Community Development Block Grants for Indian Tribes and Alaskan Native Villages; Interim Rule

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 571 and 953

[Docket No. R-94-1530; FR-2880-I-05]

RIN 2577-AB31

Community Development Block Grants for Indian Tribes and Alaskan

Native Villages

AGENCY: Office of the Secretary, HUD.

ACTION: Interim rule.

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SUMMARY: This interim rule sets forth the requirements and procedures

for awarding Community Development Block Grant (CDBG) funds to Indian

tribes and Alaskan native villages.

Following issuance of a proposed rule on June 21, 1991, the

Department issued an interim rule on April 7, 1992, regarding the

criteria for awarding CDBG funding to Indian tribes and Alaskan native

villages. The Department has decided to issue another interim rule to

address the comments received on the April 7, 1992 interim rule and to

allow the public to see how the rule works in conjunction with the

latest Notice of Fund Availability (NOFA). This interim rule will

enable Indian tribes and Alaskan native villages to meet with

representatives of the HUD Office of Native American Programs (ONAP)

field offices to make suggestions for modification of the regulation

before it is issued in final form.

DATES: Effective date: October 1, 1994.

Comments due date: December 27, 1994.

Expiration date: This interim rule will expire April 1, 1996.

FOR FURTHER INFORMATION CONTACT: Dom Nessi, Director Office of Native

American Programs, Room 4140, Department of Housing and Urban

Development, 451 Seventh Street SW., Washington, DC 20410. (202) 708-

1015. TDD (202) 708-2565. (These are not toll-free numbers.)

ADDRESSES: Interested persons are invited to submit comments regarding

this interim rule to the Rules Docket Clerk, Office of General Counsel,

Room 10276, Department of Housing and Urban Development, 451 Seventh

Street SW., Washington, DC 20410. Communications should refer to the

above docket number and title. A copy of each communication submitted

will be available for public inspection and copying between 7:30 a.m.

and 5:30 p.m. weekdays at the above address.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The information collection requirements contained in this interim

rule have been submitted to the Office of Management and Budget (OMB)

for review under the Paperwork Reduction Act of 1980 and have been

assigned OMB control number 2506-0043.

Background

The authority for the CDBG program for Indian tribes and Alaskan

native villages was previously with the Office of Community Planning

and Development; therefore, all previous issuances refer to it under 24

CFR part 571. However, that authority was transferred recently to the

Office of Public and Indian Housing. Therefore, this interim rule is

placed in 24 CFR part 953, and part 571 is removed.

Section 105 of the Department of Housing and Urban Development

Reform Act of 1989 (Pub. L. 101-235) (``Reform Act''), as amended by

the National Affordable Housing Act (``NAHA''), amended Title I of the

Housing and Community Development Act of 1974 (``1974 Act''), by

transferring the authority for making grants to Indian Tribes from the

section 107 discretionary fund to the allocation and distribution of

funds provisions of Section 106 of the 1974 Act. Under section 106, as

so amended, one percent of the title I appropriation, excluding the

amounts appropriated for use under section 107, is allocated for grants

to Indian Tribes. The allocated amount is to be distributed to Indian

Tribes/Villages on a competitive basis in accordance with selection

criteria ``contained in a regulation promulgated by the Secretary after

notice and public comment.'' The Department issued the proposed rule on

June 21, 1991, at 56 FR 28666, to comply with the requirement for

publication for comment. The Department issued an interim rule, April

7, 1992, at 57 FR 11832, to give the public an additional opportunity

to comment on the interim rule after it has been in effect for one

round of competition. This revised interim rule is issued to address

the comments and will allow the public to see how the interim rule

works in conjunction with the latest NOFA.

Section 102 of the Reform Act requires the Secretary to publish in

the Federal Register a NOFA regarding funding that is available. In

addition to announcing the availability of funds, the NOFA will further

define application procedures and selection criteria.

Relocation and Real Property Acquisition Policies

Section 953.602 describes applicable relocation and real property

acquisition policies, including those implementing the Uniform

Relocation Assistance and Real Property Acquisition Policies Act of

1970 (URA). Under the government-wide URA rule at 49 CFR Part 24, any

person (family, individual, business, nonprofit organizations, or farm)

displaced on or after April 2, 1989 as a direct result of acquisition,

rehabilitation or demolition for a project assisted under this part is

entitled to URA relocation assistance. The acquisition of real property

for a project assisted under this part is also subject to the URA. The

URA policies are described in HUD Handbook 1378, Tenant Assistance,

Relocation and Real Property Acquisition.

Public Comments

The Department of Housing and Urban Development (HUD) received 18

individual comments from 9 sources on the interim rule published on

April 7, 1992. HUD received 6 letters from tribes, and 3 from regional

and private organizations. 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 regulation.

General Comments

Numerous comments were received requesting more tribal involvement

in the development of the final rule and NOFA. Also questioned was the

need for a national NOFA since the program had operated with a regional

competition in the past.

The passage of two statutes, NAHA and the Reform Act, created the

need for a national NOFA and revised rule. These statutes changed the

Indian Community Development Block (ICDBG) program selection process.

The NAHA required the Secretary of HUD to promulgate a regulation

containing selection criteria used to award funds in competitive

programs. The Reform Act restricts the disclosure of information about

HUD programs and discretionary funds. The current interim ICDBG rule

contained changes reflecting the NAHA and Reform Act requirements. As a

result of the written comments received and the consultation sessions

held relative to this interim rule, a second interim rule is being

published to continue the process of refining and developing a final

rule. HUD is committed to involving the public in this process to the

extent practicable. In order to publish a fair and coherent NOFA, HUD

Headquarters consulted extensively with HUD ONAP field offices

throughout the NOFA's development. Since the ONAP field offices are in

frequent contact with the tribes/villages within their jurisdiction,

they were able to provide Headquarters with information on how various

NOFA provisions would be received by ICDBG applicants. Following the

publication of the NOFA and regulation and after the selection process

has been completed, HUD field staff will hold public meetings to get

suggestions on how to improve the NOFA.

To facilitate the Department's ability to more readily respond to

the consultation process, changes to the rating criteria have been made

in this Interim Rule. Sections 953.303, 953.304, and 953.305 have been

modified to permit a wider range of changes to the rating criteria in

the NOFA without changing the regulation. The separate rating criteria

has been eliminated for Public Services activities at Sec. 953.306.

Eligible Public Service activities must still meet the submission

criteria set out in this part.

Specific Comments

Section 953.4 Definitions

Comment: One comment was received concerning the requirement that

the applicant must, when reporting income levels to HUD, include and

identify the distribution of tribal or village income to families,

households or individuals in the definition of low and moderate income

beneficiary. The commenter pointed out the existence of a Federal

statute that might preclude the use of portions of such payments from

being considered income when determining eligibility for federal or

federally assisted programs.

Response: It is recognized that such exclusions may exist and the

statutory mandates will be followed where appropriate. Their existence

would not necessarily indicate the need for additional language

identifying the exclusions. These claimed exclusions would be

identified by the applicant when reporting income to HUD when complying

with this section of the interim rule.

Section 953.5 Eligible Applicants

Comment: One comment was received noting that Indians residing in

urban areas and metropolitan cities and not on reservations do not

receive adequate service or funding from IHS and no service from BIA.

The commenter suggested that if HUD recognized these groups it would be

beneficial in gaining acceptance with other agencies such as IHS and

BIA.

Response: The Department does not have legislative authority to

provide Federal recognition to Indian Tribes or Alaskan Native

Villages, but deals with those tribes and villages recognized by the

Treasury Department and the Bureau of Indian Affairs as stipulated in

this section. The Indian groups residing in urban areas and

metropolitan cities and not on reservations can receive, to the extent

such persons are otherwise eligible as low income persons, benefits

under the regular CDBG programs serving the area where they reside.

The commenter also indicated the desire to establish an entitlement

program for the Indians. This proposal has been considered but cannot

be adopted without amendments to existing legislation. For these

reasons there are no changes proposed in this section of the interim

rule.

Section 953.6 Technical Assistance

Comment: Four commenters requested that HUD give the field offices

latitude in providing more technical assistance on responding to the

NOFA and the submission requirements than presently permitted. Several

felt that the tribes/villages are penalized for not having the

sophistication needed to prepare successful applications. One commenter

felt that the lack of technical assistance resulted in some tribes/

villages not submitting applications for activities they felt were most

appropriate to address their needs because of the uncertainty of their

eligibility or rating. The majority of the commenters felt that

expanded technical assistance was necessary for the tribes/villages to

successfully compete in the program.

Response: The technical assistance provisions of the Reform Act

limit the direct assistance that may be provided by the Department. New

regulations providing in-depth guidance have been issued by the

Department and are expected to more clearly define the technical

assistance role of the Field staff. Technical Assistance during the

application process will be provided to the greatest extent allowed by

the Reform Act.

Section 953.100 Grant Ceilings

Comment: One commenter felt that the method of setting grant

ceilings was not equitable because the established limits in their area

would permit a tribe one fourth their size to apply for the same amount

of grant funds as they could. The commenter proposed a revision to the

method currently utilized by the field office that would increase the

grant amounts they could apply for each funding cycle.

Response: Paragraph (b)(1) of this section gives the Assistant

Secretary final authority to determine grant ceilings for each field

office. Field offices recommend the ceilings for their jurisdiction.

The reason for this process is to ensure that grant ceilings are

appropriate on a national level. The Department has determined that the

present procedure for establishing grant ceilings is the most

appropriate method of establishing these limits and proposes no changes

to this section.

Section 953.101 Regional Allocation of Funds

Comment: Paragraph (c) of this section states that population data

will be used to allocate funds. Commenters asked which data sources HUD

would use to count native populations.

Response: HUD will use Census data. HUD recognizes that Census data

on Indian and Alaskan native populations may be incomplete or

inaccurate. However, these are the only data that are consistently

available, and they are reasonably representative when aggregated by

region. HUD encourages tribes and villages to use their own survey or

other locally collected data in their project applications, after

consulting with the ONAP on appropriate data collection methods, if

they believe these to be more reliable.

Section 953.102 Recaptures

Comment: One commenter suggested that in cases where recaptured

funds became available and are offered to a standby applicant to fund a

previously rated and ranked activity, the applicant should be funded on

the new cost estimate and not the amount applied for initially.

Response: In all cases where recaptured funds are reallocated to

fund a standby application, the Department must insure the criteria

contained in the governing NOFA are met. If the amounts available are

not sufficient to fund the application as proposed, the next highest

ranked application would be considered for funding.

Section 953.300 Application Requirements

Comment: A comment was received that recommended that an applicant

be allowed to submit its application with an unlimited number of

projects but restrict the number approved to the grant limits

established in the NOFA.

Response: This recommendation was considered but not included in

the revisions to the interim rule. The current application process is

intended to promote a competition where all applicants have an equal

chance for funding and not one that depends upon an applicant's ability

to produce large numbers of projects that could be included in their

application. The present application process leaves the decisions on

the type of project to be submitted with the applicant and does not

pass it on to HUD.

Comment: One commenter also expressed a concern about what they

perceived as a short amount of time to submit applications after

publication of the NOFA.

Response: The regulation gives applicants at least 30 days to

submit their applications to the field office. This minimum level was

established so that it is clear that under any circumstance an

applicant would have at least this amount of time to prepare an

application. The NOFA will establish the time in which the applicants

have to prepare and submit their applications. The application

submission deadline will continue to be established by Headquarters,

since the NOFA is issued on a national basis.

In an effort to streamline this regulation, portions of

Sec. 953.300, Application requirements, will be moved to the NOFA.

Since this information is directly related to the competitive process

set out in the NOFA, it is felt that it will be more accessible to

potential applicants in this location.

Section 953.301 Screening and Review of Applications

Comment: One comment was received indicating that the 14-day cure

period was inadequate and should be increased to 20 days from date of

receipt of the field office request.

Response: This process allows applicants to submit only that

information requested by the field office to help clarify the

application. HUD's regulations at 24 CFR 4.105(b)(3) allow authorized

employees, during the selection process, to contact applicants to seek

clarification of the terms of an applicant's submission. HUD policy

requires each NOFA to include a cure period for technical deficiencies

of at least 14 calendar days. Any deficiency that can be cured (e.g.,

the submission of a missing certification) cannot affect the rating of

the application in either a positive or negative way and should by its

nature be readily correctable within the present 14 day period.

Portions of Sec. 953.301, Screening and review of applications,

have been moved from this Interim Rule and will be placed in the NOFA.

This change will provide for more flexibility in meeting the needs of

the program as it continues to evolve and makes the requirements

readily available to the applicant.

Section 953.302 Selection Process

Comment: One commenter suggested that a waiver of the threshold

requirement regarding performance deficiencies described at

Sec. 953.302(a)(2)(ii)(A) be permitted.

Response: The subject provision appears to contain sufficient

flexibility as written. Section 953.7 sets forth the conditions where a

waiver of this interim rule would be permissible. A specific waiver

provision for threshold requirements in the interim rule does not seem

warranted.

Section 953.303 Housing Rating Category

Comment: The first paragraph of this section states that the

applicant shall provide assistance only to tenants/homeowners whose

payments are current, or who are current in a repayment agreement with

HUD. One commenter noted the difficulty in obtaining current payment

information.

Response: The Department expects the applicant to obtain the most

recent payment information it can from the Indian Housing Authority

(IHA). Note that the field office may grant exceptions to this

requirement on a case-by-case basis.

Section 953.304 Community Facilities

Comment: Two commenters proposed that the regulations include

museums, ecomuseums, cultural centers and archeological sites as

appropriate, eligible community facilities.

Response: These are eligible activities under the current

regulations.

Comment: One commenter requested a reconsideration of the portions

of this section that relate to the definition of ``neediest segment of

the population'' in the rating factors for community buildings. This

rating factor required that more than 80% of the beneficiaries be very

low income to receive the maximum points. Fifty-one to 79.9 percent of

the beneficiaries must be very low income to receive moderate points.

Response: This section of the regulation has been revised to

remove this definition of ``neediest segment of the population''.

Section 953.305 Economic Development Rating Category

Comment: One commenter suggested that the regulation is unfair in

providing special opportunities for federally assisted housing

residents.

Response: While this specific language has been removed from the

regulation, it in no way diminishes HUD commitment to empower the poor

residing in federally assisted housing. This factor remains in the NOFA

to encourage applicants to provide opportunities for residents of

federally assisted housing to improve their economic situation while

possibly improving their units.

Comment: Two commenters stated that HUD should specifically allow

tribes to apply for offices and other buildings that are not eligible

as community facilities as economic development activities. While this

activity would not appear to be prohibited by the regulations, there is

not sufficient information provided to make a determination of

eligibility.

Response: Because of the wide range of activities that are

potentially eligible under this program, it is not possible to list

them all in this interim rule. The ONAP field office should be provided

with specific information so that a determination can be made.

Section 953.307 Funding Process

Comment: One commenter questioned the need to re-submit the data

listed at Sec. 953.307(b)(1) if the data had been submitted in the

application and was still valid.

Response: Language has been added to make the pre-award process

optional if HUD has determined that no additional data is needed or

that current data does not need updating.

Comment: Section 953.307(b)(2) of the current regulation gives

successful applicants at least 30 days to provide supporting

documentation at the request of the field office, prior to execution of

the grant agreement. One commenter suggested expanding the 30-day

period because of the difficulty of preparing and submitting such

information to make the application more competitive within the 30-day

time period.

Response: Since the data requested would not be intended to improve

the competitive position of the application, but rather to support the

previously provided information, it was determined that increasing the

30 days would not be appropriate.

Other Changes Made By This Interim Rule

Subpart E--Imminent Threat Grants

Section 953.403, Availability of Funds, has been revised to allow

the Office of Native American Programs to retain up to five percent of

the funds made available by this part at the national level. The NOFA

will specify the amount of Imminent Threat funds to be retained during

each funding cycle. This change is intended to insure the availability

of imminent threat funding throughout the fiscal year.

Section 953.505 Program Income

The program income language in Sec. 570.504, previously

incorporated by reference, has been reproduced in Sec. 953.505 of these

regulations. This will hopefully make the ICDBG Regulation more user

friendly by placing all program income requirements in one location.

Section 953.606 Conflict of Interest

Section 953.606 (e) has been modified to provide for a public

disclosure of the nature of the assistance to be provided and the basis

of the selection of persons to be assisted for housing rehabilitation

or new housing. Evidence of the disclosure must be submitted with the

application.

Other Matters

Justification for Interim Rule

The Department has decided to issue another interim rule to address

the comments received on the April 7, 1992 interim rule and to allow

the public to see how the rule works in conjunction with the latest

Notice of Fund Availability (NOFA). This interim rule will enable

Indian tribes and Alaskan native villages to meet with representatives

of the HUD Office of Native American Programs (ONAP) field offices to

make suggestions for modification of the regulation before it is issued

in final form.

The Department has adopted a policy of setting a date for

expiration of an interim rule unless a final rule is published before

that date. This ``sunset'' provision appears in Sec. 953.1 of the

interim rule and provides that the rule will expire on a date 18 months

from the date of publication.

National Environmental Policy Act

A Finding of No Significant Impact with respect to the environment

has been 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. 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 interim rule before publication and

by approving it certifies that this interim rule does not have a

significant economic impact on a substantial number of small entities.

The interim rule establishes criteria for funding eligible recipients

among Indian Tribes/Villages and has no impact on small entities.

Semiannual Agenda

This interim rule was listed as Item No. 1690 in the Department's

Semiannual Agenda of Regulations published on April 25, 1994 (59 FR

20424, 20470) pursuant to Executive Order 12866 and the Regulatory

Flexibility Act.

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 interim 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 interim rule is not subject to review under the Order.

While the interim 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 interim 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

14.223.

List of Subjects in 24 CFR Part 953

Alaska, Community development block grants, Grant programs--housing

and community development, Reporting and recordkeeping requirements.

Accordingly, and under the authority of 42 U.S.C. 3535(d), title 24

of the Code of Federal Regulations is amended, as follows:

Part 571--[Removed]

1. Part 571 is removed.

2. Part 953, consisting of Secs. 953.1 through 953.704, is added to

read as follows:

PART 953--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND

ALASKAN NATIVE VILLAGES

Subpart A--General Provisions

Sec.

953.1 Applicability and scope.

953.2 Program objectives.

953.3 Nature of program.

953.4 Definitions.

953.5 Eligible applicants.

953.6 Technical Assistance.

953.7 Waivers.

Subpart B--Allocation of Funds

953.100 General.

953.101 Field Office allocation of funds.

953.102 Recaptures.

Subpart C--Eligible Activities

953.200 General.

953.201 Primary and national objectives.

953.202 Nonprofit organizations.

953.203 Administrative costs.

Subpart D--Single Purpose Grant Application and Selection Process

953.300 Application requirements.

953.301 Screening and review of applications.

953.302 Selection process.

953.303 Housing rating category.

953.304 Community facilities rating category.

953.305 Economic development rating category.

953.306 Public services.

953.307 Funding process.

953.308 Program amendments.

Subpart E--Imminent Threat Grants

953.400 Criteria for funding.

953.401 Application process.

953.402 Environmental review.

953.403 Availability of funds.

Subpart F--Grant Administration

953.500 General.

953.501 Designation of public agency.

953.502 Force account construction.

953.503 Indian preference requirements.

953.504 Grant closeout procedure.

953.505 Program income.

Subpart G--Other Program Requirements

953.600 General.

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.

Subpart H--Program Performance

953.700 Reports to be submitted by grantee.

953.701 Review of recipient's performance.

953.702 Corrective and remedial actions.

953.703 Reduction or withdrawal of grant.

953.704 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 only to

grants to eligible Indian Tribes and Alaskan native villages under the

Community Development Block Grant (CDBG) program for Indian Tribes and

Alaskan native villages.

Expiration of interim rule. This interim rule will expire on April

1, 1996.

Sec. 953.2 Program objectives.

The primary objective of the Indian CDBG (ICDBG) Program and of the

community development program of each grantee covered under this Act is

the development of viable Indian and Alaskan 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 local financial support for community

development activities below the level of such support prior to the

availability of this assistance.

Sec. 953.3 Nature of program.

The ICDBG Program is competitive in nature. Therefore, selection of

eligible applicants for funds will reflect consideration of the

relative adequacy of applications in addressing locally determined

need. Applicants for funding 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.)

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 Alaskan native village.

Eligible Indian populations means the most accurate and uniform

population data available from reliable sources for Indian Tribes and

Alaskan 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.

Field offices means the HUD Offices of Native American Programs or

other HUD field offices having responsibility for the Indian CDBG

Program.

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 local 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.

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, the Secretary may establish

income ceilings higher or lower than 80 percent of the median for the

area on the basis of the Secretary'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.

Secretary means the Secretary of HUD.

Tribal government, Tribal governing body or Tribal council means

the federally recognized governing body of an Indian Tribe or Alaskan

native village.

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.

Sec. 953.5 Eligible applicants.

(a) Eligible applicants are any Indian Tribe, band, group, or

nation, including Alaskan Indians, Aleuts, and Eskimos, and any Alaskan

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 the 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 Alaskan 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.

(c) To apply for funding in a given fiscal year, an applicant must

be eligible as an Indian Tribe or Alaskan 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. A list of eligible applicants is maintained by each

ONAP field office.

Sec. 953.6 Technical assistance.

On an annual basis, each field office will provide technical

assistance to eligible applicants for these purposes:

(a) To provide eligible applicants with information on how to apply

for funds and how grants will be selected and awarded; and

(b) To inform eligible applicants of changes in the program.

Sec. 953.7 Waivers.

The Secretary may waive any requirement of this part not required

by law whenever it is determined that undue hardship will result from

applying the requirement, and where application of the requirement

would adversely affect the purposes of the Act.

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 a field office determines that such conditions

exist and if funds are available for such grants.

(b) Size of grants--(1) Ceilings. Each field office may recommend

grant ceilings for single purpose grant applications. Field offices

have the option of recommending different ceilings for different size

tribes/villages (e.g. tribes 5,000+ will have one ceiling and tribes

with less than 5,000 will have a smaller ceiling.) Single purpose grant

ceilings for each field office shall be established in the NOFA.

(2) Individual grant amounts. In determining appropriate grant

amounts to be awarded, the field office 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 Field Office allocation of funds.

(a) Except as provided in paragraph (b) of this section, funds will

be allocated to the field offices responsible for the program on the

following basis:

(1) Each field office will be allocated $1,000,000 as a base

amount, to which will be added a formula share of the balance of the

Indian CDBG Program funds, as provided in paragraph (a)(2) of this

section.

(2) The amount remaining after the base amount is allocated will be

allocated to each field office based on the most recent data available

from reliable sources referable to the same point or period in time, as

follows:

(i) Forty percent (40%) of the funds will be allocated based upon

each field office's share of the total eligible Indian population;

(ii) Forty percent (40%) of the funds will be allocated based upon

each field office'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 field office's share of the total extent of overcrowded

housing among the eligible Indian population.

(b) If funds are set aside by statute for a specific purpose in any

fiscal year, the formula in paragraph (a) of this section will apply

unless otherwise specified in the law, or unless it is determined that

the formula is inappropriate to accomplish the purpose, in which case

the Secretary may establish other criteria to determine an allocation

formula for distributing funds to the field offices.

(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 Recaptures.

(a) After the rating and ranking process is completed, use of funds

that the field office obtains from recapture of obligated funds from

grantees that fail to meet statutory or regulatory requirements, or

return of unneeded funds, will be determined by the Assistant Secretary

on a case-by-case basis. The funds may be used to fund the highest

ranking unfunded project, an imminent threat, or other uses as

determined by the Assistant Secretary.

(b) Undistributed funds (funds that are unobligated at the

conclusion of the rating and ranking process) will be treated the same

as recaptured funds.

(c) Recaptured and undistributed funds will remain with the field

office that they came from unless the Assistant Secretary determines

there is an overriding reason to redistribute the funds outside of the

field office's jurisdiction.

Subpart C--Eligible Activities

Sec. 953.200 General.

The eligibility requirements of part 570, subpart C of this title--

Eligible Activities--apply to grants under this part, except for those

provisions which are specifically stated as applying only to the

Entitlement Cities or Small Cities--HUD administered programs, and with

the modifications stated in this subpart.

Sec. 953.201 Primary and national objectives.

(a) Not less than 70 percent of the funds of each single purpose

grant must be used for activities that benefit low- and moderate-income

persons under the criteria set forth in Sec. 570.208(a) of this title.

In determining the percentage of funds used for such activities, the

provisions of Sec. 570.200(a)(3)(i), (iv), and (v) of this title shall

apply. The requirements of this paragraph (a) do not apply to imminent

threat grants funded under Subpart E of this part.

(b) In addition to the requirement of paragraph (a) of this

section, each activity must meet one of the national objectives

pursuant to the criteria set forth in Sec. 570.208 of this title.

Sec. 953.202 Nonprofit organizations.

Tribal-based nonprofit organizations replace neighborhood-based

nonprofit organizations under Sec. 570.204(c)(1) of this title. A

Tribal-based nonprofit organization is an association or corporation

duly organized to promote and undertake community development

activities on a not-for-profit basis within an identified service area.

Sec. 953.203 Administrative costs.

(a) For purposes of this part, technical assistance costs

associated with developing the capacity to undertake a specific funded

program activity are not considered administrative costs. Therefore,

these costs are not included in the twenty percent limitation on

planning and administration stated in part 570, subpart C of this

title.

(b) Technical assistance costs cannot exceed ten percent of the

total grant award. As used in this part, ``technical assistance'' means

the transfer of skills and knowledge in planning, developing, and

administering the CDBG program to eligible Indian CDBG recipients who

need them in order to undertake a specific funded program activity.

Subpart D--Single Purpose Grant Application and Selection Process

Sec. 953.300 Application requirements.

(a) Application information. Headquarters shall publish a Notice of

Funding Availability (NOFA) in the Federal Register not less than 30

days before the deadline(s) 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

utilized, and any other information pertinent to the application

process.

(b) Costs incurred by applicant. Notwithstanding any provision in

Part 570 of this title, HUD will not reimburse or recognize any costs

incurred before submission of the single purpose grant application to

HUD.

(c) HUD will not normally reimburse or recognize costs incurred

before HUD approval of the application for funding. However, under

unusual circumstances, the field office 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 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.

Sec. 953.301 Screening and review of applications.

Each Field Office will screen and review applications for single

purpose grants in accordance with the requirements specified in the

annual NOFA.

Sec. 953.302 Selection process.

(a) Threshold requirements. (1)(i) In order for applications that

have passed the initial screening tests of Sec. 953.301 to be rated and

ranked, field offices must determine that the following requirements

have been met:

(A) Community development appropriateness.

(1) The costs are reasonable;

(2) The project(s) is appropriate for the intended use; and

(3) The project(s) is usable or achievable (generally within a two-

year period).

(B) Reserved.

(ii) If in the judgment of the field office, available data

indicate that the proposed project(s) costs are unreasonable, is

inappropriate for the intended use, or is not usable generally within

two years, the field office shall determine that the applicant has not

met this threshold requirement, and shall reject such project(s) from

further consideration.

(2) Capacity and performance. The applicant has the capacity to

undertake the proposed program. Additionally, applicants that

previously have participated in the Indian CDBG Program must have

performed adequately or, in cases of previously documented deficient

performance, the applicant must have taken appropriate corrective

action to improve its performance.

(i) Capacity. The applicant possesses, or will acquire, the

managerial, technical, or administrative staff necessary to carry out

the proposed projects. If the field office determines that the

applicant does not have or cannot obtain the capacity to undertake the

project(s), such project(s) will be rejected from further

consideration.

(ii) Performance--(A) Community development. Performance

determinations are made through the field office's normal monitoring

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.

(B) 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 field office's normal monitoring

process.

(C) 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 field office 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. (1) Applications that meet the

threshold requirements established in paragraph (a) of this section

will be rated competitively within each field office's jurisdiction.

(c) Periodic NOFAs will weigh and define the rating factors

contained in this subpart. Each field office will rate applications on

the basis of their responsiveness to the factors contained in this

subpart and in the periodic NOFAs.

(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. 953.303 Housing rating category.

(a)(1) The ``housing rating'' category consists of three

components:

(i) Housing rehabilitation;

(ii) Land to support new housing; and

(iii) New housing construction.

(2) Housing rehabilitation and new housing construction consist of

three parts:

(i) Project need and design;

(ii) Planning and implementation; and

(iii) Leveraging.

(3) Land to support new housing consists of two parts:

(i) Project need; and

(ii) Planning and implementation.

(4) Housing projects will be assigned to the appropriate component

for rating and may receive a maximum of 100 points.

(b) 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 field office. The field office may grant exceptions on

a case-by-case basis to this requirement.

(c) New housing construction can only be implemented through a

nonprofit organization that is eligible under Sec. 953.202 or is

otherwise eligible under Sec. 570.207(b)(3) of this title. All

applicants for new housing construction grants shall adopt, by current

tribal resolution, construction standards prior to submitting an

application. All applications for 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

served; and

(3) Rehabilitation of the unit occupied by the household to be

housed is not economically feasible; or

(4) The household to be housed currently is in an overcrowded unit

(sharing unit with other household(s)); or

(5) The household to be housed has no current residence.

(d) Housing rehabilitation component. (1) All applicants for

housing rehabilitation projects shall adopt rehabilitation standards

and rehabilitation policies, prior to submitting an application. The

following criteria will be used to rate housing rehabilitation

applications.

(i) Project need and design.

(ii) Planning and implementation.

(iii) Leveraging.

(2) The NOFA will contain the specific housing rehabilitation

rating criteria which are designed to measure need, cost of

rehabilitating houses to a standard condition, benefit to low and

moderate income persons and other factors.

(e) Land to support new housing rating component. (1) The following

criteria will be used to rate applications for land to support new

housing.

(i) Project need.

(ii) Planning and implementation.

(2) The NOFA will contain the specific rating criteria which are

designed to measure need, cost, benefit to low and moderate income

persons and other factors for applications for land to support new

housing.

(f) New housing construction rating component. (1) New housing

construction can only be implemented through a nonprofit organization

that is eligible under Sec. 953.202 or is otherwise eligible under

Sec. 570.207(b)(3) of this title. The following criteria will be used

to rate applications for new housing construction.

(i) Project need and design.

(ii) Planning and implementation.

(iii) Leveraging.

(2) The NOFA will contain the specific rating criteria which are

designed to measure need, cost, benefit to low and moderate income

persons and other factors for applications for new housing

construction.

Sec. 953.304 Community facilities rating category.

(a)(1) The ``community facilities rating'' category consists of two

components:

(i) Infrastructure, such as water, sewer or roads; and

(ii) Buildings, such as a community center or child care facility.

(2) Each component consists of three parts:

(i) Project need and design;

(ii) Planning and implementation; and

(iii) Leveraging.

(3) Community facilities projects will be assigned to the

appropriate component for rating and may receive a maximum of 100

points.

(b) Infrastructure rating component. (1) The following criteria

will be used to rate applications for infrastructure construction.

(i) Project need and design.

(ii) Planning and implementation.

(iii) Leveraging.

(2) The NOFA will contain the specific community facilities-

infrastructure rating criteria which are designed to measure need,

benefit to low and moderate income persons, cost and other factors.

(c) Buildings rating component. (1) The following criteria will be

used to rate applications for buildings.

(i) Project need and design.

(ii) Planning and implementation.

(iii) Leveraging.

(2) The NOFA will contain the specific community facilities-

buildings rating criteria which are designed to measure need, benefit

to low and moderate income persons, cost and other factors.

Sec. 953.305 Economic development rating category.

(a)(1) Economic development assistance may be provided only when an

analysis is done which shows public benefit commensurate with the

assistance to the business can reasonably be expected to result from

the assisted project, and the project has a reasonable chance of

success. The 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.

Economic development projects may receive a maximum of 100 points.

(2) The economic development rating category has one component

consisting of four parts.

(i) Project success.

(ii) Organization.

(iii) Leveraging.

(iv) Permanent full time job creation.

(b) The NOFA will contain the specific economic development rating

criteria which are designed to measure need, benefit to low and

moderate income persons, cost and other factors.

Sec. 953.306 Public services.

Public services activities may comprise no more than 15 percent of

the total grant award. Such projects must therefore be submitted with

one or more other projects, which must comprise at least 85 percent of

the total grant award. A public service project will be funded only if

the project(s) with which it is submitted rank high enough to be

funded.

Sec. 953.307 Funding process.

(a) Notification. Field offices will notify applicants of the

actions taken regarding their applications. Grant amounts offered may

reflect adjustments made by the field offices in accordance with

Sec. 953.100(b).

(b) Grant award. (1) As soon as HUD 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. These regulations (i.e., 24 CFR Part 953) 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:

(i) Section 58.33 of this title, ``Emergencies'';

(ii) Section 58.34 of this title, ``Exempt activities''; or

(iii) Section 58.22 of this title, ``Limitations on activities

pending clearance'' on the commitment of funds and which are

reimbursable under subpart C of part 570 of this title.

(3) HUD may impose other grant conditions where additional actions

or approvals are required prior to the use of funds.

(Approved by the Office of Management and Budget under OMB Control

No. 2506-0043.)

Sec. 953.308 Program amendments.

(a) Grantees shall request prior HUD approval for all program

amendments involving the alteration of existing activities that will

significantly change the scope, location, objective, or class of

beneficiaries of the approved activities, as originally described in

the application.

(b) Amendment requests shall include the information required under

Sec. 953.300(a).

(1) Amendments of $25,000 or more shall address all the rating

parts and subparts of the last rating cycle. Approval is subject to the

following:

(i) A rating equal to or greater than the lowest rating received by

a funded project during the last rating cycle;

(ii) Capability to complete promptly the modified or new

activities;

(iii) Compliance with the requirements of Sec. 953.604 for citizen

participation; and

(iv) 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.

(2) Amendments of less than $25,000 shall be approved subject to

meeting the requirements of paragraphs (b)(1) (ii),(iii), and (iv) of

this section.

(3) 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.

(c) If a program amendment fails to be approved and the original

project is no longer feasible, the grant funds proposed for amendment

shall be returned to 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, the ONAP may make funds

available under this subpart to applicants to alleviate or remove

imminent threats to health or safety that require an immediate

solution. The urgency and immediacy of the threat shall be

independently verified prior to 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 local

or Federal funding sources cannot be made available to alleviate the

threat.

(c) The Office of Native American Programs will establish grant

ceilings for imminent threat applications.

Sec. 953.401 Application process.

(a) Letter to proceed. The 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 be submitted in accordance

with Sec. 953.300(a). Applications which meet the requirement of this

section may be approved by the ONAP without competition in accordance

with the applicable requirements of Sec. 953.307.

Sec. 953.402 Environmental review.

In accordance with 24 CFR 58.34(a)(8), grants for imminent threats

to health or safety are exempt from some or all of the environmental

review requirements of part 58 of this title, to the extent provided in

that section.

Sec. 953.403 Availability of funds.

An amount not to exceed five percent of the funds made available by

the NOFA for the ICDBG program may be retained by the Office of Native

American Programs (ONAP) for grants under this part. The amount of

imminent threat funds retained during each funding cycle will stated in

the NOFA. Any remaining funds will be used as if they are a part of the

new allocation of funds. Field offices must correctly indicate,

however, the fiscal year in which the residual funds were originally

allocated when the funds are awarded to applicants.

Subpart F--Grant Administration

Sec. 953.500 General.

The requirements of part 570, subpart J of this title--Grant

Administration--apply to grants under this part except for those

provisions that are specifically stated as applying to the Entitlement

Cities or Small Cities--HUD administered programs, and with the

modifications stated in this subpart.

(Approved by the Office of Management and Budget under OMB Control

No. 2506-0043.)

Sec. 953.501 Designation of public agency.

One or more Tribal departments or authorities may be designated by

the chief executive officer of an Indian Tribe or Alaskan native

village as the operating agency to undertake activities assisted under

this part. The Indian Tribe or Alaskan native village itself, however,

shall be the applicant. Designation of an operating agency does not

relieve the Indian Tribe or Alaskan native village of its

responsibility to assure that the program will be administered in

accordance with all HUD requirements, including these regulations.

Sec. 953.502 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 HUD before the start of project implementation. In

reviewing requests for an approval of force account construction or

renovation, HUD 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 utilized;

(3) Information showing that the workers to be utilized 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. 953.308(b) or returned to HUD promptly.

(c) Insurance coverage for force account workers and activities

shall, where applicable, include workman'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 apply to material, equipment, and supply procurement from outside

vendors under this section, but not to other activities undertaken by

force account. HUD may approve alternative requirements in lieu of

bonding if compliance with the bonding requirements specified in

Sec. 85.36(h) of this title is determined by HUD to be infeasible or

incompatible with the Indian preference requirements set forth in

Sec. 953.503.

(Approved by the Office of Management and Budget under OMB Control

No. 2506-0043.)

Sec. 953.503 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. 450e(b)), which requires 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.

(b) Definitions. Indian organizations and Indian-owned economic

enterprises include both of the following:

(1) Any economic enterprise as defined in section 3(e) of the

Indian Financing Act of 1974 (Pub. L. 93-262); that is, ``any Indian-

owned commercial, industrial, or business activity established or

organized for the purpose of profit provided that such Indian ownership

and control shall constitute not less than 51 percent of the

enterprise''; and

(2) Any ``Tribal organizations'' as defined in section 4(c) of the

Indian Self-Determination and Education Assistance Act (Pub. L. 93-

638); that is, ``the recognized governing body of any Indian Tribe; any

legally established organization of Indians which is controlled,

sanctioned or chartered by such governing body or which is

democratically elected by the adult members of the Indian community to

be served by such organizations and which includes the maximum

participation of Indians in all phases of its activities.''

(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 and Alaskan natives.

(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 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 HUD field office 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-bid the contract, using any of the methods described in

paragraph (d)(1) of this section; or

(ii) Re-bid the contract without limiting the advertisement for

bids or proposals to Indian organizations and Indian-owned economic

enterprises; or

(iii) If one approvable bid is received, request field office

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.

(3) Procurements that are within the dollar limitations established

for small purchases under 24 CFR 85.36 need not follow the formal bid

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 solicitation and the bidding documents.

(5) A grantee, at its discretion, may require information of

prospective contractors seeking to qualify as Indian organizations or

Indian-owned economic enterprises; however, this information need not

be submitted to HUD. 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, control,

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. 450e(b)) (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 and Alaskan natives.

(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) Additional Indian preference requirements. A grantee may, with

prior HUD approval, provide for additional Indian preference

requirements as conditions for the award of, or in the terms of, any

contract in connection with a project funded under this part. The

additional Indian preference requirements shall be consistent with the

objectives of the Section 7(b) clause of the Indian Act and shall not

result in a significantly higher cost or greater risk of non-

performance or longer period of performance. The additional Indian

preference requirements permitted by this part do not include the

imposition of geographic preferences or restrictions to the procurement

process.

Sec. 953.504 Grant closeout procedure.

Within 90 days of the date that HUD determines the grant has met

the criteria for closeout, the grantee shall submit to HUD a completed

Financial Status Report (SF-269). In addition, the requirements of

Sec. 570.509 of this title, Grant closeout procedures, apply to the

ICDBG program where applicable.

(Approved by the Office of Management and Budget under OMB Control

No. 2506-0043.)

Sec. 953.505 Program Income.

(a) Disposition of program income received by recipients.

(1) Program income received before grant closeout may be retained

by the recipient if the income is treated as additional CDBG funds

subject to all applicable requirements governing the use of CDBG funds.

(2) If the recipient chooses to retain program income, that income

shall affect withdrawals of grant funds from the U.S. Treasury as

follows:

(i) Program income in the form of repayments to, or interest earned

on, a revolving fund shall be substantially disbursed from the fund

before additional cash withdrawals are made from the U.S. Treasury for

the same activity. (This rule does not prevent a lump sum disbursement

to finance the rehabilitation of privately owned properties as provided

for in Sec. 570.513 of this title.)

(ii) Substantially all other program income shall be disbursed for

eligible activities before additional cash withdrawals are made from

the U.S. Treasury.

(3) Program income on hand at the time of closeout shall continue

to be subject to the eligibility requirements in subpart C of this part

and all other applicable provisions of this part until it is expended.

(4) Unless otherwise provided in any grant closeout agreement, and

subject to the requirements of paragraph (a)(5) of this section, income

received after closeout shall not be governed by the provisions of this

part, except that, if at the time of closeout the recipient has another

ongoing CDBG grant received directly from HUD, funds received after

closeout shall be treated as program income of the ongoing grant

program.

(5) If the recipient does not have another ongoing grant received

directly from HUD at the time of closeout, income received after

closeout from the disposition of real property or from loans

outstanding at the time of closeout shall not be governed by the

provisions of this part, except that such income shall be used for

activities that meet one of the national objectives in 24 CFR 570.208

and the eligibility requirements described in section 105 of the Act.

(b) All other program income received after closeout will not be

governed by the provisions of this part.

Subpart G--Other Program Requirements

Sec. 953.600 General.

The following requirements of 24 CFR part 570, subpart K--Other

Program Requirements--apply to grants under this part.

(a) 24 CFR 570.605, ``National Flood Insurance Program.''

(b) 24 CFR 570.608, ``Lead-based paint.''

(c) 24 CFR 570.609, ``Use of debarred, suspended, or ineligible

contractors or subrecipients.''

(d) 24 CFR 570.610, ``Uniform administrative requirements and cost

principles.'' Non-federally recognized tribes shall follow the

requirements of 24 CFR part 85 and OMB Circulars A-87 and A-128. Copies

of OMB Circulars may be obtained from E.O.P. Publications, room 2200,

New Executive Office Building, Washington, DC 20503, telephone (202)

395-7332. (This is not a toll-free number.) There is a limit of two

free copies.

Sec. 953.601 Nondiscrimination.

(a) Under the authority of section 107(e)(2) of the Act, the

Secretary waives the requirement that recipients comply with section

109 of the Act except with respect to the prohibition of discrimination

based on age, sex, or against an otherwise qualified disabled

individual.

(b) A recipient 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 recipient; and ``funded in

whole or in part with funds made available under this part'' means that

community development funds in any amount have been transferred by the

recipient 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, safe and habitable 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) Acquisition of real property. 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 it's 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 Field Office.

(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) Displaced person. (1) For purposes of this section, the term

``displaced person'' means any person (family, individual, 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 acquisition for a

project assisted under this part. This includes any permanent,

involuntary move for an assisted project, including any permanent move

from real property that is made:

(i) After notice by the grantee or property owner to move

permanently from the property, if the move occurs on or after the date

of the submission of an application for financial assistance by the

grantee to HUD that is later approved for the project.

(ii) Before the date of the submission of the application

requesting assistance, if either HUD or the grantee determines that the

displacement directly resulted from acquisition, rehabilitation, or

demolition for the assisted project.

(iii) By a tenant-occupant of a dwelling unit, if any one of the

following three situations occurs:

(A) The tenant moves after execution of the agreement between the

grantee and HUD and 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 upon completion of the project under reasonable terms and

conditions. Such reasonable terms and conditions include a monthly rent

and estimated average monthly utility costs that do not exceed the

greater of

(1) the tenant's monthly rent and estimated average monthly utility

costs before the agreement; or

(2) 30 percent of gross household income; or

(B) The tenant is required to relocate temporarily, does not return

to the building/complex, and either

(1) the tenant is not offered payment for all reasonable out-of-

pocket expenses incurred in connection with the temporary relocation or

(2) other conditions of the temporary relocation are not

reasonable; or

(C) The tenant is required to move to another dwelling unit in the

same building/complex but is not offered reimbursement for all

reasonable out-of-pocket expenses incurred in connection with the move,

or other conditions of the move are not reasonable.

(2) Notwithstanding the provisions of paragraph (g)(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, and, 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 not displaced, as defined 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 ask HUD, at any time, to determine whether a

specific displacement is or would be covered under this section.

(i) 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.

(ii) Reserved.

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.

Sec. 953.604 Citizen participation.

(a) In order to permit residents of Indian Tribes and Alaskan

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.

Sec. 953.605 Environment.

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 block

grant funds, the recipient shall comply with the Environment Review

Procedures for the Community Development Block Grant Program (24 CFR

Part 58). Upon completion of the environmental review, the recipient

shall submit a certification and request for release of funds for

particular projects in accordance with 24 CFR part 58.

Sec. 953.606 Conflict of interest.

(a) Applicability. (1) In the procurement of supplies, equipment,

construction, and services by grantees and subrecipients, the conflict

of interest provisions in 24 CFR 85.36 and OMB Circular A-110 shall

apply. Copies of OMB Circulars may be obtained from E.O.P.

Publications, Room 2200, New Executive Office Building, Washington, DC

20503, telephone (202) 395-7332. (This is not a toll-free number.)

There is a limit of two free copies.

(2) In all cases not governed by 24 CFR 85.36 and OMB Circular A-

110, the provisions of this section shall apply. Such cases include the

provision of assistance by the recipient 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. 570.202 of this title; or grants, loans, and

other assistance to businesses, individuals, and other private entities

under Sec. 570.203 or Sec. 570.204 of this title).

(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

recipient, or of any designated public agencies, or subrecipients under

Sec. 570.204 of this title, receiving funds under this part.

(d) Exceptions requiring HUD approval--(1) Threshold requirements.

Upon the written request of a recipient, 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 recipient's program or project. An exception may be considered

only after the recipient 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 recipient'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 recipient 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 recipient 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.

(2) All records pertaining to the recipient's decision under this

section shall be maintained for HUD review upon request.

Subpart H--Program Performance

Sec. 953.700 Reports to be submitted by grantee.

Grant recipients shall submit an annual status report of progress

made on previously funded open grants at a time determined by the field

office. The status report shall be in narrative form addressing three

areas:

(a) Progress. The progress made in completing approved activities

should be described including a listing of work remaining together with

a revised implementation schedule, if necessary.

(b) Expenditure of funds. A breakdown of funds spent on each major

project activity or category should be provided.

(c) Grantee assessment. If the project(s) has been completed, an

evaluation of the effectiveness of the project in meeting the grantee's

community development needs.

(Approved by the Office of Management and Budget under Control No.

2506-0043.)

Sec. 953.701 Review of recipient's performance.

(a) Objective. HUD will review each recipient's performance to

determine whether the recipient has:

(1) Complied with the requirements of the Act, this part, 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 recipient'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 recipient;

(3) Records maintained by the recipient;

(4) Results of HUD's monitoring of the recipient'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. 953.702 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 recipient 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 recipient 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 recipient 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

recipient on notice that more serious actions will be taken if the

deficiency is not corrected or is repeated;

(3) Advise the recipient that a certification of compliance will no

longer be acceptable and that additional information or assurances will

be required;

(4) Advise the recipient to suspend, discontinue, or not incur

costs for the affected activity;

(5) Advise the recipient 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;

(6) Advise the recipient to reimburse the recipient's program

account or line of credit in any amount improperly expended;

(7) Change the method of payment from a line of credit basis to a

reimbursement basis; and/or

(8) Suspend the line of credit until corrective actions are taken.

Sec. 953.703 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. 953.702(b) has been

taken and only then if the recipient has not made an appropriate and

timely response. Before making such a grant reduction or withdrawal,

the recipient also shall be notified and given an opportunity within a

prescribed time for an informal consultation regarding the proposed

action.

(b) Reduction or withdrawal. When the field office determines, on

the basis of a review of the grant recipient's performance, that the

objectives set forth in Sec. 953.701(a)(2) or (3) have not been met,

the field office may reduce or withdraw the grant, except that funds

already expended on eligible approved activities shall not be

recaptured.

Sec. 953.704 Other remedies for noncompliance.

(a) Secretarial actions. If the Secretary finds a recipient has

failed to comply with any provision of this part even after corrective

actions authorized under Sec. 953.702 have been applied, the following

actions may be taken provided that reasonable notice and opportunity

for hearing is made to the recipient. (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 recipient;

(2) Reduce the grant to the recipient 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 recipient'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 recipient 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: July 18, 1994.

Henry G. Cisneros,

Secretary.

[FR Doc. 94-18262 Filed 7-26-94; 8:45 am]

BILLING CODE 4210-32-P