Workforce Services, Housing and Community Development

Rule R990-11

Community Development Block Grants (CDBG)

Notice of Proposed Rule

(New Rule)

DAR File No.: 36219
Filed: 05/15/2012 04:41:17 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

H.B. 139 which was passed in the 2012 General Session moved the Division of Housing and Community Development from what was known as the Department of Community and Culture (DCC) to the Department of Workforce Service (DWS). This proposed new rule simply changes the rule numbering and moves it to DWS.

Summary of the rule or change:

This new rule text is the same as the old rule. The old rule number was R199-11 and will now be R990-11. The statutory references have been changed to reflect the new code provisions. The old department and division names were also changed to reflect the changes in H.B. 139. No other changes were made.

State statutory or constitutional authorization for this rule:

• Section 35A-8-202

Anticipated cost or savings to:

the state budget:

There will be no costs or savings to the state budget by this new rule because the rule already existed and any costs or savings are as a result of H.B. 139 and not this new rule.

local governments:

There will be no costs or savings to any local government's budget by this new rule because the rule already existed and any costs or savings are as a result of H.B. 139 and not this new rule.

small businesses:

There will be no costs or savings to any small business by this new rule because the rule already existed and any costs or savings are as a result of H.B. 139 and not this new rule.

persons other than small businesses, businesses, or local governmental entities:

There will be no costs or savings to any persons other than small businesses, businesses or local government entitles by this new rule because the rule already existed and any costs or savings are as a result of H.B. 139 and not this new rule.

Compliance costs for affected persons:

There will be no costs or savings to any affected persons by this new rule because the rule already existed and any costs or savings are as a result of H.B. 139 and not this new rule.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business.

Kristen Cox, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Housing and Community Development
140 E BROADWAY
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at spixton@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/02/2012

This rule may become effective on:

07/09/2012

Authorized by:

Kristen Cox, Executive Director

R990. Workforce Services, Housing and Community Development.

R990-11. Community Development Block Grants (CDBG).

R990-11-1. Purpose and Authority.

This rule incorporates by reference 24 CFR 570 (1996) as authorized by Section 35A-8-202.

 

R990-11-2. State and Regional Funding Processes.

(1) CDBG funds are to be distributed based on regional prioritization of projects by utilizing a rating and ranking system developed and applied by the regional review committees (RRC). The role of each RRC is to receive, review and to prioritize the CDBG applications in its region.

(2) The RRC shall develop a rating and ranking system prior to the receipt of grant application. Upon completion of the rating and ranking process, each RRC shall present to the state a list of:

(a) all projects submitted to them for ranking,

(b) copies of ranking result sheets,

(c) the rationale for not ranking any submitted projects, and

(d) a summary of all final ranking results.

 

R990-11-3. Eligible Grant Applicants, National Objectives and Eligible Projects.

(1) Eligible applicants for the State CDBG Program are:

(a) incorporated cities and towns with populations of less than 50,000, except Clearfield and jurisdictions located in Salt Lake County;

(b) all of Utah's counties except Salt Lake County;

(c) units of local government recognized by the Secretary of The Department of Housing and Urban Development (HUD).

(2) National Objective Compliance Pursuant to 24 CFR 570.208.

(a) The national objective may be met in three possible ways:

(i) activities that benefit low and moderate income individuals, families and communities.

(ii) activities aiding in the prevention or elimination of slums or blight.

(iii) activities that address urgent health and welfare needs.

(3) Inclusive Federal Compliance Requirements.

(a) applicants shall comply with all regulations in 24 CFR part 570 and all applicable federal and state regulations, laws and overlay statutes.

(b) additional federal overlay statutes and regulations may apply to the state program if directed by HUD and Congress.

(4) Eligible activities are those defined by Section 105 of the Housing and Community Development Act of 1974, as amended.

 

R990-11-4. Responsibilities of Grantee, Regions and State.

(1) Grantee Responsibilities

(a) Grantees are allowed to take up to 10% of the contract amount for administration purposes. Administrative cost must be broken out from the rest of the project costs when the application and contract budget are prepared.

(b) The formal contract with the state must include an environmental review, federal labor standards and civil rights.

(2) Regional Responsibilities.

(a) Prioritization - Each RRC shall rate and rank all applications based on a set of criteria available to the public for comment.

(b) Public participation - Each RRC is required to hold at least one public hearing yearly to assist applicants and obtain comments and suggestions regarding the CDBG process.

(c) Application completion - Each RRC has the responsibility to assure that applications are completed in full prior to submission to the state.

(d) Administrative Capacity - The RRC will assess the ability of each applicant to administer a CDBG grant.

(3) State Responsibilities.

(a) Public Participation - The state is required to hold at least one public hearing yearly to notify the public, explain the community development program and to receive comments.

(b) Review of Applications - Upon receipt of the CDBG prioritized applications from the regions, the state staff shall begin a review process.

(c) Timely Distribution of Funds - The state is required by HUD to ensure that CDBG funds are allocated and distributed in a timely manner.

(i) Application - Each applicant shall make their final application decision prior to submitting it to the RRC.

(A) Contracts will be sent out in April and Grantees will have until June 1, to sign and return all copies of the contract to the Housing and Community Development Division (HCD) of the Department of Workforce Services.

(B) On a case by case basis, RRCs may allow a one month extension to grantees experiencing unavoidable delays. Grantees must notify their RRC prior to the deadline;

(C) Funds from all contracts not returned to HCD by July 1, will be returned to the appropriate RRC for reallocation;

(D) Any funds not reallocated by the RRC by August 1, will be returned to the State. The State will reallocate the funds to an approved project;

Grantees may not delay the processing of the current application based on the possibility of receiving an allocation in the following year.

(d) Five Percent Withholding - The state reserves the right to withhold five percent of the CDBG grant amount pending a satisfactory final programmatic financial monitoring review of all projects.

(e) Cost Overruns - The state may authorize the funding of project cost overruns requested by the RRC.

(f) Fund Leveraging - One of the state's roles in the CDBG funding process is to provide assistance to grantees in leveraging other available financial resources.

(g) Program Monitoring - During the course of each CDBG contract the state must monitor all grantees.

(h) Grant Close Out - A grant close out packet will be submitted to the state at the completion of each CDBG-funded activity.

 

R990-11-5. Threshold Requirements.

Minimum threshold requirements are those defined by Section 105(e) of the Housing and Community Development Act of 1974, as amended and as stipulated in section 4 of the State CDBG Application Guide available from HCD.

(1) The determination of eligibility for recipients and activities shall be made by the RRC and State CDBG staff under state and federal criteria and regulations contained in 24 CFR part 500 and the State CDBG Application Guide available by contacting HCD at 140 E 300 S, Salt Lake City, UT 84111.

(2) Each grant application must clearly demonstrate that the project will meet one of the three National Objectives identified in R990-1-3.

(3) Each grant applicant must demonstrate consistency with the Consolidated Plan, available from HCD at 140 E 300 S, Salt Lake City, UT 84111.

(4) Each grant application may contain more than one activity addressing identified needs; however, these activities must be interrelated.

(5) All costs incorporated with the grant must be realistic given the nature and type of activities to be performed.

(6) Program income generated as a result of CDBG activities may be retained by the grantee when income is applied to continue the activity from which the income was derived, or when used for other community development projects eligible under Section 105 of the Housing and Community Development Act of 1974, as amended, and after the preparation of a plan, approved by the state, specifying the proposed activity and stating the method that will be employed for its use.

 

R990-11-6. Length of Contract and Type of Grants.

(1) All grantees shall have 18 months depending upon contract execution, or until October 31, of the following year to complete their project.

(2) There are two types of grants: Single year and multi-year.

 

R990-11-7. Adjudicative Proceedings to Appeal Decisions of RRC.

(1) Classification of Actions. Adjudicative proceeding to appeal decisions of RRC by CDBG applicant agencies shall be conducted in accordance with section 63G-4-203.

(2) Commencement of Appeals Procedure. An applicant agency requesting an appeal hearing from HCD, shall submit a request:

(a) in writing;

(b) signed by the chief elected official; and

(c) include the following information:

(i) the names and addresses of all persons to whom a copy of the request for a hearing is being sent;

(ii) the RRC file number;

(iii) the name of the adjudicative proceeding;

(iv) the date the request for an appeals hearing was mailed;

(v) a statement of the legal authority and jurisdiction under which CDBG action is requested;

(vi) a statement of relief sought from HCD; and

(vii) a statement of facts and reasons forming the basis for relief.

(d) The request for an appeals hearing must be submitted within ten days following the notice of decision by the RRC. At this point it shall be necessary for HCD to place a hold on processing any contracts from the region in which the dispute has occurred until the matter is settled.

(3) Notification of interested parties.

(a) The CDBG applicant agency that requests an appeals hearing shall file the request with the Director of HCD and shall send a copy by mail to each person known to have a direct interest in the requested hearing.

(b) The Director of HCD, or a hearing officer appointed by the Director of HCD, will within five working days after the appeals request, set the time and date for an appeals hearing. The Director of HCD or the hearing officer shall promptly give notice by mail to all parties, stating the following:

(i) HCD and RRC file number;

(ii) the name of the proceeding;

(iii) a statement indicating that the proceeding is to be conducted informally and according to the provisions of rules enacted under Sections 63G-4-203 authorizing informal proceedings.

(iv) the time and place of the scheduled appeals hearing, the purpose of the hearing, and that a party may be held in default if failing to attend or participate in the hearing.

(v) the name, title, mailing address and telephone number of the director of HCD or the hearing officer.

(vi) Hearing Procedures

(a) hearing shall be held only after notice to interested parties is given in conformance with R990-7-1C;

(b) no answer or other pleading responsive to the request for a hearing need be filed.

(c) the following issues shall be reviewed at the appeals hearing:

(i) whether reasonable and equitable criteria are established for reviewing CDBG applications by the RRC

(ii) whether the priority ranking process is fair to all applicants;

(iii) whether the criteria and process were applied equitably and consistently to all applicants.

(d) in the appeals hearing, the parties named in the request for a hearing shall be permitted to testify, present evidence, and comment on the issues.

(e) discovery is prohibited, and HCD may not issue subpoenas or other discovery orders.

(f) all parties shall have access to information contained in HCD's files and to all materials and information gathered by any investigation to the extent permitted by law.

(g) any intervention is prohibited.

(h) all hearings shall be open to all parties.

(i) within 21 days after the close of the hearing, the Director of HCD shall issue a signed order in writing that states:

(i) the decision;

(ii) the reason for the decision;

(iii) a notice of any right for administrative or judicial review available to the parties; and

(iv) the time limits for filing a request for reconsideration or judicial review.

(j) the Director of HCD's order shall be based on the facts appearing in HCD's files and on the facts presented in evidence at the appeals hearing.

(k) a copy of the Director of HCD's order shall be promptly mailed to the parties.

(l) all hearings shall be recorded at the expense of HCD. Any party, at his own expense, may have a reporter approved by HCD prepare a transcript from HCD's record of the hearing.

(5) Default

(a) the Director of HCD may enter an order of default against a party if a party fails to participate in the adjudicative proceeding.

(b) the order shall include a statement of the grounds of default and shall be mailed to all parties.

(c) a defaulted party may seek to have HCD set aside the default order according to procedures outlined in the Utah Rules of Civil Procedure.

(d) after issuing the order of default, the Director of HCD will conduct any further proceedings necessary to complete the adjudicative proceeding without the participation of the party in default and will determine all issues in the adjudicative proceeding, including those affecting the defaulted party.

(6) Reconsideration by HCD. Within ten days after the date that a final order is issued by the Director of HCD, any party may file a written request for reconsideration in accordance with the provisions of the Administrative Procedures Act, Section 63G-4-302. Upon receipt of the request, the disposition by the Director of HCD of that written request shall be in accordance with Section 63G-4-302. With the exception of reconsideration, all orders issued by the Director of HCD shall be final. There shall be no other review except for judicial review as provided below.

(7) Judicial Review. An aggrieved party may also obtain judicial review of final HCD orders by filing a petition for judicial review of that order in compliance with the provisions and requirements of the Utah Administrative Procedures Act, Sections 63G-4-401and 63G-4-402.

 

KEY: community development, grants

Date of Enactment or Last Substantive Amendment: 2012

Authorizing, and Implemented or Interpreted Law: 9-4-202(2) et seq.; 35A-8-202