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(b) The second sentence of section 106(c)(1) of such Act 2 is amended by

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(1) inserting "which are eligible to receive reallocated funds" before "for that fiscal year, except that-";

(2) striking out in clause (B) "an action" and inserting in lieu thereof "actions";

(3) striking out in clause (B) "a city or county"

and inserting in lieu thereof "any city or county"; and (4) striking out in clause (B) "such action" the 11 last time it appears and inserting in lieu thereof "such

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actions".

(c)(1) Section 104(a)(1) of such Act is amended by

(A) striking out in the first sentence ", under section 106(d) by any State, or under section 106(d)(2)(B) by any unit of general local government" and inserting

in lieu thereof the following: "or under section 106(d) by any State"; and

(B) striking out in the second sentence "and in the case of units of general local government receiving

grants pursuant to section 106(d)(2)(B)”.

(2) Section 104 of such Act is amended by

(A) striking out the fifth and sixth sentences of

subsection (d)(1); and

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(B) inserting in subsection (d)(1) after "section 106(d)(2)(B)" the following: "(as such provision existed

immediately before the effective date of the Housing and Community Development Amendments of 1985)". (3) Sections 106(d)(2) (A) and (B) of such Act are 6 amended to read as follows:

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“(2)(A) Amounts allocated under paragraph (1) shall be 8 distributed by the State to units of general local government 9 which are located in nonentitlement areas of the State to 10 carry out activities in accordance with the provisions of this 11 title. For the purposes of this subsection, distributions shall 12 not include loans to units of general local government. The 13 State shall distribute amounts allocated to it consistent with 14 the statement submitted under section 104(a) and shall be 15 responsible for the administration of funds so distributed. 16 "(B) Any amounts appropriated for fiscal year 1985 or 17 prior fiscal years which were available for distribution under 18 this subsection by the Secretary immediately before the effec19 tive date of the Housing and Community Development 20 Amendments of 1985 shall be distributed by the Secretary in 21 accordance with the provisions of this subsection as they ex22 isted immediately before such effective date, except that 23 amounts which are not obligated by January 1, 1986, (i) 24 shall be added to amounts allocated to the State under para25 graph (1) for fiscal year 1986, or (ii) if the State does not

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1 elect to receive a grant for fiscal year 1986, shall be deposit

2 ed in miscellaneous receipts of the Treasury of the United 3 States.".

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(4) Section 106(d)(3)(A) is amended by striking out the

5 first sentence.

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(5) Section 106(d)(3) of such Act is amended by

(A) striking out subparagraph (B) and redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively; and

(B) inserting in subparagraph (C), as redesignated by paragraph (6)(A) of this subsection, "(i)" before "shall be added" and inserting immediately before the

period at the end thereof the following: "or (ii) if the State does not receive a grant for such year, shall be

deposited in miscellaneous receipts of the Treasury of the United States".

(6) Section 106(d)(5) of such Act is amended by striking

18 out "or the Secretary".

(d) Section 106(d)(2) of such Act is amended by

(1) striking out in subparagraph (C) "the Governor must certify that the State" and inserting in lieu thereof "the State must certify that it”; and

(2) striking out in subparagraph (D) "the Governor of each State" and inserting in lieu thereof "the State".

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ENTITLEMENT TRANSITION

SEC. 105. (a) Section 102(a) of the Housing and Com

3 munity Development Act of 1974 is amended by

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(6);

(1) striking out the second sentence in paragraph

(2) amending paragraph (7) to read as follows: "(7) The term 'nonentitlement area' means an area which is not a metropolitan city, part of an urban county, or a city or a county which is eligible to receive a grant under section 106(b)(7)(B) or (b)(8) in the first year of such eligibility."; and

(3) amending paragraph (12) to read as follows:

"(12) The term 'extent of growth lag' means the

number of persons who would have been residents in a city or a county eligible to receive a grant under sec

tion 106(b), in excess of the current population of such city or county, if such city or county had had a population growth rate between 1960 and the date of the

most recent population count referable to the same

point or period in time equal to the population growth rate for such period of all metropolitan cities.".

(b) The first two sentences of section 104(a)(1) of such

23 Act are each amended by striking out "metropolitan" and 24 "urban" each time they appear.

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(c) Section 105(c)(2)(B) of such Act is amended by strik

2 ing out "metropolitan city or urban county" and inserting in

3 lieu thereof "a city or county eligible to receive a grant under 4 section 106(b)".

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(d) Section 106(a) of such Act is amended by

(1) striking out "metropolitan cities and urban counties" in the first sentence and inserting in lieu

thereof the following: "metropolitan cities, urban coun

ties, and cities and counties eligible to receive a grant under subsection (b) (7) or (8)"; and

(2) striking out "metropolitan city and urban county" in the second sentence and inserting in lieu thereof the following: "metropolitan city, urban county,

and city and county eligible to receive a grant under subsection (b) (7) or (8)".

(e) Section 106(b) of such Act is amended by

(1) inserting after "each metropolitan city" in

18 paragraph (1) the following: “and each city eligible to

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receive a grant under paragraph (7)";

(2) inserting after "metropolitan cities" in paragraph (1)(B)(i) the following: "and all cities eligible to

receive a grant under paragraph (7)";

(3) inserting at the end of paragraph (1) the fol

lowing new sentence: "Values for population, extent of

25 poverty, extent of housing overcrowding, extent of