9734 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Office of the Assistant Secretary for

Community Planning and

Development

24 CFR Part 585

[Docket No. R–95–1675; FR–3450–F–02]

RIN 2506–AB52

Opportunities for Youth: Youthbuild

Program

AGENCY: Office of the Assistant

Secretary for Community Planning and

Development, HUD.

ACTION: Final rule.

SUMMARY: This is the final rule for the

Youthbuild Program. The Youthbuild

Program provides funding assistance for

a wide range of multi-disciplinary

activities and services to assist

economically disadvantaged young

adults. The opportunities are designed

to help disadvantaged young adults who

have dropped out of high school to

obtain the education and employment

skills necessary to achieve economic

self-sufficiency and develop leadership

skills and a commitment to community

development in low-income

communities. Implementation grant

funds can be used to fund eligible

educational and supportive services and

activities composed of basic skills

instruction and remedial education,

employment skills and leadership

development, and counseling, referral

and support services. Planning grant

funds can be used to develop a

Youthbuild program that includes the

activities of an implementation grant.

Another important objective of the

Youthbuild program is to expand the

supply of permanent affordable housing

for homeless persons and members of

low- and very low-income families. By

giving disadvantaged young adults

participating in the program meaningful

on-site training experiences

constructing or rehabilitating housing as

a community service, they are helping

to meet the housing needs of homeless

and low-income families in their

community.

EFFECTIVE DATE: March 23, 1995.

FOR FURTHER INFORMATION CONTACT: The

Office of Economic Development,

Department of Housing and Urban

Development, Room 7136, 451 Seventh

Street, SW, Washington, DC 20410.

Telephone (202) 708–2035; TDD (202)

708–1455. (These telephone numbers

are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Information Collection Requirements

The information collection

requirements contained in this rule have

been approved under the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501–

3520) by the Office of Management and

Budget (OMB) and have been assigned

OMB control number 2506–0142;

expiration date August 31, 1996.

II. Background

Section 164 of the Housing and

Community Development Act of 1992

(Pub.L. 102–550) authorized the

Youthbuild program under subtitle D of

title IV of the National Affordable

Housing Act (42 U.S.C. 8011). On

September 23, 1993, the Department

published a proposed rule (58 FR

49830) and a Notice of Funds

Availability (NOFA) (58 FR 49849) for

this program.

The Department is now publishing

the final rule to be effective 30 days

from the date of publication. This final

rule does not contain the detailed

selection criteria and application

processing steps contained in the NOFA

for Fiscal Year 1993. Information

appropriate for a specific funding

competition will now be contained in

the NOFA published for the current

competition and will not be part of the

final rule. The final rule published here

is presented in its entirety to reflect the

addition of section numbers and all

modifications made as a result of public

comments and as a result of the

Department’s experience in running the

first competition for Youthbuild grant

fund.

III. Discussion of Public Comments on

Proposed Rule

The Department received public

comments from seven organizations

(one state agency, one local government

agency, two housing authorities and

three nonprofit organizations) in

response to the proposed rule published

on September 23, 1993, at 58 FR 49830.

The following discussion summarizes

the comments and provides HUD’s

responses to those comments.

Comment: Participant eligibility

should be extended to include juvenile

offenders held in custody at stateoperated training facilities. These

juveniles meet the qualifications of

economically disadvantaged young

adults who have dropped out of high

school and are in need of assistance to

obtain education and employment

skills. [one state agency]

Response: Such juvenile offenders

would be eligible for a Youthbuild

program without any changes to the

regulations.

Comment: The paragraph entitled

‘‘Lease’’ included in the provisions on

tenant protections under ‘‘Projectrelated restrictions applicable to

Youthbuild residential rental housing’’

[§ 585.309 (b)(1)] calls for a model lease

to become an addendum to the grant

agreement, remaining in force for ten

years. Housing authorities and other

owners may have to make changes in

lease provisions as required by HUD

and state statutes. Provisions must be

made to amend leases. [one housing

authority]

Response: For grants covered by the

requirements of section 585.309(b)(1), if

the provisions of the model lease

change, such changes will require

approval by HUD. No change to the

regulations is needed.

Comment: There is a conflict between

§ 585.309(b)(2) and 24 CFR 966.4(a)(1)

and (3) relating to the rules to be

followed by a Public Housing Authority

for termination of tenancy. [one housing

authority]

Response: The provisions of 24 CFR

part 966 take precedence for public

housing authorities.

Comment: Does the Youthbuild

program require a justification of new

construction through market and/or

feasibility studies? [one nonprofit

organization]

Response: No.

Comment: Is a mixed use project an

eligible Youthbuild activity and, and if

so, are there specific criteria involved?

[one nonprofit organization]

Response: Mixed-use projects are

eligible as long as the Youthbuild

dollars are only used in conjunction

with the housing and housing related

facilities. See definition of ‘‘related

facilities’’ in § 585.4.

Comment: Does the Youthbuild

program require that one-third of the

housing units assisted be accessible to

handicapped people? [one nonprofit

organization]

Response: Youthbuild applicants are

required to certify that they will comply

with the requirements of Section 504 of

the Rehabilitation Act of 1973, which

specifies the handicapped accessibility

standards for housing created with

Federal funds.

Comment: Several sources questioned

HUD’s use of 10 years to define ‘‘the

remaining useful life’’ of a Youthbuild

assisted property. One commenter

thought that 10 years was too long and

two thought it was too short. [one

housing authority and two nonprofit

organizations.]

Response: HUD considered a longer

period, but found that a 10-year period
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9735

was consistent with similar HUD

programs. Any Youthbuild recipient

organization that wishes to impose

longer restrictions on the use of a

property could do so on its own.

Comment: HUD should not limit

tenants with incomes between 60 and

80 percent of the area median income to

only one year. This restriction should be

removed. [two public housing

authorities]

Response: HUD agrees that the one

year limit may be too restrictive and has

raised it to two years in § 585.309(a).

Comment: When project-related

restrictions apply to Youthbuild

residential rental housing, the

requirement that units be advertised for

low-income people should be reduced

from 90-day periods to 60-day periods.

[one housing authority]

Response: Because the maximum

length of time that a tenant with an

income between 60 and 80 percent of

the area median income is allowed to

rent a Youthbuild-assisted building has

been raised from one to two years (see

above), HUD believes it is necessary to

maintain the 90-day requirement to

ensure availability to lower-income

tenants.

Comment: When a recipient has

successfully completed the activities of

a planning grant, it would be rare for

such an investment of time and money

to yield no workable program. HUD

should guarantee that all planning

recipients be awarded an

implementation grant in the next

funding cycle. [one public housing

authority]

Response: While HUD agrees that a

planning recipient will likely have a

viable project at the end of its planning

grant term, it may need additional time

to be ready to implement a program that

is superior to those of other applicants

that did not receive planning grants.

Further, given the number of planning

grants awarded during the first funding

round, there are insufficient funds to

award implementation grants to each

planning grant recipient. Each funding

round is statutorily required to be a

competition for funds, and fairness

dictates that each application for

funding be evaluated on its merits,

regardless of whether the applicant

received a previous planning grant.

HUD also believes that the process of

planning for a Youthbuild

implementation grant is a valuable

exercise, whether or not a HUD-funded

Youthbuild implementation program is

the result.

Comment: HUD should not require

programs to channel participants into

programs leading to a high school

diploma or post-secondary education,

because some participants may not be

capable of reaching those goals and such

expectations may lead them to drop out

of the program. [one public housing

authority]

Response: HUD believes that earning

a high school diploma or its equivalent

is crucial to achieving self-sufficiency.

However, the educational component of

the program does not require that

participants achieve a high school

equivalency, but merely requires

recipients to provide services and

activities designed to meet the basic

education needs of participants. This

requirement is sufficiently flexible to

allow recipients to provide educational

services that are appropriate to their

individual participants.

Comment: HUD should not require

applicants for planning grants to present

information on the need for the

program, considering that feasibility

studies are eligible activities under the

planning grant. [one public housing

authority]

Response: Need, based on distress of

the community, is a statutory selection

criterion and is fundamentally different

from feasibility studies. To present

information on the degree of economic

distress in a community in response to

the Need rating criterion, an applicant

must do research on the poverty,

unemployment, dropout rate, and other

factors currently existing in the

community. Feasibility studies are

eligible activities under the planning

grant. Instead of assessing the current

level of economic distress of the

community, a feasibility study would

focus on the physical environment,

housing stock, and the social, human,

and financial resources available for a

Youthbuild program.

Comment: Given that HUD may

approve more than the $1 million

maximum if the application proposes to

serve a large number of participants,

HUD should indicate whether the

number of participants is a factor in the

rating of an application, and, if so,

should specify the average expected

number of participants. [one public

housing authority]

Response: HUD does not have strict

participant enrollment requirements but

does consider the reasonableness of cost

per student in rating program quality

and feasibility. HUD also recognizes that

costs may vary depending on the

location of the program.

Comment: HUD should allow program

recipients to make stipends high enough

to compete with illegal endeavors by

participants. [one public housing

authority]

Response: HUD does not stipulate a

stipend level, and leaves the amount up

to the individual applicants.

Unreasonable and excessive stipend

levels will be considered in rating

program quality and feasibility.

Comment: HUD should state in the

rule that stipends may not result in a

rent increase for program participants.

[one public housing authority]

Response: The enabling statute and

rule state that the Youthbuild program

is subject to section 142 of the Job

Training Partnership Act. Section 142(b)

of the JTPA states that such wages and

stipends are not considered as income

for any Federal or Federally-assisted

program based on need, other than those

under the Social Security Act.

Comment: HUD should strike the

requirement that applicants may not

commit or expend State, local or other

funds to undertake property acquisition,

rehabilitation or construction until a

grant agreement is executed by HUD.

[one city housing agency]

Response: This provision only applies

when Youthbuild funds have been

requested to acquire, rehabilitate, or

newly construct a property. The

purpose is to allow HUD to conduct an

environmental review on the property,

which the statute requires to be done

before an application can be approved.

Applicants that expend their own or

other funds on a proposed property are

in jeopardy of using their funds on a

property that could potentially be

deemed ineligible as a result of the

environmental review. If an applicant

proposes to fund the acquisition,

rehabilitation, or new construction

entirely with non-Youthbuild funds,

there is no restriction on using those

funds before notification of grant award.

Section 585.307(a)(3) has been changed

to clarify this distinction.

Comment: The provision that makes

Davis-Bacon prevailing wage rates not

applicable to program participants

should be expanded to include state and

local wage rate restrictions. [one city

housing agency]

Response: The provision making

Davis-Bacon wage rates inapplicable to

Youthbuild trainees is required by a

specific statutory provision. HUD has no

authority to declare State and local wage

regulations inapplicable on the basis of

an employee’s status as a Youthbuild

trainee. However, in this final rule, the

Department has revised the provision in

the proposed rule regarding the need to

apply Davis-Bacon prevailing wage rates

to Youthbuild trainees where additional

Federal assistance is provided.

Subsequent to the issuance of the

proposed rule, the Department’s

attention was drawn to a decision of the

United States Department of Labor’s

Wage Appeals Board in in the matter of
9736 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

100 Court Ave. Street Project, Kurtz

Building, UDAG Proj. No. B–83–AA–

19–0020, Des Moines, Iowa (WAB Case

No. 88–9, March 16, 1990). That case

concerned a project involving training

under the Job Training Partnership Act

(JTPA), which excludes trainees from

Davis-Bacon requirements, as well as

assistance under the Urban

Development Action Grant (UDAG)

program, which has its own DavisBacon provisions. The Wage Appeals

Board determined that JTPA’s statutory

Davis-Bacon exclusion for trainees

applied to exclude a JTPA trainee from

Davis-Bacon rate requirements even

where the trainee was employed on the

UDAG project. Since the Housing and

Community Development Act of 1992

applies the JTPA Davis-Bacon provision

(and its exclusion of trainees from

Davis-Bacon rates) to the Youthbuild

program, the Department has concluded

that the Wage Appeals Board’s ruling is

applicable to the Youthbuild program.

Accordingly, the final rule provides that

Davis-Bacon wage rates are not

applicable to Youthbuild trainees,

regardless of whether other Federal

assistance is involved. However, neither

the JTPA provision nor the Wage

Appeals Board decision excludes

trainees from wage rates other than

Davis-Bacon wage rates. Therefore, the

rule notes that Youthbuild trainees must

be paid HUD-determined wage rates on

public and Indian housing work where

those rates would be applicable to

trainees under the United States

Housing Act of 1937 (e.g., on work such

as ‘‘non-routine maintenance’’).

However, where HUD wage rates are

applicable to trainees, the rates

determined by HUD to apply to

Youthbuild trainees will be trainee wage

rates rather than journeyperson rates.

Comment: Limitations on profit

imposed on housing should not apply to

projects which are owned by

governmental agencies. [one city

housing agency]

Response: This is a statutory

restriction, that has been interpreted to

apply only when construction is

financed, in whole or in part, with

Youthbuild funds. (See § 585.309)

Comment: The rule should include all

of the essential purposes of the program

that were stated in the legislation. [one

nonprofit organization]

Response: The purpose of the

Youthbuild program in § 585.2 has been

revised accordingly.

Comment: HUD should state that

construction site supervisors essential

for the training of the participants are

not considered construction or

rehabilitation costs. [one nonprofit

organization]

Response: Section 585.306 has been

added to make that clarification.

Comment: Related facilities which

stand alone should be considered

appropriate construction sites for

trainees. [one nonprofit organization]

Response: HUD construes the term

‘‘housing and related facilities’’ to mean

residential property, which does not

include stand-alone facilities that do not

include housing.

Comment: The definition of the term

‘‘self-sufficiency’’ should be providing

for oneself and one’s immediate

‘‘dependents,’’ not ‘‘family.’’ [one

nonprofit organization]

Response: The definition of ‘‘selfsufficiency’’ has been deleted from the

final rule.

Comment: In the list of ‘‘Other

activities’’ as delineated in the

discussion of program components,

‘‘short-term placement with private

contractors as internships to enhance

the participant’s preparation for

unsubsidized employment’’ should be

added. [one nonprofit organization]

Response: The list of ‘‘other

activities’’ is not exclusive, and a variety

of other activities can be done under

this heading.

Comment: The Corporation for

National and Community Service

should be added to the list of other

Federal entities from which applicants

are encouraged to enlist support. [one

nonprofit organization]

Response: The list of potential

resources in § 585.105 comes from the

statute, and is not intended to be a

comprehensive list or limitation of all

possible resources that can be used in

the program.

Comment: The requirements for the

Performance Evaluation Report and

Quarterly Progress Report should

include additional information. [one

nonprofit organization]

Response: All specific reporting

elements of the required reports have

been deleted from the Rule and are now

contained in Youthbuild Program

Reports (HUD–40201).

Comment: Additional points should

be given for counseling and leadership

development services; the points for

housing resources and the housing

priority points seem excessive; the

requirements for public support are not

realistic. [one nonprofit organization]

Response: The rule has been amended

to state only the statutory rating criteria.

The point awards and subcategories of

statutory and administratively imposed

criteria will be announced for each

competition in the NOFA for that fiscal

year.

Comment: The discussion of

Geographic Diversity provides that

lower ranked applications will be

selected if any of the 10 HUD Regions

receive substantially fewer awards; this

language does not reflect the differences

in need and interest between the HUD

regions. [one nonprofit organization]

Response: HUD regions have been

abolished under the Department’s recent

reorganization. HUD reserves the right

to invoke this provision to ensure

fairness and meet the needs of

distressed communities.

Other Matters

a. Environmental Impact. A Finding

of No Significant Impact with respect to

the environment for this rule 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. The Finding of No Significant

Impact is available for public inspection

between 7:30 a.m. and 5:30 p.m.

weekdays in the Office of the Rules

Docket Clerk, Office of the General

Counsel, Department of Housing and

Urban Development, Room 10276, 451

Seventh Street, S.W., Washington, D.C.

20410.

b. Regulatory Flexibility Act. The

Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)), has reviewed this rule before

publication and by approving it certifies

that this rule would not have a

significant economic impact on a

substantial number of small entities

because the Youthbuild program affects

primarily economically disadvantaged

young adults by providing assistance for

a wide range of multi-disciplinary

activities to assist those young adults.

The opportunities are designed to help

disadvantaged young adults who have

dropped out of high school to obtain the

education and employment skills

necessary to achieve economic selfsufficiency and develop leadership

skills and a commitment to community

development in low-income

communities. A related objective of the

program is to add to the supply of

permanent affordable housing for

homeless persons and members of lowand very low-income families by giving

young adults participating in the

program meaningful on-site training

experiences in construction and

rehabilitation of housing. It is

anticipated that fewer than 120 projects

will receive assistance under this

program.

c. Executive Order 12612, Federalism.

The General Counsel, as the Designated

Official under section 6(a) of Executive

Order 12612, Federalism, has

determined that this rule does not have

‘‘federalism implications’’ because it
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9737

does not have substantial direct effects

on the States (including their political

subdivisions), or on the distribution of

power and responsibilities among the

various levels of government.

d. Executive Order 12606, the Family.

The General Counsel, as the Designated

Official under Executive Order 12606,

the Family, has determined that some of

the policies of this rule would have a

potential significant impact on family

formation, maintenance, and general

well-being. The expected expansion of

the housing supply for homeless and

low- and very-low income persons and

the provision of opportunities to

economically disadvantaged young

adults to enhance their education and

employment skills will provide a

positive impact on the family

maintenance and general well-being.

However since the impact on the family

is beneficial and the rule involves very

little HUD discretion, no further review

is necessary.

e. Semi-Annual Agenda of

Regulations. This rule was listed as item

number 1843 in the Department’s

Semiannual Agenda of Regulations

published on November 14, 1994 (59 FR

57632, 57663) in accordance with

Executive Order 12866 and the

Regulatory Flexibility Act.

f. Catalog of Federal Domestic

Assistance. The Catalog of Federal

Domestic Assistance Program number

assigned to this program is 14.243.

List of Subjects in 24 CFR Part 585

Grant programs—housing and

community development, Homeless,

Low- and very low-income families,

Reporting and record keeping

requirements.

Accordingly, Subchapter C of Chapter

V of Title 24 of the Code of Federal

Regulations is amended to add a new

part 585, consisting of subparts A

through F, to read as follows:

PART 585—YOUTHBUILD PROGRAM

Subpart A—General

Sec.

585.1 Authority.

585.2 Program purpose.

585.3 Program components.

585.4 Definitions.

Subpart B—Application and Grant Award

Process

585.100 Notice of funds availability.

585.101 Emergency funds.

585.102 Application requirements.

585.103 Combined planning and

implementation applications.

585.104 Selection criteria.

585.105 Support of other Federal, State,

local or private entities.

585.106 Selection process.

585.107 Prohibition of disclosure.

Subpart C—Youthbuild Planning Grants

585.201 Purpose.

585.202 Award limits.

585.203 Grant term.

585.204 Locational considerations.

585.205 Eligible activities.

Subpart D—Youthbuild Implementation

Grants

585.301 Purpose.

585.302 Award limits.

585.303 Grant term.

585.304 Locational considerations.

585.305 Eligible activities.

585.306 Designation of costs.

585.307 Environmental procedures and

standards.

585.308 Relocation assistance and real

property acquisition.

585.309 Project-related restrictions

applicable to Youthbuild residential

rental housing.

585.310 Project-related restrictions

applicable to Youthbuild transitional

housing for the homeless.

585.311 Project-related restrictions

applicable to Youthbuild

homeownership housing.

585.312 Wages, labor standards, and

nondiscrimination.

585.313 Labor standards.

Subpart E—Administration

585.401 Recordkeeping by recipients.

585.402 Grant agreement.

585.403 Reporting requirements.

585.404 Program changes.

585.405 Obligation and deobligation of

funds.

585.406 Primarily religious organizations.

Subpart F—Applicability of Other Federal

Requirements

585.501 Application of OMB Circulars.

585.502 Certifications.

585.503 Conflict of interest.

585.504 Use of debarred, suspended, or

ineligible contractors.

Authority: 42 U.S.C. 3535(d) and 8011.

Subpart A—General

§ 585.1 Authority.

(a) General. The Youthbuild program

is authorized under subtitle D of title IV

of the National Affordable Housing Act

(42 U.S.C. 8011), as added by section

164 of the Housing and Community

Development Act of 1992 (Pub. L. 102–

550).

(b) Authority restriction. No provision

of the Youthbuild program may be

construed to authorize any agency,

officer, or employee of the United States

to exercise any direction, supervision,

or control over the curriculum, program

of instruction, administration, or

personnel of any educational

institution, school, or school system, or

over the selection of library resources,

textbooks, or other printed or published

instructional materials used by any

educational institution or school system

participating in a Youthbuild program.

§ 585.2 Program purpose.

The purposes of the Youthbuild

program are:

(a) To provide economically

disadvantaged young adults with

opportunities to obtain education,

employment skills and meaningful onsite work experience as a service to their

communities and a means to achieve

self-sufficiency;

(b) To foster the development of

leadership skills and commitment to

community; and

(c) To expand the supply of

permanent affordable housing for

homeless and low- and very low-income

persons by providing planning grants

for program design and implementation

grants for carrying out a Youthbuild

Program.

§ 585.3 Program components.

A Youthbuild implementation

program uses comprehensive and multidisciplinary approaches designed to

prepare young adults who have dropped

out of high school for educational and

employment opportunities by

employing them as construction trainees

on work sites for housing designated for

homeless persons and low- and very

low-income families. A Youthbuild

planning grant is designed to give

recipients sufficient time and financial

resources to develop a comprehensive

Youthbuild program that can be

effectively implemented. Youthbuild

programs must contain the three

components described in paragraphs (a),

(b) and (d) of this section. Other

activities described in paragraph (c) of

this section are optional:

(a) Educational Services, including:

(1) Services and activities designed to

meet the basic educational needs of

participants. For example, a Youthbuild

program may include basic skills

instruction and remedial education,

bilingual education for individuals with

limited English proficiency, secondary

educational services and activities

designed to lead to the attainment of a

high school diploma or its equivalency

(GED), or counseling and assistance in

attaining post-secondary education and

required financial aid;

(2) Vocational classroom courses

geared to construction terminology and

concepts; and

(3) Strategies to coordinate with local

trade unions and apprenticeship

programs where possible.

(b) Leadership Training, Counseling

and Other Support Activities, including:

(1) Activities designed to develop

employment and leadership skills,

including support for youth councils;
9738 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

(2) Counseling services to assist

trainees in personal, health, housing,

child care, family or legal problems and/

or referral services to appropriate social

service resources;

(3) Support services and stipends

necessary to enable individuals to

participate in the program and, for a

period not to exceed 12 months after

completion of training, to assist

participants through continued support

services;

(4) Job development and placement

activities and post-graduation follow-up

assistance; and

(5) Pre-employment training plan

aimed at developing job seeking skills.

(c) Other activities. A local program

may be designed to include other,

special activities such as:

(1) Entrepreneurial training and

courses in small business development;

(2) Assistance to correct learning

disabilities; or

(3) Drivers’ education courses.

(d) On-site training, through actual

housing rehabilitation and/or

construction work. This component

must include:

(1) Access to housing sites where

construction/ rehabilitation work is

being carried out;

(2) Work site training plan for a

closely supervised construction site;

(3) Construction or rehabilitation plan

and timetable; and

(4) Approaches to work site safety.

(e) The Youthbuild implementation

program must be structured so that 50

percent of each full-time participant’s

time is spent in educational services

and activities [paragraphs (a), (b), and

(c) of this section] and 50 percent is

spent in on-site training [paragraph (d)

of this section]. Youthbuild planning

grant applications must contain

strategies, plans and approaches to be

used during the planning process to

ultimately implement these program

requirements.

§ 585.4 Definitions.

As used in this part:

1937 Act means the United States

Housing Act of 1937.

1992 Act means the Housing and

Community Development Act of 1992.

Access to housing applies to

Youthbuild implementation grants

required to document that the program

has access to the housing project(s) for

young adult on-site training, e.g.

program participants have permission to

work on the housing site.

Adjusted income has the meaning

given the term ‘‘adjusted income’’ in

section 3(b) of the United States

Housing Act of 1937.

Applicable residential rental housing

quality standards shall mean those

standards of the applicable HUD or

other Federal, State or local program

providing assistance for residential

rental housing involved in a Youthbuild

implementation grant as used under

section 455(a), Youthbuild Program

Requirements, of the Act.

Applicant means a public or private

nonprofit agency, including:

(1) A community-based organization;

(2) An administrative entity

designated under section 103(b)(1)(B) of

the Job Training Partnership Act;

(3) A community action agency;

(4) A State or local housing

development agency;

(5) A community development

corporation;

(6) A public and/or Indian housing

authority and resident management

corporations, resident councils and

resident organizations;

(7) A State or local youth service or

conservation corps; and

(8) Any other entity (including States,

units of general local government, and

Indian Tribes) eligible to provide

education and employment training.

Combined Youthbuild application

means the submission by an applicant

of a single application to HUD for a

planning and implementation grant

request for one Youthbuild program.

Community Based Organization

means a private nonprofit organization

that:

(1) Maintains, through significant

representation on the organization’s

governing board or otherwise,

accountability to low-income

community residents and, to the extent

practicable, low-income beneficiaries of

programs receiving assistance under this

subtitle; and

(2) Has a history of serving the local

community or communities where a

program receiving assistance under this

subtitle is located.

Consolidated Plan means the

document that is submitted to HUD that

serves as the planning documents

(comprehensive housing affordability

strategy and community development

plan) of the jurisdiction and an

application for funding under any of the

Community Planning and Development

formula grant programs which is

prepared in accordance with the process

described in 24 CFR part 91.

Full-Time Participation for program

eligible participants is limited to not

less than 6 months and not more than

24 months.

Graduates are those participants who

have completed the full-time education/

on-site training components of a

Youthbuild program and who are

eligible to take advantage of meaningful

opportunities in continued education,

in owning their own businesses, in

meaningful employment or in other

means by which the participant can

attain economic self-sufficiency.

Homeless Act means the Stewart B.

McKinney Homeless Assistance Act, as

amended, (42 U.S.C. 11301 et seq.).

Homeless individual has the meaning

given the term in section 103 of the

Stewart B. McKinney Homeless

Assistance Act.

Housing development agency means

any agency of a State or local

government, or any private nonprofit

organization that provides housing for

homeless or low-income families.

Indian Tribe has the same meaning

given such term in section 102(a)(17) of

the Housing and Community

Development Act of 1974 [42 U.S.C.

5302(a)(17)].

Individual who has dropped out of

high school means an individual who is

neither attending any school nor subject

to a compulsory attendance law and

who has not received a secondary

school diploma or a certificate of

equivalency for such diploma.

Institution of Higher Education has

the meaning given the term in section

120(a) of the Higher Education Act of

1965.

JTPA means the Job Training

Partnership Act (P.L. 102–235), as

amended.

Limited-English proficiency has the

meaning given the term in section 7003

of the Bilingual Education Act.

Low-income Family has the meaning

given the term in section 3(b) of the

United States Housing Act of 1937.

Offender means any adult or juvenile

with a record of arrest or conviction for

a criminal offense.

Participant means:

(1) An individual who is:

(i) 16 to 24 years of age, inclusive, at

time of enrollment;

(ii) A very low-income individual or

a member of a very low-income family;

and

(iii) An individual who has dropped

out of high school.

(2) An exception of not more than 25

percent of all full-time participants is

permitted for young adults who do not

meet the program’s income or

educational requirements but who have

educational needs despite attainment of

a high school diploma or its equivalent.

Private Nonprofit Organization means

any private nonprofit organization that:

(1) Is organized and exists under

Federal, State, local, or tribal law;

(2) Has no part of its earnings inuring

to the benefit of any individual,

corporation, or other entity;

(3) Has a voluntary board;

(4) Has an accounting system or has

designated a fiscal agent in accordance
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9739

with requirements established by HUD;

and

(5) Practices nondiscrimination in the

provision of assistance.

Project-related restrictions mean

Youthbuild housing restrictions

applicable only in cases where a

Youthbuild implementation grant is

providing assistance to residential

rental, transitional or homeownership

housing projects for specific costs

relating to property acquisition,

architectural and engineering fees,

construction, rehabilitation, operating

costs, or replacement reserves.

Recipient means any entity that

receives assistance under this part.

Related facilities include cafeterias or

dining halls, community rooms or

buildings, child care centers,

appropriate recreation facilities, and

other essential service facilities that are

physically attached to the housing to be

constructed or rehabilitated. Related

facilities which stand alone are not

appropriate construction sites for

trainees.

Secretary means the Secretary of

Housing and Urban Development.

State means any of the several States,

the District of Columbia, the

Commonwealth of Puerto Rico, the

Commonwealth of the Northern Mariana

Islands, the Virgin Islands, Guam,

American Samoa, the Trust Territories

of the Pacific Islands, or any other

territory or possession of the United

States.

Title IV means title IV of the National

Affordable Housing Act, as amended (42

U.S.C. 1437).

Transitional housing means a project

that has as its purpose facilitating the

movement of homeless individuals and

families to permanent housing within a

reasonable amount of time (usually 24

months). Transitional housing includes

housing primarily designed to serve

deinstitutionalized homeless

individuals and other homeless

individuals with mental or physical

disabilities and homeless families with

children.

Useful life shall mean a period of 10

years upon construction completion and

issuance of an occupancy permit

applicable to a residential rental,

transitional or homeownership property

acquired, constructed or rehabilitated

(including architectural and engineering

fees), or maintained (i.e., operating costs

or replacement reserves), in whole or in

part, with Youthbuild implementation

grant funds (as used in section 455(a),

Youthbuild Program Requirements, of

the Act).

Very low-income family has the

meaning given the term in section 3(b)

of the United States Housing Act of

1937.

Subpart B—Application and Grant

Award Process

§ 585.100 Notice of funds availability.

When funds are made available for

assistance, HUD will publish a notice of

funds availability (NOFA) in the

Federal Register in accordance with the

requirements of 24 CFR part 12. The

notice will:

(a) Give the location for obtaining

application packages, which will

provide the application requirements

and specify the application deadline for

the competition;

(b) State the amount of funding

available and the kind of grants to be

funded under the notice;

(c) Describe the factors relative to

each selection criteria and the weight or

relative importance given to each

criteria as they will be applied to the

competition announced in the notice;

and

(d) Provide other appropriate program

information and guidance.

§ 585.101 Emergency funds.

(a) The Secretary may reserve up to

five percent of each Fiscal Year’s

program funds for implementation

grants for emergency purposes to

respond quickly to vital needs to

stimulate the provision of services to

disadvantaged young adults and to

expand the supply of affordable housing

for the homeless and low- and very lowincome persons.

(b) Unforeseen emergency needs may

result from natural and other disasters

including hurricanes, tornadoes,

earthquakes, fires, floods, etc. Other

unpredictable and sudden

circumstances, such as civil

disturbances, may affect the provision of

services to young adults or result in

housing deprivation and increased

demand for housing for low-income

persons and the homeless. The

Secretary will determine whether the

emergency is of sufficient severity to

warrant use of Youthbuild funds.

(c) The Secretary will establish a

separate and expedited process to award

funds for emergency purposes. Specific

instructions governing the use of these

funds may be published by notice in the

Federal Register, as necessary. If the setaside funds are not used for emergency

purposes by the time that awards for

each fiscal year’s funds are to be

announced, these funds will be made

available for the general implementation

grant competition for that year.

§ 585.102 Application requirements.

Applications for grants must be

submitted in the form prescribed by

HUD in the application kit, must meet

the requirements of this part, and must

be submitted within the time period

established by HUD in the NOFA or

application kit. HUD reserves the right

to reject applications from any applicant

with an outstanding obligation to HUD

that is in arrears or for which a payment

schedule has not been agreed to, or

whose response to an audit finding is

overdue or unsatisfactory. Applicants

should refer to the Youthbuild

application package for further

instructions.

(Approved by the Office of Management and

Budget under control number 2506–0142)

§ 585.103 Combined planning and

implementation applications.

(a) If permitted in the NOFA,

applicants may apply for both types of

grants using one application. In such

competitions, the application package

will provide instructions on submitting

a combined Youthbuild application.

Combined planning and

implementation grant applications will

compete separately during the

competition, based on the criteria

defined in the NOFA. In such cases, an

implementation grant request will be

disqualified from the implementation

grant competition if its companion

planning grant request is not selected

for the planning grant competition.

However, any implementation grant

request failing to be selected under the

implementation grant competition will

not cause its companion planning grant

application to be disqualified from the

planning grant competition provided

the planning grant qualifies and HUD

has determined that the activities

proposed in the planning grant request

stand alone and are not contingent upon

activities proposed in the

implementation grant request.

(b) When both parts of a combined

application are approved, the receipt of

the implementation grant award is

conditioned upon the successful

completion of the eligible activities

funded by the planning grant and

submission of the recipient’s plan and

performance evaluation report to HUD

for approval. Upon HUD approval,

reserved implementation grant funds

would be released to the recipient in

accordance with the grant agreement.

(Approved by the Office of Management and

Budget under control number 2506–0142)

§ 585.104 Selection criteria.

HUD will review applications and

assign rating scores based upon the

following criteria, which will be
9740 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

described in more detail in the notice

published in the Federal Register for

each funding competition:

(a) Capability.

(b) Need.

(c) Program quality and feasibility.

(d) Program resources.

(e) Housing program priority points

(Implementation only).

(f) Other factors: HUD may use

additional factors to rate an application

as defined in the NOFA for an

individual competition.

§ 585.105 Support of other Federal, State,

local or private entities.

Applicants are encouraged to use

existing housing programs administered

by HUD or other Federal, State, local or

private housing programs as part of their

Youthbuild programs. Use of other

Federal, State, local or private funds for

vocational, adult and bilingual

education programs or for job training

under the JTPA Act and the Family

Support Act of 1988 is also encouraged.

The selection process for Youthbuild

grants described in a NOFA provides for

applicants to receive points where grant

applications contain evidence of

proposed plans to finance, in whole or

in part, Youthbuild activities from other

Federal, State, local, or private sources.

§ 585.106 Selection process.

(a) Clarification of Application

Information: Procedures for clarifying

application information or curing

deficiencies in technical information

that does not affect an applications’s

score will be explained in the notice of

funds availability. For implementation

applications such deficiencies include,

but are not limited to:

(1) Failure to structure the proposed

Youthbuild program so that fifty percent

of the time spent by program

participants is devoted to educational

services and activities and fifty percent

to on-site training;

(2) Failure to target the outreach and

recruitment efforts to be used by the

program to disadvantaged young adults

between the ages of 16 and 24 years;

(3) Failure to identify the housing to

be used for the on-site training;

(4) Incomplete documentation

showing that the applicant has obtained

access to the housing site(s) if the

applicant does not own the site(s).

(5) Failure to designate the housing to

be produced in conjunction with the

program for the use of the homeless and

low- and very low-income families.

(b) Potential environmental

disqualification: HUD reserves the right

to disqualify an implementation

application where one or more

environmental thresholds are exceeded

and it is determined that the

environmental review cannot be

conducted and satisfactorily completed

by HUD within the HUD review period.

(Refer to § 585.307, Environmental

procedures and standards, for further

information.)

(c) Selecting applicants. HUD will

rank applications according to total

points assigned. Applications will be

selected for funding from the rank order.

However, HUD reserves the right to

select lower rated applications if

necessary to achieve geographic

diversity.

(d) Breaking tie scores. The NOFA for

the funding round will indicate which

selection criteria will be used to break

a tie if two or more applications receive

the same number of points and

sufficient funds are not available to fund

all such applications.

(e) Reduction in requested grant

amount. HUD will approve an

application for an amount lower than

the amount requested or adjust line

items in the proposed budget within the

amount requested (or both) if it

determines that:

(1) The amount requested for one or

more eligible activities is not supported

in the application or is unreasonable

related to the service or activity

proposed for the population to be served

or the housing to be provided;

(2) An activity proposed for funding

does not qualify as an eligible activity;

(3) The amount requested exceeds the

cost limitation established for a

Youthbuild grant; or

(4) There are insufficient funds

remaining to fund the applicant’s

original grant request.

(f) Notification of approval or

disapproval. After completion of the

ranking and selection of applications,

but no later than four months after the

date applications are due under the

applicable NOFA, HUD will notify the

selected applicants and the applicants

that have not been selected. HUD’s

notification to the applicant of the grant

award amount, based on the approved

application, will constitute a

preliminary approval by HUD, subject to

HUD and recipient execution of a grant

agreement to initiate program activities.

§ 585.107 Prohibition of disclosure.

The selection process for assistance

under this part is subject to the

prohibition of disclosure of covered

information regarding the selection

process, as described in 24 CFR part 4.

Applicants for or recipients of

assistance who have received covered

selection information may be subject to

appropriate sanctions.

Subpart C—Youthbuild Planning

Grants.

§ 585.201 Purpose.

HUD will award Youthbuild planning

grants to eligible applicants for the

purpose of developing Youthbuild

programs in accordance with subtitle D

of title IV of the National Affordable

Housing Act. Applications will be

selected in a national competition in

accordance with the selection process

described in the current NOFA.

§ 585.202 Award limits.

Maximum awards. The maximum

amount of a Youthbuild planning grant

is $150,000 unless a lower amount is

established in the NOFA. HUD may for

good cause approve a grant in a higher

amount.

§ 585.203 Grant term.

Funds awarded for planning grants

are expected to be used within 12

months of the effective date of the

planning grant agreement. The award of

a Youthbuild planning grant does not

obligate HUD to fund the

implementation of the program upon

completion of the approved planning

activities (unless the companion

implementation grant was submitted as

a combined application and funded in

the implementation grant competition).

§ 585.204 Locational considerations.

HUD will not approve multiple

applications for planning grants in the

same jurisdiction unless it determines

that the jurisdiction is sufficiently large

to justify approval of more than one

application.

§ 585.205 Eligible activities.

Planning grant activities to develop a

Youthbuild program may include:

(a) The undertaking of studies and

research efforts to determine the

feasibility and need for a Youthbuild

program in a selected location including

whether a proposed program can meet

the education and training needs of

young adults, aid in the expansion of

affordable housing to meet the needs of

the community, and achieve financial

feasibility;

(b) The formation and establishment

of a consortium among Federal, State, or

local training and education programs,

service providers, housing programs and

providers including but not limited to

homeless providers, housing owners,

developers, and other organizations

necessary for the establishment of a

Youthbuild program;

(c) The preliminary identification and

potential selection of housing for the

Youthbuild program including an

assessment of the type of housing
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9741

program to be used and the method by

which program participants will have

access to the housing project;

(d) The planning and identification of

resources required for basic skills

instruction and education, job training

and job development, leadership and

employment skills development,

counseling, referral, and other related

support services that will be provided as

part of the Youthbuild program;

(e) The preparation of an application

for an implementation grant.

(f) Preliminary architectural and

engineering (A & E) work for the

Youthbuild proposed housing

including:

(1) The development of cost and time

estimates associated with the amount of

work to be done through new

construction or the rehabilitation of

existing housing;

(2) Technical studies to evaluate

environmental problems and to

determine whether mitigation is feasible

on the potential site; and

(3) The identification and initiation of

the permit process required to

commence work on the selected site;

(g) The planning and development of

multi-disciplinary educational and

employment training curricula,

leadership development training,

counseling, and other supportive

services and activities for the

Youthbuild program including the

identification and training of staff

assigned to each program component;

(h) The identification and

establishment of relationships with

local unions, apprenticeship programs,

housing owners, local employers and

public or private community

organizations for job training,

development, and placement

opportunities;

(i) Administration. Youthbuild funds

for administrative costs may not exceed

15 percent of the total amount of

Youthbuild program and project costs or

such higher percentage as HUD

determines is necessary to support

capacity development by a private

nonprofit organization.

Subpart D—Youthbuild Implementation

Grants

§ 585.301 Purpose.

HUD will award Youthbuild

implementation grants to eligible

applicants for the purpose of carrying

out Youthbuild programs in accordance

with subtitle D of title IV of the National

Affordable Housing Act. Applications

will be selected in a national

competition in accordance with the

selection process described in the

current NOFA.

§ 585.302 Award limits.

Maximum awards. The maximum

award for a Youthbuild implementation

grant will be defined in the NOFA for

each competition and may vary by

competition. HUD may for good cause

approve a grant in a higher amount than

the specified limit.

§ 585.303 Grant term.

Funds awarded for implementation

grants are expected to be used within 30

months of the effective date of the

implementation grant agreement.

§ 585.304 Locational considerations.

Each application for an

implementation grant may only include

activities to carry out one Youthbuild

program, i.e., to start a new Youthbuild

program or to fund new classes of

Youthbuild participants for an existing

program. The same applicant

organization may submit more than one

application in the current competition if

the proposed programs are in different

jurisdictions. HUD will not approve

multiple applications for

implementation grants in the same

jurisdiction unless it determines that the

jurisdiction is sufficiently large to

justify approval of more than one

application.

§ 585.305 Eligible activities.

Implementation grant activities to

conduct a Youthbuild program may

include:

(a) Acquisition of housing and related

facilities to be used for the purposes of

providing homeownership, residential

rental housing, or transitional housing

for the homeless and low- and very lowincome persons and families;

(b) Architectural and engineering

work associated with Youthbuild

housing;

(c) Construction of housing and

related facilities to be used for the

purposes of providing homeownership,

residential rental housing, or

transitional housing for the homeless

and low- and very low-income persons

and families;

(d) Rehabilitation of housing and

related facilities to be used for the

purposes of providing homeownership,

residential rental housing, or

transitional housing for the homeless

and low- and very low-income persons

and families;

(e) Operating expenses and

replacement reserves for the housing

assisted in the Youthbuild program;

(f) Relocation payments and other

assistance required to comply with

§ 585.308, legal fees, and construction

management;

(g) Outreach and recruitment

activities, emphasizing special outreach

efforts to be undertaken to recruit

eligible young women (including young

women with dependent children);

(h) Education and job training

services and activities including work

experience, basic skills instruction and

remedial education, bilingual education;

secondary education leading to the

attainment of a high school diploma or

its equivalent; counseling and assistance

in attaining post-secondary education

and required financial aid;

(i) Wages, benefits and need-based

stipends provided to participants;

(j) Leadership development,

counseling, support services, and

development of employment skills;

(k) Defraying costs for the ongoing

training and technical assistance needs

of the recipient that are related to

developing and carrying out a

Youthbuild program;

(l) Job placement (including

entrepreneurial training and business

development), counseling, and support

services for a period not to exceed 12

months after completion of training to

assist participants; and

(m) Administration. Youthbuild funds

for administrative costs may not exceed

15 percent of the total amount of

Youthbuild program and project costs or

such higher percentage as HUD

determines is necessary to support

capacity development by a private

nonprofit organization.

§ 585.306 Designation of costs.

The following budget items are to be

considered training or other costs under

the Youthbuild implementation grant

and should not be considered costs

associated with acquisition,

rehabilitation, or new construction for

the purposes of §§ 585.307, 585.309,

585.310, and 585.311.

(a) Trainees’ tools and clothing.

(b) Participant stipends and wages.

(c) On-site trainee supervisors.

(d) Construction management.

(e) Relocation costs.

(f) Legal fees.

(g) Clearance and demolition.

§ 585.307 Environmental procedures and

standards.

(a) Environmental procedures.

Applicants are encouraged to select

hazard-free and problem-free properties

for their Youthbuild projects.

Environmental procedures apply to

HUD approval of implementation grants

when the applicant proposes to use

Youthbuild funds to cover any costs for

the lease, acquisition, rehabilitation, or

new construction of real property that is

proposed for housing project

development. Environmental

procedures do not apply to HUD
9742 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

approval of implementation grants

when applicants propose to use their

Youthbuild funds solely to cover any

costs for classroom and/or on-the-job

construction training and supportive

services. For those applicants that

propose to use their Youthbuild funds

to cover any costs of the lease,

acquisition, rehabilitation, or new

construction of real property, the

applicant shall submit all relevant

environmental information in its

application to support HUD decisionmaking in accordance with the

following environmental procedures

and standards.

(1) Before any Youthbuild

implementation application that

requests funds for acquisition,

rehabilitation, or construction can be

selected for funding, HUD shall

determine whether any environmental

thresholds are exceeded in accordance

with 24 CFR part 50, which implements

the National Environmental Policy Act

(NEPA) and the related Federal

environmental laws and authorities

listed under 24 CFR 50.4.

(i) If HUD determines that one or

more of the thresholds are exceeded,

HUD shall conduct a compliance review

of the issue and, if appropriate, establish

mitigating measures that the applicant

shall carry out for the property;

(ii) In performing its review, HUD

may use previously issued

environmental reviews prepared by

local, State, or other Federal agencies for

the proposed property;

(iii)(A) The application for the

Youthbuild implementation grant shall

provide HUD with:

(1) Applicant documentation for

environmental threshold review; and

(2) Any previously issued

environmental reviews prepared by

local, State, or other Federal agencies for

the proposed property.

(B) The applicant is encouraged to

contact the local community

development agency to obtain any

previously issued environmental

reviews for the proposed property as

well as for other relevant information

that can be used in the applicant

documentation for the environmental

threshold review. In using previous

reviews by other sources, HUD must,

however, conduct the environmental

analysis and prepare the environmental

review and be responsible for any

required environmental findings.

(2) HUD reserves the right to

disqualify any application where one or

more environmental thresholds are

exceeded if HUD determines that the

compliance review cannot be conducted

and satisfactorily completed within the

HUD review period for applications.

(3) If Youthbuild funds are requested

for acquisition, rehabilitation, or

construction, applicants are prohibited

from committing or expending State,

local or other funds to undertake

property acquisition (including lease),

rehabilitation or construction under this

program until notification of grant

award.

(b) Environmental thresholds: HUD

shall determine whether a NEPA

environmental assessment is required.

Also, HUD shall determine whether the

proposed property triggers thresholds

for the applicable Federal

environmental laws and authorities

listed under 24 CFR 50.4 as follows:

(1) For minor rehabilitation of a

building and any property acquisition

(including lease), Federal environmental

laws and authorities may apply when

the property is:

(i) Located within designated coastal

barrier resources;

(ii) Contaminated by toxic chemicals

or radioactive materials;

(iii) Located within a floodplain;

(iv) A building for which flood

insurance protection is required;

(v) Located within a runway clear

zone at a civil airport or within a clear

zone or accident potential zone at a

military airfield; or

(vi) Listed on, or eligible for listing

on, the National Register of Historic

Places; located within, or adjacent to, an

historic district, or is a property whose

area of potential effects includes a

historic district or property.

(2) For major rehabilitation of a

building and also for substantial

improvement in floodplains, in addition

to paragraphs (b)(1) (i) through (vi) of

this section, other Federal

environmental laws and authorities may

apply when the property:

(i) Has significant impact to the

human environment;

(ii) Is a project involving five or more

dwelling units severely noise-impacted;

or

(iii) Affects coastal zone management.

(3) For new construction, conversion

or increase in dwelling unit density, in

addition to paragraphs (b)(1) (i) through

(vi) and paragraphs (b)(2) (i) through

(iii) of this section, other Federal

environmental laws and authorities may

apply when the property:

(i) Is located near hazardous

industrial operations handling fuels or

chemicals of an explosive or flammable

nature;

(ii) Affects a sole source aquifer;

(iii) Affects endangered species; or

(iv) Is located within a designated

wetland.

(c) Qualified data sources. The

environmental threshold information

provided by applicants must be from

qualified data sources. A qualified data

source means any Federal, State, or

local agency with expertise or

experience in environmental protection

(e.g., the local community development

agency; the local planning agency; the

State environmental protection agency;

the State Historic Preservation Officer)

or any other source qualified to provide

reliable information on the particular

property.

(d) Minor rehabilitation means

proposed fixing and repairs:

(1) Whose estimated cost is less than

75 percent of the property value after

completion;

(2) That does not involve changes in

land use from residential to

nonresidential, or from nonresidential

to residential;

(3) That does not involve the

demolition of one or more buildings, or

parts of a building, containing the

primary use served by the property; and

(4) That does not increase unit density

more than 20 percent.

§ 585.308 Relocation assistance and real

property acquisition.

The Youthbuild program is subject to

the provisions of the Uniform

Relocation Assistance and Real Property

Acquisition Policies Act of 1970, as

amended (URA) and implementing

regulations at 49 CFR part 24. HUD

Handbook 1378, Tenant Assistance,

Relocation and Real Property

Acquisition, available from the

Relocation and Real Estate Division at

the address listed in this section,

describes these policies and procedures.

Any occupied property used in a

Youthbuild program is subject to the

URA regardless of the source of the

property or construction funds. The

URA requires recipients to provide

relocation assistance to persons

(families, individuals, businesses, and

nonprofit organizations) that are

displaced as a direct result of

acquisition, rehabilitation or demolition

for an assisted project. Property

occupants who are not displaced also

have certain rights. Therefore, if a

proposed Youthbuild implementation

program involves occupied property,

before submitting the application the

applicant should consult with staff of

the Relocation and Real Estate Division,

Office of Community Planning and

Development, Department of Housing

and Urban Development, Room 7154,

451 Seventh Street, SW, Washington,

DC 20410; telephone: (202) 708–0336.

TDD: (202) 708–1455. Fax: (202) 708–

1744. (These are not toll-free numbers.)
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9743

§ 585.309 Project-related restrictions

applicable to Youthbuild residential rental

housing.

Where the award of a Youthbuild

implementation grant includes the

eligible activities of acquisition,

architectural and engineering fees,

construction, rehabilitation, operating

costs or replacement reserves for

residential rental units, and where the

costs for these activities are to be

funded, in whole or in part, from the

Youthbuild grant award, the recipient

shall be required to comply with the

following Youthbuild project-related

restrictions for a period of not less than

10 years:

(a) Occupancy by low- and very lowincome families. (1) For the 10 year

period of the residential rental

Youthbuild project, the recipient or

rightful owner will be required to

maintain at least a 90 percent level of

occupancy for individuals and families

with incomes less than 60 percent of the

area median income, adjusted for family

size—‘‘the 90 percent category.’’ The

recipient or rightful owner must offer

each available rental unit to the 60

percent of area median income group for

an advertising period of not less than 90

days upon each vacancy occurrence

throughout the 10 year period.

Community-wide advertisements for

tenants of this income group must be

conducted.

(2) In order to maintain the financial

stability of the project and to provide

flexibility in averting long-term

vacancies in the 90 percent category, the

rightful owner is permitted, under

certain circumstances described below,

to execute temporary two year leases

with individuals and families with

incomes between 60 and 80 percent of

the area median income. This temporary

deviation is permitted when no

qualifying tenant (with an income of 60

percent or less of median) leases the

unit upon the end of the 90 day

advertising period. The owner may then

advertise the unit to individuals and

families with incomes less than 80

percent of the area median income,

adjusted for family size, for another

advertisement period of 90 days.

Temporary leases for tenants whose

incomes are between 60 and 80 percent

of the area median income (exclusive of

the 10 percent allowance) shall be

limited to two years. Temporary tenants

are not covered by Youthbuild tenant

protections regarding termination of

tenancy [paragraph (b)(2) of this

section], tenant selection plan

[paragraph (b)(4) of this section] and

tenant participation plan [paragraph (d)

of this section].

(3) The remaining 10 percent of the

units must be made available to and

occupied by low-income families—‘‘the

10 percent category.’’ The income test

must be conducted for both the 90

percent and 10 percent categories only

at time of entry for each unit available

for occupancy.

(b) Tenant protections. Upon

submission of the implementation grant

application, the applicant or rightful

owner of the residential rental units

covered under this paragraph shall

certify to the following tenant

protections:

(1) Lease. As part of the Youthbuild

implementation grant application, the

applicant or rightful owner of the

property shall provide a model lease

containing terms and conditions

acceptable to HUD. The model lease

shall become an addendum to the

executed grant agreement and shall

remain in force for a period of 10 years.

The lease between a tenant and the

owner of residential rental housing shall

be for a period of not less than one year,

unless otherwise mutually agreed to by

the tenant and the owner, and shall

contain such terms and conditions as

HUD determines to be appropriate. Any

change to a lease must be approved by

HUD.

(2) Termination of tenancy. Upon

submission of the implementation grant

application, the applicant or other

rightful owner of the property must

certify that the following restrictions

will be applied to all lease terminations

initiated by the owner. The restrictions

must state that an owner shall not

terminate the tenancy or refuse to renew

the lease of a tenant occupying a

Youthbuild residential rental housing

unit except for serious or repeated

violations of the terms and conditions of

the lease, or for violation of applicable

Federal, State, or local laws, or for other

good cause. Any termination or refusal

to renew the lease must be preceded by

not less than 30 days by the owner’s

service upon the tenant of a written

notice specifying the grounds for the

action. With regard to leases for tenants

in units controlled by public housing

authorities, 24 CFR part 966 shall take

precedence over this provision.

(3) Maintenance and replacements.

Upon submission of the implementation

grant application, the applicant or

rightful owner of Youthbuild residential

rental housing must certify that the

premises will be maintained in

compliance with all applicable housing

quality standards and local code

requirements for the 10 year period.

HUD’s Section 8 housing quality

standards apply when no other public

assistance is involved other than the

Youthbuild grant. In other cases, the

applicable HUD or other Federal, State

or local program guidelines shall apply.

(4) Tenant selection. The applicant or

rightful owner of Youthbuild residential

rental housing must develop and adopt

a tenant selection plan containing

selection policies and criteria that are

consistent with HUD requirements. The

tenant selection plan shall remain in

force for the 10 year period. Upon

submission of the implementation grant

application, the applicant or owner of

the property must certify that the plan

complies with the following HUD

requirements:

(i) The plan is consistent with the

purpose of providing housing for

homeless and very low-income families

and individuals;

(ii) The plan is reasonably related to

program eligibility and the applicant’s

or owner’s ability to perform the

obligations of the lease;

(iii) The plan gives reasonable

consideration to the housing needs of

families that would qualify for a

preference under section 6(c)(4)(A) of

the United States Housing Act of 1937;

(iv) The plan provides for the

selection of tenants from a written

waiting list in the chronological order of

their application, to the extent

practicable, and for the prompt

notification in writing of any rejected

applicant of the grounds for any

rejection; and

(v) The plan acknowledges that a

family holding tenant-based assistance

under section 8 of the United States

Housing Act of 1937 will not be refused

tenancy because of the status of the

prospective tenant as a holder of such

assistance.

(c) Limitation on rental payments.

Upon submission of the implementation

grant application, the applicant or other

rightful owner of Youthbuild residential

rental housing project involved in a

Youthbuild program shall certify that

tenants in each rental unit shall be not

required to pay rent in excess of the

amount provided under section 3(a) of

the United States Housing Act of 1937.

(d) Tenant participation plan. The

Youthbuild program shall require a

tenant participation plan applicable to

the rightful owner of Youthbuild

residential rental housing, provided

such owner is a nonprofit public or

private organization. Upon submission

of the implementation grant application,

the nonprofit owner shall certify that

the tenant participation plan is the plan

to be adopted and followed for tenant

participation in management decisions

for the 10 year period.

(e) Limitations on profit. Youthbuild

residential rental housing projects
9744 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

meeting the requirements of this section

shall be restricted from producing profit

in excess of the following limitations:

(1) Monthly rental limitation. The

aggregate monthly rental for each

eligible project may not exceed the

operating costs of the project (including

debt service, management, adequate

reserves, and other operating costs) plus

a 6 percent return on any equity

investment of the project owner.

(2) Profit limitations on partners. A

nonprofit organization receiving

Youthbuild assistance for a residential

rental housing project shall agree to use

any profit received from the operation,

sale, or other disposition of the project

for the purposes of providing housing

for low- and moderate-income families.

Profit-motivated partners in a nonprofit

partnership may receive:

(i) Not more than a 6 percent return

on their equity investment from project

operations; and

(ii) Upon disposition of the project,

not more than an amount equal to their

initial equity investment plus a return

on that investment equal to the increase

in the Consumer Price Index for the

geographic location of the project since

the time of the initial investment of

such partner in the project.

(f) Restrictions on conveyance.

Conveyance restrictions apply to

Youthbuild residential rental housing

project(s) meeting the requirements of

this section. Ownership of the property

may not be conveyed unless the

instrument of conveyance requires a

subsequent owner to comply with the

same restrictions imposed upon the

original owner for the balance of the 10

year period.

(g) Ten year restriction. The

restrictions listed in paragraphs (a)

through (f) of this section shall remain

in force for a period of not less than 10

years after construction completion and

issuance of an occupancy permit for all

Youthbuild residential rental housing

projects receiving Youthbuild

assistance.

(Approved by the Office of Management and

Budget under control number 2506–0142)

§ 585.310 Project-related restrictions

applicable to Youthbuild transitional

housing for the homeless.

Where the award of a Youthbuild

implementation grant includes the

eligible activities of acquisition,

architectural and engineering fees,

construction, rehabilitation, operating

costs or replacement reserves of

transitional housing units, and where

the costs for these activities are funded,

in whole or in part, with Youthbuild

grant funds, the housing project shall be

required to comply with the following

Youthbuild project-related restrictions:

(a) Limitations on profit. (1)

Youthbuild transitional housing projects

meeting the requirements of this section

shall be restricted from producing profit

in excess of the following limitations:

(i) Monthly rental limitation. The

aggregate monthly rental for each

Youthbuild project may not exceed the

operating costs of the project (including

debt service, management, adequate

reserves, and other operating costs) plus

a six (6) percent return on any equity

investment of the project owner.

(ii) Profit limitations on partners. A

nonprofit organization receiving

Youthbuild assistance for a housing

project shall agree to use any profit

received from the operation, sale, or

other disposition of the project for the

purposes of providing housing for lowand moderate-income families.

(2) Profit-motivated partners in a

nonprofit partnership may receive:

(i) Not more than a six (6) percent

return on their equity investment from

project operations; and

(ii) Upon disposition of the project,

not more than an amount equal to their

initial equity investment plus a return

on that investment equal to the increase

in the Consumer Price Index for the

geographic location of the project since

the time of the initial investment of

such partner in the project.

(b) Restrictions on conveyance.

Conveyance restrictions apply to

Youthbuild transitional housing projects

meeting the requirements of this

section. Ownership of the property may

not be conveyed unless the instrument

of conveyance requires a subsequent

owner to comply with the same

restrictions imposed upon the original

owner for the balance of the 10 year

period.

(c) Program requirements for

Transitional housing. (1) Youthbuild

transitional housing projects meeting

the requirements of this section shall

adhere to the requirements regarding

service delivery, housing standards and

rent limitations applicable to

comparable housing receiving assistance

under the Transitional Housing

component of the Supportive Housing

Program (title IV of the Stewart B.

McKinney Homeless Assistance Act).

(2) The Secretary may waive these

requirements to permit the conversion

of a Youthbuild transitional housing

project to a permanent housing project

only if such housing complies with the

Youthbuild project-related restrictions

for residential rental housing projects

found in § 585.309.

(d) Ten Year Restriction. The

restrictions listed in paragraphs A

through C of this section shall remain in

force for a period of not less than 10

years after construction completion and

issuance of an occupancy permit for a

Youthbuild transitional housing project

receiving Youthbuild assistance.

§ 585.311 Project-related restrictions

applicable to Youthbuild homeownership

housing.

Where the award of a Youthbuild

implementation grant includes the

eligible activities of acquisition,

architectural and engineering fees,

construction, or rehabilitation of

homeownership housing, and where the

costs for these activities are to be

funded, in whole or in part, with

Youthbuild grant funds, the housing

project shall be required to comply with

the following Youthbuild project-related

restrictions:

(a) Program compliance. Each

homeownership project meeting the

requirements of this section shall

comply with the requirements of the

HOPE II or HOPE III programs

authorized under subtitles B or C

respectively of title IV of the National

Affordable Housing Act.

(b) Restrictions on conveyance.

Conveyance restrictions apply to

Youthbuild homeownership housing

projects meeting the requirements of

this part. Ownership of the property

may not be conveyed unless the

instrument of conveyance requires a

subsequent owner to comply with the

same restrictions imposed upon the

original owner for the balance of the 10

year period.

(c) Ten Year Restriction. The

restrictions listed in paragraphs (a) and

(b) of this section shall remain in force

for a period of not less than 10 years

after construction completion and

issuance of an occupancy permit for

Youthbuild homeownership housing

projects meeting the requirements of

this part.

§ 585.312 Wages, labor standards, and

nondiscrimination.

Sections 142 (wages and benefits), 143

(labor standards), and 167

(nondiscrimination) of the Job Training

Partnership Act shall apply to

Youthbuild programs as if the programs

were conducted under the Job Training

Partnership Act. This provision may not

be construed to prevent Youthbuild

recipients from using funds from nonFederal sources to increase wages and

benefits under such programs, if

appropriate.

§ 585.313 Labor standards.

(a) Trainees. Davis-Bacon prevailing

wage rate requirements are not

applicable to trainees on housing
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9745

projects or in training programs assisted

by Youthbuild grant funds, regardless of

whether other Federal assistance is

involved. However, where the trainees’

performance of public and Indian

housing work is subject to HUDdetermined prevailing wage rates under

Section 12 of the United States Housing

Act of 1937, trainees must be paid HUDdetermined wage rates; as a matter of

policy, the wage rates determined by

HUD to apply to Youthbuild trainees

will be the trainee wage rates rather

than journeyperson rates.

(b) Laborers and mechanics other

than Youthbuild Trainees. (1) All

laborers and mechanics (other than

Youthbuild trainees) employed by

contractors or subcontractors in any

construction, alteration or repair,

including painting and decorating, of

housing that is assisted by a Youthbuild

grant shall be paid at rates not less than

those prevailing on similar construction

in the locality, as determined by the

Secretary of Labor in accordance with

the Davis-Bacon Act (40 U.S.C. 276a

through 276a–5). The employment of

such laborers and mechanics on assisted

housing shall be subject to the

provisions of the Contract Work Hours

and Safety Standards Act (40 U.S.C. 327

through 333). Where these requirements

are applicable, recipients, sponsors,

owners, contractors and subcontractors

must comply with all related

Department of Labor and HUD rules,

regulations and requirements.

(2) The labor standards requirements

in paragraph (b)(1) of this section do not

apply where a Youthbuild grant is

provided solely for classroom and/or

on-the-job training and supportive

services for Youthbuild trainees, and the

grant does not include costs for housing

project development involving

acquisition (including lease),

rehabilitation or new construction of

real properties; however, if other

Federal programs provide assistance to

the housing project, labor standards

apply to laborers and mechanics other

than Youthbuild trainees to the extent

required by the other Federal programs.

Applicants need to review applicable

Federal regulations to determine which

relevant requirements apply to their

individual situations.

Subpart E—Administration

§ 585.401 Recordkeeping by recipients.

(a) Each recipient of a planning or

implementation Youthbuild grant award

must keep records that will facilitate an

effective audit to determine compliance

with program requirements and that

fully disclose:

(1) The amount and disposition by the

recipient of the planning or

implementation Youthbuild grants

received, including sufficient records

that document the reasonableness,

accuracy and necessity of each

expenditure;

(2) The amount and disposition of

proceeds, if any, from financing

obtained in connection with the

Youthbuild program, e.g., housing sales

to eligible low-income families,

property sales to other public or private

entities;

(3) The total cost from all sources of

funding for the Youthbuild program

including all educational, training,

counseling, placement, and housing

activities and services;

(4) The amount and nature of any

other assistance, including cash,

property, services, materials, in-kind

contributions or other items contributed

as a condition of receiving an

implementation grant;

(5) Any other proceeds received for,

or otherwise used in connection with,

the Youthbuild program.

(6) Participant information. The

recipient must maintain records on each

Youthbuild participant, including such

information as age, high school drop out

status, income level, gender,

employment status, and racial and

ethnic characteristics.

(7) Housing information. If

Youthbuild grant funds are used for

acquisition, architectural and

engineering fees, construction,

rehabilitation, operating costs or

replacement reserves for housing used

in a Youthbuild program, the recipient

must maintain records on family size,

income, and racial and ethnic

characteristics of families renting or

purchasing Youthbuild properties.

(8) Relocation Assistance and Real

Property Acquisition. The recipient

shall maintain records sufficient to

demonstrate compliance with relocation

assistance and real property acquisition

requirements, as described in Chapter 6

of HUD Handbook 1378, Tenant

Assistance, Relocation and Real

Property Acquisition. See § 585.308.

(b) Implementation grant recipients

must submit reports pursuant to Section

3 regulations at 24 CFR part 135.

(c) Access by HUD and the

Comptroller General. For purposes of

audit, examination, monitoring, and

evaluation, each recipient must give

HUD (including any duly authorized

representatives and the Inspector

General) and the Comptroller General of

the United States (and any duly

authorized representatives) access to

any books, documents, papers, and

records of the recipient that are

pertinent to assistance received.

(Approved by the Office of Management and

Budget under control number 2506–0142)

§ 585.402 Grant agreement.

(a) General. The recipient will

provide education and job training in

accordance with the requirements of

this part as incorporated in a grant

agreement executed by HUD and the

recipient.

(b) Enforcement. HUD will enforce the

obligations in the grant agreement

through such actions as may be

appropriate, including repayment of

funds that have already been disbursed

to the recipient.

§ 585.403 Reporting requirements.

(a) Quarterly Progress Reports. Each

recipient of a Youthbuild grant must

submit a report on a quarterly basis. The

form and substance of the quarterly

progress report will be provided to

recipients. The Performance Evaluation

Report noted in paragraph (b) of this

section will constitute the final

Quarterly Report.

(b) Performance Evaluation Report.

Each recipient of a Youthbuild grant

must submit a Performance Evaluation

Report on activities undertaken and

completed in accordance with the grant

agreement. The form and substance of

the Performance Evaluation Report shall

be provided to recipients.

(Approved by the Office of Management and

Budget under control number 2506–0142)

§ 585.404 Program changes.

(a) There are three basic types of

changes that recipients may wish to

make to their programs:

(1) Grant Agreement amendments.

(2) Material changes, which include,

but are not limited to changes in

housing sites, changes in significant

participating parties, and changes in

approved activities. All material

changes require HUD approval.

(3) Self-implementing program

changes, which may include changes in

recipient staffing and content of

curriculum. All self-implementing

changes require documentation in the

recipient’s files.

(b) Approval for Grant Agreement

Amendments and material changes is

contingent upon the application ranking

remaining high enough after the

approved change to have been

competitively selected for funding in

the year the application was selected.

§ 585.405 Obligation and deobligation of

funds.

(a) Obligation of funds. When HUD

and the applicant execute a grant
9746 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

agreement, funds are obligated to carry

out approved activities consistent with

§§ 585.205 or 585.305 of this part and in

accordance with the grant agreement.

(b) Increases. After the initial

obligation of funds, HUD will not make

revisions to increase the amount

obligated.

(c) Deobligation. (1) HUD may

deobligate all or parts of grants if the

grant amounts are not expended within

the term of the grant or if there is a

condition of default as defined in the

grant agreement.

(2) HUD may award deobligated funds

to applications previously submitted in

response to the most recently published

NOFA, and in accordance with subpart

B of this part.

§ 585.406 Primarily religious

organizations.

(a) Provision of assistance to primarily

religious organizations. (1) HUD will

provide Youthbuild assistance to a

recipient that is a primarily religious

organization if it agrees to provide

housing, educational and training

activities or supportive services in a

manner that is free from religious

influences and in accordance with the

following principles:

(i) It will not discriminate against any

employee or applicant for employment

on the basis of religion and will not

limit employment or give employment

preference to persons on the basis of

religion;

(ii) It will not discriminate against any

person applying for Youthbuild

activities, supportive services or

housing on the basis of religion and will

not limit such activities or services or

give preference to persons on the basis

of religion; and

(iii) It will provide no religious

instruction or counseling, conduct no

religious worship or services, engage in

no religious proselytizing, and exert no

other religious influence in the

provision of housing, education,

training activities, or support services.

(2) HUD will provide Youthbuild

assistance to a recipient that is a

primarily religious organization if the

assistance will not be used to construct

or rehabilitate a property to be owned

by the recipient, except as described in

paragraph (b) of this section.

(b) Rehabilitation and new

construction of structures owned by a

primarily religious organization. Grant

funds may be used to rehabilitate or

newly construct a structure owned by a

primarily religious organization if the

following conditions are met:

(1) The structure (or portion of the

structure) that is to be rehabilitated or

newly constructed with HUD assistance

has been leased to a recipient that is an

existing or newly established wholly

secular organization which may be

established by the primarily religious

organization under the provision of

paragraph (c) of this section;

(2) The HUD assistance is provided to

the wholly secular organization (and not

the primarily religious organization) to

make the improvements;

(3) The leased structure will be used

exclusively for secular purposes

available to all persons regardless of

religion;

(4) The lease payments paid to the

primarily religious organization do not

exceed the fair market rent of the

structure before any rehabilitation was

completed;

(5) The portion of the costs of any

improvements that benefit any unleased

portion of the structure will be allocated

to, and paid for by, the primarily

religious organization;

(6) The primarily religious

organization agrees that, if the recipient

does not retain the use of the leased

premises for wholly secular purposes

for the useful life of the improvements,

the primarily religious organization will

pay an amount equal to the residual

value of the improvements to the

secular organization, and the secular

organization will remit the amount to

HUD.

(c) Assistance to a wholly secular

private nonprofit organization

established by a primarily religious

organization.

(1) A primarily religious organization

may establish a wholly secular private

nonprofit organization to serve as a

recipient. The wholly secular

organization may be eligible to receive

other forms of assistance available

under this part.

(i) The wholly secular organization

must agree to provide housing and

support services in a manner that is free

from religious influences and in

accordance with the principles set forth

in paragraph (a) of this section.

(ii) The wholly secular organization

may enter into a contract with the

primarily religious organization to

operate the housing or to provide

support services. In such a case, the

primarily religious organization must

agree in the contract to carry out its

contractual responsibilities in a manner

free from religious influences and in

accordance with the principles set forth

in paragraph (a) of this section.

(iii) The rehabilitation or new

construction grants are subject to the

requirements of paragraph (a) of this

section.

(2) HUD will not require the primarily

religious organization to establish the

wholly secular organization before the

selection of its application. In such a

case, the primarily religious

organization may apply on behalf of the

wholly secular organization. The

application will be reviewed on the

basis of the primarily religious

organization’s financial responsibility

and capacity, and its commitment to

provide appropriate resources to the

wholly secular organization after

formation. Access to the housing site is

demonstrated if the primarily religious

organization provides a commitment to

transfer control of the site to the wholly

secular organization after its formation.

If such an application is selected for

funding, the obligation of funds will be

conditioned upon the establishment of a

wholly secular organization that meets

the definition of private nonprofit

organization in § 585.4.

Subpart F—Applicability of Other

Federal Requirements

§ 585.501 Application of OMB Circulars.

(a) The policies, guidelines and

requirements of OMB Circular Nos. A–

87 (Cost Principles Applicable to

Grants, Contracts and other Agreements

with State and Local Governments) and

24 CFR part 85 (Administrative

Requirements for Grants and

Cooperative Agreements to State, Local

and Federally Recognized Indian Tribal

Governments) apply to the award,

acceptance and use of assistance under

the program by applicable entities, and

to the remedies for non-compliance,

except where inconsistent with the

provisions of NAHA, other Federal

statutes or this part. 24 CFR part 84

(Grants and Cooperative Agreements

with Institutions of Higher Education,

Hospitals, and other Nonprofit

Organizations), OMB Circular A–122

(Cost Principles Applicable to Grants,

Contracts and other Agreements with

Nonprofit Institutions), and, as

applicable, OMB Circular A–21 (Cost

Principles for Educational Institutions)

apply to the acceptance and use of

assistance by covered organizations,

except where inconsistent with the

provisions of NAHA, other Federal

statutes or this part. Recipients are also

subject to the audit requirements of 24

CFR part 44 (Audit Requirements for

State and Local Governments) and 24

CFR part 45 (Audit Requirements for

Institutions of Higher Education and

other Nonprofit Institutions), as

applicable. HUD may perform or require

additional audits as it finds necessary or

appropriate.

(b) Copies of OMB Circulars may be

obtained from E.O.P. Publications,

Room 2200, New Executive Office
Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations 9747

Building, Washington, DC 20503,

telephone (202) 395–7332. (This is not

a toll-free number.) There is a limit of

two free copies.

§ 585.502 Certifications.

In addition to the standard assurances

of compliance with Federal rules and

OMB Circulars contained in

applications for Federal grant

assistance, applicants must also make

the following certifications:

(a) Consolidated Plan. (1) Applicants

that are States or units of general local

government. The applicant must have a

HUD-approved Consolidated Plan in

accordance with 24 CFR part 91 for the

current year and must submit a

certification that the proposed activities

are consistent with the HUD-approved

Consolidated Plan.

(2) Applicants that are not States or

units of general local government. The

applicant must submit a certification by

the jurisdiction or jurisdictions in

which the proposed program will be

located that the applicant’s proposed

activities are consistent with the

jurisdiction’s current HUD-approved

Consolidated Plan. A required

certification must be made by the unit

of general local government if it is

required to have, or has, a Consolidated

Plan. Otherwise the certification may be

made by the State.

(3) The Insular Areas of Guam, the

Virgin Islands, American Samoa and the

Northern Mariana Islands are not

required to have a Consolidated Plan or

to make a Consolidate Plan certification.

An application by an Indian tribe or

other applicant for a Youthbuild

program that will be located on a

reservation of an Indian tribe does not

require a certification by the tribe or

State. However, where an Indian tribe or

an Indian Housing Authority (IHA) is

the applicant for a Youthbuild program

that will not be located on a reservation,

the requirement for a certification by the

jurisdiction or jurisdictions in which

the Youthbuild program will be located

under the preceding paragraph applies.

(b) Fair Housing and Equal

Opportunity. A certification that the

applicant is in compliance and will

continue to comply with the

requirements of the Fair Housing Act,

title VI of the Civil Rights Act of 1964,

section 504 of the Rehabilitation Act of

1973, and the Age Discrimination Act of

1975, and will affirmatively further fair

housing, or, in the case of a Youthbuild

application from an Indian tribe or an

Indian Housing Authority (IHA), a

certification that the applicant will

comply with the Indian Civil Rights Act

(25 U.S.C. 1301 et seq.), section 504 of

the Rehabilitation Act of 1973, and the

Age Discrimination Act of 1975.

(c) Drug-free workplace. A

certification that the applicant will

comply with the requirements of the

Drug-Free Workplace Act of 1988 (42

U.S.C. 701) and HUD’s implementing

regulations at 24 CFR part 24, subpart F.

(d) Employment opportunities. A

certification that the applicant will

comply with the requirements of section

3 of the Housing and Urban

Development Act of 1968 (12 U.S.C.

17017), as implemented by 24 CFR part

135. Section 3 requires that employment

and other economic opportunities

generated by HUD assisted housing and

community development programs

shall, to the greatest extent feasible, be

directed toward section 3 residents and

business concerns.

(e) Anti-lobbying. In accordance with

the disclosure requirements and

prohibitions of section 319 of the

Department of Interior and Related

Agencies Appropriations Act for Fiscal

Year 1990 (31 U.S.C. 1352) (The Byrd

Amendment) and the implementing

regulations at 24 CFR part 87, applicants

for and recipients of assistance

exceeding $100,000 must certify that no

Federal funds have been or will be spent

on lobbying activities in connection

with the assistance. Applicants and

recipients must also disclose where

nonappropriated funds have been spent

or committed for lobbying activities if

those activities would be prohibited if

paid with appropriated funds.

Substantial monetary penalties may be

imposed for failure to file the required

certification or disclosure.

(f) Relocation Assistance and Real

Property Acquisition. A certification

that the applicant will comply with the

requirements of the Uniform Relocation

Assistance and Real Property

Acquisition Policies Act of 1970, as

amended (URA), and implementing

regulations at 49 CFR part 24 and HUD

Handbook 1378, Tenant Assistance,

Relocation and Real Property

Acquisition. See § 585.308.

(g) Use of Housing. A certification that

the housing to be produced in

conjunction with the Youthbuild

program is to be provided for the

homeless and low- and very low-income

families.

(h) Lead-Based Paint. A certification

that the applicant will comply with the

requirements of the Lead-Based Paint

Poisoning Prevention Act and

implementing regulations at 24 CFR part

35.

(i) State and Local Standards. A

certification that all educational

programs and activities supported with

funds provided under this subtitle shall

be consistent with applicable State and

local educational standards. Standards

and procedures with respect to the

awarding of academic credit and

certifying educational attainment in

such programs shall be consistent with

applicable State and local educational

standards.

(j) Labor Standards. A certification

that the applicant and related parties

will comply with the provisions of the

Davis-Bacon Act, as amended (40 U.S.C.

276a through 276a-5), the Contract Work

Hours and Safety Standards Act (40

U.S.C. 327 through 333), and HUD

Handbook 1344.1, Revision 1, Federal

Labor Standards in Housing and

Community Development Programs, as

applicable, available from the Office of

Assistant to the Secretary for Labor

Relations, room 7118, 451 Seventh

Street, SW., Washington, DC 20410;

Telephone (202) 708–0370; FAX, (202)

619–8022; TDD, (202) 708–1455. (These

are not toll-free numbers).

(Approved by the Office of Management and

Budget under control number 2506–0142)

§ 585.503 Conflict of interest.

(a) (1) In addition to the conflict of

interest requirements in 24 CFR parts 84

and 85, no person who is an employee,

agent, consultant, officer, or elected or

appointed official of the recipient or

cooperating entity named in the

application and who exercises or has

exercised any functions or

responsibilities with respect to assisted

activities, or who is in a position to

participate in a decision-making process

or gain inside information with regard

to such activities, may obtain a financial

interest or benefit from the activity, or

have an interest in any contract,

subcontract, or agreement with respect

thereto, or the proceeds thereunder,

either for himself or herself or for those

with whom he or she has family or

business ties, during his or her tenure or

for one year thereafter, except that a

resident of an eligible property may

acquire an ownership interest.

(2) Exception. HUD may grant an

exception to the exclusion in paragraph

(a)(1) of this section on a case-by-case

basis when it determines that such an

exception will serve to further the

purposes of the Youthbuild program. An

exception may be considered only after

the applicant or recipient has provided

a disclosure of the nature of the conflict,

accompanied by an assurance that there

has been public disclosure of the

conflict, a description of how the public

disclosure was made, and an opinion of

the applicant’s or recipient’s attorney

that the interest for which the exception

is sought would not violate State or

local law. In determining whether to
9748 Federal Register / Vol. 60, No. 34 / Tuesday, February 21, 1995 / Rules and Regulations

grant a requested exception, HUD will

consider the cumulative effect of the

following factors, where applicable:

(i) Whether the exception would

provide a significant cost benefit or an

essential degree of expertise to the

Youthbuild program that would

otherwise not be available;

(ii) Whether an opportunity was

provided for open competitive bidding

or negotiation;

(iii) Whether the person affected is a

member of a group or class intended to

be the beneficiaries of the activity and

the exception will permit such person to

receive generally the same interests or

benefits as are being made available or

provided to the group or class;

(iv) Whether the affected person has

withdrawn from his or her functions or

responsibilities, or the decision-making

process, with respect to the specific

activity in question;

(v) Whether the interest or benefit was

present before the affected person was

in a position as described in paragraph

(a)(2) of this section;

(vi) Whether undue hardship will

result either to the applicant, recipient,

or the person affected when weighed

against the public interest served by

avoiding the prohibited conflict; and

(vii) Any other relevant

considerations.

(b) [Reserved]

§ 585.504 Use of debarred, suspended, or

ineligible contractors.

The provisions of 24 CFR part 24

apply to the employment, engagement

of services, awarding of contracts, or

funding of any contractors or

subcontractors during any period of

debarment, suspension, or placement in

ineligibility status.

Dated: February 7, 1995.

Andrew Cuomo,

Assistant Secretary for Community Planning

and Development.

[FR Doc. 95–4119 Filed 2–17–95; 8:45 am]

BILLING CODE 4210–29–P