Consolidated Submission for Community Planning and Development Programs

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 91, 92, 570, 574, 576, and 968

[Docket No. R-94-1731; FR-3611-F-02]

RIN 2501-AB72

Consolidated Submission for Community Planning and Development

Programs

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This rule amends the Department's existing regulations to

completely replace the current regulations for Comprehensive Housing

Affordability Strategies (CHAS) with a rule that consolidates into a

single consolidated submission the planning and application aspects of

the Department's Community Development Block Grant (CDBG), Emergency

Shelter Grant (ESG), HOME Investment Partnerships (HOME), and Housing

Opportunities for Persons With AIDS (HOPWA) formula programs with the

requirements for the CHAS. This new consolidated submission will

replace the current CHAS, the HOME program description, the Community

Development plan and the CDBG final statement, and the ESG and HOPWA

applications. The rule also consolidates the reporting requirements for

these programs, replacing five general performance reports with one

performance report. Thus, in total, the consolidated plan and

consolidated report will replace 12 documents.

Although this rule does not incorporate the public housing

Comprehensive Grant process into the consolidated planning and

application process, it makes a modification to the Comprehensive

Grants rule to encourage cooperation in the development of the

Comprehensive Grant plan and the consolidated plan. The changes are

intended to ensure that the needs and resources of public housing

authorities are included in a comprehensive planning effort to

revitalize distressed neighborhoods and help low-income residents

locally.

In addition, the rule amends the separate regulations for the CDBG,

HOME, ESG, and HOPWA programs to remove some duplicative provisions,

cross-reference the new provisions, and to conform terminology to that

used in the consolidated plan rule (revised part 91).

EFFECTIVE DATE: February 6, 1995.

FOR FURTHER INFORMATION CONTACT: Joseph F. Smith, Director, Policy

Coordination, Office of Community Planning and Development, 451 Seventh

Street, SW, Washington, DC 20410-7000, telephone (202) 708-1283 (voice)

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

Copies of this rule will be made available on tape or large print for

those with impaired vision that request them. They may be obtained at

the above address.

SUPPLEMENTARY INFORMATION:

I. Information Collections

The information collection requirements for the planning process,

the application process, and the reporting process contained in this

rule have been reviewed by the Office of Management and Budget under

the Paperwork Reduction Act of 1980 (42 U.S.C. 3501-3520) and assigned

approval number 2506-0117, which expires on March 31, 1995.

II. Background

This final rule providing for a consolidated plan and a single

performance report for all HUD community planning and development

formula grant programs reflects the Department's view that the purpose

to be served by the submissions is to enable States and localities to

examine their needs and design ways to address those needs that are

appropriate to their circumstances. The planning activities embodied in

the rule are those of the Comprehensive Housing Affordability Strategy

(CHAS) requirements, enacted by the Cranston-Gonzalez National

Affordable Housing Act (NAHA, at 42 U.S.C. 12701), and of the Community

Development Plan requirements, added to the CDBG program by NAHA (42

U.S.C. 5304).

The consolidated plan was a result of discussions with local

jurisdictions and community groups all over the United States

representing many different viewpoints. The intent of this rule is to

(1) promote citizen participation and the development of local priority

needs and objectives by providing comprehensive information on the

jurisdiction that is easy to understand; (2) coordinate these statutory

requirements in such a manner as to achieve the purposes of the Acts in

a comprehensive way, while reducing paperwork and minimizing the

federal intrusion into State and local planning activities and to

simplify the process of requesting and obtaining federal funds

available to the jurisdictions on a formula basis; (3) promote the

development of an action plan that provides the basis for assessing

performance; and (4) encourage consultation with public and private

agencies, including those outside a single jurisdiction, to identify

shared needs and solutions. In addition, HUD is providing software for

jurisdictions to facilitate meeting the planning, application and

reporting requirements, helping to move us into the 21st century.

In keeping with this approach, the rule emphasizes the role

citizens and community groups should play in identifying their needs

and recommending actions government should take in addressing those

needs. Thus, the outcome is determined at the level of government

closest to the affected persons. However, to assure that a jurisdiction

does not ignore identified needs, the rule includes the language from

the CHAS instructions to require that the consolidated plan contain a

comparative analysis of the needs identified, and explain how the

jurisdiction determined priority needs and include proposed actions

that address the identified needs.

The proposed rule for the consolidated plan was published on August

5, 1994 (59 FR 40129). During the process of developing both the

proposed and final rule, the Department has indicated its intent to

apply the new rule to Federal Fiscal Year 1995 funding. Therefore,

affected jurisdictions have been in contact with HUD about the

expectations for speedy publication of a final rule that would permit

them to start preparation of this new consolidated plan in time to make

the projected deadlines.

Another proposed rule was published in August of 1994 that would

affect some of the provisions dealing with the CDBG program that are

covered by this rule. That rule, ``Community Development Block Grant

Program: Miscellaneous Amendments to Correct Identified Deficiencies''

(59 FR 41196, August 10, 1994), proposed changes to the citizen

participation process and in treatment of CDBG ``float-funded

activities,'' for example. This rule makes changes covering both of

these topics (discussed below) but leaves other provisions of that

``CDBG miscellaneous amendments'' rule untouched, for final disposition

through that separate rulemaking. In fact, the performance standards

for the certification found in this rule that a jurisdiction is

``following'' its HUD-approved consolidated plan will be included in

that final rule. In light of the emphasis on economic development in

the CDBG program, HUD will shortly issue a final [[Page 1879]] rule on

economic development guidelines for the CDBG program.

A proposed rule on citizen participation for the CDBG Entitlement

program was published on March 28, 1990 (55 FR 11556). This rule

reflects consideration of the public comments on that rule, and

constitutes the final rule for that rulemaking.

III. Public Comments

The proposed rule drew 138 public comments from 38 local

governments or groups representing their interests, 19 States or groups

representing State interests, 62 groups advocating for the interests of

low-income persons, 15 groups advocating for the interests of persons

with disabilities, three professional organizations with no apparent

client constituency, and one individual.

In addition, the Department officials have talked by telephone to

representatives of 19 national groups that had submitted written

comments, to more fully understand their views. These groups are:

National Association for County Community and Economic Development,

Council Of State Community Development Agencies, National Community

Development Association, Local Initiatives Support Corporation,

National Association of Housing and Redevelopment Officials, Housing

Assistance Council, AIDS Council, National Coalition for the Homeless,

Center for Community Change, National Low Income Housing Coalition,

National Alliance to End Homelessness, National Council of State

Housing Agencies, Corporation for Supportive Housing, Enterprise

Foundation, United Cerebral Palsy, Coalition for Low Income Community

Development, Lawyers Committee for Civil Rights under Law, National

Association for Developmental Disabilities, and the National Housing

Law Project. Low-income advocates, cities and States often had

diametrically opposing views on the rule.

The general views of the low-income and disability advocacy groups

were that data requirements concerning needs had been removed from the

CHAS to produce the consolidated plan; a stronger linkage between need,

strategy, and action should be required to be stated in the plan;

``worst case'' needs should be addressed on the basis of a ``fair

share'' of the funds to be made available from HUD; the citizen

participation process should be augmented and adequate notice should be

provided for hearings. Many of these concerns apply equally to the CHAS

process as to the consolidated plan. Many low-income advocates also

expressed concern about the requirement making the consolidated plan

applicable for Fiscal Year 1995 funding of the formula programs, with

the short deadlines that this will require for jurisdictions--and the

impact it would have on their clients.

To respond to these concerns, the Department has added a clearer

statement of specific data requirements on needs (including a specific

description of the needs of non-homeless persons with disabilities), a

statement on how the priorities in the strategic plan relate to the

statement of needs, and a clearer statement on how the activities

proposed in the action plan relate to the strategic plan. Citizen

participation has been strengthened in a number of places, including

improved guidelines for providing adequate notice.

The Entitlement communities responded to the rule with diverse

concerns. Some objected to the use of and reporting on ``extremely low-

income'' category particularly with regard to CDBG. Many expressed

concern about the usefulness of estimating needs for community

development facilities in terms of the dollars to address those needs.

Although the term ``extremely low-income'' (0-30 percent) was

retained in the plan, since this category was familiar in the CHAS, the

reporting burden for CDBG has been reduced by requiring reporting on

beneficiaries by income only where income data is required for CDBG

eligibility. Language has been added codifying the field office

authority to grant exceptions and extensions for FY 1995 for good

cause. To meet concerns of these communities that the rule has gone

beyond the statute and become too prescriptive, suggestions for

revisions that would have added significant detail to the plan were

rejected. Other changes to accommodate entitlement community concerns

are to require that the basis be assigned for relative priority to each

category of needs in the strategic plan rather than each separate need;

that flexibility be provided for consortia; that more flexible

amendment language be provided; and that the time period for comments

on performance reports be reduced to 15 days.

A number of States had a particular concern about being required to

implement the plan in FY 1995, particularly those with early program

years. Other States wanted specific guidance on citizen participation

specifically for the States because of their unique situation. They

felt that it was inappropriate to offer technical assistance directly

to low-income groups under the citizen participation plan at the State

level. Several States suggested that HUD and the Department of Health

and Human Services should get together with regard to making estimates

of homeless needs. Several States said that the priority needs tables,

goals, and target dates for completion are too detailed for the States

since they have less degree of control over what actions are taken than

entitlement jurisdictions do. Other States felt that it was unrealistic

that States show how funds were distributed geographically since most

States distributed funds by competition for different categories of

assistance and cannot control geographical distribution.

Most States have been in contact with the appropriate HUD field

office about the timing and content of their submissions for FY 1995.

In most cases, agreement has already been reached on both matters. With

respect to tables, the States are expected to complete the information

to the extent that they are able to do so. The requirement for

information about geographic distribution is included because it is a

CHAS statutory requirement. To the extent that funds are distributed by

competition and a prediction of the ultimate geographic distribution

cannot be made, the State should so indicate. A separate section on

citizen participation has been added that applies just to States. The

Department believes that it is responsive to the comments of the

States, including the request to remove the technical assistance

provision.

In order to provide technical assistance, HUD intends to issue

supplemental guidance on effective ways to undertake consolidated

planning, prepare adequate submissions, and implement subsequent

projects and activities. In addition, the Department will issue

supplemental guidance on various cross-cutting concerns. These include

historic preservation, the role of community based organizations, urban

design and strategic planning, environmental justice, viable

communities and sustainable development.

One comment that was made by both low-income advocates and local

governments was that the status of the guidelines should be clarified.

The commenters noted that the regulations specify the requirements for

the consolidated plan, and the guidelines appear to state the

recommendations for the plan. They asked, ``How closely will grantees

be held to the `recommendations'?''

The Department agrees that this subject needs clarification. The

[[Page 1880]] regulations state the requirements. The guidelines

contain the tables and instructions for data submissions, which

constitute the ``required format'' referenced in the regulations.

Therefore, these tables and instructions are required, but the specific

format may be modified with HUD approval. Other suggestions or

recommendations included in the guidelines are to assist jurisdictions

in the preparation of the plan.

A county and a State complained about the Department's Federalism

Impact discussion. They stated that the rule requires duplication of

effort by State and local governments, since both will be preparing

consolidated plans for their jurisdiction. They argued that

consolidation has resulted in overregulation of previously less

regulated programs. They suggested that the Department seek legislative

change to really streamline the requirements.

The Department believes that there is not much duplication of

effort between State and local consolidated plans, since the State

plans focus on the nonentitlement areas of the State that are not

covered by the consolidated plan of a locality. In creating a new

framework for submissions for the CPD formula grant programs covered, a

few requirements, such as the more detailed citizen participation

requirements, have been applied to programs not previously covered.

However, the consolidation will give governments and citizens the

advantage of looking at the needs to be addressed by HUD programs all

at once. Legislative changes have been sought to combine the McKinney

Act programs, but those changes have not been enacted. Statutory change

is not necessary just to coordinate the submissions for the different

programs.

The following is a section by section summary of comments received

and HUD responses.

Section 91.1 Purpose

This section states the goals of the community development and

planning programs covered by the part and the function of the

consolidated plan. There were four primary areas of comment on the

goals portion (Sec. 91.1(a)) of this section.

First, a low-income advocacy group and the State of Florida took

stands on the Department's attempt to restate and consolidate the

statutory goals of the various programs covered. The low-income

advocacy group praised the broad discussion of goals, while the State

criticized the language as confusing and failing to reflect all the

goals of the covered programs. For example, the State said that the

CDBG goal of eliminating slum and blight is not included. It also

stated that the NAHA goal of increasing the supply of decent housing

that is accessible to job opportunities has been converted to

``provision of jobs accessible to housing affordable to low-income

persons.'' Obviously, the low-income advocacy group recommended

preserving the language, while the State advocated citing the specific

legislative language of goals to be served by the specific programs.

The Department believes that this statement of broad goals is

useful. The language concerning job accessibility mirroring the NAHA

statutory language is included in the paragraph on decent housing,

while the economic development language of the CDBG statute is

reflected in the paragraph on expansion of economic opportunity.

Elimination of slum and blight is implicit in the language of the goals

provision pertaining to improving the safety and livability of

neighborhoods.

Second, several disabilities groups objected to the phrasing of the

goals section on supportive housing, stating that it is potentially

stigmatizing, because it assumes that all persons with special needs

require housing with special features, unlike other housing that exists

in the community. The potentially offending section reads ``* * *

Decent housing also includes increasing the supply of supportive

housing, which combines structural features and services needed to

enable persons with special needs to live with dignity and

independence.'' These commenters suggested modifying the sentence to

read ``* * * Decent housing also includes increasing the supply of

housing, which may or may not require certain unique structural

features and which can be linked to on-site or community based services

desired by persons with special needs.''

The Department does not disagree with the point that many disabled

persons may require housing which does not need structural

modifications. Jurisdictions are free to provide such housing for

persons with disabilities. However, the statement of purpose on this

item was taken directly from purposes section of the National

Affordability Housing Act, and it is not necessary to change this

statement.

Third, several disability groups advocated changing the language

about ``assisting homeless persons to obtain appropriate housing'' to

include the concept of ``permanent housing.'' The Department agrees

that among the actions taken to address the needs of homeless persons

is providing permanent housing (along with providing emergency and

transitional shelter). Such an approach is part of a total homeless

strategy laid out in the strategic plan. However, to carry out this

plan, it is not necessary to change the statement of purpose to focus

on only one element of this approach. Therefore, the final rule

contains no change in response to this request.

Fourth, several States objected to the impact on them of the

expanded definition of ``suitable living environment'' and ``economic

opportunity'' found in the goals section. They indicated that the

requirement that the State's short and long term goals ``must be

developed in accordance with the statutory goals described in

Sec. 91.1'' puts greater emphasis on these goals than is desirable,

from their point of view. They also note that the goals emphasize low-

income housing and the effort to tie public facility and economic

development activities to low income and public housing, while

objectives set forth in the CDBG statute are missing. States indicated

that the emphasis on expanding economic opportunity including job

creation creates a linkage to community development that is often made

at the local level rather than being imposed from the State. States

will explore these new linkages in community building, but where such

linkages are not appropriate or possible, neither the State nor its

grantees should be penalized.

The description of what is meant by expanded economic opportunity

is consistent with the current CDBG program requirements for States at

Sec. 570.483(b)(4). This language should not limit grantees'

flexibility, and therefore, it is not being changed in the final rule.

Section 91.5 Definitions

a. Income Categories

The proposed rule used the terms ``very low-income household'' and

``low-income household'' for the households traditionally identified in

the CDBG program as ``low-income households'' and ``moderate-income

households.'' This change drew two types of comments. First, a State

pointed out that a CDBG proposed rule published on August 10, 1994 used

the traditional CDBG terms, and the two rules should be consistent.

Second, a city, county, and a professional organization of government

CDBG administrators, recommended that the consolidated plan rule should

use the terms traditionally used in the CDBG program. They argued that

to do otherwise is damaging to the perception of the program in cities

that are [[Page 1881]] struggling to keep income balance in their

community, whose citizens are more willing to see CDBG funds devoted to

income groups that appear to be more inclusive of average families.

The Department believes that the consolidated plan must use uniform

definitions of income categories for all programs covered by the plan.

The terms chosen in the proposed rule (as in the CHAS) were drawn from

the Cranston-Gonzalez National Affordable Housing Act, which created

the Comprehensive Housing Affordability Strategy (that is applicable to

all the CPD formula grant programs) and the HOME program. However, we

believe that the comments have merit. Therefore, this final rule

returns to the Housing and Community Development Act of 1974 terms:

``low-income'' (does not exceed 50 percent of median income) and

``moderate-income'' (does not exceed 80 percent of median income). This

rule adds a new term ``middle income'' to encompass the group described

as ``moderate income'' in the proposed rule, to fulfill the

responsibility under the CHAS statute to consider affordable housing

needs for this category of families and to include impact on them in

the performance report.

The ``extremely low-income'' category of 0-30 percent of median

income was praised by low-income advocacy groups and some States, while

local jurisdictions and some States took issue with its addition to the

evaluation of needs and performance reports as not statutorily required

and too burdensome.

The purpose of including this income category is to assure that

jurisdictions consider the needs of the households that have the least

ability to improve their access to affordable housing on their own. It

is a category that was addressed in the CHAS tables and there was much

support from low-income advocates for its use in the consolidated plan.

The data for the needs assessment is census data provided by HUD

that has been used under the CHAS rule. The data for the performance

report is similarly available. To accommodate the concern about data

availability, the language has been changed to require reporting on the

number of extremely-low, low-, moderate-income, and middle-income

persons served by each activity only where information on income by

family size is required to determine the eligibility of the activity.

b. Definitions of Terms That Were in the CHAS

Two local jurisdictions stated that the rule should contain

definitions for terms that are used in Sec. 91.205(b) of the rule--

moderate income, elderly, large family, cost burden, and severe cost

burden--and which were defined in the CHAS rule. An advocate for low-

income households stated that the rule needs definitions for additional

terms: assisted family, disabled family, federal preference, and

overcrowding. These definitions are needed to define ``worst case''

housing needs, which another low-income advocacy group wanted included

in the defined terms. (``Worst case needs'' was a term defined only in

the CHAS guidelines; it was not a term found in the CHAS rule.)

The terms mentioned above that are essential to the consolidated

plan rule are being added in the final rule. Those terms are ``moderate

income,'' ``elderly person,'' ``person with disability,'' ``large

family,'' ``cost burden,'' ``severe cost burden,'' and

``overcrowding.'' The last three terms are derived from the census, and

the definitions used in the rule are, therefore, those of the census.

The other definitions being added follow the definitions provided for

those terms in the CHAS rule.

One disability group advocate urged HUD to adopt the definition of

``persons with disabilities'' used in the Americans with Disabilities

Act. The definition used in the CHAS rule is consistent with the one

required for use in the assisted housing programs. The Department sees

no reason to abandon this definition.

The terms ``assisted family,'' ``federal preference,'' and ``worst

case'' are not being used in the rule, and therefore no definitions for

them are needed.

c. Homeless

Legal service agencies, homeless and low-income advocates, and

various disability and public interest organizations were concerned

that the rule's definition of ``homeless'' was not identical to the

definition of that term in the Stewart B. McKinney Homeless Assistance

Act. The definition requires the individual or family to both lack ``a

fixed, regular, and adequate nighttime residence; and [have] a primary

nighttime residence that is [a supervised emergency shelter]; * * * an

institution that provides a temporary residence for individuals

intended to be institutionalized; or a * * * place not designed for, or

ordinarily used as, a regular sleeping accommodation for human

beings.'' The commenters argued that the McKinney Act defines a

homeless individual as either one who lacks a fixed, regular, and

adequate nighttime residence or one whose primary nighttime residence

is one of the three described types. Their point seems to be that

families that are overcrowded, because more than one original family

unit resides in a housing unit intended for one, should be considered

``homeless.''

The Department agrees that the definition used in this rule should

be essentially the same as the definition in the McKinney Act. This

change does not, however, signal that the Department is altering its

position that the definition must read within the context of the

findings and purpose section of the McKinney Act. It is clear to the

Department that the McKinney Act was enacted in 1987 to assist the

rapidly growing numbers of persons living on the streets and in

shelters. It was not enacted for the purpose of assisting the

substantially larger number of persons who unfortunately live in

substandard housing or with others in so-called doubled-up arrangements

because of the problem of a lack of affordable housing. The latter

problems have been the subject of legislation since 1934, and the

Department administers many programs designed to address these

problems. Persons living in substandard housing or in doubled-up

arrangements are not homeless, although they may be at high risk of

becoming homeless. Although the Department is not changing the core

definition of homelessness in the McKinney Act, it should be noted that

the prevention of homelessness is an essential part of a larger

homeless program and the homeless plan includes actions to help low-

income families avoid becoming homeless. This would include persons who

are precariously housed.

The Department does believe that the wording of the definition for

``homeless family'' in the proposed rule was confusing. Therefore, the

definition has been renamed ``homeless family with children,'' and the

language has been clarified.

d. Other Definitions

A local jurisdiction pointed out that the definition of

``consolidated plan'' indicates that it is a document submitted

annually. Only parts of it are submitted annually--the action plan and

the certifications. The Department agrees that the definition of

consolidated plan needs to be clarified so that it does not appear that

every element must be submitted annually. A modification of the

proposed language [[Page 1882]] that adds references to provisions of

the rule has been adopted in the final rule.

Local and State governments suggested that the definitions of

income categories need to be clarified with respect to whether they

apply to ``household'' or ``family.'' The terms seem to be used

interchangeably, although they have distinct demographic meanings

resulting in different median incomes.

The final rule defines the income categories in terms of

``family''. For planning purposes, the definition HUD uses for that

term in its assisted housing programs is used in this rule (in

accordance with the definition that is adopted by the Cranston-Gonzalez

National Affordable Housing Act). The connection between data supplied

by the Census, which uses a different definition of ``family'', is

explained in the Guidelines. The individual program definitions govern

the actual use of the funds and reporting on beneficiaries.

The District of Columbia points out that the definition of

``State'' includes the District of Columbia and the definition ``unit

of general local government'' excludes the District of Columbia;

however, the District is defined as an entitlement jurisdiction (local

government) for purposes of the CDBG and ESG programs. These

definitions should not adversely impact grant allocations or

application requirements. The final rule removes reference to the

District of Columbia from the definitions, and adds a new section to

the rule to specify consolidated plan requirements for the District of

Columbia.

A State suggests that the definition of ``jurisdiction'' should be

clarified to assure that it includes only those jurisdictions receiving

funds directly from HUD. It states that the rule, as written, appears

to apply directly to the units of general local government that are

State recipients of HOME and CDBG funds. The applicability section,

Sec. 91.2(b), states that ``[a] jurisdiction must have a consolidated

plan that is approved by HUD as a prerequisite to receiving funds from

HUD under the following programs. * * *.'' The provision does not state

that a jurisdiction must have such a plan in order to receive funds

from a State. However, the section has been revised to clarify its

applicability rather than to revise the definition of ``jurisdiction.''

Section 91.10 Program Year

Representatives of county officials and local governments commented

on the requirement that a jurisdiction must have one program year for

all four of its CPD formula programs. One city praised this change as

``a positive step in streamlining the application process.'' It went on

to say that the flexibility of permitting the jurisdiction to select

this program year also is beneficial. On the other hand, an

organization of county officials stated that the change of program year

will cause additional administrative costs. It proposed that HUD permit

waiver of the cap on administrative costs in the first year under this

rule to accommodate the additional cost of changing program years.

The administrative cap is statutory.

Section 91.15 Submission date

One concern of States, local governments, disability group

advocates, and low-income advocates was the timing of the deadline for

submission of the first consolidated plan. The proposed rule states

that the consolidated plan must be submitted to HUD ``at least 45 days

before the start of its program year.'' Since the Department has made

it known that it plans to implement the rule for Federal Fiscal Year

1995 funds, many commenters have indicated that there is insufficient

time before the required submission date to comply with the process

required under the rule. More specifically, they indicate that the

stated submission deadlines do not provide for the negotiation of

exceptions to a jurisdiction's implementation of the consolidated plan

for FY 1995, as expected.

Several alternatives were suggested: (1) Delay implementation until

FY 1996 or make implementation optional in FY 1995; (2) implement the

new rule by a demonstration, giving incentive grants to several

jurisdictions to gain experience with the process; (3) start

implementation with jurisdictions that have a program year beginning

180 days following the effective date of the rule; or (4) give explicit

authority in the rule to HUD field offices to provide exceptions to the

submission deadline where they are warranted. One large city commented

that it is pleased with the apparent expanded role of local HUD offices

in granting exceptions and would like the criteria for their action to

be stated in the final rule.

The Department has chosen option number 4. The rule has been

revised to add a provision, Sec. 91.20, that explicitly authorizes HUD

field offices to grant three types of exceptions: from the requirement

to submit all or part of the consolidated plan in FY 1995 (and permit

submission of a CHAS annual update plus the individual program

submissions), from the deadline for submission, and from the

guidelines. Exceptions to requirements found in the guidelines require

that no statutory or regulatory requirements may be overridden and that

there must be a finding of good cause by the HUD field office,

documented by sending written memoranda periodically to HUD

Headquarters stating the authorized exception and the basis for the

exception.

Commenters who suggested option number 4 commended HUD for

empowering its field offices, a change that will allow local HUD staff

to more effectively coordinate the process to accommodate local needs.

One commenter recommended that the exception provision state what steps

must be taken by a jurisdiction in order to request an exception. The

rule does not deal with the procedure in this level of detail. However,

any interested jurisdiction should contact its HUD field office for the

specific information to be contained in a particular request.

Many States have been in contact with their HUD field offices and

have worked out agreed upon schedules for complying with the

requirements of this rule. It is anticipated that most jurisdictions

will work out arrangements that are mutually agreeable for the

submission of a consolidated plan that comes close to that envisioned

in this rule for this fiscal year.

Another deadline stated in the proposed rule (Sec. 91.15(a)(2)) is

the date required by the CDBG statute: ``Failure to submit the plan by

August 16 will automatically result in a loss of the CDBG funds to

which the jurisdiction would otherwise be entitled.'' State, county and

local government entities stated that this provision does not appear to

encompass the flexibility expected from HUD, based on discussions with

HUD field office staff. They recommend that the rule allow some

flexibility on HUD's part not to penalize jurisdictions that may have a

bona fide problem in making the complete submission in any given year.

The August 16 date for CDBG submissions has been established

pursuant to section 116(b) of the Housing and Community Development Act

of 1974 (42 U.S.C. 5316) as the final date for submission of final

statements for each fiscal year.

Section 91.100 Consultation

a. Adjacent Local Governments

Several local governments criticized the proposed rule's

requirement to notify adjacent local governments regarding priority

nonhousing community development needs and [[Page 1883]] suggested that

it should be deleted. On the other hand, two low-income advocates

expressed support for the regulatory section providing that the

jurisdiction should consult with adjacent local governments.

One local government believed the provision on consultation should

be deleted because it is burdensome, particularly for large local

governments which have dozens of adjacent local governments. The needs

of its own residents are overwhelming and will use all available

resources. Consultation with adjacent local governments would

unreasonably raise expectations for services and assistance.

Another local government wanted clarification regarding whether

consultation with local governments is required or optional and the

subject of the consultation. Another local government said the language

regarding notification and consultation is vague and the purpose to be

served by ``notifying'' another jurisdiction is unclear.

The consultation provision with respect to adjacent local

governments is statutorily required. The CDBG statute (section

104(m)(2)(A)) of the HCDA (42 U.S.C. 5304(m)) states, that in preparing

the community development plan (``CD plan'') describing the

jurisdiction's priority nonhousing community development needs, the

jurisdiction must, ``to the extent practicable, notify adjacent units

of general local government and solicit the views of citizens on

[these] needs.'' The following paragraph of the statute requires

submission of the CD plan to the State or any other unit of general

local government within which the jurisdiction is located, as well as

to HUD.

From the statutory context, the Department presumes that the views

of adjacent jurisdictions are to be welcomed on the validity of the

needs identified by these governments, just as the comments of the

citizens are to be considered. Consultation with adjacent jurisdictions

is not to be assumed to entail taking financial responsibility for

satisfying the needs of the adjacent jurisdictions, but only reflects

the perspective that adjacent jurisdictions may have occasion to know

of needs of their neighbors.

With respect to the burden of notifying a multitude of adjacent

jurisdictions, the rule does not require personal meetings with each

one. The burden of mailing a document that has been prepared by the

jurisdiction to a number of adjacent jurisdictions should be minimal.

An urban county asked for clarification on how this provision

applies to an urban county. If there is no adjacent unit of general

local government, the intergovernmental consultation requirement

requires only submission of the CD plan to the State. (The language

concerning submission of the CD plan to the State was not included in

the proposed rule but has been added to the section in this final

rule.)

Two local governments recommended that all jurisdictions in areas

that receive funding under the HOPWA program should assist the

jurisdiction responsible for submitting the HOPWA allocation in the

preparation of its consolidated plan. This is the type of issue that

was intended to be covered by the rule's provision concerning

consultation for problems that go beyond a single jurisdiction, found

in the penultimate sentence of Sec. 91.100(a).

The Department has determined that the provision concerning

consultation for problems and solutions that go beyond a single

jurisdiction should have one more element added: consultation with

``agencies with metropolitan-wide planning responsibilities where they

exist.''

b. Public and Private Service Providers

One county commented that the regulation should recommend, rather

than require, consultation with public and private agencies because the

current CDBG citizen participation process is sufficient to ensure an

open process for citizen participation. On the other side of the issue,

several nonprofit disability advocates commented that the regulation

should mandate, rather than encourage, consultation with public and

private agencies. They suggest that the consultation should be

undertaken at least 30 days before the jurisdiction develops its

proposed consolidated plan.

The CHAS statute (section 105(b)(17), 42 U.S.C. 12705(b)(17))

requires a jurisdiction to consult with public and private agencies

concerning programs and services to be provided in accordance with the

housing strategy. Consequently, the proposed rule required such

consultation. Section 91.100(a) provides: ``When preparing the plan,

the jurisdiction shall consult with other public and private agencies

that provide assisted housing, health services, and social services

(including those focusing on services to children, elderly persons,

persons with disabilities--including HIV/AIDS, homeless persons) during

preparation of the plan.'' However, the Department does not want to

prescribe the precise timetable for these consultations. Presumably,

the consultation will take place well in advance of the jurisdiction's

submission of its proposed consolidated plan.

Homeless and low-income advocates recommended that the regulation

specifically mention consultation with specific entities. Most of the

suggested groups are already included in the categories stated in the

proposed rule. In addition, as residents, any persons not contacted as

part of the consultation process will receive notice of and have the

opportunity to participate in the development of the consolidated plan

as part of the citizen participation process, described in Sec. 91.105.

In fact, residents in public and assisted housing developments are

specifically mentioned in paragraph (a)(3) of that section. The

Department believes it is unnecessary to lengthen the list of entities

consulted.

A homeless advocate suggested adding a new paragraph to this

section dealing with consultation on homeless needs. The advocate

wanted the regulation to require the jurisdiction to convene a local

board whose members are appointed by the jurisdiction and a majority of

whom are currently or formerly homeless or nonprofit providers serving

the homeless. The local board would be responsible for completing the

homeless portions of the consolidated plan, which would be submitted to

the jurisdiction for inclusion in the overall plan. The board would be

responsible for considering comments on the homeless portion of the

plan. This proposal may be authorized by legislative change; however,

there is no statutory basis for it now. Elsewhere, the Department is

encouraging communities to establish coordinating boards to carry out a

homeless plan, but it is inappropriate to require it now in this rule.

c. Public Housing Agency

Paragraph (c) of this section of the proposed rule requires the

jurisdiction ``to consult with the local public housing agency

participating in an approved Comprehensive Grant program concerning

consideration of public housing needs and planned Comprehensive Grant

program activities.'' One large housing authority commented that there

should be a mutual exchange of information between the jurisdiction and

the housing authority needed for the housing authority's Comprehensive

Grant Program plan and for the jurisdiction's consolidated plan.

One local government interest group commented that HUD should be

[[Page 1884]] sensitive to the difficulties involved in the requirement

of consultation and interagency coordination, particularly with public

housing authorities over which the jurisdiction has no control. They

recommended that HUD pursue public housing regulation which require

public housing agencies (PHAs) to work with the department of the

jurisdiction that has responsibility for the consolidated plan. One

city commented that the Comprehensive Grant program regulations already

provide for local government cooperation in providing resident program

and services to low-income public housing residents. The proposed rule

contained a change in that regulation (Sec. 968.320) designed to have

exactly the effect suggested by the first commenter.

d. Lead-Based Paint Consultation

The consultation requirement for the portion of the consolidated

plan concerning lead-based paint hazards is to consult with State or

local health or child welfare agencies and ``examine health department

data on the addresses of housing units in which children have been

identified as lead poisoned.'' One city stated that the information it

receives from its health department is related to areas or blocks in

which lead-poisoning cases have been identified, not specific

``addresses,'' due to Privacy Act concerns about making information

available to the public.

The CHAS statute (section 105(e)(2), 42 U.S.C. 12705(e)(2)) is

stated in terms of requiring the jurisdiction to consult with the

agencies and to ``examine existing data related to lead-based paint

hazards and poisonings, including health department data on the

addresses of housing units in which children have been identified as

lead poisoned.'' The statute does not pre-empt the Privacy Act, and the

approach taken in this particular jurisdiction is reasonable. In

addition, neither the statute nor the regulation requires the

jurisdiction to provide data regarding the addresses to the public. The

consolidated plan section for lead-based paint hazards under the

housing needs assessment requires the plan to estimate the number of

housing units that are occupied by low- and moderate-income families

and that contain lead-based paint hazards.

Several low-income advocates point out that the regulation fails to

restate the statutory language concerning consultation for lead-based

paint hazards to examine ``existing data related to lead-based paint

hazards and poisonings,'' although the regulation does include the

statutory language to examine data on the addresses of housing units in

which children have been identified as lead poisoned. The rule has been

revised to include the missing statutory language.

e. Description of the Consultation Process

Disability community and low-income community advocates recommend

that the consolidated plan require a description of the consultation

process and an identification of those who participated in the process.

Such a description is required under the CHAS regulations (Sec. 91.15,

as published on September 1, 1992). The rule has been revised to

include such a provision.

Section 91.105 Citizen Participation (``CP'') Plan

a. General

An urban county recommends that a section be added for urban county

programs, enabling urban counties to complete a consortium-wide citizen

participation plan, instead of a separate plan for each municipality.

No change is needed. An urban county is the jurisdiction, and the

regulation requires only one citizen participation plan for the

jurisdiction.

One State commented that the regulation is not clear regarding what

is applicable or required for State governments. The regulation seems

to impose additional requirements for the planning process over and

above CDBG requirements. The State believes that in the CDBG program,

the State passes citizen participation requirements to local

governments, which actually propose and carry out activities. It

comments that the requirements imposed by the proposed rule are

excessive and impractical at the State level.

Two States and two State interest groups commented that the

guidelines indicate that States do not have to provide a detailed

citizen participation plan for citizens, but must have such a plan for

units of general local government. The regulations detail a laundry

list of requirements and do not mention the fact that States are exempt

from this requirement. Clarification is needed.

One State agency commented that it would be difficult to implement

the regulatory provision that encourages the participation of all

citizens, including minorities, non-English speaking persons, and

persons with disabilities. The State action plan does not require the

State to identify the geographic areas within the state that will

receive funds or the specific activities to be funded. Therefore, such

participation would be required by every potentially involved

geographic area of the state and every potentially affected population.

The agency suggested that the rule permit States to develop citizen

participation plans that include participation of citizens and groups

representative of potentially affected geographic areas (i.e., rural,

urban and/or suburban) or potentially affected populations.

Two State agencies commented on the provision requiring the

jurisdiction to provide information to the public housing agency about

housing and community development plan activities related to its

development and surrounding communities, so the housing agency can make

this information available at the public hearing required under the

Comprehensive Grant program. One State said that the provision does not

make sense for States and should not apply to States. Another State

explained that it does not currently have ties with every public

housing authority throughout the State, although it is developing these

relationships.

A citizen participation process is statutorily required for the

CDBG program and the CHAS. Under the CDBG program, citizen

participation requirements are imposed by the statute for both the

State and the local governments. The rule has been revised to have a

separate section on the citizen participation plan for States, which

takes into account the unique situation of States, eliminating the

requirement that information be furnished to the public housing agency

for its use in developing its Comprehensive Grant program.

One local government thought that this section was extremely

confusing; it is not clear whether hearings and comments pertain to the

citizen participation plan, the consolidated plan, or both. The

Department agrees that the language needs to be more precise. This

section has been reorganized and clarified.

Low-income advocates commented that HUD should give clear and

precise minimum standards to jurisdictions in terms of time periods for

each step in the process and the type of notice, in order to avoid

confusion as to whether or not the jurisdiction is complying with HUD's

purpose and to ensure meaningful citizen participation. Expressing a

different point of view, one local government commented that the

requirement for more citizen and agency participation may complicate an

already lengthy consultative process. This local government already has

a nine month process to include citizens and agencies in determining

the elements of the CDBG application; adding components

[[Page 1885]] could significantly slow down an already unwieldy

process. On balance, the Department has decided not to prescribe

additional detailed minimums for all elements, since that would reduce

the flexibility of the jurisdictions. It is up to the jurisdictions to

adopt a detailed citizen participation plan (with citizen input) that

fits local conditions.

The Department notes that the statutes require more extensive

citizen participation for the proposed CHAS/final statement/

consolidated plan than for amendments and reports, which only require

notice and an opportunity to comment. The final rule has been revised

to distinguish the citizen participation required for the consolidated

plan from the citizen participation required for reports and

amendments.

One local government requested that the rule address the citizen

participation process in a jurisdiction where separate agencies

administer homeless services and housing services. The city would like

to be able to continue to use two separate citizen participation

processes and to incorporate the homeless plan into the consolidated

plan. The Department believes that two separate processes would hinder

a key premise of the consolidated plan, i.e., to require the

jurisdiction to comprehensively consider and address the housing and

community development needs of all persons within the jurisdiction.

b. Applicability

This section of the regulation requires the jurisdiction to adopt a

citizen participation plan for the consolidated plan process before a

jurisdiction's start of the next program year. The rule also provides

that any amendment of a jurisdiction's current citizen participation

plan for the CDBG program to satisfy these requirements must be

completed before the beginning of the program year, if it starts on or

after 180 days after the effectiveness of the final rule.

Several low-income and disability community advocates recommended

that the regulation must clearly provide that the citizen participation

plan must be adopted by the jurisdiction before the development of the

proposed consolidated plan, and the plan must describe the

jurisdiction's specific efforts to ensure participation of housing

consumers, including people with mental retardation and other

disabilities and their advocates. One individual commenter stated that

the new citizen participation plan must be adopted as soon as possible,

not after the initial consolidated submission is submitted.

Since the Department is eager to implement the consolidated plan

expeditiously, the rule does not require that the citizen participation

plan be developed, approved, and used, before any consolidated planning

process begins. It merely requires that the citizen participation plan

be completed, in accordance with this rule, before the first program

year under the consolidated plan begins. In the first year, the

jurisdiction must follow the substance of the citizen participation

plan requirements, but it does not have to have a written citizen

participation plan that follows the specific provisions of Sec. 91.105

if its program year starts within 180 days of the effective date of the

rule. In the following years, the new written citizen participation

plan will be used in developing the consolidated plan.

Several disability and low-income community advocates suggested

that the regulation set forth the process for developing and adopting

the citizen participation plan, e.g., publish the citizen participation

plan for comment, require one or more public hearings on the plan,

require a 30 day comment period, and publish the final plan. The

proposed rule's provision requires only a ``reasonable opportunity'' to

comment, not a hearing process. The Department has concluded, after

listening to the suggestions of jurisdictions, that it should not

impose greater procedural requirements on the development of the

citizen participation plan, although we have made a few modifications

to the citizen participation requirements to reflect improved notice to

citizens.

Two local governments commented that it is unclear whether the

citizen participation plan is a specific, written document that must be

submitted for approval, or whether the jurisdiction may merely report

on its activities to meet the requirements of the citizen participation

plan. The regulation suggests a separate document is required, but the

guidelines are unclear. A separate document is required; however, the

citizen plan is not required to be submitted to HUD. The requirement

for a citizen participation plan came from the CDBG statute.

c. Affected Citizens

Several disability and low-income community advocates requested

that the regulation state that the plan must ``provide for'', not just

``encourage'', participation by residents of low and moderate income

neighborhoods. They also wanted the word ``although'' stricken from the

beginning of paragraph (a)(2) because it diminishes the importance of

the first part of the sentence. These changes have been made.

Several low-income community advocates supported the regulatory

language encouraging the participation by minorities, non-English

speakers, persons with mobility, visual, or hearing impairments, and

public housing residents. One disability community advocate wanted the

language broadened to include ``persons with disabilities,'' not just

those with physical impairments. Although it may be more difficult for

a jurisdiction to determine how to provide for participation of persons

with disabilities other than the physical ones specified, the

Department agrees that the obligation should relate to the whole

category of persons with disabilities. The rule has been revised

accordingly.

Several low-income community advocates said that the regulation

does not sufficiently address the statutory requirement that ``affected

citizens'' must be given a reasonable opportunity to examine the

contents of the proposed consolidated plan and to submit comments. They

want the regulation to state that ``extremely low and very low-income''

people are among those most ``affected.'' They want the regulation to

require the jurisdictions to take additional actions to publicize/give

notice to these affected citizens, e.g., notice should be in the non-

legal section of major daily newspapers, in major non-English

newspapers, and in public service announcements on TV and radio.

The rule is written in terms of all citizens, rather than just

``affected'' citizens. One could certainly argue that all citizens in

the jurisdiction are affected. This comment is just another way of

saying that the citizen participation requirements should be stated in

greater detail. That level of detail will be provided not in this

section of the HUD rule but in the citizen participation plan prepared

by the jurisdiction.

d. Information To Be Provided

This section of the rule requires that, before it adopts a

consolidated plan, a jurisdiction must make available to the public

``information that includes the amount of assistance the jurisdiction

expects to receive and the range of activities that may be undertaken,

including the amount that will benefit persons of low- and moderate-

income and the plans to minimize displacement of persons and to assist

any persons displaced.'' [[Page 1886]]

Fearing that jurisdictions will make this information available the

day before a consolidated plan is adopted, low-income advocates urged

that the regulation specify a time period for the jurisdiction to make

information available to the public. The commenters suggested various

periods of 10 to 30 days before the consolidated plan is prepared, and

at least 30 days or 60 days before the consolidated plan is adopted.

This requirement is derived from both the CDBG statute and the CHAS

statute. Since the Department is not aware of any controversy

concerning the implementation of the CDBG requirement to furnish

information, it declines to impose a time limit in this rule, whose

purpose is to consolidate requirements--not to impose more strict

timeframes on jurisdictions. Again, the jurisdiction's citizen

participation plan is the appropriate place for these timeframes.

Local governments and local government interest groups supported

the regulation for permitting publication of a summary of the proposed

consolidated plan, rather than the entire plan. Low-income and

disability community advocates indicated disapproval of this proposal.

One local government requested that the regulation should list precise

content requirements for the plan summary to avoid lengthy disputes

about what content is acceptable. The Department continues to believe

that publication of a summary of the consolidated plan is more

meaningful to stimulate general interest in the process than

publication of the lengthy and complicated document. However, the rule

is not being revised to specify its precise contents.

Low-income and disability community advocates indicated that the

entire draft consolidated plan, plan amendments, and the performance

reports, must be made available to citizens within a period such as two

working days free of charge. The Department agrees that the documents

needed for public comment must be made available without charge in a

timely fashion. This requirement is being added to the rule.

Low-income advocates want the consolidated plan computer software

to be made available to community-based organizations. They suggested

that one local grassroots organization could be chosen to act as a lead

and to share the software with other such organizations. The software

should also be made available at no or reduced cost to local libraries.

Among the options that HUD is considering at this point are

participating in a number of demonstrations with city-wide low income

coalitions where HUD would provide the software and providing reduced

cost copies of the software to various groups.

One local government asked when the period begins for access to

records and information relating to the jurisdiction's use of program

assistance during the preceding five years. The commenter also said

that the CDBG program only requires records to be maintained for three

years and suggests the regulation be amended to give access to records

for the preceding three years. The current CDBG program regulation

requires records to be maintained for three years after the date of

submission of the performance report in which the specific activity is

reported on for the final time. The CHAS statute requires access to

records regarding assistance received during the preceding five year

period. Blending these provisions to cover all the programs requires

use of the five-year period.

Accordingly, the program regulations are being amended in this rule

to require records to be retained for a longer period than is currently

required. Since performance reports are submitted after the program

year, retention of records for four years after the activity is last

included in a performance report yields a five-year retention period.

For the CDBG program, the retention period has been changed to four

years after the CDBG activity is last included in the performance

report. Since program closeout would occur no earlier than the end of

the program year in which the activity is initiated, retention of

records for four years after closeout yields a five-year retention

period. For programs other than the CDBG program, the retention period

has been changed to four years after closeout.

e. Notice

Some low-income advocates support the requirements in the proposed

regulation for the kind of citizen participation required, but

virtually all of the advocates believe that the regulation fails to

provide sufficient specificity regarding ``publish'' and ``notice'' and

reasonable opportunity to comment.

Suggestions for specific elements to be included in the rule were

the following: how notice is given; what groups and populations must

receive notice; time period for advance notice before issuance of the

draft plan (45 days); and responses provided in draft plan to all oral

and written comments received at or before the first public hearing.

The notice should be in the non-legal section of major daily

newspapers, in major non-English newspapers, and in public service

announcements on TV and radio. The jurisdiction should maintain a

mailing list of interested individuals, nonprofit organizations, low-

income neighborhood organizations, and other interested parties and be

required to send written notice of the opportunity to comment on the

proposed consolidated plan, as well as a copy of the final plan. Copies

also should be available at public and private agencies that provide

assisted housing, health services, and social services. In addition, a

reasonable number of copies are to be provided without charge to

citizens and groups that request a copy.

The Department declines to add all of these elements to the rule.

However, recognizing that citizen notice of hearings is critical to

success of citizen participation, the Department has added language to

indicate that publishing small print notices in the newspaper a few

days before the hearing does not constitute adequate notice. Also, the

examples provided by commenters are excellent examples of how to

provide notice, and they will be included in the Guidelines issued to

assist jurisdictions in implementing the rule.

The proposed rule contained three provisions related to

accessibility of the process to persons with disabilities: the

statement about encouraging the participation in the citizen

participation process in paragraph (a)(2), discussed above, the

statement that accommodations for persons with disabilities must be

made at public hearings in paragraph (b)(5), and the statement about

accessibility of the citizen participation plan in paragraph (c).

Several disability community advocates commented that section 504

of the Rehabilitation Act (29 U.S.C. 794) requires each jurisdiction to

make the content of the proposed plan available to persons with

disabilities in a form that is accessible to them. Further, they stated

that it is essential that announcements, materials, training sessions,

and hearings related to the plan are accessible to persons with

disabilities.

Several cities asked whether the format accessible to persons with

disabilities had to be available regardless of demand for the format.

Two cities suggested that the regulatory provision for the citizen

participation plan to be made available in a format accessible to

persons with disabilities should be based upon a specific request. One

city based this suggestion on the fact that taped or Braille version of

information had not been requested in [[Page 1887]] the past 20 years.

The rule has been revised to require provision of the materials in

accessible form, upon request.

f. Comment Period

Comments were received about the appropriateness of the 30-day

comment period on the consolidated plan, as well as on the 30-day

comment period for plan amendments and for performance reports. Several

local governments believe that the 30-day comment period for the

consolidated plan is reasonable. Several low-income advocates want the

minimum period for the jurisdiction to receive comment from citizens on

the consolidated plan to be increased from 30 days to 60 days to give

residents more adequate opportunity to research, discuss, and comment

on the proposed consolidated plan.

The opportunity to comment on the consolidated plan derives from

the CHAS statute, section 107(a), which requires that a jurisdiction

provide a reasonable opportunity to examine the content of the proposed

housing strategy and to submit comments on the proposed housing

strategy and from the CDBG statute, section 104(a)(2)(B), which

requires CDBG grantees to provide a reasonable opportunity to examine

the content of the proposed statement of CDBG activities and to submit

comments on the proposed statement. The Department believes the 30-day

period specified in the rule for this process is appropriate,

especially given the comments from both sides of the issue.

Thirty days was stated to be too long and burdensome a comment

period for amendments by several local governments. The commenters

suggested a 15-day comment period for amendments to the plan or suggest

that the regulation not prescribe the period and instead required a

``reasonable period.''

One local government stated the 30 day period for receiving

comments on reports is a new requirement and is infeasible because the

report is due 90 days after the end of the program year and the report

will require information on all the formula programs. Two other local

governments agreed that the requirement for notification and a 30 day

comment period for performance reports is time consuming, redundant,

and should be eliminated. Others suggested a 15-day period for the

performance report or a ``reasonable period.''

A public comment period is required for substantial amendments and

performance reports in accordance with the CHAS statute, section

107(b). Section 91.62 of the current CHAS rule contains this same

requirement. The requirement, therefore, is not totally new, although

jurisdictions may not have been required to submit performance reports

concerning formula grant programs for public comment before submitting

them to HUD.

We note that not all changes in activities constitute a

``substantial amendment'' that will trigger this public comment

process. See the provision that permits the jurisdiction's citizen

participation plan to determine what type of change requires a

substantial amendment.

The final rule has been revised to provide that the comment period

for performance reports is 15 days, instead of 30 days, and the

deadline for submission of the reports is preserved at 90 days after

the end of the program year.

Several low-income community advocates also suggested that the

regulation specify a period between the end of the comment period and

the submission of the plan so that the jurisdiction will be able to

make changes in plan based on citizen comments. Different timeframes

were suggested: at least 10 working days, 30 days. The final rule has

been reorganized so that the provision requiring a minimum 30 day

public comment period also requires that the jurisdiction must consider

the comments. The jurisdictions need to give themselves adequate time

to consider the comments, but the regulation does not prescribe this

time period.

g. Technical Assistance

Paragraph (b)(4) of the proposed rule requires that the citizen

participation plan ``must provide for technical assistance to groups

representative of persons of low- and moderate-income that request such

assistance in developing proposals for funding assistance under any of

the programs covered by the consolidated plan, with the level and type

of assistance determined by the jurisdiction.''

One State and one State interest group asked for clarification of

how this provision would apply to States. They indicated that since

some States do not develop proposals for CDBG and HOME programs, but

instead receive requests from local governments for funds for what they

determine to be their local needs, the States would not be in a

position to provide this type of technical assistance. A local

government wanted clarification regarding whether this requirement is

statutory, and suggested eliminating it if it is not statutorily

required.

This provision comes from the CDBG statute and has applied to the

CDBG State and Entitlement programs since 1988, so it cannot be

eliminated. However, the CDBG rule has applied the requirement to

States via the local governments' citizen participation plans (see

Sec. 570.486(a)(4)). The final rule has been revised to treat it the

same way in the separate States provision on citizen participation.

Two states commented that the regulation is unclear on the extent

of the technical assistance that is to be provided. Government interest

groups and a local government expressed support for the regulation

language, which requires the jurisdiction to determine the level and

type of technical assistance. There is no change to the final rule on

this issue, although more guidance is provided on it in the Guidelines.

Two agencies from one State wanted to know the source of funds to

provide the technical assistance and requested that the regulation

specifically permit federal administrative funds to cover the costs of

providing technical assistance. One low-income advocate also asked

whether funds will be available to jurisdictions to provide this

technical assistance to them. Another State also wanted to know the

extent of any tracking of such assistance that might be required.

Technical assistance is an eligible administrative expense under the

CDBG and HOME programs.

One low-income advocate suggested that technical assistance

available to groups representative of very low and low-income people

should be advertised via mailings to all such groups in the

jurisdiction. Available technical assistance should include written

guidance, telephone contact and one-on-one meetings. Low-income and

disability community advocates want HUD to provide funding to their

organizations to develop materials and training for citizen groups to

allow for meaningful participation. The rule does not prescribe the

forms of technical assistance, but the implementing guidelines will

include suggestions.

h. Public Hearings

Local government interest groups stated that they believe that

public hearings are not the most effective way to obtain citizen views.

One city and low-income advocate recommended neighborhood meetings as

useful in the process. The rule follows the statute in requiring public

hearings, but is open to other forms of involving the public.

[[Page 1888]]

One local government suggested that HUD interpret ``public

hearing'' to mean traditional public hearings, as well as, public

meetings. This would give jurisdictions flexibility to use public

meetings and other public forums to gather citizen comments. Formal

public hearings in local government require city council members to be

present and for comments to be tape recorded. The requirement for

public hearing has been in the CDBG statute for many years, and HUD has

not found it necessary to define what this means. Public hearings are

governed by state and local law.

The question of how many hearings are required and at what point

was raised by a number of commenters. Several local government

representatives read the regulation to require two public hearings

during the plan development process and believe only one should be

required. The low-income advocates commented that the regulation should

require three hearings, instead of two, each program year, indicating

that they believe the CDBG statute requires three hearings. Various

timeframes for these hearings were also suggested.

The proposed rule was based on the requirements of the CDBG

statute, which requires (at 42 U.S.C. 5304(a)(3)((D)) that a

jurisdiction have a citizen participation plan that

Provides for public hearings to obtain citizen views and respond

to proposals and questions at all stages of the community

development program, including at least the development of needs,

the review of proposed activities, and review of program performance

* * *

One local government requested that the regulation clearly say how

many hearings are required and what topics are required to be covered.

In an attempt to give jurisdictions as much flexibility as possible,

the regulation requires a minimum of two public hearings, since the

statutory language uses the plural ``hearings,'' to be conducted at two

different stages of the process. Under this wording, the jurisdiction

may combine the hearing on needs for the coming year's planning with

the hearing on the previous year's performance, for example. However, a

jurisdiction may choose to hold one public hearing on needs, a second

on the draft consolidated plan, and a third on the draft performance

report.

One advocate wanted the regulation to require the hearing on needs

to be expanded to permit citizens the opportunity to respond to

proposals and questions. The rule has been revised to reflect the CDBG

statutory language requiring response to proposals and questions.

The low-income and disability community advocates stated that the

development of needs in the consolidated plan must be based on

determination of housing needs made after public hearings. Several

disability community advocates commented that the timeframes for

citizen participation through the public hearing process do not require

citizen participation in the earliest stages of the consolidated

planning process, when ``worst case'' housing needs can be identified.

They argued that timeframes permitted by the regulation significantly

reduce the likelihood that meaningful housing needs information or

housing strategies will be sought from persons with disabilities,

advocates, or service providers as the consolidated plan is developed.

The rule does require that the hearing on needs be conducted before the

proposed consolidated plan is published.

One nonprofit and several low-income advocates stated that HUD must

assure that meeting places and times are convenient to the persons most

affected by these programs, by providing guidance in the rule. The rule

requires the citizen participation plan to provide that hearings be

held at times and locations convenient to potential and actual

beneficiaries.

A local government interest group commended HUD for not prescribing

how the needs of non-English speaking residents will be met. The rule

does require that the citizen participation plan specify how the

jurisdiction will meet these needs.

Clarification was requested by jurisdictions on whether flexibility

is also permitted to meet the needs of disabled persons. Disability

advocates stated that the physical accessibility of meeting or hearing

sites should be ensured. Since accommodation for persons with

disabilities is required by the CDBG statute (42 U.S.C. 5304(a)(3)(D)),

by section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and by

the Americans with Disabilities Act (42 U.S.C. 12101-12213) and

implementing regulations, it does not seem necessary for the rule to

spell out exactly what is required for accommodation in this rule.

i. Comments and Complaints

Local governments and local government interest groups believe that

the requirement to attach a summary of public comments or views and set

forth the reasons for not accepting comments should be eliminated

because it is not statutory, is too burdensome, and creates additional

paperwork. One low income advocate wanted the regulation to require

detailed summaries of comments indicating the number of comments for

each constituency type and responding appropriately to each comment

that was not incorporated into the final version of the consolidated

plan.

Section 107(c) of the CHAS statute, 42 U.S.C. 12707(c), requires

the jurisdiction to consider comments and views and to attach a

summary. Although the statute does not require a discussion of the

consideration of the views/comments, the Department believes that such

a provision strengthens the citizen participation process.

Low-income advocates suggested that the regulation include a time

period from close of the comment period to submission of the

consolidated plan to ensure that the jurisdiction has adequate time to

consider the comments. The Department is reluctant to specify

additional time periods that must be honored, but citizens can

certainly seek addition of this element to a local government's citizen

participation plan.

One large city and one local government interest group commented

that the regulation should not require ``substantive responses'' to

every citizen complaint within 15 days because it is not practicable in

its city to respond to every comment individually within 15 days. HUD

should delete the reference to 15 days in the rule and allow local

control over public response time. The CDBG statute and the

consolidated plan regulation specify the 15 day period, ``where

practicable.''

Several low-income advocates stated that the regulatory requirement

for a timely substantive written response to written complaints is not

sufficient to provide resolution of the complaints. Advocates also

wanted the regulation to set forth an appeals process to HUD on

complaints and on comments on the consolidated plan.

The CDBG statute (section 104)(a)(3)(E)) requires a ``written

answer,'' while the CHAS statute (section 107(d)) requires a

jurisdiction to follow HUD-established ``procedures appropriate and

practicable for providing a fair hearing and timely resolution of

citizen complaints.'' The rule requires each jurisdiction to specify in

its citizen participation plan the procedures it has determined are

``appropriate and practicable'' to resolve complaints. A system

involving an appeal to HUD would not be possible, given the limited

staff available.

One state agency commented that it is unclear whether each

commenter on the consolidated plan is required to be sent an individual

response, separately from [[Page 1889]] the responses that must be

prepared as a part of the consolidated plan document. If so, this would

be burdensome. The provision on responses to complaints was not

intended to cover comments on the consolidated plan. The rule has been

revised to have a separate paragraph for comments and a separate

paragraph for complaints.

j. Criteria for Amendments

One state interest group commented on behalf of a state that the

citizen participation plan is very idealistic and will restrict states'

flexibility to amend individual programs. The regulation requires the

citizen participation plan to specify the criteria that the

jurisdiction will use to determine what constitutes a ``substantial

change'' which necessitates citizen participation to amend the

consolidated plan.

k. Adoption of Citizen Participation Plan

One state commenter believes that HUD presents no rationale for the

provision requiring citizen input on the citizen participation plan and

it exceeds the statute. The state is also concerned that the need to

allow for input on the citizen participation plan will require a much

earlier initiation of actions than may have been contemplated by many

states.

The Department believes that input by citizens and their advocates

is necessary for a meaningful citizen participation plan that will meet

the needs of citizens in the jurisdiction, particularly those who are

the intended beneficiaries of programs covered by the consolidated

plan. The regulation does not require adoption of a new citizen

participation plan each year.

l. Pending CDBG Rule on Citizen Participation

The citizen participation requirements in the consolidated plan

regulation incorporate the citizen participation requirements of the

CDBG program and supersede the pending rulemaking on citizen

participation for the CDBG Entitlement program. In that rulemaking, a

proposed rule was published on March 28, 1990 (55 FR 11556).

Publication of a final CDBG regulation on citizen participation was

delayed primarily by a moratorium on rulemaking.

HUD received comments on citizen participation requirements in the

proposed CDBG program from eight commenters. Some of the comments on

public hearings duplicated comments made on the proposed consolidated

plan regulation and are addressed above. Comments that apply equally to

citizen participation under the consolidated plan have been considered

by HUD in the development of the final consolidated plan regulation as

follows.

Two commenters expressed concern about the proposed requirements

that grantees must provide citizens an opportunity to comment on the

original citizen participation plan and any amendments to the plan, and

must make the plan public. The comments expressed the view that these

requirements were duplicative and would only serve to increase costs of

compliance with little benefit to the objective of public

participation.

The Department disagrees. Because the plan sets forth the detailed

mechanisms for involving citizens in the development and review of the

grantee's CDBG program and consolidated plan, it must certainly be made

public. But it is also important that the citizens, who will be so much

affected by the approaches selected by the grantee for involving them,

be given the opportunity to comment on the development and amendment of

that plan. Although this will be more costly than simply making the

plan public, it is largely a one-time added expense and is fully

justified in light of the importance placed on meaningful involvement

of citizens in the development and review of local CDBG programs and

the consolidated plan.

One of the commenting citizen organizations recommended that the

rule require that hearings be held each time a final statement is

proposed to be amended and that language be added to encourage the use

of hearings for the purpose of enabling citizens to participate in

project design and implementation. Neither of the suggestions was

adopted. The Department believes that to require hearings to discuss

amendments would be very costly, since a grantee could be expected to

have several amendments during a program year. It is also highly

questionable that holding a hearing to discuss an amendment would be

more effective in getting citizen views than the current requirement of

providing citizens the opportunity to comment in writing. It is

reasonable to assume that many citizens would be willing to submit

comments in writing about a proposal but would not be willing or able

to attend a hearing to register those comments.

In a related matter, another commenter recommended the removal of

the requirement that the hearings be held at different times during the

year. This requirement is statutory.

A commenter recommended that the requirement that the grantee

provide ``reasonable'' notice of public hearings be replaced with the

need for providing ``adequate'' notice, noting that the statute had

used the word ``adequate'' for this purpose. The Department believes

that there is little difference between the meaning of the two words in

this application. Accordingly, the final rule uses the word contained

in the statute. The commenter also recommended that the rule set a

standard for ``adequate notice,'' suggesting as a model what the

Department of Treasury has established for small-issue private purpose

industrial revenue bonds. The final rule does not contain such a model,

since HUD believes that each grantee should be given the flexibility to

meet the notice requirement in its own way, describing in its plan how

it will provide adequate notice.

One commenter questioned the inclusion of the requirement that

grantees provide ``timely notice of local meetings'' (other than for

public hearings) in addition to the requirement that they provide

``reasonable and timely access to local meetings, information, and

records * * *''. The commenter noted that the requirement to provide

timely notice went beyond the provision in the statute, and appeared to

require formal legal notices in daily newspapers. Believing this to be

unnecessary and costly, the commenter suggested that the regulation

simply retain the statutory language. This suggestion is adopted in the

final rule.

A large city expressed concern about the need for targeting citizen

participation to low- and moderate-income persons residing in certain

areas. This requirement is statutory and cannot be removed from the

rule. This commenter also objected to the requirement that the citizen

participation plan contain information on the types and levels of

assistance to be provided to persons who may be displaced by CDBG-

assisted activities. It was noted that this information is already

required to be made public and the need to duplicate it in another

document would be costly. The regulations do not duplicate requirements

concerning plans for displacement. Instead, the citizen participation

requirements in the proposed CDBG regulation and in the consolidated

plan regulation combine all citizen participation requirements,

including the requirement the plan for displacement, into a single

citizen participation plan.

One of the citizen organizations suggested that grantees be

required to [[Page 1890]] maintain all of the key CDBG materials

together in several locations throughout the community to make it

easier for citizens to involve themselves in the program. HUD is

unwilling to require this of all grantees, but notes that local citizen

groups having particular problems in this regard may want to press

their grantee to do this on a voluntary basis.

One commenter recommended that grantees be required to identify the

amount of ``unexpended'' funds allocated in previous years at the time

it provides information to citizens about the amount of CDBG funds

available in the coming year. The expressed objectives of this

suggestion were that it would help citizens identify problem areas

(presumably with performance) and would highlight that certain needs

will not have to be addressed in the coming year's program because of

earlier allocation decisions.

The Department does not believe that such a change would be

appropriate, since the rule already requires sufficient disclosure of

performance. (The rule requires that performance be covered at a public

hearing and that the grantee's performance report be subjected to

public review and comment.)

Section 91.205 Housing and homeless needs assessment

a. Categories of Persons Affected

Numerous low-income and disability community advocates commented

that the proposed rule does not require the level of detail on

subpopulations that was required in the CHAS Table 1C. They argue that

this information is essential to illustrate the needs of special

populations. A disability group advocate indicates that the rule fails

to create a comprehensive, inclusive and detailed needs analysis for

programs that address the needs of persons living with HIV/AIDS. The

commenter states that all jurisdictions are likely to be affected by

the HIV epidemic and should have a needs assessment for residents in

their areas who are living with HIV/AIDS, even if they are not seeking

funds under the HOPWA program.

The low-income advocates also note that the proposed rule does not

require that the needs of single, non-elderly or households of

nonrelated individuals be identified. Also missing is the requirement

to identify needs of nonhomeless people with disabilities, especially

those with AIDS.

The Department has revised the rule to specify that the needs must

be estimated for the number and type of families by income groups and

tenure. The requirement now includes specific reference to single

persons. Nonelderly persons presumably fall into the general categories

of persons whose needs are identified. Households of nonrelated

individuals are covered by the HUD definitions.

Nonhomeless people with special needs are now the subject of a

separate paragraph (d) in Sec. 91.205. This category covers elderly,

frail elderly, persons with disabilities (mental, physical

developmental), persons with alcohol or other drug addiction, persons

with HIV/AIDS and their families, and any other categories the

jurisdiction may specify.

We note that with regard to identification of special needs

populations, the use of HOME tenant-based rental assistance to be used

exclusively for assistance to one subpopulation of the disabled will

only be permitted if the grantee can demonstrate that (1) the need has

been documented in its consolidated plan, and (2) the reason for their

preferential treatment is to narrow the gap in available benefits and

services to the group. Therefore, this element is essential to the

consolidated plan.

The Department declines to require all the information contained in

CHAS Table 1C, because that would be contrary to our efforts to avoid

unnecessary requirements and detailed tables. However, we have

attempted to assure that the categories of special need to be served by

the Department's programs are adequately addressed in the assessment of

need.

Low-income advocates also stated that an indicator of need which

should be included is analysis of the public housing and Section 8

waiting lists. We are including this suggestion in the implementing

Guidelines.

Several public interest groups and local government commenters

questioned the requirement to collect data on ``extremely low-income''

families, indicating that this information was not statutorily

required, not required by the four grant programs included in the

proposed rule for targeting program assistance, and not required in the

past. As described above in the discussion of definitions, the term

``extremely low-income'' has been preserved in the final rule.

b. Disproportionate Need

Two local governments disagreed with the methodology on

disproportionate need, indicating that it should be weighted for

population size. Several low-income advocacy commenters thought the

approach was excellent. The Department is preserving the language on

calculation of disproportionate need from the proposed rule.

c. Lead-Based Paint Hazards

Several local government commenters requested that they not be

required to provide data on lead-based paint hazards, since it was not

easily available. One local government commenter suggested a rough

analysis between Census data on pre-1970 housing and low-income

occupancy data as a way to yield a pool of units likely to have some of

lead-based paint.

The requirement to provide this information is statutory. The

commenter's suggestion for a method to estimate the scope of hazard is

not unreasonable. However, the consultation section (Sec. 91.100) does

require consultation with local health and child welfare agencies and

examination of health department data on this subject in the

preparation of the consolidated plan.

d. Homeless

Several low-income advocates and disability community advocates

complained about the deletion of the CHAS rule's more detailed homeless

needs assessment. Commenters indicated that the rule should spell out

in detail the data required to be submitted. The proposed rule requires

that a homeless needs table be included in the plan that is prescribed

by HUD. This follows the statutory language. The final rule preserves

this provision intact.

e. Racial Impact

A number of low-income advocates stated that racial impact should

be addressed in the needs assessment. In fact, several groups advocated

that if this rule were implemented without the anticipated Fair Housing

Plan rule it should contain consideration of racial impact in every

element of the consolidated plan.

The Department has decided to deal with the more comprehensive

issue of a Fair Housing Plan in a separate proposed rule, which is

expected to be published shortly. To assure that some minimal

requirements for compliance with the statutorily required certification

that a jurisdiction is affirmatively furthering fair housing, this rule

includes, in the certification section, the requirement that an

analysis of impediments be done and that the steps to address the

impediments be described, mirroring the language added to the CDBG

regulations on the same subject. In addition, the performance report

now includes for all programs the element of data on race and ethnicity

of beneficiaries. [[Page 1891]]

Section 91.210 Housing Market Analysis

a. General Characteristics

A few low-income advocates suggested that a description of housing

stock be related to income, race and neighborhoods and ranked as

housing needs are. The language of the rule does require the

description to relate to income, race, and neighborhoods. Since this

section does not deal with needs, but with the available stock, ranking

would be inappropriate.

There were several comments on redundancy between what must be

reported in the market analysis section and what must be reported in

the strategy, especially on coordination, institutional structure and

barriers to affordable housing. The final rule has been revised by

consolidating the provisions on coordination and institutional

structure with the provisions on the same subject in the strategy

section. However, the provision on barriers to affordable housing is

seen as necessary to an analysis of the housing market and have been

retained in this section.

Two commenters suggested that a description of the housing market

should include information on vacancy rates and the availability of

credit. Such language is not being added to the rule, but it will be

included in the implementing Guidelines.

Local definitions of areas of low-income and minority

concentrations may be inconsistent with the fair housing rule once it

is published, local government commenters suggested. They requested the

ability to choose either local or HUD's definitions. This rule will

permit local definitions. However, when the Fair Housing Plan rule is

published as a final rule, it will prescribe use of its definitions for

this purpose.

One low-income advocacy commenter suggested that a city should be

required to assess whether it has sufficient sites to meet the low-

income housing needs in its community. The consolidated plan rule is

not being expanded to require this assessment in this section. However,

the Department does plan to address the question of site selection in a

later proposed rule.

b. Public and Assisted Housing

Eight disability community advocates indicated that jurisdictions

must assess the loss of public housing units which will occur because

of the implementation of Title VI of Housing and Community Development

Act of 1992. They recommended that an analysis of these issues be

required by reviewing the PHA's allocation plan and identifying the

number of units lost to persons with disabilities. The provision to

which the commenters refer is the provision that permits public housing

and Section 8 housing projects to be designated for only elderly

families, only disabled families, or for either. The Department is

considering how to encourage balancing the resources available for

these different groups. If special funding is announced to further this

end, applicants will need to supply such information.

c. Barriers to Affordable Housing

Several local government and government interest group commenters

objected to the provision requiring cities to identify public policies

that affect the cost or incentive to develop affordable housing. They

should not be required to do a self-analysis but only relate criticisms

they have received. Cities suggested that they be required to list

Federal policies that create barriers.

This element is statutorily required, so it has not been

eliminated. The Department believes that listing of Federal policies in

this part of the local plan is not appropriate. However, HUD will work

with localities to assess the impact of HUD policies separately.

Section 91.215 Strategies, Priority Needs, and Objectives

a. General

The majority of low-income and disability community advocates

recommended inclusion of the link between needs and priorities, with

the worst case needs being given the highest priority. Several

commenters wanted to restore the comparative analysis required by the

CHAS at 91.19(b)(1), matching housing inventory with severity of needs

and types of housing problems of each priority category. Some

recommended that the rule require that a jurisdiction commit to

providing a ``fair share'' of its resources to meet the ``worst case''

needs.

The Department agrees with the low-income and disability community

advocates that the strategy must explain how the priorities have been

established and how the strategic plan addresses the needs identified

in the needs assessment. The rule has been strengthened to require a

comparative analysis of the severity of housing problems and needs of

extremely low-income, low-income, and moderate-income renters and

owners. The rationale for establishing the priorities and determining

the relative priorities should flow logically from this analysis. The

title of the section has been revised to ``Strategic Plan'' to

emphasize the cohesive nature of this section of the document.

The Department declines, however, the suggestion to adopt a ``fair

share'' approach. The Department's goal for this rule is to provide the

framework for communities to have meaningful plans, serving low-income

families. The Department does not want to substitute its judgment for

locally developed plans and priorities framed through a strong citizen

participation process.

However, by establishing a stronger rationale for relating

priorities to needs, the Department hopes to discourage such situations

as the following: A major city identified a large need for housing by

low-income groups and homeless persons and proposed actions to address

these needs. Then the city council overturned these proposals and built

a high profile ``trophy'' project which completely ignored those needs.

Several commenters were critical about the level of detail which

seems to be required about specific objectives at 91.215(a)(2). This

section seems to require localities to quantify and geographically

locate Federal grant budget resources for a 3 to 5 year period in the

consolidated plan. They claimed this level of specificity is only

practical for an annual plan. There was a fear that a listing of

projects would preclude the funding of other worthwhile projects not on

the list.

The burden of the analysis has been decreased by focusing the

discussion of the basis for assigning the relative priority given to

priority needs by category of priority needs instead of by each

priority need. In addition, the information is to be provided for a

specific period of time, which is determined by the jurisdiction.

Some low-income and disability advocacy groups have argued that

priority needs of non-homeless persons with disabilities should be

added. The Department agrees. A separate section on this group has been

added.

b. Affordable Housing

Several low-income advocacy commenters wanted the Department to

require jurisdictions to address the proposed availability of

affordable housing for each income group, especially extremely low-

income, very low-income and low-income (as these terms were used in the

proposed rule), and to define affordable housing as housing for which a

low-income family pays less than 30 percent of income. The Department

agrees, and the rule has been revised accordingly to more closely

approximate what was in the CHAS. It requires specific housing

[[Page 1892]] objectives that identify the number of extremely low-,

low-, and moderate-income families (using the revised terminology) to

whom the jurisdiction will provide affordable housing.

c. Community Development

Several low-income advocates recommended that needs of extremely

low-, very low- and low-income people be expressly addressed in the CD

plan. One commenter suggested that this discussion of needs belongs in

Sec. 91.205 with the discussion of housing and homeless needs. Since

there is a statutory requirement for a discussion of priority

nonhousing community development needs, the Department is keeping the

CD plan as a part of the strategy, and not part of the housing and

homeless needs description. The Department agrees that the needs of

these income groups need to be discussed in this plan, and language

referring to the statutory goal of serving these income groups has been

added to the paragraph on the CD plan.

In addition, language has been added indicating that jurisdictions

may elect to develop a neighborhood revitalization strategy that

includes the economic empowerment of area residents. HUD is willing to

provide greater flexibility in program rules governing the use of CDBG

funds for jurisdictions that develop such a strategy, in accordance

with rule changes being made in another pending rulemaking. Approval of

the consolidated plan does not imply approval of a neighborhood

revitalization strategy proposal. A jurisdiction's neighborhood

revitalization strategy must provide that the area selected is

primarily residential and contains a percentage of low-income and

moderate-income residents that is no less than 51 percent. In addition,

the jurisdiction should consider the following:

(1) Developing the strategy in consultation with the area's

stakeholders, including residents, owners/operators of businesses and

financial institutions, non-profit organizations, and community groups

that are in or serve the area(s);

(2) Including an assessment of the economic situation in the area

and examination of economic development improvement opportunities and

problems;

(3) Developing a realistic development strategy and implementation

plan to promote the area's economic progress;

(4) Focusing on activities to create meaningful jobs for the

unemployed and low-income people in the area as well as activities to

promote the substantial revitalization of the area(s); and

(5) Identifying the results expected to be achieved, expressing

them in terms that are readily measurable.

With respect to the proposed rule, local governments commented that

the information required in the table prescribed by HUD to describe the

jurisdiction's priority nonhousing community development needs eligible

for assistance in dollar amounts is not very useful, only raises

expectations concerning infrastructure needs that cannot be met, and is

very difficult to cost out. Low-income advocates commented that there

is too little information in this section compared to the housing

section.

It is clear that Congress wanted data that could be aggregated

nationally. The key to the table is ``priority needs'' and those

covered in the table are to be those activities that are eligible for

CDBG assistance. All needs do not have to be covered. Further, it is

not difficult to estimate the dollar amounts when linear or square feet

for facilities are known and the average cost per that unit of measure

is known. The guidelines will be clarified on this point.

d. Barriers to Affordable Housing

One commenter requested that the rule state that the plan cannot be

rejected for the content of its regulatory barrier assessment. One

commenter admonished HUD to put stronger teeth in the plan to make

cities remove barriers. The CHAS statute does not permit HUD to reject

a consolidated plan on the basis of the jurisdiction's inaction to

remove identified barriers. The Department will comply with that

requirement but sees no need to add a provision to the rule on the

subject.

Another public interest group wanted jurisdictions to explain the

purpose of the policy perceived as a barrier and offer alternative

options. The Department declines to make this a more burdensome

requirement.

e. Anti-Poverty Strategy

Several public interest group and city commenters were critical of

this paragraph, indicating that it was difficult to measure how HUD

programs directly reduced the number of families with incomes below the

poverty line. Of primary concern was describing their actions in terms

of ``factors over which the jurisdiction has control,'' language from

the statute. They recommended that the requirement be restated for

programs discussed in the housing component of the consolidated plan

that the city directed to poverty families. The rule has been revised

accordingly.

Section 91.220 Action Plan

a. Linkage

The low-income and disability community advocates were critical of

what they viewed as inadequate linkage in the action plan between the

needs of the extremely low-income families and those in the worst

housing conditions and the proposed activities to be undertaken by the

jurisdiction under the draft language of this section.

In response to these concerns, the rule has been revised to require

a clearer statement of priority needs and local objectives covered in

the strategic plan, including the number and type of families to be

benefitted from the activities proposed for the year, with a required a

target date for completion of each activity. We also have required

information on location of projects, to allow citizens to determine the

degree to which they are affected.

b. Resources

With regard to describing resources, several commenters insisted

that only those resources under the control of the jurisdiction should

be listed. There was resistance to including private and nonfederal

resources. The CHAS statute requires private and nonfederal resources

that are reasonably expected to be available to be identified. The CHAS

statute also requires the extent of leverage of Federal resources to be

discussed. However, all discussion of resources has been moved from the

strategic plan section of the rule to the action plan section, in

response to commenters suggestions.

c. CDBG Float-Funded Activities

The CDBG ``miscellaneous amendments'' rule included provisions

governing float-funded activities that are perceived as providing some

risk to the CDBG program. A ``float-funded activity'' is an activity

that uses undisbursed funds in the line of credit or program account

that have been previously budgeted in an action plan (formerly, the

CDBG final statement) for one or more activities that do not need the

funds immediately.

Ten comments were received with respect to these requirements.

Responses to these comments and the specific requirements for treatment

of CDBG float-funded activities will be published in the final

miscellaneous amendments rule. However, for purposes of this rule, the

Department notes that there are two primary risks to the CDBG program

inherent in the float funding process. First, the float-funded activity

will not generate sufficient program income in a manner to allow

[[Page 1893]] for timely undertaking of previously budgeted activities.

Second, in undertaking a float-funded activity that exceeds a certain

size or duration, grantees are apparently relying on additional CDBG

funds being received in future years to enable them to continue funding

previously budgeted activities until the float-funded activity

generates program income.

The paragraph of the action plan dealing with CDBG program-specific

requirements now deals with float-funded activities, requiring a

jurisdiction to show the stream of income from repayment of float-

funded activities. This provision is designed to address: (1) the

problems identified by the Department's Inspector General in managing

such activities and (2) the need for citizens to have sufficient

information for them to know the extent to which they are likely to be

affected by these activities, particularly the consequences of their

default, so that they may have an opportunity to object to such a use

of the funds.

The action plan section also requires that jurisdictions receiving

CDBG entitlement funds may generally budget no more than 10 percent of

the total available CDBG funds described for the contingency of cost

overruns. The Department has had a longstanding requirement that the

amount so budgeted must be reasonable in relation to the grant. This is

based largely on the statutory requirement under section 104(a) of the

HCD Act that, as a prerequisite to receive its annual grant, a

community must submit a statement describing how it intends to use the

funds. When the grantee's statement contains a set-aside of funds for

contingencies in an amount that goes beyond the amount that reasonably

may be expected to be needed for cost overruns of activities

specifically identified in the statement, the net effect is that the

grantee is simply deferring making a decision as to the use of the

funds. The Department believes that this is not allowable under the

statute. The Department provided guidance in the form of a notice

(dated September 18, 1992) that it would not question the

``reasonableness'' of a set-aside of up to 10 percent of the amount of

CDBG funds described in the final statement (now part of the action

plan) for cost overruns. The regulatory language contained in this rule

now reflects this threshold. This would not, however, prohibit a

jurisdiction from setting an amount higher than 10 percent if the

jurisdiction has data available, drawing on its prior experience, to

show that actual cost overruns are likely to require a higher

contingency amount.

d. Public Housing

A provision has been added to the housing market analysis section,

to the institutional structure paragraph of the strategic plan section,

and, most importantly, to the ``other actions'' paragraph of the action

plan section, to require a jurisdiction to state any actions it is

taking to assist a public housing agency that has been designated as

``troubled'' by HUD to overcome its problems.

Section 91.225 Certifications

One commenter pointed out that the paragraph on consultation ``by

States'' is inapplicable to local governments, who are covered by this

provision. Another commenter recommended that the certification

currently found in the CDBG program that a jurisdiction's notification,

inspection, testing and abatement procedures concerning lead-based

paint will comply with the provisions of Sec. 570.608 should be

included here. We agree with both of these comments, and the rule has

been revised accordingly.

One low-income advocate suggested that jurisdictions should be

required to certify, in connection with the CDBG program, that they

have satisfied their obligations under the regulation interpreting

section 109 of the Housing and Community Development Act of 1974 (42

U.S.C. 5309), which is found at 24 CFR 570.602. It requires a

jurisdiction that has discriminated in the administration of the CDBG

program or activity, or where there is sufficient evidence to conclude

that there was discrimination, on the basis of race, color, national

origin, or sex, to take remedial affirmative action to overcome the

effects of the discrimination.

There are two provisions of the certifications section that have a

bearing on anti-discrimination laws. The first mirrors the current

requirements for the CDBG program to require specific certification of

compliance with two civil rights laws: Title VI of the 1964 Act and the

Fair Housing Act. Although the Department agrees that section 109 is

applicable to the CDBG program, it is encompassed within the second

certification, which requires certification that the jurisdiction/State

will comply with all applicable laws. We note that the underlying CDBG

regulation requiring compliance with section 109 remains in effect.

Section 91.235 Abbreviated Plan

One State pointed out that paragraph (a) appears to make use of the

abbreviated plan permissive, but paragraph (b)(1) appears to make it

required--if a jurisdiction is permitted to use it. The commenter also

complained about the lack of any requirement for the jurisdiction to

consult with the State.

The Department agrees that the provision needs clarification, so it

is now clear that a jurisdiction eligible to submit an abbreviated plan

instead of a full consolidated plan may do so, but is not required to

do so. Consultation with the State has been added.

Section 91.305 Housing and Homeless Needs Analysis

Two States complained that the requirement for a State seeking

HOPWA funding to collect data about the size and characteristics of the

population with HIV/AIDS and their families was too burdensome and

costly for States. The language for this provision and its local

government counterpart have been revised to require estimation, ``to

the extent practicable,'' of the number of persons in various

categories of special need, including persons with HIV/AIDS and their

families.

Section 91.310 Housing Market Analysis

A few low-income advocates recommended requiring States to describe

substate markets, including those that have higher poverty areas. The

rule requires analysis of the State's ``housing markets.'' This implies

that there is more than one housing market within the State.

One State commented that paragraphs (b) (Low income tax credit

use), (e) (Institutional structure), and (f) (Governmental

coordination) relate not to market analysis but to strategy. It

recommended moving them to Sec. 91.315. The Department agrees and has

revised the rule accordingly.

Several low-income advocates recommended that the paragraph on

barriers to affordable housing should require that all jurisdictions do

their ``fair share'' to provide housing opportunities to low-income

persons. They also stated that States should look at cross-

jurisdictional barriers. The Department is constrained by the statutory

limit that prevents disapproval of a plan that does not provide for

removal of barriers to affordable housing. Therefore, it cannot require

such a ``fair share'' proposal. Analysis of cross-jurisdictional

barriers would be beneficial, but the Department does not want to add

to the burden of requirements imposed by this rule. [[Page 1894]]

Section 91.315 Strategy, Priority Needs, and Objectives

Two States stated that the requirement for a statement of the

reasons for the State's choice of priority needs is too detailed a

requirement for States, since they respond to priorities established by

localities and to their requests for funding. Low-income advocates, on

the other hand, argued that States should be required to describe the

basis for assigning the relative priority to a category of needs since

the CHAS statute requires it. The language of this provision has been

revised to refer to each category of priority needs since that is the

most flexibility the Department can give to States under the statute.

The priority needs table that the rule requires States to complete

was criticized as being too detailed. The table is less detailed than

the table that was required for the State CHAS. However, HUD recognizes

that the States have less control over fulfillment of this section than

do local jurisdictions.

Several States objected to the requirement that the States include

a target date for completion of specific objectives. The final rule

indicates that the State must identify the proposed accomplishments

that the State hopes to achieve in quantitative terms, or in other

measurable terms as identified and defined by the State.

A number of States objected to the requirement that the State

furnish a projection of its resource allocation geographically within

the State, since often the funds are awarded on the basis of

competitive selection rather than on some geographic distribution plan.

The rule has been revised to reflect that a State must describe how the

State's method of distribution contributes to its general priorities

for allocating investment geographically within the State.

Three commenters recommended that the only non-Federal funds that

be included in the resource description be those that are ``available

for use in conjunction with Federal funds to address needs

identified.'' We decline to make this change, since the CHAS statute

does not so limit the language.

Section 91.325 Certifications

One commenter pointed out that the certification concerning

excessive force was not applicable to States. That provision has been

modified to clarify that the States must require the localities to make

this certification.

Sections 91.400-91.435 Consortia

Several local governments complained that the proposed rule was

confusing about which units of general local government are directed to

participate in the development of a consolidated plan of the consortium

as well as submit their own consolidated plan to cover all programs

other than HOME. They suggested that Sec. 91.400 should be revised to

clarify that units of local government that participate in a consortium

must participate in submission of a consolidated plan for the

consortium, prepared in accordance with subpart E, as well as

submitting for their own jurisdiction the following components of

subpart C: Sec. 91.215(e) (CD plan), Sec. 91.220 (Action Plan) and

Sec. 91.225 (Certifications). The preparation and submission of a

separate housing and homeless needs assessment (Sec. 91.205), housing

market analysis (Sec. 91.210) and strategies, priority needs and

objectives (Sec. 91.215) for the entitlement jurisdictions should be

optional not a requirement. We agree, and the rule has been modified

accordingly.

The majority of the commenters on this issue raised the problems

presented by the same program year for all consortium members;

suggesting this will cause consortia to break up. One suggested

solution was to eliminate the requirement. Instead the consortium would

develop its housing and homeless needs, housing market analysis and

strategy on a planning year that coincides with the program year of the

earliest entitlement jurisdiction in the consortium. Individual action

plans would be submitted on individual entitlement members' program

year cycle. Individual CD plans would be submitted at the same time as

the strategic plan or with the individual entitlement submissions. The

lead agency's action plan and program year would control the timing of

the HOME program year. The rule has not been changed; however, we will

develop waiver policies to handle this issue with consortia.

Local governments urged that Secs. 91.105 and 91.430 be clarified

to explain what citizen participation requirements apply to entitlement

jurisdictions that are part of a consortium. Such clarification is now

provided in Sec. 91.401.

Section 91.500 HUD Approval Action

Low-income advocacy groups argued that the standards for review of

the consolidated plan do not provide adequate guidance to participating

jurisdictions, citizens, and HUD field offices about what would

constitute an acceptable plan. They suggest that a consolidated plan

should be approved by HUD only if it ``demonstrates integrity when read

as a whole.'' They suggest that the needs assessment, priority

assignments, and action plan must be sound and consistent with each

other and with the purposes of the statute. For example, they state

that a housing strategy that failed to seriously address ``worst case''

needs would lack the logical link between needs and action required by

section 105(b)(8) of the CHAS statute.

We agree that the current regulations provide few guidelines on the

standards for approval. We have modified the proposed regulations to

make them more similar to the existing CHAS rule. While we agree with

the desirability of internal consistency and require a certification

that housing activities undertaken under CDBG, HOME, ESG, and HOPWA

funds are consistent with the strategic plan, we feel that the

provision recommended by the advocacy groups is needlessly directive.

Section 91.505 Amendments to Consolidated Plan

Several government interest groups, citing HUD's proposed CDBG rule

published on August 10, 1994, suggest that jurisdiction be allowed to

notify HUD after adoption of amendments to the consolidated plan. The

majority of the commenters were concerned that the specificity of the

action plan will trigger a number of amendments that will need to

undergo citizen participation and submission to the Department. The

preference was to list major activities under which projects could fall

without creating the need for amendments. One community suggested if

the jurisdiction deemed a change consistent with its need section it

could be done without citizen participation or HUD review. An alternate

suggestion was to consider an increase or decrease in the original

allocation mix over 35 percent as a substantial change.

Jurisdictions are free to determine and describe in the citizen

participation plan what constitutes a ``substantial amendment,'' upon

which public comment is required. The suggestions offered by these

commenters may be good options for defining when a change requires a

``substantial amendment.''

Section 91.510 Consistency Determinations

One commenter suggested that HUD clarify the meaning of this

section by stating that it only applies to sources of funds that are

not applied for through [[Page 1895]] the consolidated plan; for

example, the HOPE Program and Section 811. This section has been

revised to cover competitive programs only. In addition, because the

CHAS statute requires this statement of consistency for the formula

grant programs as well, the certifications have been changed to require

consistency with the strategic plan.

Section 91.520 Performance Reports

One commenter objected to reporting on the results of on-site

inspections of affordable rental housing assisted with HOME funds,

citing it as a new requirement. This is a statutory requirement at

section 226(b) of the NAHA (42 U.S.C. 12756) and is contained at

Sec. 92.504(e)(1) of the HOME regulation. That rule requires annual on-

site inspections of projects of 25 units or more, requiring every other

year inspections of projects of fewer than 25 units.

Two commenters stated that the 90-day period provided after the

program year for submission of the performance report is inadequate

time, especially for large cities, given the lack of information about

the format of the report and the computer software that HUD says it

will make available for this purpose. The 30-day comment period on the

performance report increases the difficulty of making the 90-day

deadline.

As discussed above in the citizen participation section, the

comment period on reports has been shortened to 15 days. Therefore, the

final rule retains the 90 day deadline for performance reports. HUD

will facilitate the provision of information needed by the

jurisdictions to submit the reports.

Several local governments complained about the requirement to

report on the degree to which the CDBG program was used to benefit

extremely low-income persons. The reasons stated for eliminating the

requirement are that it is not required by statute, the program is not

targeted to that specific group, and it is burdensome. A low-income

community advocate found the language of the provision inadequate in

that it was not strong enough in emphasizing the requirement of the

CDBG statute that the program benefit low-income and moderate-income

persons.

In fact, both the CDBG and HOME programs have specific requirements

with regard to income targeting. Previous reporting instructions (if

not regulations) have required information about benefits to extremely

low-income persons for activities where income information and family

data are required to justify the activity. In these cases, the

information is readily available, and therefore this reporting is not

considered to be a burdensome requirement.

Sections 570.487, 570.601 and 570.904 Fair Housing Certifications

One commenter stated that there was no justification for imposing

new CDBG fair housing requirements. The commenter argued that the

changes to these sections provide minimal requirements for compliance

with the certification that a jurisdiction will affirmatively further

fair housing. The rule now states requirements rather than performance

standards for affirmatively furthering fair housing. The requirements

include conducting an analysis of impediments, taking actions to

address the impediments, and maintaining records reflecting both. A

jurisdiction need not do an analysis of impediments every year, but is

expected to have conducted its first analysis of impediments no later

than 12 months following February 6, 1995.

Subpart G Insular Areas

In the proposed rule, there was a heading reserved for a separate

subpart to specify the consolidated plan requirements for insular

areas. There were no public comments received on this topic. The

Department has decided to handle the few jurisdictions that are insular

areas individually, through administrative guidance. Therefore, this

rule contains no subpart G.

Findings and Certifications

Regulatory Review

This rule was reviewed by the Office of Management and Budget under

Executive Order 12866, Regulatory Planning and Review. Any changes made

to the rule as a result of that review are clearly identified in the

docket file, which is available for public inspection in the office of

the Department's Rules Docket Clerk, room 10276, 451 Seventh St., SW.,

Washington, DC.

Impact on the Environment

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50 that

implement section 102(2)(C) of the National Environmental Policy Act of

1969, 42 U.S.C. 4332. The Finding of No Significant Impact is available

for public inspection and copying during regular business hours (7:30

a.m. to 5:30 p.m.) in the Office of the Rules Docket Clerk, room 10276,

451 Seventh Street, SW., Washington, DC 20410-0500.

Federalism Impact

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

contained in this rule do not have significant impact on States or

their political subdivisions since the requirements of the rule are

limited to requirements imposed by the statutes being implemented. The

final rule reflects revisions to decrease the impact on States, in

particular. Duplication of effort by State and local governments is

being avoided by focusing the efforts of the States on the CDBG

nonentitlement areas within their borders.

Impact on the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this rule does not have

potential for significant impact on family formation, maintenance, and

general well-being, and, thus is not subject to review under the Order.

The rule merely carries out the mandate of federal statutes with

respect to planning documents for housing and community development

programs.

Impact on Small Entities

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this rule before publication and by

approving it certifies that this rule will not have a significant

impact on a substantial number of small entities, because it does not

place major burdens on jurisdictions.

Regulatory Agenda

This rule was listed as sequence number 1723 under the Office of

the Secretary in the Department's Semiannual Regulatory Agenda

published on November 14, 1994 (59 FR 57632, 57641), under Executive

Order 12866 and the Regulatory Flexibility Act.

Catalog

The Catalog of Federal Domestic Assistance numbers for the programs

affected by this rule are 14.218, 14.231. 14.239, and 14.241.

List of Subjects

24 CFR Part 91

Grant programs--Indians, Homeownership, Low and moderate income

housing, Public housing.

24 CFR Part 92

Grant programs--housing and community development, Manufactured

homes, Rent subsidies, Reporting and record keeping requirements.

[[Page 1896]]

24 CFR Part 570

Administrative practice and procedure, Grant programs--housing and

community development, American Samoa, Northern Mariana Islands,

Pacific Islands Trust Territory, Puerto Rico, Virgin Islands.

24 CFR Part 574

Community facilities, Disabled, Emergency shelter, Grant programs--

health programs, Grant programs--housing and community development,

Grant programs--social programs, HIV/AIDS, Homeless, Housing, Low and

moderate income housing, Nonprofit organizations, Rent subsidies,

Reporting and recordkeeping requirements, Technical assistance.

24 CFR Part 576

Community facilities, Emergency shelter grants, Grant programs--

housing and community development, Grant programs--social programs,

Homeless, Reporting and recordkeeping requirements.

24 CFR Part 968

Grant programs--housing and community development, Loan programs--

housing and community development, Public housing, Reporting and

recordkeeping requirements.

Accordingly, parts 91, 92, 570, 574, 576, and 968 of title 24 of

the Code of Federal Regulations are amended as follows:

1. Part 91 is revised to read as follows:

PART 91--CONSOLIDATED SUBMISSIONS FOR COMMUNITY PLANNING AND

DEVELOPMENT PROGRAMS

Subpart A--General

Sec.

91.1 Purpose.

91.2 Applicability.

91.5 Definitions.

91.10 Consolidated program year.

91.15 Submission date.

91.20 Exceptions.

Subpart B--Citizen Participation and Consultation

91.100 Consultation; local governments.

91.105 Citizen participation plan; local governments.

91.110 Consultation; States.

91.115 Citizen participation plan; States.

Subpart C--Local Governments; Contents of Consolidated Plan

91.200 General.

91.205 Housing and homeless needs assessment.

91.210 Housing market analysis.

91.215 Strategic plan.

91.220 Action plan.

91.225 Certifications.

91.230 Monitoring.

91.235 Special case; abbreviated consolidated plan.

91.236 Special case; District of Columbia.

Subpart D--State Governments; Contents of Consolidated Plan

91.300 General.

91.305 Housing and homeless needs assessment.

91.310 Housing market analysis.

91.315 Strategic plan.

91.320 Action plan.

91.325 Certifications.

91.330 Monitoring.

Subpart E--Consortia; Contents of Consolidated Plan

91.400 Applicability.

91.401 Citizen participation plan.

91.402 Consolidated program year.

91.405 Housing and homeless needs assessment.

91.410 Housing market analysis.

91.415 Strategic plan.

91.420 Action plan.

91.425 Certifications.

91.430 Monitoring.

Subpart F--Other General Requirements

91.500 HUD approval action.

91.505 Amendments to the consolidated plan.

91.510 Consistency determinations.

91.515 Funding determinations by HUD.

91.520 Performance reports.

91.525 Performance review by HUD.

Authority: 42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-11388,

12701-12711, 12741-12756, and 12901-12912.

Subpart A--General

Sec. 91.1 Purpose.

(a) Overall goals. (1) The overall goal of the community planning

and development programs covered by this part is to develop viable

urban communities by providing decent housing and a suitable living

environment and expanding economic opportunities principally for low-

and moderate-income persons. The primary means towards this end is to

extend and strengthen partnerships among all levels of government and

the private sector, including for-profit and non-profit organizations,

in the production and operation of affordable housing.

(i) Decent housing includes assisting homeless persons to obtain

appropriate housing and assisting persons at risk of becoming homeless;

retention of the affordable housing stock; and increasing the

availability of permanent housing in standard condition and affordable

cost to low-income and moderate-income families, particularly to

members of disadvantaged minorities, without discrimination on the

basis of race, color, religion, sex, national origin, familial status,

or disability. Decent housing also includes increasing the supply of

supportive housing, which combines structural features and services

needed to enable persons with special needs, including persons with

HIV/AIDS and their families, to live with dignity and independence; and

providing housing affordable to low-income persons accessible to job

opportunities.

(ii) A suitable living environment includes improving the safety

and livability of neighborhoods; increasing access to quality public

and private facilities and services; reducing the isolation of income

groups within a community or geographical area through the spatial

deconcentration of housing opportunities for persons of lower income

and the revitalization of deteriorating or deteriorated neighborhoods;

restoring and preserving properties of special historic, architectural,

or aesthetic value; and conservation of energy resources.

(iii) Expanded economic opportunities includes job creation and

retention; establishment, stabilization and expansion of small

businesses (including microbusinesses); the provision of public

services concerned with employment; the provision of jobs involved in

carrying out activities under programs covered by this plan to low-

income persons living in areas affected by those programs and

activities; availability of mortgage financing for low-income persons

at reasonable rates using nondiscriminatory lending practices; access

to capital and credit for development activities that promote the long-

term economic and social viability of the community; and empowerment

and self-sufficiency opportunities for low-income persons to reduce

generational poverty in federally assisted and public housing.

(2) The consolidated submission described in this part 91 requires

the jurisdiction to state in one document its plan to pursue these

goals for all the community planning and development programs, as well

as for housing programs. It is these goals against which the plan and

the jurisdiction's performance under the plan will be evaluated by HUD.

(b) Functions of plan. The consolidated plan serves the following

functions:

(1) A planning document for the jurisdiction, which builds on a

participatory process at the lowest levels;

(2) An application for federal funds under HUD's formula grant

programs;

(3) A strategy to be followed in carrying out HUD programs; and

(4) An action plan that provides a basis for assessing performance.

[[Page 1897]]

Sec. 91.2 Applicability.

(a) The following formula grant programs are covered by the

consolidated plan:

(1) The Community Development Block Grant (CDBG) programs (see 24

CFR part 570, subparts D and I);

(2) The Emergency Shelter Grants (ESG) program (see 24 CFR part

576);

(3) The HOME Investment Partnerships (HOME) program (see 24 CFR

part 92); and

(4) The Housing Opportunities for Persons With AIDS (HOPWA) program

(see 24 CFR part 574).

(b) The following programs require either that the jurisdiction

receiving funds directly from HUD have a consolidated plan that is

approved by HUD or that the application for HUD funds contain a

certification that the application is consistent with a HUD-approved

consolidated plan:

(1) The HOPE I Public Housing Homeownership (HOPE I) program (see

24 CFR Subtitle A, Appendix A);

(2) The HOPE II Homeownership of Multifamily Units (HOPE II)

program (see 24 CFR Subtitle A, Appendix B);

(3) The HOPE III Homeownership of Single Family Homes (HOPE III)

program (see 24 CFR part 572);

(4) The Low-Income Housing Preservation (prepayment avoidance

incentives) program, when administered by a State agency (see 24 CFR

248.177);

(5) The Supportive Housing for the Elderly (Section 202) program

(see 24 CFR part 889);

(6) The Supportive Housing for Persons with Disabilities program

(see 24 CFR part 890);

(7) The Supportive Housing program (see 24 CFR part 583);

(8) The Single Room Occupancy Housing (SRO) program (see 24 CFR

part 882, subpart H);

(9) The Shelter Plus Care program (see 24 CFR part 582);

(10) The Community Development Block Grant program--Small Cities

(see 24 CFR part 570, subpart E);

(11) HOME program reallocations;

(12) Revitalization of Severely Distressed Public Housing (section

24 of the United States Housing Act of 1937, (42 U.S.C. 1437 et seq.));

(13) Hope for Youth: Youthbuild (see 24 CFR part 585);

(14) The John Heinz Neighborhood Development program (see 24 CFR

part 594);

(15) The Lead-Based Paint Hazard Reduction program (see 24 CFR part

35);

(16) Grants for Regulatory Barrier Removal Strategies and

Implementation (section 1204, Housing and Community Development Act of

1992 (42 U.S.C. 12705c)); and

(17) Competitive grants under the Housing Opportunities for Persons

With AIDS (HOPWA) program (see 24 CFR part 574).

(c) Other programs do not require consistency with an approved

consolidated plan. However, HUD funding allocations for the Section 8

Certificate and Voucher Programs are to be made in a way that enables

participating jurisdictions to carry out their consolidated plans.

Sec. 91.5 Definitions.

Certification. A written assertion, based on supporting evidence,

that must be kept available for inspection by HUD, by the Inspector

General of HUD, and by the public. The assertion shall be deemed to be

accurate unless HUD determines otherwise, after inspecting the evidence

and providing due notice and opportunity for comment.

Consolidated plan (or ``the plan''). The document that is submitted

to HUD that serves as the planning document (comprehensive housing

affordability strategy and community development plan) of the

jurisdiction and an application for funding under any of the Community

Planning and Development formula grant programs (CDBG, ESG, HOME, or

HOPWA), which is prepared in accordance with the process prescribed in

this part.

Consortium. An organization of geographically contiguous units of

general local government that are acting as a single unit of general

local government for purposes of the HOME program (see 24 CFR part 92).

Cost burden. The extent to which gross housing costs, including

utility costs, exceed 30 percent of gross income, based on data

available from the U.S. Census Bureau.

Elderly person. A person who is at least 62 years of age.

Emergency shelter. Any facility with overnight sleeping

accommodations, the primary purpose of which is to provide temporary

shelter for the homeless in general or for specific populations of the

homeless.

Extremely low-income family. Family whose income is between 0 and

30 percent of the median income for the area, as determined by HUD with

adjustments for smaller and larger families, except that HUD may

establish income ceilings higher or lower than 30 percent of the median

for the area on the basis of HUD's findings that such variations are

necessary because of prevailing levels of construction costs or fair

market rents, or unusually high or low family incomes.

Homeless family with children. A family composed of the following

types of homeless persons: at least one parent or guardian and one

child under the age of 18; a pregnant woman; or a person in the process

of securing legal custody of a person under the age of 18.

Homeless person. A youth (17 years or younger) not accompanied by

an adult (18 years or older) or an adult without children, who is

homeless (not imprisoned or otherwise detained pursuant to an Act of

Congress or a State law), including the following:

(1) An individual who lacks a fixed, regular, and adequate

nighttime residence; and

(2) An individual who has a primary nighttime residence that is:

(i) A supervised publicly or privately operated shelter designed to

provide temporary living accommodations (including welfare hotels,

congregate shelters, and transitional housing for the mentally ill);

(ii) An institution that provides a temporary residence for

individuals intended to be institutionalized; or

(iii) A public or private place not designed for, or ordinarily

used as, a regular sleeping accommodation for human beings.

Homeless subpopulations. Include but are not limited to the

following categories of homeless persons: severely mentally ill only,

alcohol/drug addicted only, severely mentally ill and alcohol/drug

addicted, fleeing domestic violence, youth, and persons with HIV/AIDS.

HUD. The United States Department of Housing and Urban Development.

Jurisdiction. A State or unit of general local government.

Large family. Family of five or more persons.

Lead-based paint hazards. Any condition that causes exposure to

lead from lead-contaminated dust, lead-contaminated soil, lead-

contaminated paint that is deteriorated or present in accessible

surfaces, friction surfaces, or impact surfaces that would result in

adverse human health effects as established by the appropriate Federal

agency.

Low-income families. Low-income families whose incomes do not

exceed 50 percent of the median family income for the area, as

determined by HUD with adjustments for smaller and larger families,

except that HUD may establish income ceilings higher or lower than 50

percent of the median for the area on the basis of HUD's findings that

such variations are necessary because of prevailing levels of

construction costs or fair market rents, or unusually high or low

family incomes.

Middle-income family. Family whose income is between 80 percent and

95 [[Page 1898]] percent of the median income for the area, as

determined by HUD, with adjustments for smaller and larger families,

except that HUD may establish income ceilings higher or lower than 95

percent of the median for the area on the basis of HUD's findings that

such variations are necessary because of prevailing levels of

construction costs or fair market rents, or unusually high or low

family incomes. (This corresponds to the term ``moderate income

family'' under the CHAS statute, 42 U.S.C. 12705.)

Moderate-income family. Family whose income does not exceed 80

percent of the median income for the area, as determined by HUD with

adjustments for smaller and larger families, except that HUD may

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

for the area on the basis of HUD's findings that such variations are

necessary because of prevailing levels of construction costs or fair

market rents, or unusually high or low family incomes.

Overcrowding. A housing unit containing more than one person per

room.

Person with a disability. A person who is determined to:

(1) Have a physical, mental or emotional impairment that:

(i) Is expected to be of long-continued and indefinite duration;

(ii) Substantially impedes his or her ability to live

independently; and

(iii) Is of such a nature that the ability could be improved by

more suitable housing conditions; or

(2) Have a developmental disability, as defined in section 102(7)

of the Developmental Disabilities Assistance and Bill of Rights Act (42

U.S.C. 6001-6007); or

(3) be the surviving member or members of any family that had been

living in an assisted unit with the deceased member of the family who

had a disability at the time of his or her death.

Poverty level family. Family with an income below the poverty line,

as defined by the Office of Management and Budget and revised annually.

Severe cost burden. The extent to which gross housing costs,

including utility costs, exceed 50 percent of gross income, based on

data available from the U.S. Census Bureau.

State. Any State of the United States and the Commonwealth of

Puerto Rico.

Transitional housing. A project that is designed to provide housing

and appropriate supportive services to homeless persons to facilitate

movement to independent living within 24 months, or a longer period

approved by HUD. For purposes of the HOME program, there is no HUD-

approved time period for moving to independent living.

Unit of general local government. A city, town, township, county,

parish, village, or other general purpose political subdivision of a

State; an urban county; and a consortium of such political subdivisions

recognized by HUD in accordance with the HOME program (24 CFR part 92)

or the CDBG program (24 CFR part 570).

Urban county. See definition in 24 CFR 570.3.

Sec. 91.10 Consolidated program year.

(a) Each of the following programs shall be administered by a

jurisdiction on a single consolidated program year, established by the

jurisdiction: CDBG, ESG, HOME, and HOPWA. Except as provided in

paragraph (b) of this section, the program year shall run for a twelve

month period and begin on the first calendar day of a month.

(b) Once a program year is established, the jurisdiction may either

shorten or lengthen its program year to change the beginning date of

the following program year, provided that it notifies HUD in writing at

least two months before the date the program year would have ended if

it had not been lengthened or at least two months before the end of a

proposed shortened program year.

(c) See subpart E of this part for requirements concerning program

year for units of general local government that are part of a

consortium.

Sec. 91.15 Submission date.

(a) General. (1) In order to facilitate continuity in its program

and to provide accountability to citizens, each jurisdiction should

submit its consolidated plan to HUD at least 45 days before the start

of its program year. (But see Sec. 92.52(b) of this subtitle with

respect to newly eligible jurisdictions under the HOME program.) With

the exception of the August 16 date noted in paragraph (a)(2) of this

section, HUD may grant a jurisdiction an extension of the submission

deadline for good cause.

(2) In no event will HUD accept a submission earlier than November

15 or later than August 16 of the Federal fiscal year for which the

grant funds are appropriated. (Failure to submit the plan by August 16

will automatically result in a loss of the CDBG funds to which the

jurisdiction would otherwise be entitled.)

(3) A jurisdiction may have a program year that coincides with the

Federal fiscal year (e.g., October 1, 1995 through September 30, 1996

for Federal fiscal year 1996 funds. However, the consolidated plan may

not be submitted earlier than November 15 of the Federal fiscal year

and HUD has the period specified in Sec. 91.500 to review the

consolidated plan.

(4) See Sec. 91.20 for HUD field office authorization to grant

exceptions to these provisions.

(b) Frequency of submission. (1) The action plan and the

certifications must be submitted on an annual basis.

(2) The complete submission must be submitted less frequently, in

accordance with a period to be specified by the jurisdiction; however,

in no event shall the complete submission be submitted less frequently

that every five years.

Sec. 91.20 Exceptions.

The HUD field office may grant a jurisdiction an exception from

submitting all or part of the consolidated plan in FY 1995, from the

submission deadline, or from a requirement in the implementation

guidelines for good cause, as determined by the field office, and

reported in writing to HUD Headquarters--to the extent the requirement

is not required by statute or regulation.

Subpart B--Citizen Participation and Consultation

Sec. 91.100 Consultation; local governments.

(a) General. (1) When preparing the consolidated plan, the

jurisdiction shall consult with other public and private agencies that

provide assisted housing, health services, and social services

(including those focusing on services to children, elderly persons,

persons with disabilities, persons with HIV/AIDS and their families,

homeless persons) during preparation of the consolidated plan.

(2) When preparing the portion of its consolidated plan concerning

lead-based paint hazards, the jurisdiction shall consult with State or

local health and child welfare agencies and examine existing data

related to lead-based paint hazards and poisonings, including health

department data on the addresses of housing units in which children

have been identified as lead poisoned.

(3) When preparing the description of priority nonhousing community

development needs, a unit of general local government must notify

adjacent units of general local government, to the extent practicable.

The nonhousing community development plan must be submitted to the

state, and, if the jurisdiction is a CDBG entitlement grantee other

than an urban county, to the county.

(4) The jurisdiction also should consult with adjacent units of

general [[Page 1899]] local government, including local government

agencies with metropolitan-wide planning responsibilities where they

exist, particularly for problems and solutions that go beyond a single

jurisdiction.

(b) HOPWA. The largest city in each eligible metropolitan

statistical area (EMSA) that is eligible to receive a HOPWA formula

allocation must consult broadly to develop a metropolitan-wide strategy

for addressing the needs of persons with HIV/AIDS and their families

living throughout the EMSA. All jurisdictions within the EMSA must

assist the jurisdiction that is applying for a HOPWA allocation in the

preparation of the HOPWA submission.

(c) Public housing. The jurisdiction shall consult with the local

public housing agency participating in an approved Comprehensive Grant

program concerning consideration of public housing needs and planned

Comprehensive Grant program activities. This consultation will help

provide a better basis for the certification by the local Chief

Executive Officer that the Comprehensive Grant Plan/annual statement is

consistent with the local government's assessment of low-income housing

needs (as evidenced in the consolidated plan) and that the local

government will cooperate in providing resident programs and services

(as required by Sec. 968.320(d) of this title for the Comprehensive

Grant program). It will also help ensure that activities with regard to

local drug elimination, neighborhood improvement programs, and resident

programs and services, funded under the public housing program and

those funded under a program covered by the consolidated plan are fully

coordinated to achieve comprehensive community development goals.

Sec. 91.105 Citizen participation plan; local governments.

(a) Applicability and adoption of the citizen participation plan.

(1) The jurisdiction is required to adopt a citizen participation plan

that sets forth the jurisdiction's policies and procedures for citizen

participation. (Where a jurisdiction, before March 6, 1995, adopted a

citizen participation plan that complies with section 104(a)(3) of the

Housing and Community Development Act of 1974 (42 U.S.C. 5304(A)(3))

but will need to amend the citizen participation plan to comply with

provisions of this section, the citizen participation plan shall be

amended by the first day of the jurisdiction's program year that begins

on or after 180 days following March 6, 1995.)

(2) Encouragement of citizen participation. (i) The citizen

participation plan must provide for and encourage citizens to

participate in the development of the consolidated plan, any

substantial amendments to the consolidated plan, and the performance

report.

(ii) These requirements are designed especially to encourage

participation by low- and moderate-income persons, particularly those

living in slum and blighted areas and in areas where CDBG funds are

proposed to be used, and by residents of predominantly low- and

moderate-income neighborhoods, as defined by the jurisdiction. A

jurisdiction also is expected to take whatever actions are appropriate

to encourage the participation of all its citizens, including

minorities and non-English speaking persons, as well as persons with

disabilities.

(iii) The jurisdiction shall encourage, in conjunction with

consultation with public housing authorities, the participation of

residents of public and assisted housing developments, in the process

of developing and implementing the consolidated plan, along with other

low-income residents of targeted revitalization areas in which the

developments are located. The jurisdiction shall make an effort to

provide information to the housing agency about consolidated plan

activities related to its developments and surrounding communities so

that the housing agency can make this information available at the

annual public hearing required under the Comprehensive Grant program.

(3) Citizen comment on the citizen participation plan and

amendments. The jurisdiction must provide citizens with a reasonable

opportunity to comment on the original citizen participation plan and

on substantial amendments to the citizen participation plan, and must

make the citizen participation plan public. The citizen participation

plan must be in a format accessible to persons with disabilities, upon

request.

(b) Development of the consolidated plan. The citizen participation

plan must include the following minimum requirements for the

development of the consolidated plan.

(1) The citizen participation plan must require that, before the

jurisdiction adopts a consolidated plan, the jurisdiction will make

available to citizens, public agencies, and other interested parties

information that includes the amount of assistance the jurisdiction

expects to receive (including grant funds and program income) and the

range of activities that may be undertaken, including the estimated

amount that will benefit persons of low- and moderate-income. The

citizen participation plan also must set forth the jurisdiction's plans

to minimize displacement of persons and to assist any persons

displaced, specifying the types and levels of assistance the

jurisdiction will make available (or require others to make available)

to persons displaced, even if the jurisdiction expects no displacement

to occur. The citizen participation plan must state when and how the

jurisdiction will make this information available.

(2) The citizen participation plan must require the jurisdiction to

publish the proposed consolidated plan in a manner that affords

citizens, public agencies, and other interested parties a reasonable

opportunity to examine its contents and to submit comments. The citizen

participation plan must set forth how the jurisdiction will publish the

proposed consolidated plan and give reasonable opportunity to examine

the contents of the proposed consolidated plan. The requirement for

publishing may be met by publishing a summary of the proposed

consolidated plan in one or more newspapers of general circulation, and

by making copies of the proposed consolidated plan available at

libraries, government offices, and public places. The summary must

describe the contents and purpose of the consolidated plan, and must

include a list of the locations where copies of the entire proposed

consolidated plan may be examined. In addition, the jurisdiction must

provide a reasonable number of free copies of the plan to citizens and

groups that request it.

(3) The citizen participation plan must provide for at least one

public hearing during the development of the consolidated plan. See

paragraph (e) of this section for public hearing requirements,

generally.

(4) The citizen participation plan must provide a period, not less

than 30 days, to receive comments from citizens on the consolidated

plan.

(5) The citizen participation plan shall require the jurisdiction

to consider any comments or views of citizens received in writing, or

orally at the public hearings, in preparing the final consolidated

plan. A summary of these comments or views, and a summary of any

comments or views not accepted and the reasons therefor, shall be

attached to the final consolidated plan.

(c) Amendments. (1) Criteria for amendment to consolidated plan.

The citizen participation plan must specify [[Page 1900]] the criteria

the jurisdiction will use for determining what changes in the

jurisdiction's planned or actual activities constitute a substantial

amendment to the consolidated plan. (See Sec. 91.505.) It must include

among the criteria for a substantial amendment changes in the use of

CDBG funds from one eligible activity to another.

(2) The citizen participation plan must provide citizens with

reasonable notice and an opportunity to comment on substantial

amendments. The citizen participation plan must state how reasonable

notice and an opportunity to comment will be given. The citizen

participation plan must provide a period, not less than 30 days, to

receive comments on the substantial amendment before the amendment is

implemented.

(3) The citizen participation plan shall require the jurisdiction

to consider any comments or views of citizens received in writing, or

orally at public hearings, if any, in preparing the substantial

amendment of the consolidated plan. A summary of these comments or

views, and a summary of any comments or views not accepted and the

reasons therefor, shall be attached to the substantial amendment of the

consolidated plan.

(d) Performance reports. (1) The citizen participation plan must

provide citizens with reasonable notice and an opportunity to comment

on performance reports. The citizen participation plan must state how

reason

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