Notice of Funding Availability (NOFA) for Comprehensive Improvement Assistance Program (CIAP)

SUMMARY: This Notice informs Public Housing Agencies and Indian Housing

Authorities (herein referred to as HAs) that own or operate fewer than

250 public housing units and, therefore, are eligible to apply and

compete for CIAP funds, of the requirements and application deadline

date for FY 1996 CIAP funding and the expected availability of up to

$257 million of CIAP funds. HAs with 250 or more public housing units

are entitled to receive a formula grant under the Comprehensive Grant

Program (CGP) and are not eligible to apply for CIAP funds.

DATES: The CIAP Application is due on or before 3:00 p.m. local time on

June 17, 1996 at the HUD Field Office with jurisdiction over the HA,

Attention: Director, Office of Public Housing (OPH), or Administrator,

Office of Native American Programs (ONAP).

FOR FURTHER INFORMATION CONTACT: William J. Flood, Director, Office of

Capital Improvements, Department of Housing and Urban Development, 451

Seventh Street, SW., Room 4134, Washington, DC 20410. Telephone (202)

708-1640. (This is not a toll free number.)

IHAs may contact Deborah M. LaLancette, Director, Housing

Management Division, Office of Native American Programs (ONAP),

Department of Housing and Urban Development, 451 Seventh Street, SW.,

B-133, Washington, DC 20410. Telephone (202) 755-0088. (This is not a

toll free number.)

Hearing or speech impaired individuals may call HUD's TTY number

(202) 708-4595. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION:

I. Allocation Amounts

(a) The Congress has not yet enacted the FY 1996 appropriations for

HUD. However, HUD is publishing this notice in order to give potential

applicants adequate time to prepare applications. The amount of funds

announced in this NOFA is an estimate of the amount that may be enacted

in 1996. HUD is not bound by the estimate set forth in this notice. The

estimated amount may be adjusted downward based on the enacted 1996

appropriation.

(1) Modernization funds are allocated between CIAP and CGP agencies

based on the relative shares of backlog needs (weighted at 50%) and

accrual needs (weighted at 50%), as determined by the field inspections

conducted for the HUD-funded ABT study of modernization needs. This

allocation results in CIAP agencies receiving approximately 10.49% and

CGP agencies receiving approximately 89.51% of the total funds

available.

(i) Backlog needs are needed repairs and replacements of existing

physical systems, items that must be added to meet the HUD

modernization and energy conservation standards and State or local/

tribal codes, and items that are necessary for the long-term viability

of a specific housing development.

(ii) Accrual needs are needs that arise over time and include

needed repairs and replacements of existing physical systems and items

that must be added to meet the HUD modernization and energy

conservation standards and State or local/tribal codes.

(2) The modernization funds available to CIAP agencies are

allocated between Public Housing at approximately 91.8505% and Indian

Housing at approximately 8.1495%. This allocation also is based on the

relative shares of backlog needs (weighted at 50%) and accrual needs

(weighted at 50%).

(b) Sub-assignment of Funds to Field Offices of Public Housing

(OPH). Headquarters has determined the distribution of Public Housing

CIAP funds for each Field OPH, based on the relative shares of backlog

and accrual needs for CIAP PHAs, adjusted as necessary.

(1) The Field OPH Director shall have authority to make Joint

Review selections and CIAP funding decisions.

(2) If additional funds for Public Housing CIAP become available,

Headquarters will allocate the funds to one or more Field OPHs based on

their relative shares of modernization need, approvable applications,

and PHA capability to carry out the modernization.

(3) If a Field OPH does not receive sufficient fundable

applications to use its allocation, Headquarters will reallocate the

remaining funds to one or more Field OPHs based on approvable

applications and PHA capability to carry out the modernization.

Of the amount available for Public Housing, 1% will be set aside to

carry out goals related to pending civil rights litigation (e.g., Young

v. Cisneros), which is subject to judicial oversight. The following

table shows the percentage distribution of CIAP funds for PHAs,

excluding IHAs, assigned by Headquarters to each Field OPH:

------------------------------------------------------------------------

Percent

of public

Office of Public Housing (OPH) housing

funds

------------------------------------------------------------------------

New England:

Massachusetts State Office................................. 2.6187

Connecticut State Office................................... .9266

New Hampshire State Office................................. 1.5066

Rhode Island State Office.................................. .7365

New York/New Jersey:

Buffalo Area Office........................................ 2.1551

New Jersey State Office.................................... 2.7271

New York State Office...................................... 1.1576

Mid-Atlantic:

Maryland State Office...................................... .4142

West Virginia State Office................................. 1.4359

Pennsylvania State Office.................................. 1.1444

Pittsburgh Area Office..................................... 1.2048

Virginia State Office...................................... .5756

District of Columbia Office................................ .1686

Southeast:

Georgia State Office....................................... 5.3561

Alabama State Office....................................... 4.7698

South Carolina State Office................................ .9216

North Carolina State Office................................ 3.0244

Mississippi State Office................................... 1.7112

Jacksonville Area Office................................... 2.9639

Knoxville Area Office...................................... .9171

Kentucky State Office...................................... 4.7691

Tennessee State Office..................................... 1.8640

Midwest:

Illinois State Office...................................... 3.5943

Cincinnati Area Office..................................... .4374

Cleveland Area Office...................................... .5098

Ohio State Office.......................................... 1.1247

Michigan State Office...................................... 2.0393

Grand Rapids Area Office................................... 3.0354

Indiana State Office....................................... 1.2262

Wisconsin State Office..................................... 2.8249

Minnesota State Office..................................... 2.9713

Southwest:

New Mexico State Office.................................... 1.3454

Texas State Office......................................... 5.4523

Houston Area Office........................................ 1.1773

Arkansas State Office...................................... 3.0053

Louisiana State Office..................................... 3.9795

Oklahoma State Office...................................... 1.9327

San Antonio Area Office.................................... 2.6835

Great Plains:

Iowa State Office.......................................... 1.4211

Kansas/Missouri State Office............................... 3.8535

Nebraska State Office...................................... 1.2155

St. Louis Area Office...................................... 2.2640

Rocky Mountain:

Colorado State Office...................................... 3.5448

Pacific/Hawaii:

Los Angeles Area Office.................................... 1.2057

Arizona State Office....................................... 1.2634

Sacramento Area Office..................................... .2747

California State Office.................................... 1.5927

Northwest/Alaska:

Oregon State Office........................................ 1.2688

Washington State Office.................................... 1.6876

----------

[[Page 17219]]

Total.................................................. 100.0000

------------------------------------------------------------------------

(c) Sub-assignment of Funds to Offices of Native American Programs

(ONAP). Headquarters has determined the distribution of Indian Housing

CIAP funds for each ONAP, based on the relative shares of backlog and

accrual needs for CIAP IHAs, adjusted as necessary. The fund assignment

will cover Indian Housing and any Public Housing owned and operated by

IHAs.

(1) The ONAP Administrator shall have authority to make Joint

Review selections and CIAP funding decisions.

(2) If additional funds for Indian Housing CIAP become available,

Headquarters will allocate the funds to one or more ONAPs based on

their relative shares of modernization need, approvable applications,

and IHA capability to carry out the modernization.

(3) If an ONAP does not receive sufficient fundable applications to

use its allocation, Headquarters will reallocate the remaining funds to

one or more ONAPs based on approvable applications and IHA capability

to carry out the modernization.

The following table shows the percentage distribution of CIAP funds

for IHAs, assigned by Headquarters to each ONAP:

------------------------------------------------------------------------

Percent

of Indian

Office of Native American Programs (ONAP) housing

funds

------------------------------------------------------------------------

Eastern/Woodlands............................................ 14.8444

Southern Plains.............................................. 12.3324

Northern Plains.............................................. 13.3174

Southwest.................................................... 29.9263

Northwest.................................................... 24.4868

Alaska....................................................... 5.0927

----------

Total.................................................. 100.0000

------------------------------------------------------------------------

II. Purpose and Substantive Description

(a) Authority. Sec. 14, United States Housing Act of 1937 (42

U.S.C. 14371); Sec. 7(d) Department of Housing and Urban Development

Act (42 U.S.C. 3535(d)). A final rule further streamlining the CIAP

regulation, 24 CFR Part 968, Subparts A and B, for PHAs and 24 CFR Part

950, Subpart I, for IHAs, was published on March 5, 1996.

(b) Program Highlights.

(1) Departmental Priority. Improving Public and Indian Housing is

one of the Department's major priorities. Accordingly, a review has

been made of the entire Public and Indian Housing Program.

Specifically, the Department is very concerned about several aspects of

the Modernization Program, as follows:

(i) Design. When identifying physical improvement needs to meet the

modernization standards, HAs are encouraged to consider design which

supports the integration of public housing into the broader community.

Although high priority needs, such as those related to health and

safety, vacant, substandard units, structural or system integrity, and

compliance with statutory, regulatory or court-ordered deadlines, will

receive funding priority, HAs should plan their modernization in a way

which promotes good design, but maintains the modest nature of public

housing. The HA should pay particular attention to design, which is

sensitive to traditional cultural values, and be receptive to creative,

but cost-effective approaches suggested by architects, residents, HA

staff, and other local entities. Such approaches may complement the

planning for basic rehabilitation needs. It should be noted that there

will be no increase in operating subsidy due to improved design

promoting the blend of public housing into the surrounding neighborhood

or to additional amenities improving the quality of life.

(ii) Expediting the Program. HAs are reminded that they are

expected to obligate all funds within two years and to expend all funds

within three years of program approval (Annual Contributions Contract

(ACC) Amendment execution) unless a longer implementation schedule

(Part III of the CIAP Budget) is approved by the Field Office due to

the size or complexity of the program. Failure to obligate funds in a

timely manner may result in the termination of the program and

recapture of the funds.

(iii) Resident Involvement and Economic Uplift. HAs are required to

explore and implement through all feasible means the involvement of

residents, including duly-elected resident councils, in every aspect of

the CIAP, from planning through implementation. HAs shall use Section 3

provisions to the maximum feasible extent. HAs are encouraged to seek

ways to employ Section 3 residents in all aspects of the CIAP's

operation and to develop means to promote contracting opportunities for

businesses in Section 3 areas. Refer to 24 CFR 85.36(e) regarding the

provision of such opportunities.

(iv) Elimination of Vacant Units. HAs are encouraged to apply for

CIAP funds to address vacant units where the work does not involve

routine maintenance, but will result in re-occupancy.

(2) Relationship to Technical Review Factors. The Departmental goal

of improving Public and Indian Housing is reflected in the technical

review factors, set forth in section IV(c)(5), on which the Field

Office scores each HA's CIAP Application. Based on the HA's total

score, the Field Office then ranks each HA to determine selection for

Joint Review. The technical review factors emphasize the following

Departmental initiatives to improve Public and Indian Housing:

(i) Restoration of vacant units to occupancy;

(ii) Resident capacity-building and resident involvement in HA

operations, including opportunities for resident management and

homeownership;

(iii) Job training and employment opportunities for residents and

contracting opportunities for Section 3 businesses;

(iv) Drug elimination initiatives;

(v) Partnership with local government; and

(vi) Provision of appropriate replacement housing, as described in

paragraph (c) below.

(c) Expansion of Eligible Activities.

(1) FY 1995 and Prior FY Modernization Funds. The FY 1995

Rescissions Act expanded the eligible activities that may be funded

with CIAP or CGP assistance provided from FY 1995 and prior FY funds.

These activities include: new construction or acquisition of additional

public housing units, including replacement units; modernization

activities related to the public housing portion of housing

developments held in partnership or cooperation with non-public housing

entities; and other activities related to public housing, including

activities eligible under the Urban Revitalization Demonstration (HOPE

VI), such as community services.

(2) FY 1996 Modernization Funds. The Continuing Resolution provides

for the continuation of the Department's programs and activities.

Funding provided under the Continuing Resolution is subject to the

authority and conditions of the 1995 appropriation, including the FY

1995 Rescissions Act. Therefore, FY 1996 funds provided under the

Continuing Resolution may be used for the eligible activities set forth

in subparagraph (1) of this paragraph with prior HUD approval.

III. Application Preparation and Submission by HA

(a) Planning. In preparing its CIAP Application, the HA is

encouraged to assess all its physical and management improvement needs.

Physical

[[Page 17220]]

improvement needs should be reviewed against the modernization

standards, as set forth in HUD Handbook 7485.2, as revised, and any

cost-effective energy conservation measures, identified in updated

energy audits. The modernization standards include development specific

work to ensure the long-term viability of the developments, such as

amenities and design changes to promote the integration of low-income

housing into the broader community. See section II(b)(1)(i). In

addition, the HA is strongly encouraged to contact the Field Office to

discuss its modernization needs and obtain information. The term

``Field Office'' includes the ONAP.

(b) Resident Involvement and Local/Tribal Official Consultation

Requirements.

(1) Residents/Homebuyers. The CIAP regulations at Secs. 968.215 or

950.624 require the HA to establish a Partnership Process to ensure

full resident participation in the planning, implementation and

monitoring of the modernization program, as follows:

(i) Before submission of the CIAP Application, consultation with

the residents, resident organization, and resident management

corporation (herein referred to as residents) of the development(s)

being proposed for modernization regarding its intent to submit an

application and to solicit resident comments;

(ii) Reasonable opportunity for residents to present their views on

the proposed modernization and alternatives to it, and full and serious

consideration of resident recommendations;

(iii) Written response to residents indicating acceptance or

rejection of resident recommendations, consistent with HUD requirements

and the HA's own determination of efficiency, economy and need, with a

copy to the Field Office at Joint Review. If the Joint Review is

conducted off-site, a copy is mailed to the Field Office;

(iv) After HUD funding decisions, notification to residents of the

approval or disapproval and, where requested, provision to residents of

a copy of the HUD-approved CIAP Budget; and

(v) During implementation, periodic notification to residents of

work status and progress and maximum feasible employment of residents

in the modernization effort.

(2) Local/Tribal Officials. Before submission of the CIAP

Application, consultation with appropriate local/tribal officials

regarding how the proposed modernization may be coordinated with any

local plans for neighborhood revitalization, economic development, drug

elimination and expenditure of local funds, such as Community

Development Block Grant funds.

(c) Contents of CIAP Application. Within the established deadline

date, the HA shall submit the CIAP Application to the Field Office,

with a copy to appropriate local/tribal officials. The HA may obtain

the necessary forms from the Field Office. The CIAP Application is

comprised of the following documents:

(1) Form HUD-52822, CIAP Application, in an original and two

copies, which includes:

(i) A general description of HA development(s), in priority order,

(including the current physical condition, for each development for

which the HA is requesting funds, or for all developments in the HA's

inventory) and physical and management improvement needs to meet the

Secretary's standards in Sec. 968.115 or Sec. 950.603; description of

work items required to correct identified deficiencies; and the

estimated cost. Where the HA has not included some of its developments

in the CIAP Application, the Field Office may not consider funding any

nonemergency work at excluded developments or subsequently approve use

of leftover funds at excluded developments. Therefore, to provide

maximum flexibility, the HA may wish to include all of its developments

in the CIAP Application, even though there are no known current needs.

Following is an example of the general description:

Development 1-1: 50 units of low-rent; 25 years old; physical needs

are: new roofs; storm windows and doors; and electrical upgrading at

estimated cost of $150,000.

Development 1-2: 40 units of low-rent; 20 years old; physical needs

are: physical accessibility in 2 units; kitchen floors; shower/bathtub

surrounds; fencing; and exterior lighting at estimated cost of $90,000.

Development 1-3: 35 units of Turnkey III; 15 years old; physical

needs are: physical accessibility in 3 units; and roof insulation at

estimated cost of $50,000.

Development 1-4: 20 units of low-rent; 5 years old; no physical

needs; no funding requested.

(ii) Where funding is being requested for management improvements,

an identification of the deficiency, a description of the work required

for correction, and estimated cost. Examples of management improvements

include, but are not limited to the following areas:

(A) the management, financial, and accounting control systems of

the HA;

(B) the adequacy and qualifications of personnel employed by the HA

in the management and operation of its developments by category of

employment; and

(C) the adequacy and efficacy of resident programs and services,

resident and development security, resident selection and eviction,

occupancy and vacant unit turnaround, rent collection, routine and

preventive maintenance, equal opportunity, and other HA policies and

procedures.

(iii) a certification that the HA has met the requirements for

consultation with local/tribal officials and residents/homebuyers and

that all developments included in the application have long-term

physical and social viability, including prospects for full occupancy.

If the HA cannot make this certification with respect to long-term

viability, the HA shall attach a narrative, explaining its viability

concerns.

(2) A narrative statement, in an original and two copies,

addressing each of the technical review factors in section IV(c)(5)

and, where applicable for Public Housing, the bonus points in section

IV(c)(6).

(3) Form HUD-50071, Certification for Contracts, Grants, Loans and

Cooperative Agreements, in an original only, required of HAs

established under State law, applying for grants exceeding $100,000.

(4) SF-LLL, Disclosure of Lobbying Activities, in an original only,

required of HAs established under State law, only where any funds,

other than federally appropriated funds, will be or have been used to

influence Federal workers, Members of Congress and their staff

regarding specific grants or contracts. The HA determines if the

submission of the SF-LLL is applicable.

(5) Form HUD-2880, Applicant/Recipient Update/Disclosure Report, in

an original only, required of HAs established under State law.

(6) At the option of the HA, photographs or video cassettes showing

the physical condition of the developments.

IV. Application Processing by Field Office

(a) Completeness Review (Corrections to Deficient Applications). To

be eligible for processing, the CIAP Application must be physically

received by the Field Office by the time and date specified in this

NOFA. Immediately after the application deadline, the Field Office

shall perform a completeness review to determine whether an application

is complete, responsive to the NOFA, and acceptable for technical

processing.

[[Page 17221]]

(1) If either Form HUD-52822, CIAP Application, or the narrative

statement on the technical review factors is missing, the HA's

application will be considered substantially incomplete and, therefore,

ineligible for further processing. The Field Office shall immediately

notify the HA in writing.

(2) If Form HUD-50071, Certification for Contracts, Grants, Loans,

and Cooperative Agreements, or SF-LLL, Disclosure of Lobbying

Activities, are required, but missing, or Form HUD-2880, Applicant/

Recipient Update/Disclosure Form, is missing, or there is a technical

mistake, such as no signature on a submitted form or the HA failed to

address all of the technical review factors, the Field Office shall

immediately notify the HA in writing to submit or correct the

deficiency within 14 calendar days from the date of HUD's written

notification. This is not additional time to substantially revise the

application. Deficiencies which may be corrected at this time are

inadvertently omitted documents, as specified in this subparagraph, or

clarifications of previously submitted material and other changes which

are not of such a nature as to improve the competitive position of the

application.

(3) If the HA fails to submit or correct the items within the

required time period, the HA's application will be ineligible for

further processing. The Field Office shall immediately notify the HA in

writing after this occurs.

(4) The HA may submit a CIAP Application for Emergency

Modernization whenever needed. See section IV(j).

(b) Eligibility Review. After the HA's CIAP Application is

determined to be complete and accepted for review, the Field Office

eligibility review shall determine if the application is eligible for

full processing or processing on a reduced scope.

(1) Eligibility for Full Processing. To be eligible for full

processing:

(i) Each eligible development for which work is proposed has

reached the Date of Full Availability (DOFA) and is under ACC at the

time of CIAP Application submission; and

(ii) Where funded under Major Reconstruction of Obsolete Projects

(MROP) after FY 1988, the development/building has reached DOFA or,

where funded during FYs 1986-1988, all MROP funds for the development/

building have been expended.

(2) Eligibility for Processing on Reduced Scope. When the following

conditions exist, the HA's application will be reviewed on a reduced

scope:

(i) Section 504 Compliance. Where the HA has not completed all

required structural changes to meet the need for accessible units, as

identified in the HA's Section 504 needs assessment, the HA is eligible

for processing only for Emergency Modernization or physical work needed

to meet Section 504 requirements.

(ii) Lead-Based Paint (LBP) Testing Compliance. Where the HA has

not complied with the statutory requirement to complete LBP testing on

all pre-1978 family units, the HA is eligible for processing only for

Emergency Modernization or work needed to complete the testing.

(iii) Fair Housing and Equal Opportunity (FHEO) Compliance. Where

the HA has not complied with FHEO requirements as evidenced by an

enforcement action, finding or determination, the HA is eligible for

processing only for Emergency Modernization or work needed to remedy

civil rights deficiencies--unless the HA is implementing a voluntary

compliance agreement or settlement agreement designed to correct the

area(s) of noncompliance. The enforcement actions, findings or

determinations that trigger limited eligibility are described in

paragraphs (A) through (E) below:

(A) A pending proceeding against the HA based upon a Charge of

Discrimination issued under the Fair Housing Act. A Charge of

Discrimination is a charge under Section 810(g)(2) of the Fair Housing

Act, issued by the Department's Assistant Secretary for FHEO or legally

authorized designee;

(B) A pending civil rights suit against the HA, referred by the

Department's Assistant Secretary for FHEO and instituted by the

Department of Justice;

(C) Outstanding HUD findings of HA noncompliance with civil rights

statutes and executive orders under 24 CFR Part 5 and 24 CFR 968.110 or

24 CFR 950.115, or implementing regulations, as a result of formal

administrative proceedings;

(D) A deferral of the processing of applications from the HA

imposed by HUD under Title VI of the Civil Rights Act of 1964 and HUD

implementing regulations (24 CFR 1.8), the Attorney General's

Guidelines (28 CFR 50.3), and procedures (HUD Handbook 8040.1), or

under Section 504 of the Rehabilitation Act of 1973 and HUD

implementing regulations (24 CFR 8.57); or

(E) An adjudication of a violation under any of the authorities

specified in 24 CFR Part 5 and 24 CFR 968.110 or 24 CFR 950.115 in a

civil action filed against the HA by a private individual.

(c) Selection Criteria and Ranking Factors. After all CIAP

Applications are reviewed for eligibility, the Field Office shall

categorize the eligible HAs and their developments into two processing

groups, as defined in subparagraph (1) of this paragraph: Group 1 for

Emergency Modernization; and Group 2 for Other Modernization. HA

developments may be included in both groups and the same development

may be in each group. However, the HA is only required to submit one

CIAP Application.

(1) Grouping Modernization Types.

(i) Group 1, Emergency Modernization. This is a type of

modernization program for a development that is limited to physical

work items of an emergency nature to correct conditions that pose an

immediate threat to the health or safety of residents or are related to

fire safety, and that must be corrected within one year of CIAP funding

approval. Funding may not be used for management improvements.

Emergency Modernization includes all LBP testing and abatement of units

housing children under six years old with elevated blood lead levels

(EBLs) and all LBP testing and abatement of HA-owned day care

facilities used by children under six years old with EBLs. Group 1

developments are not subject to the technical review rating and ranking

in subparagraphs (5), (6) and (7) of this paragraph and the long-term

viability and reasonable cost determinations in section V(a).

(ii) Group 2, Other Modernization. This is a type of modernization

program for a development that includes one or more physical work

items, where the Field Office determines that the physical improvements

are necessary and sufficient to extend substantially the useful life of

the development, and/or one or more development specific or HA-wide

management work items (including planning costs), and/or LBP testing,

professional risk assessment, interim containment, and abatement.

Therefore, eligibility of work under Other Modernization ranges from a

single work item to the complete rehabilitation of a development. Refer

to section II(b)(1)(i) regarding modest amenities and improved design.

Group 2 developments are subject to the technical review rating and

ranking in subparagraphs (5), (6) and (7) of this paragraph and the

long-term viability and reasonable cost determinations in section V(a).

(2) Assessment of HA's Management Capability. As part of its

technical review of the CIAP Application, the Field Office shall

evaluate the HA's

[[Page 17222]]

management capability. Particular attention shall be given to the

adequacy of the HA's maintenance in determining the HA's management

capability. This assessment shall be based on the compliance aspects of

on-site monitoring, such as audits, reviews or surveys which are

currently available within the Field Office, and on the performance

review under the Public Housing Management Assessment Program (PHMAP)

for PHAs or the Administrative Capability Assessment for IHAs, and

other information sources, as follows:

(i) Public Housing. A PHA has management capability if it is (A)

not designated as Troubled under Part 901, PHMAP, or (B) designated as

Troubled, but has a reasonable prospect of acquiring management

capability through CIAP-funded management improvements and

administrative support. A Troubled PHA is eligible for Emergency

Modernization only, unless it is making reasonable progress toward

meeting the performance targets established in its memorandum of

agreement or equivalent under 24 CFR 901.140 or has obtained

alternative oversight of its management functions.

(ii) Indian Housing. An IHA has management capability if it is (A)

not designated as High Risk under 24 CFR 950.135 or (B) designated as

High Risk, but has a reasonable prospect of acquiring management

capability through CIAP-funded management improvements and

administrative support. A High Risk IHA is eligible for Emergency

Modernization only, unless it is making reasonable progress toward

meeting the performance targets established in its management

improvement plan under 24 CFR 950.135.

(3) Assessment of HA's Modernization Capability. As part of its

technical review of the CIAP Application, the Field Office shall

evaluate the HA's modernization capability, including the progress of

previously approved modernization and the status of any outstanding

findings from CIAP monitoring visits, as follows:

(i) Public Housing. A PHA has modernization capability if it is (A)

not designated as Modernization Troubled under Part 901, PHMAP, or (B)

designated as Modernization Troubled, but has a reasonable prospect of

acquiring modernization capability through CIAP-funded management

improvements and administrative support, such as hiring staff or

contracting for assistance. A Modernization Troubled PHA is eligible

for Emergency Modernization only, unless it is making reasonable

progress toward meeting the performance targets established in its

memorandum of agreement or equivalent under 24 CFR 901.140 or has

obtained alternative oversight of its modernization functions. Where a

PHA does not have a funded modernization program in progress, the Field

Office shall determine whether the PHA has a reasonable prospect of

acquiring modernization capability through hiring staff or contracting

for assistance.

(ii) Indian Housing. An IHA has modernization capability if it is

(A) not designated as High Risk under 24 CFR 950.135, or (B) designated

as High Risk, but has a reasonable prospect of acquiring modernization

capability through CIAP-funded management improvements and

administrative support, such as hiring staff or contracting for

assistance. An IHA that has been classified High Risk with regard to

modernization is eligible for Emergency Modernization only, unless it

is making reasonable progress toward meeting the performance targets

established in its management improvement plan under 24 CFR

950.135(f)(2) or has obtained alternative oversight of its

modernization functions. Where an IHA does not have a funded

modernization program in progress, the ONAP shall determine whether the

IHA has a reasonable prospect of acquiring modernization capability

through hiring staff or contracting for assistance.

(4) Technical Processing. After categorizing the eligible HAs and

their developments into Group 1 and Group 2, the Field Office shall

review and rate each Group 2 HA on each of the technical review factors

in subparagraph (5) of this paragraph. With the exception of the

technical review factor of ``extent and urgency of need,'' a Group 2 HA

is rated on its overall HA application and not on each development. For

the technical review factor of ``extent and urgency of need,'' each

development for which funding is requested in the CIAP Application by a

Group 2 HA is scored; the development with the highest priority needs

is scored the highest number of points, which are then used for the

overall HA score on that factor.

(5) Technical Review Factors. The technical review factors for

assistance are:

------------------------------------------------------------------------

Maximum

Technical review factors points

------------------------------------------------------------------------

Extent and urgency of need, including need to comply with

statutory, regulatory or court-ordered deadlines, to

complete previously funded modernization work, or to provide

appropriate replacement housing for HUD- approved demolition/

disposition................................................. 40

HA's modernization capability................................ 15

HA's management capability................................... 15

Extent of vacancies, where the vacancies are not due to

insufficient demand......................................... 10

Degree of resident involvement in HA operations.............. 5

Degree of HA activity in resident initiatives, including

resident management, economic development, and drug

elimination efforts......................................... 5

Degree of resident employment through direct hiring or

contracting or job training initiatives..................... 5

Local government support for proposed modernization.......... 5

----------

Total maximum score.................................... 100

------------------------------------------------------------------------

(6) Bonus points.

(i) For Public Housing only, the Field Office shall provide up to 5

bonus points for any PHA that can demonstrate that it has obtained

funds, within the last 12 months, from a non-HUD source to support the

modernization activities or improve the general operation of the PHA.

Non-HUD sources of funding may include: local government, over and

above what is required under the Cooperation Agreement for municipal

services such as police and fire protection and refuse collection;

private non-profit organizations; or other public and private entities.

To qualify for the bonus points, the PHA shall identify the entity, the

amount of funds, the date on which the funds were or will be provided,

and the purpose of the funding.

(ii) For Public Housing only, the Field Office shall provide up to

2 bonus points for any PHA that can demonstrate that it has awarded

contracts, including subcontracts, to minority business enterprises

(MBEs) or women's business enterprises (WBEs) within the last 12

months. PHAs are

[[Page 17223]]

required by 24 CFR 968.110(b) to take every affirmative action to meet

Departmental goals for awarding contracts to MBEs and WBEs. To qualify

for the bonus points, the PHA shall identify the contractor or

subcontractor, the dollar value of the contract or subcontract, and the

date of award.

(7) Rating and Ranking. After rating all Group 2 HAs/developments

on each of the technical review factors and providing any bonus points

as set forth in subparagraph (6) of this paragraph, the Field Office

shall then rank each Group 2 HA based on its total score, list Group 2

HAs in descending order, subject to confirmation of need and cost at

Joint Review, and identify for Joint Review selection the highest

ranking applications in Group 2 and other Group 2 HAs with lower

ranking applications, but with high priority needs. High priority needs

are non-emergency needs, but related to: health or safety; vacant,

substandard units; structural or system integrity; or compliance with

statutory, regulatory or court-ordered deadlines. All Group 1

applications are automatically selected for Joint Review. The Field

Office shall consult with Headquarters regarding any identified FHEO

noncompliance.

(d) Joint Review. The purpose of the Joint Review is for the Field

Office to discuss with the HA the proposed modernization program, as

set forth in the CIAP Application, review long-term viability and cost

reasonableness determinations, and determine the size of the grant, if

any, to be awarded.

(1) The Field Office shall select HAs, including all Group 1 HAs,

for Joint Review so that the total dollar value of all proposed

modernization recommended for funding exceeds the Field Office's

estimated funding amount by at least 15 percent. This preserves the

Field Office's ability to adjust cost estimates and work items as a

result of Joint Review.

(2) The Field Office shall notify each HA whose application has

been selected for further processing as to whether Joint Review will be

conducted on-site or off-site (e.g., by telephone or in-office

meeting).

(3) The HA shall prepare for Joint Review by preparing a draft CIAP

Budget and reviewing the other items to be covered during Joint Review,

as prescribed by the Field Office, such as the need for professional

services, method of accomplishment of physical work (contract or force

account labor), HA compliance with various Federal statutes and

regulations, etc. If conducted on-site, Joint Review may include an

inspection of the proposed physical work.

(4) The Field Office shall advise in writing each HA not selected

for Joint Review of the reasons for non-selection.

(e) Funding Decisions. After all Joint Reviews are completed, the

Field Office shall adjust the HAs, developments, and work items to be

funded and the amounts to be awarded, on the basis of information

obtained from Joint Reviews, FHEO review, and environmental reviews

(refer to paragraph (h) of this section) and make the funding

decisions. Such adjustments are necessary where Joint Review determines

that actual Group 1 emergencies and Group 2 high priority needs, HA

priorities, or cost estimates vary from the HA's application. Such

adjustments may preclude the Field Office from funding all of the

higher ranked HA applications in order to accommodate the funding of

high priority needs. However, where the information obtained from Joint

Reviews, FHEO review, and environmental reviews does not substantially

alter the information used to establish the rankings before Joint

Review, the Field Office shall make funding decisions in accordance

with its rankings. An HA will not be selected for Joint Review if there

is a duplication of funding (refer to section V(c)). After

Congressional notifications, the Field Office shall notify the HAs of

their funding approval, subject to submission of the CIAP Budget,

including an implementation schedule, and other required documents.

(f) HA Submission of Additional Documents. After Field Office

funding decisions, the HA shall submit the following documents within

the time frame prescribed by the Field Office:

(1) Form HUD-52825, CIAP Budget/Progress Report, which includes the

implementation schedule(s), in an original and two copies.

(2) Form HUD-50070, Certification for a Drug-Free Workplace, in an

original only.

(3) Form HUD-52820, HA Board Resolution Approving CIAP Budget, in

an original only.

(g) ACC Amendment. After HUD approval of the CIAP Budget, the Field

Office and the HA shall enter into an ACC amendment in order for the HA

to draw down modernization funds. The ACC amendment shall require low-

income use of the housing for not less than 20 years from the date of

the ACC amendment (subject to sale of homeownership units in accordance

with the terms of the ACC). The HA Executive Director, where authorized

by the Board of Commissioners and permitted by State/tribal law, may

sign the ACC amendment on behalf of the HA. HUD has the authority to

condition an ACC amendment (e.g., to require an HA to hire a

modernization coordinator or contract administrator to administer its

modernization program).

(h) Environmental review.

(1) Public Housing. The Field Office shall review the environmental

impact of all modernization activities, proposed by PHAs, under 24 CFR

Part 50, in accordance with the provisions of Part 968. The Field

Office may obtain the information required to conduct the environmental

review during Joint Review. The PHA shall provide any documentation to

the Field Office that it needs to carry out its review under the

National Environmental Policy Act (NEPA). After all Joint Reviews are

conducted, the Field Office shall complete the environmental reviews

before funding decisions are made and announced and before PHAs are

invited to submit CIAP Budgets. Therefore, in requesting CIAP Budgets,

the Field Office shall specify any PHA modification or elimination of

activities or expenditures that the Field Office has determined, after

review under NEPA or related laws, to have an unacceptable

environmental impact. Upon approval of the CIAP Budget, the Field

Office shall send an approval letter to the PHA which includes

notification that HUD has complied with its responsibilities under

Sec. 968.110 (c) and (d) before entering into an ACC amendment with the

PHA.

(2) Indian Housing. For IHAs, the environmental impact of

modernization activities is reviewed by a responsible entity under 24

CFR Part 58 in accordance with Sec. 950.120(a). The responsible entity

may be an Indian tribe or, in the case of IHAs in Alaska, an Alaska

native village, a state, or unit of local government. Under this

procedure, the environmental impact of each IHA project will be

considered before an IHA obligates or expends funds for physical

improvements.

(i) Declaration of Trust. Where the Field Office determines that a

Declaration of Trust is not in place or is not current, the HA shall

execute and file for record a Declaration of Trust, as provided under

the ACC, to protect the rights and interests of HUD throughout the 20-

year period during which the HA is obligated to operate its

developments in accordance with the ACC, the Act, and HUD regulations

and requirements. HUD has determined that its interest in Mutual Help

units is sufficiently protected without the further requirement of a

Declaration of Trust; therefore, a Declaration of Trust is not required

for Mutual Help units.

[[Page 17224]]

(j) ``Fast Tracking'' Applications. Emergency applications do not

have to be processed within the normal processing time allowed for

other applications. Where an immediate hazard must be addressed, HA

applications may be submitted and processed at any time during the year

when funds are available. The Field Office shall ``fast track'' the

processing of these emergency applications so that fund reservation may

occur as soon as possible.

V. Other Program Items

(a) Long-Term Viability and Reasonable Cost. On Form HUD-52822,

CIAP Application, the HA certifies whether the developments proposed

for modernization have long-term physical and social viability,

including prospects for full occupancy. During Joint Review, the Field

Office will review with the HA the determination of reasonable cost for

the proposed modernization to ensure that unfunded hard costs do not

exceed 90 percent of the computed total development cost (TDC) for a

new development with the same structure type and number and size of

units in the market area. The Field Office shall make a final viability

determination. Where the estimated per unit unfunded hard cost is equal

to or less than the per unit TDC for the smallest bedroom size at the

development, no further computation of the TDC limit is required.

(1) If the Field Office determines that completion of the

improvements and replacements will not reasonably ensure the long-term

physical and social viability of the development at a reasonable cost,

the Field Office shall only approve Emergency Modernization or non-

emergency funding for essential non-routine maintenance needed to keep

the property habitable until the demolition or disposition application

is approved and residents are relocated.

(2) Where the Field Office wishes to fund a development with hard

costs exceeding 90 percent of computed TDC, the Field Office shall

submit written justification to Headquarters for final decision. Such

justification shall include:

(i) Any special or unusual conditions have been adequately

explained, all work has been justified as necessary to meet the

modernization and energy conservation standards, including development

specific work necessary to blend the development in with the design and

architecture of the neighborhood; and

(ii) Reasonable cost estimates have been provided, and every effort

has been made to reduce costs; and

(iii) Rehabilitation of the existing development is more cost-

effective in the long-term than construction or acquisition of

replacement housing; or

(iv) There are no practical alternatives for replacement housing.

(b) Use of Dwelling Units for Economic Self-Sufficiency Services

and/or Drug Elimination Activities. CIAP funds may be used to convert

dwelling units for purposes related to economic self-sufficiency

services and/or drug elimination activities. Regarding the eligibility

for funding under the Performance Funding System of dwelling units used

for these purposes, refer to 24 CFR 990.108(b)(2) or 24 CFR

950.720(b)(2).

(c) Duplication of Funding. The HA shall not receive duplicate

funding for the same work item or activity under any circumstance and

shall establish controls to assure that an activity, program, or

project that is funded under any other HUD program shall not be funded

by CIAP.

VI. Application Deadline Date and Summary of FY 1996 CIAP Processing

Steps

The deadline date for submission of the FY 1996 CIAP Application is

June 17, 1996. Dates for other processing steps will be established by

each Field Office to reflect local workload issues.

Summary of Processing Steps

1. HA submits CIAP Application.

2. Field Office conducts completeness review and requests

corrections to deficient applications or notifies HAs of ineligible

applications.

3. HA submits corrections to deficient applications within 14

calendar days of notification from Field Office.

4. Field Office conducts eligibility review and technical review

(rating and ranking) and makes Joint Review selections.

5. Field Office completes Joint Reviews, environmental reviews (for

PHAs) and FHEO review.

6. Field Office makes funding decisions and forwards Congressional

notifications to Headquarters.

7. Congressional notification is completed and Field Office

notifies HA of funding decisions.

8. HA submits additional documents as required in section IV(f).

9. Field Office completes fund reservations and forwards ACC

amendment to HA for signature and return.

10. Field Office executes ACC amendment and HA begins

implementation.

VII. Other Matters

(a) Environmental Impact. A Finding of No Significant Impact with

respect to the environment has been made in accordance with HUD

regulations at 24 CFR Part 50 implementing 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

between 7:30 a.m. and 5:30 p.m. weekdays at the Office of the Rules

Docket Clerk, 451 Seventh Street, S.W., Room 10276, Washington, DC

20410.

(b) Federalism Impact. The General Counsel, as the Designated

Official under section 6(a) of Executive Order 12612, Federalism, has

determined that the policies and procedures contained in this NOFA will

not have substantial direct effects on States or their political

subdivisions, or the relationship between the federal government and

the States, or on the distribution of power and responsibilities among

the various levels of government. As a result, the NOFA is not subject

to review under the Order.

(c) Impact on the Family. The General Counsel, as the Designated

Official for Executive Order 12606, The Family, has determined that

this NOFA will likely have a beneficial impact on family formation,

maintenance and general well-being. Accordingly, since the impact on

the family is beneficial, no further review is considered necessary.

(d) Accountability in the Provision of HUD Assistance. The

Department has promulgated a final rule to implement section 102 of the

Department of Housing and Urban Development Reform Act of 1989 (HUD

Reform Act). The final rule is codified at 24 CFR Part 12. Section 102

contains a number of provisions that are designed to ensure greater

accountability and integrity in the provision of certain types of

assistance administered by the Department. On January 16, 1992, the

Department published at 57 FR 1942, additional information that gave

the public (including applicants for, and recipients of, HUD

assistance) further information on the implementation, public access,

and disclosure requirements of section 102. The documentation, public

access, and disclosure requirements of section 102 are applicable to

assistance awarded under this NOFA as follows:

(1) Documentation and Public Access. The Department will ensure

that documentation and other information regarding each application

submitted pursuant to this NOFA are sufficient to indicate the basis

upon which assistance was provided or denied. This

[[Page 17225]]

material, including any letters of support, will be made available for

public inspection for a five-year period beginning not less than 30

days after the award of the assistance. Material will be made available

in accordance with the Freedom of Information Act (5 U.S.C. 552) and

HUD's implementing regulations at 24 CFR Part 15. In addition, HUD will

include the recipients of assistance pursuant to this NOFA in its

Federal Register notice of all recipients of HUD assistance awarded on

a competitive basis. (See 24 CFR 12.14(a) and 12.16(b), and the notice

published in the Federal Register on January 16, 1992 (57 FR 1942), for

further information on these requirements.)

(2) HUD Responsibilities--Disclosures. The Department will make

available to the public for five years all applicant disclosure reports

(Form HUD-2880) submitted in connection with this NOFA. Update reports

(also Form HUD-2880) will be made available along with the applicant

disclosure reports, but in no case for a period less than three years.

All reports, both applicant disclosures and updates, will be made

available in accordance with the Freedom of Information Act (5 U.S.C.

552) and HUD's implementing regulations at 24 CFR Part 15. (See 24 CFR

Part 12, Subpart C, and the notice published in the Federal Register on

January 16, 1992 (57 FR 1942), for further information on these

disclosure requirements.)

(e) Prohibition Against Advance Information on Funding Decisions.

HUD's regulation implementing section 103 of the Department of Housing

and Urban Development Reform Act of 1989, codified as 24 CFR part 4,

applies to the funding competition announced today. The requirements of

the rule continue to apply until the announcement of the selection of

successful applicants. HUD employees involved in the review of

applications and in the making of funding decisions are limited by part

4 from providing advance information to any person (other than an

authorized employee of HUD) concerning funding decisions, or from

otherwise giving any applicant an unfair competitive advantage. Persons

who apply for assistance in this competition should confine their

inquiries to the subject areas permitted under 24 CFR part 4.

Applicants or employees who have ethics related questions should

contact the HUD Office of Ethics (202) 708-3815. (This is not a toll-

free number.) For HUD employees who have specific program questions,

such as whether particular subject matter can be discussed with persons

outside HUD, the employee should contact the appropriate Field Office

Counsel, or Headquarters counsel for the program to which the question

pertains.

(f) Prohibition Against Lobbying Activities.

The use of funds awarded under this NOFA is subject to the

disclosure requirements and prohibitions of Section 319 of the

Department of Interior and Related Agencies Appropriations Act for

Fiscal Year 1990 (31 U.S.C. 1352) and the HUD implementing regulations

at 24 CFR Part 87. These authorities prohibit recipients of federal

contracts, grants or loans from using appropriated funds for lobbying

the Executive or Legislative Branches of the Federal Government in

connection with a specific contract, grant or loan. The prohibition

also covers the awarding of contracts, grants, cooperative agreements

or loans unless the recipient has made an acceptable certification

regarding lobbying. Under 24 CFR Part 87, applicants, recipients and

subrecipients of assistance exceeding $100,000 must certify that no

federal funds have been or will be spent on lobbying activities in

connection with the assistance.

IHAs established by an Indian tribe as a result of the exercise of

the tribe's sovereign power are excluded from coverage of the Byrd

Amendment, but IHAs established under State law are not excluded from

the statute's coverage.

If the amount applied for is greater than $100,000, the

certification is required at the time application for funds is made

that federally appropriated funds are not being or have not been used

in violation of the Byrd Amendment. If the amount applied for is

greater than $100,000 and the HA has made or has agreed to make any

payment using non-appropriated funds for lobbying activity, as

described in 24 CFR Part 87 (Byrd Amendment), the submission also must

include the SF-LLL, Disclosure of Lobbying Activities. The HA

determines if the submission of the SF-LLL is applicable.

(g) Paperwork Reduction Act Statement. The information collection

requirements contained in this NOFA have been approved by the Office of

Management and Budget (OMB) under the Paperwork Reduction Act of 1995

(44 U.S.C. 3501-3520) and have been assigned OMB control number 2577-

0044. An agency may not conduct or sponsor, and a person is not

required to respond to, a collection of information unless the

collection displays a valid control number.

VIII. Catalog of Federal Domestic Assistance Program

The Catalog of Federal Domestic Assistance Program Number is

14.852.

Dated: April 3, 1996.

Michael B. Janis,

General Deputy Assistant Secretary for Public and Indian Housing.

[FR Doc. 96-9543 Filed 4-17-96; 8:45 am]

BILLING CODE 4210-33-P