[Federal Register Volume 77, Number 36 (Thursday, February 23, 2012)]
[Rules and Regulations]
[Pages 10663-10665]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4234]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 59

RIN 2900-AN77


Due Date of Initial Application Requirements for State Home 
Construction Grants

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This final rule amends the Department of Veterans Affairs (VA) 
regulations concerning the calendar date by which VA must receive an 
initial application for a State Home Construction Grant in order for 
the application to be included on the priority list for the award of 
grants during the next fiscal year. We require that initial application 
materials must be received by VA no later than April 15, instead of 
August 15, of the year before the fiscal year in which the application 
would be considered for inclusion on the priority list for the award of 
grants. We require certification of State matching funds to be 
submitted no later than August 1, instead of August 15, in order for 
the project to be placed in priority group 1 of the priority list for 
the next fiscal year. The purpose of these changes is to ensure that VA 
has sufficient time to process all applications received and timely 
prepare the priority list, so that we can accurately notify States that 
VA intends to select and fund particular projects. We also make 
technical revisions to conform our regulations to these revisions.

DATES: This final rule is effective March 26, 2012.

FOR FURTHER INFORMATION CONTACT: Vernon Wilkes, State Veterans Homes 
(10NA5), 1717 H Street NW., Washington, DC 20006, (202) 266-4617. (This 
is not a toll-free number.)

SUPPLEMENTARY INFORMATION: Under 38 U.S.C. 8131 through 8138, VA is 
authorized to award grants to assist States in constructing, 
remodeling, altering, or expanding State home facilities that will 
furnish specified types of care to veterans. VA has implemented this 
statutory authority at 38 CFR part 59.
    Under 38 U.S.C. 8135, States that wish to receive assistance for a 
State home construction project (or acquisition of an existing facility 
to be used as a State home facility) must submit an application that 
includes certain information and documentation described in the 
statute. VA has implemented the application requirement in current 
Sec.  59.20(a), which requires that applicants seeking inclusion on the 
priority list for grants awarded during the next fiscal year submit to 
VA an original and one copy of a completed VA Form 10-0388-1 and all 
information, documentation, and other forms specified by VA Form 10-
0388-1. Under current Sec.  59.20(c), VA encourages the submission of 
the application by April 15 but considers any application submitted 
before August 16 for inclusion on the priority list. VA maintains the 
``priority list'' pursuant to current 38 CFR 59.50. Additionally, under 
current Sec.  59.70(b), VA requires a State to commit funds for a 
project before August 16 in order for that project to be eligible for 
inclusion in priority group 1 of the priority list for the next fiscal 
year.
    On March 1, 2011, VA published a proposed rule to improve the 
clarity and efficacy of the application process and

[[Page 10664]]

to address certain administrative challenges presented by the current 
rules. 76 FR 11187 (Mar. 1, 2011). We proposed adopting April 15 as the 
due date for applications, including matching funding. We provided a 
60-day comment period during which we received eight comments from 
State departments of veterans affairs and State veterans homes and a 
comment from the National Association of State Veterans Homes. All of 
the commenters raised similar or identical concerns, which we address 
below. We are grateful for their submissions and, after careful 
deliberation, make one change to the final rule based on these 
comments.
    First, several commenters assert that they have consistently 
treated the April 15 date as a ``preapplication'' date and acknowledge 
that they complete as much of the application as possible on or before 
that date. However, they argue that it is impossible to meet an April 
15 deadline for matching funds because the fiscal year for most States 
begins on July 1, which is after that deadline. To address this 
concern, the final rule adopts a separate, later, deadline for the 
official certification of matching funds. Under the final rule, the 
application must be received no later than April 15. If official 
certification of the matching funds is received on or before August 1, 
the State may be included in priority group 1.
    This will allow VA to review the submissions and establish each 
application in priority groups 2 through 7 (which mirror the sub-
priorities in priority group 1 with the distinction that projects in 
priority group 1 have State matching funds while those in priority 
groups 2 through 7 lack these resources). When a State is able to 
provide documentation of State matching funds, the application will be 
placed in the appropriate position in priority group 1. Should a State 
be unable to document matching funds by the new August 1 deadline, the 
project will be placed in one of groups 2 through 7 for the following 
fiscal year.
    Some commenters argue that the burden of filing the application 
itself, not just the matching-funds requirement, would be impossible to 
meet before April 15. Previous experience is that most States already 
submit preapplication materials on or before April 15, as acknowledged 
by the commenters themselves, and thus, we do not think that there will 
be a new significant burden. The items required on the VA Form 10-0388-
1 are generally administrative information (such as identifier numbers) 
and the schematics of the project. Schematics generally require an 
aerial view of the site of the project, a floor plan, and a rendering 
of the exterior of the building. Although these may require some 
financial expense, we believe that the cost is usually between $6,000 
and $10,000. In any event, it is never a significant expense in 
relation to the cost of the project itself, which is usually over $30 
million. We do not believe that it should be necessary to wait for a 
State legislature to authorize the expense or time for producing these 
application materials.
    The commenters challenged VA's need for the additional review time, 
citing the impact of the American Recovery and Reinvestment Act of 2009 
(ARRA) on the previous grant cycle asserting that it resulted in an 
anomalously high number of applications. We acknowledge that the ARRA 
increased the 2010 workload but maintain that there is a need for 
additional review time in general, based on the uniqueness of each 
fiscal year, the complexity of the projects, and the need for extensive 
detailed and careful review of each application. In fact, we had begun 
reassessing the August 15 due date before Fiscal Year 2010. Adoption of 
the proposed April 15 application due date, while allowing States to 
submit documentation of matching funds by August 1, will allow VA to 
provide due diligence in the review and prioritization process, while 
maximizing the States' opportunity to obtain and document matching 
funds to secure a position in priority group 1.
    Several commenters recommended delaying publication of the priority 
list rather than altering the due date. We appreciate the flexibility 
recommended by these parties but note that release of the priority list 
is determined by the time federal budget funds are appropriated. 
Regardless of the ultimate date the budget is finalized, VA strives to 
publish the priority list in a timely manner and will continue to do so 
in an effort to provide quick, efficient distribution of and maximum 
access to available funds.
    The commenters also argue administrative inconvenience. However, 
the initial application materials are not overly burdensome, and 
requiring the earlier deadlines will help VA ensure the timely delivery 
of funds to worthy State projects. Because most applications are 
already received by April 15, this date is reasonable, and allowing for 
the August 1 date for the certification of matching funds addresses the 
administrative needs of the States.
    Finally, commenters objected to VA's rulemaking as being based 
solely on the administrative needs of VA staff, at the expense of 
America's veterans. VA strives diligently to remain veteran-centric in 
all of its programs. Clarification of the due date and the technical 
changes proposed in this amendment are designed to mirror current 
practice and to facilitate a thorough and complete review of grant 
applications prior to funding, in an effort to minimize program delays 
and make space in the State homes available to our veterans as quickly 
as possible. VA has always initiated review of proposals upon receipt, 
which in most cases has been by the April 15 date cited in Sec.  59.20. 
However, VA's review of these grants and their construction plans 
necessitates numerous internal concurrences; communications with the 
States for clarification of the application materials; development and 
adoption of memorandums of understanding for each project; and other 
significant, time-consuming, relevant processes. Each proposal is 
unique and may have special issues, including terrain, access, 
potential for natural disaster, facility measures, varying codes and 
local requirements, etc. VA staff assesses new construction as well as 
renovations to facilities of various ages, under an assortment of State 
and national construction and safety standards, to ascertain that each 
element of the application is thorough, complete, and current. 
Requiring this detailed review prior to prioritization and funding 
ensures that the project is ``shovel ready'' when funds become 
available. This, in turn, helps ensure that VA funds projects that will 
be ready, on time, for waiting veterans.
    Acknowledging the effort the States have historically made to 
submit applications by the April 15 date to secure their position on 
the priority list, we believe formal adoption of an April 15 deadline, 
with the August 1 date for documentation of matching funds for 
placement in priority group 1, will help VA and the States and, most 
importantly, serve the needs of veterans by improving existing space 
and making new space available for eligible veterans at the earliest 
possible moment.

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 an 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 given year. This rule would have no such effect on 
State, local, and tribal governments, or on the private sector.

[[Page 10665]]

Paperwork Reduction Act

    Although this document contains provisions constituting collections 
of information, at 38 CFR 59.20, under the provisions of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.), no new or revised collections 
of information are associated with this rule. The information 
collection requirements for Sec.  59.20 are currently approved by OMB 
and have been assigned OMB control number 2900-0661.

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,'' which requires 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 to be a significant regulatory action under Executive 
Order 12866 because it is likely to result in a rule that may raise 
novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule would 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 rule affects States and has no impact on any small entities. 
Therefore, pursuant to 5 U.S.C. 605(b), this amendment is exempt from 
the initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers and 
titles for this rule are as follows: 64.005, Grants to States for 
Construction of State Home Facilities; 64.007, Blind Rehabilitation 
Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical 
Care Benefits; 64.010, Veterans Nursing Home Care; 64.014, Veterans 
State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 
64.018, Sharing Specialized Medical Resources; 64.019, Veterans 
Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based 
Primary Care; 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 the Department of Veterans Affairs. John R. 
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this 
document on November 14, 2011, for publication.

List of Subjects in 38 CFR Part 59

    Administrative practice and procedure; Alcohol abuse; Alcoholism; 
Claims; 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; Nursing homes; Philippines, Reporting and recordkeeping 
requirements; Veterans.

    Dated: February 17, 2012.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, VA amends 38 CFR part 59 
as follows:

PART 59--GRANTS TO STATES FOR CONSTRUCTION OR ACQUISITION OF STATE 
HOMES

0
1. Revise the authority citation for part 59 to read as follows:


    Authority: 38 U.S.C. 101, 501, 1710, 1742, 8105, 8131-8137.


0
2. Amend Sec.  59.20 by:
0
a. Revising paragraph (c).
0
b. Removing ``August'' from paragraph (d) and adding, in its place, 
``April''.
0
c. Adding an information collection approval parenthetical after the 
authority citation at the end of the section.
    The revision and addition read as follows:


Sec.  59.20  Initial application requirements.

* * * * *
    (c) The items requested under paragraph (a) of this section must be 
received by VA no later than April 15 in order for VA to include the 
application on the priority list for the award of grants during the 
next fiscal year. See Sec.  59.50, Priority List.
* * * * *

(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-0661)

0
3. Amend Sec.  59.50 by removing ``August'' from the introductory text 
of paragraph (a) and adding, in its place, ``April''.
0
4. Amend Sec.  59.70 by removing ``August 15'' from paragraph (b) and 
adding, in its place, ``August 1''.

[FR Doc. 2012-4234 Filed 2-22-12; 8:45 am]
BILLING CODE 8320-01-P