[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Rules and Regulations]
[Pages 40084-40113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19350]
[[Page 40083]]
_______________________________________________________________________
Part II
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Secretary
_______________________________________________________________________
24 CFR Part 953
Community Development Block Grants for Indian Tribes and Alaska Native
Villages; Final Rule
Federal Register / Vol. 61, No. 148 / Wednesday, July 31, 1996 /
Rules and Regulations
[[Page 40084]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Part 953
[Docket No. FR-2880-F-11]
RIN 2577-AB31
Community Development Block Grants for Indian Tribes and Alaska
Native Villages
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.
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SUMMARY: This rule makes final the requirements for the Community
Development Block Grant Program for Indian tribes and Alaska native
villages. Several revisions have been made to the previously published
interim rule by this final rule. These revisions have been made in
response to public comments, to correct errors and unintentional
omissions in the interim rule, and to include in this part those
applicable sections of subparts C, J, and K of part 570 which were
included by reference in the interim rule.
EFFECTIVE DATE: August 30, 1996.
FOR FURTHER INFORMATION CONTACT: Robert Barth, Office of Native
American Programs, Room 6728, Department of Housing and Urban
Development, 450 Golden Gate Avenue, San Francisco, CA 94102. (415)
436-8121. TTY (415) 436-6594. (These are not toll-free numbers.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The information collection requirements contained 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 number 2577-0191. 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.
Background
This final rule represents the culmination of a process which
commenced with the publication of a proposed rule on June 21, 1991 (56
FR 28666). This was followed by the first interim rule on April 7, 1992
and the second and last interim rule which was published in the Federal
Register of July 27, 1994 (59 FR 38326). The last interim rule became
effective on October 1, 1994, and invited public comments for a five
month period ending December 27, 1994. The principal impetus for this
rule making process was the need to implement various statutory
mandates included in Section 105 of the Department of Housing and Urban
Development Reform Act (Pub. L. 101-235) as amended by the National
Affordable Housing Act of 1990. In addition, the transfer of the
authority for the Community Development Block Grant Program for Indian
Tribes and Alaska Native Villages to the Office of Public and Indian
Housing, and specifically the Office of Native American Programs within
that office, occasioned a re-evaluation of various policy
determinations reflected or embodied in previously issued program
regulations.
Public Comments
The Department of Housing and Urban Development (HUD) received 18
individual comments from 5 sources on the interim rule published on
July 27, 1994. HUD received 3 letters from tribes and 2 from
representative associations. General comments are discussed below and
are followed by specific comments. The specific comments and the
Department's responses are discussed under ``Specific Comments,''
according to the section where they appear in the interim rule.
General Comments
Comment: One comment was received which stated that the 1994
revision of the 1992 rule is a ``long step in the wrong direction'' in
that the entire thrust of this rule is the centralization of decision
making in the HUD Central Office to the ultimate detriment of the
Indian tribes. This perception is apparently based upon the removal of
specific application procedures and detailed selection criteria from
the rule. As stated in the rule, this information would be included in
the Notices of Funding Availability (NOFAs) published for specific
funding cycles. The commenter is of the opinion that this change would
significantly, if not completely, remove the opportunity for public
comment on these items. The commenter also states that the application
kits provided by HUD for the last two funding rounds (presumably FY
1993 and FY 1994) contained requirements which went beyond NOFA
requirements. This statement is apparently provided as additional
support for the commenter's opinion that the centralization of decision
making with little or no opportunity for public comment is the intent
of this rule.
Response: It is the position of the Department that centralizing
decision making and restricting opportunity for public comment on this
process certainly is not the intent nor the result of this rule. The
inclusion of the specifics of application procedures and the detailed
selection criteria in the NOFA rather than in the rule does not
increase the centralization of decision making; application review and
funding decisions will continue to be made at the Area ONAPs. With
respect to the effect of these changes on the opportunity for public
comment, at best such opportunity would be increased by moving in this
direction and in no conceivable circumstance would such opportunity be
diminished as compared to that afforded under the previous interim
rule. The implementing regulations (24 CFR part 4) for section 103 of
the HUD Reform Act provide a significant window of opportunity for
public comment on the content of a NOFA. The Department encourages
tribes and other interested parties to take advantage of the
opportunity to impact the process during this period. It is
considerably easier to change the content of a NOFA from one funding
cycle to the next as compared with the process required to amend
program regulations.
Regarding the relationship between the NOFA and the application kit
issued by the Department, the purpose of the kit is to assist the
applicant in understanding NOFA and regulatory requirements and, if
necessary, to supplement NOFA instructions regarding form use and
completion. The purpose of the kit is not to impose additional
requirements on the applicant. The application kit issued for the FY
1995 ICDBG funding cycle was very closely reviewed to ensure that none
of the information provided established requirements beyond the NOFA or
Program Regulations.
Comment: One comment was received which stated that renaming the
Phoenix Office of Native American Programs as the Southwest Office of
Native American Programs works to the detriment of the tribes in the
jurisdiction of that office. The commenter also questions the source of
the funds necessary to raise the base allocation to each Area ONAP from
Sec. 500,000 to Sec. 1,000,000.
Response: The Department does not believe that changing the name of
the Area ONAP located in Phoenix will work to the detriment of any
tribes; the name change does not signify anything other than a change
in the name so that it better reflects the jurisdiction of this office;
the names of all other Area ONAPs have also been changed for the same
reason. With respect to the source of funds necessary to increase the
base
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allocation to each Area ONAP, it is to be noted that the change from
$500,000 to $1,000,000 in the base allocation represents the second
such change since the inception of the ICDBG program in 1978; the
original base allocation was $250,000. In making these changes it has
been the intent of the Department to increase the nation-wide equitable
availability of ICDBG funds.
Comment: One commenter raised an objection to moving the imminent
threat program from the Area ONAPs to Headquarters. It is the
observation of the commenter that Headquarters staff could not be as
knowledgeable about imminent threats in a specific area of the country
as the Area ONAP staff would be for that area.
Response: The Department agrees with the observation of the
commenter. However, the objection appears to be based on a misreading
of the changes made to subpart E--Imminent Threat Grants. These changes
were not intended to move the decision making process for such grants
from the Area ONAP to the Headquarters level nor is there such a
resultant effect. A clarifying memorandum was issued by ONAP on
February 9, 1995, to all Area ONAPs to make certain that this is
understood by all ONAP staff involved in this program. The changes were
to ensure that any eligible applicant would have potential access to
imminent threat funds. Before these changes, the establishment of an
Imminent Threat Set Aside was left to the determination of each Area
ONAP; some offices established such set asides and others did not.
Under this rule, all eligible applicants have the same potential access
to funds.
Comment: One commenter raised a strong objection to the elimination
of the provisions for correcting procedural errors. This commenter is
also of the opinion that HUD should have a uniform appeal procedure for
all competitive programs which would allow the redress of errors by the
raters in mathematical calculations or in the interpretation of program
requirements.
Response: Although the provisions for correcting procedural errors
have been removed from the rule, it was not the intent of the
Department to eliminate such a process; language identical to that in
the previous rule was published as part of the FY 1995 ICDBG NOFA.
Unless changed through a subsequent process of consultation, it will be
published as part of all subsequent NOFAs.
The argument made by the commenter for a uniform appeals process is
not related to the need to change the subject rule; it will, however,
be taken under advisement. It should however be noted that the
interpretation of program requirements is within the purview and
responsibility of the Department and, therefore, any appeals process
would be limited, as it always has been limited, to perceived errors of
compliance with procedural requirements.
Comment: One commenter (representing an association of housing
authorities) supports the resolution passed at the National American
Indian Housing Council's 1994 annual meeting that 1.5 percent of the
national appropriation for CDBG be reserved for the ICDBG.
Response: Increasing the percentage of the national CDBG
appropriation that is provided for the ICDBG program to 1.5 percent
from the current 1 percent would require a statutory change and it is,
therefore, outside the scope of rule making.
Comment: One commenter (representing an association of housing
authorities) strongly urges the allowance of comprehensive planning as
an eligible activity under the ICDBG program.
Response: Comprehensive planning is an eligible activity under the
ICDBG program (Sec. 953.205(a)). Funding for such activities could
however be affected by the statutory limitation (reiterated at
Secs. 953.205(c) and 953.206) which provides that no more than 20
percent of the funds of any ICDBG program may be used for planning and
administrative activities.
Specific Comments
Section 953.6--Technical Assistance
Comment: One commenter recommends that expanded technical
assistance should be made available to tribes/villages and that the
Department should provide in-depth regulations regarding the technical
assistance role of the field staff.
Response: On January 5, 1994, HUD's General Counsel issued a
memorandum to all HUD staff in which he clearly describes the type and
form of technical assistance which may be provided by HUD staff to
potential applicants for assistance under the restrictions imposed by
Section 102 of the HUD Reform Act. As it is described in this
memorandum, permissible technical assistance activities include
explaining and responding to questions concerning program regulations,
defining terms in an application package, and providing other forms of
technical guidance that may be described in the NOFA. In addition,
before the deadline for the submission of applications, HUD employees
may assist applicants by reviewing draft applications and identifying
those parts of the applications that need substantive improvement. HUD
employees may not, however, advise applicants on how to make the
improvements. The provision of technical assistance of a type and in a
manner inconsistent with that described by the General Counsel would
not be allowed by the Reform Act and, therefore, would require a
statutory change to be possible.
The Department encourages potential applicants to take advantage of
the extensive technical assistance available from the staff of the
various Area ONAPs. One of the principal reasons behind the recent
reorganization of the Area ONAPs was to improve the ability of the
organization to meet the technical assistance needs of its customers
within the parameters established by the HUD Reform Act.
Section 953.100(b)(1)--Ceilings
Comment: Two comments were made regarding the establishment of
grant ceilings. One commenter stated that the method of setting grant
ceilings is inequitable because in certain Area ONAP jurisdictions,
smaller tribes are allowed to compete for the same amount as larger
tribes. The other commenter stated that there should not be a policy of
allowing Area ONAPs to establish different ceilings for different size
tribes/villages as is done by certain of these offices.
Response: Each Area ONAP has the ability to recommend the ceiling
or ceilings for its jurisdiction. The Assistant Secretary for Public
and Indian Housing has the final authority to determine these ceilings.
The Department has determined that the present procedure for
establishing ceilings is the most appropriate method and, therefore,
has made no change to this section other than to eliminate a sentence
which was merely descriptive of one option available to Area ONAPs.
Section 953.101--Allocation of Funds
Comment: One commenter supports the increase in the base amount
allocation to each Area ONAP but strongly disagrees with the formula
for allocating the remaining funds and contends that it is unfair and
detrimental to the Alaska native villages. It is the position of the
commenter that using the total eligible Native American population in
an Area ONAP's jurisdiction as a factor in this allocation process is
not equitable. The commenter provides three suggestions for changing
the formula, all of which are based upon using the number of eligible
applicants in an Area ONAP's
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jurisdiction rather than the eligible Native American population in
each jurisdiction.
Response: It is the position of the Department that the present
procedure used to allocate funds to each Area ONAP after the base
amount is allocated is the most appropriate method to use to ensure
that the allocations reflect the relative community development needs
of eligible applicants in each area. The number of eligible applicants
in each area is not an accurate measure of the relative community
development needs of the eligible applicants in that area compared to
another area.
Comment: One commenter states that the U.S. Census population data
is not a true and accurate count of Native populations and that HUD
should therefore allow each Area ONAP to request and use more accurate
data from the tribes/villages in its area.
Response: The Department recognizes that census data on Indian and
Alaska Native populations may be incomplete or inaccurate. Census data
is, however, the only such information which is consistently available
and which is reasonably accurate when aggregated by Area ONAP
jurisdiction. It has been the experience of the Department that census
data inaccuracies tend to affect each area equally and, therefore, do
not impact the relative distribution of Native American population
characteristics such as poverty and substandard housing conditions.
Based on these considerations, the Department will continue to use U.S.
census data in the formula for allocating funds to the Area ONAPs.
In order to eliminate any possible confusion or misunderstanding
regarding the source of data used to allocate funds to the Area ONAPs,
paragraph (a)(2) of this section has been revised to include explicit
reference to the U.S. Bureau of the Census. A corresponding clarifying
revision has been made to the definition of eligible Indian population
in Sec. 953.4.
These revisions are not substantial changes to the rule since data
provided by the U. S. Bureau of the Census has been used to allocate
funds to field offices since the inception of the ICDBG program in
1978.
Please be advised, however, that the Department intends to schedule
a series of consultation sessions throughout the country. During these
sessions, the type and source of data used by the Department for funds
allocation and other purposes will be agenda items. The hope is that an
identification and discussion of the availability and applicability of
other sources of data which could more accurately reflect the relative
and absolute community development needs in Native American communities
will occur.
Section 953.300--Application Requirements
Comment: One commenter states that this section is agreeable in
that it does not allow multiple project applications.
Response: The commenter has misread this section since it does not
address the issue of multiple project applications. However, it is to
be noted that an applicant could include as many projects as it wishes
in an application as long as the total ICDBG cost for all projects does
not exceed the applicable grant ceiling. Given the apparent
misunderstanding of this policy, it will be clearly stated in the NOFA
published for this program.
Comment: One comment was received which indicates that paragraphs
(b) and (c) of this section (953.300) are in direct contradiction.
Response: These two paragraphs do not contradict each other.
Paragraph (b) addresses the recognition and reimbursement of costs
incurred by an applicant before the submission of an application.
Paragraph (c) addresses the recognition and reimbursement of costs
incurred by an applicant after the submission of an application but
before HUD approval. To eliminate any possible misunderstanding, these
two paragraphs have been rewritten.
Section 953.302--Selection Process
Comment: One commenter expresses concerns over the meaning of the
language in Sec. 953.302(b) (Application rating system) and
Sec. 953.302(c) (Periodic NOFAs) and asks for clarification of the
phrases ``rated competitively within each field office's jurisdiction''
and ``will rate applications on the basis of their responsiveness.''
The commenter supports allowing each Area ONAP to establish its own
rating system for the NOFAs based upon the responses of the tribes in
its jurisdiction, but does not support the establishment of a generic
rating system for all tribes.
Response: The first phrase for which clarification is requested
should be construed to mean that all applications submitted for funding
consideration by applicants in the jurisdiction of a specific Area ONAP
are in competition for the ICDBG funds allocated to that Area ONAP. The
second phrase means that the Area ONAPs will rate applications on the
basis of their responsiveness to the criteria identified in the Program
Regulations and further detailed in the NOFA. In all of the ICDBG
funding cycles that have taken place since the implementation of the
HUD Reform Act, a NOFA has been published which contains the detailed
rating criteria and the specifics of the application procedures to be
used; the interim rule does not change this process. Each of these
NOFAs has contained items which vary from one Area ONAP jurisdiction to
another, e.g., rehabilitation grant limits, tie breaking
considerations, etc. These variations were included to reflect real
differences between the circumstances found in the various
jurisdictions. It is important that eligible applicants provide
specific feedback to their Area ONAPs so that the need for additional
jurisdictional variations can be analyzed and, if supported,
incorporated into the NOFA.
Comment: Another commenter believes that Sec. 953.302(b) is too
wide open in that each Area ONAP is afforded too much judgmental
discretion, i.e., one office could determine a project to have
unreasonable costs and be inappropriate for the intended use and reject
it from further consideration. Another office could determine that a
similar project does not fail these threshold requirements and proceed
to rate and rank the project. The commenter recommends that the
selection process be made consistent nationally so that each applicant
has an equal chance of funding.
Response: It is expected and required of each Area ONAP that
reasonable and responsible judgement be exercised in implementing all
aspects of the selection system. The specific aspects of the selection
process referenced by commenter are two of the community development
appropriateness thresholds which have been in the Program Regulations
since the March 18, 1983 interim rule was published for effect.
Guidance has been provided and will continue to be provided to the Area
ONAPs by the Headquarters ONAP to ensure equitable and consistent
implementation of these threshold requirements. It is the position of
the Department that no change is necessary in this section.
Section 953.303--Housing Rating Category
Comment: It is the position of one commenter that the threshold
requirement that an applicant shall assure that it will use project
funds to rehabilitate units only when the homeowner's payments are
current may raise issues of confidentiality.
Response: It is necessary to note that this specific threshold
applies to homeownership and not rental situations. As such, this
specific requirement for a homeowner who
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wishes to participate in an ICDBG funded rehabilitation project should
be viewed as a reasonable condition for participation. It is also to be
noted that in all single family housing rehabilitation funded with
ICDBG funds, the households to be assisted must be of low or moderate
income status. The requirement that the household document this status
could also be viewed by some as raising issues of confidentiality, but
it is the position of the Department that it is also a reasonable
prerequisite for assistance.
Section 953.304--Community Facilities Rating Category
Comment: One commenter notes that the definition of the ``neediest
segment of the population'' has been removed from the interim rule and
asks what replaces it.
Response: Included among the details of the rating criterion of
project need which are now found in the NOFA is the definition of
``neediest segment of the population''.
Section 953.400--Criteria for Funding (Imminent Threat Grants)
Comment: One commenter states that the requirement that these funds
may only be used for imminent threats which impact an entire service
area is too restrictive.
Response: The ICDBG program was enacted by Congress to address
community development needs and was not enacted to provide assistance
grants to individuals. Therefore, it is the position of the Department
that the requirement that a threat to health or safety must impact an
entire service area and not just an individual or household is
consistent with congressional mandate and intent. The rule has not been
changed. It is to be noted, however, that the specific language of the
comment indicates that the commenter may be defining ``service area''
in a manner which is more restrictive than the definition provided in
Sec. 953.4 and the commenter is urged to review that definition.
Subpart F--Grant Administration
Comment: One commenter requests that income generated by economic
development activities funded with ICDBG funds should be able to be
retained and used at the grantee's discretion. It is the opinion of the
commenter that the requirements in the previous interim rule at
Sec. 571.505 (c) were more flexible in this regard.
Response: When the current interim rule was developed, the language
of Sec. 953.505 was written to incorporate the language of 24 CFR
570.504 which had previously only been referenced in the previous
interim rule in Sec. 571.504. However, the current and previous interim
rules were both in error. Section 913 of the National Affordable
Housing Act of 1990 included a number of technical corrections and
clarifications regarding the applicability of various sections of Title
I of the Act of 1974, as amended, to the CDBG program for Indian
tribes. Among the clarifications listed in this section was a statement
regarding the applicability of the various subsections of Section 104
of Title I of the 1974 Act. It is stated that only subsections (f),
(g), and (k) of that section apply to the ICDBG program. The
significance of this statement is that the statutory basis in the 1974
Act for the regulatory program income requirements and restrictions
specified in Sec. 570.504 is subsection (j) of Section 104. Given the
inapplicability of this subsection to the ICDBG program, the Department
has determined that 24 CFR 85.25--Program income (with the
modifications stated in a revised Sec. 953.503), will apply to the
ICDBG program. Specifically with respect to the commenter's concerns,
it is to be noted that as defined in Sec. 85.25 (b), program income
does not include income generated by the grant supported activity after
grant close-out. Given the nature of economic development activities
funded with ICDBG funds, it is most likely that any income generated by
these types of projects would occur after the grant period and
therefore its use would not be subject to regulatory restrictions.
Other Changes Made by This Rule
Subpart A--General Provisions
Section 953.1--Applicability and scope. The term ``Indian tribes
and Alaska native villages'' has been changed to ``applicants'' since,
as defined in Sec. 953.5, eligible applicants include entities, i.e.,
certain tribal organizations, other than Indian tribes and Alaska
native villages.
Section 953.4--Definitions. Six new definitions have been added--a
definition of Area ONAP, Assistant Secretary, Buildings for the General
Conduct of Government, Imminent treat, Microenterprise, and Small
Business. Please note that the definition of Area ONAP replaces that of
Field office.
The definition of Tribal government, Tribal governing body or
Tribal council has been modified to clarify that the Federal entity
providing recognition is the Bureau of Indian Affairs.
The definition of Subrecipient has been included in this section
rather than in subpart F--Grant Administration. In the interim rule
this definition was included in that subpart by virtue of the inclusion
(by reference) of subpart J of 24 CFR part 570 in that subpart.
Section 953.6--Technical assistance. This section has been deleted
since it did not address a matter or issue of program regulation; it
was a statement of Departmental policy. The deletion of this section in
no way diminishes the commitment of the Department to the provision of
technical assistance to eligible applicants. The response to the
comment submitted on this section reflects Departmental policy on this
matter.
Section 953.6--Waivers. This section (formerly Sec. 953.7) has been
revised to better state the policy of the Department regarding a waiver
of a regulatory requirement. The revised language also describes
procedural requirements for such waivers.
Subpart B--Allocation of Funds
Section 953.101--Field Office allocation of funds. This section has
been re-titled Area ONAP allocation of funds and has been changed to
clearly state that any amount retained by Headquarters to fund imminent
threat grants pursuant to Sec. 953.402 of this part will not be
available for allocation to the Area ONAPs.
Section 953.102--Use of recaptured and unawarded funds. The title
of this section has been changed so that it more accurately reflects
its content. The language of the section has also been revised so that
it more clearly states the requirements for the use of funds recaptured
or those which may remain unawarded after the completion of a funding
competition by an Area ONAP. The term ``unawarded'' replaces the term
``undistributed'' which was used in the interim rule; the term
``undistributed'' is not a term which satisfactorily describes
allocated funds which may remain with an Area ONAP after the completion
of a funding competition.
Subpart C--Eligible Activities
To improve the ease of use of the ICDBG rule for program applicants
and grantees, subpart C of part 570 has been incorporated in this
subpart with the exception of those provisions which apply only to the
Entitlement Cities or HUD-administered Small Cities programs and with
the additional exceptions or modifications discussed below. In the
interim rule, subpart C of part 570 was incorporated by reference.
Those sections of subpart C in the interim rule which were listed
as modifications to subpart C of part 570 (Sec. 953.201 through
Sec. 953.203) have been
[[Page 40088]]
incorporated in the appropriate sections of the revised subpart C.
In the process of reviewing the various sections of subpart C of
part 570 prior to their incorporation into subpart C of part 953, it
was determined that certain of these sections either included language
which was duplicative of language contained in other sections of the
rule or which was excessively descriptive or, that certain sections
included paragraphs which should be relocated to other sections or
subparts to facilitate ease of use and understanding of the rule.
Based on these determinations, the following modifications or
revisions have been made:
Section 570.200--General policies. 1. The language contained in
paragraph (a)(3)--Compliance with the primary objective (as modified to
meet the requirements of the ICDBG program) has been incorporated in
Sec. 953.208.
2. Paragraph (a)(4) Compliance with environmental review procedures
has not been incorporated since it duplicated the requirements included
in Sec. 953.605--Environment.
3. The language of paragraph (a)(5)--Cost principles was made part
of Sec. 953.501 which has been titled Applicability of uniform
administrative requirements and cost principles.
4. The language of paragraphs (b)--Special policies governing
facilities and paragraph (c)--Special assessments under the CDBG
program has been incorporated in Sec. 953.201(c)--Public facilities.
5. The introductory language of paragraph (d)--Consultant
activities has been eliminated since it was determined to be
superfluous.
6. The language of paragraph (d)(1) regarding the limitation on the
rate of compensation in employer-employee relationships has been
incorporated in the revised Sec. 953.501 as paragraph (c)(2) of that
section.
7. Both paragraph (e)--Recipient determinations required as a
condition of eligibility and (f)--Means of carrying out eligible
activities have not been included in the rule since it was determined
that the language in these paragraphs was either duplicated in other
sections of the rule or it was exemplary and not expository and did not
address a matter or issue of program regulation.
8. The language of paragraph (g)--Limitation on planning and
administrative costs has been incorporated in Sec. 953.206--Program
administration costs.
9. The language in paragraph (h)--Constitutional prohibition was
incorporated into subpart G--Other Program Requirements as
Sec. 953.600-- Constitutional prohibition.
Section 570.205--Eligible planning, urban environmental design and
policy-planning-management capacity building activities. The review of
subpart C of part 570 discussed above revealed that much of the
language included in this section was more exemplary or descriptive of
the types of activities possibly eligible under this section and did
not address a matter or issue of program regulation. The resultant
Sec. 953.205 is, therefore, more concise than Sec. 570.205, but it
affords the same degree of flexibility in the use of ICDBG funds for
planning and management capacity improvement types of activities
authorized by section 105(a)(12) of the 1974 Act, as amended.
Subpart D--Single Purpose Grant Application and Selection Process
Section 953.301--Screening and review of applications. This section
has been removed from the rule since it was determined to be
superfluous. All subsequent sections in this subpart have been re-
numbered.
Section 953.301--Selection process.
This section (formerly numbered 953.302) has been re-formatted to
clarify threshold requirements and the role of the NOFA with respect to
this process. No substantive changes have been made in the
requirements.
Section 953.303--Housing rating category, section 953.304--
Community. facilities rating category, and section 953.305--Economic
development rating category. These three sections have been
consolidated into two new sections Sec. 953.303-- Project specific
threshold requirements and Sec. 953.304--Project rating categories.
This consolidation process did not involve or include any substantial
changes in requirements. It however is to be noted that independent of
this consolidation, changes were made which affect project specific
threshold requirements for economic development projects. The threshold
requirement that ``an applicant shall demonstrate the need for grant
assistance by providing documentation to support a determination that
the assistance is appropriate to implement an economic development
project'' has been deleted. This requirement has proven to be an
unnecessary complication for potential applicants for assistance.
One of the two remaining threshold requirements for economic
development projects, i.e., that an analysis demonstrates that public
benefit commensurate with the assistance requested can reasonably be
expected, has been expanded in scope and revised. The expansion/
revision of this threshold was done to state this requirement in a
manner consistent with the objectives for the evaluation and selection
of economic development projects which were set forth in Section 806 of
the Housing and Community Development Act of 1992. As was indicated in
the Supplementary Information section of the January 5, 1995 Final Rule
and guidelines (24 CFR part 570), that rule would not apply to the
ICDBG Program; necessary compliance with the requirements of the 1992
Act would be established as part of a future rule. The Department has
reviewed the need to establish such compliance as part of a future rule
and has determined that the rating criteria for economic development
projects set forth in this rule, as explained and reified in all future
NOFAs, will be adequate to achieve general compliance with the
guidelines set forth in the 1992 Act.
The rating requirements for economic development projects have also
been changed to include a rating criterion ``additional
considerations'' which was inadvertently left out of the interim rule.
Section 953.304--Funding process. The language of
Sec. 953.304(b)(2) [formerly Sec. 953.307(b)(2)] has been changed to
delete an incorrect reference to 24 CFR part 58 made in the interim
rule and to more concisely state the applicable requirements of part
58.
Section 953.305--Program amendments. The language of this section
(formerly Sec. 953.308) has been changed since paragraph (b) of this
section in the interim rule referenced application component
requirements which were no longer specified anywhere in the rule. This
paragraph now references application component requirements now
specified in the NOFA. In addition, this paragraph has been revised to
raise the dollar amount of a program amendment request which must be
rated from $25,000 to $100,000. This change is consistent with the
Departmental policy of increasing program flexibility for clients and
customers while ensuring compliance with statutory requirements and
congressional intent.
Section 953.306--Public services. This section has been deleted
since it duplicates the language in Sec. 953.201(e) --Public services.
Subpart E--Imminent Threat Grants
Section 953.401--Application process. Paragraph (b) of this section
has been changed since the interim rule referenced application
requirements which were no longer specified anywhere in the rule. This
paragraph
[[Page 40089]]
now indicates that the form and content requirements for imminent
threat grant applications will be specified in the NOFA.
Section 953.402--Environmental review. This section has been
eliminated and the language of the section has been relocated to
Sec. 953.605 (b).
Section 953.402--Availability of Funds. This section (formerly
Sec. 953.403) has been changed to indicate that the amount which may be
retained by HUD for imminent threat grants will be determined by the
Assistant Secretary. It is the determination of the Department that
this discretion will provide for necessary flexibility. The amount to
be retained will be published in the NOFA and will be based upon an
anticipated level of demand which will take into consideration historic
funding levels and other relevant factors.
Subpart F--Grant Administration
To improve the ease of use of the ICDBG rule by program applicants
and grantees, those applicable sections of subpart J of part 570--
Program Administration--have been incorporated into subpart F of the
ICDBG rule; the interim rule incorporated these sections by reference.
Section 570.508--Public access to program records and Section 570.509--
Grant closeout procedures have been incorporated without substantial
modification as Sec. 953.507 and Sec. 953.508, respectively.
The following sections or provisions were either not incorporated
or they were incorporated but modified as discussed below.
Section 570.500--Definitions. This section has not been
incorporated. The definition of program income applicable to the ICDBG
program is set forth in Sec. 953.503. As discussed above, the
definition of subrecipient is set forth in Sec. 953.4.
Section 570.501--Responsibility for grant administration. This
section, with appropriate modifications to meet the requirements of the
ICDBG program, has been incorporated as Sec. 953.500.
Section 570.502--Applicability of uniform administrative
requirements. This section, with the following modifications, has been
incorporated into Sec. 953.501.
1. Reference to the program income requirements of 24 CFR 85.25 (as
modified by Sec. 953.503) is included in Sec. 953.501 as paragraph (7).
Reference to this section of part 85 is not included in Sec. 570.501
since there are different statutory program income requirements for the
CDBG program, as discussed above in the response to the comment
submitted regarding these requirements. Given the inclusion of a
paragraph referencing Sec. 85.25, the number of paragraphs in
Sec. 953.501 is 21 as compared to 20 in Sec. 570.502.
2. The language of paragraph (a)(12) has been incorporated in
Sec. 953.501(a)(13) and additional language has been added so that the
alternatives to the payment and performance bonding requirements of
Sec. 85.36(b) which are acceptable to HUD for the ICDBG program are
stated. These acceptable alternatives will allow grantees increased
flexibility to adequately ensure performance and payment by a
contractor while at the same time allowing the grantee to more easily
meet its other obligations and responsibilities under the rule.
3. The language of paragraph (a)(16) has been incorporated in
Sec. 953.501(a)(17) and has been added to by stating the starting date
for record retention requirements.
Section 570.504--Program income. This section has not been
incorporated in Sec. 953.501.
Section 570.505--Records to be maintained. This section has been
incorporated, in a highly modified form, in Sec. 953.505. Section
953.505 merely states that each grantee shall establish and maintain
sufficient records to enable HUD to determine whether or not it has met
the requirements of this part. A grantee guidance document which will
recommend specific records to be maintained will be issued by HUD in
the near future.
Section 570.507--Reports. This section has been incorporated, in a
modified form, as Sec. 953.506. The modifications include the deletion
of inapplicable performance reporting requirements and the relocation
to this section of the requirements of Sec. 953.700--Reports to be
submitted of the interim rule. In addition to this relocation, specific
timing requirements for the submission of the status and evaluation
reports has been added.
Section 570.510--Transferring projects from urban counties to
metropolitan cities. Section 570.513--Lump sum drawdown for financing
of property rehabilitation. These two sections have not been
incorporated. It is to be noted that lump sum drawdowns are authorized
under subsection (h) of section 104 of Title I of the 1974 Act. This
subsection was not stated in section 913 of the National Affordable
Housing Act of 1990 as being applicable to the CDBG Program for Indian
tribes.
The provisions of the following sections of subpart F of the
interim rule (with modifications discussed below) have been
incorporated into the final rule as follows.
------------------------------------------------------------------------
Interim rule Final rule
------------------------------------------------------------------------
Sec. 953.502--Force account construction.................. Sec. 953.5
09
Sec. 953.503--Indian preference........................... Sec. 953.5
10
Sec. 953.505--Program income.............................. Sec. 953.5
03
------------------------------------------------------------------------
The following modifications have been made to these sections.
Force account construction--The last sentence in paragraph (e)
regarding the approval of alternative requirements in lieu of bonding
has been deleted. As discussed above, acceptable alternatives to
performance and payment bonding are set forth in Sec. 953.501(a)(13).
Indian preference--This section has been revised in the following
ways.
1. Inaccuracies in certain referenced definitions in the interim
rule have been corrected.
2. A definition of ``Indian'' as this word is defined in the Indian
Self-Determination and Education Assistance Act (25 U.S.C. 450 b) has
been included.
3. Paragraph (e), Additional Indian preference requirements is
being deleted since its provisions have never been used and, upon
analysis, it did not appear to be meaningful or necessary.
4. A new paragraph (e) Complaint procedures in which the specific
process to be followed is clarified and in which the grantee is
identified as the final arbiter has been added.
Program income--The basis for the changes to this section and the
changes themselves are addressed above in the section Specific
Comments.
Subpart G--Other Program Requirements
In Sec. 953.600 of the interim rule it is stated that the following
requirements of 24 CFR Part 570, subpart K apply to grants under the
ICDBG Program:
Sec. 570.605--National Flood Insurance Program
Sec. 570.608--Lead-based paint
Sec. 570.609--Use of debarred, suspended or ineligible contractors
or subrecipients
Sec. 570.610--Uniform administrative cost principles
A review of these requirements with the intent of incorporating
them in their entirety into the ICDBG rule resulted in the following
determinations.
Section 570.605--National flood insurance program. This section was
not incorporated into the final rule since it duplicates the
requirements of 24 CFR 58.6(a) in which grantee responsibilities under
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4001--4128) are
set forth.
[[Page 40090]]
Section 570.608--Lead-based paint. The language of this section was
modified prior to incorporation to reflect the current policies of the
Department. The modifications were based on recommendations from HUD's
Office of Lead-Based Paint Abatement and Poisoning Prevention. These
requirements are set forth in Sec. 953.607. The Department, however,
has published a proposed regulation to implement the Residential Lead-
Based Paint Hazard Reduction Act of 1992, Title X of the Housing and
Community Development Act of 1992 (Pub. L. 102-550). The June 7, 1996
regulation will substantially alter the lead-based paint requirements
for all HUD programs including the CDBG Program for Indian Tribes and
Alaska Native Villages.
Section 570.609--Use of debarred, suspended or ineligible
contractors or subrecipients. It was determined that the incorporation
of this section would not be completely appropriate without significant
modifications. Instead of modifying this section so that its provisions
better fit the ICDBG Program, the provisions and requirements from the
Indian HOME Program regulations which address these responsibilities
will be incorporated into the final rule since the requirements for
both programs are the same. Therefore, the requirements which govern
the use of debarred, suspended or ineligible contractors or
subrecipients in the final rule (now Sec. 953.608) are the same as
those for the Indian HOME Program.
Section 570.610--Uniform administrative cost principles. This
section was not incorporated into the final rule. It was determined
that it duplicated the requirements set forth in Sec. 953.501--
Applicability of uniform administrative requirements and cost
principles.
Section 953.602--Relocation and real property acquisition. The
language of this section was revised to reflect current policies and
terminology used by the Department with respect to relocation and real
property acquisition activities related to or funded by programs under
the Act.
Section 953.605--Environment. This section was revised to
explicitly reference the flood insurance, coastal barrier resource and
airport clear zone requirements found at 24 CFR 58.6 and to correctly
identify the title of 24 CFR part 58.
Section 953.606--Conflict of interest. The references in subsection
(a) to the applicability of OMB Circular A-110 have been deleted and
replaced with a reference to 24 CFR 84.42; part 84 has superseded OMB
Circular A-110.
Subpart H--Program Performance
Section 953.700--Reports to be submitted by grantee. As stated
above, reporting requirements for ICDBG grantees have been consolidated
under Sec. 953.507. With the deletion of this section, all subsequent
sections in this subpart have been re-numbered.
Section 953.701--Corrective and remedial actions. Paragraph (b)(3)
of this section (formerly Sec. 953.702) has been deleted since
certifications of compliance are no longer used in the ICDBG program.
Other Matters
Executive Order 12866
This final 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 this
final rule as a result of that review are clearly identified in the
docket file, which is available for public inspection in the office of
the Department's Rules Docket Clerk, Room 10276, 451 Seventh Street
SW., Washington, DC.
National Environmental Policy Act
A Finding of No Significant Impact with respect to the environment
was made in accordance with HUD regulations at 24 CFR Part 50, which
implement Section 102(2)(C) of the National Environmental Policy Act of
1969, when the July 27, 1994 interim rule was issued. Because no
significant changes have been made that would pertain to the
environment, that finding applies to this final rule. 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 at the
above address.
Regulatory Flexibility
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The rule
establishes criteria for funding eligible grantees among Indian Tribes/
Villages and has no impact on small entities.
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 would not have substantial direct effects on
States or their political subdivisions, or the relationship between the
federal government and the States, or on the distribution of power and
responsibilities among the various levels of government. As a result,
the rule is not subject to review under the Order. While the rule has
some direct effects on States and political subdivisions, those effects
are limited to direct implementation of instructions contained in
statutes governing the grant program. Given the lack of discretion in
the Department to refrain from implementing these statutory
instructions, further analysis of federalism concerns would serve no
useful purpose.
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule would not have
potential for significant impact on family formation, maintenance, and
general well-being, and, thus, is not subject to review under the
Order.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance program number is
14.862.
List of Subjects in 24 CFR Part 953
Alaska, Community development block grants, Grant programs--housing
and community development, Indians, Reporting and recordkeeping
requirements.
Accordingly, 24 CFR Part 953 is revised to read as follows:
PART 953--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND
ALASKA NATIVE VILLAGES
Subpart A--General Provisions
Sec.
953.1 Applicability and scope.
953.2 Program objective.
953.3 Nature of program.
953.4 Definitions.
953.5 Eligible applicants.
953.6 Waivers.
Subpart B--Allocation of Funds
953.100 General.
953.101 Area ONAP allocation of funds.
953.102 Use of recaptured and unawarded funds.
Subpart C--Eligible Activities
953.200 General policies.
953.201 Basic eligible activities.
953.202 Eligible rehabilitation and preservation activities.
953.203 Special economic development activities.
953.204 Special activities by Community-Based Development
Organizations (CBDOs).
[[Page 40091]]
953.205 Eligible planning, urban environmental design and policy-
planning-management-capacity building activities.
953.206 Program administration costs.
953.207 Ineligible activities.
953.208 Criteria for compliance with the primary objective.
Subpart D--Single Purpose Grant Application and Selection Process
953.300 Application requirements.
953.301 Selection process.
953.302 Project specific threshold requirements.
953.303 Project rating categories.
953.304 Funding process.
953.305 Program amendments.
Subpart E--Imminent Threat Grants
953.400 Criteria for funding.
953.401 Application process.
953.402 Availability of funds.
Subpart F--Grant Administration
953.500 Responsibility for grant administration.
953.501 Applicability of uniform administrative requirements and
cost principles.
953.502 Agreements with subrecipients.
953.503 Program income.
953.504 Use of real property.
953.505 Records to be maintained.
953.506 Reports.
953.507 Public access to program records.
953.508 Grant closeout procedures.
953.509 Force account construction.
953.510 Indian preference requirements.
953.511 Use of escrow accounts for rehabilitation of privately
owned residential property.
Subpart G--Other Program Requirements
953.600 Constitutional prohibition.
953.601 Nondiscrimination.
953.602 Relocation and real property acquisition.
953.603 Labor standards.
953.604 Citizen participation.
953.605 Environment.
953.606 Conflict of interest.
953.607 Lead-based paint.
953.608 Debarment and suspension.
Subpart H--Program Performance
953.700 Review of grantee's performance.
953.701 Corrective and remedial actions.
953.702 Reduction or withdrawal of grant.
953.703 Other remedies for noncompliance.
Authority: 42 U.S.C. 3535(d) and 5301 et seq.
Subpart A--General Provisions
Sec. 953.1 Applicability and scope.
The policies and procedures described in this part apply to grants
to eligible applicants under the Community Development Block Grant
(CDBG) program for Indian tribes and Alaska native villages.
Sec. 953.2 Program objective.
The primary objective of the Indian CDBG (ICDBG) Program and of the
community development program of each grantee covered under the Act is
the development of viable Indian and Alaska native communities,
including decent housing, a suitable living environment, and economic
opportunities, principally for persons of low and moderate income. The
Federal assistance provided in this part is not to be used to reduce
substantially the amount of tribal financial support for community
development activities below the level of such support before the
availability of this assistance.
Sec. 953.3 Nature of program.
The selection of single purpose grantees under subpart B of this
part is competitive in nature. Therefore, selection of grantees for
funds will reflect consideration of the relative adequacy of
applications in addressing tribally determined need. The selection of
grantees of imminent threat grants under the provisions of subpart B of
this part is not competitive in nature. However, applicants for funding
under either subpart must have the administrative capacity to undertake
the community development activities proposed, including the systems of
internal control necessary to administer these activities effectively
without fraud, waste, or mismanagement.
Sec. 953.4 Definitions.
Act means Title I of the Housing and Community Development Act of
1974, as amended (42 U.S.C. 5301 et seq.)
Area ONAPs mean the HUD Offices of Native American Programs having
field office responsibility for the ICDBG Program.
Assistant Secretary means the Assistant Secretary for Public and
Indian Housing.
Buildings for the general conduct of government mean office
buildings and other facilities in which the legislative, judicial or
general administrative affairs of the government are conducted. This
term does not include such facilities as neighborhood service centers
or special purpose buildings located in low and moderate income areas
that house various non-legislative functions or services provided by
the government at decentralized locations.
Chief executive officer means the elected official or legally
designated official who has the prime responsibility for the conduct of
the affairs of an Indian tribe or Alaska native village.
Eligible Indian population means the most accurate and uniform
population data available from data compiled and published by the
United States Bureau of the Census available from the latest census
referable to the same point or period of time for Indian tribes and
Alaska native villages eligible under this part.
Extent of overcrowded housing means the number of housing units
with 1.01 or more persons per room, based on data compiled and
published by the United States Bureau of the Census available from the
latest census referable to the same point or period of time.
Extent of poverty means the number of persons whose incomes are
below the poverty level, based on data compiled and published by the
United States Bureau of the Census referable to the same point or
period in time and the latest reports from the Office of Management and
Budget.
HUD means the Department of Housing and Urban Development.
ICDBG Program means the Indian Community Development Block Grant
Program.
Identified service area means:
(1) A geographic location within the jurisdiction of a tribe (but
not the entire jurisdiction) designated in comprehensive plans,
ordinances, or other tribal documents as a service area;
(2) The Bureau of Indian Affairs (BIA) service area, including
residents of areas outside the geographic jurisdiction of the tribe; or
(3) The entire area under the jurisdiction of a tribe which has a
population of members of under 10,000.
Imminent threat means a problem which if unresolved or not
addressed will have an immediate negative impact on public health or
safety.
Low and moderate income beneficiary means a family, household, or
individual whose income does not exceed 80 percent of the median income
for the area, as determined by HUD, with adjustments for smaller and
larger households or families. However, HUD may establish income
ceilings higher or lower than 80 percent of the median for the area on
the basis of HUD's findings that such variations are necessary because
of unusually high or low household or family incomes. In reporting
income levels to HUD, the applicant must include and identify the
distributions of tribal or village income to families, households, or
individuals.
Microenterprise means a business that has five or fewer employees,
one or more of whom owns the enterprise.
Secretary means the Secretary of HUD.
Small business means a business that meets the criteria set forth
in section 3(a) of the Small Business Act (15 U.S.C. 631, 636, and
637).
Subrecipient means a public or private nonprofit agency, authority
or organization, or a for-profit entity
[[Page 40092]]
described in Sec. 953.201(o), receiving ICDBG funds from the grantee or
another subrecipient to undertake activities eligible for assistance
under subpart C of this part. The term excludes a CBDO receiving ICDBG
funds from the grantee under the authority of Sec. 953.204, unless the
grantee explicitly designates it as a subrecipient. The term does not
include contractors providing supplies, equipment, construction or
services subject to the procurement requirements in 24 CFR 85.36 or in
24 CFR Part 84, as applicable.
Tribal government, Tribal governing body or Tribal council means
the governing body of an Indian tribe or Alaska native village as
recognized by the Bureau of Indian Affairs.
Tribal resolution means the formal manner in which the tribal
government expresses its legislative will in accordance with its
organic documents. In the absence of such organic documents, a written
expression adopted pursuant to tribal practices will be acceptable.
URA means the Uniform Relocation and Real Property Acquisition
Policies Act of 1970, as amended (42 U.S.C. 4601 et. seq.).
Sec. 953.5 Eligible applicants.
(a) Eligible applicants are any Indian tribe, band, group, or
nation, including Alaska Indians, Aleuts, and Eskimos, and any Alaska
native village of the United States which is considered an eligible
recipient under Title I of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450) or which had been an eligible recipient
under the State and Local Fiscal Assistance Act of 1972 (31 U.S.C.
1221). Eligible recipients under the Indian Self-Determination and
Education Assistance Act will be determined by the Bureau of Indian
Affairs and eligible recipients under the State and Local Fiscal
Assistance Act of 1972 are those that have been determined eligible by
the Department of Treasury, Office of Revenue Sharing.
(b) Tribal organizations which are eligible under Title I of the
Indian Self-Determination and Education Assistance Act may apply on
behalf of any Indian tribe, band, group, nation, or Alaska native
village eligible under that act for funds under this part when one or
more of these entities have authorized the tribal organization to do so
through concurring resolutions. Such resolutions must accompany the
application for funding. Eligible tribal organizations under Title I of
the Indian Self-Determination and Education Assistance Act will be
determined by the Bureau of Indian Affairs or the Indian Health
Service, as appropriate.
(c) To apply for funding in a given fiscal year, an applicant must
be eligible as an Indian tribe or Alaska native village, as provided in
paragraph (a) of this section, or as a Tribal organization, as provided
in paragraph (b) of this section, by the application submission date.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.6 Waivers.
Upon determination of good cause, HUD may waive any provision of
this part not required by statute. Each waiver must be in writing and
must be supported by documentation of the pertinent facts and grounds.
Subpart B--Allocation of Funds
Sec. 953.100 General.
(a) Types of grants. Two types of grants are available under the
Indian CDBG Program.
(1) Single purpose grants provide funds for one or more single
purpose projects consisting of an activity or set of activities
designed to meet a specific community development need. This type of
grant is awarded through competition with other single purpose
projects.
(2) Imminent threat grants alleviate an imminent threat to public
health or safety that requires immediate resolution. This type of grant
is awarded only after an Area ONAP determines that such conditions
exist and if funds are available for such grants.
(b) Size of grants.--(1) Ceilings. Each Area ONAP may recommend
grant ceilings for single purpose grant applications. Single purpose
grant ceilings for each Area ONAP shall be established in the NOFA
(Notice of Funding Availability).
(2) Individual grant amounts. An Area ONAP may approve a grant
amount less than the amount requested. In doing so, the Area ONAP may
take into account the size of the applicant, the level of demand, the
scale of the activity proposed relative to need and operational
capacity, the number of persons to be served, the amount of funds
required to achieve project objectives and the administrative capacity
of the applicant to complete the activities in a timely manner.
Sec. 953.101 Area ONAP allocation of funds.
(a) Except as provided in paragraph (b) of this section, funds will
be allocated to the Area ONAPs responsible for the program on the
following basis:
(1) Each Area ONAP will be allocated $1,000,000 as a base amount,
to which will be added a formula share of the balance of the ICDBG
Program funds, as provided in paragraph (a)(2) of this section.
(2) The amount remaining after the base amount is allocated and any
amount retained by the Headquarters ONAP to fund imminent threat grants
pursuant to the provisions of Sec. 953.402 is subtracted, will be
allocated to each Area ONAP based on the most recent data complied and
published by the United States Bureau of the Census referable to the
same point or period in time, as follows:
(i) Forty percent (40%) of the funds will be allocated based upon
each Area ONAP's share of the total eligible Indian population;
(ii) Forty percent (40%) of the funds will be allocated based upon
each Area ONAP's share of the total extent of poverty among the
eligible Indian population; and
(iii) Twenty percent (20%) of the funds will be allocated based
upon each Area ONAP's share of the total extent of overcrowded housing
among the eligible Indian population.
(b) HUD will use other criteria to determine an allocation formula
for distributing funds to the Area ONAPs if funds are set aside by
statute for a specific purpose in any fiscal year if it is determined
that the formula in paragraph (a) of this section is inappropriate to
accomplish the purpose. HUD will use other criteria if it is determined
that, based on a limited appropriation of funds, the use of the formula
in paragraph (a) of this section is inappropriate to obtain an
equitable allocation of funds.
(c) Data used for the allocation of funds will be based upon the
Indian population of those tribes and villages that are determined to
be eligible ninety (90) days before the beginning of each fiscal year.
Sec. 953.102 Use of recaptured and unawarded funds.
(a) The Assistant Secretary will determine on a case-by-case basis
the use of grant funds which are:
(1) Recaptured by HUD under the provisions of Sec. 953.703 or
Sec. 953.704;
(2) Recaptured by HUD at the time of the closeout of a program; or
(3) Unawarded after the completion by an Area ONAP of a funding
competition.
(b) The recaptured or unawarded funds will remain with the Area
ONAP to which they were originally allocated unless the Assistant
Secretary determines that there is an overriding
[[Page 40093]]
reason to redistribute these funds outside of the Area ONAP's
jurisdiction. The recaptured funds may be used to fund the highest
ranking unfunded project from the most recent funding competition, an
imminent threat, or other uses. Unawarded funds may be used to fund an
imminent threat or other uses.
Subpart C--Eligible Activities
Sec. 953.200 General policies.
An activity may be assisted in whole or in part with ICDBG funds
only if the activity meets the eligibility requirements of section 105
of the Act as further defined in this subpart and if the criteria for
compliance with the primary objective of the Act set forth under
Sec. 953.208 have been met. The requirements for compliance with the
primary objective of the Act do not apply to imminent threat grants
funded under subpart E of this part.
Sec. 953.201 Basic eligible activities.
ICDBG funds may be used for the following activities:
(a) Acquisition. Acquisition in whole or in part by the grantee, or
other public or private nonprofit entity, by purchase, long-term lease,
donation, or otherwise, of real property (including air rights, water
rights, rights-of-way, easements, and other interests therein) for any
public purpose, subject to the limitations of Sec. 953.207.
(b) Disposition. Disposition, through sale, lease, donation, or
otherwise, of any real property acquired with ICDBG funds or its
retention for public purposes, including reasonable costs of
temporarily managing such property or property acquired under urban
renewal, provided that the proceeds from any such disposition shall be
program income subject to the requirements set forth in Sec. 953.503.
(c) Public facilities and improvements. Acquisition, construction,
reconstruction, rehabilitation or installation of public facilities and
improvements, except as provided in Sec. 953.207(a), carried out by the
grantee or other public or private nonprofit entities. In undertaking
such activities, design features and improvements which promote energy
efficiency may be included. [However, activities under this paragraph
may be directed to the removal of material and architectural barriers
that restrict the mobility and accessibility of elderly or severely
disabled persons to publicly owned and privately owned buildings,
facilities, and improvements including those provided for in
Sec. 953.207(a)(1).] Such activities may also include the execution of
architectural design features, and similar treatments intended to
enhance the aesthetic quality of facilities and improvements receiving
ICDBG assistance. Facilities designed for use in providing shelter for
persons having special needs are considered public facilities and not
subject to the prohibition of new housing construction described in
Sec. 953.207(b)(3). Such facilities include shelters for the homeless;
convalescent homes; hospitals, nursing homes; battered spouse shelters;
halfway houses for run-away children, drug offenders or parolees; group
homes for mentally retarded persons and temporary housing for disaster
victims. In certain cases, nonprofit entities and subrecipients
including those specified in Sec. 953.204 may acquire title to public
facilities. When such facilities are owned by nonprofit entities or
subrecipients, they shall be operated so as to be open for use by the
general public during all normal hours of operation. Public facilities
and improvements eligible for assistance under this paragraph (c) are
subject to the following policies in paragraphs (c)(1) through (c)(3)
of this section:
(1) Special policies governing facilities. The following special
policies apply to:
(i) Facilities containing both eligible and ineligible uses. A
public facility otherwise eligible for assistance under the ICDBG
program may be provided with ICDBG funds even if it is part of a
multiple use building containing ineligible uses, if:
(A) The facility which is otherwise eligible and proposed for
assistance will occupy a designated and discrete area within the larger
facility; and
(B) The grantee can determine the costs attributable to the
facility proposed for assistance as separate and distinct from the
overall costs of the multiple-use building and/or facility. Allowable
costs are limited to those attributable to the eligible portion of the
building or facility.
(ii) Equipment purchase. As stated in Sec. 953.207(b)(1), the
purchase of equipment with ICDBG funds is generally ineligible.
However, the purchase of construction equipment for use as part of a
solid waste facility is eligible. In addition, the purchase of fire
protection equipment is considered to be an integral part of a public
facility, and, therefore, the purchase of such equipment is also
eligible.
(2) Fees for use of facilities. Reasonable fees may be charged for
the use of the facilities assisted with ICDBG funds, but charges such
as excessive membership fees, which will have the effect of precluding
low and moderate income persons from using the facilities, are not
permitted.
(3) Special assessments under the ICDBG program. The following
policies relate to special assessments under the ICDBG program:
(i) Definition of special assessment. The term special assessment
means the recovery of the capital costs of a public improvement, such
as streets, water or sewer lines, curbs, and gutters, through a fee or
charge levied or filed as a lien against a parcel of real estate as a
direct result of benefit derived from the installation of a public
improvement, or a one-time charge made as a condition of access to a
public improvement. This term does not relate to taxes, or the
establishment of the value of real estate for the purpose of levying
real estate, property, or ad valorem taxes, and does not include
periodic charges based on the use of a public improvement, such as
water or sewer user charges, even if such charges include the recovery
of all or some portion of the capital costs of the public improvement.
(ii) Special assessments to recover capital costs. Where ICDBG
funds are used to pay all or part of the cost of a public improvement,
special assessments may be imposed as follows:
(A) Special assessments to recover the ICDBG funds may be made only
against properties owned and occupied by persons not of low and
moderate income. Such assessments constitute program income.
(B) Special assessments to recover the non-ICDBG portion may be
made provided that ICDBG funds are used to pay the special assessment
on behalf of all properties owned and occupied by low and moderate
income persons; except that ICDBG funds need not be used to pay the
special assessments on behalf of properties owned and occupied by
moderate income persons if the grantee certifies that it does not have
sufficient ICDBG funds to pay the assessments in behalf of all of the
low and moderate income owner-occupant persons. Funds collected through
such special assessments are not program income.
(iii) Public improvements not initially assisted with ICDBG funds.
The payment of special assessments with ICDBG funds constitutes ICDBG
assistance to the public improvement. Therefore, ICDBG funds may be
used to pay special assessments provided:
(A) The installation of the public improvements was carried out in
compliance with requirements applicable to activities assisted under
this part including environmental and citizen participation
requirements; and
[[Page 40094]]
(B) The installation of the public improvement meets a criterion
for the primary objective in Sec. 953.208; and,
(C) The requirements of Sec. 953.201(c)(3)(ii))(B) are met.
(d) Clearance activities. Clearance, demolition, and removal of
buildings and improvements, including movement of structures to other
sites. Demolition of HUD-assisted housing units may be undertaken only
with the prior approval of HUD.
(e) Public services. Provision of public services (including labor,
supplies, materials, and the purchase of personal property and
furnishings) which are directed toward improving the community's public
services and facilities, including but not limited to those concerned
with employment, crime prevention, child care, health, drug abuse,
education, fair housing counseling, energy conservation, welfare (but
excluding the provision of income payments identified under
Sec. 953.207(b)(4)), homebuyer downpayment assistance or recreational
needs. To be eligible for ICDBG assistance, a public service must be
either a new service, or a quantifiable increase in the level of an
existing service above that which has been provided by or on behalf of
the grantee through funds raised by the grantee, or received by the
grantee from the Federal government in the twelve calendar months
before the submission of the application for ICDBG assistance. (An
exception to this requirement may be made if HUD determines that any
decrease in the level of a service was the result of events not within
the control of the grantee.) The amount of ICDBG funds used for public
services shall not exceed 15 percent of the grant. Such projects must
therefore be submitted with one or more other projects, which must
comprise at least 85 percent of the total requested ICDBG grant amount.
(f) Interim assistance. (1) The following activities may be
undertaken on an interim basis in areas exhibiting objectively
determinable signs of physical deterioration where the grantee has
determined that immediate action is necessary to arrest the
deterioration and that permanent improvements will be carried out as
soon as practicable:
(i) The repairing of streets, sidewalks, parks, playgrounds,
publicly owned utilities, and public buildings; and
(ii) The execution of special garbage, trash, and debris removal,
including neighborhood cleanup campaigns, but not the regular curbside
collection of garbage or trash in an area.
(2) In order to alleviate emergency conditions threatening the
public health and safety in areas where the chief executive officer of
the grantee determines that such an emergency condition exists and
requires immediate resolution, ICDBG funds may be used for:
(i) The activities specified in paragraph (f)(1) of this section,
except for the repair of parks and playgrounds;
(ii) The clearance of streets, including snow removal and similar
activities; and
(iii) The improvement of private properties.
(3) All activities authorized under paragraph (f)(2) of this
section are limited to the extent necessary to alleviate emergency
conditions.
(g) Payment of non-Federal share. Payment of the non-Federal share
required in connection with a Federal grant-in-aid program undertaken
as part of ICDBG activities, provided, that such payment shall be
limited to activities otherwise eligible and in compliance with
applicable requirements under this subpart.
(h) Relocation. Relocation payments and other assistance for
permanently and temporarily relocated individuals families, businesses,
nonprofit organizations, and farm operations where the assistance is:
(1) Required under the provisions of Sec. 953.602 (b) or (c); or
(2) Determined by the grantee to be appropriate under the
provisions of Sec. 953.602(d).
(i) Loss of rental income. Payments to housing owners for losses of
rental income incurred in holding, for temporary periods, housing units
to be used for the relocation of individuals and families displaced by
program activities assisted under this part.
(j) Housing services. Housing services, as provided in section
105(a)(21) of the Housing and Community Development Act of 1974 [42
U.S.C. 5305(a)(21)].
(k) Privately owned utilities. ICDBG funds may be used to acquire,
construct, reconstruct, rehabilitate, or install the distribution lines
and facilities of privately owned utilities, including the placing
underground of new or existing distribution facilities and lines.
(l) The provision of assistance to facilitate economic development.
(1) The provision of assistance either through the grantee directly or
through public and private organizations, agencies, and other
subrecipients (including nonprofit and for-profit subrecipients) to
facilitate economic development by:
(i) Providing credit, including, but not limited to, grants, loans,
loan guarantees, and other forms of financial support, for the
establishment, stabilization, and expansion of microenterprises;
(ii) Providing technical assistance, advice, and business support
services to owners of microenterprises and persons developing
microenterprises; and
(iii) Providing general support, including, but not limited to,
peer support programs, counseling, child care, transportation, and
other similar services, to owners of microenterprises and persons
developing microenterprises.
(2) Services provided under paragraph (l)(1) of this section shall
not be subject to the restrictions on public services contained in
Sec. 953.201(e).
(3) For purposes of this paragraph (l), persons developing
microenterprises means such persons who have expressed interest and who
are, or after an initial screening process are expected to be, actively
working toward developing businesses, each of which is expected to be a
microenterprise at the time it is formed.
(m) Technical assistance. Provision of technical assistance to
public or nonprofit entities to increase the capacity of such entities
to carry out eligible neighborhood revitalization or economic
development activities. Capacity building for private or public
entities (including grantees) for other purposes may be eligible as a
planning cost under Sec. 953.205.
(n) Assistance to institutions of higher education. Provision of
assistance by the grantee to institutions of higher education where the
grantee determines that such an institution has demonstrated a capacity
to carry out eligible activities under this subpart.
(o) Homeownership assistance. ICDBG funds may be used to provide
direct homeownership assistance to low- and moderate-income households
to:
(1) Subsidize interest rates and mortgage principal amounts for
low-and moderate-income homebuyers;
(2) Finance the acquisition by low-and moderate-income homebuyers
of housing that is occupied by the homebuyers;
(3) Acquire guarantees for mortgage financing obtained by low-and
moderate-income homebuyers form private lenders (except that ICDBG
funds may not be used to guarantee such mortgage financing directly,
and grantees may not provide such guarantees directly);
(4) Provide up to 50 percent of any downpayment required from a
low-and moderate-income homebuyer; or
(5) Pay reasonable closing costs (normally associated with the
purchase of a home) incurred by a low-or moderate-income homebuyer.
[[Page 40095]]
Sec. 953.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation
or reconstruction assistance. ICDBG funds may be used to finance the
rehabilitation of:
(1) Privately owned buildings and improvements for residential
purposes; improvements to a single-family residential property which is
also used as a place of business, which are required in order to
operate the business, need not be considered to be rehabilitation of a
commercial or industrial building, if the improvements also provide
general benefit to the residential occupants of the building;
(2) Low-income public housing and other publicly owned residential
buildings and improvements;
(3) Publicly or privately owned commercial or industrial buildings,
except that the rehabilitation of such buildings owned by a private
for-profit business is limited to improvements to the exterior of the
building and the correction of code violations (further improvements to
such buildings may be undertaken pursuant to Sec. 953.203(b)); and
(4) Nonprofit-owned nonresidential buildings and improvements not
eligible under Sec. 953.201(c);
(5) Manufactured housing when such housing constitutes part of the
community's permanent housing stock.
(b) Types of assistance. ICDBG funds may be used to finance the
following types of rehabilitation or reconstruction activities, and
related costs, either singly, or in combination, through the use of
grants, loans, loan guarantees, interest supplements, or other means
for buildings and improvements described in paragraph (a) of this
section, except that rehabilitation of commercial or industrial
buildings is limited as described in paragraph (a)(3) of this section.
(1) Assistance to private individuals and entities, including
profit making and nonprofit organizations, to acquire for the purpose
of rehabilitation, and to rehabilitate properties, for use or resale
for residential purposes;
(2) Labor, materials, and other costs of rehabilitation of
properties, including repair directed toward an accumulation of
deferred maintenance, replacement of principal fixtures and components
of existing structures, installation of security devices, including
smoke detectors and dead bolt locks, and renovation through
alterations, additions to, or enhancement of existing structures, which
may be undertaken singly, or in combination;
(3) Loans for refinancing existing indebtedness secured by a
property being rehabilitated with ICDBG funds if such financing is
determined by the grantee to be necessary or appropriate to achieve the
grantee's community development objectives;
(4) Improvements to increase the efficient use of energy in
structures through such means as installation of storm windows and
doors, siding, wall and attic insulation, and conversion, modification,
or replacement of heating and cooling equipment, including the use of
solar energy equipment;
(5) Improvements to increase the efficient use of water through
such means as water saving faucets and shower heads and repair of water
leaks;
(6) Connection of residential structures to water distribution
lines or local sewer collection lines;
(7) For rehabilitation carried out with ICDBG funds, costs of:
(i) Initial homeowner warranty premiums;
(ii) Hazard insurance premiums, except where assistance is provided
in the form of a grant; and
(iii) Flood insurance premiums for properties covered by the Flood
Disaster Protection Act of 1973, pursuant to 24 CFR 58.6(a).
(iv) Procedures concerning inspection and testing for and treatment
and abatement of defective paint surfaces and lead-based paint,
pursuant to Sec. 953.607.
(8) Costs of acquiring tools to be lent to owners, tenants, and
others who will use such tools to carry out rehabilitation;
(9) Rehabilitation services, such as rehabilitation counseling,
energy auditing, preparation of work specifications, loan processing,
inspections, and other services related to assisting owners, tenants,
contractors, and other entities, participating or seeking to
participate in rehabilitation activities authorized under this section;
(10) Improvements designed to remove material and architectural
barriers that restrict the mobility and accessibility of elderly or
severely disabled persons to buildings and improvements eligible for
assistance under paragraph (a) of this section.
(c) Code enforcement. Code enforcement in deteriorating or
deteriorated areas where such enforcement together with public or
private improvements, rehabilitation, or services to be provided, may
be expected to arrest the decline of the area.
(d) Historic preservation. ICDBG funds may be used for the
rehabilitation, preservation or restoration of historic properties,
whether publicly or privately owned. Historic properties are those
sites or structures that are either listed in or eligible to be listed
in the National Register of Historic Places, listed in a State or local
inventory of historic places, or designated as a State or local
landmark or historic district by appropriate law or ordinance. Historic
preservation, however, is not authorized for buildings for the general
conduct of government.
(e) Renovation of closed buildings. ICDBG funds may be used to
renovate closed buildings, such as closed school buildings, for use as
an eligible public facility or to rehabilitate such buildings for
housing.
Sec. 953.203 Special economic development activities.
A grantee may use ICDBG funds for special economic development
activities in addition to other activities authorized in this subpart
which may be carried out as part of an economic development project.
Special activities authorized under this section do not include
assistance for the construction of new housing. Special economic
development activities include:
(a) The acquisition, construction, reconstruction, rehabilitation
or installation of commercial or industrial buildings, structures, and
other real property equipment and improvements, including railroad
spurs or similar extensions. Such activities may be carried out by the
grantee or public or private nonprofit subrecipients.
(b) The provision of assistance to a private for-profit business,
including, but not limited to, grants, loans, loan guarantees, interest
supplements, technical assistance, and other forms of support, for any
activity where the assistance is necessary or appropriate to carry out
an economic development project, excluding those described as
ineligible in Sec. 953.207(a). In order to ensure that any such
assistance does not unduly enrich the for-profit business, the grantee
shall conduct an analysis to determine that the amount of any financial
assistance to be provided is not excessive, taking into account the
actual needs of the business in making the project financially feasible
and the extent of public benefit expected to be derived from the
economic development project. The grantee shall document the analysis
as well as any factors it considered in making its determination that
the assistance is necessary or appropriate to carry out the project.
The requirement for making such a determination applies whether the
business is to receive assistance from the grantee or through a
subrecipient.
[[Page 40096]]
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.204 Special activities by Community-Based Development
Organizations (CBDOs).
(a) Eligible activities. The grantee may provide ICDBG funds as
grants or loans to any CBDO qualified under this section to carry out a
neighborhood revitalization, community economic development, or energy
conservation project. The funded project activities may include those
listed as eligible under this subpart, and, except as described in
paragraph (b) of this section, activities not otherwise listed as
eligible under this subpart. For purposes of qualifying as a project
under paragraphs (a)(1), (a)(2), and (a)(3) of this section, the funded
activity or activities may be considered either alone or in concert
with other project activities either being carried out or for which
funding has been committed. For purposes of this section:
(1) Neighborhood revitalization project includes activities of
sufficient size and scope to have an impact on the decline of a
geographic location within the jurisdiction of a grantee (but not the
entire jurisdiction) designated in comprehensive plans, ordinances, or
other local documents as a neighborhood, village, or similar
geographical designation; or the entire jurisdiction of a grantee which
is under 25,000 population;
(2) Community economic development project includes activities that
increase economic opportunity, principally for persons of low- and
moderate-income, or that stimulate or retain businesses or permanent
jobs, including projects that include one or more such activities that
are clearly needed to address a lack of affordable housing accessible
to existing or planned jobs;
(3) Energy conservation project includes activities that address
energy conservation, principally for the benefit of the residents of
the grantee's jurisdiction; and
(4) To carry out a project means that the CBDO undertakes the
funded activities directly or through contract with an entity other
than the grantee, or through the provision of financial assistance for
activities in which it retains a direct and controlling involvement and
responsibilities.
(b) Ineligible activities. Notwithstanding that CBDOs may carry out
activities that are not otherwise eligible under this subpart, this
section does not authorize:
(1) Carrying out an activity described as ineligible in
Sec. 953.207(a);
(2) Carrying out public services that do not meet the requirements
of Sec. 953.201(e), except services carried out under this section that
are specifically designed to increase economic opportunities through
job training and placement and other employment support services,
including, but not limited to, peer support programs, counseling, child
care, transportation, and other similar services;
(3) Carrying out an activity that would otherwise be eligible under
Sec. 953.205 or Sec. 953.206, but that would result in the grantee's
exceeding the spending limitation in Sec. 953.206.
(c) Eligible CBDOs. (1) A CBDO qualifying under this section is an
organization which has the following characteristics:
(i) Is an association or corporation organized under State or local
law to engage in community development activities (which may include
housing and economic development activities) primarily within an
identified geographic area of operation within the jurisdiction of the
grantee; and
(ii) Has as its primary purpose the improvement of the physical,
economic or social environment of its geographic area of operation by
addressing one or more critical problems of the area, with particular
attention to the needs of persons of low and moderate income; and
(iii) May be either non-profit or for-profit, provided any monetary
profits to its shareholders or members must be only incidental to its
operations; and
(iv) Maintains at least 51 percent of its governing body's
membership for low- and moderate-income residents of its geographic
area of operation, owners or senior officers of private establishments
and other institutions located in and serving its geographic area of
operation, or representatives of low- and moderate-income neighborhood
organizations located in its geographic area of operation; and
(v) Is not an agency or instrumentality of the grantee and does not
permit more than one-third of the membership of its governing body to
be appointed by, or to consist of, elected or other public officials or
employees or officials of an ineligible entity (even though such
persons may be otherwise qualified under paragraph (c)(1)(iv) of this
section); and
(vi) Except as otherwise authorized in paragraph (c)(1)(v) of this
section, requires the members of its governing body to be nominated and
approved by the general membership of the organization, or by its
permanent governing body; and
(vii) Is not subject to requirements under which its assets revert
to the grantee upon dissolution; and
(viii) Is free to contract for goods and services from vendors of
its own choosing.
(2) A CBDO that does not meet the criteria in paragraph (c)(1) of
this section may also qualify as an eligible entity under this section
if it meets one of the following requirements:
(i) Is an entity organized pursuant to section 301(d) of the Small
Business Investment Act of 1958 (15 U.S.C. 681(d)), including those
which are profit making; or
(ii) Is an SBA-approved Section 501 State Development Company or
Section 502 Local Development Company, or an SBA Certified Section 503
Company under the Small Business Investment Act of 1958, as amended; or
(iii) Is a Community Housing Development Organization (CHDO) under
24 CFR 92.2, designated as a CHDO by the HOME Investment Partnerships
program participating jurisdiction, with a geographic area of operation
of no more than one neighborhood, and has received HOME funds under 24
CFR 92.300 or is expected to receive HOME funds as described in and
documented in accordance with 24 CFR 92.300(e); or
(iv) Is a tribal-based nonprofit organization. Such organizations
are associations or corporations duly organized to promote and
undertake community development activities on a not-for-profit basis
within an identified service area.
(3) A CBDO that does not qualify under paragraphs (c)(1) or (2) of
this section may also be determined to qualify as an eligible entity
under this section if the grantee demonstrates to the satisfaction of
HUD, through the provision of information regarding the organization's
charter and by-laws, that the organization is sufficiently similar in
purpose, function, and scope to those entities qualifying under
paragraphs (c)(1) or (2) of this section.
Sec. 953.205 Eligible planning, urban environmental design and
policy-planning-management capacity building activities.
(a) Planning activities which consist of all costs of data
gathering, studies, analysis, and preparation of plans and the
identification of actions that will implement such plans, including,
but not limited to comprehensive plans, community development plans and
functional plans in areas such as housing and economic development. In
addition, other plans and studies such as capital improvements
programs, individual project plans, general
[[Page 40097]]
environmental studies, and strategies and action programs to implement
plans, including the development of codes and ordinances are also
eligible activities. With respect to the costs of individual project
plans, engineering and design costs related to a specific activity are
eligible as part of the cost of such activity under Secs. 953.201
through 953.204 and are not considered planning costs. Also, costs
necessary to comply with the requirements of 24 CFR part 58, including
project specific environmental assessments and clearances for
activities eligible under this part are eligible as part of the cost of
such activities under Secs. 953.201 through 953.204.
(b) Policy--planning--management--capacity building activities
including those which will enable the grantee to determine its needs,
set long term goals and short term objectives, devise programs to meet
these goals and objectives, evaluate the progress being made in
accomplishing the goals and objectives. In addition, actions necessary
to carry out management, coordination and monitoring of activities
necessary for effective planning implementation are eligible planning
activities, however the costs necessary to implement the plans are not.
Sec. 953.206 Program administration costs.
ICDBG funds may be used for the payment of reasonable
administrative costs and carrying charges related to the planning and
execution of community development activities assisted in whole or in
part with funds provided under this part. No more than 20 percent of
the sum of any grant plus program income received shall be expended for
activities described in this section and in Sec. 953.205--Eligible
planning, urban environmental design and policy-planning-management
capacity building activities. This does not include staff and overhead
costs directly related to carrying out activities eligible under
Secs. 953.201 through 953.204, since those costs are eligible as part
of such activities. In addition, technical assistance costs associated
with developing the capacity to undertake a specific funded activity
are also not considered program administration costs. These costs must
not, however, exceed 10% of the total grant award.
(a) General management, oversight and coordination. Reasonable
costs of overall program management, coordination, monitoring, and
evaluation. Such costs include, but are not necessarily limited to,
necessary expenditures for the following:
(1) Salaries, wages, and related costs of the grantee's staff, the
staff of local public agencies, or other staff engaged in program
administration. In charging costs to this category the grantee may
either include the entire salary, wages, and related costs allocable to
the program of each person whose primary responsibilities with regard
to the program involve program administration assignments, or the pro
rata share of the salary, wages, and related costs of each person whose
job includes any program administration assignments. The grantee may
use only one of these methods during the grant period. Program
administration includes the following types of assignments:
(i) Providing tribal officials and citizens with information about
the program;
(ii) Preparing program budgets and schedules, and amendments
thereto;
(iii) Developing systems for assuring compliance with program
requirements;
(iv) Developing interagency agreements and agreements with
subrecipients and contractors to carry out program activities;
(v) Monitoring program activities for progress and compliance with
program requirements;
(vi) Preparing reports and other documents related to the program
for submission to HUD;
(vii) Coordinating the resolution of audit and monitoring findings;
(viii) Evaluating program results against stated objectives; and
(ix) Managing or supervising persons whose primary responsibilities
with regard to the program include such assignments as those described
in paragraph (a)(1) (i) through (viii) of this section.
(2) Travel costs incurred for official business in carrying out the
program;
(3) Administrative services performed under third party contracts
or agreements, including such services as general legal services,
accounting services, and audit services; and
(4) Other costs for goods and services required for administration
of the program, including such goods and services as rental or purchase
of equipment, furnishings, or other personal property (or the payment
of depreciation or use allowances for such items in accordance with OMB
Circulars A-21, A-87 or A-122, as applicable), insurance, utilities,
office supplies, and rental and maintenance (but not purchase) of
office space. (OMB Circulars are available from the Executive Office of
the President, Publication Service, 725 17th Street, N.W., Suite G-
2200, Washington, DC 20503, Telephone, 202-395-7332.)
(b) Public information. The provisions of information and other
resources to residents and citizen organizations participating in the
planning, implementation, or assessment of activities being assisted
with ICDBG funds.
(c) Indirect costs. Indirect costs may be charged to the ICDBG
program under a cost allocation plan prepared in accordance with OMB
Circular A-21, A-87, or A-122 as applicable.
(d) Submission of applications for Federal programs. Preparation of
documents required for submission to HUD to receive funds under the
ICDBG program. In addition, ICDBG funds may be used to prepare
applications for other Federal programs where the grantee determines
that such activities are necessary or appropriate to achieve its
community development objectives.
Sec. 953.207 Ineligible activities.
The general rule is that any activity that is not authorized under
the provisions of Secs. 953.201 through 953.206 is ineligible to be
assisted with ICDBG funds. This section identifies specific activities
that are ineligible and provides guidance in determining the
eligibility of other activities frequently associated with housing and
community development.
(a) The following activities may not be assisted with ICDBG funds:
(1) Buildings or portions thereof used for the general conduct of
government as defined at Sec. 953.4 cannot be assisted with ICDBG
funds. This does not include, however, the removal of architectural
barriers under Sec. 953.201(c) involving any such building. Also, where
acquisition of real property includes an existing improvement which is
to be used in the provision of a building for the general conduct of
government, the portion of the acquisition cost attributable to the
land is eligible, provided such acquisition meets the primary objective
described in Sec. 953.208.
(2) General government expenses. Except as otherwise specifically
authorized in this subpart or under OMB Circular A-87, expenses
required to carry out the regular responsibilities of the grantee are
not eligible for assistance under this part.
(3) Political activities. ICDBG funds shall not be used to finance
the use of facilities or equipment for political purposes or to engage
in other partisan political activities, such as candidate forums, voter
transportation, or voter registration. However, a facility originally
assisted with ICDBG funds may be used on an incidental basis to hold
political meetings, candidate
[[Page 40098]]
forums, or voter registration campaigns, provided that all parties and
organizations have access to the facility on an equal basis, and are
assessed equal rent or use charges, if any.
(b) The following activities may not be assisted with ICDBG funds
unless authorized under provisions of Sec. 953.203 or as otherwise
specifically noted herein, or when carried out by a CBDO under the
provisions of Sec. 953.204.
(1) Purchase of equipment. The purchase of equipment with ICDBG
funds is generally ineligible.
(i) Construction equipment. The purchase of construction equipment
is ineligible, but compensation for the use of such equipment through
leasing, depreciation, or use allowances pursuant to OMB Circular A-21,
A-87 or A-122 as applicable for an otherwise eligible activity is an
eligible use of ICDBG funds.
(ii) Furnishings and personal property. The purchase of equipment,
fixtures, motor vehicles, furnishings, or other personal property not
an integral structural fixture is generally ineligible. Exceptions to
this general prohibition are set forth in Sec. 953.201(o).
(2) Operating and maintenance expenses. The general rule is that
any expense associated with repairing, operating or maintaining public
facilities, improvements and services is ineligible. Specific
exceptions to this general rule are operating and maintenance expenses
associated with public service activities, interim assistance, and
office space for program staff employed in carrying out the ICDBG
program. For example, the use of ICDBG funds to pay the allocable costs
of operating and maintaining a facility used in providing a public
service would be eligible under Sec. 953.201(e), even if no other costs
of providing such a service are assisted with such funds. Examples of
ineligible operating and maintenance expenses are:
(i) Maintenance and repair of streets, parks, playgrounds, water
and sewer facilities, neighborhood facilities, senior centers, centers
for persons with a disability, parking and similar public facilities;
and
(ii) Payment of salaries for staff, utility costs and similar
expenses necessary for the operation of public works and facilities.
(3) New housing construction. ICDBG funds may not be used for the
construction of new permanent residential structures or for any program
to subsidize or assist such new construction, except:
(i) As provided under the last resort housing provisions set forth
in 24 CFR part 42; or
(ii) When carried out by a CBDO pursuant to Sec. 953.204(a);
(4) Income payments. The general rule is that ICDBG funds may not
be used for income payments. For purposes of the ICDBG program, income
payments means a series of subsistence-type grant payments made to an
individual or family for items such as food, clothing, housing (rent or
mortgage) or utilities, but excludes emergency payments made over a
period of up to three months to the provider of such items or services
on behalf of an individual or family.
Sec. 953.208 Criteria for compliance with the primary objective.
The Act establishes as its primary objective the development of
viable communities by providing decent housing and a suitable living
environment and expanding economic opportunities, principally for
persons of low and moderate income. Consistent with this objective, not
less than 70 percent of the expenditures of each single purpose grant
shall be for activities which meet the criteria set forth in paragraphs
(a), (b), (c) and (d) of this section. Activities meeting these
criteria as applicable will be considered to benefit low and moderate
income persons unless there is substantial evidence to the contrary. In
assessing any such evidence, the full range of direct effects of the
assisted activity will be considered. (The grantee shall appropriately
ensure that activities that meet these criteria do not benefit moderate
income persons to the exclusion of low income persons.)
(a) Area benefit activities. (1) An activity, the benefits of which
are available to all the residents in a particular area, where at least
51 percent of the residents are low and moderate income persons. Such
an area need not be coterminous with census tracts or other officially
recognized boundaries but must be the entire area served by the
activity. An activity that serves an area that is not primarily
residential in character shall not qualify under this criterion.
(2) For purposes of determining qualification under this criterion,
activities of the same type that serve different areas will be
considered separately on the basis of their individual service area.
(3) In determining whether there is a sufficiently large percentage
of low and moderate income persons residing in the area served by an
activity to qualify under paragraph (a) (1) or (2) of this section, the
most recently available decennial census information shall be used to
the fullest extent feasible, together with the Section 8 income limits
that would have applied at the time the income information was
collected by the Census Bureau. Grantees that believe that the census
data does not reflect current relative income levels in an area, or
where census boundaries do not coincide sufficiently well with the
service area of an activity, may conduct (or have conducted) a current
survey of the residents of the area to determine the percent of such
persons that are low and moderate income. HUD will accept information
obtained through such surveys, to be used in lieu of the decennial
census data, where it determines that the survey was conducted in such
a manner that the results meet standards of statistical reliability
that are comparable to that of the decennial census data for areas of
similar size. Where there is substantial evidence that provides a clear
basis to believe that the use of the decennial census data would
substantially overstate the proportion of persons residing there that
are low and moderate income, HUD may require that the grantee rebut
such evidence in order to demonstrate compliance with section 105(c)(2)
of the Act.
(b) Limited clientele activities. (1) An activity which benefits a
limited clientele, at least 51 percent of whom are low or moderate
income persons. (The following kinds of activities may not qualify
under paragraph (b) of this section: Activities, the benefits of which
are available to all the residents of an area; activities involving the
acquisition, construction or rehabilitation of property for housing; or
activities where the benefit to low and moderate income persons to be
considered is the creation or retention of jobs except as provided in
paragraph (b)(4) of this section.) To qualify under paragraph (b) of
this section, the activity must meet one of the following tests:
(i) Benefit a clientele who are generally presumed to be
principally low and moderate income persons. Activities that
exclusively serve a group of persons in any one of the following
categories may be presumed to benefit persons, 51 percent of whom are
low-and moderate-income: abused children, battered spouses, elderly
persons, adults meeting the Bureau of the Census' current Population
Reports definition of ``severely disabled'', homeless persons,
illiterate adults, persons living with AIDS, and migrant workers; or
(ii) Require information on family size and income so that it is
evident that at least 51 percent of the clientele are
[[Page 40099]]
persons whose family income does not exceed the low and moderate income
limit; or
(iii) Have income eligibility requirements which limit the activity
exclusively to low and moderate income persons; or
(iv) Be of such nature and be in such location that it may be
concluded that the activity's clientele will primarily be low and
moderate income persons.
(2) An activity that serves to remove material or architectural
barriers to the mobility or accessibility of elderly persons or adults
meeting the Bureau of the Census' Current Population Reports definition
of ``severely disabled'' will be presumed to qualify under this
criterion if it is restricted, to the extent practicable, to the
removal of such barriers by assisting:
(i) The reconstruction of a public facility or improvement, or
portion thereof, that does not qualify under Sec. 953.208(a); or
(ii) The rehabilitation of a privately-owned nonresidential
building or improvement that does not qualify under Sec. 953.208 (a) or
(d); or
(iii) The rehabilitation of the common areas of a residential
structure that contains more than one dwelling unit.
(3) A microenterprise assistance activity carried out in accordance
with the provisions of Sec. 953.201(l) with respect to those owners of
microenterprises and persons developing microenterprises assisted under
the activity during the grant period who are low and moderate income
persons. For purposes of this paragraph, persons determined to be low
and moderate income may be presumed to continue to qualify for up to a
three year period.
(4) An activity designed to provide job training and placement and/
or other employment support services, including but not limited to,
peer support programs, counseling, child care, transportation, and
other similar services, in which the percentage of low and moderate
income persons assisted is less than 51 percent may qualify under this
paragraph in the following limited circumstance:
(i) In such cases where such training or provision of supportive
services assists business(es), the only use of ICDBG assistance for the
project is to provide the job training and/or supportive services; and
(ii) The proportion of the total cost of the project borne by ICDBG
funds is no greater than the proportion of the total number of persons
assisted who are low or moderate income.
(c) Housing activities. An eligible activity carried out for the
purpose of providing or improving permanent residential structures
which, upon completion, will be occupied by low and moderate income
households. This would include, but not necessarily be limited to, the
acquisition or rehabilitation of property, conversion of non-
residential structures, and new housing construction. Funds expended
for activities which qualify under the provisions of this paragraph
shall be counted as benefiting low and moderate income persons but
shall be limited to an amount determined by multiplying the total cost
(including ICDBG and non-ICDBG costs) of the acquisition, construction
or rehabilitation by the percent of units in such housing to be
occupied by low and moderate income persons. If the structure assisted
contains two dwelling units, at least one must be occupied by low and
moderate income households, and if the structure contains more than two
dwelling units, at least 51 percent of the units must be so occupied.
Where two or more rental buildings being assisted are or will be
located on the same or contiguous properties, and the buildings will be
under common ownership and management, the grouped buildings may be
considered for this purpose as a single structure. For rental housing,
occupancy by low and moderate income households must be at affordable
rents to qualify under this criterion. The grantee shall adopt and make
public its standards for determining ``affordable rents'' for this
purpose. The following shall also qualify under this criterion:
(1) When less than 51 percent of the units in a structure will be
occupied by low and moderate income households, ICDBG assistance may be
provided in the following limited circumstances:
(i) The assistance is for an eligible activity to reduce the
development cost of the new construction of a multifamily, non-elderly
rental housing project;
(ii) Not less than 20 percent of the units will be occupied by low
and moderate income households at affordable rents; and
(iii) The proportion of the total cost of developing the project to
be borne by ICDBG funds is no greater than the proportion of units in
the project that will be occupied by low and moderate income
households.
(2) When ICDBG funds are used for housing services eligible under
Sec. 953.201(j), such funds shall be considered to benefit low-and
moderate-income persons if the housing for which the services are
provided is to be occupied by low-and moderate-income households.
(d) Job creation or retention activities. An activity designed to
create or retain permanent jobs where at least 51 percent of the jobs,
computed on a full time equivalent basis, involve the employment of low
and moderate persons. For purposes of determining whether a job is held
by or made available to a low or moderate income person, the person may
be presumed to be a low or moderate income person if: he/she resides
within a census tract (or block numbering area) where not less than 70
percent of the residents have incomes at or below 80 percent of the
area median; or, if he/she resides in a census tract (or block
numbering area) which meets the Federal Empowerment Zone or Enterprise
Community eligibility criteria; or, if the assisted business is located
in and the job under consideration is to be located in such a tract or
area. As a general rule, each assisted business shall be considered to
be a separate activity for purposes of determining whether the activity
qualifies under this paragraph. However, in certain cases such as where
ICDBG funds are used to acquire, develop or improve a real property
(e.g., a business incubator or an industrial park) the requirement may
be met by measuring jobs in the aggregate for all the businesses which
locate on the property, provided such businesses are not otherwise
assisted by ICDBG funds. Where ICDBG funds are used to pay for the
staff and overhead costs of a CBDO under the provisions of Sec. 953.204
making loans to businesses from non-ICDBG funds, this requirement may
be met by aggregating the jobs created by all of the businesses
receiving loans during any one year period. For an activity that
creates jobs, the grantee must document that at least 51 percent of the
jobs will be held by, or will be available to, low and moderate income
persons. For an activity that retains jobs, the grantee must document
that the jobs would actually be lost without the ICDBG assistance and
that either or both of the following conditions apply with respect to
at least 51 percent of the jobs at the time the ICDBG assistance is
provided: The job is known to be held by a low or moderate income
person; or the job can reasonably be expected to turn over within the
following two years and that steps will be taken to ensure that it will
be filled by, or made available to, a low or moderate income person
upon turnover. Jobs will be considered to be available to low and
moderate income persons for these purposes only if:
(1) Special skills that can only be acquired with substantial
training or
[[Page 40100]]
work experience or education beyond high school are not a prerequisite
to fill such jobs, or the business agrees to hire unqualified persons
and provide training; and
(2) The grantee and the assisted business take actions to ensure
that low and moderate income persons receive first consideration for
filling such jobs.
(e) Additional criteria. (1) Where the assisted activity is
acquisition of real property, a preliminary determination of whether
the activity addresses the primary objective may be based on the
planned use of the property after acquisition. A final determination
shall be based on the actual use of the property, excluding any short-
term, temporary use.
(2) Where the assisted activity is relocation assistance that the
grantee is required to provide, such relocation assistance shall be
considered to address the primary objective as addressed by the
displacing activity.
(3) In any case where the activity undertaken for the purpose of
creating or retaining jobs is a public improvement and the area served
is primarily residential, the activity must meet the requirements of
paragraph (a) of this section as well as those of paragraph (d) of this
section in order to qualify as benefiting low and moderate income
persons.
(4) Expenditures for activities meeting the criteria for benefiting
low and moderate income persons shall be used in determining the extent
to which the grantee's overall program benefits such persons. In
determining the percentage of funds expended for such activities:
(i) Costs of administration and planning, eligible under
Sec. 953.205 and Sec. 953.206 respectively, will be assumed to benefit
low and moderate income persons in the same proportion as the remainder
of the ICDBG funds and, accordingly, shall be excluded from the
calculation.
(ii) Funds expended for the acquisition, new construction or
rehabilitation of property for housing those qualified under
Sec. 953.208(c) shall be counted for this purpose, but shall be limited
to an amount determined by multiplying the total cost (including ICDBG
and non-ICDBG costs) of the acquisition, construction, or
rehabilitation by the percent of units in such housing occupied by low
and moderate income persons.
(iii) Funds expended for any other activity which qualifies under
Sec. 953.208 shall be counted for this purpose in their entirety.
Subpart D--Single Purpose Grant Application and Selection Process
Sec. 953.300 Application requirements.
(a) Application information. A Notice of Funding Availability
(NOFA) shall be published in the Federal Register not less than 30 days
before the deadline for application submission. The NOFA will provide
information relating to the date and time for application submission,
the form and content requirements of the application, specific
information regarding the rating and ranking criteria to be used, and
any other information pertinent to the application process.
(b) Costs incurred by applicant. Costs incurred by an applicant
prior to the submission of the single purpose grant application to HUD
will not be recognized by HUD as eligible ICDBG expenses.
(c) HUD will not normally reimburse or recognize costs incurred
before HUD approval of the application for funding. However, under
unusual circumstances, the Area ONAP may consider and approve written
requests to recognize and reimburse costs incurred after submission of
the application where failure to do so would impose undue hardship on
the applicant. Such written authorization will be made only before the
costs are incurred and where the requirements for reimbursement have
been met in accordance with 24 CFR 58.22 and with the understanding
that HUD has no obligation whatsoever to approve the application or to
reimburse the applicant should the application be disapproved.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.301 Selection process.
(a) Threshold requirements. In order for applications that have
passed the initial screening tests listed in the NOFA to be rated and
ranked, Area ONAPs must determine that the following requirements have
been met:
(1) Community development appropriateness. (i) The project costs
are reasonable;
(ii) The project is appropriate for the intended use; and
(iii) The project is usable or achievable (generally within a two-
year period).
If in the judgment of the Area ONAP, available data indicate that
the proposed project does not meet these requirements, the Area ONAP
shall reject the project from further consideration.
(2) Capacity. The applicant possesses, or will acquire, the
managerial, technical, or administrative staff necessary to carry out
the proposed program. If the Area ONAP determines that the applicant
does not have or cannot obtain the capacity to undertake the proposed
program, the application will be rejected from further consideration.
(3) Performance.--(i) Community development. Performance
determinations are made through the Area ONAP's assessment process.
Applicants that have been advised in writing of negative findings on
previous grants, for which a schedule of corrective actions has been
established, will not be considered for funding if they are behind
schedule as of the deadline date for filing applications.
(ii) Housing assistance. The applicant must not have been found
taking actions to impede the provision or operation of assisted housing
for the low- and moderate-income members of the tribe or village. If
inadequate performance is found, and the applicant has been notified in
writing, they may be rejected from further consideration. Performance
determinations are made through the Area ONAP's assessment process.
(iii) Audits. An applicant that has an outstanding ICDBG obligation
to HUD that is in arrears, or one that has not agreed to a repayment
schedule, will be disqualified from the current and subsequent
competitions until the obligations are current. An applicant whose
response to an audit finding is overdue or unsatisfactory will be
disqualified from the current and subsequent competitions until the
applicant has taken final action necessary to close the audit
finding(s). The Area ONAP administrator may provide exceptions to this
disqualification requirement in cases where the applicant has made a
good faith effort to clear non-monetary audit findings. In no instance,
however, shall an exception be provided when funds are due HUD, unless
a satisfactory arrangement for repayment of the debt has been made, and
payments are current.
(b) Application rating system. Applications that meet the threshold
requirements established in paragraph (a) of this section will be rated
competitively within each Area ONAP's jurisdiction.
(c) NOFAs will define and establish weights for the selection
criteria for each rating category contained in this subpart, will
specify the maximum points available, and will describe how point
awards will be made. Each Area ONAP will rate applications on the basis
of their responsiveness to the criteria contained in this subpart as
defined in the periodic NOFAs.
[[Page 40101]]
(d) Set-aside selection of projects. If funds have been set aside
by statute for a specific purpose in any fiscal year, other criteria
pertinent to the set-aside may be used to select projects for funding
from the set-aside.
Sec. 953.302 Project specific threshold requirements.
(a) Housing rehabilitation projects. All applicants for housing
rehabilitation projects shall adopt rehabilitation standards and
rehabilitation policies before submitting an application. The applicant
shall assure that it will use project funds to rehabilitate units only
when the homeowner's payments are current or the homeowner is current
in a repayment agreement that is subject to approval by the Area ONAP.
The Area ONAP administrator may grant exceptions to this requirement on
a case-by-case basis.
(b) New housing construction projects. New housing construction can
only be implemented through a nonprofit organization that is eligible
under Sec. 953.204 or is otherwise eligible under Sec. 953.207(b)(3).
All applicants for new housing construction projects shall adopt, by
current tribal resolution, construction standards before submitting an
application. All applications which include new housing construction
projects must document that:
(1) No other housing is available in the immediate reservation area
that is suitable for the household(s) to be assisted; and
(2) No other sources can meet the needs of the household(s) to be
assisted; and
(3) Rehabilitation of the unit occupied by the household(s) to be
assisted is not economically feasible; or
(4) The household(s) to be housed currently is in an overcrowded
housing unit (sharing with another household); or
(5) The household(s) to be assisted has no current residence.
(c) Economic development projects. All applicants for economic
development projects must provide an analysis which shows public
benefit commensurate with the ICDBG assistance requested will result
from the assisted project. This analysis should also establish that to
the extent practicable: reasonable financial support will be committed
from non-Federal sources prior to disbursement of Federal funds; any
grant amount provided will not substantially reduce the amount of non-
Federal financial support for the activity; not more than a reasonable
rate of return on investment is provided to the owner; and, that grant
funds used for the project will be disbursed on a pro rata basis with
amounts from other sources. In addition, it must be established that
the project is financially feasible and that it has a reasonable chance
of success.
Sec. 953.303 Project rating categories.
(a) There are three project rating categories: housing, community
facilities, and economic development. The housing rating category
consists of three components: Housing rehabilitation, land to support
new housing, and new housing construction. The community facility
category consists of two components: Infrastructure and buildings. The
economic development category has only one component. With the
exceptions indicated in paragraph (b) of this section, the following
criteria will be used to rate projects.
(1) Project need and design.
(2) Planning and implementation.
(3) Leverage.
(b) Exceptions. (1) Projects for the acquisition of land to support
new housing will not be rated under the leverage criterion.
(2) Economic development projects will be not be rated under the
project need and design and planning and implementation criteria. These
projects will be rated under the leverage criterion and the following
additional criteria.
(i) Organization.
(ii) Project success.
(iii) Jobs.
(iv) Additional considerations consisting of the following:
(A) Use, improvement, or expansion of tribal members' special
skills.
(B) Provision of spin-off benefits.
(C) Provision of special opportunities for residents of Indian
housing.
(D) Provision of benefits to other businesses owned by Indians or
Alaska natives.
(E) Commitment to loan repayment or reuse of ICDBG funds.
Sec. 953.304 Funding process.
(a) Notification. Area ONAPs will notify applicants of the approval
or disapproval of their applications. Grant amounts offered may reflect
adjustments made by the Area ONAPs in accordance with Sec. 953.100
(b)(2).
(b) Grant award. (1) As soon as the Area ONAP determines that the
applicant has complied with any pre-award requirements and absent
information which would alter the threshold determinations under
Sec. 953.302, the grant will be awarded. The regulations become part of
the grant agreement.
(2) All grants shall be conditioned upon the completion of all
environmental obligations and approval of release of funds by HUD in
accordance with the requirements of part 58 of this title and, in
particular, subpart J of part 58 of this title, except as otherwise
provided in part 58 of this title.
(3) HUD may impose other grant conditions where additional actions
or approvals are required before the use of funds.
(Approved by the Office of Management and Budget under OMB Control
No. 2577-0191.)
Sec. 953.305 Program amendments.
(a) Grantees shall request prior HUD approval for program
amendments which will significantly change the scope, location,
objective, or class of beneficiaries of the approved activities, as
originally described in the application.
(b) Amendment requests of $100,000 or more shall include all
application components required by the NOFA published for the last
application cycle; those requests of less than $100,000 do not have to
include the components which address the selection criteria.
(c) Approval of an amendment request is subject to the following:
(1) A rating equal to or greater than the lowest rating received by
a funded project during the most recent funding competition must be
attained by the amended project if the request is for $100,000 or more;
(2) Demonstration by the grantee of the capacity to promptly
complete the modified or new activities;
(3) Demonstration by the grantee of compliance with the
requirements of Sec. 953.604 for citizen participation; and
(4) The preparation of an amended or new environmental review in
accordance with part 58 of this title, if there is a significant change
in the scope or location of approved activities.
(d) Amendments which address imminent threats to health and safety
shall be reviewed and approved in accordance with the requirements of
subpart E of this part.
(e) If a program amendment fails to be approved and the original
project is no longer feasible, the grant funds proposed for amendment
shall be recaptured by HUD.
Subpart E--Imminent Threat Grants
Sec. 953.400 Criteria for funding.
The following criteria apply to requests for assistance under this
subpart:
(a) In response to requests for assistance, HUD may make funds
[[Page 40102]]
available under this subpart to applicants to alleviate or remove
imminent threats to health or safety. The urgency and immediacy of the
threat shall be independently verified before the approval of an
application. Funds may only be used to deal with imminent threats that
are not of a recurring nature and which represent a unique and unusual
circumstance, and which impact on an entire service area.
(b) Funds to alleviate imminent threats may be granted only if the
applicant can demonstrate to the satisfaction of HUD that other tribal
or Federal funding sources cannot be made available to alleviate the
threat.
(c) HUD will establish grant ceilings for imminent threat
applications.
Sec. 953.401 Application process.
(a) Letter to proceed. The Area ONAP may issue the applicant a
letter to proceed to incur costs to alleviate imminent threats to
health and safety only if the assisted activities do not alter
environmental conditions and are for temporary or permanent
improvements limited to protection, repair, or restoration actions
necessary only to control or arrest the effects of imminent threats or
physical deterioration. Reimbursement of such costs is dependent upon
HUD approval of the application.
(b) Applications. Applications shall include the information
specified in the Notice of Funding Availability (NOFA).
(c) Application approval. Applications which meet the requirement
of this section may be approved by the Area ONAP without competition in
accordance with the applicable requirements of Sec. 953.304.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.402 Availability of funds.
Of the funds made available by the NOFA for the ICDBG program, an
amount to be determined by the Assistant Secretary may be reserved by
HUD for grants under this subpart. The amount of funds reserved for
imminent threat funding during each funding cycle will be stated in the
NOFA. If any of the reserved funds are not used to fund imminent threat
grants during a fiscal year, they will be added to the allocation of
ICDBG funds for the subsequent fiscal year and will be used as if they
were a part of the new allocation.
Subpart F--Grant Administration
Sec. 953.500 Responsibility for grant administration.
(a) One or more tribal departments or authorities, including
existing tribal public agencies, may be designated by the chief
executive officer of the grantee to undertake activities assisted by
this part. A public agency so designated shall be subject to the same
requirements as are applicable to subrecipients.
(b) The grantee is responsible for ensuring that ICDBG funds are
used in accordance with all program requirements. The use of designated
public agencies, subrecipients, or contractors does not relieve the
grantee of this responsibility. The grantee is also responsible for
determining the adequacy of performance under subrecipient agreements
and procurement contracts, and for taking appropriate action when
performance problems arise, such as the actions described in
Sec. 953.701.
Sec. 953.501 Applicability of uniform administrative requirements and
cost principles.
(a) Grantees and subrecipients which are governmental entities
(including public agencies) shall comply with the requirements and
standards of OMB Circular No. A-87, ``Principles for Determining Costs
Applicable to Grants and Contracts with State, Local and Federally
recognized Indian Tribal Governments'', OMB Circular A-128, ``Audits of
State and Local Governments'' (implemented at 24 CFR part 44) and with
the following sections of 24 CFR part 85 ``Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments''.
(1) Section 85.3, ``Definitions''.
(2) Section 85.6, ``Exceptions''.
(3) Section 85.12, ``Special grant or subgrant conditions for
`high-risk' grantees''.
(4) Section 85.20, ``Standards for financial management systems,''
except paragraph (a).
(5) Section 85.21, ``Payment''.
(6) Section 85.22, ``Allowable costs''.
(7) Section 85.25, ``Program income,'' except as modified by
Sec. 953.503.
(8) Section 85.26, ``Non-federal audits''.
(9) Section 85.32, ``Equipment,'' except in all cases in which the
equipment is sold, the proceeds shall be program income.
(10) Section 85.33, ``Supplies''.
(11) Section 85.34, ``Copyrights''.
(12) Section 85.35, ``Subawards to debarred and suspended
parties''.
(13) Section 85.36, ``Procurement,'' except paragraphs (a) States,
(i)(5) Compliance with the Davis Bacon Act (40 U.S.C. 276a to a-7) and
(i)(6) Compliance with sections 103 and 107 of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-330). There may be
circumstances under which the bonding requirements of Sec. 85.36(h) are
inconsistent with other responsibilities and obligations of the
grantee. In such circumstances, acceptable methods to provide
performance and payment assurance may include:
(i) Deposit with the grantee of a cash escrow of not less than 20
percent of the total contract price, subject to reduction during the
warranty period, commensurate with potential risk; or
(ii) Letter of credit for 25 percent of the total contract price,
unconditionally payable upon demand of the grantee, subject to
reduction during the warranty period commensurate with potential risk.
(14) Section 85.37, ``Subgrants''.
(15) Section 85.40, ``Monitoring and reporting program
performance,'' except paragraphs (b) through (d) and paragraph (f).
(16) Section 85.41, ``Financial reporting,'' except paragraphs (a),
(b), and (e).
(17) Section 85.42, ``Retention and access requirements for
records''. The retention period referenced in Sec. 85.42(b) pertaining
to individual ICDBG activities starts from the date of the submission
of the final status and evaluation report as prescribed in
Sec. 953.506(a) in which the specific activity is reported.
(18) Section 85.43, ``Enforcement''.
(19) Section 85.44, ``Termination for convenience''.
(20) Section 85.51 ``Later disallowances and adjustments''.
(21) Section 85.52, ``Collection of amounts due''.
(b) Subrecipients, except subrecipients that are governmental
entities, shall comply with the requirements and standards of OMB
Circular No. A-122, ``Cost Principles for Nonprofit Organizations,'' or
OMB Circular No. A-21, ``Cost Principles for Educational
Institutions,'' as applicable, and OMB Circular A-133, ``Audits of
Institutions of Higher Education and Other Nonprofit Institutions''
(implemented at 24 CFR part 45). Audits shall be conducted annually.
Such subrecipients shall also comply with the following provisions of
24 CFR part 84 ``Uniform Administrative Requirements for Grants and
Agreements With Institutions of Higher Education, Hospitals and Other
Non-Profit Organizations'').
(1) Subpart A--``General''.
(2) Subpart B--``Pre-Award Requirements,'' except for Sec. 84.12,
``Forms for Applying for Federal Assistance''.
[[Page 40103]]
(3) Subpart C--``Post-Award Requirements,'' except for Sec. 84.22,
``Payment Requirements,'' grantees shall follow the standards of
Secs. 85.20(7) and 85.21 in making payments to subrecipients.
(4) Section 84.23, ``Cost Sharing and Matching''.
(5) Section 84.24, ``Program Income'', as modified by Sec. 953.503.
(6) Section 84.25, ``Revision of Budget and Program Plans''.
(7) Section 84.32, ``Real Property.'' In lieu of Sec. 84.32, ICDBG
subrecipients shall follow Sec. 953.504 of the ICDBG regulations.
(8) Section 84.34(g) ``Equipment,'' except that in lieu of the
disposition provisions of this paragraph:
(i) In all cases in which equipment is sold during the grant period
as defined in 24 CFR 85.25, the proceeds shall be program income; and
(ii) Equipment not needed by the subrecipient for ICDBG activities
shall be transferred to the grantee for the ICDBG program or shall be
retained after compensating the grantee.
(9) Section 84.51, ``Monitoring and Reporting Program
Performance.'' Only Sec. 84.51(a) applies to ICDBG subrecipients.
(10) Section 84.52, ``Financial Reporting''.
(11) Section 84.53(b), ``Retention and access requirements for
records.'' The retention period referenced in Sec. 84.53(b) pertaining
to individual ICDBG activities starts from the date of the submission
of the final status and evaluation report as prescribed in
Sec. 953.506(a), in which the specific activity is reported.
(12) Section 84.61, ``Termination.'' In lieu of the provisions of
this section, ICDBG subrecipients shall comply with Sec. 953.502 (b)(7)
of the ICDBG regulations.
(13) Subpart D--``After-the-Award Requirements,'' except for
Sec. 84.71, ``Closeout Procedures''.
(c) Cost principles. (1) All items of cost listed in Attachment B
of OMB Circulars A-21, A-87, or A-123, as applicable, which require
prior Federal agency approval are allowable without the prior approval
of HUD to the extent that they comply with the general policies and
principles stated in Attachment A of such circulars and are otherwise
eligible under subpart C of this part, except for the following:
(i) Depreciation methods for fixed assets shall not be changed
without specific approval of HUD or, if charged through a cost
allocation plan, the Federal cognizant agency.
(ii) Fines and penalties are unallowable costs to the ICDBG
program.
(2) No person providing consultant services in an employer-employee
type of relationship shall receive more than a reasonable rate of
compensation for personal services paid with ICDBG funds. In no event,
however, shall such compensation exceed the equivalent of the daily
rate paid for Level IV of the Executive Schedule.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.502 Agreements with subrecipients.
(a) Before disbursing any ICDBG funds to a subrecipient, the
grantee shall sign a written agreement with the subrecipient. The
agreement shall remain in effect during any period that the
subrecipient has control over ICDBG funds, including program income.
(b) At a minimum, the written agreement with the subrecipient shall
include provisions concerning the following items:
(1) Statement of work. The agreement shall include a description of
the work to be performed, a schedule for completing the work, and a
budget. These items shall be in sufficient detail to provide a sound
basis for the grantee effectively to monitor performance under the
agreement.
(2) Records and reports. The grantee shall specify in the agreement
the particular records the subrecipient must maintain and the
particular reports the subrecipient must submit in order to assist the
grantee in meeting its recordkeeping and reporting requirements.
(3) Program income. The agreement shall include the program income
requirements set forth in Sec. 85.25 as modified by Sec. 953.503.
(4) Uniform administrative requirements. The agreement shall
require the subrecipient to comply with applicable administrative
requirements, as described in Sec. 953.501.
(5) Other program requirements. The agreement shall require the
subrecipient to carry out each activity in compliance with all Federal
laws and regulations described in subpart G of this part, except that
the subrecipient does not assume the grantee's environmental
responsibilities described at Sec. 953.605.
(6) Conditions for religious organizations. Where applicable, the
conditions prescribed by HUD for the use of ICDBG funds by religious
organizations shall be included in the agreement.
(7) Suspension and termination. The agreement shall specify that,
in accordance with 24 CFR 85.43, suspension or termination may occur if
the subrecipient materially fails to comply with any term of the award,
and that the award may be terminated for convenience in accordance with
24 CFR 85.44.
(8) Reversion of assets. The agreement shall specify that upon its
expiration the subrecipient shall transfer to the grantee any ICDBG
funds on hand at the time of expiration and any accounts receivable
attributable to the use of ICDBG funds. It shall also include
provisions designed to ensure that any real property under the
subrecipient's control that was acquired or improved in whole or in
part with ICDBG funds (including ICDBG funds provided to the
subrecipient in the form of a loan) in excess of $25,000 is either:
(i) Used to meet the primary objective as stated in Sec. 953.208
until five years after expiration of the agreement, or for such longer
period of time as determined to be appropriate by the grantee; or
(ii) Not used in accordance with paragraph (b)(8)(i) of this
section, in which event the subrecipient shall pay to the grantee an
amount equal to the current market value of the property less any
portion of the value attributable to expenditures of non-ICDBG funds
for the acquisition of, or improvement to, the property. The payment is
program income to the grantee if it is received during the grant
period. (No payment is required after the period of time specified in
paragraph (b)(8)(i) of this section.)
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.503 Program income.
(a) Program income requirements for ICDBG grantees are set forth in
24 CFR 85.25, as modified by this section.
(b) Program income means gross income received by the grantee or a
subrecipient directly generated from the use of ICDBG funds during the
grant period, except as provided in paragraph (b)(4) of this section.
When program income is generated by an activity that is only partially
assisted with ICDBG funds, the income shall be prorated to reflect the
percentage of ICDBG funds used.
(1) Program income includes, but is not limited to, the following:
(i) Proceeds from the disposition by sale or long-term lease of
real property purchased or improved with ICDBG funds;
(ii) Proceeds from the disposition of equipment purchased with
ICDBG funds;
(iii) Gross income from the use or rental of real or personal
property
[[Page 40104]]
acquired by the grantee or by a subrecipient with ICDBG funds, less
costs incidental to generation of the income;
(iv) Gross income from the use or rental of real property, owned by
the grantee or by a subrecipient, that was constructed or improved with
ICDBG funds, less costs incidental to generation of the income;
(v) Payments of principal and interest on loans made using ICDBG
funds, except as provided in paragraph (b)(3) of this section;
(vi) Proceeds from the sale of loans made with ICDBG funds except
as provided in paragraph (b)(4) of this section;
(vii) Proceeds from sale of obligations secured by loans made with
ICDBG funds;
(viii) Interest earned on funds held in a revolving fund account;
(ix) Interest earned on program income pending its disposition; and
(x) Funds collected through special assessments made against
properties owned and occupied by households not of low and moderate
income, where the assessments are used to recover all or part of the
ICDBG portion of a public improvement.
(2) Program income does not include income earned on grant advances
from the U.S. Treasury. The following items of income earned on grant
advances must be remitted to HUD for transmittal to the U.S. Treasury
and will not be reallocated:
(i) Interest earned from the investment of the initial proceeds of
a grant advance by the U.S. Treasury;
(ii) Income (e.g., interest) earned on loans or other forms of
assistance provided with ICDBG funds that are used for activities
determined by HUD either to be ineligible or that fail substantially to
meet any other requirement of this part.
(3) The calculation of the amount of program income for the
grantee's ICDBG program as a whole (i.e., comprising activities carried
out by a grantee and its subrecipients) shall exclude payments made by
subrecipients of principal and/or interest on loans received from
grantees where such payments are made from program income received by
the subrecipient. (By making such payments, the subrecipient shall be
deemed to have transferred program income to the grantee.) The amount
of program income derived from this calculation shall be used for
reporting purposes and in determining limitations on planning and
administration and public services activities to be paid for with ICDBG
funds.
(4) Program income does not include any income received in a single
year by the grantee and all its subrecipients if the total amount of
such income does not exceed $25,000.
(5) Examples of other receipts that are not considered program
income are proceeds from fundraising activities carried out by
subrecipients receiving ICDBG assistance; funds collected through
special assessments used to recover the non-ICDBG portion of a public
improvement; and proceeds from the disposition of real property
acquired or improved with ICDBG funds when the disposition occurs after
the applicable time period specified in Sec. 953.502(b)(8) for
subrecipient-controlled property, or in Sec. 953.504 for grantee-
controlled property.
(6) For purposes of determining the applicability of the program
income requirements included in this part and in 24 CFR 85.25, the
grant period is the time between the effective date of the grant
agreement and the close-out of the grant pursuant to the requirements
of Sec. 953.508.
(7) As provided for in 24 CFR 85.25(g)(2), program income received
will be added to the funds committed to the grant agreement and shall
be used for purposes and under the conditions of the grant agreement.
(8) Recording program income. The receipt and expenditure of
program income as defined in Sec. 953.503(b) shall be recorded as part
of the financial transactions of the grant program.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.504 Use of real property.
The standards described in this section apply to real property
within the grantee's control which was acquired or improved in whole or
in part using ICDBG funds in excess of $25,000. These standards shall
apply from the date ICDBG funds are first spent for the property until
five years after the closeout of the grant from which the assistance to
the property was provided.
(a) A grantee may not change the use or planned use of any such
property (including the beneficiaries of such use) from that for which
the acquisition or improvement was made unless the grantee provides
affected citizens with reasonable notice of, and opportunity to comment
on, any proposed change, and either:
(1) The new use of such property qualifies as meeting the primary
objective set forth in Sec. 953.208 and is not a building for the
general conduct of government; or
(2) The requirements in paragraph (b) of this section are met.
(b) If the grantee determines, after consultation with affected
citizens, that it is appropriate to change the use of the property to a
use which does not qualify under paragraph (a)(1) of this section, it
may retain or dispose of the property for the changed use if the
grantee's ICDBG program is reimbursed in the amount of the current fair
market value of the property, less any portion of the value
attributable to expenditures of non-ICDBG funds for acquisition of, and
improvements to, the property.
(c) If the change of use occurs after program closeout, the
proceeds from the disposition of the real property shall be used for
activities which meet the eligibility requirements set forth in subpart
C of this part and the primary objective set forth in Sec. 953.208.
(d) Following the reimbursement of the ICDBG program in accordance
with paragraph (b) of this section, the property no longer will be
subject to any ICDBG requirements.
Sec. 953.505 Records to be maintained.
Each grantee shall establish and maintain sufficient records to
enable the Secretary to determine whether the grantee has met the
requirements of this part.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.506 Reports.
(a) Status and evaluation report. Grantees shall submit a status
and evaluation report on previously funded open grants 45 days after
the end of the Federal fiscal year and at the time of grant close-out.
The report shall be in a narrative form addressing these areas.
(1) Progress. The progress made in completing approved activities
should be described. This description should include a listing of work
remaining together with a revised implementation schedule, if
necessary.
(2) Expenditure of funds. A breakdown of funds spent on each major
project activity or category should be provided.
(3) Grantee assessment. If the project has been completed, an
evaluation of the effectiveness of the project in meeting the community
development needs of the grantee should be provided.
(Approved by the Office of Management and Budget under Control No.
2577-0191.)
(b) Minority business enterprise reports. Grantees shall submit to
HUD, by April 10, a report on contract and subcontract activity during
the first half of the fiscal year and by October 10 a report on such
activity during the second half of the year.
[[Page 40105]]
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.507 Public access to program records.
Notwithstanding the provisions of 24 CFR 85.42(f), grantees shall
provide citizens with reasonable access to records regarding the past
use of ICDBG funds, consistent with applicable State and tribal laws
regarding privacy and obligations of confidentiality.
Sec. 953.508 Grant closeout procedures.
(a) Criteria for closeout. A grant will be closed out when the Area
ONAP determines, in consultation with the grantee, that the following
criteria have been met:
(1) All costs to be paid with ICDBG funds have been incurred, with
the exception of closeout costs (e.g., audit costs) and costs resulting
from contingent liabilities described in the closeout agreement
pursuant to paragraph (c) of this section. Contingent liabilities
include, but are not limited to, third-party claims against the
grantee, as well as related administrative costs.
(2) With respect to activities which are financed by means of
escrow accounts, loan guarantees, or similar mechanisms, the work to be
assisted with ICDBG funds has actually been completed.
(3) Other responsibilities of the grantee under the grant agreement
and applicable laws and regulations appear to have been carried out
satisfactorily or there is no further Federal interest in keeping the
grant agreement open for the purpose of securing performance.
(b) Closeout actions. (1) Within 90 days of the date it is
determined that the criteria for closeout have been met, the grantee
shall submit to the Area ONAP a copy of the final status and evaluation
report described in Sec. 953.506(a) and a completed Financial Status
Report (SF-269). If acceptable reports are not submitted, an audit of
the grantee's program activities may be conducted by HUD.
(2) Based on the information provided in the status report and
other relevant information, the grantee, in consultation with the Area
ONAP, will prepare a closeout agreement in accordance with paragraph
(c) of this section.
(3) The Area ONAP will cancel any unused portion of the awarded
grant, as shown in the signed grant closeout agreement. Any unused
grant funds disbursed from the U.S. Treasury which are in the
possession of the grantee shall be refunded to HUD.
(4) Any costs paid with ICDBG funds which were not audited
previously shall be subject to coverage in the grantee's next single
audit performed in accordance with 24 CFR part 44. The grantee may be
required to repay HUD any disallowed costs based on the results of the
audit, or on additional HUD reviews provided for in the closeout
agreement.
(c) Closeout agreement. Any obligations remaining as of the date of
the closeout shall be covered by the terms of a closeout agreement. The
agreement shall be prepared by the grantee in consultation with the
Area ONAP. The agreement shall identify the grant being closed out, and
include provisions with respect to the following:
(1) Identification of any closeout costs or contingent liabilities
subject to payment with ICDBG funds after the closeout agreement is
signed;
(2) Identification of any unused grant funds to be canceled by HUD;
(3) Identification of any program income on deposit in financial
institutions at the time the closeout agreement is signed;
(4) Description of the grantee's responsibility after closeout for:
(i) Compliance with all program requirements, certifications and
assurances in using program income on deposit at the time the closeout
agreement is signed and in using any other remaining ICDBG funds
available for closeout costs and contingent liabilities;
(ii) Use of real property assisted with ICDBG funds in accordance
with the principles described in Sec. 953.504; and
(iii) Ensuring that flood insurance coverage for affected property
owners is maintained for the mandatory period;
(5) Other provisions appropriate to any special circumstances of
the grant closeout, in modification of or in addition to the
obligations in paragraphs (c) (1) through (4) of this section. The
agreement shall authorize monitoring by HUD, and shall provide that
findings of noncompliance may be taken into account by HUD as
unsatisfactory performance of the grantee in the consideration of any
future grant award under this part.
(d) Termination of grant for convenience. Grant assistance provided
under this part may be terminated for convenience in whole or in part
before the completion of the assisted activities, in accordance with
the provisions of 24 CFR 85.44. The grantee shall not incur new
obligations for the terminated portions after the effective date, and
shall cancel as many outstanding obligations as possible. HUD shall
allow full credit to the grantee for those portions of obligations
which could not be canceled and which had been properly incurred by the
grantee in carrying out the activities before the termination. The
closeout policies contained in this section shall apply in such cases,
except where the approved grant is terminated in its entirety.
Responsibility for the environmental review to be performed under 24
CFR part 50 or 24 CFR part 58, as applicable, shall be determined as
part of the closeout process.
(e) Termination for cause. In cases in which HUD terminates the
grantee's grant under the authority of subpart H of this part, or under
the terms of the grant agreement, the closeout policies contained in
this section shall apply, except where the approved grant is canceled
in its entirety. The provisions in 24 CFR 85.43(c) on the effects of
termination shall also apply. HUD shall determine whether an
environmental review is required, and if so, HUD shall perform it in
accordance with 24 CFR part 50.
Sec. 953.509 Force account construction.
(a) The use of tribal work forces for construction or renovation
activities performed as part of the activities funded under this part
shall be approved by the Area ONAP before the start of project
implementation. In reviewing requests for an approval of force account
construction or renovation, the area ONAP may require that the grantee
provide the following:
(1) Documentation to indicate that it has carried out or can carry
out successfully a project of the size and scope of the proposal;
(2) Documentation to indicate that it has obtained or can obtain
adequate supervision for the workers to be used;
(3) Information showing that the workers to be used are, or will
be, listed on the tribal payroll and are employed directly by a unit,
department or other governmental instrumentality of the tribe or
village.
(b) Any and all excess funds derived from the force account
construction or renovation activities shall accrue to the grantee and
shall be reprogrammed for other activities eligible under this part in
accordance with Sec. 953.305 or returned to HUD promptly.
(c) Insurance coverage for force account workers and activities
shall, where applicable, include worker's compensation, public
liability, property damage, builder's risk, and vehicular liability.
(d) The grantee shall specify and apply reasonable labor
performance, construction, or renovation standards to work performed
under the force account.
(e) The contracting and procurement standards set forth in 24 CFR
85.36
[[Page 40106]]
apply to material, equipment, and supply procurement from outside
vendors under this section.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.510 Indian preference requirements.
(a) Applicability. HUD has determined that grants under this part
are subject to Section 7(b) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b). Section 7(b) provides that
any contract, subcontract, grant or subgrant pursuant to an act
authorizing grants to Indian organizations or for the benefit of
Indians shall require that, to the greatest extent feasible:
(1) Preference and opportunities for training and employment shall
be given to Indians; and
(2) Preference in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises as
defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C.
1452).
(b) Definitions. (1) The Indian Self-Determination and Education
Assistance Act [25 U.S.C. 450b] defines ``Indian'' to mean a person who
is a member of an Indian tribe and defines ``Indian tribe'' to mean any
Indian tribe, band, nation, or other organized group or community
including any Alaska native village or regional or village corporation
as defined or established pursuant to the Alaska Native Claims
Settlement Act, which is recognized as eligible for the special
programs and services provided by the United States to Indians because
of their status as Indians.
(2) In section 3 of the Indian Financing Act of 1974 (25 U.S.C.
1452) economic enterprise is defined as any Indian--owned commercial,
industrial, or business activity established or organized for the
purpose of profit, except that Indian ownership must constitute not
less than 51 percent of the enterprise. This act defines Indian
organization to mean the governing body of any Indian tribe or entity
established or recognized by such governing body.
(c) Preference in administration of grant. To the greatest extent
feasible, preference and opportunities for training and employment in
connection with the administration of grants awarded under this part
shall be given to Indians.
(d) Preference in contracting. To the greatest extent feasible,
grantees shall give preference in the award of contracts for projects
funded under this part to Indian organizations and Indian-owned
economic enterprises.
(1) Each grantee shall:
(i) Advertise for bids or proposals limited to qualified Indian
organizations and Indian-owned enterprises; or
(ii) Use a two-stage preference procedure, as follows:
(A) Stage 1. Invite or otherwise solicit Indian-owned economic
enterprises to submit a statement of intent to respond to a bid
announcement or request for proposals limited to Indian-owned firms.
(B) Stage 2. If responses are received from more than one Indian
enterprise found to be qualified, advertise for bids or proposals
limited to Indian organizations and Indian-owned economic enterprises;
or
(iii) Develop, subject to Area ONAP one-time approval, the
grantee's own method of providing preference.
(2) If the grantee selects a method of providing preference that
results in fewer than two responsible qualified organizations or
enterprises submitting a statement of intent, a bid or a proposal to
perform the contract at a reasonable cost, then the grantee shall:
(i) Re-advertise the contract, using any of the methods described
in paragraph (d)(1) of this section; or
(ii) Re-advertise the contract without limiting the advertisement
for bids or proposals to Indian organizations and Indian-owned economic
enterprises; or
(iii) If one approvable bid or proposal is received, request Area
ONAP review and approval of the proposed contract and related
procurement documents, in accordance with 24 CFR 85.36, in order to
award the contract to the single bidder or offeror.
(3) Procurements that are within the dollar limitations established
for small purchases under 24 CFR 85.36 need not follow the formal bid
or proposal procedures of paragraph (d) of this section, since these
procurements are governed by the small purchase procedures of 24 CFR
85.36. However, a grantee's small purchase procurement shall, to the
greatest extent feasible, provide Indian preference in the award of
contracts.
(4) All preferences shall be publicly announced in the
advertisement and bidding or proposal solicitation documents and the
bidding and proposal documents.
(5) A grantee, at its discretion, may require information of
prospective contractors seeking to qualify as Indian organizations or
Indian-owned economic enterprises. Grantees may require prospective
contractors to include the following information prior to submitting a
bid or proposal, or at the time of submission:
(i) Evidence showing fully the extent of Indian ownership and
interest;
(ii) Evidence of structure, management and financing affecting the
Indian character of the enterprise, including major subcontracts and
purchase agreements; materials or equipment supply arrangements; and
management salary or profit-sharing arrangements; and evidence showing
the effect of these on the extent of Indian ownership and interest; and
(iii) Evidence sufficient to demonstrate to the satisfaction of the
grantee that the prospective contractor has the technical,
administrative, and financial capability to perform contract work of
the size and type involved.
(6) The grantee shall incorporate the following clause (referred to
as the Section 7(b) clause) in each contract awarded in connection with
a project funded under this part:
(i) The work to be performed under this contract is on a project
subject to Section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b) (Indian Act). Section 7(b) requires
that to the greatest extent feasible:
(A) Preferences and opportunities for training and employment shall
be given to Indians; and
(B) Preferences in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises.
(ii) The parties to this contract shall comply with the provisions
of Section 7(b) of the Indian Act.
(iii) In connection with this contract, the contractor shall, to
the greatest extent feasible, give preference in the award of any
subcontracts to Indian organizations and Indian-owned economic
enterprises, and preferences and opportunities for training and
employment to Indians.
(iv) The contractor shall include this Section 7(b) clause in every
subcontract in connection with the project, and shall, at the direction
of the grantee, take appropriate action pursuant to the subcontract
upon a finding by the grantee or HUD that the subcontractor has
violated the Section 7(b) clause of the Indian Act.
(e) Complaint procedures. The following complaint procedures are
applicable to complaints arising out of any of the methods of providing
for Indian preference contained in this part, including alternate
methods enacted and approved in a manner described in this section:
(1) Each complaint shall be in writing, signed, and filed with the
grantee.
(2) A complaint must be filed with the grantee no later than 20
calendar days
[[Page 40107]]
from the date of the action (or omission) upon which the complaint is
based.
(3) Upon receipt of a complaint, the grantee shall promptly stamp
the date and time of receipt upon the complaint, and immediately
acknowledge its receipt.
(4) Within 20 calendar days of receipt of a complaint, the grantee
shall either meet, or communicate by mail or telephone, with the
complainant in an effort to resolve the matter. The grantee shall make
a determination on a complaint and notify the complainant, in writing,
within 30 calendar days of the submittal of the complaint to the
grantee. The decision of the grantee shall constitute final
administrative action on the complaint.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.511 Use of escrow accounts for rehabilitation of privately
owned residential property.
(a) Limitations. A grantee may withdraw funds from its line of
credit for immediate deposit into an escrow account for use in funding
loans and grants for the rehabilitation of privately owned residential
property under Sec. 953.202(a)(1). The following additional limitations
apply to the use of escrow accounts for residential rehabilitation
loans and grants closed after September 7, 1990:
(1) The use of escrow accounts under this section is limited to
loans and grants for the rehabilitation of primarily residential
properties containing no more than four dwelling units (and accessory
neighborhood-scale non-residential space within the same structure, if
any, e.g., a store front below a dwelling unit).
(2) An escrow account shall not be used unless the contract between
the property owner and the contractor selected to do the rehabilitation
work specifically provides that payment to the contractor shall be made
through an escrow account maintained by the grantee, by a subrecipient
as defined in Sec. 953.4, by a public agency designated under
Sec. 953.500(a), or by an agent under a procurement contact governed by
the requirements of 24 CFR 85.36. No deposit to the escrow account
shall be made until after the contract has been executed between the
property owner and the rehabilitation contractor.
(3) All funds withdrawn under this section shall be deposited into
one interest earning account with a financial institution. Separate
bank accounts shall not be established for individual loans and grants.
(4) The amount of funds deposited into an escrow account shall be
limited to the amount expected to be disbursed within 10 working days
from the date of deposit. If the escrow account, for whatever reason,
at any time contains funds exceeding 10 days cash needs, the grantee
immediately shall transfer the excess funds to its program account. In
the program account, the excess funds shall be treated as funds
erroneously drawn in accordance with the requirements of U.S. Treasury
Financial Manual, paragraph 6-2075.30.
(5) Funds deposited into an escrow account shall be used only to
pay the actual costs of rehabilitation incurred by the owner under the
contract with a private contractor. Other eligible costs related to the
rehabilitation loan or grant, e.g., the grantee's administrative costs
under Sec. 953.206 or rehabilitation services costs under
Sec. 953.202(b)(9), are not permissible uses of escrowed funds. Such
other eligible rehabilitation costs shall be paid under normal ICDBG
payment procedures (e.g., from withdrawals of grant funds under the
grantee's line of credit with the Treasury).
(b) Interest. Interest earned on escrow accounts established in
accordance with this section, less any service charges for the account,
shall be remitted to HUD at least quarterly but not more frequently
than monthly. Interest earned on escrow accounts is not required to be
remitted to HUD to the extent the interest is attributable to the
investment of program income.
(c) Remedies for noncompliance. If HUD determines that a grantee
has failed to use an escrow account in accordance with this section,
HUD may, in addition to imposing any other sanctions provided for under
this part, require the grantee to discontinue the use of escrow
accounts, in whole or in part.
Subpart G--Other Program Requirements
Sec. 953.600 Constitutional prohibition.
In accordance with First Amendment Church/State Principles, as a
general rule, ICDBG assistance may not be used for religious activities
or provided to primarily religious entities for any activities,
including secular activities. The following restrictions and
limitations therefore apply to the use of ICDBG funds.
(a) ICDBG funds may not be used for the acquisition of property or
the construction or rehabilitation (including historic preservation and
removal of architectural barriers) of structures to be used for
religious purposes or which will otherwise promote religious interests.
This limitation includes the acquisition of property for ownership by
primarily religious entities and the construction or rehabilitation
(including historic preservation and removal of architectural barriers)
of structures owned by such entities (except as permitted under
paragraph (b) of this section with respect to rehabilitation and under
paragraph (d) of this section with respect to repairs undertaken in
connection with public services) regardless of the use to be made of
the property or structure. Property owned by primarily religious
entities may be acquired with ICDBG funds at no more than fair market
value for a non-religious use.
(b) ICDBG funds may be used to rehabilitate buildings owned by
primarily religious entities to be used for a wholly secular purpose
under the following conditions:
(1) The building (or portion thereof) that is to be improved with
the ICDBG assistance has been leased to an existing or newly
established wholly secular entity (which may be an entity established
by the religious entity);
(2) The ICDBG assistance is provided to the lessee (and not the
lessor) to make the improvements;
(3) The leased premises will be used exclusively for secular
purposes available to persons regardless of religion;
(4) The lease payments do not exceed the fair market rent of the
premises as they were before the improvements are made;
(5) The portion of the cost of any improvements that also serve a
non-leased part of the building will be allocated to and paid for by
the lessor;
(6) The lessor enters into a binding agreement that unless the
lessee, or a qualified successor lessee, retains the use of the leased
premises for a wholly secular purpose for at least the useful life of
the improvements, the lessor will pay to the lessee an amount equal to
the residual value of the improvements;
(7) The lessee must remit the amount received from the lessor under
paragraph (b)(6) of this section to the grantee or subrecipient from
which the ICDBG funds were derived.
(8) The lessee can also enter into a management contract
authorizing the lessor religious entity to use the building for its
intended secular purpose, e.g., homeless shelter, provision of public
services. In such case, the religious entity must agree in the
management contract to carry out the secular purpose in a manner free
from religious influences in accordance with the principles set forth
in paragraph (c) of this section.
[[Page 40108]]
(c) As a general rule, ICDBG funds may be used for eligible public
services to be provided through a primarily religious entity, where the
religious entity enters into an agreement with the grantee or
subrecipient from which the ICDBG funds are derived that, in connection
with the provision of such services:
(1) 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;
(2) It will not discriminate against any person applying for such
public services on the basis of religion and will not limit such
services or give preference to persons on the basis of religion;
(3) It will provide no religious instruction or counseling, conduct
no religious worship or services, engage in no religious proselytizing,
and exert no other religious influence in the provision of such public
services;
(d) Where the public services provided under paragraph (c) of this
section are carried out on property owned by the primarily religious
entity, ICDBG funds may also be used for minor repairs to such property
which are directly related to carrying out the public services where
the cost constitutes in dollar terms only an incidental portion of the
ICDBG expenditure for the public services.
Sec. 953.601 Nondiscrimination.
(a) Under the authority of section 107(e)(2) of the Act, the
Secretary waives the requirement that grantees comply with section 109
of the Act except with respect to the prohibition of discrimination
based on age, sex, religion, or against an otherwise qualified disabled
individual.
(b) A grantee shall comply with the provisions of title II of Pub.
L. 90-284 (24 U.S.C. 1301--the Indian Civil Rights Act) in the
administration of a program or activity funded in whole or in part with
funds made available under this part. For purposes of this section,
``program or activity'' is defined as any function conducted by an
identifiable administrative unit of the grantee; and ``funded in whole
or in part with funds made available under this part'' means that ICDBG
funds in any amount have been transferred by the grantee to an
identifiable administrative unit and disbursed in a program or
activity.
Sec. 953.602 Relocation and real property acquisition.
(a) Minimize displacement. Consistent with the other goals and
objectives of this part, grantees shall assure that they have taken all
reasonable steps to minimize the displacement of persons (households,
businesses, nonprofit organizations, and farms) as a result of a
project assisted under this part.
(b) Temporary relocation. The following policies cover residential
tenants who will not be required to move permanently but who must
relocate temporarily for the project. Such tenants must be provided:
(1) Reimbursement for all reasonable out-of-pocket expenses
incurred in connection with the temporary relocation, including the
cost of moving to and from the temporarily occupied housing and any
increase in monthly housing costs (e.g., rent/utility costs).
(2) Appropriate advisory services, including reasonable advance
written notice of:
(i) The date and approximate duration of the temporary relocation;
(ii) The location of the suitable, decent, safe and sanitary
dwelling to be made available for the temporary period;
(iii) The terms and conditions under which the tenant may occupy a
suitable, decent, safe, and sanitary dwelling in the building/complex
following completion of the repairs; and
(iv) The provisions of paragraph (b)(1) of this section.
(c) Relocation assistance for displaced persons. A displaced person
(defined in paragraph (g) of this section) must be provided relocation
assistance at the levels described in, and in accordance with the
requirements of, the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended (URA)(42 U.S.C. 4601-4655)
and implementing regulations at 49 CFR part 24.
(d) Optional relocation assistance. Under section 105(a)(11) of the
Act, the grantee may provide relocation payments and other relocation
assistance to persons displaced by a project that is not subject to
paragraph (c) of this section. The grantee may also provide relocation
assistance to persons receiving assistance under paragraph (c) of this
section at levels in excess of those required. For assistance that is
not required by State or tribal law, the grantee shall adopt a written
policy available to the public that describes the relocation assistance
that it has elected to furnish and provides for equal relocation
assistance within each class of displaced persons.
(e) Real Property acquisition requirements. The acquisition of real
property for an assisted activity is subject to 49 CFR part 24, subpart
B. Whenever the grantee does not have the authority to acquire the real
property through condemnation, it shall:
(1) Before discussing the purchase price, inform the owner:
(i) Of the amount it believes to be the fair market value of the
property. Such amount shall be based upon one or more appraisals
prepared by a qualified appraiser. However, this provision does not
prevent the grantee from accepting a donation or purchasing the real
property at less than its fair market value.
(ii) That it will be unable to acquire the property if negotiations
fail to result in an amicable agreement.
(2) Request HUD approval of the proposed acquisition price before
executing a firm commitment to purchase the property. The grantee shall
include with its request a copy of the appraisal(s) and, when
applicable, a justification for any proposed acquisition payment that
exceeds the fair market value of the property. HUD will promptly review
the proposal and inform the grantee of its approval or disapproval.
(f) Appeals. A person who disagrees with the grantee's
determination concerning whether the person qualifies as a ``displaced
person,'' or the amount of relocation assistance for which the person
is eligible, may file a written appeal of that determination with the
grantee. A person who is dissatisfied with the grantee's determination
on his or her appeal may submit a written request for review of that
determination to the HUD Area ONAP.
(g) Responsibility of grantee. (1) The grantee shall certify that
it will comply with the URA, the regulations at 49 CFR part 24, and the
requirements of this section, i.e., provide assurance of compliance as
required by 49 CFR part 24. The grantee shall ensure such compliance
notwithstanding any third party's contractual obligation to the grantee
to comply with these provisions.
(2) The cost of required relocation assistance is an eligible
project cost in the same manner and to the same extent as other project
costs. However, such assistance may also be paid for with funds
available to the grantee from any other source.
(3) The grantee shall maintain records in sufficient detail to
demonstrate compliance with this section.
(h) Definition of displaced person. (1) For purposes of this
section, the term displaced person means any person (household,
business, nonprofit organization, or farm) that moves from real
property, or moves his or her personal property from real property,
permanently, as a direct result of rehabilitation, demolition, or
[[Page 40109]]
acquisition for a project assisted under this part. The term
``displaced person'' includes, but is not limited to:
(i) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the submission to HUD of an
application for financial assistance that is later approved.
(ii) Any person, including a person who moves before the date
described in paragraph (h)(1)(i) of this section, that either HUD or
the grantee determines was displaced as a direct result of acquisition,
rehabilitation, or demolition for the assisted project.
(iii) A tenant-occupant of a dwelling who moves from the building/
complex permanently, after the execution of the agreement between the
grantee and HUD, if the move occurs before the tenant is provided
written notice offering him or her the opportunity to lease and occupy
a suitable, decent, safe and sanitary dwelling in the same building/
complex, under reasonable terms and conditions, upon completion of the
project. Such reasonable terms and conditions include a monthly rent
and estimated average monthly utility costs that do not exceed the
greater of:
(A) The tenant's monthly rent and estimated average monthly utility
costs before the agreement; or
(B) 30 percent of gross household income.
(iv) A tenant-occupant of a dwelling who is required to relocate
temporarily, but does not return to the building/complex, if either:
(A) The tenant is not offered payment for all reasonable out-of-
pocket expenses incurred in connection with the temporary relocation,
including the cost of moving to and from the temporarily occupied unit,
any increased housing costs and incidental expenses; or
(B) Other conditions of the temporary relocation are not
reasonable.
(v) A tenant-occupant of a dwelling who moves from the building/
complex after he or she has been required to move to another dwelling
unit in the same building/complex in order to carry out the project, if
either:
(A) The tenant is not offered reimbursement for all reasonable out-
of-pocket expenses incurred in connection with the move; or
(B) Other conditions of the move are not reasonable.
(2) Notwithstanding the provisions of paragraph (h)(1) of this
section, a person does not qualify as a ``displaced person'' (and is
not eligible for relocation assistance under the URA or this section),
if:
(i) The person moved into the property after the submission of the
application for financial assistance to HUD, but, before signing a
lease or commencing occupancy, was provided written notice of the
project, its possible impact on the person (e.g., the person may be
displaced, temporarily relocated or suffer a rent increase) and the
fact that the person would not qualify as a ``displaced person'' or for
any assistance provided under this section as a result of the project;
(ii) The person is ineligible under 49 CFR 24.2(g)(2).
(iii) The grantee determines the person is not displaced as a
direct result of acquisition, rehabilitation, or demolition for an
assisted project. To exclude a person on this basis, HUD must concur in
that determination.
(3) A grantee may at any time ask HUD to determine whether a
specific displacement is or would be covered under this section.
(i) Definition of initiation of negotiations. For purposes of
determining the formula for computing the replacement housing
assistance to be provided to a person displaced as a direct result of
rehabilitation or demolition of the real property, the term
``initiation of negotiations'' means the execution of the agreement
covering the rehabilitation or demolition.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.603 Labor standards.
In accordance with the authority under section 107(e)(2) of the
Act, the Secretary waives the provisions of section 110 of the Act
(Labor Standards) with respect to this part, including the requirement
that laborers and mechanics employed by the contractor or subcontractor
in the performance of construction work financed in whole or in part
with assistance received under this part be paid wages at rates not
less than those prevailing on similar construction in the locality, as
determined by the Secretary of Labor in accordance with the Davis-Bacon
Act (40 U.S.C. 276 a to a-7).
Sec. 953.604 Citizen participation.
(a) In order to permit residents of Indian tribes and Alaska native
villages to examine and appraise the applicant's application for funds
under this part, the applicant shall follow traditional means of
resident involvement which, at the least, include the following:
(1) Furnishing residents with information concerning the amounts of
funds available for proposed community development and housing
activities and the range of activities that may be undertaken.
(2) Holding one or more meetings to obtain the views of residents
on community development and housing needs. Meetings shall be scheduled
in ways and at times that will allow participation by residents.
(3) Developing and publishing or posting a community development
statement in such a manner as to afford affected residents an
opportunity to examine its contents and to submit comments.
(4) Affording residents an opportunity to review and comment on the
applicant's performance under any active community development block
grant.
(b) Prior to submission of the application to HUD, the applicant
shall certify by an official Tribal resolution that it has met the
requirements of paragraph (a) of this section; and
(1) Considered any comments and views expressed by residents and,
if it deems it appropriate, modified the application accordingly; and
(2) Made the modified application available to residents.
(c) No part of the requirement under paragraph (a) of this section
shall be construed to restrict the responsibility and authority of the
applicant for the development of the application and the execution of
the grant. Accordingly, the citizen participation requirements of this
section do not include concurrence by any person or group in making
final determinations on the contents of the application.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.605 Environment.
(a) In order to assure that the policies of the National
Environmental Policy Act of 1969 and other provisions of Federal law
which further the purposes of that act (as specified in 24 CFR 58.5)
are most effectively implemented in connection with the expenditure of
ICDBG funds, the grantee shall comply with the Environment Review
Procedures for Entities Assuming HUD Environmental Responsibilities (24
CFR part 58). Upon completion of an environmental review, the grantee
shall submit a certification and request for release of funds for
particular projects in accordance with 24 CFR part 58. The grantee
shall also be responsible for compliance with flood insurance, coastal
barrier resource and airport clear zone requirements under 24 CFR 58.6.
(b) In accordance with 24 CFR 58.34(a)(8), grants for imminent
threats to health or safety approved under the provisions of subpart E
of this part are
[[Page 40110]]
exempt from some or all of the environmental review requirements of 24
CFR part 58, to the extent provided in that section.
Sec. 953.606 Conflict of interest.
(a) Applicability. (1) In the procurement of supplies, equipment,
construction, and services by grantees and subgrantees, the conflict of
interest provisions in 24 CFR 85.36 and 24 CFR 84.42 shall apply.
(2) In all cases not governed by 24 CFR 85.36 and 24 CFR 84.42, the
provisions of this section shall apply. Such cases include the
provision of assistance by the grantee or by its subrecipients to
businesses, individuals, and other private entities under eligible
activities that authorize such assistance (e.g., rehabilitation,
preservation, and other improvements of private properties or
facilities under Sec. 953.202; or grants, loans, and other assistance
to businesses, individuals, and other private entities under
Sec. 953.203 or Sec. 953.204.).
(b) Conflicts prohibited. Except for the use of ICDBG funds to pay
salaries and other related administrative or personnel costs, the
general rule is that no persons described in paragraph (c) of this
section who exercise or have exercised any functions or
responsibilities with respect to ICDBG activities assisted under this
part or who are in a position to participate in a decision-making
process or gain inside information with regard to such activities, may
obtain a personal or financial interest or benefit from an ICDBG
assisted activity, or have an interest in any contract, subcontract or
agreement with respect thereto, or the proceeds thereunder, either for
themselves or those with whom they have family or business ties, during
their tenure or for one year thereafter.
(c) Persons covered. The conflict of interest provisions of
paragraph (b) of this section apply to any person who is an employee,
agent, consultant, officer, or elected or appointed official of the
grantee, or of any designated public agencies, or CBDOs under
Sec. 953.204, receiving funds under this part.
(d) Exceptions requiring HUD approval.--(1) Threshold requirements.
Upon the written request of a grantee, HUD may grant an exception to
the provisions of paragraph (b) of this section on a case-by-case
basis, when it determines that such an exception will serve to further
the purposes of the Act and the effective and efficient administration
of the grantee's program or project. An exception may be considered
only after the grantee has provided the following:
(i) A disclosure of the nature of the possible conflict,
accompanied by an assurance that there has been public disclosure of
the conflict and a description of how the public disclosure was made;
and
(ii) An opinion of the grantee's attorney that the interest for
which the exception is sought would not violate Tribal laws on conflict
of interest, or applicable State laws.
(2) Factors to be considered for exceptions: In determining whether
to grant a requested exception after the grantee has satisfactorily met
the requirements of paragraph (d)(1) of this section, HUD shall
consider the cumulative effect of the following factors, where
applicable:
(i) Whether the exception would provide a significant cost benefit
or essential expert knowledge to the program or project which would
otherwise not be available;
(ii) Whether an opportunity was provided for open competitive
bidding or negotiation;
(iii) Whether the affected person has withdrawn from his or her
functions or responsibilities, or from the decision-making process,
with reference to the specific assisted activity in question;
(iv) Whether the interest or benefit was present before the
affected person was in a position as described in paragraph (b) of this
section;
(v) Whether undue hardship will result, either to the grantee or to
the person affected, when weighed against the public interest served by
avoiding the prohibited conflict;
(vi) Any other relevant considerations.
(e) Circumstances under which the conflict prohibition does not
apply. (1) In instances where a person who might otherwise be deemed to
be included under the conflict prohibition is a member of a group or
class of beneficiaries of the assisted activity and receives generally
the same interest or benefits as are being made available or provided
to the group or class, the prohibition does not apply, except that if,
by not applying the prohibition against conflict of interest, a
violation of Tribal or State laws on conflict of interest would result,
the prohibition does apply. However, if the assistance to be provided
is housing rehabilitation (or repair) or new housing, a public
disclosure of the nature of the assistance to be provided and the
specific basis for the selection of the proposed beneficiaries must be
made prior to the submission of an application to HUD. Evidence of this
disclosure must be provided as a component of the application.
(f) Record retention. All records pertaining to the grantee's
decision under this section shall be maintained for HUD review upon
request.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.607 Lead-based paint.
(a) Prohibition against the use of lead-based paint. Section 401(b)
of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4831(b))
directs HUD to prohibit the use of lead-based paint in residential
structures constructed or rehabilitated with Federal assistance. Such
prohibitions are contained in 24 CFR part 35, subpart B, and are
applicable to residential structures constructed or rehabilitated with
assistance provided under this part.
(b) Notification of hazards of lead-based paint poisoning. (1) The
Secretary has promulgated requirements regarding notification to
purchasers and tenants of HUD-associated housing constructed prior to
1978 of the hazards of lead-based paint poisoning at 24 CFR part 35,
subpart A. This paragraph is promulgated pursuant to the authorization
granted in 24 CFR 35.5(c) and supersedes, with respect to all housing
to which it applies, the notification requirements prescribed by
subpart A of 24 CFR part 35.
(2) For properties constructed prior to 1978, applicants for
rehabilitation assistance provided under this part and tenants or
purchasers of properties owned by the grantee or its subrecipient and
acquired or rehabilitated with assistance under this part shall be
notified:
(i) That the property may contain lead-based paint;
(ii) Of the hazards of lead-based paint;
(iii) Of the symptoms and treatment of lead-based paint poisoning;
(iv) Of the precautions to be taken to avoid lead-based paint
poisoning (including maintenance and removal techniques for eliminating
such hazards);
(v) Of the advisability and availability of blood lead level
screening for children under six years of age;
(vi) That in the event lead-based paint is found on the property,
appropriate treatment procedures may be undertaken.
(c) Elimination of lead-based paint hazards. The purpose of this
paragraph is to implement the provisions of section 302 of the Lead-
Based Paint Poisoning Prevention Act, 42 U.S.C. 4822, by establishing
procedures to eliminate as far as practicable the hazards due to the
presence of paint which may contain lead and to which children under
six years of age may be
[[Page 40111]]
exposed in existing housing which is rehabilitated with assistance
provided under this part. HUD has promulgated requirements regarding
the elimination of lead-based paint hazards in HUD-associated housing
at 24 CFR part 35, subpart C. This paragraph is promulgated pursuant to
the authorization granted in 24 CFR 35.24(b)(4) and supersedes, with
respect to all housing to which it applies, the requirements prescribed
by subpart C of 24 CFR part 35.
(1) Applicability. This paragraph applies to the rehabilitation of
applicable surfaces in existing housing which is assisted under this
part. The following activities assisted under the Indian Community
Development Block Grant program are not covered by this paragraph (c):
(i) Emergency repairs (not including lead-based paint-related
emergency repairs);
(ii) Weatherization;
(iii) Water or sewer hook-ups;
(iv) Installation of security devices;
(v) Facilitation of tax exempt bond issuances which provide funds
for rehabilitation;
(vi) Other similar types of single-purpose programs that do not
include physical repairs or remodeling of applicable surfaces (as
defined in 24 CFR 35.22) of residential structures; and
(vii) Any non-single purpose rehabilitation that does not involve
applicable surfaces (as defined in 24 CFR 35.22) that does not exceed
$3,000 per unit.
(2) Definitions.
Applicable surface. All intact and non-intact interior and exterior
painted surfaces of a residential structure.
Chewable surface. All protruding painted surfaces up to five feet
from the floor or ground, that are readily accessible to children under
six years of age, e.g., protruding corners, windowsills and frames,
doors and frames, and other protruding woodwork.
Defective paint surface. A surface on which the paint is cracking,
scaling, chipping, peeling or loose.
Elevated blood lead level or EBL. Excessive absorption of lead,
that is, confirmed concentration of lead in whole blood of 20 ug/dl
(micrograms of lead per deciliter) for a single test or of 15-19 ug/dl
in two consecutive tests 3-4 months apart.
HEPA. A high efficiency particle accumulator as used in lead
abatement vacuum cleaners.
Lead-based paint. A paint surface, whether or not defective,
identified as having a lead content greater than or equal to 1 mg/cm2
(milligram per square centimeter) or .5 percent by weight or 5000 parts
per million (PPM).
(3) Inspection and Testing.--(i) Defective paint surfaces. The
grantee shall inspect for defective paint surfaces in all units
constructed prior to 1978 which are occupied by families with children
under six years of age and which are proposed for rehabilitation
assistance. The inspection shall occur at the same time the property is
being inspected for rehabilitation. Defective paint conditions will be
included in the work write-up for the remainder of the rehabilitation
work.
(ii) Chewable surfaces. The grantee shall be required to test
chewable surfaces for lead-based paint if the family residing in a
unit, constructed prior to 1978 and receiving rehabilitation
assistance, includes a child under six years of age with an identified
EBL condition. Testing must be conducted by an inspector certified or
regulated by a State or local health or housing agency or an
organization recognized by HUD. Lead content shall be tested by using
an X-ray fluorescence analyzer (XRF) or by laboratory analysis of paint
samples.
(iii) Abatement without testing. In lieu of the procedures set
forth in paragraph (c)(3)(ii) of this section, in the case of a
residential structure constructed prior to 1978, the grantee may forgo
testing and treat all applicable surfaces in accordance with the
methods set out in paragraph (c)(5) of this section.
(4) Treatment Actions. (i) For inspections performed under
Sec. 953.607(c)(3)(i) and where defective paint surfaces are found,
treatment shall be provided to defective areas in accordance with
paragraph (c)(5) of this section. Treatment shall be performed before
final inspection and approval of the work.
(ii) For testing performed under Sec. 953.607(c)(3)(ii) and where
interior chewable surfaces are found to contain lead-based paint, all
interior chewable surfaces in any affected room shall be treated. Where
exterior chewable surfaces are found to contain lead-based paint, the
entire exterior chewable surface shall be treated. Treatment in
accordance with paragraph (c)(5) of this section shall be performed
before final inspection and approval of the work.
(iii) When weather prohibits repainting exterior surfaces before
final inspection, the grantee may permit the owner to treat the
defective paint or chewable lead-based paint as required by this
section and agree to repaint by a specified date. A separate inspection
is required.
(5) Treatment methods. Treatment of defective paint surfaces and
chewable surfaces must consist of covering or removal of the paint in
accordance with the following requirements:
(i) A defective paint surface shall be treated if the total area of
defective paint on a component is:
(A) More than 10 square feet on an exterior wall;
(B) More than 2 square feet on an interior or exterior component
with a large surface area, excluding exterior walls and including, but
not limited to, ceilings, floors, doors, and interior walls; or
(C) More than 10 percent of the total surface area on an interior
or exterior component with a small surface area, including, but not
limited to, window sills, baseboards and trim.
(ii) Acceptable methods of treatment are: Removal by wet scraping,
wet sanding, chemical stripping on or off site, replacing painted
components, scraping with infra-red or coil type heat gun with
temperatures below 1100 degrees, HEPA vacuum sanding, HEPA vacuum
needle gun, contained hydroblasting or high pressure wash with HEPA
vacuum, and abrasive sandblasting with HEPA vacuum. Surfaces must be
covered with durable materials with joints and edges sealed and caulked
as needed to prevent the escape of lead contaminated dust.
(iii) Prohibited methods of removal are: Open flame burning or
torching; machine sanding or grinding without a HEPA exhaust;
uncontained hydroblasting or high pressure wash; and dry scraping
except around electrical outlets or except when treating defective
paint spots no more than two square feet in any one interior room or
space (hallway, pantry, etc.) or totalling no more than twenty square
feet on exterior surfaces.
(iv) During exterior treatment, soil and playground equipment must
be protected from contamination.
(v) All treatment procedures must be concluded with a thorough
cleaning of all surfaces in the room or area of treatment to remove
fine dust particles. Cleanup must be accomplished by wet washing
surfaces with a lead solubilizing detergent such as trisodium phosphate
or an equivalent solution.
(vi) Waste and debris must be disposed of in accordance with all
applicable Federal, State and local laws.
(6) Funding for inspection, testing and treatment. Program
requirements and local program design will determine whether the cost
of inspection, testing or treatment is to be borne by the owner/
developer, the grantee or a combination of the owner/developer and the
grantee.
[[Page 40112]]
(7) Tenant protection. The owner/developer shall take appropriate
action to protect residents and their belongings from hazards
associated with treatment procedures. Residents must not enter spaces
undergoing treatment until cleanup is completed. Personal belongings
that are in work areas must be relocated or otherwise protected from
contamination. Where necessary, these actions may include the temporary
relocation of tenants during the treatment process. The owner/developer
shall notify the grantee of all such actions taken.
(8) Records. The grantee shall keep a copy of each inspection and/
or test report for at least three years.
(9) Monitoring and enforcement. Area ONAP monitoring of
rehabilitation programs includes reviews for compliance with applicable
program requirements for lead-based paint. In cases of noncompliance,
HUD may impose conditions or sanctions on grantees to encourage prompt
compliance.
(10) Compliance with other program requirements, Federal, State and
local laws.--(i) Other program requirements. To the extent that
assistance from any of the programs covered by this section is used in
conjunction with other HUD program assistance which have lead-based
paint requirements which may have more or less stringent requirements,
the more stringent requirements will prevail.
(ii) HUD responsibility. If HUD determines that a State or local
law, ordinance, code or regulation provides for lead-based paint
testing or hazard treatment in a manner which provides a level of
protection from the hazards of lead-based paint poisoning at least
comparable to that provided by the requirements of this section and
that adherence to the requirements of this subpart would be duplicative
or otherwise cause inefficiencies, HUD may modify or waive the
requirements of this section in such manner as may be appropriate to
promote efficiency while ensuring such comparable level of protection.
(iii) Grantee responsibility. Nothing in this section is intended
to relieve any grantee in the programs covered by this section of any
responsibility for compliance with applicable State or local laws,
ordinances, codes or regulations governing the inspection, testing or
treatment of lead-based paint hazards.
(Approved by the Office of Management and Budget under control
number 2577-0191)
Sec. 953.608 Debarment and suspension.
As required by 24 CFR part 24, each grantee must require
participants in lower tier covered transactions (e.g., contractors and
sub-contractors) to include the certification in appendix B of part 24
(that neither it nor its principals is presently debarred, suspended,
proposed for debarment, declared ineligible, or voluntarily excluded
from participation from the covered transaction) in any proposal
submitted in connection with the lower tier transactions. A grantee may
rely on the certification , unless it knows the certification is
erroneous.
Subpart H--Program Performance
Sec. 953.700 Review of grantee's performance.
(a) Objective. HUD will review each grantee's performance to
determine whether the grantee has:
(1) Complied with the requirements of the Act, this part, the grant
agreement and other applicable laws and regulations;
(2) Carried out its activities substantially as described in its
application;
(3) Made substantial progress in carrying out its approved program;
(4) A continuing capacity to carry out the approved activities in a
timely manner; and
(5) The capacity to undertake additional activities funded under
this part.
(b) Basis for review. In reviewing each grantee's performance, HUD
will consider all available evidence which may include, but not be
limited to, the following:
(1) The approved application and any amendments thereto;
(2) Reports prepared by the grantee;
(3) Records maintained by the grantee;
(4) Results of HUD's monitoring of the grantee's performance,
including field evaluation of the quality of the work performed;
(5) Audit reports;
(6) Records of drawdowns on the line of credit;
(7) Records of comments and complaints by citizens and
organizations; and
(8) Litigation.
Sec. 953.701 Corrective and remedial action.
(a) General. One or more corrective or remedial actions will be
taken by HUD when, on the basis of the performance review, HUD
determines that the grantee has not:
(1) Complied with the requirements of the Act, this part, and other
applicable laws and regulations, including the environmental
responsibilities assumed under section 104(g) of title I of the Act;
(2) Carried out its activities substantially as described in its
applications;
(3) Made substantial progress in carrying out its approved program;
or
(4) Shown the continuing capacity to carry out its approved
activities in a timely manner.
(b) Action. The action taken by HUD will be designed, first, to
prevent the continuance of the deficiency; second, to mitigate any
adverse effects or consequences of the deficiency; and third, to
prevent a recurrence of the same or similar deficiencies. The following
actions may be taken singly or in combination, as appropriate for the
circumstances:
(1) Request the grantee to submit progress schedules for completing
approved activities or for complying with the requirements of this
part;
(2) Issue a letter of warning advising the grantee of the
deficiency (including environmental review deficiencies and housing
assistance deficiencies), describing the corrective actions to be
taken, establishing a date for corrective actions, and putting the
grantee on notice that more serious actions will be taken if the
deficiency is not corrected or is repeated;
(3) Advise the grantee to suspend, discontinue, or not incur costs
for the affected activity;
(4) Advise the grantee to reprogram funds from affected activities
to other eligible activities, provided that such action shall not be
taken in connection with any substantial violation of part 58 and
provided that such reprogramming is subjected to the environmental
review procedures of part 58 of this title;
(5) Advise the grantee to reimburse the grantee's program account
or line of credit in any amount improperly expended;
(6) Change the method of payment from a line of credit basis to a
reimbursement basis; and/or
(7) Suspend the line of credit until corrective actions are taken.
Sec. 953.702 Reduction or withdrawal of grant.
(a) General. A reduction or withdrawal of a grant under paragraph
(b) of this section will not be made until at least one of the
corrective or remedial actions specified in Sec. 953.701(b) has been
taken and only then if the grantee has not made an appropriate and
timely response. Before making such a grant reduction or withdrawal,
the grantee also shall be notified and given an opportunity within a
prescribed time for an informal consultation regarding the proposed
action.
[[Page 40113]]
(b) Reduction or withdrawal. When the Area ONAP determines, on the
basis of a review of the grantee's performance, that the objectives set
forth in Sec. 953.700(a)(2) or (3) have not been met, the Area ONAP may
reduce or withdraw the grant, except that funds already expended on
eligible approved activities shall not be recaptured.
Sec. 953.703 Other remedies for noncompliance.
(a) Secretarial actions. If the Secretary finds a grantee has
failed to comply with any provision of this part even after corrective
actions authorized under Sec. 953.701 have been applied, the following
actions may be taken provided that reasonable notice and opportunity
for hearing is made to the grantee. (The Administrative Procedure Act
(5 U.S.C. 551 et seq.), where applicable, shall be a guide in any
situation involving adjudications where the Secretary desires to take
actions requiring reasonable notice and opportunity for a hearing):
(1) Terminate the grant to the grantee;
(2) Reduce the grant to the grantee by an amount equal to the
amount which was not expended in accordance with this part; or
(3) Limit the availability of funds to projects or activities not
affected by such failure to comply; provided, however, that the
Secretary may on due notice revoke the grantee's line of credit in
whole or in part at any time if the Secretary determines that such
action is necessary to preclude the further expenditure of funds for
activities affected by such failure to comply.
(b) Secretarial referral to the Attorney General. If there is
reason to believe that a grantee has failed to comply substantially
with any provision of the Act, the Secretary may refer the matter to
the Attorney General of the United States with a recommendation that an
appropriate civil action be instituted. Upon such a referral, the
Attorney General may bring a civil action in any United States district
court having venue thereof for such relief as may be appropriate,
including an action to recover the amount of the assistance furnished
under this part which was not expended in accordance with this part or
for mandatory or injunctive relief.
Dated: June 18, 1996.
Michael B. Janis,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 96-19350 Filed 7-30-96; 8:45 am]
BILLING CODE 4210-32-P
