apaddock@tdhca.state.tx.us
.
The amendments are proposed under Texas Government Code, Chapter
2306, §2306.098, which provides TDHCA with the authority to allocate
Community Development Block Grant non-entitlement area funds to eligible counties
and municipalities according to department rules.
Texas Administrative Code, Title 10, Part I, Chapter 9, is affected by
the proposed amendments to §§9.1, 9.2, 9.4, 9.7, 9.9, 9.10, and
9.11.
§9.1. General Provisions.
(a)
Definitions and abbreviations. The following words and
terms, when used in this subchapter, shall have the following meanings, unless
the context clearly indicates otherwise.
(1)
Applicant--A unit of general local government which is
preparing to submit or has submitted an application for Texas Community Development
funds to the Department or to the Texas Department of Economic Development
(TDED)
.
(2)-(18)
(No change.)
(b)-(d)
(No change.)
(e)
Ineligible activities. Any type of activity not described
or referred to in the Federal Housing and Community Development Act of 1974,
§5305(a) (42 United States Code §5301 et seq.) is ineligible for
funding under the Texas Community Development Program. Specific ineligible
activities include, but are not limited to: construction of buildings and
facilities used for the general conduct of government (e.g., city halls and
courthouses); new housing construction, except as described as eligible under
the current Texas Community Development Program application guides; the financing
of political activities; purchases of construction equipment
(except
in limited circumstances under the small towns environment program)
;
income payments, such as housing allowances; most operation and maintenance
expenses; pre-contract costs, except for costs incurred prior to submittal
of an application and paid with local government or other funds for administrative
consultant and engineering/architectural services
and pre-agreement costs
described in a Texas Community Development Program contract
;
prisons/detention
centers; government supported facilities; and racetracks.
[
prisons
(unless the prison is located on a federal military installation closed by
the federal government since 1989); state-supported facilities (unless the
activity addresses job creation/retention by a state-supported facility located
on a federal military installation closed by the federal government since
1989); and racetracks.
]
(f)-(m)
(No change.)
(n)
Performance threshold requirements. In addition to the
requirements of subsection (h) of this section, an applicant must satisfy
the following performance requirements in order to be eligible to apply for
program funds. A contract is considered executed for the purposes of this
subsection on the date stated in section 2 of such contract.
(1)
Obligate at least 50% of the total funds awarded under
a contract
with a 24 month contract period
(except for Texas Capital
Fund contracts, housing fund contracts, colonia self-help center contracts,
and small towns environment program fund contracts) executed at least 12 months
prior to the current program year application deadline. This paragraph does
not apply to disaster relief fund applicants.
(2)
Obligate at least 50%
of the total funds awarded under a contract with a thirty-six month contract
period (except for Texas Capital Fund contracts and colonia self-help center
contracts) executed at least 18 months prior to the current program year application
deadline. This paragraph does not apply to disaster relief fund applicants.
(3)
[
(2)
] Expend all but the reserved
audit funds, or other reserved funds that are pre-approved by Texas Community
Development Program staff, awarded under a contract
with a contract period
of 24 months
(except for Texas Capital Fund contracts, colonia self-help
center contracts, and small towns environment program fund contracts)
that has been in effect for
[
executed
] at least 24 months
prior to the current program year application deadline and submit to the Department
a certificate of completion required by the most recent edition of the Texas
Community Development Program Project Implementation Manual which documents
the expenditure of all contract funds with the exception of any contract funds
reserved for audits and other reserved funds that are pre-approved by Texas
Community Development Program staff. This paragraph does not apply to disaster
relief fund applicants.
(4)
Texas Capital Fund (TCF)
applicants may not have an existing contract with an award date in excess
of 48 months prior to the application deadline date, regardless of extensions
granted. If an existing contract requires an extension beyond the initial
term, TDED must be in receipt of the request for extension no less than 30
days prior to contract expiration date. If an existing contract expires prior
to or on the new application deadline date, without an approved extension,
TDED must be in receipt of complete closeout documentation for the existing
contract, no less than 30 days prior to the new application deadline date
(complete closeout documentation is defined in the most recent version of
the Texas Capital Fund Implementation Manual).
[
(3)
Expend all but the reserved
audit funds, or other reserved funds that are pre-approved by Texas Department
of Economic Development staff, awarded under a Texas Capital Fund contract
executed at least 36 months prior to application deadlines and submit to the
Texas Department of Economic Development the certificate of completion required
by the most recent edition of the Texas Community Development Program Project
Implementation Manual which documents the expenditure of all contract funds
with the exception of any contract funds reserved for audits and other reserved
funds that are pre-approved by Texas Department of Economic Development staff.]
(5)
[
(4)
] Expend all but the reserved
audit funds or other reserved funds that are pre-approved by Texas Community
Development Program staff, awarded under a contract (except for Texas Capital
Fund contracts, colonia self-help center contracts, and colonia demonstration
fund projects) with a contact period of 36 months and that has been in effect
for at least 36 months prior to the current program year application deadline,
and submit to the Department a certificate of completion required by the most
recent edition of the Texas Community Development Program Project Implementation
Manual which documents the expenditure of all contract funds with the exception
of any contract funds reserved for audits and other reserved funds that are
pre-approved by Texas Community Development Program staff. This paragraph
does not apply to disaster relief fund applicants.
(o)-(p)
(No change.)
(q)
Revolving loan funds. A Revolving
Loan Fund established through program income recovered from a Texas Community
Development Fund contract must meet the requirements for Revolving Loan Funds
described in the Texas Community Development Program Final Statement, Consolidated
Plan or Action Plan for the program year in which the original contract was
awarded. Revolving Loan Funds are also subject to appropriate state and federal
requirements, Texas Community Development Program contract provisions, and
the appropriate Revolving Loan Fund guidelines issued by the Department.
§9.2. Community Development Fund.
(a)
(No change.)
(b)
Funding cycle. This fund is allocated to eligible units
of general local government on a biennial basis for the
1999 and 2000
[
1997 and 1998
] program years pursuant to regional competitions
held during the
1999
[
1997
] program year. Applications
for funding must be received by the Texas Community Development Program by
5:00 p.m. on the date specified in the most recent application guide for this
fund.
(c)
Allocation plan.
(1)
(No change.)
(2)
Each state planning region is provided with a
1999
[
1997
] program year target allocation and a
2000
[
1998
] program year target allocation of funds for applications
in its region that are ranked through the
1999
[
1997
]
program year regional competitions in accordance with a shared scoring system
involving the Department and the regional review committees. Where the remainder
of the
1999
[
1997
] program year target allocation is
insufficient to completely fund the next highest ranked applicant, the applicant
receives complete funding of the original grant request through a combination
of
1999 and 2000
[
1997 and 1998
] program year funds.
Where the remainder of the
2000
[
1998
] program year
target allocation is insufficient to completely fund the next ranked application,
the Department works with the affected applicant to determine whether partial
funding is feasible. If partial funding is not feasible, the remaining funds
from all the target allocations are pooled to fund projects from among the
highest ranked, unfunded applications from each of the 24 state planning regions.
Selection criteria for such applications will consist of the selection criteria
scored by the department under this fund. Marginal applicants' community distress
scores are recomputed based on the applicants competing in the marginal pool
competition only.
(d)
Selection procedures.
(1)-(4)
(No change.)
(5)
Following a final technical review, the Department
staff presents the
1999
[
1997
] program year and the
2000
[
1998
] program year funding recommendations to the state
review committee. Department staff make a site visit to each of the applicants
recommended for funding prior to the completion of contract agreements.
(6)
(No change.)
(7)
The executive director of the Department reviews
the
1999
[
1997
] final recommendations for project awards
and announces the contract awards.
(8)
Upon announcement of the
1999
[
1997
] program year contract awards, the Department staff works with recipients
to execute the contract agreements. While the award must be based on the information
provided in the application, the Department may negotiate any element of the
contract with the recipient as long as the contract amount is not increased
and the level of benefits described in the application is not decreased. The
level of benefits may be negotiated only when the project is partially funded
with the remainder of the target allocation within a region.
(9)
When the
2000
[
1998
] program
year Texas Community Development Program allocation becomes available, the
executive director of the department reviews the
2000
[
1998
] program year final recommendations for project awards and announces
the contract awards.
(10)
Upon announcement of the
2000
[
1998
] program year contract awards, the department staff works with
recipients to execute the contract agreements. While the award must be based
on the information provided in the application, the department may negotiate
any element of the contract with the recipient as long as the contract amount
is not increased and the level of benefits described in the application is
not decreased. The level of benefits may be negotiated only when the project
is partially funded with the remainder of the target allocation within a region.
(e)
Selection criteria. The following is an outline of the
selection criteria used by the Department and the regional review committees
for scoring applications under the community development fund. Seven hundred
points are available.
(1)-(2)
(No change.)
(3)
Project impact (total--195 points).
(A)
Ten of the 195 points available are awarded to applicants
which did not receive a community development fund
or a housing rehabilitation
fund
contract award during the
1997 or 1998 program years
[
1996 program year
].
(B)
Ten of the 195 points available are awarded to applicants
that have closed all previously awarded community development fund contracts,
with the exception of
1997 and 1998
[
1996
] contracts,
by the application deadline date. A previously awarded community development
fund contract is considered to be closed when: all of the Texas Community
Development Program funds needed to complete the contract activities, except
for the reserved audit funds and other reserved funds that have been pre-approved
by Texas Community Development Program staff, have been expended; and the
certificate of completion required by the most recent edition of the Texas
Community Development Program Project Implementation Manual has been submitted
to the Department. The certificate of completion must be complete and must
meet Department standards for acceptability.
(C)
Of the remaining 175 points available, each application
is scored within a point range based on the application activities. Multi-activity
projects which include activities in different scoring ranges will receive
a combination score within the possible range. Information submitted in the
application or presented to the regional review committees is used by a committee
composed of staff of the Department to generate scores on this factor. The
point ranges used for project impact scoring are as follows:
(i)
water activities, sewer activities, and housing activities
(145 to 175 points);
(ii)
eligible public facilities
in a defense economic readjustment zone (145 to 175 points);
(iii)
[
(ii)
] street paving, drainage,
flood control and handicapped accessibility activities (130 to 150 points);
(iv)
[
(iii)
] gas facilities, electrical
facilities, solid waste disposal, fire protection, and health clinic activities
(125 to 145 points);
(v)
[
(iv)
] community center, senior
citizens center, social services center, demolition/clearance, and code enforcement
activities (115 to 135 points);
(vi)
[
(v)
] jail facilities and detention
facilities (105 to 125 points);
(vii)
[
(vi)
] all other eligible activities
(85 to 115 points).
(D)
Other factors that will be evaluated by Department staff
in the assignment of project impact scores within the point ranges for activities
include, but are not limited to, the following:
(i)-(v)
(No change.)
(vi)
projects which include self-help methods (volunteer labor,
donated materials, donated equipment, etc.) to significantly reduce the project
cost or to significantly increase the proposed improvements are given additional
consideration
;
[
.
]
(vii)
projects designed to address
drought-related water supply problems are generally given additional consideration;
(viii)
water and sewer projects
that provide first-time water or sewer service through a privately-owned for-profit
utility or an expansion/improvement of the existing water or sewer service
provided through a privately-owned for-profit utility may, on a case-by-case
basis, receive less consideration than the consideration given to projects
providing these services through a public nonprofit organization.
(4)
Matching Funds (total--60 points). An applicant's
matching share may consist of one or more of the following contributions:
cash; in-kind services or equipment use; materials or supplies; or land. An
applicant's match is considered only if the contributions are used in the
same target areas for activities directly related to the activities proposed
in its application; if the applicant demonstrates that its matching share
has been specifically designated for use in the activities proposed in its
application; and if the applicant has used an acceptable and reasonable method
of valuation. The population category under which county applications are
scored depends on the project type and the beneficiary population served.
If the project benefits residents of the entire county, the total population
of the county is used. If the project is for activities in the unincorporated
area of the county with a target area of beneficiaries, the population category
is based on the residents of the entire unincorporated area of the county.
For county applications addressing water and sewer improvements in unincorporated
areas, the population category is based on the actual number of beneficiaries
to be served by the project activities. The population category under which
multi-jurisdiction applications are scored is based on the combined populations
of the participating applicants according to the 1990 census. Applications
for housing rehabilitation and for affordable new permanent housing for low-
and moderate-income persons receive the 60 points without including any matching
funds. This exception is for housing activities only. Sewer or water service
line/connections are not counted as housing rehabilitation. Demolition/clearance
and code enforcement, when done in the same target area are counted as part
of the housing rehabilitation activity. When demolition/clearance and code
enforcement are proposed without housing rehabilitation activities, then the
match score is still based on actual matching funds committed by the applicant.
Applications which include additional activities, other than related housing
activities, are scored based on the percentage of match provided for the additional
activities.
Program funds cannot be used to install street/road improvements
in areas that are not currently receiving water or sewer service from a public
or private service provider unless the applicant provides matching funds equal
to at least 50% of the total construction cost budgeted for the street/road
improvements. This requirement will not apply when the applicant provides
assurance that the street/road improvements proposed in the application will
not be impacted by the possible installation of water or sewer lines in the
future because sufficient easements and rights-of-way are available for the
installation of such water or sewer lines.
The terms used in this paragraph
are further defined in the current application guide for this fund.
(A)
Applicants with populations equal to or less than 750
according to the 1990 census:
(i)
match equal to or greater than 5.0% of grant request--60;
(ii)
match at least 4.0% but less than 5.0% of grant request--40;
(iii)
match at least 3.0% but less than 4.0% of grant request--20;
(iv)
match at least 2.0% but less than 3.0% of grant request--10;
(v)
match less than 2.0% of grant request--0.
(B)
Applicants with populations equal to or less than 1,500
but over 750 according to the 1990 census:
(i)
match equal to or greater than 10% of grant request--60;
(ii)
match at least 7.5% but less than 10% of grant request--40;
(iii)
match at least 5.0% but less than 7.5% of grant request--20;
(iv)
match at least 2.5% but less than 5.0% of grant request--10;
(v)
match less than 2.5% of grant request--0.
(C)
Applicants with populations equal to or less than 5,000
but over 1,500 according to the 1990 census:
(i)
match equal to or greater than 15% of grant request--60;
(ii)
match at least 11.5% but less than 15% of grant request--40;
(iii)
match at least 7.5% but less than 11.5% of grant request--20;
(iv)
match at least 3.5% but less than 7.5% of grant request--10;
(v)
match less than 3.5% of grant request--0.
(D)
Applicants with populations over 5,000 according to the
1990 census:
(i)
match equal to or greater than 20% of grant request--60;
(ii)
match at least 15% but less than 20% of grant request--40;
(iii)
match at least 10% but less than 15% of grant request--20;
(iv)
match at least 5.0% but less than 10% of grant request--10;
(v)
match less than 5.0% of grant request--0.
(5)
(No change.)
§9.4. Planning/Capacity Building Fund.
(a)
(No change.)
(b)
Funding cycle. This fund is allocated to eligible units
of general local government on a biennial basis for the
1999 and 2000
[
1997 and 1998
] program years pursuant to a statewide competition
held during the
1999
[
1997
] program year. Applications
for funding from the
1999 and 2000
[
1997 and 1998
] program
year allocations must be received by the Texas Community Development Program
by 5:00 p.m. on the date specified in the most recent application guide for
this fund.
(c)
Selection procedures. Scoring and the recommended ranking
of projects is done by staff and a committee composed of Department staff
with input from the regional review committees. The application and selection
procedures consist of the following steps.
(1)-(6)
(No change.)
(7)
The Department staff submits the
1999
[
1997
] program year and
2000
[
1998
] program
year funding recommendations to the state review committee. The state review
committee reviews the project rankings and provides funding recommendations
to the executive director of the Department.
(8)
The executive director of the Department reviews
the
1999
[
1997
] program year funding recommendations
and announces the contract awards.
(9)
Upon the announcement of the
1999
[
1997
] program year contract awards, the Department staff works with
recipients to execute the contract agreements. The award is based on the information
provided in the application and on the amount of funding proposed for each
contract activity based on the matrix included in the most recent application
guide for this fund.
(10)
When the
2000
[
1998
] program
year Texas Community Development Program allocation becomes available, the
executive director of the department reviews the
2000
[
1998
] program year funding recommendations and announces the contract awards.
(11)
Upon the announcement of the
2000
[
1998
] program year contract awards, the department staff works with
recipients to execute the contract agreements. The award is based on the information
provided in the application and on the amount of funding proposed for each
contract activity based on the matrix included in the most recent application
guide for this fund.
(d)
Selection criteria. The following is an outline of the
selection criteria used by the Department for selection of the projects under
the planning/capacity building fund. Four hundred thirty points are available.
(1)-(2)
(No change.)
(3)
Planning strategy and products (total 275 points).
(A)
Previous planning (50 points).
(i)
An applicant which has not previously received a planning/capacity
building contract or an applicant which has received a planning/capacity building
fund contract prior to the
1990
[
1989
] program and has
not received any subsequent planning/capacity building fund contracts --50
points.
(ii)-(iii)
(No change.)
(B)
(No change.)
§9.7. Texas Capital Fund.
(a)
General Provisions. This fund covers projects which will
result in either an increase in new, permanent employment within a community
or retention of existing permanent employment. Under the main street improvements
program, projects may also qualify if they meet the national program objective
of aiding in the prevention or elimination of slum or blighted areas.
(1)
For an activity that creates/retains jobs, the city/county
and business must document that at least 51% of the jobs are or will be held
by low and moderate income persons. For purposes of determining whether a
job is or will be held by a low or moderate income person or not, the following
options are available.
[
All jobs being created or retained must
primarily benefit low and moderate income persons. A minimum of 51% of all
of the jobs ultimately created or retained must be for persons who at the
time of their employment had total family income below the low and moderate
income limit for the county where the development occurred.
]
(A)
The business must survey all
persons filling a created/retained job. Persons filling a created job should
be surveyed at the time of employment. Persons holding a retained job should
be surveyed prior to application submission. This determination is based on
the family's size and previous 12 month income and is normally documented
on the Family Income/Size Certification form, which is filled out, dated and
signed by employees; or
(B)
The person(s) employed by
the business for created/retained jobs may be presumed to be a low or moderate
income person if the person resides within a census tract or block numbering
area that either is part of a Federally-designated Empowerment Zone or Enterprise
Community or the person(s) reside in a census tract or block numbering area
that meets the following criteria:
(i)
The census tract or block
numbering area has a poverty rate of at least 20% as determined by the most
recently available decennial census information;
(ii)
The census tract or block
numbering area does not include any portion of a central business district,
as this term is used in the most recent Census of Retail Trade, unless the
tract has a poverty rate of at least 30% as determined by the most recently
available decennial census information; and
(iii)
The census tract or block
numbering area shows evidence of pervasive poverty and general distress by
meeting at least one of the following standards:
(I)
All block groups in the census
tract have poverty rates of at least 20%; or
(II)
The specific activity being
undertaken is located in a block group that has a poverty rate of at least
20%; or
(III)
Has at least 70% of its residents who are
low- and moderate-income persons; or
(IV)
The assisted business is
located within a census tract or block numbering area that meets the requirements
of subparagraph (B) of this section, and the job under consideration is to
be located within that census tract or block numbering area.
(2)
(No change.)
(3)
A firm financial commitment from all funding sources
other than
the
United States Department of Commerce [
Economic
Development Administration
] or
the
United States Department
of Agriculture is required upon submission of an application.
(4)
The leverage ratio between all funding sources
to
[
and
] the Texas Capital Fund
(TCF)
request
may not be less than 1:1
for awards of $750,000 or less
(except
for the main street improvements program
in which case a 0.5:1 match
for cities with a population of less than 5,000 is acceptable
[
and when a ratio less than 1:1 is approved by Texas Department of Economic
Development staff
])
, 4:1 for awards of $750,001 to $1,000,000,
and 9:1 for awards of $1,000,001 to $1,500,000
.
(5)
In order for an applicant to be eligible
, the
cost per job calculation must not exceed $25,000 for awards of $750,000 or
less; $10,000 for awards of $750,001 to $1,000,000; and $5,000 for awards
of $1,000,001 to $1,500,000. These requirements do not apply to the Main Street
Program.
[
under the low and moderate income persons benefit national
program objective, the Texas Capital Fund cost per job calculation must not
exceed $25,000.
]
(6)
No financial assistance will be provided to
projects involved in the relocation of any industrial or commercial plant,
facility or operation, from one state to another state, if the relocation
is likely to result in a significant loss of employment in the labor market
area from which the relocation occurs.
No assistance will be provided
for projects intended to facilitate the relocation of
any
industrial
or commercial
plant, facility or operation
[
plants or facilities
] from one unit of general local government within Texas to another
unit of general local government within Texas unless a 10% net gain of jobs
will occur and one or more of the following requirements has been met prior
to submitting an application for consideration under this section:
(A)
Business to relocate with approval of current locality.
Local government must provide written documentation within the application,
verifying the chief elected official (mayor or judge) of the unit of local
government from which the business is relocating supports and approves the
relocation proposal. A written agreement between the two local governments
involved in the business relocation is preferred.
(B)
Business to relocate out-of state. Business must provide
written documentation between business and out-of-state contact verifying
the business has secured out-of-state location.
(C)
Local government notification with no response. Local
government must provide written documentation that a letter has been mailed
(by registered mail) to the local government from which the business is relocating,
notifying it of the relocation. The local government, upon receipt of the
notification, then has 30 days to object to the relocation, in writing, to
the Texas Department of Economic Development before the Texas Capital Fund
application can be considered. A written objection to a relocation from a
local government will prevent the application from being considered.
(7)-(9)
(No change.)
(10)
The Texas Department of Economic Development
will consider a project proposed by a city that is in the city's corporate
limits or its extraterritorial jurisdiction, and will consider a project proposed
by a county that is in the unincorporated area of the county. Counties may
not sponsor an application for a business located in a city, if that business
is currently participating in a TCF project with that city. TDED may consider
providing funding for an economic development project proposed by a city that
is outside the city's corporate limits or extraterritorial jurisdiction, but
within the county that the city is located and will consider a project proposed
by a county that is within an incorporated city, if the applicant demonstrates
that the project is appropriate to meet its needs, if the applicant has the
legal authority to engage in such a project and if at least 51% of the principal
beneficiaries reside within the applicant's jurisdiction.
[
The
Texas Department of Economic Development may consider providing funding for
an economic development project proposed by a city that is outside the city's
corporate limits or extraterritorial jurisdiction and may consider a project
proposed by a county that is outside the unincorporated area of the county
if the applicant demonstrates that the project is appropriate to meet its
needs, if the applicant has the legal authority to engage in such a project
and if at least 51% of the principal beneficiaries reside within the applicant's
jurisdiction.
]
(11)-(12)
(No change.)
(13)
The Texas Department of Economic Development will
not consider or accept an application for funding from a community [
,
] in support of a business project that is currently receiving Texas
Capital Fund assistance through that same community [
unless all contract
close-out documents, including the certificate of completion, required for
the close out of Texas Capital Fund projects have been submitted to the Texas
Department of Economic Development and the close-out documents substantially
meet standards for acceptability
].
(14)
The minimum and maximum award amount that may
be requested/awarded for a project funded under the Texas Capital Fund infrastructure
or real estate development programs, regardless of whether the application
is submitted by a single applicant or jointly by two or more eligible jurisdictions
is addressed here. Award amounts are directly related to the number of jobs
to be created/retained and the level of matching funds in a project. Projects
that will result in a significantly increased level of jobs created/retained
and a significant increase in the matching capital expenditures may be eligible
for a higher award amount, commonly referred to as jumbo awards. TCF monies
are not specifically reserved for projects that could receive the increased
maximum award amount, however, jumbo awards may not exceed $4,500,000 in total
awards during the program year, unless a jumbo award is deobligated during
the program year, in which case another jumbo award, of up to $1,500,000,
may be awarded as a replacement. Additionally, no more than $3,000,000 in
jumbo awards will be approved in either of the first two rounds. The maximum
amount for a jumbo award is $1.5 million and the minimum award amount is $750,001.
The maximum amount for a normal award is $750,000 and the minimum award amount
is $50,000. These amounts are the maximum funding levels. The program can
fund only the actual, allowable, and reasonable costs of the proposed project,
and may not exceed these amounts. All projects awarded under the TCF program
are subject to final negotiation between TDED and the applicant regarding
the final award amount, but at no time will the award exceed the amount originally
requested in the application.
[
The maximum award amount for a real
estate program or infrastructure program award may be increased to an amount
greater than $750,000, but may not exceed $1.5 million, if a unit of local
government is applying on behalf of a specific business, and that specific
business will create or retain a designated number of jobs at a cost per job
level that qualifies for the increased award amount. These increased award
amounts are referred to as "jumbo" awards. The number of jobs, the cost per
job, and the maximum percentage of Texas Capital Fund financing of the total
project costs that will qualify an application for the increased award amount
will be defined in Texas Capital Fund application guidelines. Texas Capital
Funds are not specifically reserved for projects that could receive up to
the $1.5 million increased maximum grant amount, however, projects that receive
an amount greater than $750,000 may not exceed $4.5 million in total awards
during the program year, unless a jumbo award is deobligated during the program
year, in which case another jumbo award, of up to $1.5 million, may be awarded
as a replacement.
]
(15)
TDED will allocate the
available funds for the year, less $600,000 for the Main Street program, as
follows:
(A)
First round. 50% of the annual allocation plus
any deobligated and program income funds available, as of the application
due date.
(B)
Second round. 60% of the remaining allocation
plus any deobligated and program income funds available, as of the application
due date.
(C)
Third round. Any remaining allocation plus
any deobligated and program income funds available, as of the application
due date.
(b)
Overview. This fund is distributed to eligible units of
general local government for eligible activities in the following program
areas:
(1)
The infrastructure program. The infrastructure program
provides funds for eligible activities such as the construction or improvement
of water/wastewater facilities, public roads, natural gas-line main, electric-power
services, and railroad spurs. [
Only loans by local governments to businesses
may be provided for infrastructure improvements on private property and railroad
spurs.
]
(2)-(3)
(No change.)
(c)
Application Dates. The Texas
Capital Fund (except for the Main Street Program) is available three times
during the year, on a competitive basis, to eligible applicants statewide.
Applications for the Main Street Program are accepted annually. Applications
will not be accepted after 5:00 pm on the final day of submission. The application
deadline dates are included in the program guidelines.
(d)
Repayment Requirements. TCF
awards for real estate improvements, private infrastructure, rail improvements,
and most public infrastructure require repayment. Infrastructure payments
and real estate lease payments are intended to be paid by the benefitting
business to the applicant/contractor and constitute program income. The repayment
is structured as follows:
(1)
Real estate improvements. These improvements
are intended to be owned by the applicant and leased to the business. Real
estate improvements require full repayment. At a minimum, the lease agreement
with the business must be for a minimum three year period or until the TCF
contract between the applicant and TDED has been satisfactorily closed (whichever
is longer). A minimum monthly lease payment will be required to be collected
from the original business and any subsequent business which occupies the
real estate funded by the TCF, which equates to the principal funded by the
TCF divided over a maximum 20 year period (240 months), or until the entire
principal has been recaptured. The repayment term is determined by TDED and
may not be for the maximum of 20 years for smaller award amounts. There is
no interest expense associated with an award. Payments begin the first day
of the first month following the construction completion date or acquisition
date. Payments received 15 calendar days or more late will be assessed a late
charge/fee of 5% of the payment amount. After the contract between the applicant
and the department is satisfactorily closed, the applicant will be responsible
for continuing to collect the minimum lease payments only if a business (any
business) occupies the real estate. The lease agreement may contain a purchase
option, if the option is effective after a minimum five year ownership requirement
and if the purchase price equals (at a minimum) the remaining principal amount
originally funded by the TCF which has not been recaptured.
(2)
Infrastructure improvements.
(A)
Private Infrastructure is infrastructure that
will be located on the business's site or on adjacent and/or contiguous property,
to the site, that is owned by the business, principals, or related entities.
All funds for private infrastructure improvements require full repayment.
Terms for repayment will be interest free, with repayment not to exceed 20
years and are intended to be repaid by the business through a repayment agreement.
Payments begin the first day of the first month following the construction
completion date. Payments received 15 calendar days or more late will be assessed
a late charge/fee of 5% of the payment amount.
(B)
Public Infrastructure is infrastructure located
on public property or right-of-ways and easements granted by entities unrelated
to the business or its owners and not included or identified as private infrastructure.
Terms for repayment will be interest free, with repayment not to exceed 20
years and are intended to be repaid by the business through a repayment agreement.
Payments begin the first day of the first month following the construction
completion date. Payments received 15 calendar days or more late will be assessed
a late charge/fee of 5% of the payment amount. Funds used for public infrastructure
will comply with the following repayment schedule:
(i)
Awards of $375,000 or less require no repayment.
(ii)
Awards of $750,000 or less require repayment
of 25% of the award amount greater than $375,000.
(iii)
Awards in excess of $750,000 require repayment
of 25% of the award amount greater than $375,000 and repayment of 50% of the
amount in excess of $750,000.
(C)
Rail improvements, regardless of the location,
require full repayment. Terms for repayment will be no interest, with repayment
not to exceed 20 years and are intended to be repaid by the business through
a repayment agreement. Payments begin the first day of the first month following
the construction completion date. Payments received 15 calendar days or more
late will be assessed a late charge/fee of 5% of the payment amount.
(e)
Application process for the
infrastructure and real estate programs. The Texas Department of Economic
Development will only accept applications during the months identified in
the program guidelines. Applications are reviewed after they have been competitively
scored. Staff makes recommendation for award to TDED executive director. TDED
executive director makes the final decision. The application and selection
procedures consist of the following steps:
(1)
Each applicant must submit a complete application
to TDED's Trade and Investment Division. No changes to the application will
be allowed after the application deadline date, unless they are a result of
TDED staff recommendations. Any change that occurs will only be considered
through the amendment/modification process after the contact is signed.
(2)
Upon receipt of applications, TDED staff
reviews scores for validity and ranks them in descending order.
(3)
TDED staff will then review the applications
for eligibility and completeness in descending order based on the scoring.
In those instances where the staff determines that the application has 12
or less deficiencies on the Application Checklist, unless an extension is
granted, the applicant will be given 10 business days to rectify all deficiencies.
An application containing more than 12 deficiencies will be determined incomplete
and returned. In the event staff determines that an application contains activities
that are ineligible for funding, the application will be restructured or returned
to the applicant. An application resubmitted for future funding cycles will
be competing with those applications submitted for that cycle. No preferential
placement will be given an application previously submitted and not funded.
(4)
TDED staff then conducts a review of each
complete application to make threshold determinations with respect to:
(A)
The financial feasibility of the business to
be assisted based on a credit analysis;
(B)
The strength of commitments from all other
public and/or private investments identified in the application;
(C)
Whether the use of Texas Capital Funds is appropriate
to carry out the project proposed in the application;
(D)
Whether efforts have been made to maximize
other financial resources. The applicant must document that other funds are
unavailable to fund the project. Cities that collect an economic development
sales tax must document status of funds, including balance available, monthly
collections and a detailed list of outstanding commitments;
(E)
Whether there is evidence that the permanent
jobs created or retained will primarily benefit low-and-moderate income persons;
and
(F)
The ability of the applicant to operate or
maintain any public facility, improvements, or services funded with Texas
Community Development Program funds.
(5)
A copy of a complete application
must be provided to the appropriate Regional Review Committee (RRC) . Proposals
submitted for funding under the Texas Capital Fund require regional review
"from the standpoint of consistency with regional plans and other such considerations"
as provided for under the Texas Review and Comment System and Chapter 391,
Texas Local Government Code. It has been determined that the participation
by the RRC, as defined in the TCDP Annual Action Plan, meets the intent and
purpose of these statutes through this concurrent review process. Each regional
review committee may, at its option, review and comment on an economic development
proposal from a jurisdiction within its state planning region. These comments
become part of the application file and are considered by the staff provided,
such comments are received by the staff prior to a recommendation to management.
(6)
Upon TDED staff determination that an
application supports a feasible and eligible project, staff normally will
schedule a visit to the applicant jurisdiction to discuss the project and
program rules with the chief elected official (or designee), business representative(s),
and to visit the project site.
(7)
TDED staff prepares a project report with
recommendations (for approval or denial) to TDED's executive director.
(8)
TDED executive director reviews the recommendation
and announces the final decision.
(9)
TDED staff works with the recipient to
execute the contract agreement. While the contract award must be based on
the information provided in the application, TDED staff may negotiate some
elements of the final contract agreement with the recipient.
(10)
The contract is drafted and then reviewed
by management and legal prior to two copies being mailed to award recipient.
Upon receipt, the award recipient has 30 days to review and execute both copies.
Once returned to TDED, the contract will be fully executed by the executive
director and then a single copy is returned to contractor.
(f)
Scoring criteria for the infrastructure
and real estate programs. There is a minimum 25-point threshold requirement.
Applications will be reviewed for feasibility in descending order based on
the scoring criteria. There are a total of 100 points possible.
(1)
In the event of a tie score and insufficient
funds to approve all applications, the following tie breaker criteria will
be used.
(A)
The tying applications are ranked from lowest
to highest based on poverty rate stated on the score sheet. Thus, preference
is given to the applicant with the higher poverty rate.
(B)
If a tie still exists after applying the first
criteria then applications are ranked from lowest to highest based on unemployment
rate stated on the score sheet. Thus, preference is then given to the applicant
with the higher unemployment rate.
(2)
Community Need (maximum 30 points)
Measures the economic distress of the applicant community.
(A)
Unemployment (maximum 5 points). Awarded if
the applicant's average county rate is higher than the annual state rate,
indicating that the community is economically below the state average.
(B)
Poverty (maximum 15 points). Awarded if the
applicant's average county poverty rate is higher than the annual state rate,
indicating that the community is economically below the state average.
(C)
Enterprise/Empowerment/Defense Zone (maximum
5 points). A project located in a state designated enterprise zone, federal
enterprise community, federal empowerment zone, or defense zone receives these
five points.
(D)
Open Contracts (Maximum 5 Points). Awarded
to applicants that have two
(2)
or less open TCF contracts.
(3)
Jobs (maximum 30 points).
(A)
Job Impact (maximum 15 points). Awarded by
taking the Business' total job commitment, created & retained, and dividing
by applicant's 1990 unadjusted population. This equals the job impact ratio.
Score 5 points if this figure exceeds the median job impact ratio for prior
years; score 10 points if this figure exceeds 200% of the ratio; and score
15 points if this figure exceeds 400% of the ratio. County applicants should
deduct the 1990 census population amounts for all incorporated cities, except
in the case where the county is sponsoring an application for a business that
is or will be located in an incorporated city. In this case the city's population
would be used, rather than the county's.
(B)
Cost per Job (maximum 15 points). Awarded by
dividing the amount of TCF monies requested (including administration) by
the number of full-time job equivalents to be created and/or retained. Points
are then awarded in accordance with the following scale:
(i)
Below $10,000--15 points.
(ii)
Below $15,000--10 points.
(iii)
Below $20,000-- 5 points.
(4)
Business Emphasis (maximum 20
points).
(A)
Manufacturers (max 10 points). Awarded if the
Business' primary Standard Industrial Classification (SIC) code number starts
with 20-39 or if their primary North American Industrial Classification System
(NAICS) code number starts with 31-33. This is based on the SIC number reported
on the Business' Texas Workforce Commission (TWC) Quarterly Contribution Report,
Form C-3 or their IRS business tax return. Foreign businesses that have not
had an SIC/NAICS code number assigned to them by either the TWC or IRS may
submit alternative documentation to support manufacturing as their primary
business activity to be eligible for these points.
(B)
Small businesses (maximum 5 Points). Awarded
if the Business employs no more than 100 employees for all locations both
in and out of state. This number is determined by the business and any related
entities, such as parent companies, subsidiaries & common ownership. Common
ownership is considered 51% or more of the same owners.
(C)
HUB-Historically Underutilized Business (maximum
5 Points). Awarded if a business is certified by the state General Services
Commission (GSC) as a Historically Underutilized Business (HUB). Provide a
copy of GSC's certification in the application.
(5)
Leverage/Match (maximum 20 points).
(A)
Match Ratio (maximum 10 points). Awarded by
dividing the total amount of other funds committed to this project divided
by the requested TCF amount, including administration. Points are then awarded
in accordance with the following scale:
(i)
1.25 : 1 (125 percent)-- 5 points.
(ii)
2.00 : 1 (200 percent)--10 points
(B)
Community Match Ratio (maximum 10 points).
Points are awarded based on the following criteria.
(i)
By dividing the total amount of community funds
(ie. funds from the applicant and/or their economic/industrial development
organizations only) committed to this project by the requested TCF amount,
including administration. Points are then awarded for each full 1% of the
community match and the 10 maximum points are awarded if the community commits
at least 10% of community matching funds. Example: $50,000/$750,000=.066=6%,
thus 6 points would be awarded.
(ii)
Cities earn 5 points if they have passed the
Economic Development sales tax and if annual receipts are less than $50,000.
These points are earned whether or not the city makes a financial contribution
to the project. If the city makes a contribution the city can receive an additional
1 point for each full 1% of community contribution, not to exceed 5 additional
points.
(iii)
Counties earn 5 points if they have passed
the County Development District Tax and if annual receipts are less than $50,000.
These points are earned whether or not the county makes a financial contribution
to the project. If the county makes a contribution the county can receive
an additional 1 point for each full 1% of community contribution, not to exceed
5 additional points.
(g)
Equity requirement by the
business. All businesses are required to make financial contributions to the
proposed project. A cash injection of a minimum of 2.5% of the total project
cost is required. Total equity participation must be no less than 10% of the
total project cost. This equity participation may be in the form of cash and/or
net equity value in fixed assets utilized within the proposed project. A minimum
of a 33% equity injection (of the total projects costs) in the form of cash
and/or net equity value in fixed assets is required, if the business has been
operating for less than three years and is accessing the R/E program. TDED
staff will consider a business to have been operating for at least three years
if:
(1)
The business or principals have been operating
for at least three years with comparable product lines or services;
(2)
The parent company (100% ownership of
the business) has been operating for at least three years with comparable
product lines or services; or
(3)
An individual or partnership (100% ownership
of the business) has been in existence/operation for at least three years
with comparable product lines or services.
(h)
Application process for the
main street program. The application and selection procedures consist of the
following steps:
(1)
Each applicant must submit two complete applications
to Texas Historical Commission (THC). No changes to the application are allowed
after the application deadline date, unless they are a result of TDED staff
recommendations. Any change that occurs will only be considered through the
amendment/modification process after the contact is signed.
(2)
Upon receipt of the applications, THC
evaluates applications based on the scoring criteria and ranks them in descending
order.
(3)
TDED staff will then review the four highest
ranking applications for eligibility and completeness in descending order
based on the scoring. Applications with 13 or more deficiencies will be considered
ineligible. If that occurs than the next highest ranking application will
be substituted. In those instances where the staff determines that the application
has 12 or less deficiencies on the Application Checklist, unless an extension
is granted, the applicant will be given ten business days to rectify all deficiencies.
In the event staff determines the application contains activities that are
ineligible for funding, the application will be restructured or considered
ineligible. An application resubmitted for future funding cycles will be competing
with those applications submitted for that cycle. No preferential placement
will be given an application previously submitted and not funded.
(4)
TDED staff then conducts a review of each
complete application to make threshold determinations with respect to:
(A)
The project feasibility;
(B)
The strength of commitments from all other
public and/or private investments identified in the application;
(C)
Whether the use of Texas Capital Funds is appropriate
to carry out the project proposed in the application;
(D)
Whether efforts have been made to maximize
other financial resources. The applicant must document that other funds are
unavailable to fund the project. Cities that collect an economic development
sales tax must document status of funds, including balance available, monthly
collections and a detailed list of outstanding commitments; and
(E)
The ability of the applicant to operate or
maintain any public facility, improvements, or services funded with Texas
Community Development Program funds.
(5)
A copy of a complete application
must be provided to the appropriate Regional Review Committee (RRC). Proposals
submitted for funding under the Texas Capital Fund require regional review
"from the standpoint of consistency with regional plans and other such considerations"
as provided for under the Texas Review and Comment System and Chapter 391,
Texas Local Government Code. It has been determined that the participation
by the RRC, as defined in the TCDP Annual Action Plan, meets the intent and
purpose of these statutes through this concurrent review process. Each regional
review committee may, at its option, review and comment on an economic development
proposal from a jurisdiction within its state planning region. These comments
become part of the application file and are considered by THC and TDED provided,
such comments are received by TDED prior to a recommendation to management.
(6)
Upon TDED staff determination that an
application supports a feasible and eligible project, an on-site visit to
the four highest scoring applicants may be conducted by THC and TDED staff
to discuss the project and program rules with the chief elected official,
as applicable, or their designee and to visit the Main Street area.
(7)
TDED staff prepares a project report with
recommendations (for approval or denial) for credit committee and then credit
committee makes a recommendation to TDED's executive director for the final
decision.
(8)
TDED executive director reviews the recommendation
and announces the project selected for funding.
(9)
TDED staff works with the recipient to
execute the contract agreement. While the contract award must be based on
the information provided in the application, TDED staff may negotiate some
elements of the final contract agreement with the recipient.
(10)
The contract is drafted and then reviewed
by management and legal prior to two copies being mailed to award recipient.
Upon receipt, unless an extension is granted, award recipient has 30 days
to review and execute both copies. Once returned to TDED, the contract will
be fully executed by the executive director and then a single copy is returned
to contractor.
(i)
Scoring criteria for the main
street program. There is a minimum 25-point threshold requirement. Applications
will be reviewed for feasibility and placed in descending order based on the
scoring criteria. There is a total of 100 points possible.
(1)
In the event of a tie score, applications are
ranked from the lowest to the highest based on the current aggregate available
balance, from all existing open TCF contracts. Thus, an applicant that has
a TCF project balance of $250,000 in existing projects would be ranked above
one having a balance of $600,000.
(2)
Project Feasibility (maximum 70 points).
Measures the applicant's potential for a successful project. Each applicant
must submit detailed and complete support documentation for each category.
Compliance with the ten criteria for Main Street Recognition is required.
First year Main Street Cities must receive prior approval from THC to apply
and must submit the Main Street Criteria for Recognition Survey with the TCF
application. The ten criteria include the following:
(A)
Broad-based public support for commercial district
revitalization--(10 points)
(B)
Local Main Street program's organization's
vision and mission-(5 points)
(C)
Main Street work/marketing plan--(5 points)
(D)
Historic preservation ethic--(10 points)
(E)
Involvement of board of directors and committees--(10
points)
(F)
Main Street operating budget--(5 points)
(G)
Professional Main Street program manager experience--(10
points)
(H)
Local Main Street program training--(5 points)
(I)
Reinvestment statistics related to financial
reinvestment, job creation, and new business creation--(5 points)
(J)
Participation in the National Main Street Network--(5
points)
(3)
Applicant (maximum 10 points).
(A)
Applicant has not received a TCF main street
grant--(5 points)
(B)
Applicant has not received a TCF main street
grant and the applicant has been an Official Texas Main Street City for more
than 5 years--(10 points)
(4)
Leverage (5 points). Score 5 points
if matching dollars are greater than or equal to the following ratios based
on two separate population categories:
(A)
Applicant's population less than 5,000 persons--0.75:1
(B)
Applicant's population equal to or greater
than 5,000 persons--1.5:1
(5)
Minority Hiring (maximum 5 points).
Measures applicant's hiring practices. Percentage of minorities presently
employed by the applicant divided by the percentage of minority residents
within the local community. In the event 10% or less of the applicant's population
base is composed of minority residents, the applicant has seven or fewer non-seasonal
full-time employees, or 5% or more of the applicant's population base is living
in quarters or institutions, the applicant is assigned the average score on
this factor for all applicants for the previous program year or the score
based on the actual figures, whichever is higher.
(6)
Main Street Reinvestment Statistics (maximum
10 points). (Private Sector Reinvestment) Formulates amount based on per capita,
per year in program.
(j)
Threshold criteria for the
main street improvements program. In order for its application to be considered,
an applicant must meet the requirements of either paragraph (1) or (2) and
paragraph (3) of this subsection.
(1)
The national objective of aiding in the prevention
or elimination of Slum or Blight on a spot basis. To show how this objective
will be met, the applicant must:
(A)
document that the project qualifies as slum
or blighted on a spot basis under local law; and
(B)
describe the specific condition of blight or
physical decay that is to be treated.
(2)
Area slums/blight objective. Document
the boundaries of the area designated as a slum or blighted, document the
conditions which qualified it under the definition in §9.1(a)(14) of
this title (relating to General Provisions), and the way in which the assisted
activity addressed one or more of the conditions which qualified the area
as slum or blighted.
(3)
Main street designation. The applicant
must be designated by the Texas Historical Commission as a Main Street City
prior to submitting a Texas Capital Fund application for main street improvements.
[
(c)
Selection procedures. The
Texas Department of Economic Development will accept applications three times
annually for the infrastructure and real estate program and once annually
for the main street program. Applications are reviewed after they have been
competitively scored. Texas Department of Economic Development staff will
make recommendations to the executive director for final award. The application
and selection procedures consist of the following steps:]
[
(1)
Each applicant must submit a complete application
to the Texas Department of Economic Development's Business and Fiscal Services
Division.]
[
(2)
In accordance with the selection criteria
for the real estate program and infrastructure program, applications received
under the real estate program and infrastructure program are evaluated and
scored by Texas Department of Economic Development staff.]
[
(3)
Texas Department of Economic Development
staff then review each application for eligibility and completeness in descending
order based on the scoring. In those instances where the staff determines
that the application is incomplete (evidenced by 13 or more inadequacies on
the Application Checklist), the application will be returned to the applicant
and may be submitted in the next funding cycle. Returned applications will
not be considered for the current funding cycle. Applications resubmitted
for future funding cycles will by competing with those applications submitted
for that cycle. No preferential placement will be given for applications previously
submitted and not funded. In those instances where the staff determines that
the application has 12 or less inadequacies on the Application Checklist,
the applicant will be given ten business days to rectify all deficiencies.
In the event staff determines that the application contains activities that
are ineligible for funding, the application will be returned to the applicant.
Staff then conducts a review of each complete application to make threshold
determinations with respect to:]
[
(A)
the financial feasibility of the business
to be assisted based on a credit analysis;]
[
(B)
the strength of commitments from all other
public and/or private investments identified in the application;]
[
(C)
the ability of the applicant to operate or
maintain any public facility or service assisted with Texas Community Development
Program funds, if infrastructure improvements are requested;]
[
(D)
whether the use of Texas Capital Funds is
appropriate to carry out the project proposed in the application;]
[
(E)
whether there is evidence that at least 51%
of the permanent jobs created or retained will benefit low- and moderate-income
persons;]
[
(F)
whether efforts have been made to maximize
other financial resources; and]
[
(G)
a copy of a complete application must be provided
to the appropriate Regional Review Committee. Proposals submitted for funding
under the Texas Capital Fund require regional review "from the standpoint
of consistency with regional plans and other such considerations" as provided
for under the Texas Review and Comment System and Chapter 391, Texas Local
Government Code. Each regional review committee may, at its option, review
and comment on an economic development proposal from a jurisdiction within
its state planning region. These comments become part of the application file
and are considered by the staff provided, such comments are received by the
staff prior to the time that the staff makes a recommendation to the executive
director of the Texas Department of Economic Development.]
[
(4)
Upon the Texas Department of Economic
Development's determination that an application supports a feasible and eligible
project, staff may schedule a visit to the applicant jurisdiction to discuss
the project and program rules with the chief elected official, or his designee,
and business representative(s), and to visit the project site.]
[
(5)
Staff prepares a project report with
recommendations for the executive director who makes the final award.]
[
(6)
Upon the executive director's selection,
the projects selected for funding are announced by the Texas Department of
Economic Development.]
[
(7)
Texas Department of Economic Development
staff then negotiates the contract with the recipients. The contract terms
are based on the information provided in the application, but the Texas Department
of Economic Development may vary the terms of the contract with the recipient.]
[
(d)
Selection criteria for the
real estate and infrastructure programs of the Texas Capital Fund focus upon
factors which may include, but which are not limited to, paragraphs (1)-(9)
of this subsection. In addition to the selection criteria described in paragraphs
(1)-(9) of this subsection, projects will be reviewed and evaluated upon the
following additional factors: the history of the applicant community in the
program; the strength of the business or marketing plan; the management experience
of the business's principals; and the justification of the minimum Texas Capital
Fund contribution necessary to serve the project:]
[
(1)
Creation of jobs paying an above-average wage;]
[
(2)
Generation of a greater ratio of private
investment to Texas Capital Fund investment;]
[
(3)
Expansion of markets through means such
as exporting, value-added processing, and/or creating new or modified product
lines;]
[
(4)
Provision of job opportunities at the
lowest possible Texas Capital Fund cost per job;]
[
(5)
Benefit to areas of the state most in
need of new capital investment and/or jobs;]
[
(6)
Assistance for small businesses and manufacturers;]
[
(7)
Feasibility of project and ability to
create and/or retain jobs; and]
[
(8)
Creation or retention of jobs primarily
for low and moderate income persons.]
[
(9)
Applications from communities designated
as defense economic readjustment zones receive additional scoring consideration
if at least fifty percent (50%) of the TCF funds will be expended for the
direct benefit of the readjustment zone and the project will promote TCDP-eligible
economic development in the community.]
[
(e)
Additional criteria for the
infrastructure program. A minimum of a 10% equity injection, based on total
project costs in the form of cash, land, buildings, equipment, furniture,
or fixtures by the business is required. For infrastructure program awards
in excess of $750,000, assisted businesses are required to repay 25% of the
award amount with no interest accruing. For infrastructure program railroad
improvement awards, assisted businesses are required to make full repayment
of the Texas Capital Fund financing with no interest accruing.]
[
(f)
Additional criteria for the
real estate program. A minimum of a 10% equity injection, based on total project
costs in the form of cash, land, buildings, equipment, furniture, or fixtures
by the business is required if the business has been operating for at least
three years. A minimum of a 33% equity injection, based on total project costs,
in the form of cash, land, buildings, equipment, furniture, or fixtures by
the business is required if the business has been operating for less than
three years. For real estate development projects, assisted businesses are
required to make full repayment of the Texas Capital Fund portion of the project
financing with no interest accruing.]
[
(g)
Selection criteria for the
main street improvements program. Texas Department of Economic Development
staff and staff from the Texas Historical Commission review and evaluate the
applications. The selection criteria focus upon factors which may include,
but which are not limited to, paragraphs (1)-(8) of this subsection. In addition
to the selection criteria described in paragraphs (1)-(8) of this subsection,
projects will be reviewed and evaluated upon the following additional factors:
the history of the applicant community in the program; the strength of the
marketing plan; and the justification of the minimum Texas Capital Fund contribution
necessary to serve the project. The terms and criteria used in this subsection
are further defined in the application guidelines for this program.]
[
(1)
Threshold criteria. In order for its application
to be considered, an applicant must meet the requirements of either subparagraph
(A) or (B), and (C) of this paragraph:]
[
(A)
The national objective of aiding in the prevention
or elimination of Slum or Blight on a spot basis. To show how this objective
will be met, the applicant must;]
[
(i)
document that the project qualifies as slum
or blighted on a spot basis under local law; and]
[
(ii)
describe the specific condition of blight
or physical decay that is to be treated.]
[
(B)
Area slums/blight objective. Document the
boundaries of the area designated as a slum or blighted, document the conditions
which qualified it under the definition in §9.1(a)(14) of this title
(relating to General Provisions), and the way in which the assisted activity
addressed one or more of the conditions which qualified the area as slum or
blighted.]
[
(C)
Main street designation. The applicant must
be designated by the Texas Historical Commission as a Main Street City prior
to submitting a Texas Capital Fund application for main street improvements.]
[
(2)
Feasibility of the project.]
[
(3)
Creation of jobs paying an above-average
wage.]
[
(4)
Generation of a greater ratio of private
investment to Texas Capital Fund investment.]
[
(5)
Provision of job opportunities at the
lowest possible Texas Capital Fund cost per job.]
[
(6)
Benefit to areas of the state most in
need of new capital investment and/or jobs.]
[
(7)
Texas Historical Commission scoring.]
[
(8)
Community profile.]
§9.9. Colonia Fund.
(a)-(e)
(No change.)
(f)
Selection criteria (colonia construction fund). The following
is an outline of the selection criteria used by the Department for scoring
colonia construction fund applications. Four hundred forty points are available.
(1)-(2)
(No change.)
(3)
Project priorities (total--195 points) When necessary,
a weighted average is used to assign scores to applications which include
activities in the different project priority scoring levels. Using as a base
figure the Texas Community Development Program funds requested minus the Texas
Community Development Program funds requested for engineering and administration,
a percentage of the total Texas Community Development Program construction
dollars for each activity is calculated. The percentage of the total Texas
Community Development Program construction dollars for each activity is then
multiplied by the appropriate project priorities point level. The sum of the
calculations determines the composite project priorities score. The different
project priority scoring levels are:
(A)
activities (service lines, service connections, and/or
plumbing improvements) providing access to water and/or sewer systems funded
through the Texas Water Development Board Economically Distressed Area program--195
(B)
first time public water and/or sewer service and housing
activities--145
(C)
first time water and/or sewer
service through a privately-owned for profit utility--135
(D)
[
(C)
] installation of approved residential
on-site wastewater disposal systems--110
(E)
[
(D)
] expansion or improvement of
existing water and/or sewer service--95
(F)
[
(E)
] street paving and drainage
activities--75
(G)
[
(F)
] all other eligible activities--20
(4)
(No change.)
(g)-(j)
(No change.)
§9.10. Housing Fund.
(a)
General provisions. Two separate fund categories are available
under the housing fund. The housing
infrastructure
[
demonstration
] fund is available for public facilities and infrastructure improvements
supporting the development and construction of single family and multifamily
low to moderate income housing. The housing
infrastructure
[
demonstration
] funds may not be used for the actual construction cost
of new housing. The housing rehabilitation fund is available for the rehabilitation
or existing owner-occupied and renter-occupied housing units and, in strictly
limited circumstances, the construction of new housing that is accessible
to persons with disabilities. The housing rehabilitation fund selection criteria
places emphasis on housing activities that provide accessible housing for
persons with disabilities.
(1)
An applicant may not submit an application under this
fund and also under any other Texas Community Development Program fund category
at the same time if the proposed activity under each application is the same
or substantially similar.
(2)
Each applicant must meet the threshold requirements
of §9.1(h) and §9.1(n) of this title (relating to General Provisions),
in order to be eligible to apply for housing fund assistance.
(3)
In order to meet a national program objective under
the housing
infrastructure
[
demonstration
] fund, at
least 51% of the housing units built in conjunction with each housing
infrastructure
[
demonstration
] fund project must be occupied
by low to moderate income persons. In the case of a rental housing construction
project, occupancy by low to moderate income persons must be at affordable
rents. Texas Community Development Program funds can be used to finance 100%
of the eligible project costs when at least 51% of the units are occupied
by low to moderate income persons.
(4)
There is only one type of housing
infrastructure
[
demonstration
] fund project that may qualify for assistance
when less than 51% of the units will be occupied by low to moderate income
persons. Eligible assistance may also be provided to reduce the cost of new
construction of a multifamily non-elderly rental housing project. However,
at least 20% of the units must be occupied by persons of low to moderate income
at affordable rents. For this type of project, the maximum percentage of Texas
Community Development Program funds available for the eligible project costs
is equal to the percentage of the project's units that are occupied by persons
of low to moderate income at affordable rents.
(5)
A housing rehabilitation fund applicant must document
that at least 51% of the persons who would directly benefit from the implementation
of housing activities proposed in the application are of low to moderate income.
It is generally expected that 100% of the persons benefitting from the housing
activities will be low to moderate income persons.
(b)
Eligible activities (housing
infrastructure
[
demonstration
] fund). The only eligible activities under the housing
infrastructure
[
demonstration
] fund are:
(1)
The provision of public facilities improvements supporting
the development of the low to moderate income housing
(2)
Engineering costs associated with the public facilities
improvements
(3)
Administrative costs associated with the site clearance,
site improvements and public facilities improvements
(4)
Eligible projects must leverage public (local, state,
or federal) or private resources for the actual housing construction costs
and any other project costs that are not eligible for assistance under this
fund.
(c)
Funding cycle (housing
infrastructure
[
demonstration
] fund). This fund is allocated on an annual basis to eligible
units of general local government through a
statewide competition
[
direct award basis
]. Applications for funding must be received
by the Texas Community Development Program by the application deadline date
or dates specified in the application guide for this fund.
(d)
(No change.)
(e)
Funding cycle (housing rehabilitation fund).
This
fund is allocated to eligible units of general local government on a biennial
basis for the 1999 and 2000 program years pursuant to a statewide competition
held during the 1999 program year. Applications for funding from the 1999
and 2000 program year allocations must be received by the Texas Community
Development Program by 5:00 p.m. on the date specified in the most recent
application guide for this fund.
[
This fund is allocated on an
annual basis to eligible units of general local government through a statewide
competition. Applications for funding must be received by the Texas Community
Development Program by 5:00 p.m. on the date specified in the most recent
application guide for this fund.
]
(f)
Selection procedures
(housing rehabilitation fund)
.
(1)
Each eligible local government may submit one application
[
for funding under the housing demonstration fund and one application
] for funding under the housing rehabilitation fund. Two copies of the
application must be submitted to the Department and at least one copy of the
application must be submitted to the applicant's state planning region.
(2)
Upon receipt of an application, the Department staff
performs an initial review to determine whether the application is complete
and whether all proposed activities are eligible for funding. The results
of this initial review are provided to the applicant. If not subject to disqualification,
the applicant may correct any deficiencies identified by the Department staff
in the timeframe stated in the notification.
(3)
Each regional review committee may, at its option,
review and comment on an application from a local government within its state
planning region. These comments become part of the application file, provided
such comments are received by the Department prior to final review of an application.
(4)
The Department then scores the housing rehabilitation
fund to determine rankings. Scores on the selection factors are derived from
standardized data from the Census Bureau, other federal or state sources,
and from information provided by the applicant.
(5)
Following a final technical review, the Department
staff
submits the 1999 program year and 2000 program year funding recommendations
[
makes funding recommendations for the housing demonstration
fund and the housing rehabilitation fund
] to the executive director
of the Department.
(6)
The executive director of the department reviews
the
1999 program year funding
recommendations for project awards
and announces the contract awards.
(7)
Upon announcement of the
1999 program year
contract awards, the Department staff works with recipients to execute
the contract agreements. While the award must be based on the information
provided in the application, the Department may negotiate any element of the
contract with the recipient as long as the contract amount is not increased
and the level of benefits described in the application is not decreased. The
level of benefits may be negotiated only when the project is partially funded.
(8)
When the 2000 program
year Texas Community Development Program allocation becomes available, the
executive director of the Department reviews the 2000 program year final recommendations
for project awards and announces the contract awards.
(9)
Upon announcement of
the 2000 program year contract awards, the Department staff works with recipients
to execute the contract agreements. While the award must be based on the information
provided in the application, the Department may negotiate any element of the
contract with the recipient as long as the contract amount is not increased
and the level of benefits described in the application is not decreased. The
level of benefits may be negotiated only when the project is partially funded
with the remainder of the target allocation within a region.
(g)
(No change.)
(h)
Selection procedures (housing
infrastructure fund).
(1)
Each eligible local government may submit one
application for funding under the housing infrastructure fund. Two copies
of the application must be submitted to the Department and at least one copy
of the application must be submitted to the applicant's state planning region.
(2)
Upon receipt of an application, Texas
Community Development Program staff and Credit Division staff review the application
to determine whether it is complete, if all proposed activities are program
eligible, and if the project is financially feasible. If not subject to disqualification,
the applicant may correct any deficiencies identified by the Department staff
in the timeframe stated in the notification.
(3)
After review by Department staff, each
application is evaluated by a team of reviewers. Reviewer's scores are averaged
for a final team score and applications recommended for funding are forwarded
to the executive director of the Department.
(4)
The executive director forwards the recommended
applications to the Department's Board for final approval. If approved by
the Department's Board, the executive director announces the contract awards.
(5)
Upon announcement of the contract awards,
the Department staff works with recipients to execute the contract agreements.
While the award must be based on the information provided in the application,
the Department may negotiate any element of the contract with the recipient
as long as the contract amount is not increased and the level of benefits
described in the application is not decreased.
(i)
Selection criteria (housing
infrastructure fund). The following is an outline of the selection criteria
used by the Department for scoring applications under this fund. One hundred
sixty-five points are available.
(1)
Financial feasibility (20 points).
(2)
Market assessment (30 points).
(3)
Affordable housing solutions (30 points).
(4)
Organizational capacity (25 points).
(5)
Program consideration (35 points).
(6)
Project design (10 points)
(7)
Community support (10 points)
(8)
Rural project (5 points). Project is located
in a community with a population of 10,000 persons or less.
(j)
Principal residence requirement
(housing infrastructure fund). Each resident must be one that, at the time
the mortgage loan is executed, the borrower reasonably expects to become his
or her principal residence within a reasonable time (not to exceed 60 days)
after the financing is provided. Whether a residence is occupied as a principal
residence depends upon all the facts and circumstances of each case, including
the good faith of the borrower. A residence that is intended to be used primarily
in a trade of business will not satisfy the principal residence requirement.
Further, a residence that will be used as an investment property or a recreational
home does not satisfy the principal residence requirement.
(k)
Subsidy recapture requirement
(housing infrastructure fund) Single family subdivision homebuyers will be
subject to an infrastructure subsidy recapture on the capital gain (profit)
if the home is sold, the first lien is refinanced, or the first lien is paid
off during the first five years after closing. A second lien will be completed
and recorded by the locality at the time that the first lien is secured. A
copy of the subordinate lien should be forwarded to the Department. All funds
will be repayable directly to the Department. The recapture amount shall not
exceed the infrastructure construction cost per lot or $5,000, whichever is
less. If the homebuyer is also the recipient of downpayment assistance funds
from the Department, the infrastructure lien will take a third position. After
the five-year timeframe has elapsed, the subordinate lien will become a forgivable
loan. The recapture provision shall not apply to the off-site infrastructure
provided for multifamily projects.
§9.11. Small Towns Environment Program Fund.
(a)
General provisions. This fund is available to eligible
units of general local government to provide financial assistance to cities
and communities that are willing to address water and sewer needs through
self-help methods that are encouraged and supported by the Small Towns Environment
Program. The self-help method for addressing water and sewer needs is best
utilized by cities and communities recognizing that conventional water and
sewer financing and construction methods cannot provide an affordable response
to the water or sewer needs. By utilizing a city's or community's own resources
(human, material, and financial), the costs for the water or sewer improvements
can be reduced significantly from the retail costs of the improvements through
conventional construction methods. Participants in the small town environment
program fund should attain at least a forty percent reduction in the costs
of the water or sewer project by using self-help in lieu of conventional financing
and construction methods.
(1)-(2)
(No change.)
(3)
Cities and counties
submitting 1999 community
development fund applications
[
receiving 1997 or 1998 community
development fund grant awards for applications
] that do not include
water, sewer, or housing activities are not eligible to receive a
1999
[
1998
] grant award from this fund. However, the Department
may consider a city's or county's request to transfer funds that are not financing
water, sewer, or housing activities under a
1999 or 2000
[
1997 or 1998
] community development fund grant award to finance water
and sewer activities that will be addressed through self-help methods.
(b)-(c)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
June 9, 1999.
TRD-9903356
Daisy Stiner
Executive Director
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: July 25, 1999
For further information, please call: (512) 475-3726