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###### Department of Veterans Affairs

          - 38 CFR Part 59
          - RIN 2900-AN77

# AGENCY:

Department of Veterans Affairs.

# ACTION:

Proposed rule.

# SUMMARY:

                        This document proposes to amend the Department of Veterans Affairs (VA) regulation concerning the calendar date that VA must receive an initial application for a State Home Construction Grant in order for the application to be included on the                               ( print page 11188)                            priority list for the award of grants during the next fiscal year. We propose to require that initial application materials must be received by VA on April 15, and not 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. Similarly, we propose to require that a State make its matching funds for a project available by April 15, and not 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. We also propose technical revisions to conform with these proposed revisions.                    

# DATES:

Comments must be received on or before May 2, 2011.

# ADDRESSES:

                        Written comments may be submitted by email through                         *http://www.regulations.gov;*                         by mail or hand-delivery to Director, Regulations Management (02REG), Department of Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. Comments should indicate that they are submitted in response to “RIN 2900-AN77-Due Date of Initial Application Requirements for State Home Construction Grant.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m. Monday through Friday (except holidays). Please call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at                         *http://www.regulations.gov*.                    

# FOR FURTHER INFORMATION CONTACT:

Tom Graves, Director (114), State Home Construction, 810 Vermont Ave., NW., Washington, DC 20420, (202) 461-6084. (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 § 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 § 59.20(c), VA encourages the submission of the application by April 15 but considers any application submitted before August 16. VA maintains the “priority list” pursuant to current 38 CFR 59.50.

We propose to revise § 59.20(c) to improve the clarity and efficacy of the application process and to address certain administrative challenges presented by the current rule. We also propose to make technical revisions to related provisions in part 59.

First, we propose to change the phrase at the beginning of the first sentence of § 59.20(c) from “[t]he information requested under paragraph (a) of this section” to “[t]he items requested under paragraph (a) of this section”. Paragraph (a) requires the submission of forms and documentation as well as information, and all of the items described in paragraph (a) must be timely submitted in order for VA to consider the project for inclusion on the priority list for the next fiscal year. Yet, the current rule could be misinterpreted to require timely submission of only the “information” described in paragraph (a), and not the “documentation, and other forms specified.” This is a technical, clarifying change.

Next, we propose to change the date that initial applications must be received by VA. Current § 59.20(c) states that applications “should be submitted to VA by April 15,” but “must be received by VA by August 15” in order for VA to consider the application on the next year's priority list. The regulation does not address the distinction between submission and receipt and does not explain the four-month gap between the two dates. As a practical matter, this often results in the items not being received by VA until August 15. At the same time, current 38 CFR 59.20(d), 59.50(a), and 59.70(b) use the August 15 date without mentioning the April 15 date, which leads to further confusion as to which date actually applies.

A U.S. Government fiscal year begins on October 1 of a calendar year and extends through September 30 of the next calendar year. A fiscal year carries the date of the calendar year in which it ends. For example, if a State seeks assistance for a Fiscal Year 2012 construction project, the State's application must be received by VA, under the current rule, on or before August 15, 2011, so that the application can be on the priority list for the next fiscal year, which begins on October 1, 2011. As a matter of custom and practice, and to ensure the quick and efficient distribution of funds to States that need VA's assistance, VA seeks to issue the priority list shortly after the beginning of the fiscal year to which it applies. Under current § 59.20(c), we have from August 16 to September 30, before the beginning of the fiscal year, to analyze and process the applications. We need more time to evaluate all of the applications so that we can make fully-informed decisions concerning the allocation of grant money to the States. For Fiscal Year 2011, VA had to evaluate 111 applications in order to prepare the priority list before October 1, 2010. Therefore, we propose to revise § 59.20(c) to require that all initial applications be received by VA no later than April 15, and also to amend §§ 59.20(d) and 59.50(a) in accordance with the April 15 requirement.

We recognize that this will require some States to submit their initial applications up to 4 months earlier than has been their custom in the past. However, the April 15 submission date is already encouraged in current § 59.20(c) and implies that States should submit applications to VA as soon as possible before the current August 15 deadline. The proposed revision to § 59.20(c) would prescribe only one date, the date that the application must be received by VA. This revision would clarify the regulation. We note that the proposal does not otherwise expand the application requirements or in any way change the nature of the items submitted.

                    Consistent with our need to and proposal for amending § 59.20(c), we also propose to amend § 59.70(b). Specifically, we propose to amend the date, from August 15 to April 15, by which a State must commit funds for a project in order for that project to be eligible for inclusion in priority group 1 of the priority list for the next fiscal year. (Priority group 1 projects are projects that have State matching funds. State matching funds are not required to be placed in priority groups 2-7 on the priority list.) Paragraph (b) of § 59.70 requires that, as a condition of receiving a grant for a project, a State must make sufficient funds available for the project so that the project may proceed upon approval of the grant without further action required by the State to make the funds available. An authorized State                           ( print page 11189)                        budget official must certify that the State funds are, or will be, available for the project, so that if VA awards the grant, the project may proceed without further State action. That certification must be updated each year by every State with a priority group 1 project. Under the current rule, a State must make such funds available by August 15 of the year prior to the fiscal year for which the grant is requested to be eligible for inclusion in priority group 1. Under the proposed amendment of § 59.70(b), a State would be required to make the funds available by April 15 of the year prior to the fiscal year for which the grant is requested. We recognize that the budgetary deadlines for the States differ and that the revision will result in some projects being excluded from priority group 1 of the priority list for a given fiscal year. However, VA's need to have sufficient time to prepare the priority list before the beginning of an upcoming fiscal year necessitates this change.                

                    As a result of the change, projects in States that obtain funding before April 15 would be eligible for priority group 1 for the upcoming fiscal year, and projects in States that obtain funding after April 15 would not be eligible. In any given year, the only impact of the change will be realized for projects funded by States after April 15 and before August 16. As mentioned above, projects that are not eligible for inclusion in priority group 1 because funds are unavailable would still be eligible for inclusion in priority groups 2-7 because the initial application does not require the commitment of funds. For all of the priority groups, the date on which an application for a project is received by VA affects the position of the project on the priority list (the earlier the application was received, the higher the priority given within a specific priority group or, where relevant, subpriority group).                     *See*38 CFR 59.50.                

Finally, we are making a technical amendment to add, after the authority citation for § 59.20, a parenthetical noting that the Office of Management and Budget (OMB) has approved the information collection required by that regulation. It is VA's practice to include notations concerning the information collection approval number at the end of regulations containing information collections, and the omission here was an oversight.

## 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 proposed rule would have no such effect on State, local, and tribal governments, or on the private sector.

## 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 proposed revised collections of information are associated with this proposed rule. The information collection requirements for § 59.20 are currently approved by OMB and have been assigned OMB control number 2900-0661.                

## Executive Order 12866

Executive Order 12866 directs agencies to assess all 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, and other advantages; distributive impacts; and equity). The Executive Order classifies a regulatory action as a “significant regulatory action,” requiring review by OMB unless OMB waives such review, if it is a 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 the Executive Order.

The economic, interagency, budgetary, legal, and policy implications of this proposed rule have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866.

## Regulatory Flexibility Act

The Secretary hereby certifies that this proposed 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 proposed 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 February 8, 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 23, 2011.

Robert C. McFetridge,

Director, Regulation Policy and Management, Office of the General Counsel, Department of Veterans Affairs.

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

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

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

      ( print page 11190)    Authority:38 U.S.C. 101, 501, 1710, 1742, 8105, 8131-8137.

2. Amend § 59.20 by:

a. Revising paragraph (c).

b. Removing “August” from paragraph (d) and adding, in its place, “April”.

c. Adding an information collection approval parenthetical after the authority citation at the end of the section.

The revision and addition read as follows:

§ 59.20 

* * * * *

                            (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*                             § 59.50, Priority List.                        

* * * * *

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

§ 59.50 

3. Amend § 59.50 by removing “August” from the introductory text of paragraph (a) and adding, in its place, “April”.

§ 59.70 

4. Amend § 59.70 by removing “August” from paragraph (b) and adding, in its place, “April”.

[FR Doc. 2011-4431 Filed 2-28-11; 8:45 am]

BILLING CODE 8320-01-P