[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR570.420]

[Page 91-93]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
 
           Subpart F_ Small Cities and Insular Areas Programs
 
Sec. 570.420  General.

    Source: 62 FR 62914, Nov. 25, 1997, unless otherwise noted.


    (a) Administration of nonentitlement CDBG funds by HUD or Insular 
Areas--(1) Small cities. The Act permits each State to elect to 
administer all aspects of the CDBG program annual fund allocation for 
the nonentitlement areas within its jurisdiction. This subpart sets 
forth policies and procedures applicable to grants for nonentitlement 
areas in States that have not elected, in a manner and time prescribed 
by the Secretary, to administer the CDBG program. States that elected to 
administer the program after the close of fiscal year 1984 cannot return 
administration of the program to HUD. A decision by a State to 
discontinue administration of the program would result in the loss of 
CDBG funds for nonentitlement areas in that State and the reallocation 
of those funds to all States in the succeeding fiscal year.
    (2) Insular areas. Title V of Public Law 108-186 amended the Act to 
move the insular areas funding authorization from sections 107(a) and 
(b) to section 106(a). This revision identified a specific portion of 
the CDBG allocation for insular areas that is separate from the 
distribution for special purpose grants, as well as from the Entitlement 
and State formula distribution. The insular areas of Guam, the Northern 
Mariana Islands, the Virgin Islands, and American Samoa are permitted to 
administer all aspects of their Community Development Block Grant (CDBG) 
program under section 106 of the Act in accordance with their final 
statement as further described at Sec. 570.440.
    (b) Scope and applicability. (1) This subpart describes the policies 
and procedures of the Small Cities Program that apply to nonentitlement 
areas in States where HUD administers the CDBG program. HUD currently 
administers the Small Cities program in only two States--New York (for 
grants prior to FY2000) and Hawaii. The small cities portion of this 
subpart principally addresses the requirements for New York in 
Sec. Sec. 570.421, 570.426, 570.427, and 570.431. Sections 570.429 and 
570.430 identify special procedures applicable to Hawaii. Section 
570.432 is applicable to both New York and Hawaii.
    (2) This subpart also describes the policies and procedures 
governing community development block grants to insular areas under 
section 106 of the

[[Page 92]]

Act. Sections 570.440 and 570.441 identify procedures applicable to the 
Insular Areas program under section 106 of the Act. Fund reservations 
for insular areas under section 107 of the Act shall remain governed by 
the policies and procedures described in section 107(a)(1)(A) of the Act 
and Sec. Sec. 570.400 and 570.405 of this part.
    (3) The policies and procedures set forth in the following 
identified subparts of this part apply to the HUD-administered Small 
Cities and Insular Areas programs, except as modified or limited under 
the provisions thereof or this subpart:
    (i) Subpart A--General Provisions;
    (ii) Subpart C--Eligible Activities;
    (iii) Subpart J--Grant Administration;
    (iv) Subpart K--Other Program Requirements;
    (v) Subpart M--Loan Guarantees; and
    (vi) Subpart O--Performance Reviews.
    (c) Public notification requirements. (1) Section 102 of the 
Department of Housing and Urban Development Reform Act of 1989 (42 
U.S.C. 3545) contains a number of provisions that are designed to ensure 
greater accountability and integrity in the provision of certain types 
of assistance administered by HUD. All competitive grants in the HUD-
administered Small Cities program in New York are affected by this 
statute, and the requirements identified at 24 CFR part 4 apply to them. 
Imminent threat grants under Sec. 570.424 and section 108 repayment 
grants under Sec. 570.432 are not affected by section 102 because they 
are not competitive grants.
    (2) The Hawaii HUD-administered Small Cities program is not subject 
to section 102 because the funds are not distributed by HUD on a 
competitive basis.
    (3) The Insular Areas program under section 106 of the Act is not 
subject to section 102 because the funds are not distributed by HUD on a 
competitive basis.
    (d) Abbreviated consolidated plan. Applications for the HUD-
administered Small Cities Program and the Insular Areas program under 
section 106 of the Act that contain housing activities must include a 
certification that the proposed housing activities are consistent with 
the applicant's consolidated plan as described at 24 CFR part 91.
    (e) National and primary objectives. (1) Each activity funded 
through the Small Cities program and the Insular Areas program under 
section 106 of the Act must meet one of the following national 
objectives as defined under the criteria in Sec. 570.208:
    (i) Benefit low- and moderate-income families;
    (ii) Aid in the prevention or elimination of slums or blight; or
    (iii) Be an activity that the grantee certifies is designed to meet 
other community development needs having a particular urgency because 
existing conditions pose a serious and immediate threat to the health or 
welfare of the community and other financial resources are not available 
to meet such needs.
    (2) In addition to the objectives described in paragraph (e)(1) of 
this section, with respect to grants made through the Small Cities 
program, not less than 70 percent of the total of grant funds from each 
grant and Section 108 loan guarantee funds received under subpart M of 
this part within a fiscal year must be expended for activities which 
benefit low- and moderate-income persons under the criteria of Sec. 
570.208(a) or of Sec. 570.208(d)(5) or (6). In the case of multiyear 
plans in New York State approved in response to NOFAs published prior to 
calendar year 1997, not less than 70 percent of the total funding for 
grants approved pursuant to a multiyear plan for a time period of up to 
three years must be expended for activities which benefit low- and 
moderate-income persons. Thus, 70 percent of the grant for year 1 of a 
multiyear plan approved in response to NOFAs published prior to calendar 
year 1997 must meet the 70 percent requirement, 70 percent of the 
combined grants from years 1 and 2 must meet the requirement, and 70 
percent of the combined grants from years 1, 2, and 3 must meet the 
requirement. In determining the percentage of funds expended for such 
activity, the provisions of Sec. 570.200(a)(3)(i), (iii), (iv), and (v) 
shall apply.

[[Page 93]]

    (3) In addition to the objectives described in paragraph (e)(1) of 
this section, grants made through the Insular Areas program shall also 
comply with the primary objective of 70 percent benefit to low- and 
moderate-income persons. Insular area recipients must meet this 
requirement for each separate grant under section 107 of the Act. For 
grants made under section 106 of the Act, insular area recipients must 
ensure that over a period of time specified in their certifications not 
to exceed three years, not less than 70 percent of the aggregate of CDBG 
fund expenditures shall be for low- and moderate-income activities 
meeting the criteria under Sec. 570.208(a) or under Sec. 570.208(d)(5) 
or (6). See also Sec. 570.200(a)(3) for further discussion of the 
primary objective.
    (f) Allocation of funds--(1) Small cities. The allocation of formula 
CDBG funds for use in nonentitlement areas of Hawaii is as provided in 
subpart A of this part.
    (2) Insular areas. The allocation of appropriated funds for insular 
areas under section 106 of the Act shall be governed by the policies and 
procedures described in section 106(a)(2) of the Act and Sec. Sec. 
570.440 and 570.441 of this subpart. The annual appropriations described 
in this section shall be distributed to insular areas on the basis of 
the ratio of the population of each insular area to the population of 
all insular areas.

[69 FR 32779, June 10, 2004]