[Federal Register Volume 60, Number 13 (Friday, January 20, 1995)]
[Notices]
[Pages 4352-4359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1525]



      

[[Page 4351]]

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Part IX





Department of Housing and Urban Development





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1995 Funding for Comprehensive Improvement Assistance Program; Notice

  Federal Register / Vol. 60, No. 13 / Friday, January 20, 1995 / 
Notices   
[[Page 4352]] 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Public and Indian Housing
[Docket No. N-95-3867; FR-3774-N-01]


Advance Notice of Fiscal Year (FY) 1995 Funding for Comprehensive 
Improvement Assistance Program (CIAP)

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Advance notice of FY 1995 funding for CIAP.

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SUMMARY: This Notice provides advance information to 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 
for applying for FY 1995 CIAP funding. Therefore, the CIAP eligible HA 
may start now to plan and develop its FY 1995 CIAP application. 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: This Advance Notice does not establish an application deadline 
date. A Notice of Fund Availability (NOFA) will be published at a later 
date and will establish an application deadline date, as well as set 
forth the amount of funds available for the CIAP.

FOR FURTHER INFORMATION CONTACT: William J. Flood, Director, 
Modernization Division, Office of Distressed and Troubled Housing 
Recovery, 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 Dominic A. Nessi, Director, Office of Native 
American Programs, Department of Housing and Urban Development, 451 
Seventh Street, SW., B-133, Washington, DC 20410. Telephone (202) 755-
0032. (This is not a toll-free number).
    Hearing or speech impaired individuals may call HUD's TDD number 
(202) 708-4595. (This is not a toll-free number).

SUPPLEMENTARY INFORMATION:

I. 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)). An interim rule revising the CIAP regulation, 
24 CFR Part 968, Subparts A and B, for PHAs and 24 CFR Part 905, 
Subpart I, for IHAs, and streamlining the program was published on 
March 15, 1993. A final rule will be published shortly.
    (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 project implementation 
schedule is approved by the Field Office. If the HA does not obligate 
approved funds in a timely manner, the Department will recapture the 
funds unless there are clear, valid reasons for not meeting the 
obligation deadline; i.e., delays which are outside of the HA's 
control.
    (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 the 
provisions of Section 3 of the Housing and Urban Development Act of 
1968, as amended (Section 3) 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. Although the Department has a 
vacancy reduction effort specifically aimed at reducing vacancies, HAs 
are encouraged to apply for CIAP funds to address vacant units where 
the work does not involve routine maintenance, but will result in 
reoccupancy.
    (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) of this Notice, 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 include the following 
Departmental initiatives to improve Public and Indian Housing:
    (i) Restoration of vacant units to occupancy;
    (ii) Resident capacity-building, including opportunities for 
resident management;
    (iii) Economic development, through job training and employment 
opportunities for residents and contracting opportunities for Section 3 
businesses;
    (iv) Drug elimination initiatives; and
    (v) Partnership with local government.

II. Allocation Amounts

    The Department will publish separately a NOFA in the Federal 
Register, explaining the FY 1995 appropriation, minus any FY 1995 set-
asides and reductions, plus any carry-over from FY 1994. The NOFA also 
will explain the allocation between the CGP and the CIAP, and within 
the CIAP, the allocation between Public Housing and Indian Housing and 
the allocation to each Field Office/Office of Native Americans Program 
(ONAP). The Field Office Public Housing Director or the ONAP 
Administrator shall have authority to make Joint Review selections and 
CIAP funding decisions.

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 
[[Page 4353]] improvement needs. Physical 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 I(b)(1)(i) of this Notice). 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/Local Official Consultation Requirements.
    (1) Residents/Homebuyers. The CIAP regulations at Secs. 968.220 or 
905.624 require the HA to establish a Partnership Process for rental 
developments which ensures full resident participation in the planning, 
implementation and monitoring of the modernization program, as follows:
    (i) Before submission of the CIAP Application, consultation with 
residents, resident organization, and resident management corporation 
(herein referred to as residents) of the development(s) being proposed 
for modernization and request for resident recommendations;
    (ii) Reasonable opportunity for residents, including duly-elected 
resident councils, 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, including duly-elected 
resident councils, 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;
    (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 Officials. Before submission of the CIAP Application, 
consultation with appropriate local 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 time 
frame, 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. 905.603; description of 
work items required to correct identified deficiencies; and the 
estimated cost. For example:

Development 1-1: 50 units of low-rent; 25 years old; physical needs 
are: new roofs; LBP testing; 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 of 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 of 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.

    Note: Refer to Section IV(d)(3) of this Notice regarding the 
consequences of not including all developments in the CIAP 
Application, even where there are no known current needs.

    (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 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, 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.
    (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 within the time period specified in the 
NOFA to be published at a future date, and must be complete, including 
the signed certification. 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.
    (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 [[Page 4354]] 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 that the HA has 14 calendar days 
from the date of HUD's notification to submit or correct the 
deficiency. This is not additional time to substantially revise the 
application. Deficiencies which may be corrected at this time are 
inadvertently omitted documents 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 notify the HA in writing 
immediately after this occurs.
    (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 
processing or processing on a reduced scope.
    (1) Eligibility for Processing. To be eligible for processing:
    (i) HA Eligibility. HA has fewer than 250 Public and Indian housing 
units.
    (ii) Development Eligibility. The development is either a public 
housing development, including a conveyed Lanham Act or Public Works 
Administration development, or a Section 23 Leased Housing Bond-
Financed project (BFP).
    (iii) Date of Full Availability (DOFA)/Major Reconstruction of 
Obsolete Projects (MROP) Funding. Each eligible development for which 
work is proposed has reached DOFA at the time of CIAP Application 
submission. In addition, where funded under 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. Where the 
following conditions exist, the HA will be reviewed on a reduced scope:
    (i) Section 504 Compliance. Where the Section 504 needs assessment 
identified a need for accessible units, the HA was required to make 
structural changes to meet that need by July 11, 1992. (``Section 504'' 
refers to Section 504 of the Rehabilitation Act of 1973.) Where the HA 
has not completed all required structural changes or obtained a time 
extension from HUD to July 11, 1995, the HA is eligible for processing 
only for Emergency Modernization or physical work needed to meet 
Section 504 requirements. Refer to PIH Notice 94-56 (HA), dated August 
15, 1994.
    (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 LBP testing.
    (iii) FHEO Compliance. Where the HA has not complied with Fair 
Housing and Equal Opportunity (FHEO) requirements as evidenced by an 
action, finding or determination as described below, unless the HA is 
implementing a voluntary compliance agreement or settlement agreement 
designed to correct the area(s) of noncompliance, the HA is eligible 
for processing only for Emergency Modernization or physical work needed 
to remedy civil rights deficiencies.
    (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 General Counsel or legally authorized 
designee;
    (B) A pending civil rights suit against the HA, referred by the 
Department's General Counsel and instituted by the Department of 
Justice;
    (C) Outstanding HUD findings of HA noncompliance with civil rights 
statutes and executive orders under Sec. 968.110(a) or Sec. 905.115, or 
implementing regulations, as a result of formal administrative 
proceedings, unless the HA is implementing a HUD-approved resident 
selection and assignment plan or compliance agreement designed to 
correct the area(s) of noncompliance;
    (D) A deferral of the processing of applications from the HA 
imposed by HUD under Title VI of the Civil Rights Act of 1964, the 
Attorney General's Guidelines (28 CFR 50.3) and the HUD Title VI 
regulations (24 CFR 1.8) 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 
under Sec. 968.110(a) or Sec. 905.115 in a civil action filed against 
the HA by a private individual, unless the HA is implementing a HUD-
approved resident selection and assignment plan or compliance agreement 
designed to correct the area(s) of noncompliance.
    (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. Developments having physical 
conditions of an emergency nature, posing an immediate threat to the 
health or safety of residents or related to fire safety, and which must 
be corrected within one year of CIAP funding approval. Funding is 
limited to physical work items and 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 or the 
long-term viability and reasonable cost determination in section V(e).
    (ii) Group 2, Other Modernization. Developments not having physical 
conditions of an emergency nature and located in HAs which have 
demonstrated a capability of carrying out the proposed modernization 
activities. Other Modernization includes: one or more physical work 
items, where the Field Office determines that the physical improvements 
are necessary and sufficient to extend 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 I(b)(1)(i) of this Notice 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 
[[Page 4355]] paragraph and the long-term viability and reasonable cost 
determination in section V(e).
    (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 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 24 CFR Part 901, PHMAP, or (B) 
designated as Troubled, but has a reasonable prospect of acquiring 
management capability which may include through CIAP-funded management 
improvements. 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 Sec. 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 Sec. 905.135 or (B) designated as 
High Risk, but has a reasonable prospect of acquiring management 
capability which may include through CIAP-funded management 
improvements. A High Risk IHA is eligible for Emergency Modernization 
only, unless it is making reasonable progress toward meeting the goals 
established in its management improvement plan under Sec. 905.135.
    (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 24 CFR Part 901, PHMAP, 
or (B) designated as Modernization Troubled, but has a reasonable 
prospect of acquiring modernization capability which may include 
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 
Sec. 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 
capable of effectively carrying out the proposed modernization 
improvements. 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 the Field Office has categorized 
the eligible HAs and their developments into Group 1 and Group 2, the 
Field Office shall 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 is then 
used for the overall HA score on that factor. 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.
    (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.............        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                
 tenant opportunity, 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 from a non-HUD source to improve or support the modernization 
activities or 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 
being obtained, 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 three 
years. Such affirmative action is required by Executive Orders 11625 
and 12432 for MBEs and by Executive Order 12138 for WBEs. To qualify 
for the bonus points, the PHA shall identify the contractor or the 
subcontractor, the dollar value of the [[Page 4356]] contract or 
subcontract, and the date of award.
    (7) Rating and Ranking. After rating all Group 2 HAs 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 rank each 
Group 2 HA based on its total score, list Group 2 HAs in descending 
order and identify other Group 2 HAs with lower ranking applications, 
but with high priority needs. 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, 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 assignment amount by 
at least 15%. This will preserve the Field Office's ability to adjust 
cost estimates and work items as a result of Joint Review.
    (2) The Field Office shall notify in writing each HA whose 
application has been selected for further processing as to whether the 
Joint Review will be conducted on-site or off-site (e.g., by telephone 
or in-office meeting). An HA will not be selected for Joint Review if 
there is a duplication of funding (refer to section V(g)). The Field 
Office shall notify in writing each HA not selected for Joint Review 
and the reasons for non-selection.
    (3) Where the HA has not included some of its developments in the 
CIAP Application, the Field Office may not, as a result of Joint 
Review, consider funding any non-emergency 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.
    (4) The HA shall prepare for the Joint Review by preparing a draft 
CIAP budget, and reviewing the other items to be covered during the 
Joint Review, 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, the Joint Review may include an inspection of the 
proposed physical work.
    (e) HUD Awards. 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)). 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. After Congressional notifications, the Field Office 
shall announce the HAs selected for CIAP grants, subject to their 
submission of an approvable CIAP budget and other required documents.
    (f) HA Submission of Additional Documents. After Field Office 
funding decisions, the Field Office shall provide written notification 
to the HA of funding approval, subject to HA submission of 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, HUD and 
the HA shall enter into an ACC amendment in order for the HA to obtain 
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). 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. The Field Office shall review the 
environmental impact of all modernization activities under Part 50, in 
accordance with the provisions of Parts 905 and 968. The Field Office 
may obtain the information required to conduct the environmental review 
during Joint Review. The HA shall provide any documentation to the 
Field Office that it needs to carry out its review under NEPA. After 
all Joint Reviews are conducted, the Field Office shall complete the 
environmental reviews before funding decisions are made and announced 
and before HAs are invited to submit CIAP budgets. Therefore, in 
requesting CIAP budgets, the Field Office shall specify any HA 
modification or elimination of activities or expenditures that the 
Field Office has determined, after review under the National 
Environmental Policy Act (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 HA which includes 
notification that HUD has complied with its responsibilities under 24 
CFR 905.120(a) or 24 CFR 968.110(c) and (d) before entering into an ACC 
amendment with the HA.
    (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.
    (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) Turnkey III Developments.
    (1) General. Eligible physical improvement costs for existing 
Turnkey III developments are limited to work items under Emergency 
Modernization or Other Modernization which are not the responsibility 
of the homebuyer families and which are related to health 
[[Page 4357]] and safety, correction of development deficiencies, 
physical accessibility, energy audits and cost-effective energy 
conservation measures, or LBP testing, interim containment, 
professional risk assessment and abatement. In addition, eligible costs 
include management improvements under the modernization type of Other 
Modernization. Turnkey III units which have been paid off, but not 
conveyed, are eligible for funding, but if funded, the modernization 
work must be completed before conveyance. The cost of the physical and 
management improvements shall not increase the purchase price and 
amortization period for the homebuyer families.
    (2) Ineligible Costs. Nonroutine maintenance or replacements, 
dwelling additions, and items that are the responsibility of the 
homebuyer families are ineligible costs.
    (3) Exception for vacant or non-homebuyer-occupied Turnkey III 
units.
    (i) Notwithstanding the requirements of subparagraph (1) of this 
paragraph, an HA may carry out Other Modernization in a Turnkey III 
development, whenever a Turnkey III unit becomes vacant or is occupied 
by a non-homebuyer family. An HA that intends to use funds under this 
paragraph must identify in its CIAP Application, the estimated number 
of units proposed for Other Modernization and subsequent sale. In 
addition, an HA must certify that: the proposed modernization under 
this paragraph would result in bringing the identified units into full 
compliance with the homeownership objectives under the Turnkey III 
Program; and the HA has homebuyers who both are eligible for 
homeownership, in accordance with the regulatory requirements, and have 
demonstrated their intent to be placed into each of the Turnkey III 
units proposed for Other Modernization.
    (ii) Before an HA may be approved for Other Modernization of a unit 
under this paragraph, it must first deplete any Earned Home Payments 
Account (EHPA) or Non-Routine Maintenance Reserve (NRMR) pertaining to 
the unit, and request the maximum operating subsidy. Any increase in 
the value of a unit caused by its Other Modernization under this 
paragraph shall be reflected solely by its subsequent appraised value, 
and not by an automatic increase in its purchase price.
    (b) Mutual Help Developments. Mutual Help developments are eligible 
for the same physical and management improvement costs as are rental 
developments. Mutual Help units which have been paid off, but not 
conveyed, are eligible for funding, but if funded, the modernization 
work must be completed before conveyance.
    (c) Professional Risk Assessment for LBP. A set-aside may be made 
available for LBP professional risk assessments under a separate NOFA 
and Processing Notice. HAs with pre-1980 family developments are 
strongly encouraged to apply for these funds to conduct LBP 
professional risk assessments.
    (d) In-Place Management (Interim Containment of LBP). Where the 
results of the LBP professional risk assessment recommend that the HA 
undertake in-place management measures, the HA is strongly encouraged 
to apply for CIAP funds to carry out such measures. However, if the HA 
is not successful in obtaining CIAP funds for in-place management 
measures, the HA may request a budget revision of previously approved, 
but unobligated CIAP funds to accomplish such measures. Where the HA 
had a CIAP budget revision approved for this purpose in FY 1994, the HA 
may request FY 1995 CIAP funds to complete the items which were 
eliminated as a result of the budget revision.
    (e) Long-Term Viability and Reasonable Cost.
    (1) Long-Term Viability. On Form HUD-52822, CIAP Application, the 
HA certifies whether the developments proposed for modernization have 
long-term viability, including prospects for full occupancy. If, during 
Joint Review, the HA or Field Office believes that a particular 
development may not have long-term viability, the Field Office shall 
make a final viability determination. If the Field Office determines 
that a development does not have long-term viability, the Field Office 
shall only approve Emergency Modernization or nonemergency funding 
necessary to maintain habitability until the demolition or disposition 
application is approved and residents can be relocated. In making the 
final viability determination, the Field Office shall consider whether:
    (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.
    (2) Reasonable Cost. During the Joint Review, the Field Office 
shall determine reasonable cost for the proposed work, using one of the 
following methods: (i) unfunded hard cost of 90 percent or less of 
computed Total Development Cost (TDC), which is easier to apply when 
comprehensive-type modernization is proposed; or (ii) the 
reasonableness of the estimated cost of individual work items, using 
national indices, such as R.S. Means Index, the Dodge Report or 
Marshall and Swift, adjusted to reflect local conditions and actual 
experience, which is easier to apply when piecemeal-type modernization 
is proposed. No computation of the TDC is required 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.
    (f) Use of Dwelling Units for Economic Self-Sufficiency Services 
and/or Drug Elimination Activities. On August 24, 1990, the Department 
issued HUD Notice PIH 90-39 (PHA), concerning the eligibility for 
funding under the Performance Funding System of dwelling units used to 
promote economic self-sufficiency services for residents and anti-drug 
programs. CIAP funds may be used to convert units for these purposes. 
Also refer to the Family Self-Sufficiency Program Guidelines (56 FR 
49592, September 30, 1991).
    (g) 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 1995 CIAP 
Processing Steps

    The deadline date for submission of the FY 1995 CIAP Application 
will be established in the NOFA to be published at a future date. 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.
    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. [[Page 4358]] 
    5. Field Office completes Joint Reviews, environmental reviews 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 will be 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) in 
connection with issuance of the FY 1995 NOFA for this program. The 
Finding of No Significant Impact will be 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, SW., 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 Notice 
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 Notice 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 Notice 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 the NOFA to be published as follows:
    (1) Documentation and Public Access. The Department will ensure 
that documentation and other information regarding each application 
submitted pursuant to the NOFA to be published are sufficient to 
indicate the basis upon which assistance was provided or denied. This 
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 the NOFA in its 
quarterly 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 the NOFA to be published. 
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 HUD Reform Act, 
codified as 24 CFR Part 4, will apply to the funding competition to be 
announced under the separately published NOFA. The requirements of the 
rule continue to apply until the announcement of the selection of 
successful applicants. Also refer to a final rule amending Part 4 
published in the Federal Register on November 19, 1993 (58 FR 61016), 
regarding the regulation of certain conduct by HUD employees and by 
applicants for HUD assistance during the selection process for the 
award of financial assistance by HUD.
    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 who have questions should contact the HUD Office of 
Ethics at (202) 708-3815 (voice), (202) 708-1112 (TDD). These are not 
toll-free numbers. The Office of Ethics can provide information of a 
general nature to HUD employees, as well. However, a HUD employee who 
has specific program questions, such as whether particular subject 
matter can be discussed with persons outside the Department, should 
contact his or her Field Office Counsel or Headquarters Counsel for the 
program to which the question pertains.
    (f) Prohibition Against Lobbying of HUD Personnel.
    Section 112 of the HUD Reform Act added a new section 13 of the 
Department of Housing and Urban Development Act (42 U.S.C. 3531 et 
seq.). Section 13 contains two provisions dealing with efforts to 
influence HUD's decisions with respect to financial assistance. The 
first imposes disclosure requirements on those who are typically 
involved in these efforts--those who pay others to influence the award 
of assistance or the taking of a management action by the Department 
and those who are paid to provide the influence. The second restricts 
the payment of fees to those who are paid to influence the award of HUD 
assistance, if the fees are tied to the number of housing units 
received or are based on the amount of assistance received, or if they 
are contingent upon the receipt of assistance.
    HUD regulations implementing section 13 are at 24 CFR Part 86. If 
readers are involved in any efforts to influence the Department in 
these ways, they are urged to read the regulation, particularly the 
examples contained in Appendix A of the rule. [[Page 4359]] 
    A final rule published in the Federal Register on September 7, 
1993, amended the definition of ``person'' to exclude from coverage a 
State or local government, or the officer or employee of a State or 
local government or housing finance agency thereof who is engaged in 
the official business of the State or local government.
    Any questions regarding the rule should be directed to the Office 
of Ethics, Room 2158, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410-3000. Telephone: (202) 708-
3815 (voice); (202) 708-1112 (TDD). These are not toll-free numbers. 
Forms necessary for compliance with the rule may be obtained from the 
local HUD Office.
    (g) Prohibition Against Lobbying Activities.
    The use of funds awarded under the NOFA to be published 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 nonappropriated 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.
    (h) Paperwork Reduction Act Statement. The information collection 
requirements contained in this NOFA have been approved by the Office of 
Management and Budget (OMB) under section 3504(h) of the Paperwork 
Reduction Act of 1989 (44 U.S.C. 3501-3520) and have been assigned OMB 
control number 2577-0044.

VIII. Catalog of Federal Domestic Assistance Program

    The Catalog of Federal Domestic Assistance Program number is 
14.852.

    Dated: January 9, 1995.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 95-1525 Filed 1-19-95; 8:45 am]
BILLING CODE 4210-33-P