Veterans Employment Pay for Success Grant Program, 37753-37756 [2020-11915]

Download as PDF Federal Register / Vol. 85, No. 122 / Wednesday, June 24, 2020 / Rules and Regulations (2) Filers may access eCRB at https:// app.crb.gov. The claims filing feature for claims to DART royalty payments will be available only during the months of January and February. * * * * * (d) List of claimants. If the claim is a joint claim, it must include the name of each claimant participating in the joint claim. Filers submitting joint claims on behalf of ten or fewer claimants, must list the name of each claimant included in the joint claim directly on the filed joint claim. Filers submitting joint claims on behalf of more than ten claimants must include an Excel spreadsheet listing the name of each claimant included in the joint claim. * * * * * § 360.23 ■ [Removed] 6. Remove § 360.23. § 360.24 [Redesignated as § 360.23 and Amended] 7. Redesignate § 360.24 as § 360.23 and, in newly redesignated § 360.23(b), add the words ‘‘online through eCRB’’ after the word ‘‘notice’’. ■ Subpart C—Rules of General Application 8. Amend § 360.30 by adding a sentence at the end of the paragraph to read as follows: ■ § 360.30 Amendment of claims. * * * All Notices of Amendment must be filed online through eCRB. ■ 9. Amend § 360.31 by adding a sentence at the end of the paragraph to read as follows: § 360.31 Withdrawal of claims. * * * All Notices of Withdrawal of Claim(s) must be filed online through eCRB. Dated: June 16, 2020. Jesse M. Feder, Chief United States Copyright Royalty Judge. Approved by: Carla Hayden, Librarian of Congress. [FR Doc. 2020–13554 Filed 6–23–20; 8:45 am] BILLING CODE 1410–72–P jbell on DSKJLSW7X2PROD with RULES DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 21 RIN 2900–AP72 Veterans Employment Pay for Success Grant Program AGENCY: Department of Veterans Affairs. VerDate Sep<11>2014 17:06 Jun 23, 2020 Jkt 250001 ACTION: Final rule. The Department of Veterans Affairs (VA) established a grant program (Veterans Employment Pay for Success (VEPFS)) to award grants to eligible entities to fund projects that are successful in accomplishing employment rehabilitation for Veterans with service-connected disabilities. VA will award grants on the basis of an eligible entity’s proposed use of a Pay for Success (PFS) strategy to achieve goals. This final rule adopts with changes an interim final rule that established regulations for awarding a VEPFS grant, including the general process for awarding the grant, criteria and parameters for evaluating grant applications, priorities related to the award of a grant, and general requirements and guidance for administering a VEPFS grant program. DATES: This rule is effective on June 24, 2020. FOR FURTHER INFORMATION CONTACT: Mike Frueh, Deputy Assistant Secretary, Planning and Performance Management, (008A), Department of Veterans Affairs, 810 Vermont Ave. NW, Washington, DC, (202) 632–8784. (This is not a toll-free number.) SUPPLEMENTARY INFORMATION: Section 3119 of title 38, United States Code, authorizes the Secretary of Veterans Affairs (Secretary) to make grants to or contract with public or nonprofit agencies, including institutions of higher learning, to advance ‘‘the knowledge, methods, techniques, and resources available for use in rehabilitation programs for veterans.’’ Section 3119 specifically authorizes the Secretary to make grants to such agencies to conduct or provide support for projects which are ‘‘designed to increase the resources and potential for accomplishing the rehabilitation of disabled veterans.’’ (See also implementing regulation at 38 CFR 21.390.) On August 10, 2016, VA published an interim final rule in the Federal Register, 81 FR 52770, under the authority of sec. 3119 establishing regulations for administering a VEPFS grant program to award grants to eligible entities to fund projects that are successful in accomplishing employment rehabilitation for Veterans with service-connected disabilities. In general, a PFS model is a strategy for successfully attaining positive social or environmental outcomes by paying for an intervention to achieve such outcomes only after the intervention produces these outcomes. The interim final rule included the general process SUMMARY: PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 37753 for awarding the grant, criteria and parameters for evaluating grant applications, priorities related to the award of a grant, and general requirements and guidance for administering a VEPFS grant program. VA provided a 60-day public comment period that ended on October 11, 2016, and received nine comments from a single entity. The first comment recommended amending the definition of ‘‘Employment outcome’’ to include outcomes that occur ‘‘during’’ as well as following the service period so that the PFS agreement reflects the benefits of the selected intervention while services are provided. In addition, this comment and the third comment recommended amending the definitions of ‘‘Employment outcome’’ and ‘‘Outcomes payments’’ to allow a PFS project evaluation to be based on a ‘‘comparison’’ group in addition to a ‘‘control’’ group so there is greater flexibility when structuring valid evaluation methodologies. VA agrees that if employment outcomes can be measured during the service period, an evaluator may be able to obtain useful information that could assist with determining whether employment outcomes have improved across the lifecycle of the project. It is feasible to assume that some outcomes may be achievable and measurable at any point during the lifecycle of the service period. VA believes measuring outcomes during the service period may allow for greater flexibility in transaction structuring for outcomes payments. In addition, VA agrees that basing a project evaluation on a comparison group or a control group will allow for greater flexibility in structuring evaluation methodologies. Having greater flexibility in this regard may allow for greater statistical power when measuring outcomes and benefit the VA program office when evaluating the impact of the outcomes on future rehabilitation policy and programming. Therefore, we are amending the definition of ‘‘Employment outcome’’ to reflect that it means the employment or earnings of a participant in an intervention group or a control or comparison group either during or after a service period. We are further amending this definition and the definition of ‘‘Outcomes payments’’ to indicate that comparison groups, in addition to control groups, may be used when structuring evaluation methodologies. The second comment proposed adding a definition of ‘‘Outcome metrics’’ and additional comments, including the sixth comment, E:\FR\FM\24JNR1.SGM 24JNR1 jbell on DSKJLSW7X2PROD with RULES 37754 Federal Register / Vol. 85, No. 122 / Wednesday, June 24, 2020 / Rules and Regulations recommended adding the language, ‘‘outcomes metrics or’’ before ‘‘target levels’’ in a number of the regulatory sections in this rulemaking. ‘‘Outcomes metrics or target levels’’ as a phrase does not make sense. Outcomes are a kind of result of interventional or noninterventional activities. Targets are a hoped-for level of achievement for various outcomes, or a characteristic of outcomes, and are not part of an ‘‘either/ or’’ option. Therefore, we will not add the language ‘‘outcomes metrics or’’ to any of the regulatory provisions in this rulemaking. Because we are not adding this proposed language, there is no need to add a definition for ‘‘Outcome metrics.’’ The fourth comment recommended clarifying that the project partnership may be memorialized in more than one agreement. We are amending the definition of project partnership to reflect that it may consist of multiple agreements because allowing for multiple agreements will provide the project partnership with greater flexibility. The fifth comment recommended allowing each VEPFS grant to establish the minimum and maximum number of years rather than requiring a minimum 5-year period for all VEPFS grants. VA’s original vision for pay for success programming did not account for projects that may have a shorter duration, such as feasibility studies or studies that may require long-term evaluation of certain employment outcomes. To accommodate a broader range of PFS projects with the increased potential for better outcomes, VA agrees that performance period minimums or maximums should be established on a per grant program basis. Thus, we are amending § 21.442(c) to allow each VEPFS grant agreement to establish the project duration instead of setting a required minimum period. The seventh comment proposed to eliminate the requirement that grantees procure investors in a government acquisition process following procurement standards set forth in 2 CFR 200.317–200.326. The commenter explained that, in typical PFS arrangements to which it has been a party, investors are not ‘‘procured’’ and are not a party to the PFS agreement. Typically, the government is not a party to the investor financing agreements and does not negotiate directly with investors. The commenter explained that investors do not provide services to the government, but fund services to be provided by the service provider and bear the risk that the intervention will not achieve the agreed upon outcomes metrics. Thus, investors are recruited or VerDate Sep<11>2014 16:17 Jun 23, 2020 Jkt 250001 engaged in a manner that befits their role as risk-bearing entities in the PFS model. We agree to eliminate the requirement that grant recipients ‘‘procure’’ investors and follow procurement standards set forth in 2 CFR 200.317–200.326. Although the uniform grant regulations at 2 CFR part 200 apply to recipients (and subrecipients) of the PFS grants, they do not contemplate investors as playing a part in the grant agreement or carrying out the purposes of the grant. The procurement of goods and services by way of contract is a key factor in creating a procurement relationship. See 2 CFR 200.330(b). The Federal Acquisition Regulations defining ‘‘procurement’’ and ‘‘acquisition’’ support the position that investors and investments of capital are not ‘‘procured.’’ As the commenter explained, because investors supply money/funding, and do not provide goods or services, obtaining investments is not an acquisition or procurement as contemplated by the uniform grant regulations. While the funding investors provide is used to procure goods or services necessary to carry out the grant’s purpose, neither the investor nor the funding is a good or service that is procured. Therefore, the uniform grant regulations at 2 CFR part 200 should not apply, and we agree to exclude ‘‘investors’’ from the requirement in § 21.445(b) that partner entities be procured following procurement standards set forth in 2 CFR 200.317– 200.326. The eighth comment proposed to not require grantees to identify investors at the time of application. We see no reason why grantees should not be able to identify investors at the time of application and the commenter has provided no convincing reason. We do not believe that excluding investors from the procurement requirement supports the argument that investors should be identified later in the grant process. Furthermore, identifying investors later in the process would introduce uncertainty into the overall viability of the applicant’s proposed project. Accordingly, we will not make any changes based on this comment. The ninth comment proposed to allow VA and an applicant to negotiate a cooperative agreement or a grant agreement to provide flexibility in finalizing the terms of the VEPFS grant. As stated above, sec. 3119 provides the authority for the Secretary to make these VEPFS grants. It also provides authority for the Secretary to contract with entities to fund projects that are successful in accomplishing rehabilitation for Veterans with service- PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 connected disabilities. However, there is no authority for the Secretary to enter into cooperative agreements to fund such projects. As VA has no authority to enter cooperative agreements for this purpose, we must decline to change the regulations to allow for the negotiation of cooperative agreements between an applicant and VA. Based on the rationale set forth in the interim final rule and in this document, VA is adopting the provisions of the interim final rule as a final rule with changes, as noted above. Administrative Procedure Act The Secretary is issuing this rule because there is a need to find new methods for rehabilitating Veterans with service-connected disabilities to become employable and obtain and maintain suitable employment. This rulemaking serves an important Veterans’ need in an economical way because it provides the opportunity for discovering such new methods using a strategy that will save taxpayer money. However, funding for a grant awarded under these regulations was available to be obligated within a limited timeframe. Therefore, it was impracticable and contrary to the public interest to delay the rule for the purpose of soliciting advance public comment or to have a delayed effective date. Accordingly, VA issued an interim final rule with an immediate effective date and is now issuing this final rule after having considered the comments submitted. Executive Orders 12866, 13563 and 13771 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. The Office of Information and Regulatory Affairs has determined that this rule is not a significant regulatory action under Executive Order 12866. VA’s impact analysis can be found as a supporting document at http:// www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA’s website at http:// E:\FR\FM\24JNR1.SGM 24JNR1 Federal Register / Vol. 85, No. 122 / Wednesday, June 24, 2020 / Rules and Regulations www.va.gov/orpm/, by following the link for ‘‘VA Regulations Published From FY 2004 Through Fiscal Year to Date.’’ This final rule is considered an E.O. 13771 regulatory action. Details on the estimated costs of this final rule can be found in the rule’s economic analysis. Paperwork Reduction Act Although this action contains provisions constituting collections of information at 38 CFR 21.445, 21.447, and 21.448, under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521), no new or proposed revised collections of information are associated with this final rule. The information collection requirements for §§ 21.445, 21.447, and 21.448 are currently approved by OMB and have been assigned OMB control number 2900–0847. jbell on DSKJLSW7X2PROD with RULES 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). The Secretary estimates that, for any VEPFS grant program, no more than ten nonrenewable grants will be awarded. For each grant awarded, usually one of each, but no more than a few, outcomes payors, project coordinators, evaluators, investors, and service providers will be involved with the grant program. The goal of these grants is to rehabilitate Veterans with service-connected disabilities with regard to employment. Thus, an insubstantial number of small entities will be affected by this final rule and, accordingly, there will not be a significant economic impact on such affected entities. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector. Congressional Review Act Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of VerDate Sep<11>2014 16:17 Jun 23, 2020 Jkt 250001 Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2). Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance number and title for the program affected by this document is 64.116, Vocational Rehabilitation for Disabled Veterans. List of Subjects in 38 CFR Part 21 Administrative practice and procedure, Armed forces, Civil rights, Claims, Colleges and universities, Conflict of interests, Defense Department, Education, Employment, Grant programs—education, Grant programs—veterans, Health care, Loan programs—education, Loan programs— veterans, Manpower training programs, Reporting and recordkeeping requirements, Schools, Travel and transportation expenses, Veterans, Vocational education, Vocational rehabilitation. Signing Authority The Secretary of Veterans Affairs approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Pamela Powers, Chief of Staff, Performing the Delegable Duties of the Deputy Secretary, Department of Veterans Affairs, approved this document on April 13, 2020, for publication. Jeffrey M. Martin, Assistant Director, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs. Accordingly, the interim final rule amending 38 CFR part 21, which published at 81 FR 52770 on August 10, 2016, is adopted as final with the following changes: PART 21—VOCATIONAL REHABILITATION AND EDUCATION Subpart A—Vocational Rehabilitation and Employment Under 38 U.S.C. Chapter 31 1. The authority citation for part 21, subpart A, continues to read as follows: ■ Authority: 38 U.S.C. 501(a), chs. 18, 31, and as noted in specific sections. 2. In § 21.441, revise the definitions of ‘‘Employment outcome’’ and ‘‘Outcomes payments’’ and the introductory text of the definition of ‘‘Project partnership’’ to read as follows: ■ § 21.441 * PO 00000 * Definitions. * Frm 00025 * Fmt 4700 * Sfmt 4700 37755 Employment outcome is the employment or earnings of a participant in an intervention group or control or comparison group during or after the service period. Improving employment outcomes means creating positive impact in terms of these outcomes, where the results for individuals that receive the intervention are better than the results for a valid control or comparison group that did not receive the intervention. * * * * * Outcomes payments are funds that are paid to an investor or service provider and that are released only for the achievement of outcomes, as compared to those of a control or comparison group, that meet target levels that have been agreed to in advance of the provision of intervention (i.e., if positive impact has been created by the intervention in terms of these outcomes). When investors have provided the upfront capital for the project, these payments generally cover repayment of the principal investment and provide a modest return on investment for any associated risks of paying for the intervention upfront. * * * * * Project partnership is a collaboration among entities that negotiate one or more agreements and execute a project to improve employment outcomes for Veterans with service-connected disabilities. The entities that may be involved in a project partnership include: * * * * * 3. In § 21.442, revise paragraph (c) to read as follows: ■ § 21.442 VEPFS grants—general. * * * * * (c) A VEPFS grant will be awarded for a minimum and maximum number of years that is specified in the VEPFS grant agreement, beginning on the date on which the VEPFS grant is awarded, with the availability of no-cost extensions. * * * * * 4. In § 21.445, revise paragraph (b) to read as follows: ■ § 21.445 Application. * * * * * (b) Description of anticipated project partnership(s), including the responsibilities of each of the partner entities, the experience of any involved entities with serving Veteran populations, and other qualifications of the involved entities that may be relevant in carrying out responsibilities of the project partnership. In E:\FR\FM\24JNR1.SGM 24JNR1 37756 Federal Register / Vol. 85, No. 122 / Wednesday, June 24, 2020 / Rules and Regulations establishing the project partnership, entities, including the project coordinator, evaluator, and service provider, but excluding investors, must be procured following procurement standards set forth in 2 CFR 200.317 through 200.326. * * * * * [FR Doc. 2020–11915 Filed 6–23–20; 8:45 am] BILLING CODE 8320–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 81 Table of Contents [EPA–R09–OAR–2020–0151; FRL–10010– 56–Region 9] Finding of Failure To Attain the 1987 24-Hour PM10 Standard; Reclassification as Serious Nonattainment; Pinal County, Arizona Environmental Protection Agency (EPA). ACTION: Final rule. AGENCY: The Environmental Protection Agency (EPA) is taking final action to determine that the West Pinal County, Arizona nonattainment area did not attain the 1987 24-hour national ambient air quality standards (NAAQS or ‘‘standard’’) for particulate matter with a diameter of ten micrometers or smaller (PM10) by December 31, 2018, the statutory attainment date for the nonattainment area. This action is based on the EPA’s calculation of the PM10 design value for the nonattainment area over the 2016–2018 period, using complete, quality-assured, and certified PM10 monitoring data. With this final determination that West Pinal County has failed to attain the PM10 NAAQS by its attainment date, the Clean Air Act (CAA) section 188(b)(2) requires that the nonattainment area be reclassified to Serious by operation of law. Within 18 months from the effective date of this reclassification to Serious, the State must submit State Implementation Plan (SIP) revisions that comply with the statutory and regulatory requirements for Serious PM10 nonattainment areas. DATES: This rule will be effective on July 24, 2020. ADDRESSES: The EPA has established a docket for this action under Docket ID No. EPA–R09–OAR–2020–0151. All documents in the docket are listed on the https://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. jbell on DSKJLSW7X2PROD with RULES SUMMARY: VerDate Sep<11>2014 17:06 Jun 23, 2020 Jkt 250001 Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available through https:// www.regulations.gov, or please contact the person identified in the FOR FURTHER INFORMATION CONTACT section for additional availability information. FOR FURTHER INFORMATION CONTACT: Jerry Wamsley, EPA Region IX, (415) 947– 4111, wamsley.jerry@epa.gov. SUPPLEMENTARY INFORMATION: Throughout this document, ‘‘we’’, ‘‘us’’, and ‘‘our’’ refer to the EPA. I. Summary of the Proposed Action II. Public Comments and EPA Responses III. Final Action IV. Statutory and Executive Order Reviews I. Summary of the Proposed Action On April 7, 2020, the EPA proposed to determine that the West Pinal County nonattainment area failed to attain the 1987 24-hour PM10 NAAQS by December 31, 2018, the statutory attainment date for the area.1 For a PM10 nonattainment area classified as Moderate under the CAA, such as the West Pinal County area, section 188(c) of the CAA states that the area’s attainment date is ‘‘as expeditiously as practicable, but no later than the end of the sixth calendar year after the area’s designation as nonattainment.’’ Consequently, the applicable attainment date for West Pinal County, designated nonattainment in 2012, was December 31, 2018. CAA section 188(b)(2) requires the EPA to determine whether any PM10 nonattainment area classified as Moderate attained the 24-hour PM10 NAAQS by the area’s attainment date and requires the EPA to make such a determination within six months after that date. Our proposed determination that the West Pinal County area failed to attain the PM10 NAAQS was based on complete, quality-assured, and certified PM10 monitoring data for the appropriate three-year period, 2016– 2018. As discussed in our proposal, an area attains the 24-hour PM10 standard of 150 micrograms per cubic meter (mg/ m3) when the expected number of days per calendar year with a 24-hour concentration exceeding the standard, referred to as an ‘‘exceedance’’, averaged over a three-year period is equal to or less than one. In our proposal, the EPA’s evaluation of whether the West Pinal County nonattainment area has met the 1987 241 85 PO 00000 FR 19408 (April 7, 2020). Frm 00026 Fmt 4700 Sfmt 4700 hour PM10 NAAQS was based on our review of the monitoring data, the adequacy of the PM10 monitoring network in the nonattainment area, and the reliability of the data collected by that network. The PM10 standard is attained when the expected number of exceedances, averaged over a three-year period, is less than or equal to one. The expected number of exceedances averaged over a three-year period at any given monitor is known as the PM10 design value for that site. The PM10 design value for the nonattainment area is the highest design value from a monitor within that area. Three consecutive years of air quality data are required to show attainment of the PM10 standard. We reviewed the 2018 PM10 design values for all regulatory monitoring sites measuring PM10 within the West Pinal County nonattainment area, expressed as a single value representing the average expected exceedances over the three-year period, 2016–2018.2 The PM10 data showed that the design values at multiple monitoring sites are greater than 1.0 estimated annual average exceedances of the 1987 24-hour PM10 NAAQS. Consequently, the EPA proposed to determine, based upon three years of complete, quality-assured and certified data from 2016–2018, that the West Pinal County nonattainment area did not attain the 1987 24-hour PM10 NAAQS by the applicable attainment date of December 31, 2018. In our proposal to determine that the West Pinal County area did not attain the NAAQS by the relevant attainment date, the EPA noted that the consequence of our determination is that the West Pinal County area will be reclassified as a Serious PM10 nonattainment area by operation of law and will be subject to all applicable Serious area attainment planning and nonattainment New Source Review requirements. This includes the requirement to submit a Serious area air quality plan within 18 months of the effective date of our final rule, per section 189(b)(2) of the CAA. This Serious area air quality plan must demonstrate attainment of the 24-hour PM10 NAAQS by December 31, 2022, ten years after the area’s designation to nonattainment, per section 188(c)(2) of the CAA. 2 A design value is calculated using a specific methodology from monitored air quality data and is used to compare an area’s air quality to a NAAQS. The methodologies for calculating expected exceedances for the 24-hour PM10 NAAQS are found in 40 CFR part 50, Appendix K, Section 2.1(a). E:\FR\FM\24JNR1.SGM 24JNR1

Agencies

[Federal Register Volume 85, Number 122 (Wednesday, June 24, 2020)]
[Rules and Regulations]
[Pages 37753-37756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11915]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AP72


Veterans Employment Pay for Success Grant Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) established a grant 
program (Veterans Employment Pay for Success (VEPFS)) to award grants 
to eligible entities to fund projects that are successful in 
accomplishing employment rehabilitation for Veterans with service-
connected disabilities. VA will award grants on the basis of an 
eligible entity's proposed use of a Pay for Success (PFS) strategy to 
achieve goals. This final rule adopts with changes an interim final 
rule that established regulations for awarding a VEPFS grant, including 
the general process for awarding the grant, criteria and parameters for 
evaluating grant applications, priorities related to the award of a 
grant, and general requirements and guidance for administering a VEPFS 
grant program.

DATES: This rule is effective on June 24, 2020.

FOR FURTHER INFORMATION CONTACT: Mike Frueh, Deputy Assistant 
Secretary, Planning and Performance Management, (008A), Department of 
Veterans Affairs, 810 Vermont Ave. NW, Washington, DC, (202) 632-8784. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: Section 3119 of title 38, United States 
Code, authorizes the Secretary of Veterans Affairs (Secretary) to make 
grants to or contract with public or nonprofit agencies, including 
institutions of higher learning, to advance ``the knowledge, methods, 
techniques, and resources available for use in rehabilitation programs 
for veterans.'' Section 3119 specifically authorizes the Secretary to 
make grants to such agencies to conduct or provide support for projects 
which are ``designed to increase the resources and potential for 
accomplishing the rehabilitation of disabled veterans.'' (See also 
implementing regulation at 38 CFR 21.390.)
    On August 10, 2016, VA published an interim final rule in the 
Federal Register, 81 FR 52770, under the authority of sec. 3119 
establishing regulations for administering a VEPFS grant program to 
award grants to eligible entities to fund projects that are successful 
in accomplishing employment rehabilitation for Veterans with service-
connected disabilities. In general, a PFS model is a strategy for 
successfully attaining positive social or environmental outcomes by 
paying for an intervention to achieve such outcomes only after the 
intervention produces these outcomes. The interim final rule included 
the general process for awarding the grant, criteria and parameters for 
evaluating grant applications, priorities related to the award of a 
grant, and general requirements and guidance for administering a VEPFS 
grant program. VA provided a 60-day public comment period that ended on 
October 11, 2016, and received nine comments from a single entity.
    The first comment recommended amending the definition of 
``Employment outcome'' to include outcomes that occur ``during'' as 
well as following the service period so that the PFS agreement reflects 
the benefits of the selected intervention while services are provided. 
In addition, this comment and the third comment recommended amending 
the definitions of ``Employment outcome'' and ``Outcomes payments'' to 
allow a PFS project evaluation to be based on a ``comparison'' group in 
addition to a ``control'' group so there is greater flexibility when 
structuring valid evaluation methodologies. VA agrees that if 
employment outcomes can be measured during the service period, an 
evaluator may be able to obtain useful information that could assist 
with determining whether employment outcomes have improved across the 
lifecycle of the project. It is feasible to assume that some outcomes 
may be achievable and measurable at any point during the lifecycle of 
the service period. VA believes measuring outcomes during the service 
period may allow for greater flexibility in transaction structuring for 
outcomes payments. In addition, VA agrees that basing a project 
evaluation on a comparison group or a control group will allow for 
greater flexibility in structuring evaluation methodologies. Having 
greater flexibility in this regard may allow for greater statistical 
power when measuring outcomes and benefit the VA program office when 
evaluating the impact of the outcomes on future rehabilitation policy 
and programming. Therefore, we are amending the definition of 
``Employment outcome'' to reflect that it means the employment or 
earnings of a participant in an intervention group or a control or 
comparison group either during or after a service period. We are 
further amending this definition and the definition of ``Outcomes 
payments'' to indicate that comparison groups, in addition to control 
groups, may be used when structuring evaluation methodologies.
    The second comment proposed adding a definition of ``Outcome 
metrics'' and additional comments, including the sixth comment,

[[Page 37754]]

recommended adding the language, ``outcomes metrics or'' before 
``target levels'' in a number of the regulatory sections in this 
rulemaking. ``Outcomes metrics or target levels'' as a phrase does not 
make sense. Outcomes are a kind of result of interventional or non-
interventional activities. Targets are a hoped-for level of achievement 
for various outcomes, or a characteristic of outcomes, and are not part 
of an ``either/or'' option. Therefore, we will not add the language 
``outcomes metrics or'' to any of the regulatory provisions in this 
rulemaking. Because we are not adding this proposed language, there is 
no need to add a definition for ``Outcome metrics.''
    The fourth comment recommended clarifying that the project 
partnership may be memorialized in more than one agreement. We are 
amending the definition of project partnership to reflect that it may 
consist of multiple agreements because allowing for multiple agreements 
will provide the project partnership with greater flexibility.
    The fifth comment recommended allowing each VEPFS grant to 
establish the minimum and maximum number of years rather than requiring 
a minimum 5-year period for all VEPFS grants. VA's original vision for 
pay for success programming did not account for projects that may have 
a shorter duration, such as feasibility studies or studies that may 
require long-term evaluation of certain employment outcomes. To 
accommodate a broader range of PFS projects with the increased 
potential for better outcomes, VA agrees that performance period 
minimums or maximums should be established on a per grant program 
basis. Thus, we are amending Sec.  21.442(c) to allow each VEPFS grant 
agreement to establish the project duration instead of setting a 
required minimum period.
    The seventh comment proposed to eliminate the requirement that 
grantees procure investors in a government acquisition process 
following procurement standards set forth in 2 CFR 200.317-200.326. The 
commenter explained that, in typical PFS arrangements to which it has 
been a party, investors are not ``procured'' and are not a party to the 
PFS agreement. Typically, the government is not a party to the investor 
financing agreements and does not negotiate directly with investors. 
The commenter explained that investors do not provide services to the 
government, but fund services to be provided by the service provider 
and bear the risk that the intervention will not achieve the agreed 
upon outcomes metrics. Thus, investors are recruited or engaged in a 
manner that befits their role as risk-bearing entities in the PFS 
model.
    We agree to eliminate the requirement that grant recipients 
``procure'' investors and follow procurement standards set forth in 2 
CFR 200.317-200.326. Although the uniform grant regulations at 2 CFR 
part 200 apply to recipients (and subrecipients) of the PFS grants, 
they do not contemplate investors as playing a part in the grant 
agreement or carrying out the purposes of the grant. The procurement of 
goods and services by way of contract is a key factor in creating a 
procurement relationship. See 2 CFR 200.330(b). The Federal Acquisition 
Regulations defining ``procurement'' and ``acquisition'' support the 
position that investors and investments of capital are not 
``procured.'' As the commenter explained, because investors supply 
money/funding, and do not provide goods or services, obtaining 
investments is not an acquisition or procurement as contemplated by the 
uniform grant regulations. While the funding investors provide is used 
to procure goods or services necessary to carry out the grant's 
purpose, neither the investor nor the funding is a good or service that 
is procured. Therefore, the uniform grant regulations at 2 CFR part 200 
should not apply, and we agree to exclude ``investors'' from the 
requirement in Sec.  21.445(b) that partner entities be procured 
following procurement standards set forth in 2 CFR 200.317-200.326.
    The eighth comment proposed to not require grantees to identify 
investors at the time of application. We see no reason why grantees 
should not be able to identify investors at the time of application and 
the commenter has provided no convincing reason. We do not believe that 
excluding investors from the procurement requirement supports the 
argument that investors should be identified later in the grant 
process. Furthermore, identifying investors later in the process would 
introduce uncertainty into the overall viability of the applicant's 
proposed project. Accordingly, we will not make any changes based on 
this comment.
    The ninth comment proposed to allow VA and an applicant to 
negotiate a cooperative agreement or a grant agreement to provide 
flexibility in finalizing the terms of the VEPFS grant. As stated 
above, sec. 3119 provides the authority for the Secretary to make these 
VEPFS grants. It also provides authority for the Secretary to contract 
with entities to fund projects that are successful in accomplishing 
rehabilitation for Veterans with service-connected disabilities. 
However, there is no authority for the Secretary to enter into 
cooperative agreements to fund such projects. As VA has no authority to 
enter cooperative agreements for this purpose, we must decline to 
change the regulations to allow for the negotiation of cooperative 
agreements between an applicant and VA.
    Based on the rationale set forth in the interim final rule and in 
this document, VA is adopting the provisions of the interim final rule 
as a final rule with changes, as noted above.

Administrative Procedure Act

    The Secretary is issuing this rule because there is a need to find 
new methods for rehabilitating Veterans with service-connected 
disabilities to become employable and obtain and maintain suitable 
employment. This rulemaking serves an important Veterans' need in an 
economical way because it provides the opportunity for discovering such 
new methods using a strategy that will save taxpayer money. However, 
funding for a grant awarded under these regulations was available to be 
obligated within a limited timeframe. Therefore, it was impracticable 
and contrary to the public interest to delay the rule for the purpose 
of soliciting advance public comment or to have a delayed effective 
date. Accordingly, VA issued an interim final rule with an immediate 
effective date and is now issuing this final rule after having 
considered the comments submitted.

Executive Orders 12866, 13563 and 13771

    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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866.
    VA's impact analysis can be found as a supporting document at 
http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's website at 
http://

[[Page 37755]]

www.va.gov/orpm/, by following the link for ``VA Regulations Published 
From FY 2004 Through Fiscal Year to Date.''
    This final rule is considered an E.O. 13771 regulatory action. 
Details on the estimated costs of this final rule can be found in the 
rule's economic analysis.

Paperwork Reduction Act

    Although this action contains provisions constituting collections 
of information at 38 CFR 21.445, 21.447, and 21.448, under the 
provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521), no new or proposed revised collections of information are 
associated with this final rule. The information collection 
requirements for Sec. Sec.  21.445, 21.447, and 21.448 are currently 
approved by OMB and have been assigned OMB control number 2900-0847.

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). The Secretary estimates that, for any VEPFS grant program, no 
more than ten non-renewable grants will be awarded. For each grant 
awarded, usually one of each, but no more than a few, outcomes payors, 
project coordinators, evaluators, investors, and service providers will 
be involved with the grant program. The goal of these grants is to 
rehabilitate Veterans with service-connected disabilities with regard 
to employment. Thus, an insubstantial number of small entities will be 
affected by this final rule and, accordingly, there will not be a 
significant economic impact on such affected entities. Therefore, 
pursuant to 5 U.S.C. 605(b), the initial and final regulatory 
flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

Unfunded Mandates

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

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 64.116, Vocational Rehabilitation 
for Disabled Veterans.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict of interests, Defense 
Department, Education, Employment, Grant programs--education, Grant 
programs--veterans, Health care, Loan programs--education, Loan 
programs--veterans, Manpower training programs, Reporting and 
recordkeeping requirements, Schools, Travel and transportation 
expenses, Veterans, Vocational education, Vocational rehabilitation.

Signing Authority

    The Secretary of Veterans Affairs approved this document and 
authorized the undersigned to sign and submit the document to the 
Office of the Federal Register for publication electronically as an 
official document of the Department of Veterans Affairs. Pamela Powers, 
Chief of Staff, Performing the Delegable Duties of the Deputy 
Secretary, Department of Veterans Affairs, approved this document on 
April 13, 2020, for publication.

Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
the Secretary, Department of Veterans Affairs.

    Accordingly, the interim final rule amending 38 CFR part 21, which 
published at 81 FR 52770 on August 10, 2016, is adopted as final with 
the following changes:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart A--Vocational Rehabilitation and Employment Under 38 U.S.C. 
Chapter 31

0
1. The authority citation for part 21, subpart A, continues to read as 
follows:

    Authority: 38 U.S.C. 501(a), chs. 18, 31, and as noted in 
specific sections.


0
2. In Sec.  21.441, revise the definitions of ``Employment outcome'' 
and ``Outcomes payments'' and the introductory text of the definition 
of ``Project partnership'' to read as follows:


Sec.  21.441  Definitions.

* * * * *
    Employment outcome is the employment or earnings of a participant 
in an intervention group or control or comparison group during or after 
the service period. Improving employment outcomes means creating 
positive impact in terms of these outcomes, where the results for 
individuals that receive the intervention are better than the results 
for a valid control or comparison group that did not receive the 
intervention.
* * * * *
    Outcomes payments are funds that are paid to an investor or service 
provider and that are released only for the achievement of outcomes, as 
compared to those of a control or comparison group, that meet target 
levels that have been agreed to in advance of the provision of 
intervention (i.e., if positive impact has been created by the 
intervention in terms of these outcomes). When investors have provided 
the upfront capital for the project, these payments generally cover 
repayment of the principal investment and provide a modest return on 
investment for any associated risks of paying for the intervention 
upfront.
* * * * *
    Project partnership is a collaboration among entities that 
negotiate one or more agreements and execute a project to improve 
employment outcomes for Veterans with service-connected disabilities. 
The entities that may be involved in a project partnership include:
* * * * *


0
3. In Sec.  21.442, revise paragraph (c) to read as follows:


Sec.  21.442  VEPFS grants--general.

* * * * *
    (c) A VEPFS grant will be awarded for a minimum and maximum number 
of years that is specified in the VEPFS grant agreement, beginning on 
the date on which the VEPFS grant is awarded, with the availability of 
no-cost extensions.
* * * * *


0
4. In Sec.  21.445, revise paragraph (b) to read as follows:


Sec.  21.445  Application.

* * * * *
    (b) Description of anticipated project partnership(s), including 
the responsibilities of each of the partner entities, the experience of 
any involved entities with serving Veteran populations, and other 
qualifications of the involved entities that may be relevant in 
carrying out responsibilities of the project partnership. In

[[Page 37756]]

establishing the project partnership, entities, including the project 
coordinator, evaluator, and service provider, but excluding investors, 
must be procured following procurement standards set forth in 2 CFR 
200.317 through 200.326.
* * * * *
[FR Doc. 2020-11915 Filed 6-23-20; 8:45 am]
BILLING CODE 8320-01-P