[Federal Register Volume 61, Number 117 (Monday, June 17, 1996)]
[Notices]
[Pages 30625-30632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15010]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Substance Abuse and Mental Health Services Administration


Block Grant Allocation Processes

AGENCY: Substance Abuse and Mental Health Services Administration, HHS.

ACTION: Notice and opportunity for public comment.

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SUMMARY: The Substance Abuse and Mental Health Services Administration 
(SAMHSA) allocates funding to States and territories for the Community 
Mental Health Services (CMHS) Block Grant and the Substance Abuse 
Prevention and Treatment (SAPT) Block Grant. This notice describes the 
formulas which the law requires be used for distributing these funds 
and the information used in making the calculations.
    This notice has five parts. Section I provides background 
information on the allocation process. Section II describes the 
legislation and the formulas applicable to the Community Mental Health 
Services Block Grant. Section III describes the legislation and the 
formulas applicable to the Substance Abuse Prevention and Treatment 
Block Grant. Section IV provides detailed information on the sources of 
data used in the calculations. Section V contains technical information 
important in making the actual calculations.

DATES: Written comments must be received by August 1, 1996. Any written 
comments received will be taken into

[[Page 30626]]

consideration and will become a matter of public record.

ADDRESSES: Written comments should be addressed to Nancy Pearce, Office 
of Applied Studies, Substance Abuse and Mental Health Services 
Administration, Room 16-105, 5600 Fishers Lane, Rockville, MD 20857, 
Fax (301) 443-9847.

FOR FURTHER INFORMATION CONTACT: Nancy Pearce, Office of Applied 
Studies, Substance Abuse and Mental Health Services Administration, 
Room 16-105, 5600 Fishers Lane, Rockville, MD 20857, Phone (301) 443-
7978, Fax (301) 443-9847.

I. Background

    The Omnibus Reconciliation Act of 1981 established a single Block 
Grant for supporting alcohol, drug abuse, and mental health services, 
the Alcohol, Drug Abuse and Mental Health Services (ADMS) Block Grant. 
On July 10, 1992, the ADAMHA Reorganization Act was signed into law, 
Public Law 102-321. This Act amended the Public Health Service Act and, 
among other things, established two separate Block Grants to replace 
the ADMS Block Grant. The Community Mental Health Services (CMHS) Block 
Grant supports community mental health services; the Substance Abuse 
Prevention and Treatment (SAPT) Block Grant supports services for the 
prevention and treatment of substance abuse. Public Law 102-321 also 
contains eligibility criteria for receipt of funds under the Grants and 
provides the formulas and methods for determining States and 
territorial allotments of funds under each type of block Grant.
    Under the legislation, the Secretary of the U.S. Department of 
Health and Human Services (DHHS), acting through the Director of 
SAMHSA's Center for Mental Health Services and through the Center for 
Substance Abuse Treatment, determines the allotments for States and 
territories for both Block Grants and disburses federal funds to 
eligible States and territories.
    In July, 1995, responsibility for calculating the amount of support 
each State and territory receives in a given fiscal year was assigned 
to the Office of Applied Studies in the Substance Abuse and Mental 
Health Services Administration (SAMSHA). The Center for Substance Abuse 
Treatment and the Center for Mental Health Services manage the grants.
    SAMHSA is publishing this notice to inform the public about how 
block grant allocations are calculated and provide an opportunity for 
comment.

II. Legislative Requirements and Allocation Process for Community 
Mental Health Services (CMHS) Block Grant

A. Legislative Requirements

    Sections 1911 through 1920 of the Public Health Service (PHS) Act 
establish the Community Mental Health Services (CMHS) Block Grant and 
rules that must be followed in making these grants. Section 1920(a) of 
the Act authorizes the appropriation of funds for the CMHS Block Grant; 
the size of the appropriation is determined each year by the Congress. 
Section 1920 of the Act also specifies that 5 percent of the amount 
appropriated in a given year shall be used by the Department of Health 
and Human Services (DHHS) to collect data on mental health services and 
patients and conduct evaluations of programs to prevent and treat 
mental health problems. The remaining 95 percent of any appropriation 
for the CMHS Block Grant must be allocated to the States and 
territories.
    Section 1918 of the PHS Act provides formulas for making these 
allocations. Of the 95 percent of the appropriation available for 
distribution 98.5 percent must be given to the States and 1.5 percent 
must be distributed to the territories.

B. State Allocations

    The amount of an allotment for an individual State is determined by 
three factors: the Population at Risk, the Cost of Services Index, and 
the Fiscal Capacity Index. The Population at Risk represents the 
relative risk of mental health problems in a State. The Cost of 
Services Index represents the relative costs of providing mental health 
services in a State. The Fiscal Capacity Index represents the relative 
ability of a State to pay for mental health services. The product of 
these three terms establishes the need for a given State.
    Formulas for calculating Population at Risk and the Fiscal Capacity 
Index are specified in Sections 1918(a)(5) and (6) of the PHS Act. The 
Cost of Services Index formula is included by reference and derived 
from a report entitled Adjusting the Alcohol, Drug Abuse and Mental 
Health Services Block Grant Allocations for Poverty Populations and 
Cost of Service, dated March 30, 1990, prepared by Health Economics 
Research.
    The law requires the estimate of the Population at Risk and the 
Fiscal Capacity Index be revised each fiscal year. The Cost of Services 
Index is revised every third fiscal year. Section 1918(a)(8) of the PHS 
Act provides that the first determination of the Cost of Services Index 
would be made on October 1, 1992. The same factor remained in effect 
until FY 1995 when a new Index was developed. The Index will be 
recalculated for FY 1998. DHHS is also directed by the legislation to 
``periodically make such refinements in the methodology * * *'' for the 
calculation of the Cost of Services Index as are consistent with the 
purpose of this adjustment of the allotments. (See Technical Note B, 
Section V.)

C. State Calculations for the Mental Health Block Grant

    The allocation for each State is calculated using equations 
described below. For the purposes of explanation, the subscript ``I'' 
is used to denote an individual State or the District of Columbia. The 
symbol ``<greek-S>''is used to denote the summation over the 50 States 
and the District of Columbia.

General Equation:

SALLOC<INF>i = 0.985*0.95*AMT*(P<INF>i*C<INF>i*F<SUP>i)/
(<greek-S>(P<INF>i*C<INF>i*F<INF>i))    (1)

where:
SALLOC<INF>i = State specific allotment of the block grant.
AMT = appropriation for mental health and related services.
P<INF>i = State specific Population at Risk (calculated using 
Equation 2).
C<INF>i = State specific Cost of Services Index (calculated using 
Equation 3).
F<INF>i = State specific Fiscal Capacity Index (calculated using 
Equation 8).

    The coefficients 0.985 and 0.95 are specified in the legislation. 
The first coefficient (0.985) represents the proportion of the total 
allocable funds available for distribution to the States and the 
District of Columbia. The second coefficient (0.95) represents the 
proportion of the total appropriation available for allocation to all 
recipients--the States, the District of Columbia, and the territories.

Equation for the State Population at Risk:

P<INF>i = 0.107*P18-24<INF>i+0.166*P25-44<INF>i+0.099*P45-
64<INF>i+0.082*P65UP<INF>i    (2)

where:
P18-24<INF>i = State specific population aged 18 to 24.
P25-44<INF>i = State specific population aged 25 to 44.
P45-64<INF>i = State specific population aged 45 to 64.
P65UP<INF>i = State specific population aged 65 and older.

    The coefficients 0.107, 0.166, 0.099, and 0.082 are specified in 
the legislation. The population of each State by age group is obtained 
from the Bureau of the Census, ``Resident Population of States, by 
Single Year of Age,'' using the most current data available as of 
October 1 of each year.

Equation for the Cost of Services Index:


[[Page 30627]]


C<INF>i = 0.9 if 0.75*W<INF>i+0.15*R<INF>i+0.10*S<INF>i < 0.9    (3)
1.1 if 0.75*W<INF>i+0.15*R<INF>i+0.10*S<INF>i > 1.1 C<INF>i = 
0.75*W<INF>i+0.15*R<INF>i+0.10*S<INF>i otherwise

where:
W<INF>i = State specific wage subindex (calculated using Equation 
4).
R<INF>i = State specific rent subindex (calculated using Equation 
5).
S<INF>i = State specific supplies subindex.

    The coefficients 0.75, 0.15, and 0.10 are specified in the report 
cited by the legislation, as is S<INF>i, which is equal to 1 for all 
States and the District of Columbia. The boundary values of 0.9 and 1.1 
are specified in the legislation.

Equation for State Specific Wage Subindex:

W<INF>i = AVGSTHW<INF>i/AVGUSHW    (4)

where:
AVGSTHW<INF>i = average State specific hourly manufacturing wage 
including overtime.
AVGUSHW = average U.S. hourly manufacturing wage including overtime.

    The State and national wage data are obtained from the Bureau of 
Labor Statistics, Current Employment Statistics Survey, ``Employment, 
Hours and Earnings,'' using the most current data available as of 
October 1 of each year.

Equation for State Specific Rent Subindex:

R<INF>i = AVGSTRTi/AVGUSRT    (5)

where:
AVGSTRT<INF>i = weighted average State specific rent (calculated 
using Equation 6).
AVGUSRT = weighted average U.S. rent (calculated using Equation 7).

Equation for Weighted Average State Specific Rent:

AVGSTRTi = (<greek-S>POP<INF>ij*RENT<INF>ij)/(<greek-S>POP<INF>ij)    
(6)

where:
POP<INF>ij = population of jth subarea of the State.
RENT<INF>ij = fair market rent of 4-bedroom dwelling in jth subarea 
of the State.

    Each State is subdivided into ``J'' mutually exclusive subareas 
that cover the State. If the State is not a New England State, 
population source data PSOURCE<INF>ij (obtained at the State, county, 
subdivision and place levels from the Bureau of the Census, ``Census of 
Population and Housing''), and rent source data RTSOURCE<INF>ij 
(obtained at the State, county, and SMSA levels from the Department of 
Housing and Urban Development, ``Fair Market Rents...'') are used to 
calculate POP<INF>ij and RENT<INF>ij on a county-level basis (after 
addition of population of ``independent cities'' for HI, MD, MO, MT, 
and VA). If State I is a New England State, SMSA codes (obtained from 
the Office of Management and Budget, ``Revised Statistical Definitions 
of Metropolitan Areas (MAs) and Guidance on Uses of MA Definitions'') 
are matched to county subdivisions; the non-SMSA balances of county 
populations (using data obtained from the Bureau of the Census, ``Non-
metropolitan New England County Names and Codes'') are determined; 
POP<INF>ij and RENT<INF>ij are calculated on a township-level basis by 
assigning groups of FIPS codes (obtained from the Department of 
Commerce, ``FIPS Publications'') to SMSAs; and POP<INF>ij and 
RENT<INF>ij are matched and merged.

Equation for the Weighted Average of the U.S. Rent:

AVGUSRT = (<greek-S><greek-S>POP<INF>ij*RENT<INF>ij)/
(<greek-S><greek-S>POP<INF>ij)    (7)

Equation for State Specific Fiscal Capacity Index:

F<INF>i = maximum of 0.4 and 1-(0.35*((AVGTTR<INF>i/C<INF>i)/
(<greek-S>AVGTTR<INF>i/C<INF>i))/(P<INF>i/<greek-S>P<INF>i)), if 
specific State variable is a State, otherwise; 1-
(0.35*((AVGTPI<INF>i/C<INF>i)/(<greek-S>AVGTPI<INF>i/C<INF>i))/
(P<INF>i/<greek-S>P<INF>i)) if the State variable is DC    (8)

where:
AVGTTR<INF>i = State specific 3-year average Total Taxable Resources 
(calculated using Equation 9).
AVGTPI<INF>i = State specific 3-year average Total Personal Income 
(calculated using Equation 10).

    The boundary value of 0.4, constant of 1, and coefficient of 0.35 
are specified in the legislation.

Equation for State Specific 3-Year Average Total Taxable Resources:

AVGTTR<INF>i = (TTR1<INF>i+TTR2<INF>i+TTR3<INF>i)/3    (9)

where:
TTR1<INF>i, TTR2<INF>i and TTR3<INF>i = State specific Total Taxable 
Resources, 3 most recent years.

    The total taxable resources by State data are obtained from the 
Department of the Treasury, ``Total Taxable Resources by State, and are 
updated annually for all three years used in the calculations.

Equation for State Specific 3-Year Average Total Personal Income:

AVGTPI<INF>i = (TPI1<INF>i+TPI2<INF>i+TPI3<INF>i)/3    (10)

where:
TPI1<INF>i, TPI2<INF>i and TPI3<INF>i = State specific Total 
Personal Income, 3 most recent years.
The total personal income by State data are obtained from the 
Department of Commerce, Survey of Current Business, and are updated 
annually for all three years used in the calculations.

D. Territory Allocations

    The amount of an allotment for an individual territory is 
determined by multiplying the appropriation amount for allotment to all 
territories by the ratio of civilian population for an individual 
territory to the civilian population of all territories. (See Technical 
Note C, Section V.) Section 1918 of the PHS Act states that no 
territory shall receive less than a minimum allotment of $50,000 each 
fiscal year.

E. Territory Calculations for Mental Health Block Grant

    The allocation for each territory is calculated using the equation 
described below. For the purposes of explanation, the subscript ``I'' 
is used to denote an individual territory, and the symbol ``<greek-S>'' 
is used to denote the summation over all territories.

TALLOC<INF>i=maximum of $50,000 and 0.015*0.95*AMT*PCCIVIL<INF>i/
<greek-S>PCCIVIL<INF>i (11)

where:
PCCIVIL<INF>i=Civilian population per most recent decennial census 
for Territory I.

    The coefficients 0.015 and 0.95 are specified in the legislation. 
They represent the proportion (0.015) of the total allocable funds to 
be distributed among the territories and the proportion (0.95) of the 
total appropriation to be allocated among the States, DC and the 
territories. The appropriation amount is established by Congress. The 
civilian population data is obtained from the Bureau of the Census, 
``Estimates of Resident Population of States, by Age.'' If the 
Secretary determines that recent data on the civilian population of a 
territory are not available for a fiscal year, the law authorizes DHHS 
to estimate the population for the territory by modifying the most 
recent data to reflect the average extent of change occurring during 
the period in the population of all territories for which recent data 
do exist. (See Technical Note C, Section V.) The boundary of $50,000 is 
specified in the legislation.

III. Legislative Requirements and Allocation Process for Substance 
Abuse Prevention and Treatment (SAPT) Block Grant

A. Legislative Requirements

    Sections 1921 through 1935 of the Public Health Service (PHS) Act 
establish the SAPT Block Grant and the rules that must be followed in 
making these grants. Section 1935(a) of the Act authorizes the 
appropriation of funds for the substance abuse block grant. The size of 
the appropriation is determined each year by the Congress. Section 
1935(b) of the Act requires that 5 percent of the appropriated amount 
in a given year shall be used by DHHS for data collection to determine 
the incidence and prevalence of substance abuse and for technical 
assistance and program evaluations relevant to substance abuse 
treatment and prevention. The remaining 95 percent of the appropriation 
must be allocated among the States and territories.
    Section 1933 of the PHS Act provides a formula for this allocation. 
The law

[[Page 30628]]

specifies that 98.5 percent of the total allocation available for 
distribution must be given to the States. The remaining 1.5 percent of 
the total must be distributed to the territories.
    The law also provides for a direct federal allotment for Indian 
tribes or tribal organizations that meet certain requirements. For any 
tribe eligible to receive a direct allotment (See Technical Note E, 
Section V.), the tribe's share of the relevant State's share is the 
ratio of the tribe's FY 1991 allotment to that portion of the State 
allotment actually spent on the authorized activities.

B. State Allocations

    The amount of an allotment for a specific State is determined by 
three factors: the Population at Risk, the Cost of Services Index, and 
the Fiscal Capacity Index. The Population at Risk represents the 
relative risk of substance abuse problems in a State. The Cost of 
Services Index represents the relative costs of providing substance 
abuse prevention and treatment services in a State. The Fiscal Capacity 
Index represents the relative ability of the State to pay for substance 
abuse related services. The product of these three terms establishes 
the need for a given State.
    Formulas for calculating Population at Risk and the Fiscal Capacity 
Index are specified in legislation. The Cost-of-Services Index formula 
is not contained in the legislation, but is defined as a factor 
``determined according to the methodology presented in the report 
entitled Adjusting the Alcohol, Drug Abuse and Mental Health Services 
Block Grant Allocations for Poverty Populations and Cost of Service,'' 
dated March 30, 1990, prepared by Health Economics Research.
    The law requires the estimates of the Population at Risk and the 
Fiscal Capacity Index be revised each fiscal year. The Cost of Services 
Index is revised every third fiscal year. Section 1918(a)(8) of the PHS 
Act provides that the first determination of the Cost of Services Index 
be made on October 1, 1992. The same factor remained in effect until FY 
1995 when a new Index was developed. The Index will be recalculated for 
FY 1998. DHHS is also directed by the legislation to ``* * * 
periodically make such refinements in the methodology * * *'' for the 
calculation of the Cost of Services Index as are consistent with the 
purpose of this adjustment of the allotments. (See Technical Note B, 
Section V.)

C. State Calculations for the Substance Abuse Block Grant

    The allocation for each State is calculated using equations 
described below. For the purposes of explanation, the subscript ``I'' 
is used to denote an individual State or the District of Columbia, and 
the symbol ``<greek-S>'' is used to denote the summation over the 50 
States and the District of Columbia.

General Equation:

SALLOC<INF>i=0.985*0.95*AMT*(P<INF>i*C<INF>i*F<INF>i)/
(<greek-S>(P<INF>i*C<INF>i*F<INF>i))    (12)

where:
SALLOC<INF>i=State specific allotment of the block grant.
AMT=appropriation for substance abuse and related services.
P<INF>i=State specific Population at Risk Index (calculated using 
Equation 13).
C<INF>i=State specific Cost of Services Index (calculated using 
Equation 15).
F<INF>i=State specific Fiscal Capacity Index (calculated using 
Equation 20).

    The coefficients 0.985 and 0.95 are specified in the law. The first 
coefficient (0.985) represents the proportion of the total allocable 
funds available for distribution to the States and the District of 
Columbia. The second coefficient (0.95) represents the proportion of 
the total appropriation available for allocation to all recipients--the 
States, the District of Columbia, and the territories.

Equation for the State Population at Risk:

P<INF>i=0.5*(P18-24<INF>i+UP18-24<INF>i)/(<greek-S>(P18-
24<INF>i+UP18-24<INF>i))+0.5*(P25-64<INF>i/<greek-S>P25-64<INF>i)    
(13)

where:
P18-24<INF>i=State specific population aged 18 to 24.
UP18-24<INF>i=State specific urban population aged 18 to 24 
(calculated using Equation 14).
P25-64<INF>i=State specific population aged 25 to 64.

    The coefficients 0.5 are specified in the legislation. The State 
population by age group is obtained from the Bureau of the Census, 
``Resident Population of States, by Single Year of Age,'' using the 
most current data available as of October 1 of each year.

Equation for the State Specific Urban Population:

UP18-24<INF>i=P18-24<INF>i*UPC18-24<INF>i/PC18-24<INF>i    (14)

where:
UPC18-24<INF>i=State specific urban population aged 18 to 24 (per 
most recent decennial census).
PC18-24<INF>i=State specific population aged 18 to 24 (per most 
recent decennial census).

    Both sets of decennial census-based population data are obtained 
from the Bureau of the Census, Census of Population and Housing, 1990: 
Summary Tape File 1C. (See Technical Note D, Section V.)

Equation for the Cost of Services Index:

C<INF>i=0.9 if 0.75*W<INF>i+0.15*R<INF>i+0.10*S<INF>i<0.9    (15)
1.1 if 0.75*W<INF>i+0.15*R<INF>i+0.10*S<INF>i>1.1
C<INF>i=0.75*W<INF>i+0.15*R<INF>i+0.10*S<INF>i otherwise.

where:
W<INF>i=State specific wage subindex (calculated using Equation 16).
R<INF>i=State specific rent subindex (calculated using Equation 17).
S<INF>i=State specific supplies subindex.

    The coefficients 0.75, 0.15, and 0.10 are specified in the article 
cited by the legislation, as is S<INF>i, which is equal to 1 for all 
States and the District of Columbia. The boundary values of 0.9 and 1.1 
are specified in the legislation.

Equation for State Specific Wage Subindex:

W<INF>i=AVGSTHW<INF>i/AVGUSHW    (16)

where:
AVGSTHW<INF>i=average State specific hourly manufacturing wage 
including overtime.

AVGUSHW=average U.S. hourly manufacturing wage including overtime.

    The State and national wage data are obtained from the Bureau of 
Labor Statistics, Current Employment Statistics Survey, ``Employment, 
Hours and Earnings,'' using the most current data available as of 
October 1 of each year.

Equation for Weighted Average State Specific Rent Subindex:

R<INF>i=AVGSTRT<INF>i/AVGUSRT    (17)

where:
AVGSTRT<INF>i=weighted average State specific rent (calculated using 
Equation 18).
AVGUSRT=weighted average U.S. rent (calculated using Equation 19).

Equation for Weighted Average State Specific Rent:

AVGSTRT<INF>i=(<greek-S>POP<INF>ij*RENT<INF>ij)/
(<greek-S>POP<INF>ij) (18)
where:
POP<INF>ij=population of jth subarea of State I.
RENT<INF>ij=fair market rent of 4-bedroom dwelling in jth subarea of 
State I.

    Each State is subdivided into ``J'' mutually exclusive subareas 
that cover the State. If State I is not a New England State, population 
source data PSOURCE<INF>ij (obtained at the State, county, subdivision 
and place levels from the Bureau of the Census, ``Census of Population 
and Housing''), and rent source data RTSOURCE<INF>ij (obtained at the 
State, county, and SMSA levels from the Department of Housing and Urban 
Development, ``Fair Market Rents * * *'') are used to calculate 
POP<INF>ij and RENT<INF>ij on a county-level basis (after addition of 
population of ``independent cities'' for HI, MD, MO, MT, and VA). If 
State I is a New England State, SMSA codes (obtained from the Office of 
Management and Budget, ``Revised Statistical Definitions of 
Metropolitan

[[Page 30629]]

Areas (MAs) and Guidance on Uses of MA Definitions'') are matched to 
county subdivisions; the non-SMSA balances of county populations (using 
data obtained from the Bureau of the Census, ``Non-metropolitan New 
England County Names and Codes'') are determined; POP<INF>ij and 
RENT<INF>ij are calculated on a township-level basis by assigning 
groups of FIPS codes (obtained from the Department of Commerce, ``FIPS 
Publications'') to SMSAs; and POP<INF>ij and RENT<INF>ij are matched 
and merged.

Equation for Weighted Average of the U.S. Rent:

AVGUSRT=(<greek-S><greek-S>POP<INF>ij*RENT<INF>ij)/
(<greek-S><greek-S>POP<INF>ij)    (19)
Equation for State Specific Fiscal Capacity Index:
Fi=maximum of 0.4 and 1-(0.35*((AVGTTR<INF>i/C<INF>i)/
(<greek-S>AVGTTR<INF>i/C<INF>i))/(P<INF>i/<greek-S>P<INF>i)), if 
specific State is a State, otherwise 1-(0.35*((AVGTPI<INF>i/
C<INF>i)/(<greek-S>AVGTPI<INF>i/C<INF>i))/(P<INF>i/
<greek-S>P<INF>i)) if the State variable is DC    (20)

where:
AVGTTR<INF>i=State specific 3-year average Total Taxable Resources 
(calculated using Equation 21).
AVGTPI<INF>i=State specific 3-year average Total Personal Income 
(calculated using Equation 22).

    The boundary value of 0.4, constant of 1, and coefficient of 0.35 
are specified in the legislation.

Equation for State Specific 3-Year Average Total Taxable Resources:

AVGTTR<INF>i=(TTR1<INF>i+TTR2<INF>i+TTR3<INF>i)/3    (21)
where:
TTR1<INF>i, TTR2<INF>i and TTR3<INF>i=State specific Total Taxable 
Resources, 3 most recent years.

    The total taxable resources by State data are obtained from the 
Department of the Treasury, ``Total Taxable Resource by State,'' and 
are updated annually for all three years used in the calculations.
Equation for State Specific 3-Year Average Total Personal Income:

AVGTPI<INF>i=(TPI1<INF>i+TPI2<INF>i+TPI3<INF>i)/3    (22)
where:
TPI1<INF>i, TPI2<INF>i and TPI3<INF>i=State specific Total Personal 
Income, 3 most recent years.

    The total personal income by State data are obtained from the 
Department of Commerce, ``Survey of Current Business,'' and are updated 
annually for all three years used in the calculations.

D. Territory Allocations

    The amount of an allotment for an individual territory is 
determined by multiplying the appropriation amount for allotment to all 
territories by the ratio of civilian population for an individual 
territory to the civilian population of all territories. (See Technical 
Note C, Section V.) Section 1933 of the PHS Act specifies that no 
territory shall receive less than a minimum allotment of $50,000 each 
fiscal year.

E. Territory Calculations for Substance Abuse Block Grant

    The allocation for each territory is calculated using the equation 
described below. For the purposes of explanation, the subscript ``I'' 
is used to denote an individual territory, and the symbol ``<greek-S>'' 
is used to denote the summation over all territories.

TALLOC<INF>i=maximum of $50,000 and

0.015*0.95*AMT*PCCIVIL<INF>i/<greek-S>PCCIVIL<INF>i    (23)

where:
PCCIVIL<INF>i=Civilian population per most recent decennial census 
for Territory I.

    The coefficients 0.015 and 0.95 are specified in the legislation. 
The first coefficient (0.015) represents the proportion of the total 
allocable funds to be distributed among the territories. The second 
coefficient (0.95) represent the proportion of the total appropriation 
to be allocated among the States, DC and the territories. The Congress 
establishes the level of the appropriation each fiscal year. The 
civilian population data is obtained from the Bureau of the Census, 
``Estimates of Resident Population of States, by Age.'' If the 
Secretary determines that recent data on the civilian population of a 
territory are not available for a fiscal year, the law authorizes DHHS 
to estimate the population for the territory by modifying the most 
recent data to reflect the average extent of change occurring during 
the period in the population of all territories for which recent data 
do exist. (See Technical Note C, Section V.) The boundary of $50,000 is 
specified in the legislation.

F. Allocations to Indian Tribes and Tribal Organizations

    The Red Lake Band of the Chippewa Indians in Minnesota receives a 
direct allocation, as provided under Section 1933(d) of the PHS Act. 
(See Technical Note E, Section V.) Therefore, the substance abuse block 
grant allocation for the State of Minnesota is apportioned between the 
Red Lake Band of Chippewas and the remainder of the State as provided 
in the law and described in the following equations.

Equation for Allotment of Funds to the Red Lake Indians:

RLIALLOC=SALLOC<INF>MN*0.0240535  (24)

where:
RLIALLOC=allotment for Red Lake Indians.

SALLOC<INF>MN=Minnesota State allotment (calculated using Equation 
12).

    The coefficient 0.0240535 reflects FY 1991 funding, as specified by 
Section 1933(d) of the PHS Act.

Equation for the Allotment for the Remainder of Minnesota:

MNRALLOC=SALLOC<INF>MN-RLIALLOC  (25)

where:
MNRALLOC=allotment for the remainder of Minnesota.

IV. Data Elements and Sources

    The following table presents a list of data elements used in the 
allocation formulas. It identifies the agency that develops the data, 
the frequency with which that source agency updates the data, and 
includes some technical notes about the data as they are used in the 
allocation formulas. The table also shows the years of the data used in 
the FY 1996 allocations.

------------------------------------------------------------------------
   Data element and update                                              
 frequency by source agency        Data source              Notes       
------------------------------------------------------------------------
Total Taxable Resources       U.S. Department of    1. Calculations are 
 (TTR), by State--Annual.      the Treasury,         made specifically  
                               Office of Economic    for these block    
                               Policy. Unpublished   grants, and        
                               data, dated August    provided to SAMHSA 
                               24, 1994.             on diskette.       
                                                    2. Annual estimates 
                                                     include revision of
                                                     estimates for the  
                                                     two prior years.   
                                                     Therefore, all     
                                                     three years of data
                                                     are replaced each  
                                                     year.              
                                                    3. The data used in 
                                                     the calculations   
                                                     consist of the     
                                                     source data as     
                                                     received truncated 
                                                     to three           
                                                     significant decimal
                                                     places             
                                                    4. FY 1996          
                                                     allocations use 3- 
                                                     year average of    
                                                     data for 1991,     
                                                     1992, 1993.        
                                                    5. Used in Fiscal   
                                                     Capacity Index.    

[[Page 30630]]

                                                                        
Total Personal Income (TPI),  U.S. Department of    1. Final estimates  
 by State--Annual.             Commerce, Bureau of   are typically      
                               Economic Analysis.    published in       
                               Survey of Current     August, including  
                               Business: Press       revision of        
                               release BEA 94-36     estimates for the  
                               dated August 23,      two prior years.   
                               1994, Table 3--       Therefore, all     
                               Total Personal        three years of data
                               Income, by State      are replaced each  
                               and Region, 1989-93.  year.              
                                                    2. FY 1996          
                                                     allocations use 3- 
                                                     year average of    
                                                     data for 1991,     
                                                     1992, 1993.        
                                                    3. Used in Fiscal   
                                                     Capacity Index.    
Estimates of Resident         U.S. Department of    1. The only Bureau  
 Population of States, by      Commerce, Bureau of   of the Census      
 Age--Annual.                  the Census.           release of         
                               Unpublished           population         
                               estimates by the      estimates by single
                               Population            year of age (needed
                               Division,             to create age      
                               Population            groupings for      
                               Distribution Branch.  population at risk 
                                                     in each block      
                                                     grant) is in early 
                                                     March for July 1 of
                                                     the previous year. 
                                                     Data for July 1,   
                                                     1993 were only     
                                                     released on        
                                                     diskette by the    
                                                     Population         
                                                     Distribution       
                                                     Branch, Population 
                                                     Division, 301-457- 
                                                     2385. Cost is $20. 
                                                     Data for subsequent
                                                     years are available
                                                     on the Internet;   
                                                     estimates on the   
                                                     Internet are those 
                                                     for the most recent
                                                     year available.    
                                                    2. FY 1996          
                                                     allocations use    
                                                     estimates for July 
                                                     1, 1993.           
                                                    3. Used to determine
                                                     Population at Risk.
Population age 18-24 and 18-  U.S. Department of    1. Urbanized        
 24 living in urbanized        Commerce, Bureau of   population is used 
 areas, by State--Decennial.   the Census. Census    only in the        
                               of Population and     substance abuse    
                               Housing, 1990:        block grant.       
                               Summary Tape File                        
                               1C.                                      
                                                    2. The Bureau of the
                                                     Census does not    
                                                     make inter-censal  
                                                     estimates of the   
                                                     urbanized          
                                                     population.        
                                                     Therefore, data    
                                                     from the 1990      
                                                     census are used    
                                                     until data from the
                                                     2000 census are    
                                                     available.         
                                                    3. Used to determine
                                                     Population at Risk.
Population by county--        U.S. Department of    1. County population
 Decennial.                    Commerce, Bureau of   is used in         
                               the Census. Census    conjunction with   
                               of Population and     Fair Market Rent in
                               Housing, 1990:        the Cost of        
                               Summary Tape File     Services Index.    
                               1C.                                      
                                                    2. In order to have 
                                                     population data for
                                                     the specific       
                                                     geographic area    
                                                     configurations used
                                                     in the FMR files,  
                                                     it is necessary to 
                                                     use data available 
                                                     only from the      
                                                     decennial census.  
                                                     1990 data were used
                                                     for FY 1996        
                                                     allocations.       
                                                    3. Used in Cost of  
                                                     Services Index     
Civilian population of the    U.S. Department of    1. Each press       
 U.S. territories--Varies.     Commerce, Bureau of   release also       
                               the Census,           included data for  
                               Population            1980, except for   
                               Division. 1990 data   Puerto Rico. 1980  
                               released in press     data for Puerto    
                               releases, as          Rico are from      
                               follows: American     report PC 80-1-A53,
                               Samoa, CB 91-242 (7/  Table 2, page 53-10
                               24/91); Guam, CB 91-  (12/84).           
                               276 (9/13/91);                           
                               Northern Mariana                         
                               Islands, CB 91-243                       
                               (7/24/91); Palau,                        
                               CB 91-244 (7/24/                         
                               91); Puerto Rico CB                      
                               91-275 (9/13/91);                        
                               Virgin Islands CB                        
                               91-263 (8/23/91).                        
                                                    2. The Bureau of the
                                                     Census no longer   
                                                     collects data for  
                                                     the Federated      
                                                     States of          
                                                     Micronesia and the 
                                                     Republic of the    
                                                     Marshall Islands.  
                                                     See Technical Note 
                                                     C in Section V.    
                                                    3. Inter-censal     
                                                     estimates are made 
                                                     only for Puerto    
                                                     Rico.              
Average hourly manufacturing  U.S. Department of    1. Data include     
 wage, by State--Annual.       Labor, Bureau of      overtime.          
                               Labor Statistics,                        
                               Current Employment                       
                               Statistics Survey,                       
                               ``Employment and                         
                               Earnings,'' May                          
                               1994. Table 2, p.                        
                               162--(Annualized)                        
                               Average Hourly                           
                               Earnings, by State,                      
                               1993.                                    
                                                    2. FY 1996          
                                                     allocations use    
                                                     1993 data.         
                                                    3. Used in Cost of  
                                                     Services Index.    
U.S. average manufacturing    U.S. Department of    1. Data include     
 wage--Annual.                 Labor, Bureau of      overtime.          
                               Labor Statistics.                        
                               Current Employment                       
                               Statistics Survey,                       
                               ``Employment and                         
                               Earnings,'' May                          
                               1994. Table B-2, p.                      
                               52--National                             
                               (Annualized)                             
                               Average Hourly                           
                               Earnings for 1993.                       
                                                    2. FY 1996          
                                                     allocation uses    
                                                     data for 1993.     
                                                    3. Used in Cost of  
                                                     Services Index.    
Four Bedroom Fair Market      ``Section 8 Housing   1. HUD is required  
 Rent (FMR)--Annual.           Assistance Payments   by law to establish
                               Program; Fair         FMRs annually and  
                               Market Rent           to publish proposed
                               Schedules for Use     and final FMR's in 
                               in the Rental         the Federal        
                               Certificate           Register.          
                               Program, Loan                            
                               Management and                           
                               Property                                 
                               Disposition                              
                               Programs; Moderate                       
                               Rehabilitation                           
                               Program and Rental                       
                               Voucher Program (24                      
                               CFR Part 888)                            
                               issued by the                            
                               Department of                            
                               Housing and Urban                        
                               Development, Office                      
                               of the Secretary.                        
                               Federal Register,                        
                               September 28, 1994,                      
                               Part IV; Vol 59,                         
                               No. 187, pp. 49494-                      
                               49553..                                  

[[Page 30631]]

                                                                        
                                                    2. The typical cycle
                                                     is a Notice of     
                                                     Proposed Rule      
                                                     Making published in
                                                     late April or early
                                                     May, with the Final
                                                     Rule published in  
                                                     the last two weeks 
                                                     of September for an
                                                     October 1 effective
                                                     date.              
                                                    3. Used in Cost of  
                                                     Services Index.    
Metropolitan Area             ``Section 8 Housing   1. The Federal      
 Definitions for FMR--         Assistance Payments   Register notice    
 Annual, at a minimum.         Program; Fair         fully documents how
                               Market Rent           ``housing market   
                               Schedules for Use     areas'' are defined
                               in the Rental         and how            
                               Certificate           Metropolitan Area  
                               Program, Loan         definitions are    
                               Management and        used. For non-     
                               Property              metropolitan areas,
                               Disposition           counties are used. 
                               Programs; Moderate    In New England,    
                               Rehabilitation        town definitions   
                               Program and Rental    are used.          
                               Voucher Program (24                      
                               CFR Part 888)                            
                               issued by the                            
                               Department of                            
                               Housing and Urban                        
                               Development, Office                      
                               of the Secretary.                        
                               Federal Register,                        
                               April 6, 1994, Part                      
                               XII, Vol 59, No.                         
                               66, pp. 16408-16484.                     
                                                    2. Used in Cost of  
                                                     Services Index     
------------------------------------------------------------------------



V. Technical Notes

A. Establishment of Cutoff Date for ``Most Recent Data''

    The legislation for both block grants refers to use of the most 
recent available data in calculating the allotments for each State and 
territory. Section 1918(a)(5)(B) states that ``With respect to data on 
population that is necessary for purposes of making a determination 
under subparagraph (A), the Secretary shall use the most recent data 
that is available from the Secretary of Commerce pursuant to the 
decennial census and pursuant to reasonable estimates by such Secretary 
of changes occurring in the data in the ensuing period.'' Section 
1918(a)(6)(B)(I) requires use of ``the most recent 3-year arithmetic 
mean of the total taxable resources of the State, as determined by the 
Secretary of the Treasury.'' Section 1918(a)(6)(D)(ii) requires ``the 
most recent 3-year arithmetic mean of total personal income in such 
District [the District of Columbia], as determined by the Secretary of 
Commerce.''
    When the legislation for the two block grants was first 
implemented, SAMHSA staff tried to update population and other data 
whenever new estimates of the block grant allotments were required. 
This caused considerable confusion because projections of specific 
State allotments under the two Block Grant programs were changing 
constantly. Specific State allotment projections for various 
appropriation levels must be provided to Congress early in the budget 
consideration process; and changing estimates complicate the decision 
making process.
    Given the time constraints and the need for consistent estimates 
for the budget process, SAMHSA now bases all calculations on the latest 
data available by the beginning of each fiscal year (October 1). For 
example, allotments for FY 1997, determined during FY 1996, employ 
those data available as of October 1, 1995. This approach was adopted 
for all allotment determinations beginning with those for FY 1996. 
Congress was notified of the change in approach in February, 1995.

B. Wage Data Set for Cost of Services Index

    The Cost of Services Index is discussed on page 13 of the report 
cited in Section 1918(a)(8)(B) of the Act. According to that report ``* 
* * the ideal cost-of-service measure would be data on the cost of 
providing a standard set of substance abuse and mental health services 
in each State.'' The report also notes such data are not available. The 
report reviews several potential sources of wage data, and proposes the 
use of non-manufacturing wage data from the decennial Census of 
Population and Housing. At the time of the 1990 report, the only census 
information available was 1980. Those data referred to earnings in 
1979. A copy of the unpublished report is available on request from the 
`Information Contact' listed at the beginning of this notice.
    When SAMHSA began to assemble information to make the first block 
grant allotment computations, the non-manufacturing wages data from the 
1990 census were not yet available and the 1979 data were out-of-date. 
After consultation with the Comptroller General, as required by the PHS 
Act, SAMSHA decided to use manufacturing wage data collected annually 
by the Bureau of Labor Statistics (BLS) through the Current Employment 
Statistics Program for developing estimates for the Cost of Services 
Index.
    There are several advantages to using manufacturing wage data. (1) 
Timeliness. The BLS data are collected continuously on a monthly basis. 
In contrast, the most recent non-manufacturing data were collected in 
1989 during the decennial census and are not subject to post-census 
updates in the years between censuses. (2) Reliability. Hours and 
earnings manufacturing data are based on the actual records of gross 
payrolls and corresponding paid hours of employment maintained by 
economic establishments for a variety of tax and accounting purposes. 
Non-manufacturing decennial census data are based on individual self-
report. (3) Scope. Manufacturing wage data are collected on a monthly 
basis from a large sample of manufacturing establishments from which 
valid estimates of wages at the State level can be made. According to 
the BLS ``Manual on Series Available and Estimating Methods, Current 
Employment Statistics Program, March 1994,'' published in March 1995, 
the sample contains over 61,000 manufacturing establishments. Non-
manufacturing data are collected from a 1-in-6 sample of households in 
the decennial census, only a portion of which report non-manufacturing 
wage data. (4) Suitability. Because the sampling point for the BLS 
Current Employment Statistics Program is the economic establishment, 
i.e., the point at which economic activity is generated, the resulting 
manufacturing wage data are better suited to providing information on 
the geographic distribution of employment and its impact on the demand 
for labor as measured by wage rates.
    BLS collects its data from a survey conducted in cooperation with 
State Employment Security Agencies, which obtain the data from a sample 
of employers who are able to report the actual weekly wage data from 
their records of payments. By contrast, the household survey method 
used in the decennial census to obtain non-manufacturing wage data 
places primary emphasis on the employment status of individuals and 
other demographic

[[Page 30632]]

characteristics of the labor force. To obtain its estimates, Census 
divides the total annual income due to wages reported by households by 
52 to derive a weekly figure. The data are then divided by the reported 
number of hours worked during the census week to derive a wage value. 
The resulting estimate is not precise. Therefore, the BLS manufacturing 
wage data are used in computing the allotments under the block grants. 
The appropriate Congressional committees were informed of this 
approach.

C. Population Estimates for Territories

    For both the mental health and the substance abuse block grants the 
law provides that the Secretary shall estimate the civilian population 
of a territory current if data on the civilian population of the 
territory does not exist. These estimates are developed by modifying 
the population estimates for the territories for which recent data do 
not exist by the average increase or decrease in the population of all 
territories for which there are recent data.
    Data are available from the 1990 census for American Samoa, Guam, 
the Northern Mariana Islands, Palau, Puerto Rico and the Virgin 
Islands. For the Federated States of Micronesia and the Republic of the 
Marshall Islands the latest data on population are from 1980. The 
Census Bureau no longer has responsibility for collecting data from 
these two territories, which signed Compacts of Free Association with 
the United States in 1988. The 1990 population estimates for the 
Federated States of Micronesia and the Republic of the Marshall Islands 
were derived by applying the average percent change between 1980 and 
1990 for the other territories to their 1980 populations. This 
determination was made as follows:

Territory Populations for Which the Bureau of the Census--Collected Data
              in 1980 and 1990 and Percent Change 1980-1990             
------------------------------------------------------------------------
                                       1980         1990       Percent  
            Territory               Population   Population     change  
------------------------------------------------------------------------
American Samoa...................       32,297       46,773        +44.8
Guam.............................      105,979      133,152        +25.6
Northern Mariana Islands.........       16,780       43,345       +158.3
Palau............................       12,116       15,122        +24.8
Puerto Rico......................    3,196,520    3,522,037        +10.2
Virgin Islands...................       96,569      101,809         +5.4
                                               --------------           
      Average Increase...........  ...........  ...........        +44.9
------------------------------------------------------------------------


      1990 Estimated Populations of Territories for Which the Bureau of the Census No Longer Collects Data      
----------------------------------------------------------------------------------------------------------------
                                                                                              1990 Estimated    
                                                                                          population (using 44.9
                                                                   1980 Population as        percent average    
                           Territory                                   enumerated          territory population 
                                                                                           increase from above  
                                                                                                  table)        
----------------------------------------------------------------------------------------------------------------
Federated States of Micronesia................................                   73,087                  105,903
Republic of the Marshall Islands..............................                   30,873                   44,735
----------------------------------------------------------------------------------------------------------------

    The Bureau of the Census has made post-1990 decennial census 
estimates only for Puerto Rico. With post-1990 estimates available only 
for Puerto Rico, the only way to adjust the population estimates for 
the other territories is to assume that the percentage change in the 
population of each is similar to the percentage change in Puerto Rico. 
Since the distribution of funding for each territory is proportional to 
its contribution to the total population of the territories, any 
adjustment based only on the change for Puerto Rico would not alter the 
allocation of funds. Therefore, the territory population data and 
estimates for 1990 continue to be used for allocation purposes.

D. Population in Urbanized Areas for Substance Abuse Block Grant

    The formula for the SAPT block grant adjusts for the population at 
risk for substance abuse using the State population between 18-24 years 
of age living in urbanized areas and the total U.S. population between 
18-24 years living in urbanized areas. The Bureau of the Census does 
not make inter-censal estimates of the population living in urbanized 
areas. Therefore, the estimates of this population group are derived 
from the 1990 census.

E. Indian Tribes Receiving Direct Allotments Under the Substance Abuse 
Block Grant

    Section 1933(d) of the Act provides for separate grants for 
substance abuse prevention and treatment to Indian tribes or tribal 
organizations. Several categorical grant programs for which a number of 
tribes had been direct recipients were folded into the former ADMS 
block grant when it was established in 1981. The Red Lake Band of the 
Chippewa Indians in Minnesota was the only tribe or tribal organization 
still receiving ADMS block grant funds at the time the SAPT Block Grant 
was established in 1992 and is therefore the only Indian tribe 
currently eligible for direct receipt of funds. This group continues to 
receive a direct allotment under the SAPT Block Grant. The funding 
level for the Red Lake Indians, as determined by SAMSHA based on FY 
1991 funding levels, is 0.0240535 of the total amount of the Minnesota 
annual allocation.

    Dated: June 7, 1996.
Richard Kopanda,
Executive Officer, SAMHSA.
[FR Doc. 96-15010 Filed 6-14-96; 8:45 am]
BILLING CODE 4162-20-P