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Proposed Timeliness Expenditure Standards for the Insular Areas Program
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: August 7, 2006 (Volume 71, Number 151)]
[Proposed Rules]
[Page 44859-44864]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au06-18]
[[Page 44860]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 91 and 570
[Docket No. FR-5012-P-01]
RIN 2501-AD15
Proposed Timeliness Expenditure Standards for the Insular Areas Program
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a regulatory timeliness
standard for the Insular Areas Program, as established by the Housing
and Community Development Act of 1974 (HCD Act). This proposed rule
follows publication of a February 22, 2005, final rule implementing a
2003 amendment to the HCD Act. This amendment moved the Community
Development Block Grant (CDBG) program assistance for Insular Areas
from section 107 to section 106 of the HCD Act. The expenditure
standards proposed ensure that grantees carry out their programs in a
timely manner. These standards take into consideration and reflect the
unique circumstances faced by Insular Areas in their ability to expend
CDBG allocations. This proposed rule would also establish provisions
for the distribution of assistance made available either as a result of
reductions or if an Insular Area fails to submit a final statement for
CDBG funds. This proposed rule also makes technical and conforming
changes to the Insular Areas Program.
DATES: Comment Due Date: October 6, 2006.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Office of the General Counsel, Rules Docket
Clerk, Department of Housing and Urban Development, 451 Seventh Street,
SW., Room 10276, Washington, DC 20410-0001. Communications should refer
to the above docket number and title and should contain the information
specified in the ``Request for Comments'' section.
Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
http://www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
In all cases, communications must refer to the docket number and title.
Public Inspection of Public Comments. All comments and
communications submitted to HUD will be available, without charge, for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at (202) 708-3055 (this
is not a toll-free number). Copies of all comments submitted are
available for inspection and downloading at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Steve Rhodeside, Senior Program
Officer, State and Small Cities Division, Office of Block Grant
Assistance, Office of Community Planning and Development, Department of
Housing and Urban Development, 451 Seventh Street, SW., Room 7184,
Washington, DC 20410-7000, telephone (202) 708-1322 (this is not a
toll-free number). Individuals with speech or hearing impairments may
access this number through TTY by calling the toll-free Federal
Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
The CDBG program authorized by the Housing and Community
Development Act of 1974 (HCD Act) (42 U.S.C. 5301, et seq.) provides
flexible funding for communities across the nation, including Insular
Areas, to develop and implement community and economic development
strategies that primarily benefit low- and moderate-income individuals.
Title V of the American Dream Downpayment Act (Pub. L. 108-186, 117
Stat. 2685, approved December 16, 2003) (Title V) amended the HCD Act,
moving the Insular Areas funding authorization from section 107(a) (42
U.S.C. 5307(a)) to section 106(a) (42 U.S.C. 5306(a)). This amendment
to the HCD Act provided for a specific portion of the CDBG allocation
to be distributed to Insular Areas, separate from the distribution for
special purpose grants as well as from the entitlement and state
formula distribution. The change provides the Insular Areas of Guam,
the Northern Mariana Islands, the Virgin Islands, and American Samoa
with greater assurance of annual CDBG program funding. On June 10,
2004, the Department published interim regulations (69 FR 32774) to
implement the statutory change. The Department adopted the interim rule
without change on February 22, 2005 (70 FR 8705).
The preamble of the June 10, 2004, interim rule stated that ``HUD
will establish timeliness standards for the Insular Areas Program under
section 106 by regulation at a later date. Until then, Insular Area
jurisdictions that will be funded under section 106 are encouraged to
adopt and achieve the timeliness standards for Sec. 570.902(a)
currently applicable to entitlement jurisdictions. In the meantime, HUD
specifically invites comments on the idea of adopting the Sec.
570.902(a) standards as the Insular Areas Program timeliness standards
under section 106.'' In response to the interim rule, no comments were
received concerning timeliness standards.
II. This Proposed Rule
This proposed rule would establish a new Sec. 570.902(c), which
would establish the timeliness standards for the Insular Areas Program.
As of 60 days prior to the conclusion of the Insular Areas' most recent
program years, the amount of grant funds available but undisbursed was
3.39 times the amount of American Samoa's most recent grant, 1.63 times
Guam's most recent grant, 1.63 times the Commonwealth of the Northern
Mariana Islands' most recent grant, and 2.57 times the Virgin Islands'
most recent grant. Although there is a clear need to improve the
expenditure rate for the Insular Areas Program, the Department
recognizes that Insular Areas Program grantees face unique geographic
and administrative challenges in implementing their CDBG program. For
example, due to the islands' remoteness, it takes much longer for
supplies to reach the Insular Areas than other CDBG grantees. As a
result, HUD believes that it should set a standard for the Insular
Areas Program, but that the standard should be less stringent than that
for the Entitlement Grant Program.
HUD therefore proposes that the timeliness standard for the Insular
Areas Program be that 60 days prior to the conclusion of an Insular
Area's most recent program year, the amount of grant funds available
but undisbursed
[[Page 44861]]
should be no more than two times the amount of the Insular Areas
grantee's most recent grant. If the grantee fails to demonstrate to
HUD's satisfaction that the lack of timeliness has resulted from
factors beyond the grantee's reasonable control, the grantee shall be
deemed to be untimely. A grantee that has less than two times its most
recent grant in its CDBG line of credit 60 days prior to the conclusion
of its most recent program year shall also be deemed to be untimely if
the amount of CDBG program income the recipient has on hand 60 days
prior to the end of the program year, together with the amount of funds
in its CDBG line of credit, exceeds twice the amount of the grantee's
most recent grant, unless the grantee is able to demonstrate to HUD's
satisfaction that the lack of timeliness has resulted from factors
beyond the grantee's reasonable control. In determining the corrective
action for untimely expenditure, HUD will consider the likelihood that
the recipient will expend a sufficient amount of funds over the next
program year to bring the grantee into compliance with the timeliness
requirements.
The first timeliness review under these standards will take place
60 days prior to the conclusion of the 2006 funding year. As a result,
the first review would take place on August 2, 2007, for Insular Areas
that do not change their program year start dates. This will give the
Insular Areas transition time to adjust to the new policy. In keeping
with the policy that is used for entitlement grantees, once a grantee
is deemed to be untimely under the new standard, the grantee will be
given 12 months, to the grantee's next 60-day test, to reach the
timeliness standard. Failure to meet the standard may cause HUD to
reduce the next grant by 100 percent of the amount in excess of twice
the Insular Area's most recent CDBG grant, unless HUD determines that
the untimeliness resulted from factors outside of the grantee's
reasonable control. The earliest that HUD will reduce grants under this
regulation will be in Fiscal Year (FY) 2008, should an Insular Areas
grantee be untimely 60 days prior to the conclusion of its FY 2006 and
2007 program years.
A new Sec. 570.442 entitled ``Reallocations'' would be added to
subpart F of part 570. This provision would provide that amounts that
become available as a result of reductions under subpart O, or as a
result of an Insular Area not submitting a final statement for CDBG
funds, shall be reallocated to the remaining eligible Insular Areas on
a pro rata basis.
III. Technical Corrections
Subpart O of part 570 would be revised to reference the Insular
Areas Program in Sec. Sec. 570.900, 570.901, 570.903, 570.910, and
570.911. This revision would implement the changes enacted by Title V.
In addition, the reference to Sec. 570.304(d) would be deleted from
Sec. 570.910(b)(8), since Sec. 570.304(d) was previously removed from
the regulations (60 FR 56891). In addition, the references to the
Housing Assistance Plan would be deleted from Sec. 570.900, since the
Housing Assistance Plan would no longer be required. Section 570.903(d)
would also be deleted, since the Department is no longer funding new
Small Cities grants in the State of New York.
Section 570.600 would be revised to reflect the fact that Sec.
570.612 does not apply to Insular Areas grants. Section 570.209(b)(2)
would be revised to have Sec. 570.209(b)(2) apply to Insular Areas by
program year for all Insular Areas grants that are made from section
106 of the HCD Act.
IV. Consolidated Plan
Section 570.440(a) of the interim regulation published on June 10,
2004, permitted Insular Areas grantees to either submit an abbreviated
consolidated plan under Sec. 91.235, or a complete consolidated plan
in accordance with subpart C of part 91 of the regulations. HUD
specifically requested comments on whether Insular Areas grantees
should continue to have the choice of submitting an abbreviated
consolidated plan or whether they should be required to submit a full
consolidated plan. The Department has received no comments to date on
this requirement. This proposed rule would revise Sec. 570.903 to
state that an abbreviated consolidated plan would be considered to be a
consolidated plan for the purposes of Sec. 570.903. This revision
would specifically make the section applicable to Insular Areas
grantees that choose to submit an abbreviated consolidated plan.
Section 91.235(a) would be revised to permit Insular Areas receiving
HOME funding to submit abbreviated consolidated plans. Section
91.235(c)(4) would require Insular Areas that submit an abbreviated
consolidated plan to follow the Submissions, Certifications,
Amendments, and Performance Reports requirements of Sec. 570.440.
Section 91.235(e) would be revised to require Insular Areas submitting
an abbreviated consolidated plan to follow the citizen participation
requirements of Sec. 570.441. If submission of a full consolidated
plan would help a grantee integrate its CDBG, HOME and Emergency
Shelter Grant programs, the grantee should strongly consider submitting
a full consolidated plan.
V. Findings and Certifications
Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866 (entitled ``Regulatory Planning and Review'').
OMB determined that this rule is a ``significant regulatory action'' as
defined in section 3(f) of the order (although not an economically
significant regulatory action, as provided under section 3(f)(1) of the
order). The docket file is available for public inspection in the
Regulations Division, Office of General Counsel, Department of Housing
and Urban Development, 451 Seventh Street, SW., Room 10276, Washington,
DC 20410-0500. Due to security measures at the HUD Headquarters
building, please schedule an appointment to review the docket file by
calling the Regulations Division at (202) 708-3055 (this is not a toll-
free number).
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments and the private sector. This interim rule does not
impose any federal mandates on any state, local, or tribal government
or the private sector within the meaning of UMRA.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits, to the
extent practicable and permitted by law, an agency from promulgating a
regulation that has federalism implications and either imposes
substantial direct compliance costs on state and local governments and
is not required by statute, or preempts state law, unless the relevant
requirements of section 6 of the executive order are met. This rule
does not have federalism implications and does not impose substantial
direct compliance costs on state and local governments or preempt state
law within the meaning of the executive order.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct regulatory flexibility analysis
of any rule subject to
[[Page 44862]]
notice and comment rulemaking requirements, unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. This rule will not have a
significant economic impact on a substantial number of small entities
for the following reasons. This rule only codifies in HUD's regulations
procedures that will enable the Department to enforce its timeliness
policy for the Insular Areas Program. As such, the rule does not
significantly differ from the current status in terms of the impact on
the number of entities, the amount of funding, or the governing
requirements applicable. Therefore, the undersigned certifies that this
proposed rule will not have a significant economic impact on a
substantial number of small entities, and an initial regulatory
flexibility analysis is not required.
Notwithstanding HUD's determination that this rule will not have a
significant economic impact on a substantial number of small entities,
HUD specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in this preamble.
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,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant
Impact is available for public inspection between the hours of 8 a.m.
and 5 p.m. weekdays in the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room 10276, Washington, DC 20410-0500. Due to security
measures at the HUD Headquarters building, please schedule an
appointment to review the finding by calling the Regulations Division
at (202) 708-3055 (this is not a toll-free number).
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number for the Insular
Areas Program is 14.225.
List of Subjects
24 CFR Part 91
Aged, Grant programs-housing and community development, Homeless,
Individuals with disabilities, Low and moderate income housing,
Reporting and recordkeeping requirements.
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, HUD proposes to amend 24 CFR parts 91 and 570 as follows:
PART 91--CONSOLIDATED SUBMISSIONS FOR COMMUNITY PLANNING AND
DEVELOPMENT PROGRAMS
1. The authority citation for 24 CFR 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. In Sec. 91.235 revise paragraphs (a), (b)(3), and (e) and add
paragraph (c)(4) to read as follows:
Sec. 91.235 Special case; abbreviated consolidated plan.
(a) Who may submit an abbreviated plan? A jurisdiction that is not
a CDBG entitlement community under 24 CFR part 570, subpart D, and is
not expected to be a participating jurisdiction in the HOME program
under 24 CFR part 92, as well as an Insular Area that is a HOME
grantee, may submit an abbreviated consolidated plan that is
appropriate to the types and amounts of assistance sought from HUD,
instead of a full consolidated plan.
(b) * * *
(3) Limitation. For the HOME program, an abbreviated consolidated
plan is permitted only with respect to reallocations to other than
participating jurisdictions (see 24 CFR part 92, subpart J), and for
Insular Areas that submit an abbreviated consolidated plan pursuant to
24 CFR part 570.440. For the CDBG program, an abbreviated plan may be
submitted for the HUD-administered Small Cities program (except that an
abbreviated plan may not be submitted for the HUD-administered Small
Cities program in the State of Hawaii), and for Insular Areas pursuant
to 24 CFR 570.440.
(c) * * *
(4) Submissions, Certifications, Amendments and Performance
Reports. An Insular Area that submits an abbreviated consolidated plan
under this section must comply with the submission, certification
amendment, and performance report requirements of Sec. 570.440.
* * * * *
(e) Citizen Participation. An Insular Area that submits an
abbreviated consolidated plan under this section must comply with the
citizen participation requirements of Sec. 570.441.
* * * * *
PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS
3. The authority citation for 24 CFR part 570 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 5301-5320.
4. Revise Sec. 570.209(b)(2)(i) to read as follows:
Sec. 570.209 Guidelines for evaluating and selecting economic
development projects.
* * * * *
(b) * * *
(2) Applying the aggregate standards. (i) A metropolitan city, an
urban county, or an Insular Area shall apply the aggregate standards
under paragraph (b)(1) of this section to all applicable activities for
which CDBG funds are first obligated within each single CDBG program
year, without regard to the source year of the funds used for the
activities. For Insular Areas, the preceding sentence applies to grants
received in program years after Fiscal Year 2004. A grantee under the
HUD-administered Small Cities program in New York, or Insular Areas
CDBG programs grants prior to Fiscal Year 2005, shall apply the
aggregate standards under paragraph (b)(1) of this section to all funds
obligated for applicable activities from a given grant; program income
obligated for applicable activities will, for these purposes, be
aggregated with the most recent open grant. For any time period in
which a community has no open HUD-administered grant, the aggregate
standards shall be applied to all applicable activities for which
program income is obligated during that period.
* * * * *
5. Add Sec. 570.442 to read as follows:
Sec. 570.442 Reallocations--Insular Areas.
(a) Any Insular Area funds that become available as a result of
reductions under subpart O of this part, shall be reallocated in the
same or future fiscal year to any remaining eligible Insular Areas
grantees pro rata according to population.
(b) Any Insular Areas grant funds for a fiscal year reserved for an
applicant that chooses not to submit a final
[[Page 44863]]
statement in accordance with Sec. 570.440 to receive such funds, shall
be reallocated in the same or future fiscal year to any remaining
eligible Insular Areas grantees pro rata according to population.
(c) No amounts shall be reallocated under this section in any
fiscal year to any applicant whose grant amount in such fiscal year was
reduced under subpart O of this part or who did not submit a final
statement in accordance with Sec. 570.440 for that fiscal year.
(d) Insular Areas grantees receiving additional funds under this
section will be evaluated for timeliness under Sec. 570.902 based upon
the original grant amount plus the additional funds received.
Accordingly, references in Sec. 570.902 to an Insular Area's grant
amount for its current program year include such additional funds, and
references to unexpended or undisbursed funds include such additional
funds.
6. Revise Sec. 570.600(a) to read as follows:
Sec. 570.600 General.
(a) This subpart K enumerates laws that the Secretary will treat as
applicable to grants made under section 106 of the Act, other than
grants to States made pursuant to section 106(d) of the Act, for
purposes of the Secretary's determinations under section 104(e)(1) of
the Act, including statutes expressly made applicable by the Act and
certain other statutes and Executive Orders for which the Secretary has
enforcement responsibility. This subpart K applies to grants made under
the Insular Areas Program in Sec. 570.405 and Sec. 570.440 with the
exception of Sec. 570.612. The absence of mention herein of any other
statute for which the Secretary does not have direct enforcement
responsibility is not intended to be taken as an indication that, in
the Secretary's opinion, such statute or Executive Order is not
applicable to activities assisted under the Act. For laws that the
Secretary will treat as applicable to grants made to States under
section 106(d) of the Act for purposes of the determination required to
be made by the Secretary pursuant to section 104(e)(2) of the Act, see
Sec. 570.487.
* * * * *
7. In Sec. 570.900, revise paragraphs (a)(1) and (b)(1) to read as
follows:
Sec. 570.900 General.
(a) Performance review authorities--(1) Entitlement, Insular Areas,
and HUD-administered Small Cities performance reviews. Section
104(e)(1) of the Act requires that the Secretary shall, at least on an
annual basis, make such reviews and audits as may be necessary or
appropriate to determine whether the recipient has carried out its
activities in a timely manner, whether the recipient has carried out
those activities and its certifications in accordance with the
requirements and the primary objectives of the Act and with other
applicable laws, and whether the recipient has a continuing capacity to
carry out those activities in a timely manner.
* * * * *
(b) * * *
(1) The Department will determine the performance of each
entitlement, Insular Areas, and HUD-administered small cities recipient
in accordance with section 104(e)(1) of the Act by reviewing for
compliance with the requirements described in Sec. 570.901 and by
applying the performance criteria described in Sec. Sec. 570.902 and
570.903 relative to carrying out activities in a timely manner. The
review criteria in Sec. 570.904 will be used to assist in determining
if the recipient's program is being carried out in compliance with
civil rights requirements.
8. In Sec. 570.901, revise the introductory paragraph, redesignate
existing paragraphs (f), (g), and (h), as paragraphs (g), (h), and (i)
respectively, and add a new paragraph (f) to read as follows:
Sec. 570.901 Review for compliance with the primary and national
objectives and other program requirements.
HUD will review each entitlement, Insular Areas, and HUD-
administered small cities recipient's program to determine if the
recipient has carried out its activities and certifications in
compliance with:
* * * * *
(f) For Insular Areas Program grants only, the application and
amendment requirements at Sec. 570.440, the citizen participation
requirements at Sec. 570.441, the displacement policy requirements of
Sec. 570.606, and the lead-based paint requirements of Sec. 35.940;
* * * * *
9. In Sec. 570.902, revise the introductory paragraph, and add a
new paragraph (c) to read as follows:
Sec. 570.902 Review to determine if CDBG-funded activities are being
carried out in a timely manner.
HUD will review the performance of each entitlement, HUD-
administered small cities, and Insular Areas recipient to determine
whether each recipient is carrying out its CDBG-assisted activities in
a timely manner.
* * * * *
(c) Insular Areas recipients. (1) Before the funding of the next
annual grant and absent contrary evidence satisfactory to HUD, HUD will
consider an Insular Areas recipient to be failing to carry out its CDBG
activities in a timely manner if:
(i) Sixty days prior to the end of the grantee's current program
year, the amount of Insular Areas grant funds available to the
recipient under grant agreements but undisbursed by the U.S. Treasury
is more than 2.0 times the Insular Area's grant amount for its current
program year; and
(ii) The grantee fails to demonstrate to HUD's satisfaction that
the lack of timeliness has resulted from factors beyond the grantee's
reasonable control.
(2) Notwithstanding that the amount of funds in the line of credit
indicates that the Insular Areas recipient is carrying out its
activities in a timely manner pursuant to paragraph (c)(1) of this
section, HUD may determine that the recipient is not carrying out its
activities in a timely manner if:
(i) The amount of CDBG program income the recipient has on hand 60
days prior to the end of its current program year, together with the
amount of funds in its CDBG line of credit, exceeds 2.0 times the
Insular Area's grant amount for its current program year; and
(ii) The grantee fails to demonstrate to HUD's satisfaction that
the lack of timeliness has resulted from factors beyond the grantee's
reasonable control.
(3) In determining the appropriate corrective action to take with
respect to a HUD determination that a recipient is not carrying out its
activities in a timely manner pursuant to paragraphs (c)(1) or (c)(2)
of this section, HUD will consider the likelihood that the recipient
will expend a sufficient amount of funds over the next program year to
reduce the amount of unexpended funds to a level that will fall within
the standard described in paragraphs (c)(1) and (2) of this section
when HUD next measures the grantee's timeliness performance. For these
purposes, HUD will take into account the extent to which funds on hand
have been obligated by the recipient and its sub-recipients for specific
activities at the time the finding is made and other relevant information.
(4) If a recipient is determined to be untimely pursuant to
paragraphs (c)(1) or (c)(2) of this section in one year, and the
recipient is again determined to be untimely in the following year, HUD
may reduce the recipient's next grant by 100 percent of the amount in
excess of twice the Insular Area's most recent CDBG grant, unless HUD
determines that the untimeliness resulted from
[[Page 44864]]
factors outside of the grantee's reasonable control.
(5) The first review under paragraphs (c)(1) and (c)(2) will take
place 60 days prior to the conclusion of the Fiscal Year 2006 program year.
10. In Sec. 570.903, revise the introductory paragraph, paragraph
(a), and remove paragraph (d) to read as follows:
Sec. 570.903 Review to determine if the recipient is meeting its
consolidated plan responsibilities.
The consolidated plan, action plan, and amendment submission
requirements referred to in this section are in 24 CFR part 91. For the
purpose of this section, the term consolidated plan includes an abbreviated
consolidated plan that is submitted pursuant to 24 CFR part 91.235.
(a) Review timing and purpose. HUD will review the consolidated
plan performance of each entitlement, Insular Areas, and Hawaii HUD-
administered Small Cities grant recipient prior to acceptance of a
grant recipient's annual certification under 24 CFR part 91.225(b)(3)
to determine whether the recipient followed its HUD-approved
consolidated plan for the most recently completed program year, and
whether activities assisted with CDBG funds during that period were
consistent with that consolidated plan, except that grantees are not
bound by the consolidated plan with respect to the use or distribution
of CDBG funds to meet non-housing community development needs.
* * * * *
11. In Sec. 570.910, revise paragraphs (b)(2)(iii) and (b)(8) to
read as follows:
Sec. 570.910 Corrective and remedial actions.
* * * * *
(b) * * *
(2) * * *
(iii) For entitlement and Insular Areas recipients, canceling or
revising affected activities that are no longer feasible to implement
due to the deficiency and re-programming funds from such affected
activities to other eligible activities (pursuant to the citizen
participation requirements in 24 CFR part 91); or
* * * * *
(8) In the case of an entitlement or Insular Areas recipient,
condition the use of funds from a succeeding fiscal year's allocation
upon appropriate corrective action by the recipient. The failure of the
recipient to undertake the actions specified in the condition may
result in a reduction, pursuant to Sec. 570.911, of the entitlement or
Insular Areas recipient's annual grant by up to the amount
conditionally granted.
12. Revise Sec. 570.911(b) to read as follows:
Sec. 570.911 Reduction, withdrawal, or adjustment of a grant or other
appropriate action.
* * * * *
(b) Entitlement and Insular Areas grants. Consistent with the
procedures described in Sec. 570.900(b), the Secretary may make a
reduction in the entitlement grant amount either for the succeeding
program year or, if the grant had been conditioned, up to the amount
that had been conditioned. The amount of the reduction shall be based
on the severity of the deficiency and may be for the entire grant amount.
* * * * *
Dated: July 12, 2006.
Pamela H. Patenaude,
Assistant Secretary for Community Planning and Development.
[FR Doc. 06-6702 Filed 8-4-06; 8:45 am]
BILLING CODE 4210-67-P