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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations If you use a telecommunications device for the deaf TDD or a text telephone TTY, call the Federal Relay Service FRS, toll free, at 1800877
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SUPPLEMENTARY INFORMATION:

Purpose of Program: The ARPHCY
program provides a total of $800 million for the Secretary of Education Secretary to use for the purposes of identifying homeless children and youth and providing homeless children and youth with wrap-around services in light of the challenges of the COVID19
pandemic and assistance needed to enable homeless children and youth to attend school and participate fully in school activities. These funds may be used by States to address urgent needs of children and youth experiencing homelessnessincluding academic, social, emotional, and mental health needs. The funds will also be used by States and local educational agencies LEAs to increase capacity by hiring staff, dedicating resources, and planning partnerships with community-based organizations, among other strategies.
Program Authority: Section 2001b1
of the ARP Act, Public Law 1172, March 11, 2021.
Background: The ARPHCY program provides $800 million to fund vital assistance to homeless children and youth. On April 26, 2021, the Department released approximately 25
percent of these funds ARP Homeless I
as a supplement to SEAs grants under the Education for Homeless Children and Youths EHCY program authorized by Title VIIB of the McKinney-Vento Homeless Assistance Act McKinneyVento Act. SEAs and LEAs may use ARP Homeless I funds for a wide range of services and activities, including tutoring, transportation, coordination with housing, health and social services, counseling, and other supports for academic, social, emotional, and mental health needs, to address the urgent needs of homeless children and youth.
Funds may also be used to build SEA
and LEA capacity to effectively administer these funds. SEAs were encouraged to use the initial disbursement of funds to supplement existing EHCY grants, and many have done so or are in the process of doing so.
The Secretary is establishing final requirements for the second disbursement of ARPHCY funds ARP
Homeless II related to program requirements and the formula for the SEAs distribution of these funds to LEAs.
In paragraph a of the final requirements, the Department provides
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that the requirements apply to an SEAs ARP Homeless II allocation.
Paragraph b provides that the funds are subject to all provisions of Title VII
B of the McKinney-Vento Act, except as provided in paragraph c, which governs subgrants to LEAs. The Department establishes this requirement because the EHCY program supports an existing infrastructure of State Coordinators in States and local liaisons in LEAs. Furthermore, the allowable activities under this program are broadly defined and meet a wide range of academic, social, emotional, and mental health needs of children and youth experiencing homelessness.
Creating a program with different requirements and a different infrastructure is likely to result in confusion and duplication of efforts, at a time when students urgently need support.
Paragraph c of the requirements contains a formula for the SEAs distribution of funds to LEAs from the funds remaining after the SEA State activities reservation which may be up to 25 percent of the SEAs award, consistent with section 722e2 of the McKinney-Vento Act. The McKinneyVento Act includes a statutory requirement that States distribute at least 75 percent of funds to LEAs. It also requires SEAs to award these funds competitively to LEAs using criteria based on need and quality. This requirement ensures that the limited EHCY program funds that have historically been appropriated under this program are distributed to the LEAs with the greatest need but has also resulted in only approximately 25
percent of LEAs receiving EHCY
subgrants. Given the substantial increase in funding for supports and services for homeless children and youth under the ARP Act, the need for rapid distribution to meet urgent student needs, and the importance of serving students experiencing homelessness in communities that have not historically participated in the EHCY subgrant program, the Department establishes a requirement in paragraph c1 that the SEA distribute the ARP Homeless II funds to LEAs by formula rather than competition.
Requiring SEAs to distribute the ARP
Homeless II funds to LEAs by formula will ensure that the vast majority of LEAs will be able to receive subgrants.
The formula is based equally on the proportional share of an LEAs allocation under Title I, Part A of the Elementary and Secondary Education Act of 1965 ESEA for the most recent fiscal year, and the LEAs proportional share of the number of homeless
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children and youth identified by each LEA relative to all LEAs in the State, using the greater of the number of homeless children and youth in either the 201819 or 201920 school year in each LEA. This formula ensures a balance in the distribution of funds to focus on the needs of the LEAs, considering both the LEAs number of low-income students and the number of homeless children and youth. In addition, allowing the use of either the 201819 school year or 201920 school year homeless counts takes into consideration the potential for undercounting in the 201920 school year due to COVID19 by allowing LEAs to use the greater of the two numbers.
The Department establishes in paragraph c2 that an LEA must have an allocation of at least $5,000 under the formula to be eligible for an ARP
Homeless II subgrant on its own. This $5,000 minimum will enable each subgrantee to have sufficient ARP
Homeless II funds to address the needs of homeless children and youth. We chose as the threshold the smallest amount reasonable to sufficiently implement a local program. If an LEAs allocation would be less than $5,000, in order to receive an ARP Homeless II
subgrant, the LEA must join a consortium of LEAs in which the sum of its members allocations meets the $5,000 threshold. For LEAs with an allocation less than $5,000, the rule encourages the use of consortia to create favorable economies of scale.
Final Requirements: The Secretary establishes the following final requirements for the ARPHCY
program.
a Applicability. These requirements apply to a State educational agencys SEA second allocation of funds from the Department of Education under section 2001b1 of the American Rescue Plan Act of 2021 ARP Homeless II.
b Program administration. The funds described in paragraph a are subject to all provisions of Title VIIB of the McKinney-Vento Homeless Assistance Act, except as provided in paragraph c.
c Subgrants to local educational agencies LEAs.
1 Each SEA must award subgrants by allocating not less than 75 percent of the funds it receives under the ARP
Homeless II program to LEAs as follows:
i 50 percent in proportion to the amount that each LEA received under Part A of Title I of the Elementary and Secondary Education Act of 1965, as amended, for the most recent fiscal year;
and ii 50 percent in proportion to the number of homeless children and youth
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