99-26820. Block Grant Programs  

  • [Federal Register Volume 64, Number 199 (Friday, October 15, 1999)]
    [Rules and Regulations]
    [Pages 55843-55858]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-26820]
    
    
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    DEPARTMENT OF HEALTH AND HUMAN SERVICES
    
    Office of the Secretary
    
    45 CFR Part 96
    
    RIN 0991-AA97
    
    
    Block Grant Programs
    
    AGENCY: Department of Health and Human Services (HHS).
    
    ACTION: Final rule with comment period.
    
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    SUMMARY: This final rule amends the regulations of the Department of 
    Health and Human Services (HHS) governing the administration of block 
    grant programs. It updates the current regulations to reflect current 
    statutory citations for the block grants. It establishes a requirement 
    for grantees to submit obligation and expenditure reports for all of 
    the block grants. Additionally, this rule establishes submission dates 
    and completion dates for applications for funding from States and 
    territories for Low-Income Home Energy Assistance Program (LIHEAP) and 
    Social Services Block Grant Program (SSBG). It also establishes a 
    completion date for applications for direct funding from Indian tribes 
    and tribal organizations for LIHEAP and clarifies procedures related to 
    the withholding of funds for these programs. In addition, it modifies 
    the requirements for reallotment of funds under LIHEAP. This regulation 
    also includes an amendment to Sec. 96.82, regarding the required 
    submission of reports on households applying for and receiving LIHEAP 
    assistance that is being issued as an interim final rule with 
    opportunity for comment.
    
    DATES: Effective Date: This final rule and the interim Sec. 96.82 are 
    effective November 15, 1999, except that Secs. 96.10(c), 96.10(d) and 
    96.49, are effective March 1, 2000. The information collection 
    requirements contained in Sec. 96.30 will take effect upon OMB 
    approval.
        Comment Period: Comments on Sec. 96.82 will be considered, if 
    received at the appropriate address, as provided below, no later than 5 
    p.m on December 14, 1999. We will not consider comments concerning 
    provisions that remain unchanged from the July 17, 1992 or November 16, 
    1993 proposed rules or that were revised based on public comment.
    
    ADDRESSES: Mail written comments on Sec. 96.82 to Janet M. Fox, 
    Director, Division of Energy Assistance, Office of Community Services, 
    Administration for Children and Families, 370 L'Enfant Promenade SW, 
    Washington, DC 20447.
        The comments received in response to the requirements in Sec. 96.82 
    may be inspected or reviewed at the above address, Monday through 
    Friday, between 9 a.m. and 5 p.m., beginning one week after the 
    publication of this rule.
    
    FOR FURTHER INFORMATION CONTACT: Mike Herrell, 202/690-5739.
    
    SUPPLEMENTARY INFORMATION:
    
    Background
    
        The Omnibus Budget Reconciliation Act of 1981 (Pub. L. 97-35) 
    established seven block grants to be administered by the Department of 
    Health and Human Services (HHS). Subsequent legislation repealed the 
    Primary Care Block Grant. Additional legislation divided the Alcohol 
    and Drug Abuse and Mental Health Services Block Grant into two, 
    resulting in the Community Mental Health Services Block Grant and the 
    Substance Abuse Prevention and Treatment Block Grant. An interim final 
    regulation to implement the block grants was published in the Federal 
    Register on October 1, 1981 (46 FR 48582) and the final regulation was 
    issued on July 6, 1982 (47 FR 29472). Subsequent legislation changed 
    certain provisions of the block grants and the regulation was modified 
    several times. The regulation was modified most recently on May 1, 1995 
    (60 FR 21332) to address requirements for LIHEAP. Based on our 
    experience in administering the block grants, we have identified 
    several aspects of the block grant rules that require, or would benefit 
    from, clarification. Some of those changes were proposed in a notice of 
    proposed rulemaking (NPRM) issued by HHS for block grant programs dated 
    July 17, 1992 (57 FR 31685) and are discussed below.
        The Augustus F. Hawkins Human Services Reauthorization Act of 1990, 
    Public Law 101-501, was enacted on November 3, 1990. Title VII of this 
    public law contains amendments to the Low-Income Home Energy Assistance 
    Act of 1981 (title XXVI of Pub. L. 97-35, as amended), including 
    several changes affecting LIHEAP grantee program administration. An 
    interim final rule published January 16, 1992, in the Federal Register 
    (57 FR 1960 et seq.) promulgated regulatory changes for several 
    provisions which were effective for fiscal years (FY) 1991 and FY 1992, 
    including a leveraging incentive program. It also indicated that 
    regulations concerning additional changes resulting from Public Law 
    101-501 would be issued at a later date. A final rule relating to the 
    provisions included in the interim final rule was published on May 1, 
    1995 (60 FR 21332). An NPRM dated November 16, 1993 (58 FR 60498) 
    proposed additional regulatory changes for provisions included in 
    Public Law 101-501 that were scheduled to become effective in FY 1993 
    and FY 1994. The later changes concerned ``forward funding'' and the 
    end of authority to transfer LIHEAP funds to other HHS block grants. 
    Other provisions relating to application submission and completion 
    dates were included in the NPRM. Some of the provisions included in the 
    Department's NPRM of July 17, 1992, were also included in the November 
    16, 1993 NPRM.
        This final rule includes provisions which were originally contained 
    in both the NPRM issued by the Department of Health and Human Services 
    on July 17, 1992 (57 FR 31685) and the NPRM issued on November 16, 1993 
    (58 FR 60498) concerning LIHEAP, CSBG and SSBG, all of which are 
    administered by the Administration for Children and Families (ACF). It 
    includes a due date for completion of applications for direct funding 
    of Indian tribes and tribal organizations under LIHEAP. Other issues 
    proposed in the NPRM of July 17, 1992 which address LIHEAP, CSBG, and 
    SSBG as well as some of the other block grant programs which are 
    administered by agencies of the Public Health Service (PHS), are also 
    finalized in this rule. It clarifies procedures related to the 
    withholding and reallotment of funds and requires obligation and 
    expenditure reports. Some of those items in the July 17, 1992 NPRM 
    which relate to the block grants that are administered by agencies of 
    the PHS may be addressed in a separate action. Therefore, this final 
    rule excludes the following sections relating to the block grants 
    administered by the PHS contained in the July 1992 NPRM: 96.121, 
    96.122, 96.123 and 96.124. In addition, this final rule finalizes 
    proposals from the November
    
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    16, 1993 NPRM. It establishes submission and completion dates for block 
    grant applications from States and territories for LIHEAP and SSBG. It 
    also codifies the end of transfer authority under LIHEAP. Since the 
    publication of the November 16, 1993 NPRM, legislation changed the 
    forward funding program year for LIHEAP to October 1 through September 
    30, the same dates as the current Federal fiscal year, but funded one 
    year in advance. The issue of forward funding for LIHEAP is discussed 
    below. Also, this final rule adds new provisions to update the 
    regulation to reflect the current names and statutory citations for the 
    block grants. The NPRM dated November 16, 1993 also included technical 
    changes to Sec. 96.82, concerning a statutorily required report on 
    households assisted under the LIHEAP program. Subsequently, however, 
    the Human Services Amendments of 1994 (Pub. L. 103-252) amended the 
    statutory requirements applying to that report. This amendment includes 
    changes to the existing regulations to reflect implementation of those 
    new requirements, which we are issuing as an interim final rule with 
    opportunity for comment.
        Provisions in both the July 17, 1992 NPRM and the November 16, 1993 
    NPRM included provisions relating to requirements for CSBG. Since the 
    publication of those NPRMs, new legislation has significantly amended 
    certain provisions of the Community Services Block Grant Act. 
    Accordingly, this final rule deletes the following provisions relating 
    to CSBG: Sections 96.49(a), 96.92 and 96.95 of the July 17, 1992 NPRM 
    and Secs. 96.10(c)(1), 96.10(d)(1) and 96.49(a) of the November 16, 
    1993 NPRM.
        The NPRM dated July 17, 1992 (57 FR 31682) allowed a comment period 
    of 60 days. Thirteen letters were received in response to that NPRM and 
    are discussed below. The NPRM dated November 16, 1993 allowed a 45-day 
    comment period. Three letters were received in response to that NPRM 
    and are also discussed below.
        A final rule to replace the interim final rule of January 16, 1992 
    on the leveraging incentive program and other issues was published on 
    May 1, 1995 (60 FR 21322). In some cases, provisions from the July 1992 
    and November 1993 NPRM's were included in that final rule, if they were 
    related to issues already being addressed in that rule. This applies to 
    Secs. 96.14, 96.83, 96.84 and 96.87.
    
    Waiver of Notice and Comment Procedures
    
        The Human Services Amendments of 1994 (Pub. L. 103-252) amended 
    section 2605(c)(1)(G) of the LIHEAP statute regarding data required to 
    be submitted to the Department as part of a grantee's annual 
    application for funds under the LIHEAP program. Section 96.82 of this 
    amendment to the block grant statute, which implements these statutory 
    changes, is being published in interim final form. The Administrative 
    Procedures Act (5 U.S.C. 553(b)(B)) provides that, if the Department 
    for good cause finds that a notice of proposed rulemaking (NPRM) is 
    unnecessary, impracticable, or contrary to public interest, it may 
    dispense with the NPRM if it incorporates a brief statement in the 
    interim final rule of the reasons for doing so.
        The Department finds that there is good cause to dispense with an 
    NPRM with respect to proposed changes to Sec. 96.82 of the block grant 
    regulations. First, it is important that grantees have timely notice of 
    the rules for operating their LIHEAP programs consistent with the 1994 
    statutory provisions. Second, LIHEAP grantees and interested parties 
    were notified by information memorandum of the opportunity to comment 
    on these requirements as part of the Department's request for approval 
    by the Office of Management and Budget of the collection of the 
    information. No objections were submitted to the information collection 
    approval request.
        We are interested in receiving formal comments on this interim 
    final rule for Sec. 96.82. We will review any comments which we receive 
    by December 14, 1999. We will revise the rule, as appropriate, based on 
    the comments we receive and our experience in implementing the 
    requirement.
        Forward Funding of LIHEAP. Sections in the November 16, 1993 NPRM 
    relating to the program year dates are being deleted because of a 
    change in the law. A new section, 2602(c), was added to the LIHEAP 
    statute by Public Law 101-501. This section provided that LIHEAP funds 
    would be available for obligation on the basis of a new ``program 
    year'' of July 1 through June 30, rather than on the normal Federal 
    fiscal year basis of October 1 to September 30. The law provided that 
    this change from a fiscal year to a program year basis, known as 
    ``forward funding'', would take place beginning in fiscal year (FY) 
    1993, and that it would be implemented by appropriating funds in the FY 
    1993 HHS appropriations law for a nine-month transition period of 
    October 1, 1992 to June 30, 1993, and also for the new program year of 
    July 1, 1993 to June 30, 1994, a period of 21 months.
        The FY 1993 appropriations law for HHS (Pub. L. 102-394) provided 
    funding for the regular Federal fiscal year 1993, which began October 
    1, 1992 and ended September 30, 1993. It also provided advance funding 
    for FY 1994 to operate the program for a nine-month transition period 
    of October 1, 1993 to June 30, 1994, thus providing partial 
    implementation of forward funding a year later than authorized.
        The FY 1994 appropriations law, Public Law 103-112, provided 
    advance FY 1995 funds for the period beginning October 1, 1994. This 
    left a three-month funding gap of July 1 to September 30, 1994. To 
    eliminate that funding gap, an amendment to the Emergency Supplemental 
    Appropriations Act of 1994 (Pub. L. 103-211) made the FY 1994 funds 
    available until September 30, 1994.
        The Budget of the United States Government for Fiscal Year 1995 
    requested funds for the normal Federal fiscal year of October 1, 1994 
    to September 30, 1995. Subsequently, Title III of the Human Services 
    Amendments of 1994, Public Law 103-252, reauthorized LIHEAP and 
    provided that the program year shall begin on October 1 of the fiscal 
    year following the year in which the appropriation is made. Therefore, 
    the reauthorization law, Public Law 103-252, opted for funding a 
    program year that is on the same time frame as the Federal fiscal year, 
    but funded one year in advance. Consequently, the changes which related 
    to forward funding which were proposed in the NPRM dated November 16, 
    1993 (58 FR 60498) will not be implemented, since due dates for reports 
    and other actions do not need to be changed to be consistent with the 
    timetable for a new program year. Therefore, the information concerning 
    forward funding and the resultant technical changes contained in that 
    NPRM are deleted from Secs. 96.10, 96.42, 96.49, 96.80, 96.81, 96.85 
    and 96.87. Throughout this current regulation, the dates proposed in 
    the NPRM dated November 16, 1993 (58 FR 60498) for implementation 
    during forward funding are deleted and the dates included are based on 
    the Federal fiscal year.
    
    Section-by-Section Analysis of Changes in the Regulations
    
    Subpart A--Introduction
    
    Section 96.1  Scope
    
        Several changes have taken place in the block grants since these 
    regulations
    
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    were first issued in 1981. We are amending this section, which 
    specifies which programs are subject to the regulations, to reflect the 
    current names and legal status of the block grants. Although these 
    amendments were not in either the July 17, 1992 or the November 16, 
    1993 NPRMs, we are including them in the final rule since the changes 
    are only technical in nature and reflect the statutory situation.
        Specifically, we are revising paragraph (a) to show that the CSBG 
    program is now covered by sections 671-683 of Public Law 97-35, as 
    amended; deleting reference in paragraph (d) to the Primary Care Block 
    Grant, which was repealed; and amending paragraph (e) to reflect the 
    fact that the Maternal and Child Health Services Block Grant (MCH) 
    program is found at 42 U.S.C. 701-709. We are also deleting reference 
    in paragraph (c) to the Alcohol and Drug Abuse and Mental Health 
    Services Block Grant, which has been repealed and replaced by the 
    Community Mental Health Services Block Grant (CMHS) and the Substance 
    Abuse Prevention and Treatment Block Grant (SAPT). CMHS and SAPT are 
    now referenced in revised paragraphs (c) and (d).
        Finally, we are revising paragraph (f) to clarify that these 
    regulations also apply to the Empowerment Zones and Enterprise 
    Communities programs enacted in 1993 as a part of the Social Services 
    Block Grant statute. A question had been raised by eligible entities as 
    to whether the block grant regulations or parts 74 and 92 of 
    Departmental regulations applied to the Empowerment Zones and 
    Enterprise Communities. This amendment will make clear that part 96, 
    the block grant regulations, are applicable. This is consistent with 
    guidance previously issued by the Department.
    
    Section 96.2  Definitions
    
        The Trust Territory of the Pacific Islands (TTPI) consisted of 
    Micronesia, the Marshall Islands, and Palau for the first five years of 
    the LIHEAP and CSBG programs. Two of the components of the TTPI, the 
    Marshall Islands and Micronesia, entered into Compacts of Free 
    Association with the United States in 1986, under which they were 
    declared independent nations that will be associated with the United 
    States for defense purposes during a 15-year transition period. Under 
    the terms of those Compacts, allocations to the new Federated States of 
    Micronesia and the Republic of the Marshall Islands under LIHEAP, CSBG, 
    and several other Federal assistance programs were phased out over a 
    three-year period, beginning in FY 1987. Beginning with FY 1990, they 
    were no longer eligible to receive any LIHEAP or CSBG funding. Palau 
    has also signed a Compact of Free Association, which went into effect 
    at noon on October 1, 1994. As a result, no remaining entity is 
    encompassed by the term, ``Trust Territory of the Pacific Islands''. 
    The LIHEAP and CSBG allocations for the new Republic of Palau were also 
    phased out over a three-year period, beginning in FY 1996. The 
    allocation for the Republic of Palau was no more than 75% of its FY 
    1995 amount in FY 1996, no more than 50% in FY 1997, and no more than 
    25% in FY 1998. Beginning in FY 1999, no LIHEAP or CSBG funds will be 
    allocated to the Republic of Palau. All three original components of 
    TTPI (the Federated States of Micronesia, the Republic of the Marshall 
    Islands, and the Republic of Palau) continue to receive funding under 
    the block grants administered by agencies of the PHS, since they were 
    exempt from the compacts' requirements to phase out funding.
        To take account of changes in the Trust Territory, the NPRM dated 
    July 17, 1992 (57 FR 31682) proposed to modify the definition of 
    ``State'' as used in the block grant rule. This final rule will further 
    modify that definition by deleting ``the Trust Territory of the Pacific 
    Islands comprised of Palau'' since Palau's Compact of Free Association 
    became effective after the publication of the July 1992 NPRM. We are 
    also adding a statement that, for block grants administered by agencies 
    of the PHS, ``States'' will include the Federated States of Micronesia, 
    the Republic of the Marshall Islands, and the Republic of Palau.
        No comments were received in response to Sec. 96.2 of the NPRM. 
    Therefore, the final rule is revised as described above.
    
    Subpart B--General Procedures
    
    Section 96.10 Prerequisites To Obtain Block Grant Funds
    
        Form of application. In general, the block grant regulations 
    provide States and other grantees with substantial discretion in 
    preparing applications and related forms. The current section reads: 
    ``No particular form is required for a State's application or the 
    related submission required by statute.'' This language may be 
    misleading, however, inasmuch as some block grant statutes do, in fact, 
    require grantees to submit applications and other information in a 
    particular form in order to ensure that the information is useful for 
    statutorily intended purposes, e.g., Congressional oversight. Examples 
    are the application requirements for MCH, CMHS and SAPT. The NPRM dated 
    July 17, 1992 (57 FR 31682) proposed to modify subsection (a) to allow 
    the Department to specify the form of an application when this is 
    required or clearly contemplated by the authorizing statute.
        Comments: Two comments were received in response to the proposal 
    concerning the form of an application. One commenter indicated that the 
    Department was proposing to specify the form of application to be 
    submitted for CSBG funding. The other commenter indicated the fact that 
    adding ``except where prescribed elsewhere in this rule'' to the 
    current language is not all inclusive, especially since the above 
    example omitted at least one other block grant statute, MCH, which 
    explicitly requires the Secretary to provide a specific ``standard 
    form'' for the States' applications. The commenter recommended that the 
    rule be amended either to add this example or to clarify that 
    exceptions include any program where the authorizing legislation 
    specifically requires a particular form.
        Response: Although the CSBG statute requires the specific content 
    to be included in CSBG applications, no particular format is required. 
    The format by regulation is at the discretion of the grantee.
        The Department agrees with the commenter that the above example 
    should include an additional statement that Title V of the MCH statute 
    requires the Secretary to provide a specific ``standard form'' for the 
    States' applications. Therefore, section 96.10(a) is amended to include 
    this specific requirement. Furthermore, we have added a clarification 
    to allow specific formats when authorizing legislation requires it.
        In support of its commitment to Federalism, the Department will 
    continue to make every effort to develop its application requirements 
    and forms in close cooperation with the States, and where possible, the 
    communities. For example, when developing the MCH application and 
    annual report, the Maternal and Child Health Bureau developed new 
    guidance and an automated reporting system based on the emerging 
    concept of ``Performance Partnerships''. Not only did the Bureau meet 
    regularly with a Block Grant Guidance Work Group made up largely of 
    State and local MCH representatives, but the Bureau field tested the 
    guidance and information system with 9 states and held a number of 
    sessions at three separate national meetings with representatives of 
    all State MCH and Children with Special Health Care
    
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    Needs Directors, as well as many local directors. The initial national 
    sessions focused on discussing and reviewing the proposed guidance and 
    performance partnership measures. Later sessions included hands on 
    training in using the guidance that was provided by the Bureau and the 
    nine test States.
        Application Submission and Completion Dates for States and 
    Territories For Block Grants. Due dates for submission and completion 
    of State and territorial applications for LIHEAP, CSBG and SSBG were 
    proposed by the November 16, 1993 NPRM to be added to the block grant 
    regulations so that grant awards can be issued as close as possible to 
    the beginning of a grant period.
        The Cash Management Improvement Act of 1990, (CMIA, Pub. L. 101-
    453) imposes requirements for the timely transfer of funds between a 
    Federal agency and a State and for the exchange of interest where 
    transfers are not made in a timely fashion. The CMIA also requires 
    States to minimize the time between the receipt of Federal funds and 
    their disbursement by the State for program purposes. The CMIA applies 
    to States and territories, but it does not apply to Indian tribes or 
    tribal organizations.
        The establishment of application due dates for States and 
    territories will allow the agency sufficient time to process 
    applications and issue awards in a timely manner, in order to minimize 
    interest charges associated with the CMIA. The NPRM issued by the 
    Department on July 17, 1992 (57 FR 31685) also proposed completion 
    dates for tribal applications for the CSBG and LIHEAP. See below under 
    Sec. 96.49 for further discussion of tribal applications.
        Because significant changes to the CSBG Act have been enacted since 
    the publication of the NPRMs, we have deleted the provisions relating 
    to CSBG application submission and completion dates from this final 
    rule.
        SSBG: The November 16, 1993 NPRM also proposed to establish the due 
    date for SSBG applications as one month prior to the beginning of the 
    SSBG State program year. State SSBG allocations are established by a 
    formula based on population. Each fall, individual State allocations 
    for the following Federal fiscal year, based on the projected 
    Congressional appropriation, are published in the Federal Register. 
    Unless the appropriation is enacted at a different level, the 
    allocations published in the Federal Register the previous fall are the 
    basis for determining the amount of the grant awards for the following 
    fiscal year. For example, FY 1999 allocations were published in the 
    Federal Register in the fall of 1998 for distribution to the States in 
    Federal fiscal year 1999, beginning October 1, 1998. This approach 
    gives the grantee plenty of time to plan its program activities.
        For SSBG, accordingly, it was proposed that States and territories 
    which operate on a Federal fiscal year basis submit applications (pre-
    expenditure reports) for funding by September 1 of the preceding fiscal 
    year. It was also proposed that States and territories which operate 
    their SSBG program on a July 1--June 30 basis submit their applications 
    for funding by June 1 of the preceding funding period. For example, for 
    States and territories which operate on the basis of the fiscal year 
    which begins on October 1, 2000, and ends on September 30, 2001, the 
    date of submission for applications would be September 1, 2000. For 
    SSBG programs with a funding period which begins on July 1, 2000, and 
    ends on June 30, 2001, the date of submission would be June 1, 2000. No 
    date was proposed for completion of SSBG applications.
        No comments were received in response to the proposal for 
    submission dates for the SSBG program. Thus, the provision is adopted 
    as proposed, with two exceptions. We have added the authority to allow 
    the Department to agree to a later application submission date, in 
    order to allow for unusual circumstances that may make meeting these 
    deadlines difficult or impossible. In addition, we have changed the 
    term ``Secretary'' used in the NPRM to ``Department'', to better 
    reflect actual working relationships.
        Therefore, the date for submission of SSBG applications is 
    September 1 of the preceding fiscal year for those States which operate 
    on a Federal fiscal year basis unless the Department agrees to a later 
    date. The date for submission of applications for those States which 
    operate on a July 1--June 30 basis is the preceding June 1 unless the 
    Department agrees to a later date. States requesting a later submission 
    date should provide proper documentation to the Department.
        LIHEAP: For LIHEAP, it was proposed in the NPRM dated November 16, 
    1993 (58 FR 60498) that the submission date for applications be 
    established as one month before the beginning of the new ``program 
    year'' of July 1 to June 30. Thus, the due date for submission of the 
    applications would be June 1, if forward funding were implemented.
        Also in the NPRM, for LIHEAP, the final date for completion of 
    applications from States and territories was proposed to be established 
    as December 31 of the program year for which they were requesting 
    funds, almost seven months after the due date for the submission of the 
    applications.
        Comment: One comment was received in response to the proposed 
    LIHEAP submission dates and completion dates for States and 
    territories. The commenter was in favor of the proposed LIHEAP 
    submission date but did not think the completion date should be more 
    than 60 days after submittal. The commenter expressed the belief that 
    the Department was attempting to circumvent the requirements under the 
    Cash Management Improvement Act (CMIA) and that grantees should receive 
    a grant award notification before October 1 or December 31 of the 
    program year.
        Response: The Department disagrees with the assertion that we are 
    trying to circumvent the requirements under the CMIA. If States submit 
    their applications earlier, the Department will review them as soon as 
    possible. Departmental review will be delayed only if the grantee fails 
    to submit all the information required. The December 31 completion date 
    requirement was proposed in order to give grantees the time to submit 
    the required information, not to give the Department more time to 
    review it.
        It is the conclusion of the Department that since LIHEAP will 
    continue to be operated on a normal fiscal year basis of October 1 to 
    September 30, with funding scheduled to be appropriated one year in 
    advance, the due date for submission of funding applications from 
    States and territories will be established as September 1, one month 
    prior to the beginning of the fiscal year, unless the Department agrees 
    to a later date. We believe it is appropriate to require submission of 
    the funding application prior to the start of the funding period, since 
    the grantees will have been advised of the amount of their allocations 
    (they should know the level or amount) one year in advance and thus 
    will have had sufficient time for planning and to hold the required 
    public hearings. The submission date of September 1 is also consistent 
    with the submission date for applications for tribal grantees.
        The Department agrees with the commenter that a period of almost 
    seven months is not needed for review of the applications. However, 
    based on past experience, since numerous applications from both States 
    and tribes will be received at the same time, sixty days may not be 
    sufficient time for the completion of reviews, notification of grantees 
    concerning deficiencies in applications, and receipt of the grantees' 
    responses. Therefore, as a compromise,
    
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    the due date for the completion of all information required by States 
    and territories is being established as December 15 of the fiscal year 
    for which they are requesting funds, 3\1/2\ months after the due date 
    for the submission of the applications. For example, for fiscal year 
    2000, which begins on October 1, 1999 and ends on September 30, 2000, 
    applications must be submitted by September 1, 1999 and must be 
    completed by December 15, 1999, unless the Department agrees to a later 
    date after proper documentation from the State.
        As with the SSBG program, we have added the authority to allow the 
    Department to agree to a later application submission or completion 
    date, in order to allow for unusual circumstances that may make meeting 
    these deadlines difficult or impossible, and we have changed the term 
    ``Secretary'' to ``Department''.
        Effective Date: Given the timing of publication of this final rule, 
    there will not be time for grantees to meet the new schedule for 
    submission and completion of FY 2000 SSBG and LIHEAP applications, 
    which will be due on September 1 (or June 1 for some SSBG applications) 
    of each year. Accordingly, Secs. 96.10(c) (1) and (2) and 96.10(d) of 
    this rule, relating to the submission deadlines for SSBG applications 
    and the submission and completion deadlines for LIHEAP applications, 
    will become effective on March 1, 2000, and will apply beginning with 
    FY 2001 plans for SSBG and LIHEAP. Under these provisions, for example, 
    SSBG applications for FY 2001 must be submitted by September 1, 2000 
    for States that operate their programs on a federal fiscal year basis, 
    and by June 1, 2000 for States that operate on a July 1-June 30 program 
    year basis. LIHEAP applications for FY 2001 must be submitted by 
    September 1, 2000 and must be completed by December 15, 2000.
    
    Section 96.15  Waivers
    
        The LIHEAP statute provides that grantees may request waivers of 
    the limit on the amount of funds that may be spent on weatherization 
    activities and other energy-related home repairs and of certain crisis 
    assistance performance standards.
        The LIHEAP statute provides that, in general, not more than 15 
    percent of funds allotted to or available to a grantee for any fiscal 
    year may be used for weatherization activities and other energy-related 
    home repairs. Section 705 of Public Law 101-501 (42 U.S.C. 8624(k)) 
    amended section 2605(k) of the LIHEAP statute to allow the Department, 
    under certain circumstances, to grant a waiver to increase the maximum 
    amount of LIHEAP funds a grantee may use for low cost weatherization or 
    other energy-related home repairs from 15 percent to up to 25 percent 
    of the funds allotted or available to the grantee.
        Section 2604(c) of the LIHEAP statute provides that a ``reasonable 
    amount'' of LIHEAP funds (based on data from prior years) shall be 
    reserved until March 15 of each year by each grantee for energy crisis 
    intervention. This section describes performance standards for time 
    frames for the provision of assistance, in addition to performance 
    standards for geographical accessibility and obtaining applications 
    from individuals who are physically infirm. However, the statute 
    provides for a waiver of the performance standards for a program in a 
    geographical area affected by a natural disaster designated by the 
    Secretary or affected by a major disaster or emergency designated by 
    the President for as long as the designation remains in effect, when 
    the emergency makes compliance with the standards impracticable. 
    Detailed criteria for a waiver of the crisis assistance performance 
    standards are described in 45 CFR, part 96, Sec. 96.89.
        Currently, no mention is made in Sec. 96.15 of the regulations to 
    indicate to whom applications for waivers that are permitted by statute 
    should be submitted for the LIHEAP program. Current regulation requires 
    that waivers under the CSBG program are to be submitted to the 
    Director, Office of Community Services. It was proposed in the NPRM 
    dated November 16, 1993 (58 FR 60498) that waiver applications for SSBG 
    (formerly submitted to the defunct Office of Human Development 
    Services) and for LIHEAP should also be submitted to the Director, 
    Office of Community Services. This section also currently specifies 
    that applications for waivers for block grants administered by agencies 
    of the PHS should be submitted to the Assistant Secretary of Health. 
    With the reorganization of the Office of the Assistant Secretary for 
    Health in 1995, this responsibility was delegated to the cognizant 
    Agencies of the PHS. Accordingly, this section has been revised to 
    specify that waiver requests should be submitted to the Director of the 
    Centers for Disease Control and Prevention for PHS, to the 
    Administrator of the Substance Abuse and Mental Health Services 
    Administration for CMHS and SAPT, and to the Director of the Maternal 
    and Child Health Bureau for MCH. The new titles of the CMHS and SAPT 
    block grants are also reflected in this section.
        No comments were received in response to Sec. 96.15 of the NPRM. 
    Therefore, this rule is adopted as proposed, with the changes discussed 
    above for the titles and waiver approving authorities for the block 
    grants administered by agencies of the PHS.
    
    Subpart C--Financial Management
    
    Section 96.30  Fiscal and Administrative Requirements
    
        The NPRM issued by the Department dated July 17, 1992 proposed to 
    add a new paragraph that would require block grant recipients to submit 
    information on the obligation and expenditure status of each block 
    grant allocation. For block grants whose statutory authorizations 
    include time limits on both obligation and expenditure of funds, this 
    information would include: (1) The dollar amount of the funds obligated 
    by the grantee and the date of the last obligation; and (2) the dollar 
    amount of the funds expended by the grantee and the date of the last 
    expenditure.
        For block grant statutes which have time limits on the obligation 
    of funds but not on the expenditure of funds, this information would 
    include the dollar amount of the funds obligated during the period 
    funds were available for obligation and the date of the last 
    obligation.
        For block grant statutes which have time limits only on the 
    expenditure of funds, this information would include the dollar amount 
    of the funds expended and the date of the last expenditure.
        The information would be required for each block grant award 
    allocation after the close of the statutory period(s) for obligation of 
    funds and/or expenditure of funds.
        As proposed in the NPRM, grantees would be required to answer an 
    inquiry issued to the grantee by the Department's Office of Payment 
    Management Systems. This letter would be sent at the end of the 
    statutory period for obligation or expenditure of funds. Grantees would 
    have 90 days after the end of the applicable statutory period (or 90 
    days after receipt of the letter, whichever is the later date) to 
    return the letter with the required information.
        This information would allow HHS and the grantee to verify the 
    financial status of block grant funds and allow the Department to 
    determine aggregate obligations, expenditures, and available balances. 
    The reporting requirement would not affect a grantee's right to 
    subsequent reimbursement or to draw down funds for authorized 
    obligations or expenditures made within the allowable statutory 
    periods.
    
    [[Page 55848]]
    
        Comments: Three commenters wrote in response to this section of the 
    NPRM. One commenter indicated that, although submission of a letter to 
    the Department at the end of the year on the expenditure of CSBG funds 
    would not be a significant burden, it seemed to be a duplication of 
    information which the States provide in the expenditure reports 
    submitted at the end of the year. The commenter continued by stating 
    that it would have no adverse impact for this report to be submitted 
    concerning LIHEAP expenditures.
        The second commenter wrote that the imposition of new reporting 
    requirements is contrary to the original intent of the block grant 
    legislation that sought to minimize Federal administrative requirements 
    by placing greater reliance on State government. The writer stated that 
    the current block grant reporting requirements are adequate and should 
    not be changed.
        The final commenter asserted that the CSBG Act is administered 
    exclusively by subgrantees, and the proposed section does not make it 
    clear what requirements would be placed on subgrantees to report to a 
    State in order for the State to be able to file the information the new 
    section will require. The commenter stated the hope that any 
    requirements placed on subgrantees to provide information to the State 
    would conform to the system HHS now imposes on its direct grantees to 
    file various financial reports.
        Response: Currently, the Department does not require obligation or 
    expenditure reports for the block grants (although some grantees submit 
    them voluntarily.) This has caused problems in the past because there 
    is no clear-cut information as to when a grantee has completely used 
    its grant funds, thus allowing the Department to close the grant 
    account. Public Law 101-510 (signed into law on November 5, 1990) 
    amended 31 U.S.C. Chapter 15 to provide that, by the end of the fifth 
    fiscal year after the fiscal year in which the Federal government 
    obligated the funds, the account will be canceled. If valid charges to 
    a canceled account are presented after cancellation, they may be 
    honored only by charging them to a current appropriation account, not 
    to exceed an amount equal to 1 percent of the total appropriations of 
    that account.
        Because of our need to determine the status of grant accounts, we 
    have determined that it is appropriate to require an annual report on 
    obligations and/or expenditures from all grantees under the block grant 
    programs. We do not believe this requirement would be a significant 
    burden on block grant recipients, as they are already required to 
    maintain this information under current requirements of section 96.30. 
    This section of the block grant regulations currently states that 
    recipients are to maintain information sufficient to: ``* * * (b) 
    permit the tracing of funds to a level of expenditure adequate to 
    establish that such funds have not been used in violation of the 
    restrictions and prohibitions of the statute authorizing the block 
    grant.'' Furthermore, the Department now periodically sends grantees 
    letters indicating the status of their block grant funds and asks 
    grantees to confirm this information. However, since the publication of 
    the July 17, 1992 NPRM, the Department considered designating the use 
    of OMB Standard Form 269A, Financial Status Report (short form), to 
    collect this information because it would be less burdensome on the 
    grantees and the Department. The first comment reinforced this thought. 
    By using Form 269A, grantees would be submitting the information on a 
    familiar form and in a familiar format.
        At least 90% of the CSBG funds are administered by subgrantees. It 
    continues to be the policy of the Department to defer to the State for 
    the type and frequency of reporting requirements a State mandates of 
    subgrantees, so long as the reporting requirements are reasonable and 
    provide the necessary information the State needs to comply with 
    Federal regulations.
        The Amendments enacted in 1998 (section 678D of Pub. L. 105-285) 
    mandate that for CSBG grantees, ``a State shall ensure that cost and 
    accounting standards of the Office of Management and Budget (OMB) apply 
    to a recipient of funds under this subtitle.'' These standards are 
    reflected in OMB Circulars A-110 and A-122.
        Therefore, Sec. 96.30 is adopted, with several changes from the 
    version proposed in the NPRM, in order to make the requirement more 
    consistent with other programs and thus reduce the burden on grantees. 
    Rather than have a letter of inquiry sent to grantees at the end of the 
    applicable statutory grant period, the final rule establishes a 
    requirement that grantees submit, within 90 days of the end of the 
    grant period, OMB Standard Form 269A, Financial Status Report (short 
    form). This will allow grantees to submit the required information 
    without a need to wait for a request from the Department, using a form 
    with which they are familiar because it is used for most other 
    Departmental grant programs. In addition, we have made modifications to 
    change the term ``recipient'' to ``grantee''. These are technical 
    changes to use a more accurate term, since ``recipients'' are often 
    considered to be individual beneficiaries.
    
    Subpart D--Direct Funding of Indian Tribes and Tribal Organizations
    
    Section 96.41  General Determination
    
        Each of the block grant statutes provides direct funding for States 
    and territories. Statutes for four block grants--LIHEAP, CSBG, PHHS, 
    and SAPT--authorize the Secretary to fund certain Indian tribes and 
    tribal organizations directly if the Secretary determines that tribal 
    members would be better served by the tribe than by the State(s) in 
    which the tribe is located. In the case of SAPT, this authority is 
    limited by statute to tribes that were funded in FY 1991 under the 
    Alcohol and Drug Abuse and Mental Health Services Block Grant, the 
    predecessor to SAPT and CMHS. Under this statutory provision, only one 
    tribe qualifies for direct funding under SAPT. By law, Indian tribes 
    may not apply for direct funding under MCH, CMHS, or SSBG.
        Section 96.41(a) provides that the Department will award block 
    grant funds directly to an eligible Indian tribe or tribal organization 
    upon receipt of a complete application for funds that meets the 
    statutory requirements. The preamble to the original block grant final 
    rule dated July 6, 1982 (47 FR 29480) states the Department's policy on 
    direct funding of Indian tribes as follows: ``By regulation, the 
    Secretary has determined that members of Indian tribes and tribal 
    organizations would be better served by direct Federal funding than by 
    funding through the States in every instance that the Indian tribe or 
    tribal organization requests direct funding.''
        This language reflects our view that, as a general rule, tribal 
    rather than State priorities and program administration will result in 
    better service to tribal members. The final rule published in July 1982 
    established the primacy of the Indian tribe in determining the services 
    to be provided and how best to provide them. It avoided the need for a 
    Departmental assessment of the relative efficiency and effectiveness of 
    alternative services systems, lodged primary responsibility with the 
    tribe for administering the programs, and established the tribe's 
    accountability for providing appropriate services to its service 
    population.
        The NPRM dated July 17, 1992 (57 FR 31682) proposed to add a 
    paragraph (c) to the existing rule to clarify that under limited 
    circumstances, the Secretary may use his or her discretionary authority 
    to determine that the members
    
    [[Page 55849]]
    
    of a particular Indian tribe eligible for block grant funds would be 
    better served by the State in which the tribe is located. The proposed 
    amendment included in the NPRM would clarify the block grant 
    regulations and apply only to the circumstances specified in paragraph 
    (c):
        (1) The Department has determined that the tribe has not used its 
    block grant funds substantially in accordance with the block grant 
    statute; and
        (2) The Department has withheld block grant funds from the tribe 
    based on that determination and in accordance with procedures 
    established by the block grant regulations; and
        (3) The tribe has not provided sufficient evidence that it has 
    taken action to correct the problems leading to the withholding of 
    funds.
        The Secretary's determination to award funds to the State rather 
    than directly to the tribe would be limited to the situation described 
    above. If a tribe is located in more than one State, funds that had 
    been set aside for a direct grant to the tribe would be awarded to 
    these States in the same proportion as they were offset from the 
    States' allotments for direct award to the tribe. When the Department 
    withholds block grant funds from a tribe, the Department would make the 
    determination to award funds to the State only after allowing as much 
    time as it determines to be reasonable for the tribe to correct the 
    conditions that led to withholding, consistent with provision of timely 
    and meaningful services to the tribe's service population during the 
    fiscal year. For example, if LIHEAP funds were withheld from a tribe 
    effective October 1, the first day of the Federal fiscal year, but 
    funds were not yet available to the Department for distribution to 
    grantees, the Department probably would allow additional time for the 
    tribe to correct these conditions. However, if LIHEAP funds were 
    withheld later in the fiscal year, for example, effective as late as 
    December 1, during the winter heating season, and funds were then 
    available to the Department for distribution to grantees, the 
    Department probably would make the determination to award funds to the 
    State at the same time that it took the official withholding action, in 
    order to ensure that tribal members received needed services during the 
    winter months.
        To assure that well-planned, uninterrupted, and timely services are 
    provided to the service population of a tribe from which funds are 
    withheld, the proposed amendment provided that the State would receive 
    all remaining funds reserved for the tribe for that fiscal year and all 
    funds for subsequent fiscal years until the Secretary determines that 
    the tribe has corrected the problems which resulted in the withholding. 
    Where funds have been withheld and the tribe has not taken satisfactory 
    corrective action by the first day of the following fiscal year, all of 
    the funds to serve the tribe's service population for the following 
    fiscal year would be awarded to the State. The State would then be 
    responsible for serving the tribe's service population.
        If the tribe takes satisfactory corrective action during the 
    following fiscal year, the tribe may receive direct funding for that 
    fiscal year with the concurrence of the State. This is consistent with 
    45 CFR 96.42(e), which provides for acceptance of a tribal application 
    submitted after September 1 only with the concurrence of the State(s) 
    in which the tribe is located. For example, if the State had provided 
    LIHEAP services for a fiscal year to the tribe's service population 
    before the tribe took corrective action, the State would be unlikely to 
    concur in the acceptance of an application from the tribe for that 
    fiscal year.
        The July 17, 1992 NPRM (57 FR 31682) was intended to clarify the 
    responsibility for serving these tribal households and assure that 
    services would be provided in a timely manner. The NPRM was intended to 
    provide clear, published notice so that all parties concerned--
    including the tribe or tribal organization, the tribe's service 
    population and the State--would understand the actions that the 
    Department would take and understand the State's responsibility to 
    serve the tribal service population while funds are withheld from the 
    tribe or tribal organization.
        The preamble to the original block grant final rule affirms the 
    Department's commitment to continue the government-to-government 
    relationship between the United States and Indian tribes and affirms 
    the policy of self-determination for tribes. The Department continues 
    to be committed to these policies; it is neither the intent nor the 
    effect of the clarification in this final rule to change them.
        The Department will withhold block grant funds from a grantee only 
    after determining, in accordance with the due process procedures 
    specified in the block grant statutes and regulations, that the grantee 
    is not using its block grant funds substantially in accordance with 
    statutory requirements to which the grantee has agreed. In such a case, 
    the grantee has violated its agreement to abide by the terms and 
    conditions of the grant, and the Department must act, in accordance 
    with the law, to assure accountability for public funds.
        The NPRM dated July 17, 1992 (57 FR 31682) also proposed to amend 
    paragraph (a) to clarify that paragraph (c) constitutes a limited 
    exception to the principle of direct funding of Indian tribes and 
    tribal organizations. The proposed rule would apply when funds are 
    withheld from a tribal organization, as well as from a tribe. (A tribe 
    that was to be served by a separate tribal organization from which 
    funds are withheld may rescind its resolution authorizing that role for 
    the tribal organization and, consistent with statutory and regulatory 
    requirements including Sec. 96.42(e), may request direct funding for 
    itself--on its own--or through another tribal organization. Because the 
    tribal organization would be the grantee from which funds are withheld, 
    a tribe separate from the tribal organization would be eligible for its 
    own funding).
        We anticipate there would be very few instances in which the 
    exception to the Department's policy on direct tribal funding would 
    apply. Over the past 15 or 16 years of HHS administration of the block 
    grants with direct tribal funding--with over 100 tribes and tribal 
    organizations receiving direct funding each year--there has been only 
    one instance in which the Department has withheld block grant funds 
    from a tribe. The NPRM was consistent with the actions previously taken 
    by the Department.
        Comments: Two comments were received in response to Sec. 96.41 of 
    the NPRM. One commenter (a tribe) stated that the proposed rule would 
    impact tribal self-determination and begin to close the existing policy 
    that in most Federal programs, tribes are treated as equals with the 
    States.
        Response: We believe that the rule would reaffirm HHS policy to 
    directly fund tribes whenever it is authorized by a block grant 
    statute, so long as the tribes submit the applications required by the 
    statute and administer the block grant funds substantially in 
    accordance with the statute. The Department's intent of the new 
    language is to provide a means of continuing services to tribal 
    populations if tribal management of block grant funds is found to be 
    substantially out of compliance with statutory requirements to which 
    the tribe agreed when it applied for and accepted Federal funds, and 
    the tribe does not take corrective action during the period of a grant. 
    In essence, we are seeking a way to continue services uninterrupted 
    when we have no viable tribal alternative available. This has happened 
    only once in the history of the
    
    [[Page 55850]]
    
    block grants, and we do not anticipate that this procedure would be 
    used in the future until all reasonable efforts at assisting a tribe or 
    tribal organization to come into compliance would be exhausted.
        Comment: The second commenter (a State) objected to having the 
    State be the alternative for providing services when funds are withheld 
    from a tribe located within that State; the commenter mistakenly 
    believed that the State would not have access to the withheld funds. 
    The commenter proposed that HHS assume the responsibility to serve such 
    a tribe.
        Response: HHS has neither the authority nor the capacity to provide 
    direct block grant services; the State does. Also, the proposed rule 
    and its preamble specified that the State would receive any funds 
    withheld from a tribe, if the tribe did not correct the problems that 
    led to withholding within a reasonable period, so that the State could 
    then serve the tribe's service population until the tribe corrected 
    these problems. The State would serve this tribe's service population 
    as it serves its other residents, including the service populations of 
    tribes within the State that do not apply for direct Federal funding. 
    There is no requirement that the State provide more specialized 
    treatment or accessibility to members of this tribe than it does to its 
    other residents.
        Therefore, the rule is adopted as proposed, with a technical 
    modification to change the term ``Secretary'' to ``Department''.
    
    Section 96.42  General Procedures and Requirements
    
        Paragraph (f) of subpart D, Sec. 96.42 of the block grant 
    regulations, provides that a State receiving block grant funds is not 
    required to use those funds to provide tangible benefits (e.g., cash or 
    goods) to American Indians who are within the service population of an 
    Indian tribe or tribal organization that received direct funding from 
    the Department under the same block grant program for the same fiscal 
    year. A State, however, may not deny tribal members access to 
    intangible services funded by block grant programs (e.g., treatment at 
    a community health center) even if they are members of an organization 
    receiving direct funding for a similar service.
        The original preamble to the regulations (July 6, 1982, 47 FR 
    29482) provides the following clarification of this provision:
        ``Thus, for example, States are not required to provide cash 
    payments or weatherization assistance to Indians included in the 
    service population of a tribe receiving funds under the low-income home 
    energy assistance program.''
        The proposed amendment in the July 17, 1992 NPRM clarified that 
    tribes receiving direct block grant funding are not required to use 
    those funds to provide tangible benefits to non-Indians residing within 
    the tribe's service area, unless a written tribe-State agreement so 
    provides. In the case of tangible benefits such as those provided under 
    the LIHEAP block grant, where the service unit is the household, the 
    clarification would apply to non-Indian households.
        The justification for this policy is clear. The LIHEAP statute 
    authorizes the direct funding of Indian tribes for the provision of 
    benefits to Indian households. The statute specifies that a tribe with 
    a reservation is eligible to receive LIHEAP funds based on the number 
    of Indian households eligible for the program and residing on the 
    tribe's reservation or adjacent trust land, as a proportion of the 
    eligible households in the State, or a larger amount based on an 
    agreement between the tribe and its State. The tribe's allotment is to 
    be offset from the allotment of the State. Unless a tribe-State 
    agreement provides otherwise, the tribe's LIHEAP allotment is not based 
    on the total eligible population of its reservation and nearby trust 
    land. The tribe does not receive LIHEAP funds to serve non-Indian 
    households residing in these areas. This is the responsibility of the 
    State. Similarly, the statute provides that a tribe without a 
    reservation is to receive LIHEAP funds based on the number of Indian 
    households eligible for the program in its service population area, as 
    determined by the Secretary in consultation with the tribe and its 
    State.
        Thus, unless a tribe-State agreement provides otherwise, tribes 
    receive LIHEAP funds based only on the number of eligible Indian 
    households in their service areas.
        This amendment, therefore, would clarify that States have the 
    responsibility to serve the non-Indian households residing in the 
    service area of a direct grant tribe, unless the tribe and the State 
    agree that the tribe will do so.
        No comments were received in response to Sec. 96.42 (f) as proposed 
    in the NPRM. Therefore, the rule is adopted as proposed.
    
    Section 96.49  Due Date for Receipt of All Information Required for 
    Completion of Tribal Applications for the Low-Income Home Energy 
    Assistance Block Grants
    
        Section 96.49 was proposed to be added to the block grant 
    regulations by the NPRM issued by the Department on July 17, 1992 (57 
    FR 31685). It proposed to establish completion dates for tribal 
    applications for CSBG and for LIHEAP. Because significant changes to 
    the CSBG statute have been enacted since the publication of the NPRM, 
    we are dropping the provision establishing completion dates for tribal 
    applications for CSBG.
        LIHEAP: Section 96.49 of the NPRM dated July 17, 1992 proposed that 
    once the LIHEAP tribal applications are received by the Department, 
    additional information needed to complete the applications must be 
    received no later than January 31 for a given fiscal year. The July 17, 
    1992 proposed rule also indicated that after January 31, funds would 
    revert to the State(s) in which the tribe is located. This provision 
    was also included in the November 16, 1993 NPRM (58 FR 60498) in an 
    amended version. The later NPRM included a due date for completion of 
    tribal applications of October 1, once forward funding went into 
    effect.
        Comments: In response to this part of Sec. 96.49 of the July 17, 
    1992 NPRM, three comments were received. A commenter from a northern 
    State indicated that the deadline should provide States with sufficient 
    notice in case they need to provide LIHEAP assistance to the service 
    population of a tribe that has not completed its application for a 
    direct grant. Additionally, the commenter stated that the State's 
    extremely cold weather necessitates that winter heating assistance 
    begin by November 1. Thus, it felt that the January 31 deadline was too 
    late, and suggested October 15 instead.
        One commenter indicated that the requirement that tribal 
    applications be completed by January 31 or the State becomes 
    responsible to serve the tribe would result in funds being allocated to 
    the State after February. The commenter was concerned that, in addition 
    to the financial impact on the State, the State would not have 
    sufficient lead time to plan, staff and implement its program to serve 
    the tribe.
        Another commenter indicated that the current regulatory due date of 
    September 1 for submission of a tribal application for both CSBG and 
    LIHEAP is satisfactory. The commenter was uncertain whether the due 
    date for completion of the tribal applications is
    
    [[Page 55851]]
    
    necessary. The commenter also expressed the need to receive LIHEAP 
    funding as early in the fiscal year as possible.
        No comments were received in response to the LIHEAP completion date 
    proposed in Sec. 96.49 of the November 16, 1993 NPRM related to forward 
    funding. As mentioned earlier, the proposed dates related to forward 
    funding are being deleted because forward funding will not be 
    implemented. However, that NPRM proposed a completion date five months 
    after the submission date.
        Response: The Department concludes, upon further review, that such 
    a lengthy period for completion of the applications should not be 
    needed. Because most LIHEAP funds are spent for winter heating 
    assistance, it would be preferable that States know by early winter at 
    the latest whether they will be required to serve a tribe's service 
    population. It should be mentioned that most tribes submit all the 
    information necessary to complete their applications in a timely 
    manner. However, in a few cases, tribes take many months to complete 
    their applications, or never complete their applications, despite 
    repeated communication from HHS about missing items.
        Under this final rule, the due date for receipt of all information 
    necessary to complete LIHEAP tribal applications is December 15 unless 
    the State(s) in which the tribe is located agrees to a later completion 
    date. This is the same date set for completion of applications from 
    States and territories. We believe it balances the need to give tribes 
    a reasonable amount of time to provide all necessary information to 
    complete their applications with the need of the States to know as 
    early as possible whether they will be responsible for serving tribal 
    members. We have also made explicit that when funds revert to the State 
    because a tribe's application is not completed by the deadline, the 
    State is responsible for serving that tribe's members.
        Effective Date: Given the timing of publication of this final rule, 
    there will not be time for tribal grantees to meet the new schedule for 
    completion of FY 2000 applications for LIHEAP. Accordingly, Sec. 96.49 
    of this rule, which applies to LIHEAP applications, will become 
    effective on March 1, 2000 and will apply beginning with FY 2001 plans. 
    For example, for FY 2001, LIHEAP tribal applications must be submitted 
    by September 1, 2000 and must be completed by December 15, 2000.
    
    Subpart E--Enforcement
    
    Section 96.53  Length of Withholding
    
        Six of the seven block grant statutes provide for withholding of 
    funds from grantees under certain circumstances. (SSBG has no provision 
    for withholding of funds.)
        The statutes for PHHS, CMHS, and SAPT provide that the Secretary 
    shall, after adequate notice and an opportunity for a hearing conducted 
    within the affected State, withhold funds from any State which does not 
    use its allotment in accordance with the requirements of the statute or 
    the certification provided under the statute. The Secretary shall 
    withhold such funds until the Secretary finds that the reason for the 
    withholding has been removed and there is reasonable assurance that it 
    will not recur.
        The statute for MCH provides that the Secretary may, after notice 
    and opportunity for a hearing, withhold payment of funds to any State 
    which is not using its allotment under this title in accordance with 
    this title. The Secretary may withhold such funds until the Secretary 
    finds that the reason for the withholding has been removed and there is 
    reasonable assurance that it will not recur.
        The LIHEAP and CSBG statutes provide that the Secretary shall, 
    after adequate notice and an opportunity for a hearing conducted within 
    the affected State, withhold funds from any State which does not 
    utilize its allotment substantially in accordance with the provisions 
    of this statute and the assurances such State provided under the 
    statute.
        Section 96.53 was proposed in the NPRM issued by the Department on 
    July 17, 1992 (57 FR 31685). It clarifies that under LIHEAP and CSBG, 
    the Secretary may withhold funds until the Secretary finds that the 
    reason for withholding has been removed, as is the case with the other 
    block grants which provide for the withholding of funds. It proposed 
    making explicit authority which is implicit in the LIHEAP and CSBG 
    statutes. The proposed new language is similar to that of the other 
    four statutes which provide for withholding of funds.
        Comment: In response to Sec. 96.53 in the NPRM dated July 17, 1992, 
    one comment was received. The commenter indicated agreement with the 
    proposed language, both because it is very similar to language in 
    several other block grant statutes and because it provides a time frame 
    for when the funds would be released once they have been withheld.
        Response: The Department concludes that for the sake of 
    thoroughness and consistency with the other block grants, the proposed 
    language is needed to clarify for grantees authority which is implicit 
    in the LIHEAP and CSBG statutes. Therefore, the language proposed for 
    Sec. 96.53 is included in this final rule.
    
    Subpart H--Low-Income Home Energy Assistance Program (LIHEAP)
    
    Section 96.81  Carryover and Reallotment
    
        Section 2607(b)(2) of the LIHEAP statute provides that grantees may 
    hold available (carry forward or carry over) for use or obligation in 
    the following fiscal year up to 10 percent of the amount payable to 
    them in a fiscal year and not transferred to another HHS block grant. 
    Section 2607(b)(l) provides for reallotment among all grantees in the 
    following fiscal year of any amounts unused (unobligated) as of the end 
    of a fiscal year that exceed the amount that may be held available for 
    use in the following fiscal year. Section 2604(f)(2) of the LIHEAP 
    statute, as amended by Public Law 101-501, provides that, beginning in 
    FY 1994, grantees may no longer transfer LIHEAP funds to other HHS 
    block grants.
    --Required Carryover and Reallotment Report
        As part of the reallotment procedure established by section 
    2607(b), LIHEAP grantees must report information annually on funds they 
    plan to hold available for obligation in the following fiscal year and 
    on excess unobligated funds available for reallotment among all 
    grantees in the following fiscal year. Section 96.81 of the block grant 
    regulations lists the requirements for these reports.
        The January 16, 1992 (57 FR 1960) interim final rule amended 
    Sec. 96.81 to reflect the change made by Public Law 101-501 reducing 
    the maximum amount of LIHEAP funds that grantees may carry forward for 
    obligation in the succeeding fiscal year, from 15 percent to 10 percent 
    of the funds payable to the grantee and not transferred, pursuant to 
    section 2604(f) of the LIHEAP statute (as in effect prior to 1998), to 
    another HHS block grant. The change was effective beginning with FY 
    1991 funds carried over to FY 1992. The amended Sec. 96.81 required 
    that, as part of their annual carryover and reallotment reports, 
    grantees indicate the amount of LIHEAP funds they want to hold 
    available for obligation in the next fiscal year, ``not to exceed 10 
    percent of the funds payable to the grantee and not transferred * * *''
        The November 16, 1993 (58 FR 60498) NPRM proposed to specify in 
    Sec. 96.81
    
    [[Page 55852]]
    
    that, beginning with funds appropriated for FY 1994, grantees would not 
    be able to transfer any LIHEAP funds to another block grant, consistent 
    with changes to the LIHEAP statute made by Public Law 101-501. We 
    received no comments on this proposed amendment.
        Because the transfer authority has now expired, this final rule 
    deletes reference to it in the list of requirements for grantees' 
    future carryover and reallotment reports in Sec. 96.81. It codifies the 
    requirements for these reports at Sec. 96.81(b).
        Title III of the Human Services Amendments of 1994, Public Law 103-
    252, reauthorized LIHEAP and provided that the Department may not 
    release block grant funds to a grantee until its carryover and 
    reallotment report, which is due by August 1 of each year, has been 
    submitted for the previous year. This requirement was effective 
    beginning with fiscal year 1995 and has been added to this section.
    --Conditions for Reallotment
        In addition, we are making final a change relating to reallotment 
    of LIHEAP funds that we proposed in the July 17, 1992 (57 FR 31682) 
    NPRM.
        The preamble to the NPRM noted that when grantees have had excess 
    unobligated funds available for reallotment, these amounts have usually 
    been small. For example, in FY 1987, a total of $16,706 in unobligated 
    FY 1986 LIHEAP funds were available for reallotment; in FY 1988, $2,858 
    in unobligated FY 1987 funds were available for reallotment; and in FY 
    1994, a total of $23,591 in unobligated FY 1993 funds were available 
    for reallotment. If HHS had reallotted these funds, many grantees would 
    have received grant awards of less than $1, and many others would have 
    received awards of less than $25. We therefore determined that it would 
    not be cost effective for HHS to award these small amounts to grantees, 
    or for grantees to account for and use them. HHS then published notices 
    in the Federal Register announcing its decision that no LIHEAP funds 
    from FY 1986, FY 1987, or FY 1993 would be reallotted.
        Because similar situations are likely to occur in the future, the 
    NPRM proposed to amend Sec. 96.81 of the block grant regulations to 
    state that HHS will not reallot LIHEAP funds if less than $25,000 is 
    available. If $25,000 or more is available, HHS would reallot these 
    funds. However, HHS would not award less than $25 in reallotted funds 
    to a grantee. If $25,000 were available for reallotment, all States 
    would receive at least $25.
        The NPRM's preamble proposed that if a tribe's share of reallotted 
    funds would be less than $25, the tribe's share would be awarded to the 
    State(s) in which the tribe is located. If a territory's share of 
    reallotted funds would be less than $25, the territory's share would be 
    distributed proportionately among the other territorial grantees 
    receiving shares of $25 or more.
        We received one comment supporting this proposed amendment and none 
    opposing it.
        We are adopting this change at section 96.81(c), as proposed in the 
    July 17, 1992 NPRM. If a tribe, tribal organization, or territory's 
    share of reallotted funds would be less than $25, HHS will follow the 
    procedures for such circumstances that are described above.
    --Technical Amendments
        We also are clarifying that Sec. 96.81 applies to regular LIHEAP 
    block grant funds and not to LIHEAP leveraging incentive funds. 
    (Section 96.87(k) of the regulations as established by the final rule 
    of May 1, 1995, sets the period of obligation for leveraging incentive 
    funds. Leveraging incentive funds are not subject to reallotment; all 
    leveraging incentive funds not obligated during the appropriate period 
    allowed for obligation must be returned to the Federal government.)
        Finally, in minor technical amendments, we are dividing Sec. 96.81 
    into paragraphs ``(a) Scope'', ``(b) Required carryover and reallotment 
    report'', and ``(c) Conditions for reallotment'', as proposed in the 
    July 1992 NPRM. Also, we are changing the heading of the section from 
    ``Reallotment report'' to ``Carryover and reallotment'', and making 
    several other minor technical changes, to accurately reflect the 
    contents of the LIHEAP statute and this section.
    
    Section 96.82  Required Report on Households Assisted
    
        The title of Sec. 96.82 was proposed to be revised in the November 
    16, 1993 NPRM (58 FR 60498) from ``Required report'' to ``Required 
    report on households assisted'' to reflect the contents of the report. 
    In addition, the NPRM included provisions related to the implementation 
    of forward funding, and proposed changing the term ``handicapped'' to 
    ``disabled''. No comments were received in response to this section of 
    the NPRM.
        Subsequently, however, the Human Services Amendments of 1994 (Pub. 
    L. 103-252) amended section 2605(c)(1)(G) of the LIHEAP statute to 
    provide that, beginning with fiscal year 1995, additional data must be 
    reported by grantees concerning the households applying for assistance, 
    as well as those households receiving assistance under the LIHEAP 
    program. Pub. L. 103-252 also required that the data for the prior year 
    must be submitted as part of the application for grant funds. 
    Accordingly, grant awards for the current fiscal year may not be made 
    until the data for the prior year is received.
        The Office of Management and Budget has approved the collection of 
    the new data requirements (LIHEAP Household Report--OMB Control No. 
    0970-0060, expiration date 6/30/2000), beginning with data for FY 1998, 
    which must be submitted as part of the application for FY 1999 LIHEAP 
    funds. As required by the statute and approved by OMB, the data that 
    must be reported for each type of LIHEAP assistance provided by the 
    grantee is (1) the number and income levels of those households 
    applying for assistance and of those households receiving assistance; 
    and (2) for those households receiving assistance, the number of 
    households that contain one or more members who are elderly, disabled, 
    or a young child. In addition, OMB approved the collection of data on a 
    voluntary basis on the breakout of young children into two age 
    categories, as recommended in the legislative history for the law. As 
    part of the OMB clearance, insular areas that receive regular LIHEAP 
    block grant allocations of less than $200,000 annually and Indian 
    tribes and tribal organizations that receive direct funding from HHS 
    need to submit only data on the number of households assisted for each 
    type of LIHEAP assistance provided by the grantee. The OMB approval 
    included a recommended format that grantees may (but are not required) 
    to use to report the data.
        Consistent with the amendments to the LIHEAP statute, the OMB 
    information collection approval provides that a grant award will not be 
    made until the LIHEAP Household Report for the previous fiscal year is 
    received.
        We are adopting this section of the regulation, with several 
    changes to reflect the change in statutory requirements and the OMB 
    information collection approval. We have revised this section to 
    require grantees to submit a report on data required by the LIHEAP 
    statute, as approved by OMB for information collection under the 
    Paperwork Reduction Act of 1995. Rather than specify the information 
    required, we have referenced the information required by the statute, 
    so that the regulations will not need to be changed if this part of the 
    statute is
    
    [[Page 55853]]
    
    amended again. We have also included the reduced amount of information 
    required from insular areas with annual block allotments of less than 
    $200,000 and from tribal grantees under the OMB approval. The proposed 
    date changes which were related to forward funding are being deleted 
    since forward funding will not be implemented. A technical change is 
    being made to change the word ``handicapped'' to the word ``disabled'' 
    in this section. The title of the section is being changed to 
    ``Required LIHEAP household report'', to more accurately reflect its 
    content under the current statutory requirements.
        Because the provisions in Sec. 96.82 that are included in this 
    notice were not previously included in a notice of proposed rulemaking, 
    we are issuing this part of the regulation as an interim final rule, 
    with an opportunity for comment. This means that this portion of the 
    regulation is effective November 15, 1999, after publication of this 
    notice in the Federal Register, but that we are interested in receiving 
    comments on the interim final provisions. We will review any comments 
    which we receive by December 14, 1999. We will revise the rule, as 
    appropriate, based on the comments we receive and on our experience in 
    implementing the provisions.
    
    Section 96.84  Miscellaneous
    
        End of Transfer Authority. At the time of publication of the NPRM 
    dated November 16, 1993 (58 FR 60498), grantees were no longer allowed 
    to transfer up to 10 per cent of LIHEAP funds payable in a fiscal year 
    to other HHS block grant programs. The 1990 amendments to the statute 
    provided that, beginning in fiscal year 1994, no LIHEAP funds payable 
    to a grantee may be transferred to other block grant programs. 
    Accordingly, the NPRM proposed to amend the block grant regulations to 
    specify that after September 30, 1993, grantees no longer may transfer 
    any of their LIHEAP funds to the block grant programs specified in 
    section 2604(f) of the statute.
        The FY 1993 HHS appropriations law (Pub. L. 102-394) provided 
    advance funding for LIHEAP for the first nine months of FY 1994, and 
    allowed $141,950,240 of those funds to be used by grantees to reimburse 
    themselves for expenses incurred in FY 1993. Because they were 
    appropriated as advance funding for FY 1994, any such funds used by 
    grantees to reimburse themselves for FY 1993 expenses could not be 
    considered funds payable to grantees in FY 1993 and thus could not have 
    been used to calculate the maximum amount that could have been 
    transferred in FY 1993.
        The authority for territories to consolidate funding for several 
    programs under one or more HHS programs is not considered a transfer 
    and thus did not terminate in FY 1994. Likewise, LIHEAP funds earmarked 
    by grantees for use for LIHEAP weatherization assistance or other 
    energy-related home repair, even if administered by another grantee 
    agency, are not considered to be transferred, and this authority did 
    not terminate in FY 1994.
        No comments were received in response to Sec. 96.84 of the NPRM. 
    Therefore, the rule is adopted as proposed.
    
    Section 96.85  Income Eligibility
    
        The statute sets maximum and minimum income eligibility standards 
    for participation in the LIHEAP program that are tied to poverty income 
    guidelines and to State median income estimates as determined by the 
    Bureau of Census. The date for adoption of the current poverty income 
    guidelines is any time between the date of their publication in the 
    Federal Register and the beginning of the next fiscal year. The date 
    for adoption of the State median income estimates has been the first 
    day of the fiscal year after their publication, but that date had not 
    been reflected in the block grant regulations. The NPRM dated November 
    16, 1993 (58 FR 60498) proposed that the block grant regulations be 
    amended to incorporate an adoption date for the State median income 
    estimates that is consistent with the adoption date for the poverty 
    income guidelines and to amend that adoption date to reflect the shift 
    to forward funding, although the law subsequently deleted the concept 
    of forward funding. The poverty income guidelines and the State median 
    income estimates are published annually in the Federal Register, 
    generally in the month of February or March. Therefore, with the 
    amendment of this section, grantees could adopt the annual poverty 
    income guidelines and the annual State median income estimates at any 
    time between the date of publication in the Federal Register and the 
    first day of the next fiscal year, October 1, or the beginning of the 
    State fiscal year, whichever is later. Grantees could also choose to 
    implement the changes during the period between the heating and cooling 
    seasons.
        No comments were received in response to Sec. 96.85 of the NPRM. 
    Therefore, the rule is adopted as proposed, except for deleting 
    references to dates under forward funding.
    
    Regulatory Procedures
    
    Paperwork Reduction Act of 1995
    
        Sections 96.10, 96.49, 96.81, and 96.82 contain information 
    collections. As required by the Paperwork Reduction Act of 1995 (44 
    U.S.C. 3507 (d)), the Department submitted a copy of these sections to 
    the Office of Management and Budget (OMB) for its review. The following 
    data collection forms have been approved by OMB:
        Section 96.10(a) (Maternal and Child Health Services Block Grant 
    guidance and Forms for the Title V Application/Annual Report, OMB 
    clearance number 0915-0172, expiration date 11/99);
        Section 96.10(c) (LIHEAP Model Plan, OMB Clearance Number 0970-
    0075, expiration date 12/31/2001);
        Sections 96.49, LIHEAP Model Plan, OMB Clearance Number 0970-0075, 
    expiration date 12/31/2001);
        Section 96.81 (LIHEAP Carryover and Reallotment Report, OMB 
    Clearance Number 0970-0106, expiration date 09/30/2001).
        Section 96.82 (LIHEAP Report on Applicant and Recipient Households 
    (OMB Control Number 0970-0060, expiration date 6/30/2000).
        Title: Maternal and Child Health Services Block Grant guidance and 
    Forms for the Title V Application/Annual Report (OMB clearance number 
    0915-0172, expiration date 11/99).
        Summary: The rule modifies Sec. 96.10(a) to allow the Department to 
    specify the form of a block application when this is required or 
    clearly contemplated by the authorizing statute. It also states that 
    the MCH application shall be in the format specified by the Secretary, 
    as required by the MCH authorizing law. Previously, the rule stated 
    that no particular form was required. This information will be used to 
    obtain descriptions of grantee programs and to make grant awards.
        Respondents: State and territorial grantees under the MCH block 
    grant. The number of likely respondents is 59.
        Burden information: The MCH application and annual report are 
    required annually of each grantee. The application, annual report, and 
    guidance are currently undergoing revision and renewal of the OMB 
    clearance. The public reporting burden for the revised application and 
    annual report is estimated to be approximately 495 hours for each State 
    grantee and 200 hours for the District of Columbia and territories, for 
    4 out of every 5 years, for a total burden of 26,550 hours. In the 5th 
    year, a needs assessment is also required. In that year, the estimated 
    burden is 675 hours for each State grantee and 360 hours for the 
    District of
    
    [[Page 55854]]
    
    Columbia and territories, for a total burden of 36,990 hours. The 
    average annual burden over the next three years is 30,030 hours. This 
    includes time for reviewing instructions, searching existing data 
    sources, gathering and maintaining the data needed, and completing and 
    reviewing the collection of information. The changes in this final rule 
    are consistent with the notice of the request for OMB renewal of the 
    information collection for the MCH application and annual report, 
    published at 62 FR 17198. Furthermore, in the support of its commitment 
    to new Federalism, the Department has made every effort to develop its 
    application requirements and forms in close cooperation with the 
    States, and where possible the communities. With respect to the MCH 
    application and annual report, the Maternal and Child Health Bureau 
    developed new guidance and an automated reporting system based on the 
    emerging concept of ``Performance Partnerships.'' Not only did the 
    Bureau meet regularly with a Block Grant Guidance Work Group made up 
    largely of State and local MCH representatives, but the Bureau field 
    tested the guidance and information system with 9 states and held a 
    number of sessions at three separate national meetings with 
    representatives of all State MCH and Children with Special Health Care 
    Needs Directors, as well as many local directors. The initial national 
    sessions focused on discussing and reviewing the proposed guidance and 
    performance partnership measures. Later sessions included hands on 
    training in using the guidance that was provided by the Bureau and the 
    nine test States.
        Title: LIHEAP Model Plan (OMB Clearance Number 0970-0075, 
    expiration date 12/31/2001).
        Summary: Section 96.10(c) establishes application submission and 
    completion deadlines for annual applications for LIHEAP funds from 
    States and territories. This will allow the Department to issue grant 
    awards as close as possible to the beginning of a grant period and thus 
    meet its obligations under the Cash Management improvement Act to 
    minimize interest charges associated with that Act. Other than 
    establishing due dates, this final rule does not affect the information 
    collection.
        Respondents: State, territorial, and tribal grantees under the 
    LIHEAP block grant.
        Burden information: The LIHEAP application is required annually of 
    each grantee. We estimate the number of likely respondents to be 180. 
    The public reporting burden is estimated to be 1 hour for each of the 
    60 grantees that submit a detailed plan (required of each grantee every 
    three years) and 20 minutes for each of the 120 grantees that submit an 
    abbreviated form, for an estimated total annual reporting and 
    recordkeeping burden of 103 hours. This includes time for reviewing 
    instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information.
        Title: LIHEAP Model Plan (OMB Clearance Number 0970-0075, 
    expiration date 12/31/2001).
        Summary: Section 96.49 establishes application completion deadlines 
    for annual applications for LIHEAP funds from Indian tribes and tribal 
    organizations. The current rule establishes an application submission 
    deadline for tribal grantees. This change will allow the Department to 
    advise States early in the heating season whether they will be 
    responsible for serving members of a tribe's service population, or 
    whether the tribe will do so. Other than establishing a completion 
    date, this final rule does not affect the information collection.
        Respondents: State, territorial, and tribal grantees under the 
    LIHEAP block grant.
        Burden information: The LIHEAP application is required annually of 
    each grantee. We estimate the number of likely respondents to be 180. 
    The public reporting burden is estimated to be 1 hour for each of the 
    60 grantees that submit a detailed plan (required of each grantee every 
    three years) and 20 minutes for each of the 120 grantees that submit an 
    abbreviated form, for an estimated total annual reporting and 
    recordkeeping burden of 103 hours. This includes time for reviewing 
    instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information.
        Title: LIHEAP Carryover and Reallotment Report (OMB Clearance 
    Number 0970-0106, expiration date 09/30/2001).
        Summary: Section 96.81 amends requirements relating to a required 
    report on the amount of funds grantees wish to carry forward from the 
    year in which they are appropriated to the following fiscal year 
    (limited to 10% of funds payable to the grantee). The changes reflect 
    amendments to the LIHEAP statute. The data are used to determine 
    whether excess carryover funds will be available for reallotment to 
    other grantees. Other than making the regulations consistent with 
    statutory requirements, the changes do not affect the information 
    collection.
        Respondents: State, territorial, and tribal grantees under the 
    LIHEAP block grant.
        Burden information: The LIHEAP carryover and reallotment report is 
    required annually of each grantee. We estimate the number of likely 
    respondents to be 177. The public reporting burden is estimated to be 3 
    hours for each of the 177 grantees, for an estimated total annual 
    reporting and recordkeeping burden of 531 hours. This includes time for 
    reviewing instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information.
        Title: LIHEAP Report on Applicant and Recipient Households (OMB 
    Control Number 0970-0060, expiration date 6/30/2000).
        Summary: Section 96.82 amends requirements for a required report on 
    LIHEAP households applying for and receiving assistance in the prior 
    fiscal year, in order to make them consistent with statutory provisions 
    enacted in 1994 (Pub. L. 103-252). The collection of the statutorily 
    required data has been approved by OMB. Other than making the 
    regulatory language consistent with the statute and the OMB approval, 
    this final rule does not affect the information collection.
        Respondents: State, territorial, and tribal grantees under the 
    LIHEAP block grant.
        Burden information: The report on households applying for and 
    receiving LIHEAP assistance the previous fiscal year must be submitted 
    as part of a grantee's LIHEAP application each fiscal year. We estimate 
    the number of likely respondents to be 183. The public reporting burden 
    is estimated to be 38 hours for each of the 52 grantees that must 
    submit all required data (all States, the District of Columbia, and 
    Puerto Rico). The reporting burden is estimated to be 1 hour for each 
    of the 131 grantees that submit information only on the number of 
    households assisted under each type of assistance offered by the 
    grantee (applicable to Indian tribes and tribal organizations, and to 
    those insular areas with annual allotments of less than $200,000). The 
    estimated total annual reporting and recordkeeping burden is 2,107 
    hours. This includes time for reviewing instructions, searching 
    existing data sources, gathering and maintaining the data needed, and 
    completing and reviewing the collection of information.
        Section 96.30 also contains information collection requirements. As 
    required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d), the 
    Department will submit a copy of this
    
    [[Page 55855]]
    
    section to the Office of Management and Budget (OMB) for its review.
        Title: Financial Status Report, OMB Standard Form 269A.
        Summary: Section 96.30 of this final rule establishes a new 
    requirement that grantees under block grants covered by these 
    regulations submit, within 90 days of the end of the grant period, OMB 
    Standard Form 269A, Financial Status Report (short form), reporting the 
    obligation and/or expenditure of block grant funds. Currently, the 
    Department does not require obligation or expenditure reports for the 
    block grants (although some grantees submit them voluntarily.) This has 
    caused problems in the past because there is no clear-cut information 
    as to when a grantee has completely used its grant funds, thus allowing 
    the Department to close the grant account. This information would allow 
    HHS and the grantee to verify the financial status of block grant funds 
    and allow the Department to determine aggregate obligations, 
    expenditures, and available balances.
        Respondents: States, territories, and Indian tribes or tribal 
    organizations that receive funds under the block grants subject to 
    these regulations.
        Burden Information: These obligation and expenditure reporting 
    requirements will be required annually for all State, territorial, and 
    tribal grantees under each of the block grant programs subject to these 
    regulations. We estimate the number of likely respondents to be 620, 
    based on the following number of grantees for each block grant: 180 for 
    LIHEAP, 130 for CSBG, 57 for SSBG, 75 for PHHS, 59 for MCH, 59 for 
    CMHS, and 60 for SAPT. The public reporting burden is estimated to be 
    less than an hour each for a grantee, including time for reviewing 
    instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information, for an estimated total annual reporting and 
    recordkeeping burden of 620 hours.
        The Department of Health and Human Services will consider comments 
    by the public on the proposed collection of information under 
    Sec. 96.30 in--
         Evaluating whether the proposed collections are necessary 
    for the proper performance of the functions of the Department, 
    including whether the information will have practical utility;
         Evaluating the accuracy of the Department's estimate of 
    the burden of the proposed collections of information, including the 
    validity of the methodology and assumptions used;
         Enhancing the quality, usefulness, and clarity of the 
    information to be collected; and
         Minimizing the burden of the collection of information on 
    those who are to respond, including through the use of appropriate 
    automated, electronic, mechanical, or other technology, e.g., 
    permitting electronic submission of responses.
        To ensure that public comments have maximum effect in developing 
    the final regulations, the Department urges that each comment clearly 
    identify the specific section or sections of the regulations that the 
    comment addresses and that comments be in the same order as the 
    regulations.
        Under the Paperwork Reduction Act of 1995, we are required to 
    provide 60 day notice in the Federal Register and solicit public 
    comment before a collection of information requirement is submitted to 
    the Office of Management and budget (OMB) for review and approval. To 
    comment on this information collection and record keeping requirement, 
    please send comments to the following: Department of Health and Human 
    Services, Office of Planning and Evaluation, Room 447D, 200 
    Independence Ave., SW, Washington, DC 20201, Attn: Michael Herrell.
        After receipt and full consideration of comments, the Department 
    will submit the information collection requirement to OMB for review 
    and approval. The requirement will take effect upon OMB approval.
    
    Regulatory Impact Analysis
    
        Executive Order 12866 requires preparation of a regulatory impact 
    analysis if the regulation will have an annual effect on the economy of 
    $100 million or more or adversely affect in a material way the economy, 
    a sector of the economy, productivity, competition, jobs, the 
    environment, public health or safety, or State, local or tribal 
    governments or communities. In this respect, the Department of Health 
    and Human Services believes that this final regulation will not have an 
    impact on the economy of $100 million or more or adversely affect in a 
    material way any of the sectors listed above, including State, local or 
    tribal governments.
        Primarily this rule amends the regulation governing block grant 
    programs to clarify a number of administrative processes that include 
    submission and completion dates for applications, where to submit 
    waiver requests, direct funding of Indian tribes and other 
    organizations, and procedures for termination, reduction, suspension 
    and partial withholding of funding. In the case of application 
    submission and completion dates, we have provided substantial 
    flexibility in response to public comments to accommodate the varying 
    State cycles and believe setting these dates will have a positive 
    impact in allowing the Department to issue awards to States in a timely 
    manner. We also believe that our clarification of administrative 
    processes for waiver requests, direct funding and related items 
    provides only the minimum requirements and guidance needed and 
    therefore will not impose a burden, especially since it is expected 
    that these procedures will be needed only in rare circumstances.
        The rule additionally codifies a number of statutory changes such 
    as program name changes, statutory citations and fund transfer 
    authorities. There is no burden associated with these changes.
        Finally, the rule clarifies the authority of the Department to 
    specify block grant reporting requirements where authorized by 
    governing statutes and it requires some minimal financial reporting 
    requirements to allow the Department to comply with legal requirements 
    for fund management. Authority for establishing the content and format 
    of reports required under block grants continues to be governed by the 
    authorizing statutes and the clarification provided in this rule does 
    not set substantive requirements. The Department will continue to 
    solicit State input on the development of the format and content of 
    required reports as it has done under the MCH program.
        With respect to the financial reporting requirement, the Department 
    believes the burden imposed is not significant. This information is 
    already collected by the States and periodically submitted to the 
    Department. This rule will provide a set process for submitting the 
    information in the future, giving States a predictable routine to 
    follow. The SF-269a is already used by States and is intended to 
    further reduce the report burden on grantees. We have adopted the short 
    form to acquire only the minimum information needed for our accounting 
    purposes.
        In accordance with the provisions of Executive Order 12866, this 
    regulation was reviewed by the Office of Management and Budget.
    
    Federalism
    
        We have examined this rule under Executive Order 12612 on 
    Federalism and do not believe that the rule violates the principles or 
    policymaking criteria set forth by the Order. In several instances 
    under the rule, we are establishing standard administrative procedures 
    for actions such as application submission dates, direct funding of 
    Indian tribes and tribal
    
    [[Page 55856]]
    
    organizations, termination of funds, and financial reporting. In 
    establishing these procedures, the Department has tried to allow 
    maximum flexibility to States in the way they can meet these 
    requirements. For instance, the Department, in response to public 
    comment, has revised the regulations to allow the Department to 
    accommodate varying State and Tribal cycles in the submission of 
    applications. We also note that a number of States have commented in 
    support of various provisions of this rule. We will also continue to 
    consult with States and Tribes in the development and modification of 
    any standard reporting requirements and formats that are authorized by 
    the governing program statutes.
    
    Regulatory Flexibility Act
    
        The Regulatory Flexibility Act (Pub. L. 96-354) requires the 
    Federal government to anticipate and reduce the impact of regulations 
    and paperwork requirements on small entities. The primary impact of 
    this final rule is on State, tribal and territorial governments. 
    Therefore, the Department of Health and Human Services certifies that 
    these rules will not have a significant economic impact on a 
    substantial number of small entities because they affect payments to 
    States, tribes and territories. Thus, a regulatory flexibility analysis 
    is not required.
    
    Catalog of Federal Domestic Assistance Program Numbers
    
        The Catalog of Federal Domestic Assistance Program Numbers for 
    these programs are: 93.568 for the Low-Income Home Energy Assistance 
    Program (LIHEAP); 93.569 for the Community Services Block Grant (CSBG); 
    93.667 for the Social Services Block Grant (SSBG), 93.991 for the 
    Preventive Health and Health Services Block Grant (PHHS); 93.958 for 
    the Community Mental Health Services Block Grant (CMHS); 93.959 for the 
    Substance Abuse Prevention and Treatment Block Grant (SAPT); and 93.994 
    for the Maternal and Child Health Services Block Grant (MCH).
    
    List of Subjects in 45 CFR Part 96
    
        Child welfare, Community action program, Energy, Grant programs--
    energy, Grant programs--Indians, Grant programs--social programs, 
    Health, Income assistance, Indians, Individuals with disabilities, Low 
    and moderate income housing, Maternal and child health, Mental health 
    programs, Public health, Reporting and record keeping requirements, 
    Substance Abuse, Transfers, Weatherization.
    
        Dated: November 10, 1998.
    Donna E. Shalala,
    Secretary, Department of Health and Human Services.
    
        Note: This document was received in the Office of the Federal 
    Register on October 8, 1999.
    
        For the reasons set forth in the preamble, part 96 of title 45 of 
    the Code of Federal Regulations is amended as follows:
    
    PART 96--BLOCK GRANTS
    
        1. The authority citation for part 96 continues to read as follows:
    
        Authority: 42 U.S.C. 300w et seq.; 42 U.S.C. 300x et seq.; 42 
    U.S.C. 300y et seq.; 42 U.S.C. 701 et seq.; 42 U.S.C. 8621 et seq.; 
    42 U.S.C. 9901 et seq.; 42 U.S.C. 1397 et seq.; 31 U.S.C. 1243 note.
    
    Subpart A--Introduction
    
        2. Section 96.1 is amended by revising paragraphs (a), (c), (d), 
    (e), and (f) to read as follows:
    
    
    Sec. 96.1   Scope.
    
        (a) Community services (Pub. L. 97-35, sections 671-683) (42 U.S.C. 
    9901-9912).
    * * * * *
        (c) Community mental health services (Public Health Service Act, 
    sections 1911-1920 and sections 1941-1954) (42 U.S.C. 300x-1-300x-9 and 
    300x-51-300x-64).
        (d) Substance abuse prevention and treatment (Public Health Service 
    Act, sections 1921-1935 and sections 1941-1954) (42 U.S.C. 300x-21-
    300x-35 and 300x-51-300x-64).
        (e) Maternal and child health services (Social Security Act, Title 
    V) (42 U.S.C. 701-709).
        (f) Social services, empowerment zones and enterprise communities 
    (Pub. L. 97-35, sections 2351-55; Pub. L. 103-66, section 1371) (42 
    U.S.C. 1397-1397f).
    * * * * *
        3. Section 96.2 is amended by revising paragraph (d) to read as 
    follows:
    
    
    Sec. 96.2   Definitions.
    
    * * * * *
        (d) State includes the fifty States, the District of Columbia, and 
    as appropriate with respect to each block grant, the Commonwealth of 
    Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the 
    Commonwealth of the Northern Mariana Islands, and for purposes of the 
    block grants administered by agencies of the Public Health Service, the 
    Federated States of Micronesia, the Republic of the Marshall Islands, 
    and the Republic of Palau.
    
    Subpart B--General Procedures
    
        3. Section 96.10 is amended by revising paragraph (a) and adding 
    paragraphs (c) and (d) to read as follows:
    
    
    Sec. 96.10   Prerequisites to obtain block grant funds.
    
        (a) Except where prescribed elsewhere in this rule or in 
    authorizing legislation, no particular form is required for a State's 
    application or the related submission required by the statute. For the 
    maternal and child health block grant, the application shall be in the 
    form specified by the Secretary, as provided by section 505(a) of the 
    Social Security Act (42 U.S.C. 705(a)).
        (b) * * *
        (c) Effective beginning in fiscal year 2001, submission dates for 
    applications under the social service and low-income home energy 
    assistance block grant programs are:
        (1) for the social services block grant, States and territories 
    which operate on a Federal fiscal year basis, and make requests for 
    funding from the Department, must insure that their applications (pre-
    expenditure reports) for funding are submitted by September 1 of the 
    preceding fiscal year unless the Department agrees to a later date. 
    States and territories which operate their social services block grant 
    on a July 1-June 30 basis, must insure that their applications are 
    submitted by June 1 of the preceding funding period unless the 
    Department agrees to a later date.
        (2) for the low-income home energy assistance program, States and 
    territories which make requests for funding from the Department must 
    insure that their applications for a fiscal year are submitted by 
    September 1 of the preceding fiscal year unless the Department agrees 
    to a later date.
        (d) Effective beginning in fiscal year 2001, for the low-income 
    home energy assistance program, States and territories which make 
    requests for funding from the Department must insure that all 
    information necessary to complete their applications is received by 
    December 15 of the fiscal year for which they are requesting funds 
    unless the Department agrees to a later date.
        4. Section 96.15 is revised to read as follows:
    
    
    Sec. 96.15  Waivers.
    
        Applications for waivers that are permitted by statute for the 
    block grants should be submitted to the Director, Centers for Disease 
    Control and Prevention in the case of the preventive health and health 
    services block grant; to the Administrator, Substance Abuse and Mental 
    Health Services
    
    [[Page 55857]]
    
    Administration in the case of the community mental health services 
    block grant and the substance abuse prevention and treatment block 
    grant; to the Director, Maternal and Child Health Bureau in the case of 
    the maternal and child health services block grant; and to the 
    Director, Office of Community Services in the case of the community 
    services block grant, the low-income home energy assistance program and 
    the social services block grant. Beginning with fiscal year 1986, the 
    Secretary's authority to waive the provisions of section 2605(b) of 
    Public Law 97-35 (42 U.S.C. 8624(b)) under the low-income home energy 
    assistance program is repealed.
    
    Subpart C--Financial Management
    
        5. Section 96.30 is amended by designating text of the current 
    paragraph as paragraph (a), adding a heading to newly designated 
    paragraph (a), and adding a new paragraph (b) to read as follows:
    
    
    Sec. 96.30  Fiscal and administrative requirements.
    
        (a) Fiscal control and accounting procedures. * * *
        (b) Financial summary of obligation and expenditure of block grant 
    funds.--(1) Block grants containing time limits on both the obligation 
    and the expenditure of funds. After the close of each statutory period 
    for the obligation of block grant funds and after the close of each 
    statutory period for the expenditure of block grant funds, each grantee 
    shall report to the Department:
        (i) Total funds obligated and total funds expended by the grantee 
    during the applicable statutory periods; and
        (ii) The date of the last obligation and the date of the last 
    expenditure.
        (2) Block grants containing time limits only on obligation of 
    funds. After the close of each statutory period for the obligation of 
    block grant funds, each grantee shall report to the Department:
        (i) Total funds obligated by the grantee during the applicable 
    statutory period; and
        (ii) The date of the last obligation.
        (3) Block grants containing time limits only on expenditure of 
    funds. After the close of each statutory period for the expenditure of 
    block grant funds, each grantee shall report to the Department:
        (i) Total funds expended by the grantee during the statutory 
    period; and
        (ii) The date of the last expenditure.
        (4) Submission of information. Grantees shall submit the 
    information required by paragraph (b)(1), (2), and (3) of this section 
    on OMB Standard Form 269A, Financial Status Report (short form). 
    Grantees are to provide the requested information within 90 days of the 
    close of the applicable statutory grant periods.
    
    Subpart D--Direct Funding of Indian Tribes and Tribal Organizations
    
        6. Section 96.41 is amended by revising paragraph (a) and by adding 
    a new paragraph (c) to read as follows:
    
    
    Sec. 96.41  General determination.
    
        (a) The Department has determined that, with the exception of the 
    circumstances addressed in paragraph (c) of this section, Indian tribes 
    and tribal organizations would be better served by means of grants 
    provided directly by the Department to such tribes and organizations 
    out of their State's allotment of block grant funds than if the State 
    were awarded its entire allotment. Accordingly, with the exception of 
    situations described in paragraph (c) of this section, the Department 
    will, upon request of an eligible Indian tribe or tribal organization 
    and where provided for by statute, reserve a portion of the allotment 
    of the State(s) in which the tribe is located, and, upon receipt of a 
    complete application and related submission meeting statutory and 
    regulatory requirements, grant it directly to the tribe or 
    organization.
    * * * * *
        (c) The Department has determined that Indian tribal members 
    eligible for the funds or services provided through the block grants 
    would be better served by the State(s) in which the tribe is located 
    rather than by the tribe, where:
        (1) The tribe has not used its block grant allotment substantially 
    in accordance with the provisions of the relevant statute(s); and
        (2) Following the procedures of 45 CFR 96.51, the Department has 
    withheld tribal funds because of those deficiencies; and
        (3) The tribe has not provided sufficient evidence that it has 
    removed or corrected the reason(s) for withholding. In these cases, 
    block grant funds reserved or set aside for a direct grant to the 
    Indian tribe will be awarded to the State(s), and the State(s) will 
    provide block grant services to the service population of the tribe. 
    Before awarding these funds to the State(s), the Department will allow 
    as much time as it determines to be reasonable for the tribe to correct 
    the conditions that led to withholding, consistent with provision of 
    timely and meaningful services to the tribe's service population during 
    the fiscal year. If a State(s) is awarded funds under this paragraph, 
    the State(s) will receive all remaining funds set aside for the tribe 
    for the Federal fiscal year for which the award is made. Where the 
    Department has withheld funds from a tribe and the tribe has not taken 
    satisfactory corrective action by the first day of the following fiscal 
    year, all of the funds to serve the tribe's service population for the 
    following fiscal year will be awarded to the State(s). The State(s) is 
    responsible for providing services to the service population of the 
    tribe in these cases. This paragraph also applies when funds are 
    withheld from a tribal organization.
        7. Section 96.42 is amended by adding a new sentence to the end of 
    paragraph (f) to read as follows:
    
    
    Sec. 96.42  General procedures and requirements.
    
    * * * * *
        (f) * * * A tribe receiving direct block grant funding is not 
    required to use those funds to provide tangible benefits to non-Indians 
    living within the tribe's service area unless the tribe and the 
    State(s) in which the tribe is located agree in writing that the tribe 
    will do so.
        8. A new Sec. 96.49 is added to Subpart D to read as follows:
    
    
    Sec. 96.49  Due date for receipt of all information required for 
    completion of tribal applications for the low-income home energy 
    assistance block grants.
    
        Effective beginning in FY 2001, for the low-income home energy 
    assistance program, Indian tribes and tribal organizations that make 
    requests for direct funding from the Department must insure that all 
    information necessary to complete their application is received by 
    December 15 of the fiscal year for which funds are requested, unless 
    the State(s) in which the tribe is located agrees to a later date. 
    After December 15, funds will revert to the State(s) in which the tribe 
    is located, unless the State(s) agrees to a later date. If funds revert 
    to a State, the State is responsible for providing low-income home 
    energy assistance program services to the service population of the 
    tribe.
    
    Subpart E--Enforcement
    
        9. A new section 96.53 is added to subpart E to read as follows:
    
    
    Sec. 96.53  Length of withholding.
    
        Under the low-income home energy assistance program and community 
    services block grant, the Department may withhold funds until the 
    Department finds that the reason for the withholding has been removed.
    
    [[Page 55858]]
    
    Subpart H--Low-Income Home Energy Assistance Program
    
        10. Section 96.81 is revised to read as follows:
    
    
    Sec. 96.81  Carryover and reallotment.
    
        (a) Scope. Pursuant to section 2607(b) of Public Law 97-35 (42 
    U.S.C. 8626(b)), this section concerns procedures relating to carryover 
    and reallotment of regular LIHEAP block grant funds authorized under 
    section 2602(b) of Public Law 97-35 (42 U.S.C. 8621(b)).
        (b) Required carryover and reallotment report. Each grantee must 
    submit a report to the Department by August 1 of each year, containing 
    the information in paragraphs (b)(1) through (b)(4) of this section. 
    The Department shall make no payment to a grantee for a fiscal year 
    unless the grantee has complied with this paragraph with respect to the 
    prior fiscal year.
        (1) The amount of funds that the grantee requests to hold available 
    for obligation in the next (following) fiscal year, not to exceed 10 
    percent of the funds payable to the grantee;
        (2) A statement of the reasons that this amount to remain available 
    will not be used in the fiscal year for which it was allotted;
        (3) A description of the types of assistance to be provided with 
    the amount held available; and
        (4) The amount of funds, if any, to be subject to reallotment.
        (c) Conditions for reallotment. If the total amount available for 
    reallotment for a fiscal year is less than $25,000, the Department will 
    not reallot such amount. If the total amount available for reallotment 
    for a fiscal year is $25,000 or more, the Department will reallot such 
    amount, except that the Department will not award less than $25 in 
    reallotted funds to a grantee.
        11. Section 96.82 is revised to read as follows:
    
    
    Sec. 96.82  Required report on households assisted.
    
        (a) Each grantee which is a State or an insular area which receives 
    an annual allotment of at least $200,000 shall submit to the 
    Department, as part of its LIHEAP grant application, the data required 
    by section 2605(c)(1)(G) of Public Law 97-35 (42 U.S.C. 8624(c)(1)(G)) 
    for the 12-month period corresponding to the Federal fiscal year 
    (October 1-September 30) preceding the fiscal year for which funds are 
    requested. The data shall be reported separately for LIHEAP heating, 
    cooling, crisis, and weatherization assistance.
        (b) Each grantee which is an insular area which receives an annual 
    allotment of less than $200,000 or which is an Indian tribe or tribal 
    organization which receives direct funding from the Department shall 
    submit to the Department, as part of its LIHEAP grant application, data 
    on the number of households receiving LIHEAP assistance during the 12-
    month period corresponding to the Federal fiscal year (October 1-
    September 30) preceding the fiscal year for which funds are requested. 
    The data shall be reported separately for LIHEAP heating, cooling, 
    crisis, and weatherization assistance.
        (c) Grantees will not receive their LIHEAP grant allotment for the 
    fiscal year until the Department has received the report required under 
    paragraph (a) or (b) of this section.
        12. Section 96.84 is amended by adding paragraph (d) as follows:
    
    
    Sec. 96.84  Miscellaneous.
    
    * * * * *
        (d) End of transfer authority. Beginning with funds appropriated 
    for FY 1994, grantees may not transfer any funds pursuant to section 
    2604(f) of Public Law 97-35 (42 U.S.C. 8623(f)) that are payable to 
    them under the LIHEAP program to the block grant programs specified in 
    section 2604(f).
        13. Section 96.85 is amended by revising paragraph (a) to read as 
    follows:
    
    
    Sec. 96.85  Income Eligibility.
    
        (a) Application of poverty income guidelines and State median 
    income estimates. In implementing the income eligibility standards in 
    section 2605(b)(2) of Public Law 97-35 (42 U.S.C. 8624(b)(2)), grantees 
    using the Federal government's official poverty income guidelines and 
    State median income estimates for households as a basis for determining 
    eligibility for assistance shall, by October 1 of each year, or by the 
    beginning of the State fiscal year, whichever is later, adjust their 
    income eligibility criteria so that they are in accord with the most 
    recently published update of the guidelines or estimates. Grantees may 
    adjust their income eligibility criteria to accord with the most 
    recently published revision to the poverty income guidelines or State 
    median income estimates for households at any time between the 
    publication of the revision and the following October 1, or the 
    beginning of the State fiscal year, whichever is later.
    * * * * *
    [FR Doc. 99-26820 Filed 10-14-99; 8:45 am]
    BILLING CODE 4150-04-U
    
    
    

Document Information

Published:
10/15/1999
Department:
Health and Human Services Department
Entry Type:
Rule
Action:
Final rule with comment period.
Document Number:
99-26820
Pages:
55843-55858 (16 pages)
RINs:
0991-AA97: Block Grant Programs
RIN Links:
https://www.federalregister.gov/regulations/0991-AA97/block-grant-programs
PDF File:
99-26820.pdf
CFR: (13)
45 CFR 96.1
45 CFR 96.2
45 CFR 96.10
45 CFR 96.15
45 CFR 96.30
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