[Federal Register Volume 70, Number 249 (Thursday, December 29, 2005)]
[Rules and Regulations]
[Pages 77292-77294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24576]



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Part III





Department of Housing and Urban Development





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24 CFR Part 5



Electronic Submission of Applications for Grants and Other HUD 
Financial Assistance; Final Rule

  Federal Register / Vol. 70, No. 249 / Thursday, December 29, 2005 / 
Rules and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

[Docket No. FR-4875-F-02]
RIN 2501-AD02


Electronic Submission of Applications for Grants and Other HUD 
Financial Assistance

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule establishes the requirement for applicants for 
HUD grants or certain other financial assistance to submit their 
applications to HUD electronically. This final rule follows publication 
of a proposed rule on November 23, 2004. HUD received four comments in 
response to the proposed rule's invitation for public comment. After 
careful consideration of the comments, this rule makes final without 
substantive changes the proposed rule published on November 23, 2004.

DATES: Effective Date: January 30, 2006.

FOR FURTHER INFORMATION CONTACT: Barbara Dorf, Director, Office of 
Departmental Grants Management and Oversight, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Room 3156, Washington, DC 
20410-3000, telephone (202) 708-0667 (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's November 23, 2004, Proposed Rule

    On November 23, 2004, HUD published a proposed rule (69 FR 68218) 
that would add a new section to 24 CFR part 5 (Sec.  5.1005). The new 
section would require applicants for HUD grants or certain other 
financial assistance to submit their applications to HUD electronically 
through the federal government grant portal, Grants.gov, or its 
successor Web site. Applications subject to this requirement would 
include submissions from applicants for HUD grants, cooperative 
agreements, capital advances, vouchers, and other financial assistance 
awards, including programs that are classified by the Office of 
Management and Budget (OMB) as mandatory, as well as formula grant 
programs that HUD has placed an electronic application on Grants.gov/Apply or its successor Web site. HUD refers readers to the preamble of 
the November 23, 2004, proposed rule for a more detailed discussion of 
the legal authorities and policy objectives on which the rule is based.
    HUD noted in the proposed rule that electronic grant application 
submission will standardize, simplify, and improve the integrity of 
HUD's grant-making process. For the applicant, electronic submission of 
applications will result in saving time and resources in preparing, 
mailing, and delivering paper copies of applications to HUD 
Headquarters, field offices, or multiple locations.
    The proposed rule concluded that the requirement for electronic 
submission will apply to all program applications or plan submissions 
placed by HUD at www.grants.gov/Apply for electronic submission through 
the Grants.gov portal. The requirement is consistent with the 
President's goals for electronic government set forth in the 
President's Management Agenda for Fiscal Year 2002. The proposed rule 
also indicated that the requirement was responsive to a 2002 OMB policy 
directive to federal agencies to use the Grants.gov Web site to post 
opportunities with respect to federal financial assistance programs. 
Additionally, the rule noted that the requirement for electronic 
submission will not take effect for individual program applications 
until HUD makes available the electronic application on the 
www.grants.gov/Apply Web site. Finally, to address the concerns of 
applicants with limited or no access to the Internet, the proposed rule 
provided that the HUD Assistant Secretary with authority over the 
program may waive the electronic submission requirement.

II. This Final Rule

    This final rule follows publication of the November 23, 2004, 
proposed rule, and takes into consideration the four public comments 
received on the proposed rule. The four comments received were from 
four housing authorities. The Department has carefully considered each 
of the four comments, and its experience in receiving electronic 
application submissions for competitive programs using Grants.gov, and 
has determined to adopt the proposed regulation without substantive 
change. In the interest of clarity, the rule now includes language to 
specify that a waiver of the requirement for electronic submission will 
be made in writing. The rule substitutes language for the phrase ``or 
the equivalent HUD official'' to identify more particularly the 
officials who, in addition to the Assistant Secretary, are authorized 
to grant waivers. The rule would now allow a waiver to be granted by 
the Assistant Secretary, the General Deputy Assistant Secretary or the 
responsible official authorized to perform the duties and 
responsibilities of the Assistant Secretary or General Deputy Assistant 
Secretary.
    The process for seeking and granting waivers of the requirement to 
submit an electronic grant application, as provided in this final rule, 
while similar to HUD's process for waiver of regulations in 24 CFR 
5.110, is not the same as the regulatory waiver process. The process 
for seeking and granting waivers of regulations is governed by section 
106 of the Department of Housing and Urban Development Reform Act of 
1989 (HUD Reform Act) (42 U.S.C. 3535(a)). Section 106 requires that 
waivers of a HUD regulation must be in writing and must specify the 
grounds for approving the waiver, and HUD must notify the public of 
waivers granted through a Federal Register notice, published each 
calendar quarter, that provides a summary of the waivers granted in the 
preceding quarter. While this final rule patterns the waiver process 
for the electronic grant application requirement largely on the 
regulatory waiver process, it does not provide for quarterly reporting 
of waivers granted of the electronic grant application submission 
requirement. HUD is not adopting that feature of the regulatory waiver 
process because section 103 of the HUD Reform Act prohibits disclosure 
of the identity of any applicant before the deadline for submission of 
the application. However, section 102 of the HUD Reform Act, which 
establishes the elements of HUD's funding competitions, also requires 
that each application and all related documentation be available for 
public inspection at the end of the competition process. In accordance 
with section 102(a)(4)(E) of the HUD Reform Act, and HUD's implementing 
regulation at 24 CFR 4.5, all applications and related documentation, 
including an applicant's request for a waiver from the requirement to 
file its application electronically and HUD's action on such request, 
will be available for public inspection commencing 30 days after the 
award of grants is made and these files must remain available for 
public inspection for a period of at least five years. Therefore, the 
transparency required by the HUD Reform Act in the granting of 
regulatory waivers is also present in the granting of waivers of the 
electronic grant application requirement.

III. Discussion of Public Comments Received on the November 23, 2004, 
Proposed Rule

    Comment: The rule will require applicants to have yet another 
password to satisfy the electronic filing

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requirement. The commenter questioned the claimed efficiency of the 
electronic filing process. The commenter wrote that it would be 
inefficient and confusing to require housing authorities to use 
different log-ins and passwords for various HUD programs. The commenter 
observed that because each housing authority already has a unique ID, 
there should be no reason for a separate ID for use in each program. 
The commenter expressed a preference for one password that could be 
used with all government software programs.
    HUD Response: HUD acknowledges that the maintenance and use of 
separate passwords adds to the administrative effort required of 
housing authorities to participate in the affected programs. However, 
the Grants.gov electronic submission requirement will eliminate that 
burden. By registering with Grants.gov for electronic application 
submission, an applicant for federal funding, regardless of the agency 
to which the applicant is applying, will need to use only one password 
and ID to submit applications for funding posted by all federal 
agencies through Grants.gov. In addition to providing information on 
funding available from the federal government, Grants.gov has posted 
application packages for funding opportunities in the State of 
Minnesota and the District of Columbia.
    Comment: The commenter supports the rule with qualifications. This 
housing authority voiced support for the rule, but cautioned that, 
until the system ensures participation of all potential applicants and 
is bug-free, an alternative system must be available. This commenter 
recommended staggering the application process over a 12-month period, 
thus allowing for level user demand. The commenter further recommended 
that the electronic filing system should permit the uploading of files 
and not include a ``bumping off'' or ``timing out'' feature. The 
commenter also wrote that the system should have a process for 
verifying the receipt of applications and that HUD should provide 
adequate funding for housing authorities to purchase systems and 
browsers that are compatible with HUD's system.
    HUD Response: As indicated in the proposed rule, consistent with 
the OMB directive, all applicants for HUD grants will be required to 
submit applications electronically, unless a waiver is granted. Access 
to Grants.gov requires only a computer with an Internet browser. In 
addition, the Grants.gov site does not require applicants to work on-
line. Applicants download their application packages, work off-line, 
and then upload the application and submit their applications via 
Grants.gov. This eliminates the time-out issues of concern to the 
commenter, as HUD is aware that development of an application for 
funding can take time. Grants.gov provides the applicant with a receipt 
and tracking number through the application submission process. 
Applicants receive notification when the application has been 
successfully submitted, received by Grants.gov, and validated by 
Grants.gov. HUD does not believe that staggering the application due 
dates, as recommended by the commenter, is necessary. HUD will provide 
Grants.gov with an estimated utilization rate so that adequate server 
and storage capacity is available at all times, especially anticipated 
application filing dates. Based upon HUD and other federal agency 
utilization in FY2005, Grants.gov has made a number of system upgrades, 
including increasing the number of servers, and installing a Secure 
Socket Layer (SSL) Accelerator and high capacity Storage Area Network 
(SAN) device to better handle traffic and increased storage volumes. In 
addition, the Grants.gov site has been segmented across various servers 
to ensure adequate capacity is available for submissions, downloads, 
and status checking. Grants.gov has also instituted several ways to 
track site utilization, patterns, and volumes on an hourly basis to 
provide early alert to increased needs. Therefore, HUD believes that 
the system is sized to accommodate a high volume of application 
submissions from a variety of federal and other agencies on a given 
date.
    Comment: Application forms are not user-friendly and cannot be 
saved. The commenter wrote that her extensive experience in completing 
and being awarded various HUD grants would be jeopardized because she 
does not believe the system is ready for implementation.
    HUD Response: Based on user surveys, Grants.gov has found that 
users of Grants.gov have found the Web site easy to use and navigate. A 
number of features facilitate the use of Grants.gov. At the present 
time, the Grants.gov application features some electronic forms 
developed in eXtensible Mark-Up Language (XML) using 
PureEdgeTM software. The forms are designed to be user-
friendly and incorporate embedded help tips to help applicants meet 
submission requirements. HUD has been working with Grants.gov to 
increase the number of HUD application forms available with this 
technology. Until all forms are created in XML, HUD will continue to 
make all forms, including those currently available in XML, available 
in AdobeTM Portable Document Format (PDF). Application forms 
in PDF, in addition to those in Microsoft WordTM or 
Microsoft ExcelTM format, can be saved and uploaded as part 
of an application submission to Grants.gov. HUD has provided users 
several ways to submit electronic files as part of their electronic 
application submission. In FY2005, the majority of HUD applicants found 
the PureEdge forms easy to use, save, and submit.
    Comment: This housing authority applauds HUD's effort to centralize 
and streamline the application process. The commenter, however, urged 
HUD to establish an alternative plan and to put precautions in place to 
ensure that the system is not overwhelmed, thereby reducing its 
efficiency. The commenter further recommended that there should be 
separate submission paths for agencies previously screened by HUD. The 
commenter also requested more guidance on using the Central Contractor 
Registration (CCR) and Grants.gov.
    HUD Response: As noted herein, Grants.gov is designed to provide 
for large numbers of users with large application submissions. The 
federal agencies are working with Grants.gov to ensure that the 
Grants.gov server capability can handle the number and size of 
applications expected for each application period. Given Grants.gov's 
record of accomplishment to date of having received over 15,000 
applications electronically, HUD believes that the system will function 
as designed. In addition, the system upgrades described in this notice 
will prevent the system from being overwhelmed by the number of users 
or the number of separate applications posted by the federal agencies. 
The purpose of Grants.gov is to provide one portal, with similar 
requirements and consistent format for all users of federal financial 
assistance programs.
    With regard to the other concerns raised by the commenter, HUD 
believes that adequate information is currently available on-line and 
through the Grants.gov Web site and its support help desk to assist 
applicants through the registration process. Applicants can go to 
www.Grants.gov/GetStarted and follow the step-by-step instructions on 
how to find and apply for funding opportunities, including instructions 
on how to obtain a DUNS number, register with the CCR, and register 
with an E-Authentication provider. Grants.gov Support offers customers 
assistance by calling 800-518-GRANTS or by sending an email to 
Support@Grants.gov. In addition, HUD has placed informational brochures 
and checklists on HUD's

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Internet Grants page at http://www.hud.gov/grants/index.cfm, issued a 
notice in the Federal Register on December 9, 2005 (70 FR 273332), and 
published a brochure describing the steps in the registration process 
to assist applicants through the five-step registration process.

IV. Findings and Certifications

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 the private sector. This final rule does not impose 
any federal mandate on any state, local, or tribal government, or the 
private sector within the meaning of the Unfunded Mandates Reform Act 
of 1995.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications, if the rule 
imposes either 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 order. This final rule does not have federalism 
implications and does not impose substantial direct compliance costs on 
state and local governments or preempt state law within the meaning of 
the order.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this final rule and in so 
doing, certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. Providing for 
electronic submission of grant applications will simplify and lessen 
the burden on applicants' resources because they will no longer need to 
duplicate and submit paper applications.

Environmental Impact

    In accordance with 24 CFR 50.19(c)(1), this final rule does not 
direct, provide for assistance or loan and mortgage insurance for, or 
otherwise govern or regulate, real property acquisition, disposition, 
leasing, rehabilitation, alteration, demolition, or new construction, 
or establish, revise, or provide for standards for construction or 
construction materials, manufactured housing, or occupancy. Therefore, 
this final rule is categorically excluded from the requirements of the 
National Environmental Policy Act (42 U.S.C. 4321 et seq.).

List of Subjects in 24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs--housing and community 
development, Individuals with disabilities, Intergovernmental 
relations, Loan programs--housing and community development, Low and 
moderate-income housing, Mortgage insurance, Penalties, Pets, Public 
housing, Rent subsidies, Reporting and recordkeeping requirements, 
Social security, Unemployment.


0
Accordingly, for the reasons described in the preamble, HUD amends 24 
CFR part 5 as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for 24 CFR part 5 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d).


0
2. Add Sec.  5.1005 to Subpart K to read as follows:


Sec.  5.1005  Electronic submission of applications for grants and 
other financial assistance.

    Applicants described under 24 CFR 5.1001 are required to submit 
electronic applications or plans for grants and other financial 
assistance in response to any application that HUD has placed on the 
www.grants.gov/Apply Web site or its successor. The HUD Assistant 
Secretary, General Deputy Assistant Secretary or, the individual 
authorized to perform duties and responsibilities of these positions, 
with authority over the specific program for which the waiver is 
sought, may in writing, waive the electronic submission requirement for 
an applicant on the basis of good cause.

    Dated: December 21, 2005.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. 05-24576 Filed 12-28-05; 8:45 am]
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