[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: 24CFR570.201]

[Page 41-44]
 
                 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 C_Eligible Activities
 
Sec. 570.201  Basic eligible activities.

    CDBG funds may be used for the following activities:
    (a) Acquisition. Acquisition in whole or in part by the recipient, 
or other public or private nonprofit entity, by purchase, long-term 
lease, donation, or otherwise, of real property (including air rights, 
water rights, rights-of-way, easements, and other interests therein) for 
any public purpose, subject to the limitations of Sec. 570.207.
    (b) Disposition. Disposition, through sale, lease, donation, or 
otherwise, of any real property acquired with CDBG funds or its 
retention for public purposes, including reasonable costs of temporarily 
managing such property or property acquired under urban renewal, 
provided that the proceeds from any such disposition shall be program 
income subject to the requirements set forth in Sec. 570.504.
    (c) Public facilities and improvements. Acquisition, construction, 
reconstruction, rehabilitation or installation of public facilities and 
improvements, except as provided in Sec. 570.207(a), carried out by the 
recipient or other public or private nonprofit entities. (However, 
activities under this paragraph may be directed to the removal of 
material and architectural barriers that restrict the mobility and 
accessibility of elderly or severely disabled persons to public 
facilities and improvements, including those provided for in Sec. 
570.207(a)(1).) In undertaking such activities, design features and 
improvements which promote energy efficiency may be included. Such 
activities may also include the execution of architectural design 
features, and similar treatments intended to enhance the aesthetic 
quality of facilities and improvements receiving CDBG assistance, such 
as decorative pavements, railings, sculptures, pools of water and 
fountains, and other works of art. Facilities designed for use in 
providing shelter for persons having special needs are considered public 
facilities and not subject to the prohibition of new housing 
construction described in Sec. 570.207(b)(3). Such facilities include 
shelters for the homeless; convalescent homes; hospitals, nursing homes; 
battered spouse shelters; halfway houses for run-away children, drug 
offenders or parolees; group homes for mentally retarded persons and 
temporary housing for disaster victims. In certain cases, nonprofit 
entities and subrecipients including those specified in Sec. 570.204 
may acquire title to public facilities. When such facilities are owned 
by nonprofit entities or subrecipients, they shall be operated so as

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to be open for use by the general public during all normal hours of 
operation. Public facilities and improvements eligible for assistance 
under this paragraph are subject to the policies in Sec. 570.200(b).
    (d) Clearance activities. Clearance, demolition, and removal of 
buildings and improvements, including movement of structures to other 
sites. Demolition of HUD-assisted or HUD-owned housing units may be 
undertaken only with the prior approval of HUD.
    (e) Public services. Provision of public services (including labor, 
supplies, and materials) including but not limited to those concerned 
with employment, crime prevention, child care, health, drug abuse, 
education, fair housing counseling, energy conservation, welfare (but 
excluding the provision of income payments identified under Sec. 
570.207(b)(4)), homebuyer downpayment assistance, or recreational needs. 
To be eligible for CDBG assistance, a public service must be either a 
new service or a quantifiable increase in the level of an existing 
service above that which has been provided by or on behalf of the unit 
of general local government (through funds raised by the unit or 
received by the unit from the State in which it is located) in the 12 
calendar months before the submission of the action plan. (An exception 
to this requirement may be made if HUD determines that any decrease in 
the level of a service was the result of events not within the control 
of the unit of general local government.) The amount of CDBG funds used 
for public services shall not exceed paragraphs (e) (1) or (2) of this 
section, as applicable:
    (1) The amount of CDBG funds used for public services shall not 
exceed 15 percent of each grant, except that for entitlement grants made 
under subpart D of this part, the amount shall not exceed 15 percent of 
the grant plus 15 percent of program income, as defined in Sec. 
570.500(a). For entitlement grants under subpart D of this part, 
compliance is based on limiting the amount of CDBG funds obligated for 
public service activities in each program year to an amount no greater 
than 15 percent of the entitlement grant made for that program year plus 
15 percent of the program income received during the grantee's 
immediately preceding program year.
    (2) A recipient which obligated more CDBG funds for public services 
than 15 percent of its grant funded from Federal fiscal year 1982 or 
1983 appropriations (excluding program income and any assistance 
received under Public Law 98-8), may obligate more CDBG funds than 
allowable under paragraph (e)(1) of this section, so long as the total 
amount obligated in any program year does not exceed:
    (i) For an entitlement grantee, 15% of the program income it 
received during the preceding program year; plus
    (ii) A portion of the grant received for the program year which is 
the highest of the following amounts:
    (A) The amount determined by applying the percentage of the grant it 
obligated for public services in the 1982 program year against the grant 
for its current program year;
    (B) The amount determined by applying the percentage of the grant it 
obligated for public services in the 1983 program year against the grant 
for its current program year;
    (C) The amount of funds it obligated for public services in the 1982 
program year; or,
    (D) The amount of funds it obligated for public services in the 1983 
program year.
    (f) Interim assistance. (1) The following activities may be 
undertaken on an interim basis in areas exhibiting objectively 
determinable signs of physical deterioration where the recipient has 
determined that immediate action is necessary to arrest the 
deterioration and that permanent improvements will be carried out as 
soon as practicable:
    (i) The repairing of streets, sidewalks, parks, playgrounds, 
publicly owned utilities, and public buildings; and
    (ii) The execution of special garbage, trash, and debris removal, 
including neighborhood cleanup campaigns, but not the regular curbside 
collection of garbage or trash in an area.
    (2) In order to alleviate emergency conditions threatening the 
public health and safety in areas where the chief executive officer of 
the recipient determines that such an emergency

[[Page 43]]

condition exists and requires immediate resolution, CDBG funds may be 
used for:
    (i) The activities specified in paragraph (f)(1) of this section, 
except for the repair of parks and playgrounds;
    (ii) The clearance of streets, including snow removal and similar 
activities, and
    (iii) The improvement of private properties.
    (3) All activities authorized under paragraph (f)(2) of this section 
are limited to the extent necessary to alleviate emergency conditions.
    (g) Payment of non-Federal share. Payment of the non-Federal share 
required in connection with a Federal grant-in-aid program undertaken as 
part of CDBG activities, provided, that such payment shall be limited to 
activities otherwise eligible and in compliance with applicable 
requirements under this subpart.
    (h) Urban renewal completion. Payment of the cost of completing an 
urban renewal project funded under title I of the Housing Act of 1949 as 
amended. Further information regarding the eligibility of such costs is 
set forth in Sec. 570.801.
    (i) Relocation. Relocation payments and other assistance for 
permanently and temporarily relocated individuals families, businesses, 
nonprofit organizations, and farm operations where the assistance is (1) 
required under the provisions of Sec. 570.606 (b) or (c); or (2) 
determined by the grantee to be appropriate under the provisions of 
Sec. 570.606(d).
    (j) Loss of rental income. Payments to housing owners for losses of 
rental income incurred in holding, for temporary periods, housing units 
to be used for the relocation of individuals and families displaced by 
program activities assisted under this part.
    (k) Housing services. Housing services, as provided in section 
105(a)(21) of the Act (42 U.S.C. 5305(a)(21)).
    (l) Privately owned utilities. CDBG funds may be used to acquire, 
construct, reconstruct, rehabilitate, or install the distribution lines 
and facilities of privately owned utilities, including the placing 
underground of new or existing distribution facilities and lines.
    (m) Construction of housing. CDBG funds may be used for the 
construction of housing assisted under section 17 of the United States 
Housing Act of 1937.
    (n) Homeownership assistance. CDBG funds may be used to provide 
direct homeownership assistance to low- or moderate-income households in 
accordance with section 105(a) of the Act.
    (o)(1) The provision of assistance either through the recipient 
directly or through public and private organizations, agencies, and 
other subrecipients (including nonprofit and for-profit subrecipients) 
to facilitate economic development by:
    (i) Providing credit, including, but not limited to, grants, loans, 
loan guarantees, and other forms of financial support, for the 
establishment, stabilization, and expansion of microenterprises;
    (ii) Providing technical assistance, advice, and business support 
services to owners of microenterprises and persons developing 
microenterprises; and
    (iii) Providing general support, including, but not limited to, peer 
support programs, counseling, child care, transportation, and other 
similar services, to owners of microenterprises and persons developing 
microenterprises.
    (2) Services provided this paragraph (o) shall not be subject to the 
restrictions on public services contained in paragraph (e) of this 
section.
    (3) For purposes of this paragraph (o), ``persons developing 
microenterprises'' means such persons who have expressed interest and 
who are, or after an initial screening process are expected to be, 
actively working toward developing businesses, each of which is expected 
to be a microenterprise at the time it is formed.
    (4) Assistance under this paragraph (o) may also include training, 
technical assistance, or other support services to increase the capacity 
of the recipient or subrecipient to carry out the activities under this 
paragraph (o).
    (p) Technical assistance. Provision of technical assistance to 
public or nonprofit entities to increase the capacity of such entities 
to carry out eligible neighborhood revitalization or economic 
development activities. (The recipient must determine, prior to the

[[Page 44]]

provision of the assistance, that the activity for which it is 
attempting to build capacity would be eligible for assistance under this 
subpart C, and that the national objective claimed by the grantee for 
this assistance can reasonably be expected to be met once the entity has 
received the technical assistance and undertakes the activity.) Capacity 
building for private or public entities (including grantees) for other 
purposes may be eligible under Sec. 570.205.
    (q) Assistance to institutions of higher education. Provision of 
assistance by the recipient to institutions of higher education when the 
grantee determines that such an institution has demonstrated a capacity 
to carry out eligible activities under this subpart C.

[53 FR 34439, Sept. 6, 1988, as amended at 53 FR 31239, Aug. 17, 1988; 
55 FR 29308, July 18, 1990; 57 FR 27119, June 17, 1992; 60 FR 1943, Jan. 
5, 1995; 60 FR 56911, Nov. 9, 1995; 61 FR 18674, Apr. 29, 1996; 65 FR 
70215, Nov. 21, 2000; 67 FR 47213, July 17, 2002]