local government as determined under this subpart, and will be deducted from such entitlement amount for Fiscal Year 1975. Deductions for this purpose will be made after the allocation of funds pursuant to this subpart and shall not otherwise affect the allocation of funds. The deduction required for such grants shall be disregarded in determining the amount of grants made to any unit of general local government that may be applied, pursuant to § 570.802(b), to payment of temporary loans in connection with urban renewal projects under Title I of the Housing Act of 1949.

Subpart C-Eligible Activities

§ 570.200 Eligible activities.

(a) Grant assistance for a community development program may be used only for the following activities:

(1) Acquisition in whole or in part by purchase, lease, donation, or otherwise, of real property (including air rights, water rights, and other interests therein), which is

(i) Blighted, deteriorated, deteriorating, undeveloped, or inappropriately developed from the standpoint of sound community development and growth, as determined by the recipient pursuant to State and local laws;

(ii) Appropriate for rehabilitation or conservation activities;

(iii) Appropriate for the preservation or restoration of historic sites, the beautification of urban land, the conservation of open spaces, natural resources, and scenic areas, the provision of recreational opportunities, or the guidance of urban development;

(iv) To be used for the provision of public works, facilities, and improvements eligible for assistance under paragraph (a) (2) of this section; or

(v) To be used for other public purposes, including the conversion of land to other uses where necessary or appropriate to the community development program.

(2) Acquisition, construction, reconstruction, or installation of the following public works, facilities, and site or other improvements: neighborhood facilities, senior centers, historic properties, utilities, streets, street lights, water and sewer facilities, foundations and platforms for air rights sites, pedestrian malls and walkways, and parks, playgrounds, and other facilities for recreational participation; flood and drainage facilities

in cases where assistance for such facilities has been determined to be unavailable under other Federal laws or programs pursuant to the provisions of § 570.608; and parking facilities, solid waste disposal facilities, and fire protection services and facilities which are located in areas or which serve areas in which other activities described in § 570.303(b) are being, or are to be, carried out.

(3) Code enforcement in deteriorated or deteriorating areas in which such enforcement, together with public improvements and services to be provided, may be expected to arrest the decline of the area.

(4) Clearance, demolition, removal, and rehabilitation of buildings and improvements (including (i) interim assistance to alleviate harmful conditions in which immediate public action is needed and (ii) financing rehabilitation of privately owned properties through the use of grants, direct loans, loan guarantees, and other means, when in support of other activities described in § 570.303 (b), and (iii) demolition and modernization (but not new construction) of publicly owned low-rent housing.

(5) Special projects directed to the removal of material and architectural barriers which restrict the mobility and accessibility of elderly and handicapped persons.

(6) Payments to housing owners for losses of rental income incurred in holding for temporary periods housing units to be utilized for the relocation of individuals and families displaced by program activities.

(7) Disposition, through sale, lease, donation, or otherwise of any real property acquired pursuant to this Part or its retention for public purposes, provided that the proceeds from any such disposition shall be expended only for activities in accordance with this part.

(8) Provision of public services not otherwise available in areas, or serving residents of areas, in which the recipient is undertaking, or will undertake, other activities described in § 570.303(b), where such services are determined to be necessary or appropriate to support such other activities and where assistance in providing or securing such services under other applicable Federal laws or programs has been applied for and denied or not made available pursuant to the provisions of

§ 570.607. For the purposes of this paragraph, such services shall be directed toward (i) improving the community's public services and facilities including those concerned with the employment, economic development, crime prevention, child care, health, drug abuse, education, welfare, or recreation needs of persons residing in such areas, and (ii) coordinating public and private development programs.

(9) Payment of the non-Federal share required in connection with a Federal grant-in-aid program undertaken as part of the community development program pursuant to § 570.303(b), provided, That such payment shall be limited to activities otherwise eligible under this section.

(10) Payment of the cost of completing a project funded under Title I of the Housing Act of 1949, including the provisions for financial settlement contained in Subpart I.

(11) Relocation payments and assistance for individuals, families, businesses, organizations, and farm operations displaced by activities assisted under this Part, including all benefits at least equal to the minimum levels established under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601).

(12) Activities necessary (i) to develop a comprehensive community development plan (which plan may address the needs, strategy, and objectives to be summarized in the application pursuant to § 570.303 (a) but may treat only such public services as are necessary or appropriate to support activities meeting such needs and objectives), and (ii) to develop a policy-planning-management capacity so that the recipient may more rationally and effectively (A) determine its needs, (B) set long-term goals and short-term objectives, (C) devise programs and activities to meet the goals and objectives, (D) evaluate the progress of such programs in accomplishing these goals and objectives, and (E) carry out management, coordination, and monitoring of activities necessary for effective planning implementation.

(13) Payment of reasonable administrative costs and carrying charges related to the planning and execution of community development and housing activities, including the provision of information and, at the discretion of the recipient, of resources to residents of areas in which other community development ac

tivities described in § 570.303(b) and the housing activities covered in the Housing Assistance Plan described in § 570.303 (c) are to be concentrated with respect to the planning and execution of such activities.

(b) Notwithstanding anything to the contrary in this section or in § 570.201, any ongoing activity being carried out in a model cities program shall be eligible for funding under this Part from that portion of the hold-harmless amount attributable to such model cities program until the applicant has received five years of funding for such activities as calculated pursuant to § 570.103(c) (2) (iii). For the purpose of this paragraph, the term "ongoing activity" means any model cities activity underway as of January 1, 1975, that was approved and funded by HUD on or before June 30, 1974.

(c) Costs incurred in carrying out the program, whether charged to the program on a direct or an indirect basis, must be in conformance with the requirements of Federal Management Circular 74-4, "Cost Principles Applicable to Grants and Contracts with State and Local Governments," except as modified in these regulations.

Any type of activity not described in § 570.200 is ineligible. The following list of examples of ineligible activities is merely illustrative, and does not constitute a list of all ineligible activities.

(a) Public facilities. The general rule is that a public facility is ineligible to be acquired, constructed, reconstructed, rehabilitated, or installed unless it is specifically mentioned in § 570.200(a) (2), or was previously eligible under any of the programs consolidated by the Act (except the public facilities loan program, the model cities program, and as an urban renewal local grant-in-aid eligible under section 110 (d) (3) of the Housing Act of 1949) and cited in § 570.1(c). Examples of facilities which cannot be provided with these funds include the following:

A

(1) Buildings and facilities for the general conduct of government, such as city halls and other headquarters of government (where the governing body meets regularly), of the recipient and which are predominantly used for municipal purposes, courthouses, police stations, and other municipal office buildings;

(2) Stadiums, sports arenas, auditoriums, concert halls, cultural and art centers, convention centers, museums, libraries, and similar facilities which are used by the general public primarily as spectators or observers, except cultural, art, museum, library, and similar facilities undertaken as part of a neighborhood facilities project;

(3) Schools generally, including elementary, secondary, college and university facilities, but excluding a neighborhood facility or senior center in which classes in practical and vocational activities (such as first aid, homemaking, crafts, etc.) may be taught;

(4) Airports, subways, trolley lines, bus or other transit terminals, or stations, and other transportation facilities; and

(5) Hospitals, nursing homes, and other medical facilities, but excluding a neighborhood facility or senior center in which health services are but part of the services offered.

(b) Operating and maintenance expenses. Except for the public services described in § 570.200 (a) (8), and the interim assistance authorized under § 570.200(a) (4), operating and maintenance expenses in connection with community services and facilities are not eligible. Examples include maintenance and repairs of water and sewer and parking facilities, and salaries of staff operating such facilities.

(c) General government expenses. Except for the provisions of § 570.200 (c), expenses required to carry out the regular responsibilities of the unit of general local government are not eligible. Examples include all ordinary general government expenditures not related to the community development program described pursuant to § 570.303(b) and not related to activities eligible under

§ 570.200.

(d) Political activities. No expenditure may be made for the use of equipment or premises for political purposes, sponsoring or conducting candidates' meetings, engaging in voter registration activity or voter transportation (except where part of the communitywide registration drive sponsored by the unit of general local government), or other partisan political activities.

(e) New housing construction. Construction of new permanent residential structures, or any program to subsidize or finance such construction, is not a permissible use of funds provided under this

Part, except as provided under the last resort housing provisions of 24 CFR Part 43.

(f) Income payments. Except as authorized under § 570.200, funds may not be expended for direct income payments for housing or for any other purpose, except as provided under the last resort housing provisions of 24 CFR Part 43. Examples include payments for income maintenance and housing allow

ances.

Subpart D-Applications for Entitlement Grants

§ 570.300 Pre-submissions.

(a) Timing of submission of applications. The Secretary will establish from time to time the earliest and latest dates for submission of an application for each fiscal year. Applications, or draft materials relating to applications, received before the earliest date will be returned to the applicant without review. For fiscal year 1975, the earliest date for submission of an application shall be December 1, 1974; the latest date shall be April 15, 1975: Provided, however, That the Secretary may extend the April 15, 1975, deadline for submission of an application in particular cases in which, in his judgment, procedures mandated by state statute or regulation render submission of the application by April 15, 1975, impracticable, but in no event will submission of an application be accepted after May 30, 1975. Applicants wishing to request an extension of the April 15, 1975, headline pursuant to this paragraph shall inform the appropriate HUD Area Office by March 1, 1975, giving the basis for the applicant's inability to file an application by April 15, 1975. No extension will be granted if the request for extension and the reasons therefor have not been received by HUD by March 1, 1975. Prior to the earliest date for submission of an application for each fiscal year, HUD will provide all applicants with forms and instructions, including the actual or estimated entitlement amount. Entitlement applicants wishing to apply for discretionary grants shall follow the procedures described in Subpart E, Applications and Criteria for Discretionary Grants.

(b) Upon receiving advice from HUD that the application has been received for processing, the applicant shall make reasonable efforts to inform citizens involved in the local citizen participation

process that the application has been submitted to HUD and is available to interested parties upon request. This requirement may be satisfied by publication of a notice to that effect in a periodical or general circulation in the jurisdiction of the applicant.

(c) Meeting the requirement of OMB Circular No. A-95. Applicants must comply with the procedures set forth in OMB Circular No. A-95 which require the submission of the application to the State and area wide clearinghouses for review and comment prior to submission to HUD. For Fiscal Year 1975 submissions only, the Office of Management and Budget has granted an exception to the length of review time for block grant applications to permit clearinghouses a single 45-day period for review. In addition, clearinghouses should divide their comments into two sections. The first will cover comments relating to facts and data relevant to HUD's making its statutory determination on the application in accordance with 8570.306(b). The second section will include all other comments and recommendations which clearinghouses desire to submit to the applicant.

[39 FR 40136, Nov. 13, 1974, as amended at 40 FR 5356, Feb. 5, 1975]

§ 570.301 Program year.

(a) First program year. The first program year shall start on the date of HUD approval of the application and shall run for twelve consecutive months, except when modified under the provision of paragraph (b) of this section.

(b) Subsequent program years. The second program year shall normally begin twelve months after the beginning date of the first program year. However, an applicant may request to shorten the first program year by no more than three calendar months in order to meet urgent local needs and objectives, to reflect activity funded with Fiscal Year 1975 appropriations for the urban renewal and model cities programs, or to conform the program year to State or local budgeting requirements. The applicant shall not submit an application for a program year beginning prior to the end of the preceding twelve-month program year without the prior concurrence of the HUD Area Office.

1975, an applicant may request an advance of funds in an amount not to exceed ten percent of its entitlement amount. A request for advance may be submitted to the appropriate HUD Area Office no earlier than December 1, 1974. An advance of funds may not be approved prior to January 1, 1975, and the applicant's program year does not begin until approval of a full application for a grant. The request for advance shall be in a form and manner prescribed by HUD and shall identify and estimate the cost of the activities to be carried out with the advance.

(b) Eligible uses of advance funds. Advance funds will be made available for the following purposes:

(1) To plan and prepare for the implementation of activities to be assisted under this part; and

(2) To continue previously approved urban renewal (including Neighborhood Development Program) activities being carried out under Title I of the Housing Act of 1949 and/or previously approved model cities activities being carried out under Title I of the Demonstration Cities and Metropolitan Development Act of 1966. The phrase "previously approved" in the preceding sentence shall mean those urban renewal and model cities activities that were approved and funded by HUD on or before June 30, 1974.

(c) Authorization to incur costs. Upon the effective date of these regulations, applicants, by appropriate resolution of the local governing body and as of the date of such resolution, may begin to incur costs for the planning and preparation of an application for funds available under this part. The resolution shall recognize that reimbursement for such costs will be dependent upon the availability of funds to implement this part, and submission of a timely application in accordance with 8570.303. Costs incurred with local funds pursuant to this paragraph may be reimbursed from an advance of funds. The total of all costs incurred pursuant to this section may not exceed ten percent of the applicants' entitlement amount and must be fully documented in the applicants' files.

§ 570.303 Application requirements.

An application for a grant shall conform to and be limited to the prescribed HUD forms and shall include the following items:

(a) Community development plan summary. The application shall include a summary of a three-year community development plan which identifies community development needs, demonstrates a comprehensive strategy for meeting those needs, and specifies both shortand long-term community development objectives which have been developed in accordance with areawide development planning and national urban growth policies. The plan shall be written in a manner to encompass the needs, strategy and objectives, and to described a program, which is designed to eliminate or prevent slums, blight, and deterioration where such conditions or needs exist, and to provide improved comniunity development facilities and public improvements, including the provision of supporting health, social and similar services where necessary and appropriate. In identifying the needs, the applicant shall take into consideration any special needs found to exist, in any identifiable segment of the total group of lower income persons in the community. With respect to areawide planning, the applicant must give careful consideration to applicable areawide plans but need not conform rigidly to such plans or secure approval of areawide planning agencies. Where areawide activities are determined in the A-95 comments transmitted by the area wide planning agency to be inconsistent with applicable areawide plans, then the applicant shall provide in the application to HUD an explanation of the reasons for the inconsistencies.

(b) Community development program. (1) The application shall include a summary of a community development program which:

(i) Includes the activities to be undertaken with the funds provided under this part for the program year to meet the community development needs and objectives together with the estimated costs and general location of such activities:

(ii) Indicates resources other than those provided under this Part which are expected to be made available during the program year toward meeting the identified needs and objectives; and

(iii) Takes into account appropriate environmental factors.

(2) The applicant shall submit maps of the geographic jurisdiction of the applicant. Such maps shall indicate the general location of proposed activities to be undertaken with funds provided under

this Part and indicate, by each census tract, the concentrations of minority groups and lower-income persons.

(3) An applicant may provide in the community development program for the planned expenditure of program year funds in the subsequent program year. (c) Housing assistance plan. The application shall contain a housing assistance plan which:

(1) Accurately surveys the condition of the housing stock in the community. The applicant shall present in summary form a description of housing conditions by number of units in standard condition and in substandard condition, and to the extent such information is generally available, the units suitable for rehabilitation, and in each case distinguishing the numbers which are occupied and which are vacant.

(2) Estimates the housing assistance needs of lower income persons (including lower-income persons who are elderly and handicapped persons, large families, and persons displaced or to be displaced) either already residing in the community, or planning or expected to reside in the community as a result of planned or existing employment facilities. The assessment of housing assistance needs of lower income persons should take into consideration and summarize any special needs found to exist in any identifiable segment of the total group of lowerincome persons in the community.

(3) Specifies a realistic annual goal for the number of dwelling units or persons to be assisted including the relative proportion of new, rehabilitated and existing dwelling units, and the sizes and types of housing projects and assistance best suited to the needs of lower income persons in the community. This statement of the annual goal for dwelling units to be assisted shall take into consideration the housing conditions and needs summarized pursuant to the two preceding paragraphs of this section. The goals for new, rehabilitated, and existing units should be consistent with the findings pursuant to § 570.303 (c) (1) with respect to the availability of existing units of standard quality and units suitable for rehabilitation. HUD field offices will advise applicants, upon request, of housing assistance resources available to field office juridictions pursuant to section 213 of the Housing and Community Development Act of 1974 prior to submission of the housing assistance plan by the locality.