[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR570.405]

[Page 75-76]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
 
                    Subpart E_Special Purpose Grants
 
Sec. 570.405  The insular areas.

    (a) Eligible applicants. Eligible applicants are Guam, the Virgin 
Islands, American Samoa, the Trust Territory of the Pacific Islands, and 
the Commonwealth of the Northern Mariana Islands.
    (b) Threshold requirements. HUD shall review each grantee's progress 
on outstanding grants made under this section based on the grantee's 
performance report, the timeliness of close-outs and compliance with 
fund management requirements and pertinent regulations, taking into 
consideration the size of the grant and the degree and complexity of the 
program. If HUD determines upon such review that the applicant does not 
have the capacity effectively to administer a new grant, or a portion of 
a new grant, in addition to grants currently under administration, the 
applicant shall not be invited to submit an application for the current 
year's funding.
    (c) Previous audit findings and outstanding monetary obligations. 
HUD shall not accept for review an application from an applicant that 
has either an outstanding audit finding for any HUD program, or an 
outstanding monetary obligation to HUD that is in arrears, or for which 
a repayment schedule has not been established and agreed to. The Field 
Office manager may waive this restriction if he or she finds that the 
applicant has made a good faith effort to clear the audit. In no 
instance, however, shall a waiver be provided when funds are due HUD, 
unless a satisfactory arrangement for repayment of the debt has been 
made and payments are current.
    (d) Criteria for funding. The Secretary shall establish, for each 
fiscal year, an amount for which eligible applicants may apply. Grant 
amounts will be based on population of the applicant and its performance 
in previous years. In determining performance, HUD will consider program 
achievements and the applicant's effectiveness in using program funds. 
Effectiveness in using program funds shall be measured by reviewing 
audit, monitoring and performance reports.
    (e) Application and performance reporting. Application and 
performance reporting requirements are as follows:
    (1) Applicants must submit applications within 90 days of the 
notification of the grant amount from HUD.
    (2) Applicants shall prepare and publish or post a proposed 
application in accordance with the citizen participation requirements of 
paragraph (h) of this section.
    (3) Applicants shall submit to HUD a final application containing 
its community development objectives and activities. This application 
shall be submitted to the appropriate HUD office, together with the 
required certifications, in a form prescribed by HUD.
    (4) Grant recipients must submit to HUD an annual performance report 
on progress achieved on previously funded grants. Grant recipients must 
submit the report at a time and in a format determined by HUD. The 
report should be

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made available to citizens in accordance with the requirements of 
paragraph (h)(1)(iv) of this section.
    (f) Costs incurred by the applicant. (1) Notwithstanding any other 
provision of this part, HUD will not reimburse or recognize any costs 
incurred by an applicant before submission of the application to HUD.
    (2) Normally, HUD will not reimburse or recognize costs incurred 
before HUD approval of the application for funding. However, under 
unusual circumstances, the Field office manager may consider and 
conditionally approve written requests to recognize and reimburse costs 
that will be incurred after submission of the application but before it 
is approved where failure to do so would impose undue or unreasonable 
hardship on the applicant. Conditional approvals will be made only 
before the costs are incurred and where the conditions for release of 
funds have been met in accordance with 24 CFR 58.22, and with the 
understanding that HUD has no obligation whatsoever to approve the 
application or to reimburse the applicant should the application be 
disapproved.
    (g) Criteria for conditional approval. HUD may approve a grant 
subject to specified conditions. In any such case, the obligation and 
utilization of funds may be restricted. The reasons for the conditional 
appproval and the actions necessary to remove the conditions shall be 
specified. Failure of the applicant to satisfy the conditions may result 
in a termination of the grant. A conditional approval may be granted 
under any of the following circumstances:
    (1) When local environmental reviews under 24 CFR part 58 have not 
yet been completed;
    (2) To ensure that actual provision of other resources required to 
complete the proposed activities will be available within a reasonable 
period of time;
    (3) To ensure that a project can be completed within its estimated 
costs;
    (4) Where the grantee is required to satisfy an outstanding debt due 
to HUD under a payment plan executed between the grantee and the 
Department;
    (5) Pending resolution of problems related to specific projects or 
the capability of the grantee to obtain resources needed to carry out, 
operate or maintain the project; or
    (6) Pending approval of site and neighborhood standards for proposed 
housing projects.
    (h) Citizen participation. (1) The applicant shall provide for 
appropriate citizen participation in the application and amendment 
process. The applicant must, at least, do each of the following:
    (i) Furnish citizens with information concerning the amount of funds 
available for community development and housing activities and the range 
of activities that may be undertaken, including the estimated amount 
proposed to be used for activities that will benefit persons of low and 
moderate income, and the plans of the grantee for minimizing 
displacement of persons as a result of activities assisted with such 
funds and to assist persons actually displaced;
    (ii) Hold one or more public hearings (scheduled at convenient times 
and places) to obtain the views of citizens on community development and 
housing needs;
    (iii) Develop and publish or post the community development 
statement in such a manner as to afford affected citizens an opportunity 
to examine its contents and to submit comments;
    (iv) Afford citizens an opportunity to review and comment on the 
applicant's performance under any community development block grant.
    (2) Before submitting the application to HUD, the applicant shall 
certify that it has:
    (i) Met the requirements of paragraph (h)(1) of this section;
    (ii) Considered any comments and views expressed by citizens; and
    (iii) If appropriate, modified the application accordingly and made 
the modified application available to citizens.

[50 FR 37526, Sept. 16, 1985, as amended at 60 FR 56914, Nov. 9, 1995; 
61 FR 32269, June 21, 1996]

    Effective Date Note: At 61 FR 32269, June 21, 1996, Sec. 
570.405(e)(4) was revised. This section contains information collection 
and recordkeeping requirements and will not become effective until 
approval has been given by the Office of Management and Budget.

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