- DEPARTMENT OF HEALTH AND HUMAN SERVICES
- HHS CFR Title 45, Part 1000
- Individual Development Accounts
- Federal Register: February 25, 2000 (Volume 65, Number 38)
- Rules and Regulations
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Part 1000
RIN 0970-ACO2
Individual Development Accounts
AGENCY: Office of Community Services, ACF, HHS.
ACTION: Interim final rule with comment.
-----------------------------------------------------------------------
SUMMARY: This regulation implements a statutory requirement of the
Assets for Independence Act establishing the Assets for Independence
Demonstration Program, under title IV of the Community Opportunities,
Accountability, and Training and Educational Services Act of 1998. The
Act provides competitive demonstration grants for projects to
establish, support, and evaluate individual development accounts for
low income individuals and families. The statute requires the Secretary
of Health and Human Services to prescribe regulations that grantees
must follow in accounting for amounts grantees deposit in the reserve
fund. This rule implements that provision of the legislation. Other
factors in the legislation have been, or will be, addressed
administratively, through the grant announcement and award process.
DATES: These regulations are effective February 25, 2000. Consideration
will be given to written comments received by April 25, 2000.
ADDRESSES: Comments should be submitted in writing to the Office of
Community Services, Administration for Children and Families, 370
L'Enfant Promenade, SW, 5th Floor, Washington, DC 20447, Attention:
Director of Office of Community Services, Mail Stop: OCS/OD. Comments
will be available for public inspection Monday through Friday, 8:30
a.m. to 5 p.m. on the 5th floor of the Department's offices at the
above address. Comments may also be submitted by sending electronic
mail (e-mail) to RSaul@acf.dhhs.gov, or by telefaxing to 202-401-4687
or 202 (401)-5718. This is not a toll-free number. Comments sent
electronically must be in ASCII format.
FOR FURTHER INFORMATION CONTACT: Sheldon Shalit, Office of Community
Services, (202) 401-4807, or Richard Saul, Office of Community
Services, (202) 401-9341. Hearing impaired individuals may call the
Federal Dual Party Relay Service at 800-877-8339 between 8 a.m. and 7
p.m. eastern time.
SUPPLEMENTARY INFORMATION
I. Statutory and Regulatory Authority
These rules implement section 407(b)(2) of the Community
Opportunities, Accountability, and Training and Educational Services
Act of 1998 (Pub. L. 105-285). Under this provision, the Secretary of
Health and Human Services is to prescribe by regulation the rules
grantees must follow in accounting for monies in reserve funds,
established under the Act, which are used for depositing grant funds,
the non-Federal matching funds required for establishing individual
development accounts, and the proceeds from any investment of such
funds.
II. Background
The Assets for Independence Act, or title IV of Pub. L. 105-285,
provides for the establishment of Individual Development Account (IDA)
demonstration projects to determine how effective IDAs and ``asset-
building'' strategies are in helping low-income people save, acquire
productive assets, and achieve economic self-sufficiency. The Act
authorizes the Department of Health and Human Services to conduct a
five-year Individual Development Account demonstration, through which
grants are made to non-profit organizations on a competitive basis.
The statute provides specific and detailed requirements for
establishing such programs and authorizes grants for projects to be awarded within
10 months of enactment of the Act (August 27, 1999). For these reasons,
coupled with the Department's commitment to reduce regulatory burden,
we have decided to limit regulating to the one area where the statute
indicates regulations are required. Specifically, section 407(b)(2) of
Pub. L. 105-285 requires grantees to maintain a reserve fund in
accordance with accounting regulations prescribed by the Secretary.
Responding to this legislative provision, these rules stipulate which
Departmental uniform administrative requirements must be met in
maintaining IDA reserve funds.
The statute requires that amounts in the reserve funds be used as
matching contributions to individual development accounts for project
participants; for expenses related to collecting and reporting project
data and information required for the evaluation; for administration of
the project including skill training necessary to achieve economic
self-sufficiency; and for other project related expenses. Federal funds
can only be drawn down after the match funds have been deposited.
With respect to provisions of the Act other than accounting for the
amounts in the reserve fund, on January 27, 1999, the Department issued
a Program Announcement in the Federal Register, ``Program Announcement
No. OCS-99-04'' (64 FR 4258), announcing the availability of funds and
requesting competitive applications. On March 29, 1999, the Department
published guidance, ``Clarification of Program Announcement No. OCS 99-
04'' (64 FR 14923), in the Federal Register to assist interested
applicants in understanding the law and the requirements for
eligibility. Also, on July 2, 1999, a Second Round of Applications was
published, ``Program Announcement No. OCS-99-04'' (64 FR 36184).
Further information will be made available to the grantees as part of
Terms and Conditions at the time of the grant award.
III. Description of Regulatory Provisions
We are adding a new part 1000 in title 45 of the Code of Federal
Regulations.
New Part 1000 of Chapter X, title 45 of the CFR--Individual
Development Account--Reserve Funds Established Pursuant to Grants
for Assets for Independence
We are establishing requirements under new 45 CFR part 1000
regarding reserve funds established pursuant to the Assets for
Independence Program. We are confirming that Departmental
administrative requirements found in part 74 are applicable to reserve
funds established by grantees that are not-for-profit organizations as
defined by section 501(c)(3) of the Internal Revenue Code of 1986. We
are also confirming that the Departmental administrative requirements
found in Part 92 are applicable to reserve funds established by State
or local government agencies or tribal governments.
New Sec. 1000.1 provides that this part applies to the Community
Services Assets for Independence Program.
We are adding a definition of Individual Development Account at
Sec. 1000.2(a) to read:
Individual Development Account means a trust or custodial account
created or organized in the United States exclusively for the purpose
of paying the qualified expenses of an eligible individual, as defined
in section 404(2) of Pub. L. 105-285, or enabling the eligible
individual to make an emergency withdrawal, as prescribed in section
404(3) of Pub. L. 105-285. The written governing instrument creating
the trust or custodial account must meet the requirements of section
404(5) of Pub. L. 105-285, (section 404(5)(A)) and of the Project
Eligibility Requirements set forth in the Program Announcement No. OCS-
99-04 and any future announcements that may be issued.
We are adding a definition of qualified entity at Sec. 1000.2(b) to
read:
Qualified Entity means one or more not-for-profit organizations
described in section 501(c)(3) of the Internal Revenue Code of 1986 and
exempt from taxation under section 501(a) of such Code; or a State or
local government agency, or a tribal government, submitting an
application under section 405 of Pub. L. 105-285 jointly with a
501(c)(3) organization that is exempt from taxation under 501(a) of the
Internal Revenue Code of 1986.
We are adding a definition of reserve fund at Sec. 1000.2(c) to
read
(c) Reserve Fund means a fund, established by a qualified entity,
that shall include all funds provided to the qualified entity from any
public or private source in connection with the demonstration project
and the proceeds from any investment made with such funds. The fund
shall be maintained in accordance with Section 407 of Pub. L. 105-285.
At least 90.5% of the funds must be used as matching contributions for
Individual Development Accounts.
Under Sec. 1000.3(a), we are confirming that Reserve Funds under
the Assets for Independence Program established by qualified entities,
other than State or local government agencies or tribal governments,
are subject to the Department of Health and Human Services' uniform
administrative requirements under 45 CFR part 74.
Under Sec. 1000.3(b), we are confirming which requirements are
applicable to Reserve Funds by a qualified entity that is a State or
local government agency or tribal government. While these entities are
not required to establish reserve funds, reserve funds that are
established by these entities are subject to the Department of Health
and Human Services' uniform administrative requirements under 45 CFR
part 92.
IV. Justification for Dispensing with Notice of Proposed Rulemaking
These regulations are being published in final form with a comment
period. The Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B),
provides that, if the Department for good cause finds that a notice of
proposed rulemaking is unnecessary, impracticable or contrary to public
interest, it may dispense with the notice if it incorporates a brief
statement in the final regulations of the reasons for doing so.
The Department finds that there is good cause to dispense with
proposed rulemaking procedures for the following reasons. First, the
new part 1000 of the CFR does not establish original accounting
requirements, but provides that existing regulations found in 45 CFR
parts 74 and 92 apply to Reserve Funds established under the Assets for
Independence Act. Therefore, this Interim Final Rule is a matter in
which public comment would not significantly aid. Second, the Assets
for Independence Act, as part of the Human Services Reauthorization Act
of 1998, established stringent timelines which mandate that grant
awards are to be determined by August 27, 1999. To ensure that grantees
will have guiding principles by which they may operate the program, it
is necessary to provide adequate administrative regulations in a timely
manner. Therefore, we are eliminating a proposed rule for the sake of
expediency.
For these reasons, OCS believes that there is sufficient cause to
dispense with proposed rulemaking. Nonetheless, we wish to have the
advantage of the information and opinions we may receive through public
comments. We will consider any comments received and revise the
regulations if necessary. We will issue a final document confirming
that this interim final rule is final and will add any revisions, as
needed, from the comments.
V. Justification for Dispensing with Publication 30 Days Prior to
the Effective Date
The Assets for Independence Act, as part of the Human Services
Reauthorization Act of 1998, established stringent timelines which
mandate that grant awards are to be determined by August 27, 1999. To
ensure that grantees will have guiding principles by which they may
operate the program, it is necessary to provide adequate administrative
regulations in a timely manner. Therefore, we are eliminating the 30-
day delay period for the effective date of publication for this rule.
VI. Regulatory Flexibility Analysis
The Secretary certifies, under 5 U.S.C. 605(b), the Regulatory
Flexibility Act (Pub. L. 96-354), that these proposed regulations will
not result in a significant impact on a substantial number of small
entities. The primary impact is on a limited number of grantees and the
impact is not significant.
VII. Executive Order 12866
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
proposal is consistent with these priorities and principles. The rule
implements the statutory provisions by specifying applicable rules
grantees are subject to in meeting accounting requirements for reserve
funds established for purposes of carrying out demonstration projects
under the Assets for Independence Act.
VIII. Unfunded Mandates Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded
Mandates Act) requires that a covered agency prepare a budgetary impact
statement before promulgating a rule that includes any Federal mandate
that may result in the expenditure by State, local and Tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year.
If a covered agency must prepare a budgetary impact statement,
section 205 further requires that it select the most cost-effective and
least burdensome alternative that achieves the objectives of the rule
and is consistent with the statutory requirements. In addition, section
203 requires a plan for informing and advising any small government
that may be significantly or uniquely impacted by the proposed rule.
We have determined that this rule will not result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of more than $100 million in any one year.
Accordingly, we have not prepared a budgetary impact statement,
specifically addressed the regulatory alternatives considered, or
prepared a plan for informing and advising any significantly or
uniquely impacted small government.
IX. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, Pub. L. 104-13, all
Departments are required to submit to the Office of Management and
Budget (OMB) for review and approval any reporting or record keeping
requirements inherent in a rule. This rule contains information
collection requirements in Sec. 1000.3 (requiring the establishment of
a reserve fund) which have been submitted to OMB for review and
approval.
The respondents to the information collection requirements in the
rule are IDA grantees, which may be not-for-profit organizations, State
or local agencies or tribal governments.
The Department is requiring the collection of information in
conjunction with section 407 of Pub. L. 105-285 which requires a
qualified entity, other than a State or local government agency or a
tribal government, to establish a Reserve Fund for depositing all funds
provided to the qualified entity from any public or private source in
connection with the demonstration project and the proceeds from any
investments.
We estimate a burden of 40 hours for each new grantee. On average
we anticipate 76 new grantees each year resulting in a total annual
burden for this rule of 3,040 hours.
The Administration for Children and Families will consider comments
by the public on this proposed collection of information in: evaluating
whether the proposed collection is necessary for the proper performance
of the functions of ACF, including whether the information will have
practical utility; evaluating the accuracy of ACF'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.
OMB is required to make a decision concerning the collection of
information contained in this interim final rule between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment is best assured of having its full effect if OMB received it
within 30 days of publication. Written comments to OMB for the proposed
information collection should be sent directly to the following: Office
of Management and Budget, Paperwork Reduction Project, 725 17th Street,
NW, Washington, DC 20503, Attn: Wendy Taylor.
X. Congressional Review
This rule is not a major rule as defined in 5 U.S.C., Chapter 8.
XI. Assessment of Federal Regulations and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a policy or
regulation may affect family well being. If the agency's conclusion is
affirmative, then the agency must prepare an impact assessment
addressing seven criteria specified in the law. These regulations will
not have an impact on family well being as defined in the legislation.
XII. Executive Order 13132
Executive Order 13132 on Federalism applies to policies that have
federalism implications, defined as ``regulations, legislative comments
or proposed legislation, and other policy statements or actions that
have substantial direct effects on the States, on the relationship
between the national government and the States, or the distribution of
power and responsibilities among the various levels of government.''
This rule does not have federalism implications as defined in the
Executive Order.
List of Subjects in 45 CFR part 1000
Grant programs-Social programs.
(Catalog of Federal Domestic Assistance Programs No. 93.602,
Individual Development Account/Assets for Independence)
Dated: October 21, 1999.
Olivia A. Golden,
Assistant Secretary for Children and Families.
Approved: November 1, 1999.
Donna E. Shalala,
Secretary, Department of Health and Human Services.
For the reasons set forth in the preamble, we are adding to Chapter
X a new part 1000 of title 45 of the Code of Federal Regulations as
follows:
1. A new Part 1000 is added to Chapter X of title 45 of the Code of
Federal Regulations to read as follows:
Part 1000--Individual Development Account Reserve Funds Established
Pursuant to Grants for Assets for Independence
Sec.
1000.1 Scope.
1000.2 Definitions.
1000.3 Requirements.
Authority: Sec. 407(b)(2), Pub. L. 105-285, 112 Stat. 2766.
Sec. 1000.1 Scope.
This part applies to the Office of Community Services' Assets for
Independence Program.
Sec. 1000.2 Definitions.
Individual Development Account means a trust or custodial account
created or organized in the United States exclusively for the purpose
of paying the qualified expenses of an eligible individual, as defined
in section 404(2) of Pub. L. 105-285, or enabling the eligible
individual to make an emergency withdrawal as defined in section 404(3)
of Pub. L.105-385. The written governing instrument creating the trust
or custodial account must meet the requirements of Section 404(5) of
Pub. L. 105-285, and of the Project Eligibility Requirements set forth
in Program Announcements.
Qualified Entity means one or more not-for-profit organizations
described in section 501(c)(3) of the Internal Revenue Code of 1986 and
exempt from taxation under section 501(a) of such Code; or a State or
local government agency, or a tribal government, submitting an
application under section 405 of Pub. L. 105-285 jointly with a
501(c)(3) organization that is also exempt from taxation under 501(a)
of the Internal Revenue Code of 1986.
Reserve Fund means a fund, established by a qualified entity, that
shall include all funds provided to the qualified entity from any
public or private source in connection with the demonstration project
and the proceeds from any investment made with such funds. The fund
shall be maintained in accordance with section 407 of Pub. L. 1052-285.
At least 90.5% of the funds must be used as matching contributions for
Individual Development Accounts.
Sec. 1000.3 Requirements.
(a) A qualified entity, other than a State or local government
agency or tribal government, shall establish a Reserve Fund for use in
the Assets for Independence program. Each reserve fund established by a
qualified entity, other than a State or local government agency or
tribal government, is subject to the Department of Health and Human
Services' uniform administrative requirements under 45 CFR part 74.
(b) Any reserve fund established by a qualified entity that is a
State or local government agency or tribal government, is subject to
the Department of Health and Human Services' uniform administrative
requirements under 45 CFR part 92.
[FR Doc. 00-4390 Filed 2-24-00; 8:45 am]
BILLING CODE 4184-01-P
Return to Top