[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 92-94]

 

                 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



[[Page 93]]



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 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



[[Page 94]]



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.

    (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]