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HomeMy WebLinkAboutBack-Up from Law DepartmentU.S. OOVERNMEN7 INFORMATION GPO Ofe. of Asst. Secy., Comm. Planning, Develop., HUD (10) Judicial review. The respondent may seek judicial review of HUD's de- cision pursuant to section 111(c) of the Act. [74 FR 4636, Jan, 26, 2009] § 570.497 Condition of State election to administer State CDBG Program. Pursuant to section 106(d)(2)(A)(i) of the Act, a State has the right to elect, in such manner and at such time as the Secretary may prescribe, to administer funds allocated under subpart A of this part for use in nonentitlement areas of the State. After January 26, 1995, any State which elects to administer the allocation of CDBG funds for use in nonentitlement areas of the State in any year must, in addition to all other requirements of this subpart, submit a pledge by the State in accordance with section 108(d)(2) of the Act, and in a form acceptable to HUD, of any future CDBG grants it may receive under sub- part A and this subpart. Such pledge shall be for the purpose of assuring re- payment of any debt obligations (as de- fined in §570.701), in accordance with their terms, that HUD may have guar- anteed in the respective State on be- half of any nonentitlement public enti- ty (as defined in §570.701) or its des- ignated public agency prior to the State's election. [59 FR 66604, Dec. 27, 1994] Subpart J®Grant Administration SouRcR: 53 FR 8058, Mar, 11, 1988, unless otherwise noted. § 570.500 Definitions. For the purposes of this subpart, the following terms shall apply: (a) Prograin incoine means gross in- come received by the recipient or a subrecipient directly generated from the use of CDBG funds, except as pro- vided in paragraph (a)(4) of this sec- tion. (1) Program income includes, but is not limited to, the following: (i) Proceeds from the disposition by sale or long-term lease of real property purchased or improved with CDBG funds; (ii) Proceeds from the disposition of equipment purchased with CDBG funds; § 570.500 (iii) Gross income from the use or rental of real or personal property ac- quired by the recipient or by a sub - recipient with CDBG funds, less costs incidental to generation of the income; (iv) Gross income from the use or rental of real property, owned by the recipient or by a subrecipient, that was constructed or improved with CDBG funds, less costs incidental to genera- tion of the income; (v) Payments of principal and inter- est on loans made using CDBG funds, except as provided in paragraph (a)(3) of this section; (vi) Proceeds from the sale of loans made with CDBG funds; (vii) Proceeds from sale of obliga- tions secured by loans made with CDBG funds; (viii) [Reserved] (ix) Interest earned on program in- come pending its disposition; and (x) Funds collected through special assessments made against properties owned and occupied by households not of low and moderate income, where the assessments are used to recover all or part of the CDBG portion, of a public improvement. (2) Program income does not include income earned (except for interest de- scribed in §570.513) on grant advances from the U.S. Treasury. The following items of income earned on grant ad- vances must be remitted to HUD for transmittal to the U,S. Treasury, and will not be reallocated under section 106(c) or (d) of the Act; '(i) Interest earned from the invest- ment of the initial proceeds of a grant advance by the U.S. Treasury; (ii) Interest earned on loans or other forms of assistance provided with CDBG funds that are used for activities determined by HUD either to be ineli- gible or to fail to meet a national ob- jective in accordance with the require- ments of subpart C of this part, or that fail substantially to meet any other re- quirement of this part; and (iii) Interest earned on the invest- ment of amounts reimbursed to the CDBG program account prior to the use of the reimbursed funds for eligible purposes. (3) The calculation of the amount of program income for the recipient's 133 § 570.500 CDBG program as a whole (i.e., com- prising activities carried out by a grantee and its subrecipients) shall ex- clude payments made by subrecipients of principal and/or interest on CDBG- funded loans received from grantees if such payments are made using program income received by the subrecipient. (By making such payments, the sub - recipient shall be deemed to have transferred program income to the grantee,) The amount of program in- come derived from this calculation shall be used for reporting purposes, for purposes of applying the requirement under §570.504(b)(2)(iii), and in deter- mining limitations on planning and ad- ministration and public services activi- ties to be paid for with CDBG funds. (4) Program income does not include: (i) Any income received in a single program year by the recipient and all its subrecipients if the total amount of such income does not exceed $25,000; and (ii) Amounts generated by activities that are financed by a loan guaranteed udder section 108 of the Act and meet one or more of the public benefit cri- teria specified at §570.209(b)(2)(v) or are carried out in conjunction with a giant under section 108(q) in an area deter- mined by HUD to meet the eligibility requirements for designation as an Urban Empowerment Zone pursuant to 24 CFR hart 597, subpart B. Such exclu- sion shall not apply if CDBG funds are used to repay the guaranteed loam. When such'a guaranteed loan is par- tially repaid with CDBG funds, the amount generated shall be prorated to reflect the percentage of CDBG funds used. Amounts generated by activities financed with loans guaranteed udder section 108 which are not defined as program income shall be treated as miscellaneous revenue and shall not be subject to any of the requirements of this part, except that the use of such funds shall be limited to activities that are located in a revitalization strategy area and implement a HUD approved area revitalization strategy pursuant to §91.215(e) of this title, However, such treatment shall not affect the right of the Secretary to require the section 108 borrower to pledge such amounts as se- curity for the guaranteed loan. The de- termination whether such amounts 24 CFR Ch. V (4-1-12 Edition) shall constitute program income shall be governed by the provisions of the contract required at § 570.705(b)(1). (5) Examples of other receipts that are not considered program income are proceeds from fund raising activities carried out by subrecipients receiving CDBG assistance (the costs of fund- raising are generally unallowable under the applicable OMB circulars ref- erenced in 24 CFR 84.27), funds col- lected through special assessments used to recover the lion-CDBG portion of a public improvement, and proceeds from the disposition of real property acquired or improved with CDBG funds when the disposition'` occurs after the applicable time period specified in §570.503(b)(8) for subrecipient-con- trolled property, or in §570.505 for re- cipient -controlled property. (b) Revolving ,fund means a separate fund (with a set of accounts that are independent of other program ac- counts) established for the purpose of carrying out specific activities which, in turn, generate payments to the fund for use in carrying out the same activi- ties. Each revolving loan fund's cash balance must be held in an interest- bearing account, and any interest paid on CDBG funds held in this account shall be considered interest earned on grant advances and must be remitted to HUD for ti°ansmittal to the U.S. Treasury no less frequently than annu- ally. (Interest paid by borrowers on eli- gible loans made from the revolving loan fund shall be program income and. treated accordingly.) (c) S1ul)' t means a public or pri- vaterinonp,°ofit agency, authority, or organizat!o.n or a for-profit entity au- thorized under §570.201(o), receiving CDBG funds from the recipient or an- other subrecipient to undertake activi- ties eligible for such assistance under subpart C of this Bart. The term ex- cludes an entity receiving CDBG funds from the recipient under the authority of §570.204, unless the grantee explic- itly designates it as a subrecipient. The term ` includes a public agency des- ignated by a unit of general local gov- ernment to receive a loan guarantee under subpart M of this part, but does 134 Ofc. of Asst. Secy., Comm. Planning, Develop., HUD not include contractors providing sup- plies, equipment, construction, or serv- ices subject to the procurement re- quirements in 24 CFR 85.36 or 84.40, as applicable. [53 FR 8058, Mar. 11, 1988, as amended at 57 FR 27120, June 17, 1992; 60 FR 1952, Jan, 5, 1995; 60 FR 17445, Apr; 6, 1995; 60 FR 56914, Nov. 9, 1995] § 570.501 Responsibility for grant ad- ministration. (a) One or more public agencies, in- cluding existing local public agencies, may be designated by the chief execu- tive officer of the recipient to under- take activities assisted by this part. A public agency so designated shall be subject to the same requirements as are applicable to subrecipients. (b) The recipient is responsible for ensuring that CDBG funds are used in accordance with all program require- ments. The use of designated public agencies, subrecipients, or contractors does not relieve the recipient of this re- sponsibility. The recipient is also re- sponsible for determining the adequacy of performance under subrecipient agreements and procurement con- tracts, and for taking appropriate ac- tion when performance problems arise, such as the actions described in §570.910, Where a unit of general local government is participating with, or as part of, an urban county, or as part of a metropolitan city, the recipient is re- sponsible for applying to the unit of general local government the same re- quirements as are applicable to sub - recipients, except that the five-year pe- riod identified under §570.503(b)(8)(i) shall begin with the date that the unit of general local government is no longer considered by HUD to be a part of the metropolitan city or urban coun- ty, as applicable, instead of the date that the subrecipient agreement ex- pires. [53 FR 8058, Mar. 11, 1988, as amended at 57 FR 27120, June 17, 1992] §570.502 Applicability of uniform ad- ministrative requirements. (a) Recipients and subrecipients that are governmental entities (including public agencies) shall comply with the requirements and standards of OMB Circular No. A-87, "Cost Principles for § 570.502 State, Local, and Indian Tribal Govern- ments"; OMB Circular A-128, "Audits of State and Local Governments" (im- plemented at 24 CFR part 44); and with the following sections of 24 CFR part 85 "Uniform Administrative Require- ments for Grants and Cooperative Agreements to State and Local Gov- ernments" or the related CDBG provi- sion, as specified in this paragraph; (1) Section 85.3, "Definitions"; (2) Section 85.6, "Exceptions"; (3) Section 85.12, "Special grant or subgrant conditions for `high-risk' grantees"; (4) Section 85.20, "Standards for fi- nancial management systems," except paragraph (a); (5) Section 85,21, "Payment," except as modified by § 570.513; (6) Section 85.22, "Allowable costs (7) Section 85.26„ "Non-federal au- dits"; (8) Section 85.32, "Equipment," ex- cept in all cases in which the equip- ment is sold, the proceeds shall be pro- gram income; (9) Section 85.33, "Supplies"; (10) Section 85.34, "Copyrights"; (11) Section 85.35, "Subawards to debarred and suspended parties"; (12) Section 85.36, "Procurement," ex- cept paragraph (a); (13) Section 85.37, "Subgrants"; (14) Section 85.40, "Monitoring and reporting program performance," ex- cept paragraphs (b) through (d) and paragraph (f); (15) Section 85.41, "Financial report- ing," except paragraphs (a), (b), and (e); (16) Section 85.42, "Retention and ac- cess requirements for records," except that the period shall be four years; (17) Section 85.43, "Enforcement"; (18) :Section 85.44, "Termination for convenience"; (19) Section 85.51 "Later disallow- ances and adjustments" and (20) Section 85.52, "Collection of amounts due." (b) Subrecipients, except subrecipi- ents that are governmental entities, shall comply with the requirements and standards of OMB Circular No. A- 122, "Cost Principles for Non-profit Or- ganizations," or OMB Circular No. A- 21, "Cost Principles for Educational In- stitutions," as applicable, and OMB Circular A-133, "Audits of Institutions 135