[Federal Register Volume 89, Number 191 (Wednesday, October 2, 2024)]
[Proposed Rules]
[Pages 80172-80191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22606]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 81

RIN 2900-AS17


Legal Services for Veterans--Legal Assistance for Access to VA 
Programs Grant Program

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations to implement a new authority requiring VA to establish a 
pilot program to assess the feasibility of awarding grants to eligible 
entities to establish new legal assistance clinics or enhance existing 
legal assistance clinics and pro bono efforts to provide certain legal 
assistance to veterans and individuals who served in the Armed Forces. 
This rulemaking provides proposed grant program eligibility criteria, 
application requirements, scoring criteria, constraints on the 
allocation and use of grant funds, and other requirements necessary to 
implement the grant program.

DATES: Comments must be received on or before December 2, 2024.

ADDRESSES: Comments may be submitted through www.regulations.gov. 
Except as provided below, comments received before the close of the 
comment period will be available at www.regulations.gov for public 
viewing, inspection, or copying, including any personally identifiable 
or confidential business information that is included in a comment. We 
post the comments received before the close of the comment period on 
www.regulations.gov as soon as possible after they have been received. 
VA will not post on www.regulations.gov public comments that make 
threats to individuals or institutions or suggest that the commenter 
will take actions to harm an individual. VA encourages individuals not 
to submit duplicative comments; however, we will post comments from 
multiple unique commenters even if the content is identical or nearly 
identical to other comments. Any public comment received after the 
comment period's closing date is considered late and will not be 
considered in the final rulemaking. In accordance with the Providing 
Accountability Through Transparency Act of 2023, a 100 word Plain-
Language Summary of this proposed rule is available at Regulations.gov, 
under RIN 2900-AS17.

FOR FURTHER INFORMATION CONTACT: Madolyn Gingell, National Coordinator, 
Legal Services for Veterans, Veterans Justice Programs, Clinical 
Services, Veterans Health Administration, Department of Veterans 
Affairs, at <a href="/cdn-cgi/l/email-protection#99d4f8fdf6f5e0f7b7def0f7fefcf5f5d9eff8b7fef6ef"><span class="__cf_email__" data-cfemail="266b4742494a5f4808614f4841434a4a66504708414950">[email protected]</span></a> or (239) 223-4681.

SUPPLEMENTARY INFORMATION:

Background

    On January 1, 2021, the William M. (Mac) Thornberry National 
Defense Authorization Act for Fiscal Year 2021, Public Law 116-283 (the 
Act), was signed into law and authorized appropriations for defense 
activities and various other purposes. Section 548(b) of the Act 
directed the Secretary of VA (Secretary) to establish a pilot program 
to assess the feasibility and advisability of awarding grants to 
eligible entities to establish new legal assistance clinics or enhance 
existing legal assistance clinics or other pro bono efforts in 
locations other than VA facilities to provide certain legal assistance 
to veterans and individuals who served in the Armed Forces. VA proposes 
to implement this pilot program by creating the Legal Services for 
Veterans--Legal Assistance for Access to VA Programs Grant Program 
(Grant Program) in new part 81 of title 38, Code of Federal Regulations 
(CFR).
    The primary purpose of the Grant Program is to provide certain 
legal assistance to former service members to assist them in gaining 
access to VA benefits. Because a former service member's discharge is 
often a barrier to VA benefits, VA believes the Grant Program would 
provide needed assistance with improving the character of discharge for 
those individuals whose current discharge status renders them 
ineligible for VA benefits. Attorneys are well-suited to help 
individuals navigate these processes, and the proposed Grant Program 
would directly fund the provision of legal assistance with any VA 
program, with improving the status of a military discharge or 
characterization of service, and with seeking a review of a military 
record before a board of correction of military or naval records, 
consistent with Section 548(b) of the Act. The Grant Program would 
serve a broad group of individuals, not just those who meet the 
statutory definition of veteran under 38 U.S.C. 101(2), and would also 
assist any individual discharged or released from the Armed Forces, 
including those who served in a reserve component.
    To be eligible for VA programs and services, an individual's 
military discharge or release must generally be under ``other than 
dishonorable conditions'' (e.g., honorable, under honorable conditions, 
general), a standard established in the statutory definition of veteran 
under 38 U.S.C. 101(2). A military discharge or release under certain 
conditions, regardless of the character of service listed on an 
individual's Certificate of Uniformed Service (DD Form 214/5), could 
also constitute a statutory bar to VA programs and services under 38 
U.S.C. 5303. However, in certain circumstances, individuals that do not 
meet the statutory definition under 38 U.S.C. 101(2) could qualify for 
VA programs and services if they receive a favorable outcome through a 
military service discharge review board, a board for correction of 
military or naval records, or VA's character of discharge 
determination.
    In late September 2021, VA sought input from 18 veterans service 
organizations and legal services organizations to inform development of 
the criteria and requirements for implementation of the Grant Program. 
VA asked the organizations to provide comments on: (1) the types of VA 
programs to be focused on; (2) any additional assistance that should be 
provided beyond what is specified in the Act; (3) criteria that should 
be emphasized during the grant selection process; (4) how VA should 
require grantees to target individuals eligible to receive legal 
assistance without regard for the conditions of discharge or release 
from the Armed Forces; (5) criteria that should be used to assess the 
effectiveness of the Grant Program; (6) and any additional factors VA 
should consider for the Grant Program.
    VA received input from two veterans service organizations and three 
legal services organizations. Multiple commenters stated the Grant 
Program should prioritize approving grant applicants that: operate in 
underserved areas; would provide legal assistance to improve the status 
of a military discharge or characterization of service; and would 
provide legal assistance to

[[Page 80173]]

those who are ineligible for VA health care. Almost all commenters 
suggested VA prioritize approving grant applicants that have experience 
providing legal assistance to veterans instead of prioritizing grant 
applicants who would expand their current program to newly provide 
legal assistance to veterans or grant applicants who would start an 
entirely new legal assistance program. In addition, commenters 
suggested VA prioritize grant applicants that engage in community 
outreach to former service members, considering both the direct 
outreach of the applicant as well as the applicant's relationships with 
community partners serving these individuals. Additionally, some 
commenters suggested that VA allow grantees to provide a broad range of 
legal assistance beyond what is specified in the Act. These comments 
were considered during development of the proposed Grant Program 
criteria and requirements, and the feedback VA received is publicly 
available at www.regulations.gov as ``Supporting & Related Material'' 
to this rulemaking.

38 CFR Part 81--Legal Services for Veterans--Legal Assistance for 
Access to VA Programs Grant Program

    The Legal Services for Veterans--Legal Assistance for Access to VA 
Programs Grant Program (Grant Program) would be established in new part 
81 of title 38, CFR, to provide clarity and establish criteria for 
applicants and grantees who may participate in the Grant Program. These 
new regulations would ensure consistency in the overall administration 
of the Grant Program and would provide transparency to eligible 
entities applying for and administering a legal assistance grant.
    The purpose, scope, and definitions applicable to the Grant Program 
would be established in proposed Sec. Sec.  81.0 and 81.5. Eligibility 
for entities seeking a legal assistance grant would be established in 
proposed Sec.  81.10. Eligible individuals seeking legal assistance 
from a grantee would be established in proposed Sec.  81.15. The types 
of legal assistance that could be provided to eligible individuals 
under the Grant Program would be established in proposed Sec.  81.20. 
Grant Program application, scoring, and selection criteria for new 
grantees and renewals would be established in proposed Sec. Sec.  81.25 
through 81.50. Grantee requirements would be established in proposed 
Sec. Sec.  81.55 through 81.115. The proposed content and structure of 
new part 81 are described in further detail below.

Sec.  81.0 Purpose and Scope

    Proposed 38 CFR 81.0 would explain the purpose and scope of part 
81. Proposed paragraph (a) would state that the purpose is to implement 
the Legal Services for Veterans--Legal Assistance for Access to VA 
Programs Grant Program to award grants to eligible entities to 
establish new legal assistance clinics or enhance existing legal 
assistance clinics or other pro bono efforts providing legal assistance 
to eligible individuals. Proposed paragraph (b) would state that part 
81 applies only to the provision of legal assistance in locations other 
than VA facilities to align with section 548(b)(1) of the Act. These 
statements would be consistent with the intent, purpose, and scope of 
the Grant Program established in section 548(b) of the Act.
    We note that the present Grant Program is distinct from the program 
established by Section 548(a) of the Act, codified in 38 U.S.C. 5906, 
which directs VA to facilitate the provision of pro bono legal 
assistance by a qualified legal clinic at certain VA locations. Legal 
assistance authorized under section 548(a) of the Act is provided at VA 
facilities, operates through pro bono legal clinic partnerships with 
VA, and is only available to veterans, surviving spouses of veterans, 
and children of deceased veterans using the statutory definition of 
veteran under 38 U.S.C. 101(2).
    The present Grant Program is also distinct from the grant program 
authorized by 38 U.S.C. 2022A, codified in 38 CFR part 79 as the Legal 
Services for Homeless Veterans and Veterans At-Risk for Homelessness 
Grant Program (hereinafter referred to as LSV-H), which awards grants 
to provide a wide range of legal services directly addressing the needs 
of homeless veterans and veterans at-risk for homelessness, and also 
uses the statutory definition of veteran under 38 U.S.C. 101(2). While 
the authority for the LSV-H grant program is distinct from the present 
Grant Program, we relied on the LSV-H grant program regulations in 38 
CFR part 79 when drafting these proposed regulations. VA believes 
maintaining as much consistency as possible between these two similar 
grant programs will allow for ease of administration and use by VA, 
eligible entities, and eligible individuals alike. In our discussion 
below, we note the instances where we relied on the LSV-H regulations 
to develop this rulemaking.

81.5 Definitions

    Proposed 38 CFR 81.5 would set forth the definitions, in 
alphabetical order, for terms that apply throughout part 81 and to any 
Notice of Funding Opportunity (NOFO) for the Grant Program.
    VA would define applicant as an entity meeting the eligibility 
criteria of Sec.  81.10 that submits an application for a legal 
assistance grant announced in a NOFO for the Grant Program administered 
under this part. VA would define applicant in this manner since only an 
eligible entity as defined in Sec.  81.10 could submit an application 
for a legal assistance grant in accordance with Sec.  81.25. This 
proposed definition is based on a plain language understanding of the 
term and would be similar to the definition used in the LSV-H grant 
program (see 38 CFR 79.5).
    VA would define Armed Forces as having the meaning given to that 
term in 38 U.S.C. 101(10). Section 101(10) of title 38, U.S.C., defines 
Armed Forces as the United States Army, Navy, Marine Corps, Air Force, 
Space Force, and Coast Guard, including the reserve components thereof. 
Defining this term would be necessary to further identify eligible 
individuals in proposed 38 CFR 81.15, and we would use the definition 
of Armed Forces in 38 U.S.C. 101(10) to maintain consistency among VA 
programs.
    VA would define grantee as an eligible entity that is awarded a 
legal assistance grant under this part. This proposed definition is 
based on a plain language understanding of the term and would be 
similar to the definition used in the LSV-H grant program (see 38 CFR 
79.5).
    VA would define legal assistance clinic as an entity or program 
whose primary purpose is to provide legal assistance to individuals on 
a pro bono basis. The definition would refer collectively to both the 
individuals providing pro bono assistance and to the legal services 
rendered. The term would not be a reference to a certain physical 
space, as legal assistance clinics may operate remotely or virtually. 
This definition would be consistent with the term's common usage in the 
legal community.
    VA would define legal assistance grant as a grant awarded under 
this part. This definition is a plain language understanding of the 
term.
    VA would define nonprofit entity as an entity that meets the 
requirements of 26 U.S.C. 501(c)(3), (6), or (19), which establish the 
criteria for tax exempt status by the Internal Revenue Service. This 
definition would be necessary to further define eligible nonprofit 
entities

[[Page 80174]]

under proposed 38 CFR 81.10 and would be similar to the definition used 
in the LSV-H grant program (see 38 CFR 79.10(c)).
    Nonprofit organizations classified under section 501(c)(3) include 
certain entities operated exclusively for religious, charitable, 
scientific, public safety testing, literary, or educational purposes; 
to foster amateur sports competition; or for the prevention of cruelty 
to children or animals; and that do not substantially participate in 
legislative or political activities. To be eligible under section 
501(c)(3), no net earnings of the entity may benefit a private 
shareholder or individual.
    Nonprofit organizations classified under section 501(c)(6) include 
business leagues, chambers of commerce, real-estate boards, boards of 
trade, or professional football leagues (whether or not administering a 
pension fund for football players). To be eligible under section 
501(c)(6), no net earnings of the entity may benefit a private 
shareholder or individual.
    Nonprofit organizations classified under section 501(c)(19) are 
those entities comprised of current or former members of the Armed 
Forces of the United States; or an auxiliary unit, society, trust, or 
foundation associated with such entity as long as it is organized in 
the United States or any of its possessions, and a majority of its 
members are past or present members of the Armed Forces of the United 
States, with the remainder comprised mostly of individuals who are 
cadets or former members of the Armed Forces of the United States. To 
be eligible under section 501(c)(19), no net earnings of the entity may 
benefit a private shareholder or individual.
    VA would define Notice of Funding Opportunity (NOFO) using the 
meaning given in 2 CFR 200.1, or successor regulations. Section 200.1 
defines NOFO as a formal announcement of the availability of Federal 
funding through a financial assistance program from a Federal awarding 
agency. The NOFO provides information on the award, who is eligible to 
apply, the evaluation criteria for selection of an awardee, the 
required components of an application, and how to submit an 
application. The NOFO is any paper or electronic issuance that an 
agency uses to announce a funding opportunity, whether it is called a 
``program announcement,'' ``notice of funding availability,'' ``broad 
agency announcement,'' ``research announcement,'' ``solicitation,'' or 
some other term. The Grant Program would be subject to the requirements 
of 2 CFR part 200, which establishes the uniform administrative 
requirements, cost principles, and audit requirements for Federal 
awards to non-Federal entities. This definition would also be 
consistent with the LSV-H grant program (see 38 CFR 79.5).
    VA would define participant as an individual meeting the 
eligibility criteria of 38 CFR 81.15 who receives legal assistance from 
a grantee under this part. This is a plain language understanding of 
the term.
    VA would define reserve component as having the meaning given to 
that term in 10 U.S.C. 10101. Section 10101 of title 10, U.S.C., (the 
title applicable to the Armed Forces of the United States) defines the 
reserve components of the Armed Forces as the Army National Guard of 
the United States, the Army Reserve, the Navy Reserve, the Marine Corps 
Reserve, the Air National Guard of the United States, the Air Force 
Reserve, and the Coast Guard Reserve. We would refer to section 10101 
to provide further clarity on the specific types of service that would 
qualify as reserve component service, because VA's definition of 
``Armed Forces'' in 38 U.S.C. 101(10) does not individually define the 
term ``reserve components''. Defining this term would be necessary to 
further identify eligible individuals in proposed 38 CFR 81.15.
    VA would define State as any of the several States of the United 
States, the District of Columbia, the Commonwealth of Puerto Rico, any 
territory or possession of the United States, or any agency or 
instrumentality of a State exclusive of local governments. This would 
be similar to the definition of the term found in 38 U.S.C. 101(20), as 
well as the definition used in the LSV-H grant program (see 38 CFR 
79.5).
    VA would define subcontractor as any third-party contractor, of any 
tier, performing work directly for an eligible entity. This is a common 
understanding of the term and would be consistent with the definition 
used in the LSV-H grant program (see 38 CFR 79.5).
    VA would define suspension as an action by VA that temporarily 
withdraws VA funding under a legal assistance grant, pending corrective 
action by the grantee or pending a decision by VA to terminate the 
legal assistance grant. Suspension of a legal assistance grant would be 
a separate action from suspension under VA regulations or guidance 
implementing Executive Orders 12549 and 12689, ``Debarment and 
Suspension.'' This definition would be consistent with the definition 
used in the LSV-H grant program (see 38 CFR 79.5). However, with 
regards to implementing Executive Orders 12549 and 12689, VA has added 
the word guidance, as not all of VA's implementations of Executive 
Orders are regulatory. Suspension is addressed in proposed 38 CFR 
81.110, which is further discussed in this rulemaking.
    VA would define withholding to mean that payment under a legal 
assistance grant would not be made until such time as VA determines 
that the grantee provides sufficiently adequate documentation and/or 
actions to correct a deficiency for the legal assistance grant. This 
term is defined in this manner as it is intended to provide a general 
description of how this term is used in 2 CFR part 200, which governs 
VA grant programs, including the legal assistance grant program. This 
term relates to withholding payment of a legal assistance grant 
pursuant to 38 CFR 81.110, which is further discussed in this 
rulemaking. This definition would be similar to the definition used in 
the LSV-H grant program (see 38 CFR 79.5).

Sec.  81.10 Eligible Entities

    Proposed 38 CFR 81.10 would set forth the criteria for an entity to 
be considered eligible for the Grant Program. This section would be 
consistent with the provisions specified in section 548(b)(2) of the 
Act, which state that an eligible entity is a veterans service 
organization or other nonprofit organization specifically focused on 
assisting veterans; an entity specifically focused on assisting 
veterans and associated with an accredited law school; a legal services 
organization or bar association; or such other type of entity as VA 
considers appropriate for purposes of the Grant Program. This section 
would also provide additional criteria for such entities to be 
considered eligible for a legal assistance grant.
    Proposed 38 CFR 81.10 would state that an eligible entity must be a 
nonprofit or public entity that meets the following requirements.
    Proposed Sec.  38 CFR 81.10(a) would establish the types of 
nonprofit entities that could be eligible for a legal assistance grant. 
While nonprofit status is required only in section 548(b)(2)(A) for an 
organization that is ``specifically focused on assisting veterans'', 
proposed Sec.  81.10(a) would require that all of the entities set 
forth in proposed paragraphs (1) through (5) operate in a nonprofit 
status to be eligible for a legal assistance grant. We would include 
this additional requirement to ensure that only organizations who do 
not operate for profit would be eligible for a legal assistance grant 
as we believe that would be consistent with the intent of

[[Page 80175]]

the Grant Program, but we note that the majority of these entities 
already operate in a nonprofit status. As discussed previously, 
``nonprofit entity'' would be defined in proposed Sec.  81.5 as an 
entity that meets the requirements of 26 U.S.C. 501(c)(3), (6), or 
(19).
    Proposed 38 CFR 81.10(a)(1) would state that a veterans service 
organization (VSO) that is specifically focused on assisting veterans 
and recognized by VA in accordance with 38 U.S.C. 5902 would be 
eligible for a legal assistance grant. This would be consistent with 
section 548(b)(2)(A) and (e)(2) of the Act. We note that section 
548(b)(2)(A) of the Act limits eligibility to VSOs ``specifically 
focused on assisting veterans'', but we do not believe Congress 
intended to limit eligibility only to those VSOs providing services 
exclusively to veterans as defined in 38 U.S.C. 101(2). Such an 
interpretation would render the language in section 548(b)(1)(A) of the 
Act, which states that ``individuals who served in the Armed Forces'' 
are eligible, superfluous. Therefore, even though the VSO must 
specifically focus on veterans, we would consider VSOs that provide 
services to more than just veterans (specifically those individuals 
eligible under proposed 38 CFR 81.15) to be eligible organizations 
under proposed Sec.  81.10(a)(1). To the extent that Congress did not 
intend this outcome under section 548(b)(2)(A) of the Act, VA would use 
its discretion under section 548(b)(2)(D) of the Act to include VSOs 
that may also provide services to eligible individuals who do not meet 
the criteria to be a veteran under in 38 U.S.C. 101(2).
    Proposed 38 CFR 81.10(a)(2) would state that an organization that 
is specifically focused on assisting veterans, but is not a VSO in 
accordance with proposed paragraph (a)(1), would be eligible for a 
legal assistance grant. This would be consistent with section 
548(b)(2)(A) of the Act. Similar to proposed 38 CFR 81.10(a)(1), VA 
would consider organizations specifically focused on assisting veterans 
that provide services to more than just veterans (specifically those 
individuals eligible under proposed Sec.  81.15) to be eligible 
organizations under proposed Sec.  81.10(a)(2).
    Proposed 38 CFR 81.10(a)(3) would state that an entity associated 
with a law school accredited by the American Bar Association and 
specifically focused on assisting veterans would be eligible for a 
legal assistance grant. This would be consistent with section 
548(b)(2)(B) of the Act. Many law schools operate one or more pro bono 
(no cost) legal assistance clinics as part of their curriculum. These 
legal assistance clinics allow law students to provide legal assistance 
directly to clients under the supervision of a licensed attorney. The 
areas of law and types of individuals served by these legal assistance 
clinics vary among law schools. Section 548(b)(2)(B) of the Act 
specifies that these entities must be ``associated with an accredited 
law school.'' VA would require accreditation by the American Bar 
Association (ABA), as it is the largest and most universal 
accreditation standard for legal education in the United States. 
According to the Law School Admissions Council, only 35 law schools in 
the United States are not ABA-accredited, compared to nearly 200 law 
schools accredited by the ABA. See https://www.lsac.org/choosing-law-school/find-law-school/non-aba-approved-law-schools/ and https://www.americanbar.org/groups/legal_education/resources/aba_approved_law_schools/. VA proposes to adopt this accreditation 
criteria because the ABA requires strict adherence to uniform academic 
standards and using this standard would provide for transparency and 
consistency among Grant Program applicants. See https://www.americanbar.org/groups/legal_education/resources/standards/.
    Proposed 38 CFR 81.10(a)(4) would state that a legal services 
organization would be eligible for a legal assistance grant. Legal 
services organizations are entities whose primary purpose is to provide 
pro bono legal assistance to individuals. Commonly referred to as 
``legal aid,'' each State has one or more organizations providing these 
services, which are typically limited to low-income individuals. Legal 
services organizations may operate from a defined physical space using 
attorneys employed by the organization, or they may be structured as a 
network of attorneys providing pro bono services in their individual 
capacity to clients upon referral from the organization. Legal services 
organizations operate in a nonprofit status and are therefore distinct 
from law firms that operate for profit but may provide limited pro bono 
services. VA would not add any additional criteria for a legal services 
organization to be considered eligible, because these organizations are 
structured similarly and are easily identifiable within the legal 
community. This would be consistent with section 548(b)(2)(C) of the 
Act.
    Proposed 38 CFR 81.10(a)(5) would state that a bar association, 
which is an organization of lawyers aligned at the national, State, or 
local level, would be eligible for a legal assistance grant. Some bar 
associations serve a regulatory function, while others are solely a 
professional organization for members. VA would not add any additional 
criteria for a bar association to be considered eligible, because these 
organizations are structured similarly and are easily identifiable 
within the legal community. This would be consistent with section 
548(b)(2)(C) of the Act.
    Proposed 38 CFR 81.10(b) would establish the three categories of 
public entities that would be eligible for the Grant Program, which 
would be consistent with section 548(b)(2)(D) of the Act.
    Proposed 38 CFR 81.10(b)(1) would state that a local government, 
which would be further defined as a county, municipality, city, town, 
township, local public authority (including any public and Indian 
housing agency under the United States Housing Act of 1937), school 
district, special district, intrastate district, council of governments 
(whether or not incorporated as a nonprofit corporation under state 
law), any other regional or interstate government entity, or any agency 
or instrumentality of a local government, would be eligible for a legal 
assistance grant.
    Proposed paragraph (b)(2) would state that a State government would 
be eligible for a legal assistance grant. We would not include any 
further definition, as this term is commonly understood by the public.
    Proposed paragraph (b)(3) would state that a Federally recognized 
Indian tribal government would be eligible for a legal assistance 
grant. We would further define this term as the governing body or a 
governmental agency of any Indian tribe, band, nation, or other 
organized group or community (including any Native village as defined 
in section 3 of the Alaska Native Claims Settlement Act, 85 Stat. 688) 
certified by the Secretary of the Interior as eligible for the special 
programs and services provided by him through the Bureau of Indian 
Affairs. Using this definition would establish consistency and 
uniformity among Federal agencies in the administration of grants and 
cooperative agreements to State, local, and federally recognized Indian 
tribal governments. Inclusion of these public entities would be 
consistent with the LSV-H grant program (see 38 CFR 79.10).

Sec.  81.15 Eligible Individuals

    Proposed 38 CFR 81.15 would set forth the individuals eligible to 
receive legal assistance from grantees under the Grant Program. 
Proposed paragraph (a)

[[Page 80176]]

would establish the first criterion for an individual to be eligible 
for legal assistance, stating that the individual must have served in 
the Armed Forces, including individuals who served in a reserve 
component of the Armed Forces. This criterion would be consistent with 
the definition of individuals eligible to receive legal assistance 
described in section 548(b)(1)(A) of the Act.
    As explained previously, ``Armed Forces'' and ``reserve component'' 
would be defined in proposed 38 CFR 81.5 as having the meaning given to 
those terms in 38 U.S.C. 101(10) and 10 U.S.C. 10101, respectively. We 
would not use the term ``veteran'' as defined in 38 U.S.C. 101(2) in 
proposed 38 CFR 81.15(a), because the title 38 definition is narrower 
than those who would be explicitly eligible under section 548(b)(1)(A) 
of the Act regarding character of discharge. Relying on the definition 
of ``reserve component'' in 10 U.S.C. 10101 would also clarify that an 
individual who was called to serve in the Army or Air National Guard of 
the United States (pursuant to the authority to federalize the State 
militia under title 10, U.S.C.) would be eligible to receive legal 
assistance, while an individual who served only in the Army or Air 
National Guard of an individual State (pursuant to the authority to 
maintain a State militia under title 32, U.S.C.) would not be eligible 
to receive legal assistance. An individual who was never called to 
Federal service in the Army or Air National Guard of the United States, 
but who served only in the Army or Air National Guard of an individual 
State, would not be eligible for any VA services, regardless of the 
individual's military discharge or characterization of service, and 
such individual would therefore receive no benefit from the types of 
legal assistance able to be provided under the Grant Program as 
established in proposed 38 CFR 81.20.
    Proposed 38 CFR 81.15(b) would establish the second criterion, 
stating that the individual must have been discharged or released 
therefrom, regardless of the conditions of such discharge or release. 
Proposed paragraph (b) would also state that for the purpose of 
determining eligibility, ``discharged or released'' refers to the 
official termination of service in the component of the Armed Forces in 
which the individual served. This would be a commonsense interpretation 
of the term and would be necessary to ensure consistent application 
among the different terminology and documentation used by each military 
service and its reserve component(s). The conditions of an individual's 
discharge or release would not be considered in determining eligibility 
for legal assistance under the Grant Program, which would be a 
deviation from the majority of VA programs and services that use the 
statutory definition of veteran under 38 U.S.C. 101(2) and require an 
individual's discharge or release to be ``under conditions other than 
dishonorable.'' This section would be consistent with the eligibility 
criteria specified in section 548(b)(1)(A) of the Act.

Sec.  81.20 Legal Assistance

    Proposed 38 CFR 81.20 would set forth the types of legal assistance 
eligible individuals could receive from grantees under the Grant 
Program. This section would be consistent with sections 548(b)(1)(A) of 
the Act and 38 U.S.C. 5906(c) with one limitation, which is discussed 
in further detail below.
    Section 548(b)(1)(A) of the Act cites to 38 U.S.C. 5906(c) to 
establish the types of legal assistance that may be provided under the 
Grant Program. Section 5906(c) provides for the following types of 
legal assistance: legal assistance with any program administered by the 
Secretary; legal assistance associated with improving the status of a 
military discharge or characterization of service in the Armed Forces, 
including through a discharge review board or seeking a review of a 
military record before a board of correction for military or naval 
records; and such other legal assistance as the Secretary considers 
appropriate and determines may be needed by eligible individuals.
    Proposed 38 CFR 81.20(a) would explain that legal assistance could 
be provided with regard to any VA program administered by the 
Secretary. This would include navigating the full range of VA programs 
and services such as claims and appeals for compensation and pension, 
education, health care, loans, national cemetery matters, and VA 
character of discharge determinations. This would be consistent with 
section 548(b)(1)(A) of the Act and 38 U.S.C. 5906(c)(1). Pursuant to 
38 U.S.C. 5901, no one can act as an agent or attorney in the 
preparation, presentation, or prosecution of any claim under laws 
administered by VA unless such individual has been recognized for such 
purposes by VA. VA implemented this authority and established a formal 
accreditation process in 38 CFR 14.626 through 14.637. We would include 
a note to proposed paragraph (a) to state that a grantee must be 
accredited consistent with Sec. Sec.  14.626 through 14.637 before 
acting as an agent or attorney in the preparation, presentation, or 
prosecution of any claim under laws administered by VA.
    Proposed 38 CFR 81.20(b) would explain that legal assistance could 
be provided to improve the status of a military discharge or 
characterization of service in the Armed Forces, including through a 
discharge review board. Proposed paragraph (b) would further explain 
that legal assistance could also be provided in seeking review of a 
military record before a board of correction for military or naval 
records. This would be consistent with section 548(b)(1)(A) of the Act 
and 38 U.S.C. 5906(c)(2).
    During consultation, we received two comments encouraging VA to 
include legal assistance for any type of legal issue an eligible 
individual may be facing. We considered this input, but for the 
purposes of the Grant Program, we would not incorporate into regulation 
the ``other legal assistance'' provision in 38 U.S.C. 5906(c)(3). 
Limiting legal assistance provided under the Grant Program to the areas 
specifically listed in 38 U.S.C. 5906(c)(1) and (2) would allow 
grantees to devote maximum resources to ensure this expanded population 
of eligible individuals can access VA programs and services for which 
they may be eligible. That is, VA believes it is critical to focus the 
legal assistance offered under the Grant Program on enabling 
eligibility for VA programs and services and does not intend to add 
assistance under 5906(c)(3) at this time.

Sec.  81.25 Applications for Legal Assistance Grants

    Proposed 38 CFR 81.25 would set forth the process for eligible 
entities to apply for a legal assistance grant under this part.
    Proposed paragraph (a) would provide the requirements for an 
application package to be considered complete, as described in further 
detail in the NOFO. To select eligible entities in accordance with the 
criteria provided in section 548(b)(6) of the Act, Grant Program 
application packages would require the following information:
    Proposed 38 CFR 81.25(a)(1) would state that applicants must 
provide documentation demonstrating the entity is eligible to apply for 
a legal assistance grant under proposed Sec.  81.10. This would ensure 
VA had necessary information to determine the applicant's eligibility 
status and would be consistent with section 548(b)(2) of the Act.
    Proposed 38 CFR 81.25(a)(2) would state that applicants must 
describe their capacity, and the capacity of any

[[Page 80177]]

identified subcontractors, to provide legal assistance to eligible 
individuals. This would be consistent with section 548(b)(6)(A) of the 
Act.
    Proposed 38 CFR 81.25(a)(3) would state that applicants must 
describe the legal assistance they would provide and the identified 
need for that assistance among eligible individuals. This would be 
consistent with section 548(b)(6)(B) of the Act.
    Proposed 38 CFR 81.25(a)(4) would state that applicants must also 
provide documentation that demonstrates their need for financial 
assistance from a legal assistance grant. This would be consistent with 
section 548(b)(6)(C) of the Act.
    Proposed 38 CFR 81.25(a)(5) would state that applicants must 
provide a description of the geographic area or community served by the 
applicant. This would be consistent with section 548(b)(6)(D) of the 
Act.
    Proposed 38 CFR 81.25(a)(6) through (14) would set forth additional 
information necessary to ensure that VA could adequately evaluate 
applicants for the purposes of this Grant Program. These application 
criteria would be similar to criteria used in the LSV-H grant program 
(see 38 CFR 79.25).
    Proposed paragraph (a)(6) would state that applicants must describe 
the physical location where legal assistance will be provided to 
eligible individuals, if applicable (that is, if the applicant would be 
utilizing a physical space).
    Proposed paragraph (a)(7) would state that applicants must describe 
how they will ensure that legal assistance is provided to eligible 
individuals.
    Proposed paragraph (a)(8) would state that applicants must describe 
the characteristics of the eligible individuals who will receive legal 
assistance provided by the applicant. This criterion would provide an 
opportunity for applicants to explain if their proposed program would 
reach special populations, such as medically underserved or tribal 
individuals, and would be consistent with section 548(b)(6)(B) and (E) 
of the Act.
    Proposed paragraph (a)(9) would state that applicants must provide 
an estimate with supporting documentation of the number of eligible 
individuals who will receive legal assistance provided by the 
applicant.
    Proposed paragraph (a)(10) would state that applicants must provide 
documentation relating to their ability to maintain appropriate levels 
of qualified staff and coordinate with any identified subcontractors.
    Proposed paragraph (a)(11) would state that applicants must provide 
documentation relating to their capacity to effectively administer a 
legal assistance grant. This documentation would need to address the 
applicant's accounting practices and financial controls; capacity for 
data collection and reporting required under part 81; and experience 
administering other Federal, State, or county grants similar to the 
Grant Program under this part.
    Proposed paragraph (a)(12) would state that applicants must provide 
documentation of their managerial capacity. This documentation would 
need to address the applicant's capacity to coordinate the provision of 
legal assistance by the applicant or by other organizations on a 
referral basis; continually assess the needs of participants for legal 
assistance; coordinate the provision of legal assistance with services 
provided by VA; customize legal assistance to the needs of eligible 
individuals; and comply with and implement the requirements of part 81 
throughout the term of the legal assistance grant.
    Proposed paragraph (a)(13) would state that applicants must provide 
documentation demonstrating that adequate financial support will be 
available to carry out the legal assistance for which the grant is 
sought consistent with the application.
    Proposed paragraph (a)(14) would state that applicants must provide 
any additional information that VA deems appropriate, which VA would 
specifically list in the NOFO. This inclusive provision would allow VA 
to further tailor application requirements throughout the duration of 
the Grant Program, if necessary.
    Proposed paragraph (b) would state that subject to funding 
availability, grantees could apply for renewal of a legal assistance 
grant if the grantee's program will remain substantially the same. To 
apply for renewal, a grantee would be required to submit a complete 
legal assistance grant renewal application package, as described in the 
NOFO. This would allow VA to renew legal assistance grants in a timely 
and efficient manner without lapse in the provision of legal assistance 
to participants from year to year. This would be consistent with the 
LSV-H grant program (see 38 CFR 79.25(b)).
    Proposed paragraph (c) would state that VA could request, in 
writing, that an applicant or grantee, as applicable, submit other 
information or documentation relevant to the application. This would be 
distinct from proposed paragraph (a)(14), which allows additional 
information to be requested within the NOFO. If an application caused 
concern or failed to address all required information, proposed 
paragraph (c) would allow VA to collect all necessary information to 
properly evaluate each applicant or grantee.

 81.30 Threshold Requirements Prior to Scoring Legal Assistance Grant 
Applicants

    Proposed 38 CFR 81.30 would set forth the threshold requirements 
that must be met before VA would score legal assistance grant 
applicants pursuant to Sec.  81.35.
    Proposed paragraphs (a) through (h) of Sec.  81.30 would state that 
an application would be scored by VA if it demonstrates that the entity 
is eligible to receive a legal assistance grant under Sec.  81.10; if 
it is filed within the time period established in the NOFO and any 
additional information or documentation requested by VA under Sec.  
81.25(c) is provided within the time frame established by VA; if it is 
completed in all parts; if the activities for which the legal 
assistance grant is requested would be eligible for funding under this 
part; if the applicant's proposed participants would be eligible to 
receive legal assistance under this part; if the applicant agrees to 
comply with the requirements of this part; if the applicant does not 
have an outstanding obligation to the Federal government that is in 
arrears and does not have an overdue or unsatisfactory response to an 
audit; and if the applicant is not in default by failing to meet the 
requirements for any previous Federal assistance.
    By establishing these threshold requirements in regulation, 
applicants would be able to clearly determine whether they meet the 
minimum standard before beginning the intensive process of preparing 
and submitting a legal assistance grant application. This section would 
serve as an administrative checklist for applicants and would be 
similar to the LSV-H grant program (see 38 CFR 79.30). These threshold 
requirements would also ensure that VA could effectively utilize its 
resources by scoring only complete applications that could be eligible 
to receive a legal assistance grant.

81.35 Scoring Criteria for Legal Assistance Grant Applicants

    Proposed 38 CFR 81.35 would set forth the criteria to score legal 
assistance grant applicants. VA would establish scoring criteria for 
awarding grants to allow VA to distribute legal assistance grants 
consistent with section 548(b) of the Act and VA's goals and objectives 
for the Grant Program, which would be further detailed in the NOFO.

[[Page 80178]]

    This section would not include specific point values for each 
criterion but would state that point values would be set forth in the 
NOFO. This would provide VA the flexibility to adjust point values 
throughout the administration of the Grant Program, if necessary. 
Values for these criteria could vary according to their likelihood to 
impact the successful development and operation of the applicant's 
program. The proposed scoring criteria would be substantially similar 
to those developed for the LSV-H grant program (see 38 CFR 79.35).
    Proposed 38 CFR 81.35(a) would state that VA would award points 
based on the background, qualifications, experience, and past 
performance of the applicant and any subcontractors identified by the 
applicant in the legal assistance grant application, as demonstrated by 
the criteria described in proposed paragraphs (a)(1) and (2) of this 
section. These criteria would ensure that the applicant has the 
necessary and relevant background as well as the experience to provide 
legal assistance consistent with section 548(b)(6)(A) of the Act.
    Background and organizational history. Proposed 38 CFR 81.35(a)(1) 
would establish how VA would assess an applicant's background and 
organizational history. VA would score an applicant's background and 
organizational history relevant to the provision of legal assistance. 
VA would also score whether the applicant maintains organizational 
structures with clear lines of reporting and defined responsibilities, 
as well as whether the applicant has a history of complying with 
agreements and not defaulting on financial obligations. All 
``background and organizational history'' requirements listed for an 
applicant would also be scored for any subcontractors identified by the 
applicant.
    Organization and staff qualifications. Proposed paragraph (a)(2) 
would establish how VA would assess an applicant's organization and 
staff qualifications. VA would award points based on the applicant's 
experience working with and providing legal assistance to individuals 
who would meet the criteria for eligibility specified in Sec.  81.15. 
VA would consider an applicant's experience working with former members 
of the Armed Forces, who are the individuals eligible for legal 
assistance under proposed Sec.  81.15, as well as an applicant's 
experience working with VA programs and services important to ensure 
the needs of eligible individuals will be met through the Grant 
Program. This would be especially relevant given that the legal 
assistance available under the Grant Program concerns only VA programs 
and services and military service-related matters.
    Applicants would be scored based on their qualifications to provide 
legal assistance, including the professional qualifications of staff 
and the ability to properly supervise law students, if applicable. 
Scoring would take into consideration whether attorneys are properly 
licensed, in good standing as a member of their State bar, and not 
subject to professional disciplinary action. Scoring would also 
consider whether an applicant associated with a law school has 
appropriate staff to meet applicable standards for supervising law 
students engaged in student practice. The rules for supervising law 
students eligible to practice law under the supervision of a practicing 
attorney vary among jurisdictions.
    To ensure that Grant Program resources could be allocated 
appropriately, VA would award points based on the experience of the 
applicant's staff in administering programs similar to the Grant 
Program. All ``organization and staff qualifications'' requirements 
listed for an applicant would also be scored for any subcontractors 
identified by the applicant.
    Proposed paragraph (b) would state that VA would award points based 
on the applicant's program concept and legal assistance plan, as 
demonstrated by the criteria listed in proposed paragraphs (b)(1) 
through (7). These criteria would be used to determine whether the 
applicant has a fully developed program concept and plan able to meet 
the intent of section 548(b) of the Act and this part. These criteria 
would be instrumental in assessing the potential effectiveness of an 
applicant's proposed program and allocating resources to the greatest 
benefit of eligible individuals.
    Need for the program. Proposed 38 CFR 81.35(b)(1) would establish 
how VA would assess the need for the program. Applicants would receive 
points based on the ability to demonstrate a need amongst eligible 
individuals, as well as an understanding of the legal assistance needs 
unique to eligible individuals, in the area or community the program 
would serve. VA would also consider the applicant's demonstration of 
need for financial assistance from the legal assistance grant to serve 
eligible individuals. These selection criteria would be consistent with 
section 548(b)(6)(B) and (C) of the Act.
    Outreach and screening plan. Proposed 38 CFR 81.35(b)(2) would 
establish how VA would assess the applicant's outreach and screening 
plan for eligible individuals. Applicants would receive points based on 
their outreach and referral plan to identify and assist eligible 
individuals in need of legal assistance covered by the Grant Program. 
Applicants would also need to demonstrate a plan to process and receive 
legal assistance referrals and assess and accommodate the needs of 
referred eligible individuals.
    Program concept. Proposed paragraph (b)(3) would establish that 
points would be awarded based on the feasibility of the applicant's 
program concept, size, scope, and staffing plan. Program concept 
scoring would also include whether the applicant's program is 
sufficiently designed to meet the legal needs of eligible individuals.
    Program implementation timeline. Proposed paragraph (b)(4) would 
establish that points would be awarded based on the timeliness of the 
proposed program. This would account for the applicant's ability to 
begin providing legal assistance to eligible individuals as quickly as 
possible and within a specified timeline. Applicants would also be 
scored on the timeliness of their hiring plan or their plan to utilize 
present staff for the program.
    Collaboration and communication with VA. Proposed paragraph (b)(5) 
would establish that points would be awarded based on the applicant's 
plan to coordinate services with local VA facilities.
    Ability to meet Grant Program expectations. Proposed paragraph 
(b)(6) would establish that points would be awarded based on the 
demonstration of commitment to ensuring the applicant's program meets 
VA's requirements, goals, and objectives for the Grant Program as 
specified in the NOFO.
    Capacity to undertake program. Proposed paragraph (b)(7) would 
establish that points would be awarded based on whether the applicant 
has sufficient capacity, including staff resources, to undertake the 
proposed program.
    Proposed paragraph (c) would state that VA would award points based 
on the applicant's quality assurance and evaluation plan, as 
demonstrated by the criteria in proposed paragraphs (c)(1) through (4). 
These factors would be used to assess whether applicants will be 
equipped to adequately evaluate, monitor, report on, remediate, and 
manage the proposed program. These criteria would ensure that 
applicants selected for participation in the Grant Program would be 
able to provide the

[[Page 80179]]

information needed by VA to routinely assess the effectiveness of the 
Grant Program.
    Program evaluation. Proposed paragraph (c)(1) would establish that 
points would be awarded based on the creation of clear, realistic, and 
measurable metrics that align with the Grant Program's aim of 
addressing the legal needs of eligible individuals and through which 
the applicant's program performance can be continually evaluated.
    Monitoring. Proposed paragraph (c)(2) would establish that points 
would be awarded based on the applicant's ability to monitor the 
proposed program. Points awarded would consider whether the applicant 
has adequate controls in place to regularly monitor the program, 
including any subcontractors, for compliance with all applicable laws, 
regulations, and guidelines. Whether the applicant has adequate 
financial and operational controls in place to ensure the proper use of 
legal assistance grant funds would also be considered. VA would score 
the feasibility of the applicant's plan for ensuring that their staff, 
and any subcontractors, are appropriately trained and comply with the 
requirements of part 81.
    Remediation. Proposed paragraph (c)(3) would establish that points 
would be awarded based on the applicant's plan to establish a system to 
remediate noncompliant aspects of the program if and when they are 
identified.
    Management and reporting. Proposed paragraph (c)(4) would establish 
that points would be awarded based on whether the applicant's program 
management team has the capability and a system in place to provide 
timely and accurate reports at the frequency set by VA.
    Proposed paragraph (d) would state that VA would award points based 
on the applicant's financial capability and plan, as demonstrated by 
the criteria listed in proposed paragraphs (d)(1) and (2). These 
criteria ensure that funds would be provided only to applicants who 
have considered the costs and have an acceptable plan to secure 
necessary funding for the consistent provision of legal assistance to 
eligible individuals.
    Organizational finances. Proposed paragraph (d)(1) would establish 
that points would be awarded based on the financial stability of the 
applicant and any identified subcontractors.
    Financial feasibility of the program. Proposed paragraph (d)(2) 
would establish that points would be awarded based on the applicant's 
plan to obtain all funding necessary to operate the proposed program 
for the period of the legal assistance grant. VA would also score the 
cost-effectiveness of the applicant's proposed program and the ability 
to effectively implement it on-budget.
    Proposed paragraph (e) would state that VA would award points based 
on the applicant's connections within the community, a factor VA 
considers key to ensuring the success of the applicant's proposed 
program and the Grant Program overall. Applicants would demonstrate 
this through the criteria listed in proposed paragraphs (e)(1) through 
(4). VA acknowledges that applicants may not have existing 
relationships but could develop them over time. Additionally, VA 
understands that applicants without these connections could obtain them 
through relationships with community partners.
    Area or community linkages. Proposed paragraph (e)(1) would 
establish that points would be awarded based on the applicant's plan to 
develop or rely on existing linkages with VA, Federal, State, local, 
and tribal governments, agencies, and private entities for the purpose 
of providing additional legal assistance to eligible individuals.
    Past working relationships. Proposed paragraph (e)(2) would 
establish that points would be awarded based on the applicant's (or 
applicant's staff's), and any identified subcontractors' (or 
subcontractors' staff's) successful past working relationships and 
linkages with public and private organizations that provide legal and 
non-legal supportive services to eligible individuals.
    Local presence and knowledge. Proposed paragraph (e)(3) would 
establish that points would be awarded based on the applicant's 
presence in the area or community to be served by the applicant, as 
well as the applicant's understanding of the dynamics of that area or 
community.
    Integration of linkages and program concept. Proposed paragraph 
(e)(4) would establish that points would be awarded based on how the 
applicant's linkages to the area or community would enhance the 
effectiveness of the proposed program.

81.40 Selection of Grantees

    Proposed 38 CFR 81.40 would set forth the process for awarding 
legal assistance grants to applicants. These criteria would be 
consistent with the selection criteria in section 548(b)(6) of the Act 
and similar to the LSV-H grant program (see 38 CFR 79.40).
    Proposed paragraph (a) would state that VA would score all 
applicants meeting the threshold requirements specified in Sec.  81.30 
using the scoring criteria specified in Sec.  81.35.
    Proposed paragraph (b) would state that applicants would be grouped 
within the applicable funding priorities if such priorities are set 
forth in the NOFO. Establishing funding priorities in the NOFO would 
provide VA the flexibility to update changing priorities quickly and 
efficiently throughout the conduct of the Grant Program.
    Proposed paragraph (c) would state that applicants receiving the 
minimum amount of total points and points per category set forth in the 
NOFO would be ranked in order from highest to lowest scores, within 
their respective funding priority group, if any. The minimum amount of 
total points and points per category would be specified in the NOFO and 
could change annually. Establishing point values in the NOFO would 
provide VA the flexibility to address changing requirements throughout 
the administration of the Grant Program.
    Proposed paragraph (d) would state that VA would use the 
applicant's ranking as the primary basis for selection for funding. VA 
would ensure that at least one legal assistance grant is distributed to 
an eligible entity in each State, if VA determines that there is such 
an entity in a State that has applied for a legal assistance grant and 
meets the requirements specified in Sec.  81.30. This would be 
consistent with the requirement specified in section 548(b)(3) of the 
Act and would also account for the requirement to consider the 
geographic diversity of applicants specified in section 548(b)(6)(D) of 
the Act.
    Proposed 38 CFR 81.40(e) would state that VA would fund the 
highest-ranked applicants for which funding is available, within the 
highest funding priority group, if any, subject to the provisions of 
proposed paragraph (d) of this section. If funding priorities have been 
established, VA would select applicants in the next highest funding 
priority group based on their rank within that group, to the extent 
funding is available and subject to the provisions of proposed 
paragraph (d) of this section.
    Proposed paragraph (f) would state that VA could select an 
applicant for funding when sufficient funds become available if the 
applicant would have been selected but for a procedural error committed 
by VA. This provision would apply only if there is no material change 
in the information that would have resulted in the applicant's 
selection. A new application would not be required.

[[Page 80180]]

Sec.  81.45 Scoring Criteria for Grantees Applying for Renewal of Legal 
Assistance Grants

    Proposed 38 CFR 81.45 would set forth the criteria to score legal 
assistance grantees applying for renewal of a previously awarded grant. 
Utilization of these scoring criteria would allow VA to review and 
evaluate grantees appropriately to ensure that only successful programs 
would receive additional grant funding. These criteria would be 
consistent with section 548(b) of the Act and similar to the LSV-H 
grant program (see 38 CFR 79.45).
    Proposed paragraph (a) would state that VA would award points based 
on the success of the grantee's program. Success would be determined by 
the overall satisfaction of program participants, if such information 
was available, as well as the timeliness of the legal assistance 
provided to participants by the grantee. VA would score how well the 
grantee developed and sustained relationships with community partners 
to refer eligible individuals in need of legal assistance. Grantees 
would also be scored on their effectiveness in conducting outreach to 
eligible individuals, demonstrated through increased engagement of 
participants.
    Proposed paragraph (b) would state that VA would award points based 
on the cost effectiveness of the grantee's program, demonstrated by 
showing that the cost per participant was reasonable and that the 
program was effectively implemented within budget.
    Proposed paragraph (c) would state that VA would award points based 
on how well the program complied with Grant Program goals and 
requirements. VA would consider whether the grantee's program was 
administered in accordance with VA's goals for the Grant Program as 
described in the NOFO; with all applicable laws, regulations, and 
guidelines; and with the legal assistance grant agreement.
    Proposed paragraph (d) would state that VA would award points based 
on the continued need of the grantee's program for financial assistance 
from the Grant Program to serve eligible individuals. This would be 
consistent with section 548(b)(6)(C) of the Act.

81.50 Selection of Grantees for Renewal of Legal Assistance Grants

    Proposed 38 CFR 81.50 would set forth the process for selecting 
grantees applying for renewal of legal assistance grants. VA would 
score grantees seeking renewal using a simplified process considering 
the success, cost effectiveness, and compliance of their program with 
Grant Program expectations. These criteria would be consistent with 
section 548(b) of the Act and similar to the LSV-H grant program (see 
38 CFR 79.50).
    Proposed 38 CFR 81.50(a) would state that VA would score all 
grantees meeting the threshold requirements specified in Sec.  81.30 
using the scoring criteria specified in Sec.  81.45.
    Proposed paragraph (b) would state that grantees receiving the 
minimum amount of total points and points per category set forth in the 
NOFO would be ranked in order from highest to lowest scores.
    Proposed paragraph (c) would state that VA would use the grantee's 
ranking as the basis for selection for funding and would fund the 
highest-ranked grantees for which funding is available.
    Proposed paragraph (d) would state that VA could award any 
deobligated funds to an applicant or existing grantee at its 
discretion. If VA chose to award deobligated funds to an applicant or 
existing grantee, proposed paragraph (d)(1) would state that VA could 
first offer the deobligated funds to the applicant or grantee with the 
highest score under the relevant NOFO that applies for, or is awarded a 
renewal grant in, the same community as, or a proximate community to, 
the affected community. Such applicant or grantee would have to have 
the capacity and agree to provide prompt services to the affected 
community.
    The relevant NOFO refers to the most recently published NOFO which 
covers the geographic area including the affected community, or for 
multi-year grant awards, the NOFO for which the grantee, who is offered 
additional funds, received the multi-year award. If the first such 
applicant or grantee offered the deobligated funds refuses, proposed 
paragraph (d)(2) would state that VA could then offer the deobligated 
funds to the next highest-ranked applicant or grantee, per the criteria 
in proposed paragraph (d)(1) of this section. VA would continue on in 
rank order until the deobligated funds were awarded. Under proposed 
paragraph (d)(3), VA could offer to award funds under other conditions, 
or could choose not to award the deobligated funds at all, when VA 
deems it appropriate based on other relevant factors.
    Proposed paragraph (e) would state that VA could select a grantee 
for renewed funding when sufficient funds become available if the 
grantee would have been selected for renewal but for a procedural error 
committed by VA. This provision would apply only if there is no 
material change in the information that would have resulted in the 
grantee's selection. A new application would not be required.

81.55 General Operation Requirements

    Proposed 38 CFR 81.55 would set forth the requirements for the 
operation of legal assistance programs administered pursuant to this 
part. These requirements would further the effective administration of 
the grantee's program, ensure that the legal needs of eligible 
individuals are being properly addressed, and would be similar to the 
LSV-H grant program (see 38 CFR 79.55).
    Eligibility documentation. Proposed paragraph (a) would explain how 
grantees must handle and record the eligibility of participants. Prior 
to providing legal assistance, grantees must verify and document an 
individual's eligibility using the criteria specified in Sec.  81.15. 
Once a grantee begins providing legal assistance, the grantee must 
continue to provide legal assistance as long as the participant remains 
eligible and has a need for legal assistance. If a participant becomes 
ineligible or the grantee is unable to meet the participant's legal 
needs, the grantee would be required to provide information about other 
programs and resources or provide a referral to another organization 
able to meet the participant's need.
    Legal assistance documentation. Proposed paragraph (b) would 
explain how grantees must document information about the legal 
assistance provided to participants. Grantees would have to document 
the legal assistance provided and how it was provided. Grantees would 
have to document the duration of the legal assistance provided and 
document the goals for the provision of such assistance. Grantees would 
also have to document any measurable outcomes of the legal assistance 
provided as determined by VA, such as whether the participant's legal 
issue was resolved. This information is necessary to VA to evaluate the 
success of the Grant Program and how to allocate funds.
    Confidentiality. Proposed paragraph (c) would explain that grantees 
must maintain the confidentiality of participant records related to the 
provision of legal assistance. Grantees would have to establish and 
implement procedures ensuring the confidentiality of participant 
records, as well as information related to the address or location 
where legal assistance is provided. The procedures established by a 
grantee must be consistent with the attorney-client confidentiality 
rules of the applicable State bar.

[[Page 80181]]

    Notifications to participants. Proposed paragraph (d) would explain 
that grantees would need to provide certain information to 
participants. Prior to providing legal assistance, grantees would 
inform participants that legal assistance is being paid for, in whole 
or in part, by VA. Participants would also have to be notified of the 
specific type of legal assistance available through the grantee's 
program, as well as any conditions or restrictions on the receipt of 
legal assistance by the participant.
    Assessment of funds. Proposed paragraph (e) would explain that 
grantees must regularly assess how grant funds can be used alongside 
other available funds and services to ensure the continuity of program 
operations and assist participants. This would encourage grantees to 
search for and leverage additional resources that could improve the 
grantee's program and the legal and non-legal needs of participants.
    Administration of legal assistance grants. Proposed paragraph (f) 
would explain that grantees must properly administer legal assistance 
grants. This would include compliance with the requirements of this 
part, with the legal assistance grant agreement, and with other 
applicable Federal, State, and local laws and regulations. Grantees 
would also be responsible for ensuring that the activity of 
subcontractors is in compliance.
    While proposed Sec.  81.55 would not include a reporting 
requirement for the information required from grantees in this section, 
grantees would be required to include such information in a report to 
VA as required and specified in Sec.  81.95. This report, discussed in 
further detail in the discussion of Sec.  81.95 below, would contain 
information relating to a grantee's operational effectiveness, fiscal 
responsibility, compliance with the legal assistance grant agreement, 
and legal and regulatory compliance. Additionally, the records required 
under this section would need to be maintained for at least three years 
as specified in Sec.  81.100, which is also discussed in further detail 
below. These provisions would be consistent with the reporting 
requirement found in section 548(b)(7) of the Act.

81.60 Fee Prohibition

    Proposed 38 CFR 81.60 would explain that grantees would be 
prohibited from charging a fee to participants for providing legal 
assistance funded by a legal assistance grant under this part. This 
prohibition would be mandated by section 548(b) of the Act, which 
requires ``pro bono legal assistance'' for the program and would be 
similar to the LSV-H grant program (see 38 CFR 79.60).
    We note that attorneys providing services in connection with 
representation for benefits outside of this Grant Program may be 
eligible to recover fees and expenses under the provisions of 38 CFR 
14.636 and 14.637. Section 14.636 authorizes accredited agents and 
attorneys to collect reasonable fees directly related to the 
representation of individuals before VA and the Board of Veterans' 
Appeals through a fixed fee, an hourly rate, a percentage of benefits 
recovered, or a combination of such bases. Section 14.637 authorizes 
accredited agents and attorneys to be reimbursed for certain 
nonrecurring expenses such as travel, copying records, and expert 
opinions incurred directly in the prosecution of a claim for benefits. 
However, because the attorneys providing legal assistance under the 
Grant Program must provide such assistance pro bono in accordance with 
the authorizing statute, the fee prohibition in proposed Sec.  81.60 
would apply irrespective of the provisions in Sec.  14.636. The fee 
prohibition in proposed Sec.  81.60 would also apply despite the 
ability for accredited attorneys and agents outside of this program to 
collect certain reimbursement expenses under Sec.  14.637 because these 
fees are only authorized pursuant to a fee agreement, and a fee 
agreement would not be executed in the provision of pro bono legal 
assistance under the Grant Program.

Sec.  81.65 Notice of Funding Opportunity

    Proposed 38 CFR 81.65 would provide information on the Notice of 
Funding Opportunity (NOFO). The NOFO would be a formal announcement 
published on www.grants.gov that communicates specific details about 
the availability and award of legal assistance grants to the public. 
This section would be similar to the LSV-H grant program (see 38 CFR 
79.65).
    This section would explain what would be identified in the NOFO, 
including the location to obtain legal assistance grant applications, 
as well as the date, time, and place to submit completed applications. 
The NOFO would identify the estimated amount and type of funding 
available, including the maximum amount and the length of each award. 
The NOFO would identify specific point values for each criterion 
specified in proposed Sec.  81.35 and 81.45 along with the minimum 
number of total points and points per category that an applicant or 
grantee would need to receive for a legal assistance grant to be 
funded. The NOFO would identify any maximum uses of grant funds for 
specific types of legal assistance and the timeframes and manner of 
payment for legal assistance grants. The NOFO would also identify any 
additional information necessary for the application process as 
determined by VA, including the requirements, goals, and objectives of 
the Grant Program.

Sec.  81.70 Legal Assistance Grant Agreements

    Proposed 38 CFR 81.70 would provide information on legal assistance 
grant agreements, which would be the written agreements executed 
between VA and grantees. These agreements would be legally enforceable 
and provide assurance to VA that grantees would use awarded funds 
properly. This section would be similar to the LSV-H grant program (see 
38 CFR 79.70).
    Proposed paragraph (a) would state that VA would draft and execute 
a legal assistance grant agreement with an applicant after the 
applicant is selected for a legal assistance grant in accordance with 
Sec.  81.40. Upon execution of the agreement, VA would obligate funds 
to cover the amount of the approved legal assistance grant, subject to 
the availability of funding. The grantee would be required to agree, 
and ensure that each subcontractor agrees, to operate the program in 
accordance with their application and the provisions of part 81. 
Grantees would also need to agree to comply with other terms and 
conditions established by VA for purposes of carrying out the Grant 
Program in an effective and efficient manner. Such terms and conditions 
would include recordkeeping and reports for program monitoring and 
evaluation purposes. Grantees would be required to agree to provide 
additional information deemed appropriate by VA.
    Proposed paragraph (b) would state that VA would draft and execute 
a legal assistance grant agreement with a grantee after such grantee is 
selected for grant renewal in accordance with Sec.  81.50. Upon 
execution of the agreement, VA would obligate funds to cover the amount 
of the approved legal assistance grant, subject to the availability of 
funding. The renewed legal assistance grant agreement would contain the 
same provisions described in proposed Sec.  81.70(a).
    Proposed paragraph (c) would explain that Grant Program funds could 
not be used to replace Federal, State, tribal, or local funds 
previously used, or designated for use, to assist eligible individuals.

[[Page 80182]]

Sec.  81.75 Program or Budget Changes and Corrective Action Plans

    Proposed 38 CFR 81.75 would set forth the process for modifications 
to a grantee's program or budget and would provide for the use of a 
corrective action plan (CAP). These provisions would provide necessary 
oversight and control of grantees' programs, allowing VA to address 
deficiencies and ensure grant funds are used properly. This section 
would be similar to the LSV-H grant program (see 38 CFR 79.75).
    Proposed paragraph (a) would state that a grantee must submit a 
written request to VA to modify a legal assistance grant for any 
proposed significant change that would alter its legal assistance 
program. If approved, VA would issue a written amendment to the legal 
assistance grant agreement. A grantee would need to receive VA approval 
prior to implementing a significant change.
    Proposed paragraph (a)(1) would state that significant changes 
would include--but would not be limited to--a change in the grantee or 
any subcontractors identified in the legal assistance grant agreement; 
a change in the area or community served by the grantee; additions or 
deletions of legal assistance provided by the grantee; a change in 
category of eligible individuals to be served; and a change in budget 
line items that are more than ten percent of the total legal assistance 
grant award.
    Proposed paragraph (a)(2) would state that VA's approval of changes 
would be contingent upon the grantee's amended application retaining a 
sufficient rank to have been competitively selected for funding in the 
year the application was granted. Modification requests would need to 
contain a description of, and justification for, the revised proposed 
use of legal assistance grant funds.
    Proposed paragraph (b) would state that VA could require a grantee 
to initiate, develop, and submit a CAP if, on a quarterly basis, actual 
legal assistance grant expenditures vary from the amount disbursed to a 
grantee for that same quarter or actual legal assistance grant 
activities vary from the grantee's program description provided in the 
legal assistance grant agreement.
    A CAP would need to identify the expenditure or activity source 
that has caused the deviation, describe the reason(s) for the variance, 
and provide specific proposed corrective action(s) and a timetable for 
accomplishment of the corrective action. After receipt, VA would inform 
the grantee, by letter, whether the CAP is approved or disapproved. If 
the CAP is disapproved, VA would make suggestions to improve the 
proposed CAP and request resubmission. VA could also take other 
remedial actions in accordance with this part.
    Proposed paragraph (c) would state that grantees must inform VA in 
writing of any grantee address changes and key personnel changes, such 
as a new executive director, legal assistance grant program director, 
or chief financial officer. Notice of these changes would need to be 
given to VA within 30 days of the change.

Sec.  81.80 Faith-Based Organizations

    Proposed 38 CFR 81.80 would state that faith-based organizations 
would be eligible, on the same basis as other organizations, to 
participate in the Grant Program under this part. This section would 
reference the requirements of 38 CFR part 50. Part 50 explains that 
faith-based organizations are eligible to participate in VA's grant-
making programs on the same basis as any other organizations, that VA 
will not discriminate against faith-based organizations in the 
selection of service providers, and that faith-based and other 
organizations may request accommodations from program requirements and 
may be afforded such accommodations in accordance with Federal law.
    VA would apply the provisions of part 50 to the Grant Program 
established under part 81. However, we would not restate the provisions 
of part 50 in part 81. In the event that VA makes future amendments to 
part 50, such amendments would apply to the Grant Program without 
further need to amend part 81.

Sec.  81.85 Visits To Monitor Operations and Compliance

    Proposed 38 CFR 81.85 would set forth VA's authority to conduct 
visits for the purpose of inspecting a grantee's legal assistance grant 
program for compliance with the requirements of this part. The ability 
to conduct inspections and monitor operations would provide critical 
oversight for legal assistance grants and would be similar to the LSV-H 
grant program (see 38 CFR 79.85).
    Proposed paragraph (a) would authorize VA to make visits at 
reasonable times to all grantee locations where legal assistance grant 
funds are being utilized. The purpose of these visits would be to 
review grantee accomplishments and management control systems and to 
provide technical assistance as required. VA would conduct these 
inspections of program locations and records of a grantee at such times 
as necessary to determine compliance with the provisions of this part.
    If the visit would be to the premises of the grantee or a 
subcontractor, the grantee, and any subcontractor, would need to 
provide all reasonable facilities and assistance for the safety and 
convenience of the VA representatives in the performance of their 
duties. If legal assistance would be provided at a participant's home 
or a location away from the grantee's place of business, VA could 
accompany the grantee but would only visit a participant's home with 
consent of the participant. All visits and evaluations would be 
performed in such a manner as to not unduly delay services.
    Proposed paragraph (b) would clarify that the authority to inspect 
would not provide VA with authority over the management or control of 
any applicant or grantee under this part.

Sec.  81.90 Financial Management and Administrative Costs

    Proposed 38 CFR 81.90 would set forth the financial management 
expectations for grant funds. While this section would specifically 
mention certain general principles, it would also orient readers to the 
full financial management requirements of 2 CFR part 200. This 
reference would ensure that applicants and grantees would be aware that 
legal assistance grants would be subject to the additional requirements 
of part 200. VA would refer to part 200 rather than including all 
applicable provisions to prevent the necessity of changes to this part 
if changes to part 200 are later made. This section would be similar to 
the LSV-H grant program (see 38 CFR 79.90).
    Proposed paragraph (a) would state that grantees must comply with 
applicable requirements of the Uniform Administrative Requirements, 
Cost Principles, and Audit Requirements for Federal Awards under 2 CFR 
part 200, which applies to all Federal funds awarded to non-Federal 
entities.
    Proposed 38 CFR 81.90(b) would state that grantees must use a 
financial management system that provides adequate fiscal control and 
accounting records and meets the requirements established in 2 CFR part 
200. Financial management requirements are currently located in Sec.  
200.302.
    Proposed 38 CFR 81.90(c) would state that payment up to the amount 
specified in the legal assistance grant must be made only for 
allowable, allocable, and reasonable costs in conducting the work under 
the grant. The determination of allowable costs would need to be made 
in accordance with the applicable

[[Page 80183]]

Federal cost principles found in 2 CFR part 200. Cost principles are 
currently located in Sec. Sec.  200.400 through 200.476.
    Proposed 38 CFR 81.90(d) would adopt the requirement in 2 CFR 
200.414, or successor regulations, that all grantees may request 
indirect costs by applying the negotiated indirect cost rate 
established with their Federal cognizant agency; by applying a de 
minimis rate as described in 2 CFR 200.414(f), or successor 
regulations, if they do not have a negotiated indirect cost rate; or 
requesting to negotiate an indirect cost rate with VA or their Federal 
cognizant agency.

Sec.  81.95 Grantee Reporting Requirements

    Proposed 38 CFR 81.95 would set forth the reporting requirements 
for legal assistance grantees. These requirements would be consistent 
with section 548(b)(7) of the Act, which states that legal assistance 
grantees must report on their activities and the utilization of grant 
funds in accordance with criteria established by VA. These requirements 
would allow for oversight and prudent management of taxpayer dollars 
and would be similar to the LSV-H grant program (see 38 CFR 79.95).
    Proposed 38 CFR 81.95(a) would state that VA could require grantees 
to provide, in such form as may be prescribed, such reports or answers 
in writing to specific questions, surveys, or questionnaires as VA 
determines necessary to carry out the Grant Program.
    Proposed paragraph (b) would state that grantees must submit to VA 
at least once per year, or at another frequency set by VA, a report 
containing information on the grantee's performance under the Grant 
Program. This report would contain data concerning the operational 
effectiveness and fiscal responsibility of the grantee, as well as the 
grantee's compliance with the legal assistance grant agreement and all 
applicable laws and regulations. The report would need to include a 
breakdown of how the grantee utilized legal assistance grant funds, the 
number of participants assisted, and describe the legal assistance 
provided to participants. Because the Grant Program would serve an 
expanded population of eligible individuals, this report would also 
need to include critical data on each participant, including gender, 
age, race, service era, branch of service, component, and status of 
military discharge or characterization of service. The information 
specified in proposed paragraph (b) would be critical to analyze and 
monitor the grantee's performance, and VA would be able to request any 
additional information if necessary.
    Proposed paragraph (c) would state that VA retains the discretion 
to request additional reports or information needed to fully assess the 
provision of legal assistance under this part. This inclusive provision 
would allow VA to collect all necessary information to properly assess 
and develop the Grant Program, and VA anticipates that requests under 
proposed paragraph (c) would vary on a based on the grantee's 
circumstances. This provision would also allow VA to clarify any 
information received in other reports from a grantee, if necessary.
    Proposed paragraph (d) would state that grantees must connect 
financial data to performance data and develop unit cost information 
whenever practical. This data would be instrumental in evaluating the 
financial efficiency of the grantee's program and the individual legal 
assistance provided.
    Proposed paragraph (e) would state that all pages of reports must 
cite the grantee's legal assistance grant number and be submitted in a 
timely manner as specified in the grant agreement.
    Proposed paragraph (f) would state that grantees must provide 
consent to post report information on the internet and in other ways 
deemed appropriate by VA. Additionally, grantees would be required to 
redact confidential information based on attorney-client privilege, 
unless the privilege has been waived by the client. These provisions 
would allow VA to keep the public informed of the availability and 
progression of the Grant Program.

Sec.  81.100 Recordkeeping

    Proposed 38 CFR 81.100 would set forth the recordkeeping 
requirements for legal assistance grantees. To document compliance with 
the requirements of the Grant Program, grantees would be required to 
maintain all relevant records for three years (unless a longer period 
is otherwise required by VA) and produce them upon request by VA. 
Maintaining records for this period would provide VA the information it 
needs to oversee and manage the Grant Program. This provision would be 
consistent with the recordkeeping requirements for Federal awards found 
in 2 CFR 200.334, as well as the reporting requirement found in section 
548(b)(7) of the Act. This provision would also be similar to the LSV-H 
grant program (see 38 CFR 79.100).

Sec.  81.105 Technical Assistance

    Proposed 38 CFR 81.105 would explain that VA would provide 
technical assistance to applicants and grantees, as necessary, to help 
them meet the requirements of this part. This assistance would be 
provided directly by VA or through contracts with appropriate public or 
nonprofit private entities. Assistance could include resources for 
planning, development, and provision of legal assistance to eligible 
individuals. VA could also offer training sessions to help applicants 
and grantees understand and implement the Grant Program. This section 
would also be similar to the LSV-H grant program (see 38 CFR 79.105).

Sec.  81.110 Withholding, Suspension, Deobligation, Termination, and 
Recovery of Funds by VA

    Proposed 38 CFR 81.110 would explain that VA would enforce part 81 
through appropriate actions such as withholding, suspension, 
deobligation, termination, recovery of funds by VA, and any other 
allowable actions in accordance with 2 CFR part 200. This section would 
be similar to the LSV-H grant program (see 38 CFR 79.110).
    Similar to proposed 38 CFR 81.90, proposed Sec.  81.110 would 
reference 2 CFR part 200 to ensure that applicants and grantees would 
be aware that legal assistance grants would be subject to the 
additional requirements of part 200. Remedies for noncompliance and 
collection of funds are currently located in Sec. Sec.  200.208, 
200.305, 200.339 through 200.343, and 200.346. Rather than including 
all applicable provisions, VA would refer to part 200 to prevent the 
necessity of changes to part 81 if changes to part 200 are later made.
    Certain enforcement actions under proposed 38 CFR 81.110, such as 
suspension and termination, could result in a disruption of legal 
assistance to participants. We do not propose to regulate the 
responsibilities of grantees to continue providing services or to 
coordinate the transfer of participants to other sources of legal 
support. Instead, we would include such requirements and 
responsibilities in the grant agreement that VA and the grantee would 
enter into, which would ensure any disruption and impact on 
participants is minimized as much as possible.

Sec.  81.115 Legal Assistance Grant Closeout Procedures

    Proposed 38 CFR 81.115 would explain that legal assistance grants 
would be closed out in accordance with the provisions of 2 CFR part 
200. Similar to proposed 38 CFR 81.90 and 81.110, proposed Sec.  81.115 
would reference 2 CFR part 200 to ensure that applicants and grantees 
are aware that

[[Page 80184]]

legal assistance grants would be subject to these additional 
requirements. VA would refer to part 200 rather than include the 
relevant requirements in this section in case changes are later made to 
part 200. Procedures for closing out Federal awards are currently 
located in Sec. Sec.  200.344 and 200.345. 38 CFR 81.115 would be 
similar to the LSV-H grant program (see 38 CFR 79.115).

Executive Orders 12866, 13563, and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
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 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and definitions governing contemporary 
regulatory review established in Executive Order 12866 of September 30, 
1993 (Regulatory Planning and Review), and Executive Order 13563 of 
January 18, 2011 (Improving Regulation and Regulatory Review). The 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is not a significant regulatory action under Executive Order 
12866, as amended by Executive Order 14094. The Regulatory Impact 
Analysis associated with this rulemaking can be found as a supporting 
document at www.regulations.gov.

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). To the extent there is any such impact, it would 
result in financial assistance to eligible entities who apply for a 
legal assistance grant. 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 proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

    This proposed rule includes provisions constituting collections of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) that require approval by the Office of Management and Budget 
(OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of 
this rulemaking action to OMB for review.
    OMB assigns control numbers to collections of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. Section 81.25 contains application 
provisions for legal assistance grants, including renewals. Section 
81.75 contains provisions for program or budget changes and submission 
of corrective action plans. Section 81.95 contains grantee reporting 
requirements. These sections are collections of information under the 
Paperwork Reduction Act of 1995. If OMB does not approve the 
collections of information as requested, VA will immediately remove the 
provisions containing a collection of information or take such other 
action as is directed by OMB.
    Comments on the new collection of information contained in this 
rulemaking should be submitted through www.regulations.gov. Comments 
should be sent within 60 days of publication of this rulemaking. The 
collection of information associated with this rulemaking can be viewed 
at www.reginfo.gov/public/do/PRAMain. OMB is required to make a 
decision concerning the collection of information contained in this 
rulemaking between 30 and 60 days after publication of this rulemaking 
in the Federal Register. Therefore, a comment to OMB is best assured of 
having its full effect if OMB receives it within 30 days of 
publication. This does not affect the deadline for the public to 
comment on the provisions of this rulemaking.
    The Department considers comments by the public on collections of 
information in--
    <bullet> Evaluating whether the collections of information are 
necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
    <bullet> Evaluating the accuracy of the Department's estimate of 
the burden of the collections of information, including the validity of 
the methodology and assumptions used;
    <bullet> Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
    <bullet> Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses. The collections of information 
contained in 38 CFR 81.25, 81.75, and 81.95 are described immediately 
following this paragraph, under their respective titles.

    Title: Application for the Legal Services for Veterans--Legal 
Assistance for Access to VA Programs (LSV-A) Grant Program.
    OMB Control No: 2900-xxxx (New/TBD).
    CFR Provision: 38 CFR 81.25.
    <bullet> Summary of collection of information: The new collection 
of information in 38 CFR 81.25 contains application provisions for the 
LSV-A Grant Program.
    <bullet> Description of need for information and proposed use of 
information: This information is needed to award legal assistance 
grants to eligible entities.
    <bullet> Description of likely respondents: Nonprofit private and 
public legal service entities applying for grants.
    <bullet> Estimated number of respondents per year: 100.
    <bullet> Estimated frequency of responses: Once annually.
    <bullet> Estimated average burden per response: 1,440 minutes.
    <bullet> Estimated total annual reporting and recordkeeping burden: 
2,400 hours.
    <bullet> Estimated cost to respondents per year: Using VA's average 
annual number of respondents, VA estimates the application information 
collection burden cost to respondents as $137,112.00 per year * (2,400 
burden hours x $57.13 per hour).

    Title: Renewal Application for the Legal Services for Veterans--
Assistance with Access to VA Programs (LSV-A) Grant Program.
    OMB Control No: 2900-xxxx (New/TBD).
    CFR Provision: 38 CFR 81.25.
    <bullet> Summary of collection of information: The new collection 
of information in 38 CFR 81.25 requires grantees who want to renew 
their LSV-A grant to file a renewal application.

[[Page 80185]]

    <bullet> Description of need for information and proposed use of 
information: VA needs this information to renew legal assistance grants 
previously awarded.
    <bullet> Description of likely respondents: Grant program grantees 
seeking a renewal of funds.
    <bullet> Estimated number of respondents: 85.
    <bullet> Estimated frequency of responses: Once annually.
    <bullet> Estimated average burden per response: 1,200 minutes.
    <bullet> Estimated total annual reporting and recordkeeping burden: 
1,700 hours.
    <bullet> Estimated cost to respondents per year: Using VA's average 
annual number of respondents, VA estimates the renewal application 
information collection burden cost to respondents as $97,121.00 per 
year * (1,700 burden hours x $57.13 per hour).

    Title: Budget Changes and Corrective Action Plan (CAP) for the 
Legal Services for Veterans--Legal Assistance for Access to VA Programs 
(LSV-A) Grant Program.
    OMB Control No: 2900-xxxx (New/TBD).
    CFR Provision: 38 CFR 81.75.
    <bullet> Summary of collection of information: The new collection 
of information in 38 CFR 81.75 would require grantees to inform VA of 
changes to their approved program through an amendment process.
    <bullet> Description of need for information and proposed use of 
information: This information is needed for a grantee to inform VA of 
significant changes that will alter a grant program approved by VA. In 
addition, VA may require grantees to initiate, develop, and submit to 
VA for approval corrective action plans (CAPs) if actual legal 
assistance grant expenditures vary from the amount disbursed to a 
grantee for that same quarter or actual legal assistance grant 
activities vary from the grantee's program description provided in the 
LSV-A grant agreement.
    <bullet> Description of likely respondents: Grantees who desire to 
modify their approved grant program.
    <bullet> Estimated number of respondents: 10.
    <bullet> Estimated frequency of responses: Once annually.
    <bullet> Estimated average burden per response: 120 minutes.
    <bullet> Estimated total annual reporting and recordkeeping burden: 
20 hours.
    <bullet> Estimated cost to respondents per year: Using VA's average 
annual number of respondents, VA estimates the total CAP information 
collection burden cost to respondents as $1,142.60 per year * (20 
burden hours x $57.13 per hour).
    Title: Quarterly Performance Reporting Requirements for the Legal 
Services for Veterans--Legal Assistance for Access to VA Programs (LSV-
A) Grant Program.
    OMB Control No: 2900-xxxx (New/TBD).
    CFR Provision: 38 CFR 81.95.
    <bullet> Summary of collection of information: The new collection 
of information in 38 CFR 81.95 would require the grantee to submit 
reports pertaining to operational effectiveness and other applicable 
LSV-A grant agreement requirements.
    <bullet> Description of need for information and proposed use of 
information: VA will use this information to determine grantee program 
effectiveness and compliance with the requirements for the LSV-A Grant 
Program.
    <bullet> Description of likely respondents: Program grantees for 
the current grant award year.
    <bullet> Estimated number of respondents: 85.
    <bullet> Estimated frequency of responses: Quarterly = 4 times per 
year.
    <bullet> Estimated average burden per response: 60 minutes.
    <bullet> Estimated total annual reporting and recordkeeping burden: 
340 hours.
    <bullet> Estimated cost to respondents per year: Using VA's average 
annual number of respondents, VA estimates the total performance report 
information collection burden cost to respondents as $19,424.20 per 
year * (340 burden hours for respondents x $57.13 per hour).
    Title: Bi-Annual Finance Reporting Requirements for the Legal 
Services for Veterans--Legal Assistance for Access to VA Programs (LSV-
A) Grant Program.
    OMB Control No: 2900-xxxx (New/TBD).
    CFR Provision: 38 CFR 81.95.
    <bullet> Summary of collection of information: The new collection 
of information in 38 CFR 81.95 would require the grantee to submit 
reports pertaining to cost effectiveness, fiscal responsibility, and 
other applicable LSV-A grant agreement requirements.
    <bullet> Description of need for information and proposed use of 
information: VA will use this information to determine grantee program 
effectiveness and compliance with the requirements for the LSV-A Grant 
Program.
    <bullet> Description of likely respondents: Program grantees for 
the current grant award year.
    <bullet> Estimated number of respondents: 85.
    <bullet> Estimated frequency of responses: Bi-annually = 2 times 
per year.
    <bullet> Estimated average burden per response: 60 minutes.
    <bullet> Estimated total annual reporting and recordkeeping burden: 
170 hours.
    <bullet> Estimated cost to respondents per year: Using VA's average 
annual number of respondents, VA estimates the total finance report 
information collection burden cost to respondents as $9,712.10 per year 
* (170 burden hours for respondents x $57.13 per hour).
    * The total burden cost to respondents for the information 
collections associated with the LSV-A Grant Program regulation is 
estimated to be $264,511.90.

Assistance Listing

    The Assistance Listing number and title for the program affected by 
this document is 64.056, Legal Services for Veterans Grants.

List of Subjects in 38 CFR Part 81

    Administrative practice and procedure; Armed Forces; Armed Forces 
Reserves; Disability benefits; Grant programs--health; Grant programs--
law; Grant programs--social programs; Grant programs--veterans; Grants 
administration; Health care; Lawyers; Legal services; Military law; 
Military personnel; Nonprofit organizations; Public assistance 
programs; Reporting and recordkeeping requirements; Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved and signed 
this document on September 27, 2024, 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.

Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR chapter I to add part 81 to read as 
follows:

PART 81--LEGAL SERVICES FOR VETERANS--LEGAL ASSISTANCE FOR ACCESS 
TO VA PROGRAMS GRANT PROGRAM

Sec.
81.0 Purpose and scope.
81.5 Definitions.
81.10 Eligible entities.
81.15 Eligible individuals.
81.20 Legal assistance.
81.25 Applications for legal assistance grants.
81.30 Threshold requirements prior to scoring legal assistance grant 
applicants.
81.35 Scoring criteria for legal assistance grant applicants.

[[Page 80186]]

81.40 Selection of grantees.
81.45 Scoring criteria for grantees applying for renewal of legal 
assistance grants.
81.50 Selection of grantees for renewal of legal assistance grants.
81.55 General operation requirements.
81.60 Fee prohibition.
81.65 Notice of Funding Opportunity (NOFO).
81.70 Legal assistance grant agreements.
81.75 Program or budget changes and corrective action plans.
81.80 Faith-based organizations.
81.85 Visits to monitor operations and compliance.
81.90 Financial management and administrative costs.
81.95 Grantee reporting requirements.
81.100 Recordkeeping.
81.105 Technical assistance.
81.110 Withholding, suspension, deobligation, termination, and 
recovery of funds by VA.
81.115 Legal assistance grant closeout procedures.

    Authority:  38 U.S.C. 501, Section 548(b) of Pub. L. 116-283, 
and as noted in specific sections.


Sec.  81.0   Purpose and scope.

    (a) Purpose. This part implements the Legal Services for Veterans--
Legal Assistance for Access to VA Programs Grant Program to award 
grants to eligible entities to establish new legal assistance clinics 
or enhance existing legal assistance clinics or other pro bono efforts 
providing legal assistance to eligible individuals.
    (b) Scope. This part applies only to the provision of legal 
assistance in locations other than VA facilities.


Sec.  81.5   Definitions.

    For purposes of this part and any Notice of Funding Opportunity 
(NOFO) issued under this part:
    Applicant means an entity meeting the eligibility criteria of Sec.  
81.10 that submits an application for a legal assistance grant 
announced in a NOFO under this part.
    Armed Forces has the meaning given to that term in 38 U.S.C. 
101(10).
    Grantee means an eligible entity that is awarded a legal assistance 
grant under this part.
    Legal assistance clinic means an entity or program whose primary 
purpose is to provide legal assistance to individuals on a pro bono 
basis.
    Legal assistance grant means a grant awarded under this part.
    Nonprofit entity means an entity that meets the requirements of 26 
U.S.C. 501(c)(3), (6), or (19).
    Notice of Funding Opportunity (NOFO) has the meaning given to this 
term in 2 CFR 200.1, or successor regulations.
    Participant means an individual meeting the eligibility criteria of 
Sec.  81.15 who receives legal assistance from a grantee under this 
part.
    Reserve component has the meaning given to that term in 10 U.S.C. 
10101.
    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments.
    Subcontractor means any third-party contractor, of any tier, 
performing work directly for an eligible entity.
    Suspension means an action by VA that temporarily withdraws VA 
funding under a legal assistance grant, pending corrective action by 
the grantee or pending a decision by VA to terminate the legal 
assistance grant. Suspension of a legal assistance grant is a separate 
action from suspension under VA regulations or guidance implementing 
Executive Orders 12549 and 12689, ``Debarment and Suspension.''
    Withholding means that payment under a legal assistance grant will 
not be made until such time as VA determines that the grantee provides 
sufficiently adequate documentation and/or actions to correct a 
deficiency for the legal assistance grant.


Sec.  81.10   Eligible entities.

    To be an eligible entity under this part, the entity must be a 
nonprofit or public entity that meets the following requirements.
    (a) A nonprofit entity must be:
    (1) A veterans service organization that is specifically focused on 
assisting veterans and recognized by the Secretary in accordance with 
38 U.S.C. 5902;
    (2) An organization that is specifically focused on assisting 
veterans but is not a veterans service organization under paragraph 
(a)(1);
    (3) An entity associated with a law school accredited by the 
American Bar Association and specifically focused on assisting 
veterans;
    (4) A legal services organization; or
    (5) A bar association.
    (b) A public entity must be:
    (1) A local government, which is a county, municipality, city, 
town, township, local public authority (including any public and Indian 
housing agency under the United States Housing Act of 1937), school 
district, special district, intrastate district, council of governments 
(whether or not incorporated as a nonprofit corporation under state 
law), any other regional or interstate government entity, or any agency 
or instrumentality of a local government;
    (2) A State government; or
    (3) A federally recognized Indian tribal government, which is the 
governing body or a governmental agency of any Indian tribe, band, 
nation, or other organized group or community (including any Native 
village as defined in section 3 of the Alaska Native Claims Settlement 
Act, 85 Stat 688) certified by the Secretary of the Interior as 
eligible for the special programs and services provided by the Bureau 
of Indian Affairs.


Sec.  81.15   Eligible individuals.

    To be eligible for legal assistance under Sec.  81.20, an 
individual must:
    (a) Have served in the Armed Forces, including individuals who 
served in a reserve component of the Armed Forces; and
    (b) Have been discharged or released therefrom, regardless of the 
conditions of such discharge or release. For the purpose of determining 
eligibility, ``discharged or released'' refers to the official 
termination of service in the component of the Armed Forces in which 
the individual served.


Sec.  81.20   Legal assistance.

    Legal assistance provided under this Grant Program is limited to 
the following:
    (a) Legal assistance with any VA program administered by the 
Secretary.
    Note to paragraph (a): A grantee must be accredited consistent with 
Sec. Sec.  14.626 through 14.637 before acting as an agent or attorney 
in the preparation, presentation, or prosecution of any claim under 
laws administered by VA.
    (b) Legal assistance associated with:
    (1) Improving the status of a military discharge or 
characterization of service in the Armed Forces, including through a 
discharge review board; or
    (2) Seeking a review of a military record before a board of 
correction for military or naval records.


Sec.  81.25   Applications for legal assistance grants.

    (a) To apply for a legal assistance grant, an applicant must submit 
to VA a complete legal assistance grant application package, as 
described in the NOFO. A complete legal assistance grant application 
package includes the following:
    (1) Documentation that demonstrates the applicant is an eligible 
entity under Sec.  81.10;
    (2) A description of the capacity of the applicant, and any 
identified subcontractors, to provide legal assistance to eligible 
individuals;
    (3) A description of the legal assistance to be provided by the 
applicant and the identified need for

[[Page 80187]]

such legal assistance among eligible individuals;
    (4) Documentation that demonstrates the applicant's need for 
financial assistance from a legal assistance grant;
    (5) A description of the geographic area or community served by the 
applicant;
    (6) A description of the physical location where the applicant will 
provide legal assistance to eligible individuals, if applicable;
    (7) A description of how the applicant will ensure that legal 
assistance is provided to eligible individuals;
    (8) A description of the characteristics of eligible individuals 
who will receive legal assistance provided by the applicant;
    (9) An estimate with supporting documentation of the number of 
eligible individuals who will receive legal assistance provided by the 
applicant;
    (10) Documentation relating to the applicant's ability to maintain 
appropriate levels of qualified staff and coordinate with any 
identified subcontractors;
    (11) Documentation relating to the applicant's capacity to 
effectively administer a grant under this section that describes the 
applicant's:
    (i) Accounting practices and financial controls;
    (ii) Capacity for data collection and reporting required under this 
part; and
    (iii) Experience administering other Federal, State, or county 
grants similar to the Grant Program under this part.
    (12) Documentation of the managerial capacity of the applicant to:
    (i) Coordinate the provision of legal assistance by the applicant 
or by other organizations on a referral basis;
    (ii) Assess continuously the needs of participants for legal 
assistance;
    (iii) Coordinate the provision of legal assistance with services 
provided by VA;
    (iv) Customize legal assistance to the needs of eligible 
individuals; and
    (v) Comply with and implement the requirements of this part 
throughout the term of the legal assistance grant;
    (13) Documentation that demonstrates that adequate financial 
support will be available to carry out the legal assistance for which 
the grant is sought consistent with the application; and
    (14) Any additional information as deemed appropriate by VA and 
listed in the NOFO.
    (b) Subject to funding availability, grantees may submit an 
application for renewal of a legal assistance grant if the grantee's 
program will remain substantially the same. To apply for renewal of a 
legal assistance grant, a grantee must submit to VA a complete legal 
assistance grant renewal application package, as described in the NOFO.
    (c) VA may request in writing that an applicant or grantee, as 
applicable, submit other information or documentation relevant to the 
legal assistance grant application.


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


Sec.  81.30   Threshold requirements prior to scoring legal assistance 
grant applicants.

    VA will only score applicants who meet the following threshold 
requirements:
    (a) The application demonstrates that the entity is eligible to 
receive a legal assistance grant under Sec.  81.10;
    (b) The application is filed within the time period established in 
the NOFO, and any additional information or documentation requested by 
VA under Sec.  81.25(c) is provided within the time frame established 
by VA;
    (c) The application is completed in all parts;
    (d) The activities for which the legal assistance grant is 
requested are eligible for funding under this part;
    (e) The applicant's prospective participants are eligible to 
receive legal assistance under this part;
    (f) The applicant agrees to comply with the requirements of this 
part;
    (g) The applicant does not have an outstanding obligation to the 
Federal government that is in arrears and does not have an overdue or 
unsatisfactory response to an audit; and
    (h) The applicant is not in default by failing to meet the 
requirements for any previous Federal assistance.


Sec.  81.35   Scoring criteria for legal assistance grant applicants.

    VA will score applicants who apply for a legal assistance grant. VA 
will set forth specific point values to be awarded for each criterion 
in the NOFO. VA will use the following criteria to score these 
applicants:
    (a) VA will award points based on the background, qualifications, 
experience, and past performance of the applicant, and any 
subcontractors identified by the applicant in the legal assistance 
grant application, as demonstrated by the following:
    (1) Background and organizational history.
    (i) Applicant's, and any identified subcontractors', background and 
organizational history relevant to providing legal assistance.
    (ii) Applicant, and any identified subcontractors, maintain 
organizational structures with clear lines of reporting and defined 
responsibilities.
    (iii) Applicant, and any identified subcontractors, have a history 
of complying with agreements and not defaulting on financial 
obligations.
    (2) Organization and staff qualifications.
    (i) Applicant, and any identified subcontractors, have experience 
working with individuals who meet the eligible individual criteria in 
Sec.  81.15.
    (ii) Applicant, and any identified subcontractors, have experience 
providing legal assistance to individuals who meet the eligible 
individual criteria in Sec.  81.15.
    (iii) Applicant's staff, and any identified subcontractors' staff, 
are qualified to provide legal assistance, and as applicable, are in 
good standing as a member of the applicable State bar. In the case of 
an entity associated with a law school, applicant maintains appropriate 
staff to meet applicable standards for supervising law students 
authorized to practice within the jurisdiction.
    (iv) Applicant's staff, and any identified subcontractors' staff, 
have experience administering programs similar to the Grant Program 
under this part.
    (b) VA will award points based on the applicant's program concept 
and legal assistance plan, as demonstrated by the following:
    (1) Need for the program.
    (i) Applicant has shown a need amongst eligible individuals in the 
area or community where the program will be based.
    (ii) Applicant demonstrates an understanding of the legal 
assistance needs unique to eligible individuals in the area or 
community where the program will be based.
    (iii) Applicant has shown a need for financial assistance from a 
legal assistance grant in order to serve eligible individuals.
    (2) Outreach and screening plan.
    (i) Applicant has a feasible outreach and referral plan to identify 
and assist eligible individuals in need of legal assistance.
    (ii) Applicant has a plan to process and receive legal assistance 
referrals for eligible individuals.
    (iii) Applicant has a plan to assess and accommodate the needs of 
referred eligible individuals.
    (3) Program concept.
    (i) Applicant's program concept, size, scope, and staffing plan are 
feasible.
    (ii) Applicant's program is designed to meet the legal needs of 
eligible individuals.
    (4) Program implementation timeline.

[[Page 80188]]

    (i) Applicant's program will be implemented in a timely manner and 
legal assistance will be delivered to eligible individuals as quickly 
as possible and within a specified timeline.
    (ii) Applicant has a feasible hiring plan in place to meet the 
applicant's program timeline or has existing staff to meet such 
timeline.
    (5) Collaboration and communication with VA. Applicant has a 
feasible plan to coordinate services with local VA facilities.
    (6) Ability to meet Grant Program expectations. Applicant 
demonstrates commitment to ensuring that its program meets VA's 
requirements, goals, and objectives for the Grant Program as identified 
in the NOFO.
    (7) Capacity to undertake program. Applicant has sufficient 
capacity, including staff resources, to undertake the program.
    (c) VA will award points based on the applicant's quality assurance 
and evaluation plan, as demonstrated by the following:
    (1) Program evaluation. Applicant has created clear, realistic, and 
measurable metrics that align with the Grant Program's aim of 
addressing the legal needs of eligible individuals and through which 
the applicant's program performance can be continually evaluated.
    (2) Monitoring.
    (i) Applicant has adequate controls in place to regularly monitor 
the program, including any subcontractors, for compliance with all 
applicable laws, regulations, and guidelines.
    (ii) Applicant has adequate financial and operational controls in 
place to ensure the proper use of legal assistance grant funds.
    (iii) Applicant has a feasible plan for ensuring that the 
applicant's staff and any subcontractors are appropriately trained and 
comply with the requirements of this part.
    (3) Remediation. Applicant has an appropriate plan to establish a 
system for remediating noncompliant aspects of the program if and when 
they are identified.
    (4) Management and reporting. Applicant's program management team 
has the capability and a system in place to provide to VA timely and 
accurate reports at the frequency set by VA.
    (d) VA will award points based on the applicant's financial 
capability and plan, as demonstrated by the following:
    (1) Organizational finances. Applicant, and any identified 
subcontractors, are financially stable.
    (2) Financial feasibility of the program.
    (i) Applicant has a realistic plan for obtaining all funding 
required to operate the program for the period of the legal assistance 
grant.
    (ii) Applicant's program is cost-effective and can be effectively 
implemented on-budget.
    (e) VA will award points based on the applicant's area or community 
linkages and relations, as demonstrated by the following:
    (1) Area or community linkages. Applicant has a plan for developing 
or relying on existing linkages with Federal (including VA), State, 
local, and tribal governments, agencies, and private entities for the 
purpose of providing additional legal assistance to eligible 
individuals.
    (2) Past working relationships. Applicant (or applicant's staff), 
and any identified subcontractors (or subcontractors' staff), have 
fostered successful working relationships and linkages with public and 
private organizations providing legal and non-legal supportive services 
to eligible individuals.
    (3) Local presence and knowledge.
    (i) Applicant has a presence in the area or community to be served 
by the applicant.
    (ii) Applicant understands the dynamics of the area or community to 
be served by the applicant.
    (4) Integration of linkages and program concept. Applicant's 
linkages to the area or community to be served by the applicant enhance 
the effectiveness of the applicant's program.


Sec.  81.40   Selection of grantees.

    VA will use the following process to select applicants to receive 
legal assistance grants:
    (a) VA will score all applicants that meet the threshold 
requirements set forth in Sec.  81.30 using the scoring criteria set 
forth in Sec.  81.35.
    (b) VA will group applicants within the applicable funding 
priorities if funding priorities are set forth in the NOFO.
    (c) VA will rank those applicants who receive at least the minimum 
amount of total points and points per category set forth in the NOFO, 
within their respective funding priority group, if any. The applicants 
will be ranked in order from highest to lowest scores, within their 
respective funding priority group, if any.
    (d) VA will use the applicant's ranking as the primary basis for 
selection for funding. However, VA will ensure that legal assistance 
grants are distributed to at least one eligible entity in each State, 
if VA determines that there is such an entity in a State that has 
applied for a legal assistance grant and meets the requirements set 
forth in Sec.  81.30.
    (e) Subject to paragraph (d) of this section, VA will fund the 
highest-ranked applicants for which funding is available, within the 
highest funding priority group, if any. If funding priorities have been 
established, to the extent funding is available and subject to 
paragraph (d) of this section, VA will select applicants in the next 
highest funding priority group based on their rank within that group.
    (f) If an applicant would have been selected but for a procedural 
error committed by VA, VA may select that applicant for funding when 
sufficient funds become available if there is no material change in the 
information that would have resulted in the applicant's selection. A 
new application will not be required for this purpose.


Sec.  81.45   Scoring criteria for grantees applying for renewal of 
legal assistance grants.

    VA will score grantees who are applying for a renewal of a legal 
assistance grant. VA will set forth the specific point values to be 
awarded for each criterion in the NOFO. VA will use the following 
criteria to score grantees applying for renewal of a legal assistance 
grant:
    (a) VA will award points based on the success of the grantee's 
program, as demonstrated by the following:
    (1) Participants were satisfied with the legal assistance provided 
by the grantee.
    (2) The grantee delivered legal assistance to participants in a 
timely manner.
    (3) The grantee implemented the program by developing and 
sustaining relationships with community partners to refer eligible 
individuals in need of legal assistance.
    (4) The grantee was effective in conducting outreach to eligible 
individuals and increased engagement of participants seeking legal 
assistance provided by the grantee.
    (b) VA will award points based on the cost effectiveness of the 
grantee's program, as demonstrated by the following:
    (1) The cost per participant was reasonable.
    (2) The grantee's program was effectively implemented within 
budget.
    (c) VA will award points based on the extent to which the grantee's 
program complied with the Grant Program's goals and requirements, as 
demonstrated by the following:
    (1) The grantee's program was administered in accordance with VA's

[[Page 80189]]

goals for the Grant Program as described in the NOFO.
    (2) The grantee's program was administered in accordance with all 
applicable laws, regulations, and guidelines.
    (3) The grantee's program was administered in accordance with the 
grantee's legal assistance grant agreement.
    (d) The continued need of the grantee's program for financial 
assistance from the legal assistance grant in order to serve eligible 
individuals.


Sec.  81.50   Selection of grantees for renewal of legal assistance 
grants.

    VA will use the following process to select grantees applying for 
renewal of legal assistance grants:
    (a) So long as the grantee continues to meet the threshold 
requirements set forth in Sec.  81.30, VA will score the grantee using 
the scoring criteria set forth in Sec.  81.45.
    (b) VA will rank those grantees who receive at least the minimum 
amount of total points and points per category set forth in the NOFO. 
The grantees will be ranked in order from highest to lowest scores.
    (c) VA will use the grantee's ranking as the basis for selection 
for funding. VA will fund the highest-ranked grantees for which funding 
is available.
    (d) At its discretion, VA may award any deobligated funds to an 
applicant or existing grantee. If VA chooses to award deobligated funds 
to an applicant or existing grantee, funds will be awarded as follows:
    (1) VA may first offer to award the deobligated funds to the 
applicant or grantee with the highest grant score under the relevant 
NOFO that applies for, or is awarded a renewal grant in, the same 
community as, or a proximate community to, the affected community. Such 
applicant or grantee must have the capacity and agree to provide prompt 
services to the affected community. For the purposes of this section, 
the relevant NOFO is the most recently published NOFO which covers the 
geographic area that includes the affected community, or for multi-year 
grant awards, the NOFO for which the grantee, who is offered the 
additional funds, received the multi-year award.
    (2) If the first such applicant or grantee offered the deobligated 
funds refuses the funds, VA may offer to award the funds to the next 
highest-ranked applicant or grantee, per the criteria in paragraph 
(d)(1) of this section, and continue on in rank order until the 
deobligated funds are awarded.
    (3) VA, at its discretion, may choose to award the deobligated 
funds under other conditions, or may choose to not award the 
deobligated funds at all, when VA determines appropriate based on 
consideration of other relevant factors.
    (e) If a grantee would have been selected but for a procedural 
error committed by VA, VA may select that grantee for funding when 
sufficient funds become available if there is no material change in the 
information that would have resulted in the grantee's selection. A new 
application will not be required for this purpose.


Sec.  81.55   General operation requirements.

    (a) Eligibility documentation.
    (1) Prior to providing legal assistance, grantees must verify and 
document an individual's eligibility for legal assistance using the 
criteria set forth in Sec.  81.15.
    (2) Once the grantee initiates legal assistance, the grantee will 
continue to provide legal assistance to the participant so long as the 
individual continues meet the eligibility criteria set forth in Sec.  
81.15.
    (3) If a grantee finds that a participant is ineligible to receive 
legal assistance under this part, or the grantee is unable to meet the 
legal needs of that participant, the grantee must provide information 
on other available programs and resources or provide a referral to 
another legal services organization that is able to meet the 
participant's need.
    (b) Legal assistance documentation. For each participant who 
receives legal assistance from the grantee, the grantee must document 
the legal assistance provided, how such assistance was provided, the 
duration of the assistance provided, goals for the provision of such 
assistance, and measurable outcomes of the legal assistance provided as 
determined by VA, such as whether the participant's legal issue was 
resolved.
    (c) Confidentiality. Grantees must maintain the confidentiality of 
records kept in connection to legal assistance provided to 
participants. Grantees that provide legal assistance must establish and 
implement procedures to ensure the confidentiality of:
    (1) Records pertaining to any participant, and
    (2) The address or location where legal assistance is provided.


Such confidentiality must be consistent with the grantee's State bar 
rules on confidentiality in an attorney-client relationship.
    (d) Notifications to participants. Prior to initially providing 
legal assistance to a participant, the grantee must notify each 
participant of the following:
    (1) The legal assistance is being paid for, in whole or in part, by 
VA;
    (2) The specific legal assistance available to the participant 
through the grantee's program; and
    (3) Any conditions or restrictions on the receipt of legal 
assistance by the participant.
    (e) Assessment of funds. Grantees must regularly assess how legal 
assistance grant funds can be used in conjunction with other available 
funds and services to ensure continuity of program operations and to 
assist participants.
    (f) Administration of legal assistance grants. Grantees must ensure 
that legal assistance grants are administered in accordance with the 
requirements of this part, the legal assistance grant agreement, and 
other applicable Federal, State, and local laws and regulations. 
Grantees are responsible for ensuring that any subcontractors carry out 
activities in compliance with this part.


Sec.  81.60   Fee prohibition.

    Grantees must not charge a fee to participants for providing legal 
assistance that is funded with amounts from a legal assistance grant 
under this part. Grantees may not recover fees otherwise authorized 
under 38 CFR 14.636.


Sec.  81.65   Notice of Funding Opportunity (NOFO).

    When funds are available for legal assistance grants, VA will 
publish a NOFO on Grants.gov. The NOFO will identify:
    (a) The location for obtaining legal assistance grant applications;
    (b) The date, time, and place for submitting completed legal 
assistance grant applications;
    (c) The estimated amount and type of legal assistance grant funding 
available, including the maximum grant funding available per award;
    (d) The length of term for the legal assistance grant award;
    (e) Specific point values to be awarded for each criterion listed 
in Sec. Sec.  81.35 and 81.45;
    (f) The minimum number of total points and points per category that 
an applicant or grantee, as applicable, must receive for a legal 
assistance grant to be funded;
    (g) Any maximum uses of legal assistance grant funds for specific 
legal assistance;
    (h) The timeframes and manner for payments under the legal 
assistance grant; and
    (i) Other information necessary for the legal assistance grant 
application

[[Page 80190]]

process as determined by VA, including the requirements, goals, and 
objectives of the Grant Program.


Sec.  81.70   Legal assistance grant agreements.

    (a) After an applicant is selected for a legal assistance grant in 
accordance with Sec.  81.40, VA will draft a legal assistance grant 
agreement to be executed by VA and the applicant. Upon execution of the 
legal assistance grant agreement, VA will obligate legal assistance 
grant funds to cover the amount of the approved legal assistance grant, 
subject to the availability of funding. The legal assistance grant 
agreement will provide that the grantee agrees, and will ensure that 
each subcontractor agrees, to:
    (1) Operate the program in accordance with the provisions of this 
part and the applicant's legal assistance grant application;
    (2) Comply with such other terms and conditions, including 
recordkeeping and reports for program monitoring and evaluation 
purposes, as VA may establish for purposes of carrying out the Grant 
Program, in an effective and efficient manner; and
    (3) Provide such additional information as deemed appropriate by 
VA.
    (b) After a grantee is selected for renewal of a legal assistance 
grant in accordance with Sec.  81.50, VA will draft a legal assistance 
grant agreement to be executed by VA and the grantee. Upon execution of 
the legal assistance grant agreement, VA will obligate legal assistance 
grant funds to cover the amount of the approved legal assistance grant, 
subject to the availability of funding. The legal assistance grant 
agreement will contain the same provisions described in paragraph (a) 
of this section.
    (c) No funds provided under this part may be used to replace 
Federal, State, tribal, or local funds previously used, or designated 
for use, to assist eligible individuals.


Sec.  81.75   Program or budget changes and corrective action plans.

    (a) Change in legal assistance grant agreement. A grantee must 
submit to VA a written request to modify a legal assistance grant for 
any proposed significant change that will alter its legal assistance 
program. If VA approves such change, VA will issue a written amendment 
to the legal assistance grant agreement. A grantee must receive VA's 
approval prior to implementing a significant change.
    (1) Significant changes include, but are not limited to:
    (i) A change in the grantee or any subcontractors identified in the 
legal assistance grant agreement;
    (ii) A change in the area or community served by the grantee;
    (iii) Additions or deletions of legal assistance provided by the 
grantee; and
    (iv) A change in category of eligible individuals to be served; and 
a change in budget line items that are more than 10 percent of the 
total legal assistance grant award.
    (2) VA's approval of changes is contingent upon the grantee's 
amended application retaining a sufficient rank to have been 
competitively selected for funding in the year that the application was 
granted.
    (3) Each legal assistance grant modification request must contain a 
description of, and justification for, the revised proposed use of 
legal assistance grant funds.
    (b) Corrective action plan. VA may require that the grantee 
initiate, develop, and submit to VA for approval a corrective action 
plan (CAP) if, on a quarterly basis, actual legal assistance grant 
expenditures vary from the amount disbursed to a grantee for that same 
quarter or actual legal assistance grant activities vary from the 
grantee's program description provided in the legal assistance grant 
agreement.
    (1) The CAP must identify the expenditure or activity source that 
has caused the deviation, describe the reason(s) for the variance, 
provide specific proposed corrective action(s), and provide a timetable 
for accomplishment of the corrective action.
    (2) After receipt of the CAP, VA will send a letter to the grantee 
indicating that the CAP is approved or disapproved. If disapproved, VA 
will make beneficial suggestions to improve the proposed CAP and 
request resubmission or take other actions in accordance with this 
part.
    (c) Grantees must inform VA in writing of any key personnel changes 
(e.g., new executive director, grant program director, or chief 
financial officer) and grantee address changes within 30 days of the 
change.


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


Sec.  81.80   Faith-based organizations.

    Organizations that are faith-based are eligible, on the same basis 
as any other organization, to participate in the Grant Program under 
this part in accordance with 38 CFR part 50.


Sec.  81.85   Visits to monitor operations and compliance.

    (a) VA has the right, at all reasonable times, to make visits to 
all grantee locations where a grantee is using legal assistance grant 
funds in order to review grantee accomplishments and management control 
systems and to provide such technical assistance as may be required. VA 
may conduct inspections of all program locations and records of a 
grantee at such times as are deemed necessary to determine compliance 
with the provisions of this part. If a grantee delivers services in a 
participant's home, or at a location away from the grantee's place of 
business, VA may accompany the grantee. If the grantee's visit is to 
the participant's home, VA will only accompany the grantee with the 
consent of the participant. If any visit is made by VA on the premises 
of the grantee or a subcontractor under the legal assistance grant, the 
grantee must provide, and must require its subcontractors to provide, 
all reasonable facilities and assistance for the safety and convenience 
of the VA representatives in the performance of their duties. All 
visits and evaluations will be performed in such a manner as will not 
unduly delay services.
    (b) The authority to inspect carries with it no authority over the 
management or control of any applicant or grantee under this part.


Sec.  81.90   Financial management and administrative costs.

    (a) Grantees must comply with applicable requirements of the 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards under 2 CFR part 200.
    (b) Grantees must use a financial management system that provides 
adequate fiscal control and accounting records and meets the 
requirements set forth in 2 CFR part 200.
    (c) Payment up to the amount specified in the legal assistance 
grant must be made only for allowable, allocable, and reasonable costs 
in conducting the work under the legal assistance grant. The 
determination of allowable costs must be made in accordance with the 
applicable Federal cost principles set forth in 2 CFR part 200.
    (d) In accordance with 2 CFR 200.414, or successor regulations, 
grantees may, in regard to indirect costs:
    (i) Apply the negotiated indirect cost rate established with their 
Federal cognizant agency;
    (ii) Apply a de minimis rate, as described in 2 CFR 200.414(f), or

[[Page 80191]]

successor regulations, if they do not have a negotiated indirect cost 
rate; or
    (iii) Request to negotiate an indirect cost rate with VA or their 
Federal cognizant agency.


Sec.  81.95   Grantee reporting requirements.

    (a) VA may require grantees to provide, in such form as may be 
prescribed, such reports or answers in writing to specific questions, 
surveys, or questionnaires as VA determines necessary to carry out the 
Grant Program.
    (b) At least once per year, or at the frequency set by VA, each 
grantee must submit to VA a report containing information relating to 
operational effectiveness; fiscal responsibility; legal assistance 
grant agreement compliance; and legal and regulatory compliance. This 
report must include a breakdown of how the grantee used the legal 
assistance grant funds; the number of participants assisted; 
information on each participant's gender, age, race, service era, 
branch of service, component, and status of military discharge or 
characterization of service; a description of the legal assistance 
provided to each participant; and any other information that VA 
requests.
    (c) VA may request additional reports or information to allow VA to 
fully assess the provision of legal assistance under this part.
    (d) Grantees must relate financial data to performance data and 
develop unit cost information whenever practical.
    (e) All pages of the reports must cite the assigned legal 
assistance grant number and be submitted in a timely manner as set 
forth in the grant agreement.
    (f) Grantees must provide VA with consent to post information from 
reports on the internet and use such information in other ways deemed 
appropriate by VA. Grantees must clearly redact information that is 
confidential based on attorney-client privilege, unless that privilege 
has been waived by the client.


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


Sec.  81.100   Recordkeeping.

    Grantees must ensure that records are maintained for at least a 3-
year period (unless a longer period is otherwise required) to document 
compliance with this part. Grantees must produce such records at VA's 
request.


Sec.  81.105   Technical assistance.

    VA will provide technical assistance, as necessary, to applicants 
and grantees to meet the requirements of this part. Such technical 
assistance will be provided either directly by VA or through contracts 
with appropriate public or nonprofit private entities.


Sec.  81.110   Withholding, suspension, deobligation, termination, and 
recovery of funds by VA.

    VA will enforce this part through such actions as may be 
appropriate. Appropriate actions include withholding, suspension, 
deobligation, termination, recovery of funds by VA, and actions in 
accordance with 2 CFR part 200.


Sec.  81.115   Legal assistance grant closeout procedures.

    Legal assistance grants will be closed out in accordance with 2 CFR 
part 200.

[FR Doc. 2024-22606 Filed 10-1-24; 8:45 am]
BILLING CODE 8320-01-P


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