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

SUMMARY: This final rule establishes the requirements and procedures

for awarding and administering special purpose grants under Title I of

the Housing and Community Development Act of 1974, as amended by the

Housing and Community Development Act of 1992, to institutions of

higher education or to States and units of general local government and

institutions of higher education jointly submitting applications to

HUD. Institutions of higher education must demonstrate that they have

the capacity to carry out eligible activities.

EFFECTIVE DATE: April 26, 1995.

FOR FURTHER INFORMATION CONTACT: Jane Karadbil, Office of University

Partnerships, Department of Housing and Urban Development, 451 Seventh

Street SW., Washington, DC 20410, (202) 708-1537. The

Telecommunications Device for the Deaf (TDD) number is (202) 708-1455.

(These are not toll free numbers.)

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

The information collection requirements contained in this final

rule have been submitted to the Office of Management and Budget for

review under the provisions of the Paperwork Reduction Act of 1980 (44

U.S.C. 3501-3520) and have been assigned OMB approval number 2535-0084.

II. Background

Section 801(c)(2) of the Housing and Community Development Act of

1992 (Pub. L. 102-550, approved October 28, 1992) amended Section 107

of Title I of the Housing and Community Development Act of 1974 (42

U.S.C. 5301 et seq.) to add a new category of special purpose grants.

This new program authorizes grants to institutions of higher education

or to States and units of general local government and institutions of

higher education that jointly submit applications to HUD. Institutions

of higher education must demonstrate capacity to carry out eligible

activities under Title I. This rule implements this new grant

authority. For ease of reference, this new program may be called the

Joint Community Development (CD) Program.

III. Summary of Final Rule

Following are the highlights of the rule that will govern the

grants under the Joint CD Program:

1. A new section 570.411 is being added to Subpart E, Special

Purpose Grants, of the Community Development Block Grant (CDBG)

regulations to govern grants under this program. It should be noted

that section 570.400, which contains general requirements for all

special purpose grant programs, applies to this new program as well.

Additionally, grantees must comply with the Americans with Disabilities

Act of 1990.

2. Section 570.411(b) provides definitions for ``demonstrated

capacity'' and ``institutions of higher education.''

3. Section 570.411(c) defines eligible applicants. It indicates

that an application must be filed either by an institution of higher

education or jointly by an institution of higher education and a State

or unit of general local government. This subsection also states that

HUD will not fund an applicant twice for the same kinds of activities.

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

the joint applications.

5. Section 570.411(e) defines the eligible activities as those

eligible under the basic CDBG regulations found in subpart C of part

570. It also makes clear that these activities may be designed to

assist residents of colonias to improve living conditions and standards

within colonias.

6. Section 570.411(f) indicates that the program will be run

competitively through publication of a Notice of Funding Availability

(NOFA).

7. Section 570.411(g) provides that when an institution of higher

education or a State which is a joint applicant proposes to carry out

an activity within the entitlement jurisdiction of one or more units of

general local government, then such governments must approve the

activity and certify that it is consistent with their consolidated plan

(see 24 CFR part 91).

8. Section 570.411(h) provides a general description of what will

be contained in each NOFA.

9. Sections 570.411 (i) and (j) detail the selection criteria that

HUD will use to evaluate applications under each NOFA competition.

10. Section 570.411(l) spells out that an applicant proposing

housing activities will have to submit a certification that the

activities are consistent with the Consolidated Plan of the

jurisdiction to be served.

11. Section 570.411(m) deals with the citizen participation

requirement under the Joint CD Program. It is a modified version of the

basic CDBG requirement and is similar to that used in other special

purpose grant programs.

12. Section 570.411(n) provides details on environmental review

responsibilities for this program.

IV. Discussion of Public Comments

A proposed rule was published in the Federal Register on December

29, 1993, at 58 FR 68795, and the public was given 60 days in which to

submit comments. Three comments were received on the proposed rule: one

from a university, one from a city and one from an association of

institutions of higher education. Following are the comments made and

HUD's response to each comment.

Comment. The definition of eligible institution of higher education

should be broadened to include community colleges.

Response. Community colleges generally do not have the capacity to

undertake the kinds of activities that will be eligible under this

program. With a limited amount of funds and a very large number of

qualified four-year institutions applying for these funds, it would be

unfair to community colleges to have them expend time and costs to

prepare applications when their chances of being successful are very

limited. Therefore, the proposed definition was not changed.

Comment. The rule should spell out in greater detail the program

objectives and not leave this for the Notice of Funding Availability

(NOFA).

Response. The precise program objectives may change from time-to-

time. Each NOFA will spell out the precise objective for that

competition. Therefore, the objectives will not be included in the rule

but in the NOFA.

Comment. Grants should be limited to those institutions that meet

the Federal definition of ``urban'' universities.

Response. There is no Federal government-wide definition of urban

universities. The definition cited by the commenter is not a Federal

definition but restricted to a specific program in the U.S. Department

of Education. The Joint CD program has no statutory provision limiting

grants to urban universities, nor does HUD feel that

[[Page 15837]] such a restriction is appropriate, given the interest of

many different kinds of institutions of higher education in addressing

CDBG needs. Therefore, the comment was not accepted.

Comment. All applications from States or units of local governments

must demonstrate support from an institution of higher education.

Response. Such a demonstration of support is inherent in the

requirement that applications from governments must be filed jointly

with an institution of higher education. HUD does not believe that any

further demonstration of support is needed or desirable.

Comment. Two commenters indicated that the provision in section

570.411(c) that eligible applicants will be funded only every other

funding cycle is not clear. They questioned whether grants would be for

one year or two year periods.

Response. A funding cycle is determined each time HUD issues a

NOFA. A decision regarding the length of the grant will be made at the

time each NOFA is issued and delineated in the NOFA. Since HUD expects

that each NOFA may deal with different priorities and eligible

activities, it is not prudent to identify the project period in the

regulations. In addition, HUD has revised the requirement that eligible

applicants be funded only every other funding cycle to prohibit

grantees that are institutions of higher education from receiving any

subsequent grants from NOFAs with the same program objectives as those

for which they received funding. State or local governments may apply

in subsequent cycles in which the NOFA contains the same program

objectives as long as they apply with a different institution of higher

education. The need for these funds is great, as is the number of

institutions and governments interested in applying. HUD believes that

it would be unwise to concentrate the funds among a few institutions.

V. Other Matters

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

in this rule do not have Federalism implications and, thus, are not

subject to review under the Order. Nothing in the rule implies any

preemption of State or local law, nor does any provision of the rule

disturb the existing relationship between the Federal Government and

State and local governments.

Executive Order 12606, the Family

The General Counsel, as the designated Official under Executive

Order 12606, has determined that this rule does not have potential

significant impact on family formation, maintenance, and general well-

being, and, thus, is not subject to review under the Order.

Environmental Finding

A Finding of No Significant Impact with regard to the environment

has been made in accordance with HUD regulations in 24 CFR part 50,

which implement section 102(2)(C) of the National Environmental Policy

Act of 1969, 42 U.S.C. 4321. The Finding of No Significant Impact is

available for public inspection between 7:30 a.m. and 5:30 p.m.

weekdays in the Office of the Rules Docket Clerk, Room 10276, 451

Seventh Street, SW., Washington, DC 20410.

Regulatory Flexibility

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this rule before publication and by

approving it certifies that this rule does not have a significant

economic impact on a substantial number of small entities inasmuch as

the entities funded under this program will be relatively few in

number. Consequently, HUD does not believe that a significant number of

small entities will be affected by this program. The application

requirements associated with funding under the program have been kept

to the minimum necessary for administration of grant funds, and the

Department does not believe it is necessary or appropriate to alter

these requirements as they apply to small entities who may be

prospective grantees.

Semiannual Agenda

This final rule was listed as item 1849 in the Department's

Semiannual Agenda of Regulations published on November 14, 1994 (59 FR

57632, 57665) under Executive Order 12866 and the Regulatory

Flexibility Act.

Catalog of Federal Domestic Assistance

The Joint Community Development Program is listed in the Catalog of

Federal Domestic Assistance under number 14.242.

List of Subjects in 24 CFR Part 570

Administrative practice and procedure, American Samoa, Community

development block grants, Grant programs--education, Grant programs--

housing and community development, Guam, Indians, Lead poisoning, Loan

programs--housing and community development, Low and moderate income

housing, New communities, Northern Mariana Islands, Pacific Islands

Trust Territory, Pockets of poverty, Puerto Rico, Reporting and

recordkeeping requirements, Small cities, Student aid, Virgin Islands.

Accordingly, 24 CFR part 570 is amended as follows:

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

1. The authority citation for 24 CFR part 570 continues to read as

follows:

Authority: 42 U.S.C. 3535(d) and 5300-5320.

2. Section 570.411 is added to subpart E, to read as follows:

Sec. 570.411 Joint Community Development Program.

(a) General. Grants under this section will be awarded to

institutions of higher education or to States and local governments

applying jointly with institutions of higher education. Institutions of

higher education must demonstrate the capacity to carry out activities

under Title I of the Housing and Community Development Act of 1974. For

ease of reference, this program may be called the Joint CD Program.

(b) Definitions.

Demonstrated capacity to carry out eligible activities under Title

I means recent satisfactory activity by the institution of higher

education's staff designated to work on the program, including

subcontractors and consultants firmly committed to work on the proposed

activities, in Title I programs or similar programs without the need

for oversight by a State or unit of general local government.

Institution of higher education means a college or university

granting 4-year degrees and accredited by a national or regional

accrediting agency recognized by the U.S. Department of Education.

(c) Eligible applicants. Institutions of higher education or States

and units of general local government jointly with institutions of

higher education may apply. Institutions of higher education with

demonstrated capacity to carry out eligible activities under Title I

may apply on their own, without the joint participation of a State or

unit of general local government. States or unit of general local

governments must file jointly with an institution of higher education.

For these approved joint applications, the grant will be made to the

State or unit of general local government and the institution of higher

education jointly. If an eligible applicant is an institution of higher

education, it will not be funded more [[Page 15838]] than once for the

same kinds of activities. These grantees may not receive funding under

a subsequent NOFA if it has the same program objectives as the one

under which the grantee previously received funding. However, a State

or unit of general local government is eligible to apply if it files

jointly with a different institution of higher education in each NOFA

cycle. HUD may further limit the type of eligible applicant to be

funded. Any such limitations will be contained in the Notice of Funding

Availability described below in paragraph (h) of this section.

(d) Role of participants in joint applications. An institution of

higher education and a State or unit of general local government may

carry out eligible activities approved in joint applications. Where

there are joint applicants, the grant will be made to both and both

will be responsible for oversight, compliance, and performance. The

application will have to clearly delineate the role of each applicant

in the joint application. Any funding sanctions or other remedial

actions by HUD for noncompliance or nonperformance, whether by the

State or unit of general local government or by the institution of

higher education, shall be taken against both grantees.

(e) Eligible activities. Activities that may be funded under this

section are those eligible under 24 CFR Part 570--Community Development

Block Grants, Subpart C--Eligible Activities. These activities may be

designed to assist residents of colonias, as defined in Section 916(d)

of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.

5306 note), to improve living conditions and standards within colonias.

HUD may limit the activities to be funded. Any such limitations will be

contained in the Notice of Funding Availability described in paragraph

(h) of this section.

(f) Applications. Applications will only be accepted from eligible

applicants in response to a publication of a Notice of Funding

Availability (NOFA) published by HUD in the Federal Register.

(g) Local approval. (1) Where an institution of higher education is

the applicant, each unit of general local government that is an

entitlement jurisdiction where an activity is to take place must

approve the activity and certify that the activity is consistent with

its Consolidated Plan.

(2) Where a State is the joint applicant and it proposes to carry

out an activity within the jurisdiction of one or more units of general

local government, then each such unit must approve the activity and

state that the activity is consistent with its Consolidated Plan.

(3) These approvals and findings must accompany each application

and may take the form of a letter by the chief executive officer of

each unit of general local government affected or a resolution of the

legislative body of each such unit of general local government.

(h) NOFA contents. The NOFA will describe any special objectives

sought to be achieved by the funding to be provided, including any

limitations on the type of activities to be funded to achieve the

objectives, any limitations on the type of eligible applicants, and

points to be awarded to each of the selection criteria and any special

factors to be evaluated in assigning points under the selection

criteria to achieve the stated objectives. The NOFA will also state the

deadline for the submission of applications, the total funding

available for the competition, the period of performance and the

maximum and minimum amount of individual grants. The NOFA will also

state which of the various possible levels of competition HUD will use:

national and/or regional or entitlement areas vs. non-entitlement

areas; and States or units of general local government vs. institutions

of higher education vs. institutions of higher education with a

demonstrated capacity. The NOFA will include further information and

instructions for the submission of acceptable applications to HUD.

(i) Selection criteria. Each application submitted under this

section will be evaluated by HUD using the following criteria:

(1) The extent to which the applicant addresses the objectives

published in the NOFA and demonstrates how the proposed activities will

have a substantial impact in achieving the objectives.

(2) The extent of the needs to be addressed by the proposed

activities, particularly with respect to benefiting low- and moderate-

income persons and residents of colonias, where applicable.

(3) The feasibility of the proposed activities, i.e., their

technical and financial feasibility, for achieving the stated

objectives.

(4) The capability of the applicant to carry out satisfactorily the

proposed activities in a timely fashion, including satisfactory

performance in carrying out any previous HUD-assisted projects or

activities.

(5) The extent of commitment to fair housing and equal opportunity,

as indicated by such factors as previous HUD monitoring/compliance

activity, actions to promote minority- and women-owned business

enterprise, affirmatively furthering fair housing issues, and

nondiscriminatory delivery of services.

(j) Selection discretion. HUD retains the right to exercise

discretion in selecting projects in a manner that would best serve the

program objectives, with consideration given to the needs of States and

units of general local government and institutions of higher education,

types of activities proposed, an equitable geographical distribution,

and program balance. The NOFA will state whether HUD will use this

discretion in any specific competition.

(k) Certifications. (1) Certifications, including those indicating

that applicants have adhered to all civil rights requirements under

subpart K of this part and the Americans with Disabilities Act of 1990,

required to be submitted by applicants shall be as prescribed in the

NOFA.

(2) In the absence of independent evidence which tends to challenge

in a substantial manner the certifications made by the applicant, the

required certifications will be accepted by HUD. However, if

independent evidence is available, HUD may require further information

or assurances to be submitted in order to determine whether the

applicant's certifications are satisfactory.

(l) Consolidated plan. An applicant that proposes any housing

activities as part of its application will be required to submit a

certification that these activities are consistent with the

Consolidated Plan of the jurisdiction to be served.

[[Page 15839]] (m) Citizen participation. The citizen participation

requirements of Secs. 570.301, 570.431, 570.485(c) and 570.486(a) are

modified to require the following: The applicant must certify that

citizens likely to be affected by the project regardless of race,

color, creed, sex, national origin, familial status, or handicap,

particularly low- and moderate-income persons, have been provided an

opportunity to comment on the proposal or application.

(n) Environmental and Intergovernmental Review. The requirements

for Intergovernmental Reviews do not apply to these awards. When

required, an environmental review in accordance with 24 CFR part 58

must be carried out by the State or unit of general local government

when it is the applicant. HUD will conduct any required environmental

review when an institution of higher education is the applicant.

(Approved by the Office of Management and Budget under control

number 2535-0084)

Dated: March 17, 1995.

Henry G. Cisneros,

Secretary.

[FR Doc. 95-7401 Filed 3-24-95; 8:45 am]

BILLING CODE 4210-62-P