TITLE 10.COMMUNITY DEVELOPMENT

Part 6. OFFICE OF RURAL COMMUNITY AFFAIRS

Chapter 255. TEXAS COMMUNITY DEVELOPMENT PROGRAM

Subchapter A. ALLOCATION OF PROGRAM FUNDS

10 TAC §§255.1 - 255.4, 255.6 - 255.11

The Office of Rural Community Affairs (Office) proposes amendments to §§255.1 - 255.4 and §§255.6 - 255.11, concerning the allocation of Community Development Block Grant (CDBG) non-entitlement area funds under the Texas Community Development Program (TCDP).

The amendments are being proposed to establish the standards and procedures by which TDHCA will allocate 2003 and 2004 fiscal years' community development, planning capacity building, and housing rehabilitation funds and fiscal year 2003 colonia, housing infrastructure, urgent need, economic development, and TCDP Small Town Environment Program funds. The amendments are being proposed to make changes to the application and selection criteria for the program fund categories.

Robt. J. "Sam" Tessen, MS, Executive Director of the Office, has determined that for the period that the sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections.

Mr. Tessen, also has determined that for the period that the sections are in effect, the public benefit as a result of enforcing the sections will be the equitable allocation of CDBG non-entitlement area funds to eligible units of general local government in Texas. There will be no effect on any small businesses or micro-business. There are no anticipated economic costs to persons who are required to comply with the sections as proposed. There is no anticipated impact on local employment.

Comments on the proposal may be submitted to Jerry Hill, General Counsel, Office of Rural Community Affairs, P.O. Box 12877, Austin, Texas 78711, telephone: (512) 936-6701. Comments will be accepted for 30 days following the date of publication of this proposal in the Texas Register .

The amendments are proposed under the §487.052 of the Government Code, which provides the executive committee with the authority to adopt rules concerning the implementation of the Office's responsibilities.

No other code, article, or statute is affected by the proposed amendments to §§255.1 - 255.4 and §§255.6 - 255.11.

§255.1.General Provisions.

(a) (No change.)

(b) Overview--Community Development Block Grant nonentitlement area funds are distributed by the TCDP to eligible units of general local government in the following program areas:

(1) - (6) (No change.)

(7) Young v. Martinez [ Cuomo ] fund;

(8) - (9) (No change.)

(c) - (e) (No change.)

(f) Citizen Participation.

(1) - (3) (No change.)

(4) Complaint procedures. Applicants and contractors must maintain written citizen complaint procedures that provide a timely written response to complaints and grievances. [ The complaint procedures for contractors must comply with the requirements of the TCDP Complaint System, Part I, §§1.11 - 1.13 of this title (relating to General Provisions, Nonrenewal of Contracts and Reduction in Funding, and Complaint System). ] Citizens must be made aware of the location and hours at which they may obtain a copy of the written procedures.

(5) (No change.)

(g) Appeals. An applicant for funding under the TCDP may appeal the disposition of its application in accordance with this subsection.

(1) The appeal may only be based on one or more of the following grounds.

(A) - (B) (No change.)

(C) Other procedural error. The application is not processed by the Office and, in the case of TCF applications, by the TDA, in accordance with the application and selection procedures set forth in this subchapter. Procedural errors alleged to have been committed by a regional review committee may only be appealed in accordance with the provisions of §255.8 [ §9.8 ] of this title (relating to Regional Review Committees).

(2) The appeal must be submitted in writing to the TCDP of the Office no later than 30 days after the date the announcement of community development fund and planning/capacity building fund contract awards is published in the Texas Register . In addition, timely appeals not submitted in writing at least five working days prior to the next regularly scheduled meeting of the state review committee will be heard at the subsequent meeting of the state review committee. The Office staff will evaluate the appeal and may either concur with the appeal and make an appropriate adjustment to the applicant's scores, or disagree with the appeal and prepare an appeal file for consideration by the state review committee at its next regularly scheduled meeting. The state review committee will make a final recommendation to the executive director of the Office. The decision of the executive director of the Office is final. If the appeal concerns a TCF application, the appeal must be submitted in writing to the TDA no later than 30 days following the date of the notification letter of the denial. If the appeal concerns a small towns environment program fund, disaster relief fund, or urgent need fund application, the appeal must be submitted in writing to the Office no later than 30 days following the date of the notification letter of the denial. If the appeal concerns a housing fund, colonia fund or Young v. Martinez [ type-name="italic">Cuomo ] fund application, the appeal must be submitted in writing to the Office no later than 30 days after the date the announcement of contract awards is published in the Texas Register . The staff of either the Office or the TDA, when appropriate, evaluates the appeal and may either concur with the appeal or disagree with the appeal and prepare an appeal file for consideration by the appropriate executive director. The executive director, of the agency with which the appeal was filed, then considers the appeal within 30 days and makes the final decision.

(3) In the event the appeal is sustained and the corrected scores would have resulted in project funding, the application is approved and funded. If the appeal concerning a community development fund or planning/capacity building fund application is rejected, the office notifies the applicant of its decision, including the basis for rejection after the meeting of the state review committee at which the appeal was considered. If the appeal concerns a Young v. Martinez [ Cuomo ] fund, TCF, housing fund, colonia fund, disaster relief fund, small towns environment program fund, or urgent need fund application, the applicant will be notified of the decision made by the appropriate executive director within ten days after the final determination by the executive director.

(4) (No change.)

(h) Threshold requirements. An applicant must satisfy each of the following requirements in order to be eligible to apply for or to receive funding under the TCDP:

(1) - (5) (No change.)

(6) submit any past due audit to the Office [ in accordance with §1.3 of this title (relating to Delinquent Audits and Related Issues) ]; and

(7) (No change.)

(i) (No change.)

(j) False information. If an applicant provides false information in its community development fund or planning/capacity building fund application which has the effect of increasing the applicant's competitive advantage, the number of beneficiaries, or the percentage of low to moderate income beneficiaries, the Office refers the matter to the state review committee for disciplinary action. If the applicant provides false information in a Young v. Martinez [ type-name="italic">Cuomo ] fund, colonia fund, disaster relief fund, housing fund, small towns environment program fund, or urgent need fund application, the Office staff shall make a recommendation for action to the executive director of the Office. If the applicant provides false information in a TCF application, TDA staff shall make a recommendation for action to the appropriate executive director. The state review committee makes a recommendation for action to the executive director of the Office at its next regularly scheduled meeting. Documentation of false information must be submitted at least ten business days prior to the next regularly scheduled meeting of the state review committee to be considered at that meeting. Recommendations that the state review committee or executive director may make include, but are not limited to:

(1) - (3) (No change.)

(k) (No change.)

(l) Unobligated and recaptured funds. Deobligated funds, unobligated funds and program income (except program income recovered from local revolving loan funds) generated by TCF projects shall be retained for expenditure in accordance with the Consolidated Plan. Program income derived from TCF projects will be used by the Office for eligible TCDP activities in accordance with the Consolidated Plan. Any deobligated funds, unobligated funds, program income, and unused funds from the current year's allocation or from previous years' allocations derived from any TCDP Fund, including program income recovered from TCF local revolving loan funds, and any reallocated funds which HUD has recaptured from Small Cities may be redistributed among the established current program year fund categories, for otherwise eligible projects. The selection of eligible projects to receive such funds is approved by the Office Executive Director, or when applicable, approved by [ of ] the TDA on a priority needs basis with eligible disaster relief and urgent need projects as the highest priority; followed by, Young v. Martinez litigation projects, TCF projects, special needs projects, projects in colonias, housing activities, and other projects as determined by the Office Executive Director. [ and the Office's special targeted activities (e.g., colonias, special housing projects, Texas Small Town Environment Program (STEP), TCF, etc.) as the next highest priority. ]

(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 TCF contracts, housing fund contracts, colonia self-help center contracts, colonia economically distressed area program contracts, Young v. type-name="italic">Martinez [ Cuomo ] contracts, disaster recovery initiative 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 TCF contracts, housing fund contracts, colonia self-help center contracts, colonia economically distressed area program contracts, Young v. type-name="italic">Martinez [ Cuomo ] contracts, disaster recovery initiative contracts, and small towns environment program fund 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) Expend all but the reserved audit funds, or other reserved funds that are pre-approved by TCDP staff, awarded under a contract with a contract period of 24 months (except for TCF contracts, housing fund contracts, colonia self-help center contracts, colonia economically distressed area program contracts, Young v. Martinez [ Cuomo ] contracts, disaster recovery initiative contracts, and small towns environment program fund contracts) that has been in effect for at least 24 months prior to the current program year application deadline and submit to the Office a certificate of completion required by the most recent edition of the TCDP 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 TCDP staff. This paragraph does not apply to disaster relief fund applicants.

(4) (No change.)

(5) Expend all but the reserved audit funds or other reserved funds that are pre-approved by TCDP staff, awarded under a contract (except for TCF contracts, housing fund contracts, colonia self-help center contracts, colonia economically distressed area program contracts, Young v. Martinez [ type-name="italic">Cuomo ] contracts, disaster recovery initiative contracts, and small towns environment program fund contracts) with a contract 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 Office a certificate of completion required by the most recent edition of the TCDP 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 TCDP staff. This paragraph does not apply to disaster relief fund applicants.

(o) - (q) (No change.)

§255.2.Community Development Fund.

(a) General provisions. This fund covers housing, public facilities, and public service projects. Eligible units of general local government may apply for funding of a single purpose project such as housing assistance, sewer improvements, water improvements, drainage, roads, or community centers, or for a multi-purpose project which consists of any combination of such eligible activities.

(1) (No change.)

(2) In addition to the threshold requirements of §255.1(h) and (n) [ §9.1(h) and §9.1(n) ] of this title (relating to General Provisions), in order to be eligible to apply for community development funds, an applicant must document that at least 51% of the persons who would directly benefit from the implementation of each activity proposed in the application are of low to moderate income.

(b) Funding cycle. This fund is allocated to eligible units of general local government on a biennial basis for the 2003 and 2004 [ 2001 and 2002 ] program years pursuant to regional competitions held for the 2003 program year applicants [ 2001 ]. Applications for funding must be received by the TCDP by the dates and times 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 2003 [ 2001 ] program year target allocation and a 2004 [ 2002 ] program year target allocation of funds for applications in its region that are ranked through the 2003 [ 2001 ] program year regional competitions in accordance with a shared scoring system involving the Office and the regional review committees. Where the remainder of the 2003 [ 2001 ] 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 2003 and 2004 [ 2001 and 2002 ] program year funds. Where the remainder of the 2004 [ 2002 ] program year target allocation is insufficient to completely fund the next ranked application, the Office 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 Office 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) Prior to the submission deadline specified in the most recent application guide for this fund, each eligible unit of general local government may submit an application to the Office for funding under the community development fund. Two copies of the application must be submitted. Each applicant must also provide at least one copy of its application to the applicant's regional review committee within three [ two ] weeks after the Office submission deadline.

(2) - (3) (No change.)

(4) Following the resolution of any appeals from actions of the regional review committees as specified in §255.8 [ Section 9.8 ] of this title (relating to Regional Review Committees) the Office adds scores relating to community distress, benefits to low- and moderate-income persons, project impact, other considerations, and match to the regional review committees' scores to determine regional rankings. Scores on the factors in these categories are derived from standardized data from the U.S. Census Bureau, Texas Workforce Commission, and from information provided by the applicant.

(5) Following a final technical review, the Office staff presents the 2003 [ 2001 ] program year and the 2004 [ 2002 ] program year funding recommendations to the state review committee. Office staff make a site visit to each of the applicants recommended for funding prior to the completion of contract agreements.

(6) The funding recommendations of the state review committee are then provided to the executive director of the Office. If the state review committee recommendations differ from the funding recommendations of a regional review committee, the state review committee must provide the affected regional review committee with a written explanation of its determination. The regional review committee may then provide a response to the executive director of the Office. If there is not a consensus between a regional review committee and the state review committee, all review comments by all of the parties involved in the selection process will be forwarded to the executive director of the Office [ Department ].

(7) The executive director of the Office reviews the 2003 [ 2001 ] final recommendations for project awards and except for awards exceeding $300,000 announces the contract awards. Awards exceeding $300,000.00 are submitted to the Executive Committee for approval.

(8) Upon announcement of the 2003 [ 2001 ] program year contract awards, the Office staff works with recipients to execute the contract agreements. While the award must be based on the information provided in the application, the Office 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 2004 [ 2002 ] program year TCDP allocation becomes available, the executive director of the Office reviews the 2004 [ 2002 ] program year final recommendations for project awards and except for awards exceeding $300,000 announces the contract awards. Awards exceeding $300,000.00 are submitted to the Executive Committee for approval.

(10) Upon announcement of the 2004 [ 2002 ] program year contract awards, the Office staff works with recipients to execute the contract agreements. While the award must be based on the information provided in the application, the Office 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 Office and the regional review committees for scoring applications under the community development fund. Seven hundred points are available.

(1) Community distress (total--55 points). All community distress factor scores are based on the population of the applicant. An applicant that has 125% or more of the average of all applicants in its region of the rate on any community distress factor, except per capita income, receives the maximum number of points available for that factor. An applicant with less than 125% of the average of all applicants in its region on a factor will receive a proportionate share of the maximum points available for that factor. An applicant that has 75% or less of the average of all applicants in its region on the per capita income factor will receive the maximum number of points available for that factor.

(A) percentage of persons living in poverty-- 25 [ 20 ]

(B) (No change.)

(C) unemployment rate-- 10 [ 15 ]

(2) (No change.)

(3) Project impact (total--175 points).

(A) 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 Office to generate scores on this factor. The point ranges used for project impact scoring are as follows:

(i) - (ii) (No change.)

(iii) street paving, drainage, flood control and handicapped accessibility activities (130 to 160 [ 150 ] points);

(iv) fire protection, health clinic activities, and facilities providing shelter for persons with special needs (125 to 145 points);

[(iv) gas facilities, electrical facilities, solid waste disposal, fire protection, and health clinic activities (125 to 145 points);]

(v) community center, senior citizens center, social services center, demolition/clearance, and code enforcement activities (115 to 135 points);

(vi) gas facilities, electrical facilities, and solid waste disposal activities (110 to 130 points);

[(vi) jail facilities and detention facilities (105 to 125 points);]

(vii) access to basic telecommunications, jail facilities and detention facilities (105 to 125 points);

(viii) [ (vii) ] all other eligible activities (85 to 115 points).

(B) (No change.)

(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 2000 [ 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 1,500 according to the 2000 [ 1990 ] census:

(i) - (v) (No change.)

(B) Applicants with populations equal to or less than 3,000 but over 1,500 according to the 2000 [ 1990 ] census:

(i) - (v) (No change.)

(C) Applicants with populations equal to or less than 5,000 but over 3,000 according to the 2000 [ 1990 ] census:

(i) - (v) (No change.)

(D) Applicants with populations over 5,000 according to the 2000 [ 1990 ] census:

(i) - (v) (No change.)

(5) Other considerations (total--20 points). An applicant receives up to 20 points on the following three factors.

(A) Ten of the 20 points available are awarded to applicants that did not receive a community development fund or a housing rehabilitation fund contract award during the 2001 and 2002 [ 1999 or 2000 ] program years.

(B) - (C) (No change.)

(6) Regional scoring factors (total--350 points). Each regional review committee shall use the following three factors to score applications in its region:

(A) Project priorities. Each regional review committee shall rank and assign points to categories of eligible activities based on the priority of such projects in the region. The first priority shall receive at least 100 points.

(B) Local effort. A minimum of 75 points shall be awarded based on definitions and criteria adopted by each regional review committee.

(C) Merits of the project. A maximum of 175 points shall be awarded based on definitions and criteria adopted by each regional review committee.

[(6) Regional scoring factors (total--350 points).]

[(A) Required factors. Each regional review committee shall use the following two factors to score applications in its region.]

[(i) Project priorities. Each regional review committee shall rank and assign points to categories of eligible activities based on the priority of such projects in the region. The first priority shall receive at least 100 points.]

[(ii) Merits of the project. A maximum of 175 points shall be awarded based on definitions and criteria adopted by each regional review committee.]

[(B) Optional factor. Each regional review committee may award points based on a local effort factor. Points shall be awarded based on definitions and criteria adopted by each regional review committee.]

§255.3. Young v. Martinez Fund [ Allocation of Program Funds ].

(a) General provisions. Assistance under this fund is limited to the eligible cities selected by the U.S. Department of Housing and Urban Development (HUD) to complete the Court-ordered activities under the Final Order and Decree in the Young v. type-name="italic">Martinez [ Cuomo ] litigation. The only eligible activities are the activities described in revised Memoranda of Understanding (MOUs) and any 1990 Desegregation Plan activities cited in the revised MOUs.

(1) A local government with Young v. Martinez [ type-name="italic">Cuomo ] required activities must submit an application under this fund which addresses the required activities and which includes local matching funds.

(2) In addition to the threshold requirements of §255.1(h) [ Section 9.1(h) ] of this title (relating to General Provisions) and the requirements of §255.1(n) [ Section 9.1(n) ], in order to be eligible to apply for Young v. type-name="italic">Martinez [ Cuomo ] funding, an applicant must document that at least 51% of the persons who would directly benefit from the implementation of each activity proposed in the application are of low to moderate income.

(b) Funding cycle. Recaptured and deobligated funds from prior program years are available to the eligible cities. Applications for funding must be received by the date specified by the TCDP. [ Funds, not to exceed $2.3 million, are available to eligible cities from the 2001 program year allocation. Applications for funding must be received by the TCDP by the date specified in the application guide for this fund. ]

(c) Selection procedures.

(1) Each [ Prior to the application deadline, each ] eligible local government may submit one application for funding under the Young v. Martinez [ Cuomo ] fund. Two copies of the application must be submitted to the Office and at least one copy of the application must be submitted to the applicant's state planning region.

(2) - (7) (No change.)

§255.4.Planning/Capacity Building Fund.

(a) General provisions. This fund is intended to provide an opportunity for units of general local government to prepare comprehensive community development plans, develop strategies, assess needs, and build or improve local capacity to undertake future community development projects or to prepare other needed planning elements. Eligible units of general local government are to be the direct recipients of planning contracts. Units of general local government may submit one application for planning funds annually if all previous planning/capacity building contracts with the Office have been totally reimbursed by the Office.

(1) A cash match equal to or greater than 20% of the total TCDP funds requested is required of all applicants having a population over 5,000, a cash match equal to or greater than 15% of the total TCDP funds requested is required of all applicants having a population over 3,000 [ 1,500 ] but equal to or less than 5,000, a cash match equal to or greater than 10% of the total TCDP funds requested is required of all applicants having a population over 1,500 [ 750 ] but equal to or less than 3,000 [ 1,500 ], and a cash match equal to or greater than 5% of the total TCDP funds requested is required of all applicants having a population of less than 1,501 [ 750 ]. The population of an applicant is based on the 2000 [ 1990 ] census unless an applicant submits a survey conducted in accordance with §255.1(k) [ Section 9.1(k) ] of this title (relating to General Provisions). The percentage of match required from a county applicant is based on the actual target area population benefitting from the proposed planning project. In lieu of providing the cash match specified in this paragraph, and as further described in the most recent application guide for this fund, an applicant may agree to pay out of its own resources for other eligible planning activities described on the matrix included in such application guide.

(2) In addition to the threshold requirements of §255.1(h) and (n) [ Section 9.1(h) and Section 9.1(n) ] of this title (relating to General Provisions), in order to be eligible to apply for planning/capacity building funding, an applicant under this section must document that at least 51% of the persons in the area who would benefit from the implementation of the proposed planning activity are of low and moderate income.

(b) Funding cycle. This fund is allocated to eligible units of general local government on a biennial basis for the 2003 and 2004 [ 2001 and 2002 ] program years pursuant to a statewide competition held during the 2003 [ 2001 ] program year. Applications for funding from the 2003 and 2004 [ 2001 and 2002 ] program year allocations must be received by the TCDP by the dates and times 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 Office staff with input from the regional review committees. The application and selection procedures consist of the following steps.

(1) Prior to the application deadline, each eligible jurisdiction may submit one application for funding under the planning/capacity building fund. An applicant may not submit an application under this fund and also under the colonia fund if the proposed activity under each application is the same or substantially similar. One copy of the application must be provided to the applicant's regional review committee and two copies must be submitted to the Office [ department ].

(2) - (6) (No change.)

(7) The Office staff submits the 2003 [ 2001 ] program year and 2004 [ 2002 ] 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 Office [ Department ].

(8) The executive director of the Office reviews the 2003 [ 2001 ] program year funding recommendations and except for awards exceeding $300,000 announces the contract awards. Awards exceeding $300,000 are submitted to the Executive Committee for approval.

(9) Upon the announcement of the 2003 [ 2001 ] program year contract awards, the Office 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 2004 [ 2002 ] program year TCDP allocation becomes available, the executive director of the Office reviews the 2004 [ 2002 ] program year funding recommendations and except for awards exceeding $300,000 announces the contract awards. Awards exceeding $300,000 are submitted to the Executive Committee for approval.

(11) Upon the announcement of the 2004 [ 2002 ] program year contract awards, the Office 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 Office for selection of the projects under the planning/capacity building fund. Four hundred thirty points are available.

(1) Community distress (total--55 points). All community distress factor scores are based on the total population of the applicant.

(A) Percentage of persons living in poverty-- 25 [ 20 ]

(B) (No change.)

(C) Unemployment rate-- 10 [ 15 ]

(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 1993 [ 1991 ] program year and has not received any subsequent planning/capacity building fund contracts --50 points.

(ii) - (iii) (No change.)

(B) Proposed planning effort (225 points). The factors considered by a committee composed of staff of the Office in determining this score are as follows:

(i) the extent to which findings of any previous planning efforts have been implemented or accomplished ;

(ii) (No change.)

(iii) whether the proposed activities will result in the development of a viable and implementable strategy [ capable of implementation ] and be [ will be ] an efficient use of contract funds; and

(iv) (No change.)

§255.6.Urgent Need Fund.

(a) General provision. Assistance under this fund is provided only to eliminate existing water and sewer conditions which pose a serious and immediate threat to the health or welfare of the residents of the applicant where other financial resources are not available to meet such conditions. A unit of general local government that wishes to receive assistance under this fund must submit an application, as provided by the Office, to the Office. There is no application deadline. However, an application for urgent need assistance is not accepted for funding until discussions between the potential applicant and representatives of the Office and other state regulatory and funding resource agencies (such as the Texas Commission on Environmental Quality [ Texas Natural Resource Conservation Commission ] and the Texas Water Development Board) have occurred and a determination is made that the potential applicant and the situation meet urgent need fund threshold criteria. An applicant may not submit an application under this fund and also under any other TCDP fund category at the same time if the proposed activity under each application is the same or substantially similar. An applicant may receive one contract award under this fund in any one program year. The Office may negotiate the level of funding to be provided to an applicant and the scope of work to be performed by the applicant.

(b) Threshold requirements. In addition to the threshold requirements set forth in §255.1(h) and §255.1(n) [ §9.1(h) and §9.1(n) ] of this title (relating to General Provisions), each of the following requirements must be satisfied in order to be eligible for funding under this fund:

(1) - (5) (No change.)

§255.7.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) - (10) (No change.)

[(11) A business which is currently being provided assistance from the TCF must create at least 50 permanent jobs in each additional proposed TCF project in order for such project to be considered for funding.]

(11) [ (12) ] A TCF contractor must satisfactorily close out a contract in support of a specific business or main street improvements project in order to be eligible to receive additional funds under the TCF for the same business or main street city. The contractor is eligible for an additional TCF award in support of a specific business, provided that the prerequisite program income choice has been selected, if the assisted business is not in the designated main street geographic area or if the main street project selected the elimination of slums and blight as its national program objective and the assisted business will create or retain jobs to meet the national program objective.

(12) [ (13) ] The TDA will not consider or accept an application for funding from a community, in support of a business project that is currently receiving TCF assistance through that same community.

(13) [ (14) ] The minimum and maximum award amount that may be requested/awarded for a project funded under the TCF 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 $2 million [ $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 $1 million [ $3,000,000 ] in jumbo awards will be approved in any round. [ either of the first two rounds. ] The maximum amount for a jumbo award is $1 million [ $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 TDA and the applicant regarding the final award amount, but at no time will the award exceed the amount originally requested in the application.

(14) [ (15) ] TDA 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) - (c) (No change.)

(d) Repayment Requirements. TCF awards for real estate improvements and private 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 TDA 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 TDA 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 third [ 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 Office 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 third [ 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) (No change.)

(C) Rail improvements on private property 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 third [ 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 TDA 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 TDA executive director. TDA executive director makes the final decision. The application and selection procedures consist of the following steps:

(1) - (2) (No change.)

(3) TDA staff will [ then ] review the applications for eligibility and completeness in descending order based on the scoring. The [ 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 an excessive number of deficiencies, or deficiencies of a material nature [ 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) - (10) (No change.)

(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) (No change.)

[(2) Depending on availability of funds, TDA may elect not to make jumbo awards in program year 2001 after the April 30, 2001 round of applications.]

(2) [ (3) ] Community Need (maximum 60 [ 40 ] points). Measures the economic distress of the applicant community.

(A) Unemployment (maximum 10 [ 5 ] points). Five points awarded [ Awarded ] if the applicant's unemployment rate (for cities, the most recently available quarterly [ prior annual ] city rate will be used; for counties, the most recently available quarterly county or [ prior annual ] census tract rate, for where the business site is located , whichever is higher, will be used) is higher than the [ annual ] state rate, indicating that the community is economically below the state average. Ten points awarded if the applicant's most recently available quarterly unemployment rate is 1.5% over the state rate.

(B) Poverty (maximum 15 points). Awarded if the applicant's most recently available annual [ 1999 ] county poverty rate, as provided in Appendix A of the Application, [ (for cities, the prior annual city rate will be used; for counties, the prior annual census tract rate for where the business site is located will be used) ] is higher than the annual state rate, indicating that the community is economically below the state average. Applicants will score 5 points if their rate meets or exceeds the state average [ of 16.54% ]; score 10 points if this figure exceeds the state average by at least 15% [ 19.02% (15% over the state average) ]; and score 15 points if this figure exceeds the state average by at least 25% [ 20.68% (25% over 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) Previous [ Open ] Contracts (Maximum 10 [ 5 ] Points). Award 5 points if the community has been awarded one contract in the current calendar year or preceding 4 calendar years. Award 10 points if the community has been awarded zero contracts in the current calendar year or the preceding 4 calendar years. [ Awarded to applicants that have two (2) or less open TCF contracts. ]

(E) Community Population (maximum 10 points). Points are awarded to applying cities with populations of 5,050 [ 3,000 ] or less and counties with a total population of 35,000 [ 32,343 ] or less, using 2000 [ 1990 ] census data. For cities: score 5 points if the city is located in a county with a population of 35,000 or less; and score 5 additional points if the population of the city is less than 5,050. [ population is less that 3,000 and score 10 points if the city population is less than 1,177. ] For counties: score 5 points if the county population is less than 35,000 [ 32,343 ] and score 5 additional [ 10 ] points if the county population is less than 15,350 [ 15,072 ].

(F) Community Income (maximum 10 points). Ten points awarded to communities that have a low and moderate income level for a 4 person household that is in the bottom 90% of all county level 4 person low and moderate income levels.

(3) [ (4) ] Jobs (maximum 20 [ 30 ] points).

(A) Job Impact (maximum 10 [ 15 ] points). Awarded by taking the Business' total job commitment, created & retained, and dividing by applicant's 2000 [ 1990 ] unadjusted population. This equals the job impact ratio. Score 5 points if this figure exceeds the median job impact ratio for prior years; and 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 2000 [ 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 10 [ 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.]

(i) [ (ii) ] Below $15,000--10 points.

(ii) [ (iii) ] Below $20,000--5 points.

(4) [ (5) ] 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 50 [ 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 Texas Building and Procurement Commission (TBPC) as a Historically Underutilized Business (HUB). Provide a copy of TBPC's certification in the application.

[(6) Leverage/Match (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:]

[(A) 1.25 : 1 (125 percent)--5 points]

[(B) 2.00 : 1 (200 percent)--10 points]

(g) - (i) (No change.)

(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) (No change.)

(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 §255.1(a)(14) [ §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) (No change.)

§255.8.Regional Review Committees.

(a) (No change.)

(b) Role. Each regional review committee reviews and scores all applications submitted from within its region under the community development fund. Each regional review committee may review and comment on other TCDP applications. Each regional review committee sends its scores and comments to the Office. Regional review committees may elect to utilize staff of regional planning commissions to assist with project review responsibilities except when staff of the regional planning commission intend to prepare TCDP applications for the current funding cycle or when staff of the regional planning commission intend to administer TCDP projects that could receive TCDP funding under the current funding cycle. When staff of the regional planning commissions cannot assist with project review responsibilities, the Office staff may provide the assistance .

(c) General requirements. In the performance of its responsibilities, each regional review committee shall comply with all federal and state laws and regulations relating to the administration of community development block grant nonentitlement area funds including, but not limited to, requirements of this subchapter, the scoring procedures specified in the current Regional Review Committee Guidebook, and the procedures established by the regional review committee under the TCDP.

(1) Meetings. Each meeting held by a regional review committee shall conform to the following requirements.

(A) The regional review committee shall notify each eligible unit of general local government within the regional review committee's state planning region, in writing, of the date, time and location of its organizational meeting at least five days prior to the meeting. The regional review committee shall notify each applicant within its region, in writing, of the date, time and location of its scoring meeting at least five days prior to the meeting. The notices must be in the format specified by the Office [ department ] in the most recent Regional Review Committee Guidebook. The notices must also be published in a regional newspaper at least three days prior to the meeting. Articles published in such newspapers which satisfy the content and timing requirements of this subparagraph will be accepted by the Office [ department ] in lieu of publication of notices.

(B) - (E) (No change.)

(2) - (4) (No change.)

(d) Appeals. An applicant may appeal the actions of the regional review committee established in its state planning region by following the procedures set forth in this subsection. The Office [ department ] will withhold the running of computer scores on community development fund applications for five working days after the regional review committee's scoring meeting or until all regional appeals, if any, have been resolved, whichever is longer. A regional review committee must provide written notification of each appeal to all applicants in the region. An applicant that is adversely affected by the action of its regional review committee on an appeal, may appeal that action in accordance with the procedures specified in this subsection.

(1) An applicant shall notify its regional review committee, in writing, of an alleged violation of regional review committee procedures committed by the regional review committee within five working days after the date of the regional review committee meeting which is the subject of the appeal. The applicant shall also send a copy of the appeal to the Office [ department ]. All appeals must be based on a specifically identified violation of regional review committee procedures.

(2) - (5) (No change.)

§255.9.Colonia Fund.

(a) General provisions. This fund covers the payment of assessments, access fees, and capital recovery fees for low and moderate income persons for eligible water and sewer improvements projects, all other program eligible activities, eligible planning activities projects, and the establishment of colonia self-help centers to serve severely distressed unincorporated areas of counties which meet the definition of a colonia under this fund. A colonia is defined as: any identifiable unincorporated community that is determined to be a colonia on the basis of objective criteria, including lack of potable water supply, lack of adequate sewage systems, and lack of decent, safe, and sanitary housing; and was in existence as a colonia prior to November 28, 1990. For an eligible county to submit an application on behalf of eligible colonia areas, the colonia areas must be within 150 miles of the Texas-Mexico border region, except that any county that is part of a standard metropolitan statistical area with a population exceeding one million is not eligible under this fund.

(1) (No change.)

(2) In addition to the threshold requirements of §255.1(h) and §255.1(n) [ §9.1(h) and §9.1(n) ] of this title (relating to General Provisions), in order to be eligible to apply for colonia funds, an applicant must document that at least 51% of the persons who would directly benefit from the implementation of each activity proposed in the application are of low to moderate income.

(3) (No change.)

(4) In accordance with Subchapter Z, Chapter 43, Section 43.905 of the Local Government Code, eligible colonia areas annexed by municipalities on or after September 1, 1999, remain eligible for five years after the effective date of the annexation to receive any form of assistance for which the colonia would be eligible if the annexation had not occurred. A nonentitlement city located in a county that is eligible under the TCDP Colonia Fund and Texas Water Development Board's Economically Distressed Areas Program that has annexed a colonia area is an eligible applicant for the Office's [ Department's ] colonia EDAP fund. However, an application for TCDP colonia construction fund or colonia planning fund assistance for a colonia area annexed by a municipality on or after September 1, 1999, may only be submitted by the county where the annexed colonia area is located.

(b) (No change.)

(c) Types of applications. Eligible applicants may submit one application for the colonia construction fund and the colonia planning fund. Eligible applicants may submit one application for the colonia EDAP fund, unless the TCDP has an excess amount of colonia EDAP funds available in which case an eligible applicant could submit more than one application for the colonia EDAP fund. [ Eligible applicants may submit one application for the colonia EDAP fund, the colonia construction fund and the colonia planning fund. ] Eligible planning activities cannot be included in an application for the colonia construction fund. Two separate fund categories are available under the colonia planning fund. The colonia area planning fund is available for eligible planning activities that are targeted to selected colonia areas. The colonia comprehensive planning fund is available for countywide comprehensive planning activities that include an assessment and profiles of a county's colonia areas. Separate competitions are held for the colonia area planning fund and colonia comprehensive planning fund allocations. A county that has previously received a colonia comprehensive planning fund grant award from the Office may not submit another application for colonia comprehensive planning fund assistance.

(d) - (g) (No change.)

(h) Selection criteria (colonia comprehensive planning fund). The following is an outline of the selection criteria used by the Office for scoring applications for eligible planning activities under this fund. Two hundred points are available.

(1) (No change.)

(2) Project design (total--175 points). Each application is scored by a committee composed of the Office [ Department ] staff using the following information submitted in the application:

(A) - (D) (No change.)

(i) Program guidelines (colonia self-help centers fund). The colonia self-help centers fund is administered by the Texas Department of Housing and Community Affairs (TDHCA) under an interagency agreement with the Office. The following is an outline of the administrative requirements and eligible activities under this fund.

(1) The geographic area served by each colonia self-help center shall be determined by the Office or by the TDHCA . Five colonias located in each established colonia self-help center service area shall be designated to receive concentrated attention from the center. Each colonia self-help center shall set a goal to improve the living conditions of the residents located in the colonias designated for concentrated attention within a two-year period set under the contract terms. The Office and the TDHCA have [ has ] the authority to make changes to the colonias designated for this concentrated attention.

(2) (No change.)

(3) A colonia advisory committee is established and not fewer than five persons who are residents of colonias are selected from the candidates submitted by local nonprofit organizations and the commissioners court of a county where a self-help center is located. One committee member shall be appointed to represent each of the counties in which a colonia self-help center is located. Each committee member must be a resident of a colonia located in the county the member represents but may not be a board member, contractor, or employee of or have any ownership interest in an entity that is awarded a contract through the TCDP. The advisory committee shall advise the Office and the TDHCA regarding:

(A) - (C) (No change.)

(4) - (5) (No change.)

(j) (No change.)

§255.10.Housing Fund.

(a) General provisions. Two separate fund categories are available under the housing fund. The housing infrastructure 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 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) (No change.)

(2) Each applicant must meet the threshold requirements of §255.1(h) and §255.1(n) [ §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) - (5) (No change.)

(b) - (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 2003 and 2004 [ 2001 and 2002 ] program years pursuant to a statewide competition held during the 2003 [ 2001 ] program year. Applications for funding from the 2003 and 2004 [ 2001 and 2002 ] program year allocations must be received by the TCDP by the dates and times specified in the most recent application guide for this fund.

(f) Selection procedures (housing rehabilitation fund).

(1) - (4) (No change.)

(5) Following a final technical review, the Office staff submits the 2003 [ 2001 ] program year and 2004 [ 2002 ] program year funding recommendations to the executive director of the Office.

(6) The executive director of the Office reviews the 2003 [ 2001 ] program year funding recommendations for project awards and except for awards exceeding $300,000 announces the contract awards. Awards exceeding $300,000 are submitted to the Executive Committee for approval.

(7) Upon announcement of the 2003 [ 2001 ] program year contract awards, the Office staff works with recipients to execute the contract agreements. While the award must be based on the information provided in the application, the Office 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 2004 [ 2002 ] program year TCDP allocation becomes available, the executive director of the Office reviews the 2004 [ 2002 ] program year final recommendations for project awards and except for awards exceeding $300,000 announces the contract awards. Awards exceeding $300,000 are submitted to the Executive Committee for approval.

(9) Upon announcement of the 2004 [ 2002 ] program year contract awards, the Office staff works with recipients to execute the contract agreements. While the award must be based on the information provided in the application, the Office 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) Selection criteria (housing rehabilitation fund). The following is an outline of the selection criteria used by the Office for scoring applications under this fund. Two hundred points are available.

(1) Community distress (total--25 points). All community distress factor scores are based on the [ unincorporated ] population of the applicant. For counties, the population may include the unincorporated county population and the populations of any cities located in the county participating in the application.

(A) - (B) (No change.)

(2) Project design (total--175 points). Each application is scored by a committee composed of the Office [ Department ] staff using the following information submitted in the application:

(A) - (D) (No change.)

(h) Selection procedures (housing infrastructure fund).

(1) (No change.)

(2) Upon receipt of an application, the Office staff [ TCDP 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 Office staff in the timeframe stated in the notification.

(3) (No change.)

(4) The executive director of the Office reviews the funding recommendations for project awards and except for awards exceeding $300,000 announces the contract awards. [ The executive director forwards the recommended applications to the Office's Board for final approval. If approved by the Office's Board, the executive director except for awards exceeding $300,000 announces the contract awards. ] Awards exceeding $300,000 are submitted to the Executive Committee for approval.

(5) (No change.)

(i) Selection criteria (housing infrastructure fund). The following is an outline of the selection criteria used by the Office for scoring applications under this fund. One hundred seventy [ sixty-five ] points are available.

(1) - (7) (No change.)

(8) Rural project ( 10 [ 5 ] points). Project is located in a community with a population of 10,000 persons or less.

(j) (No change.)

§255.11.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) (No change.)

(2) In addition to the threshold requirements of §255.1(h) and §255.1(n) [ §9.1(h) and §9.1(n) ] of this title (relating to General Provisions), in order to be eligible to apply for small towns environment program funds, an applicant must document that at least 51% of the persons who would directly benefit from the implementation of each activity proposed in the application are of low to moderate income.

(3) Cities and counties submitting 2003 [ 1999 ] community development fund applications that do not include water, sewer, or housing activities are not eligible to receive a 2003 [ 1999 or 2000 ] grant award from this fund. However, the Office may consider a city's or county's request to transfer funds that are not financing water, sewer, or housing activities under a 2003 [ 1999 or 2000 ] community development fund grant award to finance water and sewer activities that will be addressed through self-help methods.

[(4) Cities and counties submitting 2001 community development fund applications that do not include water, sewer, or housing activities are not eligible to receive a 2001 or 2002 grant award from this fund. However, the Office may consider a city's or county's request to transfer funds that are not financing water, sewer, or housing activities under a 2001 or 2002 community development fund grant award to finance water and sewer activities that will be addressed through self-help methods.]

(b) - (c) (No change.)

(d) Application review and contract award procedures.

(1) The Office staff review each application to determine whether it is complete, if all proposed activities are program eligible, and if the project is financially feasible. Each application recommended for funding is forwarded to the executive director of the Office.

(2) The executive director of the Office reviews each funding recommendation for a project award and except for any award exceeding $300,000 announces the contract award. Any award exceeding $300,000 is submitted to the Executive Committee for approval.

(3) Upon announcement of a contract award, the Office staff works with the recipient to execute the contract agreement. While the award must be based on the information provided in the application, the Office 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.

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 January 30, 2003.

TRD-200300780

Robt. J. "Sam" Tessen, MS

Executive Director

Office of Rural Community Affairs

Earliest possible date of adoption: March 16, 2003

For further information, please call: (512) 936-6710