BEFORE THE DEPARTMENT OF COMMERCE

OF THE STATE OF MONTANA

 

In the matter of the adoption of New Rule I pertaining to the administration of the Community Development Block Grant Cares Act (CDBG-CV) program

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NOTICE OF ADOPTION

 

TO: All Concerned Persons

 

            1. On July 9, 2021, the Department of Commerce published MAR Notice No. 8-94-189 pertaining to the public hearing on the proposed adoption of the above-stated rule at page 813 of the 2021 Montana Administrative Register, Issue Number 13.

 

2.  The department has adopted NEW RULE I (8.94.3733) as proposed.

 

3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

 

COMMENT NO. 1:  Thank you for providing notice of the proposed changes to the application and guidelines for both the 2021 CDBG Housing and Community and Public Facilities grant programs. In reviewing the notice, it appears that the application deadlines for both programs occur before the proposed amendments will be adopted by the department.

 

To ensure that the Department of Commerce has time to review and consider comments received on the proposed changes, that the guidelines are finalized before the applications are due, and that our members have time to finalize their applications in accordance with the adopted guidelines, we respectfully request that the department immediately issue a notice that the application deadline for the 2021 CDBG Housing and Facilities grant programs are extended to October 15, 2021.

 

Thank you very much for considering this request. Please let me know if you have any questions or wish to discuss further.

 

RESPONSE NO. 1: To adopt a new administrative rule to administer CDBG-CARES or "CDBG-CV" funds, the Montana Department of Commerce (Commerce) announced a public hearing and comment period on July 26, 2021.  A hearing was held on July 29, 2021, and comments were accepted verbally at the hearing and in writing through August 6, 2021. Commerce's process for adopting the new administrative rule concerning CDBG-CV will officially close on August 27, 2021, which precedes Commerce's proposed CDBG-CV application deadline of September 15, 2021.

 

Commerce is considering extending the CDBG-CV application deadline to October 7, 2021, to allow applicants more time to conduct required public outreach and finalize and submit applications.  If granted, an extension will be announced upon the conclusion of the administrative rule process.  

 

COMMENT NO. 2:  I am writing to request that the Department of Commerce consider extending the deadline for CDBG-CV applications. Creating and conducting a request for proposals process for community agencies likely to partner with Missoula County on implementation of CDBG-CV grants within the allotted timeframe will pose a significant challenge. Additionally, proposals will need to be reviewed and ranked, and applications for CDBG-CV funding prepared and submitted for the highest priority projects. This will be very difficult to accomplish by September 15. Thank you for your consideration of this request.

  

RESPONSE NO. 2: As indicated above, Commerce is considering extending the CDBG-CV application deadline to October 7, 2021.  This extension will provide applicants more time to complete their processes for considering appropriate projects and applying for grant funding. If granted, an extension will be announced upon the conclusion of Commerce's administrative rule process (August 27, 2021).

 

COMMENT NO. 3: The North Central Montana Economic Development District (NCMEDD) is comprised of Glacier, Cascade, Pondera, Teton, and Toole Counties, as well as the Blackfeet Nation and the Little Shell Tribe. As a certified regional development corporation, our mission and objectives are to assist the citizens in the area to achieve their economic goals, while preserving their distinct cultures and way of life. 

 

Approximately $10 million has been allocated to Montana through the program, but to date, none of the funds have been designated for economic development. The current proposed use of the CDBG-CV is focused solely on affordable housing (LMI), public infrastructure, and reducing homelessness. The Housing and Urban Development quick guide indicates that CDBG-CV funds can be used for activities that prevent, prepare for, and respond to coronavirus. It also specifically indicates economic development activities are allowed and encouraged, to provide direct assistance to for-profit businesses. 

 

It is curious at this time, with the Governor's Come Back Plan, and the need that has emerged from the pandemic, why economic development is not a focus? The previous plan from 2019-2020 allocated only the basic amount of funding for economic development. This seems to reinforce the increased need for the CDBG-CV funds to be allocated for business needs throughout the state. 

 

We would respectfully request that one-third of the total allocation be designated toward economic development activities. This would ensure that in our rural areas, low- and moderate-income jobs and workers benefit. With the reallocation of funds, we would ask that the CDBG-CV application be updated. 

 

Updating the application would allow inclusion of economic development projects and let eligible applicants to apply. This would also include removing any professional technical documents from the CDBG-CV application. Due to the emergent nature of the pandemic, this would lessen the burden on the applicants, allowing a quicker review of applications by Commerce staff.   We would also like to ask that in the future, public hearings be scheduled at a separate date and time from any community development training.

 

Thank you so very much for the opportunity to comment on the proposal. I look forward to the department's response and revisions. Thanks again.

 

RESPONSE NO. 3:   Commerce amended Montana's 2019-2020 Annual Action Plan (AAP) in June 2021 to direct CDBG-CV funds to public facility, public service, housing, and homelessness activities that prevent, prepare for, and respond to COVID-19 based on informal outreach to grantees and stakeholders.  The public comment period and public hearing for the 2019-2020 AAP amendment were announced and advertised on June 7, 2021, with comments accepted June 8, 2021, through July 8, 2021, and a public hearing occurring June 22, 2021.  Prior to adopting amendments to the 2019-2020 AAP, Commerce received numerous comments indicating strong support for housing and homelessness activities, no objections to public facility and public service activities, and no requests to consider economic development activities.

 

Although CDBG-CV resources are not allocated to economic development, other resources are available for these activities.  For example, a portion of the state's regular CDBG allocation is used for economic development that revitalizes communities and benefits persons of low to moderate income (https://comdev.mt.gov/Programs-and-Boards/Community-Development-Block-Grant-Program/Economic-Development).  Funding levels for CDBG economic development or "CDBG-ED" are based on historic and projected need and can be prioritized further if applications demonstrate unmet needs and public participation reveals general support.

 

In addition to CDBG-ED, the state of Montana administered several business-focused grant programs in 2020 using CARES Act Coronavirus Relief Funds (CRF), including business stabilization grants ($253M funds paid), business innovation grants ($2.8M), and business adaption grants ($22M).  Details of business awards are available on Commerce's transparency website: https://commerce.mt.gov/Coronavirus-Relief/Awarded-Grants.

 

Furthermore, the Montana Legislature House Bill 632 (HB632), which allocates American Rescue Plan Act (ARPA) of 2021 funds to state agencies, includes $150,000,000 of ARPA state fiscal recovery funds to economic transformation, stabilization, and workforce development programs.  An advisory commission established under HB632 is holding regular meetings, which are open to the public, to provide recommendations on use of funds.  Details about past and upcoming meetings are available at https://commerce.mt.gov/News/Public-Meetings and https://arpa.mt.gov/Economic.

 

For more information about existing resources available for economic development, interested parties should contact Commerce's Community Development Division.

                       

The CDBG-CV application has been designed to remove unnecessary barriers to application.  Basic information and only those items required by federal regulation or by Commerce's ranking process are requested.  If applicants have concerns about specific application requirements, they are encouraged to contact Commerce's Community Development Division for technical assistance.

 

Commerce is committed to making its programs and processes accessible to all members of the public and will increase coordination between programs to reduce scheduling conflicts between hearings and trainings.

 

 

/s/ Jessica Blumberg                                   /s/ Adam Schafer                                        

Jessica Blumberg                                        Adam Schafer

Rule Reviewer                                             Deputy Director

                                                                     Department of Commerce

 

Certified to the Secretary of State August 17, 2021.