dissenting:
After careful review of the legislative history of the CDBG program from 1974-1983 and the implementing regulations, I remain convinced that the principal benefit objective of the statute is a statutory requirement which cannot be waived by HUD. The 1983 amendments to the CDBG program and their legislative history strongly support, if not mandate, such an interpretation and further stand as the governing law to be applied in this appeal. I therefore, for the following reasons, dissent from the denial of the petition for panel rehearing.
(1) The Legislative History of the 1983 Amendments to the CDBG Program
In order to place the 1983 amendments in their historical perspective, a brief chronology of the CDBG statute, its legislative history and implementing regulations follows.
In enacting the Housing and Community Development Act of 1974, Congress defined its purpose: “The primary objective of this chapter is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” 42 U.S.C.A. § 5301(c). In setting the criterion relevant in this case for approval of a grant Congress established the requirement that the grantee certify that its Community Development Program “has been developed so as to give maximum feasible priority to activities which will benefit low- or moderate-income families ...” 42 U.S.C.A. § 5304(b)(2) (1974). Nothing on the face of the statute prevents a consistent interpretation of these two provisions, with “maximum feasible priority” read in light of the stated Congressional objective of principally benefiting persons of low and moderate income.
The legislative history of the 1974 Act does not preclude such an interpretation. The original Senate version of 42 U.S.C.A. § 5304(b)(2) contained a provision prohibiting more than twenty percent of an applicant’s community development funds to be used for activities which did not directly benefit low and moderate income families. This requirement was deleted from the bill by the Conference Committee before final passage and the term “maximum feasible priority” substituted without explanation. Congress’ silence for its reasons in rejecting the eighty percent requirement does not indicate, however, that it was repudiating its stated objective of principally benefiting low and moderate income families. Instead, this deletion logically indicates *624that Congress was concerned with providing more flexibility with funds in achieving its objective of principally benefiting low and moderate income families.
Any doubts as to whether the principal benefit objective of Congress is a statutory requirement embodied in § 5304(b)(2) of the Act as well as § 5301(c) were clearly resolved by the 1977 amendments to the statute. The House Conference Report states:
Application disapproval
The Senate amendment contained a provision not included in the House bill which provided for the disapproval of block grant applications which do not comply with the requirements of the block grant program and specifically with the primary purpose that the program principally benefit persons of low- and moderate-income. The conference report contains the Senate provision amended to specifically incorporate the present law requirements that no application be approved unless it: (1) aids in the prevention or elimination of slums and blight, (2) principally benefits persons of low- and moderate-income, or (3) meets a need of particular urgency, (emphasis supplied).
Conf.Rep. No. 95-634, reprinted in 1977 U.S.Code Cong. & Ad.News at 2965. As the panel majority notes, “this language reflects that particular Congress’ understanding that maximum feasible priority means above and beyond primarily benefiting low and moderate income persons.” 721 F.2d at 776. Further, this language reflects Congress’ understanding that the principal benefit “present law requirement” was statutorily embodied in § 5304(b) (2) as well as § 5301(c). Finally, although “the view of a later Congress does not establish definitively the meaning of an earlier enactment ... it does have persuasive value,” Bell v. New Jersey, 461 U.S. 773, 784, 103 S.Ct. 2187, 2194, 76 L.Ed.2d 312, 323 (1983); especially when, as here:
[W]e have Congress at its most authoritative, adding complex and sophisticated amendments to an already complex' and sophisticated act. Congress is not merely expressing an opinion ... but is acting on what it understands its own prior acts to mean.
Id. at 785 n. 12, 103 S.Ct. at 2194 n. 12, 76 L.Ed.2d at 323 n. 12 (citation omitted) (emphasis added).
Although entitled to deference if consistent with the Congressional objective of the statute, HUD’s interpretations of the statute have been both inconsistent internally and inconsistent with the primary objective of the statute. The original 1974 implementing regulations did not contain a principal benefit requirement for § 5304(b)(2). In 1977 HUD proposed, and in 1978 promulgated, a regulation requiring that at least fifty percent of the persons benefited by the activities be of low or moderate income. 24 C.F.R. § 570.302(d)(2). As the panel majority notes, the fact that in proposing this regulation HUD appeared unsure whether “the principal benefit requirement was even [statutorily] permissible,” 721 F.2d at 778, does not require an interpretation of the statute at variance with “the statutory mandate or that [would] frustrate the policy that Congress sought to implement.” Id., quoting Federal Election Comm’n v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 102 S.Ct. 38, 70 L.Ed.2d 23 (1981).
In 1981 Congress again amended the Act, “restructuring its provisions to emphasize administrative oversight of post-award use of funds instead of stringent enforcement of detailed application requirements.” 721 F.2d at 778. In this context, Congress expressed its disapproval of HUD’s interpretation of the Act:
In the period since 1974, various pressures from both Congress and within HUD, have worked both to narrow the focus of the program and to layer thicker and more restrictive regulations on the application____ The 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.
*625S.Rep. No. 139, 97th Cong., 1st Sess. 227, reprinted in 1981 U.S.Code Cong. & Ad. News 396, 523. Although relevant to this case, the 1981 amendments to the Act did not affect the “maximum feasible priority” project requirement of former § 5304(b)(2) (now renumbered § 5304(b)(3)) and the legislative history contains no reference to 24 C.F.R. §§ 570.302(b)(1), (d)(2) and in fact reiterates the primary objective of the Act.1 HUD has subsequently apparently considered the fifty percent benefit requirement of 24 C.F.R. § 570.302(b)(1) to be one of the “restrictive regulations” disapproved by Congress in the context of its 1981 restructuring of the CDBG program. Thus, on October 4, 1982, HUD published proposed amendments to 24 C.F.R. § 570. In relation to overall program benefit, the proposed amendments deleted the fifty percent benefit requirement of 24 C.F.R. § 570.302(b)(1) and stated that “in restructuring the approach used to determine compliance with the primary objectives, HUD will no longer conduct any review of the grantee’s overall program with respect to benefit to low and moderate income persons.” 47 Fed.Reg. 43912, 43932 (Oct. 4, 1982). In relation to particular activities within a given program, at issue in this case, the proposed amendments retained the principal benefit requirement of the previous rules. Id.
In reaction, Congress amended the CDBG program effective November 30, 1983, one month before the panel opinion in this case. The primary objective section of the Act was reworded:
The primary objective of this title and of the community development program of each grantee under this chapter is the development of viable urban communities, by providing [enumerated benefits] principally for persons of low and moderate income. Consistent with this primary objective, not less than 51 percent of the aggregate of [CDGB funding] shall be used for the support of activities that benefit persons of low and moderate income. ..
42 U.S.C.A. § 5301(c). Amended § 5304(b)(3), the “maximum feasible priority” requirement, now reads:
[T]he aggregate use of funds received under [CDBG programs] shall principally benefit persons of low and moderate income in a manner that ensures that not less than 51 percent of such funds are used for activities that benefit such persons ...
The legislative history of the 1983 amendments is clear that in amending the statute Congress considered itself to be clarifying the initial principal benefit statutory objective and requirement set forth in the 1974 Act:
Relatively few changes are made to the programs[:] however[,] requirements for targetting the community development program principally for the benefit of [low] and moderate income families have been clarified.
S.Rep. No. 98-142, 98th Cong., 1st Sess. 2, reprinted in 1983 U.S.Code Cong. & Ad. News 1770, 1773 (emphasis added).
A major element of H.R. 1 is the attempt to clarify Congressional intent____ The Department of Housing and Urban Development and the Department of Agriculture have exercised options regarding program administration without respecting Congressional intent____ In particular, the Committee’s efforts are specifically aimed at strengthening the Community Development Block Grant Program *626so that low and moderate income people are the principal beneficiaries and to ensure that activities are benefiting low and moderate income people ...
H.Rep. No. 98-123, 98th Cong., 1st Sess. 2 (emphasis added).
Provisions clarify the conditions under which credit for benefiting low and moderate income persons may be claimed by CDBG recipients.
Id. at 4 (emphasis added).
The bill also clarifies the extent to which certain activities may be considered to benefit low and moderate income families.
Id. at 10. (emphasis added). In sum, Congress was emphatically clear that it did not consider itself to be adopting a new principal benefit requirement but instead to be restating the principal benefit primary objective of the Act present since 1974 and recognized on both occasions that Congress had addressed the issue, 1977 and 1981.
Further, the 1983 legislative history expressly disapproves of HUD’s interpretations of the Act’s primary objective in the 1974 and proposed 1982 regulations and endorses the 1978 regulations’ principal benefit test. I quote this portion of the House Report at length as evidence of Congress’ interpretation of the history of the 1974 Act and its implementing regulations.
Low and moderate income beneficiaries
As a result of the amendments to the Community Development Block Grant Program which were adopted when the far-reaching Gramm-Latta amendments to the Omnibus Reconciliation Act of 1981 were approved, the Department of Housing and Urban Development undertook a comprehensive reyision of the regulations governing the CDBG Program. However, instead of limiting the regulatory changes to those mandated by the 1981 Act, HUD proposed modifications that had the potential for a fundamental redirection of the program away from its primary objective, which is to develop “viable urban communities by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.”
Since the agency was singularly unresponsive to the concerns of the majority of the members of this Committee, to the issues raised during comprehensive hearings on these matters in 1981 and again in December 1982, and to the voluminous comments received by the agency which were highly critical of these changes, the Committee has decided that the statute must be modified so that the principles that have guided the program and which have been embodied in statute, regulations, as well as Departmental policy over the years will not be weakened by regulations that fail to assure that the primary objective of the program will be met.
When the CDGB Program was initially proposed by the Nixon Administration, the program provided so much flexibility to local governments that it more closely resembled a general revenue sharing program. In rejecting this approach, Congress determined that in order to receive federal CDBG funds, communities must assess their housing and community needs, must design a strategy to meet those needs and must develop a program individually tailored for the community which would meet the primary objective of the Act of providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.
Ironically, during the first few years of the program, the program was governed by regulations that were not strong enough to reflect the intent of Congress. They were similar to those proposed by the present Administration, in that they merely restated the statutory language and resulted in many communities failing to principally benefit their low and moderate income residents. While HUD revised the regulations in 1978 to require that an applicant’s program as a whole shall principally benefit low and moderate income persons and to *627presume that this standard was met if at least 75 percent of its funds were allocated to activities principally benefiting low and moderate income persons, an attempt was made in that year to amend the statute to state that benefiting low and moderate income persons, eliminating slums and blight or meeting urgent needs were primary and coequal purposes of the Act. That amendment was rejected and the conferees reaffirmed the original intent of the program which provides for local assessment of local needs and the development of local solutions while making clear that its primary purpose is to develop viable urban communities principally for the benefit of low and moderate income persons. The regulations promulgated in 1978 are the ones the Administration is now proposing to weaken. Based on the extensive correspondence received by the Committee and the hearings held in 1981 and 1982, community after community has endorsed the necessity to retain regulations that provide unequivocal guidance regarding the use of CDBG funds for the benefit of low and moderate income families.
The Committee believes it is important that HUD promulgate strong and clear regulations requiring each recipient community to expend a majority of its CDBG funds for activities that actually benefit low and moderate income persons. The maintenance of this basic principle is particularly necessary when communities are hard hit by the recession and when the budgets of a wide variety of federal and state assistance programs are shrinking or stagnating. When less money is available to meet the needs of our citizens, the funds that are available should be targeted to those low and moderate income families most in need.
In order the [sic] assure the continued targeting of funds to low and moderate income families, the bill requires each entitlement community and small city to use at least 51 percent of its CDBG funds and loan guarantee authority to benefit low and moderate income families.
Id. at 8-10. From the legislative history of the 1983 amendments, I think it is clear that the panel majority’s reliance on the 1974 regulations and the proposed 1982 regulations is misplaced. Further, I think it is equally clear that since 1974 Congress has followed a consistent interpretation of the Act as containing not only a statutory objective but a statutory requirement in § 5304 that a program as a whole, as well as activities within a given program, principally benefit persons of low and moderate income. This statutory requirement cannot be waived by HUD. Therefore, the petition for rehearing is, in my judgment, due to be granted on this ground.
(2) The Applicability of the 1983 Amendments to this Appeal
The 1983 amendments became effective one month before the panel opinion in this case. Bradley v. Richmond County School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), is controlling on the issue of whether the 1983 amendments should govern the disposition of this appeal. In Bradley, the Court held “that a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary.” Id. at 711, 94 S.Ct. at 2016. In the 1983 amendments and its legislative history there is no express statement that the amendments should be applied either retroactively or prospectively. In fact, the legislative history of the 1983 amendments concerning the principal benefit requirement indicates that Congress has always assumed that this requirement must be met before funds can be allocated to a grantee. In Bradley, the Court stated that “[w]e must reject the contention that a change in the law is to be given effect in a pending case only where that is the clear and stated intention of the legislature.” Id. at 715, 94 S.Ct. at 2018. Therefore, the fact that the 1983 amendments do not provide a clear statutory direction on the law to be applied to this appeal does not mean *628that only a prospective application is mandated.
Further, the manifest injustice exception recognized by Bradley is a narrow one, and is, in my judgment, not applicable to this case. The Bradley Court noted that “although the precise category of cases to which this exception applies has not been clearly delineated,” id. at 717, 94 S.Ct. at 2019, the focus of such an inquiry centers upon “(a) the nature and identity of the parties, (b) the nature of their rights, and (c) the nature of the impact in the change in law upon those rights.” Id. The Bradley Court noted that it had recognized that manifest injustice could result “in mere private cases between individuals,” id. at 717, 94 S.Ct. at 2019, quoting United States v. Schooner Peggy, 1 Cranch 103, 110, 2 L.Ed. 49 (1801), and held that an award of attorneys’ fees in a school desegregation case did not involve a “routine private lawsuit” and that application of a newly enacted attorneys’ fees statute was required in light-of the principle that in “great national concerns ... the court must decide according to existing laws.” Id. at 719, 94 S.Ct. at 2020, quoting Schooner Peggy, 1 Cranch at 110. Certainly the present case does not involve routine private litigation and does involve an area of great national concern with far-reaching implications for the CDBG program. Thus, I conclude that the first prong of the Bradley manifest injustice inquiry is not passed in this case.
Second, the Bradley Court found that application of the intervening attorneys’ fees statute did not affect any matured or unconditional rights of the defendant. “It cannot be claimed that the publicly elected School Board had such a right in the funds allocated to it by the taxpayers.” Id. at 720, 94 S.Ct. at 2020. In this case, neither the City of Alma nor HUD had an absolute right to the CDBG funds. Third and finally, the impact of the 1983 amendments on the conditions necessary to receive a CDBG grant is minimal since the 1978 regulations requiring a principal benefit showing were in effect at the time of the grant. In sum, in my judgment the 1983 amendments are the governing law to be applied in this appeal under Bradley and none of the Bradley exceptions are applicable to this case. Therefore, I would grant the petition for panel rehearing on this ground.’
In conclusion, the 1983 amendments confirm the evidence of Congressional intent since 1974 that the principal benefit requirement is a statutory requirement that cannot be waived by HUD and are the governing law to be applied in this appeal. Therefore, I would grant the petition for panel rehearing and modify the opinion in light of the 1983 amendments.
. The Committee believes that, in conjunction with the simplification and restructuring of the block grant program, it is desirable to reaffirm the program's overall objective contained in section 101(c) — the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income. As in existing law, this objective is to be achieved through activities which carry out the three broad national objectives governing block grant expenditures and referred to in proposed section 104(b)(3): activities which benefit low- and moderate-income families; aid in the prevention or elimination of slums or blight; or meet other particular urgent community development needs.
Id.