[Federal Register Volume 75, Number 166 (Friday, August 27, 2010)]
[Notices]
[Pages 52772-52776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21402]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5435-N-01]


Notice of Neighborhood Stabilization Program Reallocation Process 
Changes

AGENCY: Office of the Secretary, HUD.

ACTION: Notice.

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SUMMARY: This Notice describes the applicable corrective actions, 
recapture process, the reallocation formula, and the waivers of 
regulations granted to grantees under Title III of Division B of the 
Housing and Economic Recovery Act of 2008, for the purpose of assisting 
in the redevelopment of abandoned and foreclosed homes under the 
Emergency Assistance for Redevelopment of Abandoned and Foreclosed 
Homes heading. This notice affects grantees receiving grants under the 
first round of funding under the Neighborhood Stabilization Program, 
which is referred to throughout this notice as NSP1. As described in 
the Supplementary Information section of this notice, HUD is authorized 
by statute to specify alternative requirements and make regulatory 
waivers for this purpose. This notice advises the public that HUD is 
revising the recapture policy of the October 6, 2008, NSP1 Notice, as 
amended, in a manner that affects the consequences of failing to meet 
the 18-month deadline for using NSP1 funds.

DATES: Effective Date: August 23, 2010.

FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, Office of 
Block Grant Assistance, Department of Housing and Urban Development, 
451 Seventh Street, SW., Room 7286, Washington, DC 20410, telephone 
number 202-708-3587. Persons with hearing or speech impairments may 
access this number via TTY by calling the Federal Information Relay 
Service at 800-877-8339. FAX inquiries may be sent to Mr. Gimont at 
202-401-2044. (Except for the ``800'' number, these telephone numbers 
are not toll-free.)

SUPPLEMENTARY INFORMATION: 

Authority To Provide Alternative Requirements and Grant Regulatory 
Waivers

    Title III of Division B of the Housing and Economic Recovery Act, 
2008 (Pub. L. 110-289, approved July 30, 2008), as amended, (HERA) 
appropriated $3.92 billion for emergency assistance for redevelopment 
of abandoned and foreclosed homes and residential properties, and 
provides under a rule of construction that, unless HERA states 
otherwise, the grants are to be considered Community Development Block 
Grant (CDBG) funds. The grant program under Title III is commonly 
referred to as NSP, and the first round of NSP funding is referred to 
as NSP1. When referring to a provision of the appropriations statute 
itself, this notice will refer to HERA; when referring to the grants, 
grantees, assisted activities, and implementation rules affected by 
this notice, this notice will use the term NSP1.
    HERA authorizes the Secretary to specify alternative requirements 
to any provision under Title I of the Housing and Community Development 
Act of 1974, as amended, (the HCD Act) except for requirements related 
to fair housing, nondiscrimination, labor standards, and the 
environment (including lead-based paint), in accordance with the terms 
of section 2301 of HERA and for the sole purpose of expediting the use 
of grant funds. The CDBG requirements will apply to NSP except where 
this notice supersedes or amends such requirements. This Notice does 
not specify any new alternative requirements to statutory requirements.
    Except as described in this notice and previous notices governing 
the NSP, statutory and regulatory provisions governing the CDBG 
program, including those at 24 CFR part 570 subpart I for states or, 
for CDBG entitlement communities, including those at 24 CFR part 570 
subparts A, C, D, J, K, and O, as appropriate, apply to the use of 
these funds. (The State of Hawaii was allocated funds and will be 
subject to part 570, subpart I, as modified by this notice.)

Substantive Revisions

    NSP1 grantees are statutorily required to use NSP1 funds within 18 
months from the date HUD signed their grant agreement. HUD has defined 
``use'' to mean obligation of funds for approved activities. The 
primary purpose of this notice is to amend the reallocation provision 
of the October 6, 2008, Notice, 73 FR 58330 (NSP1 Notice), which noted 
that the ordinary CDBG reallocation statutory requirement would apply 
in the event of any recapture of NSP1 funds for noncompliance with 
program requirements. This Notice provides instead for a range of 
corrective actions, in accordance with 24 CFR 570.900(b)(5) and (6), 
for failure to meet the 18-month use requirements; and for any 
recaptured funds to remain in the NSP1 program and to be reallocated in 
accordance with the formula in Attachment A. The formula will 
reallocate funds to communities with the most current need for support 
in addressing neighborhoods destabilized by foreclosed and abandoned 
homes and may take into account prior allocations of NSP1 and NSP2 
already serving those communities. This Notice further addresses how 
grantees who have funds recaptured will meet the requirement that 25 
percent of NSP1 funds support units affordable to households whose 
incomes are 50 percent of area median income or less.
    The substantive revisions made by this notice follow. The Federal 
Register page number identifies where the language to be revised can be 
found in the October 6, 2008, notice.

A. Reallocation Process

Background
    In the NSP1 Notice, HUD noted in paragraph I.B. Formula 
Reallocation, that if a jurisdiction failed to meet the requirement to 
use its NSP1 funds in 18 months, HUD would recapture the funds and 
reallocate them in accordance with the CDBG reallocation provisions of 
the HCD Act at 42 U.S.C. 5306(c)(4). This provision of the HCD Act 
specifically applies to funds recaptured under the authority of 42 
U.S.C. 5304(e) and 5311 of the HCD Act. However, upon further 
reflection, HUD has determined that 42 U.S.C. 5306(c)(4) does not apply 
to recaptures under NSP1 and therefore NSP funds are not required to be 
reallocated to major disaster areas. As the 18-month deadline 
approaches, HUD is updating this provision to limit the negative 
effects on communities that, although they may not have had the 
capacity to meet the deadline, still have great need for neighborhood 
stabilization funding.
    Therefore, HUD is revising the NSP1 Notice's provisions to provide 
a process for addressing a grantee's failure to meet the 18-month use 
requirement and to state that any recaptured funds will be reallocated 
to provide additional NSP grants on a formula basis. This Notice 
explains how HUD will proceed to restrict further obligation of NSP 
funds the day after the 18-month use deadline and provide grantees the 
opportunity to submit additional information regarding the NSP funds 
subject to a finding and potential corrective action or sanction. 
Following the review and before selecting a corrective or remedial 
action, HUD will, in accordance with 24 CFR 570.905 and 570.493, 
consider the grantee's continuing capacity to carry out the grant.
    HUD has a range of possible corrective actions available in the 
regulations at 24 CFR 570.910 and 570.495. Additional guidance is 
provided in the Community Planning

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and Development Monitoring Handbook 6509.2, Rev-6. HUD may also provide 
targeted technical assistance when it determines that the grantee is in 
need of such assistance to complete its program successfully.
    In many instances, HUD anticipates that NSP grantees failing to 
meet the use deadline will face a choice of (a) entering into a 
memorandum of agreement with the Department or (b) recapturing of 
unobligated amounts. Based largely on the grantee's NSP1 performance 
and the amount of unobligated funds, HUD may enter into a memorandum of 
agreement designed to improve the grantee's performance and enable use 
of the funds for the purposes intended in the NSP1 Notice. A few very 
low capacity grantees may be required to demonstrate that they have 
acquired stronger program partners, such as proven nonprofit or for-
profit developers, before HUD will allow further use of NSP1 funds. To 
ensure uniform national application of corrective actions, HUD will 
issue guidance to field offices regarding corrective actions for NSP1 
grantees that fail to meet the deadline for use of funds, and 
corrective actions may be reviewed by headquarters staff. Failure on 
the grantee's part to achieve use of funds or to meet the terms of the 
memorandum of agreement may lead to recapture of funds.
    States with unused funds will be subject to a recapture of unused 
amounts up to $19.6 million. This is because the NSP1 allocation 
formula provided $19.6 million to each state regardless of the state's 
relative need for funds. Local governments received funds strictly 
based on their formula need. States received the $19.6 million base 
payment plus any need-based formula increment. Therefore, if a state 
has unused NSP1 funds up to $19.6 million, HUD will recapture and 
reallocate those funds to a higher need location based on a strictly 
need-driven formula. After HUD determines the recapture amount, any 
remaining unused state grant funds in excess of $19.6 million will be 
addressed under the additional corrective actions, as described above.
    To address concerns that some grantees may inflate obligation 
amounts for projects before the deadline, then withdraw from or reduce 
these obligations after the deadline as a strategy for meeting the fund 
use requirement by the deadline, HUD staff will be reviewing a sample 
of obligation documents. (Note that HUD recognizes that grantees will 
not be able to budget perfectly and has provided guidance allowing a 
reasonable contingency for each project.) HUD field staff may request 
removal of the obligation blocks in the reporting system after 
assessment of a grantee's performance, if the field staff determines 
the grantee is not high risk consistent with this notice.
    Finally, the Notice addresses enforcement of the grantee's 
statutory obligation to spend at least 25 percent of NSP1 funds on 
housing for persons at or below 50 percent area median income.
Revised Requirement
    Section I.B.2. of the NSP1 Notice at page 58331 is amended to read 
as follows:
    2. a. HUD will block each grantee's ability to obligate NSP1 grant 
funds in the Disaster Recovery Grant Reporting System (DRGR) on the 
first business day after the statutory 18-month deadline for use of 
funds. HUD will notify the grantee of this action by electronic mail. 
Grantees will not be able to obligate grant funds after the deadline 
without requesting and receiving permission from HUD, until HUD 
determines that the grantee is not high risk consistent with this 
notice. The grantee will still be able to expend grant funds obligated 
before the deadline. Receipt and use of any program income will also be 
unaffected.
    b. Any grantee that fails to obligate an amount equal to or greater 
than its initial grant amount may submit information to HUD, for up to 
30 days following its 18-month deadline, documenting any additional 
obligation of funds not already recorded in the DRGR system and 
demonstrating to HUD that the obligation occurred on or before the 18-
month deadline. Before the 18-month deadline, each grantee should also 
review its recorded obligations and notify HUD within 30 days following 
the deadline of any necessary adjustments to the amount and the reason 
for such an adjustment. For example, the grantee has become aware that 
an obligation amount that was previously recorded for an acquisition 
will not proceed, therefore a downward adjustment is necessary.
    c. After the deadline, if any grantee needs to decrease or increase 
the amount of grant funds obligated to an activity, it must first ask 
HUD to remove the DRGR block on changing the amount obligated. If the 
amount of decrease is more than 15 percent of the obligation for any 
activity, the grantee must submit to HUD a written request that clearly 
demonstrates with compelling information that factors beyond the 
grantee's reasonable control caused the need to withdraw or decrease 
after the deadline. If HUD agrees to grant the request, it will restore 
the grantee's ability to obligate grant funds in DRGR. If HUD does not 
grant the request, the grantee must either complete the activity as 
originally obligated or the amount previously obligated for that 
activity will be recaptured. HUD may also remove the obligations block 
following risk assessment of the grantee or a review of some or all of 
a grantee's obligation documentation.
    d. Before HUD determines the appropriate corrective action or 
recaptures grant funds, HUD will review the submitted information, 
consider the grantee's capacity as described in 24 CFR 570.905 and 24 
CFR 570.493, and the grantee's continuing need for the funds.
    e. Following the review, HUD will proceed to notify the grantee of 
the selected corrective action it is required to undertake.
    f. HUD will recapture and reallocate up to $19.6 million from any 
state grantee with unused NSP grant funds. Additional corrective 
actions may be taken related to any amount of unused funds greater than 
$19.6 million.
    g. HUD will reallocate recaptured funds in accordance with the 
reallocation formula described in Attachment A. A grantee receiving a 
reallocation must apply for the grant in accordance with the NSP1 
Notice. A nonentitlement grant recipient that is not required to submit 
a consolidated plan to HUD under the CDBG program will prepare an 
abbreviated plan. The substance of an abbreviated plan must include all 
the required elements that entitlement communities provide as part of 
an NSP Action Plan substantial amendment as described under Section 
II.B.2.
    h. Each grantee must meet the statutory requirement to expend 25 
percent of its grant amount for activities that will provide housing 
for households whose income is at or under 50 percent of area median 
income. This cannot occur unless the funds are first obligated to 
activities for this purpose, or program income is received and used for 
eligible activities. Therefore, if a grantee fails to obligate or 
record program income use of at least 25 percent of its original grant 
amount for activities that will provide housing for households whose 
income is at or under 50 percent of area median income, HUD may issue a 
concern or a finding of noncompliance. HUD will require as a corrective 
action that the grantee either adjust its remaining NSP1 planned 
activities to ensure that 25% of the original NSP1 formula grant amount 
and program income supports activities providing housing to households 
with

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incomes at or under 50 percent of area median income, or make a firm 
commitment to provide such housing with nonfederal funds in an amount 
sufficient to offset any deficiency to comply with the requirement 
before the expenditure deadline for the NSP1 grant.
    i. The NSP1 Notice allows each grantee to use up to ten percent of 
its NSP1 grant for general administration and planning activities. If 
HUD recaptures funds from a grant, this percentage limitation will 
still apply to the remaining grant funds, reducing the amount available 
for administration activities.

B. Changes to Pre-Grant Process

Background
    With this notice, HUD is establishing the pre-grant process for the 
NSP reallocation grants. The formula is published in Attachment A. HUD 
will announce the reallocation amounts after completing the recapture 
process for all states that have failed to meet the 18-month use 
requirement. Additional reallocation announcements will be made only if 
HUD recaptures funds from grantees who fail to comply with any 
memorandum of agreement or grant conditions. At the time of each 
announcement, CDBG grantees receiving NSP1 reallocations may 
immediately begin to prepare and submit action plan substantial 
amendments or abbreviated plans for NSP1 funds, in accordance with this 
notice and the original NSP1 Notice. (Insular areas should follow the 
requirements for entitlement communities.)
    To receive NSP1 reallocation funding, grantees must submit an 
action plan substantial amendment to HUD in accordance with this notice 
by no later than the deadline in the allocation announcement. Any unit 
of general local government in a nonentitlement area receiving an 
allocation must submit an abbreviated plan under 24 CFR 91.235 to HUD 
by the same deadline. An abbreviated plan will have essentially the 
same content as a NSP1 substantial amendment, although the 
certifications will be different.
    In the October 6, 2008 NSP1 Notice, HUD encouraged each local 
jurisdiction receiving an allocation to carefully consider its 
administrative capacity to use the funds within the statutory deadline. 
HUD is encouraging each local jurisdiction receiving reallocated fund 
to consider its administrative capacity. To support this consideration, 
HUD is providing a self-assessment tool that grantees may find useful 
in better understanding their capacity to undertake and manage NSP1 
activities. This is the same self-assessment tool that is used for NSP 
Technical Assistance (NSP-TA) purposes and it will allow HUD to more 
rapidly identify capacity gaps and technical assistance needs and to 
provide appropriate technical assistance. Although HUD suggests that 
every grantee complete and submit the self-assessment with its 
substantial amendment, HUD will require some grantees to complete and 
submit such a self-assessment as a special condition of receiving 
funding.
    HUD also provided regulatory waivers and alternative requirements 
to allow joint requests among contiguous entitlement communities and to 
allow joint requests between an entitlement community and a state. Any 
two or more contiguous units of general local government may make a 
joint request to HUD to implement a joint NSP1 program with reallocated 
funds. A jurisdiction need not have a joint agreement with an urban 
county under the regular CDBG entitlement program or have joint request 
with a local government or state for the original NSP1 allocation to 
request a joint program for NSP1 reallocation funding. Potential 
requestors should contact HUD as soon as possible (as far as possible 
in advance of publishing a proposed substantial amendment or 
abbreviated plan) for technical guidance. The requestors will specify 
which jurisdiction will receive the funds and administer the combined 
grant on behalf of the requestors; in the case of a joint request 
between a local government jurisdiction and a state, the state will 
administer the combined grant. (Grantees choosing this option should 
consider the Consolidated Plan and citizen participation implications 
of this approach. The lead entity's substantial amendment will cover 
all participating members. The citizen participation process must 
include citizens of all jurisdictions participating in the joint 
program.)
    Given the rule of construction in HERA that NSP funds generally are 
construed as CDBG program funds, subject to CDBG program requirements, 
HUD generally will treat reallocated NSP funds as a special allocation 
of Fiscal Year (FY) 2010 CDBG funding for grantees receiving an 
allocation for the first time. This has important consequences for 
local governments presently participating in an existing urban county 
program, and for metropolitan cities that have joint agreements with 
urban counties. HUD will consider any existing cooperation agreements 
between a local government and an urban county governing FY2010 CDBG 
funding (for purposes of either an urban county or a joint program) to 
automatically cover NSP funding as well. These cooperation agreements 
will continue to apply to the use of NSP funds for the duration of the 
NSP grant, just as cooperation agreements covering regular CDBG 
Entitlement program funds continue to apply to any use of the funds 
appropriated during the 3-year period covered by the agreements. For 
example, a local government presently has a cooperation agreement 
covering a joint program or participation in an urban county for 
Federal FYs 2009, 2010 and 2011. The local government may choose to 
discontinue its participation with the county at the end of the 
applicable qualification period for future CDBG entitlement funding. 
However, the existing cooperation agreement covers the NSP funding 
until expended and the county will still be responsible for any NSP 
projects funded in that community, and for any NSP funding the local 
government receives from the county, until those funds are expended and 
the funded activities are completed.
    A third method of cooperating is also available, and may be 
required by HUD in some jurisdictions that HUD determines have high 
need for NSP funds and low capacity to implement some or all planned 
NSP activities in the required timeframes. HUD may condition some NSP 
reallocations on such cooperation being demonstrated to HUD's 
satisfaction before execution of a grant agreement. A jurisdiction may 
apply for its entire grant and immediately enter into a subrecipient 
agreement with another jurisdiction, an NSP2 grantee, or a nonprofit 
entity with capacity to administer the grant.
    Finally, some communities with a great need for neighborhood 
stabilization support do not have the capacity to design and deliver a 
successful NSP program. HUD can identify these communities before 
execution of a grant agreement based on NSP, CDBG, or HOME program 
performance or information from technical assistance providers. In 
these cases, HUD may reallocate funds to such communities but will take 
actions designed to ensure appropriate and timely use of grant funds. 
HUD will condition their grants on the grantee's acceptance of 
technical assistance, as evidenced by an executed technical assistance 
work plan or by a memorandum of agreement with HUD. In either such 
document, the responsibilities and roles of the grantee, HUD, and HUD's 
technical assistance providers will be described--including

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a specific scope of work and schedule--and duly executed before HUD 
signs the grant agreement for the reallocation award.
    At the time HUD publishes the reallocation amounts, it will also 
publish a specific date for a recipient to complete and submit a 
substantial amendment to its annual action plan or an abbreviated plan. 
A grantee that wishes to initially submit its action plan amendment to 
HUD electronically in the DRGR system rather than via paper may do so 
by contacting its local field office for the DRGR submission 
directions. Paper submissions to HUD also will be allowed, although 
each grantee must set up its action plan in DRGR before the deadline 
for the first required performance report after receiving a grant.
    HUD will review each grantee submission for completeness and 
consistency with the requirements of this notice and will disapprove 
incomplete and inconsistent action plan amendments and abbreviated 
plans. HUD will allow revision and resubmission of a disapproved 
amendment or abbreviated action plan in accordance with 24 CFR 91.500 
so long as any such resubmission is received by HUD 45 days or less 
following the date of first disapproval.
    In combination, these requirements provide the following expedited 
steps for NSP grants:
     Proposed action plan amendment or abbreviated plan 
published via the usual methods and on the Internet for no less than 15 
calendar days of public comment;
     Final action plan amendment or abbreviated plan posted on 
the Internet and submitted to HUD by the deadline indicated in the 
allocation announcement (grant application includes Standard Form 424 
(SF-424) and certifications);
     HUD expedites review;
     HUD accepts the plan and prepares a cover letter, grant 
agreement, and grant conditions;
     Grantee meets any conditions required before HUD's 
execution of the grant agreement.
     Grant agreement signed by HUD and immediately transmitted 
to the grantee;
     Grantee signs and returns the grant agreements;
     HUD establishes the line of credit and the grantee 
requests and receives DRGR access;
     After completing the environmental review(s) pursuant to 
24 CFR part 58 and, as applicable, receiving from HUD or the state an 
approved Request for Release of Funds and certification, the grantee 
may draw-down funds from the line of credit.
    As with the initial allocation process, the action plan substantial 
amendment, abbreviated plan and citizen participation alternative 
requirements will permit an expedited grant-making process, but one 
that still provides for public notice, appraisal, examination, and 
comment on the activities proposed for the use of NSP grant funds.
Revised Requirements
    Section II.B.4.a of the NSP1 Notice on page 58334 is amended to add 
the following at the end: To receive an NSP reallocation, a grantee 
must submit to HUD for approval an NSP application by the deadline 
indicated in the allocation announcement. This submission will include 
a signed standard Federal form SF-424, signed certifications, and a 
substantial action plan amendment or abbreviated plan meeting the 
requirements of paragraph b below. (24 CFR 91.505 is waived to the 
extent necessary to require submission of the substantial amendment to 
HUD for approval in accordance with this Notice.)
    Section II.B.5-6 of the NSP1 Notice on beginning on page 58334 is 
amended to add: 5.
    c. Local jurisdictions receiving reallocation funds may enter into 
joint agreements in accordance with 5.a. or b., regardless of whether 
the local jurisdiction had a joint agreement for the original NSP 
allocation.
    6. b. Any cooperation agreement between a unit of general local 
government and a county, concerning either a joint program or 
participation in an urban county under 24 CFR 570.307 or 570.308, and 
governing CDBG funds appropriated for federal FY 2010, will be 
considered to incorporate and apply to NSP reallocated funding. Any 
such cooperation agreements will continue to apply to the use of NSP 
funds until the NSP funds are expended and the NSP grant is closed out. 
Grantees should note that certain provisions in existing cooperation 
agreements that govern FY2010 CDBG funding may be inconsistent with 
parts of HERA and this notice. For instance, set minimum and/or maximum 
allocation amounts may conflict with priority distributions to areas of 
greatest need identified in the grantee's action plan substantial 
amendment. Conforming amendments should be made to existing cooperation 
agreements, as necessary, to comply with HERA and this notice.

C. Change to Timeliness of Use Requirement

    The requirements of paragraph M. Timeliness of use and expenditure 
of NSP funds of the NSP1 Notice will apply to reallocation grants. 
Grantees are reminded that section of HERA 2301(c)(1) provides that any 
grantee receiving a grant:

    ``* * *shall, not later than 18 months after the receipt of such 
amounts, use such amounts to purchase and redevelop abandoned and 
foreclosed homes and residential properties.''

HUD has defined the term ``use'' to include obligation of funds.
Revised Requirement
    Section II.M. of the NSP1 Notice on page 58340 is amended to add 
paragraph 3 after paragraph 2:
    3. Grantees receiving a reallocation of funds must comply with the 
18-month use requirement.

D. Certifications

Background
    HUD is substituting alternative certifications. The alternative 
certifications are tailored to NSP1 grants and remove certifications 
and references that are appropriate only to the annual CDBG formula 
program.
Requirements
    Section II.T. of the NSP1 Notice starting on page 58342 is amended 
to read as follows: Certifications for states and for entitlement 
communities, alternative requirement. Although the NSP is being 
implemented as a substantial amendment to the current annual action 
plan, HUD is requiring submission of this alternative set of 
certifications as a conforming change, reflecting alternative 
requirements and waivers under this notice. Each jurisdiction will 
submit the following certifications:
    1. Affirmatively furthering fair housing. The jurisdiction 
certifies that it will affirmatively further fair housing, which means 
that it will conduct an analysis to identify impediments to fair 
housing choice within the jurisdiction, take appropriate actions to 
overcome the effects of any impediments identified through that 
analysis, and maintain records reflecting the analysis and actions in 
this regard.
    2. Anti-displacement and relocation plan. The applicant certifies 
that it has in effect and is following a residential anti-displacement 
and relocation assistance plan.
    3. Anti-lobbying. The jurisdiction must submit a certification with 
regard to compliance with restrictions on

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lobbying required by 24 CFR part 87, together with disclosure forms, if 
required by that part.
    4. Authority of jurisdiction. The jurisdiction certifies that the 
consolidated plan is authorized under state and local law (as 
applicable) and that the jurisdiction possesses the legal authority to 
carry out the programs for which it is seeking funding, in accordance 
with applicable HUD regulations and other program requirements.
    5. Consistency with plan. The jurisdiction certifies that the 
housing activities to be undertaken with NSP funds are consistent with 
its consolidated plan.
    6. Acquisition and relocation. The jurisdiction certifies that it 
will comply with the acquisition and relocation requirements of the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970, as amended (42 U.S.C. 4601), and implementing regulations 
at 49 CFR part 24, except as those provisions are modified by the 
notice for the NSP program published by HUD.
    7. Section 3. The jurisdiction certifies that it will comply with 
section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701u), and implementing regulations at 24 CFR part 135.
    8. Citizen participation. The jurisdiction certifies that it is in 
full compliance and following a detailed citizen participation plan 
that satisfies the requirements of Sections 24 CFR 91.105 or 91.115, as 
modified by NSP requirements.
    9. Following a plan. The jurisdiction certifies it is following a 
current consolidated plan (or Comprehensive Housing Affordability 
Strategy) that has been approved by HUD.
    10. Use of funds. The jurisdiction certifies that it will comply 
with Title III of Division B of the Housing and Economic Recovery Act 
of 2008, as amended, by using all of its grant funds within 18 months 
of receipt of the grant.
    11. The jurisdiction certifies:
    a. That all of the NSP funds made available to it will be used with 
respect to individuals and families whose incomes do not exceed 120 
percent of area median income; and
    b. The jurisdiction will not attempt to recover any capital costs 
of public improvements assisted with CDBG funds, including Section 108 
loan guaranteed funds, by assessing any amount against properties owned 
and occupied by persons of low- and moderate-income, including any fee 
charged or assessment made as a condition of obtaining access to such 
public improvements. However, if NSP funds are used to pay the 
proportion of a fee or assessment attributable to the capital costs of 
public improvements (assisted in part with NSP funds) financed from 
other revenue sources, an assessment or charge may be made against the 
property with respect to the public improvements financed by a source 
other than CDBG funds. In addition, with respect to properties owned 
and occupied by moderate-income (but not low-income) families, an 
assessment or charge may be made against the property with respect to 
the public improvements financed by a source other than NSP funds if 
the jurisdiction certifies that it lacks NSP or CDBG funds to cover the 
assessment.
    12. Excessive force. The jurisdiction certifies that it has adopted 
and is enforcing:
    a. A policy prohibiting the use of excessive force by law 
enforcement agencies within its jurisdiction against any individuals 
engaged in nonviolent civil rights demonstrations; and
    b. A policy of enforcing applicable state and local laws against 
physically barring entrance to, or exit from, a facility or location 
that is the subject of such nonviolent civil rights demonstrations 
within its jurisdiction.
    13. Compliance with anti-discrimination laws. The jurisdiction 
certifies that the NSP grant will be conducted and administered in 
conformity with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d), the Fair Housing Act (42 U.S.C. 3601-3619), and implementing 
regulations.
    14. Compliance with lead-based paint procedures. The jurisdiction 
certifies that its activities concerning lead-based paint will comply 
with the requirements of part 35, subparts A, B, J, K, and R of this 
title.
    15. Compliance with laws. The jurisdiction certifies that it will 
comply with applicable laws.

Note on Statutory Limitation on Distribution of Funds

    Section 2304 of HERA states that none of the funds made available 
under this Title or title IV shall be distributed to an organization 
that has been indicted for a violation under Federal law relating to an 
election for Federal office; or an organization that employs applicable 
individuals. Section 2304 defines applicable individuals.

Information Collection Approval

    HUD has approval from the Office of Management and Budget (OMB) for 
information collection requirements in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3520). OMB approval is under OMB 
control number 2506-0165. In accordance with the Paperwork Reduction 
Act, HUD 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.

Duration of Funding

    The appropriation accounting provisions in 31 U.S.C. 1551-1557, 
added by section 1405 of the National Defense Authorization Act for 
Fiscal Year 1991 (Pub. L. 101-510), limit the availability of certain 
appropriations for expenditure. Such a limitation may not be waived. 
The appropriations acts for NSP grants direct that these funds be 
available until expended. However, the Department is imposing a shorter 
deadline on the expenditure of NSP funds in this notice.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for grants made 
under NSP1 are as follows: 14.218; 14.225; and 14.228.

Finding of No Significant 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(C)(2)). The Finding of No Significant 
Impact is available for public inspection between 8 a.m. and 5 p.m. 
weekdays in the Office of the Rules Docket Clerk, Office of General 
Counsel, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 10276, Washington, DC 20410-0500.

    Dated: August 23, 2010.
Mercedes M. M[aacute]rquez,
Assistant Secretary for Community Planning and Development.
[FR Doc. 2010-21402 Filed 8-26-10; 8:45 am]
BILLING CODE 4210-67-P