DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Community Planning and Development

24 CFR Part 570

[Docket No. R931684; FR3415P01]

RIN 2506AB60

Joint Community Development Program: Institutions of Higher Education and
States/Units of General Local Government; Special Purpose Grants

AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.

ACTION: Proposed rule.

SUMMARY: This proposed rule would establish the requirements and procedures
for awarding and administering special purpose grants under Title I of the
Housing and Community Development Act of 1974, as amended by the Housing and
Community Development Act of 1992, to states and units of general local
government and institutions of higher education with demonstrated capacity to
carry out eligible activities, that jointly submit applications to HUD.

DATES: Comment due date: February 28, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding the
proposed rule the Rules Docket Clerk, Office of General Counsel, room 10276,
Department of Housing and Urban Development, 451 Seventh Street, SW.,
Washington, DC 20410. Comments should refer to the above docket number and
title. Copies of all written comments received will be available for public
inspection and copying between 7:30 a.m. and 5:30 p.m. weekdays in the Office
of the Rules Docket Clerk, at the address listed above.

FOR FURTHER INFORMATION CONTACT: Jerome B. Friedman, Technical Assistance
Division, Office of Technical Assistance, Department of Housing and Urban
Development, 451 Seventh Street, SW., Washington, DC 20410, (202) 7083176.
The Telecommunications Device for the Deaf (TDD) number is (202) 7082565.
(These are not toll free numbers.)

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

The information collection requirements contained in this proposed rule have
been submitted to the Office of Management and Budget for review under the
provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 35013520). No
person may be subjected to a penalty for failure to comply with these
information collection requirements until they have been approved and assigned
an OMB control number. The OMB control number, when assigned, will be
announced in the Federal Register. Information on these collection
requirements is provided later in this preamble under Other Matters. Send
comments regarding this burden estimate or any other aspect of this collection
of information, including suggestions for reducing this burden, to the
Department of Housing and Urban Development, Rules Docket Clerk, 451 Seventh
Street, SW., room 10276, Washington, DC 20410; and to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
Attention: Desk Officer for HUD, Washington, DC 20503.

II. Background

Section 801(c)(2) of the Housing and Community Development Act of 1992 (Pub.
L. 102550, approved October 28, 1992) amended section 107 of title I of the
Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.) to add
a new category of special purpose grants. This new program authorizes grants
to states and units of general local government and institutions of higher
education with demonstrated capacity to carry out eligible activities under
title I that jointly submit applications to HUD. This rule proposes
implementation of this new grant authority. For ease of reference, this new
program may be called the Joint Community Development (CD) Program.

III. Summary of Proposed Rule

Following are the highlights of the proposed rule that will govern the grants
under the Joint CD Program:

1. A new  570.411 is being added to Subpart E, Special Purpose Grants, of the
Community Development Block Grant (CDBG) regulations to govern grants under
this program. It should be noted that  570.400, which contains general
requirements for all special purpose grant programs, applies to this new
program as well. Additionally, grantees will have to comply with the Americans
with Disabilities Act of 1990.

2. Section 570.411(b) provides definitions for "demonstrated capacity'' and
"institutions of higher education.''

3. Section 570.411(c) defines who the eligible applicants are. It indicates
that an application must be filed jointly by an institution of higher
education and a state or unit of general local government. This subsection
also states that HUD will fund eligible applicants only once every two funding
cycles.

4. Section 570.411(d) spells out the role of each participant in the joint
applications.

      5. Section 570.411(e) defines the eligible activities as those eligible
under the basic CDBG regulations found in subpart C of part 570. It also makes
clear that these activities may be designed to assist residents of colonias to
improve living conditions and standards within colonias.

6. Section 570.411(f) indicates that the program will be run competitively
through publication of a Notice of Funding Availability (NOFA).

7. Section 570.411(g) provides that when an institution of higher education or
a state which is a joint applicant proposes to carry out an activity within
the jurisdiction of one or more units of general local government, then such
governments must approve the activity and indicate that it is not inconsistent
with their community development plan or program.

8. Section 570.411(h) provides a general description of what will be contained
in each NOFA.

9. Sections 570.411 (i) and (j) detail the selection criteria that HUD will
use to evaluate applications under each NOFA competition.

10. Section 570.411(l) spells out that an applicant proposing housing
activities will have to provide evidence of consistency with a Comprehensive
Housing Affordability Strategy (CHAS) of the jurisdiction to be served.

11. Section 570.411(m) deals with the citizen participation requirement under
the Joint CD Program. It is a modified version of the basic CDBG requirement
and is similar to that used in other special purpose programs.

12. Section 570.411(n) provides details on environmental review
responsibilities for this program.

Other Matters

Public Reporting Burden

The information collection requirements contained in this proposed rule have
been submitted to the Office of Management and Budget under the Paperwork
Reduction Act of 1980 (44 U.S.C. 35013520). The Department has determined
that the following provisions contain information collection requirements.

c6,L2,i1,s100,10,10,10,10,10

Annual Reporting Burden 24 CFR 570.411 Joint Community Development

 [col head 1]   [col head 1] Number of respondents

 [col head 1] Number of responses per respondent

 [col head 1] Total annual responses

 [col head 1] Hours per response

 [col head 1] Total hours

Application 	200 	1 	200 	40 	8,000

Quarterly reports 	20 	4 	80 	7 	560

Final reports 	20 	1 	20 	4 	80

Recordkeeping 	20 	1 	20 	32 	640
=====

  	  	  	  	  	9,280

Executive Order 12866

This proposed rule was reviewed by the Office of Management and Budget (OMB)
under Executive Order 12866 on Regulatory Planning and Review, issued by the
President on September 30, 1993. Any changes made in the proposed rule
subsequent to its submission to OMB are identified in the docket file, which
is available for public inspection in the Office of the Rules Docket Clerk,
room 10276, Department of Housing and Urban Development, 451 Seventh Street,
SW, Washington, DC 20410.

Executive Order 12612, Federalism

The General Counsel, as the designated Official under section 6(a) of
Executive Order 12612, Federalism, has determined that the policies proposed
in this proposed rule would not have Federalism implications when implemented
and, thus, are not subject to review under the Order. Nothing in the proposed
rule implies any preemption of State or local law, nor does any provision of
the proposed rule disturb the existing relationship between the Federal
Government and State and local governments.

Executive Order 12606, the Family

The General Counsel, as the designated Official under Executive Order 12606,
has determined that this proposed rule would not have potential significant
impact on family formation, maintenance, and general well-being, and, thus, is
not subject to review under the Order.

Environmental Finding

A Finding of No Significant Impact with regard to the environment has been
made in accordance with HUD regulations in 24 CFR part 50, which implement
section 102(2)(C) of the National Environmental Policy Act of 1969, 42 U.S.C.
4321. The Finding of No Significant Impact is available for public inspection
between 7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket
Clerk, room 10276, 451 Seventh Street, SW., Washington, DC 20410.

Regulatory Flexibility

Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Undersigned hereby
certifies that this proposed rule would not have a significant economic impact
on a substantial number of small entities inasmuch as the entities funded
under this program will be relatively few in number. Consequently, HUD does
not believe that a significant number of small entities will be affected by
this program. The application requirements associated with funding under the
program have been kept to the minimum necessary for administration of grant
funds, and the Department does not believe it is necessary or appropriate to
alter these requirements as they apply to small entities who may be
prospective grantees.

Semiannual Agenda

This proposed rule was listed as item 1580 in the Department's Semiannual
Agenda of Regulations published on October 25, 1993 (58 FR 56402, 56438) under
Executive Order 12866 and the Regulatory Flexibility Act.

Catalog of Federal Domestic Assistance

The Joint Community Development Program is listed in the Catalog of Federal
Domestic Assistance under number 14.242.

List of Subjects in 24 CFR Part 570

Administrative practice and procedure, American Samoa, Community development
block grants, Grant programs education, Grant programs housing and community
development, Guam, Indians, Lead poisoning, Loan programs housing and
community development, Low and moderate income housing, New communities,
Northern Mariana Islands, Pacific Islands Trust Territory, Pockets of poverty,
Puerto Rico, Reporting and recordkeeping requirements, Small cities, Student
aid, Virgin Islands.

      Accordingly, 24 CFR part 570 is proposed to be amended as follows:

PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS

1. The authority citation for 24 CFR part 570 would continue to read as
follows:

Authority: 42 U.S.C. 3535(d) and 53005320.

2. Section 570.411 would be added to subpart E to read as follows:

 570.411 Joint Community Development Program.

(a) General. Grants under this section will be awarded to states and units of
general local government and institutions of higher education having a
demonstrated capacity to carry out activities under title I of the Housing and
Community Development Act of 1974. For ease of reference, this program may be
called the Joint Community Development Program.

(b) Definitions. (1) Demonstrated capacity to carry out eligible activities
under title I means recent satisfactory activity by the institution of higher
education's staff designated to work on the program, including subcontractors
and consultants firmly committed to work on the proposed activities, in title
I programs or similar programs without the need for oversight by a state or
unit of general local government.

(2) Institution of higher education means a college or university granting
4-year degrees and accredited by a national or regional accrediting agency
recognized by the Department of Education.

(c) Eligible applicants. States, units of general local government and
institutions of higher education. Each application by a state or unit of
general local government must be filed jointly in cooperation with an
institution of higher education. For all such approved applications, the grant
will be made to the state or unit of general local government. Each
application by an institution of higher education must be filed by an
institution with demonstrated capacity to carry out eligible activities under
this part and filed jointly with a state or unit of general local government.
For all such approved applications, the grant will be made to the institution
of higher education. An eligible applicant will not be funded more frequently
than once every other funding cycle. Thus, for the funding cycle after
receiving funding, otherwise eligible applicants will not be deemed eligible.
A state or unit of general local government will not be funded more frequently
than once every other funding cycle even if filing jointly with a different
institution of higher education in each cycle. An institution of higher
education will not be funded in consecutive funding cycles even if funded one
year directly and applying jointly with a state or unit of general local
government in the next cycle. HUD may limit the type of eligible applicant to
be funded. Any such limitations will be contained in the Notice of Funding
Availability described below in paragraph (h) of this section.

(d) Role of participants in joint applications. A state, unit of general local
government or institution of higher education may carry out eligible
activities approved in the joint applications. Where a state or unit of
general local government is the recipient, the institution of higher education
will serve as a subrecipient. The state or unit of general local government
will then be responsible for oversight of and compliance and performance by
the institution of higher education and, if necessary, providing assistance to
the institution of higher education. Where the institution of higher education
is the recipient, it will be responsible for oversight and compliance and the
state or unit of local government will serve as a subrecipient. The
application will have to clearly delineate the role of each participant in the
joint application. The recipient must have a subrecipient agreement with the
subrecipient meeting the requirements of  570.503. Any funding sanctions or
other remedial actions by HUD for noncompliance or nonperformance, whether by
the state or unit of general local government or by the institution of higher
education, shall be taken against the grantee. The grantee may include
appropriate provisions for its rights of recourse in the subrecipient
agreement with the subrecipient.

(e) Eligible activities. Activities that may be funded under this section are
those eligible under 24 CFR part 570 Community Development Block Grants,
subpart C Eligible Activities. These activities may be designed to assist
residents of colonias, as defined in section 916(d) of the Cranston-Gonzalez
National Affordable Housing Act (Pub. L. 101625), to improve living
conditions and standards within colonias. HUD may limit the activities to be
funded. Any such limitations will be contained in the Notice of Funding
Availability described in paragraph (h) of this section.

(f) Applications. Applications will only be accepted from eligible applicants
in response to a publication of a Notice of Funding Availability (NOFA)
published by HUD in the Federal Register.

      (g) Local approval. (1) Where an institution of higher education is the
applicant, each unit of general local government where an activity is to take
place must approve the activity and state the activity is not inconsistent
with its community development plan or program.

(2) Where a state is the joint applicant and it proposes to carry out an
activity within the jurisdiction of one or more units of general local
government, then each such unit must approve the activity and state that the
activity is not inconsistent with its community development plan or program.

(3) These approvals and findings must accompany each application and may take
the form of a letter by the chief executive officer of each unit of general
local government affected or a resolution by the legislative body of each such
unit of general local government.

(h) NOFA contents. The NOFA will describe any special objectives sought to be
achieved by the funding to be provided, including any limitations on the type
of activities to be funded to achieve the objectives of the selection
criteria, any limitations on the type of eligible applicants, and points to be
awarded to each of the selection criteria and any special factors to be
evaluated in assigning points under the selection factors to achieve the
stated objectives. The NOFA will also state the deadline for the submission of
applications, the total funding available for the competition, the period of
performance and the maximum and minimum amount of individual grants. The NOFA
will also state if HUD will use the various possible levels of competition:
National and/or regional; entitlement areas vs. non-entitlement areas; and
states or units of general local government/institutions of higher education
vs. institutions of higher education with a demonstrated capacity. The NOFA
will include further information and instructions for the submission of
acceptable applications to HUD.

(i) Selection criteria. Each application submitted under this section will be
evaluated by HUD using the following criteria:

(1) The extent to which the applicant addresses the objectives published in
the NOFA and demonstrates how the proposed activities will have a substantial
impact in achieving the objectives.

(2) The extent of the needs to be addressed by the proposed activities,
particularly with respect to benefiting low- and moderate-income persons and
residents of colonias, where applicable.

(3) The feasibility of the proposed activities, i.e., their technical and
financial feasibility, for achieving the stated objectives.

(4) The capability of the applicant to carry out satisfactorily the proposed
activities in a timely fashion, including satisfactory performance in carrying
out any previous HUD-assisted projects or activities.

(5) The fair housing and equal opportunity record of the community as
indicated by previous HUD monitoring/compliance activity.

(j) Selection discretion. HUD retains the right to exercise discretion in
selecting projects in a manner that would best serve the program objectives,
with consideration given to the needs of States and units of general local
government and institutions of higher education, types of activities proposed,
an equitable geographical distribution, and program balance. The NOFA will
state whether HUD will use this discretion in any specific competition.

(k) Certifications. (1) Certifications required to be submitted by applicants
shall be as prescribed in the NOFA.

(2) In the absence of independent evidence which tends to challenge in a
substantial manner the certifications made by the applicant, the required
certifications will be accepted by HUD. If independent evidence is available
to HUD, however, HUD may require further information or assurances to be
submitted in order to determine whether the applicant's certifications are
satisfactory.

(l) Comprehensive Housing Affordability Strategy (CHAS). An applicant that
proposes any housing activities as part of its application will be required to
submit a certification that these activities are consistent with the CHAS of
the jurisdiction to be served.

(m) Citizen participation. The citizen participation requirements of 
570.301 and 570.431 are modified to require the following: The applicant must
certify that citizens likely to be affected by the project regardless of race,
color, creed, sex, national origin, familial status, or handicap, particularly
low- and moderate-income persons, have been provided an opportunity to comment
on the proposal or application.

(n) Environmental and Intergovernmental Review. The requirements for
Intergovernmental Reviews do not apply to these awards. An environmental
review in accordance with 24 CFR part 58 must be carried out by the state or
unit of general local government when it is the applicant. HUD will conduct
the required environmental review when an institution of higher education is
the applicant.

Dated: December 1, 1993.

Mark Gordon,

Deputy Assistant Secretary for Community Planning and Development.

[FR Doc. 9331651 Filed 122893; 8:45 am]

BILLING CODE 421029P
