(2) assist localities (whether they be within or outside of SMSA's) and States which have demonstrated special needs or special performance capabilities, and (3) provide incentives for achievement of national growth objectives. Funds for Smaller Communities. Smaller communities both inside and outside of metropolitan areas would be equitably served. Those which have had continuing HUD develo lopment programs would receive at least as much under urban community development revenue sharing as they have received under the programs that would be replaced.

A special appropriation authorization is provided in the legislation for the exclusive use of communities having a population of less than 50,000. Smaller communities would also be eligible to receive assistance from the discretionary funds and, if they are located within metropolitan areas, from SMSA balances. In addition, a principal source of community development assistance for these communities would be the rural community development revenue sharing funds provided under separate legislation.

Community Development Activities Eligible for Assistance

Shared revenues could be used to support a wide

range of community development activities located any

where in the community.

Recipients could acquire and dispose of real

property for a broad range of community development purposes. Funds could be used to acquire property for the

guidance of urban development or for other public purposes as well as to acquire property which is blighted, inappropriately developed, or needed for public facilities, historic preservation, beautification, conservation, or recreation. In disposing of property acquired pursuant to the legislation, recipients would determine the appropriate reuse and sale price for each parcel. Property could be sold, leased, donated, or retained for public purposes. As under existing law, Federal funds could be used for the costs incurred in preparing property for disposition.

The authority to provide public works, facilities, and site or other improvements would be substantially

equivalent to that provided under existing laws. example, funds could be used for water and sewer

For

facilities, neighborhood facilities, historic properties, streets, platforms for air right sites, parks and playgrounds. As under the categorical development programs, clearance, demolition, removal, and rehabilitation of

buildings and improvements which are acquired for redevelopment would be eligible for assistance. Financing the rehabilitation of privately owned properties would be eligible, but only when incidental to other activities. This restriction is appropriate since funds to support private and public housing would continue to be available under the Federal housing programs.

Funds could also be used to support certain service activities. Health, social, and similar activities eligible for Model Cities supplemental grants would be eligible for assistance, as would activities which provide for the elimination (by code enforcement or otherwise) of harmful physical conditions constituting a danger to public health and safety. The cost of relocating individuals, families, business concerns and farm operations displaced by community development activities is also

specifically eligible, but no further Federal contribution

in addition shared revenues would be made for such

relocation expenses. As in the case of the programs being replaced, expenses incurred in connection with the planning or administration of assisted activites, but not general expenses required to carry out overall governmental responsibilities, would be eligible costs.

Decisions on which activities would be undertaken

in each community and what proportion of available funds would be channeled into each activity would be made locally. Recipients could decide for themselves whether or not specific activities carried out under the categorical grant programs should be continued. No present program deemed desirable at the local level would have to be terminated. On the other hand a program could be terminated if the city felt the programs were unsuccessful or not directed toward the priority needs of

the community.

Operational Rules and Requirements

Reporting Requirements.

No prior Federal approval

would be required for any activity. Each recipient would be required to file with the Secretary of HUD and publish a statement of his community development objectives and the projected uses of funds beginning with fiscal year 1973. Each statement by a unit of general local government would also have to be submitted to the Governor of the State in which it is located.

Audits and Recovery of Funds.

There would be periodic

audits to determine how urban community development

funds have been spent. A procedure is provided for the

Secretary to suspend payments to any recipient if he determines as a result of an audit or otherwise that the recipient has failed to comply with the requirements of

the legislation.

Nondiscrimination.

There could be no discrimination

in the use of urban community development revenue sharing funds. The civil rights requirements that are applicable to the antecedent programs would apply to the successor

program.

Labor Standards. The payment of prevailing wages, as determined by the Secretary of Labor, would be required with respect to all laborers and mechanics employed for all construction (except multifamily housing with 11 or fewer units) financed in whole or in part with urban community development revenue sharing funds.

Combining Shared Revenues with Other Federal Grants. Shared revenues could be used by recipients for community development activities being assisted in part under other Federal grant programs. For the purpose of satisfying any local matching requirements under the grant program, shared revenues could be considered as local matching funds.