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median income of all unrelated individuals residing in the metropolitan area, or in the case of unrelated individuals residing in nonmetropolitan areas, of all nonmetropolitan areas of the State.

§ 570.4 Waivers.

The Secretary may waive any requirement of this part not required by law whenever it is determined that undue hardship will result from applying the requirement and where application of the requirement would adversely affect the purposes of the Act.

Subpart B-Allocation and

Distribution of Funds

AUTHORITY: Title I, Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.); Title I, Housing and Community Development Act of 1977 (Pub. L. 95128); and sec. 7(d), Department of Housing and Urban Development Act (42 U.S.C. 3535(d)).

SOURCE: 43 FR 4385, Feb. 1, 1978, unless otherwise noted.

§ 570.100 General.

(a) This subpart describes the policies and procedures governing the determination of entitlement for eligible units of general local government to receive grants, the entitlement amounts, and the allocation of appropriated funds among the several distribution categories provided under Title I of the Housing and Community Development Act of 1974, as amended.

(b) In determining eligibility for a Basic Grant and in allocating funds under this subpart, current corporate status and geographic boundaries will be considered, in accordance with the following, to the extent such information was certified and available to the U.S. Bureau of the Census 90 days prior to the beginning of such fiscal year, and has been proceesed by Census at the time the allocation of funds is to be made each year:

(1) Incorporation of a community having population of at least 50,000 based on latest national census;

(2) Change in boundaries or annexations resulting in the population of the unit of general local government

reaching or exceeding 50,000 based on latest national census count;

(3) All changes in boundaries or annexations that have been accepted at such point in time for use by the Office of Revenue Sharing; and

(4) Designation or redesignation of Standard Metropolitan Statistical Areas by the Office Management and Budget occurring not later than 90 days prior to the beginning of such fiscal year.

(c) The referenced population or national census count to be used in the determination of entitlements shall be the most recent decennial or middecade census; or the most recent updating of such censuses as represented by the Bureau of the Census national population estimates, and shall use the latest geographic base resulting from Boundary and Annexation Surveys, new incorporations, and consolidations of governments available as previously specified.

§ 570.101 Allocation between metropolitan and nonmetropolitan areas.

Eighty percent of the funds appropriated each fiscal year for the purposes of this part, excluding the amounts specified below, will be allocated to metropolitan areas, with the balance of twenty percent allocated to nonmetropolitan areas, for community development block grants in metropolitan and nonmetropolitan areas, respectively. Funds to be excluded for this purpose are:

(a) Metropolitan area "set-aside" fund. $50,000,000 for each of fiscal years 1975 and 1976, $200,000,000 fiscal year 1977 (not more than 50 percent of which to be used for holdharmless needs in metropolitan areas), $350,000,000 fiscal year 1978 (not more than 50 percent for hold-harmless needs in metropolitan areas), $265,000,000 for fiscal year 1979 (not more than $25,000,000 for hold-harmless needs in metropolitan areas), and $250,000,000 for fiscal year 1980 (none to be used for hold-harmless needs);

(b) Transition/categorical program settlement fund. $50,000,000 for each of fiscal years 1975 and 1976, and $100,000,000 for each of fiscal years 1977, 1978, 1979, and 1980 to facilitate

transition and categorical program settlements, pursuant to Section 103(b) of the Act;

(c) Urban development action grants. Funds authorized and appropriated for making Urban Development Action Grants under Subpart G; and

(d) Secretary's fund. And amount equal to two percent for fiscal years 1975, 1976, and 1977, and three percent for fiscal years 1978, 1979, and 1980 of the total funds authorized and appropriated for each fiscal year that remain after excluding those funds under paragraphs (a), (b), and (c) for that fiscal year.

§ 570.102 Basic grant amounts.

(a) Metropolitan cites. (1) Of the amount allocated to metropolitan areas pursuant to § 570.101, the Secretary will allocate to each metropolitan city an amount of funds which shall be the greater of an amount that bears the same ratio to the allocation for all metropolitan areas as either:

(i) The average of the ratios between:

(A) The population of that metropolitan city and the population of all metropolitan areas;

(B) The extent of poverty in that metropolitan city and the extent of poverty in all metropolitan areas; and

(C) The extent of housing overcrowding by units in that metropolitan city and the extent of housing overcrowding by units in all metropolitan areas; or

(ii) The average of the ratios between:

(A) The extent of growth lag in that metropolitan city and the extent of growth lag in all metropolitan cities;

(B) The extent of poverty in that metropolitan city and the extent of poverty in all metropolitan areas; and

(C) The age of housing in that metropolitan city and the age of housing in all metropolitan areas.

(2) In determining the average of ratios under paragraph (a)(1)(i) of this section, the ratio involving the extent of poverty shall be counted twice, and each of the other ratios shall be counted once (.50+.25+25=1.00); and in determining the average of ratios under

paragraph (a)(1)(ii), the ratio involving the extent of growth lag shall be counted once, the ratio involving extent of poverty shall be counted one and one-half times, and the ratio involving the age of housing shall be counted two and one-half time (.20+.30+.50=1.00).

(3) The Secretary shall determine eligibility of towns or townships to be cities on the basis of information available from the U.S. Bureau of the Census with respect to population level, closeness of settlement, and presence of incorporated places within the boundaries of town or township, and on the basis of information provided by the town or township and its included units of government. In computing amounts for a metropolitan city that is a town or township containing incorporated places, there shall be excluded and such incorporated place which is entitled to receive a hold-harmless grant for that year pursuant to § 570.103 and has not waived such entitlement under § 570.103(e).

(b) Urban counties. (1) Of the amount allocated to metropolitan areas pursuant to § 570.101, the Secretary will allocate to each urban county an amount of funds which shall be the greater of an amount that bears the same ratio to the allocation for all metropolitan areas as either:

(i) The average of the ratios between:

(A) The population of the urban county and the population of all metropolitan areas;

(B) The extent of proverty in that urban county and the extent of poverty in all metropolitan areas; and

(C) The extent of housing overcrowding in the urban county and the extent of housing overcrowding in all metropolitan areas; or

(ii) The average of the ratios between:

(A) The extent of growth lag in that urban county and the extent of growth lag in all metropolitan cities and urban counties;

(B) The extent of poverty in that urban county and the extent of poverty in all metropolitan areas; and

(C) The age of housing in that urban county and the age of housing in all metropolitan areas.

(2) In determining the average of ratios under paragraph (b)(1)(i) of this section, the ratio involving the extent of poverty shall be counted twice, and each of the other ratios will be counted once (.50+.25+.25=1.00); and in determining the average of ratios under paragraph (b)(1)(ii), the ratio involving the extent of growth lag shall be counted once, the ratio involving extent of poverty shall be counted one and one-half times, and the ratio involving the age of housing shall be counted two and one-half times (.20+.30+.50=1.00).

(3) In computing amounts or exclusions with respect to an urban county in any fiscal year there will be excluded any metropolitan city, any other unit of general local government located within the county which is entitled to receive a hold-harmless grant for that fiscal year pursuant to § 570.103 and has not waived such intitlement under § 570.103(e), any other unit of general local government the population of which has been cluded from the county's population as part of the unban county qualification process, pursuant to § 570.105, and any Indian tribes located within the county.

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(4) In excluding the population, poverty, housing overcrowding, and age of housing data for units of general local government which are entitled to receive a hold-harmless grant from the computations in this paragraph as required by paragraphs (a)(3) and (b)(3) of this section, the Secretary will exclude only two-thirds of such data for fiscal year 1978 and one-third of such data for fiscal year 1979. In fiscal year 1980 and in subsequent years, no such exclusion is to be made.

(c) Phase-in provision. With respect to funds approved for distribution to a metropolitan city or urban county during fiscal years 1975, 1976 and 1977, the basic grant amount of any such city or county as computed under paragraphs (a) and (b) will be adjusted only for such funds approved for distribution in fiscal years 1975, 1976 and 1977 if the amount so computed for

the first year such funds are approved for distribution exceeds the city's or county's hold-harmless amount for that year as determined under § 570.103. The adjustments are made so that:

(1) The amount for the city's or county's first year does not exceed one-third of its full basic grant amount, or its hold-harmless amount, whichever is the greater;

(2) The amount for its second year does not exceed two-thirds of its full basic amount, or its hold-harmless amount, or the amount allowed under Paragraph (c)(1) of this section, whichever is the greatest; and

(3) The amount for its third year does not exceed its full basic grant amount. The full basic grant amount as determined under § 570.102(a) and § 570.102(b) will be allocated to each metropolitan city and each urban county respectively for each of the fiscal years 1978, 1979, and 1980 regardless of their eligibility for or receipt of entitlement in preceding years and without regard to the application of the phase-in provision.

§ 570.103 Hold-harmless grants.

(a) Metropolitan cities and urban counties. Any metropolitan city or urban county having a hold-harmless amount, as calculated under paragraph (c) of this section, in any fiscal year which exceeds its basic grant amount for that year as computed under § 570.102 will be entitled to receive a hold-harmless grant, in addition to its basic grant. Except as provided in paragraph (d) of this section, the amount of the hold-harmless grant will be equal to the difference between the basic grant amount and the hold-harmless amount.

(b) Other units of general local government. Any other unit of general local government will be entitled to receive a hold-harmless grant if, during the five fiscal year period ending June 30, 1972 (or June 30, 1973, in the case of a locality which first received a grant for a neighborhood development program in that fiscal year), it had been carrying out one or more urban renewal projects, code enforcement programs, or neighborhood develop

ment programs under Title I of the Housing Act of 1949, or model cities programs under Title I of the Demor.stration Cities and Metropolitan Development Act of 1966, under commitments for assistance entered into with HUD during that period. Except as provided in paragraph (d) of this section, such hold-harmless grant will equal the hold-harmless amount as computed under paragraph (c) of this section.

(c) Calculation of hold-harmless amount. (1) For each unit of general local government having entitlement for either a basic grant amount or a hold-harmless grant, the Secretary will calculate a hold-harmless amount for each of the first five fiscal years beginning with Fiscal Year 1975.

(2) The hold-harmless amount will be the sum of:

(i) The annual average during the five fiscal years ending June 30, 1972, of:

(A) Commitments for grants for urban renewal (excluding neighborhood development programs) under Part A of Title I of the Housing Act of 1949. For the purposes of this calculation, "commitments for grants" means any of the following conditions occurring during the five year base period:

(1) Funds reserved and not either cancelled or allocated;

(2) Funds reserved and allocated; and funds allocated which had not previously been reserved.

(B) Loans made for the purpose of rehabilitation of property under section 312 of the Housing Act of 1964;

(C) Grants for open space land projects, including urban beautification and historic preservation, under Title VII of the Housing Act of 1961;

(D) Grants for water and sewer projects under section 702 of the Housing and Urban Development Act of 1965;

(E) Grants for neighborhood facilities under section 703 of the Housing and Urban Development Act of 1965; and

(F) Loans for public facilities under Title II of the Housing Amendments of 1955; and

(ii) The average annual grant for a neighborhood development program under Part B of Title I of the Housing

Act of 1949 made during the five fiscal years ending June 30, 1972, or during Fiscal Year 1973 in the case where the initial grant for this purpose was made in that fiscal year; and

(iii) In the case of a unit of general local government having a model cities program which was funded or extended in Fiscal Year 1973 for a period ending after June 30, 1973, amounts based on the following percentages of the average annual grant made for the model cities program under Title I of the Demonstration Cities and Metropolitan Development Act of 1966 during fiscal years ending June 30, 1972:

(A) One hundred percent for each of a number of years, which, when combined with the number of funding years for which the unit of general local government has received grants prior to Fiscal Year 1975, equals five.

(B) Eighty percent for the year immediately following year five as determined in paragraph (c)(2)(iii)(A) of this section;

(C) Sixty percent for the year immediately following the year provided in paragraph (c)(2)(iii)(B) of this section; and

(D) Forty percent for the year immediately following the year provided in paragraph (c)(2)(iii)(C) of this section. For the purpose of calculating hold-harmless amounts, the average annual grant under paragraphs (c)(2) (ii) and (iii) of this section will be established by dividing the total amount of grants made to the unit of general local government by the number of months of program activity for which such grants were made and multiplying the result by twelve. In calculating the hold-harmless amount, any portion of grants which were made as one-time payments for relocation costs under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601) will be excluded. In calculating the average annual grant under paragraph (c)(2)(iii) of this section, the Secretary will exclude Planned Variations grants and grants for such other special purposes as relocation costs for Project Rehab in model cities programs. In attributing credit to metropolitan cities

for grants or loans for the purpose of calculating the hold-harmless amount, the Secretary will be guided primarily by the location of the project, and, in addition, the identity of the local government which contracted for such grants or loans. Thus, where a county park authority received a grant to provide recreational facilities in a metropolitan city, the city would be credited with the grant in the hold-harmless calculation, and not the county.

(d) Phase-out of hold-harmless. (1) In determining the hold-harmless grant for Fiscal Years 1975, 1976, and 1977, the full hold-harmless amount calculated under paragraph (c) of this section will be used in accordance with paragraphs (a) and (b) of this section. In Fiscal Years 1978 and 1979, if the hold-harmless amount exceeds the basic grant amount for a locality in any such year, as computed under § 570.102, it will be reduced so that:

(i) In Fiscal Year 1978, the excess of the hold-harmless amount over the basic grant amount for that year will equal two-thirds of the difference between such hold-harmless and basic grant amounts; and

(ii) In Fiscal Year 1979, the excess of the hold-harmless amount over the Łasic grant amount for that year will equal one-third of the difference between such hold-harmless and basic grant amounts.

(2) In Fiscal Year 1980, no holdharmless grants will be made.

(3) In determining the adjustments under paragraph (d)(1) of this section for units of general local government not qualifying for a basic grant, the provisions of paragraph (d)(1) (i) and (ii) of this section will be applied as though such units had entitlement to a basic grant amount of zero.

(e) Waiver of hold-harmless. Any unit of general local government qualifying for a hold-harmless grant in any fiscal year under the conditions contained in paragraph (b) of this section may, by November 15 of any such fiscal year, irrevocably waive its eligibility for a hold-harmless grant for a single year. Any such waiver under this subsection must be submitted to the Secretary in writing. In the case of such a waiver, the unit of general local

government shall not be excluded in that year from the computations as otherwise required § 570.102(b)(3) and § 570.104(c) (1) and (2) for such units of government having eligibility for hold-harmless grants.

(f) Pro rata reduction. In the event that the total amount of funds available for distribution in metropolitan areas under this Part in fiscal year 1978 and fiscal year 1979 is insufficient to meet all basic grant and holdharmless entitlement needs in such metropolitan areas as provided pursuant to §570.102 (a) and (b), and § 570.103, and that funds are not otherwise appropriated to meet such deficiency, the Secretary shall meet the deficiency through a pro rata reduction of; All basic grant and hold-harmless entitlement amounts; General purpose funds for metropolitan areas under § 570.104(c)(1) (including metropolitan area "set aside" funds under § 570.101(a)); and General purpose funds for nonmetropolitan areas under § 570.104(c)(2). The amount of any such reduction shall be determined as follows for each such fiscal year:

(1) The amount allocated for use in meeting basic grant and hold-harmless entitlement amounts in metropolitan areas shall be determined as provided in § 570.101;

(2) The basic grant and hold-harmless entitlement amounts in metropolitan areas shall be determined as provided in § 570.102 and § 570.103;

(3) If the sum of all entitlement amounts, determined in paragraph (f)(2) of this section, exceeds the total amount available for meeting such entitlements, determined in paragraph (f)(1), of this section, the difference between such amounts shall be computed;

(4) The ratio of any such difference, determined in paragraph (f)(3) of this section, to the sum of all funds allocated for use in metropolitan and nonmetropolitan areas, including any metropolitan area --set-aside" funds but excluding the Secretary's fund, and funds for either the transition and categorical settlements or Urban Development Action Grants, shall be determined;

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