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Rule2024-01913

Older Americans Act: Grants to State and Community Programs on Aging; Grants to Indian Tribes and Native Hawaiian Grantees for Supportive, Nutrition, and Caregiver Services; Grants for Supportive and Nutritional Services to Older Hawaiian Natives; and Allotments for Vulnerable Elder Rights Protection Activities

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Published

February 14, 2024

Effective

March 15, 2024

Issuing agencies

Health and Human Services DepartmentCommunity Living Administration

Abstract

ACL is issuing this final rule to modernize the implementing regulations of the Older Americans Act of 1965 ("the Act" or OAA). These changes advance the policy goals of the Act as articulated by Congress, including equity in service delivery, accountability for funds expended, and clarity of administration for ACL and its grantees. This final rule ultimately facilitates improved service delivery and enhanced benefits for OAA participants, particularly those in greatest economic need and greatest social need consistent with the statute.

Full Text

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<title>Federal Register, Volume 89 Issue 31 (Wednesday, February 14, 2024)</title>
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[Federal Register Volume 89, Number 31 (Wednesday, February 14, 2024)]
[Rules and Regulations]
[Pages 11566-11699]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-01913]

[[Page 11565]]

Vol. 89

Wednesday,

No. 31

February 14, 2024

Part IV

Department of Health and Human Services

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Administration for Community Living

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45 CFR Parts 1321, 1322, 1323, et al.

Older Americans Act: Grants to State and Community Programs on Aging;
Grants to Indian Tribes and Native Hawaiian Grantees for Supportive,
Nutrition, and Caregiver Services; Grants for Supportive and
Nutritional Services to Older Hawaiian Natives; and Allotments for
Vulnerable Elder Rights Protection Activities; Final Rule

Federal Register / Vol. 89 , No. 31 / Wednesday, February 14, 2024 /
Rules and Regulations

[[Page 11566]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Community Living

45 CFR Parts 1321, 1322, 1323, and 1324

RIN 0985-AA17

Older Americans Act: Grants to State and Community Programs on
Aging; Grants to Indian Tribes and Native Hawaiian Grantees for
Supportive, Nutrition, and Caregiver Services; Grants for Supportive
and Nutritional Services to Older Hawaiian Natives; and Allotments for
Vulnerable Elder Rights Protection Activities

AGENCY: Administration for Community Living (ACL), Department of Health
and Human Services (HHS or ``the Department'').

ACTION: Final rule.

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SUMMARY: ACL is issuing this final rule to modernize the implementing
regulations of the Older Americans Act of 1965 (``the Act'' or OAA).
These changes advance the policy goals of the Act as articulated by
Congress, including equity in service delivery, accountability for
funds expended, and clarity of administration for ACL and its grantees.
This final rule ultimately facilitates improved service delivery and
enhanced benefits for OAA participants, particularly those in greatest
economic need and greatest social need consistent with the statute.

DATES:
Effective date: This final rule is effective on March 15, 2024.
Compliance date: October 1, 2025.

FOR FURTHER INFORMATION CONTACT: Amy Wiatr-Rodriguez, Director of
Regional Operations, Administration for Community Living, Department of
Health and Human Services, 330 C Street SW, Washington, DC 20201.
Email: <a href="/cdn-cgi/l/email-protection#47262a3e69302e2633356a352823352e2032223d0726242b692f2f3469202831">[email&#160;protected]</a>, Telephone: (312) 938-9858.
Alice Kelsey, Deputy Director for the Administration on Aging,
Administration for Community Living, Department of Health and Human
Services, 330 C Street SW, Washington, DC 20201. Email:
<a href="/cdn-cgi/l/email-protection#d4b5b8bdb7b1fabfb1b8a7b1ad94b5b7b8fabcbca7fab3bba2">[email&#160;protected]</a>, Telephone: (202) 795-7342.
Assistance to Individuals with Disabilities in Reviewing the
Rulemaking Record: Upon request, the Department will provide an
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for the regulations. To schedule an
appointment for this type of accommodation or auxiliary aid, please
call (312) 938-9858 or email <a href="/cdn-cgi/l/email-protection#94f5f9edbae3fdf5e0e6b9e6fbf0e6fdf3e1f1eed4f5f7f8bafcfce7baf3fbe2">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
A. Statutory and Regulatory History
B. Overview of the Final Rule
C. Severability
II. Provisions of the Final Rule and Analysis and Responses to
Public Comments
Part 1321: Grants to State and Community Programs on Aging
A. Provisions Revised To Reflect Statutory Changes and/or for
Clarity
Subpart A--Introduction
1. Sec. 1321.1 Basis and Purpose of This Part
2. Sec. 1321.3 Definitions
Subpart B--State Agency Responsibilities
1. Sec. 1321.5 Mission of the State Agency
2. Sec. 1321.7 Organization and Staffing of the State Agency
3. Sec. 1321.9 State Agency Policies and Procedures
4. Sec. 1321.11 Advocacy Responsibilities
5. Sec. 1321.13 Designation of and Designation Changes to
Planning and Service Areas
6. Sec. 1321.15 Interstate Planning and Service Area
7. Sec. 1321.17 Appeal to the Departmental Appeals Board on
Planning and Service Area Designation
8. Sec. 1321.19 Designation of and Designation Changes to Area
Agencies
9. Sec. 1321.21 Withdrawal of Area Agency Designation
10. Sec. 1321.25 Duration, Format, and Effective Date of the
State Plan
11. Sec. 1321.27 Content of State Plan
12. Sec. 1321.29 Public Participation
13. Sec. 1321.31 Amendments to the State Plan
14. Sec. 1321.33 Submission of the State Plan or Plan Amendment
to the Assistant Secretary for Aging for Approval
15. Sec. 1321.35 Notification of State Plan or State Plan
Amendment Approval or Disapproval for Changes Requiring Assistant
Secretary for Aging Approval
16. Sec. 1321.39 Appeals to the Departmental Appeals Board
Regarding State Plan on Aging
17. Sec. 1321.41 When a Disapproval Decision Is Effective
18. Sec. 1321.43 How the State Agency May Appeal the
Departmental Appeals Board's Decision
19. Sec. 1321.45 How the Assistant Secretary for Aging May
Reallot the State Agency's Withheld Payments
20. Sec. 1321.49 Intrastate Funding Formula
21. Sec. 1321.51 Single Planning and Service Area States
Subpart C--Area Agency Responsibilities
1. Sec. 1321.55 Mission of the Area Agency
2. Sec. 1321.57 Organization and Staffing of the Area Agency
3. Sec. 1321.61 Advocacy Responsibilities of the Area Agency
4. Sec. 1321.63 Area Agency Advisory Council
5. Sec. 1321.65 Submission of an Area Plan and Plan Amendments
to the State Agency for Approval
Subpart D--Service Requirements
1. Sec. 1321.71 Purpose of Services Allotments Under Title III
2. Sec. 1321.73 Policies and Procedures
3. Sec. 1321.75 Confidentiality and Disclosure of Information
4. Sec. 1321.79 Responsibilities of Service Providers Under
State and Area Plans
5. Sec. 1321.83 Client and Service Priority
6. Sec. 1321.93 Legal Assistance
B. New Provisions Added To Clarify Responsibilities and
Requirements Under Grants to State and Community Programs on Aging
Subpart B--State Agency Responsibilities
1. Sec. 1321.23 Appeal to the Departmental Appeals Board on
Area Agency on Aging Withdrawal of Designation
2. Sec. 1321.37 Notification of State Plan Amendment Receipt
for Changes Not Requiring Assistant Secretary for Aging Approval
3. Sec. 1321.47 Conflicts of Interest Policies and Procedures
for State Agencies
4. Sec. 1321.53 State Agency Title III and Title VI
Coordination Responsibilities
Subpart C--Area Agency Responsibilities
1. Sec. 1321.59 Area Agency Policies and Procedures
2. Sec. 1321.67 Conflicts of Interest Policies and Procedures
for Area Agencies on Aging
3. Sec. 1321.69 Area Agency on Aging Title III and Title VI
Coordination Responsibilities
Subpart D--Service Requirements
1. Sec. 1321.77 Purpose of Services--Person- and Family-
Centered, Trauma-Informed
2. Sec. 1321.81 Client Eligibility for Participation
3. Sec. 1321.85 Supportive Services
4. Sec. 1321.87 Nutrition Services
5. Sec. 1321.89 Evidence-Based Disease Prevention and Health
Promotion Services
6. Sec. 1321.91 Family Caregiver Support Services
7. Sec. 1321.95 Service Provider Title III and Title VI
Coordination Responsibilities
Subpart E--Emergency and Disaster Requirements
1. Sec. 1321.97 Coordination With State, Tribal, and Local
Emergency Management
2. Sec. 1321.99 Setting Aside Funds To Address Disasters
3. Sec. 1321.101 Flexibilities Under a Major Disaster
Declaration
4. Sec. 1321.103 Title III and Title VI Coordination for
Emergency and Disaster Preparedness
5. Sec. 1321.105 Modification During Major Disaster Declaration
or Public Health Emergency
C. Deleted Provisions
Subpart A--Introduction
1. Sec. 1321.5 Applicability of Other Regulations
Subpart D--Service Requirements
1. Sec. 1321.75 Licenses and Safety
Part 1322: Grants to Indian Tribes and Native Hawaiian Grantees
for Supportive, Nutrition, and Caregiver Services

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A. Provisions Revised To Reflect Statutory Changes and/or for
Clarity
Subpart A--Introduction
1. Sec. 1322.1 Basis and Purpose of This Part
2. Sec. 1322.3 Definitions
Subpart B--Application
1. Sec. 1322.5 Application Requirements
2. Sec. 1322.7 Application Approval
3. Sec. 1322.9 Hearing Procedures
Subpart C--Service Requirements
1. Sec. 1322.13 Policies and Procedures
2. Sec. 1322.15 Confidentiality and Disclosure of Information
3. Sec. 1322.25 Supportive Services
4. Sec. 1322.27 Nutrition Services
B. New Provisions Added To Clarify Responsibilities and
Requirements Under Grants to Indian Tribes and Native Hawaiian
Grantees for Supportive, Nutrition, and Caregiver Services
Subpart C--Service Requirements
1. Sec. 1322.11 Purpose of Services Allotments Under Title VI
2. Sec. 1322.17 Purpose of Services--Person- and Family-
Centered, Trauma-Informed
3. Sec. 1322.19 Responsibilities of Service Providers
4. Sec. 1322.21 Client Eligibility for Participation
5. Sec. 1322.23 Client and Service Priority
6. Sec. 1322.29 Family Caregiver Support Services
7. Sec. 1322.31 Title VI and Title III Coordination
Subpart D--Emergency and Disaster Requirements
1. Sec. 1322.33 Coordination With Tribal, State, and Local
Emergency Management
2. Sec. 1322.35 Flexibilities Under a Major Disaster
Declaration
3. Sec. 1322.37 Title VI and Title III Coordination for
Emergency and Disaster Preparedness
4. Sec. 1322.39 Modification During Major Disaster Declaration
or Public Health Emergency
C. Deleted Provisions
1. Sec. 1322.5 Applicability of Other Regulations
Part 1323: Grants for Supportive and Nutritional Services to
Older Hawaiian Natives
A. Deleted Provisions
1. Part 1323: Grants for Supportive and Nutritional Services to
Older Hawaiian Natives.
Part 1324: Allotments for Vulnerable Elder Rights Protection
Activities
A. Provisions Revised To Reflect Statutory Changes and/or for
Clarity
Subpart A--State Long-Term Care Ombudsman Program
1. Sec. 1324.1 Definitions
2. Sec. 1324.11 Establishment of the Office of the State Long-
Term Care Ombudsman
3. Sec. 1324.13 Functions and Responsibilities of the State
Long-Term Care Ombudsman
4. Sec. 1324.15 State Agency Responsibilities Related to the
Ombudsman Program
5. Sec. 1324.17 Responsibilities of Agencies Hosting Local
Ombudsman Entities
6. Sec. 1324.19 Duties of the Representatives of the Office
7. Sec. 1324.21 Conflicts of Interest
B. New Provisions Added To Clarify Responsibilities and
Requirements Under Allotments for Vulnerable Elder Rights Protection
Activities
Subpart B--Programs for Prevention of Elder Abuse, Neglect, and
Exploitation
1. Sec. 1324.201 State Agency Responsibilities for the
Prevention of Elder Abuse, Neglect, and Exploitation
Subpart C--State Legal Assistance Development
1. Sec. 1324.301 Definitions
2. Sec. 1324.303 Legal Assistance Developer
III. Required Regulatory Analyses
A. Regulatory Impact Analysis
B. Regulatory Flexibility Act
C. Executive Order 13132 (Federalism)
D. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
E. Unfunded Mandates Reform Act of 1995
F. Plain Language in Government Writing
G. Paperwork Reduction Act (PRA)

I. Background

Congress passed the OAA in 1965 to expand and enhance community
social services for older persons.\1\ The original legislation
established authority for grants to State agencies for community
planning and social services, research and development projects, and
personnel training in the field of aging. Subsequent reauthorizations
expanded and enhanced the reach of the Act, including through the
authorization of the Long-Term Care Ombudsman Program (LTCOP or
Ombudsman program). The Act created the Administration on Aging (AoA)
within the Department of Health, Education and Welfare, now the
Department of Health and Human Services (HHS), to serve as the
principal agency designated to carry out the provisions of the OAA and
as the Federal focal point on matters concerning older persons.\2\ It
designated a Commissioner on Aging, now Assistant Secretary for Aging,
to lead the activities of AoA and administer the OAA.\3\ Since 2012,
AoA has been housed in ACL.\4\
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\1\ Public Law 89-73, 79 Stat. 218 (1965). 42 U.S.C. 3001 et
seq.
\2\ Section 201 of the OAA; 42 U.S.C. 3011.
\3\ Section 202 of the OAA; 42 U.S.C. 3012. Title V of the OAA
added in the 1978 reauthorization is administered by the Dep't of
Labor.
\4\ 80 FR 31389, 31391 (June 2, 2015).
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Title III of the OAA authorizes grants to State agencies on aging
(State agencies), who in turn provide funding to area agencies on aging
(AAAs or area agencies) to serve as advocates on behalf of older
persons and create comprehensive and coordinated community-based
continuums of services and supports.\5\ In 2022 the national aging
network included 56 State agencies (including the District of Columbia
and five Territories), over 600 AAAs, and over 20,000 local service
providers.\6\
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\5\ Title III of the OAA; 42 U.S.C. 3021 et seq.
\6\ Cong. Research Serv., R43414, Older Americans Act: Overview
and Funding (May 17, 2023), <a href="https://crsreports.congress.gov/product/pdf/R/R43414">https://crsreports.congress.gov/product/pdf/R/R43414</a>.
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Title III authorizes the largest OAA programs by population served
and Federal funds expended as administered by ACL. These include
supportive, nutrition, evidence-based disease prevention and health
promotion, caregiver, legal, and other services.\7\ Title III programs
served 10.1 million older persons in 2020 (the most recent year for
which data is available).\8\ Title III accounted for nearly three
quarters of the of the $2.378 billion OAA 2023 budget and funding for
these programs is based on a statutory formula that determines yearly
allocations to individual Territories and States.\9\
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\7\ Title III of the OAA; 42 U.S.C. 3021 et seq.
\8\ Admin. for Cmty. Living, Overview of Older Americans Act
Title III, VI, and VII Programs: 2020 Summary of Highlights and
Accomplishments, p. III-2 (2022), <a href="https://acl.gov/sites/default/files/news%202022-09/2020%20OAA%20Report_Complete%20Product%209-1-22_508.pdf">https://acl.gov/sites/default/files/news%202022-09/2020%20OAA%20Report_Complete%20Product%209-1-22_508.pdf</a>.
\9\ Admin. For Cmty. Living, FY 2022 OAA Title III Annual Grant
Awards (without transfers) (Apr. 27, 2022), <a href="https://acl.gov/sites/default/files/about-acl/2022-05/Title%20III-2022.pdf">https://acl.gov/sites/default/files/about-acl/2022-05/Title%20III-2022.pdf</a>.
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Title III services are available to persons aged 60 and older and
family caregivers; however, they are prioritized to serve those with
the greatest economic need and greatest social need, particularly low-
income minority older individuals, older persons with limited English
proficiency (LEP), older persons residing in rural areas, and older
persons with disabilities.\10\
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\10\ Title III of the OAA; 42 U.S.C. 3021 et seq.
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First included as a part of the 1978 reauthorization of the Act,
Title VI authorizes funds for nutrition, supportive, and caregiver
services to older Native Americans. The purpose of Title VI programs is
to support the independence and well-being of Tribal elders and
caregivers living in their communities consistent with locally
determined needs. ACL awards funding directly to Federally recognized
Tribal organizations, including Native Alaskan organizations, and a
designated not-for-profit group representing Native Hawaiians. To be
eligible for funding, a Tribal organization or Hawaiian Native grantee
must represent at least 50 Native Americans aged 60 and older who
reside in the service area. In FY2023, grants were awarded to 290
Tribal organizations representing approximately 400 Indian Tribes and
Alaskan Native entities and one

[[Page 11568]]

organization serving Native Hawaiian elders.\11\
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\11\ U.S. Dep't of Health & Human Servs., Tracking
Accountability in Government Grants System (TAGGS), <a href="https://taggs.hhs.gov">https://taggs.hhs.gov</a> (last visited Oct. 13, 2023).
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Title VII authorizes the Ombudsman program, programs for elder
abuse, neglect, and exploitation prevention, and a requirement for
State agencies to provide a State Legal Assistance Developer.\12\
States' Ombudsman programs investigate and resolve complaints related
to the health, safety, welfare, and rights of individuals who live in
long-term care facilities. Begun in 1972 as a demonstration program,
Ombudsman programs today exist in all States, the District of Columbia,
Puerto Rico, and Guam, under the authorization of the Act.\13\ These
States and Territories have an Office of the State Long-Term Care
Ombudsman (the Office), headed by a full-time State Long-Term Care
Ombudsman (the Ombudsman). In FY 2022, the program had a budget of
$19.9 million.\14\ That same year, Ombudsman fielded 182,000 complaints
and provided more than 569,000 instances of information and assistance
to individuals and long-term care facilities.\15\ Title VII also
authorizes grants to State agencies for program activities aimed at
preventing and remedying elder abuse, neglect, and exploitation.
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\12\ Title VII of the OAA; 42 U.S.C. 3058 et seq.
\13\ Cong. Research Serv., R43414, Older Americans Act: Overview
and Funding (May 17, 2023), <a href="https://crsreports.congress.gov/product/pdf/R/R43414">https://crsreports.congress.gov/product/pdf/R/R43414</a>.
\14\ Admin. For Cmty. Living, Fiscal Year 2023 Justification of
Estimates for Appropriations Committees, 132, <a href="https://acl.gov/about-acl/budget">https://acl.gov/about-acl/budget</a>.
\15\ National Ombudsman Reporting System (NORS), Data at a
Glance, Admin. for Cmty. Living (last visited Jan. 18, 2023).
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A. Statutory and Regulatory History

This final rule is published under the authority granted to the
Assistant Secretary for Aging by the Older Americans Act of 1965,
Public Law 89-73, 79 Stat. 218 (1965), as amended through the
Supporting Older Americans Act of 2020, Public Law 116-131, 134 Stat.
240 (2020), sections 201(e)(3), 305(a)(1), 306(d)(1), 307(a),
307(d)(3), 331(a), 614(a), 624(a) and 712-713 (42 U.S.C. 3011(e), 42
U.S.C. 3025, 42 U.S.C. 3026(d), 42 U.S.C. 3027(a), 42 U.S.C. 3027(a),
3027(d), 42 U.S.C. 3057e, 42 U.S.C. 3057j, and 3058g-3058h,
respectively). These provisions authorize the Assistant Secretary for
Aging to prescribe regulations regarding designation of State agency
activities; development and approval of State plans on aging; and
funding for supportive, nutrition, evidence-based disease prevention
and health promotion, family caregiver support, and legal services
under Title III of the Act; funding for Indian Tribes, Tribal
organizations, and a Hawaiian Native grantee to serve Hawaiian Native
and Tribal elders and family caregivers under Title VI of the Act; and
allotments for vulnerable elder rights protection activities, including
the Long-Term Care Ombudsman Program under Title VII of the Act.
The OAA was passed in 1965 and vested authority for carrying out
the purposes of the Act, including through the issuance of regulations,
in the Assistant Secretary for Aging (then the Commissioner for Aging).
Since its initial passage, the OAA has been amended a total of eighteen
times. Regulations for programs authorized under the Act date from
1988.\16\ Title III, except regarding the Ombudsman program, and Title
VI implementing regulations have not been revised since that time,
while Title VII regulations 45 CFR part 1324 Allotments for Vulnerable
Elder Rights Protection Activities, subpart A and portions of 45 CFR
part 1321--Grants to State and Community Programs on Aging regarding
the Ombudsman program were published in 2015.\17\
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\16\ 53 FR 33758 (Aug. 31, 1988).
\17\ 80 FR 7704 (Feb. 11, 2015).
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There have been substantial statutory changes since 1988, as
detailed by the Congressional Research Service in several summary
publications.\18\ Title VII: State Long-Term Care Ombudsman and
Vulnerable Elder Rights Protection was added to the Act by the 1992
amendments (Pub. L. 102-375; 42 U.S.C. 3058g-3058i), which consolidated
and expanded existing programs focused on protecting the rights of
older persons. Title VII incorporated separate authorizations of
appropriations for the Ombudsman program; the program for the
prevention of elder abuse, neglect, and exploitation; elder rights and
legal assistance development; and outreach, counseling, and assistance
for insurance and public benefit programs. The 1992 amendments also
strengthened requirements related to focusing Title III funding and
services on populations in greatest need with particular attention to
older low-income minority individuals. Other elements of the 1992
amendments authorized programs for assistance to caregivers of the
frail elderly, clarified the role of Title III agencies in working with
the private sector, and required improvements in AoA data collection.
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\18\ Cong. Research Serv., R46439, Older Americans Act: A 2020
Reauthorization (July 1, 2020), <a href="https://crsreports.congress.gov/product/pdf/R/R46439">https://crsreports.congress.gov/product/pdf/R/R46439</a>; Cong. Research Serv., R43414, Older Americans
Act: Overview and Funding (May 17, 2023), <a href="https://crsreports.congress.gov/product/pdf/R/R43414">https://crsreports.congress.gov/product/pdf/R/R43414</a>.
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The National Family Caregiver Support Program under Title III and
Native American Caregiver Support Program under Title VI were
authorized by the 2000 amendments (Pub. L. 106-501), which also
permitted State agencies to impose cost-sharing, subject to
limitations, for some Title III services certain older persons receive
while retaining authority for voluntary contributions toward the costs
of services. The 2006 amendments (Pub. L. 109-365) authorized the
Assistant Secretary for Aging to designate an individual within AoA to
be responsible for prevention of elder abuse, neglect, and exploitation
and to coordinate Federal elder justice activities. In addition, the
2006 amendments expanded the reach of Aging and Disability Resource
Centers (ADRCs), brought increased attention to services and supports
related to mental health and mental disorders, required State agencies
to conduct increased planning efforts related to the growing number of
older people in coming decades, and focused attention on the needs of
older people with LEP and those at risk of institutional placement.
The 2016 amendments (Pub. L. 114-144) provided additional
flexibility to State agencies, AAAs, and social services providers in
addressing the modernization of senior centers, falls prevention, and
behavioral health screening, and codified existing practices, such as
requiring ``evidence-based'' disease prevention and health promotion
services. For the Ombudsman program, they clarified conflicts of
interest (COI) provisions, strengthened confidentiality and Ombudsman
training requirements, and improved resident access to representatives
of the Office. They addressed coordination among ADRCs and other home
and community-based service (HCBS) organizations providing information
and referrals.
The Supporting Older Americans Act of 2020 (Pub. L. 116-131) added
new definitions, including person-centered and trauma-informed. The
legislation amended the Act to address a range of disease prevention
and health promotion activities, such as chronic disease self-
management and falls prevention, as well as address the negative
effects of social isolation among older individuals. Congress focused
on other reauthorization issues as well, including changes to nutrition

[[Page 11569]]

services programs and to programs that provide support to family
caregivers.
We issued a Request for Information (RFI) on May 6, 2022 seeking
input from the aging network, Indian Tribes, States, and Territories on
challenges they face administering services, as well as feedback from
individuals and other interested parties on experiences with services,
providers, and programs under the Act.\19\ Most of the comments we
received focused on: equitably serving older adults and family
caregivers from underserved and marginalized communities, the Ombudsman
program, area plans on aging, and flexibilities within the nutrition
and other programs.
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\19\ 87 FR 27160 (May 6, 2022); section 2013A of the OAA, 42
U.S.C. 3013a.
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On June 16, 2023, the Federal Register published a notice of
proposed rulemaking (NPRM) regarding OAA Titles III, VI, and VII (88 FR
39568). Through this NPRM, ACL sought feedback regarding ACL's proposal
to modernize the implementing regulations of the OAA, which have not
been substantially altered since their promulgation in 1988. The NPRM
addressed supportive, nutrition, evidence-based disease prevention and
health promotion, caregiver, legal, long-term care ombudsman, and other
services provided by State agencies, Tribal organizations and a
Hawaiian Native grantee, AAAs, and service providers under the OAA. The
60-day comment period for the NPRM closed on August 15, 2023.

B. Overview of the Final Rule

This final rule adopts the same structure and framework as the
proposed rule. Part 1321 addresses programs authorized under Title III
of the Act and includes subpart A (basis, purpose, and definitions),
subpart B (State agency responsibilities), subpart C (area agency
responsibilities), subpart D (service requirements), and subpart E
(emergency and disaster requirements). Part 1322 addresses programs
authorized under Title VI of the Act and includes subpart A (basis,
purpose, and definitions), subpart B (application), subpart C (service
requirements), and subpart D (emergency and disaster requirements).
Part 1324 includes programs authorized under Title VII of the Act and
includes subpart A (State Long-Term Care Ombudsman Program), subpart B
(programs for prevention of elder abuse, neglect, and exploitation),
and subpart C (State legal assistance development).
ACL has made changes to several of the proposed rule's provisions
based on public comments. Our final rule is a direct response to
feedback from interested parties and reflects the evolving needs of
both grantees and OAA program participants. In response to robust
comment, we have clarified the flexibilities available during a major
disaster, increased the amount of funds under Title III, part C-1 of
the Act that may be used for shelf-stable, pick-up, carry-out, drive-
through, or similar meals, and provided more information about
implementing the definition of ``greatest social need'' in State and
area plans, among other clarifications.

C. Severability

To the extent that any portion of the requirements arising from the
final rule is declared invalid by a court, ACL intends for all other
parts of the final rule that are capable of operating in the absence of
the specific portion that has been invalidated to remain in effect.
While our expectation is that all parts of the final rule that are
operable in such an environment would remain in effect, ACL will assess
at that time whether further rulemaking is necessary to amend any
provisions subsequent to any holding that ACL exceeded its discretion,
or the provisions are inconsistent with the OAA, or are vacated or
enjoined on any other basis.

II. Provisions of the Final Rule and Analysis and Responses to Public
Comments

We received 780 public comments from individuals and organizations,
including State agencies, Tribes and Tribal organizations, AAAs,
service providers, Ombudsman programs, advocacy groups, and private
citizens. We thank commenters for their consideration of the proposed
rule and appreciate all comments received. We particularly are grateful
for the OAA program participants who wrote to share their experience of
OAA services and their thoughts on what they enjoy and would like to
see in the future regarding OAA programming. In the subsequent
sections, we summarize the rule's provisions and the public comments
received, and we provide our response.

General Comments on the NPRM

General Support
Comment: Commenters overwhelmingly supported most provisions in the
proposed rule. Many commenters expressed general support for our
updates to modernize the regulations. Other commenters appreciated the
flexibilities in the rule and noted that they would like to work with
their State and local leaders to identify other creative approaches to
expanding services to older adults. A significant number of commenters
requested additional funds to provide services under the Act.
Response: ACL appreciates these comments. We encourage
collaboration at the State and local levels to identify solutions that
are responsive to the needs and resources in local communities.
Requests for funding are outside the scope of this rule.
Technical Corrections; Recommendations for Sub-Regulatory Guidance
Comment: A number of commenters identified technical corrections,
including citation errors and a misnumbered preamble provision.
Commenters also provided suggestions and raised questions that could be
addressed in future sub-regulatory guidance on a variety of topics.
Response: We appreciate these comments and have made the
recommended technical corrections. We have also clarified the
regulation text to remove references to sub-regulatory guidance that
has not yet been issued, and we have revised the regulation title to
accurately reflect program titles. We look forward to providing
technical assistance and guidance on a number of topics subsequent to
promulgation of the final rule.
LGBTQI+ Older Adults and Older Adults Living With HIV
Comment: A significant number of comments focused on the importance
of serving those in greatest economic need and greatest social need,
including older adults and family caregivers who are lesbian, gay,
bisexual, transgender, queer, intersex and/or have other sexual
orientations, gender identities and expressions, and sex
characteristics (LGBTQI+). Many commenters expressed support overall,
and for specific provisions, concerning LGBTQI+ older adults and older
adults with HIV. Specifically, commenters voiced support for full legal
protections, protection of rights and privacy, and protection from
discrimination when accessing services or meeting with providers.
Commenters also supported quality, inclusive, and equitable
legislation, regulations, aging policies, programs, services, and
initiatives. Many commenters also suggested that staff and
professionals working with older adults be trained in sensitivity,
cultural competency, and needs specific to LGBTQI+ older adults and
older adults with HIV. Specifically, commenters expressed the
importance of ensuring that providers foster a welcoming, safe, and
respectful

[[Page 11570]]

environment. Several commenters noted the importance of considering
other noneconomic factors, such as geographic location (e.g., rural),
disabilities, ethnicity, and the intersectional challenges of multiply
marginalized populations. Several commenters noted the specific
concerns of this community related to services funded under Title VII
of the Act, such as the Ombudsman program and prevention of elder
abuse, neglect, and exploitation.
A few commenters specifically recommended engaging State agencies,
AAAs, and service providers in providing funding, outreach, and
services specific to older adults with HIV. Additionally, a few
commenters noted the importance of hiring LGBTQI+ service provider
employees and professionals. Several commenters referenced support for
and access to high quality and culturally competent medical and mental
health care. Some commenters noted the importance of recognition of and
respect for partners, friends, and families. One commenter suggested
requiring inclusive language and graphics in marketing materials as a
matter of compliance. One commenter observed that LGBTQI+ individuals
and people with HIV have a greater need to overcome isolation. Several
commenters expressed concerns about finding affordable senior supported
living options.
Response: ACL appreciates these comments expressing concern for
older adults and family caregivers who are LGBTQI+, as well as older
adults and family caregivers with HIV. A majority of these comments are
beyond the scope of this regulation because they do not relate to the
substance of the rule, and in some cases address areas that are outside
of ACL's statutory authority. However, we appreciate the numerous
comments in support of these communities and believe the provisions at
Sec. 1321.3 (defining ``Greatest social need''), Sec. 1321.11
(Advocacy responsibilities), Sec. 1321.27 (Content of State plan),
Sec. 1321.61 (Advocacy responsibilities of the area agency), Sec.
1321.65 (Submission of an area plan and plan amendments to the State
agency for approval), Sec. 1321.75 (Confidentiality and disclosure of
information), and Sec. 1321.93 (Legal assistance) will improve
services to these populations.
ACL funds the National Resource Center on LGBTQ+ Aging (<a href="https://www.lgbtagingcenter.org">https://www.lgbtagingcenter.org</a>), which provides training and technical
assistance to aging services providers, including those funded under
the OAA, in their work to support and include LGBTQI+ older adults and
family caregivers. In a partnership with the Office of the Assistant
Secretary for Health, ACL has worked to support the development of
innovative efforts that improve health outcomes and quality of life for
people aging with HIV and long-term survivors in both rural and urban
areas, particularly among underserved communities, including on the
basis of race, ethnicity, and LGBTQI+ status.\20\ We expect to build on
these efforts and anticipate providing training and technical
assistance following promulgation of the final rule to support
effective implementation of these provisions.
---------------------------------------------------------------------------

\20\ HHS Selects Phase 2 Winners of National HIV and Aging
Challenges, <a href="http://HIV.gov">HIV.gov</a>, <a href="https://www.hiv.gov/blog/hhs-selects-phase-2-winners-of-national-hiv-and-aging-challenges/">https://www.hiv.gov/blog/hhs-selects-phase-2-winners-of-national-hiv-and-aging-challenges/</a> (last updated Sept.
21, 2023).
---------------------------------------------------------------------------

Collaboration Between State Agencies and Area Agencies
Comment: ACL received many comments expressing concern that the
rule allows State agencies to exert too much control in a variety of
areas (e.g., which programs AAAs implement under the Act, how AAAs
implement programs, minimum expenditures for certain services,
prioritization of services, voluntary contributions). Commenters also
expressed concern that the extent of control afforded to State agencies
by the rule will stifle AAAs' abilities to tailor programs to the needs
of their respective planning and service areas (PSAs).
Response: Section 305 of the Act requires designated State agencies
to ``[. . .] be primarily responsible for the planning, policy
development, administration, coordination, priority setting, and
evaluation of all State activities related to the objectives of this
Act[.]'' \21\ As the grantees under the Act, State agencies are
responsible to ACL for monitoring the compliance of activities
initiated under Title III with all applicable requirements to ensure
grant awards are used for authorized purposes and are in compliance
with Federal law. In light of these responsibilities, we believe the
rule affords State agencies appropriate authority over the
administration and implementation of the Act within their states.
---------------------------------------------------------------------------

\21\ 42 U.S.C. 3025(a)(1)(C).
---------------------------------------------------------------------------

Notwithstanding these State agency obligations, AAAs have a
critical role in the development of State agency policies and
procedures. Section 1321.9(a) requires that the policies and procedures
be developed by State agencies in consultation with AAAs, program
participants, and other appropriate parties in the State. As set forth
in Sec. 1321.61 (Advocacy responsibilities of the area agency), AAAs
also have an obligation to monitor, evaluate, and comment on policies,
programs, hearings, levies, and community actions which affect older
persons and family caregivers; this includes regarding the policies and
procedures developed and implemented by State agencies. Further, except
for the Ombudsman program as set forth in 45 CFR part 1324, subpart A
and where otherwise indicated, the State agency policies may allow for
such policies and procedures to be developed at the AAA level.
Accordingly, the final rule provides tools for State and area agencies
to work in tandem with one another and to address the concerns raised
by these comments.
The OAA is clear that State agencies and AAAs should work together
to achieve the mission set forth in the Act. AAAs and State agencies
have distinct but related roles that are all vitally important in
providing services to older adults and family caregivers. ACL is
available to provide technical assistance and support to State agencies
and AAAs in maintaining positive working relationships, fulfilling
their roles, and meeting the expectations of the OAA.
Housing, Housing Instability, and Homelessness
Comment: Many commenters expressed support for addressing housing,
housing instability, and homelessness, including information and
assistance/referral (I&A/R), partnerships with the U.S. Department of
Housing and Urban Development (HUD), assistance with paying for housing
costs and shared living options, advocacy regarding rising housing
costs and development which displaces older residents, and legal
assistance to assist with housing problems, including evictions.
Response: ACL appreciates these comments expressing concern for
older adults and family caregivers who experience challenges with
housing, housing instability, and homelessness. ACL notes the OAA's
long-standing role in support of this topic, including State agency and
AAA development of a comprehensive and coordinated network of services
and supports; instances of co-location of congregate meal programs
under Title III, part C-1 of the Act in affordable housing facilities;
and the provision of legal assistance under the Act to respond to
various housing and housing-related concerns. While regulating the
provision of housing, including paying for housing costs, is beyond the
scope

[[Page 11571]]

of the Act, we believe the provisions at Sec. 1321.3 (defining
``Access to services or access services,'' ``In-home supportive
services,'' and ``Greatest social need''), Sec. 1321.27 (Content of
State plan), Sec. 1321.61 (Advocacy responsibilities of the area
agency), Sec. 1321.65 (Submission of an area plan and plan amendments
to the State agency for approval), Sec. 1321.75 (Confidentiality and
disclosure of information), Sec. 1321.85 (Supportive services), and
Sec. 1321.93 (Legal assistance) will support the aging network in
responding to issues relating to housing, housing instability, and
homelessness. This includes local partnerships between AAAs and housing
authorities or providers and enabling access to services and supports
for older adults residing in HUD-assisted housing as well as the
braiding of funding to support housing stability with service
coordination and delivery.
ACL leads the Housing and Services Resource Center (<a href="https://acl.gov/HousingAndServices">https://acl.gov/HousingAndServices</a>), a partnership between HHS and HUD. We
expect to build on these efforts and anticipate providing training and
technical assistance following promulgation of the final rule to
support effective implementation of these provisions.
Accessibility and Civil Rights Obligations
Comment: Numerous commenters expressed concern with the elimination
of the definition of ``severe disability,'' as well as the lack of a
specific definition of disability, and the absence of specific
incorporation of major sensory disabilities and accessibility in the
definition of ``greatest social need.'' Many of these commenters
reported instances in which OAA grantees and subrecipients had not
respected the civil rights of people with sensory or mobility
disabilities. Some shared specific accounts of AAAs and legal service
providers failing to provide culturally competent, accessible services
to older adult consumers who are blind, low-vision, deaf, hard-of-
hearing, deafblind, or who have limited mobility. Many requested that
we expand the definition of greatest social need to encompass these
disability populations, codify the terms ``accessibility'' and ``vision
rehabilitation services,'' require training in disability competency,
and more clearly and forcefully require grantees to meet their civil
rights obligations to older adults with disabilities.
Commenters also recommended that ACL direct resources specifically
to research on aging and vision loss, treatment for diseases that
result in vision loss, and supportive services for people with vision
loss so that they may age in place--such as transportation and home
care assistance.
Response: All recipients of Federal funding, including OAA grantees
and subrecipients, must comply with the Americans with Disabilities
Act,\22\ Section 504 of the Rehabilitation Act,\23\ Section 1557 of the
Affordable Care Act,\24\ and all other applicable laws that protect
against discrimination, including against people with disabilities.
These civil rights laws require OAA grantees and subrecipients to
provide auxiliary aids and services to ensure effective communication
and to ensure that no eligible person with a disability is denied
access to OAA programs and services due to disability. Older adults
with disabilities and advocates may file complaints with the HHS Office
for Civil Rights if anyone is denied equitable access to OAA programs
or services, including due to lack of effective communication.\25\
---------------------------------------------------------------------------

\22\ 42 U.S.C. 12101 et seq.
\23\ 29 U.S.C. 794.
\24\ 42 U.S.C. 18116.
\25\ How to File a Civil Rights Complaint, U.S. Dept. of Health
and Human Serv., Office for Civil Rights, <a href="https://www.hhs.gov/civil-rights/filing-a-complaint/complaint-process/index.html">https://www.hhs.gov/civil-rights/filing-a-complaint/complaint-process/index.html</a> (last visited
Oct. 11, 2023).
---------------------------------------------------------------------------

While we strongly recommend that OAA grantees and subrecipients
train staff on cultural competency and disability accommodations as a
best practice, training requirements in disability accommodation and
cultural competency are beyond the scope of this rulemaking. We decline
to adopt definitions of accessibility, vision rehabilitation services,
and related terms, preferring to defer to existing definitions in
relevant civil rights laws. However, we have reincorporated the
definition of ``severe disability'' in this final rule. In addition,
the definition of ``greatest social need'' already includes ``physical
and mental disabilities,'' and this includes all severe disabilities
and sensory and communication disabilities.
Directing resources for research on aging and vision loss is also
outside the scope of this rule. However, we believe the provisions at
Sec. 1321.3 (defining ``Access to services or access services'' and
``Greatest social need''), Sec. 1321.27 (Content of State plan), Sec.
1321.61 (Advocacy responsibilities of the area agency), Sec. 1321.65
(Submission of an area plan and plan amendments to the State agency for
approval), and Sec. 1321.85 (Supportive services) will support the
aging network in responding to issues relating to vision and hearing
loss.
Age Discrimination in the Workplace
Comment: Several commenters expressed concern about age
discrimination in the workplace.
Response: While addressing age discrimination in the workplace
broadly is outside of the scope of these regulations, ACL notes that
supportive services provided under Title III of the Act may be helpful
to those experiencing work-related concerns. For example, age
discrimination is one of the priority areas that may be addressed by
legal assistance provided under the Act (Sec. 1321.93 Legal
assistance). While Title V, the Senior Community Service Employment
Program, is outside the scope of these regulations because it is
implemented by the Department of Labor, programs funded under Title
III, VI, and VII of the Act are encouraged to have referral mechanisms
among programs funded under all Titles of the Act.
Administrative Burden, Implementation Costs, Implementation Timeframe
Comment: We received a significant number of comments related to
concerns about the burden, cost, and amount of time regulated entities
would need to implement the final rule (e.g., costs and time needed to
review and update existing policies and procedures, to create new
policies and procedures, create or update state regulations, and to
train staff), as well as concerns about the ongoing costs of monitoring
compliance with the final rule. Some State agencies commented that they
anticipate that consultants and/or additional staff will need to be
hired and/or that changes will need to be made to information
technology systems. Some State agencies asserted that ACL has greatly
underestimated both the cost, and the amount of time, needed to come
into compliance with the rule.
Response: A limited number of substantive changes were made by the
2020 reauthorization to the implementation of programs under the Act,
and much of this final rule codifies the policies and procedures that
Title VI grantees, State agencies, AAAs, and service providers already
have or should have in place to administer programs and deliver
services under the Act. Similarly, State and area agencies should
already be engaging in monitoring activities for compliance with the
Act and implementing regulations. State and area agencies will have to
review and revise their existing practices, policies, and procedures to
ensure they comply with the final rule. For example, State agencies and
AAAs will need to update definitions of

[[Page 11572]]

greatest social need and greatest economic need. However, this final
rule does not require States to have regulations, and many of the new
potentially burdensome aspects of the final rule are at the State
agency's option to implement (for example, allowing shelf-stable, pick-
up, carry-out, drive-through, or similar meals to complement the
congregate meals program). We also note that public comments that
provided State-specific cost estimates to implement and administer the
final rule did not clearly differentiate between costs attributable to
the statute and the incremental costs of implementing the final rule;
accordingly, it is not feasible to incorporate this information into
our analysis of the impact of the final rule. As more particularly
discussed in the Regulatory Impact Analysis below, we anticipate that
any costs to regulated entities associated with the final rule will not
be onerous.
In consideration of comments related to the time required for
implementation of the rule, we have decided to delay the compliance
date of this rule until October 1, 2025. This should give all regulated
entities sufficient time to come into compliance with these
regulations. It will also allow time for State and area plans on aging
that will be effective as of October 1, 2025, to incorporate the
requirements of this final rule into new or amended plans.
Consistent with current practice, if State agencies encounter
challenges implementing specific provisions of the rule, they should
engage with ACL for technical assistance and support. In addition,
State agencies that need additional time to comply with one or more
provisions of the rule may submit a request to proceed under a
corrective action plan. A request should include the reason the State
needs additional time, the steps the State will take to reach full
compliance, and how much additional time the State anticipates needing.
The corrective action plan process is intended to be highly
collaborative and flexible. Under a corrective action plan, States
agencies and ACL will jointly identify progress milestones and a
feasible timeline for the State agency to come into compliance with the
provision(s) of the rule incorporated into the corrective action plan.
State agencies must make a good faith effort at compliance to continue
operating under a corrective action plan. Requests for corrective
action plans will be reviewed after April 1, 2024, and ACL will provide
guidance on this process after this rule takes effect.

Part 1321: Grants to State and Community Programs on Aging

A. Provisions Revised To Reflect Statutory Changes or Provide Clarity

The following provisions of this final rule reflect statutory
changes (e.g., changing ``Commissioner for Aging'' to ``Assistant
Secretary for Aging'' throughout), revisions for clarity, and direction
in response to requests for technical assistance from grantees and
other interested parties, RFI responses, listening sessions, Tribal
consultation, and public comment received on the NPRM.
Subpart A--Introduction
Sec. 1321.1 Basis and Purpose of This Part
Section 1321.1 sets forth the requirements of Title III of the Act
to provide grants to State and community programs on aging. This final
rule ensures consistency with statutory terminology and requirements,
such as referring to evidence-based disease prevention and health
promotion and caregiver services, specifying family caregivers as a
service population, and listing the key roles of the State agency
identified to implement Title III and Title VII of the Act.
Comment: Commenters expressed support for the priority given to
services for those with the greatest economic and social need. One
commenter requested Sec. 1321.1(c)(4) also recognize the need for
advocacy on behalf of family caregivers.
Response: We appreciate these comments and have revised Sec.
1321.1(c)(4) to read, ``Serve as an advocate for older individuals and
family caregivers[.]''
Comment: One commenter stated that given the authority for the
State agency to allocate funds to the Ombudsman program, they strongly
recommend language be added at Sec. 1321.1(c)(7) to reflect allocation
of funds for the Ombudsman program.
Response: ACL appreciates this comment and has revised Sec.
1321.1(c)(7) to remove ``or'' in (i), add ``or'' to the end of (ii),
and add (iii) to read, ``The Ombudsman program, as set forth in part
1324.''
Sec. 1321.3 Definitions
The final rule updates the definitions of significant terms in
Sec. 1321.3 by adding several new definitions, revising several
existing definitions, and deleting definitions of terms that are
obsolete or no longer necessary. The additions, revisions, and
deletions are intended to reflect changes to the statute, important
practices in the administration of programs under the Act, and feedback
we have received from a range of interested parties.
We add definitions of the following terms: ``Access to services,''
``Acquiring,'' ``Area agency on aging,'' ``Area plan administration,''
``Best available data,'' ``Conflicts of interest,'' ``Cost sharing,''
``Domestically produced foods,'' ``Family caregiver,'' ``Governor,''
``Greatest economic need,'' ``Greatest social need,'' ``Immediate
family,'' ``Local sources,'' ``Major disaster declaration,''
``Multipurpose senior center,'' ``Native American,'' ``Nutrition
Services Incentive Program,'' ``Older relative caregiver,'' ``Planning
and service area,'' ``Private pay programs,'' ``Program development and
coordination activities,'' ``Program income,'' ``Single planning and
service area State,'' ``State,'' ``State agency,'' ``State plan
administration,'' ``Supplemental foods,'' and ``Voluntary
contributions.''
We retain and make minor revisions to the terms: ``Altering or
renovating,'' ``Constructing,'' ``Department,'' ``Direct services,''
``In-home supportive services,'' ``Means test,'' ``Official duties,''
``Periodic,'' ``Reservation,'' ``Service provider,'' and ``Severe
disability.'' We retain with no revisions the terms: ``Act'' and
``Fiscal year'' and we remove the terms: ``Frail'' and ``Human
services.''
Comment: We received many comments in support of these updated
definitions.
Response: We appreciate these comments. ACL's responses to comments
of particular note follow.
``Access to Services'' or ``Access Services''
Comment: We received one comment requesting additional examples of
access services.
Response: ACL appreciates this comment and acknowledges that
service provision and technologies continue to evolve. In response to
this comment, we have added ``options counseling'' to the list of
examples.
``Acquiring,'' ``Altering or Renovating,'' and ``Constructing''
Comment: We received comments supporting the removal of the term
``multipurpose senior center'' from the definitions of ``altering or
renovating'' and ``constructing.'' Other commenters expressed confusion
related to these terms, because the rule only allows grantees to use
OAA funding for ``acquiring'' and ``constructing'' multipurpose senior
centers. Other commenters sought clarity as to whether these terms
apply to minor home repairs

[[Page 11573]]

or modifications provided to individual service participants under the
Act.
Response: We only use these terms to clarify how grantees may use
OAA funds on facilities where OAA services are provided or facilities
that are otherwise necessary to satisfy the administrative requirements
of the Act. These terms do not apply to ``in-home supportive services''
provided to individuals, such as minor modification of homes or
individual residences.
``Conflicts of Interest''
Recognizing the importance of ensuring the integrity of, and trust
in, activities carried out under the Act, section 307(a)(7) of the Act
requires State agencies to have mechanisms in place to identify and
remove COI.\26\ We include several provisions related to COI to provide
clarity for State agencies, AAAs, and service providers: Sec. Sec.
1321.3, 1321.47, and 1321.67. These provisions include a general
definition of COI and specific requirements for State agencies and
AAAs, respectively, which are discussed in more detail below. These
provisions reflect the expanded potential for COI due to changes in the
scope of activities undertaken by these entities since the Act was
first passed and these regulations were first issued. The intent of the
COI provisions is to ensure that State agencies, AAAs, and service
providers carry out the objectives of the Act consistent with the best
interests of the older people they serve.
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\26\ 42 U.S.C. 3027(a)(7).
---------------------------------------------------------------------------

``Cost Sharing''
We clarify the definition of cost sharing to implement the intent
of section 315 of the Act.\27\ The term ``cost sharing'' generally
refers to the portion of the cost of an item or service for which an
individual is responsible in order to receive that item or service.
However, this term is used differently in the Act than it is commonly
used in other settings. There are many restrictions on how cost sharing
may be implemented under the Act, including that an eligible individual
may not be denied service for failure to make a cost sharing payment.
The OAA allows for cost sharing from certain individuals for some
services,\28\ but State agencies that wish to allow the practice of
cost sharing must comply with a number of requirements, which are
described in Sec. 1321.9(c)(2)(xi).
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\27\ 42 U.S.C. 3030c-2.
\28\ 42 U.S.C. 3030c-2(a)(2) prohibits a State agency from
implementing cost sharing for the following services: information
and assistance, outreach, benefits counseling, or case management;
ombudsman, elder abuse prevention, legal assistance, or other
consumer protection services; congregate and home-delivered meals;
and any services delivered through Tribal organizations. 42 U.S.C.
3030c-2(a)(3) prohibits cost-sharing for any services delivered
through a Tribal organization or to an individual whose income is at
or below the FPL. State agencies are prohibited from considering
assets and other resources when considering whether a low-income
individual is exempt from cost-sharing, when creating a sliding
scale for cost sharing, or when seeking a contribution from a low-
income individual.
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``Cost Sharing'' and ``Voluntary Contributions''
Comment: We received a mix of comments on these definitions; some
commenters felt the definitions were clear as drafted, while others
disagreed or asked for further clarification.
Response: We have revised the definition of ``voluntary
contributions'' to read, ``[. . .] means donations of money or other
personal resources given freely, without pressure or coercion, by
individuals receiving services under the Act.'' For consistency, we
have also revised this definition in part 1322. We intend to address
other suggestions and requests for clarification through technical
assistance.
``Family Caregiver''
We define ``family caregiver'' to include the following subsets:
adult family members or other individuals who are caring for an older
individual, adult family members or other individuals who are caring
for an individual of any age with Alzheimer's disease or a related
disorder with neurological and organic brain dysfunction, and ``older
relative caregivers'' (defined below). With this inclusive approach to
defining ``family caregiver,'' we include those populations specified
in the National Family Caregiver Support Program, as set forth in Title
III, part E of the Act. For example, this includes unmarried partners,
friends, or neighbors caring for an older adult.
Comment: We received one comment suggesting that individuals of
working age who are not adults should be included in the definition of
family caregiver.
Response: ACL appreciates this comment. Entities implementing
services for family caregivers have the discretion to define an
``adult'' in this context or to consider such individuals as ``other
individuals'' as used in the definition, so long as they comply with
State agency policies and procedures, these regulations, and any other
applicable Federal requirements.
Comment: We received many comments supporting an inclusive
definition of family caregiver, as well as suggestions for expanded
wording of the definition. One commenter recommended ACL consider
alternatives to the term ``informal'' within the family caregiver
definition to avoid minimizing their invaluable role and avoid
inaccuracy due to some receiving financial compensation.
Response: ACL appreciates these comments and concurs that the
definition includes non-traditional families and families of choice. We
believe that the definition of ``an adult family member, or another
individual'' and the subsequent preamble explanation that this
``includes unmarried partners, friends, or neighbors'' is sufficiently
broad. To address family caregivers who may receive limited financial
compensation, we have revised the definition to add, ``For purposes of
this part, family caregiver does not include individuals whose primary
relationship with the older adult is based on a financial or
professional agreement.'' We have also revised this definition in part
1322.
``Greatest Economic Need''
One of the basic tenets of the Act is focusing OAA services on
individuals who have the greatest economic need. The definition of
``greatest economic need'' in the Act incorporates income and poverty
status. The Act also permits State agencies to set policies, consistent
with our regulations, that incorporate other considerations into the
definition of ``greatest economic need.'' \29\ Through its policies,
the State agency may permit AAAs to further refine specific target
populations of greatest economic need within their PSA.\30\ A variety
of local conditions and individual situations, other than income, could
factor into an individual's level of economic need. State agencies and
AAAs are in the best position to understand the conditions and factors
in their State and local areas that contribute to individuals falling
within this category. Accordingly, this definition allows State
agencies and AAAs to further refine target populations of greatest
economic need.
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\29\ 42 U.S.C. 3026(a)(4)(A)(i)(I)(aa).
\30\ 42 U.S.C. 3025(a)(1).
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Comment: We received multiple comments expressing support for
focusing services on those in greatest economic need. One commenter
stated that it would be beneficial to create a process of enabling
local AAAs to set standards and definitions to reflect local needs.
Response: ACL appreciates these comments and notes that the
preamble discussion supports local targeting. Furthermore, Sec.
1321.27(d) and

[[Page 11574]]

Sec. 1321.65(b)(2) permit the State agency and AAAs to further refine
specific target populations of greatest economic need based on local
and individual factors.
Comment: Some commenters noted that the definition in Sec. 1321.3
of ``greatest social need'' does not entirely align with the text at
Sec. 1321.27 and Sec. 1321.65.
Response: We appreciate commenters raising this issue; we have
revised these provisions for consistency.
Comment: Some commenters expressed concern that the expanded
definition of greatest social need could diminish the focus on those in
greatest economic need if the revised definition results in changing an
intrastate funding formula (IFF).
Response: Changes to IFFs are one, but not an exclusive, method of
targeting and prioritizing services to those in greatest social need.
We provide additional discussion on methods to target and prioritize
services to those in greatest economic and greatest social need in the
preamble discussion under Sec. 1321.27.
``Greatest Social Need''
Focusing OAA services on individuals who have the greatest social
need is one of the basic tenets of the Act. ``Greatest social need'' is
defined in the Act as ``need caused by noneconomic factors'' including
physical and mental disabilities, language barriers, and cultural,
social, or geographic isolation, including isolation caused by racial
or ethnic status that restricts the ability of an individual to perform
normal daily tasks or threatens the capacity of the individual to live
independently.\31\ This definition allows for consideration of other
noneconomic factors that contribute to cultural, social, or geographic
isolation.
---------------------------------------------------------------------------

\31\ 42 U.S.C. 3002(24).
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For example, in multiple places the Act requires special attention
to the needs of older individuals residing in rural locations. In some
communities, such isolation may be caused by religious affiliation.
Isolation may also be related to sexual orientation, gender identity,
or sex characteristics. For example, research indicates that LGBTQI+
older adults are at risk for poorer health outcomes and have lived
through discrimination, social stigma, and the effects of prejudice,
impacting their connections with families of origin, lifetime earnings,
opportunities for retirement savings, and ability to trust health care
professionals and aging services providers.\32\ People aging with HIV
are a growing population with distinct needs. The experience of HIV
stigma may contribute to isolation and feelings of loneliness and be
complicated by other stigmatized or marginalized components of an
individual's identity, including age, race, sexual orientation, and
gender identity. Older people with HIV report poor mental and physical
health at higher rates than their HIV negative counterparts, as well as
difficulty accessing necessary supports and services like
transportation, nutrition, and housing.\33\
---------------------------------------------------------------------------

\32\ Nat'l Resource Ctr. on LGBT Aging, Inclusive Services for
LGBT Older Adults: A Practical Guide to Creating Welcoming Agencies
(2020), <a href="https://www.lgbtagingcenter.org/resources/pdfs/Sage_GuidebookFINAL1.pdf">https://www.lgbtagingcenter.org/resources/pdfs/Sage_GuidebookFINAL1.pdf</a>.
\33\ State of Aging with HIV: Third National Survey, HealthHIV
(2023) <a href="https://healthhiv.org/stateof/agingwithhiv/?eType=EmailBlastContent&eId=883056c6-e9af-47dc-a653-022e1f4fb9fc">https://healthhiv.org/stateof/agingwithhiv/?eType=EmailBlastContent&eId=883056c6-e9af-47dc-a653-022e1f4fb9fc</a>;
Mark Brennan-Ing, Emerging Issues in HIV and Aging, prepared for the
HIV and Aging Policy and Action Collation (May 11, 2020), <a href="https://www.sageusa.org/wp-content/uploads/2020/07/emerging-issues-in-hiv-and-aging-may-2020.pdf">https://www.sageusa.org/wp-content/uploads/2020/07/emerging-issues-in-hiv-and-aging-may-2020.pdf</a>.
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Other chronic conditions may also result in isolation or stigma, as
may housing instability, food insecurity, lack of access to reliable
and clean water supply, lack of transportation, utility assistance
needs, or interpersonal safety concerns, including abuse, neglect, and
exploitation.
We received many comments through the RFI and the NPRM comment
period urging ACL to set clear and consistent expectations regarding
the populations to be included, and our intent is to do so in this
definition. As with ``greatest economic need,'' the Act permits State
agencies to set policies, consistent with our regulations, that further
define the noneconomic considerations that contribute to populations
designated as having the ``greatest social need.'' \34\ Through its
policies, the State agency may permit AAAs to further refine specific
target populations of greatest social need within their PSAs.\35\ State
agencies and AAAs are in the best position to understand additional
conditions and factors in their State and local areas that contribute
to individuals falling within this category. Accordingly, this
definition allows State agencies and AAAs to further refine target
populations of greatest social need.
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\34\ 42 U.S.C. 3026(a)(4)(A)(i)(I)(aa).
\35\ 42. U.S.C. 3025(a)(1).
---------------------------------------------------------------------------

Comment: We received multiple comments expressing support for
focusing services on those in greatest social need. One commenter
stated it would be beneficial to create a process of enabling local
AAAs to set standards and definitions to reflect local needs.
Response: ACL appreciates these comments and notes that the
preamble discussion supports local targeting. Furthermore, Sec.
1321.27(d) and Sec. 1321.65(b)(2) permit the State agency and AAAs to
further refine specific target populations of greatest social need
based on local and individual factors.
Comment: Commenters suggested various additions to the list of non-
economic factors, such as ``solo older adults,'' people living alone
with cognitive impairments, older individuals who are experiencing
abuse, neglect, self-neglect, and/or exploitation, and formerly
incarcerated individuals. One commenter requested a modification from
``normal'' to ``routine'' in proposed (9)(i). Other commenters
disagreed with the proposed definition and/or provided other
suggestions. For example, some commenters raised the concern that the
definition is inadequate regarding racial or ethnic status because it
only mentions it in the context of isolation when impacts are far more
extensive, including experiences of incarceration, higher rates of
poverty and homelessness, health inequities such as being served in
underperforming facilities, and lack of trust in external services and
service providers. Commenters also requested clarification as to
whether sensory loss or sensory impairment, including deafness, being
hard of hearing, blindness, and having low vision, may be considered
under ``physical and mental disabilities'' or ``chronic conditions.''
Response: ACL appreciates these comments and recognizes that there
are various additional factors that a State agency or a AAA may wish to
include within the category of ``[o]ther needs as further defined by
State and area plans based on local and individual factors[.]'' Such
factors may be included in the target populations that a State agency
or a AAA may define pursuant to Sec. 1321.27(d)(1) and Sec.
1321.65(b)(2)(i), respectively. Additionally, we acknowledge that the
concepts included in our definition may be expressed using different
words. For example, ``solo older adults'' or ``older adults living
alone'' may be included as examples of experiences of cultural, social,
or geographical isolation due to ``any other status'' under (3)(x) of
this revised definition. We have added ``routine'' to (3)(x)(a) in
addition to the statutory term, ``normal.''
ACL recognizes the extensive impacts to older adults who may face
cumulative effects of a lifetime of

[[Page 11575]]

isolation caused by racial or ethnic status which restrict the ability
of an individual to perform routine daily tasks or threaten the
capacity of an individual to live independently, such as experiences of
incarceration, higher rates of poverty and homelessness, health
inequities due to being served in underperforming facilities, and lack
of trust in external services and service providers. Considerations
relating to racial or ethnic status may be further defined under ``(x)
Other needs as further defined by State and area plans based on local
and individual factors[.]''
ACL confirms that sensory loss or sensory impairment, including
deafness, being hard of hearing, blindness, and having low vision, may
be considered under ``Physical and mental disabilities,'' ``Chronic
conditions,'' or separately defined as provided at ``Other needs as
further defined by State and area plans based on local and individual
factors[.]'' Older individuals who are experiencing abuse, neglect,
self-neglect, and/or exploitation may be considered under
``Interpersonal safety concerns,'' as well as under several of the
other population categories listed here, depending on the individual's
personal situation.
Comment: A commenter recommended including the concept of
``lifesaving/preservation'' (relating to the availability of
necessities such as water, access to food supplies, and electricity) in
the definition of greatest social need. This comment was raised in the
context of Indian reservations where, for example, water may need to be
manually hauled and electricity may be unavailable.
Response: ACL appreciates these comments. We acknowledge that
access to these types of necessities is important, and we have revised
the definition to include lack of access to reliable and clean water
supply. We have also amended the regulatory definition to better align
with the structure of the statutory provision.
ACL has determined that the definition as proposed, with the
revisions noted here, provides an appropriate balance in meeting the
intent of the Act and allowing for State and local agency
customization.
``Immediate Family''
Comment: We received one comment stating that the term ``immediate
family'' should include non-relatives that are socially connected,
especially including clan relationships in Tribal communities.
Response: This term is used specifically in the context of COI
policies at Sec. 1321.47 and Sec. 1321.67 requiring State agencies
and AAAs, respectively, to have policies and procedures ``[e]nsuring
that no individual, or member of the immediate family of an individual,
involved in administration or provision of a Title III program has a
conflict of interest[.]'' ACL declines to expand the definition of
immediate family to avoid creating an overly broad application of COI
provisions in Tribal communities. ACL notes that the definition of
``family caregiver'' set forth in Sec. 1321.3 and used in Sec.
1321.91 for provision of family caregiver support services includes
``[. . .] an adult family member, or another individual [. . .]'' which
includes non-relatives that are socially connected and clan
relationships in Tribal communities.
``In-Home Supportive Services''
Comment: We received supportive comments regarding this provision,
as well as comments requesting expansion of the in-home supportive
services identified. We received comment asking for the definition to
be altered or to otherwise remove the phrase ``[. . .] and that is not
available under another program'' regarding the example of minor
modification of homes for parity with the definition under part 1322,
to allow for collaboration with other programs, and to avoid excessive
burden in proving no other program is available.
Response: ACL appreciates these comments. We have revised (1) under
this definition to read, ``Homemaker, personal care, home care, home
health, and other aides[.]'' Recognizing that respite care of all types
assists older adults in avoiding institutionalization, we have revised
(4) under this definition to begin, ``Respite care for families[.]'' To
facilitate consistency of definitions and avoid excessive burden, we
have amended the phrase regarding minor modification of homes to state,
``[. . .] and that is not readily available under another program.'' We
have similarly amended this definition in part 1322 for consistency.
``Means Test''
Comment: We received several comments questioning how to prioritize
participants without means testing.
Response: The definition of ``means test'' in the final rule is
very similar to the previous regulatory definition. We updated the
definition to be consistent with the statute by adding family
caregivers and made other edits for clarity. Under the Act, service
providers may not determine an older adult or family caregiver to be
ineligible for services due to the participant's income, assets, or
other resources.\36\ However, service providers may determine that due
to limited resources and requirements to focus providing services to
those in greatest economic need and greatest social need, they are
unable to provide immediate service to some individuals. In such
situations, service providers may include prospective participants on a
waiting list; make referrals to other service providers or services;
offer to provide services under a private pay program, as set forth in
Sec. 1321.9(c)(2)(xiii); and/or advocate for additional resources.
Service providers may ask for financial information from prospective
participants to assess for needs, screen for other benefits or services
that may be available, establish priority for receipt of services, and
collect data for needs assessment, reporting, evaluation, and other
appropriate purposes.
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\36\ Section 315 of the OAA; 42 U.S.C. 3030c-2 (b)(3).
---------------------------------------------------------------------------

For example, a family caregiver seeking respite assistance may be
assessed by a AAA and found to have some financial resources, several
other family members providing care as back-up to the primary
caregiver, and a care recipient who has fewer care needs. A second
family caregiver seeking respite assistance from the AAA is caring for
a care recipient with very high care needs and is from an underserved
community, as identified in the State and area plan. This second family
caregiver may be prioritized for respite services by the AAA, as they
have very limited financial resources and no nearby sources of back-up
caregiving. The first family caregiver would not be ineligible for
services, but due to the respite program's limited resources might be
placed on a waiting list and referred to other services, including
those under private pay arrangements. While not receiving respite
services, the first family caregiver could also participate in
caregiver support group and education services provided by the AAA
under the Act.
The AAA could use the data collected regarding waiting lists and
unmet needs in its advocacy efforts. With successful advocacy efforts
resulting in an increase in funding for family caregiver programs, the
first family caregiver could then receive respite services when those
additional resources become available.
``Multipurpose Senior Center''
Comment: We received comments requesting a change from ``shall'' to
``may'' in the definition as proposed. We received comments questioning
the use

[[Page 11576]]

of the term ``multipurpose senior center'' to reference a service. We
also received comment disagreeing with the definition, including with
the inclusion of ``virtual facilities'' to the definition. Other
commenters expressed appreciation for the inclusion of ``virtual
facilities'' to reflect a growing number of programs and services
offered online after the pandemic, noting this may make programs more
accessible and equitable.
Response: We appreciate these comments and have revised Sec.
1321.3 (Definitions) to indicate ``[. . .] as used in Sec. 1321.85,
facilitation of services in such a facility.'' We have determined that
the inclusion of virtual facilities allows for the option of various
service modalities and that the use of the term ``as practicable''
allows for appropriate variation in local circumstances, while
remaining true to the definition of ``multipurpose senior center'' as
set forth in the Act and the intent for facilitation of such services.
We have made a corresponding revision to this definition in part 1322.
``Official Duties''
Comment: We received recommendations to clarify that
representatives of the Office may be carrying out the duties ``[. . .]
by direct delegation from, the State Long-Term Care Ombudsman'' in
addition to the proposed ``[. . .] under the auspices and general
direction of [. . .] the State Long-Term Care Ombudsman.''
Response: We appreciate the comments. We recognize that Ombudsman
programs operate in a variety of organizational structures and that
direct delegation is one way that programs are managed. We have
modified the definition as recommended and made a corresponding
revision to part 1324.
``Private Pay''
Comment: We received a comment requesting private pay and
commercial relationship be defined separately.
Response: We define private pay as a type of commercial
relationship. As discussed in our response to comments on Sec.
1321.9(c)(2)(xiv), we have declined to define ``commercial
relationship.''
``Program Development and Coordination Activities''
This term explains certain activities of State agencies and AAAs to
achieve the goals of the Act. This work includes the development of
innovative ways to address the evolving social service, health, and
economic climates in which they operate. Separate from administering
programs to provide direct services, State agencies and AAAs plan,
develop, provide training regarding, and coordinate at a systemic
level, programs and activities aimed at the Act's target populations.
In addition to this definition, we include language in Sec. 1321.27 to
clarify requirements for these activities.
``Severe Disability''
Comment: A number of commenters objected to our proposal to
eliminate the definition of ``severe disability'' from the regulation.
Commenters expressed concern that people with disabilities would no
longer sufficiently be considered within the definition of greatest
social need.
Response: We have reincorporated the statutory definition of
``severe disability'' into the regulation. We reiterate that people
with disabilities also meet the definition of the general term
``physical and mental disabilities.'' However, there are several
statutory references that require specifically prioritizing people with
``severe disabilities,'' and so we have incorporated the statutory
definition in this final rule.
Comment: We received other suggestions, program management
recommendations, and implementation questions regarding the definitions
in this provision.
Response: We decline to make further changes to this provision and
intend to address other suggestions and requests for clarification
through technical assistance.
Subpart B--State Agency Responsibilities
Sec. 1321.5 Mission of the State Agency
Section 1321.7 of the existing regulation (Mission of the State
agency) is redesignated here as Sec. 1321.5 for clarity with respect
to other relevant provisions. Section 1321.5 sets forth the State
agency's mission, role, and functions as a leader on all aging issues
in the State, and it specifies that the State agency will designate
AAAs in States with multiple PSAs to assist in carrying out the
mission. We include minor revisions to align with reauthorizations of
the statute, such as adding family caregivers as a service population
per the 2000 amendments (Pub. L. 106-501). We also update regulatory
references and revise language for clarity.
Comment: We received comments expressing support for the wording
used in this section, including the additional detailed grant
requirements for State agencies to develop comprehensive and
coordinated systems of service delivery. We received several
suggestions for other text to add to this section. Several commenters
also recommended cultural humility and cultural competency training for
the aging network, including regarding Tribal and disability issues.
Response: We appreciate these comments. We believe the text is
sufficient as drafted and that further examples, explanation, and
training opportunities may be addressed through technical assistance,
as appropriate.
Comment: One commenter questioned the proposed change to ``[. . .]
shall be the lead on all aging issues'' recommending instead ``be the
leader,'' recognizing that some aging issues may be led by other
entities within the State.
Response: ACL appreciates this comment and has revised this
statement to ``[. . .] shall be a leader on all aging issues[.]''
Sec. 1321.7 Organization and Staffing of the State Agency
Section 1321.9 of the existing regulation (Organization and
staffing of the State agency) is redesignated here as Sec. 1321.7. We
make several changes to the provision on organization and staffing for
consistency and for clarification. Minor changes at Sec. 1321.7(a),
(c), and (d) reflect consistent wording with the State agency's
obligations under 45 CFR part 1324 with respect to the administration
of the Ombudsman program. The Ombudsman program is authorized under
Title VII of the Act, and the implementing regulations for the program
were promulgated in 2015 at 45 CFR part 1324. Section 1321.7(d)
includes minor language changes to clarify the State agency's existing
obligations to carry out the Ombudsman program in accordance with the
Act's requirements, regardless of any applicable State law
requirements.
Section 307(a)(13) \37\ and section 731 \38\ of the Act require the
State agency to ensure that there is a Legal Assistance Developer and
other personnel, as needed, to provide State leadership in developing
legal assistance programs for older individuals throughout the State.
These staffing requirements are absent from the existing regulation
regarding staffing; we add a new paragraph (e) to this provision that
sets forth these requirements to assist State agencies to better
understand their obligations under the Act related to staffing. The
role of the Legal Assistance Developer is

[[Page 11577]]

discussed more fully in the preamble, below.
---------------------------------------------------------------------------

\37\ 42 U.S.C. 3027(a)(13).
\38\ 42 U.S.C. 3058j.
---------------------------------------------------------------------------

Comment: We received comments of support for language recognizing
the Ombudsman as the head of the Office of the State Long-Term Care
Ombudsman and for including expectations for the Legal Assistance
Developer. Other commenters expressed concern that provisions regarding
State agency oversight of the Ombudsman program would create
complexities within their State agency's current organizational
structure.
Response: We appreciate these comments. Regarding concerns with
oversight of the Ombudsman program, the updates included in the
proposed rule did not differ significantly from current regulatory
expectations. We have made a minor revision to proposed Sec. 1321.7(c)
for clarity. ACL will provide technical assistance to help State
agencies understand and satisfy these requirements.
Comment: We also received a recommendation that State agencies be
allowed to enter into a contract or other arrangement to designate an
individual as Legal Assistance Developer.
Response: State agencies have the discretion to make human
resources decisions about how to staff their agencies in order to
fulfill their obligations under the Act.
Sec. 1321.9 State Agency Policies and Procedures
We retitle the provision contained in Sec. 1321.11 of the existing
regulation (State agency policies) to better reflect the intent of the
provision and to redesignate it here as Sec. 1321.9. We also
incorporate provisions contained in Sec. 1321.45 (Transfer between
congregate and home-delivered nutrition service allotments), Sec.
1321.47 (Statewide non-Federal share requirements), Sec. 1321.49
(State agency maintenance of effort), Sec. 1321.67 (Service
contributions), and Sec. 1321.73 (Grant related income under Title
III-C) within this provision to consolidate and streamline applicable
requirements.
Section 305 of the Act requires the designated State agencies to
``[. . .] be primarily responsible for the planning, policy
development, administration, coordination, priority setting, and
evaluation of all State activities related to the objectives of this
Act[.]'' \39\ Consistent with that obligation, this final rule requires
State agencies to promulgate policies and procedures related to a range
of topics that fall within the State agency's authority to oversee
compliance with the State plan in Sec. 1321.9(c)(1) (policies and
procedures related to direct service provision) and Sec. 1321.9(c)(2)
(policies and procedures related to fiscal requirements). The policy
development process includes the establishment of procedures, which set
forth the steps to follow to implement policies. Accordingly, we have
included minor revisions to clarify that the policy development and
implementation process includes the establishment of procedures, as
well as policies.
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\39\ 42 U.S.C. 3025(a).
---------------------------------------------------------------------------

The language at Sec. 1321.9(a) is intended to (1) reflect
statutory updates (i.e., the LTCOP regulation (45 CFR part 1324) which
was promulgated in 2015); (2) clarify that the State agency's
obligations to develop policies and procedures extend to elder abuse
prevention and legal assistance development programs; (3) confirm the
ability of the State agency to allow procedures to be developed at the
AAA level, except where specifically prohibited; and (4) clarify the
State agency's responsibility for monitoring the compliance of
activities initiated under Title III with all applicable requirements
to ensure that grant awards are used for the authorized purposes and in
compliance with Federal law.
The Act contains many programmatic and fiscal requirements of which
State agencies must be aware and for which State agencies must have
established policies and procedures. For clarity and ease of reference,
we combine the areas for which State agencies must have established
policies and procedures in this provision. The first area relates to
data collection and reporting. Section 307 of the Act requires the
collection of data and periodic (at a minimum, once each fiscal year)
submission of reports to ACL regarding State agency and AAA
activities.\40\ ACL has implemented a national reporting system and
reporting requirements that must be used by all State agencies to
ensure timely and consistent reporting. Section 1321.9(b) sets forth
the State agency's responsibility to have policies and procedures to
ensure that its data collection and reporting align with ACL's
requirements.
---------------------------------------------------------------------------

\40\ 42 U.S.C. 3027.
---------------------------------------------------------------------------

Section 1321.9(c)(1) describes policies and procedures that State
agencies must establish to ensure that services provided under the Act
meet the requirements of the Act and are provided equitably and in a
consistent manner throughout the State, as appropriate.\41\ In response
to the RFI and the NPRM comment period, this section addresses comments
from AAAs and service providers that requested State agencies provide
transparency and clarity to AAAs and service providers about the
policies and procedures that they must follow, including setting
requirements for client eligibility, assessment, and person-centered
planning; specifying a listing and definitions of services that may be
provided; detailing any limitations on the frequency, amount, or type
of service provided; defining greatest economic need and greatest
social need, and specific actions the State agency will use or require
to provide services to those identified populations; how AAAs can
provide services directly; how voluntary contributions are to be
collected; and the grievance process for older adults and family
caregivers who are dissatisfied with or denied services under the Act.
As indicated in Sec. 1321.9(a), except for the Ombudsman program and
where otherwise indicated, the State agency policies may allow for
procedures to implement specific policies to be developed at the AAA
level. ACL strongly encourages State agencies to make their OAA
policies and procedures available to the public, either by posting them
online or by providing a point of contact at the State agency to
respond to requests for this information. Doing so may help ensure
accountability to the public regarding the implementation of OAA
programs and services.
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\41\ 42 U.S.C. 3025(a)(2); 42 U.S.C. 3012(a)(9).
---------------------------------------------------------------------------

Under section 306(a)(4)(A)(i)(I)(aa), AAAs are responsible for
setting specific objectives, consistent with State agency policy, for
provision of services to older individuals with greatest economic need
and greatest social need.\42\ Identifying such populations at the State
level facilitates consistent messaging and outreach, collaboration with
other State level organizations and interested parties, and development
of specific plans for the State agency, AAAs, and service providers to
implement, as intended by the Act. Definitions of these populations at
the State level are intended to provide statewide direction, while
maintaining the opportunity for additional definition of populations at
greatest economic need and greatest social need specific to local
circumstances as part of an area plan on aging as further set forth in
Sec. 1321.65. For example, a State agency might choose to define those
at greatest economic need to include individuals or households with an
income within a specific range (e.g., up to 125 percent of the Federal
poverty level (FPL)), and another State agency may include older

[[Page 11578]]

adults experiencing housing instability in their definition of greatest
economic need. A State agency might also choose to define those at
greatest social need to include people with low literacy, while another
State agency may include grandparents raising grandchildren due to
substance use disorder or loss of parents to COVID-19 in their
definition of greatest social need. There are multiple circumstances
where State level identification of needs may be further complemented
at the AAA level, such as older adults experiencing economic need due
to catastrophic flooding in a rural portion of a State, or a AAA
including older refugees in the community in their definition of
greatest social need.
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\42\ 42 U.S.C. 3026(a)(4)(A)(i)(I)(aa).
---------------------------------------------------------------------------

The Act sets forth at section 307(a)(8)(A) that services will not
be directly provided by a State agency or by a AAA, subject to certain
conditions. AAAs must receive State agency approval to provide direct
services. We clarify in this rule that the State agency must
communicate how the area agencies may request approval to directly
provide services.\43\ This section also incorporates the requirement
under section 307(a)(5)(B) of the Act that State agencies are required
to issue guidelines applicable to grievance processes for any older
adult or family caregiver who has a complaint about a service or has
been denied a service.\44\
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\43\ 42 U.S.C. 3027(a)(8)(A).
\44\ Id. section 3027(a)(5)(B).
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Section 1321.9(c)(2) requires State agencies to establish policies
and procedures related to the fiscal requirements associated with being
awarded funding for the Nutrition Services Incentive Program
(NSIP),\45\ Title III,\46\ and Title VII \47\ under the Act. Over the
years, we have found that some State agencies may be unaware of certain
requirements or may not understand their obligations under these
requirements. Section 1321.9(c)(2) provides guidance on the following
fiscal requirements: distribution of Title III \48\ and NSIP \49\
funds; non-Federal share (match) requirements; \50\ permitted transfers
of service allotments; \51\ maximum allocation amounts for State,
Territory, and area plan administration; \52\ minimum funding
expenditures for access to services, in-home supportive services, and
legal assistance; \53\ State agency maintenance of effort obligations;
\54\ requirements related to Ombudsman program expenditures and fiscal
management; \55\ minimum expenditures for services for older adults who
live in rural areas; \56\ reallotment of funds; \57\ voluntary
contributions, including cost-sharing at the election of the State
agency; \58\ use of program income; \59\ private pay programs; \60\
commercial relationships; \61\ buildings, alterations or renovations,
maintenance, and equipment; \62\ prohibition against supplantation;
\63\ monitoring of State plan assurances; \64\ advance funding; \65\
and fixed amount subawards.\66\ We provide further context for these
fiscal requirements in the following paragraphs.
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\45\ 42 U.S.C. 3030a(e).
\46\ 42 U.S.C. 3023.
\47\ 42 U.S.C. 3058a.
\48\ 42 U.S.C. 3025(a)(2)(C).
\49\ 42 U.S.C. 3030a(d).
\50\ 42 U.S.C. 3024(d), 3028(a)(1), 3029(b), 3030s-1(h)(2).
\51\ 42 U.S.C. 3028(a)(4), (5).
\52\ 42 U.S.C. 3024(d)(1), 3028(a), (b)(1)-(2).
\53\ 42 U.S.C. 3026(a)(2).
\54\ 42 U.S.C. 3029(c).
\55\ 42 U.S.C. 3027(a)(9)(A).
\56\ Id. section 3027(a)(3)(B)(i).
\57\ 42 U.S.C. 3024(b), 3058b(b).
\58\ 42 U.S.C. 3030c 2.
\59\ Id. section 3030c-2(a)(5)(c).
\60\ 42 U.S.C. 3020c; 42 U.S.C. 3026(g).
\61\ 42 U.S.C. 3026(a)(13)-(14).
\62\ 45 CFR 75; 42 U.S.C. 3030b, 3030d(b).
\63\ 42 U.S.C. 3026(a)(9)(B), 3030c-2(b)(4)(E), 3030d(d), 3030s-
2, 3058d(a)(4).
\64\ 42 U.S.C. 3025(a)(1)(A)-(C).
\65\ 45 CFR 75.305.
\66\ Id. section 75.353.
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Comment: Many commenters, including but not limited to State and
area agencies, expressed support for this section generally. One
commenter expressed support for the proposed rule, specifically Sec.
1321.9(a) and (b). Other commenters expressed support for specific
portions of Sec. 1321.9, including one commenter noted that the
prohibition against means testing is a strength of the Act, and another
expressed support for the requirement in Sec. 1321.9(c)(2)(i) that
State agency policies and procedures must provide for the prompt
disbursement of Title III funds and NSIP funds. Commenters also
supported the clarification in Sec. 1321.9(c)(2)(vi) that excess State
match reported on the Federal financial report does not become part of
the maintenance of effort unless the State agency certifies the excess.
Commenters additionally supported the requirement to have policies
clarifying that funds awarded under certain sections of the Act cannot
supplant existing Federal, State, and local funds (Sec.
1321.9(c)(2)(xvi)) and the requirement to have policies which address
monitoring for compliance with assurances (Sec. 1321.9(c)(2)(xvii)).
Response: ACL appreciates the support for this provision, the
purpose of which is to consolidate, and to make easier to locate,
applicable requirements of the Act for which State agencies should have
established policies and procedures.
Comment: A commenter sought guidance as to whether Sec. 1321.9
requires State agencies to monitor the performance of Ombudsman
programs.
Response: Regarding concerns with oversight of the Ombudsman
program, the requirements in the final rule do not differ significantly
from current regulatory expectations. ACL will provide technical
assistance to help State agencies understand and sufficiently meet
these requirements.
Sec. 1321.9(b)
Comment: ACL received several comments requesting additional
guidance and direction with respect to the collection of data (such as
data on sexual orientation and gender identity, data regarding
populations experiencing greatest economic need and greatest social
need, and data stratification). Some commenters expressed concern as to
additional data collection that may be required in connection with the
expansion of the definitions of greatest economic need and greatest
social need. Other commenters were concerned about potential costs
associated with changes to data collection expectations. We also
received various comments asking for improvements in ACL's data
collection efforts, including specific data collection on sexual
orientation and gender identity.
Response: Section 307(a)(4) of the Act requires the collection of
data and periodic submission of reports to ACL regarding State agency
and AAA activities.\67\ ACL has developed a system for these purposes
and has implemented reporting requirements that must be used by all
State agencies to ensure timely and consistent reporting, as well as
the quality and accuracy of the data reported. These reporting
requirements include, among other things, data that must be collected
by all State agencies (at a minimum, once each fiscal year). Specific
details on the reporting system and its related requirements are
outside the scope of the final rule. ACL is available to provide
technical assistance to State agencies regarding data collection and
reporting.
---------------------------------------------------------------------------

\67\ 42 U.S.C. 3027(a)(4).
---------------------------------------------------------------------------

Comment: Some commenters suggested that certain requirements be
added to the proposed rule related to abuse and neglect of older
adults. One commenter noted that the Ombudsman program is required to
serve all residents and does not prioritize clients

[[Page 11579]]

based on greatest social need or greatest economic need and requested
the proposed rule be clarified to acknowledge this distinction.
Response: ACL declines to add any requirements to part 1321 of the
rule related to abuse and neglect of older adults. The Ombudsman
program and programs for the prevention of elder abuse, neglect, and
exploitation are established pursuant to Title VII of the Act.\68\ ACL
believes that Title VII of the Act and its accompanying regulation (45
CFR part 1324) adequately address requirements for these programs and
that no additional clarification is needed in the final rule.
---------------------------------------------------------------------------

\68\ 42 U.S.C. 3058 et seq.
---------------------------------------------------------------------------

Comment: Some State agencies and AAAs expressed concern that the
requirements in Sec. 1321.9 regarding the promulgation of policies and
procedures are too burdensome.
Response: The Act contains many programmatic and fiscal
requirements of which State agencies should be aware, and section 305
of the Act requires State agencies to develop policies for ``[. . .]
all State activities related to the objectives of this Act[.]'' \69\
Substantially all requirements included in this section are set forth
in the Act; accordingly, State agencies should be aware of them and
already should have policies and procedures in place. For clarity and
ease of reference, we combined the areas for which State agencies
should have established policies and procedures in this provision to
assist State agencies in understanding their obligations under, and
ensuring their compliance with, the Act. ACL understands that some
State agencies' existing policies and procedures may not address all
areas included in this section. To give State agencies ample time to
establish or update their policies and procedures, ACL has deferred the
compliance date of the rule to October 1, 2025.
---------------------------------------------------------------------------

\69\ 42 U.S.C. 3025(a)(1)(C).
---------------------------------------------------------------------------

Comment: One commenter recommends that the term ``policies and
procedures'' be defined to also include State administrative rules or
contractual obligations.
Response: ACL declines to define ``policies and procedures'' in
order to provide flexibility to the State agencies and to allow them to
take into account applicable State requirements and standard practices
with respect to the development of policies and procedures, which can
vary from one State to another.
Sec. 1321.9(c)(1) Direct Service Provision
Comment: A commenter requested that the list in Sec. 1321.9(c)(1)
of topics related to direct services for State agencies be a suggested
list, rather than a required list of topics to be covered.
Response: ACL declines to revise the regulatory language as
requested. The topics covered are the minimum, essential areas for
which State agencies should have policies and procedures to administer
direct services as contemplated by the Act. State agencies may elect to
adopt additional policies and procedures with respect to the provision
of direct services under the Act.
Comment: With respect to Sec. 1321.9(c)(1)(i), which requires
State agencies to develop policies and procedures regarding
requirements for client eligibility, periodic (at a minimum, once each
fiscal year) assessment, and person-centered planning, one commenter
suggested that ACL require AAAs to consider the full array of available
long-term service and support options, inclusive of community-based
long-term services and supports, such as Programs of All-Inclusive Care
for the Elderly (PACE programs).
Response: ACL appreciates the comment, but ACL declines to direct
State agencies as to the specific requirements that State agencies must
include in these policies and procedures. State agencies are in the
best position to make such decisions based on conditions and need in
their States, and ACL leaves these determinations to the State
agencies.
Comment: Section 1321.9(c)(1), requires State agencies to have
policies and procedures regarding the definition of those with greatest
economic need and those with greatest social need within their States.
One commenter recommended that ACL provide more detailed guidance on
strategies for reaching populations with the ``greatest economic
need.'' The commenter also recommended that ACL provide guidance
regarding methods for measuring their success in reaching such
populations and requested additional guidance regarding the definition
of ``greatest economic need'' to prevent ``unintended consequences''
and to ensure that vulnerable older adults receive essential services.
Commenters also recommended that we impose additional limitations on
State agency determinations related to the definitions of greatest
social need and greatest economic need, including recommendations of
other populations to include and how such determinations should be made
and disclosed.
Response: ACL retains the regulatory text in Sec. 1321.9(c)(1) as
proposed. ACL believes the definitions in Sec. 1321.3 of greatest
economic need and greatest social need, as well as the requirements in
Sec. 1321.27 regarding information required to be included in the
State plan, adequately address these concerns.
Regarding the comments raised with respect to the definition of
``greatest economic need,'' the definition in the Act incorporates
income and poverty status. The Act also permits State agencies to set
policies, consistent with ACL's regulations, that incorporate other
considerations into the definition of ``greatest economic need,'' and
the discussion in Sec. 1321.3 above includes additional guidance for
State agencies regarding how to define ``greatest economic need.'' \70\
Through its policies, the State agency may permit AAAs to further
refine specific target populations of greatest economic need within
their PSAs. A variety of local conditions and individual situations,
other than income, could factor into an individual's level of economic
need. State agencies and AAAs are in the best position to understand
the conditions and factors in their State and local areas that
contribute to individuals falling within this category. Accordingly,
this definition allows State agencies and AAAs to further refine target
populations of greatest economic need. To maximize the flexibility
afforded to State agencies in making these determinations, ACL declines
to provide more specific direction in the final rule. Any additional
guidance that may be appropriate will be offered by ACL via technical
assistance.
---------------------------------------------------------------------------

\70\ 42 U.S.C. 3026(a)(4)(A)(i)(I)(aa); 42. U.S.C. 3025(a)(1).
---------------------------------------------------------------------------

Sec. 1321.9(c)(2)(i) Intrastate funding formula (IFF).
The Act sets forth requirements for distribution of Title III funds
within the State in section 305(a)(2)(C)-(D).\71\ The Act requires
distribution to occur via an IFF (further defined in Sec. 1321.49) or
funds distribution plan (further defined in Sec. 1321.51). The IFF is
required for States with multiple PSAs, and a funds distribution plan
is required for single PSA States. Through this provision, we also
require that funds be promptly disbursed using the IFF or funds
distribution plan and to allow fixed amount subawards up to the
simplified acquisition threshold, as set forth in 45 CFR 75.353.
---------------------------------------------------------------------------

\71\ 42 U.S.C. 3025(a)(2)(C)-(D).
---------------------------------------------------------------------------

Comment: Some commenters requested definitions of the terms
``promptly disbursed'' ``fixed amount subawards,'' and ``subaward'' as
used in this section. One commenter asked how

[[Page 11580]]

State agencies will be monitored for compliance.
Response: The requirement that funds be promptly disbursed can be
found in section 311(d)(4) of the Act, and ACL declines to provide a
definition for this term.\72\ State agencies should define this term in
their policies and procedures. Such definitions should include a
reasonable time frame and should take into account State fiscal policy
(which can vary from one State to another). For a definition of
``subaward'' see 2 CFR 200.1 and 45 CFR 75.2, and for an explanation of
``fixed amount subaward'' see 2 CFR 200.333 and 45 CFR 75.353. State
agencies should have systems in place to monitor their compliance with
the requirements of the Act, which ACL will regularly review as part of
State plan review, in addition to ACL's other fiscal and program
monitoring activities.
---------------------------------------------------------------------------

\72\ 42 U.S.C. 3030a.
---------------------------------------------------------------------------

In the course of reviewing Sec. 1321.9(c)(2)(i) in response to
comments received, ACL has determined that the language in this section
should be clarified. Accordingly, ACL has revised the regulatory text
of Sec. 1321.9(c)(2)(i). In addition, ACL has moved the language
regarding fixed amount subawards from this section to a new Sec.
1321.9(c)(2)(xix) and has simplified the language used in this
provision. For a definition of ``simplified acquisition threshold'' see
2 CFR 200.1 and 45 CFR 75.2. ACL will provide technical assistance, as
needed, regarding Sec. 1321.9(c)(2)(xix).
Comment: ACL received several other suggestions, recommendations,
and implementation questions regarding the IFF.
Response: We intend to address any additional issues related to the
IFF through technical assistance.
Sec. 1321.9(c)(2)(ii) Non-Federal Share (Match)
The provision contained in Sec. 1321.47 (Statewide non-Federal
share requirements) of the existing regulation is redesignated here as
Sec. 1321.9(c)(2)(ii) and revised. The Act includes requirements for
non-Federal share (match) funds from State or local sources, as set
forth in sections 301(d)(1),\73\ 304(c),\74\ 304(d)(1)(A),\75\
304(d)(1)(D),\76\ 304(d)(2),\77\ 309(b),\78\ 316(b)(5),\79\ and
373(h)(2).\80\ We consolidate and streamline the requirements by
listing the requirements and considerations that apply to such funds.
We have received frequent technical assistance requests concerning the
allowability of using funding for services that are means tested for
match. We clarify that State or local public resources used to fund a
program which uses a means test shall not be used to meet match
requirements. We also clarify that a State agency or AAA may determine
match in excess of required amounts, and we clarify match requirements
that apply to service and administration costs for each type of grant
award under Title III of the Act. We also provide prior written
approval for unrecovered indirect costs to be used as match.
---------------------------------------------------------------------------

\73\ 42 U.S.C. 3021(d)(1).
\74\ 42 U.S.C. 3023(c).
\75\ Id. section 3023(d)(1)(A).
\76\ Id. section 3023(d)(1)(D).
\77\ Id. section 3023(d)(2).
\78\ 42 U.S.C. 3029(b).
\79\ 42 U.S.C. 3030c-3(b)(5).
\80\ 42 U.S.C. 3030s-1(h)(2).
---------------------------------------------------------------------------

Comment: One commenter suggested that ACL encourage State agencies
to allow the use of unrecovered facilities and administrative or
indirect costs as match for administration.
Response: ACL appreciates this comment and notes that the rule
authorizes unrecovered indirect costs to be used as match (see Sec.
1321.9(c)(2)(ii)(J)(1)). ACL encourages State agencies to consider this
approach, subject to State agency policies and procedures. ACL will
provide technical assistance, as requested.
Comment: We received multiple comments supporting the use of means
tested funds to count toward the required match. In addition, many
commenters requested clarification on, or objected to, Sec.
1321.9(c)(2)(ii)(C), which provides that ``State or local public
resources used to fund a program which uses a means test shall not be
used to meet the match.''
Response: The prohibition against using State or local public
resources which use a means test to count toward match is due to the
prohibition against means testing in the OAA under section
315(b)(3).\81\ Match for the federal grant is the non-federal share of
the total project costs that a grantee is required to contribute to
achieve the purposes of the award and allowability of costs must
conform to any limitations or exclusions set forth in the Federal
award, 2 CFR 200.403(b) and 45 CFR 75.403(b). Therefore, match must
meet the same requirements that apply to allowed costs under the Act,
and the Act prohibits means testing. Accordingly, we maintain the
regulatory language of Sec. 1321.9(c)(2)(ii)(C) as proposed. ACL will
further address this requirement through technical assistance, as
needed.
---------------------------------------------------------------------------

\81\ 42 U.S.C. 3030c-2(b)(3).
---------------------------------------------------------------------------

Comment: A commenter asked for clarification regarding the
difference between means testing and prioritizing services for
individuals of ``greatest economic need.''
Response: Means testing is a criterion used to determine an
individual's financial eligibility for a program. If an individual's
resources exceed the determined limit for a program, the individual is
ineligible for a program--that individual cannot participate in the
program even if the program has sufficient resources to be able to
serve them. On the other hand, the use of ``greatest economic need'' is
a way to prioritize services for those who are most in need of the
service; it does not deem those of lesser economic need to be
ineligible for the program.
Comment: Some commenters expressed concern that a State agency or
AAA may determine a match in excess of amounts required under the Act.
Response: The Act does not prohibit a State agency or AAA from
requiring a match in excess of amounts required under the Act, and ACL
leaves these decisions to State agencies and AAAs to determine in
accordance with State agency and AAA policies and procedures. ACL
encourages State agencies to make requirements clear in terms and
conditions of subaward agreements.
Comment: Some commenters requested that the match requirements be
reduced.
Response: The match requirements are set by the Act, and ACL has no
authority to reduce them.
Comment: Some commenters requested clarification regarding Sec.
1321.9(c)(2)(ii)(I), which provides that other Federal funds may not be
used as match for programs funded under Title III of the Act unless
there is specific statutory authority.
Response: The Act does not provide statutory authority for other
Federal programs to meet match requirements. ACL will provide
additional guidance through technical assistance, as needed.
Sec. 1321.9(c)(2)(iii) Transfers
The provision contained in Sec. 1321.45 of the existing regulation
(Transfer between congregate and home-delivered nutrition service
allotments) is redesignated here as Sec. 1321.9(c)(2)(iii) and
revised. The Act allows for transfer of service allotments to provide
some flexibility to meet State and local needs. ACL allocates Title III
funding to State agencies by parts of the Act (for example, the
supportive services allocation is designated as part B and the
nutrition services allocation is designated as part C, and further by
subpart (for example, part C-1 funding is for congregate meals and part
C-2

[[Page 11581]]

funding is for home-delivered meals)). We list the requirements and
considerations that apply if a State agency elects to make transfers
between allotments, including the parts and subparts of Title III which
are subject to transfer of allocations, the maximum percentage of an
allocation which may be transferred between parts and subparts, and a
confirmation that such limitations apply in aggregate to the State
agency. For example, a State may find that older individuals have a
need for transportation to congregate meal sites. A State agency is
able to transfer, within allowed limits, allotments from the congregate
meal nutrition grant award (part C-1) to the supportive services grant
award (part B) to provide transportation to meet State and local
service needs.
Comment: ACL received several comments on this section, which
addresses transfers between Title III, parts C-1 and C-2 and between
Title III, parts B and C. The comments on this section were mixed. Some
expressed support for the provision, while other commenters expressed
that the transfer limitations are unnecessarily burdensome, and that
AAAs should be able to make transfers as they see fit and without State
agency approval.
Response: ACL does not have the authority to modify this
requirement. Section 308(b) of the Act does not allow the State agency
to delegate authority to make a transfer to a AAA or any other
entity.\82\ However, section 308 of the Act requires the State agency,
in consultation with AAAs, to ensure that the process used by the State
agency in transferring funds between Title III, parts C-1 and C-2 and
between Title III, parts B and C is simplified and clarified to reduce
administrative barriers. We have also clarified that for transfers
between parts C-1 and C-2, State agencies must direct limited resources
to the greatest nutrition service needs at the community level. We have
added these requirements to Sec. 1321.9(c)(2)(iii). Given the volume
of comments on this issue, ACL will further address these requirements
through technical assistance, as needed.
---------------------------------------------------------------------------

\82\ 42 U.S.C. 3028(b).
---------------------------------------------------------------------------

Sec. 1321.9(c)(2)(iv) State, Territory, and Area Plan Administration
Section 308 of the Act sets limits on the amount of Title III funds
which may be used for State, Territory, and area plan
administration.\83\ In this provision, we specify the requirements and
considerations that apply, including flexibilities that some State
agencies of single planning and service States may exercise and how the
State agency may calculate the maximum amounts available for AAAs to
use. We receive regular requests for technical assistance about the use
of funds for plan administration. This provision is intended to provide
clarity to State agencies. For example, State agencies may either
receive five percent of their funding allocation or $750,000 ($100,000
for certain Territories) of their total Title III allocation as set
forth in the Act to complete the State plan administration activities
required by the Act. Plan administration activities include planning,
coordination, and oversight of direct services provided with the
remainder of the Title III allocation. The State, Territory, and area
plan administration allocation amounts may be taken from any same
fiscal year Title III award allocation at any time during the grant
period and may be allocated to any part of the same fiscal year Title
III grant allocation, with the statutory exception of allocation of
area plan administration to part D (which provides funding for
evidence-based disease prevention and health promotion programs). In
States with multiple PSAs, we clarify section 304(d)(1)(A) of the Act
and better streamline implementation of maximum allocation amounts.\84\
We specify that the maximum amount the State agency may make available
for area plan administration is ten percent of the total amount of
funding allocated to AAAs. This funding may be made available to AAAs
in accordance with the IFF for the purpose of area plan administration,
which we further address in Sec. 1321.57(b).
---------------------------------------------------------------------------

\83\ Id. section 3028.
\84\ 42 U.S.C. 3024(d)(1)(A).
---------------------------------------------------------------------------

Comment: We received comment asking ACL to limit the amount of area
plan administration funds that may be spent on the development of
private pay or other contracts and commercial relationships.
Response: Funds for area plan administration are limited to ten
percent of the total funding allocated to AAAs. AAAs must complete the
area plan activities required under the Act and as set forth by State
agency policies and procedures; development of private pay programs or
other contracts and commercial relationships is allowable, but not
required. Given the levels of funding for Title III programs under the
Act and the responsibility for State agencies to set policies and
procedures, ACL does not believe further limitation is needed.
Comment: One commenter expressed that too much OAA funding is
allocable to State and area plan administration and requested that the
administration of OAA programs be streamlined, while another expressed
that amounts available for area plan administration should be
increased, noting that area plan administration costs exceed the
maximum that can be made available under the Act.
Response: The maximum amounts for State and area plan
administration are specified in the Act, and ACL does not have the
authority to modify such amounts. Accordingly, ACL maintains the
regulatory language for this provision as proposed.
Sec. 1321.9(c)(2)(v) Minimum Adequate Proportion
The Act sets forth requirements that the State plan must identify a
minimum proportion of funds that will be spent on access services, in-
home supportive services, and legal assistance. Our final rule requires
the State agency to have policies and procedures to implement these
requirements.
Comment: A commenter expressed concern about the impact of Sec.
1321.9(c)(2)(v) in States that may lack continuity of leadership in
their State agencies. The commenter also expressed concern that minimum
expenditure requirements set by State agencies could impact the area
agency and service provider network, given limited availability of OAA
funds. Another commenter expressed concern that decisions on minimum
adequate proportion amounts that will be expended on access services,
in-home supportive services, and legal assistance will take away from
current service levels in other areas without more funding being made
available.
Response: ACL appreciates these concerns but declines to make any
modifications to this section. Section 307(a)(2)(C) of the Act requires
each State plan to specify a minimum proportion of Title III, part B
funds that will be used by area agencies to provide access services,
in-home supportive services, and legal assistance.\85\ Accordingly, ACL
does not have the authority to modify this requirement. Finally, the
minimum expenditure requirements in this section are not new
requirements; State and area agencies are already subject to these
requirements.
---------------------------------------------------------------------------

\85\ 42 U.S.C. 3027(a)(2)(C).
---------------------------------------------------------------------------

Comment: A commenter suggested that ACL modify Sec.
1321.9(c)(2)(v) to require each State plan to specify a minimum
proportion of funds that will be used by area agencies to provide
caregiver support services, in addition

[[Page 11582]]

to access services, in-home supportive services, and legal assistance.
Response: ACL declines to make the requested change. The Act does
not require that Title III, part B funds be used to provide caregiver
support services, and ACL declines to impose such a requirement on
State agencies. Title III, part E funds are specified to provide family
caregiver support services. ACL leaves the decision to the State
agencies as to whether to use Title III, part B funds for caregiver
services in accordance with the Act, in order to afford flexibility to
the State agencies as to how to allocate Title III, part B funding.
Sec. 1321.9(c)(2)(vi) Maintenance of Effort
The provision contained in Sec. 1321.49 (State agency maintenance
of effort) of the existing regulation is redesignated here as Sec.
1321.9(c)(2)(vi) and revised. The final rule requires State agencies to
develop fiscal policies and procedures related to requirements under
the Act, corresponding to sections 309(c) \86\ and 374.\87\ These
requirements include expending specific minimum maintenance of effort
amounts, which are calculated as required by the Act. In response to
technical assistance requests, we also clarify that excess amounts
reported in other reports, such as the Federal financial report (SF-
425), do not become part of the amounts used in calculating the minimum
required maintenance of effort expenditures, unless the State agency
specifically certifies the excess amounts for such purpose.
---------------------------------------------------------------------------

\86\ 42 U.S.C. 3029.
\87\ 42 U.S.C. 3030s-2.
---------------------------------------------------------------------------

Comment: Two commenters recommended that Sec. 1321.9(c)(2)(vi) be
amended to allow for one-time appropriations of State funding to be
excluded from the Act's maintenance of effort requirement for Title
III.
Response: ACL understands these concerns. ACL is unable to
accommodate this suggestion, however, as this requirement is based on
the language in section 309(c) of the Act, which provides that ``[a]
State's allotment under section 304 [of the Act] for a fiscal year
shall be reduced by the percentage (if any) by which its expenditures
for such year from State sources under its State plan approved under
section 307 [of the Act] are less than its average annual expenditures
from such sources for the period of 3 fiscal years preceding such
year.'' \88\
---------------------------------------------------------------------------

\88\ 42 U.S.C. 3029.
---------------------------------------------------------------------------

Comment: A commenter recommended that Sec. 1321.9(c)(2)(vi)(C) be
removed. This paragraph provides that any amount of State resources
included in the Title III maintenance of effort certification that
exceeds the minimum amount required becomes part of the permanent
maintenance of effort. The commenter expressed that this requirement
may disincentivize States from providing more than the minimum amount
of funds.
Response: ACL appreciates the comment but declines to remove this
paragraph, in order to provide maximum flexibility to the State
agencies. Contrary to the commenter's note, a State agency may have
reason to employ this provision to increase the required maintenance of
effort. In addition, as set forth in Sec. 1321.9(c)(2)(vi)(D), excess
State match reported on the Federal financial report does not become
part of the maintenance of effort unless the State agency certifies the
excess.
Sec. 1321.9(c)(2)(vii) State Long-Term Care Ombudsman Program
This final rule requires State agencies to develop fiscal policies
and procedures related to requirements under the Act, corresponding to
section 307(a)(9).\89\ These requirements include that the State agency
will expend no less than the minimum amounts that are required to be
expended by section 307(a)(9) of the Act. We also clarify that the
State agency must provide the Ombudsman with information to complete
Ombudsman program requirements and that the fiscal activities relating
to the operation of the Office comply with the requirements set forth
in Sec. 1324.13(f).
---------------------------------------------------------------------------

\89\ 42 U.S.C. 3027(a)(9).
---------------------------------------------------------------------------

Comment: Two commenters expressed support for this provision.
Currently, the Act sets the required minimum expenditure amount at the
amount expended by the State agency during fiscal year 2019 for the
Ombudsman program under Titles III and VII of the Act,\90\ and
subsection (A) of Sec. 1321.9(c)(2)(vii), which addresses the minimum
expenditure amount, likewise refers specifically to fiscal year 2019.
Several commenters recommended not including a specific fiscal year in
Sec. 1321.9(c)(2)(vii)(A), as such fiscal year may be modified as a
result of future reauthorizations of the Act and recommends instead
using language in Sec. 1321.9(c)(2)(vii)(A) that avoids mentioning a
specific fiscal year.
---------------------------------------------------------------------------

\90\ Id.
---------------------------------------------------------------------------

Response: ACL appreciates the support expressed for Sec.
1321.9(c)(2)(vii). We agree with the suggestion to remove the reference
to fiscal year 2019 and have revised subsection (A) accordingly.
Comment: A commenter expressed concern that the language in Sec.
1321.9(c)(2)(vii)(A), which sets forth the minimum amount State
agencies must expend for the Ombudsman program, is unclear.
Response: ACL will address any questions regarding minimum
expenditures for the Ombudsman program through technical assistance, as
needed.
Sec. 1321.9(c)(2)(viii)--Rural Minimum Expenditures
The final rule requires State agencies to develop fiscal policies
and procedures related to requirements under the Act, corresponding to
section 307(a)(3)(B).\91\ These requirements include that the State
agency must: expend not less than the amount expended in accordance
with the level set in the Act for services for older individuals
residing in rural areas, project the cost of providing such services,
and specify a plan for meeting the needs for such services. To
implement these requirements, we set forth that the State agency
establish a process and control for determining how rural areas within
the State shall be defined.
---------------------------------------------------------------------------

\91\ 42 U.S.C. 3027(a)(3)(B).
---------------------------------------------------------------------------

Comment: A few commenters expressed support for Sec.
1321.9(c)(2)(viii). Many commenters sought more clarity about the
requirements in Sec. 1321.9(c)(viii). One commenter shared the concern
that State agencies will lack the necessary information to project the
cost of providing services to rural areas.
Response: ACL appreciates the support of this provision. ACL
appreciates these comments but declines to provide further direction in
this final rule to State agencies as to how to comply with these
requirements (which can be found in section 307(a)(3)(B) of the
Act).\92\ State agencies are best positioned to make these
determinations.
---------------------------------------------------------------------------

\92\ Id.
---------------------------------------------------------------------------

The term ``rural'' appears many times in the Act with respect to
the delivery and prioritization of services. In addition, State
agencies may use the IFF to direct Title III funding to rural areas.
There is no one universally accepted or mandated definition of what
constitutes a ``rural area.'' Over the years, State agencies have
determined what areas in their States are rural, and the factors that
State agencies have used to make this determination can vary. In
recognition of this variation in how State agencies determine what
areas in their State are rural, the Act does not

[[Page 11583]]

mandate a definition of rural areas, and ACL declines to limit the
flexibility afforded to the State agencies by the Act.
Likewise, State agencies are better positioned than ACL to project
the cost of providing services and to develop a plan for meeting the
needs for services in the rural areas of their respective States. We
note that State agencies provide these projections in their current
State plans on aging, as this is an existing requirement. For clarity,
we have revised the final rule to specify that the minimum amount as
set forth in the Act must be maintained. ACL will provide technical
assistance with respect to this requirement, as needed.
Comment: Two commenters raised questions about the relationship
between the requirement in Sec. 1321.9(c)(2)(viii) that State agencies
develop a process for determining how ``rural areas'' are defined and
the Older Americans Act Performance System (OAAPS) definition of
``rural'' for reporting purposes. Another commenter raised a concern
that this requirement conflicts with the OAAPS definition of ``rural.''
Response: ACL appreciates these questions and concerns and
acknowledges the potential for confusion due to the requirement of
Sec. 1321.9(c)(2)(viii) related to defining ``rural areas'' and the
separate requirement to submit annual performance report data on
``rural'' program participants. OAAPS is the reporting tool that State
agencies and, in some cases area agencies, use to submit their annual
performance report data on program participants, services, and
expenditures related to the Act. OAAPS uses rural-urban commuting area
(RUCA) codes defined at the ZIP code level to determine whether an
individual program participant resides in a rural or non-rural
area.\93\ With respect to those clients for whom demographic data must
be reported into OAAPS, all State agencies must use this definition and
tool to report on ``rural'' program participants. State agencies are
not required to use this definition of ``rural'' for any other purpose.
---------------------------------------------------------------------------

\93\ Specifically, OAAPS uses Categorization C of the Rural-
Urban Commuting Area (RUCA) codes to determine geographic
distribution between rural and non-rural. See The Rural Health
Research Ctr., <a href="http://depts.washington.edu/uwruca/ruca-uses.php">http://depts.washington.edu/uwruca/ruca-uses.php</a>
(last visited Oct. 25, 2023). For additional information and
background on the zip code-based RUCA, see also Rural-Urban
Commuting Area, The U.S. Dep't. of Agric., Econ. Research Serv.,
<a href="https://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes/documentation/">https://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes/documentation/</a> (last visited Oct. 25, 2023).
---------------------------------------------------------------------------

Section 1321.9(c)(2)(viii) of the final rule, by contrast, relates
to the State agency's projections, plans, and expenditures pertaining
to its implementation and administration of programs and services under
the Act. The definition of ``rural areas'' referred to in this section
may be separate and distinct from the definition of ``rural areas''
that is required to be used for annual program reporting on individual
program participants.
Comment: A commenter expressed concern that the language of Sec.
1321.9(c)(2)(viii)(B), which requires State agencies to expend annually
on services for older individuals residing in rural areas no less than
the amount expended for such services as set forth in the Act, may
cause State agencies to believe they are not allowed to spend on such
services more than the required minimum expenditure.
Response: ACL appreciates this comment but disagrees with this
interpretation of the section (the language of which is the same as
that found in section 307(a)(3)(B) of the Act).\94\ The language
provides the minimum amount that State agencies must spend; it does not
impose a maximum amount that State agencies may spend on services for
older adults residing in rural areas.
---------------------------------------------------------------------------

\94\ 42 U.S.C. 3027(a)(3)(B).
---------------------------------------------------------------------------

Comment: With respect to the requirement in Sec.
1321.9(c)(2)(viii)(B) that State agencies expend annually on services
for older individuals residing in rural areas no less than the amount
expended for such services as set forth in the Act, a commenter
proposed that State agencies be required to demonstrate how their IFFs
meet the needs of older adults with greatest social need and with
greatest economic need, in lieu of a policy of requiring minimum
expenditure levels for one category of older adults (i.e., older adults
residing in rural areas).
Response: There is a requirement that State agencies expend
annually on services for older individuals residing in rural areas no
less than the amount as set forth in section 307(a)(3)(B) of the
Act.\95\ This provision is included to further implementation of this
statutory requirement. ACL requires State agencies to include in the
IFF a descriptive statement and application of the State agency's
definitions of greatest economic need and greatest social need (see
Sec. 1321.49); we believe this requirement addresses the concern.
---------------------------------------------------------------------------

\95\ Id.
---------------------------------------------------------------------------

Comment: A few commenters expressed concern as to how State
agencies will be able to comply with the rural minimum expenditure
amount requirement set forth in Sec. 1321.9(c)(2)(viii)(B) when the
rule allows for various definitions among the State agencies. Another
commenter recommends that ACL add clarifying language requiring State
agencies to address their application of the rural minimum expenditure
requirement, including how this requirement relates to each State
agency's IFF.
Response: ACL appreciates the above comments related to rural
minimum expenditure requirements set forth Sec. 1321.9(c)(2)(viii)(B)
but maintains the regulatory language as proposed. Regarding potential
varying definitions of what constitutes rural areas, each State agency
only compares what it will spend for each fiscal year against what was
spent in that State as set forth in the Act. The definitions applied in
other States will be irrelevant to this calculation. In addition, Sec.
1321.9 (c)(2)(viii)(A) requires the State agency to establish a process
and control for determining the definition of rural areas within their
State in part so that the State agency will be able to comply with the
rural minimum expenditure requirement.
Regarding the recommendation that State agencies be required to
address their application of the rural minimum expenditure requirement,
section 307(a)(3) of the Act requires State agencies to provide
assurances in their State plans with respect to their compliance with
the rural minimum expenditure.\96\ ACL declines to impose additional
requirements.
---------------------------------------------------------------------------

\96\ Id. section 3027(a)(3).
---------------------------------------------------------------------------

Comment: Two commenters noted that without additional funding, the
requirements of Sec. 1321.9(c)(2)(viii) may result in decreased
services to metropolitan areas with a higher proportion of older
adults.
Response: The commenters' concerns relate to the distribution of
Title III funds throughout the State, which is addressed elsewhere in
the rule. Section 305(a)(2)(C) through (D) of the Act \97\ requires
distribution of Title III funds to occur via an IFF (further defined in
Sec. 1321.49) or funds distribution plan (further defined in Sec.
1321.51). The IFF is required for States with multiple PSAs, and a
funds distribution plan is required for single PSA States. Sections
1321.49 and 1321.51 require State agencies to develop the IFF or funds
distribution plan, through a process that allows for input from area
agencies, interested parties, and the public; the concerns raised by
the commenters can be addressed during this public input process.
---------------------------------------------------------------------------

\97\ 42 U.S.C. 3025(a)(2)(C-D).

---------------------------------------------------------------------------

[[Page 11584]]

Comment: A commenter expressed concern that the OAAPS definition of
rural is an inaccurate reflection of rural areas and could negatively
impact area agencies. Another commenter expressed concerns as to U.S.
Census data used in the OAAPS definition of rural.\98\
---------------------------------------------------------------------------

\98\ Supra note 93.
---------------------------------------------------------------------------

Response: States are not required to use the OAAPS definition of
rural in their IFFs; accordingly, the commenter's concern that the
OAAPS definition could negatively impact area agencies is misplaced.
The comments regarding the inaccuracy of, and the data used in, the
OAAPS definition of rural are outside of the scope of the rule, which
does not address the OAAPS reporting system. ACL is available to
provide technical assistance regarding defining and serving rural
areas.
Sec. 1321.9(c)(2)(ix) Reallotment
Our final rule requires State agencies to develop fiscal policies
and procedures related to a State agency's voluntary release of funds
(reallotment), corresponding with sections 304(b) \99\ and 703(b) \100\
of the Act. These policies and procedures include that the State agency
must communicate annually to ACL if the State agency has funding that
will not be expended in the grant period to be voluntarily reallotted
to the Assistant Secretary for Aging that will then be redistributed to
other State agencies who identify as being able to utilize funds within
the grant period. Additionally, the State agency should communicate
annually to ACL whether they are able to receive and expend within the
grant period any reallotted funds that may become available from the
Assistant Secretary for Aging. We also clarify that the State agency
must distribute any such reallotted funds it receives in accordance
with the IFF or funds distribution plan, as set forth in Sec. 1321.49
or Sec. 1321.51.
---------------------------------------------------------------------------

\99\ 42 U.S.C. 3024(b).
\100\ 42 U.S.C. 3058b(b).
---------------------------------------------------------------------------

Sec. 1321.9(c)(2)(x) Voluntary Contributions; Sec. 1321.9(c)(2)(xi)
Cost Sharing
The provision contained in Sec. 1321.67 of the existing regulation
(Service contributions) is redesignated here as Sec. 1321.9(c)(2)(x)
(Voluntary contributions) and revised, and we add Sec.
1321.9(c)(2)(xi) (Cost sharing) to delineate between the two types of
consumer contributions. Section 315 of the Act allows for consumer
contributions which may take the form of (1) an individual voluntarily
contributing toward the cost of a service (a voluntary contribution)
\101\ and (2) the State agency establishing a cost sharing policy,
creating a structured system for collecting sliding scale payments from
some service participants for some services (cost sharing).\102\ For
many decades, State and area agencies and service providers have
collected voluntary contributions from participants receiving services
under the Act. Such voluntary contributions allow service participants
to demonstrate their support of these services and for expansion of
services to others in the community. For example, in FY 2021 State
agencies reported nearly $166 million in program income for Title III-
funded services to ACL, a significant amount we estimate was in the
form of voluntary contributions.
---------------------------------------------------------------------------

\101\ 42 U.S.C. 3030c-2(b).
\102\ Id. section 3030c-2(a).
---------------------------------------------------------------------------

Cost sharing provisions were added in the 2000 amendments to the
OAA (Pub. L. 106-501). Because the Act includes many restrictions
regarding cost sharing, in practice ACL has seen cost sharing
implemented for a few limited services such as transportation and
respite. For example, a State agency may wish to pursue cost sharing
under the Act as a way of more consistently soliciting contributions or
for administrative simplicity to align with services provided under
other funding sources that use a cost sharing model. Many State
agencies choose not to pursue cost sharing as they find no benefit in
comparison to the traditional model of collecting voluntary
contributions.
We discuss these two provisions together because ACL has received
many questions about how voluntary contributions and cost sharing
compare. We discuss voluntary contributions first because, as explained
above, State agencies have a long history of requesting voluntary
contributions and are less likely to pursue cost sharing arrangements.
We specify in Sec. 1321.9(c)(2)(x) that the Act states that
voluntary contributions are allowed and may be solicited for all
services, as long as the method of solicitation is non-coercive.\103\
In contrast, we also list the services for which the Act prohibits cost
sharing, which include information and assistance, outreach, benefits
counseling, and case management services; long-term care ombudsman,
elder abuse prevention, legal assistance, and other consumer protection
services; congregate or home-delivered meals; and any services
delivered through Tribal organizations.\104\
---------------------------------------------------------------------------

\103\ 42 U.S.C. 3030c-2.
\104\ Id. section 3030c-2(a)(2).
---------------------------------------------------------------------------

In Sec. 1321.9(c)(2)(xi) we list applicable requirements to
include how suggested contribution levels for cost sharing are
established, which individuals are encouraged to contribute, the manner
of solicitation of contributions, a prohibition on means testing,
provisions that apply to all service recipients, a prohibition on
denial of services, procedures that are to be established, that amounts
collected are considered to be program income, and further provisions
that apply to cost sharing. Both Sec. 1321.9(c)(2)(x) and Sec.
1321.9(c)(2)(xi) are intended to clarify that services may not be
denied, even when a State agency has a cost sharing policy and or a
voluntary contribution policy, if someone cannot or chooses not to
contribute or to pay a suggested cost sharing amount. In other words,
any State agency cost sharing and consumer contribution policies must
not be required for OAA program participants, and State agencies must
ensure that program participants are aware that they are not required
to contribute, and services will not be impacted if they choose not to
contribute. We also clarify that State agencies, AAAs, and service
providers are prohibited from using means testing to determine
eligibility for or to deny services to older people and family
caregivers, as set forth in section 315(a)(5)(E) \105\ and (b)(3),\106\
and we confirm that both voluntary contribution and cost sharing
solicitation amounts are to be based on the actual cost of services.
---------------------------------------------------------------------------

\105\ Id. section 3030c-2(a)(5)(E).
\106\ Id. section 3030c-2(b)(3).
---------------------------------------------------------------------------

In specifying differences between voluntary contributions and cost
sharing, voluntary contributions are encouraged for individuals whose
self-declared income is at or above 185 percent of the FPL, while the
Act further restricts the implementation of cost sharing and does not
allow it to be imposed on service participants who are at or below the
FPL or are otherwise low-income as specified by the State agency. Cost
sharing is also prohibited for services delivered through Tribal
organizations.
Additionally, if a State agency chooses to establish a cost sharing
policy, it must be implemented statewide at all AAAs in the State, with
limited exceptions, where a State agency approves a waiver request from
a AAA where the AAA demonstrates that a significant proportion of
persons receiving services under the Act have incomes below a certain
threshold or that applying the cost sharing policy would place an
unreasonable burden

[[Page 11585]]

upon the AAA, as set forth in section 315(a)(6).\107\
---------------------------------------------------------------------------

\107\ Id. section 3030c-2(a)(6).
---------------------------------------------------------------------------

Sec. 1321.9(c)(2)(x) Voluntary Contributions
Comment: A few commenters expressed support for Sec.
1321.9(c)(2)(x) and Sec. 1321.9(c)(2)(xi), which detail requirements
related to voluntary contributions and cost sharing, respectively, and
expressed appreciation for the distinctions made between the two
concepts.
Response: ACL appreciates the support for these provisions.
Comment: A few commenters recommended removal of the requirement in
Sec. 1329.9(c)(2)(x)(B) that voluntary contributions be encouraged for
individuals whose self-declared income is at or above 185 percent of
the FPL. One commenter requested clarity as to whether this requirement
applies to both registered and non-registered services, as defined in
OAAPS.\108\ The commenter also suggested that an exception be added to
this provision for non-registered services under OAAPS where self-
reported income is not collected as part of service delivery. Another
commenter recommended that the voluntary donation policy be eliminated
for Title III, part C meal programs and replaced with an income-based
charge for meals.
---------------------------------------------------------------------------

\108\ Registered services are certain services for which
demographic and other information are collected from each client and
reported into OAAPS (such as home-delivered meals), while non-
registered services are those for which no client demographic
information is required to be reported in OAAPS (such as public
information sessions).
---------------------------------------------------------------------------

Response: ACL appreciates these comments but does not have the
authority to modify this requirement because it is mandated by section
315 of the Older Americans Act.\109\ However, Sec. 1329.9(c)(2)(x)(B)
does not require an agency to obtain the income levels of all clients
to determine whether the clients should be encouraged to voluntarily
donate; rather, the provision merely requires that voluntary
contributions be encouraged for individuals whose self-declared income
is at or above 185 percent of the FPL.
---------------------------------------------------------------------------

\109\ 42 U.S.C. 3030c-2.
---------------------------------------------------------------------------

Comment: ACL received a few comments objecting to allowing
Ombudsman programs to seek voluntary contributions, noting a concern
that it could be a barrier to residents accessing ombudsman services.
Response: The language of the rule is permissive, and we defer to
Ombudsman programs to make determinations about voluntary
contributions. We decline to make further revisions to this provision.
Sec. 1321.9(c)(2)(xi) Cost Sharing
Comment: ACL received many comments regarding this section. There
was disagreement among the commenters about this section. Some
commenters expressed that the section helped to clarify the
requirements of the Act. Most commenters, however, had issues with the
concept of cost sharing as set forth in the provision (some felt the
concept should be eliminated) or had issues with the process as set
forth in the provision (many felt decisions as to cost sharing should
be made at the area agency level).
Response: ACL appreciates these comments but declines to make the
commenters' requested changes to this section. The requirements in
Sec. 1329.9(c)(2)(xi) is mandated by section 315 of the Act.\110\
---------------------------------------------------------------------------

\110\ Id. section 3030c-2.
---------------------------------------------------------------------------

Comment: Some commenters expressed confusion regarding the
distinctions between voluntary contributions and cost sharing, and one
commenter's understanding was that cost sharing is not voluntary.
Response: For many decades, State and area agencies and service
providers have collected voluntary contributions from participants
receiving services under the Act. Cost-sharing provisions were added in
the 2000 amendments to the Act (Pub. L. 106-501). Because the Act
includes many restrictions and requirements regarding cost sharing, in
practice ACL has only seen cost sharing implemented for a few limited
services, such as transportation and respite. Many State agencies
choose not to pursue cost sharing as they find limited or no benefit in
comparison to the traditional model of collecting voluntary
contributions. We clarify in Sec. 1321.9(c)(2)(x) that voluntary
contributions are allowed and may be solicited for all services, as
long as the method of solicitation is noncoercive. In contrast, we also
list the services for which the Act prohibits cost sharing.
In Sec. 1321.9(c)(2)(xi) we list applicable requirements to
include how suggested contribution levels for cost sharing are
established, which individuals are encouraged to contribute, the manner
of solicitation of contributions, a prohibition on means testing,
provisions that apply to all service recipients, a prohibition on
denial of services, procedures that are to be established, that amounts
collected are considered to be program income, and further provisions
that apply to cost sharing. Both Sec. 1321.9(c)(2)(x) and (xi) are
intended to clarify that services may not be denied, even when a State
agency has a cost-sharing policy and a voluntary contribution policy,
if someone cannot or chooses not to contribute or to pay a suggested
cost-sharing amount. In other words, all State agency cost sharing and
consumer contribution policies must be voluntary for OAA program
participants, and State agencies must ensure that program participants
are aware that they are not required to contribute.
ACL will offer technical assistance to any State agencies that
request assistance in implementing voluntary contributions and cost
sharing.
Comment: One commenter expressed concern regarding the
applicability of cost sharing to Tribal organizations and requested
that Tribal organizations be allowed to request a waiver from such
requirements.
Response: ACL appreciates the comment but believes the commenter's
concerns are adequately addressed in the rule. Section 315(a) of the
Act \111\ and Sec. 1321.9(c)(2)(xi)(D)(3)(iv) expressly prohibit cost
sharing for any services delivered through Tribal organizations.
---------------------------------------------------------------------------

\111\ Id. section 3030c-2(a).
---------------------------------------------------------------------------

Comment: One commenter requested that AAAs be allowed to implement
cost sharing for Title III, part C nutrition programs (congregate and
home-delivered meals). The commenter also expressed concern that some
clients with the financial means to voluntarily contribute to the cost
of the meals do not do so, which can impact a AAA's ability to provide
services to those at greatest social need and greatest economic need.
Response: Section 315(a) of the Act \112\ expressly prohibits cost
sharing for congregate and home-delivered meals. Even if cost sharing
were permitted for these services, an area agency would not be
permitted to deny the service to any client who is unwilling to
contribute, as discussed above. Section 1321.9(c)(2)(x) requires that
voluntary contributions be encouraged for clients whose self-reported
income is at or above 185 percent of the FPL. In addition, serving
clients with the ``greatest social need'' could include clients of
considerable financial means.
---------------------------------------------------------------------------

\112\ Id.
---------------------------------------------------------------------------

Sec. 1321.9(c)(2)(xii) Use of Program Income
The provision contained in Sec. 1321.73 of the existing regulation
(Grant related income under Title III-C) is redesignated here as Sec.
1321.9(c)(2)(xii) and revised. We clarify the fiscal requirements that
apply to program income, which include voluntary contributions and
cost-sharing

[[Page 11586]]

payments. For example, we clarify that State agencies are required to
report contributions as program income and set forth restrictions on
the use of program income.
Comment: ACL received comments requesting clarification of the
requirement in Sec. 1321.9(c)(2)(xii)(B) that ``[p]rogram income
collected must be used to expand the service category by part of Title
III of the Act, as defined in Sec. 1321.71, for which the income was
originally collected;'' as well as requesting that Sec.
1321.9(c)(2)(xii) be modified to permit area agencies the flexibility
to allow program income to be used to expand any Title III service.
Response: Section 315 of the Act \113\ does not authorize ACL to
permit area agencies to use program income collected under one part of
Title III to expand a service provided under another part of Title III.
---------------------------------------------------------------------------

\113\ Id. section 3030c-2.
---------------------------------------------------------------------------

In addition, in the course of reviewing these comments, ACL has
determined that contributions must be used to expand a service funded
under the Title III grant award pursuant to which the income originally
was collected, and that the language of this section was in need of
revision. Accordingly, Sec. 1321.9(c)(2)(xii)(B) has been revised to
state that program income collected must be used to expand a service
funded under the Title III grant award pursuant to which the income was
originally collected.
Thus, a contribution for transportation (a supportive service under
Title III, part B) can only be reported as income and used to expand
Title III, part B supportive services such as transportation or
multipurpose senior centers. Similarly, if someone pays a portion of
the cost of a Title III, part B transportation service under a cost-
sharing arrangement, that portion must be reported as income to the
Title III, part B supportive services program. In addition, because
Title III, part C-1 funding for congregate meals and Title III, part C-
2 funding for home-delivered meals are issued under separate grant
awards, contributions for services under these two awards cannot be
commingled. A contribution for the nutrition service of home-delivered
meals must be reported as income to the home-delivered nutrition
program and used to expand home-delivered nutrition services, such as
home-delivered meals, or nutrition education for home-delivered meals
clients; it cannot be used to expand congregate meals services.
Sec. 1321.9(c)(2)(xiii) Private Pay Programs
AAAs and service providers may, in addition to programs supported
by funding received under the Act, offer separate private pay programs
for which individual consumers agree to pay to receive services. These
private pay programs may offer similar or the same services as those
funded under Title III. We add paragraph (c)(2)(xiii) to this provision
to provide guidance as to policies and procedures that should be in
place to ensure that private pay programs offered by AAAs and service
providers do not compromise core responsibilities under the Act. One
such core responsibility, for example, is to ensure that individuals
who receive information about private pay programs and who are eligible
for services provided with Title III funds also are made aware of Title
III-funded services and waitlist opportunities for those services.
Sec. 1321.9(c)(2)(xiv) Contracts and Commercial Relationships
AAAs and service providers may receive and administer funding from
multiple sources as they seek to provide comprehensive services to
older adults. In doing so, they may enter into contracts and commercial
relationships with various entities to accomplish the delivery of
comprehensive services, as authorized in sections 212 \114\ and
306(a)(13) and (14) of the Act.\115\
---------------------------------------------------------------------------

\114\ 42 U.S.C. 3020c.
\115\ 42 U.S.C. 3026(a)(13)-(14).
---------------------------------------------------------------------------

The Act has always contemplated an aging network that plans,
coordinates, and facilitates comprehensive and coordinated systems for
supportive, nutrition, and other services, leveraging resources beyond
what the OAA alone can support. The aging network has growing
opportunities to braid different sources of government with private
funding to serve older adults in need, which has been accomplished
through contracts and commercial relationships with organizations such
as Medicaid managed care plans and health systems, among others.
Congress further strengthened this flexibility in the 2020
reauthorization of the OAA.\116\
---------------------------------------------------------------------------

\116\ 42 U.S.C. 3027(a)(26) (2018) as amended by Public Law 116-
131 (2020).
---------------------------------------------------------------------------

In response to numerous questions about the appropriate roles,
responsibilities, and oversight of such activities, feedback received
in response to the RFI and the NPRM, and based on our observations of
program activities, this final rule clarifies the policies and
procedures that State agencies must establish related to all contracts
and commercial relationships in subsection Sec. 1321.9(c)(2)(xiv). We
intend this rule to respond to numerous concerns from AAAs regarding
inconsistent State agency approaches to contracts and commercial
relationships, as well as concerns from State agencies about the level
of risk and associated oversight required. We encourage a review and
approval process that complies with the statutory requirements found in
section 212 \117\ and throughout Title III but is not onerous, can be
implemented easily, and does not cause undue delay. We anticipate
providing technical assistance in this area to State agencies and AAAs.
---------------------------------------------------------------------------

\117\ 42 U.S.C. 3020c.
---------------------------------------------------------------------------

As a component of these policies and procedures, and consistent
with their authority under sections 305(a)(1)(C),\118\ 306(a),\119\
306(b),\120\ and 212(b)(1),\121\ State agencies must establish
processes for AAAs to receive prior approval for contracts and
commercial relationships permitted under section 212 of the Act.\122\
We expect such processes to be flexible and streamlined. This provision
will help ensure that the activities of recipients and subrecipients of
funding further the intended benefits of the Act and do not compromise
core responsibilities or the statutory mission of State agencies, AAAs,
and service providers. Through these requirements, we intend to promote
and expand the ability of the aging network to engage in business
activities.
---------------------------------------------------------------------------

\118\ 42 U.S.C. 3025(a)(1)(C).
\119\ 42 U.S.C. 3026(a).
\120\ Id. section 3026(b).
\121\ 42 U.S.C. 3020c(b)(1).
\122\ Id. section 3020c.
---------------------------------------------------------------------------

Comment: Several commenters recommended that we define ``commercial
relationships.'' Commenters also sought clarity as to whether this
provision applies to contracts or commercial relationships to provide
services to non-profit entities in addition to ``profitmaking''
entities (under section 212 of the Act).\123\ We have received several
questions through public comments and requests for technical assistance
seeking to understand when a business arrangement is or is not a
``commercial relationship.''
---------------------------------------------------------------------------

\123\ Id.
---------------------------------------------------------------------------

Response: Typically, an organization seeking clarity on this issue
either wants to or is already engaged in a business arrangement and is
trying to understand whether certain OAA requirements apply to that
arrangement. Our intent is to broadly define ``commercial
relationships.'' Whether they are contracts, ``business arrangements,''
``agreements,'' ``business transactions,''

[[Page 11587]]

or any other term that an organization might use to describe the
activity, it is broadly encompassed within the statutory term
``contracts or commercial relationships.''
The Act only uses the phrase ``commercial relationship'' in tandem
with ``contracts'' or ``contractual.'' \124\ We have sought to
consistently adopt the phrase ``contracts and commercial
relationships'' throughout the NPRM and in this final rule. When we are
not referring to all ``contracts and commercial relationships,'' we
explain which subset is relevant. For example, the phrase ``contracts
and commercial relationships that fall under section 212 of the Act''
would refer to the agreements described in section 212 of the Act.\125\
It is not relevant to distinguish between a ``contract'' and a
``commercial relationship'' under section 212; the same requirements
apply, regardless of how an organization defines the agreement.
---------------------------------------------------------------------------

\124\ 42 U.S.C. 3026; 42 U.S.C. 3027; 42 U.S.C. 3012.
\125\ 42 U.S.C. 3020c.
---------------------------------------------------------------------------

We appreciate comments seeking a clearer definition of ``private
pay'' in the final rule. We have revised the definitions of ``area plan
administration,'' ``private pay programs'' and ``program development
and coordination activities'' to use ``contracts and commercial
relationships,'' consistent with our use throughout the rest of the
rule.
We also decline to provide a regulatory definition of
``profitmaking'' as used in section 212 of the Act, which lays out the
circumstances under which a recipient may enter ``[. . .] an agreement
with a profitmaking organization for the recipient to provide services
to individuals or entities not otherwise receiving services under this
Act[.]'' \126\ We interpret ``profitmaking'' as referring to entities
that are not non-profits. However, because section 212 establishes a
framework for understanding how and when these arrangements are
consistent with the intent of the Act, we think it is reasonable for a
State agency to apply the same opportunities and obligations in the
context of agreements with non-profit entities. In other words, if an
agreement would be permitted under section 212 with a for-profit
entity, a State agency could determine that a similar agreement with a
non-profit entity is permissible so long as the other requirements of
section 212 are met. We encourage State agencies to take this approach
or otherwise explain why they decline to do so in their policies and
procedures.
---------------------------------------------------------------------------

\126\ 42 U.S.C. 3020c(a).
---------------------------------------------------------------------------

Comment: We received a significant number of comments related to
contracts and commercial relationships, generally focusing on approval
requirements for agreements that fall under section 212 of the
Act.\127\ Many commenters raised concerns about the appropriate degree
of State oversight and the role of the State agency. Commenters had
concerns about how time-consuming State agency approval processes can
be, both out of concern for the burden and potential cost to State
agencies and because of the potential delay in executing contracts and
commercial relationships and subsequent impact on potential
partnerships. Several commenters were concerned that this provision
could deter OAA grantees from innovating and forming relationships with
health and social sector commercial entities.
---------------------------------------------------------------------------

\127\ Id. section 3020c.
---------------------------------------------------------------------------

All commenters that raised this issue agreed that oversight of
contracts and commercial relationships should be streamlined and not
overly burdensome. Several commenters described the proposed policies
and procedures as an expansion of State agency control and were
concerned that ``excessive approval requirements'' would usurp local
decision-making. Other commenters suggested that ACL limit the State
agency approval process to a generic review of AAA activity, and that
State agencies should not be authorized to review and approve of
specific contracts or contract details. Commenters recommended relying
solely on assurances in AAA contracts that reflect adherence to all key
principles within the OAA as a maximum degree of State oversight. One
commenter suggested that State agency approval should be limited to
approval of standard language for AAAs to incorporate into agreements
with third-party entities, as appropriate.
Many comments related to the State approval process under section
212 of the Act,\128\ including requests for more clarity about how
comprehensive the process should be. One commenter recommended
incorporating more specific information about the nature of State
agency ``approval'' into the regulation and establishing a right of
appeal if a State agency opts not to approve of a contract or
commercial relationship. Several commenters noted that State agencies
are not a party to the contract they are responsible for approving, and
thus should not have approval authority; other commenters asked whether
the State agency became a party to the contract by virtue of its review
and approval role.
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\128\ 42 U.S.C. 3020c.
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Several comments included requests for information that we believe
would be better incorporated into sub-regulatory guidance to assist in
implementing this provision. For example, how should State agencies
deal with contract amendments; can ACL provide examples of streamlined
State agency review processes; what degree of oversight does a State
agency have over a separate non-profit entity established by a AAA;
what is the scope of State liability in the event of an issue that
arises due to a contract or commercial relationship approved by the
State agency; and what the remedy is if the State agency identifies an
issue related to the proposed contract or commercial relationship.
Response: We appreciate these comments. We agree that State agency
oversight policies and procedures should be streamlined, transparent,
not overly burdensome to either the State or the subrecipients of
Federal funds, and commensurate to the degree of risk associated with a
specific contract or commercial relationship. Like most commenters who
raised this issue, we do not believe it should usually be necessary for
State agencies to review contract documents in order to approve the
establishment of a contract or commercial relationship. As we stated in
the proposed rule, we expect State agency approval processes to be
flexible, reflecting the needs of the older individuals served and the
abilities of AAAs and service providers to engage in contracts and
commercial relationships.\129\ We believe that requiring State agencies
to establish clear policies and procedures for approval processes,
developed in consultation with AAAs, will expedite the establishment of
important partnerships.
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\129\ 88 FR 39578 (June 16, 2023).
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States agencies could use a number of different approaches to
streamline the approval processes. For example, a State agency could
adopt standard assurances related to COI (and other concerns) to be
adopted into all AAA agreements to provide services and decide not to
review case-by-case information related to COI. A State agency could
pre-approve a AAA to engage in a general category of contracts and
commercial relationships with a certain type of organization, subject
to certain conditions and a commitment to provide information about the
agreement annually, as required under

[[Page 11588]]

section 306(a).\130\ The State agency could decide as a matter of
policy that all contracts and commercial relationships to expand the
reach of services will be approved unless certain concerning conditions
exist (for example, if a AAA is under a corrective action plan). Under
such a policy, AAAs would provide assurances that proposed agreements
do not meet any exclusionary criteria. State agencies might decide that
certain kinds of arrangements pose more risk than others. For example,
contracts that involve a AAA on a corrective action plan or contracts
that are disproportionately large compared to a AAA's overall budget
may be considered to pose more risk. As we discussed in the proposed
rule, State agencies could consider the potential risks of different
kinds of contracts and commercial relationships as they develop and
implement the most efficient and least burdensome approval processes
possible.\131\ State agencies have the discretion to decide whether it
is appropriate to incorporate template language into agreements,
standard assurances, or to use other methods of standardization.
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\130\ 42 U.S.C. 3026(a)(13).
\131\ 88 FR 39578 (June 16, 2023).
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We hope that having clear statewide policies and procedures will
help to establish best practices nationwide. We strongly encourage
State agencies to seek input on proposed approval processes from AAAs
to help achieve a balanced and feasible approach that will achieve the
goal of minimizing risks while enabling the expansion of services to
reach older adults with unmet needs.
Commenters raised questions related to compliance and State agency
liability for unsuccessful contracts or commercial relationships
approved under State agency policy. We appreciate these concerns and
reiterate here that the activities described in section 212 (both
successful and unsuccessful) are allowable costs under the grant.\132\
The State agency must establish and follow policies and procedures that
are compliant with this final rule and comply with any other applicable
requirements for recipients of Federal grants.
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\132\ 42 U.S.C. 3020c.
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The structure of the Act is such that State agencies (as Federal
grantees) are ultimately responsible for ensuring the appropriate use
of funds, while AAA subrecipients are predominantly responsible for
using those funds to develop the aging services network. This framework
may lead State agencies to err on the side of caution (which is
appropriate in overseeing the use of Federal funds) so as not to be
held responsible for risky subrecipient activities. However, too much
caution in this area may inhibit the provision of vital services and
the sustainable growth of the network at a time when there is a growing
population of older adults and greater demand for services. Section 212
\133\ and section 306(g) \134\ highlight the importance of leveraging
existing knowledge, expertise, and relationships to expand the reach of
the aging services network.\135\ All new business endeavors represent
some degree of risk; we intend the policies and procedures under this
provision to help mitigate, not eliminate, that risk. The intent of
sections 212 and 306(g) can only be realized if the full weight of the
potential failure of new contracts and commercial relationships does
not fall on State agencies. We can alleviate that concern by clarifying
that activities under section 212 are allowable costs so long as they
comply with State agency policies and procedures.
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\133\ Id. section 3020c.
\134\ 42 U.S.C. 3026(g).
\135\ 42 U.S.C. 3020c; 42 U.S.C. 3026(g).
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We agree with commenters who noted that State agencies are not
parties to these contracts and commercial relationships; however, that
has no bearing on their authority to review and approve them. State
agencies are responsible for reviewing and approving certain contracts
and commercial relationships, consistent with sections
305(a)(1)(C),\136\ 306(a),\137\ 306(b),\138\ and 212(b)(1) of the
Act.\139\ Engaging in these responsibilities does not make the State
agency a party to the contract or commercial relationship under review.
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\136\ 42 U.S.C. 3025(a)(1)(C).
\137\ 42 U.S.C. 3026(a).
\138\ Id. section 3026(b).
\139\ 42 U.S.C. 3020c(b)(1).
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Commenters encouraged ACL to develop regulatory text that sets an
appropriate Federal regulatory floor for State agencies to meet but
that remains flexible enough for State agencies with capacity or need
to establish processes or standards that meet their State-specific
priorities. We intend the regulatory text that we have set forward to
be just that: a standard regulatory floor that defers to State agency
discretion to develop policies and procedures to appropriately review
contracts and commercial relationships that require State agency
approval.
We prefer to leave State agencies the discretion to decide the
details of their policies and procedures related to review and approval
of contracts and commercial relationships (including pre-approval of
agreements described in section 212 of the Act) \140\ because
circumstances vary across States and the State agency is ultimately
responsible for ensuring the appropriate use of Federal funds granted
to the State. However, in developing their policies and procedures,
State agencies should consider the government interests in reviewing
the potential contract or commercial relationship (including, among
other concerns, any potential COI and whether appropriate firewalls
exist to mitigate them; whether the AAA is meeting existing obligations
under the Act; and potential risks to the AAA, the aging services
network, or to the individuals served by the AAA associated with the
proposed contract or commercial relationship). Section 306(a) of the
Act sets forth many of these interests in the form of assurances that
AAAs must offer for area plan approval.\141\ State agencies have the
discretion to request to review contract documents if they deem it
necessary to determine whether the contract or commercial relationship
may be approved, consistent with their policies and procedures.
However, subrecipients should generally be able to provide sufficient
information to address these concerns without having to share contract
documents for review. This should include, at a minimum, information
related to the proposed partnering entity,\142\ the proposed services
to be provided, and specific assurances related to other requirements
under section 212(b).\143\ We intend to provide tools and examples that
State agencies may, at their discretion, adapt and use. We intend the
delayed compliance date for this provision to provide adequate time for
State agencies and subrecipients to adopt compliant policies and to
engage in technical assistance as needed.
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\140\ 42 U.S.C. 3020c(b)(1).
\141\ 42 U.S.C. 3026(a)(13).
\142\ In deference to non-disclosure agreements, this may
include the type of organization and not the identity of the
specific entity. However, the State agency may require the AAA to
attest that the proposed agreement is not with a specific entity.
\143\ 42 U.S.C. 3020c(b).
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Comment: We received several comments recommending against
incorporating any prior approval process for contracts and commercial
relationships into the area plan approval process. Commenters also
recommended that State agencies be required to provide timely approval.
Response: We agree that State agencies should establish a prior
approval process that is distinct from the area plan approval process,
as opportunities may arise outside of

[[Page 11589]]

standard area plan timeframes and requests for prior approval may not
need to meet the same expectations for public input, advisory council
review, and other requirements. Subrecipients can only successfully
establish contracts and commercial relationships that require prior
approval if approval can be granted in a timely fashion. However, we
encourage State agencies to use the area plan approval process as an
additional opportunity to discuss any new business under development.
Comment: A number of commenters were particularly interested in
minimizing the State's oversight role with respect to contracts and
commercial relationships described in section 212 of the Act \144\ that
are executed by AAAs without expending OAA funding. Several commenters
argued that the Act does not apply to such agreements, and thus
oversight is not appropriate. Some commenters raised concerns that the
State pre-approval required under section 212 of the Act conflicts with
section 306(g) of the Act, which states that, ``Nothing in this Act
shall restrict an area agency on aging from providing services not
provided or authorized by this Act[.]'' \145\ On the other hand, one
AAA commenter strongly supported the approval role of the State agency
and suggested that statewide standardization of the process to engage
in contracts and commercial relationships under section 212 of the Act
would help improve the AAA network's ability to equitably engage in
such business.
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\144\ 42 U.S.C. 3020c.
\145\ 42 U.S.C. 3026(g).
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Response: We disagree with commenters who described State oversight
in this area as an overreach. Our interpretation of the statute is that
the Act applies to agreements ``[. . .] to provide services to
individuals or entities not otherwise receiving services under this Act
[. . .]'' \146\ regardless of whether OAA funds are directly expended
as part of the agreement. We seek to clarify here our interpretation of
the statutory language and the Federal interests (as articulated in the
Act) in responsible oversight of any contract or commercial
relationship that falls within the category of ``agreements'' described
in section 212.
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\146\ 42 U.S.C. 3020c(a).
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Section 212(a) of the Act states that, subject to the conditions
set forth in 212(b), ``[. . .] this Act shall not be construed to
prevent a recipient of a grant or a contract under this Act (other than
title V) from entering into an agreement with a profitmaking
organization for the recipient to provide services to individuals or
entities not otherwise receiving services under this Act[.]'' \147\ We
interpret this paragraph as defining ``an agreement'' for the purposes
of section 212 as any arrangement with a profitmaking organization to
provide services to individuals or entities not otherwise receiving
services under this Act. Consistent with section 306(g),\148\ such
agreements must be permitted, provided they meet the conditions laid
out in section 212, and that a subrecipient seeking pre-approval has
followed the State agency policy and procedures established under this
provision. A State agency should not arbitrarily deny approval of an
agreement that satisfies the requirements of section 212 and of the
State's own policies and procedures.
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\147\ Id. section 3020c(a).
\148\ 42 U.S.C. 3026(g) Nothing in this Act shall restrict an
area agency on aging from providing services not provided or
authorized by this Act, including through--(1) contracts with health
care payers; (2) consumer private pay programs; or (3) other
arrangements with entities or individuals that increase the
availability of home- and community-based services and supports.
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Subsection (a) continues in paragraphs (a)(1) through (3) by
providing three limiting conditions that are only relevant to certain
agreements:
<bullet> Paragraph (a)(1) states that if funds provided under this
Act to such recipient are initially used by the recipient to pay part
or all of a cost incurred by the recipient in developing and carrying
out such agreement, such agreement guarantees that the cost is
reimbursed to the recipient.\149\ We interpret this paragraph to mean
that if agreements are developed and carried out using OAA funds, those
funds must be reimbursed. Importantly, agreements may also be entered
into without using OAA funds, in which case this condition does not
apply, and reimbursement of OAA funds is not relevant.
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\149\ 42 U.S.C. 3020c(a)(1).
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<bullet> Paragraph (a)(2) states that if such agreement provides
for the provision of one or more services, of the type provided under
this Act by or on behalf of such recipient, to an individual or entity
seeking to receive such services \150\ certain additional conditions
apply. Individuals and entities may only purchase services at a fair
market rate; all costs incurred (and not otherwise reimbursed under
(a)(1)) must be reimbursed; and recipients must report rates and rates
must be consistent with the prevailing market rate in the relevant
geographic area. We interpret this paragraph to mean that if the
agreement is for the recipient to provide one or more OAA-authorized
services to OAA service participants or clients, these additional
conditions apply. As in (a)(1), we also interpret this paragraph to
mean that an agreement might be entered into under section 212 that
does not provide for the provision of one or more OAA services.
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\150\ Id. section 3020c(a)(2).
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<bullet> Paragraph (a)(3) describes any amount of payment to the
recipient under the agreement that exceeds reimbursement under this
subsection of the recipient's costs is used to provide, or support the
provision of, services under this Act.\151\ We interpret this paragraph
to mean that if an agreement is profitable beyond the required
reimbursement of any OAA funds if used (under (a)(1)) and the
reimbursement of any other costs incurred by the recipient (under
(a)(2)(B)), any profits must be used to support the provision of OAA
services to OAA clients.
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\151\ 42 U.S.C. 3020c(a)(3).
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Section 212(b) lists the limitations that apply to all agreements
under section 212. An agreement described in paragraph (a) may not:
<bullet> be made without the prior approval of the State agency
(or, in the case of a grantee under title VI, without the prior
recommendation of the Director of the Office for American Indian,
Alaska Native, and Native Hawaiian Aging and the prior approval of the
Assistant Secretary), after timely submission of all relevant documents
related to the agreement including information on all costs
incurred.\152\ We interpret this paragraph to require State agency pre-
approval for all agreements under section 212. We have discussed at
length the requirement in this final rule for State agencies to develop
policies and procedures to implement this provision;
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\152\ Id. section 3020c(b)(1).
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<bullet> have the effect of ``[. . .] paying, reimbursing,
subsidizing, or otherwise compensating an individual or entity in an
amount that exceeds the fair market value of the services subject to
such an agreement[.]'' \153\ This paragraph applies the limitation in
section 212(a)(2)(A) to all agreements under section 212;
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\153\ Id. section 3020c(b)(2).
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<bullet> result in the displacement of services otherwise available
to an older individual with greatest social need, an older individual
with greatest economic need, or an older individual who is at risk of
institutional placement; or
<bullet> in any other way compromise, undermine, or be inconsistent
with the objective of serving the needs of older individuals, as
determined by the

[[Page 11590]]

Assistant Secretary.\154\ Agreements under section 212 may not
compromise OAA services to OAA program participants or clients and may
not be inconsistent with the objective of serving older individuals.
The Assistant Secretary for Aging has the discretion to determine
whether an agreement violates this provision.
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\154\ Id. section 3020c(b)(3),(4).
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Section 212(c), (d), and (e) relate to monitoring and reporting
requirements, timely reimbursement, and defining ``cost'' in this
section, respectively.\155\ We did not receive significant comments
related to interpreting these provisions.
---------------------------------------------------------------------------

\155\ Id. section 3020c(c),(d),(e).
---------------------------------------------------------------------------

Section 212 \156\ cannot be read without the context provided by
section 306(a),\157\ which sets forth the requirements for the
development of area plans, which lay out in detail the work that a AAA
must do to fulfill their obligations under the Act, inclusive of
compliance with section 212. Both sections 306(a) and 212 require
subrecipients to provide information for State agency review and
approval about the contracts and commercial relationships in which they
are engaged, or in which they intend to engage. Section 306(a)
incorporates the requirements of section 212 and enumerates the
assurances the AAAs must offer as part of developing an area plan.
Among other attestations, AAAs are required to provide assurances that
they will:
---------------------------------------------------------------------------

\156\ 42 U.S.C. 3020c.
\157\ 42. U.S.C. 3026(a).
---------------------------------------------------------------------------

<bullet> maintain the integrity and public purpose of services
provided, and service providers, under this title in all contractual
and commercial relationships;
<bullet> disclose the identity of each nongovernmental entity with
which they have a contract or commercial relationship relating to
providing any service to older individuals and the nature of such
contract or such relationship;
<bullet> demonstrate that a loss or diminution in the quantity or
quality of the services provided, or to be provided, under this title
by such agency has not resulted and will not result from such contract
or such relationship;
<bullet> demonstrate that the quantity or quality of the services
to be provided under this title by such agency will be enhanced as a
result of such contract or such relationship;
<bullet> if requested, disclose all sources and expenditures of
funds such agency receives or expends to provide services to older
individuals;
<bullet> avoid giving preference in receiving services under this
title to particular older individuals as a result of a contract or
commercial relationship that is not carried out to implement this
title; and use funds provided under this title to provide benefits and
services to older individuals, giving priority to older individuals
identified in section 306(a)(4)(A)(i),\158\ and in compliance with
these assurances and the limitations specified in section 212.\159\
[.]''
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\158\ 42 U.S.C. 3026(a)(4)(A)(i).
\159\ 42 U.S.C. 3020c.
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