       Applicability of the Uniform Relocation Assistance Act
       to the Community Development Block Grant Program

The U niform Relocation A ssistance and Real Property A cquisition A ct (URA), w hich authorizes
  com pensation fo r persons displaced by federally funded urban redevelopm ent, applies to the
  projects funded out of the C om m unity D evelopm ent B lock Grant (C D B G ) program , as am ended
  by the Om nibus Budget Reconciliation A ct of 1981.

T he statutory language and legislative history of the H ousing and C om m unity Developm ent A ct of
    1974 indicate that Congress intended the URA to apply to grants m ade under authority of that law,
    including grants under the C D B G program . A dm inistrative practice and legislative consideration
   of the CDBG program since 1974 reflect that intention. T he am endm ents m ade to the C D B G
   program by the O m nibus B udget Reconciliation Act o f 1981 sim plified the CD B G program and
   reduced the level o f federal involvement; however, these am endm ents m ake no explicit reference
   to the URA and are not inconsistent with continued application of the URA. T herefore, they
   cannot be said to affect the continuing applicability of the URA to com m unity developm ent block
   grants.


                                                                              November 5, 1982

       MEMORANDUM OPINION FOR THE GENERAL COUNSEL,
       DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,
            AND FOR THE COUNSEL TO THE DIRECTOR,
             OFFICE OF MANAGEMENT AND BUDGET


                                         I. Introduction

   This memorandum responds to your request for our opinion concerning the
applicability of the Uniform Relocation Assistance and Real Property Acquisi­
tion Policies Act (URA), 42 U.S.C. §§ 4601^1655, to the Community Develop­
ment Block Grant (CDBG) program, as recently amended by the Omnibus
Budget Reconciliation Act of 1981 (Reconciliation Act). Pub. L. No. 97-35, 95
Stat. 357. The CDBG program was originally established by the Housing and
Community Development Act of 1974 (HCDA). Pub. L. No. 93-383, 88 Stat.
633.
   A similar issue was raised by a request submitted to this Office last year
concerning the applicability of four cross-cutting civil rights statutes to the
education and social services block grants created by the Reconciliation Act. In
response to that earlier request, we determined that the specified cross-cutting
statutes did apply to the education and social services block grants. Memoran-

                                                 605
dum for Michael Horowitz, Counsel to the Director, Office of Management and
Budget, “Applicability of Certain Cross-Cutting Statutes to Block Grants Under
the Omnibus Budget Reconciliation Act of 1981,” January 18, 1982 (OLC
Memorandum of January 18, 1982).* Although your recent request concerns a
different cross-cutting statute and a different block grant program, several of the
issues and principles discussed in the OLC Memorandum of January 18, 1982,
are relevant to the question posed by your current request. We have therefore
referred to its conclusions where appropriate.
   In responding to your request, we have reviewed the relevant statutes, their
legislative history, cases involving the URA and the HCDA, and related second­
ary sources. In brief, we have concluded (1) that Congress intended the URA to
apply to the original CDBG program established in 1974, and (2) that Congress
did not intend to alter this result when it amended the CDBG program in the
Reconciliation Act.
   These conclusions are set forth below as follows. In Section II, we discuss the
statutory background of the URA and the original HCDA and describe the
relevant provisions of each statute. In Section III, we consider the applicability of
the URA to the original HCDA by reviewing the language and policy of the
URA, the language and legislative history of the HCDA, HUD’s prior interpreta­
tions of the applicability of the URA to the HCDA, relevant case law concerning
this issue, and finally, legislative action between the original adoption of the
HCDA and the adoption of the Reconciliation Act. In Section IV, we describe the
specific changes made to the HCDA by the Reconciliation Act. Finally, in
Section V, we discuss the applicability of the URA to the amended CDBG
program.

                 II. Statutory Background: The URA and the HCDA

A. The URA

   The URA was adopted in 1970 in order to establish a uniform program of
relocation assistance for those displaced by federal and federally assisted proj­
ects . In the words of Section 201,42 U .S .C . § 4621, the purpose of the URA was
           to establish a uniform policy for the fair and equitable treatment of
           persons displaced as a result of Federal and federally assisted
           programs in order that such persons shall not suffer disproportion­
           ate injuries as a result of programs designed for the benefit of the
           public as a whole.
  Congress specifically linked the need for a uniform relocation assistance
policy to the increasing involvement of the federal government in urban re­
developm ent.1 The House Report stated:

  * N o te : The January 18, 1982, memorandum is reprinted in this volume at p. 83, supra. Ed
   1 This point is further highlighted by the fact that the provisions of the URA were taken in substantial part from the
relocation assistance provisions ofthe Housing and Urban Development Act. S Rep No. 4 8 8 ,91stCong .IstS e ss .
2 (1969).


                                                        606
        As the thrust of Federal and federally assisted programs have [sic]
        shifted from rural to urban situations, it became increasingly
        apparent that the application of traditional concepts of valuation
        and eminent domain resulted in inequitable treatment for large
        numbers of people displaced by public action. When applied to
        densely populated urban areas, with already limited housing, the
        result can be catastrophic for those whose homes or businesses
        must give way to public needs. The result far too often has been
        that a few citizens have been called upon to bear the burden of
        meeting public needs.

H.R. Rep. No. 1656, 91st Cong., 2d Sess. 2 (1970). Thus, Congress concluded
that, particularly in the context of urban land acquisition, basic principles of
fairness and equitable treatment required compensation to displaced persons
beyond that which was constitutionally mandated.
   A second major concern of Congress was that the basic right to receive
adequate compensation when displaced by a federal or federally assisted pro­
gram should be uniformly applied with respect to all such programs. Prior to the
URA, various relocation assistance provisions were scattered throughout a
number of federal statutes, and benefits to displaced individuals and businesses
varied widely. For example, a person displaced by a federally assisted project in
one state might have received extensive relocation assistance, while a person
displaced by a similar project in another state might have received no assistance at
all. The URA was designed to remedy this inequitable treatment by applying one
set of compensation standards to all federally assisted projects. H.R. Rep. No.
 1656, 91st Cong., 2d Sess. 2-3 (1970), Code Cong. & Admin. News 5850,
5851-52. See Note, Relocation—The Uniform Relocation Assistance and Real
Property Acquisition Policies A ct c f 1970—An Empirical Study, 26 Mercer L.
Rev. 1329, 1341—42 (1975).
   Finally, with respect to the general policy of the URA, it is important to note
that relocation assistance was intended to compensate equitably not just individu­
als, but businesses as well. The definitions of “ person” and “ displaced person”
(for whom relocation benefits must be provided) were drafted specifically to
include partnerships, corporations, and associations, in addition to individuals.
42 U.S.C. §§ 4601(5) & 4601(6). In addition, the URA contains specific
provisions relating to the manner in which businesses will be compensated when
they are required to move as a result of federally assisted programs. 42 U.S.C.
§§ 4622(a) & 4622(c). Thus, the URA is not a welfare measure, but rather a
method of fairly compensating both individuals and businesses for the special
burdens they may have to bear in connection with the acquisition of property for
federal or federally assisted programs.
   The URA imposes several specific requirements in order to fulfill this purpose.
First, the Act requires certain payments to displaced individuals and businesses
in order to compensate them for the actual financial losses involved in moving
their homes or businesses, obtaining new mortgages, or locating replacement

                                       607
housing. 42 U .S.C . §§ 4622—4624. Second, the Act provides for certain reloca­
tion assistance advisory services to those who are displaced. 42 U .S.C .
§ 4625(a). Finally, the Act requires the responsible agency to assure that substan­
tially equivalent housing will be available within a reasonable period of time prior
to displacement. 42 U.S.C. § 4625(c).
   The URA applies these requirements not only to federal agencies, but also to
state agencies that obtain federal financial assistance. Section 210 of the URA
states that unless the head of the responsible federal agency receives satisfactory
assurances from a state agency that the state will comply with the requirements
set forth above, then “ the head o f a Federal agency shall not approve any grant to,
or contract or agreement with, a State agency, under which Federal financial
assistance will be available to pay all or part of the cost of any program or project
which will result in the displacement of any person. . . .” 42 U.S.C. § 4630.
The term “ federal financial assistance” is defined in the URA as “ a grant, loan,
or contribution provided by the United States. . . .” 42 U.S.C. § 4601(4). Thus,
in order to receive federal funds for the purpose of acquiring property, a state
must certify that it will comply with the requirements of the URA.

B. The HCDA

   The HCDA was adopted in 1974 to consolidate and simplify a number of
different housing and community development programs. See Pub. L. No.
93-383, 88 Stat. 633 (1974). The most notable feature of the HCDA was the
creation of the Community Development Block Grant program, which trans­
formed ten existing federal categorical grants into a single block grant program
under which the federal government would allocate funds to local governments,
which would then plan and administer their own community development
programs with these federal funds.2
   The principal purpose in adopting the block grant formula was to give the local
governments the power to determine the projects on which the federal funds they
received would be spent. As President Ford observed in signing the bill,
          In a very real sense, this bill will help to return power from the
          banks of the Potomac to people in their own communities. Deci­
          sions will be made at the local level. Action will come at the local
          level. And responsibility for results will be placed squarely where
          it belongs— at the local level.

10 Weekly Comp. Pres. Doc. 1060 (Aug. 22, 1974). See Fishman, Title I of the
Housing and Community Development Act c f 1974: New Federal and Local
Dynam ics in Community Development, 7 Urban Lawyer 189, 190-91 (1975).
  At the same time, however, Congress rejected revenue sharing’s “ no strings”
approach. Congress defeated the Administration-supported revenue-sharing pro­

  2 For a description of the relationship and distinction between categorical grants, block grants, and revenue
sharing, see our memorandum of January 18, 1982, at 17-19


                                                    608
posals and instead “ adopted the block grant approach primarily to insure that
Federal funds would be used with a priority to eliminate slums and blight and to
upgrade and make the Nation’s cities more livable, attractive and viable places in
which to live.” S. Rep. No. 693, 93d Cong., 2d Sess. 2 (1974). Thus, although
the states were given the right to select the projects on which the funds would be
spent, Congress at the same time intended to ensure that all the funds would be
spent to further the specified goals of the HCDA.
   This balance is reflected in the procedures adopted for implementation of the
new CDBG program. These procedures can generally be divided into four
separate categories: (1) Application Requirements; (2) HUD Review of Applica­
tions; (3) Allocation and Distribution Procedures; and (4) Performance Review.
These categories are analyzed below in some detail in order to determine the level
of federal involvement mandated by the HCDA and to establish a basis for
comparing the changes in federal control wrought by the Reconciliation Act
amendments to the CDBG program.

1. Application Requirements

   The HCDA required all applications for CDBG funds to contain the following
four elements: (1) a summary of a three-year community development plan that
identified specific needs and objectives, set forth the activities that would be
undertaken to meet community development needs and objectives, and was
designed to eliminate or prevent slums and to provide improved community
facilities and public improvements; (2) a housing assistance plan that surveyed
the condition of available housing and specified an annual goal for the number of
dwelling units or persons to be assisted; (3) satisfactory assurances that the
program would be conducted in conformity with certain civil rights provisions;
and (4) satisfactory assurances that the applicant had provided citizens with
information about the proposed plan and had given them an opportunity to
participate in the development of the application. These application requirements
were far more limited than those previously required under the categorical grant
programs, and they were designed to simplify the “ lengthy, burdensome, and
generally frustrating process by which HUD approves applications for various
community development grants. . . .” H.R. Rep. No. 1279, 93d Cong., 2d
Sess. 6 (1974).

2. HUD Approval Process

   Under the HCDA, HUD was required to approve an application unless: (1) the
description of needs was “ plainly inconsistent” with the facts and data available
to HUD; or (2) the activities identified in the application were “ plainly inap­
propriate” to the needs identified; or (3) the application did not comply with the
HCDA or other applicable laws. Congress intended that the presumption would
be in favor of approval of an application and that HUD’s review “ should be
limited in its scope. . . .” S. Rep. No. 6 9 3 ,93d Cong., 2d Sess. 55 (1974), H.R.

                                       609
Rep. No. 1279, 93d Cong., 2d Sess. 127-28 (1974); see Fishman, Title I o f the
Housing and Community Development A ct c f 1974: New Federal and Local
D ynam ics in Community Development, 1 Urban Lawyer 189, 194 (1975).
Congress intended to “ reduce significantly the unnecessary ‘second-guessing by
Washington’ that has been criticized under existing programs,” and it expected
that “ the shift from project to program review will accomplish this, in large
measure.” S. Rep. No. 693, 93d Cong., 2d Sess. 56 (1974). This policy was
underscored by the requirement that any application would be deemed approved
unless HUD set forth specific reasons for disapproval within 75 days after receipt
of the application.

3. Allocation and Distribution Procedures

   The HCDA replaced the more discretionary allocation procedures contained in
the previous categorical grant programs with a formula approach to be developed
by HUD on the basis of several specified factors.3 Once HUD developed this
formula, the distribution procedures operated automatically.

4. Performance Review

   The HCDA also contained specific procedures for HUD review of a grantee’s
performance under the CDBG program. HUD was required to make an annual
review and audit of the grantee’s performance in order to determine whether the
grantee had carried out the program as described in its application, whether the
program conformed to the requirements of the HCDA and other applicable laws,
and whether the applicant maintained a continuing capacity to carry out the
program. § 104(d), 88 Stat. 633 (1974). HUD was required to make appropriate
adjustments in the amount of annual grants in accordance with its findings during
the annual performance review. Thus, the performance review was designed to be
a backup for the review of the original application.

                        III. Applicability of the URA to the HCDA

A. Statutory Language and Policy c f the URA

   By its terms, the URA seems to apply to community development block grants
under the HCDA. The URA is applicable to “ any grant to, or contract or
agreement with, a State agency, under which Federal financial assistance will be
available to pay all or part of the cost of any program or project which will result
in the displacement of any person. . . 42 U.S.C. § 4630. A CDBG award is
clearly a grant to a state agency, and it is well within the definition of “ federal

   3 “ The formula amount is determined on a 4-factor basis including population, extent of poverty counted twice,
and housing overcrowding ” H.R Rep No. 1279, 93d Cong., 2d Sess. 131 (1974). Other than the discretion
inherent in the development of the formula itself, HUD lacked discretion with respect to the distribution of the great
bulk o f the funds under the HCDA.

                                                       610
financial assistance.” 4 In addition, the HCDA specifically contemplated assist­
ance to state “ programs” (such as the community development programs out­
lined in CDBG applications) which were likely to “ result in displacement” of
individuals or businesses. The CDBG program established by the HCDA seems
to fall squarely within the contemplated scope of the relief provided by the URA.
   Moreover, this result is consistent with the general policy of the URA. The
principal policy judgment underlying the URA was the conclusion that, par­
ticularly in the context of the increasing federal subsidization of urban renewal,
some form of statutorily required relocation assistance was necessary to compen­
sate displaced individuals and businesses. Congress decided that since federal
funds were being used to dislocate persons and businesses, federal funds ought to
be available to pay for the full costs of each dislocation. Community development
was one of the critical areas upon which Congress focused when it enacted the
URA, and relocation assistance was regarded not as a welfare program, but rather
as the only fair method of spreading the burden imposed by projects undertaken
on behalf of the public.5 Thus, even though the HCDA permitted the states to
determine what types of projects to pursue, it did not supplant Congress’
determination that federal funds should not be used to displace individuals and
businesses without adequate compensation. In addition, the important goal of
uniform treatment of persons displaced by federally assisted projects regardless
of the project’s location6 could not accomplished if relocation assistance were
merely optional under the HCDA.

B. Statutory Language and Legislative History c f the HCDA

   Having determined that community development block grants under the
HCDA are the type of federal assistance that the URA was intended to govern,
the question remains whether there is anything in the statutory language or
legislative history of the HCDA itself that is antithetical to the application of the
URA. On the whole, both the statutory language and the legislative history of the
HCDA suggest that Congress assumed that the URA would apply to block grants
under the HCDA. The statutory language does not specifically refer to the URA,
but it does require the Secretary to disapprove an application not in compliance
with the requirements of “ other applicable law.” Thus, Congress expected that at
least some laws other than the HCDA would govern block grants.
   The legislative history of the HCDA suggests that Congress assumed that the
URA was among the statutes that would apply to block grants. Two sections
proposed as part of the Senate bill that became the HCDA were included to
expand the coverage of the URA.7 Although these provisions were not ultimately

  4 4 2 U S C § 4 6 0 1 (3 )d efin esstaieag en cy to m ean ,m tera/w , “ any department, agency, or instrumentality of a
State or of apolitical subdivision of a State . . .” 42 U .S.C. § 4601(4)defines“ Federalfinancialassistance” a s “ a
grant, loan, or contribution provided by the United States
  5 In this sense, the URA is more akin to a cross-cutting civil rights statute than to a welfare statute or other federal
grant program. Although it results in the payment of money, in essence it establishes certain rights to fair and
equitable treatment
  6 See supra.
  7 These provisions are discussed in your memorandum of July 30, 1982, at pages 11-13.


                                                          611
adopted, they strongly suggest that at least the Senate understood that the URA
would apply to the HCDA block)grants.
  Proposed § 309 would have provided for additional federal payments to
compensate a local community development agency for required relocation
payments beyond the amounts to which the local agency would otherwise have
been entitled under the URA. The Senate Report explained the need for this
provision as follows:
          The Committee took cognizance of the fact that the Uniform
       Relocation Assistance Act of 1970 requires that the Federal
       government no longer pay the full relocation cost after July 1,
       1972. Under this act the Federal contribution for relocation assist­
       ance will be significantly reduced. Many localities have already
       notified members of the Congress that this change will drastically
       curtail their ability to carry out community development ac­
       tivities. The Committee, therefore, includes this provision [pro­
       posed § 309] in order to express its serious concern about the
       expected adverse effect of the pending relocation provisions on
       housing and community development programs, and records its
       view that Federal contributions for relocation costs associated
       with Federally-assisted development programs should remain at
       their present level.
S. Rep. No. 693, 93d Cong., 2d Sess. 51 (1974). As your memorandum of
July 30, 1982, recognizes, this provision indicates that the Senate “ believed the
URA to be applicable to displacement resulting from acquisition for title I. . .
See your memorandum of July 30, 1982, at 12.
   In addition, proposed § 315 of the Senate bill was an amendment to the URA
to extend its coverage of only those who were displaced by actual acquisitions of
property to those who were displaced by code enforcement, rehabilitation, and
demolition as a result of activity assisted under the HCDA. The Senate Report
described this provision as follows:
          UNIFORM RELOCATION ASSISTANCE AND REAL
          PROPERTY ACQUISITION POLICIES ACT OF 1970

       Sec. 315— Would extend the definition of a person displaced as a
       result of the acquisition of real property to include those who are
       required to discontinue business or move from their dwelling as a
       direct result of activity assisted under this Chapter.
S. Rep. No. 693, 93d Cong., 2d Sess. 136 (1974). This provision also suggests
that the Senate understood that the URA would apply to the HCDA, and by this
provision it sought to extend the URA beyond those persons to which it would
otherwise have been applicable. There would have been no reason to broaden the
range of persons eligible for URA benefits if the Senate had concluded that the
URA would not apply to the HCDA.

                                       612
   Although these proposed expansions of the URA were not ultimately adopted
as part of the HCDA, there is no evidence that they were rejected because the
Senate believed the URA would not apply. To the contrary, the inclusion of these
provisions to expand the coverage of the URA in the proposed HCDA indicates
that there was little question, at least in the Senate, that the URA would apply to
the HCDA.8 Thus, although the legislative history is not conclusive, it strongly
suggests that Congress assumed that the URA would be applicable to community
development block grants.

C. H U D ’s Contemporaneous Construction c f the Applicability c f the URA to
Block Grants

    HUD’s regulations implementing the URA and the HCDA are unquestionably
relevant to the issue whether the URA is applicable to the HCDA. The Supreme
Court has noted that “ [w]hen faced with a problem of statutory construction, this
Court shows great deference to the interpretation given the statute by the officers
or agency charged with its administration.” U dall v. Tollman, 380 U.S. 1, 16
(1965). The Court has also stated that an agency’s interpretation is particularly
persuasive “ when the administrative practice at stake ‘involves a contempo­
raneous construction of a statute by men charged with the responsibility of setting
its machinery in motion, of making the parts work efficiently and smoothly while
they are yet untried and new.’ ” Power Reactor Development Co. v. Electricians,
367 U.S. 396, 408 (1961) (citation omitted). On this basis, the Court has
concluded that to sustain an agency’s interpretation of a statutory term, the Court
“ need not find [the agency’s] construction is the only reasonable one, or even that
it is the result we would have reached had the question arisen in the first instance
injudicial proceedings.” Unemployment Compensation Commission v. Aragon,
329U .S. 143, 153(1946). Thus, HUD’s construction of the URA and the HCDA
is entitled to considerable weight in determining the applicability of the URA.
See 2A, C. Sands, Sutherland Statutory Construction, §§ 49.01-49.11 (4th ed.
1973); McMillan and Peterson, The Permissible Scope of Hearings, Discovery,
and Additional Factfinding During Judicial Review c f Informal Agency Action,
1982 Duke L. J. 333, 373-74.
   Since the enactment of the HCDA, HUD has consistently construed the URA
to be applicable to community development block grants. Shortly after the
adoption of the HCDA, HUD adopted regulations for the implementation of that
Act, which included a requirement that grantees comply with the URA. 39 Fed.
Reg. 40144 (Nov. 13, 1974). Subsequently, in a revision of its regulations

   8 Contrary to your suggestion (see your memorandum of July 30, 1982, at p 13), we do not regard these
provisions as being consistent with merely discretionary application of the URA; nor do we believe that their
deletion suggests that Congress intended all relocation assistance to be at the choice of the grantee Similarly, we do
not believe that the inclusion of relocation assistance in § 105's list of authonzed uses of block grant funds means that
the provision of relocation assistance is discretionary. That Congress included relocation assistance as one o f the
permissible uses to which block grant funds could be put does not indicate congressional intent that application of
the URA be permissive rather than mandatory. See § 105, 88 Stat. 633 (1974). Rather, § 105 by its terms was
intended simply to set forth the permissible uses of block grant funds. The section sets boundaries for local
programs; it does not make otherwise-required activities merely permissive


                                                        613
concerning the URA, HUD set forth as first on a list of HUD grants to which the
URA was applicable, “ community development block grant[s] under title I of the
Housing and Community Development Act of 1974.” 40 Fed. Reg. 7602, 7604
(Feb. 20, 1975). HUD’s regulations concerning the URA were subsequently
revised in 1978, at which time HUD stated, “ [t]he basic objectives of the
proposed revision are to adopt requirements appropriate to the community
development block program authorized by Title I of the Housing and Community
Development Act of 1974. . .    43 Fed. Reg. 13836 (March 31, 1978). Thus,
from the adoption of the HCDA in 1974 until the enactment of the Reconciliation
Act in 1981, HUD consistently interpreted the URA to apply to community
development block grants.

D . C ase Law Concerning the A pplicability o f the URA to the HCDA

   As your memorandum points out, no cases have ever directly considered the
issue whether the URA is applicable to community development block grants.
Since HUD regulations have specifically provided for application of the URA to
block grants, no litigation has arisen concerning that basic issue. HUD did,
however, impose certain restrictions on the extent to which the URA applied to
situations other than where the federal or local government acquired property as
part of an urban renewal project. These restrictions prompted litigation on the
scope of the URA.
   For example, in Alexander v. H U D , 441 U.S. 39 (1979), the Supreme Court
resolved a split in the circuits concerning whether the URA applied to individuals
who were displaced when HUD foreclosed mortgages after private parties
defaulted on federally guaranteed loans. In that case the Court agreed with
HUD’s interpretation that the URA applied only to acquisitions of property that
occurred as part of a comprehensive program, and not to individual mortgage
foreclosures. In other cases, the lower courts were called upon to resolve similar
disputes. \n D evines Maier, 494 F. Supp, 992 (E.D. Wis. 1980), a district court
concluded that the URA did not apply to non-acquisition activity such as
intensive housing code enforcement programs carried on with block grant funds.
In Young v. Harris, 599 F.2d 870 (8th Cir. 1979), the Eighth Circuit decided that
the URA did not apply to redevelopment projects undertaken by private de­
velopers, even if the private developers were indirectly aided by CDBG funds.
   Although none of these cases dealt specifically with the question at issue here,
several of the cases assume (as your memorandum recognizes) that the URA is
generally applicable to community development block grants. In Young v.
Harris, for example, the court stated the applicable test as follows:

           Whether the project has received federal financial assistance
        depends upon an evaluation of the city’s use of the Community
        Development Block Grant funds. Since we have already con­
        cluded that the city’s agreement with the developer clearly did not
        render the developer’s project a joint undertaking, financial assist­

                                        614
          ance for municipal services cannot necessarily be equated with
          financial assistance to the private redevelopment project. This is
          especially true if the city was not required directly to apply or
          channel the Community Development Block Grant funds to the
          municipal services it provided in the Pershing-Waterman area. In
          any event, federal financial assistance to a private project is
          insufficient to bring the project into the realm of the URA.
599 F.2d at 878 (footnote omitted). See also Devines v. Maier, 494 F. Supp. at
996. Your memorandum also cites two unreported cases in which courts have
commented (although not held) that the URA is applicable to community
development block grants. Grand Boulevard Improvement Ass'n. v. City c f
Chicago, No. 8 0 -C ^ 7 6 0 , (N.D. 111., Oct. 14, 1981); Campbell v. Hills, No.
75-1331 (W.D. F^., Oct. 15, 1975). Thus, although no court has expressly and
categorically held that the URA is applicable to community development block
grants, every court that has dealt with the subject has assumed that result. We are
aware of no contrary holding or even contrary dictum.

E. Legislative Action After the HCDA and Prior to the Reconciliation Act

    After the enactment of the HCDA, Congress reconsidered the CDBG program
several times prior to the Reconciliation Act. The HCDA was reauthorized and
amended in both 1977 and 1980. Housing and Community Development Act of
1977,91 Stat. 1111 (1977); Housing and Community Development Act of 1980,
94 Stat. 1614 (1980). At each of these times during the reauthorization and
amendment of the HCDA, Congress could have altered HUD’s well-known
determination that the URA applied to community development block grants, but
it chose not to do so.9 When Congress reenacts a statute that has been contempo­
raneously interpreted by the administrative agency responsible for its enforce­
ment, courts presumptively regard the administrative interpretation to be correct.
Snyder v. Harris, 394 U.S. 332, 339 (1969). This rule is “ based upon the theory
that the legislature is acquainted with the contemporaneous interpretation of a
statute, especially when made by an administrative body or executive officers
charged with the duty of administering or enforcing the law, and therefore
im pliedly adopts the interpretation upon reenactm ent.” 2A, C. Sands,
Sutherland Statutory Construction, § 49.09 at 256-57 (4th ed. 1973). In this
instance, the reauthorization of the HCDA in 1977 and 1980 is strong evidence
that Congress intended the URA to apply to community development block
grants.
    Moreover, Congress passed certain amendments to the HCDA in 1978 that
provide additional evidence of its intent to apply the URA to the CDBG program.

   9 In fact, as the House Report noted in 1977, “ (w]hen the program was enacted in 1974, it was recognized that
experience with the program and that further study of the mechanics of grant allocations to various recipients could
lead to extensive changes in the program in the course of reauthorization." H.R Rep. No. 2 3 6 ,95th Cong., 1st Sess
2 (1977). When Congress reauthorized the HCDA in 1977, the House Housing and Communities Subcommittee
“ undertook a thorough review of the program. . .” and ultimately made “ numerous changes in the program ’s
operations." id.

                                                      615
Congress adopted an amendment to the HCDA designed to permit grantees to
utilize block grant funds to provide relocation payments and assistance to those
displaced by private developer projects.
   The Senate Report described this provision as follows:
          Section 103(b) would enable localities to use community de­
       velopment block grant funds to provide relocation payments and
       assistance when the communities determine these are appropriate
       to the community development program. Under the existing
       program, only displacements caused by activities assisted under
       the block grant program are eligible for assistance. This provision
       would permit assistance where there is a displacement of tenants
       under private developer-Section 8 projects, or as a result of other
       public or private actions which cause displacement but are not
       presently covered by the Uniform Relocation Act.
S. Rep. No. 8 7 1,95th Cong., 2d Sess. 12(1978). A similar passage is set forth in
the House Report, which indicates that the provision was designed to give more
discretion to local communities to make relocation payments with CDBG funds,
“ except as may be required under the Relocation Act.” H.R. Rep. No. 1161,95th
C ong., 2d Sess. 14 (1978). These statements suggest that although certain types
of displacements might not have been covered by the URA, at least some aspects
of the community development block grant program were covered.
   This conclusion is confirmed by the Conference Report on the same provision:
       [T]he conferees understand that the Department has narrowly
       interpreted the Uniform Relocation A ct to exclude displacement
       caused by certain public or private actions which have been
       undertaken with the use of Federal funds. The validity of this
       interpretation is currently before the courts. Both the Senate bill
       and the House amendment contained a provision which would
       enable localities to use Community Development Block Grant
       funds to provide relocation payments and other assistance to
       persons who are displaced by private or public activities, when
       such payments or assistance are appropriate to the locality’s
       community development plan. The conferees wish to make clear
       that the enactment of that provision shall not be read as an
       endorsement of any interpretation of the URA; rather, the adopted
       provision is intended to permit CDBG funds to be used for
       relocation payments, whether or not the displacement is covered
       by the URA.
H.R. Rep. No. 1792, 95th Cong., 2d Sess. 99-100 (1978) (emphasis added).
   This statement demonstrates that Congress was aware of the cases previously
cited concerning the issue whether the URA was applicable to situations other
than acquisitions undertaken by state or local governments as part of an urban
renewal plan. The statement also shows that the Committee regarded HUD’s

                                       616
interpretation of the URA as a narrow one. Although the Committee purports not
to pass judgment on the issue then before the courts (whether a broader inter­
pretation was required by the URA), at the very least, the statement shows that
Congress accepted HUD’s interpretation that the URA applied to some aspects of
the CDBG program. Thus, Congress has implicitly endorsed HUD’s conclusion
that the URA is applicable to the HCDA.

F. Summary

   On the basis of the foregoing evidence, we have concluded that there is little
doubt that Congress intended the URA to apply to the CDBG program enacted by
the HCDA. This conclusion is consistent with the statutory language and
legislative history of both acts, their administrative construction, relevant court
cases, and subsequent legislative action. On the basis of this conclusion, we now
proceed to an analysis of the effect of the Reconciliation Act.

                IV. The Omnibus Budget Reconciliation Act of 1981

A. Background

   The Reconciliation Act was an unprecedented piece of legislation that, through
the new mechanism of the budget reconciliation process, converted numerous
existing federal categorical grant programs into a series of block grants to state
and local governments. The general background of the block grants enacted by
the Reconciliation Act is described in our memorandum of January 18, 1982,
concerning the applicability of cross-cutting civil rights statutes to two of the
Reconciliation Act block grants. See OLC Memorandum of January 18, 1982.
[See p. 83 of this volume.] In many instances, the new block grants marked a
radical departure from the existing system of federal categorical grants.10
   The changes made by the Reconciliation Act to the CDBG program, however,
were relatively limited. The community development aid program was already in
the form of a block grant, and no federal categorical grants were added to the
CDBG program. Instead, the program was simplified and streamlined, par­
ticularly in the application process, as described in greater detail below.

B. Specific Changes in the CDBG Program

 The Senate Report described the purpose of the Reconciliation Act amend­
ments to the CDBG program as follows:
             Our intent is to greatly reduce burgeoning administrative hur­
          dles forced in the path of local governments seeking “ entitle­
          ment” community development grants. In so doing, it is our

  10 This was particularly true, for example, with respect to the education block grant discussed in our previous
memorandum.


                                                    617
        purpose to lessen significantly this improper Federal intervention
        in the local decision making process.

S. Rep. No. 139, 97th Cong., 1st Sess. 226 (1981).
   To a great extent, Congress seems to have viewed the Reconciliation Act
amendments to the CDBG program as designed to recapture the spirit of the
original HCDA. The principal criticisms of the CDBG program related not to the
specific provisions of the HCDA, but rather to HUD’s implementation of the
statute and specifically its tendency to substitute its own judgment for that of local
officials. See Williamson [Assistant to the President for Intergovernmental
Affairs], Community Development Block Grants, 14 Urban Lawyer 283,288-90
(1982). For example, the Senate Report noted with approval that the HCDA had
made possible a reduction in federal regulations from 2600 pages to only 52
pages, but then commented with dismay that in the ensuing years, the number of
pages of regulations had begun to “ approach the 2600 replaced in 1974.” The
Report concluded, “ [f]ederal intrusion into the local policy making machinery is
real and direct. The notion of entitlement is, at best, clouded by the events of
recent history.” S. Rep. No. 139, 97th Cong., 1st Sess. 227 (1981). In other
words, Congress objected to the recent HUD regulations, which had the effect of
converting a program where states were entitled to certain funds into a program
that was administered in a style appropriate to categorical grants. Thus, Congress
acted to simplify the administration of the CDBG program and return the
program to the more limited HUD involvement contemplated by the drafters of
the HCDA.
   Congress implemented this purpose by streamlining the application process.
In place of the more detailed statements of needs and objectives and projected
uses of block grant funds, the Reconciliation Act required only “ a final statement
of community development objectives and projected use of funds. . . . ” Section
302(b), 95 Stat. 384, 42 U.S.C. A. § 5304(a)(1) (1982 Supp.). HUD’s previous
right to review the statements to determine whether they were “ plainly inconsist­
ent” or “ plainly inappropriate” was eliminated because Congress found that
“ [t]he HUD regional and area office staff has used the application process far too
frequently as a means for imposing HUD’s views of acceptable program activity
on local entities.” S. Rep. N o. 139, 97th Cong., 1st Sess. 227 (1981). In
addition, the Reconciliation A ct eliminated the complex citizen participation
procedures of the old statute, but retained requirements for publication of the
proposed community development activities and public hearings in order to
assure full participation by affected citizens. See 42 U.S.C.A. § 5304(a)(2)
(1982 Supp.); S. Rep. No. 139, 97th Cong., 1st Sess. 228 (1981).
   Other application requirements remained as part of the CDBG program.
Communities are still required to make a number of certifications “ to the
satisfaction of the Secretary,” including certifications that the grantee has com­
plied with the public notice and hearing requirements, that the grant will be
conducted and administered in conformity with certain civil rights statutes, that
the projected use of funds will “ give maximum feasible priority to activities

                                         618
which will benefit low- and moderate-income families or aid in the prevention or
elimination of slums or blight,” and that “ the grantee will comply with the other
provisions of this chapter and with other applicable laws.” 42 U .S .C .A .
§ 5304(b)(3)—(4) (1982 Supp.). In addition, the Reconciliation Act continued to
require entitlement communities to certify that they are following a HUD-
approved housing assistance plan. 42 U.S.C.A. § 5304(c) (1982 Supp.).
   Outside of the application process, the CDBG program remained substantially
the same. The Senate Report pointed out, for example, that the allocation process
for the entitlement program remained “ essentially unchanged.” S. Rep. No. 139,
97th Cong., 1st Sess. 241 (1981). States were, however, given the option of
administering block grant distribution for non-metropolitan areas." If a state
declines to administer the small cities program, HUD will administer the pro­
gram in accordance with the provision governing the entitlement program. 42
U.S.C.A. § 5306(a) (1982 Supp.).
   The Reconciliation Act also left intact the requirement for annual performance
review by HUD. HUD is authorized to make adjustments in the block grants
based upon its annual performance review. See S. Rep. No. 139,97th C ong., 1st
Sess. 227 (1981). Thus, the underlying theory of the Reconciliation Act changes
to the CDBG program was that HUD’s review of initial applications should be
replaced by the annual review of actual performance under the CDBG program.

         V. Applicability of the URA to the Amended CDBG Program

A. Applicable Legal Standard

   The ultimate legal issue addressed in this memorandum is whether the URA
applies to the CDBG program as amended by the Reconciliation Act. As
discussed above, it seems clear that the URA was intended to apply to the original
HCDA. Therefore, the remaining question is whether, in amending the HCDA,
Congress intended that the URA no longer apply to the CDBG program. As your
memorandum suggests, there is no direct discussion of the URA in the Recon­
ciliation Act. Thus, since the Reconciliation Act did not create a new statute, but
simply modified the CDBG program, the question is whether there is evidence
that Congress intended to alter the applicability of the URA to community
development block grants, i.e ., whether the Reconciliation Act impliedly re­
pealed the URA with respect to the CDBG program.12

   11 The Reconciliation Act also shifted the balance of funding between the entitlement metropolitan communities
and non-metropolitan areas from 80-20 percent to 70-30 percent. Although a number of states have chosen to take
over the small cities CDBG program, several o f the larger states, including California and New York, have chosen
not to take over the program. Williamson, Community Development Block G rants, 14 Urban Lawyer 283,296 n.82
(1982)
   12 Your memorandum suggests that “ the present inquiry does not raise the issue of implied repeal, but concerns
the applicability vel non of the URA itself.” (Your memorandum of July 30, 1982 at p. 20, fn 3.) Since we have
determined, however, that the URA was intended to apply to the original HCDA, the question of the effect of the
Reconciliation Act necessarily involves the issue of implied repeal. It is axiomatic that new amendments and an
existing statute must be read together as one statute Kirchner v. Kansas Turnpike Authonty, 336 F 2d 222,230 (10th
Cir 1964); see 1A, C. Sands, Sutherland Statutory Construction, §§ 22.34—35 (4th ed. 1972) Thus, the
Reconciliation Act amendments must be read as a part of the existing CDBG program, to which, as we have
demonstrated. Congress clearly intended the URA to apply.


                                                      619
   In our memorandum of January 18, 1982, we set forth the applicable legal
standard for determining whether Congress has impliedly repealed an earlier law.
As we stated there, repeals by implication are disfavored, and, in general, courts
will require clear and convincing evidence that a later statute is impossible to
reconcile with the earlier law. OLC Memorandum of January 18, 1982, at 23-28.
Thus, this question must be resolved

        by first attempting to ascertain if Congress made a “ clear and
        manifest” expression of such intention, especially whether it
        made an affirmative expression of such intent. If it did not do so,
        we must then examine whether the [statutes] are irreconcilable.

OLC Memorandum of January 18, 1982, at 28.

B. A pplicability c f the URA

   That the Reconciliation Act does not refer to the URA is not an indication that
Congress intended it not to apply to block grants in the future. To the contrary,
since Congress was unquestionably aware that URA was being applied to the
CDBG program, if Congress had intended the URA not to apply, it would have
explicitly stated that it wished to change current law. Regardless of the extent of
the changes made in the CDBG program, the Reconciliation Act did not purport
to create a new statute; it simply amended the existing CDBG program. Thus, the
fact that Congress made no mention of the URA is evidence that it intended the
URA to continue to apply to the CDBG program, rather than the contrary.
   This conclusion is confirmed by Congress’ acknowledgment that, except for
the specified changes in the application process, Congress intended that its
actions not change the existing law. The Senate Report stated that the amended act

       retains the thrust and purposes of the 1974 Act but eliminates the
       application, application review and citizen participation require­
       ments of the current law. In all other major respects the bill retains
       current law or its intent.

S. Rep. No. 139, 97th Cong., 1st Sess. 237 (1981).
   In addition, the specific changes made by the Reconciliation Act are not
incompatible with continued application of the URA to the amended CDBG
program. The principal changes made by the Reconciliation Act were designed to
streamline the application process and reduce the role of HUD in evaluating and
approving applications. These procedural changes to reduce initial federal re­
view, however, do not conflict with HUD enforcement of the URA. States can
continue to certify that they will comply with the requirements of the URA
without imposing any additional burden upon the application process. That
Congress intended to simplify the application procedures does not necessarily
mean that it also intended to eliminate substantive requirements such as the
URA. To the contrary, the Senate Report states, “ [i]t should be emphasized that

                                        620
the Committee’s intent is to cause procedural simplification rather than substan­
tive change.” S. Rep. No. 139, 97th Cong., 1st Sess. 227 (1981).
   Moreover, although Congress intended to reduce federal review, particularly at
the time of application, substantial responsibility remains with HUD to review
local CDBG programs. HUD retains the discretion to review the certifications
made by the applicant under Section 5304(b),13 and the Secretary must have
approved a housing assistance plan for any entitlement area to receive a CDBG
award. Finally, each recipient of CDBG funds must be reviewed annually by
HUD to determine whether its use of CDBG funds is consistent with the
requirements of the Act. Thus, the elimination of HUD review of an applicant’s
statement of needs and contemplated uses does not mean that there will ultimately
be any less review by the federal government; it simply changes the timing of that
review. The remaining provisions for federal review are more than adequate to
ensure continued compliance with the URA.
   This conclusion is reinforced by the self-enforcing nature of the URA. If local
grantees do not make proper relocation payments or provide the assistance
specified by the URA, affected property owners may vindicate their rights in
court. See D evines v. Maier, 494 F. Supp. 992 (E.D. Wis. 1980). Thus, the URA
could be enforced without any federal intervention at all.
   Finally, continued application of the URA would not conflict with the underly­
ing policy of the Reconciliation Act to reduce federal involvement in the
selection of community development projects. The URA was not designed to tell
federal grantees how to design or implement a community development plan;
rather, it was intended to spread more equitably the burden imposed by whatever
choices were made in the implementation of a community development plan.
Moreover, the Reconciliation Act was designed to recapture the purpose and
intent of the original HCDA, to which the URA was clearly intended to apply.
Thus, the URA is fully consistent with the underlying policy of the Reconcilia­
tion Act to permit more local autonomy in the selection of community develop­
ment programs.

C. Arguments That the URA Should Nbt Apply to the Amended CDBG
Program

   In your memorandum you suggest several reasons why the URA should be
interpreted as not applicable to the amended CDBG program. First, you suggest
that although block grant funds are clearly “ federal financial assistance” within
the meaning of the URA, “ it is less clear whether a provision applicable to
programs in which an agency must ‘approve’ a ‘grant’ to defray a cost of
‘program or project,’ can be considered applicable to the amended Community
Development Block Grant program, in which the Secretary distributes funds on a
nondiscretionary basis to states, according to a statutory formula, and in which
the states then use the funds for programs or projects at their own discretion,

 13 As previously noted, these certifications must be made “ lo the satisfaction of the Secretary.”


                                                    621
within the constraints of categories of eligible activities.” See your memorandum
of July 30, 1982, at 21.
   The language of the (JRA, however, seems clearly to cover the type of program
envisioned by the amended CDBG program. Although an application need not
identify each project in detail, the grantee must describe a “ program” that will
utilize federal funds. As a technical matter, there is little doubt that HUD must
“ approve” these grants. Although HUD no longer reviews the statement of needs
and projected uses at the time of application, HUD does have discretion in
reviewing the acceptability of the required certifications and the Housing Assist­
ance Plan, which must accompany applications from all entitlement areas.
Moreover, HUD has the power during its performance review to adjust grants on
the basis of its findings. Thus, the amounts of the subsequent grants are inevitably
based upon HUD approval of the grantees’ prior performance. We have found no
evidence in either the statutory language or the legislative history of the URA to
suggest that Congress expected that a greater degree of federal involvement
would be necessary before states could be required to follow the provisions of
URA in using federal funds as part of a community development program.
   Finally, we note that this argument simply extends too far in that it would also
apply equally well to the original HCDA. Since the URA seems clearly to apply
to the original HCDA (an interpretation that not only seems apparent on the face
of the statutes, but which has also been accepted by HUD, Congress, and the
courts), this argument does not provide a basis for concluding that the Reconcilia­
tion Act amendments to the CDBG program were intended to foreclose applica­
tion of the U R A .14
   You have also suggested that non-applicability of the URA is supported by
G oolsby v. Blumenthal, 590 F.2d 1369 (5th Cir.) (en banc), cert, denied, 444
U.S. 970 (1979). In that case, the Fifth Circuit decided that the URA was not
applicable to the Revenue Sharing Act, 31 U.S.C. §§ 1221-1265. This con­
clusion was based on three factors: (1) the relationship between the specific
provisions of each statute; (2) the legislative history of the Revenue Sharing Act,
specifically as it concerned the absence of “ federal strings” attached to the
receipt of revenue sharing funds; and (3) Congress’ failure to overturn an earlier
court decision that held the provisions of NEPA not to be applicable to the
Revenue Sharing Act.
   Your memorandum relies solely on the first aspect of the G oolsby decision, in
which the court concluded that there was an insurmountable conflict between the
policies of the two Acts that would have posed substantial problems if the URA
had been applied to states receiving revenue sharing funds. The court reached

   14 One might contend that HUD’s interpretation of the effect of the Reconciliation Act is entitled to great
deference. Although we of course agree with this general principle, the Supreme Court has held that the degree of
deference owed to an agency interpretation depends on several factors, including “ its consistency with earlier and
later pronouncements. . .       Skidmore v. S w ift & Co., 323 U .S 134,140(1944). When an agency changes a long-
held interpretation o f a statute o r regulation, courts need not defer to the agency's revised interpretation Standard
O ilC o . v.D O E , 596F.2d 1029 (Temp Emer. Ct App. J978). In this instance, your proposed interpretation of the
CDBG program is not consistent with previous HUD interpretations that apparently have been accepted by Congress
and the courts Thus, the interpretation now tendered by HUD would not, we believe, be accorded the same level of
deference by the courts as its previous interpretation.

                                                       622
this conclusion by determining that revenue sharing payments were automatically
made upon the receipt of certain minimal assurances from the states. The court
contrasted this scheme with its finding that the URA contemplated “ discretion­
ary federal approval and specific requests to fund specific projects.” 15 Thus, the
court concluded that it was “ at a loss to understand how these two Acts can work
in consort if one Act provides for automatic distribution and the other Act
contemplates prior federal approval for specifically proposed projects.” 590 F.2d
at 1371-72.
   This type of conflict does not, however, exist with respect to the URA and the
amended CDBG program. First, the amended CDBG program does not on its
face have the same no-strings approach as revenue sharing. As we previously
noted, there is some federal discretion in the approval of grants and in the review
of grantees’ performance. Moreover, in contrast to the Revenue Sharing Act, the
HCDA requires federal funds to be utilized for one of the specifically enumerated
purposes set forth in the Act.
   Second, the URA’s requirement that the head of a federal agency shall not
approve a grant unless he receives satisfactory assurances that the URA will be
followed is not inconsistent with this CDBG mechanism. Ever since the adoption
of the HCDA in 1974, HUD has been able to implement the URA by requiring
satisfactory assurances in grant applications. Nothing in the changes made by the
Reconciliation Act makes it any more difficult to apply the URA to CDBG
grants. HUD can still require the same assurances and can monitor compliance
with the URA through its performance review. If G oolsby’s suggestion that “ the
URA envisions federal control over a funded project while revenue sharing does
not” (590 F.2d at 1372) is read to require federal approval of individual projects,
then our conclusion is that this statement goes too far and does not accurately
characterize the URA .16 As long as a program permits the federal government to
require the proper assurances and determine whether a grantee has complied with
the URA’s requirements, then that program is consistent with the structure of the
URA.
   Finally, although Goolsby does contain broad language concerning the scope
of the URA, the Goolsby court’s real concern seems to be suggested by its
reference to the “ vast administrative problems in determining when a project is
funded with revenue sharing money.” 590 F.2d at 1372. Since there was so little
federal direction with respect to how revenue sharing funds would be spent, there
would indeed have been serious problems in implementing the URA in the
context of the revenue sharing program. The same problem does not exist,
however, with respect to the amended CDBG program. HUD has been able to
trace the use of federal funds without any significant problems, and the Recon­
ciliation Act amendments will not impede this ability in any material way.17
   13 This finding was based on the statutory language that “ [t]he head of a Federal agency shall not approve any
grant     . unless he receives satisfactory assurances from such State agency that [the URA will be followed].” 590
F.2d at 1371
    16 Under this reading, the URA would not have been applicable to the original HCDA
   17 Courts have not permitted states to avoid responsibilities imposed by cross-cutting statutes by the expedient of
diverting block grant funds to other projects and replacing them with state funds. See Ely v. Velde, 497 F.2d 252 (4th
C ir 1974) (application of NEPA and the National Historic Preservation Act to Law Enforcement Assistance
Administration (LEAA) block grants).

                                                      623
   The other two elements relied upon by the G oolsby court strongly suggest that
the URA should continue to apply to the amended CDBG program. The second
factor considered in Goolsby was the legislative history of the Revenue Sharing
Act, which indicated that Congress had considered and rejected imposing federal
strings upon revenue sharing funds other than the requirements specifically set
forth in the Revenue Sharing Act. 590 F.2d at 1372-75. In the case of the
amended CDBG program, however, there are no such indications in the legis­
lative history. To the contrary, the legislative history suggests, as previously
indicated, that Congress intended the URA to apply to the CDBG program.
   The final factor upon which G oolsby relied was Congress’ failure to overturn
an earlier court of appeals decision which held that NEPA did not apply to the
Revenue Sharing Act. See Carolina Action v. Simon, 522 F.2d 295 (4th Cir.
1975). In the present case, however, the opposite factual setting exists. HUD
specifically by regulation applied the URA to the CDBG program, and Congress
failed to overturn that requirement. Congress had previously recognized and
discussed HUD’s policies with respect to application of the URA, but it chose not
to change those policies. Thus, under the rationale of Goolsby, Congress’ failure
to change H U D ’s explicit interpretation is evidence that Congress intended the
URA to continue to apply to the amended CDBG program.
   Moreover, in relying upon Congress’ failure to overturn the prior court
decision on the applicability of NEPA to revenue sharing, the Goolsby court
concluded that, even though the URA is more specific and could apply in a
situation where NEPA did not, it would be “ incongruous to distinguish between
the two acts.” 590 F.2d at 1377. Therefore, the court ruled that the fact that NEPA
did not apply to revenue sharing was evidence that the URA did not apply as well.
In the case of the amended CDBG program, precisely the contrary is true.
Congress has implicitly recognized that NEPA does apply to the HCDA and, in
fact, has adopted a special provision to permit local grantees to carry out the
federal government’s responsibilities under NEPA.18Thus, under the principle of
Goolsby, the applicability of NEPA to the CDBG program suggests that the URA
should also apply.
   In sum, the facts relating to the Revenue Sharing Act are sufficiently different
from the amended CDBG program to distinguish Goolsby from the present issue.
In fact, the principles established by G oolsby suggest a different result in this
case, that the URA should continue to apply to the amended CDBG program.
   The present facts seem closer to those considered by the court in Ely v. Velde,
451 F.2d 1130 (4th Cir. 1971); 497 F.2d 252 (4th Cir. 1974).19 In that case, the
    18 Section 104(h)(1) of the HCDA states that “ in lieu of the environmental protection procedures otherwise
applicable," HUD may require a local grantee to assume the Secretary’s responsibilities under NEPA. (Emphasis
added ) This language and the legislative history of the HCDA suggest that Congress assumed that NEPA would
apply to the CDBG program. See H.R. Rep. N o 1114, 93d C ong., 2d Sess. 50 (1974); 120 Cong. Rec. 28148
(1974) (Statement of Senator Jackson) Subsequent cases and scholarly commentary have also assumed that NEPA
would apply to the HCDA in the absence of HUD regulations implementing § 104(h). Ulster County Community
Action Committee, Inc. v. Koenig, 402 F. Supp 986, 991 (S.D .N .Y . 1975); Notis-McConarty, Federal Account­
a b ility D elegation c f Responsibility by HUD under NEPA, 5 Env. Aff. 121 (1976)
    19 The Fourth Circuit held, on its first hearing of Ely v. Velde, that NEPA and the National Historic Preservation
Act applied to LEAA block grants. Subsequently, plaintiffs sued again after the state attempted to avoid the court's
first order by shifting the federal funds to a different project. On the second hearing, the court reaffirmed its earlier
decision and ruled that the state could not avoid that decision merely by shifting the federal funds to a different
project.

                                                          624
court determined that both NEPA and the National Historic Preservation Act
(NHPA) applied to block grants distributed by the Law Enforcement Assistance
Administration (LEAA). The court noted that “ [a] block grant is not the same as
unencumbered revenue sharing, for the grant comes with strings attached.” 497
F.2d at 256. Since the block grant was not for general purposes, but for the
specific purposes described in the statute, the court held that the state was not
entitled to use the money without observing the requirements of NEPA and
NHPA.
   The amended CDBG program is closer to the LEAA block grant of the Ely case
than it is to the revenue sharing provisions at issue in Goolsby. Although the
amended program simplifies the application process and permits states more
discretion in determining the type of community development projects on which
CDBG funds will be expended, the grants do not come without federal strings.
HUD still must review certain aspects of the application prior to the approval of a
grant, and HUD’s performance review is designed to determine whether the
program has been carried out in a manner consistent with the provisions of the
HCDA. Ely thus confirms that the URA should continue to apply to the amended
CDBG program.

                                VI. Conclusion

   In summary, we have concluded that there is little question that the URA was
intended to apply to the original block grant program established by the Housing
and Community Development Act of 1974. Congress was undoubtedly aware
that HUD by regulation determined that the URA applied to the block grant
program and implicitly approved of this result. The Reconciliation Act amend­
ments to the CDBG program do not make any explicit reference to the application
of the URA. Although they simplify the application process and diminish the
amount of federal involvement at the initial application stage, the amendments
are not inconsistent with continued application of the URA. In the absence of a
more explicit statement that Congress intended to change the established practice
of applying the URA to the CDBG program, we conclude that the URA remains
applicable to community development block grants.

                                             T heodore B. O   lson

                                          Assistant Attorney General
                                           Office c f Legal Counsel




                                      625
