[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Rules and Regulations]
[Pages 51546-51553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25054]
[[Page 51545]]
_______________________________________________________________________
Part IV
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 576
Streamlining the Emergency Shelter Grants Program; Final Rule
Federal Register / Vol. 61, No. 192 / Wednesday, October 2, 1996 /
Rules and Regulations
[[Page 51546]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 576
[Docket No. FR-4088-F-01]
RIN 2506-AB84
Office of the Assistant Secretary for Community Planning and
Development; Streamlining the Emergency Shelter Grants Program
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
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SUMMARY: This final rule amends HUD's regulations for the Emergency
Shelter Grants (ESG) Program. In an effort to comply with the
President's regulatory reform initiatives, this rule will streamline
the regulations by eliminating provisions that are redundant of
statutes or are otherwise unnecessary. This final rule will make the
ESG regulations clearer and more concise. In addition, this rule will
reflect provisions implementing legislation that has amended the
program since the last general rule amending the ESG regulations. The
legislation has, among other changes to the program: Extended program
entitlements to Indian tribes; established new limits on expenditures
for specified purposes, including administrative costs, services, and
prevention activities; reduced the amount required to be matched by
grantees and recipients, especially those non-State recipients that are
least capable of meeting matching funds requirements; and mandated
habitability standards and required the implementation of procedures to
ensure confidentiality of records relating to family violence services.
EFFECTIVE DATE: November 1, 1996.
FOR FURTHER INFORMATION CONTACT: Mark Johnston, Director, Program
Coordination and Analysis Division, Office of Community Planning and
Development, Room 7262, telephone (202) 708-1226. For questions on
program requirements for Indian tribes, contact: Bruce Knott, Director,
Housing and Community Development Division, Office of Native American
Programs, Room B-133, telephone (202) 755-0068. (These telephone
numbers are not toll-free.) For hearing- and speech-impaired persons,
these numbers may be accessed via TTY (text telephone) by calling the
Federal Information Relay Service at 1-800-877-8339.
The address for both of these persons is: Department of Housing and
Urban Development, 451 Seventh Street, SW., Washington, DC 20410.
SUPPLEMENTARY INFORMATION:
Background
On March 4, 1995, President Clinton issued a memorandum to all
Federal departments and agencies regarding regulatory reinvention. In
response to this memorandum, the Department of Housing and Urban
Development conducted a page-by-page review of its regulations to
determine which can be eliminated, consolidated, or otherwise improved.
HUD has determined that the regulations for the ESG Program can be
improved and streamlined by eliminating unnecessary provisions.
Several provisions in the regulations repeat statutory language. It
is unnecessary to maintain statutory requirements in the Code of
Federal Regulations (CFR), because those requirements are otherwise
fully accessible and binding. Furthermore, if regulations contain
statutory language, HUD must amend the regulations whenever Congress
amends the statute. Therefore, this final rule removes repetitious
statutory language and replaces it with a citation to the specific
statutory section for easy reference.
Several other provisions in the regulations apply to more than one
program, and therefore HUD repeated these provisions in different
parts. This repetition is unnecessary, and updating these scattered
provisions is cumbersome and often creates confusion. Therefore, this
final rule consolidates duplicative and related provisions, maintaining
appropriate cross-references for the reader's convenience. For example,
requirements for environmental review have been moved into the section
on ``Other federal requirements'' (Sec. 576.57) and have been
streamlined by reference to a new rule on these requirements that was
published on April 30, 1996 (61 FR 19120). This April 30 rule also
permits streamlining of references to flood hazards and coastal
barriers in Sec. 576.57.
Similarly, provisions that are not regulatory requirements--for
example, provisions containing nonbinding guidance or explanations--
have been removed. Although this information can be helpful to program
participants, HUD will more appropriately provide this information
through handbook guidance or other materials, rather than maintain it
in the CFR.
Justification for Final Rulemaking
HUD generally publishes a rule for public comment before issuing a
rule for effect, in accordance with its own regulations on rulemaking
in 24 CFR part 10. However, part 10 provides for exceptions to the
general rule if the agency finds good cause to omit advance notice and
public participation. The good cause requirement is satisfied when
prior public procedure is ``impracticable, unnecessary, or contrary to
the public interest'' (24 CFR 10.1). HUD finds that good cause exists
to publish portions of this rule for effect without first soliciting
public comment. This rule merely removes unnecessary regulatory
provisions and does not establish or affect substantive policy.
Therefore, prior public comment is unnecessary.
Some portions of this rule have been subject to notice-and-comment
rulemaking in the past. A proposed rule that was published in 58 FR
17766 (April 5, 1993) included statutory provisions applicable to
Indian tribe allocations, and was based on the first Notice of Funding
Availability (NOFA) that the Department used to distribute Emergency
shelter grant (ESG) amounts to Indian tribes. Normally, the Department
would not allow a final rule to be based on a proposed rule for which
so much time has lapsed. Because this very limited portion of the
program has been operating in accordance with the statutory
requirements and expressly based upon the methodology included in the
proposed rule, and because this is the first general rule that the
Department has published on this program subsequent to the proposed
rule (upon which the Department received no comments), an exception is
being made to the standard rulemaking policy. The Department
emphasizes, however, that any provisions in the proposed rule that are
made final in this rule are based strictly upon the statutory
provisions and are allowed primarily because inclusion in this rule
provides better notice to affected parties.
Similarly, this rule also makes final a very limited interim rule
on the reallocation of unused ESG amounts that was published on
November 19, 1992 (57 FR 54505) and has remained in effect since that
time. The Department received three comments on the interim rule, one
of which praised the rule and two which suggested changes. Based on its
experience in operating under the provision contained in the interim
rule, the Department does not believe that the administrative mechanism
chosen to distribute the unused funds is unfair, as suggested by one of
the commenters. The regulations already ensure a preference for using
grant amounts in the jurisdiction to which they were allocated. A
change suggested by
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another commenter, regarding advance notification by the Department
before an action to recover unspent grant amounts, does not require a
regulation for implementation. Therefore, in issuing this final
streamlining rule, the Department is not changing the provision on
reallocation of unused grant amounts.
The ESG Program
The more general regulations applicable to the ESG Program (24 CFR
part 576) were amended most recently by a final rule published on
November 7, 1989 (54 FR 46799). Today's streamlining rule incorporates
provisions in two subsequent statutes that contain numerous amendments
to subtitle B of title IV of the Stewart B. McKinney Homeless
Assistance Act (42 U.S.C. 11371-11377) (the McKinney Act), the
authorizing legislation for the ESG program: (1) section 832 (104 Stat.
4359) of the National Affordable Housing Act (Pub. L. 101-625, approved
November 28, 1990) (NAHA); and (2) section 1402 (106 Stat. 4012) of the
Housing and Community Development Act of 1992 (Pub. L. 102-550,
approved October 28, 1992) (1992 Act).
Changes in NAHA
Section 832(b) of NAHA permits recipients to use up to 5% of an
annual ESG Program grant for administrative purposes. Section 832(c)
increased from 20% to 30% the percentage of a grant that may be used to
provide essential services. Section 832(d) withdraws homelessness
prevention activities from categorization as ``essential services'',
and imposes a separate limit of 30% of the aggregate amount of
assistance to a State (including each territory), local government, or
Indian tribe that may be used for efforts to prevent homelessness.
Section 832(e) reduced by $100,000 the amount that States are
required to provide as a match to assistance received under the ESG
program. The $100,000 reduction is required to be implemented by each
State in a manner that will benefit those participating local
governments, Indian tribes, agencies, and nonprofit organizations that
are least able to contribute to the State's matching funds. The
Department is revising Sec. 576.51 (as redesignated) to reflect the
determination under which the Department has been operating that a
territory is not required to provide matching funds. This revision,
which is authorized as a matter of the Department's discretion by 48
U.S.C. 1469a(d), ensures that the funds allocated to the territories
can be provided whether or not they are able to meet the matching
requirements otherwise applicable under this program.
Section 832(e) of NAHA requires each recipient to certify that it
will develop and implement procedures to ensure the confidentiality of
records pertaining to any individual provided family violence
prevention or treatment services with ESG Program assistance. In
addition, the address or location of any ESG-assisted housing used as a
family violence shelter may not be made public without the written
authorization of persons responsible for the operation of the shelter.
Section 832(f) expressly extends eligibility for assistance under
the ESG Program to Indian tribes. This extension is reflected in
numerous sections of this rule. Additional requirements that will be
applicable to Indian tribes interested in competing for ESG set-aside
funds will be included in periodic NOFAs published in the Federal
Register, as provided in Sec. 576.31 of this final rule.
Section 832(g) mandates the Secretary to prescribe standards for
emergency shelters that ensure appropriate privacy, safety, and health-
related living conditions. Section 576.55 of this rule continues to
require that buildings used for emergency shelters comply with local
government safety and sanitation standards.
Changes in Housing and Community Development Act of 1992
Section 1402(b) of the 1992 Act requires a certification regarding
the involvement of homeless individuals and families in providing work
or services pertaining to facilities or activities assisted under the
ESG program. Section 1402(c) requires each unit of local government,
Indian tribe, and nonprofit recipient that receives ESG funds to
provide for the participation of homeless individuals on its board of
directors or other policymaking entity. Section 1402(d) provides that
grantees and recipients may terminate assistance provided to an
individual or family who violates program requirements only in
accordance with a formal process. Section 1402(e) expressly authorizes
as an eligible activity the use of not more than 10 percent of any ESG
grant for costs of staff.
Policy Emphasis
The Department seeks to emphasize that emergency shelters are
intended to be part of a process for ending homelessness. Thus,
emergency shelter grant funds are also appropriately targeted on
efforts to avoid homelessness for families and individuals at imminent
risk of becoming homeless. This policy is reflected in language added
to Sec. 576.1, ``Applicability and purpose''.
While the Department is not expanding its definition of
``homeless'', it is restating in this preamble its understanding of the
scope of that definition. The Department does not believe that the
limited resources of the ESG program were intended by Congress to be
used to serve persons who are poorly housed; the primary purpose of the
program is to help persons who lack shelter. Therefore, in this program
the Department is concerned with persons who are, or may soon become,
homeless, rather than persons who are living in overcrowded or
substandard housing. Other programs administered by the Department,
such as the Section 8 housing assistance payments programs, public and
Indian housing, and the HOME Program, target persons living in
overcrowded or substandard housing.
The Department would correct several omissions from the current
regulations by adding paragraphs (h) and (i) to Sec. 576.57 (as
redesignated). Paragraph (h) refers to statutory lobbying and
disclosure requirements. Paragraph (i) clarifies that the Davis-Bacon
Act (40 U.S.C. 276a-276a-5), which establishes minimum wage
requirements, does not apply to this Program. Although the Davis-Bacon
Act was never incorporated into the McKinney Act and therefore is not
applicable to the ESG program, a specific statement to this effect was
not included in the program regulations. Similar references may be
found in other McKinney Act programs administered by HUD.
Findings and Certifications
Paperwork Reduction Act Statement.
The information collection requirements contained in Secs. 576.21,
576.31, 576.57, 576.43, 576.59, and 576.61 in this rule have been
approved by the Office of Management and Budget (OMB) in accordance
with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), and
assigned OMB control numbers 2506-0117 and 2506-0089. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection displays a valid
control number.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C.
605(b)), the Secretary has reviewed this rule before publication and by
approving it certifies that this rule will not have a significant
economic impact on a substantial
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number of small entities. The rule is largely in the nature of
technical amendments to existing regulations for the purpose of
recognizing specific statutory requirements under which the program
already is operating. The remainder of the rule merely streamlines
regulations by removing unnecessary provisions. The rule will have no
adverse or disproportionate economic impact on small businesses.
Environmental Review
This rulemaking does not have an environmental impact. This
rulemaking simply amends existing regulations by streamlining and
updating provisions and does not alter the environmental effect of the
regulations being amended. A Finding of No Significant Impact with
respect to the environment was made in accordance with HUD regulations
in 24 CFR part 50 that implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of
development of the ESG program regulations. That Finding remains
applicable to this rule, and is available for public inspection between
7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket
Clerk at the above address.
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
contained in this rule will not have federalism implications, because
the regulatory changes either: (1) Would not have substantial direct
effects on States, including units of local government and other
political subdivisions established by the States; on the relationship
between the Federal Government and the States; or on the distribution
of power and responsibilities among the various levels of government;
or (2) would merely implement statutory changes to the Emergency
Shelter Grants Program. A more comprehensive review under Executive
Order 12612 of any of these changes is not required because the
implementation of the statutes leaves little discretion with the
Department to lessen these impacts.
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule does not have
potential for significant impact on family formation, maintenance, and
general well-being, and, thus, is not subject to review under the
Order. No significant change in existing HUD policies or programs would
result from promulgation of this rule.
Unfunded Mandates Reform Act
The Secretary has reviewed this rule before publication and by
approving it certifies, in accordance with the Unfunded Mandates Reform
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal
mandate that will result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year. This rule is limited to simplifying
and streamlining the Emergency Shelter Program regulations.
The Catalog of Federal Domestic Assistance program number is
14.231.
List of Subjects in 24 CFR Part 576
Community facilities, Emergency shelter grants, Grant programs--
housing and community development, Grant programs--social programs,
Homeless, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, part 576 of title 24 of the
Code of Federal Regulations is amended as follows:
PART 576--EMERGENCY SHELTER GRANTS PROGRAM: STEWART B. McKINNEY
HOMELESS ASSISTANCE ACT
1. The authority citation for part 576 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 11376.
Subpart A--General
2. Section 576.1 is revised to read as follows:
Sec. 576.1 Applicability and purpose.
This part implements the Emergency Shelter Grants program contained
in subtitle B of title IV of the Stewart B. McKinney Homeless
Assistance Act (42 U.S.C. 11371-11378). The program authorizes the
Secretary to make grants to States, units of general local government,
territories, and Indian tribes (and to private nonprofit organizations
providing assistance to homeless individuals in the case of grants made
with reallocated amounts) for the rehabilitation or conversion of
buildings for use as emergency shelter for the homeless, for the
payment of certain operating expenses and essential services in
connection with emergency shelters for the homeless, and for homeless
prevention activities. The program is designed to be the first step in
a continuum of assistance to enable homeless individuals and families
to move toward independent living as well as to prevent homelessness.
3. Section 576.3 is amended as follows:
a. By revising the first sentence in the definition of
``Consolidated plan.'';
b. By revising the definitions of ``Conversion'', ``Homeless'',
``Major rehabilitation'', ``Metropolitan city'', ``Private nonprofit
organization'', ``Rehabilitation'', ``Renovation'', and ``Urban
county'';
c. By removing the definition for ``Emergency shelter grant amounts
or grant amounts'';
d. By redesignating paragraphs (a) through (h) of the definition of
``Essential services'' as paragraphs (1) through (8), respectively; and
e. By redesignating paragraphs (a) through (f) of the definition of
``Homeless prevention'' as paragraphs (1) through (6), respectively;
and
f. By adding definitions in alphabetical order of ``Administrative
costs'', ``Indian tribe'', and ``Responsible entity''; to read as
follows:
Sec. 576.3 Definitions.
* * * * *
Administrative costs means as the term is defined in 583.135(b) of
this part, except that the exclusion relates to the costs of carrying
out eligible activities under Sec. 576.21(a).
Consolidated plan means the plan prepared in accordance with part
91 of this title. * * *
Conversion means a change in the use of a building to an emergency
shelter for the homeless under this part, where the cost of conversion
and any rehabilitation costs exceed 75 percent of the value of the
building after conversion.
* * * * *
Formula city or county means a metropolitan city or urban county
that is eligible to receive an allocation of grant amounts under
Sec. 576.5.
* * * * *
Homeless means as the term is defined in 42 U.S.C. 11302.
* * * * *
Indian tribe means as the term is defined in 42 U.S.C. 5302(a).
Major rehabilitation means rehabilitation that involves costs in
excess of 75 percent of the value of the building before
rehabilitation.
Metropolitan city means a city that was classified as a
metropolitan city under 42 U.S.C. 5302(a) for the fiscal year
immediately preceding the fiscal year for which emergency shelter grant
amounts are made available.
* * * * *
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Private nonprofit organization means as the term is defined in 42
U.S.C. 11371.
Rehabilitation means the labor, materials, tools, and other costs
of improving buildings, other than minor or routine repairs. The term
includes where the use of a building is changed to an emergency shelter
and the cost of this change and any rehabilitation costs does not
exceed 75 percent of the value of the building before the change in
use.
Renovation means rehabilitation that involves costs of 75 percent
or less of the value of the building before rehabilitation.
Responsible entity means as the term is defined in Sec. 58.2 of
this title, as applied though Sec. 58.1(b)(3) of this title and
Sec. 576.57(e).
* * * * *
Urban county means a county that was classified as an urban county
under 42 U.S.C. 5302(a) for the fiscal year immediately preceding the
fiscal year for which emergency shelter grant amounts are made
available.
* * * * *
4. A new Sec. 576.5 is added in subpart A, to read as follows:
Sec. 576.5 Allocation of grant amounts.
(a) Territories. HUD will set aside for allocation to the
territories an amount equal to 0.2 percent of the total amount of each
appropriation under this part in any fiscal year. HUD will allocate
this set-aside amount to each territory based upon its proportionate
share of the total population of all territories.
(b) States, metropolitan cities, urban counties, and Indian tribes.
HUD will allocate the amounts that remain after the set-aside to
territories under paragraph (a) of this section, to States,
metropolitan cities, urban counties, and Indian tribes, as provided in
42 U.S.C. 11373. HUD will subsequently distribute the amount set aside
for Indian tribes under this paragraph as provided in Sec. 576.31.
(c) Notification of allocation amount. HUD will notify in writing
each State, metropolitan city, urban county, and territory that is
eligible to receive an allocation under this section of the amount of
its allocation.
Subpart B--Eligible Activities
5. Section 576.21 is revised to read as follows:
Sec. 576.21 Eligible activities.
(a) Eligible activities. Emergency shelter grant amounts may be
used for one or more of the following activities relating to emergency
shelter for the homeless:
(1) Renovation, major rehabilitation, or conversion of buildings
for use as emergency shelters for the homeless;
(2) Provision of essential services to the homeless, subject to the
limitations in paragraph (b) of this section;
(3) Payment for shelter maintenance, operation, rent, repairs,
security, fuel, equipment, insurance, utilities, food, and furnishings.
Not more than 10 percent of the grant amount may be used for costs of
staff;
(4) Developing and implementing homeless prevention activities,
subject to the limitations in 42 U.S.C. 11374(a)(4) and paragraph (c)
of this section. Grant funds may be used under this paragraph to assist
families that have received eviction notices or notices of termination
of utility services only if the conditions stated in 42 U.S.C.
11374(a)(4) are met; and
(5) Administrative costs, in accordance with 42 U.S.C. 11378.
(b) Limitations on provision of essential services. (1) Grant
amounts provided by HUD to units of general local government,
territories, or Indian tribes, and grant amounts provided by a State to
State recipients, may be used to provide an essential service under
paragraph (a)(2) of this section only if the service is a new service,
or is a quantifiable increase in the level of a service above that
which the unit of general local government (or, in the case of a
nonprofit organization, the unit of general local government in which
the proposed activities are to be located), territory, or Indian tribe,
as applicable, provided with local funds during the 12 calendar months
immediately before the grantee or State recipient received initial
grant amounts.
(2) Limits on the use of assistance for essential services
established in 42 U.S.C. 11374(a)(2) are applicable even when the unit
of local government, territory, or Indian tribe provides some or all of
its grant funds to a nonprofit recipient. This limitation may be waived
in accordance with 42 U.S.C. 11374.
(c) Limitation on homeless prevention activities. Limits on the use
of assistance for homeless prevention activities established in 42
U.S.C. 11374(a)(4) are applicable even when the unit of local
government, territory, or Indian tribe provides some or all of its
grant funds to a nonprofit recipient.
Secs. 576.22 and 576.23 [Redesignated as Secs. 576.23 and 576.25]
6. Sections 576.22 and 576.23 are redesignated as Secs. 576.23 and
576.25, respectively, and are revised to read as follows:
Sec. 576.23 Limitations--Primarily religious organizations.
(a) Provision of assistance. (1) Assistance may be provided under
this part to a grantee or recipient that is a primarily religious
organization if the primarily religious organization agrees to provide
all eligible activities under this program in a manner that is free
from religious influences and in accordance with the following
principles:
(i) It will not discriminate against any employee or applicant for
employment on the basis of religion and will not limit employment or
give preference in employment to persons on the basis of religion;
(ii) It will not discriminate against any person applying for
shelter or any of the eligible activities under this part on the basis
of religion and will not limit such housing or other eligible
activities or give preference to persons on the basis of religion; and
(iii) It will provide no religious instruction or counseling,
conduct no religious services or worship (not including voluntary
nondenominational prayer before meetings), engage in no religious
proselytizing, and exert no other religious influence in the provision
of shelter and other eligible activities under this part.
(2) HUD may provide reallocated amounts to a recipient that is a
primarily religious organization if the assistance will not be used by
the organization to acquire a structure (in the case of homeless
prevention activities under Sec. 576.21(a)(4)), or to rehabilitate a
structure owned by the organization, except as described in paragraph
(b) of this section.
(b) Rehabilitation or conversion of emergency shelters. Grants may
be used to rehabilitate or convert to an emergency shelter a structure
that is owned by a primarily religious organization, only if:
(1) The structure (or portion thereof) that is to be renovated,
rehabilitated, or converted with HUD assistance has been leased to an
existing or newly established wholly secular organization;
(2) The HUD assistance is provided to the secular organization (and
not the religious organization) to make the improvements;
(3) The leased structure will be used exclusively for secular
purposes available to all persons;
(4) The lease payments paid to the primarily religious organization
do not exceed the fair market rent for the structure before the
renovation, rehabilitation, or conversion;
(5) The portion of the cost of any improvements that benefit any
unleased
[[Page 51550]]
portion of the structure will be allocated to, and paid for by, the
religious organization; and
(6) The primarily religious organization agrees that if the
recipient does not retain the use of the leased premises for wholly
secular purposes for the useful life of the improvements, the primarily
religious organization will pay to the original grantee (from which the
amounts used to renovate, rehabilitate, or convert the building were
derived) an amount equal to the residual value of the improvements. A
private nonprofit organization must remit to HUD this amount if the
organization is the lessee as well as the grantee. The original grantee
is expected to use this amount to alleviate homelessness in its
jurisdiction, but there is no requirement that funds received after the
close of the grant period be used in accordance with the requirements
of this part.
(c) Assistance to a wholly secular private nonprofit organization.
(1) A primarily religious organization may establish a wholly secular
private nonprofit organization to serve as a recipient. The secular
organization may be eligible to receive all forms of assistance
available under this part, subject to the following:
(i) The secular organization must agree to provide shelter and
services eligible under this part in a manner that is free from
religious influences and in accordance with the principles set forth in
paragraph (a)(1) of this section.
(ii) The secular organization may enter into a contract with the
religious organization to provide essential services or undertake
homeless prevention activities. The religious organization must agree
in the contract to carry out its contractual responsibilities in a
manner free from religious influences and in accordance with the
principles set forth in paragraph (a)(1) of this section.
(iii) The rehabilitation, conversion, or renovation of emergency
shelters are subject to the requirements of paragraph (b) of this
section.
(2) HUD will not require the religious organization to establish
the secular organization before the selection of its application. In
such a case, the religious organization may apply on behalf of the
secular organization. The application will be reviewed on the basis of
the religious organization's financial responsibility and capacity, and
its commitment to provide appropriate resources to the secular
organization after formation. After formation, a secular organization
that is not in existence at the time of the application will be
required to demonstrate that it meets the definition of private
nonprofit organization contained in Sec. 576.3. The obligation of funds
will be conditioned upon compliance with these requirements.
Sec. 576.25 Who may carry out eligible activities.
(a) Generally. As provided in 42 U.S.C. 11373 eligible activities
may be carried out by all State recipients and grantees, except States.
(b) States. All of a State's formula allocation, except for
administrative costs, must be made available to the following entities:
(1) Units of general local government in the State, which may
include formula cities and counties even if such cities and counties
receive grant amounts directly from HUD; or
(2) Private nonprofit organizations, in accordance with 42 U.S.C.
11373(c).
(c) Nonprofit recipients. Units of general local government,
territories, and Indian tribes may distribute all or part of their
grant amounts to nonprofit recipients to be used for emergency shelter
grant activities.
Subparts C and D--[Removed]
7. Subparts C and D are removed.
Subparts E through H [Redesignated as Subparts C through F]
8. Subparts E through H are redesignated as subparts C through F
Subpart C--Award and Use of Grant Amounts
Sec. 576.51 [Redesignated as Sec. 576.31]
9. Section 576.51 is redesignated as Sec. 576.31 and is revised to
read as follows:
Sec. 576.31 Application requirements.
(a) Indian tribes. After funds are set aside for allocation to
Indian tribes under Sec. 576.5, HUD will publish a Notice of Funding
Availability (NOFA) in the Federal Register. The NOFA will specify the
requirements and procedures applicable to the allocation and
competitive awarding of these set-aside funds to eligible Indian tribe
applicants.
(b) States, territories, and formula cities and counties. To
receive emergency shelter grant amounts, a State, territory, or formula
city or county must:
(1) Submit documentation required under this part, part 5 of this
title, or any other applicable provisions of Federal law; and
(2) Submit and obtain HUD approval of a consolidated plan that
includes activities to be funded under this part. This consolidated
plan serves as the jurisdiction's application for funding under this
part.
Sec. 576.52 [Removed]
10. Section 576.52, ``Environmental review'', is removed.
Sec. 576.53 [Redesignated as Sec. 576.33 and amended]
11. Section 576.53, ``Review and approval of applications'', is
redesignated as Sec. 576.33 and is amended by removing the reference
``576.89'' and adding in its place the reference ``576.69''.
Sec. 576.55 [Redesignated as Sec. 576.35 and amended]
12. Section 576.55 is redesignated as Sec. 576.35 and is amended by
revising (a)(1), (b), and (c), to read as follows:
Sec. 576.35 Deadlines for using grant amounts.
(a)(1) States. Each State must make available to its State
recipients all emergency shelter grant amounts that it was allocated
under Sec. 576.5 within 65 days of the date of the grant award by HUD.
Funds set aside by a State for homeless prevention activities under
Sec. 576.21(a)(4) must be made available to State recipients within 180
days of the grant award by HUD.
* * * * *
(b) Formula cities and counties, territories and Indian tribes--
Expenditure of grant funds. Each formula city or county, territory, and
Indian tribe must spend all of the grant amounts it was allocated or
awarded under Secs. 576.5 or 576.31 within 24 months of the date of the
grant award by HUD.
(c) Failure to meet deadlines. (1) Any emergency shelter grant
amounts that are not made available or obligated within the applicable
time periods specified in paragraphs (a)(1) or (b) of this section will
be reallocated under Sec. 576.45.
(2) The State must recapture any grant amounts that a State
recipient does not obligate and spend within the time periods specified
in paragraph (a)(2) of this section. The State, at its option, must
make these amounts and other amounts returned to the State (except
amounts referred to in Sec. 576.22(b)(6) available as soon as
practicable to other units of general local government for use within
the time period specified in paragraph (a)(2) of this section or to HUD
for reallocation under Sec. 576.45.
[[Page 51551]]
Subpart D--Reallocations
Sec. 576.61 [Redesignated as Sec. 576.41 and amended]
13. Section 576.61 is redesignated as Sec. 576.41 and is amended
by:
a. Revising the section heading;
b. Revising paragraphs (b), (d)(1), (d)(2), (e), (f), and (g); and
c. Revising the heading of paragraph (c) to read as follows:
Sec. 576.41 Reallocation; lack of approved consolidated plan--formula
cities and counties.
* * * * *
(b) Grantee. HUD will make available to the State in which the city
or county is located the amounts that a city or county referred to in
paragraph (a) of this section would have received.
(c) Notification of availability. * * *
(d) * * *
(1) Execute a grant agreement with HUD for the fiscal year for
which the amounts to be reallocated were initially made available.
(2) If necessary, submit an amendment to its application for that
fiscal year for the reallocation amounts it wishes to receive. The
amendment must be submitted to the responsible HUD field office no
later than 30 days after notification is given to the State under
paragraph (c) of this section.
(e) Amendment review and approval. (1) Section 576.33 governs the
review and approval of application amendments under this section. HUD
will endeavor to make grant awards within 30 days of the application
amendment deadline, or as soon thereafter as practicable.
(2) Program activities represented by proposed amendments are
subject to environmental review under Sec. 576.57 in the same manner as
original proposals.
(f) Deadlines for using reallocated grant amounts. Section 576.35
governs the use of amounts reallocated under this section.
(g) Amounts that cannot be reallocated. Any grant amounts that
cannot be reallocated to a State under this section will be reallocated
as provided by Sec. 576.43. Amounts that are reallocated under this
section, but that are returned or unused, will be reallocated under
Sec. 576.45.
Sec. 576.63 [Redesignated as Sec. 576.43 and amended]
14. Section 576.63 is redesignated as Sec. 576.43 and is amended:
a. By revising the section heading;
b. By revising paragraphs (a) and (b);
c. By revising the first sentence of paragraph (c);
d. By revising the introductory text of paragraph (d);
e. By revising paragraph (d)(2);
f. By removing the parenthetical ``(except paragraph (e))'' in the
introductory text of paragraph (e); and
g. By revising paragraphs (f), (g), and (h), to read as follows:
Sec. 576.43 Reallocation of grant amounts; lack of approved
Consolidated Plan--States, territories, and Indian tribes.
(a) Applicability. This section applies when:
(1) A State, territory, or Indian tribe fails to obtain approval of
its consolidated plan within 90 days of the date upon which amounts
under this part first become available for allocation in any fiscal
year; or
(2) Grant amounts cannot be reallocated to a State under
Sec. 576.41.
(b) Grantees. (1) HUD will reallocate the amounts that a State or
Indian tribe referred to in paragraph (a)(1) of this section would have
received:
(i) In accordance with 42 U.S.C. 11373(d)(3); and
(ii) If grant amounts remain, then to territories that demonstrate
extraordinary need or large numbers of homeless individuals.
(2) HUD will make available the amounts that a territory under
paragraph (a)(1) of this section would have received to other
territories that demonstrate extraordinary need or large numbers of
homeless individuals.
(c) Notification of funding availability. HUD will make
reallocations to States and Indian tribes under this section by direct
notification or Federal Register notice that will set forth the terms
and conditions under which amounts under this section are to be
reallocated and grant awards made. In the case of reallocations to
territories, the responsible HUD field office will promptly notify each
territory of any reallocation amounts under this section and will
indicate the terms and conditions under which reallocation amounts are
to be made available and grant awards made.
(d) Eligibility for reallocation amounts. In order to receive
reallocation amounts under this section, the formula city or county,
State, territory, or Indian tribe must:
(1) * * *
(2) Execute a grant agreement with HUD for the fiscal year for
which the amounts to be reallocated were initially made available.
* * * * *
(f) Grant amounts. HUD may make a grant award for less than the
amount applied for or for fewer than all of the activities identified
in the application amendment.
(g) Deadlines for using reallocated amounts. Section 576.35 governs
the use of amounts reallocated under this section.
(h) Amounts not reallocated. Any grant amounts that are not
reallocated under this section, or that are reallocated, but are
unused, will be reallocated under Sec. 576.45(d). Any amounts that are
reallocated, but are returned, will be reallocated under
Sec. 576.45(c).
Sec. 576.67 [Redesignated as Sec. 576.45 and amended]
15. Section 576.67 is redesignated as Sec. 576.45, and is amended
as follows:
a. In paragraph (c)(1), by italicizing the first sentence and by
removing the reference ``Sec. 576.43'' and adding in its place the
reference ``Sec. 576.5'';
b. By redesignating paragraphs (c) (2) and (3) as paragraphs (c)
(3) and (4), respectively;
c. By adding a new paragraph (c)(2);
d. By revising paragraphs (c)(3) and (c)(4), as redesignated;
e. In paragraph (c)(9), by removing the reference to
``Sec. 576.52'' and adding in its place a reference to ``576.57'';
f. In paragraph (d), by removing the reference to ``subpart D'' and
adding in its place a reference to ``Sec. 576.5'';
g. By revising the heading of paragraph (f); and
h. By revising paragraph (f)(2) to read as follows:
Sec. 576.45 Reallocation of grant amounts; returned or unused amounts.
* * * * *
(c) * * *
(1) States and formula cities and counties. * * *
(2) Indian tribes. Returned grant amounts that were allocated to an
Indian tribe will be made available to other Indian tribes.
(3) Territories. Returned grant amounts that were allocated to a
territory will be made available, first, to other territories and, if
grant amounts remain, then to States.
(4) Further reallocation: States, formula cities and counties,
territories, and Indian tribes. HUD will reallocate under paragraph (e)
of this section any grant amounts that remain after applying the
preceding provisions of paragraph (c) of this section or that are
returned to HUD after reallocation under those provisions.
* * * * *
(f) Definitions--returned or unused grant amounts. * * *
(2) For purposes of this section, emergency shelter grant amounts
are considered ``unused'' (i.e., Federal deobligation):
(i) When they become available for reallocation by HUD after a
grantee has
[[Page 51552]]
executed a grant agreement with HUD for those amounts; or
(ii) The amounts remain after reallocation under Sec. 576.43 or
paragraph (c) of this section.
Subpart E--Program Requirements
Sec. 576.71 [Redesignated as Sec. 576.51 and revised]
16. Section 576.71 is redesignated as Sec. 576.51 and is revised to
read as follows:
Sec. 576.51 Matching funds.
(a) General. Each grantee, other than a territory, must match the
funding provided by HUD under this part as set forth in 42 U.S.C.
11375. The first $100,000 of any assistance provided to a recipient
that is a State is not required to be matched, but the benefit of the
unmatched amount must be shared as provided in 42 U.S.C. 11375(c)(4).
Matching funds must be provided after the date of the grant award to
the grantee. Funds used to match a previous ESG grant may not be used
to match a subsequent grant award under this part. A grantee may comply
with this requirement by providing the matching funds itself, or
through matching funds or voluntary efforts provided by any State
recipient or nonprofit recipient (as appropriate).
(b) Calculating the matching amount. In calculating the amount of
matching funds, in accordance with 42 U.S.C. 11375(a)(3), the time
contributed by volunteers shall be determined at the rate of $5 per
hour. For purposes of this paragraph, the grantee will determine the
value of any donated material or building, or of any lease, using a
method reasonably calculated to establish a fair market value.
Sec. 576.73 [Redesignated as Sec. 576.53 and amended]
17. Section 576.73 is redesignated as Sec. 576.53, and is amended
by revising paragraph (a) and the introductory text of paragraph (b),
to read as follows:
Sec. 576.53 Use as an emergency shelter.
(a)(1) Restrictions and definition. Period of use restrictions
applicable to assistance provided under this part are governed by 42
U.S.C. 11375(a). Use of grant amounts for developing and implementing
homeless prevention activities does not trigger period of use
requirements.
(2) For purposes of the requirements under this section, the term
same general population means either the same types of homeless persons
originally served with ESG assistance (i.e., battered spouses, runaway
children, families, or mentally ill individuals), or persons in the
same geographic area.
(b) Calculating the applicable period. The 3- and 10-year periods
applicable under paragraph (a) of this section begin to run:
* * * * *
Sec. 576.75 [Redesignated as Sec. 576.55]
18. Section 576.75 is redesignated as Sec. 576.55 and is revised to
read as follows:
Sec. 576.55 Building standards.
(a) Any building for which emergency shelter grant amounts are used
for conversion, major rehabilitation, rehabilitation, or renovation
must meet local government safety and sanitation standards.
(b) For projects of 15 or more units, when rehabilitation costs
are:
(1) 75 percent or more of the replacement cost of the building,
that project must meet the requirements of Sec. 8.23(a) of this title;
or
(2) Less that 75 percent of the replacement cost of the building,
that project must meet the requirements of Sec. 8.23(b) of this title.
Sec. 576.77 [Redesignated as Sec. 576.56]
19. Section 576.77 is redesignated as Sec. 576.56, and is revised
to read as follows:
Sec. 576.56 Homeless assistance and participation.
(a) Assistance. (1) Grantees and recipients must assure that
homeless individuals and families are given assistance in obtaining:
(i) Appropriate supportive services, including permanent housing,
medical health treatment, mental health treatment, counseling,
supervision, and other services essential for achieving independent
living; and
(ii) Other Federal, State, local, and private assistance available
for such individuals.
(2) Requirements to ensure confidentiality of records pertaining to
the provision of family violence prevention or treatment services with
assistance under this part are set forth in 42 U.S.C. 11375(c)(5).
(3) Grantees and recipients may, in accordance with 42 U.S.C.
11375(e), terminate assistance provided under this part to an
individual or family who violates program requirements.
(b) Participation. (1) Each unit of local government, Indian tribe,
and nonprofit recipient that receives funds under this part must
provide for the participation of homeless individuals on its
policymaking entity in accordance with 42 U.S.C. 11375(d).
(2) Each State, territory, Indian tribe, unit of local government,
and nonprofit recipient that receives funds under this part must
involve homeless individuals and families in providing work or services
pertaining to facilities or activities assisted under this part, in
accordance with 42 U.S.C. 11375(c)(7).
Sec. 576.79 [Redesignated as Sec. 576.57 and amended]
20. Section 576.79 is redesignated as Sec. 576.57, and is amended
as follows:
a. By revising paragraphs (e) and (f);
b. By redesignating paragraph (h) as paragraph (j); and
c. By adding new paragraphs (h) and (i) to read as follows:
Sec. 576.57 Other Federal requirements.
* * * * *
(e) Environmental review responsibilities.--(1) Generally.
Responsible entities must assess the environmental effects of each
application under part 58 of this title. An applicant must include in
its application an assurance that the applicant will assume all the
environmental review responsibility that would otherwise be performed
by HUD as the responsible Federal official under the National
Environmental Policy Act of 1969 (NEPA) and related authorities listed
in part 58 of this title. The grant award is subject to completion of
the environmental responsibilities set out in part 58 of this title
within a reasonable time period after notification of the award. This
provision does not preclude the applicant from enclosing its
environmental certification and Request for Release of Funds with its
application.
(2) Awards to States. In the case of emergency shelter grants to
States that are distributed to:
(i) Units of general local government, the unit of general local
government shall be the responsible entity, and the State will assume
HUD's functions with regard to the release of funds; or
(ii) Nonprofit organizations, the State shall be the responsible
entity, and HUD will perform functions regarding release of funds under
part 58 of this title.
(3) Release of funds. HUD will not release funds for an eligible
activity if the grantee, recipient, or any other party commits
emergency shelter grant funds before the grantee submits, and HUD
approves, any required Request for Release of Funds.
(f) Audit. The financial management systems used by a State,
formula city or county, governmental entity, or an Indian tribe that is
a grantee under this program must provide for audits in
[[Page 51553]]
accordance with part 44 of this title. A private nonprofit organization
is subject to the audit requirements of OMB Circular A-133, as set
forth in part 45 of this title. (OMB Circulars are available from the
Executive Office of the President, Publication Service, 725 17th
Street, NW., Suite G-2200, Washington, DC 20503, Telephone, 202-395-
7332.)
* * * * *
(h) Lobbying and disclosure requirements. The disclosure
requirements and prohibitions of 42 U.S.C. 3537a and 3545 and 31 U.S.C.
1352 (the Byrd Amendment), and the implementing regulations at parts 4
and 87 of this title.
(i) Davis-Bacon Act. The provisions of the Davis-Bacon Act (40
U.S.C. 276a-276a-5) do not apply to this program.
Sec. 576.80 [Redesignated as Sec. 576.59]
21. Section 576.80, ``Relocation and acquisition'', is redesignated
as Sec. 576.59.
Subpart F--Grant Administration
Sec. 576.81 [Redesignated as Sec. 576.61 and amended]
22. Section 576.81 is redesignated as Sec. 576.61, and is amended
by revising the second sentence and adding paragraphs (a) and (b), to
read as follows:
Sec. 576.61 Responsibility for grant administration.
* * * The State, territory, Indian tribe, or unit of local
government is responsible for ensuring that its recipients carry out
the recipients' emergency shelter grant programs in compliance with all
applicable requirements in the case of:
(a) A State making grant amounts available to State recipients; or
(b) A territory, Indian tribe, or unit of general local government
distributing grant amounts to nonprofit recipients.
Sec. 576.83 [Redesignated as Sec. 576.63 and amended]
23. Section 576.83, ``Method of payment'', is redesignated as
Sec. 576.63, and is amended by removing the last sentence.
Sec. 576.87 [Redesignated as Sec. 576.65]
24. Section 576.87 is redesignated as Sec. 576.65 and is revised to
read as follows:
Sec. 576.65 Recordkeeping.
(a) Each grantee must ensure that records are maintained for a 4-
year period to document compliance with the provisions of this part.
(b) Requirements to ensure confidentiality of records pertaining to
the provision of family violence prevention or treatment services with
assistance under this part are set forth in 42 U.S.C. 11375(c)(5).
Sec. 576.89 [Redesignated as Sec. 576.67 and amended]
25. Section 576.89, ``Sanctions'', is redesignated as Sec. 576.67,
and is amended as follows:
a. By removing a reference in paragraph (b) to
``Sec. 576.55(a)(2)'' and adding in its place a reference to
``Sec. 576.35(a)(2)''; and
b. By removing references in paragraphs (b) and (c) to
``Sec. 576.67(d)'' and adding in their places references to
``Sec. 576.45(d)''.
Dated: September 20, 1996.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 96-25054 Filed 10-1-96; 8:45 am]
BILLING CODE 4210-29-P
