[Federal Register Volume 60, Number 60 (Wednesday, March 29, 1995)]
[Rules and Regulations]
[Pages 16358-16361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7402]
[[Page 16357]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Assistant Secretary for Community Planning and
Development
_______________________________________________________________________
24 CFR Parts 594 and 595
John Heinz Neighborhood Development Program; Final Rule
Federal Register / Vol. 60, No. 60 / Wednesday, March 29, 1995 /
Rules and Regulations
[[Page 16358]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development
24 CFR Parts 594 and 595
[Docket No. R-95-1665; FR-3389-F-02]
RIN 2506-AB48
John Heinz Neighborhood Development Program
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
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SUMMARY: The John Heinz Neighborhood Development Program was
established as a permanent program in the Housing and Community
Development Act of 1992. Previously, the program had been administered
by the Department as a demonstration program. Pending this final rule,
the permanent program has been implemented through Notices of Funding
Availability (NOFAs) published in the Federal Register. The most recent
NOFA was published on February 24, 1995.
This final rule establishes the requirements applicable to the
permanent program and contains HUD's responses to comments received on
the proposed rule. The rule, which takes effect before the deadline for
applications under the February 24 NOFA, will govern that NOFA and
future funding competitions that may be announced from time to time.
EFFECTIVE DATE: April 28, 1995.
FOR FURTHER INFORMATION CONTACT: Gene Hix, Grant Officer, Office of
Community Planning and Development, Department of Housing and Urban
Development, Room 7218, 451 Seventh Street SW., Washington, D.C. 20410;
telephone number (202) 708-2186. The TDD number is (202) 708-1455.
(These are not toll-free numbers.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The information collection requirements contained in this rule have
been approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1980. The control number for information
collections described in this document is 2535-0084.
Background
Section 832 of the Housing and Community Development Act of 1992
(42 U.S.C. 5318a) established the John Heinz Neighborhood Development
Program as a permanent program of the Department. Previously, the
program had been authorized and operated as a demonstration program,
pursuant to section 123 of the Housing and Urban-Rural Recovery Act of
1983 (42 U.S.C. 5318 note). On June 8, 1993 (58 FR 32210), HUD
published a proposed rule addressing requirements of the permanent
program. This proposed rule referenced a notice of funding availability
(NOFA) that was published on the same day as the proposed rule (58 FR
32215) and invited public comment on the announced requirements.
Discussion of Public Comments
The Department received only one comment in response to the
proposed rule. The comment, from the National Neighborhood Coalition,
incorporated four separate points that are addressed in this section of
the preamble.
(1) Neighborhood resident participation. The commenter stated that
two conditions are critical to the success and sustainability of the
organization and projects that it undertakes. The comment emphasized
the importance of both participation by residents of the neighborhood
and a governing body whose composition reflects the demographic
characteristics of the neighborhood. HUD agrees with this observation,
and the final rule indicates that NOFAs developed for this program will
give appropriate weight to this factor.
(2) Neighborhood Development Funding Organizations (NDFO). Another
comment questioned the requirement that an applicant obtain the
participation of an NDFO (bank) located within the neighborhood, noting
that a number of organizations do not have bank branches located within
their neighborhoods. The final rule clarifies this requirement by
omitting any requirement that the NDFO be located within the
neighborhood.
(3) Record of past performance of an applicant. Another comment
suggested that the record of past performance of an applicant is a
critical factor. HUD took this comment into consideration, but believes
that the record of past performance is adequately reflected in other
factors. The final rule is unchanged on this point.
(4) Smaller Grants to Fledgling Organizations. The commenter also
suggested that HUD make smaller grants in the $5,000 to $20,000 range
to fledgling organizations to help them get started. HUD already has
the authority to make smaller grants to these organizations; therefore,
the final rule is unchanged on this point.
Removal of Part 595
Currently 24 CFR part 595 contains regulations for the Neighborhood
Self-Help Development Program. Although this program was conceptually
similar to the John Heinz Neighborhood Development Program, the
authorizing legislation for the Neighborhood Self-Help Development
Program was repealed in 1981 (42 U.S.C. 8121 note, 95 Stat. 398).
Therefore, the Department is removing part 595 from the Code of Federal
Regulations, in order to avoid confusion about the status of that
program.
Other Matters
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule do 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 rule is not subject to review under the Order. The program
implemented by this rule will provide incentive funds to encourage
neighborhood organizations to become more self-sufficient in their
development activities.
Executive Order 12606, the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule has potential
for a significant impact on family formation, maintenance, and general
well-being. The purpose of the program implemented by this rule is to
improve neighborhood opportunities relating to employment, business,
housing, and the provision of essential services, all of which could
benefit families significantly. However, because the impact on families
is indirect and beneficial, no further review is considered necessary.
Environmental Review
At the time of publication of the proposed rule, a finding of no
significant impact with respect to the environment was made in
accordance with HUD regulations in 24 CFR part 50 that implement
section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332). The proposed rule is adopted by this final rule without
significant change. Accordingly, the [[Page 16359]] initial finding of
no significant impact remains applicable, and is available for public
inspection between 7:30 a.m. and 5:30 p.m. weekdays in the office of
the Rules Docket Clerk at the above address.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The rule
establishes program regulations for the award of grants to neighborhood
development organizations for the purpose of supporting local efforts
to improve opportunities relating to employment, business, housing, and
services within the participating neighborhoods.
Semiannual Agenda of Regulations
This rule was listed as Item No. 1842 in the Department's
Semiannual Agenda of Regulations published on November 14, 1994 (59 FR
57632, 57663), in accordance with Executive Order 12866 and the
Regulatory Flexibility Act.
The Federal Domestic Assistance Catalog number for this program
is 14.242.
List of Subjects
24 CFR Part 594
Community development, Grant programs--housing and community
development, Reporting and recordkeeping requirements, Urban renewal.
24 CFR Part 595
Community development, Grant programs--housing and community
development, Urban renewal.
Accordingly, and under the authority of 42 U.S.C. 3535(d), 24 CFR
chapter V is amended as follows:
1. Part 594 is added to read as follows:
PART 594--JOHN HEINZ NEIGHBORHOOD DEVELOPMENT PROGRAM
Subpart A--General
Sec.
594.1 Applicability and purpose.
594.3 Definitions.
Subpart B--Eligibility
594.5 Eligible applicants.
594.7 Other threshold requirements.
594.10 Eligible activities.
Subpart C--Funding Allocation and Criteria
594.15 Allocation amounts.
594.17 General criteria for competitive selection.
Subpart D--Award and Use of Grant Amounts
594.20 Submission procedures.
594.23 Approval and certification procedures.
594.25 Project administration.
594.28 Environmental reviews.
594.30 Equal opportunity and other Federal requirements.
Authority: 42 U.S.C. 3535(d) and 5318a.
Subpart A--General
Sec. 594.1 Applicability and purpose.
(a) General. This part establishes as a permanent program the John
Heinz Neighborhood Development Program, as authorized by section 832 of
the Housing and Community Development Act of 1992. Previously, the
program had been administered by the Department as a demonstration
program under Section 123 of the Housing and Urban-Rural Recovery Act
of 1983 (42 U.S.C. 5318 note).
(b) Purpose. The program is intended to assist communities to
become more viable, by providing incentive funds to carry out
neighborhood development activities that benefit low- and moderate-
income families. The program objectives are to increase the capacity of
neighborhood organizations, promote long-term financial support for
their neighborhood projects, and encourage greater participation of
neighborhood organizations with private and public institutions.
Sec. 594.3 Definitions.
Empowerment zone means an area designated by HUD as an Empowerment
Zone under 26 U.S.C. 1391-1393.
Enterprise community means an area designated by HUD as an
Enterprise Community under 26 U.S.C. 1391-1393.
Grantee means an eligible neighborhood organization that executes a
grant agreement with HUD under this part.
HUD means the Department of Housing and Urban Development.
Low- and moderate-income persons means families and individuals
whose incomes do not exceed 80 percent of the median income for the
area, as determined by the Secretary of HUD in accordance with 42
U.S.C. 5302(a)(20).
Neighborhood development funding organization means:
(1) A depository institution, the accounts of which are insured
pursuant to the Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq.,
or the Federal Credit Union Act, 12 U.S.C. 1751 et seq., and any
subsidiary (as such term is defined in 12 U.S.C. 1813(w)) thereof;
(2) A depository institution holding company and any subsidiary (as
such term is defined in 12 U.S.C. 1813(w)) thereof; or
(3) A company at least 75 percent of the common stock of which is
owned by one or more insured depository institutions or depository
institution holding companies.
Neighborhood development organization means the same as the term is
defined in Sec. 594.5.
Rural neighborhoods. In small cities with under 10,000 in
population and in rural areas, a neighborhood area can be the same unit
as the unit of general local government.
Unit of general local government means a city, town, township,
county, parish, village, or other general purpose political subdivision
of a State; an urban county; the Federated States of Micronesia; the
Marshall Islands; or a general purpose political subdivision thereof.
Subpart B--Eligibility
Sec. 594.5 Eligible applicants.
(a) General requirements. To be eligible under this program, a
neighborhood development organization must be located within the
neighborhood for which assistance is to be provided. It cannot be a
city-wide consortium, or, in general, an organization serving a large
area of the city. The applicant must meet all of the following
requirements:
(1) The organization must be incorporated as a private, voluntary,
nonprofit corporation under the laws of the State in which it operates;
(2) The organization must be responsible through a governing body
to the residents of the neighborhood it serves, and not less than 51
percent of the members of the governing body must be residents of the
neighborhood;
(3) The organization must have conducted business for at least one
year;
(4) The organization must operate within an area that meets at
least one of the following criteria:
(i) The area meets the requirements for Federal assistance under
section 119 of the Housing and Community Development Act of 1974, 42
U.S.C. 5318;
(ii) The area is designated as an Enterprise Community or
Empowerment Zone under Federal law as enacted;
(iii) The area is designated as an enterprise zone under State law
and is recognized by the Secretary as a State enterprise zone for
purposes of this part; or [[Page 16360]]
(iv) The area is a qualified distressed community within the
meaning of section 233(b)(1) of the Bank Enterprise Act of 1991, 12
U.S.C. 1834a(b)(1); and
(5) The organization must have conducted one or more eligible
neighborhood development activities that primarily benefit low- and
moderate-income persons.
(b) Special eligibility. Any facility that provides small
entrepreneurial business with affordable shared support services and
business development services and that meets the requirements of
paragraph (a) of this section may also be eligible to participate in
this program.
Sec. 594.7 Other threshold requirements.
In addition, an applicant must meet the following threshold
requirements:
(a) Specify a management business plan for accomplishing one or
more of the eligible activities specified in Sec. 594.10;
(b) Specify a strategy for achieving greater long-term private
sector support, especially in cooperation with a neighborhood
development funding organization; and
(c) Specify a strategy for increasing the capacity of the
applicant.
Sec. 594.10 Eligible activities.
Eligible activities include, but are not limited to, the following:
(a) Developing economic development activities that include:
(1) Creating permanent jobs in the neighborhood; or
(2) Establishing or expanding businesses within the neighborhood;
(b) Developing new housing, rehabilitating existing housing, or
managing housing stock within the neighborhood;
(c) Developing delivery mechanisms for essential services that have
lasting benefits to the neighborhood; and
(d) Planning, promoting, or financing voluntary neighborhood
improvement efforts.
Subpart C--Funding Allocation and Criteria
Sec. 594.15 Allocation amounts.
(a) Amounts and match requirement. HUD will make grants, in the
form of matching funds, to eligible neighborhood development
organizations. HUD reserves the right to make grants for less than the
maximum amount established by statute, and to limit the number of times
a previous grantee can receive funding. A Federal matching ratio will
be established for each grantee in accordance with the statutory
requirement that the highest ratios be established for neighborhoods
having the greatest degree of economic distress or the smallest number
of households.
(b) Administrative costs. The Secretary may use no more than 5
percent of the funds appropriated for the program for administrative or
other expenses in connection with the program.
Sec. 594.17 General criteria for competitive selection.
(a) Criteria. HUD will use the following general criteria for
selecting and ranking applications for all competitions for John Heinz
Neighborhood Development Program funds. The relative values for the
criteria will be indicated in each NOFA:
(1) The degree of economic distress and the benefit to low- and
moderate-income residents of the neighborhood;
(2) The past performance in carrying out eligible activities, and
staff capability;
(3) The quality of the Management/Business Plan;
(4) The evidence of coordination and resident participation; and
(5) The quality of the strategy to increase the capacity of the
organization and the strategy developed for meeting long-term financial
needs.
(b) Geographic diversity. The Department also reserves the right to
fund applicants in other than rank order, for the purpose of achieving
geographic balance.
Subpart D--Award and Use of Grant Amounts
Sec. 594.20 Submission procedures.
(a) Use of NOFAs. The Department will publish a Notice of Funding
Availability (NOFA) in the Federal Register for each funding
competition under this program, indicating the objective of the
competition; the amount of funding available; the application
procedures, including the eligible applicants and activities to be
funded; and any special conditions applicable to the competition,
including the requirements for the match. The NOFA also will describe
the maximum points to be awarded under each evaluation criterion, for
the purpose of ranking applications, and any special factors to be
considered in assigning the points to each criterion.
(b) Applications shall be submitted in accordance with the time,
place, and content described in the NOFA.
(Approved by the Office of Management and Budget under control
number 2535-0084)
Sec. 594.23 Approval and certification procedures.
(a) Approval of application. HUD's acceptance of an application for
review does not imply a commitment to provide funding. HUD will provide
notification of whether a project will be funded in accordance with the
criteria and procedures set out in the applicable NOFA.
(b) Certifications. In the absence of independent evidence that
tends to challenge in a substantial manner the certifications made by
the applicant pursuant to Sec. 594.30, the required certifications will
be accepted by HUD.
However, if independent evidence is available that tends to
challenge in a substantial manner an applicant's certification, HUD may
require further information or assurances to be submitted in order to
determine whether the applicant's certification is satisfactory.
Sec. 594.25 Project administration.
Project administration will be governed by the terms of the grant
agreement.
Sec. 594.28 Environmental reviews.
(a) For all proposed actions or activities that are not considered
categorically excluded under 24 CFR 50.20, HUD will perform the
appropriate environmental reviews under the National Environmental
Policy Act (NEPA).
(b) Whether the action or activity is categorically excluded from
NEPA review or not, HUD will comply also with other applicable
requirements of environmental statutes, Executive Orders, and HUD
standards listed in 24 CFR 50.4. The environmental reviews will be
performed before award of a grant. Grantees shall adhere to all
assurances applicable to environmental concerns as contained in the
RFGA and grant agreements.
Sec. 594.30 Equal opportunity and other Federal requirements.
Each participating neighborhood development organization must
certify that it will carry out activities assisted under the program in
compliance with:
(a) The requirements of the Fair Housing Act (42 U.S.C. 3601-3619)
and implementing regulations at 24 CFR parts 100, 108, 109, 110, and
115; part 200, subpart M; and Executive Order 11063 (Equal Opportunity
in Housing) (3 CFR, 1958-1963 Comp., p. 652) and implementing
regulations at 24 CFR Part 107; and applicable provisions of the Civil
Rights Act of 1964, 42 U.S.C. 2000a et seq., including Title VI (42
U.S.C. 2000d) (Nondiscrimination in [[Page 16361]] Federally Assisted
Programs) and its implementing regulations at 24 CFR part 1;
(b) The prohibitions against discrimination on the basis of age
under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and
implementing regulations at 24 CFR part 146; the prohibition against
discrimination against individuals with a disability under section 504
of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing
regulations at 24 CFR part 8; and the requirements of Executive Order
11246 (Equal Employment Opportunity) (3 CFR, 1964-1965 Comp., p. 339)
and the implementing regulations issued at 41 CFR chapter 60;
(c) The requirements of section 3 of the Housing and Urban
Development Act of 1968, 12 U.S.C. 1701u, and implementing regulations
at 24 CFR part 135;
(d) The requirements of Executive Order 11625 (3 CFR, 1971-1975
Comp., p. 616), Executive Order 12138 (3 CFR, 1979 Comp., p. 393), and
Executive Order 12432 (3 CFR, 1983 Comp., p. 198). Consistent with
HUD's responsibilities under these Orders, the grantee must make
efforts to encourage the use of minority and women's business
enterprises in connection with activities funded;
(e) The prohibitions against discrimination and related
requirements of section 109 of the Housing and Community Development
Act of 1974 (42 U.S.C. 5309);
(f) The requirements of the Americans with Disabilities Act (42
U.S.C. 12181-12189) and implementing regulations at 28 CFR part 36, as
applicable;
(g) The Consolidated Plan of the appropriate unit of general local
government; and
(h) Other Federal requirements as specified in the applicable NOFA
and application kit.
PART 595--[REMOVED AND RESERVED]
2. Part 595 is removed and reserved.
Dated: March 16, 1995.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 95-7402 Filed 3-28-95; 8:45 am]
BILLING CODE 4210-29-P