DAR File No. 28740

Community and Culture, Housing and Community Development

R199-11

Community Development Block Grants (CDBG)

NOTICE OF PROPOSED RULE

DAR File No.: 28740
Filed: 05/16/2006, 01:21
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This amendment changes part of the Community Development Block Grant (CDBG) contract process to make it simpler.

Summary of the rule or change:

This amendment eliminates the two category contract processing system. It is now the same system whether or not there are other funding sources. The amendment also eliminates multi-purpose types of grants now there are only single year and multi-year grant types.

State statutory or constitutional authorization for this rule:

Section 9-4-202 and 24 CFR 570 (1996)

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to the state budget. This change does not impact the process significantly and will not change the amount of time required to process applications and issue grant contracts.

local governments:

There is no anticipated cost or savings to local government. This change does not impact the process significantly and will not change the amount of time required to process or prepare applications and issue grant contracts.

other persons:

There is no anticipated cost or savings to any other persons. This change does not impact the process significantly and will not change the amount of time required to prepare applications and grant contracts.

Compliance costs for affected persons:

There will be no costs or changes to individuals or local governments preparing grant applications or contracts.

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

This change only affects internal processing and has no fiscal impact.

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

Direct questions regarding this rule to:

Keith Heaton at the above address, by phone at 801-538-8700, by FAX at 801-538-8888, or by Internet E-mail at kheaton@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:

07/17/2006

This rule may become effective on:

07/25/2006

Authorized by:

Richard Bradford, Director

RULE TEXT

R199. Community and Culture, Housing and Community Development.

R199-11. Community Development Block Grants (CDBG).

R199-11-4. 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.[

(ii) Contracts - Two separate categories will be used to process contracts:

Category one:]

(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 DCC (The Department of Community and Culture);

(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 DCC 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;[

Category two:

(A) Applicants in this category must demonstrate that they are actively seeking the additional funds needed for an identified CDBG project;

(B) Contracts shall be returned by August 1, accompanied by verification of all other funds;

(C) If additional funds have not been secured by August 1, grantees may, after notifying and receiving the permission of their AOG, (Association of Governments) have the months of August, September, and October to obtain definite commitment from other funding sources;

(D) There are varying time frames and unexpected delays inherent with the funding agencies. Therefore, after October 31, the RRC, in conjunction with the State, will determine necessary or requested extensions on a case by case basis based on criteria administered by the Policy Committee. If the additional funds cannot be obtained within the time permitted, the RRC must follow the procedure outlined in (C) and (D) of method one.]

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

(d) [Ten]Five Percent Withholding - The state reserves the right to withhold [ten]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.

R199-11-6. 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 [four]two types of grants: Single year and multi-year.[

(a) Single Year, Single Purpose

(b) Single Year, Multi Purpose

(c) Multi Year, Single Purpose

(d) Multi Year, Multi Purpose]

KEY: community development, grants

Date of Enactment or Last Substantive Amendment: [December 17, 1996]2006

Notice of Continuation: April 19, 2006

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

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Keith Heaton at the above address, by phone at 801-538-8700, by FAX at 801-538-8888, or by Internet E-mail at kheaton@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.