[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Rules and Regulations]
[Pages 18672-18674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10240]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 570

[Docket No. FR-2905-C-03]
RIN 2506-AB24


Office of the Assistant Secretary for Community Planning and 
Development; Community Development Block Grant Program; Correction of 
Identified Deficiencies and Updates; Technical Correction

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Technical correction.

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SUMMARY: On November 9, 1995 (60 FR 56892), HUD published in the 
Federal Register a final rule that corrected identified deficiencies in 
the Community Development Block (CDBG) program, implemented relevant 
portions of the Cranston-Gonzalez National Affordable Housing Act, 
amended the CDBG conflict of interest provisions, implemented statutory 
changes from the Housing and community Development Act of 1987 and the 
Appropriations Act of 1989, and provided criteria for performance 
reviews and timely expenditure of funds under the CDBG program. This 
document corrects minor errors in that final rule.

EFFECTIVE DATE: December 11, 1995.

FOR FURTHER INFORMATION CONTACT: Deirdre Maguire-Zinni, Director, 
Entitlement Communities Division, Room 7282, Department of Housing and 
Urban Development, 451 Seventh Street SW., Washington, DC 20410, 
telephone number (202) 708-1577. (This telephone number is not toll-
free.) Hearing- or speech-impaired persons may access this number via 
TTY by calling the Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Corrections to November 9, 1995 Final Rule

    On November 9, 1995 (60 FR 56812), HUD published a final rule in 
the

[[Page 18673]]

Federal Register that amended the regulations for the Community 
Development Block Grant (CDBG) program in 24 CFR part 570. As described 
in the preamble (60 FR 65892), the November 9, 1995 final rule 
represented the final rulemaking for several prior rules, and it 
reflected the President's regulatory reinvention efforts by updating 
the regulations to conform with significant statutory changes to the 
CDBG program. More specifically, the November 9, 1995 final rule 
corrected identified deficiencies in the CDBG program, implemented 
relevant portions of the Cranston-Gonzalez National Affordable Housing 
Act, amended the CDBG conflict of interest provisions, implemented 
statutory changes from the Housing and Community Development Act of 
1987 and the Appropriations Act of 1989, and provided criteria for 
performance reviews and timely expenditure of funds under the CDBG 
program. In reviewing this final rule in preparation for its 
codification in the Code of Federal Regulations (CFR), HUD discovered 
several minor errors.
    In the November 9, 1995 final rule (60 FR 56912), HUD amended 
Sec. 570.208 by adding and redesignating certain paragraphs. However, 
the rule inadvertently did not make the necessary conforming change to 
the definition of ``Income'' in Sec. 570.3, which contains a reference 
to the CDBG regulations on resident income surveys (60 FR 56909). The 
definition incorrectly refers to Sec. 570.208(a)(1)(iv) for those 
regulations, but the November 9, 1995 rule redesignated this paragraph 
as paragraph (a)(1)(vi). Therefore, this document corrects the 
definition of ``Income'' in Sec. 570.3 to refer correctly to 
Sec. 570.208(a)(1)(vi).
    Similarly, the first sentence of the newly redesignated 
Sec. 570.208(a)(1)(vi) contains an internal reference to paragraph 
(a)(1)(v). However, the November 9, 1995 rule redesignated paragraph 
(a)(1)(v) as (a)(1)(vii). Therefore, this document corrects 
Sec. 570.208(a)(1)(vi) to refer correctly to paragraph (a)(1)(vii).
    The November 9, 1995 final rule removed the obsolete reference in 
Sec. 570.200(d)(1) to a compensation level of General Schedule (GS)-18, 
replacing it with a correct reference to Level IV of the Executive 
Schedule (60 FR 56910). The General Schedule and the Executive Schedule 
indicate certain levels of compensation for Federal employees. However, 
while the November 9, 1995 final rule updated Sec. 570.200(d)(1), it 
inadvertently failed to update paragraph (d)(2) of that section. 
Therefore, this document corrects Sec. 570.200(d)(2) regarding the 
correct level of consultant compensation.
    In a proposed rule published on March 28, 1990 (55 FR 11556), HUD 
proposed to add a new paragraph (f) to Sec. 570.202 that would 
implement section 510 of the Housing and Community Development Act of 
1987 (Pub. L. 100-242, approved February 5, 1988), authorizing the 
substantial reconstruction of housing owned and occupied by low- and 
moderate-income persons under certain circumstances. However, in the 
November 9, 1995 final rule (60 FR 56902), HUD explained that it would 
not be finalizing the proposed Sec. 570.202(f) at that time due to 
pending legislative proposals that would make this change unnecessary. 
Instead, the November 9, 1995 final rule used paragraph (f) to contain 
the authority for evaluating and reducing lead-based paint hazards. 
However, HUD failed to remove two incorrect references, in 
Secs. 570.200(e) and 570.506(c), to paragraph (f) as it had been 
proposed for substantial reconstruction. This document removes those 
incorrect references.
    This document also removes two references to ``enumeration 
districts,'' replacing them with the correct term ``block numbering 
areas.'' The Census Bureau now uses the term ``block numbering area,'' 
and HUD recognized the use of this term in its CDBG economic 
development final rule (January 5, 1995; 60 FR 1922, 1946) in 
Sec. 570.208(a)(4)(iv). However, HUD used the incorrect term 
``enumeration districts'' in Sec. 570.208(a)(1)(iii) (B) and (D) of its 
November 9, 1995 final rule. therefore, this document corrects these 
paragraphs.
    The effective date of this correction, December 11, 1995, reflects 
the effective date of the November 9, 1995 final rule (60 FR 56892).

II. Housing Opportunity Program Extension Act of 1996

    The November 9, 1995 final rule updated Sec. 570.201(n), by 
providing that CDBG funds could be used to provide direct homeownership 
assistance to low- and moderate-income households until October 1, 1995 
(60 FR 56911). Although the eligibility for this activity had expired 
by the date the Department published the final rule, the Department 
maintained the provision in Sec. 570.201(n), hoping that Congress would 
respond to the Department's request to reinstate the activity's 
eligibility (60 FR 56905).
    This document corrects Sec. 570.201(n) by removing the obsolete 
reference to the expiration date. Section 3(a) of the Housing 
Opportunity Program Extension Act of 1996 (Pub. L. 104-120; approved 
March 28, 1996) renewed the eligibility of using CDBG funds to provide 
direct homeownership assistance during Fiscal Year 1996 (October 1, 
1995 through September 30, 1996). However, rather than simply changing 
the date, which will again become obsolete and require additional 
regulatory amendments, this document corrects the section to provide 
that direct homeownership assistance is eligible ``subject to statutory 
authority.'' In an effort to keep grantees informed, the Department 
will attempt to publish a notice in the Federal Register as quickly as 
possible if Congress does not reinstate this authority.

III. Other Corrections and Conforming Changes

    The Department has also discovered several technical corrections 
and changes to other sections of the regulations that it should have 
included in the November 9, 1995 final rule. The Department will 
publish a separate technical amendment to correct these sections. The 
Department cannot include such corrections and changes in this 
technical correction document, because they involve sections that the 
Department did not otherwise amend in the November 9, 1995 final rule.

IV. Clarification Regarding ``Extent of Growth Lag''

    The November 9, 1995 final rule revised the definition of ``Extent 
of growth lag'' in Sec. 570.3 in an effort to reflect an amendment to 
section 102(a)(12) of the Housing and Community Development Act of 1974 
(the Act). This amendment, in section 904 of the Cranston-Gonzalez 
National Affordable Housing Act (Pub. L. 101-625, approved November 28, 
1990), provides instructions on adjusting population in the event of 
annexation. In the November 9, 1995 final rule, the Department referred 
to the 1990 Census in the erroneous belief that the Act requires the 
most recent census data available when adjusting the ``extent of growth 
lag'' calculation (see 60 FR 56905).
    However, the Department has reconsidered its interpretation of the 
Act and concludes that the Act's definition of ``Extent of growth lag'' 
requires the use of data from the 1980 Census, not the most recent 
census data available, in cases where boundaries have changed as a 
result of annexation. No further changes to the regulations are 
necessary, however, since the Department already removed the incorrect 
language from the definition in the CDBG Streamlining final rule,

[[Page 18674]]

published on March 20, 1996 (61 FR 11474). Section 570.3 now refers 
directly to section 102(a)(12) of the Act for the definition of 
``Extent of growth lag''.
    Accordingly, FR Doc. 95-27488, a final rule published in the 
Federal Register on November 9, 1995 (60 FR 56892), is corrected to 
read as follows:
    1. On page 56909, in the third column, in Sec. 570.3, the second 
sentence of the definition of the term ``Income'' is corrected to read 
as follows.


Sec. 570.3   Definitions.

* * * * *
    Income. * * * The option to choose a definition does not apply to 
activities that qualify under Sec. 570.208(a)(1) (Area benefit 
activities), except when the recipient carries out a survey under 
Sec. 570.208(a)(1)(vi). * * *
* * * * *
    2. On page 56910, in the third column, in Sec. 570.200, paragraph 
(d)(2) is corrected, and the third sentence of paragraph (e) is 
corrected, to read as follows:


Sec. 570.200   General policies.

* * * * *
    (d) * * *
    (2) Independent contractor relationship. Consultant services 
provided under an independent contractor relationship are governed by 
the procurement requirements in 24 CFR 85.36, and are not subject to 
the compensation limitation of Level IV of the Executive Schedule.
    (e) * * * A written determination is required for any activity 
carried out under the authority of Secs. 570.201(f), 570.201(i)(2), 
570.201(p), 570.201(q), 570.202(b)(3), 570.206(f), 570.209, and 
570.309.
* * * * *
    2a. On page 56911, in the second column, in instruction paragraph 
8., the words ``the introductory text of paragraph (n)'' are corrected 
to read ``paragraph (n)''.
    3. On page 56911, in the third column, in Sec. 570.201, paragraph 
(n) is corrected to read as follows:


Sec. 570.201   Basic eligible activities.

* * * * *
    (n) Homeownership assistance. Subject to statutory authority, CDBG 
funds may be used to provide direct homeownership assistance to low- 
and moderate-income households, as provided in section 105(a)(25) of 
the Act.
* * * * *
    4. On page 56912, in the second and third columns, in Sec. 570.208, 
the second sentence of paragraph (a)(1)(iii)(B), the second sentence of 
paragraph (a)(1)(iii)(D), and the first sentence of paragraph 
(a)(1)(vi) are corrected to read as follows:


Sec. 570.208  Ineligible activities.

    (a) * * *
    (1) * * *
    (iii) * * *
    (B) * * * As available, the recipient must provide information that 
identifies the total number of calls actually received over the 
preceding 12-month period for each of the emergency services to be 
covered by the emergency telephone number system and relates those 
calls to the geographic segment (expressed as nearly as possible in 
terms of census tracts, block numbering areas, block groups, or 
combinations thereof that are contained within the segment) of the 
service area from which the calls were generated. * * *
* * * * *
    (D) * * * For this purpose, the recipient must include a 
description of the boundaries of the service area of the emergency 
telephone number system, the census divisions that fall within the 
boundaries of the service area (census tracts or block numbering 
areas), the total number of persons and the total number of low- and 
moderate-income persons within each census division, the percentage of 
low- and moderate-income persons within the service area, and the total 
cost of the system.
* * * * *
    (vi) In determining whether there is a sufficiently large 
percentage of low- and moderate-income persons residing in the area 
served by an activity to qualify under paragraphs (a)(1) (i), (ii), or 
(vii) of this section, the most recently available decennial census 
information must be used to the fullest extent feasible, together with 
the section 8 income limits that would have applied at the time the 
income information was collected by the Census Bureau. * * *
* * * * *
    5. On page 56916, in the first column, in Sec. 570.506, paragraph 
(c) is corrected to read as follows:


Sec. 570.506  Records to be maintained.

* * * * *
    (c) Records that demonstrate that the recipient has made the 
determinations required as a condition of eligibility of certain 
activities, as prescribed in Secs. 570.201(f), 570.201(i)(2), 
570.201(p), 570.201(q), 570.202(b)(3), 570.206(f), 570.209, and 
570.309.
* * * * *
    Dated: April 18, 1996.
Camille E. Acevedo,
Assistant General Counsel for Regulations.
[FR Doc. 96-10240 Filed 4-26-96; 8:45 am]
BILLING CODE 4210-29-M