April 26, 1984 MP-1, Part I

Chapter 13

CONTENTS

CHAPTER 13. INTERGOVERNMENTAL REVIEW

OF THE VETERANS ADMINISTRATION PROGRAMS AND ACTIVITIES

(38 CFR Part 40)

PARAGRAPH PAGE

1.  PURPOSE 13-1

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2.  SCOPE 13-1

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3.  RESPONSIBILITIES 13-2

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4.  DEFINITIONS 13-2

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5.  FEDERAL ASSISTANCE PROGRAMS 13-3

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6.  DIRECT FEDERAL DEVELOPMENT 13-4

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7.  WAIVERS 13-5

APPENDIX

A.  Executive Order 12372 13A-1

April 26, 1984 MP-1, Part I

Chapter 13

CHAPTER 13. INTERGOVERNMENTAL REVIEW OF THE VETERANS ADMINISTRATION
PROGRAMS

AND ACTIVITIES

(38 CFR Part 40)

1.  PURPOSE

a\. This chapter furnishes guidance to departments and affected staff
offices of the VA in implementation of Executive Order 12372,
"Intergovernmental Review of Federal Programs," dated July 14, 1982, as
amended

April 8, 1983, for added cooperation with State and local governments in
the evaluation, review and coordination of Federal development and
assistance programs. These procedures provide, in part, for:

\(1\) Encouraging the establishment of a project notification and review
system to facilitate coordinated planning on an intergovernmental basis
for certain VA assistance programs in furtherance of Section 204 of the
Demonstration Cities and Metropolitan Development Act of 1966 (Pub. L.
89-754) as amended, Title IV of the Intergovernmental Cooperation Act of
1968 (Pub. L. 90-577) as amended, and Executive Order 12372.

\(2\) Coordination of direct Federal development programs and projects
with State, area-wide and local planning and programs pursuant to Title
IV of the Intergovernmental Cooperation Act of 1968.

\(3\) Securing the comments and views of State and local agencies which
are authorized to develop and enforce environmental standards on certain
Federal or federally assisted projects affecting the environment
pursuant to Section 102(2)(C ) of the NEPA (National Environmental
Policy Act) of 1969 (Pub. L. 91-190) and regulations of the Council on
Environmental Quality.

\(4\) Publishing the requirement for use of SF 424, Federal Assistance
(with attachments), as part of grant applications for designated
programs.

b\. The objective of Executive Order 12372 is to foster an
intergovernmental partnership and a strengthened federalism by relying
on State and local processes for State and local government coordination
and review of proposed Federal financial assistance and direct Federal
development.

c\. The Executive order allows States, after consultation with local
officials, to establish their own process for review and comment on
proposed Federal financial assistance and direct Federal development;
increases Federal responsiveness to State and local officials by
requiring Federal agencies to accommodate State and local views or
explain why those views will not be accommodated. The order also revokes
OMB Circular A-95.

d\. The VA published the final regulations, titled "Intergovernmental
Review of the Veterans Administration Programs and Activities" (38 CFR
Part 40), implementing the order, on June 24, 1983. The rules took
effect September 30, 1983.

2\. SCOPE

a\. These procedures are to serve as agency procedural guidelines in
carrying out the provisions of Executive Order 12372.

b\. All Direct Federal Development activities in the areas of health
care delivery, construction, and national cemeteries (including the
following programs identified in the Catalog of Federal Domestic
Assistance) are within the purview of these procedures.

64.005 Grants to States for Construction of State Home Facilities

64.203 State Cemetery Grants

c\. Coverage of the Direct Development Programs, Acquisition and
Disposition of Property (38 U.S.C. ch. 81), and National Cemeteries and
Memorials (38 U.S.C. ch. 24) is defined to include the following:

\(1\) Acquisition and Disposition of Property

\(a\) A building addition, new structure or within an existing cemetery.
(Minor utility pads or equipment and projects for additions, alteration,
or modernization of an existing facility which do not substantially
alter the scale or the type or intensity of use of each facility need
not be reported.)

\(b\) A major utility modernization that may require new primary sources
or discharge points from the community.

( c) An acquisition of real property.

\(d\) A major building demolition project exceeding \$500,000
expenditure.

\(e\) A project for inpatient care purposes exceeding \$2,000,000
expenditure and either:

[1]{.underline}. Increases the bed capacity by 25,

[2]{.underline}. Modifies the primary function of the facility, or

[3]{.underline}. Provides a major new medical care service.

\(2\) National Cemeteries and Memorials. A cemetery burial area
expansion of 20 acres or more.

d\. Transaction with nongovernmental entities and payments to
individuals are not covered by Executive Order 12372. Excluded from
coverage are: Assistance in Establishing New State Medical Schools (38
U.S.C. ch. 82); Grants to Affiliated Manpower Training Institutions (38
U.S.C. 5091-5093); Payments to State Homes (38 U.S.C. 641-643); Sharing
of Medical Facilities, Equipment, and Information (38 U.S.C. 5051-5057);
Sharing of Veterans Administration and Department of Defense Health Care
Resources (38 U.S.C. 5011); Administration of Educational Benefits (38
U.S.C. ch. 36); Home Loan Guaranty Program (38 U.S.C. ch. 37).

3\. RESPONSIBILITIES

a\. Associate Deputy Administrators, Department Heads and Staff Office
Directors. Associate Deputy Administrators, department heads and staff
office directors will supplement this chapter as necessary to make its
provisions and policies effective in their areas of jurisdiction. In
carrying out these responsibilities they will seek the advice and
guidance of the Director, Office of Congressional and Intergovernmental
Affairs, as appropriate.

b\. Department of Medicine and Surgery. The Department of Medicine and
Surgery is responsible for agency compliance under this chapter for the
following assistance program: Grants to States for Construction of State
Home Facilities (64.005). It is the further responsibility of the
Department of Medicine and Surgery to notify the State single point of
contact of planned VA construction projects and/or land acquisitions
related to medical facilities, and other aspects of the agency's health
care programs applicable to the notification process under the order
described herein.

c\. Department of Veterans Benefits. The Department of Veterans Benefits
is responsible for agency compliance under this chapter for activities
involving the construction and/or acquisition of real property for
regional offices.

d\. Department of Memorial Affairs. The Department of Memorial Affairs
is responsible for agency compliance under this chapter for activities
involving the acquisition of real property for national cemeteries, all
VA cemetery construction projects, and the State Cemetery Grants Program
(64.203).

e\. Office of Congressional and Intergovernmental Affairs. The Associate
Deputy Administrator for Congressional and Intergovernmental Affairs, is
the VA liaison with the Office of Management and Budget in matters
relating to compliance with Executive Order 12372 and provides general
guidance to operating departments on the implementation of the order
within the VA. This includes keeping a current listing of State program
selections and State's single point of contact. The Associate Deputy
Administrator also serves as the Administrator's representative on all
matters concerning nonaccommodations under the order and will review,
for concurrence, nonaccommodation responses prior to transmittal to the
State single point of contact.

f\. Office of Construction. The Director, Office of Construction,
provides guidance and assistance to VA departments in agency compliance
with construction standards, codes, NEPA and NHPA rules and regulations.

g\. Office of Information Management and Statistics. The Director,
Office of Information, Management and Statistics, will serve as the
agency's contact with the Office of Management and Budget on matters
relating to the FAADS (Federal Assistance Awards Data System). This
initiative keeps the States and Congress informed on expenditures for
Federal assistance programs.

4\. DEFINITIONS

a\. Office of Management and Budget Issuances. The instructions from the
Office of Management and Budget to the heads of executive agencies and
establishments which provide guidance for the coordination of Federal
Assistance and Direct Federal Development programs and projects, with
States and localities.

b\. State Single Point of Contact. After the issuance of Executive Order
12372, the Office of Management and Budget requested each Governor to
name an interim Executive Order contact person to help the State and
local governments adapt to changes in intergovernmental consultation
resulting from the order. A key responsibility of the single point of
contact is to disseminate information within the State about the order,
including how local input can be provided. An up-to-date list of these
contacts is maintained by the Office of Congressional and
Intergovernmental Affairs.

c\. Application. A request for assistance under a Federal Assistance
program.

d\. Assistance Program. A program whereby a grant of Federal assistance
is made available to non-Federal entities.

e\. Direct Development Programs. Planning and construction of public
works, physical facilities and installations or land and real property
development (including the acquisition, use and disposal of real
property) undertaken by or for the use of the VA or any of its
departments.

f\. State process. The framework under which State and local officials
carry out intergovernmental review activities under Executive Order
12372. If a State does not establish an official process, the VA will
continue to seek and consider the views of State and local governments
as the Intergovernmental Cooperation Act requires, but the VA will be
under no formal obligation to accommodate their recommendations as
required under Executive Order 12372.

g\. Role of State and Area-wide Clearinghouse. The Executive order
represents a fundamental change in the way the Federal Government will
treat State and local governments in the consultation process. The order
makes not attempt to prescribe what procedures or organizations State
and local governments should use to review Federal programs and
projects. Nor does it mandate their review of any program. State and
local elected officials are free to establish a process that best suits
their own purposes and priorities and to select the Federal programs and
projects covered by the order that they feel are important for them to
review. They have the flexibility to continue to use the system of State
and area-wide clearinghouses created in response to OMB Circular A-95,
or to establish, without Federal interference, a different procedure.

h\. Acquisition of Real Property. This term includes the acquisition of
real property by purchase, lease, donation or condemnation. Real
property acquisition under 38 U.S.C. ch. 37 is excluded.

5\. FEDERAL ASSISTANCE PROGRAMS

a\. All entities making application for Federal assistance shall include
with their application an SF 424, Federal Assistance, with sections I
and II completed. This form must contain evidence that the appropriate
elements within the State have been given an opportunity to review and
comment on the application.

b\. The applicant will notify the appropriate State single point of
contact of its intent to apply for assistance for VA programs covered
under Executive Order 12372.

c\. The above will be carried out at the earliest feasible time in
project planning. The required notifications will include a summary
description of the project and will contain the following information.

\(1\) Identity of the applicant State agency, organization, and official
representative of the State.

\(2\) The geographic location of the project to be assisted or
constructed. A map or site plan should be provided, if appropriate.

\(3\) A brief description of the proposed project by type, purpose,
general size or scale (scope), estimated cost, beneficiaries, or other
characteristics which will enable the State single point of contact to
identify agencies of State or local government having plans, programs,
or projects that might be affected by the proposed project(s).

\(4\) Environmental information to assist the VA in its compliance with
the Environmental Policy and Historic Preservation Acts. (Evidence of
consultation with the State Historic Preservation Officer and a
statement as to whether the property is listed or eligible for inclusion
in the National Register of Historic Places are required.)

\(5\) The estimated date the applicant expects to formally file the
application.

d\. State Process Recommendations. Deadlines for receipt of State
Process recommendations will be announced by the appropriate VA
department or staff office for programs covered by the order.

e\. Review of Recommendations - Accommodate or Explain. Appropriate VA
program officials will review the State single point of contact
transmittal. If this individual determines it is necessary to discuss
the transmittal with the State, the VA program official may contact the
State single point of contact directly. The State single point of
contact will be provided a minimum of 30 days to coordinate the review
among appropriate affected jurisdictions and make comment on the
proposed project. The responsible department will notify the State
single point of contact in writing when taking action contrary to the
State Process recommendations submitted. Explanation will be provided
for any necessary inconsistency or incompatibility. In the event the VA
program official must make a nonaccommodation response to a State
Process recommendation, the individual preparing the response will
submit the nonaccommodation to the Director, Office of Congressional and
Intergovernmental Affairs, for review and concurrence before sending the
response to the State single point of contact. Furthermore, the VA
organizational element initiating the nonaccommodation will wait 15 days
from the date of notification before implementing the funding decision.

f\. State's single point of contact will be provided 60 days after
receipt of a project notification to inform those State, regional and
local agencies affected. The review by the affected agencies and the
submission of their comments to the State single point of contact may be
completed during this 60-day period. If the review has not been
completed, the State single point of contact will be expected to work
with the applicant in the resolution of any problems raised by the
proposed project during the periods in which the application is being
completed.

g\. All comments provided to the State single point of contact will be
included with the application when presented to the agency. If no
comments are received, this must be indicated on SF 424. If applications
are received without section II of SF 424 duly certified, or without
comments when a response is indicated, the applicant will be advised of
the requirements and afforded the opportunity to perform. If there is no
response within 60 days, the application will be returned for
appropriate action.

h\. The State single point of contact will be notified of the agency's
decision on each application and an explanation of any decision contrary
to the State Process recommendation will be provided. The responsible
department will insure that for approved applications only one SF 424
award notice will be sent to the State single point of contact
(Executive Order 12372).

i\. In the event comments identify project conflicts with other Federal
agencies, a review of the proposal in light of the conflict will be made
in consultation with other Federal agencies before a decision is made on
the application for assistance.

6\. DIRECT FEDERAL DEVELOPMENT

a\. To the greatest extent possible consistent with the statutory
mission of the VA to provide Federal benefits to eligible veterans, the
agency will follow the provisions of Executive Order 12372 in affording
States the opportunity to review and comment on VA plans and
developments.

b\. The responsible department will provide the appropriate State single
point of contact, for review and comment, information on agency plans
for facility construction projects and the acquisition or use of land
and real property which impacts on States and localities to assure
maximum feasible consistency of agency plans with State and local plans
and programs. This coordination will also provide the agency with
information on possible environmental impact of the proposed
development. Agency plans for the provision of major new medical care
services will be coordinated in like manner.

c\. The coordination with State's single point of contact will take
place at the earliest stage practical in the planning and design
process.

d\. Criteria for Notification. A project will be reported to State's
single point of contact provided that it is any of the following:

\(1\) A building addition or new structure. (Minor utility pads or
equipment and projects for additions, alteration, or modernization of an
existing facility which do not substantially alter the scale or the type
of intensity of use of such facility need not be reported.)

\(2\) A burial area expansion of 20 acres or more within an existing
cemetery.

\(3\) A major utility modernization that may require new primary power
sources from the community.

\(4\) An acquisition of real property.

\(5\) A major building demolition project exceeding \$500,000
expenditure and either

\(a\) Alters the bed capacity by 25,

\(b\) Modifies the primary function of the facility, or

(c ) Provides a major new medical care service, e.g., Supervoltage
Therapy, Hemodialysis, Cardiac Catheterization, etc.

e\. The State single point of contact will be provided a maximum of 60
days to coordinate the review among appropriate affected jurisdictions
and make comment on the proposed project.

f\. The responsible department will notify the State single point of
contact in writing when taking action contrary to the State Process
recommendation submitted. Explanation will be provided for any necessary
inconsistency or incompatibility.

g\. Those projects for which State notification has been performed and
which have subsequent schedule changes in excess of one year, will be
resubmitted to the State single point of contact.

h\. Coordination With Environmental Impact Program

\(1\) The criteria for normally preparing an Environmental Impact
Statement should be the same as those contained in VA Environmental
Regulations, "Environmental Effects of VA Actions" (38 CFR Part 26). The
categories of action normally requiring an environmental impact
statement are:

\(a\) Construction of major VA facilities.

\(b\) Major land acquisition, disposal, development of VA facility or
other action that significantly changes land use patterns.

(c ) Subdivision approval in connection with the Home Loan Guarantee
Program with a flexible threshold determination for over 500 housing
units within a SMSA (Standard Metropolitan Statistical Area) as set
forth in table 1 of VA Environmental Regulations, 38 CFR Part 26.

\(2\) When the responsible department official has approved the need for
an Environmental Impact Statement on a particular VA construction
project, the responsible office preparing the Statement (Director,
Office of Construction) will request copies of the State's comments from
the department to include in the Draft Environmental Impact Statement.

7\. WAIVERS

a\. The Administrator is authorized to waive any provision of the
regulation in an emergency. (38 CFR 40.13) This authority will be used
sparingly to deal with unforeseen situations or other problems beyond
the VA's control. Requests will be routed to the Administrator through
the Office of Congressional and Intergovernmental Affairs.

b\. If the emergency waiver provision is used, individuals with
programmatic responsibility will attempt, to the extent feasible and
meaningful, to involve the State Process in subsequent decision-making
concerning the matter.

c\. The Office of Congressional and Intergovernmental Affairs and the
awarding department will keep records of all situations in which the
emergency waiver is used.

Federal Register Presidential Documents

Vol. 47, No. 137

Friday, July 16, 1982

+-----------------+----------------------------------------------------+
| Title 3 -       | Executive Order 12372 of July 14, 1982             |
|                 |                                                    |
| The President   | Intergovernmental Review of Federal Programs       |
|                 |                                                    |
|                 | By the authority vested in me as President by the  |
|                 | Constitution and laws of the United States of      |
|                 | America, including Section 401(a) of the           |
|                 | Intergovernmental Cooperation Act of 1968 (42      |
|                 | U.S.C. 4231(a)), Section 301 of Title 3 of the     |
|                 | United States Code, and in order to foster an      |
|                 | intergovernmental partnership and a strengthened   |
|                 | federalism by relying on State and local processes |
|                 | for the State and local government coordination    |
|                 | and review of proposed Federal financial           |
|                 | assistance and direct Federal development, it is   |
|                 | hereby ordered as follows:                         |
|                 |                                                    |
|                 | **Section 1.** Federal agencies shall provide      |
|                 | opportunities for consultation by elected          |
|                 | officials of those State and local governments     |
|                 | that would provide the non-Federal funds for, or   |
|                 | that would be directly affected by, proposed       |
|                 | Federal financial assistance or direct Federal     |
|                 | development.                                       |
|                 |                                                    |
|                 | **Sec. 2.** To the extent the States, in           |
|                 | consultation with local general purpose            |
|                 | governments, and local special purpose governments |
|                 | they consider appropriate, develop their own       |
|                 | processes or refine existing processes for State   |
|                 | and local elected officials to review and          |
|                 | coordinate proposed Federal financial assistance   |
|                 | and direct Federal development, the Federal        |
|                 | agencies shall, to the extent permitted by law:    |
|                 |                                                    |
|                 | \(a\) Utilize the State process to determine       |
|                 | official views of State and local elected          |
|                 | officials.                                         |
|                 |                                                    |
|                 | \(b\) Communicate with State and local elected     |
|                 | officials as early in the program planning cycle   |
|                 | as is reasonably feasible to explain specific      |
|                 | plans and actions.                                 |
|                 |                                                    |
|                 | \(c\) Make efforts to accommodate State and local  |
|                 | elected officials\' concerns with proposed Federal |
|                 | financial assistance and direct Federal            |
|                 | development that are communicated through the      |
|                 | designated State process. For those cases where    |
|                 | the concerns cannot be accommodated, Federal       |
|                 | officials shall explain the bases for their        |
|                 | decision in a timely manner.                       |
|                 |                                                    |
|                 | \(d\) Allow the States to simplify and consolidate |
|                 | existing Federally required State plan             |
|                 | submissions. Where State planning and budgeting    |
|                 | systems are sufficient and where permitted by law, |
|                 | the substitution of State plans for Federally      |
|                 | required State plans shall be encouraged by the    |
|                 | agencies.                                          |
|                 |                                                    |
|                 | \(e\) Seek the coordination of views of affected   |
|                 | State and local elected officials in one State     |
|                 | with those of another State when proposed Federal  |
|                 | financial assistance or direct Federal development |
|                 | has an impact on interstate metropolitan urban     |
|                 | centers or other interstate areas. Existing        |
|                 | interstate mechanisms that are redesignated as     |
|                 | part of the State process may be used for this     |
|                 | purpose.                                           |
|                 |                                                    |
|                 | \(f\) Support State and local governments by       |
|                 | discouraging the reauthorization or creation of    |
|                 | any planning organization which is                 |
|                 | Federally-funded, which has a Federally-prescribed |
|                 | membership, which is established for a limited     |
|                 | purpose, and which is not adequately               |
|                 | representative of, or accountable to, State or     |
|                 | local elected officials.                           |
|                 |                                                    |
|                 | **Sec. 3.** (a) The State process referred to in   |
|                 | Section 2 shall include those where States         |
|                 | delegate, in specific instances, to local elected  |
|                 | officials the review, coordination, and            |
|                 | communication with Federal agencies.               |
|                 |                                                    |
|                 | \(b\) At the discretion of the State and local     |
|                 | elected officials, the State process may exclude   |
|                 | certain Federal programs from review and comment.  |
|                 |                                                    |
|                 | **Sec. 4.** The Office of Management and Budget    |
|                 | (OMB) shall maintain a list of official State      |
|                 | entities designated by the States to review and    |
|                 | coordinate proposed Federal financial assistance   |
|                 | and direct Federal development. The Office of      |
|                 | Management and Budget shall disseminate such lists |
|                 | to the Federal agencies.                           |
|                 |                                                    |
|                 | **Sec. 5.** (a) Agencies shall propose rules and   |
|                 | regulations governing the formulation, evaluation, |
|                 | and review of proposed Federal financial           |
|                 | assistance and direct Federal development pursuant |
|                 | to this Order, to be submitted to the Office of    |
|                 | Management and Budget for approval.                |
|                 |                                                    |
|                 | \(b\) The rules and regulations which result from  |
|                 | the process indicated in Section 5(a) above shall  |
|                 | replace any current rules and regulations and      |
|                 | become effective April 30, 1983.                   |
|                 |                                                    |
|                 | **Sec. 6.** The Director of the Office of          |
|                 | Management and Budget is authorized to prescribe   |
|                 | such rules and regulations, if any, as he deems    |
|                 | appropriate for the effective implementation and   |
|                 | administration of this Order and the               |
|                 | Intergovernmental Cooperation Act of 1968. The     |
|                 | Director is also authorized to exercise the        |
|                 | authority vested in the President by Section       |
|                 | 401(a) of that Act (42 U.S.C. 4231(a)), in a       |
|                 | manner consistent with this Order.                 |
|                 |                                                    |
|                 | **Sec. 7.** The Memorandum of November 8, 1968, is |
|                 | terminated (33 *Fed. Reg.* 16487, November 13,     |
|                 | 1968). The Director of the Office of Management    |
|                 | and Budget shall revoke OMB Circular A-95, which   |
|                 | was issued pursuant to that Memorandum. However,   |
|                 | Federal agencies shall continue to comply with the |
|                 | rules and regulations issued pursuant to that      |
|                 | Memorandum, including those issued by the Office   |
|                 | of Management and Budget, until new rules and      |
|                 | regulations have been issued in accord with this   |
|                 | Order.                                             |
|                 |                                                    |
|                 | **Sec. 8.** The Director of the Office of          |
|                 | Management and Budget shall report to the          |
|                 | President within two years on Federal agency       |
|                 | compliance with this Order. The views of State and |
|                 | local elected officials on their experiences with  |
|                 | these policies, along with any suggestions for     |
|                 | improvement, will be included in the Director\'s   |
|                 | report.                                            |
|                 |                                                    |
|                 | Ronald Reagan                                      |
|                 |                                                    |
|                 | THE WHITE HOUSE                                    |
|                 |                                                    |
|                 | July 14, 1982                                      |
+-----------------+----------------------------------------------------+