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Federal Register / Vol. 86, No. 110 / Thursday, June 10, 2021 / Rules and Regulations
guidance that HUD has issued to assist grantees in compliance. Compliance with AFFH is included as a condition in a myriad of funding notices that HUD
publishes on a regular basis and that it cannot delay past the effective date of this interim final rule. Similarly, HUD
cannot delay past the effective date of this interim final rule because participants in the Community Development Block Grant CDBG
program must submit their Annual Action Plans, which include AFFH
certifications, by August 16 each year.
Each year, HUD provides States, local governments, and public housing agencies with billions of dollars in federal financial assistance, appropriated and authorized by Congress. As part of HUDs obligations as a grantor agency, consistent with longstanding statutory requirements, HUD oversees the use of such funds to ensure that taxpayer dollars are used in a responsible manner that is consistent with the law. For example, HUD is obligated to ensure that all federal grants are made consistently and in accordance with federal grant making requirements set forth at 2 CFR part 200.
These requirements obligate HUD to engage in active oversight of its recipients, including ensuring compliance with civil rights requirements. See, e.g., 2 CFR 200.300
The Federal awarding agency must manage and administer the Federal award in a manner so as to ensure that Federal funding is expended and associated programs are implemented in full accordance with the U.S.
Constitution, Federal Law, and public policy requirements: Including, but not limited to, those protecting free speech, religious liberty, public welfare, the environment, and prohibiting discrimination..
As a vital part of this oversight role, HUD requires program participants to annually certify that they will comply with various federal requirements, including the obligation to affirmatively further fair housing. Under the PCNC
Rule, these certifications are to a standard that is inconsistent with the underlying legal obligation, preventing HUD from relying on them to carry out its oversight obligations. For these reasons, and with impending deadlines including the August 16 CDBG annual action plan deadline, it is imperative that HUD immediately provide its recipients with legally supportable definitions and certifications for HUD to meet its own obligations as a grantor agency and put its grantees on notice that PCNC represents a standard that HUD now believes is not consistent with the statutory obligation to
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affirmatively further fair housing.
Moreover, because certifications made under the PCNC rule do not require compliance with the Fair Housing Act, allowing that rule to remain in place risks further entrenching segregation and inequity in access to housing and opportunity, challenges that have been exacerbated by presently converging health, economic, and climate crises.
HUD Is Delaying the Effective Date of This Interim Final Rule Until July 31, 2021
While HUD is providing notice immediately that it does not regard the PCNC definitions as compliant with the statutory AFFH obligation, HUDs prior interpretations, and judicial precedent, HUD is delaying the effective date of this interim final rule until July 31, 2021
to give program participants time to adjust. HUD has determined that this is the longest delay of the effective date it can provide while ensuring that municipalities and other participants in the Community Development Block Grant program can submit annual action plans, including AFFH certifications, that are consistent with the AFFH
statutory obligation as described above.
CDBG annual action plans must be submitted by August 16 each year, and so HUD has determined that it is necessary for this rule to go into effect before then and to provide program participants with sufficient notice.12
Between the date of publication and the effective date, HUD will provide additional clarity to affected program participants. HUD will provide guidance and technical support to program participants regarding the interim final rule, including with respect to the reinstated definitions and certifications and with respect to fair housing planning and actions that program participants may voluntarily undertake in support of their certifications. Additionally, although the definitions have already been the subject of notice-and-comment rulemaking, HUD will seek comment for a period of 30 days from publication to solicit additional views. HUD will carefully consider all such comments and in response to those comments, as it deems appropriate, may amend the interim final rule accordingly.
Conclusion Under the totality of the circumstances described above, HUD
believes this limited-in-scope interim 12 See 42 U.S.C. 5316b; 24 CFR 91.15a; 24 CFR
570.304c1.

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final rule is justified by good cause.13
HUD finds that the PCNC rule is contrary to the AFFH statutory mandate and constitutes a substantial departure from HUDs prior interpretations and judicial precedent. Moreover, the PCNC
rule is contrary to multiple Congressional mandates with which HUD must act promptly to comply by removing the PCNC regulation and restoring definitions upon which program participants can reasonably rely in certifying compliance with their statutory duty to AFFH. HUD further finds that the PCNC rule was improperly promulgated without a sufficient reason for forgoing notice and comment rulemaking. This interim final rule reinstates provisions that have already undergone sufficient notice and comment processes, and HUD is now inviting additional comment and delaying the effective date of this interim final rule until July 31, 2021.
HUD may further revise this interim final rule before its effective date in response to these comments.
Additionally, HUD is reestablishing voluntary processes and technical assistance to assist program participants in complying with their statutory AFFH
obligations and engage in fair housing planning.
III. This Interim Final Rule Against this backdrop, this interim rulemaking is narrowly focused to meet the urgent need to withdraw the PCNC
rule definition, which promotes confusion and noncompliance with the statutory obligation to AFFH, and to reinstate a definition that properly states that duty and is the result of notice and comment rulemaking. This interim final rule restores the understanding of the AFFH obligation for certain recipients of federal financial assistance from HUD to the previously established understanding by reinstating legally supportable definitions that are consistent with a meaningful AFFH
requirement and certifications that incorporate these definitions. HUD has also amended the certifications in the program regulations at 24 CFR 91.225, 91.325, 91.425, 570.487, 903.7, and related record keeping requirements to restore meaningful AFFH certifications that incorporate appropriate definitions.
13 See Petry v. Block, 737 F.2d 1193, 1200 D.C.
Cir. 1984 For here the combination of several extraordinary factors validates the Departments adoption of the interim rule under the mantle of good cause. ; see also Natl Women, Infants, &
Children Grocers Assn v. Food & Nutrition Serv., 416 F. Supp. 2d 92, 105107 D.D.C. 2006 finding that, under the totality of circumstances, a combination of the four reasons advanced by the agency established good cause to promulgate an interim final rule.

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