[Federal Register Volume 63, Number 208 (Wednesday, October 28, 1998)]
[Proposed Rules]
[Pages 57882-57886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28812]


      

[[Page 57881]]

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Part IV





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Parts 91 and 570



Fair Housing Performance Standards for Acceptance of Consolidated Plan 
Certifications and Compliance With Community Development Block Grant 
Performance Review Criteria; Proposed Rule

  Federal Register / Vol. 63, No. 208 / Wednesday, October 28, 1998 / 
Proposed Rules  

[[Page 57882]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 91 and 570

[Docket No. FR-4133-P-01]
RIN No. 2529-AA81


Fair Housing Performance Standards for Acceptance of Consolidated 
Plan Certifications and Compliance With Community Development Block 
Grant Performance Review Criteria

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would amend HUD regulations on Consolidated 
Submissions for Community Planning and Development Programs to 
establish a standard for determining if the jurisdiction's 
certification regarding affirmatively furthering fair housing is 
inaccurate.
    This rule would also amend HUD regulations on Community Development 
Block Grants to provide performance review standards for affirmatively 
furthering fair housing requirements. The performance review standards 
would clarify the basis upon which the Department makes its annual 
statutory determination that a grantee is carrying out its Community 
Development Block Grant (CDBG) program in compliance with its 
certifications and with other applicable laws.
    Both revisions would also make clear that compliance with the 
requirement to affirmatively further fair housing would require 
grantees to have a complete and accurate analysis of impediments to 
fair housing choice and to not violate the Fair Housing Act or civil 
rights laws prohibiting discrimination in housing programs receiving 
Federal financial assistance. These revisions would serve to provide 
communities with a clear idea of the standards that HUD would use in 
both reviewing certifications included as part of a grantee's 
Consolidated Plan submission, as well as determining CDBG grantees' 
compliance with the statutory requirements of the CDBG program to 
affirmatively further fair housing.

DATES: Comment Due Date: December 28, 1998.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to Rules Docket Clerk, Office of General Counsel, Room 10276, 
Department of Housing and Urban Development, 451 Seventh Street, S.W., 
Washington, D.C. 20410-0500. Communications should refer to the above 
docket number and title. Facsimile (FAX) comments are not acceptable. A 
copy of each communications submitted will be available for public 
inspection and copying between 7:30 a.m. and 5:30 p.m. weekdays at the 
above address.

FOR FURTHER INFORMATION CONTACT: For questions on part 570, Deirdre 
Maguire-Zinni, Director, Entitlement Communities Division, Office of 
Block Grant Assistance, Department of Housing and Urban Development, 
Room 7282, 451 Seventh Street, SW, Washington, DC 20410. Telephone 
(202) 708-1577, ext. 4529. For questions on part 91, Sal Sclafani, 
Acting Director, Policy Coordination Division, Office of Executive 
Services, Department of Housing and Urban Development, 451 Seventh 
Street, SW, Washington, DC 20410. Telephone (202) 708-1283, ext. 4364. 
For questions on affirmatively furthering fair housing or the analysis 
of impediments to fair housing choice, William Dudley Gregorie, Deputy 
Director, Office of Programs, Office of Fair Housing and Equal 
Opportunity, Department of Housing and Urban Development, 452 Seventh 
Street, SW, Washington, DC 20410. Telephone (202) 708-2288, ext. 266. 
(These telephone numbers are not toll-free.) Hearing-impaired or 
speech-impaired individuals may access the voice telephone number 
listed above by calling the Federal information relay service during 
working hours at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Statutory Bases

    Section 105 of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12705) established a requirement for the development of 
a Comprehensive Housing Affordability Strategy (CHAS) as a condition of 
a jurisdiction receiving grants from HUD, primarily CDBG and HOME 
program funds. (The CHAS replaced the CDBG Housing Assistance Plan 
requirement.) The CHAS includes a certification that jurisdictions 
receiving the HUD grants will affirmatively further fair housing.
    Section 104(b)(2) of the Housing and Community Development Act of 
1974 (HCD Act), as amended, (42 U.S.C. 5304), the governing statute for 
the CDBG program, requires that each grantee certify to HUD's 
satisfaction that (1) the grant will be conducted and administered in 
conformity with the Fair Housing Act (42 U.S.C. 3601-20) and (2) the 
grantee will affirmatively further fair housing. Further, section 
104(c)(1) of the HCD Act authorizes CDBG Entitlement grants to be made 
only to a grantee that is following an approved CHAS. Section 104(e) of 
the HCD Act also contains a requirement for the Department to 
determine, at least annually, that each CDBG grantee is carrying out 
its program in compliance with applicable laws and requirements.

The Consolidated Plan Regulation's Review Standard for Acceptance

    When the Consolidated Submission for CPD Programs regulation (part 
91) (the ``Consolidated Plan regulation'') was promulgated in 1995, one 
of the primary purposes of the rule was to coordinate statutory 
requirements for CPD formula grant programs (CDBG, HOME Investment 
Partnerships, Emergency Shelter Grant, and Housing Opportunities for 
Persons with AIDS) in a comprehensive way, in order to simplify 
application requirements while simultaneously addressing local priority 
needs more effectively. The Consolidated Plan regulation thus 
incorporates CHAS requirements as well as CDBG submission requirements.
    Departmental approval of a Consolidated Plan is required in order 
for a jurisdiction to receive any of the four CPD formula grant funds. 
Disapproval of a Consolidated Plan is based on the statutory standards 
of the CHAS which authorizes disapproval of any Plan only on two 
grounds: the Plan is either (1) inconsistent with the purposes of the 
Cranston-Gonzalez National Affordable Housing Act or (2) substantially 
incomplete. One of the ways that a Plan may be determined substantially 
incomplete is if HUD concludes that a certification is inaccurate. In 
addition, the separate CDBG certifications may be disapproved if not 
satisfactory to HUD, which would result in disapproval of the CDBG 
component of the Consolidated Plan.
    The Consolidated Plan regulations contain an affirmatively further 
fair housing certification. The regulations define the certification to 
mean that a grantee will conduct an ``analysis of impediments to fair 
housing choice within the jurisdiction, take appropriate actions to 
overcome the effects of any impediments identified through that 
analysis, and maintain records reflecting the analysis and actions in 
this regard'' [Secs. 91.225(a)(1), 91.325(a)(1) and 91.425(a)(1)]. The 
analysis of impediments is not restricted to the design and operation 
of HUD-funded programs within a grantee's jurisdiction but is meant to 
be an assessment of conditions, both public and private, that affect 
fair housing choice.
    The Consolidated Plan requirement contains a narrow review standard 
and a review time frame of 45 days (after which a Plan may be deemed 
approved automatically unless the Department

[[Page 57883]]

specifically notifies a jurisdiction that the Plan has been 
disapproved). Disapproval of a Consolidated Plan results in the 
withholding of all CPD formula grant funds for a grantee unless and 
until an adequate submission is made within an established time frame.

The CDBG Program's Greater Flexibility To Require Grantee Actions 
in Connection With Grant Award or Improve Performance

    The CDBG Entitlement regulations were amended with the Consolidated 
Plan regulations so that the affirmatively further fair housing 
certification has the same requirements in the CDBG regulations as in 
the Consolidated Plan regulations. See Sec. 570.601(a)(2). A 
determination made by HUD that a CDBG grantee is not affirmatively 
furthering fair housing, however, offers a wider array of opportunities 
for resolution in connection with either making the CDBG grant or 
applying sanctions because of the statutory review authority in the HCD 
Act (e.g., requesting special assurances; seeking voluntary compliance; 
or taking actions to reduce or withdraw a grant), whereas evaluation of 
the grantee's affirmatively furthering activities in the context of the 
Consolidated Plan offers only one opportunity for HUD action (i.e., 
disapproval of a Consolidated Plan). Furthermore, corrective actions 
with respect to the CDBG program are not limited to the Consolidated 
Plan submission review time frame but can be initiated at any point 
during a grantee's program year.

The Need for Clarification

    While the Department has provided both guidance and training to 
grantees on meeting the Consolidated Plan fair housing certification 
requirements, the Department's experience indicates that confusion 
remains over both the meaning and application of the affirmatively 
further fair housing requirements. Notwithstanding the identical 
statutory predicates for affirmatively furthering fair housing in both 
the CDBG program and the CHAS (included now as a Consolidated Plan 
requirement), this confusion has been complicated by the placement of 
the CDBG requirement in the Consolidated Plan regulation at part 91 as 
a certification requirement (which now applies to all CPD formula grant 
programs) while remaining in the CDBG regulations at part 570 as a 
performance review standard. Certification of compliance with the Fair 
Housing Act is in the Consolidated Plan regulations applicable only to 
the CDBG program. Thus, in cases where a grantee has been determined to 
have violated the Fair Housing Act, the narrow disapproval standard for 
the Consolidated Plan complicates the withholding of CPD grant funds, 
despite the Department's clear mandate to ensure compliance with Fair 
Housing Act requirements. Confusion has also resulted over what it 
means to have a ``complete'' Consolidated Plan as well as the language 
of the certification which is written in the future tense (that 
grantees ``will'' conduct an analysis).

Purpose of the Proposed Rule Change

    The Department seeks to foster effective fair housing strategies 
and to provide clear guidance to local communities to help them in 
their efforts to responsibly identify and solve fair housing problems, 
as these grantees strive to achieve their own visions of ``viable urban 
communities.'' Furthermore, the Department believes that grantees 
receiving CPD formula grant funds not only have the responsibility to 
identify and endeavor to overcome impediments to fair housing choice, 
but clearly should not be receiving the grant funds if they are in 
violation of the Fair Housing Act. At the same time, the Department 
wishes to ensure more objective application of requirements and to 
ensure that grantees have a current and accurate analysis of 
impediments to fair housing choice in place at the time of grant award. 
To that end, the proposed rule is intended to provide specific 
standards and the bases upon which these requirements would be 
measured--both for purposes of receiving CPD formula grant funds and to 
aid the Department in annually determining that CDBG grantees are in 
compliance with applicable requirements.

Proposed Change to Part 91

    This rule would amend Secs. 91.225(a)(1), 91.325(a)(1) and 
91.425(a)(1) to make clear that a certification to affirmatively 
further fair housing means that (1) an analysis of impediments to fair 
housing choice has already been conducted (and would be updated, as 
appropriate) and (2) the grantee is taking actions to eliminate 
identified impediments if the impediments are within the control of the 
grantee and to overcome the effects of other identified impediments, 
and is keeping appropriate supporting documentation. Amendments are 
also made to Sec. 91.500(b)(3) to add three standards for a 
Departmental determination that a grantee's Consolidated Plan 
certification to affirmatively further fair housing is inaccurate. HUD 
could determine that the certification is inaccurate if: (1) the 
analysis of impediments to fair housing choice is inaccurate or 
substantially incomplete based on generally available facts and data; 
(2) the actions taken do not address an identified impediment 
(eliminate an impediment within the grantee's control or overcome the 
effects of an impediment that is outside the grantee's control) or do 
not result in meaningful and measurable progress; or (3) the grantee 
(a) has been charged with a violation of the Fair Housing Act by HUD, 
(b) is the defendant in a Fair Housing Act lawsuit filed by the U.S. 
Department of Justice, or (c) has received from HUD a letter of 
noncompliance findings involving housing under title VI of the Civil 
Rights Act of 1968, section 504 of the Rehabilitation Act of 1973 or 
section 109 of the HCD Act, and the grantee has not resolved such 
charge, lawsuit, or letter of noncompliance findings to the 
satisfaction of HUD.
    These amendments would make clear that a grantee must (1) have a 
complete and accurate analysis of impediments to fair housing choice 
before submitting its Consolidated Plan, (2) be taking appropriate 
actions to eliminate the impediments within the grantee's control and 
overcome the effects of identified impediments outside the grantee's 
control, and (3) comply with the Fair Housing Act and other statutes 
prohibiting discrimination in housing that the Department enforces. 
Failure to do so will result in a rejection of its Consolidated Plan 
certification to affirmatively further fair housing. The amendments are 
also designed to clarify what is meant by appropriate actions. For 
example, a grantee that identifies certain types of zoning as 
impediments to fair housing choice and then holds a housing poster 
contest as an appropriate action in response to the zoning impediment 
could expect HUD to question the accuracy of its certification.

Proposed Change to Part 570

    This rule would amend Sec. 570.601 to make clear that the 
requirement to affirmatively further fair housing means that (1) 
grantees have conducted an analysis of impediments to fair housing 
choice before submission of a Consolidated Plan (and would require 
updates to an analysis, as appropriate) and (2) the grantees are taking 
actions to eliminate identified impediments that are within the control 
of the grantee and to overcome the effects of identified impediments 
outside the grantee's control and are maintaining records reflecting 
the analysis and actions. Section 570.904 would be amended to clarify 
the distinction between the

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rebuttable presumption of compliance with civil rights 
nondiscrimination requirements versus the standards to measure 
performance with the requirements for affirmatively furthering fair 
housing. Currently, this section of the regulation states that the 
Department will consider grantees to be in compliance with applicable 
equal opportunity and fair housing criteria UNLESS there is evidence to 
the contrary. The requirements to affirmatively further fair housing 
and carry out programs in compliance with the Fair Housing Act require, 
however, positive actions on the part of grantees. Moreover, the 
section no longer contains criteria because they were deleted when 
substantive requirements for affirmatively furthering fair housing were 
added to the Consolidated Plan rule. Accordingly, the introductory 
language is proposed to be deleted in paragraph (a) and the paragraph 
is renamed ``Nondiscrimination requirements.'' In addition, the current 
paragraph (b) is proposed to be removed because it essentially repeats 
paragraph (a). Paragraphs (c) and (d) are reordered as paragraphs (b) 
and (c). As a technical matter, the regulation is amended to reflect 
that the Fair Housing Act also prohibits discrimination based on 
disability or familial status.
    This section of the regulation is also amended to specify three 
performance review standards that HUD will use to determine whether a 
grantee has affirmatively furthered fair housing. Two of the standards 
are: (1) that the analysis of impediments to fair housing choice is 
accurate and substantially complete based on generally available facts 
and data, and (2) that the actions taken to eliminate the impediments 
within the grantee's control or overcome the effects of identified 
impediments outside the grantee's control result in meaningful and 
measurable progress. The third standard is a presumption by HUD that a 
grantee has not violated the civil rights laws prohibiting 
discrimination in housing unless the grantee (a) has been charged with 
a violation of the Fair Housing Act by HUD, (b) is the defendant in a 
Fair Housing Act lawsuit filed by the U.S. Department of Justice, or 
(c) has received from HUD a letter of noncompliance findings involving 
housing under title VI of the Civil Rights Act of 1968, section 504 of 
the Rehabilitation Act of 1973 or section 109 of the HCD Act, and the 
grantee has not resolved such charge, lawsuit, or letter of 
noncompliance findings to the satisfaction of HUD. Such violations 
could result from actions taken by the grantee in connection with 
programs other than the four CPD formula grant programs. For example, a 
grantee that takes discriminatory actions to prevent a public housing 
authority from acquiring or building scattered site public housing 
units could be determined to be in violation of the Fair Housing Act 
and thus might expect the Department to challenge its Consolidated Plan 
certification to affirmatively further fair housing.
    In reviewing performance based on an existing analysis of 
impediments to fair housing choice, the Department would expect that a 
jurisdiction would identify actions to be taken based on the analysis 
and would have taken such actions, or have begun to undertake actions 
with a reasonable time frame for completion. Further, the 
appropriateness of the actions would be judged on what impact they have 
had in eliminating impediments within the grantee's control or 
overcoming the effects of identified impediments to fair housing choice 
that are outside the grantee's control.
    Examples of such appropriate actions are contained in Volume 1 of 
HUD's Fair Housing Planning Guide, specifically, Chapter 3, Appendix A, 
the Chapter 4 Appendix and throughout Chapter 5. A detailed discussion 
of grantee actions, in general, is the focus of Volume 2 of the Fair 
Housing Planning Guide.
    Comments are specifically sought on (1) the clarity and usefulness 
of the standards in assisting the Department's review of a grantee's 
compliance with its certification to affirmatively further fair 
housing, both as part of a Consolidated Plan submission and as a CDBG 
performance review requirement; and (2) the identification of any 
unintended consequences in applying these requirements that would 
frustrate the purposes of, or otherwise impede a grantee's ability to 
comply with, fair housing requirements.
    Most grantees completed their analysis of impediments to fair 
housing choice last year and are now taking actions to address 
identified impediments. Thus, grantees' concerns are now generally 
focused on how HUD will view the appropriateness and sufficiency of 
their actions. The proposed regulation is intended to provide for a 
more objective determination of appropriateness. The regulation does 
not specifically address, however, the following issues: (1) Is a 
grantee required to take actions to eliminate or overcome the effects 
of all identified impediments? (2) Must the actions be taken each 
program year, or over a period of time--which may coincide with the 
grantee's Consolidated Plan period or some other period of time? (3) 
Should certain impediments have a priority for action? (4) At what 
point in the future would the grantee be expected to have eliminated 
all identified impediments within the grantee's control and taken all 
possible actions to overcome the effects of impediments not within the 
grantee's control? Comments are sought on whether and how the 
regulation should address these issues.
    States are requested to comment on the issue of whether the State 
CDBG regulations should contain fair housing performance standards 
comparable to those proposed under Sec. 570.904. The CDBG Entitlement 
program regulations contain an entire subpart (subpart O) concerning 
HUD reviews and determinations of grantee performance. Section 570.904, 
for example, describes the review criteria for determining compliance 
with equal opportunity and fair housing requirements. In contrast, the 
regulatory language governing performance reviews under the State CDBG 
program is much shorter and less detailed. Section 570.493 essentially 
declares only that HUD shall make such reviews and audits as are 
necessary to determine whether a State is in compliance with the 
various requirements of the Act and other applicable laws.
    This rule proposes to clarify the review standard (at Sec. 570.904) 
concerning fair housing performance for entitlement communities. There 
is no comparable review standard being proposed for States because 
there is no comparable section in the State program regulations. This 
proposed rule seeks to ensure more objective determinations of 
compliance with fair housing requirements. It also seeks to resolve the 
discontinuity between HUD's limited authority for action under the 
Consolidated Plan rule and HUD's broader authority to undertake 
performance reviews under the CDBG program rules. Not including 
specific review standards for the State CDBG program, however, means 
that the disparity and ambiguity over standards for performance will 
still exist for States. The difference between the CDBG program 
regulations for States and for Entitlement communities could also 
impart the false impression that HUD is more concerned about fair 
housing performance under the Entitlement program than under the State 
program. On the other hand, if HUD revises Sec. 570.493 to include fair 
housing performance standards comparable to those proposed under 
Sec. 570.904, the State program regulations

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would be far more specific about fair housing performance than about 
other program requirements. This likewise could convey a false 
impression that HUD is more concerned about fair housing performance by 
States than about other CDBG program requirements. Comments on these 
State CDBG issues are therefore requested.

Findings and Certifications

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
for this rule has been made in accordance with HUD regulations at 24 
CFR part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969. The Finding of No Significant Impact 
is available for public inspection between 7:30 a.m. and 5:30 p.m. 
weekdays in the Office of the Rules Docket Clerk, Office of the General 
Counsel, Department of Housing and Urban Development, Room 10276, 451 
Seventh Street, S.W., Washington, D.C. 20410.

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 would not have a significant 
economic impact on a substantial number of small entities. There are no 
anti-competitive discriminatory aspects of the rule with regard to 
small entities and there are not any unusual procedures that would need 
to be complied with by small entities. Nevertheless, the Department is 
sensitive to the fact that the uniform application of requirements on 
entities of differing sizes often places a disproportionate burden on 
small businesses. The Department, therefore, is soliciting alternatives 
for compliance from small entities as to how these small entities might 
comply in a way less burdensome to them.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this rule 
does not have ``federalism implications'' because it does not have 
substantial direct effects on the States (including their political 
subdivisions), or on the distribution of power and responsibilities 
among the various levels of government.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance Program number assigned 
to the Community Development Block Grant entitlement program is 14.218 
and for the State CDBG program is 14.228.

List of Subjects in 24 CFR Part 91

    Aged, Grant programs--housing and community development, Homeless, 
Individuals with disabilities, Low and moderate income housing, 
Reporting and recordkeeping requirements.

List of Subjects in 24 CFR Part 570

    Administrative practice and procedure, American Samoa, Community 
development block grants, Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Lead poisoning, Loan 
programs--housing and community development, Low and moderate income 
housing, New communities, Northern Mariana Islands, Pacific Islands 
Trust Territory, Pockets of poverty, Puerto Rico, Reporting and 
recordkeeping requirements, Small cities, Student aid, Virgin Islands.

    Accordingly, the Department proposes to amend parts 91 and 570 of 
title 24 of the Code of Federal Regulations as follow:

PART 91--CONSOLIDATED SUBMISSION FOR COMMUNITY PLANNING AND 
DEVELOPMENT PROGRAMS

    1. The authority citation for part 91 continues to read as follows:

    Authority: 42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-11388, 
12701-12711, 12741-12756, and 12901-12912.

    2. Section 91.225 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 91.225  Certifications.

    (a) * * *
    (1) Affirmatively furthering fair housing. Each jurisdiction is 
required to submit a certification that it will affirmatively further 
fair housing which means that it will assume the responsibility of fair 
housing planning by having conducted a complete and accurate analysis 
of impediments to fair housing choice within the jurisdiction (with 
periodic updates, as appropriate); is taking appropriate actions to 
overcome the effects of any impediments identified through that 
analysis outside the jurisdiction's control and to eliminate identified 
impediments within the control of the jurisdiction; and is maintaining 
records reflecting the analysis and actions in this regard.
* * * * *
    3. Section 91.325 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 91.325  Certifications.

    (a) General--(1) Affirmatively furthering fair housing. Each State 
is required to submit a certification that it will affirmatively 
further fair housing which means that it will assume the responsibility 
of fair housing planning by having conducted a complete and accurate 
analysis of impediments to fair housing choice within the State (with 
periodic updates, as appropriate); is taking appropriate actions to 
overcome the effects of any impediments identified through that 
analysis outside the State's control and to eliminate identified 
impediments within the State's control; and is maintaining records 
reflecting the analysis and actions in this regard. (See 
Sec. 570.487(b)(4) of this title.)
* * * * *
    4. Section 91.425 is amended by revising paragraph (a)(1)(i) to 
read as follows:


Sec. 91.425  Certifications.

    (a) Consortium certifications--(1) General--(i) Affirmatively 
furthering fair housing. Each consortium must certify that it will 
affirmatively further fair housing which means that it will assume the 
responsibility of fair housing planning by having conducted a complete 
and accurate analysis of impediments to fair housing choice within the 
area (with periodic updates, as appropriate); is taking appropriate 
actions to overcome the effects of any impediments identified through 
that analysis outside the consortium's control and to eliminate 
identified impediments within the consortium members' control; and is 
maintaining records reflecting the analysis and actions in this regard.
* * * * *
    5. Section 91.500 is amended by adding a sentence to the end of 
paragraph (b)(3) to read as follows:


Sec. 91.500  HUD approval action.

* * * * *
    (b) * * *
    (3) * * * A jurisdiction's certification to affirmatively further 
fair housing would be determined to be inaccurate if the jurisdiction 
has no supporting records; the jurisdiction's analysis of impediments 
to fair housing choice (with periodic updates) is inaccurate or 
substantially incomplete based on generally available facts and data, 
including, but not limited to, Home Mortgage Disclosure Act data, facts 
disclosed in a HUD civil rights monitoring or compliance review, a 
civil action brought by the U.S. Department of Justice or private 
parties, and public and private studies of

[[Page 57886]]

housing discrimination affecting residents of the grantee jurisdiction; 
the actions taken by the jurisdiction to eliminate impediments within 
the grantee's control and overcome the effects of other identified 
impediments to fair housing choice were not appropriate because the 
actions did not address an identified impediment or did not result in 
meaningful and measurable progress in eliminating the impediment or 
overcoming the impediment's effects; or the grantee has been charged 
with a violation of the Fair Housing Act by HUD, is the defendant in a 
Fair Housing Act lawsuit filed by the U.S. Department of Justice, or 
has received from HUD a letter of noncompliance findings involving 
housing under title VI of the Civil Rights Act of 1968, section 504 of 
the Rehabilitation Act of 1974 or Section 109 of the Housing and 
Community Development Act of 1974, and the grantee has not resolved 
such charge, lawsuit, or letter of noncompliance findings to the 
satisfaction of HUD.
* * * * *

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

    6. The authority citation for part 570 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 5300-5320.

    7. Section 570.487 is amended by revising paragraphs (b)(1) and 
(b)(2) to read as follows:


Sec. 570.487  Other applicable laws and related program requirements.

* * * * *
    (b) * * *
    (1) Conducting a complete and accurate analysis to identify 
impediments to fair housing choice within the State (with periodic 
updates, as appropriate);
    (2) Taking appropriate actions to eliminate any impediments 
identified through that analysis that are within the control of the 
State and to overcome the effects of any impediments outside the 
control of the State;
* * * * *
    8. Section 570.601 is amended by revising paragraph (a)(1) and the 
third sentence of paragraph (a)(2) to read as follows:


Sec. 570.601  Public Law 88-352 and Public Law 90-284; affirmatively 
furthering fair housing; Executive Order 11063.

    (a) * * *
    (1) Public Law 88-352, which is title VI of the Civil Rights Act of 
1964 (42 U.S.C. 2000d et seq.), and implementing regulations in 24 CFR 
parts 1 and 100.
    (2) * * * Furthermore, in accordance with section 104(b)(2) of the 
Act, for each community receiving a grant under subpart D of this part, 
the certification that the grantee will affirmatively further fair 
housing shall specifically require the grantee to assume the 
responsibility of fair housing planning by conducting a complete and 
accurate analysis to identify impediments to fair housing choice within 
its jurisdiction (with periodic updates, as appropriate), taking 
appropriate actions to eliminate any impediments identified through 
that analysis that are within the grantee's control and to overcome the 
effects of any identified impediments that are outside its control, and 
maintaining records reflecting the analysis and actions in this regard.
* * * * *
    9. Section 570.904 is amended by revising paragraphs (a)(1) 
introductory text and (a)(1)(ii), removing the current paragraph (b), 
redesignating paragraphs (c) and (d) as (b) and (c) respectively and 
revising newly redesignated paragraph (b), to read as follows:


Sec. 570.904  Equal opportunity and fair housing review.

    (a) Nondiscrimination requirements. (1) The Department will presume 
that the recipient has carried out its CDBG-funded program in 
accordance with civil rights certifications and requirements of the Act 
prohibiting discrimination unless:
* * * * *
    (ii) There is evidence that a policy, practice, standard or method 
of administration, although neutral on its face, operates to deny or 
affect adversely in a significantly disparate way the provision of 
employment or services, benefits or participation to persons of a 
particular race, color, religion where applicable, sex, national 
origin, age or handicap, or fair housing to persons of a particular 
race, color, religion, sex, disability, familial status, or national 
origin, or
* * * * *
    (b) Affirmatively furthering fair housing. HUD will review to 
determine whether the grantee is affirmatively furthering fair housing 
in accordance with Sec. 570.601(a)(2).
    (1) HUD will determine whether:
    (i) The grantee's analysis of impediments to fair housing choice 
(with periodic updates) is accurate and substantially complete based on 
generally available facts and data, including, but not limited to, Home 
Mortgage Disclosure Act data, facts disclosed in a HUD civil rights 
monitoring or compliance review, a civil action brought by the U.S. 
Department of Justice or private parties, and public and private 
studies of housing discrimination affecting residents of the grantee 
jurisdiction.
    (ii) The grantee took appropriate actions to eliminate any 
identified impediments that are within its control and to overcome the 
effects of impediments to fair housing choice identified in the 
grantee's analysis of impediments to fair housing choice that are 
outside its control. An action is appropriate if the action addresses 
an identified impediment and results in meaningful and measurable 
progress in overcoming the impediment's effects.
    (2) Notwithstanding favorable determinations under paragraph (b)(1) 
of this section, HUD may conclude that the grantee failed to meet its 
responsibility to affirmatively further fair housing if the grantee has 
been charged with a violation of the Fair Housing Act by HUD, is the 
defendant in a Fair Housing Act lawsuit filed by the U.S. Department of 
Justice, or has received from HUD a letter of noncompliance findings 
involving housing under title VI of the Civil Rights Act of 1968, 
section 504 of the Rehabilitation Act of 1973 or section 109 of the HCD 
Act, and the grantee has not resolved such charge, lawsuit, or letter 
of noncompliance findings to the satisfaction of HUD.
* * * * *
    Dated: September 25, 1998.
Andrew Cuomo,
Secretary.
[FR Doc. 98-28812 Filed 10-27-98; 8:45 am]
BILLING CODE 4210-32-P