Emergency Sections
An agency may adopt a new or amended section or repeal an existing section on an 
emergency basis if it determines that such action is necessary for the public 
health, safety, or welfare of this state. The section may become effective 
immediately upon filing with the Texas Register, or on a stated date less than 
20 days after filing, for no more than 120 days. The emergency action is 
renewable once for no more than 60 days.
Symbology in amended emergency sections. New language added to an existing 
section is indicated by the use of bold text. [Brackets] indicate deletion of 
existing material within a section.
TITLE 10. COMMUNITY DEVELOPMENT
Part I. Texas Department of Housing and Community Affairs
Chapter 9. Texas Community Development Program
Subchapter A. Allocation of Program Funds
10 TAC sec.sec.9.1, 9.3, 9.7
The Texas Department of Housing and Community Affairs (TDHCA) adopts on an 
emergency basis new program rules concerning application procedures and eligible 
activities for 1991 community development block grant funds under the Texas 
Capital Fund Program and the Governor's Special Assistance Fund for Small and 
Minority Businesses Program. The program rules outline application procedures 
and augment activities for eligible nonentitlement cities and counties.
The program rules are adopted on an emergency basis to immediately implement 
application procedures and additional eligible activities thus ensuring easier 
access to the Texas Capital Fund Program and the Governor's Special Assistance 
Fund for Small and Minority Businesses Program, and for the purpose of more 
timely awards to eligible nonentitlement cities and counties.
The new sections are adopted on an emergency basis under Texas Civil Statutes, 
Article 4413(501), sec.2.07 which provide TDHCA with the authority to allocate 
community development block grant nonentitlement area funds to eligible counties 
and municipalities according to department rules.
sec.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.
(2) Application-A written request for Texas Community Development Program funds 
in the format required by the department.
(3)  Community Development Block Grant nonentitlement area funds-The funds 
awarded to the State of Texas pursuant to the Housing and Community Development 
Act of 1974, Title I, as amended, (42 United States Code, sec.5301 et seq) and 
the regulations promulgated thereunder in 24 Code of Federal Regulations, Part 
570.
(4) Community-A unit of general local government.
(5)  Contract-A written agreement, including all amendments thereto, executed by 
the department and contractor which is funded with community development block 
grant nonentitlement area funds.
(6) Contractor-A unit of general local government with which the department has 
executed a contract.
(7) Department-The Texas Department of Housing and Community Affairs.
(8) Local government-A unit of general local government.
(9)  Low-and moderate-income person-A member of a family which earns less than 
80% of the area median family income, as defined under the United States 
Department of Housing and Urban Development Section 8 Assisted Housing Program.
(10) Nonentitlement area-An area which is not a metropolitan city or part of an 
urban county as defined in 42 United States Code, sec.5302.
(11)  Permanent job-A job for which continuation of employment is not dependent 
on funds provided through the Texas Community Development Program.
(12)  Poverty-The current official poverty line established by the director of 
the Federal Office of Management and Budget.
(13) Primary beneficiary-A low-or moderate-income person.
(14) Regional review committee-A regional community development review 
committee, one which is established in each of the 24 state planning regions 
established by the governor pursuant to Texas Local Government Code, 
sec.391.003.
(15) State review committee-The State Community Development Review Committee 
established pursuant to Texas Civil Statutes, Article 4413(501), sec.2.10.
(16)  Underemployed person-A person who works less than 40 hours per week not by 
choice, at a salary that is not commensurate with his skills and experience.
(17) Unemployed person-A person between the ages of 16 and 64, inclusive, who is 
not presently working but is seeking employment.
(18) Unit of general local government-An entity defined as a unit of general 
local government in 42 United States Code sec.5302(a)(1), as amended.
(b) Overview-Community development block grant nonentitlement area funds. 
Overview-Community development blockgrant nonentitlement area funds are 
distributed by the Texas Community Development Program to eligible units of 
general local government in the following program areas:
(1) community development fund;
(2) Texas capital fund;
(3)  planning/capacity building fund;
(4) emergency fund;
(5)  urgent need fund;
(6) governor's special assistance fund for small and minority businesses;
(7) colonia fund.
(c) Types of applications.
(1) Single jurisdiction applications. An applicant may submit one application 
per Texas Community Development Program fund, as outlined in subsection (b) of 
this section, on its own behalf per funding cycle (except as specified for the 
Texas capital fund, the governor's special assistance fund for small and 
minority businesses, and the governor's small business special assistance fund). 
A city may include beneficiaries who reside in the extraterritorial jurisdiction 
of the city provided that at least 30% of the beneficiaries of the project 
reside within the corporate limits of the jurisdiction and, if funded, the city 
will be required to annex the area in its extraterritorial jurisdiction prior to 
receiving any contract construction funds. If the city is unwilling to annex the 
area, the city and county in which the area is located must submit the project 
as a joint application.
(2)  Joint applications. Subject to approval by the United States Department of 
Housing and Urban Development and subject to each participating community 
satisfying the application requirements of the Texas Community Development 
Program fund under which the application is submitted and this paragraph, an 
application will be accepted from two or more units of general local government 
if the application clearly demonstrates that the proposed activities will 
mutually benefit the residents of the communities applying for funds. A joint 
application solely for administrative convenience will not be accepted. Any 
community participating in a joint application may not submit a single 
jurisdiction application under the project fund for which the joint application 
was submitted. One of the participating communities must be primarily 
accountable to the department for financial compliance and program performance. 
Only one unit of general local government may be the official applicant and this 
applicant must enter into a legally binding cooperation agreement with each 
participant that incorporates Texas Community Development Program requirements. 
A proposed project which is located in more than one jurisdiction or in which 
beneficiaries from more than one jurisdiction will be counted must be submitted 
as a joint application (except as specified for the Texas capital fund, the 
governor's special assistance fund for small and minority businesses, and the 
governor's small business special assistance fund).
(d) Eligible location. Only projects or activities which are located in the 
nonentitlement areas of the state are eligible for funding under the Texas 
Community Development Program. The only exception is Hidalgo County, an 
entitlement county, which is eligible for the Colonia fund.
(e) Ineligible activities. Any type of activity not described or referred to in 
the federal Housing and Community Development Act of 1974, sec.5305(a) (42 
United States Code, sec.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; income payments, such as housing 
allowances; most operation and maintenance expenses; pre-contract costs, such as 
application preparation fees paid prior to submittal of the application; 
prisons; and racetracks.
(f)  Citizen participation.
(1) Public hearing requirements. For each public hearing scheduled and conducted 
by an applicant or contractor, the following public hearing requirements shall 
be followed.
(A) Notice of each hearing must be published in the nonlegal section of a 
newspaper having general circulation in the city or county at least 72 hours 
prior to each scheduled hearing. The published notice must include the date, 
time, and location of each hearing and the topics to be considered at each 
hearing. The published notice must be printed in both English and Spanish, if 
appropriate. Articles published in such newspapers which satisfy the content and 
timing requirements of this subparagraph will be accepted by the department in 
lieu of publication of notices. Notices must also be prominently posted in 
public buildings.
(B) Each public hearing shall be held after 5 p.m. on a weekday or on a Saturday 
and at a location convenient to potential or actual beneficiaries, with 
accommodation for the handicapped.
(C) When a significant number of non-English speaking residents can reasonably 
be expected to participate in a public hearing, an applicant or contractor shall 
provide an interpreter to accommodate the needs of the non-English speaking 
residents.
(2) Application requirements. Prior to submitting an application, an applicant 
for Texas Community Development Program funding shall satisfy the following 
requirements.
(A) At least one public hearing shall be held prior to preparing its application 
and at least one additional public hearing prior to submitting its completed 
application to the department.
(B)  The public hearings must be held at least seven days apart.
(C) At least one of the public hearings must be held in the proposed project 
area.
(D) An applicant shall retain documentation of the hearing notices, a list of 
attendees at each hearing, minutes of the hearings, and any other records 
concerning the proposed use of funds for a period of one year or until the 
project, if funded, is closed out. Such records must be made available to the 
public in accordance with Texas Civil Statutes, Article 6252-17a.
(E)  The first public hearing must include a discussion with citizens on the 
development of housing and community development needs, the amount of funding 
available, all eligible activities under the Texas Community Development 
Program, and the use of past Texas Community Development Program contract funds, 
if applicable. Citizens, with particular emphasis on persons of low and moderate 
income who are residents of slum and blight areas, shall be encouraged to submit 
their views and proposals regarding community development and housing needs. 
Citizens shall be made aware of the location where they may submit their views 
and proposals should they be unable to attend the public hearing.
(F)  The second public hearing must include a discussion of the proposed 
project, the amount of funds being requested, the estimated amount of funds 
proposed for activities that will benefit low- and moderate-income persons, and 
the plans of the applicant to minimize displacement of persons and to assist 
persons actually displaced as a result of activities assisted with Texas 
Community Development Program funds, if applicable. The notice must include the 
location and hours when the application is available for review.
(3) Contractor requirements.
(A) A contractor must hold a public hearing concerning any substantial change, 
as determined by the department, proposed to be made in the use of Texas 
Community Development Program funds from one eligible activity to another.
(B) Upon completion of its contract, the contractor shall hold a public hearing 
to review its program performance, including the actual use of the funds 
provided under the contract.
(C) A contractor shall retain documentation of the hearing notices, a list of 
attendees at each hearing, minutes of the hearings, and any other records 
concerning the actual use of funds for a period of three years after the 
contract is closed out. Such records must be made available to the public in 
accordance with Texas Civil Statutes, Article 6252-17a.
(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 Texas Community Development Program Complaint 
System, Part V of this title sec.178.1 and sec.178.2. Citizens must be made 
aware of the location and hours at which they may obtain a copy of the written 
procedures.
(5) Technical assistance. An applicant shall provide technical assistance to 
groups representative of persons of low and moderate income that request such 
assistance in developing proposals for the use of Texas Community Development 
Program funds. The level and type of assistance shall be determined by the 
applicant based upon the specific needs of its residents.
(g) Appeals. An applicant for funding under the Texas Community Development 
Program 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) Misplacement of an application. All or a portion of an application is lost, 
misfiled, or otherwise misplaced by department staff, resulting in unequal 
consideration of the applicant's proposal.
(B) Mathematical error. In rating the application, the score on any selection 
criteria is incorrectly computed by the department due to human or computer 
error.
(C) Other procedural error. The application is not processed by the department 
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 
sec.9.8 of this title (relating to Regional Review Committees).
(2) The appeal must be submitted in writing to the Texas Community Development 
Program of the department no later than 30 days after the date the announcement 
of contract awards is published in the Texas Register<ol>. 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 department 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 department. The decision 
of the executive director of the department is final. If the appeal concerns a 
Texas capital fund application, a governor's special assistance fund for small 
and minority businesses application, or a governor's small business special 
assistance fund application, the appeal must be submitted in writing to the 
department no later than 30 days following the date of the notification letter 
of the denial. The staff evaluates the appeal and may either concur with the 
appeal or disagree with the appeal and prepare an appeal file for consideration 
by the executive director. The executive director 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 is rejected, the department 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 Texas 
capital fund application, a governor's special assistance fund for small and 
minority businesses application, or a governor's small business special 
assistance fund application, the applicant will be notified of the decision made 
by the executive director within 10 days after the final determination by the 
executive director.
(4) Appeals not submitted in accordance with this subsection are dismissed and 
may not be refiled.
(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 Texas Community Development Program:
(1) demonstrate the ability to manage and administer the proposed project, 
including meeting all proposed benefits outlined in its application;
(2) demonstrate the financial management capacity to operate and maintain any 
improvement made in conjunction with the proposed project;
(3) levy a local property tax or local sales tax option;
(4) demonstrate satisfactory performance on existing and prior Texas Community 
Development Program contracts; and
(5) resolve all outstanding compliance and audit findings related to existing 
and prior Texas Community Development Program and Texas Rental Rehabilitation 
Program contracts.
(i) Unmet benefits. Actions that may be taken against a contractor by the 
department where the department finds that the contractor did not provide the 
level of benefits specified in its contract include, but are not limited to:
(1) holding the contractor ineligible to apply for Texas Community Development 
Program funds for a period of two program years or until any issue of 
restitution is resolved, whichever is longer;
(2) requiring the contractor to reimburse the department for the difference 
between the amount of funds provided for the level of benefits specified in the 
contract and the amount of funds actually expended in providing such level of 
benefits; and
(3) rescoring the contractor's application, and if the level of benefits 
actually provided by the contractor would have changed the funding 
recommendation, terminating the local government's contract.
(j) False information. If an applicant provides false information in its 
application which has the effect of increasing the applicant's competitive 
advantage, the department refers the matter to the State Review Committee for 
disciplinary action. If the applicant provides false information in a Texas 
capital fund application, a governor's special assistance fund For small and 
minority businesses application, or a governor's small business special 
assistance fund application, the department staff in conjunction with the staff 
of the Texas Department of Commerce shall make a recommendation for action to 
the executive director of the department. The State Review Committee makes a 
recommendation for action to the executive director of the department at its 
next regularly scheduled meeting. Recommendations that the State Review 
Committee may make include, but are not limited to:
(1) holding the applicant or contractor ineligible to apply for Texas Community 
Development Program Texas Community Development Program funds for a period of 
two program years or until any issue of restitution is resolved, whichever is 
longer; and
(2)  terminating the local government's contract if the correct information 
would have changed the scores and resulted in a change in the rankings for 
purposes of funding.
(k) Substitution of standardized data. Any applicant that chooses to substitute 
locally generated data for standardized information available to all applicants 
must use the survey instrument provided by the department and must follow the 
procedures prescribed in the instructions to the survey instrument.
(1) Only door-to-door surveys are allowed, unless an alternate method is 
approved in writing by the department.
(2) Surveys, including signed tabulation sheets, all responses, and all 
nonresponses must be submitted to the department at least 14 days prior to the 
application deadline, for verification and spot-checking.
(3) A survey instrument that lacks any information is considered as a 
nonresponse for that family.
(4) The applicant must demonstrate a 100% effort in contacting households to be 
surveyed and obtain at least an 80% response rate for surveys which include 150 
or fewer beneficiary households or obtain at least a 70% response rate for 
surveys which include 151 or more beneficiary households.
(5) A survey that was completed after the 1984 program year for a previous Texas 
Community Development Program application may be accepted by the department for 
a new application to the extent specified in the most recent application guide 
for the proposed project.
(l) Unobligated and recaptured funds. Any additional funds resulting from the 
recapture of dollars from a prior year's allocation, recapture of program 
income, unobligated funds from a program area specified in subsection (b) of 
this section, or reallocated funds which the United States Department of Housing 
and Urban Development has recaptured from small cities grantees are 
redistributed to eligible communities on a priority basis with eligible 
emergency and urgent need projects and projects benefitting public housing as 
the highest priorities. Any additional remaining funds may be redistributed to 
eligible communities at the discretion of the executive director of the 
department within such program areas. A governor's small business special 
assistance fund was established for economic development projects proposed by 
communities impacted by base closings/cutbacks or defense related layoffs (i.e., 
Fort Hood area). This program was funded through $500,000 of 1988 and 1989 
program years' allocations by an amendment to the 1990 final statement. This 
fund does not involve 1991 funds.
(m) Waivers. The department may waive any provision of this subchapter upon its 
own motion, or upon an applicant's or contractor's written request for such a 
waiver if the department finds that compelling circumstances exist outside the 
control of the applicant or contractor which justify the approval of such a 
waiver.
(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 year 1991 
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 (except 
for Texas capital fund contracts) executed at least 12 months prior to the 
program year 1991 application deadline.
(2) Expend all but the audit funds awarded under a contract (except for Texas 
capital fund contracts) executed at least 24 months prior to the program year 
1991 application deadline and submit to the department the close-out documents 
required by the most recent edition of the Texas Community Development Program 
Project Implementation Manual.
sec.9.3. 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. 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 have been for people 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. Eligible activities include 
the loan program, the infrastructure program, and the real estate development 
program. The loan program provides financing for activities such as machinery 
and equipment, working capital, the purchase of land and depreciable property, 
new construction, and rehabilitation of commercial or industrial facilities. The 
public infrastructure program provides funds for eligible activities such as the 
construction or improvement of water/wastewater facilities, public roads, 
natural gas-line services, electric-power services, and railroad spurs. The real 
estate development program provides a contract to an eligible applicant for the 
acquisition, construction, or rehabilitation of real estate in support of a 
specific business (either a for-profit entity or a nonprofit entity). The terms 
and criteria for the loan program, the public infrastructure program, and the 
real estate development program are further defined in the pre-application 
guidelines for the programs. A firm financial commitment from all funding 
sources other than the United States Department of Commerce Economic Development 
Administration is required upon submission of a pre-application. A letter from 
the United States Department of Commerce Economic Development Administration 
inviting a formal application under its public works program must be included in 
the pre-application if applicable. The leverage ratio between all funding 
sources and Texas capital funds must not be less than 1:1. In order for an 
applicant to be eligible for Texas capital funding, the cost per job calculation 
must not exceed $25,000.
(1) No assistance will be provided for projects intended to facilitate the 
relocation of industrial or commercial plants or facilities from one unit of 
general local government within Texas to another unit of general local 
government within Texas unless the relocating industrial or commercial plant or 
facility provides the department with satisfactory documentation that it will 
move out of the State of Texas without such assistance, or unless the chief 
elected official of the unit of general local government from which such plant 
or facility is relocating provides the department with satisfactory 
documentation that such unit of general local government has no objections to 
the relocation.
(2) The department will not consider any application for funding which would 
result in the provision of assistance for an economic development project where 
the applicant and one or more other cities or counties are competing to provide 
economic development project funds to that project.
(3) The department will not consider any application for funding in which the 
business to be assisted thereunder has filed under the Federal Bankruptcy Code, 
and the matter is in the process of being adjudicated or in which such business 
has been adjudicated bankrupt.
(4) The department will only consider applications that provide funding for one 
business.
(5)  The department 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.
(6)  A business which is currently being provided assistance from the Texas 
capital fund must create at least 50 permanent jobs in each additional proposed 
Texas capital fund project in order for such project to be considered for 
funding.
(7) A Texas capital fund or governor's special assistance fund for small and 
minority businesses contractor must satisfactorily close out a contract in 
support of a specific business in order to be eligible to receive additional 
funds under the Texas capital fund for the same business.
(8)  The department will not consider or accept an application for funding under 
the Texas capital fund or the governor's special assistance fund for small and 
minority businesses in support of the same project.
(b) Funding cycle. This fund is distributed to eligible units of general local 
government. Pre-applications are accepted continuously. There are no pre-
application deadlines.
(c) Selection procedures. The department has entered into an interagency 
cooperation contract with the Texas Department of Commerce by which the Texas 
Department of Commerce performs marketing and underwriting services for this 
fund. Applications under this section are reviewed by the Texas Capital Fund 
Advisory Committee after they have been scored by staff of the Texas Department 
of Commerce. The Advisory Committee is appointed by the executive director of 
the Texas Department of Commerce and the Community Development Block Grant 
division director of the department. The Texas Department of Commerce and the 
department have equal representation on the Advisory Committee. The Texas 
Capital Fund Advisory Committee and staff make recommendations to the 
department's executive director for final award. The application and selection 
procedures consist of the following steps.
(1) Prior to submitting a formal application, each potential applicant must 
submit a complete pre-application to the Office of Business Finance Services, 
Business Development Division, of the Texas Department of Commerce.
(2) Upon receipt of a pre-application containing financial information on the 
business to be considered for funding, the staff of the Texas Department of 
Commerce performs an initial review to determine whether the pre-application is 
complete and whether the activities proposed are eligible for funding. In those 
instances where the staff of the Texas Department of Commerce determines that 
the pre-application is either incomplete or that the activities are ineligible 
for funding, the pre-application is returned for the applicant to complete or is 
cited as ineligible. The staff at the Texas Department of Commerce then conducts 
a review of each complete pre-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 pre-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, as defined in the 
pre-application guidelines for this fund, to carry out the project proposed in 
the pre-application; and
(E) whether there is evidence that at least 51% of the permanent jobs created or 
retained will benefit low- and moderate-income persons.
(3) If the Texas Department of Commerce or the department invite a formal 
application, the staff of the Texas Department of Commerce is required to 
discuss the project and program rules with the mayor or judge, as applicable, or 
his designee, and one company official. A formal application may only be 
submitted if the Texas Department of Commerce or the department authorizes such 
in writing. If an authorization to submit a formal application is granted, a 
formal application must be submitted within 45 days of the authorization.
(4) A copy of a complete application must be provided to the appropriate 
regional review committee. 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 department provided such comments are received by 
the department within 10 days after the formal application is submitted.
(5) The staff of the Texas Department of Commerce generates scores on selection 
criteria related to leverage ratio, cost per job, minority hiring, and project 
feasibility. Scores on factors in these categories are derived from information 
provided by the applicant. An applicant must receive at least 60 points out of a 
possible 100 points to be considered for funding. An applicant that receives at 
least 60 points on such criteria may be invited to send a representative to make 
a presentation to the Texas Capital Fund Advisory Committee.
(6) The staff of the Texas Department of Commerce in conjunction with department 
staff may conduct a site visit of the proposed project.
(7) If a project is determined not to be feasible by the Advisory Committee, the 
department notifies the applicant of its decision, including the basis for 
denial.
(8) The Texas Capital Fund Advisory Committee and staff make recommendations to 
the department's executive director for final award.
(9) The executive director of the department reviews the recommendations and 
announces the projects selected for funding.
(10) The staff of the Texas Department of Commerce in conjunction with 
department staff works with the recipients to execute contract agreements. While 
the contract award must be based on the information provided in the pre-
application and the formal application, the department may negotiate any element 
of the final contract agreement with the recipient.
(d)  Selection criteria. The following is an outline of the selection criteria 
used for selection of projects under the Texas capital fund. One hundred points 
are available. The terms and criteria used in this subsection are further 
defined in the pre-application guidelines for this fund.
(1) Project feasibility (total-30 points). The feasibility of each project is 
evaluated and scored based on the financial soundness of the project. Factors 
examined include firm commitments for financial investments and the jobs to be 
created or retained; the history of the business; the current financial 
condition of the business, including a full review of the credit analysis; cash 
flow projections; the business or marketing plan, including letters of intent to 
purchase products or services; and management experience of the business's 
principals. A project located in a designated enterprise zone receives special 
consideration.
(2)  Minority hiring (total-20 points). Percentage of minorities presently 
employed by the applicant divided by the percentage of minority residents within 
the local community (20 points). In the event less than 5.0% of the applicant's 
population base is composed of minority residents or the applicant has less than 
five permanent employees, the applicant is assigned the average score on this 
factor for all applicants for the previous program year or the score calculated 
on the actual figures, whichever is higher.
(3) Leverage ratio (total-30 points). Points are awarded by dividing the total 
other funds committed by the amount of Texas capital funds requested less 
administration, in accordance with the following scale:
(A) 1.0:1 (100%)-10 points;
(B) 1.5:1 (150%)-15 points;
(C) 2.0:1 (200%)-20 points;
(D) 2.5:1 (250%)-25 points;
(E) 3.0:1 (300%)-30 points.
(4) Cost per job (total-20 points). Points are awarded by dividing the amount of 
Texas capital funds requested by the number of full-time job equivalents to be 
created or retained, in accordance with the following scale:
(A) at or below 10,000-20 points;
(B) at or below 15,000-15 points;
(C) at or below 20,000-10 points;
(D) at or below 25,000-five points.
(e) Additional criteria for the loan program and the public infrastructure 
program. A minimum of a 10% equity injection (of the total project costs) in the 
form of cash, land, buildings, equipment, furniture, or fixtures by the business 
is required.
(f) Additional criteria for the real estate development program. A minimum of a 
10% equity injection (of the 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 (of the 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.
sec.9.7. Governor's Special Assistant Fund for Small and Minority Businesses.
(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. 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 have been held by people 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 firm financial commitment from 
all funding sources is required upon submission of a pre-application. The 
department may provide a maximum of 75% of the total cost of the project. A 
minimum of a 10% equity injection (of the total project costs) in the form of 
cash, land, buildings, equipment, furniture, or fixtures by the business is 
required. In order for an applicant to be eligible for funding, the cost per job 
calculation must not exceed $25,000.
(1) A small business is defined as a for-profit enterprise with less than 100 
employees or less than $1 million in annual gross receipts. A minority business 
is defined as a for-profit enterprise in which at least 51% of the enterprise is 
owned, operated, and controlled by one or more persons who are socially 
disadvantaged because of their identification as members of certain groups, 
including, but not limited to women, Black Americans, Hispanic Americans, Asian 
or Pacific Americans, and American Indians.
(2) No assistance will be provided for projects intended to facilitate the 
relocation of industrial or commercial plants or facilities from one unit of 
general local government within Texas to another unit of general local 
government within Texas unless the relocating industrial or commercial plant or 
facility provides the department with satisfactory documentation that it will 
move out of the State of Texas without such assistance, or unless the chief 
elected official of the unit of general local government from which such plant 
or facility is relocating provides the department with satisfactory 
documentation that such unit of general local government has no objections to 
the relocation.
(3) The department will not consider any application for funding which would 
result in the provision of assistance for an economic development project where 
the applicant and one or more other cities or counties are competing to provide 
economic development project funds to that project.
(4) The department will not consider any application for funding in which the 
business to be assisted thereunder has filed under the Federal Bankruptcy Code, 
and the matter is in the process of being adjudicated or in which such business 
has been adjudicated bankrupt.
(5) The department will only consider applications that provide funding for one 
business.
(6) The department 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.
(7) A Texas capital fund or governor's special assistance fund for small and 
minority businesses contractor must satisfactorily close out a contract in 
support of a specific business in order to be eligible to receive additional 
funds under the governor's special assistance fund for small and minority 
businesses for the same business.
(8) The department will not consider or accept an application for funding under 
the Texas capital fund or the governor's special assistance fund for small and 
minority businesses in support of the same project.
(b) Funding cycle. This fund is distributed to eligible units of general local 
government. Pre-applications are accepted continuously. There are no pre-
application deadlines.
(c)  Selection procedures. The department has entered into an interagency 
cooperation contract with the Texas Department of Commerce by which the Texas 
Department of Commerce performs marketing and underwriting services for this 
fund. Applications under this section are reviewed by the governor's special 
assistance fund for small and minority businesses advisory committee. The 
advisory committee is appointed by the executive director of the Texas 
Department of Commerce and the Community Development Block Grant division 
director of the department. The Texas Department of Commerce and the department 
have equal representation on the Advisory Committee. The Advisory Committee and 
staff make recommendations to the department's executive director for final 
award. The application and selection procedures consist of the following steps.
(1) Prior to submitting a formal application, each potential applicant must 
submit a complete pre-application to the Office of Business Finance Services, 
Business Development Division, of the Texas Department of Commerce.
(2) Upon receipt of a pre-application containing financial information on the 
business to be considered for funding, the staff of the Texas Department of 
Commerce performs an initial review to determine whether the pre-application is 
complete and whether the activities proposed are eligible for funding. In those 
instances where the staff of the Texas Department of Commerce determines that 
the pre-application is either incomplete or that the activities are ineligible 
for funding, the pre-application is returned for the applicant to complete or is 
cited as ineligible. The staff at the Texas Department of Commerce then conducts 
a review of each complete pre-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 pre-application;
(C) whether the use of funds from the governor's special assistance fund for 
small and minority businesses is appropriate, as defined in the pre-application 
guidelines for this fund, to carry out the project proposed in the pre-
application; and
(D) whether there is evidence that at least 51% of the permanent jobs created or 
retained will benefit low- and moderate-income persons.
(3) If the Texas Department of Commerce or the department invite a formal 
application, the staff of the Texas Department of Commerce is required to 
discuss the project and program rules with the mayor or judge, as applicable, or 
his designee, and one company official. A formal application may only be 
submitted if the Texas Department of Commerce or the department authorizes such 
in writing. If an authorization to submit a formal application is granted, a 
formal application must be submitted within 45 days of the authorization.
(4) A copy of a complete application must be provided to the appropriate 
regional review committee. 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 department provided such comments are received by 
the department within 10 days after the formal application is submitted.
(5)  Based on the information provided by the applicant, the staff of the Texas 
Department of Commerce evaluates the application on the basis of financial 
feasibility, leverage ratio, cost per job, and management capabilities.
(6)  The staff of the Texas Department of Commerce in conjunction with 
department staff may conduct a site visit of the proposed project.
(7) If a project is determined not to be feasible by the Advisory Committee and 
staff, the department notifies the applicant of its decision, including the 
basis for denial.
(8) The governor's special assistance fund for small and minority businesses 
advisory committee and staff make recommendations to the department's executive 
director for final award.
(9) The executive director of the department reviews the recommendations and 
announces the projects selected for funding.
(10) The staff of the Texas Department of Commerce in conjunction with 
department staff works with the recipients to execute contract agreements. While 
the contract award must be based on the information provided in the pre-
application and the formal application, the department may negotiate any element 
of the final contract agreement with the recipient.
(d) Selection criteria. The following is an outline of the selection criteria 
used for selection of projects under the governor's special assistance fund for 
small and minority businesses. The terms and criteria used in this subsection 
are further defined in the pre-application guidelines for this fund.
(1) Financial feasibility and management capabilities. The feasibility of each 
project is evaluated based on the financial soundness of the project. Factors 
examined include firm commitments for financial investments and the jobs to be 
created or retained; the history of the business; the current financial 
condition of the business, including a full review of the credit analysis; cash 
flow projections; the business or marketing plan, including letters of intent to 
purchase products or services; and management experience of the business's 
principals. A project located in a designated enterprise zone receives special 
consideration.
(2) Leverage ratio. The leverage ratio is calculated by dividing the all other 
funds exclusive of governor's special assistance fund for small and minority 
businesses by the governor's special assistance fund for small and minority 
business grant amount requested less administration.
(3) Cost per job. The cost per job ratio is calculated by dividing the amount of 
governor's special assistance fund for small and minority businesses' funds 
requested by the number of full-time job equivalents to be created or retained. 
In order for an applicant to be eligible for funding, the cost per job 
calculation must not exceed $25,000.
Issued in Austin, Texas, on November 4, 1991.
TRD-9113813
Anne O. Paddock
Interim Assistant General Counsel
Texas Department of Housing and Community Affairs
Effective date: November 4, 1991
Expiration date: March 3, 1992
For further information, please call: (512) 320-9526
       
TITLE 22. EXAMINING BOARDS
Part VIII. Texas Appraiser Licensing and Certification Board
Chapter 153. Provisions of the Texas Appraiser Licensing and Certification Act
22 TAC sec.153.9
The Texas Appraiser Licensing and Certification Board adopts on an emergency 
basis an amendment to sec.153.9, concerning applications, which was adopted on 
an emergency basis in the September 13, 1991, issue of the Texas Register  (16 
TexReg 5017). This section is part of the implementation of the Texas Appraiser 
Licensing and Certification Act (the Act), Texas Civil Statutes, Article 
6573a.2. The board found that the adoption of emergency rules is necessary 
because of an imminent peril to the public welfare.
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (FIRREA) requires the use of state certified or licensed real estate 
appraisers in connection with federally related transactions performed after 
December 31, 1991. It is necessary to adopt these rules in order to license and 
certify appraisers before December 31, 1991.
The amendment is adopted on an emergency basis under the Act, Texas Civil 
Statutes, Article 6573a.2, which provides the Texas Appraiser Licensing and 
Certification Board with the authority to adopt rules and regulations necessary 
for the performance of its duties. The Act, sec.26, provides for emergency 
adoption of rules.
sec.153.9. Applications.
(a) (No change.)
(b) The Texas Licensing and Certification Board adopts by reference the 
following forms approved by the board in 1991 and published by and available 
from the board, P.O. Box 12188, Austin, Texas 78711-2188:
(1) (No change.)
(2) TALCB Form<nl>2.1<ol> [2.0], Appraisal Experience Affidavit;
(3) TALCB Form <nl>3.1<ol> [3.0], Appraisal Experience Log;
(4) (No change.)
(5) TALCB Form 5.0, Request for Course Approval and Renewal; [and]
(6) (No change.)
<nl>(7) TALCB Form 7.0, Joint Affidavit for Experience; and
<nl>(8) TALCB Form 8.0, Change of Office Address by a Licensed or Certified 
Appraiser
(c)-(f) (No change.)
Issued in Austin, Texas, on November 4, 1991.
TRD-9113860
Renil C. Liner
Commissioner
Texas Appraiser Licensing and Certification Board
Effective date: November 5, 1991
Expiration date: January 2, 1992
For further information, please call: (512) 465-3950
       
TITLE 37. PUBLIC SAFETY AND CORRECTIONS
Part III. Texas Youth Commission
Chapter 81. Administrative Provisions
General
37 TAC sec.81.13
The Texas Youth Commission adopts on an emergency basis new sec.81.13, 
concerning the selection process of an architect/engineer. The emergency 
adoption will allow the commission to select architects and engineers necessary 
to begin construction of four new dormitories and a new facility in Beaumont as 
authorized by the 72nd Legislature. The emergency adoption is necessary in order 
for the commission to provide additional bed space necessary for detaining 
committed youth longer periods of time in residential facilities.
The new section is adopted on an emergency basis under the Human Resources Code, 
sec.61.048, which provides the Texas Youth Commission authority to promulgate 
rules relating to award of contracts for construction.
sec.81.13. Selection Process of an Architect/Engineer.
(a) Policy. The Texas Youth Commission (TYC) obtains architect/engineer services 
through a systematic process.
(b) Rules.
(1) TYC solicits proposals from architects, engineers, and other design 
professionals based on the following:
(A) request for proposals prepared by maintenance and construction department;
(B) user recommendation;
(C) expressed interest in seeking TYC consultants contracts;
(D) general knowledge of consultants available in the project area; and
(E) legal advertisement of request for proposals.
(2) The director of plant operations and development, chief of planning and 
design, and chief of building engineering and management rate proposals received 
based on evaluation criteria in the request for proposals.
(3) Not less than five firms (short list) are selected based on the combined 
ratings from paragraph (2) of this subsection.
(4) Interview committee composed of director of plant operations and 
development, chief of planning and design, superintendent at facility, business 
manager at the facility, and plant maintenance manager at the facility meet to 
review short list and interview process.
(5) Chief of planning and design mails questionnaire to references for firms on 
short list.
(6) Interview committee reviews the returned questionnaires for the firms on the 
short list, interviews firms on short list at the facility, rates each firm 
based on the interview, ranks firms in order, and recommends three top firms to 
the board for selection.
(7) The director of plant operations and development presents the findings of 
the interview committee to the board and recommends selections.
(8) Upon selection of a consultant and an alternate by the board, the chief of 
planning and design negotiates an architectural/engineering agreement for 
execution with the firm selected at the fee states.
(9) If an agreement cannot be executed within 45 days from selection with the 
selected consultant, the consultant shall be notified that the firm is no longer 
being considered and negotiations shall begin with the alternate firm selected 
by the board.
(10) TYC enters into an architectural/engineering agreement.
(11) In the event the project under consideration is a new facility, the 
superintendent, business manager, and plant maintenance manager shall be 
replaced by appointments made by the executive director, director of 
institutions, or director of community services depending on the facility and 
director of finance.
Issued in Austin, Texas, on November 1, 1991.
TRD-9113780
Ron Jackson
Executive Director
Texas Youth Commission
Effective date: November 4, 1991
Expiration date: March 3, 1992
For further information, please call: (512) 483-5244