[Federal Register Volume 68, Number 239 (Friday, December 12, 2003)]
[Rules and Regulations]
[Pages 69580-69582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30748]



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Part IV





Department of Housing and Urban Development





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24 CFR Part 570



Modification of the Community Development Block Grant Definition for 
Metropolitan City and Other Conforming Amendments; Interim Rule

  Federal Register / Vol. 68, No. 239 / Friday, December 12, 2003 / 
Rules and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 570

[Docket No. FR-4872-I-01]
RIN 2506-AC15


Modification of the Community Development Block Grant Definition 
for Metropolitan City and Other Conforming Amendments

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

ACTION: Interim rule.

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SUMMARY: This interim rule revises the Community Development Block 
Grant (CDBG) program regulations by replacing the obsolete term 
``central city'' with a new term ``principal city'' in the definition 
of ``metropolitan city'' and other CDBG regulations referencing 
``central city.'' The revisions are necessary because of the recent 
changes to the Office of Management and Budget's (OMB) Standards for 
Defining Metropolitan and Micropolitan Statistical Areas (MSAs) and the 
announcement in 2003 of new definitions for those areas using Census 
2000 data. The rule updates the affected CDBG program regulations so 
that the terminology used by HUD is consistent with OMB standards and 
the purposes of the Housing and Community Development Act of 1974.

DATES: Effective Date: January 12, 2004.
    Comments Due Date: February 10, 2004.

ADDRESSES: Interested persons are invited to submit comments regarding 
this interim rule to the Regulations Division, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410-0500. Comments should refer 
to the above docket number and title. A copy of each comment submitted 
will be available for public inspection and copying during weekdays 
between 8 a.m. and 5 p.m. at the above address. Facsimile (FAX) 
comments are not acceptable.

FOR FURTHER INFORMATION CONTACT: Sue Miller, Director, Entitlement 
Communities Division, Office of Block Grant Assistance, Office of 
Community Planning and Development, Room 7282, Department of Housing 
and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-
7000; telephone (202) 708-1577 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access the telephone number 
listed in this section through TTY by calling the toll-free Federal 
Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Statutory Background

    Title I of the Housing and Community Development Act of 1974 (42 
U.S.C. 5301-5320) (the Act) establishes the statutory framework for the 
CDBG program. HUD's regulations implementing the CDBG program are 
located at 24 CFR part 570 (entitled ``Community Development Block 
Grants'').
    Section 102(a)(4) of the Act defines the term ``metropolitan city'' 
as ``(A) a city within a metropolitan area which is the central city of 
such area, as defined and used by the Office of Management and Budget, 
or (B) any other city, within a metropolitan area, which has a 
population of fifty thousand or more. . . .'' The term ``metropolitan 
area'' is defined in section 102(a)(3) of the Act as ``a standard 
metropolitan statistical area as established by the Office of 
Management and Budget.'' Section 102(b) of the Act provides that the 
Secretary may, by regulation, change or otherwise modify the meaning of 
the terms defined in section 102(a) in order to reflect any technical 
change or modification made by the United States Bureau of the Census 
or OMB.

II. Regulatory Background

    The CDBG program regulations at Sec.  570.3 define ``metropolitan 
city'' as having the meaning provided in section 102(a)(4) of the Act. 
The term ``metropolitan city'' is defined in section 102(a)(4) of the 
Act as a city within a metropolitan area which is the central city of 
such area, as defined and used by OMB, or any other city within a 
metropolitan area, which has a population of 50,000 or more. OMB has 
defined ``central city'' and ``principal city'' in its Federal Register 
publications on standards for metropolitan statistical areas. OMB 
published standards at 55 FR 12154 on March 30, 1990, which included 
the definition of ``central city'' currently in use (the 1990 
standards) in the CDBG program regulations. On December 27, 2000, OMB 
published at 65 FR 82228 new Standards for Defining Metropolitan and 
Micropolitan Statistical Areas, collectively called Core Based 
Statistical Areas (CBSAs) (the December 27, 2000, standards). These new 
standards replace the previous standards adopted in 1990 for defining 
metropolitan areas, and also replace ``central cities'' with the new 
concept of ``principal cities.''
    Under the 1990 standards, the term ``central city'' was defined as: 
(A) The city with the largest population in a Metropolitan Statistical 
Area (MSA); (B) each additional city with a population of at least 
250,000 or with at least 100,000 persons working within its limits; (C) 
each additional city with a population of at least 25,000, an 
employment/residence ratio (the number of persons working in the city 
divided by the number of resident workers with place of work reported) 
of at least 0.75, and at least 40 percent of its employed residents 
working in the city; (D) each city of 15,000 to 24,999 population that 
is at least one-third as large as the largest central city, has an 
employment/residence ratio of at least 0.75, and at least 40 percent of 
its employed residents working in the city; (E) the largest city in a 
secondary noncontiguous urbanized area (an additional urbanized area 
within an MSA that has no common boundary of more than a mile with the 
main urbanized area around which the MSA is defined), provided it has 
at least 15,000 population, an employment/residence ratio of at least 
0.75, and at least 40 percent of its employed residents working in the 
city; and (F) each additional city in a secondary noncontiguous 
urbanized area that is at least one-third as large as the largest 
central city of that urbanized area, that has at least 15,000 
population and an employment/residence ratio of at least 0.75, and that 
has at least 40 percent of its employed residents working in the city 
(55 FR 12155).
    Under the 1990 standards, the term ``metropolitan area'' was a 
collective term that referred to MSAs, Primary Metropolitan Statistical 
Areas, and Consolidated Metropolitan Statistical Areas (55 FR 12155). 
In accordance with the requirements of the Act, the CDBG program has 
utilized the 1990 standards and Census data to determine entitlement 
eligibility and allocation of CDBG Entitlement program funds to 
eligible communities.
    The December 27, 2000, standards use the new term ``principal 
city'' instead of ``central city.'' A ``principal city'' is defined in 
relation to a CBSA rather than an MSA. The principal city (or cities) 
of a CBSA includes: (A) The largest incorporated place in the CBSA with 
a Census 2000 population of at least 10,000 or, if no such place 
exists, the largest incorporated place or census designated place in 
the CBSA; (B) any additional incorporated place or census designated 
place with a Census 2000 population of at least 250,000 or in which 
100,000 or more persons work; (C) any additional incorporated place or

[[Page 69581]]

census designated place with a Census 2000 population of at least 
50,000, but less than 250,000, and in which the number of jobs meets or 
exceeds the number of employed residents; and (D) any additional 
incorporated place or census designated place with a Census 2000 
population of at least 10,000, but less than 50,000, and one-third the 
population size of the largest place, and in which the number of jobs 
meets or exceeds the number of employed residents (65 FR 82236).
    The terms ``central city'' and ``principal city'' have slightly 
different meanings based on their respective standards. In the CDBG 
program, however, the term ``principal city'' will serve the same 
purpose as the now obsolete ``central city'' in determining CDBG 
entitlement eligibility.

III. This Interim Rule

    This interim rule revises the CDBG program regulations (24 CFR part 
570) at Sec. Sec.  570.3, 570.4(c) and 570.307(e) to conform these 
sections to OMB's new definitions for CBSAs, and particularly for 
``principal cities.'' The rule amends the regulatory definition of 
``Metropolitan City'' in 24 CFR 570.3 to include the term ``principal 
city,'' and makes conforming changes to certain other sections of the 
CDBG regulations.

IV. Findings and Certifications

Justification for Interim Rulemaking

    It is HUD's policy to publish rules for public comment before their 
issuance for effect, in accordance with 24 CFR part 10. Part 10 
provides, however, that prior public procedure will be omitted if HUD 
determines that it is ``impracticable, unnecessary, or contrary to the 
public interest'' (24 CFR 10.0). HUD finds that good cause exists to 
publish this rule for effect without first soliciting public comment, 
in that prior public procedure is unnecessary and would be contrary to 
the public interest. Public procedure is unnecessary because this rule 
simply makes technical amendments that conform the CDBG regulations to 
new terminology adopted by OMB, in accordance with statutory authority. 
Delayed effectiveness pending public comment would be contrary to the 
public interest because potentially eligible cities would be deprived 
from receiving CDBG entitlement funds due to a change in nomenclature 
and other CDBG regulations may become misleading by referencing an 
obsolete term. HUD recognizes that adding principal cities may, 
depending on appropriations from Congress and the increased number of 
entitlement communities, result in reduced funding for current 
entitlement communities. The exact impact of this rule cannot be 
quantified; some number of the newly qualified communities that meet 
OMB's designation criteria would have also met OMB's previous ``central 
city'' criterion. Additionally, a number of entitlement communities 
that qualify under the existing central city definition and that would 
not meet the definition of ``principal city'' will qualify for 
continued entitlement status because they meet section 102(a)(4) of the 
Act which provides that ``any city that was classified as a 
metropolitan city for at least two years * * * shall remain classified 
as a metropolitan city.'' Although HUD believes issuing this interim 
rule for immediate effect will benefit the public overall, HUD will 
consider public comments on this issue prior to the publication of a 
final rule.

Executive Order 12866

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, Regulatory Planning and Review. OMB determined 
that this rule is a ``significant regulatory action'' (but not 
economically significant) as defined in section 3(f) of the Order. Any 
changes made in this rule subsequent to its submission to OMB are 
identified in the docket file. The docket file 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 General Counsel, Room 10276, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC.

Environmental Impact

    This rule simply revises existing HUD regulations by replacing 
``central city'' or ``central cities'' with ``principal city'' or 
``principal cities,'' where applicable, in order to be consistent with 
OMB standards. This rule does not direct, provide for assistance or 
loan or mortgage insurance for, or otherwise govern or regulate, real 
property acquisition, disposition, leasing, rehabilitation, alteration, 
demolition or new construction, nor does it establish, revise, or 
provide for standards for construction, construction materials, 
manufactured housing, or occupancy. This rule revises an existing 
document where the existing document as a whole would not fall under a 
categorical exclusion but the amendment by itself does so. Pursuant to 
24 CFR 50.19(c)(1) and (c)(2), these revisions are categorically 
excluded from the environmental assessment required by the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332).

Impact on Small Entities

    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. There are no 
anti-competitive discriminatory aspects of the rule with regard to 
small entities and there are not any unusual procedures that need to be 
complied with by small entities. Although HUD has determined that this 
interim rule does not have a significant economic impact on a 
substantial number of small entities, HUD invites comments regarding 
any less burdensome alternatives to this rule that will meet HUD's 
objectives as described in this preamble.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the executive order. This interim rule does not have 
federalism implications and does not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the executive order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1532) establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. This interim rule does not impose a 
federal mandate that will result in the expenditure by state, local, or 
tribal governments, in the aggregate, or the private sector, of $100 
million or more in any one year.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance (CFDA) program number is 
14.218.

List of Subjects in 24 CFR Part 570

    Administrative practice and procedure, Community development block 
grant, Grant programs--education, Grant programs, housing and community 
development, Indians, insular areas, Lead poisoning, Loan programs--
housing and community development, Low- and moderate-income housing, 
New communities,

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Pockets of poverty, Puerto Rico, Reporting and recordkeeping 
requirements, Small cities, Student aid.


0
Accordingly, for the reasons discussed in the preamble, HUD amends 24 
CFR part 570 as follows:

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

0
1. The authority citation for part 570 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 5301-5320.


0
2. Amend Sec.  570.3 by revising the definition of ``metropolitan 
city'' to read as follows:


Sec.  570.3  Definitions.

* * * * *
    Metropolitan city shall have the meaning provided in section 
102(a)(4) of the Act except that the term ``central city'' is replaced 
by ``principal city.''
* * * * *

0
3. Amend Sec.  570.4 by revising the introductory text of paragraphs 
(c) and (c)(3) to read as follows:


Sec.  570.4  Allocation of funds.

* * * * *
    (c) In determining eligibility for entitlement and in allocating 
funds under section 106 of the Act for any federal fiscal year, HUD 
will recognize corporate status and geographical boundaries and the 
status of metropolitan areas and principal cities effective as of July 
1 preceding such federal fiscal year, subject to the following 
limitations:
* * * * *
    (3) With respect to the status of Metropolitan Statistical Areas 
and principal cities, as officially designated by the Office of 
Management and Budget as of such date.
* * * * *

0
4. Amend Sec.  570.307 by revising the first sentence of paragraph 
(e)(1) to read as follows:


Sec.  570.307  Urban counties.

* * * * *
    (e) Grant ineligibility of included units of general local 
government. (1) An included unit of general local government cannot 
become eligible for an entitlement grant as a metropolitan city during 
the period of qualification of the urban county (even if it becomes a 
principal city of a metropolitan area or its population surpasses 
50,000 during that period). * * *
* * * * *

    Dated: November 17, 2003.
Roy A. Bernardi,
Assistant Secretary for Community Planning and Development.
[FR Doc. 03-30748 Filed 12-11-03; 8:45 am]
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