VA Homeless Providers Grant and Per Diem Program, 12600-12617 [2013-04222]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 78, Number 37 (Monday, February 25, 2013)]
[Rules and Regulations]
[Pages 12600-12617]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04222]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 61

RIN 2900-AN81


VA Homeless Providers Grant and Per Diem Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with changes, the 
proposed rule to amend the Department of Veterans Affairs (VA) 
regulations concerning VA's Homeless Providers Grant and Per Diem 
Program (Program). This rulemaking updates and improves the clarity of 
these regulations, and implements and authorizes new VA policies.

DATES: Effective Date: This final rule is effective March 27, 2013.

FOR FURTHER INFORMATION CONTACT: Guy Liedke, VA Homeless Providers 
Grant and Per Diem Program Office, 10770 N. 46th Street, Suite C-200, 
Tampa, FL 33617; (877) 332-0334. (This is a toll-free number.)

SUPPLEMENTARY INFORMATION: Pursuant to 38 U.S.C. 501, 2001, 2011, 2012,

[[Page 12601]]

2061, and 2064, the VA Homeless Providers Grant and Per Diem Program 
provides capital grants and per diem payments to public or nonprofit 
private entities that assist homeless veterans by helping to ensure the 
availability of supportive housing and service centers to furnish 
outreach, rehabilitative services, vocational counseling and training, 
and supportive housing. The regulations governing this program are 
located at title 38, Code of Federal Regulations, part 61.
    In a document published in the Federal Register on March 1, 2012 
(77 FR 12698), VA proposed to amend its regulations concerning the VA 
Homeless Providers Grant and Per Diem Program which are found in 38 CFR 
part 61.

Discussion of Comments

    We provided a 60-day comment period and received two comments. One 
comment was supportive of the proposed definition of ``supportive 
housing.'' We appreciate the comment and have not made any changes 
based on it. Another comment was received from a health care interest 
group, which recommended changes to the proposed rule. A discussion of 
these recommendations follows.
    The commenter stated that the definition of supportive housing 
should be amended to specifically include ``medical respite care.'' 
Medical respite care, as defined by the commenter, provides short term 
access to a bed to an individual who is recuperating from an acute 
injury or illness. The commenter noted that homeless adults are 
hospitalized more frequently than the general population, and the lack 
of a stable home environment following discharge negatively affects 
clinical outcomes. The commenter recommended changing the term 
``respite'' to ``medical respite'' in the definition of supportive 
housing in Sec.  61.1 to avoid confusion between what the commenter 
referred to as ``caregiver respite'' and ``medical respite.'' In 
addition, the commenter recommended incorporating into the final rule 
the definition of ``medical respite services'' used by the Health 
Resources and Services Administration (HRSA). Additionally, the 
commenter recommended revising the definition of supportive services to 
include such medical respite services that are delivered in settings 
other than those included in the definition of supportive housing.
    Under Sec.  61.1, ``supportive housing'' is defined in relevant 
part as housing that is designed to ``[p]rovide specific medical 
treatment such as detoxification, respite, or hospice treatments.'' 
(Emphasis added.) The word ``respite'' is used in the definition of 
``supportive housing'' as being an example of ``specific medical 
treatment.'' The commenter suggested that the term ``respite'' is 
ambiguous and can somehow be confused with respite care provided to 
veterans with caregivers. We make no changes based on this comment 
because there is no meaningful difference between these types of 
respite care.
    The commenter appears to misunderstand the nature of respite care 
provided through VA's caregiver benefits program under 38 CFR part 71. 
The commenter attempts to distinguish ``caregiver respite'' from part 
61 ``respite'' care, but the distinction cannot be drawn in the manner 
described by the commenter. ``Caregiver respite'' is medical care 
provided to veterans who have caregivers as part of the medical 
benefits package, found at 38 CFR 17.38(a)(1)(ix), as further 
delineated under 38 CFR 71.25(d), 71.40(a)(4), and 71.40(c)(2). As a 
medical benefit, this respite care, too, could be referred to as 
``medical respite care''--just like the type of respite services 
discussed by the commenter. It is identical in all meaningful respects 
to the type of care that the commenter refers to as ``medical respite 
services''--it is short-term medical care and case management provided 
to an individual who is unable to care for him/herself. In short, any 
distinction between ``caregiver respite'' and respite care provided 
under part 61 could not be made based on the insertion of the word 
``medical'' before ``respite.'' The only clear distinction is that 
respite care provided to veterans with caregivers is not necessarily 
provided in an emergent situation, and we see no reason to limit 
respite care provided under part 61 to respite care provided in an 
emergent situation.
    We also note that under 38 CFR 62.33(a)(2)(i), respite care is an 
authorized supportive service under VA's Supportive Services for 
Veteran Families (SSVF) program, which may be provided by SSVF grantees 
who are providing health care services to veteran families who recently 
became homeless or who are at risk of becoming homeless. There has been 
no confusion among SSVF grantees that such respite care may only be 
provided to a veteran with a caregiver, and we likewise see no 
potential for confusion in Sec.  61.1. Indeed, we might create 
ambiguity where there currently is none if we were to refer in Sec.  
61.1 to ``medical respite care'' and in Sec.  62.33 to ``respite care'' 
when both regulations describe the same medical service. Therefore, 
Sec.  61.1 should not be revised to differentiate between ``caregiver 
respite'' and respite care provided to a homeless, seriously ill 
veteran.
    The commenter recommended incorporating the HRSA definition of 
``medical respite'' into the final rule. The HRSA definition defines 
``medical respite services'' in part as ``short term medical care and 
case management provided to persons (generally homeless) recovering 
from an acute illness or injury, whose conditions would be exacerbated 
by living on the street, in a shelter or other unsuitable places.'' We 
decline to do so because, as noted above, respite care is already 
identified as medical care in the context of the medical benefits 
package, and as a type of care appropriate for homeless veterans under 
SSVF. In addition, the definition proposed by the commenter, by its 
express terms, includes persons who may not be homeless. The statutory 
authority for the VA Homeless Providers Grant and Per Diem Program 
extends only to a veteran who is homeless as that term is defined in 
section 103(a) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
11302(a)).
    The commenter urged us to revise the definition of supportive 
services, noting that medical respite services may be delivered in 
settings other than those included in the definition of ``supportive 
housing.'' The VA Homeless Providers Grant and Per Diem Program was 
authorized by Congress in 1992 under Public Law 102-590, which gave VA 
authority to provide financial support to nonprofit organizations and 
state and local governments to establish programs to assist the 
homeless veteran population. Two program parameters set by statute have 
remained constant since the inception of this program: (1) Providing 
support services in the context of housing for homeless veterans; and 
(2) doing so via capital grants to eligible organizations, or per diem 
payments to entities that are either receiving or are eligible to 
receive capital grants. 38 U.S.C. 2011 and 2012. These criteria reflect 
VA's goal to provide homeless veterans a safe and stable environment 
with needed services, as well as ensuring that entities providing 
services have sufficient resources to maintain those services. 
Providing medical respite as a standalone support service separate and 
apart from offering supportive housing to homeless veterans is not 
within the purview of this program.
    Although we make no changes based on the comments, we do assure the 
commenter that care meeting the HRSA definition of medical respite 
services

[[Page 12602]]

could be provided as a supportive service to homeless veterans under 
the VA Homeless Providers Grant and Per Diem Program, so long as the 
provider and the care meet the other part 61 requirements for either a 
capital or per diem grant. We recognize the importance of such care to 
the recovery of homeless veterans from emergent medical crises, and we 
do not believe that our regulations bar, or even discourage, the 
provision of such care by grantees.
    The commenter also urged VA to conduct research to determine the 
number of detoxification programs that are based out of housing before 
publishing its final rule. The commenter states that many 
detoxification programs are based out of clinical settings rather than 
housing settings, and that by limiting the VA Homeless Providers Grant 
and Per Diem Program to those detoxification programs based out of 
housing, VA may be limiting access in many communities. In 2010, VA 
announced its goal to eliminate veteran homelessness within 5 years. 
The VA Homeless Providers Grant and Per Diem Program is one of several 
programs focused on achieving that goal, and it provides funding for 
supportive services through housing, not clinical, settings. Other VA 
programs, such as VA's Health Care for Homeless Veterans (HCHV) Program 
(implemented under 38 CFR part 63) does focus on the substance abuse 
issues of homeless veterans. It offers outreach, exams, treatment, 
referrals, and case management to veterans who are homeless and dealing 
with mental health issues, including substance use. Other related VA 
programs that offer services to homeless veterans include VA's 
Substance Use Disorder Treatment Enhancement Initiative as well as 
Veteran Justice Outreach. The scope of the VA Homeless Providers Grant 
and Per Diem Program does not include funding for detoxification 
treatment in other venues, but homeless veterans may receive that 
treatment through other VA programs.
    The final issues raised by the commenter focused on operational 
requirements for grantees. The commenter stated that the current 
requirement for grantee compliance with the Life Safety Code of the 
National Fire Protection Association (NFPA) prevents some potential 
grantees from participating in the VA Homeless Providers Grant and Per 
Diem Program. The specific example cited by the commenter was a local 
program that was prevented from collaborating with VA because it was 
unable to comply with code requirements for a sprinkler system 
throughout its facility. The commenter stated that VA should assist 
programs by providing grants to help medical respite programs meet 
operational requirements. In addition, the commenter suggests that VA 
develop alternative policies relative to operational requirements that 
are more flexible and reflect a balance between safety and no care at 
all.
    Section 2011(b)(5) of title 38, United States Code, states that the 
eligibility criteria for entities eligible to receive grants shall 
include provisions to ensure that the entity receiving a grant meets 
fire and safety requirements established by VA, including applicable 
state and local requirements as well as fire and safety requirements 
applicable under the Life Safety Code of the NFPA or such other 
comparable fire and safety requirements as VA may specify. Similar 
requirements for per diem only payments are found in 38 U.S.C. 2012(c). 
We interpret these provisions to require that grantees meet fire and 
safety requirements as a prerequisite to receiving a grant award. 
Providing grants to assist programs in meeting fire and safety 
requirements could result in situations where an applicant receives a 
grant to upgrade a structure to meet fire and safety requirements, and 
thereafter does not meet the other criteria for receiving a grant to 
provide services to homeless veterans.
    The safety of veterans receiving services directly from VA or 
through grantees is of paramount importance. Fire and safety 
requirements that are applicable across VA ensure that homeless 
veterans receiving services from a grantee are protected to the same 
degree regardless of location. We believe this rule strikes the correct 
balance and do not make any changes based on this comment.

61.67

    In proposed Sec.  61.67(b), we had proposed to revise the amount of 
grant money VA will seek to recover on a prorated basis where the grant 
recipient ceases to provide services for which the grant was made or 
withdraws from the Program prior to the expiration of the applicable 
period of operation. This was reflected in a chart showing the 
correlation between grant amounts and years of operation, which is 
necessary to apply the formula for grant recovery described in proposed 
paragraph (b). We had proposed to extend the periods of operation from 
the existing range of 7 to 20 years to a range of 20 to 40 years, and 
to change the grant amount relating to periods of years within that 
proposed 20- to 40-year period. At the time the proposed rule was 
published, we believed these revisions would better reflect industry 
standards for both accounting and real estate methodologies for 
calculating depreciation and asset worth.
    Since this proposed change in the recovery provisions was 
published, VA has increased funding to programs that focus on moving 
veterans to permanent housing. We believe it is reasonable to conclude 
that although transitional housing will always be needed, demand for 
transitional housing will decline as homeless veterans move into 
permanent housing. In December 2011, VA announced that the number of 
homeless veterans had decreased by 12 percent and that between 2009 and 
2011 VA and the Department of Housing and Urban Development had 
successfully housed a total of 33,597 veterans in permanent, supportive 
housing with dedicated case managers and access to high-quality VA 
health care. In its first 6 months of operation, the SSVF provided 
services to over 15,000 participants. To date, over 80 percent of those 
discharged from SSVF have been placed in or saved their permanent 
housing.
    Based on the successful transition of so many veterans to permanent 
housing, we now believe that there is less of a need to extend the 
operational period for grants awarded under this program. The VA 
Homeless Providers Grant and Per Diem Program specifically provides for 
the homeless veteran population, and the purpose of the extended 
recovery period was to require a longer-term period of operation for 
grantee programs. We now believe that lengthening the time of operation 
for our grantees could hamper their continued viability, as 
transitional housing beds may not be filled, decreasing grantee per 
diem income. Further, grantees would have to wait longer to convert 
from providing existing transitional housing to providing permanent 
housing (which is beyond the scope of this program), since the 
conversion can be accomplished only after the original grant 
obligations have been met. By continuing to use the current rather than 
the proposed recovery period, grantees could convert earlier thereby 
keeping their organizations viable while continuing to serve veterans. 
Therefore, we are not amending Sec.  61.67(b) at this time.
    In addition, we have included in this final rule changes to part 61 
mandated by the Honoring America's Veterans and Caring for Camp Lejeune 
Families Act of 2012, Public Law 112-154. This law was enacted 
following publication of the proposed rule. Title III of this Public 
Law impacts this final rule by expanding the definition of homeless

[[Page 12603]]

veterans with special needs to include individuals, regardless of 
gender, who have care of minor dependents; allowing special needs grant 
and per diem recipients to provide services directly to a dependent of 
a homeless veteran with special needs who is under the care of that 
homeless veteran; and clarifying grant eligibility for certain 
nonprofit organizations. This final rule differs from the proposed rule 
as necessary to reflect those changes. Because we are repeating the 
statutory language in the regulations without substantive change, 
additional notice and comment rulemaking is not required. We made the 
following changes:

61.14

    New paragraph (d) states that VA may not reject an application 
solely on the basis that the entity proposes to use funding from other 
private or public sources, if the entity demonstrates that a private 
nonprofit organization will provide oversight and site control for the 
project. ``Private nonprofit organization'' is further defined.

61.40

    VA provides special need grants to public or nonprofit private 
entities that will create or provide supportive housing and services, 
which they would not otherwise create or provide, for certain special 
need homeless veteran populations. In paragraph (a), we expand the 
covered special need homeless veteran populations to include male 
homeless veterans with minor children.
    New paragraph (c) states that recipients of special needs grants 
under this section may use amounts under the grant to provide services 
directly to a dependent of a homeless veteran with special needs who is 
under the care of that homeless veteran while the veteran receives 
services from the grant recipient.

61.41

    Paragraphs (b) and (c) of this section are revised to match special 
needs grant application requirements related to changes in Sec.  61.40.
    In this final rule we also correct some minor, nonsubstantive 
typographical errors. Based on the rationale set forth in the proposed 
rule and in this document, VA is adopting the provisions of the 
proposed rule as a final rule, except as to the changes noted above.

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
final rulemaking, represents VA's implementation of its legal authority 
on this subject. Other than future amendments to this regulation or 
governing statutes, no contrary guidance or procedures are authorized. 
All existing or subsequent VA guidance must be read to conform with 
this rulemaking if possible or, if not possible, such guidance is 
superseded by this rulemaking.

Paperwork Reduction Act

    This final rule at Sec. Sec.  61.62(f) and 61.80(c) contains new 
collections of information under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3521). On March 1, 2012, in a proposed rule published 
in the Federal Register, we requested public comments on the new 
collections of information. We received no comments. Therefore, we make 
no changes to these collections.
    The Office of Management and Budget (OMB) has approved the new 
information collection requirements associated with this final rule and 
assigned OMB Control Number 2900-0554. We are adding a parenthetical 
statement after the authority citations to the sections in part 61 for 
which new collections have been approved so that the control number is 
displayed for each new collection.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This final rule will directly affect only those entities that 
choose to participate in the VA Homeless Providers Grant and Per Diem 
Program. Small entity applicants would not be affected to a greater 
extent than large entity applicants. Small entities must elect to 
participate, and it is considered a benefit to those who choose to 
apply. To the extent this rule would have any impact on small entities, 
it would not have an impact on a substantial number of small entities. 
Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from 
the initial and final regulatory flexibility analysis requirements of 5 
U.S.C. 603 and 604.

Executive Orders 12866 and 13563

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

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any 1 year. This final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.009, Veterans Medical 
Care Benefits and 64.024, VA Homeless Providers Grant and Per Diem 
Program.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of

[[Page 12604]]

the Department of Veterans Affairs. John R. Gingrich, Chief of Staff, 
Department of Veterans Affairs, approved this document on February 14, 
2013, for publication.

List of Subjects in 38 CFR Part 61

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Day care, Dental health, Drug abuse, Government contracts, Grant 
programs-health, Grant programs-veterans, Health care, Health 
facilities, Health professions, Health records, Homeless, Mental health 
programs, Reporting and recordkeeping requirements, Travel and 
transportation expenses, Veterans.

    Dated: February 20, 2013.
Robert C. McFetridge,
Director, Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 61 is 
revised to read as follows:

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

Sec.
Subpart A--General Provisions
61.0 Purpose.
61.1 Definitions.
61.2 Supportive services--general.
61.3 Notice of Fund Availability.
61.4 Definition of capital lease.
Subpart B--Capital Grants
61.10 Capital grants--general.
61.11 Capital grants--application packages.
61.12 Capital grant application packages--threshold requirements.
61.13 Capital grant application packages--rating criteria.
61.14 Capital grants--selection of grantees.
61.15 Capital grants--obtaining additional information and awarding 
capital grants.
61.16 Matching funds for capital grants.
61.17 Site control for capital grants.
61.18 Capital grants for vans.
61.19 Transfer of capital grants.
Subpart C--Per Diem Payments
61.30 Per diem--general.
61.31 Per diem--application packages.
61.32 Per diem application packages--rating criteria.
61.33 Payment of per diem.
Subpart D--Special Need Grants
61.40 Special need grants--general.
61.41 Special need grants--application packages and threshold 
requirements.
61.44 Awarding special need grants and payment of special need per 
diem.
Subpart E--Technical Assistance Grants
61.50 Technical assistance grants--general.
61.51 Technical assistance grants--application packages.
61.52 Technical assistance grant application packages--threshold 
requirements.
61.53 Technical assistance grant application packages--rating 
criteria.
61.54 Awarding technical assistance grants.
61.55 Technical assistance reports.
Subpart F--Awards, Monitoring, and Enforcement of Agreements
61.61 Agreement and funding actions.
61.62 Program changes.
61.63 Procedural error.
61.64 Religious organizations.
61.65 Inspections.
61.66 Financial management.
61.67 Recovery provisions.
61.80 General operation requirements for supportive housing and 
service centers.
61.81 Outreach activities.
61.82 Participant fees for supportive housing.

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

Subpart A--General Provisions


Sec.  61.0  Purpose.

    This part implements the VA Homeless Providers Grant and Per Diem 
Program which consists of the following components: capital grants, per 
diem, special need capital and non-capital grants, and technical 
assistance grants.

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

Sec.  61.1  Definitions.

    For purposes of this part:
    Area or community means a political subdivision or contiguous 
political subdivisions (such as a precinct, ward, borough, city, 
county, State, Congressional district, etc.) with a separately 
identifiable population of homeless veterans.
    Capital grant means a grant for construction, renovation, or 
acquisition of a facility, or a grant for acquisition of a van.
    Capital lease is defined by Sec.  61.4.
    Chronically mentally ill means a condition of schizophrenia or 
major affective disorder (including bipolar disorder) or post-traumatic 
stress disorder (PTSD), based on a diagnosis from a licensed mental 
health professional, with at least one documented hospitalization for 
this condition sometime in the last 2 years or with documentation of a 
formal assessment on a standardized scale of any serious symptomatology 
or serious impairment in the areas of work, family relations, thinking, 
or mood.
    Default means a determination by VA that an awardee has materially 
failed to comply with the terms and conditions of an award.
    Fixed site means a physical structure that under normal conditions 
is not capable of readily being moved from one location to another 
location.
    Frail elderly means 65 years of age or older with one or more 
chronic health problems and limitations in performing one or more 
activities of daily living (such as bathing, toileting, transferring 
from bed to chair, etc.).
    Homeless has the meaning given that term in section 103 of the 
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302(a)).
    New construction means building a structure where none existed, or 
building an addition to an existing structure that increases the floor 
area by more than 100 percent.
    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 be recognized as a 
section 501(c)(3) or 501(c)(19) nonprofit organization by the United 
States Internal Revenue Service, and meet all of the following 
criteria:
    (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 to maintain such a functioning accounting system; and
    (3) Practice nondiscrimination in the provision of supportive 
housing and supportive services assistance.
    Notice of Fund Availability (NOFA) means a notice published in the 
Federal Register in accordance with Sec.  61.60.
    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, obtaining program audits, and securing accreditation; and 
similar costs related to administering the grant after the award), 
maintenance, repair and security for the supportive housing;
    (2) Van costs or building rent (except under capital leases), e.g., 
fuel, insurance, utilities, furnishings, and equipment;
    (3) Conducting on-going assessments of supportive services provided 
for and needed by participants and the availability of such services; 
and
    (4) Other costs associated with operating the supportive housing.
    Operational means a program for which all VA inspection 
requirements under this part have been met and an activation document 
has been issued by the VA National GPD Program.
    Outpatient health services means outpatient health care, outpatient 
mental health services, outpatient

[[Page 12605]]

alcohol and/or substance abuse services, and case management.
    Participant means a person receiving services based on a grant or 
per diem provided under this part.
    Participant agreement means any written or implied agreement 
between a grant recipient agency and a program participant that 
outlines the requirements for program compliance, participant or 
service delivery.
    Project means all activities that define the parameters of the 
purpose of the grant.
    Public entity means any of the following:
    (1) 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; or
    (2) 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 the 
Bureau of Indian Affairs.
    Recipient means the entity whose employer or taxpayer 
identification number is on the Application for Federal Assistance (SF 
424) and is consequently responsible to comply with all terms and 
conditions of the award. For the purpose of this part the terms 
``grantee,'' ``recipient,'' and ``awardee'' are synonymous and 
interchangeable.
    Rehabilitation means the improvement or repair of an existing 
structure. Rehabilitation does not include minor or routine repairs.
    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 with supportive services provided 
for homeless veterans that:
    (1) Is not shelter care, other emergent housing, or housing 
designed to be permanent or long term (more than 24 months), with no 
requirement to move; and
    (2) Is designed to either:
    (i) Facilitate the movement of homeless veterans to permanent 
housing within a period that is not less than 90 days and does not 
exceed 24 months, subject to Sec.  61.80; or
    (ii) Provide specific medical treatment such as detoxification, 
respite, or hospice treatments that are used as step-up or step-down 
programs within that specific project's continuum.
    Supportive services has the meaning assigned to it under Sec.  
61.2.
    Terminally ill means a prognosis of 9 months or less to live, based 
on a written medical diagnosis from a physician.
    Total project cost means the sum of all costs incurred by a 
recipient for the acquisition, rehabilitation, and new construction of 
a facility, or van(s), identified in a grant application.
    VA means the Department of Veterans Affairs.
    VA National GPD Program refers to the VA Homeless Providers Grant 
and Per Diem Program.
    Veteran means a person who served in the active military, naval, or 
air service, and who was discharged or released there from under 
conditions other than dishonorable.

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

Sec.  61.2  Supportive services--general.

    (a) Recipients must design supportive services. Such services must 
provide appropriate assistance, or aid participants in obtaining 
appropriate assistance, to address the needs of homeless veterans. The 
following are examples of supportive services:
    (1) Outreach activities;
    (2) Providing food, nutritional advice, counseling, health care, 
mental health treatment, alcohol and other substance abuse services, 
case management services;
    (3) Establishing and operating child care services for dependents 
of homeless veterans;
    (4) Providing supervision and security arrangements necessary for 
the protection of residents of supportive housing and for homeless 
veterans using supportive housing or services;
    (5) Assistance in obtaining permanent housing;
    (6) Education, employment counseling and assistance, and job 
training;
    (7) Assistance in obtaining other Federal, State and local 
assistance available for such residents including mental health 
benefits, employment counseling and assistance, veterans' benefits, 
medical assistance, and income support assistance; and
    (8) Providing housing assistance, legal assistance, advocacy, 
transportation, and other services essential for achieving and 
maintaining independent living.
    (b) Supportive services do not include inpatient acute hospital 
care.

(Authority: 38 U.S.C. 501, 2011, 2012, 2061)

Sec.  61.3  Notice of Fund Availability.

    When funds are made available for a grant or per diem award under 
this part, VA will publish a Notice of Fund Availability in the Federal 
Register. The notice will:
    (a) Give the location for obtaining application packages;
    (b) Specify the date, time, and place for submitting completed 
applications;
    (c) State the estimated amount and type of funding available; and
    (d) State any priorities for or exclusions from funding to meet the 
statutory mandate of 38 U.S.C. 2011, to ensure that awards do not 
result in the duplication of ongoing services and to reflect the 
maximum extent practicable appropriate geographic dispersion and an 
appropriate balance between urban and nonurban locations.
    (e) Provide other information necessary for the application 
process, such as the grant period, where applicable.

(Authority: 38 U.S.C. 501, 2011, 2012, 2061, 2064)

Sec.  61.4  Definition of capital lease.

    A capital lease, for purposes of this part, means a conditional 
sales contract that either:
    (a) Will be in effect for all of the period of recovery listed in 
Sec.  61.67(b); or
    (b) That satisfies one of the following criteria:
    (1) The lease transfers ownership to the lessee at the expiration 
of the lease term.
    (2) The lease contains a bargain purchase option.
    (3) The present value of lease payments that are applied to the 
purchase are equal to or greater than 90 percent of the fair market 
value of the asset.

(Authority: 38 U.S.C. 501, 2011, 2012, 2061, 2064)

Subpart B--Capital Grants


Sec.  61.10  Capital grants--general.

    (a) Subject to the availability of appropriations provided for such 
purpose, VA will provide capital grants to public or nonprofit private 
entities so they can assist homeless veterans by helping to ensure the 
availability of

[[Page 12606]]

supportive housing and service centers to furnish outreach, 
rehabilitative services, and vocational counseling and training. 
Specifically, VA provides capital grants for up to 65 percent of the 
cost to:
    (1) Construct structures and purchase the underlying land to 
establish new supportive housing facilities or service centers, or to 
expand existing supportive housing facilities or service centers;
    (2) Acquire structures to establish new supportive housing 
facilities or service centers, or to expand existing supportive housing 
facilities or service centers;
    (3) Renovate existing structures to establish new supportive 
housing facilities or service centers, or to expand existing supportive 
housing facilities or service centers; and
    (4) Procure a van in accordance with Sec.  61.18, Capital grants 
for vans.
    (b) Capital grants may not be used for acquiring buildings located 
on VA-owned property. However, capital grants may be awarded for 
construction, expansion, or renovation of buildings located on VA-owned 
property.

(Authority: 38 U.S.C. 501, 2011)


Sec.  61.11  Capital grants--application packages.

    (a) General. To apply for a capital grant, an applicant must obtain 
from, complete, and submit to VA a capital grant application package 
within the time period established in the Notice of Fund Availability.
    (b) Content of application. The capital grant application package 
will require the following:
    (1) Site description, site design, and site cost estimates.
    (2) Documentation supporting:
    (i) Eligibility to receive a capital grant under this part;
    (ii) Matching funds committed to the project;
    (iii) A proposed operating budget and cost sharing;
    (iv) Supportive services committed to the project;
    (v) The applicant's authority to control the site and meet 
appropriate zoning laws; and
    (vi) The boundaries of the area or community that would be served.
    (3) If capital grant funds would be used for acquisition or 
rehabilitation, documentation demonstrating that the costs associated 
with acquisition or rehabilitation are less than the costs associated 
with new construction.
    (4) If capital grant funds would be used for new construction, 
documentation demonstrating that the costs associated with new 
construction are less than the costs associated with rehabilitation of 
an existing building, that there is a lack of available appropriate 
units that could be rehabilitated at a cost less than new construction, 
and 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).
    (5) If proposed construction includes demolition:
    (i) A demolition plan that describes the extent and cost of 
existing site features to be removed, stored, or relocated; and
    (ii) Information establishing that the proposed construction is 
either in the same location as the building to be demolished or that 
the demolition is inextricably linked to the design of the construction 
project. Without such information, the cost of demolition cannot be 
included in the cost of construction.
    (6) If the applicant is a state, comments or recommendations by 
appropriate state (and area wide) clearinghouses pursuant to E.O. 12372 
(3 CFR, 1982 Comp., p. 197).
    (7) A statement from the applicant that all of the following are 
true:
    (i) The project will furnish to veterans the level of care for 
which such application is made, and services provided will meet the 
requirements of this part.
    (ii) The applicant will continue to operate the project until the 
expiration of the period during which VA could seek full recovery under 
Sec.  61.67.
    (iii) Title to the site will vest solely in the applicant and the 
applicant will insure the site to the same extent they would insure a 
site bought with their own funds.
    (iv) Adequate financial support will be available for the 
completion of the project.
    (v) The applicant will keep records and submit reports as VA may 
reasonably require, within the time frames required, and, upon demand, 
allow VA access to the records upon which such information is based.
    (vi) The applicant will state that no more than 25 percent of the 
grant-awarded beds are occupied by non-veterans.
    (c) Multiple capital grant applications. Subject to Sec.  61.12(i), 
applicants may apply for more than one capital grant.

(Authority: 38 U.S.C. 501, 2011)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554).


Sec.  61.12  Capital grant application packages--threshold 
requirements.

    The following threshold requirements for a capital grant 
application must be met, or the application will be rejected before 
being rated under Sec.  61.13:
    (a) The application package must meet all of the following 
criteria:
    (1) Be on the correct application form.
    (2) Be completed in all parts, including all information requested 
in the Notice of Fund Availability and application package.
    (3) Include a signed Application for Federal Assistance (SF 424) 
that contains the Employer Identification Number or Taxpayer 
Identification Number (EIN/TIN) that corresponds to the applicant's 
Internal Revenue Service (IRS) 501(c)(3) or (19) determination letter. 
All applicants must provide such an IRS determination letter, which 
includes their EIN/TIN. Applicants that apply under a group EIN/TIN 
must be identified by the parent EIN/TIN as a member or sub-unit of the 
parent EIN/TIN and provide supporting documentation.
    (4) Be submitted before the deadline established in the Notice of 
Fund Availability.
    (b) The applicant must be a public or nonprofit private entity at 
the time of application.
    (c) The activities for which assistance is requested must be 
eligible for funding under this part.
    (d) The applicant must demonstrate that adequate financial support 
will be available to carry out the project for which the capital grant 
is sought, consistent with the plans, specifications, and schedule 
submitted by the applicant.
    (e) The application must demonstrate compliance with the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 
1970 (URA) (42 U.S.C. 4601-4655).
    (f) The applicant must agree to comply with the requirements of 
this part and demonstrate the capacity to do so.
    (g) The applicant must not have an outstanding obligation to VA 
that is in arrears, or have an overdue or unsatisfactory response to an 
audit.
    (h) The applicant must not have been notified by VA as being in 
default.
    (i) The applicant, during the 5 years preceding the date of the 
application, must not have done any of the following:
    (1) Had more than two grants awarded under this part that remain in 
development;

[[Page 12607]]

    (2) Failed to establish two previous awarded grant projects under 
this part; or
    (3) Had a previous grant or per diem project awarded under this 
part terminated or transferred to another eligible entity for failure 
to comply with the terms and conditions of the award.

(Authority: 38 U.S.C. 501, 2011)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554).


Sec.  61.13  Capital grant application packages--rating criteria.

    (a) General. Applicants that meet the threshold requirements in 
Sec.  61.12 will be rated using the selection criteria listed in this 
section. To be eligible for a capital grant, an applicant must receive 
at least 750 points (out of a possible 1000) and must receive points 
under each of the following paragraphs (b), (c), (d), (e), (f), and (g) 
of this section.
    (b) Project plan. VA will award up to 300 points based on the 
demonstration and quality of the following:
    (1) The selection of the proposed housing in light of the 
population to be served.
    (2) The process used for deciding which veterans are appropriate 
for admission.
    (3) How, when, and by whom the progress of participants toward 
meeting their individual goals will be monitored, evaluated, and 
documented.
    (4) The role program participants will have in operating and 
maintaining the housing.
    (5) The responsibilities the applicant, sponsors, or contractors 
will have in operating and maintaining the housing.
    (6) The supportive services that will be provided and by whom to 
help participants achieve residential stability, increase skill level 
and/or income, and become involved in making life decisions that will 
increase self-determination.
    (7) The measureable objectives that will be used to determine 
success of the supportive services.
    (8) How the success of the program will be evaluated on an ongoing 
basis.
    (9) How the nutritional needs of veterans will be met.
    (10) How the agency will ensure a clean and sober environment.
    (11) How participants will be assisted in assimilating into the 
community through access to neighborhood facilities, activities, and 
services.
    (12) How the proposed project will be implemented in a timely 
fashion.
    (13) How permanent affordable housing will be identified and made 
known to participants upon leaving the supportive housing.
    (14) How participants will be provided necessary follow-up 
services.
    (15) The description of program policies regarding participant 
agreements, rent, and fees.
    (c) Outreach to persons on streets and in shelters. VA will award 
up to 100 points based on:
    (1) The agency's outreach plan to 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
    (2) The likelihood that proposed plans for outreach and selection 
of participants will result in these populations being served.
    (d) Ability of applicant to develop and operate a project. VA will 
award up to 200 points based on the extent to which the application 
demonstrates the necessary staff and organizational experience to 
complete and operate the proposed project, based on the following:
    (1) Staffing plan for the project that reflects the appropriate 
professional staff, both administrative and clinical;
    (2) Experience of staff, if staff not yet hired, position 
descriptions and expectations of time to hire;
    (3) Amount of time each staff position is dedicated to the project, 
and in what capacity;
    (4) Applicant's previous experience assessing and providing for the 
housing needs of homeless veterans;
    (5) Applicant's previous experience assessing and providing 
supportive services for homeless veterans;
    (6) Applicant's previous experience assessing supportive service 
resources and entitlement benefits;
    (7) Applicant's previous experience with evaluating the progress of 
both individual participants and overall program effectiveness using 
quality and performance data to make changes;
    (8) Applicant's previous experience operating housing for homeless 
individuals;
    (9) Overall agency organizational overview (org. chart); and
    (10) Historical documentation of past performance both with VA and 
non-VA projects, including those from other Federal, state and local 
agencies and audits by private or public entities.
    (e) Need. VA will award up to 150 points based on the extent to 
which the applicant demonstrates:
    (1) Substantial unmet needs, particularly among the target 
population living in places not ordinarily meant for human habitation 
such as the streets, emergency shelters, based on reliable data from 
surveys of homeless populations or other reports or data gathering 
mechanisms that directly support claims made; and
    (2) An understanding of the homeless population to be served and 
its unmet housing and supportive service needs.
    (f) Completion confidence. VA will award up to 50 points based on 
the review panel's confidence that the applicant has effectively 
demonstrated the supportive housing or service center project will be 
completed as described in the application. VA may use historical 
program documents of past performance both VA and non-VA, including 
those from other Federal, state and local agencies as well as audits by 
private or public entities in determining confidence scores.
    (g) 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 program 
providers relevant to the needs of homeless veterans in the local 
community. Applicants are required to demonstrate that they have 
coordinated with the VA medical care facility of jurisdiction and/or VA 
Regional Office of jurisdiction in their area. VA will award up to 50 
points of the 200 points based on the extent to which commitments to 
provide supportive services are documented at the time of application. 
Up to 150 points of the 200 points will be given to the extent 
applicants demonstrate that:
    (1) They are part of an ongoing community-wide planning process 
within the framework described above which is designed to share 
information on available resources and reduce duplication among 
programs that serve homeless veterans;
    (2) They have consulted directly with the closest VA Medical Center 
and other providers within the framework described above regarding 
coordination of services for project participants; and
    (3) They have coordinated with the closest VA Medical Center their 
plan to assure access to health care, case management, and other care 
services.

(Authority: 38 U.S.C. 501, 2011)


[[Page 12608]]




Sec.  61.14  Capital grants--selection of grantees.

    (a) Applicants will first be grouped in categories according to the 
funding priorities set forth in the NOFA, if any. Applicants will then 
be ranked, within their respective funding category if applicable. The 
highest-ranked applications for which funding is available, within 
highest priority funding category if applicable, will be conditionally 
selected to receive a capital grant in accordance with their ranked 
order, as determined under Sec.  61.13. If funding priorities have been 
established and funds are still available after selection of those 
applicants in the highest priority group VA will continue to 
conditionally select applicants in lower priority categories in 
accordance with the selection method set forth in this paragraph 
subject to available funding.
    (b) In the event of a tie between applicants, VA will use the score 
from Sec.  61.13(g) to determine the ranking. If the score from Sec.  
61.13(g) is also tied, VA will use the score from Sec.  61.13(d) to 
determine the ranking.
    (c) VA may reject an application where the project is not cost 
effective based on the cost and number of new supportive housing beds 
made available--or based on the cost, amount, and types of supportive 
services made available--when compared to other supportive housing or 
services projects, and when adjusted for high cost areas. For those 
applications that VA believes not to be cost-effective VA will;
    (1) Reduce the award; or
    (2) Not select the application for funding.
    (d) VA may not reject an application solely on the basis that the 
entity proposes to use funding from other private or public sources, if 
the entity demonstrates that a private nonprofit organization will 
provide oversight and site control for the project. In this section 
``private nonprofit organization'' means one of the following:
    (1) An incorporated private institution, organization, or 
foundation--
    (i) That has received, or has temporary clearance to receive, tax-
exempt status under paragraph (2), (3), or (19) of section 501(c) of 
the Internal Revenue Code of 1986;
    (ii) For which no part of the net earnings of the institution, 
organization, or foundation inures to the benefit of any member, 
founder, or contributor of the institution, organization, or 
foundation; and
    (iii) That VA determines is financially responsible.
    (2) A for-profit limited partnership or limited liability company, 
the sole general partner or manager of which is an organization that is 
described by paragraph (d)(1) of this section.
    (3) A corporation wholly owned and controlled by an organization 
that is described by paragraph (d)(1) of this section.
    (e) In the case of a previously awarded project that can no longer 
provide services and or housing and the recipient agency has decided to 
withdraw or the project has been terminated for failure to comply with 
the terms and conditions of the award; VA may transfer a capital grant 
or non-capital grant to another eligible entity in the same 
geographical area without competition, in order to prevent a loss of 
capacity of services and housing to homeless veterans. The new entity 
must meet all of the requirements to which the original grantee was 
subject. In the case of a capital grant transfer the new grantee will 
only be entitled to the funding that remains from the original capital 
obligation and remains responsible for all commitments made by the 
original grantee.

(Authority: 38 U.S.C. 501, 2011)

Sec.  61.15  Capital grants--obtaining additional information and 
awarding capital grants.

    (a) Each applicant who has been conditionally selected for a 
capital grant will be requested by VA to submit additional 
documentation or information as necessary, including:
    (1) Any additional information necessary to show that the project 
is feasible, including a plan from an architect, contractor, or other 
building professional who provides estimated costs for the proposed 
design;
    (2) Documentation showing the sources of funding for the project 
and firm financing commitments for the matching requirements described 
in Sec.  61.16;
    (3) Documentation establishing site control described in Sec.  
61.17;
    (4) Documentation establishing compliance with the National 
Historic Preservation Act (16 U.S.C. 470);
    (5) Information necessary for VA to ensure compliance both with 
Uniform Federal Accessibility Standards (UFAS) and the Americans with 
Disabilities Act Accessibility Guidelines;
    (6) Documentation establishing compliance with local and state 
zoning codes;
    (7) Documentation in the form of one set of design development (35 
percent completion) drawings demonstrating compliance with local codes, 
state codes, and the current Life Safety Code of the National Fire 
Protection Association.
    (8) Information necessary for VA to ensure compliance with the 
provisions of the National Environmental Policy Act (42 U.S.C. 4321 et 
seq.);
    (9) A site survey performed by a licensed land surveyor; and
    (10) Such other documentation as specified by VA in writing or 
verbally to the applicant to confirm or clarify information provided in 
the application.
    (b) Items requested under paragraph (a) of this section must be 
received by VA in acceptable form within the time frame established in 
accordance with the Notice of Fund Availability.
    (c) Following receipt of the additional information in acceptable 
form, VA will execute an agreement and make payments to the grant 
recipient in accordance with Sec.  61.61 and other applicable 
provisions of this part.

(Authority: 38 U.S.C. 501, 2011)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554)


Sec.  61.16  Matching funds for capital grants.

    (a) VA cannot award a capital grant for more than 65 percent of the 
total allowable costs of the project. The grantee must provide funding 
(``matching funding'') for the remaining 35 percent of the total cost, 
using non-federal funds. VA requires that applicants provide 
documentation of all costs related to the project including those that 
are not allowable under OMB Circular A-122 as codified at 2 CFR part 
230. Allowable costs means those related to the portion (percentage) of 
the property that would be used to provide supportive housing and 
services under this part.
    (b) Capital grants may include application costs, including site 
surveys, architectural, and engineering fees, but may not include 
relocation costs or developer's fees.
    (c) Documentation of matching funds. The matching funds described 
in paragraph (a) of this section must be documented as follows; no 
other format will be accepted as evidence of a firm commitment of 
matching funds:
    (1) Donations must be on the donor's letterhead, signed and dated.
    (2) The applicant's own cash must be committed on the applicant's 
letterhead, signed, and dated.
    (3) No conditions may be placed on the matching funds other than 
the organization's receipt of the capital grant.
    (4) Funds must be committed to the same activity as the capital 
grant application (i.e., acquisition, renovation,

[[Page 12609]]

new construction, or a van), and must not relate to operating costs or 
services.
    (5) The value of matching funds must be for a cost that is included 
in the calculation of the total project cost, thereby decreasing the 
total expenditures of the grantee.
    (d) Van applications. The requirements of this section also apply 
to applications for a capital grant for a van under Sec.  61.18.

(Authority: 38 U.S.C. 501, 2011)

Sec.  61.17  Site control for capital grants.

    (a) In order to receive a capital grant for supportive housing or a 
fixed site service center, an applicant must demonstrate site control. 
Site control must be demonstrated through a deed or an executed 
contract of sale, or a capital lease, which assigns control or 
ownership to the entity whose Federal employer or taxpayer 
identification number is on the Application for Federal Assistance 
(SF424), unless one of the following apply:
    (1) VA gives written permission for an alternate assignment. VA 
will permit alternate assignments except when:
    (i) The alternate assignment is to a for-profit entity which is 
neither controlled by the applicant or by the applicant's parent 
organization or the entity is controlled by the applicant's parent 
organization which is a for-profit entity; or
    (ii) VA has a reasonable concern that the assignment may provide an 
economic or monetary benefit to the assignee other than the benefit 
that would have inured to the applicant had the applicant not made the 
alternate assignment.
    (2) The site is in a building or on land owned by VA, and the 
applicant has an agreement with VA for site control.
    (b) A capital grant recipient may change the site to a new site 
meeting the requirements of this part subject to VA approval under 
Sec.  61.62. However, the recipient is responsible for and must 
demonstrate ability to provide for any additional costs resulting from 
the change in site.
    (c) If site control is not demonstrated within 1 year after 
execution of an agreement under Sec.  61.61, the grantee may request a 
reasonable extension from the VA national GPD office, or the grant may 
be terminated. VA will authorize an extension request if the grantee 
was not at fault for being unable to exercise site control and the lack 
of site control does not affect the grantee's ability to complete the 
project.

(Authority: 38 U.S.C. 501, 2011)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554)


Sec.  61.18  Capital grants for vans.

    (a) General. A capital grant may be used to procure one or more 
vans, as stated in a NOFA, to provide transportation or outreach for 
the purpose of providing supportive services. The grant may cover the 
purchase price, sales taxes, and title and licensing fees. Title to the 
van must vest solely in the applicant, and the applicant must insure 
the van to the same extent they would insure a van bought with their 
own funds.
    (b) Who can apply for a van. VA will only award vans to applicants 
who currently have an operational grant under this part, or in 
conjunction with a new application.
    (c) Application packages for van(s). In order to receive a van, the 
application must demonstrate the following:
    (1) Clear need for the van(s);
    (2) Specific use of the van(s);
    (3) Frequency of use of the van(s);
    (4) Qualifications of the van driver(s);
    (5) Training of the van driver(s);
    (6) Type of van(s) to be obtained; and
    (7) Adequate financial support will be available for the completion 
of the project or for the purchase and maintenance, repair, and 
operation of the van(s).
    (d) Rating criteria. Applications will be scored using the 
selection criteria listed in this section. To be eligible for a van 
grant, an applicant must receive at least 80 points (out of a possible 
100) of this section.
    (1) Need. VA will award up to 60 points based on the extent to 
which the applicant demonstrates a substantial unmet need for 
transportation due to:
    (i) Lack of alternative public transportation,
    (ii) Project location,
    (iii) Expired life use of current van, or
    (iv) Special disabled individual transportation.
    (2) Activity. VA will award up to 20 points based on the extent to 
which the applicant demonstrates:
    (i) Frequency of use,
    (ii) Type of use, and
    (iii) Type of van, e.g., whether there is a justification for a van 
with a wheelchair lift or other modifications.
    (3) Operator qualification. VA will award up to 20 points based on 
the extent to which the applicant demonstrates a job description for 
the van operator that details:
    (i) Requirements of the position, and
    (ii) Training that will be provided to the driver.

(Authority: 38 U.S.C. 501, 2011)

Sec.  61.19  Transfer of capital grants.

    In the case of a previously awarded project that can no longer 
provide services and/or housing and the recipient agency has decided to 
withdraw or the project has been terminated for failure to comply with 
the terms and conditions of the award, VA may transfer a capital grant 
or non-capital grant to another eligible entity in the same 
geographical area without competition, in order to prevent a loss of 
capacity of services and housing to homeless veterans. The new entity 
must meet all of the requirements to which the original grantee was 
subject. In the case of a capital grant transfer the new grantee will 
only be entitled to the funding that remains from the original capital 
obligation and remains responsible for all commitments made by the 
original grantee.

(Authority: 38 U.S.C. 501, 2011)

Subpart C--Per Diem Payments


Sec.  61.30  Per diem--general.

    (a) General. VA may provide per diem funds to offset operating 
costs for a program of supportive housing or services. VA may provide:
    (1) Per diem funds to capital grant recipients; or
    (2) Per diem only (PDO) funds to entities eligible to receive a 
capital grant, if the entity established a program of supportive 
housing or services after November 10, 1992.
    (b) Capital grant recipients. Capital grant recipients may request 
per diem funds after completion of a project funded by a capital grant 
and a site inspection under Sec.  61.80 to ensure that the grantee is 
capable of providing supportive services.
    (c) Per diem only applicants. PDO awards to entities eligible to 
receive a capital grant must provide supportive housing or services to 
the homeless veteran population within 180 days after the date on the 
notification of award letter, or VA will terminate the PDO payments.

(Authority: 38 U.S.C. 501, 2012)

Sec.  61.31  Per diem--application packages.

    (a) Capital grant recipient. To apply for per diem, a capital grant 
recipient need only indicate the intent to receive per diem on the 
capital grant application or may separately request per diem by 
submitting to VA a written statement requesting per diem.
    (b) Non-capital-grant recipient (per diem only). To apply for per 
diem only, a non-capital grant applicant must obtain from VA a non-
capital grant application package and submit to VA the information 
called for in the

[[Page 12610]]

application package within the time period established in the Notice of 
Fund Availability. The application package includes exhibits to be 
prepared and submitted as part of the application process, including:
    (1) Documentation on eligibility to receive per diem under this 
part;
    (2) Documentation on operating budget and cost sharing;
    (3) Documentation on supportive services committed to the project;
    (4) Comments or recommendations by appropriate state (and area 
wide) clearinghouses pursuant to E.O. 12372 (3 CFR, 1982 Comp., p. 
197), if the applicant is a state; and
    (5) Reasonable assurances with respect to receipt of per diem 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 the requirements of this part;
    (ii) Adequate financial support will be available for the per diem 
program; and
    (iii) The recipient will keep records and submit reports as VA may 
reasonably require, within the time frames required; and give VA, upon 
demand, access to the records upon which such information is based.

(Authority: 38 U.S.C. 501, 2012)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554)


Sec.  61.32  Per diem application packages--rating criteria.

    (a) Conditional selection. Application packages for per diem only 
(i.e., from non-capital grant applicants) in response to a Notice of 
Fund Availability (NOFA) will be reviewed and grouped in categories 
according to the funding priorities set forth in the NOFA, if any. Such 
applications will then be ranked within their respective funding 
category according to scores achieved only if the applicant scores at 
least 750 cumulative points out of a possible 1000 from each of the 
following paragraphs: (b), (c), (d), (e), (f), and (g) of Sec.  61.13. 
The highest-ranked applications for which funding is available, within 
highest funding priority category if applicable, will be conditionally 
selected for eligibility to receive per diem payments or special need 
payment in accordance with their ranked order. If funding priorities 
have been established and funds are still available after selection of 
those applicants in the highest priority group, VA will continue to 
conditionally select applicants in lower priority categories in 
accordance with the selection method set forth in this paragraph 
subject to available funding. Conditional selectees will be 
subsequently awarded per diem, if they otherwise meet the requirements 
of this part, including passing the inspection required by Sec.  61.80.
    (b) Ranking applications. In the event of a tie between applicants, 
VA will use the score from Sec.  61.13(g) to determine the ranking. 
Note: Capital grant recipients are not required to be ranked; however, 
continuation of per diem payments to capital grant recipients will be 
subject to limitations set forth in Sec.  61.33.
    (c) Executing per diem agreements. VA will execute per diem 
agreements with an applicant whose per diem application was 
conditionally selected under this section using the same procedures 
applicable to a capital grant under Sec.  61.15.

(Authority: 38 U.S.C. 501, 2012)

Sec.  61.33  Payment of per diem.

    (a) General. VA will pay per diem to the recipient for those 
homeless veterans:
    (1) Who VA referred to the recipient; or
    (2) For whom VA authorized the provision of supportive housing or 
supportive service.
    (b) Rate of payments for individual veterans. The rate of per diem 
for each veteran in supportive housing shall be the lesser of:
    (1) The daily cost of care estimated by the per diem recipient 
minus other sources of payments to the per diem recipient for 
furnishing services to homeless veterans that the per diem recipient 
certifies to be correct (other sources include payments and grants from 
other departments and agencies of the United States, from departments 
of local and State governments, from private entities or organizations, 
and from program participants); or
    (2) The current VA state home program per diem rate for domiciliary 
care, as set by the Secretary under 38 U.S.C. 1741(a)(1).
    (c) Rate of payments for service centers. The per diem amount for 
service centers shall be \1/8\ of the lesser of the amount in paragraph 
(b)(1) or (b)(2) of this section, per hour, not to exceed 8 hours in 
any day.
    (d) Continuing payments. Recipients may continue to receive per 
diem only so long as funding is available, they continue to provide the 
supportive services described in their application, and they continue 
to meet the applicable ongoing requirements of this part. For non-
capital grant recipients of per diem only, funds will be paid to the 
highest-ranked applicants, within the highest-funding priority category 
if applicable, in descending order until funds are expended. Generally, 
payments will continue for the time frame specified in the Notice of 
Fund Availability. When necessary due to funding limitations, VA will 
reduce the rate of per diem.
    (e) Retroactive payments. Per diem may be paid retroactively for 
services provided not more than 3 days before VA approval is given or 
where, through no fault of the recipient, per diem payments should have 
been made but were not made.
    (f) Payments for absent veterans. VA will pay per diem for up to, 
and not more than, 72 consecutive hours (scheduled or unscheduled) of 
absence.
    (g) Supportive housing limitation. VA will not pay per diem for 
supportive housing for any homeless veteran who has had three or more 
episodes (admission and discharge for each episode) of supportive 
housing services paid for under this part. VA may waive this limitation 
if the services offered are different from those previously provided 
and may lead to a successful outcome.
    (h) Veterans receiving supportive housing and services. VA will not 
pay per diem for both supportive housing and supportive services 
provided to the same veteran by the same per diem recipient.
    (i) At the time of receipt, a per diem recipient must report to VA 
all other sources of income for the project for which per diem was 
awarded. The report provides a basis for adjustments to the per diem 
payment under paragraph (b)(1) of this section.

(Authority: 38 U.S.C. 501, 2012)

Subpart D--Special Need Grants


Sec.  61.40  Special need grants--general.

    (a) VA provides special need grants to public or nonprofit private 
entities that will create or provide supportive housing and services, 
which they would not otherwise create or provide, for the following 
special need homeless veteran populations:
    (1) Women;
    (2) Frail elderly;
    (3) Terminally ill;
    (4) Chronically mentally ill; or
    (5) Individuals who have care of minor dependents.
    (b) Applicants must submit an application package for a capital or 
non-capital grant, which will be processed by the VA National GPD 
Program in accordance with this part; however, to be eligible for a 
capital special need

[[Page 12611]]

grant, an applicant must receive at least 800 points (out of a possible 
1000) and must receive points under each of the following paragraphs: 
(b), (c), (d), (e), (f), and (g) of Sec.  61.13. Non-capital special 
need grants are rated in the same manner as non-capital grant 
applications under Sec.  61.32.
    (c) A recipient of a grant under paragraph (a) of this section may 
use amounts under the grant to provide services directly to a dependent 
of a homeless veteran with special needs who is under the care of such 
homeless veteran while such homeless veteran receives services from the 
grant recipient under this section.
    (d) The following sections apply to special need grants: Sec. Sec.  
61.61 through 61.67, Sec.  61.80, and Sec.  61.82.

(Authority: 38 U.S.C. 501, 2061)

Sec.  61.41  Special need grants--application packages and threshold 
requirements.

    (a) Applications. To apply for a special need grant, an applicant 
must obtain, complete, and submit to VA a special need capital grant or 
special need per diem only application package within the time period 
established in the Notice of Fund Availability. A special need grant 
application must meet the same threshold requirements applicable to a 
capital grant under Sec.  61.12.
    (b) Additional requirement. In addition to the requirements of 
Sec.  61.11, applicants must describe how they will address the needs 
of one or more of the homeless veteran populations identified in 
paragraphs (c) through (g) of this section.
    (c) Women. Applications must show how the program design will:
    (1) Ensure transportation for women, especially for health care and 
educational needs; and
    (2) Address safety and security issues including segregation from 
other program participants if deemed appropriate.
    (d) Individuals who have care of minor dependents. Applications 
must show how the program design will:
    (1) Ensure transportation for individuals who have care of minor 
dependents, and their children, especially for health care and 
educational needs;
    (2) Provide directly or offer referrals for adequate and safe child 
care;
    (3) Ensure children's health care needs are met, especially age-
appropriate wellness visits and immunizations; and
    (4) Address safety and security issues including segregation from 
other program participants if deemed appropriate.
    (e) Frail elderly. Applications must show how the program design 
will:
    (1) Ensure the safety of the residents in the facility to include 
preventing harm and exploitation;
    (2) Ensure opportunities to keep residents mentally and physically 
agile to the fullest extent through the incorporation of structured 
activities, physical activity, and plans for social engagement within 
the program and in the community;
    (3) Provide opportunities for participants to address life 
transitional issues and separation and/or loss issues;
    (4) Provide access to walkers, grippers, or other assistance 
devices necessary for optimal functioning;
    (5) Ensure adequate supervision, including supervision of 
medication and monitoring of medication compliance; and
    (6) Provide opportunities for participants either directly or 
through referral for other services particularly relevant for the frail 
elderly, including services or programs addressing emotional, social, 
spiritual, and generative needs.
    (f) Terminally ill. Applications must show how the program design 
will:
    (1) Help participants address life-transition and life-end issues;
    (2) Ensure that participants are afforded timely access to hospice 
services;
    (3) Provide opportunities for participants to engage in ``tasks of 
dying,'' or activities of ``getting things in order'' or other 
therapeutic actions that help resolve end of life issues and enable 
transition and closure;
    (4) Ensure adequate supervision including supervision of medication 
and monitoring of medication compliance; and
    (5) Provide opportunities for participants either directly or 
through referral for other services particularly relevant for 
terminally ill such as legal counsel and pain management.
    (g) Chronically mentally ill. Applications must show how the 
program design will:
    (1) Help participants join in and engage with the community;
    (2) Facilitate reintegration with the community and provide 
services that may optimize reintegration such as life-skills education, 
recreational activities, and follow up case management;
    (3) Ensure that participants have opportunities and services for 
re-establishing relationships with family;
    (4) Ensure adequate supervision, including supervision of 
medication and monitoring of medication compliance; and
    (5) Provide opportunities for participants, either directly or 
through referral, to obtain other services particularly relevant for a 
chronically mentally ill population, such as vocational development, 
benefits management, fiduciary or money management services, medication 
compliance, and medication education.

(Authority: 38 U.S.C. 501, 2061)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554).


Sec.  61.44  Awarding special need grants and payment of special need 
per diem.

    (a) For those applicants selected for a special need grant, VA will 
execute an agreement and make payments to the grantee under Sec.  
61.61.
    (b) Capital grantee selectees who successfully complete the capital 
portion of their grant, or non-capital grantee selectees who 
successfully pass VA inspection, will be eligible for a special need 
per diem payment to defray the operational cost of the project. Special 
need per diem payment will be the lesser of:
    (1) 100 percent of the daily cost of care estimated by the special 
need recipient for furnishing services to homeless veterans with 
special need that the special need recipient certifies to be correct, 
minus any other sources of income; or
    (2) Two times the current VA State Home Program per diem rate for 
domiciliary care.
    (c) Special need awards are subject to funds availability, the 
recipient meeting the performance goals as stated in the grant 
application, statutory and regulatory requirements, and annual 
inspections.
    (d) Special need capital grantees are not eligible for per diem 
payment under Sec.  61.33, as the special need per diem payment covers 
the cost of care.

(Authority: 38 U.S.C. 501, 2061)

Subpart E--Technical Assistance Grants


Sec.  61.50  Technical assistance grants--general.

    (a) General. VA provides technical assistance grants to entities or 
organizations with expertise in preparing grant applications relating 
to the provision of assistance for homeless veterans. The recipients 
must use the grants to provide technical assistance to nonprofit 
organizations with experience in providing assistance to homeless 
veterans in order to help such groups apply for grants under this part, 
or from any other source, for addressing the needs of homeless 
veterans. Current recipients of any grant under this part

[[Page 12612]]

(other than a technical assistance grant), or their sub-recipients, are 
ineligible for technical assistance grants.
    (b) Allowable activities. Technical assistance grant recipients may 
use grant funds for the following activities:
    (1) Group or individual ``how-to'' grant writing seminars, 
providing instructions on applying for a grant. Topics must include:
    (i) Determining eligibility;
    (ii) Matching the awarding agency's grant mission to the applicant 
agency's strengths;
    (iii) Meeting the specific grant outcome requirements;
    (iv) Creating measurable goals and objectives for grants;
    (v) Relating clear and concise grant project planning;
    (vi) Ensuring appropriate grant project staffing; and
    (vii) Demonstrating the applicant's abilities.
    (2) Creation and dissemination of ``how-to'' grant writing 
materials, i.e., compact disks, booklets, web pages or other media 
specifically designed to facilitate and instruct applicants in the 
completion of grant applications.
    (3) Group or individual seminars, providing instructions on the 
legal obligations associated with grant applications. Topics must 
include:
    (i) Office of Management and Budget (OMB) grant management 
circulars and forms, 2 CFR parts 215, 225, 230;
    (ii) Federal funding match and fund separation requirements; and
    (iii) Property and equipment disposition.
    (4) Telephone, video conferencing or email with potential grant 
applicants that specifically address grant application questions.
    (c) Unallowable activities. Technical assistance grant recipients 
may not use grant funds for the following activities:
    (1) Meetings, consortia, or any similar activity that does not 
assist community agencies in seeking grants to aid homeless veterans.
    (2) Referral of individual veterans to agencies for benefits, 
housing, medical assistance, or social services.
    (3) Lobbying.

(Authority: 38 U.S.C. 501 and 2064)


Sec.  61.51  Technical assistance grants--application packages.

    (a) To apply for a technical assistance grant, an applicant must 
obtain from VA, complete, and submit to VA a technical assistance grant 
application package within the time period established in the Notice of 
Fund Availability.
    (b) The technical assistance grant application package will require 
the following:
    (1) Documentation on eligibility to receive a technical assistance 
grant under this part;
    (2) A description of technical assistance that would be provided 
(see Sec.  61.50);
    (3) Documentation concerning the estimated operating costs and 
operating budget for the technical assistance program for which the 
grant is sought;
    (4) Documentation concerning expertise in preparing grant 
applications;
    (5) Documentation of resources committed to the provision of 
technical expertise;
    (6) Comments or recommendations by appropriate state (and area 
wide) clearinghouses pursuant to E.O. 12372 (3 CFR, 1982 Comp., p. 
197), if the applicant is a state; and
    (7) Reasonable assurances that:
    (i) The recipient will provide adequate financial and 
administrative support for providing the services set forth in the 
technical assistance grant application, and will actually provide such 
services; and
    (ii) The recipient will keep records and timely submit reports as 
required by VA, and will give VA, on demand, access to the records upon 
which such reports are based.

(Authority: 38 U.S.C. 501, 2064)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554)


Sec.  61.52  Technical assistance grant application packages--threshold 
requirements.

    The following threshold requirements for a technical assistance 
grant must be met, or the application will be rejected before being 
rated under Sec.  61.53:
    (a) The application must be complete and submitted on the correct 
form and in the time period established in the Notice of Fund 
Availability;
    (b) The applicant must establish expertise in preparing grant 
applications;
    (c) The activities for which assistance is requested must be 
eligible for funding under this part;
    (d) The applicant must demonstrate 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;
    (e) The applicant must not have an outstanding obligation to VA 
that is in arrears, or have an overdue or unsatisfactory response to an 
audit; and
    (f) The applicant must not have been notified by VA as being in 
default.

(Authority: 38 U.S.C. 501, 2064)


Sec.  61.53  Technical assistance grant application packages--rating 
criteria.

    (a) General. Applicants that meet the threshold requirements in 
Sec.  61.52 will then be rated using the selection criteria listed in 
paragraphs (b) and (c) of this section. To be eligible for a technical 
assistance grant, an applicant must receive at least 600 points (out of 
a possible 800).
    (b) Quality of the technical assistance. VA will award up to 400 
points based on the following:
    (1) How the recipients of technical training will increase their 
skill level regarding the completion of applications;
    (2) How the recipients of technical training will learn to find 
grant opportunities in a timely manner;
    (3) How the technical assistance provided will be monitored and 
evaluated and changes made, if needed; and
    (4) How the proposed technical assistance programs will be 
implemented in a timely fashion.
    (c) Ability of applicant to demonstrate expertise in preparing 
grant applications and to develop and operate a technical assistance 
program. VA will award up to 400 points based on the extent to which 
the application demonstrates all of the following:
    (1) Ability to find grants available for addressing the needs of 
homeless veterans.
    (2) Ability to find and offer technical assistance to entities 
eligible for such assistance.
    (3) Ability to administer a technical assistance program.
    (4) Ability to provide grant technical assistance.
    (5) Ability to evaluate the overall effectiveness of the technical 
assistance program and to make adjustments, if necessary, based on 
those evaluations.
    (6) Past performance. VA may use historical documents of past 
performance from both VA and non-VA, including those from other 
Federal, state and local agencies and audits by private or public 
entities in scoring technical assistance applications.


(Authority: 38 U.S.C. 501, 2064)

Sec.  61.54  Awarding technical assistance grants.

    (a) Applicants will first be grouped in categories according to the 
funding priorities set forth in the NOFA, if any. Applicants will then 
be ranked within their respective funding category, if applicable. The 
highest-ranked applications for which funding is available, within 
highest priority funding category if applicable, will be

[[Page 12613]]

selected to receive a technical assistance grant in accordance with 
their ranked order, as determined under Sec.  61.53. If funding 
priorities have been established and funds are still available after 
selection of those applicants in the highest priority group, VA will 
continue to conditionally select applicants in lower priority 
categories in accordance with the selection method set forth in this 
paragraph subject to available funding.
    (b) In the event of a tie between applicants, VA will use the score 
from Sec.  61.53(c) to determine the ranking.
    (c) For those applicants selected to receive a technical assistance 
grant, VA will execute an agreement and make payments to the grant 
recipient in accordance with Sec.  61.61.
    (d) The amount of the technical assistance grant will be the 
estimated total operational cost of the technical assistance over the 
life of the technical assistance grant award as specified in the 
technical assistance grant agreement. Payments may be made for no more 
than the period specified in the Notice of Fund Availability.
    (e) VA will not pay for sustenance or lodging for the nonprofit 
community participants or attendees at training conferences offered by 
technical assistance grant recipients; however, the grantee may use 
grant funds to recover such expenses.


(Authority: 38 U.S.C. 501, 2064)


Sec.  61.55  Technical assistance reports.

    Each technical assistance grantee must submit to VA a quarterly 
report describing the activities for which the technical assistance 
grant funds were used, including the type and amount of technical 
assistance provided and the number of nonprofit community-based groups 
served.


(Authority: 38 U.S.C. 501, 2064)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554)

Subpart F--Awards, Monitoring, and Enforcement of Agreements


Sec.  61.61  Agreement and funding actions.

    (a) Agreement. When VA selects an applicant for grant or per diem 
award under this part, VA will incorporate the requirements of this 
part into an agreement to be executed by VA and the applicant. VA will 
enforce the agreement through such action as may be appropriate, 
including temporarily withholding cash payments pending correction of a 
deficiency. Appropriate actions include actions in accordance with the 
VA common grant rules at 38 CFR parts 43 and 49 and the OMB Circulars, 
including those cited in Sec.  61.66.
    (b) Obligating funds. Upon execution of the agreement, VA will 
obligate funds to cover the amount of the approved grant/per diem, 
subject to the availability of funding. Payments will be for services 
rendered, contingent on submission of documentation in the form of 
invoices or purchase agreements and inspections, as VA deems necessary. 
VA will make payments on its own schedule to reimburse for amounts 
expended. Except for increases in the rate of per diem, VA will not 
increase the amount obligated for assistance under this part after the 
initial obligation of funds.
    (c) Deobligating funds. VA may deobligate all or parts of funds 
obligated under this part:
    (1) If the actual total cost for assistance is less than the total 
cost stated in the application; or
    (2) If the recipient fails to comply with the requirements of this 
part.
    (d) Deobligation procedure. Before deobligating funds under this 
section, VA will issue a notice of intent to terminate payments. The 
recipient will have 30 days to submit documentation demonstrating why 
payments should not be terminated. After review of any such 
documentation, VA will issue a final decision concerning termination of 
payment.
    (e) Other government funds. No funds provided under this part may 
be used to replace Federal, state or local funds previously used, or 
designated for use, to assist homeless veterans.


(Authority: 38 U.S.C. 501, 2011, 2012, 2061, 2064)

Sec.  61.62  Program changes.

    (a) Except as provided in paragraphs (b) through (d) of this 
section, a recipient may not make any significant changes to a project 
for which a grant has been awarded without prior written approval from 
the VA National Grant and Per Diem Program Office. Significant changes 
include, but are not limited to, a change in the recipient, a change in 
the project site (including relocating, adding an annex, a branch, or 
other expansion), additions or deletions of activities, shifts of funds 
from one approved type of activity to another, and a change in the 
category of participants to be served.
    (b) Recipients of grants involving both construction and non-
construction projects must receive prior written approval from the VA 
National Grant and Per Diem Program Office for cumulative transfers 
among direct cost categories which exceed or are expected to exceed 10 
percent of the current total approved budget.
    (c) Recipients of grants for projects involving both construction 
and non-construction who are state or local governments must receive 
prior written approval from the VA National Grant and Per Diem Program 
Office for any budget revision which would transfer funds between non-
construction and construction categories.
    (d) 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.
    (e) Any changes to an approved program must be fully documented in 
the recipient's records.
    (f) Recipients must inform the VA National Grant and Per Diem 
Program Office in writing of any key position and address changes in/of 
their organization within 30 days of the change, i.e., new executive 
director or chief financial officer, permanent change of address for 
corporate communications.


(Authority: 38 U.S.C. 501, 2011, 2012, 2061, 2064)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554).


Sec.  61.63  Procedural error.

    If an application would have been selected but for a procedural 
error committed by VA, VA may reconsider that application in the next 
funding round. A new application will not be required for this purpose 
so long as there is no material change in the information.


(Authority: 38 U.S.C. 501)

Sec.  61.64  Religious organizations.

    (a) Organizations that are religious or faith-based are eligible, 
on the same basis as any other organization, to participate in VA 
programs under this part. In the selection of service providers, 
neither the Federal Government nor a state or local government 
receiving funds under this part shall discriminate for or against an 
organization on the basis of the organization's religious character or 
affiliation.
    (b)(1) No organization may use direct financial assistance from VA 
under this part to pay for any of the following:
    (i) Inherently religious activities such as, religious worship, 
instruction, or proselytization; or

[[Page 12614]]

    (ii) Equipment or supplies to be used for any of those activities.
    (2) For purposes of this section, ``indirect financial assistance'' 
means Federal assistance in which a service provider receives program 
funds through a voucher, certificate, agreement or other form of 
disbursement, as a result of the independent and private choices of 
individual beneficiaries. ``Direct financial assistance'' means Federal 
aid in the form of a grant, contract, or cooperative agreement where 
the independent choices of individual beneficiaries do not determine 
which organizations receive program funds.
    (c) Organizations that engage in inherently religious activities, 
such as worship, religious instruction, or proselytization, must offer 
those services separately in time or location from any programs or 
services funded with direct financial assistance from VA, and 
participation in any of the organization's inherently religious 
activities must be voluntary for the beneficiaries of a program or 
service funded by direct financial assistance from VA.
    (d) A religious organization that participates in VA programs under 
this part will retain its independence from Federal, state, or local 
governments and may continue to carry out its mission, including the 
definition, practice and expression of its religious beliefs, provided 
that it does not use direct financial assistance from VA under this 
part to support any inherently religious activities, such as worship, 
religious instruction, or proselytization. Among other things, faith-
based organizations may use space in their facilities to provide VA-
funded services under this part, without removing religious art, icons, 
scripture, or other religious symbols. In addition, a VA-funded 
religious organization retains its authority over its internal 
governance, and it may retain religious terms in its organization's 
name, select its board members and otherwise govern itself on a 
religious basis, and include religious reference in its organization's 
mission statements and other governing documents.
    (e) An organization that participates in a VA program under this 
part shall not, in providing direct program assistance, discriminate 
against a program beneficiary or prospective program beneficiary 
regarding housing, supportive services, or technical assistance, on the 
basis of religion or religious belief.
    (f) If a state or local government voluntarily contributes its own 
funds to supplement Federally funded activities, the state or local 
government has the option to segregate the Federal funds or commingle 
them. However, if the funds are commingled, this provision applies to 
all of the commingled funds.
    (g) To the extent otherwise permitted by Federal law, the 
restrictions on inherently religious activities set forth in this 
section do not apply where VA funds are provided to religious 
organizations through indirect assistance as a result of a genuine and 
independent private choice of a beneficiary, provided the religious 
organizations otherwise satisfy the requirements of this part. A 
religious organization may receive such funds as the result of a 
beneficiary's genuine and independent choice if, for example, a 
beneficiary redeems a voucher, coupon, or certificate, allowing the 
beneficiary to direct where funds are to be paid, or a similar funding 
mechanism provided to that beneficiary and designed to give that 
beneficiary a choice among providers.


(Authority: 38 U.S.C. 501)

Sec.  61.65  Inspections.

    VA may inspect the facility and records of any applicant or 
recipient when necessary to determine compliance with this part or an 
agreement under Sec.  61.61. The authority to inspect does not 
authorize VA to manage or control the applicant or recipient.


(Authority: 38 U.S.C. 501, 2011, 2012, 2061, 2064)

Sec.  61.66  Financial management.

    (a) All recipients must comply with applicable requirements of the 
Single Audit Act Amendments of 1996, as implemented by OMB Circular A-
133 and codified at 38 CFR part 41.
    (b) All entities receiving assistance under this part must use a 
financial management system that follows generally accepted accounting 
principles and meets the requirements set forth under OMB Circular A-
102, Subpart C, section 20, codified at 38 CFR 43.20, for state and 
local government recipients, or under OMB Circular A-110, Subpart C, 
section 21, codified at 38 CFR 49.21 for nonprofit recipients. All 
recipients must implement the requirements of the appropriate OMB 
Circular for Cost-Principles (A-87 or A-122 codified at 2 CFR parts 225 
and 230, respectively) for determining costs reimbursable under all 
awards issued under this part.


(Authority: 38 U.S.C. 501)


Sec.  61.67  Recovery provisions.

    (a) Full recovery of capital grants. VA may recover from the grant 
recipient all of the grant amounts provided for the project if, after 3 
years after the date of an award of a capital grant, the grant 
recipient has withdrawn from the VA Homeless Providers Grant and Per 
Diem Program (Program), does not establish the project for which the 
grant was made, or has established the project for which the grant was 
made but has not passed final inspection. Where a recipient has no 
control over causes for delays in implementing a project, VA may extend 
the 3-year period, as appropriate. VA may obligate any recovered funds 
without fiscal year limitation.
    (b) Prorated (partial) recovery of capital grants. If a capital 
grant recipient is not subject to recovery under paragraph (a) of this 
section, VA will seek recovery of the grant amount on a prorated basis 
where the grant recipient ceases to provide services for which the 
grant was made or withdraws from the Program prior to the expiration of 
the applicable period of operation, which period shall begin on the 
date shown on the activation document produced by the VA National GPD 
Program. In cases where capital grant recipients have chosen not to 
receive per diem payments, the applicable period of operation shall 
begin on the date the VA Medical Center Director approved placement at 
the project site as shown on the inspection documents. The amount to be 
recaptured equals the total amount of the grant, multiplied by the 
fraction resulting from using the number of years the recipient was not 
operational as the numerator, and using the number of years of 
operation required under the following chart as the denominator.

------------------------------------------------------------------------
                                                               Years of
            Grant amount  (dollars in thousands)              operation
------------------------------------------------------------------------
0-250......................................................            7
251-500....................................................            8
501-750....................................................            9
751-1,000..................................................           10
1,001-1,250................................................           11
1,251-1,500................................................           12
1,501-1,750................................................           13
1,751-2,000................................................           14
2,001-2,250................................................           15
2,251-2,500................................................           16
2,501-2,750................................................           17
2,751-3,000................................................           18
Over 3,000.................................................           20
------------------------------------------------------------------------

     (c) Disposition of real property for capital grantees. In addition 
to being subject to recovery under paragraphs (a) and (b) of this 
section, capital grantees are subject to real property disposition

[[Page 12615]]

as required by 38 CFR 49.32 when the grantee no longer is providing 
services through a grant awarded under this part.
    (d) Recovery of per diem and non-capital grants. VA will seek to 
recover from the recipient of per diem, a special need non-capital 
grant, or a technical assistance grant any funds that are not used in 
accordance with the requirements of this part.
    (e) Notice. Before VA takes action to recover funds, VA will issue 
to the recipient a notice of intent to recover funds. The recipient 
will then have 30 days to submit documentation demonstrating why funds 
should not be recovered. After review of any such documentation, VA 
will issue a decision regarding whether action will be taken to recover 
funds.
    (f) Vans. All recovery provisions will apply to vans with the 
exception of the period of time for recovery. The period of time for 
recovery will be 7 years. Disposition provisions of 38 CFR 49.34 apply 
to vans. Grantees are required to notify the VA National Grant and Per 
Diem Program Office for disposition of any van funded under this part.


(Authority: 38 U.S.C. 501, 2011, 2012, 2061, 2064)

Sec.  61.80  General operation requirements for supportive housing and 
service centers.

    (a) Supportive housing and service centers for which assistance is 
provided under this part must comply with the requirements of the 
current edition of the Life Safety Code of the National Fire Protection 
Association and 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 supportive housing 
or service centers. Note: All facilities are to be protected throughout 
by an approved automatic sprinkler system unless a facility is 
specifically exempted under the Life Safety Code.
    (b) 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) 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) 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;
    (3) 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;
    (4) Each resident must be afforded appropriate space and security 
for themselves and their belongings, including an acceptable place to 
sleep that is in compliance with all applicable local, state, and 
federal requirements;
    (5) Every room or space must be provided with natural or mechanical 
ventilation and the structures must be free of pollutants in the air at 
levels that threaten the health of residents;
    (6) The water supply must be free from contamination;
    (7) Residents must have access to sufficient sanitary facilities 
that are in proper operating condition, that may be used in privacy, 
and that are adequate for personal cleanliness and the disposal of 
human waste;
    (8) The housing must have adequate heating and/or cooling 
facilities in proper operating condition;
    (9) The housing must have adequate natural or artificial 
illumination to permit normal indoor activities and to support the 
health and safety of residents and sufficient electrical sources must 
be provided to permit use of essential electrical appliances while 
assuring safety from fire;
    (10) All food preparation areas must contain suitable space and 
equipment to store, prepare, and serve food in a sanitary manner;
    (11) The housing and any equipment must be maintained in a sanitary 
manner;
    (12) The residents with disabilities must be provided meals or meal 
preparation facilities must be available;
    (13) Residential supervision from a paid staff member, volunteer, 
or senior resident participant must be provided 24 hours per day, 7 
days per week and for those times that a volunteer or senior resident 
participant is providing residential supervision a paid staff member 
must be on call for emergencies 24 hours a day 7 days a week (all 
supervision must be provided by individuals with sufficient knowledge 
for the position); and
    (14) Residents must be provided a clean and sober environment that 
is free from illicit drug use or from alcohol use that: could threaten 
the health and/or safety of the residents or staff; hinders the 
peaceful enjoyment of the premises; or jeopardizes completion of the 
grantee's project goals and objectives. Those supportive housing or 
service centers that provide medical or social detox at the same site 
as the supportive housing or service must ensure that those residents 
in detox are clearly separated from the general residential population.
    (c) Each recipient of assistance under this part must conduct an 
ongoing assessment of the supportive services needed by the residents 
of the project and the availability of such services, and make 
adjustments as appropriate. The recipient will provide evidence of this 
ongoing assessment to VA regarding the plan described in their grant 
application to include meeting their performance goals. This 
information will be incorporated into the annual inspection. Grantees 
must submit during the grant agreement period to VA, a quarterly 
technical performance report. A quarterly report must be filed once 
during each quarter and no later than January 30, April 30, July 30, 
and October 30. The report may be in any acceptable business format and 
must include the following information:
    (1) A comparison of actual accomplishments to established goals for 
the reporting period and response to any findings related to monitoring 
efforts. This comparison will be on the same level of detail as 
specified in the program approved in the grant document. It will 
address quantifiable as well as non-quantifiable goals.
    (2) If established goals have not been met, provide a detailed 
narrative explanation and an explanation of the corrective action(s) 
which will be taken, as well as a timetable for accomplishment of the 
corrective action(s).
    (3) Other pertinent information, including a description of grant-
related activities occurring during the report period. This may include 
personnel activity (hiring-training), community orientation/awareness 
activity, programmatic activity (job development). Also identify 
administrative and programmatic problems, which may affect performance 
and proposed solutions.
    (4) The quarterly technical performance report will be submitted to 
the VA National GPD Program Liaison assigned to the project, with each 
quarterly report being a cumulative report for the entire calendar 
year. All pages of the reporting documents should have the appropriate 
grant number and signature, where appropriate. VA National GPD Program 
Liaisons will file the report and corrective actions in the 
administrative file for the grant.
    (5) Between scheduled reporting dates, the recipient will also 
immediately inform the VA National GPD Program Liaison of any 
significant

[[Page 12616]]

developments affecting the recipient's ability to accomplish the work. 
VA National GPD Program Liaisons will provide grantees with necessary 
technical assistance, when and where appropriate as problems arise.
    (6) For each goal or objective listed in the grant application, 
grantees will be allowed a 15 percent deviation of each goal or 
objective. If the deviation is greater than 15 percent in any one goal 
or objective, a corrective action plan must be submitted to the VA 
National GPD Program Liaison. Failure to meet goals and objectives may 
result in withholding of placement, withholding of payment, suspension 
of payment and termination as outlined in this part or other applicable 
Federal statutes if the goal or objective would impact the program's 
ability to provide a successful outcome for veterans.
    (7) Corrective Action(s): When necessary, the grantee will 
automatically initiate a Corrective Action Plan (CAP). A CAP will be 
required if, on a quarterly basis, actual grant accomplishments vary by 
a margin of +/-15 percent or more from the planned goals and 
objectives. Please note that this is a general rule of thumb, and in 
some cases +/-15 percent deviations are beneficial to the program such 
as more placements into employment or training than planned, less cost 
per placement than planned, higher average wage at placement than 
planned, etc.
    (8) All +/-15 percent deviations from the planned goals that have a 
negative impact on the grantee's ability to accomplish planned goals 
must be fully explained in the grantee's quarterly technical report and 
a CAP is to be initiated, developed, and submitted by the grantee to 
the VA Liaison for approval.
    (9) The CAP must identify the activity or expenditure source which 
has the +/-15 percent deviation, describe the reason(s) for the 
variance, provide specific proposed corrective action(s), and a 
timetable for accomplishment of the corrective action. The plan may 
include an intent to modify the grant when appropriate.
    (10) The CAP will be submitted as an addendum to the quarterly 
technical report. After receipt of the CAP, the VA National GPD Program 
Liaison will send a letter to the grantee indicating that the CAP is 
approved or disapproved. If disapproved, VA Liaison will make 
beneficial suggestions to improve the proposed CAP and request 
resubmission until CAP is satisfactory to both parties.
    (d) A homeless veteran may remain in supportive housing for which 
assistance is provided under this part for a period no longer than 24 
months, except that a veteran may stay longer, if permanent housing for 
the veteran has not been located or if the veteran requires additional 
time to prepare for independent living. However, at any given time, no 
more than one-half of the veterans at such supportive housing facility 
may have resided at the facility for periods longer than 24 months.
    (e) 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 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.
    (f) 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.
    (g) Each recipient of assistance under this part shall establish 
procedures for fiscal control and fund accounting to ensure proper 
disbursement and accounting of assistance received under this part.
    (h) The recipient of assistance under this part that provides 
family violence prevention or treatment services must establish and 
implement procedures to ensure:
    (1) The confidentiality of records pertaining to any individual 
provided services, and
    (2) The confidentially of the address or location where the 
services are provided.
    (i) Each recipient of assistance under this part must maintain the 
confidentiality of records kept on homeless veterans receiving 
services.
    (j) VA may disapprove use of outpatient health services provided 
through the recipient if VA determines that such services are of 
unacceptable quality. Further, VA will not pay per diem where the 
Department concludes that services furnished by the recipient are 
unacceptable.
    (k) A service center for homeless veterans shall provide services 
to homeless veterans for a minimum of 40 hours per week over a minimum 
of 5 days per week, as well as provide services on an as-needed, 
unscheduled basis. The calculation of average hours shall include 
travel time for mobile service centers. 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; and
    (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.
    (l) Fixed site service centers will prominently post at or near the 
entrance to the service center their hours of operation and contacts in 
case of emergencies. Mobile service centers must take some action 
reasonably calculated to provide in advance a tentative schedule of 
visits (e.g., newspapers, fliers, public service announcements on 
television or radio). The schedule should include but is not limited 
to:
    (1) The region of operation;
    (2) Times of operation;
    (3) Expected services to be provided; and
    (4) Contacts for specific information and changes.
    (m) Each recipient that provides housing and services must have a 
written disaster plan that has been coordinated with the emergency 
management entity responsible for the locality in which the project 
exists. The plan must encompass natural and man-made disasters.
    (n) The recipient will inform within 24 hours its VA liaison of any 
sentinel events occurring within the program (i.e., drug overdose, 
death, injury).
    (o) The grantee, or sub-grantee, will provide appropriate 
orientation and training to staff to enable them to provide quality 
services that are appropriate to homeless veteran or homeless special 
need veteran population.

[[Page 12617]]

    (p) The grantee will maintain systematic participant enrollment 
information and participant tracking records designed to facilitate the 
uniform compilation and analysis of programmatic data necessary for 
verification of veteran status and case management, reporting, 
monitoring, and evaluation purposes.
    (q) The grantee will also document in each participant record at a 
minimum:
    (1) Family status.
    (2) Verification of veteran status (DD214, Department of Veterans 
Affairs confirmation report and/or identification card).
    (3) Education, employment history, and marketable skills/licenses/
credentials.
    (4) An Individual Service Plan (ISP) for each individual 
participant will be maintained in the participant case management 
record which contains the following:
    (i) An assessment of barriers, service needs, as well as strengths; 
and
    (ii) Specific services and referrals planned and benefits to be 
achieved as a result of program participation.
    (5) Duration and outcome of supportive service.
    (6) The grantee must verify service outcomes each calendar year 
quarter through the participant and provide documentation of this 
verification in the participant case management files.
    (r) The grantee will ensure that no more than 25 percent of the 
grant awarded beds are occupied by non-veterans, or VA may take actions 
as appropriate to decrease the beds, grant amounts, or terminate the 
grant and seek recapture in the case of capital funding. To calculate 
the occupancy rate, divide the actual number of bed days of care for 
veterans eligible to reside in the project, by the total number of 
possible bed days of care (the previous 180 days from the most current 
6 month period).


(Authority: 38 U.S.C. 501, 2011, 2012, 2061)


    (The Office of Management and Budget has approved the 
information collection requirements in this section under control 
number 2900-0554).


Sec.  61.81  Outreach activities.

    Recipients of capital grants and per diem relating to supportive 
housing or service centers must use their best efforts to ensure that 
eligible hard-to-reach veterans are found, engaged, and provided 
assistance. To achieve this goal, recipients may search for homeless 
veterans at places such as shelters, soup kitchens, parks, bus or train 
stations, and the streets. Outreach particularly should be directed 
toward veterans who have a nighttime residence that is an emergency 
shelter or a public or private place not ordinarily used as a regular 
sleeping accommodation for human beings (e.g., cars, streets, or 
parks).


(Authority: 38 U.S.C. 501, 2011, 2012, 2061)


Sec.  61.82  Participant fees for supportive housing.

    (a) Each participant of supportive housing may be required to pay a 
participant fee in an amount determined by the recipient, except that 
such participant fee may not exceed 30 percent of the participant's 
monthly income after deducting medical expenses, child care expenses, 
court ordered child support payments, or other court ordered payments; 
nor may it exceed the program's set maximum rate or the HUD Fair Market 
Rent for that type of housing and its location, whichever is less. The 
participant fee determination and collection process/procedures should 
be documented in the grant recipient's operating procedures to ensure 
consistency, fairness, and accuracy of fees collected. The 
participant's monthly income includes all income earned by or paid to 
the participant.
    (b) Retroactive benefit payments from any source to program 
participants, for the purpose of this part, may be considered income in 
the month received and therefore may be used in calculating the 
participant fee for that month.
    (c) Participant fees may be used for costs of operating the 
supportive housing or to assist supportive housing residents' move to 
permanent housing, and must have a therapeutic benefit.
    (d) In addition to a participant fee, recipients may charge 
residents reasonable fees for extracurricular services and activities 
(extracurricular fee) that participants are not required to receive 
under the terms of the grant award, are not paid for by VA per diem, or 
provided by VA. Extracurricular fees must be voluntary on the part of 
the participant.
    (e) In projects funded under this part where participants sign 
agreements, VA treats the costs associated with participant eviction to 
be as unallowable.
    (f) Use of participant agreements.
    (1) Participant agreements must be between the grant recipient of 
record and the program participant.
    (2) Participant agreements must be part of a therapeutic plan to 
increase self-determination and responsibility.
    (3) Participant agreements must include a clause that allows 
program participants the ability to break the lease or program 
agreement without penalty for medical or clinical necessity.
    (4) Participant agreements may not be used to exclude homeless 
veterans with little or no income from the program.
    (5) Participant agreements and conditions must be fully disclosed 
to potential participants and acknowledged in writing by both parties.

(Authority: 38 U.S.C. 501, 2011, 2012, 2061)


[FR Doc. 2013-04222 Filed 2-22-13; 8:45 am]
BILLING CODE 8320-01-P