Fair Housing Performance Standards for Acceptance of Consolidated Plan Certifications and Compliance With Community Development Block Grant Performance Review Criteria

SUMMARY: This proposed rule would amend HUD regulations on Consolidated

Submissions for Community Planning and Development Programs to

establish a standard for determining if the jurisdiction's

certification regarding affirmatively furthering fair housing is

inaccurate.

This rule would also amend HUD regulations on Community Development

Block Grants to provide performance review standards for affirmatively

furthering fair housing requirements. The performance review standards

would clarify the basis upon which the Department makes its annual

statutory determination that a grantee is carrying out its Community

Development Block Grant (CDBG) program in compliance with its

certifications and with other applicable laws.

Both revisions would also make clear that compliance with the

requirement to affirmatively further fair housing would require

grantees to have a complete and accurate analysis of impediments to

fair housing choice and to not violate the Fair Housing Act or civil

rights laws prohibiting discrimination in housing programs receiving

Federal financial assistance. These revisions would serve to provide

communities with a clear idea of the standards that HUD would use in

both reviewing certifications included as part of a grantee's

Consolidated Plan submission, as well as determining CDBG grantees'

compliance with the statutory requirements of the CDBG program to

affirmatively further fair housing.

DATES: Comment Due Date: December 28, 1998.

ADDRESSES: Interested persons are invited to submit comments regarding

this rule to Rules Docket Clerk, Office of General Counsel, Room 10276,

Department of Housing and Urban Development, 451 Seventh Street, S.W.,

Washington, D.C. 20410-0500. Communications should refer to the above

docket number and title. Facsimile (FAX) comments are not acceptable. A

copy of each communications submitted will be available for public

inspection and copying between 7:30 a.m. and 5:30 p.m. weekdays at the

above address.

FOR FURTHER INFORMATION CONTACT: For questions on part 570, Deirdre

Maguire-Zinni, Director, Entitlement Communities Division, Office of

Block Grant Assistance, Department of Housing and Urban Development,

Room 7282, 451 Seventh Street, SW, Washington, DC 20410. Telephone

(202) 708-1577, ext. 4529. For questions on part 91, Sal Sclafani,

Acting Director, Policy Coordination Division, Office of Executive

Services, Department of Housing and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410. Telephone (202) 708-1283, ext. 4364.

For questions on affirmatively furthering fair housing or the analysis

of impediments to fair housing choice, William Dudley Gregorie, Deputy

Director, Office of Programs, Office of Fair Housing and Equal

Opportunity, Department of Housing and Urban Development, 452 Seventh

Street, SW, Washington, DC 20410. Telephone (202) 708-2288, ext. 266.

(These telephone numbers are not toll-free.) Hearing-impaired or

speech-impaired individuals may access the voice telephone number

listed above by calling the Federal information relay service during

working hours at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Statutory Bases

Section 105 of the Cranston-Gonzalez National Affordable Housing

Act (42 U.S.C. 12705) established a requirement for the development of

a Comprehensive Housing Affordability Strategy (CHAS) as a condition of

a jurisdiction receiving grants from HUD, primarily CDBG and HOME

program funds. (The CHAS replaced the CDBG Housing Assistance Plan

requirement.) The CHAS includes a certification that jurisdictions

receiving the HUD grants will affirmatively further fair housing.

Section 104(b)(2) of the Housing and Community Development Act of

1974 (HCD Act), as amended, (42 U.S.C. 5304), the governing statute for

the CDBG program, requires that each grantee certify to HUD's

satisfaction that (1) the grant will be conducted and administered in

conformity with the Fair Housing Act (42 U.S.C. 3601-20) and (2) the

grantee will affirmatively further fair housing. Further, section

104(c)(1) of the HCD Act authorizes CDBG Entitlement grants to be made

only to a grantee that is following an approved CHAS. Section 104(e) of

the HCD Act also contains a requirement for the Department to

determine, at least annually, that each CDBG grantee is carrying out

its program in compliance with applicable laws and requirements.

The Consolidated Plan Regulation's Review Standard for Acceptance

When the Consolidated Submission for CPD Programs regulation (part

91) (the ``Consolidated Plan regulation'') was promulgated in 1995, one

of the primary purposes of the rule was to coordinate statutory

requirements for CPD formula grant programs (CDBG, HOME Investment

Partnerships, Emergency Shelter Grant, and Housing Opportunities for

Persons with AIDS) in a comprehensive way, in order to simplify

application requirements while simultaneously addressing local priority

needs more effectively. The Consolidated Plan regulation thus

incorporates CHAS requirements as well as CDBG submission requirements.

Departmental approval of a Consolidated Plan is required in order

for a jurisdiction to receive any of the four CPD formula grant funds.

Disapproval of a Consolidated Plan is based on the statutory standards

of the CHAS which authorizes disapproval of any Plan only on two

grounds: the Plan is either (1) inconsistent with the purposes of the

Cranston-Gonzalez National Affordable Housing Act or (2) substantially

incomplete. One of the ways that a Plan may be determined substantially

incomplete is if HUD concludes that a certification is inaccurate. In

addition, the separate CDBG certifications may be disapproved if not

satisfactory to HUD, which would result in disapproval of the CDBG

component of the Consolidated Plan.

The Consolidated Plan regulations contain an affirmatively further

fair housing certification. The regulations define the certification to

mean that a grantee will conduct an ``analysis of impediments to fair

housing choice within the jurisdiction, take appropriate actions to

overcome the effects of any impediments identified through that

analysis, and maintain records reflecting the analysis and actions in

this regard'' [Secs. 91.225(a)(1), 91.325(a)(1) and 91.425(a)(1)]. The

analysis of impediments is not restricted to the design and operation

of HUD-funded programs within a grantee's jurisdiction but is meant to

be an assessment of conditions, both public and private, that affect

fair housing choice.

The Consolidated Plan requirement contains a narrow review standard

and a review time frame of 45 days (after which a Plan may be deemed

approved automatically unless the Department

[[Page 57883]]

specifically notifies a jurisdiction that the Plan has been

disapproved). Disapproval of a Consolidated Plan results in the

withholding of all CPD formula grant funds for a grantee unless and

until an adequate submission is made within an established time frame.

The CDBG Program's Greater Flexibility To Require Grantee Actions

in Connection With Grant Award or Improve Performance

The CDBG Entitlement regulations were amended with the Consolidated

Plan regulations so that the affirmatively further fair housing

certification has the same requirements in the CDBG regulations as in

the Consolidated Plan regulations. See Sec. 570.601(a)(2). A

determination made by HUD that a CDBG grantee is not affirmatively

furthering fair housing, however, offers a wider array of opportunities

for resolution in connection with either making the CDBG grant or

applying sanctions because of the statutory review authority in the HCD

Act (e.g., requesting special assurances; seeking voluntary compliance;

or taking actions to reduce or withdraw a grant), whereas evaluation of

the grantee's affirmatively furthering activities in the context of the

Consolidated Plan offers only one opportunity for HUD action (i.e.,

disapproval of a Consolidated Plan). Furthermore, corrective actions

with respect to the CDBG program are not limited to the Consolidated

Plan submission review time frame but can be initiated at any point

during a grantee's program year.

The Need for Clarification

While the Department has provided both guidance and training to

grantees on meeting the Consolidated Plan fair housing certification

requirements, the Department's experience indicates that confusion

remains over both the meaning and application of the affirmatively

further fair housing requirements. Notwithstanding the identical

statutory predicates for affirmatively furthering fair housing in both

the CDBG program and the CHAS (included now as a Consolidated Plan

requirement), this confusion has been complicated by the placement of

the CDBG requirement in the Consolidated Plan regulation at part 91 as

a certification requirement (which now applies to all CPD formula grant

programs) while remaining in the CDBG regulations at part 570 as a

performance review standard. Certification of compliance with the Fair

Housing Act is in the Consolidated Plan regulations applicable only to

the CDBG program. Thus, in cases where a grantee has been determined to

have violated the Fair Housing Act, the narrow disapproval standard for

the Consolidated Plan complicates the withholding of CPD grant funds,

despite the Department's clear mandate to ensure compliance with Fair

Housing Act requirements. Confusion has also resulted over what it

means to have a ``complete'' Consolidated Plan as well as the language

of the certification which is written in the future tense (that

grantees ``will'' conduct an analysis).

Purpose of the Proposed Rule Change

The Department seeks to foster effective fair housing strategies

and to provide clear guidance to local communities to help them in

their efforts to responsibly identify and solve fair housing problems,

as these grantees strive to achieve their own visions of ``viable urban

communities.'' Furthermore, the Department believes that grantees

receiving CPD formula grant funds not only have the responsibility to

identify and endeavor to overcome impediments to fair housing choice,

but clearly should not be receiving the grant funds if they are in

violation of the Fair Housing Act. At the same time, the Department

wishes to ensure more objective application of requirements and to

ensure that grantees have a current and accurate analysis of

impediments to fair housing choice in place at the time of grant award.

To that end, the proposed rule is intended to provide specific

standards and the bases upon which these requirements would be

measured--both for purposes of receiving CPD formula grant funds and to

aid the Department in annually determining that CDBG grantees are in

compliance with applicable requirements.

Proposed Change to Part 91

This rule would amend Secs. 91.225(a)(1), 91.325(a)(1) and

91.425(a)(1) to make clear that a certification to affirmatively

further fair housing means that (1) an analysis of impediments to fair

housing choice has already been conducted (and would be updated, as

appropriate) and (2) the grantee is taking actions to eliminate

identified impediments if the impediments are within the control of the

grantee and to overcome the effects of other identified impediments,

and is keeping appropriate supporting documentation. Amendments are

also made to Sec. 91.500(b)(3) to add three standards for a

Departmental determination that a grantee's Consolidated Plan

certification to affirmatively further fair housing is inaccurate. HUD

could determine that the certification is inaccurate if: (1) the

analysis of impediments to fair housing choice is inaccurate or

substantially incomplete based on generally available facts and data;

(2) the actions taken do not address an identified impediment

(eliminate an impediment within the grantee's control or overcome the

effects of an impediment that is outside the grantee's control) or do

not result in meaningful and measurable progress; or (3) the grantee

(a) has been charged with a violation of the Fair Housing Act by HUD,

(b) is the defendant in a Fair Housing Act lawsuit filed by the U.S.

Department of Justice, or (c) has received from HUD a letter of

noncompliance findings involving housing under title VI of the Civil

Rights Act of 1968, section 504 of the Rehabilitation Act of 1973 or

section 109 of the HCD Act, and the grantee has not resolved such

charge, lawsuit, or letter of noncompliance findings to the

satisfaction of HUD.

These amendments would make clear that a grantee must (1) have a

complete and accurate analysis of impediments to fair housing choice

before submitting its Consolidated Plan, (2) be taking appropriate

actions to eliminate the impediments within the grantee's control and

overcome the effects of identified impediments outside the grantee's

control, and (3) comply with the Fair Housing Act and other statutes

prohibiting discrimination in housing that the Department enforces.

Failure to do so will result in a rejection of its Consolidated Plan

certification to affirmatively further fair housing. The amendments are

also designed to clarify what is meant by appropriate actions. For

example, a grantee that identifies certain types of zoning as

impediments to fair housing choice and then holds a housing poster

contest as an appropriate action in response to the zoning impediment

could expect HUD to question the accuracy of its certification.

Proposed Change to Part 570

This rule would amend Sec. 570.601 to make clear that the

requirement to affirmatively further fair housing means that (1)

grantees have conducted an analysis of impediments to fair housing

choice before submission of a Consolidated Plan (and would require

updates to an analysis, as appropriate) and (2) the grantees are taking

actions to eliminate identified impediments that are within the control

of the grantee and to overcome the effects of identified impediments

outside the grantee's control and are maintaining records reflecting

the analysis and actions. Section 570.904 would be amended to clarify

the distinction between the

[[Page 57884]]

rebuttable presumption of compliance with civil rights

nondiscrimination requirements versus the standards to measure

performance with the requirements for affirmatively furthering fair

housing. Currently, this section of the regulation states that the

Department will consider grantees to be in compliance with applicable

equal opportunity and fair housing criteria UNLESS there is evidence to

the contrary. The requirements to affirmatively further fair housing

and carry out programs in compliance with the Fair Housing Act require,

however, positive actions on the part of grantees. Moreover, the

section no longer contains criteria because they were deleted when

substantive requirements for affirmatively furthering fair housing were

added to the Consolidated Plan rule. Accordingly, the introductory

language is proposed to be deleted in paragraph (a) and the paragraph

is renamed ``Nondiscrimination requirements.'' In addition, the current

paragraph (b) is proposed to be removed because it essentially repeats

paragraph (a). Paragraphs (c) and (d) are reordered as paragraphs (b)

and (c). As a technical matter, the regulation is amended to reflect

that the Fair Housing Act also prohibits discrimination based on

disability or familial status.

This section of the regulation is also amended to specify three

performance review standards that HUD will use to determine whether a

grantee has affirmatively furthered fair housing. Two of the standards

are: (1) that the analysis of impediments to fair housing choice is

accurate and substantially complete based on generally available facts

and data, and (2) that the actions taken to eliminate the impediments

within the grantee's control or overcome the effects of identified

impediments outside the grantee's control result in meaningful and

measurable progress. The third standard is a presumption by HUD that a

grantee has not violated the civil rights laws prohibiting

discrimination in housing unless the grantee (a) has been charged with

a violation of the Fair Housing Act by HUD, (b) is the defendant in a

Fair Housing Act lawsuit filed by the U.S. Department of Justice, or

(c) has received from HUD a letter of noncompliance findings involving

housing under title VI of the Civil Rights Act of 1968, section 504 of

the Rehabilitation Act of 1973 or section 109 of the HCD Act, and the

grantee has not resolved such charge, lawsuit, or letter of

noncompliance findings to the satisfaction of HUD. Such violations

could result from actions taken by the grantee in connection with

programs other than the four CPD formula grant programs. For example, a

grantee that takes discriminatory actions to prevent a public housing

authority from acquiring or building scattered site public housing

units could be determined to be in violation of the Fair Housing Act

and thus might expect the Department to challenge its Consolidated Plan

certification to affirmatively further fair housing.

In reviewing performance based on an existing analysis of

impediments to fair housing choice, the Department would expect that a

jurisdiction would identify actions to be taken based on the analysis

and would have taken such actions, or have begun to undertake actions

with a reasonable time frame for completion. Further, the

appropriateness of the actions would be judged on what impact they have

had in eliminating impediments within the grantee's control or

overcoming the effects of identified impediments to fair housing choice

that are outside the grantee's control.

Examples of such appropriate actions are contained in Volume 1 of

HUD's Fair Housing Planning Guide, specifically, Chapter 3, Appendix A,

the Chapter 4 Appendix and throughout Chapter 5. A detailed discussion

of grantee actions, in general, is the focus of Volume 2 of the Fair

Housing Planning Guide.

Comments are specifically sought on (1) the clarity and usefulness

of the standards in assisting the Department's review of a grantee's

compliance with its certification to affirmatively further fair

housing, both as part of a Consolidated Plan submission and as a CDBG

performance review requirement; and (2) the identification of any

unintended consequences in applying these requirements that would

frustrate the purposes of, or otherwise impede a grantee's ability to

comply with, fair housing requirements.

Most grantees completed their analysis of impediments to fair

housing choice last year and are now taking actions to address

identified impediments. Thus, grantees' concerns are now generally

focused on how HUD will view the appropriateness and sufficiency of

their actions. The proposed regulation is intended to provide for a

more objective determination of appropriateness. The regulation does

not specifically address, however, the following issues: (1) Is a

grantee required to take actions to eliminate or overcome the effects

of all identified impediments? (2) Must the actions be taken each

program year, or over a period of time--which may coincide with the

grantee's Consolidated Plan period or some other period of time? (3)

Should certain impediments have a priority for action? (4) At what

point in the future would the grantee be expected to have eliminated

all identified impediments within the grantee's control and taken all

possible actions to overcome the effects of impediments not within the

grantee's control? Comments are sought on whether and how the

regulation should address these issues.

States are requested to comment on the issue of whether the State

CDBG regulations should contain fair housing performance standards

comparable to those proposed under Sec. 570.904. The CDBG Entitlement

program regulations contain an entire subpart (subpart O) concerning

HUD reviews and determinations of grantee performance. Section 570.904,

for example, describes the review criteria for determining compliance

with equal opportunity and fair housing requirements. In contrast, the

regulatory language governing performance reviews under the State CDBG

program is much shorter and less detailed. Section 570.493 essentially

declares only that HUD shall make such reviews and audits as are

necessary to determine whether a State is in compliance with the

various requirements of the Act and other applicable laws.

This rule proposes to clarify the review standard (at Sec. 570.904)

concerning fair housing performance for entitlement communities. There

is no comparable review standard being proposed for States because

there is no comparable section in the State program regulations. This

proposed rule seeks to ensure more objective determinations of

compliance with fair housing requirements. It also seeks to resolve the

discontinuity between HUD's limited authority for action under the

Consolidated Plan rule and HUD's broader authority to undertake

performance reviews under the CDBG program rules. Not including

specific review standards for the State CDBG program, however, means

that the disparity and ambiguity over standards for performance will

still exist for States. The difference between the CDBG program

regulations for States and for Entitlement communities could also

impart the false impression that HUD is more concerned about fair

housing performance under the Entitlement program than under the State

program. On the other hand, if HUD revises Sec. 570.493 to include fair

housing performance standards comparable to those proposed under

Sec. 570.904, the State program regulations

[[Page 57885]]

would be far more specific about fair housing performance than about

other program requirements. This likewise could convey a false

impression that HUD is more concerned about fair housing performance by

States than about other CDBG program requirements. Comments on these

State CDBG issues are therefore requested.

Findings and Certifications

Environmental Impact

A Finding of No Significant Impact with respect to the environment

for this rule has been made in accordance with HUD regulations at 24

CFR part 50, which implement section 102(2)(C) of the National

Environmental Policy Act of 1969. The Finding of No Significant Impact

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

weekdays in the Office of the Rules Docket Clerk, Office of the General

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

Seventh Street, S.W., Washington, D.C. 20410.

Regulatory Flexibility Act

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 would not have a significant

economic impact on a substantial number of small entities. There are no

anti-competitive discriminatory aspects of the rule with regard to

small entities and there are not any unusual procedures that would need

to be complied with by small entities. Nevertheless, the Department is

sensitive to the fact that the uniform application of requirements on

entities of differing sizes often places a disproportionate burden on

small businesses. The Department, therefore, is soliciting alternatives

for compliance from small entities as to how these small entities might

comply in a way less burdensome to them.

Executive Order 12612, Federalism

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

of Executive Order 12612, Federalism, has determined that this rule

does not have ``federalism implications'' because it does not have

substantial direct effects on the States (including their political

subdivisions), or on the distribution of power and responsibilities

among the various levels of government.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance Program number assigned

to the Community Development Block Grant entitlement program is 14.218

and for the State CDBG program is 14.228.

List of Subjects in 24 CFR Part 91

Aged, Grant programs--housing and community development, Homeless,

Individuals with disabilities, Low and moderate income housing,

Reporting and recordkeeping requirements.

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, the Department proposes to amend parts 91 and 570 of

title 24 of the Code of Federal Regulations as follow:

PART 91--CONSOLIDATED SUBMISSION FOR COMMUNITY PLANNING AND

DEVELOPMENT PROGRAMS

1. The authority citation for part 91 continues to read as follows:

Authority: 42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-11388,

12701-12711, 12741-12756, and 12901-12912.

2. Section 91.225 is amended by revising paragraph (a)(1) to read

as follows:

Sec. 91.225 Certifications.

(a) * * *

(1) Affirmatively furthering fair housing. Each jurisdiction is

required to submit a certification that it will affirmatively further

fair housing which means that it will assume the responsibility of fair

housing planning by having conducted a complete and accurate analysis

of impediments to fair housing choice within the jurisdiction (with

periodic updates, as appropriate); is taking appropriate actions to

overcome the effects of any impediments identified through that

analysis outside the jurisdiction's control and to eliminate identified

impediments within the control of the jurisdiction; and is maintaining

records reflecting the analysis and actions in this regard.

* * * * *

3. Section 91.325 is amended by revising paragraph (a)(1) to read

as follows:

Sec. 91.325 Certifications.

(a) General--(1) Affirmatively furthering fair housing. Each State

is required to submit a certification that it will affirmatively

further fair housing which means that it will assume the responsibility

of fair housing planning by having conducted a complete and accurate

analysis of impediments to fair housing choice within the State (with

periodic updates, as appropriate); is taking appropriate actions to

overcome the effects of any impediments identified through that

analysis outside the State's control and to eliminate identified

impediments within the State's control; and is maintaining records

reflecting the analysis and actions in this regard. (See

Sec. 570.487(b)(4) of this title.)

* * * * *

4. Section 91.425 is amended by revising paragraph (a)(1)(i) to

read as follows:

Sec. 91.425 Certifications.

(a) Consortium certifications--(1) General--(i) Affirmatively

furthering fair housing. Each consortium must certify that it will

affirmatively further fair housing which means that it will assume the

responsibility of fair housing planning by having conducted a complete

and accurate analysis of impediments to fair housing choice within the

area (with periodic updates, as appropriate); is taking appropriate

actions to overcome the effects of any impediments identified through

that analysis outside the consortium's control and to eliminate

identified impediments within the consortium members' control; and is

maintaining records reflecting the analysis and actions in this regard.

* * * * *

5. Section 91.500 is amended by adding a sentence to the end of

paragraph (b)(3) to read as follows:

Sec. 91.500 HUD approval action.

* * * * *

(b) * * *

(3) * * * A jurisdiction's certification to affirmatively further

fair housing would be determined to be inaccurate if the jurisdiction

has no supporting records; the jurisdiction's analysis of impediments

to fair housing choice (with periodic updates) is inaccurate or

substantially incomplete based on generally available facts and data,

including, but not limited to, Home Mortgage Disclosure Act data, facts

disclosed in a HUD civil rights monitoring or compliance review, a

civil action brought by the U.S. Department of Justice or private

parties, and public and private studies of

[[Page 57886]]

housing discrimination affecting residents of the grantee jurisdiction;

the actions taken by the jurisdiction to eliminate impediments within

the grantee's control and overcome the effects of other identified

impediments to fair housing choice were not appropriate because the

actions did not address an identified impediment or did not result in

meaningful and measurable progress in eliminating the impediment or

overcoming the impediment's effects; or the grantee has been charged

with a violation of the Fair Housing Act by HUD, is the defendant in a

Fair Housing Act lawsuit filed by the U.S. Department of Justice, or

has received from HUD a letter of noncompliance findings involving

housing under title VI of the Civil Rights Act of 1968, section 504 of

the Rehabilitation Act of 1974 or Section 109 of the Housing and

Community Development Act of 1974, and the grantee has not resolved

such charge, lawsuit, or letter of noncompliance findings to the

satisfaction of HUD.

* * * * *

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

6. The authority citation for part 570 continues to read as

follows:

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

7. Section 570.487 is amended by revising paragraphs (b)(1) and

(b)(2) to read as follows:

Sec. 570.487 Other applicable laws and related program requirements.

* * * * *

(b) * * *

(1) Conducting a complete and accurate analysis to identify

impediments to fair housing choice within the State (with periodic

updates, as appropriate);

(2) Taking appropriate actions to eliminate any impediments

identified through that analysis that are within the control of the

State and to overcome the effects of any impediments outside the

control of the State;

* * * * *

8. Section 570.601 is amended by revising paragraph (a)(1) and the

third sentence of paragraph (a)(2) to read as follows:

Sec. 570.601 Public Law 88-352 and Public Law 90-284; affirmatively

furthering fair housing; Executive Order 11063.

(a) * * *

(1) Public Law 88-352, which is title VI of the Civil Rights Act of

1964 (42 U.S.C. 2000d et seq.), and implementing regulations in 24 CFR

parts 1 and 100.

(2) * * * Furthermore, in accordance with section 104(b)(2) of the

Act, for each community receiving a grant under subpart D of this part,

the certification that the grantee will affirmatively further fair

housing shall specifically require the grantee to assume the

responsibility of fair housing planning by conducting a complete and

accurate analysis to identify impediments to fair housing choice within

its jurisdiction (with periodic updates, as appropriate), taking

appropriate actions to eliminate any impediments identified through

that analysis that are within the grantee's control and to overcome the

effects of any identified impediments that are outside its control, and

maintaining records reflecting the analysis and actions in this regard.

* * * * *

9. Section 570.904 is amended by revising paragraphs (a)(1)

introductory text and (a)(1)(ii), removing the current paragraph (b),

redesignating paragraphs (c) and (d) as (b) and (c) respectively and

revising newly redesignated paragraph (b), to read as follows:

Sec. 570.904 Equal opportunity and fair housing review.

(a) Nondiscrimination requirements. (1) The Department will presume

that the recipient has carried out its CDBG-funded program in

accordance with civil rights certifications and requirements of the Act

prohibiting discrimination unless:

* * * * *

(ii) There is evidence that a policy, practice, standard or method

of administration, although neutral on its face, operates to deny or

affect adversely in a significantly disparate way the provision of

employment or services, benefits or participation to persons of a

particular race, color, religion where applicable, sex, national

origin, age or handicap, or fair housing to persons of a particular

race, color, religion, sex, disability, familial status, or national

origin, or

* * * * *

(b) Affirmatively furthering fair housing. HUD will review to

determine whether the grantee is affirmatively furthering fair housing

in accordance with Sec. 570.601(a)(2).

(1) HUD will determine whether:

(i) The grantee's analysis of impediments to fair housing choice

(with periodic updates) is accurate and substantially complete based on

generally available facts and data, including, but not limited to, Home

Mortgage Disclosure Act data, facts disclosed in a HUD civil rights

monitoring or compliance review, a civil action brought by the U.S.

Department of Justice or private parties, and public and private

studies of housing discrimination affecting residents of the grantee

jurisdiction.

(ii) The grantee took appropriate actions to eliminate any

identified impediments that are within its control and to overcome the

effects of impediments to fair housing choice identified in the

grantee's analysis of impediments to fair housing choice that are

outside its control. An action is appropriate if the action addresses

an identified impediment and results in meaningful and measurable

progress in overcoming the impediment's effects.

(2) Notwithstanding favorable determinations under paragraph (b)(1)

of this section, HUD may conclude that the grantee failed to meet its

responsibility to affirmatively further fair housing if the grantee has

been charged with a violation of the Fair Housing Act by HUD, is the

defendant in a Fair Housing Act lawsuit filed by the U.S. Department of

Justice, or has received from HUD a letter of noncompliance findings

involving housing under title VI of the Civil Rights Act of 1968,

section 504 of the Rehabilitation Act of 1973 or section 109 of the HCD

Act, and the grantee has not resolved such charge, lawsuit, or letter

of noncompliance findings to the satisfaction of HUD.

* * * * *

Dated: September 25, 1998.

Andrew Cuomo,

Secretary.

[FR Doc. 98-28812 Filed 10-27-98; 8:45 am]

BILLING CODE 4210-32-P