[Federal Register Volume 69, Number 250 (Thursday, December 30, 2004)]
[Proposed Rules]
[Pages 78830-78843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28430]



[[Page 78829]]

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Part IV





Department of Housing and Urban Development





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24 CFR Part 91



Revisions and Updates to Consolidated Plan; Proposed Rule

  Federal Register / Vol. 69 , No. 250 / Thursday, December 30, 2004 / 
Proposed Rules  

[[Page 78830]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 91

[Docket No. FR-4923-P-01; HUD 2004-0028]
RIN 2501-AD07


Revisions and Updates To Consolidated Plan

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the consolidated plan 
regulations of state and local governments to make clarifying and 
streamlining changes that are expected to make the consolidated plan of 
state and local jurisdictions more results-oriented and useful to 
communities in assessing their own progress toward addressing the 
problems of low-income areas. The consolidated plan is the document 
that is submitted to HUD by jurisdictions that receive funding under 
any of HUD's Community Planning and Development formula grant programs 
and serves as the jurisdiction's planning document for the use of the 
funds received under these programs. The proposed rule would eliminate 
some obsolete and redundant provisions and make other changes that 
would conform the consolidated plan regulations with HUD's public 
housing regulations that govern the Public Housing Agency (PHA) Plan.

DATES: Comment due date: January 31, 2005.

ADDRESSES: Interested persons are invited to submit comments regarding 
this 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. Interested persons may also submit 
comments electronically through either:
     The federal electronic rulemaking Portal at 
www.regulations.gov; or
     The HUD electronic Web site at www.epa.gov/feddocket. 
Follow the link entitled ``View Open HUD Dockets.'' Commenters should 
follow the instructions provided on that site to submit comments 
electronically.
    Facsimile (FAX) comments are not acceptable. In all cases, 
communications must refer to the docket number and title. All comments 
and communications submitted will be available, without revision, for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Copies are also available for inspection and downloading 
at www.epa.gov/feddocket.

FOR FURTHER INFORMATION CONTACT: Salvatore Sclafani, CPD Office of 
Policy Development and Coordination, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410-7000, 
telephone, (202) 708-1817 extension 4364 (this is not a toll-free 
number). Hearing-or speech-impaired individuals may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    HUD published a final rule on January 5, 1995 (60 FR 1896) for the 
``Consolidated Submission for Community Planning and Development 
Programs'' that consolidated and streamlined the planning, application, 
and reporting requirements for HUD's Community Development Block Grant 
(CDBG), Emergency Shelter Grant (ESG), HOME Investment Partnerships 
(HOME), and Housing Opportunities for Persons with AIDS (HOPWA) formula 
programs into a consolidated planning document (consolidated plan) and 
a consolidated annual performance report. The final rule for the PHA 
Plan, published in the Federal Register on October 21, 1999 (64 FR 
56844), established the procedures and requirements for the submission 
of PHA Plans that provide a mechanism for defining long-term and short-
term needs and strategies. Both the consolidated plan and the PHA Plan 
resulted from an extensive consultation process that involved numerous 
stakeholders representing the interests of state and local governments 
and low-income persons.
    In Fiscal Year (FY) 2002, the President's Management Agenda 
directed HUD to work with local stakeholders to streamline the 
consolidated plan, making it more results-oriented and useful to 
communities in assessing their own progress toward addressing the 
problems of low-income areas. To launch this activity, several HUD 
Office of Community Planning and Development (CPD) Field Offices held 
focus group sessions with grantees and other stakeholders in February 
2002, to discuss ways to streamline the consolidated plan and improve 
performance measurement. On March 14, 2002, CPD convened a national 
planning meeting to introduce the concept of the Consolidated Plan 
Improvement Initiative to a national audience that included public 
interest groups, grantees, other stakeholders, along with staff from 
HUD headquarters and field offices, and the Office of Management and 
Budget (OMB).
    At a meeting of these stakeholders, participants agreed that 
addressing the issues of streamlining and performance measurement would 
be best served by small working groups that represent the full range of 
people involved in and affected by the consolidated plan, including 
grantee practitioners, public interest groups, HUD staff, and other 
stakeholders. Six working groups were identified to assess alternative 
planning requirements, examine and suggest performance measures, and 
identify communities that would be willing to test pilots of 
alternative planning procedures. Alternative planning procedures were 
tested by representatives of state and local governments that 
participated in eight pilots. A steering committee coordinated the work 
of the six working groups and reviewed ideas under consideration to 
make the consolidated plan more useful and results oriented.
    One pilot looked at streamlining the plan by referencing existing 
documents to avoid requiring redundant information. Another pilot 
evaluated alternative means of satisfying non-housing community 
development plan requirements. A third pilot addressed alternative 
formats for submission of consolidated plans, action plans, and 
performance reporting. The fourth pilot explored ways to enhance the 
citizen participation process. The fifth pilot involved development and 
use of templates. The sixth pilot involved coordination of consolidated 
plan and public housing agency plan. The seventh pilot explored the 
development and review of tools to submit consolidated plans, track 
results, and report performance. The eighth pilot documented useful 
practices for streamlining and performance measurement. An analysis of 
these pilots helped HUD determine how the consolidated planning process 
and regulatory requirements might be made more streamlined, results-
oriented, and ultimately more useful to communities in addressing the 
needs of their low-income residents and areas.

II. This Proposed Rule

    This proposed rule resulted from an extensive consultation process 
that involved stakeholders representing the interests of state and 
local governments and low-income persons. The Department carefully 
considered ideas generated by several working groups that were 
established to explore alternative planning requirements and 
suggestions for improving the consolidated plan. Representatives from

[[Page 78831]]

the following national groups participated in the process: Council of 
State Community Development Agencies, National Community Development 
Association, National Association for County, Community and Economic 
Development, National Association of Housing and Redevelopment 
Officials, and National Low Income Housing Coalition.
    The proposed rule builds on the existing framework that established 
the consolidated plan as a collaborative process whereby a community 
establishes a unified plan of community development actions. That 
framework gave states and local governments the flexibility to use 
existing plans and strategies to help citizens understand the 
jurisdiction's priority needs, and assess the jurisdiction's progress 
toward meeting identified goals and objectives through measurable 
indicators.
    This rule also conforms the consolidated plan regulations to 
sections 568 and 583 of the Quality Housing and Work Responsibility Act 
of 1998 (Pub. L. 105-276, 112 Stat. 2461, approved October 21, 1998, 
codified at 42 U.S.C. 12705) that required state or local consolidated 
plans to describe the manner that the jurisdiction will help address 
the needs of public housing, and that a consolidated plan from a state 
or unit of general local government in which any troubled PHA is 
located must include a description of the manner in which the state or 
unit of local government will provide financial or other assistance to 
remove the PHA's troubled designation. This rule also makes certain 
other conforming amendments and clarification changes.

A. Concise, Action-Oriented Management Tool

    The general view of the groups participating in the Consolidated 
Plan Improvement Initiative was that the consolidated plan should be a 
concise, action-oriented management tool that would be more 
understandable to the public and more useful to decision makers in the 
community. This view is consistent with ideas expressed in the 
conference report accompanying the Cranston-Gonzalez National 
Affordable Housing Act that stated that the (housing) strategies ``will 
serve not only as effective monitoring tools for the Department, but 
also as concise, useful, action-oriented management tools for States 
and local governments.'' (H.R. Conf. Rep. 101-943, October 25, 1990). 
In accordance with this view, Sec.  91.200 (b); Sec.  91.205(a), (b), 
(c); Sec.  91.215 (d), (e), (h), (i), (j); Sec.  91.220(b)(1); Sec.  
91.300(b); Sec.  91.305(a), (b), (c); Sec.  91.315(d), (e), (h), (i), 
(j); and Sec.  91.320(b)(1) are modified to emphasize the format of the 
descriptions should be a concise summary, not a detailed narrative. In 
addition, Sec.  91.1(b)(4) is amended to read the consolidated plan 
serves as ``a management tool for assessing performance and tracking 
results.''

B. Citizen Participation

    HUD regulations that concern citizen participation would be amended 
at Sec.  91.1 to include citizens, organizations, businesses, and other 
stakeholders among those that should be involved in the citizen 
participation process and at Sec. Sec.  91.105 and 91.115 to encourage 
the participation of local and regional institutions and other 
organizations (including businesses, developers, community and faith-
based organizations) in the process of developing and implementing the 
consolidated plan. Jurisdictions would be encouraged to explore 
alternative public involvement techniques (such as focus groups and the 
use of the Internet) and quantitative ways to measure efforts that 
encourage citizen participation in a shared vision for change in 
communities and neighborhoods, and the review of program performance.
    HUD also invites comment on whether an executive summary would be a 
useful tool for citizens as well as jurisdictions. For example, the 
format of the executive summary could include two items: (1) A list of 
the significant short and long-term performance goals (for grantee 
activities and the communities/neighborhoods assisted); and (2) the 
major activities and projects grantees plan to fund to achieve those 
goals. HUD is particularly interested in comments on what specific 
information should be included in an executive summary and whether the 
benefit of an executive summary would outweigh the burden.

C. Clarification of Chronic Homelessness

    HUD's regulations that concern the homeless are amended to include 
and emphasize the needs of unaccompanied homeless individuals with a 
disabling condition who have been continuously homeless for a year or 
more or have had at least four episodes of homelessness in the past 
three years. The rule would amend Sec.  91.5 to include a definition of 
a chronically homeless person. This definition is consistent with the 
January 23, 2003 Notice of Funding Availability (NOFA) for the 
Collaborative Initiative to Help End Chronic Homelessness (68 FR 4018). 
In addition, clarifications are made at Sec. Sec.  91.100(a)(2) and 
91.110 that indicate the jurisdiction shall consult with other public 
and private agencies that provide assisted housing, health services, 
and social services to determine what resources are available to 
address the needs of any persons that are chronically homeless. 
Clarifying changes are made at Sec.  91.210 and Sec.  91.310 to include 
persons that are chronically homeless in the brief inventory of 
facilities and services that meet the emergency shelter, transitional 
housing, permanent supportive housing, and permanent housing needs of 
homeless persons within the jurisdiction. A clarifying amendment is 
made to the regulations that govern the strategic plan at Sec.  
91.215(c) and Sec.  91.315(c) to include the chronically homeless in a 
jurisdiction's efforts to address homelessness. The regulations that 
govern the action plan are also amended at Sec.  91.220(g) and Sec.  
91.320(g) to include specific action steps to end chronic homelessness. 
These changes are designed to bring the consolidated plan more in line 
with the Administration's goal of ending chronic homelessness by 2012.

D. Removal of Barriers to Affordable Housing

    HUD regulations that concern barriers to affordable housing would 
contain clarifying amendments at Sec. Sec.  91.220 and 91.320, adding a 
new paragraph (h) that requires each jurisdiction to describe specific 
actions it plans to take during the next year to address the public 
policies, procedures, and processes of the jurisdiction that impact the 
cost of developing, maintaining, or improving affordable housing. 
Addressing regulatory barriers to affordable housing is a component of 
a housing strategy. Barrier removal will not only make it easier to 
find and get approval for affordable housing sites but it will also 
allow available subsidies to go further in meeting local housing needs. 
The removal of regulatory barriers to affordable housing has also 
become a top Administration priority. HUD Form HUD-27300, used for 
competitive grants, can serve as a useful guidance document in 
assisting jurisdictions identify the specific policies, procedures or 
process that impact the cost of developing, maintaining or improving 
affordable housing.

E. Clarifications of Strategic Plan Provisions

    A change is made to Sec. Sec.  91.215(a)(4) and (a)(5) and 
91.315(a)(4) to make the sections clearer that the summary of specific 
objectives must identify proposed accomplishments the jurisdiction 
hopes to achieve in quantitative terms over a specified time period 
(e.g., one, two, three or more

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years), or in other measurable terms as identified by the jurisdiction. 
The strategic plan must also describe how funds expected to be 
available will be used to address identified needs. HUD is adding a new 
Sec.  91.215(a)(6) and Sec.  91.315(a)(6) to encourage grantees to 
include outcomes in the strategic plan. Similar clarifying change are 
made to Sec. Sec.  91.215(b)(2), (b)(3) and 91.315(b)(2) and (b)(3) to 
clarify that specific housing objectives must identify the number of 
extremely low-income, low-income, and moderate-income families to whom 
the jurisdiction will provide affordable housing as defined in 24 CFR 
92.252 for rental housing and 24 CFR 92.254 for homeownership over a 
specific time period. The affordable housing section must describe how 
the characteristics of the housing market will influence the use of 
funds made available for rental assistance, production of new units, 
rehabilitation of existing units, or acquisition of existing units. In 
addition, Sec. Sec.  91.215(b)(2), 91.215(d), 91.315(b)(2), and 
91.315(d) would be amended to indicate if a jurisdiction plans to use 
HOME funds for tenant-based assistance, it must specify local market 
conditions that lead to the choice of this option.
Priorities and Priority Needs
    HUD invites comment on whether assigning ``priority'' needs, 
especially the assigning ``relative'' allocation priorities of ``High'' 
``Medium'' and ``Low'' pursuant to Sec. Sec.  91.215(a)(1) and (2) is 
useful. For housing, a ``High'' priority means activities to address 
the unmet need ``will be funded'' with federal funds. A ``Medium'' 
priority means activities to address the unmet need ``may be funded'' 
with federal funds, if available. A ``Low'' priority means the 
jurisdiction ``will not fund'' activities to address the unmet need, 
but will consider certifications of consistency for other entities' 
applications for federal assistance. HUD would welcome suggestion on 
alternatives for indicating general priorities for allocating 
investment. Section 105(b)(7) of the Cranston-Gonzalez National 
Affordable Housing Act requires the jurisdiction to indicate the 
general priorities for allocating investment among different activities 
and housing needs. Section 105(b)(8) requires the jurisdiction describe 
the reasons for allocation priorities. Sec. Sec.  91.215(a)(1) and (2) 
are amended to more closely conform with the language in the statute.
    The proposed rule also contains a change to Sec.  91.215(e)(1) that 
eliminates the provision dealing with ``dollars to address'' in the 
priority community development needs table that some jurisdictions do 
not find useful and adds a requirement that the plan include an 
estimate of the number of abandoned buildings, using the locality's 
definition.
    Clarifying changes are made to Sec. Sec.  91.215(e)(2) and 
91.315(e)(2) requiring that neighborhood revitalization strategies 
identify long-term and short-term objectives (e.g., physical 
improvements, social initiatives and economic empowerment), in terms of 
measures of outputs and outcomes expected to be achieved in the area 
through the use of HUD programs. These changes will make the 
consolidated plan more results or outcome oriented.
    A clarification would be made to Sec.  91.215(h) indicating 
jurisdictions may include policies for providing training and 
employment opportunities to residents under section 3 of the Housing 
and Urban Development Act of 1968 (12 U.S.C. 1701u) and 24 CFR part 
135.

F. Action Plan

    A clarification is made at Sec.  91.220(b) indicating federal 
resources include Section 8 funds made available to the jurisdiction 
and competitive McKinney-Vento Homeless Assistance Act funds. A 
clarification is also made at Sec.  91.220(g) that CDBG funds includes 
proceeds from Section 108 loan guarantees.
    This proposed rule would add the following requirements to the 
action plan. The first change would add a new provision at Sec.  
91.220(b)(3) and Sec.  91.320(b)(3) that would require a jurisdiction 
to include a summary of the annual objectives the jurisdiction expects 
to achieve during the forthcoming program year.
    The second change would add a new provision at Sec.  91.220(d) and 
Sec.  91.320(d) to require a jurisdiction to measure outcomes for some 
of the proposed activities that are included in its action plan. These 
may include specific outcome measures to be issued in future HUD 
guidance so that the outcomes can be aggregated on a national basis, as 
well as locally identified outcomes to meet local needs. Outcomes are 
defined as benefits that result from a program that typically relate to 
a change in conditions, status, attitudes, skills, knowledge, or 
behavior. Common outcomes could include measures of improved quality of 
life for program beneficiaries, improved quality of program assisted 
local housing stock, or revitalization of a neighborhood. HUD plans to 
develop outcome measures in consultation with grantees and public 
interest groups, as well as specific comments that are made in response 
to this proposed rule. The Department is participating in an effort 
with the Council of State Community Development Agencies, the National 
Association for County, Community, and Economic Development, and the 
National Community Development Association to develop workable outcome 
measures that will be acceptable to the Department and its grantees.
    The third change would add a provision at Sec.  91.220(e) that 
would require the jurisdiction to estimate the percentage of funds the 
jurisdiction plans to dedicate to target areas. Target areas might 
include areas such as neighborhood revitalization strategy areas, 
neighborhood improvement areas, or other low- and moderate-income 
service areas in which block grant assistance activities are being 
carried out in a concentrated manner.
    The fourth change would add specific provisions at a new Sec.  
91.220(f) and Sec.  91.320(f) to require the jurisdiction to specify 
one-year goals for the number of homeless, non-homeless, and special 
needs families to be provided affordable housing through activities 
that provide rental assistance, production of new units, rehabilitation 
of existing units, or acquisition of existing units using funds made 
available to the jurisdiction. This change will make the annual action 
plan submission more results oriented and focus more attention on how 
formula grant funds are used to provide affordable housing.
    The fifth change would add a new Sec.  91.220(j)(1)(iv) to require 
CDBG grantees to identify the estimated amount of CDBG funds that will 
benefit persons of low- and moderate-income. The sixth change would add 
a new Sec.  91.220(j)(3) to require HOPWA grantees to specify one-year 
goals for the number of households to be provided with housing through 
the use of HOPWA funds for activities that provide short-term rent, 
mortgage and utility assistance payments to prevent homelessness of the 
individual or family; tenant-based rental assistance; and units 
provided in housing facilities that are being developed, leased or 
operated with HOPWA funds.
    Finally, changes at Sec. Sec.  91.220(k) and 91.320(k) would 
require a concise summary of the citizen participation and consultation 
process (including efforts to broaden public participation), a summary 
of comments or views received, and a summary of comments or views not 
accepted and a rationale for not accepting the comments.

[[Page 78833]]

G. Submission Requirements

    Changes are made to Sec.  91.15(b)(1) to clarify that a summary of 
the citizen participation and consultation process must be submitted on 
an annual basis together with the action plan and certifications.
    Clarifying changes are made to Sec.  91.15(b)(2) indicating the 
housing and homeless needs assessment, housing market analysis, and 
strategic plan sections must be submitted at least once every five 
years, or at such time as jointly agreed upon by HUD and the 
jurisdiction. This will allow jurisdictions the flexibility to submit 
and update plans in a manner that facilitates orderly program 
management. A new provision at Sec.  91.15(b)(3) would allow 
jurisdictions to make amendments that extend the time period covered by 
their plan if agreed upon by HUD. This provision would be used to 
coordinate consolidated plans with the time periods used for 
cooperation agreements, other local plans, or the availability of data.

H. Exceptions

    A clarifying change is made to the exceptions at Sec.  91.20 to 
remove an obsolete requirement that applied only for FY 1995 and to 
indicate that exceptions may be granted from submission deadlines for 
consolidated plans and performance reports required under Sec. Sec.  
91.15 and 91.520. Only the last exception (i.e. from the implementation 
guidelines) is modified to the extent the requirement is not required 
by statute or regulation.

I. Public and Assisted Housing

    This proposed rule would make a number of additional conforming and 
clarifying changes to part 91. The conforming changes would add the 
provisions at Sec.  91.2 that would require the PHA Plan (24 CFR part 
903) to include a certification of consistency with the applicable 
consolidated plan by the appropriate state or local official and a 
description of the manner in which the applicable contents of the PHA 
Plan are consistent with the consolidated plan. Conforming changes are 
made to Sec. Sec.  91.100(c), 91.105, and 91.210 to remove reference to 
the Comprehensive Grant Program and substitute references to the PHA 
Plan. The housing needs section at Sec.  91.205 is revised to include 
the needs of public housing residents and families on the public 
housing and section 8 tenant-based waiting list among those considered 
in estimating the housing needs of the jurisdiction. The housing market 
analysis section at Sec.  91.210 is also revised to include the 
expiration of Section 8 contracts as an example of affordable housing 
expected to be lost from the assisted housing inventory.
    Redundant and obsolete provisions dealing with organizational 
relationships between the jurisdiction and PHA, including the 
appointing authority for the commissioners or board of the housing 
agency; relationships regarding hiring, contracting and procurement; 
provision of services funded by the jurisdiction; and review by the 
jurisdiction of proposed development sites, of the comprehensive plan 
of the public housing agency, and of any proposed demolition or 
disposition of public housing developments are removed at Sec.  91.215 
(i)(2) since this information is available in the PHA Plan.
    This rule amends Sec. Sec.  91.215(k) and 91.315(l), to include the 
requirements of sections 568 and 583 of the Quality Housing and Work 
Responsibility Act of 1998 (42 U.S.C. Sec.  12705). The strategic plan 
of a jurisdiction must describe the manner in which the jurisdiction 
will address the needs of public housing and the financial or other 
assistance the jurisdiction will provide to improve the operations of a 
public housing agency designated as ``troubled'' in order to remove 
such designation. However, this rule does not require a State to 
describe the manner in which financial or other assistance is provided 
to a troubled public housing agency if that agency is located entirely 
within the boundaries of a unit of local government that must submit a 
housing strategy to HUD. Corresponding changes are made at Sec.  
91.220(f) and Sec.  91.320(f). This rule would also include among the 
needs of public housing, the need to increase the number of accessible 
units required by section 504 voluntary compliance agreements.
    In addition, this rule also adds a conforming change at Sec.  
91.500(b)(4) that would provide that the failure to include a 
description of the manner in which a jurisdiction will provide 
financial or other assistance to remove a PHA's troubled designation 
may cause HUD to disapprove a plan or determine that it is 
substantially incomplete.

J. State Method of Distribution

    This proposed rule would amend Sec.  91.320(g) to resolve some 
apparent confusion that states and state grantees have regarding the 
Method of Distribution requirements. In meetings with states and state 
organizations, as well as from monitoring visits, it has become clear 
that many states are not aware that the entire rating and ranking 
process needed to be transparent. This proposed rule clarifies that the 
state must document how it selected state CDBG applications for funding 
so that it can be easily reviewed by citizens, HUD staff, and the 
Inspector General. The revised rule indicates the Method of 
Distribution, the application manual, or other generally available 
state publication that is referenced in the Method of Distribution, 
must contain a description of all of the rating and ranking criteria 
that is used to select applications from local governments for funding. 
If the description of the rating and ranking criteria is published in a 
document other than the Method of Distribution, the Method of 
Distribution must include a listing of all of the state's selection 
criteria. This includes any criteria that might be used by a state's 
senior management that affect final funding selection decisions. HUD's 
purpose is to ensure full disclosure to units of general local 
government and citizens of all criteria affecting how funding decisions 
are to be made and not to dictate how a state selects its grantees. The 
process should be transparent so that potential applicants will have a 
clear indication of what they have to do to prepare a successful 
application.
    The proposed rule also makes clear that HUD's approval of the 
consolidated plan does not necessarily confer approval of a state's 
actual implementation of its Method of Distribution, or compliance with 
the requirements of Section 91.320(g)(1)(i) as HUD may determine in a 
subsequent monitoring or audit of the state's Method of Distribution.
    HUD specifically welcomes comments on this rule from states, units 
of general local government participating in the State Community 
Development Block Grant Program, and citizens affected by the State 
CDBG program.

III. Findings and Certifications

Justification for 30-Day Comment Period

    In general, HUD publishes a proposed rule for a 60-day public 
comment period on all proposed rules, however, HUD is reducing its 
usual 60-day public comment period to 30 days for this proposed rule. 
The Department developed these clarifying changes in response to 
suggestions by affected parties and after extensive consultation with 
interested stakeholders representing the interests of state and local 
governments and low-income persons. In addition, many jurisdictions are 
in the process of preparing their consolidated plans for FY2005 and 
publication of an updated rule that would guide the development of 
their

[[Page 78834]]

plans. Therefore, HUD is publishing this proposed rule with a 30-day 
public comment period because the rule makes clarifying and conforming 
changes to a regulation to make it more internally consistent and to 
conform to recent statutory changes. HUD welcomes comments on the rule, 
and these comments will be taken into consideration in developing the 
final rule.

Paperwork Reduction Act

    The proposed new information collection requirements contained in 
Sec. Sec.  91.15, 91.215, 91.220, 91.315, 91.320, and 91.520 have been 
submitted to the Office of Management and Budget (OMB) for review under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Under this 
Act, an agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection 
displays a valid control number. The current information collection 
requirements for the consolidated plan at 24 CFR part 91 have been 
approved by the Office of Management and Budget under OMB Approval No. 
2506-0117.
    Information on the estimated public reporting burden is provided in 
the following table:

----------------------------------------------------------------------------------------------------------------
                                              Number of       Frequency of
 Information collection, 24 CFR part 91      respondents        response        Burden hours       Total hours
----------------------------------------------------------------------------------------------------------------
Consolidated Plan
    Localities
         Strategic Plan                      1,000                 1               220           220,000
         Development Sec.   91.215).....
         Action Plan Development             1,000                 1               112           112,000
         (Sec.   91.220)................
    States
         Strategic Plan                         50                 1               604            30,200
         Development (Sec.   91.315)....
         Action Plan Development                50                 1               374            18,700
         (Sec.   91.320)................
Performance Report (Sec.  Sec.   91.15,
 91,520)
         Localities.............             1,000                 1               162           162,000
         States.................                50                 1               252            12,600
        *Abbreviated Strategy...........               100  ................  ................             8,200
                                         -------------------
            Total Burden................  ................  ................  ................          563,700
----------------------------------------------------------------------------------------------------------------
*Respondents that submit abbreviated plans are those local governments that are required by statute to submit an
  abbreviated plan because they receive direct funds from HUD and are not formula grantees. For example, local
  governments that are recipients of lead based paint grants.

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning the 
proposed collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this proposal. Under the 
provisions of 5 CFR 1320, OMB is required to make a decision concerning 
this collection of information between 30 and 60 days after today's 
publication date. Therefore, any comment on the information collection 
requirements is best assured of having its full effect if OMB receives 
the comment within 30 days of today's publication. This time frame does 
not affect the deadline for comments to the agency on the proposed 
rule, however. Comments must refer to the proposal by name and docket 
number (FR-4923-P-01) and must be sent to:

Mark D. Menchik, HUD Desk Officer, Office of Management and Budget, New 
Executive Office Building, Washington, DC 20503, Mark--D. 
[email protected];

 and

Shelia Jones, Reports Liaison Officer, Office of the Assistant 
Secretary for Community Planning and Development, Department of Housing 
and Urban Development, 451 7th Street, SW., Room 7232, Washington, DC 
20410.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
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 (42 U.S.C. 4332). The Finding of No Significant Impact is 
available for public inspection weekdays between the hours of 8 a.m. 
and 5 p.m. 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 20410-0500.

Impact on Small Entities

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements unless the agency certifies that the rule will 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. Accordingly, the 
undersigned certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. 
Notwithstanding HUD's determination that this rule will not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comments regarding 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 proposed rule does not have 
federalism implications and does not impose substantial direct 
compliance costs on

[[Page 78835]]

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. 
1531-1538) establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and on the private sector. This proposed rule does not 
impose a federal mandate on any state, local, or tribal government, or 
on the private sector, within the meaning of the Unfunded Mandates 
Reform Act of 1995.

Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, entitled ``Regulatory Planning and Review.'' OMB 
determined that this rule is a ``significant regulatory action'' as 
defined in section 3(f) of the order (although not an economically 
significant regulatory action under the order). Any changes made to the 
rule as a result of that review are identified in the docket file, 
which is available for public inspection in the office of the 
Department's Rules Docket Clerk, Office of General Counsel, Room 10276, 
451 Seventh Street, SW., Washington, DC 20410-0500.

Catalog of Federal Domestic Assistance

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

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.

    Accordingly, for the reasons stated in the preamble, HUD proposes 
to amend 24 CFR part 91 as follows:

PART 91--CONSOLIDATED SUBMISSIONS 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. In Sec.  91.1, revise paragraph (b) to read as follows:


Sec.  91.1  Purpose.

* * * * *
    (b) Functions of plan. The consolidated plan serves the following 
functions:
    (1) A planning document for the jurisdiction, which builds on a 
participatory process among citizens, organizations, businesses, and 
other stakeholders;
    (2) An application for federal funds under HUD's formula grant 
programs for jurisdictions;
    (3) A strategy to be followed in carrying out HUD programs; and
    (4) A management tool for assessing performance and tracking 
results.
    3. Add Sec.  91.2(d) to read as follows:


Sec.  91.2  Applicability.

* * * * *
    (d) The Public Housing Agency Plan submission (PHA Plan) (see 24 
CFR part 903) includes a certification by the appropriate state or 
local official that the PHA Plan is consistent with the applicable 
consolidated plan for the jurisdiction in which the public housing 
agency is located and must describe the manner in which the applicable 
contents of the PHA Plan are consistent with the consolidated plan.
    4. Amend Sec.  91.5 by adding alphabetically definitions for 
``chronically homeless person'' and ``disabling condition'' to read as 
follows:


Sec.  91.5  Definitions.

* * * * *
    Chronically homeless person. An unaccompanied homeless individual 
with a disabling condition who has either been continuously homeless 
for a year or more or has had at least four episodes of homelessness in 
the past three years. To be considered chronically homeless, a person 
must have been sleeping in a place not meant for human habitation (e.g. 
living on the streets) and/or in an emergency shelter during that time.
* * * * *
    Disabling condition. For the purposes of chronic homelessness, a 
disabling condition is a diagnosable substance use disorder, serious 
mental illness, developmental disability, or chronic physical illness 
or disability, including the co-occurrence of two or more of these 
conditions. A disabling condition limits an individual's ability to 
work or perform one or more activities of daily living.
* * * * *
    5. Revise Sec.  91.15 to read as follows:


Sec.  91.15  Submission date.

    (a) General. (1) In order to facilitate continuity in its program 
and to provide accountability to citizens, each jurisdiction should 
submit its consolidated plan to HUD at least 45 days before the start 
of its program year. (But see Sec.  92.104 of this subtitle with 
respect to newly eligible jurisdictions under the HOME program.) With 
the exception of the August 16 date noted in paragraph (a)(2) of this 
section, HUD may grant a jurisdiction an extension of the submission 
deadline for good cause.
    (2) In no event will HUD accept a submission earlier than November 
15 or later than August 16 of the Federal fiscal year for which the 
grant funds are appropriated. Failure to submit the plan by August 16 
will automatically result in a loss of the CDBG funds to which the 
jurisdiction would otherwise be entitled.
    (3) A jurisdiction may have a program year that coincides with the 
Federal fiscal year (e.g., October 1, 2003 through September 30, 2004 
for Federal fiscal year 2004 funds). However, the consolidated plan may 
not be submitted earlier than November 15 of the Federal fiscal year 
and HUD has the period specified in Sec.  91.500 to review the 
consolidated plan.
    (4) See Sec.  91.20 for HUD field office authorization to grant 
exceptions to these provisions.
    (b) Frequency of submission. (1) The summary of the citizen 
participation and consultation process, the action plan, and the 
certifications must be submitted on an annual basis.
    (2) The housing, and homeless needs assessment, market analysis, 
and strategic plan must be submitted at least once every five years, or 
at such time agreed upon by HUD and the jurisdiction in order to 
facilitate orderly program management, coordinate consolidated plans 
with time periods used for cooperation agreements, other plans, or the 
availability of data.
    (3) A jurisdiction may make amendments that extend the time period 
covered by their plan if agreed upon by HUD.
    6. Revise Sec.  91.20 to read as follows:


Sec.  91.20  Exceptions.

    The HUD Field Office may grant a jurisdiction an exception from the 
submission deadline for plans and reports and from a requirement in the 
implementation guidelines for good cause, as determined by the field 
office and reported in writing to HUD Headquarters unless the 
requirement is required by statute or regulation.
    7. In Sec.  91.100, revise paragraphs (a) and (c) to read as 
follows:


Sec.  91.100  Consultation: local governments.

    (a) General. (1) When preparing the consolidated plan, the 
jurisdiction shall consult with other public and private

[[Page 78836]]

agencies that provide assisted housing, health services, and social 
services (including those focusing on services to children, elderly 
persons, persons with disabilities, persons with HIV/AIDS and their 
families, homeless persons) during preparation of the consolidated 
plan.
    (2) When preparing the portion of the consolidated plan describing 
the jurisdiction's homeless strategy, the jurisdiction shall consult 
with public and private agencies that provide assisted housing, health 
services, and social services to determine what resources are available 
to address the needs of any persons that are chronically homeless.
    (3) When preparing the portion of its consolidated plan concerning 
lead-based paint hazards, the jurisdiction shall consult with State or 
local health and child welfare agencies and examine existing data 
related to lead-based paint hazards and poisonings, including health 
department data on the addresses of housing units in which children 
have been identified as lead poisoned.
    (4) When preparing the description of priority nonhousing community 
development needs, a unit of general local government must notify 
adjacent units of general local government, to the extent practicable. 
The nonhousing community development plan must be submitted to the 
state, and, if the jurisdiction is a CDBG entitlement grantee other 
than an urban county, to the county.
    (5) The jurisdiction also should consult with adjacent units of 
general local government, including local government agencies with 
metropolitan-wide planning responsibilities, particularly for problems 
and solutions that go beyond a single jurisdiction.
* * * * *
    (c) Public housing. The jurisdiction shall consult with the local 
public housing agency (PHA) concerning consideration of public housing 
needs and planned programs and activities. This consultation will help 
provide a better basis for the certification by the authorized official 
that the PHA Plan is consistent with the consolidated plan and the 
local government's description of the manner in which it will address 
the needs of public housing and, where necessary, the manner in which 
it will provide financial or other assistance to a troubled PHA to 
improve its operations and remove such designation. It will also help 
ensure that activities with regard to local drug elimination, 
neighborhood improvement programs, and resident programs and services, 
funded under a public housing agency's program and those funded under a 
program covered by the consolidated plan are fully coordinated to 
achieve comprehensive community development goals.
    8. In Sec.  91.105, paragraph (a)(2)(ii) is revised and paragraph 
(a)(2)(iii) is revised to read as follows:


Sec.  91.105  Citizen participation plan; local governments.

    (a) * * *
    (2) * * *
    (ii) These requirements are designed especially to encourage 
participation by low- and moderate-income persons, particularly those 
living in slum and blighted areas and in areas where CDBG funds are 
proposed to be used, and by residents of predominantly low- and 
moderate-income neighborhoods, as defined by the jurisdiction. A 
jurisdiction also is expected to take whatever actions are appropriate 
to encourage the participation of all its citizens, including 
minorities and non-English speaking persons, as well as persons with 
disabilities. The jurisdiction shall encourage the participation of 
local and regional institutions and other organizations (including 
businesses, developers, community and faith-based organizations) in the 
process of developing and implementing the consolidated plan. The 
jurisdiction should also explore alternative public involvement 
techniques and quantitative ways to measure efforts that encourage 
citizen participation in a shared vision for change in communities and 
neighborhoods, and the review of program performance, for example, use 
of focus groups, use of Internet, etc.
    (iii) The jurisdiction shall encourage, in conjunction with 
consultation with public housing agencies, the participation of 
residents of public and assisted housing developments, in the process 
of developing and implementing the consolidated plan, along with other 
low-income residents of targeted revitalization areas in which the 
developments are located. The jurisdiction shall make an effort to 
provide information to the public housing agency about consolidated 
plan activities related to its developments and surrounding communities 
so that the public housing agency can make this information available 
at the annual public hearing required for the PHA Plan.
* * * * *
    9. Revise Sec.  91.110 to read as follows:


Sec.  91.110  Consultation; States.

    When preparing the consolidated plan, the State shall consult with 
other public and private agencies that provide assisted housing 
(including any State housing agency administering public housing), 
health services, and social services (including those focusing on 
services to children, elderly persons, persons with disabilities, 
persons with HIV/AIDS and their families, homeless persons) during 
preparation of the consolidated plan. When preparing the portion of the 
consolidated plan describing the state's homeless strategy, the state 
shall consult with public and private agencies that provide assisted 
housing, health services, and social services to determine what 
resources are available to address the needs of any persons that are 
chronically homeless. When preparing the portion of its consolidated 
plan concerning lead-based paint hazards, the State shall consult with 
State or local health and child welfare agencies and examine existing 
data related to lead-based paint hazards and poisonings, including 
health department data on the addresses of housing units in which 
children have been identified as lead poisoned. When preparing its 
method of distribution of assistance under the CDBG program, a State 
must consult with local governments in nonentitlement areas of the 
State.
    10. Revise Sec.  91.115(a)(2) to read as follows:


Sec.  91.115  Citizen participation plan; states.

    (a) * * *
    (2) Encouragement of citizen participation. The citizen 
participation plan must provide for and encourage citizens to 
participate in the development of the consolidated plan, any 
substantial amendments to the consolidated plan, and the performance 
report. These requirements are designed especially to encourage 
participation by low- and moderate-income persons, particularly those 
living in slum and blighted areas and in areas where CDBG funds are 
proposed to be used and by residents of predominantly low- and 
moderate-income neighborhoods. A State also is expected to take 
whatever actions are appropriate to encourage the participation of all 
its citizens, including minorities and non-English speaking persons, as 
well as persons with disabilities. The State shall encourage the 
participation of statewide and regional institutions and other 
organizations (including businesses, developers, community and faith-
based organizations) in the process of developing and implementing the 
consolidated plan. The state should also explore alternative public 
involvement techniques that encourage a shared vision of change for the 
community and

[[Page 78837]]

the review of program performance, for example, use of focus groups, 
use of Internet.
* * * * *
    11. Revise Sec.  91.200 to read as follows:


Sec.  91.200  General.

    (a) A complete consolidated plan consists of the information 
required in Sec.  91.205 through Sec.  91.230, submitted in accordance 
with instructions prescribed by HUD (including tables and narratives), 
or in such other format as jointly agreed upon by HUD and the 
jurisdiction.
    (b) The jurisdiction shall describe the lead agency or entity 
responsible for overseeing the development of the plan and the 
significant aspects of the process by which the consolidated plan was 
developed, the identity of the agencies, groups, organizations, and 
others who participated in the process, and a description of the 
jurisdiction's consultations with social service agencies and other 
entities. It also shall include a concise summary of the citizen 
participation process, public comments, and efforts made to broaden 
public participation in the development of the consolidated plan.
    12. Revise Sec.  91.205(a), (b) and (c) to read as follows:


Sec.  91.205  Housing and homeless needs assessment.

    (a) General. The consolidated plan must provide a concise summary 
of the jurisdiction's estimated housing needs projected for the ensuing 
five-year period. Housing data included in this portion of the plan 
shall be based on U.S. Census data, as provided by HUD, as updated by 
any properly conducted local study, or any other reliable source that 
the jurisdiction clearly identifies and should reflect the consultation 
with social service agencies and other entities conducted in accordance 
with Sec.  91.100 and the citizen participation process conducted in 
accordance with Sec.  91.105. For a jurisdiction seeking funding on 
behalf of an eligible metropolitan statistical area under the HOPWA 
program, the needs described for housing and supportive services must 
address the needs of persons with HIV/AIDS and their families 
throughout the eligible metropolitan statistical area.
    (b) Categories of persons affected. (1) The plan shall estimate the 
number and type of families in need of housing assistance for extremely 
low-income, low-income, moderate-income, and middle-income families, 
for renters and owners, for elderly persons, for single persons, for 
large families, public housing residents, families on the public 
housing and section 8 tenant-based waiting list, persons with HIV/AIDS 
and their families, and for persons with disabilities. The description 
of housing needs shall include a concise summary of the cost burden and 
severe cost burden, overcrowding (especially for large families), and 
substandard housing conditions being experienced by extremely low-
income, low-income, moderate-income, and middle-income renters and 
owners compared to the jurisdiction as a whole. (The jurisdiction must 
define in its consolidated plan the terms ``standard condition'' and 
``substandard condition but suitable for rehabilitation.'')
    (2) For any of the income categories enumerated in paragraph (b)(1) 
of this section, to the extent that any racial or ethnic group has 
disproportionately greater need in comparison to the needs of that 
category as a whole, assessment of that specific need shall be 
included. For this purpose, disproportionately greater need exists when 
the percentage of persons in a category of need who are members of a 
particular racial or ethnic group in a category of need is at least 10 
percentage points higher than the percentage of persons in the category 
as a whole.
    (c) Homeless needs. The plan must provide a concise summary of the 
nature and extent of homelessness (including rural homelessness), 
addressing separately the need for facilities and services for homeless 
individuals and homeless families with children, both sheltered and 
unsheltered, and homeless subpopulations, in accordance with a table 
prescribed by HUD. This description must include the characteristics 
and needs of low-income individuals and families with children 
(especially extremely low-income) who are currently housed but 
threatened with homelessness. The plan also must contain a brief 
narrative description of the nature and extent of homelessness by 
racial and ethnic group, to the extent information is available.
* * * * *
    13. In Sec.  91.210, paragraphs (b)(1), (b)(2), and (c) are revised 
to read as follows:


Sec.  91.210  Housing market analysis.

* * * * *
    (b) Public and assisted housing. (1) The plan must describe and 
identify the public housing developments and the number of public 
housing units in the jurisdiction, the physical condition of such 
units, the restoration and revitalization needs, results from the 
Section 504 needs assessment (i.e., assessment of needs of tenants and 
applicants on waiting list for accessible units, as required by 24 CFR 
8.25), and the public housing agency's strategy for improving the 
management and operation of such public housing and for improving the 
living environment of low- and moderate-income families residing in 
public housing. The consolidated plan must identify the public housing 
developments in the jurisdictions that are participating in an approved 
PHA Plan.
    (2) The jurisdiction shall include a description of the number and 
targeting (income level and type of family served) of units currently 
assisted by local, state, or federally funded programs, and an 
assessment of whether any such units are expected to be lost from the 
assisted housing inventory for any reason, for example, expiration of 
Section 8 contracts.
    (c) Homeless facilities. The plan must include a brief inventory of 
facilities and services that meet the emergency shelter, transitional 
housing, permanent supportive housing, and permanent housing needs of 
homeless persons within the jurisdiction, including any persons that 
are chronically homeless.
* * * * *
    14. In Sec.  91.215, revise paragraphs (a)(1) through (a)(6), 
(b)(2), (b)(3), (c), (d), (e), (h), (i), (j) and (k) to read as 
follows:


Sec.  91.215  Strategic plan.

    (a) * * *
    (1) Indicate the general priorities for allocating investment 
geographically within the jurisdiction (or within the EMSA for the 
HOPWA program) and among different activities and needs, as identified 
in tables prescribed by HUD.
    (2) Describe the reasons for assigning the priority (including the 
relative priority, where required) given to each category of priority 
needs;
    (3) Identify any obstacles to meeting underserved needs;
    (4) Summarize the priorities and specific objectives the 
jurisdiction intends to initiate and/or complete during the time period 
covered by the strategic plan. For each specific objective, identify 
proposed accomplishments the jurisdiction hopes to achieve in 
quantitative terms over a specified time period (e.g., one, two, three 
or more years), or in other measurable terms as identified and defined 
by the jurisdiction;
    (5) Describe how funds that are reasonably expected to be available 
will be used to address identified needs for the period covered by the 
plan;
    (6) Where known, grantees should include proposed outcomes measures 
for some of the proposed accomplishments listed in paragraph

[[Page 78838]]

(a)(4) of this section in accordance with guidance to be issued by HUD.
    (b) * * *
    (2) The affordable housing section shall indicate how the 
characteristics of the housing market will influence the use of funds 
made available for rental assistance, production of new units, 
rehabilitation of existing units, or acquisition of existing units 
(including preserving affordable housing units that may be lost from 
the assisted housing inventory for any reason). If the jurisdiction 
intends to use HOME funds for tenant-based assistance, it must specify 
local market conditions that lead to the choice of this option.
    (3) The affordable housing section shall include specific 
objectives that describe proposed accomplishments the jurisdiction 
hopes to achieve and must specify the number of extremely low-income, 
low-income, and moderate-income families to whom the jurisdiction will 
provide affordable housing as defined in 24 CFR 92.252 for rental 
housing and 24 CFR 92.254 for homeownership over a specific time 
period.
    (c) Homelessness. With respect to homelessness, the consolidated 
plan must include the priority homeless needs table prescribed by HUD 
and must describe the jurisdiction's strategy for the following:
    (1) Helping low-income families avoid becoming homeless;
    (2) Reaching out to homeless persons and assessing their individual 
needs;
    (3) Addressing the emergency shelter and transitional housing needs 
of homeless persons; and
    (4) Helping homeless persons (especially any persons that are 
chronically homeless) make the transition to permanent housing and 
independent living.
    (d) Other special needs. With respect to supportive needs of the 
non-homeless, the consolidated plan must provide a concise summary of 
the priority housing and supportive service needs of persons who are 
not homeless but require supportive housing (i.e., elderly, frail 
elderly, persons with disabilities (mental, physical, developmental), 
persons with alcohol or other drug addiction, persons with HIV/AIDS and 
their families, and public housing residents). If the jurisdiction 
intends to use HOME funds for tenant-based assistance to assist one or 
more of these subpopulations, it must specify local market conditions 
that lead to the choice of this option.
    (e) Nonhousing community development plan. (1) If the jurisdiction 
seeks assistance under the Community Development Block Grant program, 
the consolidated plan must provide a concise summary of the 
jurisdiction's priority non-housing community development needs 
eligible for assistance under HUD's community development programs by 
CDBG eligibility category, in accordance with a table prescribed by 
HUD. This community development component of the plan must state the 
jurisdiction's specific long-term and short-term community development 
objectives (including economic development activities that create 
jobs), which must be developed in accordance with the primary objective 
of the CDBG program to develop viable urban communities by providing 
decent housing and a suitable living environment and expanding economic 
opportunities, principally for low-income and moderate-income persons. 
The plan shall also include an estimate of the number of abandoned 
buildings, using the jurisdiction's definition.
    (2) A jurisdiction that elects to carry out a neighborhood 
revitalization strategy that includes the economic empowerment of low-
income residents with respect to one or more of its areas may submit 
this strategy as part of its community development plan. The strategy 
must identify long-term and short-term objectives (e.g., physical 
improvements, social initiatives and economic empowerment), expressing 
them in terms of measures of outputs and outcomes expected to be 
achieved in the neighborhood through the use of HUD programs. If HUD 
approves such a strategy, the jurisdiction can obtain greater 
flexibility in the use of the CDBG funds in the revitalization area(s) 
as described in 24 CFR part 570, subpart C.
* * * * *
    (h) Anti-poverty strategy. The consolidated plan must provide a 
concise summary of the jurisdiction's goals, programs, and policies for 
reducing the number of poverty level families and how the 
jurisdiction's goals, programs, and policies for producing and 
preserving affordable housing, set forth in the housing component of 
the consolidated plan, will be coordinated with other programs and 
services for which the jurisdiction is responsible and the extent to 
which they will reduce (or assist in reducing) the number of poverty 
level families, taking into consideration factors over which the 
jurisdiction has control. These policies may include the jurisdiction's 
policies for providing employment and training opportunities to section 
3 residents pursuant to 24 CFR part 135.
    (i) Institutional structure. (1) The consolidated plan must provide 
a concise summary of the institutional structure, including private 
industry, nonprofit organizations, community and faith-based 
organizations, and public institutions, through which the jurisdiction 
will carry out its housing, homeless, and community development plan, 
assessing the strengths and gaps in that delivery system.
    (2) The plan must provide a concise summary of what the 
jurisdiction will do to overcome gaps in the institutional structure 
for carrying out its strategy for addressing its priority needs.
    (j) Coordination. The consolidated plan must provide a concise 
summary of the jurisdiction's activities to enhance coordination 
between public and assisted housing providers and private and 
governmental health, mental health, and service agencies. With respect 
to the preparation of its homeless strategy, the jurisdiction must 
describe efforts in addressing the needs of persons that are 
chronically homeless. With respect to the public entities involved, the 
plan must describe the means of cooperation and coordination among the 
State and any units of general local government in the metropolitan 
area in the implementation of its consolidated plan.
    (k) Public housing. The consolidated plan must describe the manner 
in which the plan of the jurisdiction will address the needs of public 
housing, including the need to increase the number of accessible units 
where required by a section 504 voluntary compliance agreement. The 
consolidated plan must also describe the jurisdiction's activities to 
encourage public housing residents to become more involved in 
management and participate in homeownership. If the public housing 
agency is designated as ``troubled'' by HUD under 24 CFR part 902, the 
jurisdiction must describe the manner in which it will provide 
financial or other assistance to improve its operations and remove the 
``troubled'' designation.
    15. Revise Sec.  91.220 to read as follows:


Sec.  91.220  Action plan.

    The action plan must include the following:
    (a) Form application. Standard Form 424;
    (b) Resources and objectives. (1) Federal resources. The 
consolidated plan must provide a concise summary of the federal 
resources (including grant funds and program income) expected to be 
made available. Federal resources include Section 8 funds made 
available to jurisdictions and competitive McKinney-Vento Homeless 
Assistance Act funds.

[[Page 78839]]

    (2) Other resources. The consolidated plan must indicate resources 
from private and state and local sources that are reasonably expected 
to be made available to address the needs identified in the plan. The 
plan must explain how Federal funds will leverage those additional 
resources, including a description of how matching requirements of the 
HUD programs will be satisfied. Where the jurisdiction deems it 
appropriate, it may indicate publicly owned land or property located 
within the jurisdiction that may be used to address the needs 
identified in the plan;
    (3) Annual objectives. The consolidated plan must contain a summary 
of the annual objectives the jurisdiction expects to achieve during the 
forthcoming program year.
    (c) Activities to be undertaken. A description of the activities 
the jurisdiction will undertake during the next year to address 
priority needs and objectives. This description of activities shall 
estimate the number and type of families that will benefit from the 
proposed activities, the specific local objectives and priority needs 
(identified in accordance with Sec.  91.215) that will be addressed by 
the activities using formula grant funds and program income the 
jurisdiction expects to receive during the program year, proposed 
accomplishments, and a target date for completion of the activity. This 
information is to be presented in the form of a table prescribed by 
HUD;
    (d) Outcome measures. Each jurisdiction must provide outcome 
measures for activities included in its action plan in accordance with 
guidance to be issued by HUD.
    (e) Geographic distribution. A description of the geographic areas 
of the jurisdiction (including areas of low-income and minority 
concentration) in which it will direct assistance during the ensuing 
program year, giving the rationale for the priorities for allocating 
investment geographically. When appropriate, jurisdictions should 
estimate the percentage of funds they plan to dedicate to target areas.
    (f) Affordable housing. The jurisdiction must specify one-year 
goals for the number of homeless, non-homeless, and special needs 
households to be provided affordable housing through activities that 
provide rental assistance, production of new units, rehabilitation of 
existing units, or acquisition of existing units using funds made 
available to the jurisdiction. The term affordable housing shall be as 
defined in 24 CFR 92.252 for rental housing and 24 CFR 92.254 for 
homeownership.
    (g) Homeless and other special needs activities. Activities it 
plans to undertake during the next year to address emergency shelter 
and transitional housing needs of homeless individuals and families 
(including subpopulations), to prevent low-income individuals and 
families with children (especially those with incomes below 30 percent 
of median) from becoming homeless, to help homeless persons make the 
transition to permanent housing and independent living, specific action 
steps to end chronic homelessness, and to address the special needs of 
persons who are not homeless identified in accordance with Sec.  
91.215(d);
    (h) Barriers to Affordable Housing. Actions it plans to take during 
the next year to address public policies, procedures and processes of 
the jurisdiction that impact the cost of developing, maintaining or 
improving affordable housing. Such policies, procedures and processes 
include but are not limited to: land use controls, tax policies 
affecting land, zoning ordinances, building codes, fees and charges, 
growth limitations and policies affecting the return on residential 
investment.
    (i) Other actions. (1) General. Actions it plans to take during the 
next year to address obstacles to meeting underserved needs, foster and 
maintain affordable housing, evaluate and reduce lead-based paint 
hazards, reduce the number of poverty level families, develop 
institutional structure, and enhance coordination between public and 
private housing and social service agencies (see Sec.  91.215 (a), (b), 
(g), (h), (i), and (j).
    (2) Public housing. Actions it plans to take during the next year 
to address the needs of public housing and actions to encourage public 
housing residents to become more involved in management and participate 
in homeownership. If the public housing agency is designated as 
``troubled'' by HUD under part 902 of this title, the jurisdiction must 
describe the manner in which it will provide financial or other 
assistance to improve its operations and remove the ``troubled'' 
designation.
    (j) Program-specific requirements--(1) CDBG. (i) A jurisdiction 
must describe activities planned with respect to all CDBG funds 
expected to be available during the program year (including program 
income that will have been received before the start of the next 
program year), except that an amount generally not to exceed ten 
percent of such total available CDBG funds may be excluded from the 
funds for which eligible activities are described if it has been 
identified for the contingency of cost overruns.
    (ii) CDBG funds expected to be available during the program year 
includes the following:
    (A) Any program income that will have been received before the 
start of the next program year and that has not yet been programmed;
    (B) Proceeds from Section 108 loan guarantees that will be used 
during the year to address the priority needs and specific objectives 
identified in its strategic plan;
    (C) Surplus from urban renewal settlements;
    (D) Grant funds returned to the line of credit for which the 
planned use has not been included in a prior statement or plan; and
    (E) Income from float-funded activities. The full amount of income 
expected to be generated by a float-funded activity must be shown, 
whether or not some or all of the income is expected to be received in 
a future program year. To assure that citizens understand the risks 
inherent in undertaking float-funded activities, the recipient must 
specify the total amount of program income expected to be received and 
the month(s) and year(s) that it expects the float-funded activity to 
generate such program income.
    (iii) An ``urgent needs'' activity (one that is expected to qualify 
under Sec.  570.208(c) of this title) may be included only if the 
jurisdiction identifies the activity in the action plan and certifies 
that the activity is designed to meet other community development needs 
having a particular urgency because existing conditions pose a serious 
and immediate threat to the health or welfare of the community and 
other financial resources are not available.
    (iv) The plan shall identify the estimated amount of CDBG funds 
that will be used for activities that benefit persons of low- and 
moderate-income. The information about activities shall be in 
sufficient detail, including location, to allow citizens to determine 
the degree to which they are affected.
    (2) HOME. (i) For HOME funds, a participating jurisdiction shall 
describe other forms of investment that are not described in Sec.  
92.205(b) of this title.
    (ii) If the participating jurisdiction intends to use HOME funds 
for homebuyers, it must state the guidelines for resale or recapture, 
as required in Sec.  92.254 of this subtitle.
    (iii) If the participating jurisdiction intends to use HOME funds 
to refinance existing debt secured by multifamily housing that is being 
rehabilitated with HOME funds, it must state its

[[Page 78840]]

refinancing guidelines required under 24 CFR 92.206(b). The guidelines 
shall describe the conditions under which the participating 
jurisdictions will refinance existing debt. At minimum, the guidelines 
must:
    (A) Demonstrate that rehabilitation is the primary eligible 
activity and ensure that this requirement is met by establishing a 
minimum level of rehabilitation per unit or a required ratio between 
rehabilitation and refinancing.
    (B) Require a review of management practices to demonstrate that 
disinvestment in the property has not occurred; that the long term 
needs of the project can be met; and that the feasibility of serving 
the targeted population over an extended affordability period can be 
demonstrated.
    (C) State whether the new investment is being made to maintain 
current affordable units, create additional affordable units, or both.
    (D) Specify the required period of affordability, whether it is the 
minimum 15 years or longer.
    (E) Specify whether the investment of HOME funds may be 
jurisdiction-wide or limited to a specific geographic area, such as a 
neighborhood identified in a neighborhood revitalization strategy under 
24 CFR 91.215(d)(2) or a Federally designated Empowerment Zone or 
Enterprise Community.
    (F) State that HOME funds cannot be used to refinance multifamily 
loans made or insured by any Federal program, including CDBG.
    (iv) If the participating jurisdiction will receive funding under 
the American Dream Downpayment Initiative (ADDI) (see 24 CFR part 92, 
subpart M), it must include:
    (A) A description of the planned use of the ADDI funds;
    (B) A plan for conducting targeted outreach to residents and 
tenants of public and manufactured housing and to other families 
assisted by public housing agencies, for the purposes of ensuring that 
the ADDI funds are used to provide downpayment assistance for such 
residents, tenants, and families; and
    (C) A description of the actions to be taken to ensure the 
suitability of families receiving ADDI funds to undertake and maintain 
homeownership.
    (3) HOPWA. For HOPWA funds, the jurisdiction must specify one-year 
goals for the number of households to be provided housing through the 
use of HOPWA activities for: short-term rent, mortgage and utility 
assistance payments to prevent homelessness of the individual or 
family; tenant-based rental assistance; and units provided in housing 
facilities that are being developed, leased or operated with HOPWA 
funds.
    (k) A concise summary of the citizen participation and consultation 
process (including efforts to broaden public participation) (24 CFR 
91.200(b)), a summary of comments or views, and a summary of comments 
or views not accepted and the reasons therefore. (24 CFR 91.105(b)(5))
    16. Revise Sec.  91.300(b) to read as follows:


Sec.  91.300  General.

* * * * *
    (b) The state shall describe the lead agency or entity responsible 
for overseeing the development of the plan and the significant aspects 
of the process by which the consolidated plan was developed, the 
identity of the agencies, groups, organizations, and others who 
participated in the process, and a description of the state's 
consultations with social service agencies and other entities. It also 
shall include a concise summary of the citizen participation process, 
public comments, and efforts made to broaden public participation in 
the development of the consolidated plan.
    17. In Sec.  91.305, revise paragraphs (a), (b), and (c) to read as 
follows:


Sec.  91.305  Housing and homeless needs assessment.

    (a) General. The consolidated plan must provide a concise summary 
of the state's estimated housing needs projected for the ensuing five-
year period. Housing data included in this portion of the plan shall be 
based on U.S. Census data, as provided by HUD, as updated by any 
properly conducted local study, or any other reliable source that the 
jurisdiction clearly identifies and should reflect the consultation 
with social service agencies and other entities conducted in accordance 
with Sec.  91.110 and the citizen participation process conducted in 
accordance with Sec.  91.115. For a State seeking funding under the 
HOPWA program, the needs described for housing and supportive services 
must address the needs of persons with HIV/AIDS and their families in 
areas outside of eligible metropolitan statistical areas.
    (b) Categories of persons affected. (1) The plan shall estimate the 
number and type of families in need of housing assistance for extremely 
low-income, low-income, moderate-income, and middle-income families, 
for renters and owners, for elderly persons, for single persons, for 
large families, for persons with HIV/AIDS and their families, and for 
persons with disabilities. The description of housing needs shall 
include a concise summary of the cost burden and severe cost burden, 
overcrowding (especially for large families), and substandard housing 
conditions being experienced by extremely low-income, low-income, 
moderate-income, and middle-income renters and owners compared to the 
state as a whole. (The state must define in its consolidated plan the 
terms ``standard condition'' and ``substandard condition but suitable 
for rehabilitation.'')
    (2) For any of the income categories enumerated in paragraph (b)(1) 
of this section, to the extent that any racial or ethnic group has 
disproportionately greater need in comparison to the needs of that 
category as a whole, assessment of that specific need shall be 
included. For this purpose, disproportionately greater need exists when 
the percentage of persons in a category of need who are members of a 
particular racial or ethnic group in a category of need is at least 10 
percentage points higher than the percentage of persons in the category 
as a whole.
    (c) Homeless needs. The plan must provide a concise summary of the 
nature and extent of homelessness (including rural homelessness) within 
the state, addressing separately the need for facilities and services 
for homeless individuals and homeless families with children, both 
sheltered and unsheltered, and homeless subpopulations, in accordance 
with a table prescribed by HUD. This description must include the 
characteristics and needs of low-income individuals and families with 
children (especially extremely low-income) who are currently housed but 
threatened with homelessness. The plan also must contain a brief 
narrative description of the nature and extent of homelessness by 
racial and ethnic group, to the extent information is available.
* * * * *
    18. Revise Sec.  91.310(b) to read as follows:


Sec.  91.310  Housing market analysis.

* * * * *
    (b) Homeless facilities. The plan must include a brief inventory of 
facilities and services that meet the emergency shelter, transitional 
housing, permanent supportive housing, and permanent housing needs of 
homeless persons within the jurisdiction, including any persons that 
are chronically homeless.
* * * * *

[[Page 78841]]

    19. Revise Sec.  91.315(a)(4), (a)(6), (b)(2), (b)(3), (c), (d), 
(e), (h), (i), (j), and (l) as follows:


Sec.  91.315  Strategic plan.

    (a) * * *
    (4) Summarize the priorities and specific objectives the State 
intends to initiate and/or complete during the time period covered by 
the strategic plan, describing how the proposed distribution of funds 
will address identified needs. For each specific objective, identify 
proposed accomplishments the state hopes to achieve in quantitative 
terms over a specified time period (e.g., one, two, three or more 
years), or in other measurable terms as identified and defined by the 
jurisdiction;
* * * * *
    (6) Where known, grantees should include proposed outcomes measures 
for some of the proposed accomplishments listed in paragraph (a)(4) of 
this section in accordance with guidance to be issued by HUD.
    (b) * * *
    (2) The affordable housing section shall indicate how the 
characteristics of the housing market will influence the use of funds 
made available for rental assistance, production of new units, 
rehabilitation of existing units, or acquisition of existing units 
(including preserving affordable housing units that may be lost from 
the assisted housing inventory for any reason). If the State intends to 
use HOME funds for tenant-based assistance, it must specify local 
market conditions that lead to the choice of this option.
    (3) The affordable housing section shall include specific 
objectives that describe proposed accomplishments the state hopes to 
achieve and must specify the number of extremely low-income, low-
income, and moderate-income families to whom the jurisdiction will 
provide affordable housing as defined in 24 CFR 92.252 for rental 
housing and 24 CFR 92.254 for homeownership over a specific time 
period.
    (c) Homelessness. With respect to homelessness, the consolidated 
plan must include the priority homeless needs table prescribed by HUD 
and must describe the state's strategy for the following:
    (1) Helping low-income families avoid becoming homeless;
    (2) Reaching out to homeless persons and assessing their individual 
needs;
    (3) Addressing the emergency shelter and transitional housing needs 
of homeless persons; and
    (4) Helping homeless persons (especially any persons that are 
chronically homeless) make the transition to permanent housing and 
independent living.
    (d) Other special needs. With respect to supportive needs of the 
non-homeless, the consolidated plan must provide a concise summary of 
the priority housing and supportive service needs of persons who are 
not homeless but require supportive housing (i.e., elderly, frail 
elderly, persons with disabilities (mental, physical, developmental), 
persons with alcohol or other drug addiction, persons with HIV/AIDS and 
their families, and public housing residents). If the State intends to 
use HOME funds for tenant-based assistance to assist one or more of 
these subpopulations, it must specify local market conditions that lead 
to the choice of this option.
    (e) Nonhousing community development plan. (1) If the State seeks 
assistance under the CDBG Program, the consolidated plan must concisely 
describe the State's priority nonhousing community development needs 
that affect more than one unit of general local government. These 
priority needs must be described by CDBG eligibility category, 
reflecting the needs of persons or families for each type of activity. 
This community development component of the plan must state the State's 
specific long-term and short-term community development objectives 
(including economic development activities that create jobs), which 
must be developed in accordance with the primary objective of the CDBG 
program to develop viable urban communities by providing decent housing 
and a suitable living environment and expanding economic opportunities, 
principally for low-income and moderate-income persons.
    (2) A State may elect to allow units of general local government to 
carry out a community revitalization strategy that includes the 
economic empowerment of low income residents, in order to obtain the 
additional flexibility available as provided in 24 CFR part 570, 
subpart I. A State must approve a local government's revitalization 
strategy before it may be implemented. If a State elects to allow 
revitalization strategies in its program, the method of distribution 
contained in a State's action plan pursuant to Sec.  91.320(j)(1) must 
reflect the State's process and criteria for approving local 
governments' revitalization strategies. The strategy must identify the 
long-term and short-term objectives (e.g. physical improvements, social 
initiatives and economic empowerment), expressing them in terms of 
measures of outputs and outcomes expected to be achieved through the 
use of HUD programs. The State's process and criteria are subject to 
HUD approval.
* * * * *
    (h) Anti-poverty strategy. The consolidated plan must provide a 
concise summary of the state's goals, programs, and policies for 
reducing the number of poverty level families and how the state's 
goals, programs, and policies for producing and preserving affordable 
housing, set forth in the housing component of the consolidated plan, 
will be coordinated with other programs such as Temporary Aid for Needy 
Families as well as employment and training programs and services for 
which the state is responsible and the extent to which they will reduce 
(or assist in reducing) the number of poverty level families, taking 
into consideration factors over which the jurisdiction has control.
    (i) Institutional structure. (1) The consolidated plan must provide 
a concise summary of the institutional structure, including private 
industry, nonprofit organizations, and public institutions, through 
which the state will carry out its housing, homeless, and community 
development plan, assessing the strengths and gaps in that delivery 
system.
    (2) The plan must provide a concise summary of what the state will 
do to overcome gaps in the institutional structure for carrying out its 
strategy for addressing its priority needs.
    (j) Coordination. The consolidated plan must provide a concise 
summary of the state's activities to enhance coordination between 
public and assisted housing providers and private and governmental 
health, mental health, and service agencies. With respect to the 
preparation of its homeless strategy, the state must describe efforts 
in addressing the needs of persons that are chronically homeless. With 
respect to the public entities involved, the plan must describe the 
means of cooperation and coordination among the state and any units of 
general local government in the metropolitan area in the implementation 
of its consolidated plan.
* * * * *
    (l) Public housing. With respect to public housing, the 
consolidated plan must do the following:
    (1) Resident initiatives. For a State that has a State housing 
agency administering public housing funds, the consolidated plan must 
describe the State's activities to encourage public housing residents 
to become more involved in management and participate in homeownership;
    (2) Public housing needs. The consolidated plan must describe the

[[Page 78842]]

manner in which the plan of the State will address the needs of public 
housing; and
    (3) Troubled public housing agencies. If a public housing agency 
located within a State is designated as ``troubled'' by HUD under part 
902 of this title, the strategy for the State or unit of local 
government in which any troubled public housing agency is located must 
describe the manner in which the State or unit of general local 
government will provide financial or other assistance to improve the 
public housing agency's operations and remove the ``troubled'' 
designation. A State is not required to describe the manner in which 
financial or other assistance is provided if the troubled public 
housing agency is located entirely within the boundaries of a unit of 
general local government that must submit a consolidated plan to HUD.
    20. Revise Sec.  91.320 to read as follows:


Sec.  91.320  Action plan.

    The action plan must include the following:
    (a) Form application. Standard Form 424;
    (b) Resources and objectives. (1) Federal resources. The 
consolidated plan must provide a concise summary of the Federal 
resources expected to be made available. These resources include grant 
funds and program income.
    (2) Other resources. The consolidated plan must indicate resources 
from private and non-Federal public sources that are reasonably 
expected to be made available to address the needs identified in the 
plan. The plan must explain how federal funds will leverage those 
additional resources, including a description of how matching 
requirements of the HUD programs will be satisfied. Where the State 
deems it appropriate, it may indicate publicly owned land or property 
located within the State that may be used to carry out the purposes 
identified in the plan;
    (3) Annual objectives. The consolidated plan must contain a summary 
of the annual objectives the State expects to achieve during the 
forthcoming program year.
    (c) Activities. A description of the State's method for 
distributing funds to local governments and nonprofit organizations to 
carry out activities, or the activities to be undertaken by the State, 
using funds that are expected to be received under formula allocations 
(and related program income) and other HUD assistance during the 
program year and how the proposed distribution of funds will address 
the priority needs and specific objectives described in the 
consolidated plan;
    (d) Outcome measures. Each State must provide outcome measures for 
activities included in its action plan in accordance with guidance to 
be issued by HUD. For the Community Development Block Grant Program 
this would include activities that are likely to be funded as a result 
of the implementation of the State's Method of Distribution.
    (e) Geographic distribution. A description of the geographic areas 
of the State (including areas of low-income and minority concentration) 
in which it will direct assistance during the ensuing program year, 
giving the rationale for the priorities for allocating investment 
geographically. When appropriate, the State should estimate the 
percentage of funds they plan to dedicate to target area(s).
    (f) Affordable housing goals. The state must specify one-year goals 
for the number of homeless, non-homeless, and special needs households 
to be provided affordable housing through activities that provide 
rental assistance, production of new units, rehabilitation of existing 
units, or acquisition of existing units using funds made available to 
the state. The term affordable housing shall be as defined in 24 CFR 
92.252 for rental housing and 24 CFR 92.254 for homeownership.
    (g) Homeless and other special needs activities. Activities it 
plans to undertake during the next year to address emergency shelter 
and transitional housing needs of homeless individuals and families 
(including subpopulations), to prevent low-income individuals and 
families with children (especially those with incomes below 30 percent 
of median) from becoming homeless, to help homeless persons make the 
transition to permanent housing and independent living, specific action 
steps to end chronic homelessness, and to address the special needs of 
persons who are not homeless identified in accordance with Sec.  
91.315(d);
    (h) Barriers to Affordable Housing. Actions it plans to take during 
the next year to address public policies, procedures, and processes of 
the State that impact the cost of developing, maintaining, or improving 
affordable housing. Such policies, procedures, and processes include 
but are not limited to: land use controls, tax policies affecting land, 
zoning ordinances, building codes, fees and charges, growth 
limitations, and policies affecting the return on residential 
investment.
    (i) Other actions. Actions it plans to take during the next year to 
implement its strategic plan and address obstacles to meeting 
underserved needs, foster and maintain affordable housing (including 
the coordination of Low-Income Housing Tax Credits with the development 
of affordable housing), evaluate and reduce lead-based paint hazards, 
reduce the number of poverty level families, develop institutional 
structure, enhance coordination between public and private housing and 
social service agencies, address the needs of public housing (including 
providing financial or other assistance to troubled public housing 
agencies), and encourage public housing residents to become more 
involved in management and participate in homeownership.
    (j) Program-specific requirements. In addition, the plan must 
include the following specific information: (1) The method of 
distribution shall contain a description of all criteria used to select 
applications from local governments for funding, including the relative 
importance of the criteria--if the relative importance has been 
developed. The action plan must include a description of how all CDBG 
resources will be allocated among all funding categories and the 
threshold factors and grant size limits that are to be applied. If the 
State intends to aid nonentitlement units of general local government 
in applying for guaranteed loan funds under 24 CFR part 570, subpart M, 
it must describe available guarantee amounts and how applications will 
be selected for assistance. If a State elects to allow units of general 
local government to carry out community revitalization strategies, the 
method of distribution shall reflect the State's process and criteria 
for approving local governments' revitalization strategies. (The 
statement of the method of distribution must provide sufficient 
information so that units of general local government will be able to 
understand and comment on it and be able to prepare responsive 
applications.)
    (i) The method of distribution shall contain a description of all 
criteria used to select applications from local governments for 
funding. Notwithstanding, the method of distribution may provide a 
summary of the selection criteria, (providing that all criteria are 
listed) as long as the details are contained in application manuals or 
other official state publications that are widely distributed to 
potential applicants. The action plan must include a description of how 
all CDBG resources will be allocated among all funding categories and 
the threshold factors and grant size limits that are to be applied. If 
the State intends to aid nonentitlement units of general local

[[Page 78843]]

government in applying for guaranteed loan funds under 24 CFR part 570, 
subpart M, it must describe available guarantee amounts and how 
applications will be selected for assistance. If a State elects to 
allow units of general local government to carry out community 
revitalization strategies, the method of distribution shall reflect the 
State's process and criteria for approving local government's 
revitalization strategies. The statement of the method of distribution 
must provide sufficient information so that units of general local 
government will be able to understand and comment on it, understand on 
what criteria and information their application will be judged, and be 
able to prepare responsive applications. This means that all selection 
criteria must be included in at least summary form, with the details 
included in other application materials that are widely distributed to 
potential applicants. If final funding decisions will be made by senior 
management, the Method of Distribution must include the criteria that 
senior management will use to make the decisions.
    (ii) The State shall keep records to document its funding decision 
reached under the Method of Distribution described in paragraph (i) 
above so that they can be reviewed by HUD, the Inspector General, the 
Government Accountability Office and citizens pursuant to the 
requirements of Sec.  570.493(a).
    (iii) Approval of the Consolidated Plan under Sec.  91.500 shall 
not be deemed to indicate that the Method of Distribution is in 
compliance with the requirements of paragraph (i) above, and HUD may 
monitor the Method of Distribution as part of its review and audit as 
provided in Sec.  570.493(a)(1).
    (2) HOME. (i) The State shall describe other forms of investment 
that are not described in Sec. 92.205(b) of this subtitle.
    (ii) If the State intends to use HOME funds for homebuyers, it must 
state the guidelines for resale or recapture, as required in Sec.  
92.254 of this subtitle.
    (iii) If the State intends to use HOME funds to refinance existing 
debt secured by multifamily housing that is being rehabilitated with 
HOME funds, it must state its refinancing guidelines required under 24 
CFR 92.206(b). The guidelines shall describe the conditions under which 
the State will refinance existing debt. At minimum, the guidelines 
must:
    (A) Demonstrate that rehabilitation is the primary eligible 
activity and ensure that this requirement is met by establishing a 
minimum level of rehabilitation per unit or a required ratio between 
rehabilitation and refinancing.
    (B) Require a review of management practices to demonstrate that 
disinvestment in the property has not occurred; that the long term 
needs of the project can be met; and that the feasibility of serving 
the targeted population over an extended affordability period can be 
demonstrated.
    (C) State whether the new investment is being made to maintain 
current affordable units, create additional affordable units or both.
    (D) Specify the required period of affordability, whether it is the 
minimum 15 years or longer.
    (E) Specify whether the investment of HOME funds may be 
jurisdiction-wide or limited to a specific geographic area, such as a 
neighborhood identified in a neighborhood revitalization strategy under 
24 CFR 91.215(e)(2) or a Federally designated Empowerment Zone or 
Enterprise Community.
    (F) State HOME funds cannot be used to refinance multifamily loans 
made or insured by any Federal program, including CDBG.
    (iv) If the state will receive funding under the American Dream 
Downpayment Initiative (ADDI) (see 24 CFR part 92, subpart M), it must 
include:
    (A) A description of the planned use of the ADDI funds;
    (B) A plan for conducting targeted outreach to residents and 
tenants of public and manufactured housing and to other families 
assisted by public housing agencies, for the purposes of ensuring that 
the ADDI funds are used to provide downpayment assistance for such 
residents, tenants, and families; and
    (C) A description of the actions to be taken to ensure the 
suitability of families receiving ADDI funds to undertake and maintain 
homeownership, such as provision of housing counseling to homebuyers.
    (3) ESG. The State shall state the process for awarding grants to 
State recipients and a description of how the State intends to make its 
allocation available to units of local government and nonprofit 
organizations (including community and faith-based organizations).
    (4) HOPWA. The State shall state the method of selecting project 
sponsors (including community and faith-based organizations).
    (k) A concise summary of the citizen participation and consultation 
process (including efforts to broaden public participation) (24 CFR 
91.200 (b)), a summary of comments or views, and a summary of comments 
or views not accepted and the reasons therefore. (24 CFR 91.105 
(b)(5)).
    21. In Sec.  91.500, revise paragraph (b)(3) and add paragraph 
(b)(4) to read as follows:


Sec.  91.500  HUD approval action.

* * * * *
    (b) * * *
    (3) A plan for which a certification is rejected by HUD as 
inaccurate, after HUD has inspected the evidence and provided due 
notice and opportunity to the jurisdiction for comment; and
    (4) A plan that does not include a description of the manner in 
which the unit of general local government will provide financial or 
other assistance to a public housing agency if the public housing 
agency is designated as ``troubled'' by HUD.
* * * * *
    22. Revise Sec.  91.520 by adding paragraph (g) to read as follows:


Sec.  91.520  Performance reports.

* * * * *
    (g) The report will include a comparison of the proposed versus 
actual outcomes for each outcome measure submitted with the 
consolidated plan. The report must explain variances between the 
proposed and actual outcomes.

    Dated: November 30, 2004.
Nelson R. Breg[oacute]n,
General Deputy Assistant Secretary for Community Planning and 
Development.
[FR Doc. 04-28430 Filed 12-29-04; 8:45 am]
BILLING CODE 4210-32-P