[Federal Register Volume 61, Number 233 (Tuesday, December 3, 1996)]
[Notices]
[Pages 64196-64218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30440]


      

[[Page 64195]]

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Part II





Department of Housing and Urban Development





_______________________________________________________________________



Notice of Funding Availability for CDBG Small Cities Development Grants 
for Fiscal Year 1997; Notice

  Federal Register / Vol. 61, No. 233 /  Tuesday, December 3, 1996 /  
Notices  

[[Page 64196]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4174-N-01]


Notice of Funding Availability for: the HUD-Administered Small 
Cities Community Development Block Grant (CDBG) Program, Development 
Grants--Fiscal Year 1997; and the Section 108 Loan Guarantee Program 
for Small Communities in New York State

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice of funding availability (NOFA) for CDBG Small Cities 
Development Grants for Fiscal Year (FY) 1997.

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SUMMARY: This Notice of Funding Availability (NOFA) announces the 
availability of CDBG Small Cities development grants and guaranteed 
loans to fund eligible development activities related to the New York 
canal system. This NOFA is part of the Canal Corridor Initiative, a 
multiyear effort designed to revitalize the economic base of 
communities in upstate New York through development projects and job 
creation along the canal system and connecting waterways.
    Eligible development activities are expected to be funded through a 
combination of resources, including Community Development Block Grant 
(CDBG) funds made available through this NOFA under the HUD-
administered Small Cities CDBG program and the Section 108 Loan 
Guarantee program. HUD expects to provide funds for the selected 
development projects through a combination of CDBG and Section 108 in 
an aggregate amount of approximately $120 million or more depending 
upon the proposals submitted.
    HUD expects that the typical project proposal would be a Section 
108-eligible development project that builds on the unique locational 
opportunities afforded by the New York canal system and connecting 
waterways to foster commercial revitalization, business growth and 
expansion, and job creation that will result in the economic and 
physical revitalization of the project area. Such projects would 
utilize funds made available by the Section 108 Loan Guarantee program 
to provide the ``up-front'' financing, along with other public or 
private resources to the extent financially feasible. The loan 
guaranteed by section 108 would be expected to be repaid with a 
combination of the CDBG funds requested as part of this application, 
future CDBG appropriations, and the ``cash flows'' generated by the 
assisted project. This NOFA makes available between $3 million and $9 
million in FY 1997 funding through the HUD-administered Small Cities 
CDBG program for the first year of multiyear plans requested through 
applications. In the event that HUD does not receive sufficient numbers 
of applications that are fundable in the aggregate amount that HUD is 
setting aside in this NOFA, HUD may publish a subsequent NOFA 
soliciting applications for the remainder of the funds that HUD intends 
to set aside for this initiative. Multiyear plans approved will not 
propose an amount of grant funds totaling more than $60 million for all 
years.
    HUD encourages applications from joint applicants in accordance 
with 24 CFR 570.422. The nature of riverfront revitalization is such 
that waterfront projects undertaken in tandem at different points along 
the waterfront creates a ``regional synergy'' that enhances the success 
of all projects in the region.

Combining Section 108 Loans with Multiyear Plans for CDBG Funding 
to Create a Financial Package

    Under the Section 108 program and pursuant to 24 CFR 
570.705(a)(2)(iii), a New York State nonentitled community/public 
entity eligible to receive HUD-administered CDBG Small Cities funds may 
borrow an aggregate amount of funds guaranteed under the Section 108 
Loan Guarantee program that is five times the greater of:
    (A) The most recent CDBG Small Cities grant approved for the 
applicant,
    (B) The average of the most recent three CDBG Small Cities grants 
approved for the applicant (excluding any CDBG grant in the same fiscal 
year as the Section 108 Loan Guarantee commitment), or
    (C) The average amount of CDBG Small Cities grants made to units of 
general local government in New York State in the previous fiscal year.
    In FY 1996, the average New York State CDBG Small Cities grant 
amount awarded was $600,723. This means that under the Section 108 
program, a typical New York State nonentitled community or county may 
borrow approximately $3 million. Given current Section 108 Loan 
Guarantee rates and a 20-year financing term, the average annual 
straight line principal and interest payment of a $3 million guaranteed 
Section 108 loan would be approximately $305,000 per year. In this 
example, a $100,000 a year CDBG grant for the 20 years would have the 
effect of reducing the effective interest rate to approximately 3 
percent per annum. This helps communities undertake development 
projects that might not otherwise be financially feasible.
    In addition to any other security arrangement that may be permitted 
or required pursuant to 24 CFR 570.705(b), and in order to reduce the 
risk to HUD and individual borrowers beginning in fiscal year 1998, HUD 
will establish a debt service reserve with CDBG Small Cities funds that 
will be used to make the first year's Section 108 debt obligation 
payments when they come due (ending in August of any year under the 
current system). Early in the next fiscal year, HUD will replenish the 
debt service reserve for purposes of the next year's payments with 
another Small Cities grant under the noncompetitive authority of 24 CFR 
570.432. HUD intends to, subject to the conditions stated in 
Sec. 570.432 including the availability of appropriations, continue to 
replenish the debt service reserve account each year for each grant 
made under this NOFA as long as any related Section 108 loan remains 
outstanding.
    This NOFA sets out program guidelines that will govern the 
application, application review, and award process for the CDBG New 
York State Small Cities grants made available as part of the financial 
package for Canal Corridor Initiative projects.

DATES: Applications are due on or prior to January 2, 1997. 
Applications, if mailed, must be postmarked by the United States Postal 
Service no later than midnight on January 2, 1997. Overnight delivery 
items received within ten (10) days after January 2, 1997 will be 
deemed to have been received by that date, upon submission of 
documentary evidence that they were placed in transit with the 
overnight delivery service by no later than December 31, 1996. If an 
application is hand-delivered to the New York or the Buffalo Office, 
the application must be delivered to the appropriate office by no later 
than 4:00 p.m. on the deadline date.
    The above-stated application deadline is firm as to date and hour. 
In the interest of fairness to all competing applicants, HUD will treat 
as ineligible for consideration any application that is not received by 
4:00 p.m. on, or postmarked by January 2, 1997. Applicants should take 
this policy into account and make early submission of their materials 
to avoid any risk of loss of eligibility brought about by unanticipated 
delays or other delivery-related problems.

ADDRESSES: Completed applications will be accepted at the following 
addresses:

[[Page 64197]]

    1. For the nonentitled CDBG jurisdictions in and county of Ulster 
and nonparticipating jurisdictions in the urban county of Dutchess: 
Department of Housing and Urban Development, Office of Community 
Planning and Development, Attention: Small Cities Coordinator, 26 
Federal Plaza, New York, NY 10278-0068. Telephone (212) 264-0771; and
    2. For the nonentitled CDBG jurisdictions in and counties of 
Albany, Cayuga, Clinton, Columbia, Erie, Essex, Greene, Herkimer, 
Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, 
Orleans, Oswego, Rensselaer, Saratoga, Schenectady, Schuyler, Seneca, 
Tompkins, Warren, Washington, Wayne and Yates: Department of Housing 
and Urban Development, Community Planning and Development Division, 
Attention: Small Cities Coordinator, 465 Main Street, Lafayette Court, 
Buffalo, NY 14203-1780. Telephone (716) 551-5742.

FOR FURTHER INFORMATION CONTACT: Robert Duncan, Deputy Director, Office 
of Block Grant Assistance, Department of Housing and Urban Development, 
Room 7286, 451 Seventh Street, SW, Washington, DC 20410, Telephone 
(202) 708-3587; or Mr. Joseph D'Agosta, New York Regional Director, 
Office of Community Planning and Development, Department of Housing and 
Urban Development, 26 Federal Plaza, New York, NY 10278-0068, Telephone 
(212) 264-0771.
    Persons with hearing or speech impairments may access these numbers 
via TTY by calling the Federal Information Relay Service at (800) 877-
8339.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    The information collection requirements contained in this NOFA have 
been submitted to the Office of Management and Budget (OMB) for review 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The 
OMB control number, when assigned, will be announced by separate notice 
in the Federal Register. An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless the collection displays a valid control number. Prior to this 
submission to OMB, HUD had, on June 3, 1996 (61 FR 27926) published in 
the Federal Register a notice and request for comments on the New York 
State Small Cities CDBG program concerning the collection of 
information for that program. The deadline for the submission of 
comments was August 2, 1996. HUD's request for an OMB control number 
takes into account the comments received in response to that June 3, 
1996 notice.

I. Purpose and Substantive Description

A. Authorities and Background

1. Authority
    Title I, Housing and Community Development Act of 1974 (the HCD 
Act) (42 U.S.C. 5301-5320); 24 CFR part 570, subpart F.
2. Background
    Title I of the Housing and Community Development Act of 1974 
authorizes the Community Development Block Grant (CDBG) program. 
Section 106 of Title I permits the States to elect to assume the 
administrative responsibility for the CDBG program for nonentitled 
areas within their jurisdiction. Section 106 provides that HUD will 
administer the CDBG program for nonentitled areas within any State that 
does not elect to assume the administrative responsibility for the 
program. Subpart F of 24 CFR part 570 sets out the requirements for 
HUD's administration of the CDBG program in nonentitled areas (Small 
Cities program). The State of New York has not elected to implement the 
CDBG Small Cities program.
    With respect to this NOFA, subpart F, at 24 CFR 570.421(a)(6), 
``Economic development grants,'' provides that in the event that a 
nonentitlement New York State Small Cities applicant needs a CDBG Small 
Cities grant, in addition to a Section 108 Loan Guarantee, to make its 
economic development project viable, HUD may fund such applications, as 
they are determined to be fundable in a specific amount up to the sum 
set aside for development projects in this Notice of Funding 
Availability. This NOFA proposes to maximize the utilization of Section 
108 guaranteed loans in conjunction with multiyear plans for use of 
CDBG funds to undertake eligible development projects. As a result of 
this approach, the funds announced in this NOFA provide eligible small 
communities and counties in New York State with a unique opportunity to 
propose programs that focus on canal-related economic development 
projects to expand economic and job opportunities and act as a catalyst 
to spur community and neighborhood economic revitalization. HUD 
encourages eligible communities to propose programs that are creative 
and innovative in addressing their development needs. Although the 
focus of 24 CFR 570.421(a)(6) is broadly described as economic 
development, as a technical matter any activity eligible for Section 
108 Loan Guarantee assistance under 24 CFR 570.703 is eligible under 
this NOFA (except as stated in section I.C.3.a. of this NOFA, below). 
As emphasized in the selection factors (see section II.C. of this 
NOFA), however, the overall purpose of the eligible activity, or group 
of eligible activities, proposed for funding in response to this NOFA 
is the economic development of the area served by the proposed project.
    Because of the integral relationship of CDBG grant funds and the 
Section 108 Loan Guarantees, the scale of development projects 
solicited, and the expectation of a long-term stream of CDBG funds 
(subject to future appropriations) to make such projects economically 
feasible, this NOFA solicits applications for multiyear plans. If an 
applicant's multiyear plan is selected on a competitive basis, the 
first year will be funded, and HUD may fund future years on a 
noncompetitive basis subject to acceptable performance, submission of 
an acceptable application and certifications, and the provision of 
adequate appropriations for the CDBG New York nonentitlement Small 
Cities program.
3. Other Program Requirements
    a. Abbreviated Consolidated Plan. Each jurisdiction that applies 
for funds under this NOFA must have submitted a consolidated plan, as 
provided at 24 CFR part 91. A jurisdiction that does not expect to be a 
participating jurisdiction in the HOME program under 24 CFR part 92, 
may submit (or may have submitted) an abbreviated consolidated plan 
that is appropriate to the types and amounts of assistance sought from 
HUD. (See 24 CFR 91.235.) If an applicant has an abbreviated 
consolidated plan previously approved by HUD, the applicant may update 
it, if necessary, if the CDBG development activities proposed in the 
application contain any new non-housing community development activity.
    Any applicant that plans to undertake a housing activity with funds 
under this NOFA needs to prepare and submit, at a minimum, an 
abbreviated consolidated plan that is appropriate to the types and 
amounts of housing assistance sought under this NOFA. Even if the 
community's Small Cities application is approved, HUD must also approve 
the consolidated plan before the community may receive Small Cities 
funding. Further, that applicant must also include a certification that 
any housing activities in its CDBG Small Cities application are 
consistent with the consolidated plan. An applicant seeking funds under 
this NOFA to address non-housing community

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development needs should prepare an abbreviated consolidated plan that 
describes the jurisdiction's priority non-housing community development 
needs eligible for assistance under the CDBG program by eligibility 
category, reflecting the needs of families for each type of activity, 
as appropriate, in terms of dollar amounts estimated to meet the 
priority need for the type of activity (see 24 CFR 91.235(c)(2)). The 
abbreviated consolidated plan is subject to the same citizen 
participation requirements as is the jurisdiction's Small Cities CDBG 
application. Both must meet the citizen participation requirements 
before they may be submitted to HUD. (See 24 CFR 570.431) A Section 108 
Loan Guarantee application would also have to meet these requirements 
if the jurisdiction submits one to HUD for consideration.
    If possible, applicants should endeavor to submit the abbreviated 
consolidated plan in advance of the Small Cities application due date. 
The latest time at which the abbreviated consolidated plan will be 
accepted by HUD for the HUD-administered Small Cities program in New 
York will be the application due date for the Small Cities application. 
Failure to submit the abbreviated consolidated plan by the due date is 
not a curable technical deficiency. Questions regarding the abbreviated 
consolidated plan should be directed to the appropriate HUD field 
office.
    Any application that is fundable, but does not have an approved 
consolidated plan, will receive a conditional approval subject to HUD's 
approval of the abbreviated consolidated plan. If HUD is unable to 
approve the abbreviated consolidated plan within a reasonable period of 
time, but not less than 60 days from the date that the conditional 
approval is announced, HUD reserves the right to rescind the award. In 
such event the funding will be awarded to the highest rated fundable 
applicant that did not receive funding under this competition.
    b. Section 3. Assistance provided under this NOFA is subject to the 
requirements of section 3 of the Housing and Urban Development Act of 
1968, and the implementing regulations in 24 CFR part 135. One of the 
purposes of this NOFA, which is consistent with section 3, is to give, 
to the greatest extent feasible and consistent with Federal, State, and 
local laws and regulations, job training, employment and other 
contracting opportunities generated from certain HUD financial 
assistance to low- and very low-income persons. Public entities awarded 
funds under this NOFA that intend to use the funds for housing 
rehabilitation, housing construction, or other public construction must 
comply with the applicable requirements set forth in the regulations.
    c. CDBG Program Requirements. The provisions of 24 CFR part 570, 
subpart F, as applicable, shall apply to CDBG grants made under this 
NOFA.
4. Accountability in the Provision of HUD Assistance: Documentation and 
Public Access Requirements; Applicant/Recipient Disclosures
    HUD has promulgated a final rule to implement section 102 of the 
Department of Housing and Urban Development Reform Act of 1989 (HUD 
Reform Act) (Pub. L. 101-235; approved December 15, 1989). The final 
rule is codified at 24 CFR part 4. Section 102 contains a number of 
provisions that are designed to ensure greater accountability and 
integrity in the provision of certain types of assistance administered 
by HUD. On January 16, 1992 (57 FR 1942), HUD published a final rule 
implementing section 102. Although the rule has been amended and now 
appears in part 4, the January 16, 1992 notice provided the public 
(including applicants for, and recipients of, HUD assistance) with 
further information on the implementation of section 102. The 
documentation, public access, and applicant and recipient disclosure 
requirements of section 102 apply to assistance awarded under this NOFA 
as follows:
    a. HUD Responsibilities. (1) Documentation and Public Access. HUD 
will ensure that documentation and other information regarding each 
application submitted pursuant to this NOFA are sufficient to indicate 
the basis upon which assistance was provided or denied. This material, 
including any letters of support, will be made available for public 
inspection for a five-year period beginning not less than 30 days after 
the award of the assistance. Material will be made available in 
accordance with the Freedom of Information Act (5 U.S.C. 552) and HUD's 
implementing regulations at 24 CFR part 15. In addition, HUD will 
include the recipients of assistance pursuant to this NOFA in its 
Federal Register notice of all recipients of HUD assistance awarded on 
a competitive basis.
    (2) Disclosures. HUD will make available to the public for five 
years all applicant disclosure reports (HUD Form 2880) submitted in 
connection with this NOFA. Update reports (also Form 2880) will be made 
available along with the applicant disclosure reports, but in no case 
for a period of less than three years. All reports--both applicant 
disclosures and updates--will be made available in accordance with the 
Freedom of Information Act (5 U.S.C. 552) and HUD's implementing 
regulations at 24 CFR part 15.
    b. Units of General Local Government Responsibilities. Units of 
general local government awarded assistance under this NOFA are subject 
to the provisions of either paragraph b.(1), or paragraph b.(2) and 
b.(3), below. For units of local government awarded assistance under 
this NOFA which in turn make the assistance available on a 
NONCOMPETITIVE BASIS for a specific project or activity to a 
subrecipient, or a ``Community Based Development Organization'' (CBDO) 
as defined in 24 CFR 570.204, paragraph b(1) applies. For units of 
local government awarded assistance under this NOFA, which in turn make 
the assistance available on a COMPETITIVE BASIS for a specific project 
or activity to a subrecipient, or a CBDO, paragraphs b. (2) and (3) 
apply.
    (1) Disclosures. The units of general local government receiving 
assistance under this NOFA must make all applicant disclosure reports 
available to the public for three years. Required update reports must 
be made available along with the applicant disclosure reports, but in 
no case for a period less than three years. Each unit of general local 
government may use HUD Form 2880 to collect the disclosures, or may 
develop its own form.
    (2) Documentation and Public Access. The recipient unit of general 
local government must ensure that documentation and other information 
regarding each application submitted to the recipient by a subrecipient 
or CBDO applicant are adequate to indicate the basis upon which 
assistance was provided or denied. The unit of general local government 
must make this material, including any letters of support, available 
for public inspection for a five-year period beginning not less than 30 
days after the award of the assistance. Unit of general local 
government recipients must also notify the public of the subrecipients 
or CBDO's that receive the assistance. Each recipient will develop 
documentation, public access, and notification procedures for its 
programs.
    (3) Disclosures. Units of general local government receiving 
assistance under this NOFA must make all applicant disclosure reports 
available to the public for five years. Required update reports must be 
made available along with the applicant disclosure reports, but in no 
case for a period less than three years. Each unit of general local 
government may use HUD Form 2880 to

[[Page 64199]]

collect the disclosures, or may develop its own form.

B. Allocation of Grant Amounts and Section 108 Loan Guarantee 
Commitments

1. Total Available Funding
    The nonentitlement CDBG funds for New York State for FY 1997 total 
approximately $55,982,000. Of that amount, this NOFA sets aside between 
$3 million and $9 million for eligible development grants for projects 
that increase economic opportunities related to the New York State 
Canal System or connecting waterways (see section I.C.1. of this NOFA, 
below, regarding eligible applicants).
2. Maximum Grant Amounts
    The maximum CDBG grant amount that will be awarded from FY 1997 
funds for an eligible development project pursuant to this NOFA is 
$900,000. For a multiyear plan, HUD expects that no more than $5 
million will be made available in funds under this NOFA and future 
years' CDBG funds (subject to appropriations) to pay the Section 108-
guaranteed debt obligation per grantee over the life of the plan. Thus 
in the aggregate for all plans, HUD expects that no more than $60 
million will be available (subject to appropriations) for Section 108 
loan payments over the life of all multiyear plans approved, limiting 
the set-asides of CDBG funds for multiyear plans to an average of $3 
million per year over a 20-year period.
3. Availability of Section 108 Loan Guarantees
    HUD expects to make $80 million in Section 108 Loan Guarantee 
commitments, or higher, depending on the CDBG development applications 
approved in conjunction with grants made under this NOFA.
4. Multiyear Requests and Repayment of Section 108 Loans With CDBG 
Funds
    a. General. Pursuant to 24 CFR 570.432, HUD expects to approve 
multiyear plans of up to twenty (20) years, for use of CDBG funds for 
the sole purpose of paying any amounts due on debt obligations issued 
by such unit of general local government (or its designated public 
agency) and guaranteed by the Secretary pursuant to section 108 of the 
Housing and Community Development Act of 1974, as amended.
    b. Submission of multiyear request and plan. Each application for a 
CDBG development grant under this NOFA should include a multiyear plan 
for CDBG funds, the use of which will be limited to paying projected 
amounts due on Section 108-guaranteed debt obligations over the 
projected term of the loan.
    The multiyear plans will be rated competitively against each other 
based on the selection criteria in section II.C. of this NOFA. Each 
applicant's multiyear plan must discuss the total amount of the Section 
108 Loan Guarantee commitment that will be requested, the term of the 
Section 108 guaranteed loan, a repayment schedule for the Section 108 
guaranteed loan that clearly identifies the amount and source of the 
projected funds, including the CDBG funds proposed to be used to repay 
the Section 108 guaranteed loan over the course of the multiyear plan. 
The multiyear period may not exceed 20 years.
    HUD intends to fund succeeding years of the plan on a 
noncompetitive basis, subject to acceptable performance, submission of 
an acceptable application and certifications, and the provision of 
adequate appropriations for the HUD-administered Small Cities program. 
HUD reserves the right to lower the amount of funds for succeeding 
years if respective recipients are not in compliance with performance 
requirements and applicable regulations. The application must list for 
each year of the multiyear period the projected amount of CDBG funds 
requested for each year. The amount of CDBG funds requested for each 
year need not be the same amount; however, the amount requested for 
each year should relate to the anticipated amounts appropriate to meet 
the CDBG portion of the debt obligation on the Section 108 guaranteed 
loan, consistent with section I.B.2. of this NOFA, above. For 
subsequent years of the multiyear period and pursuant to 24 CFR 
570.432, HUD will adjust the actual CDBG grant amount awarded to such 
amounts required for the sole purpose of paying any principal and 
interest amounts due on the loan guaranteed by Section 108 as provided 
under the Section 108 note contract, or in the event of a default any 
amounts due under the guarantee.

C. Eligibility

1. Eligible Applicants
    Eligible applicants are units of general local government in New 
York State (excluding metropolitan cities, urban counties, units of 
government that are participating in urban counties or metropolitan 
cities even if only part of the participating unit of government is 
located in the urban county or metropolitan city, and Indian tribes 
eligible for assistance under section 106 of the HCD Act) that are 
proposing development activities related to the New York State Canal 
System or connecting waterways, including, but not limited to the 
Hudson River, Cayuga Lake, Seneca Lake, Lake Champlain, Lake George, 
Lake Erie, and Lake Ontario. Eligible applicants are further limited to 
the nonentitled CDBG jurisdictions in and counties of Albany, Cayuga, 
Clinton, Columbia, Erie, Essex, Greene, Herkimer, Madison, Montgomery, 
Niagara, Oneida, Onondaga, Ontario, Orleans, Oswego, Rensselaer, 
Saratoga, Schenectady, Schuyler, Seneca, Tompkins, Ulster, Warren, 
Washington, Wayne, and Yates, and the nonparticipating jurisdictions in 
the urban counties of Dutchess and Monroe.
2. Joint Applicants
    There may be several instances in which several communities have 
common economic development opportunities that are more feasible if an 
eligible development project were carried out jointly rather than on an 
individual basis. In such cases, HUD encourages these communities to 
develop regional solutions to regional problems and propose a joint 
application from all affected communities. This NOFA authorizes 
eligible units of general local government under section I.C.1. of this 
NOFA, above, to submit a joint application to carry out an eligible 
development project that addresses common problems faced by all of the 
jurisdictions. A joint application must be pursuant to a written 
cooperation agreement submitted with the application. The cooperation 
agreement must authorize one of the participating units of government 
to act as the lead applicant that will submit the application to HUD, 
and must delineate the responsibilities of each participating unit of 
government with respect to the Small Cities program. (See 24 CFR 
570.422 for requirements regarding joint applications.) Except as 
otherwise noted, a joint application must meet all of the requirements 
of this NOFA as an application from a single unit of general local 
government. Applications under this NOFA may be submitted individually 
or jointly, subject to 24 CFR 570.422. However, Section 108 Loan 
Guarantee applications must be submitted individually and in accordance 
with 24 CFR 570.704 by each unit of general local government that will 
receive a guarantee and issue guaranteed obligations.

[[Page 64200]]

3. Activities Eligible for CDBG Small Cities Grants Under This NOFA
    Eligible activities are development activities related to the New 
York State Canal System or connecting waterways, including, but not 
limited to the Hudson River, Cayuga Lake, Seneca Lake, Lake Champlain, 
Lake George, Lake Erie and Lake Ontario. Development activities must 
also meet the criteria below:
    a. Eligible development projects and activities to be financed with 
FY 1997 CDBG funds include the following:
    (1) The activities listed under the Section 108 Loan Guarantee 
program at 24 CFR 570.703, except subparagraphs (j) Construction of 
housing by non-profit organizations, and (m) regarding activities by 
``colonias;'' and
    (2) Capitalization of a Section 108 debt service reserve/loan loss 
reserve as part of the financing of activities that are otherwise 
eligible under this NOFA. A debt service reserve created from Small 
Cities grant funds should not, however, exceed one year's Section 108 
needs.
    b. Eligible activities to be funded during FY 1998 and later years 
under multiyear plans proposed pursuant to this NOFA are limited to the 
repayment of any amounts due on debt obligations issued by a units of 
general local government and guaranteed by the Secretary pursuant to 
section 108 of the HCD Act. This includes planned repayments from CDBG 
funds, as well as amounts due in the event of default, as applicable.
4. National Objectives and Primary Objective
    Each activity must meet one of the national objectives (i.e., 
benefit to low- and moderate-income persons, elimination of slums or 
blighting conditions, or meeting imminent threats to the health and 
safety of the community). Pursuant to 24 CFR 570.420(e)(2), not less 
than 70 percent of the total of grant funds from a grant made under 
this NOFA and Section 108 Loan Guarantee funds received within a fiscal 
year must be expended for activities that benefit low- and moderate-
income persons under the criteria of Sec. 570.208(a) or Sec. 570.208(d) 
(5) or (6).
5. Limitations on the Ratio of CDBG Grant Funds to Section 108 Loan 
Guarantee Funds
    HUD reserves the right, within the maximum grant limit of $900,000 
provided in section I.B.2. of this NOFA, above, to determine a minimum 
or a maximum amount of any CDBG grant award under this NOFA with the 
difference from the amount requested, if any, to be made up (to the 
maximum extent feasible to fund the eligible development project) with 
loan funds guaranteed by Section 108. HUD also reserves the right to 
determine the amount and number of years of the multiyear plan, or 
Section 108 Loan Guarantee award per applicant, application, or project 
and to modify requests accordingly.
    HUD expects to approve CDBG grant amounts for approvable 
applications at a range of ratios of CDBG grant funds awarded to new 
Section 108 Loan Guarantee commitments. For example, an applicant could 
request a CDBG grant of $100,000 and propose to leverage $2.5 million 
in new Section 108 Loan Guarantee commitments, and another applicant 
could request a CDBG grant of $1 million and propose to leverage $5 
million in new Section 108 Loan Guarantee commitments. However, in no 
event will HUD make an award in which the cumulative amount of CDBG 
funds proposed for the full multiyear period exceeds the amount of new 
Section 108 commitments. All applicants should discuss why their canal-
related development project requires the particular level of CDBG grant 
assistance to Section 108 Loan Guarantee funds that is proposed.
    In the case of an applicant that has received a prior CDBG grant 
award for an activity proposed in this application, HUD reserves the 
right to consider the amount of the previous CDBG award and the grant 
amount requested in response to this NOFA, and to adjust the amount of 
a CDBG award under this NOFA, including, if appropriate, not making an 
award.
    In the event the applicant is awarded a CDBG grant that has been 
reduced below the original request, the applicant will be required to 
modify its project plans and application to conform to the terms of HUD 
approval before execution of a grant agreement and/or a Section 108 
Loan Guarantee commitment. HUD reserves the right to reduce or de-
obligate the CDBG grant award if an approvable Section 108 Loan 
Guarantee application is not submitted by the grantee in the required 
amounts on a timely basis (see section II.B.1.b. After approval of the 
CDBG grant, any program amendments must meet the provisions of 24 CFR 
570.427.
6. Environmental Review Requirement
    The HUD environmental review procedures contained in 24 CFR part 58 
apply to this program, according to 24 CFR 570.604. Under part 58, 
grantees assume all of the responsibilities for environmental review, 
decisionmaking, and action pursuant to the National Environmental 
Policy Act of 1969 and the other provisions of law specified by the 
Secretary in 24 CFR part 58 that would apply to the Secretary were he 
to undertake such projects as Federal projects.
II. The Application Process
    Eligible applicants seeking CDBG assistance must apply in 
accordance with this NOFA. The CDBG application shall be accompanied by 
a request for Section 108 Loan Guarantee commitments, as further 
described in section II.B. of this NOFA, below. Application 
requirements for the Section 108 program are found in Sec. 570.704.

A. Timing of submission

    Applications for CDBG assistance must be submitted for receipt in 
the manner described under ``Dates'' and ``Addresses,'' above.

B. Submission Requirements

    1. The CDBG application (an original plus two copies) shall be 
accompanied by a request for loan guarantee assistance under Section 
108. If more than one jurisdiction applies jointly, each entity that 
will receive a guarantee and issue guaranteed obligations must submit a 
separate request. Each request for Section 108 Loan Guarantee can be 
either one or more of the following:
    a. A formal application for Section 108 Loan Guarantee(s), 
including the documents listed at 24 CFR 570.704(b);
    b. A brief description of a Section 108 Loan Guarantee 
application(s) to be submitted within 60 days (with HUD reserving the 
right to extend such period for good cause on a case-by-case basis) of 
a notice of CDBG selection (CDBG awards will be conditioned on approval 
of actual Section 108 loan commitments). This description must be 
sufficient to support the basic eligibility of the proposed project or 
activities for Section 108 assistance;
    c. A request for a Section 108 Loan Guarantee amendment (analogous 
to subparagraph a. or b. above) that proposes to increase the amount of 
a previously approved application.
    d. Applicants should note that an application for a Section 108 
Loan Guarantee commitment requires that the applicant certify that it 
has made efforts to obtain financing without the use of the Section 108 
Loan Guarantee and that it cannot complete such financing consistent 
with the timely execution of the program plans without the Section 108 
Loan Guarantee.
    2. In addition, an application for CDBG grant funds shall include 
the following:

[[Page 64201]]

    a. A completed Standard Form 424, Application for Federal 
Assistance.
    b. A signed copy of certifications required under the CDBG program, 
including, but not limited to the Drug-Free Workplace Certification, 
and the Certification Regarding Lobbying pursuant to section 319 of the 
Department of Interior Appropriations Act for Fiscal Year 1990 (31 
U.S.C. 1352), generally prohibiting use of appropriated funds, and, if 
applicable, Disclosure of Lobbying Activities (SF-LLL). The applicant 
may use the lobbying certification published with this NOFA.
    c. Form HUD-2880, Applicant/Recipient Disclosure/Update Report, as 
required under 24 CFR 4.9 through 4.13. The applicant may use the form 
published with this NOFA.
    d. Abbreviated consolidated plan, if applicable;
    e. A narrative statement, in accordance with section I.A.3.a. of 
this NOFA, consisting of the following:
    (1) A description of the activities that will be carried out with 
the CDBG grant funds and Section 108 Loan Guarantee funds. The 
narrative statement should explain how the use of CDBG grant funds 
together with Section 108 Loan Guarantee funds will meet the selection 
criteria in section II.C. of this NOFA, below;
    (2) A description of the multiyear plan for CDBG funds, the use of 
which will be limited to paying projected amounts due on Section 108 
guaranteed loan debt obligations over the projected term of the loan 
that is guaranteed by the Section 108 Loan Guarantee. Each applicant's 
multiyear plan must discuss the total amount of the Section 108 Loan 
Guarantee commitments that will be requested, the term of the Section 
108 guaranteed loans, a repayment schedule for the Section 108 
guaranteed loans that clearly identifies the amount and source of the 
projected funds, including the CDBG funds proposed to be used to repay 
the Section 108 guaranteed loans over the course of the multiyear plan. 
The multiyear period may not exceed 20 years. The description must 
list, for each year of the multiyear period, the projected amount of 
CDBG funds that will be needed each year to meet the Section 108 debt 
obligation. The amount of CDBG funds requested for each year need not 
be the same amount; however, the amount requested for each year should 
relate to the anticipated amounts appropriate to meet the CDBG portion 
of the payment on the Section 108 guaranteed loans, consistent with the 
maximum grant amounts specified in section I.B.2. of this NOFA; and
    (3) The description of the activities to be carried out with the 
CDBG grant and Section 108 Loan Guarantee funds should also describe 
how they will create visible change and are part of a larger 
comprehensive revitalization effort, and how they meet the selection 
criteria, including performance measures and benchmarks for these 
activities; identify and describe the project service area; and, as an 
aid to reviewing the multiyear plan, include a draft business plan with 
financial projections for not less than a 5-year period.
    In addition to the above, HUD encourages applicants to submit maps 
and related information generated by the community's consolidated plan 
computer software with their applications, and depictions of proposed 
projects.

(Note that the Office of Community Planning and Development's 
Consolidated Plan computer software is available for applicants to use 
in defining their project area, planning and coordinating 
revitalization activities, and illustrating how activities will 
physically and economically revitalize the project area. HUD encourages 
applicants to submit maps and other data generated with this software 
with their applications.)

    d. The narrative statement and the response to all of the selection 
criteria in section II.D. of this NOFA, below, should preferably not 
exceed thirty (30) 8.5'' by 11'' typewritten pages.

D. Selection Criteria

    All applications will be considered for selection based on the 
following criteria. As described in section II.B.2.d. of this NOFA, 
above, each applicant's response to the narrative statement and all of 
the selection criteria should preferably not exceed thirty (30) 8.5'' 
by 11'' typewritten pages. Each application will receive only one 
score.
    A maximum of 184 points is possible under this NOFA, with the 
maximum points for each factor being:

------------------------------------------------------------------------
                                                                  Points
------------------------------------------------------------------------
Need--absolute number of persons in poverty....................       22
Need--percent of persons in poverty............................       22
Program Impact.................................................      125
Outstanding performance--FHEO..................................       15
                                                                --------
      Total....................................................      184
------------------------------------------------------------------------

    Each of the four factors is outlined below. All points for each 
factor are rounded to the nearest whole number.
    1. Need--Absolute Number of Persons in Poverty--(up to 22 points). 
HUD uses 1990 census data to determine the absolute number of persons 
in poverty residing within the applicant unit of general local 
government. Applicants which are county governments are rated 
separately from all other applicants. Applicants in each group are 
compared in terms of the number of persons whose incomes are below the 
poverty level. Individual scores are obtained by dividing each 
applicant's absolute number of persons in poverty by the greatest 
number of persons in poverty of any applicant, and multiplying by 22.
    2. Need--Percent of Persons in Poverty--(up to 22 points). HUD uses 
1990 census data to determine the percent of persons in poverty 
residing within the applicant unit of general local government. 
Applicants in each group are compared in terms of the percentage of 
their population below the poverty level. Individual scores are 
obtained by dividing each applicant's percentage of persons in poverty 
by the highest percentage of persons in poverty of any applicant, and 
multiplying by 22.
    3. Program Impact--(up to 125 points)
    Within this selection factor, points will be awarded as follows:
    a. Quality of the Plan--(up to 60 points). In reviewing the 
applicant's response to this criterion, HUD will consider the 
following:
    (1) Economic and commercial revitalization. The extent to which the 
proposed canal-related development project will contribute to the 
physical and economic revitalization of a waterfront district, and the 
impact of the project in strengthening the economic health of the 
entire community.
    (2) Regional impact. The extent to which the proposed canal-related 
development project relates to other waterfront development projects in 
the region to create a regional synergy which contributes to regional 
economic growth, including job creation, increased business activity 
and tourism.
    (3) Job creation. The extent to which the proposed canal-related 
development project assisted by the requested CDBG grant, Section 108 
Loan Guarantees, and the multiyear CDBG program will create jobs, 
principally for low- and moderate-income persons.
    (4) Innovation and creativity. The extent to which the applicant 
incorporated innovation and/or creativity in the design and proposed 
implementation of the activities to be carried out with Section 108/
CDBG funds.
    (5) Feasibility of the development proposal. HUD will consider the 
feasibility and quality of the applicant's canal-related development 
proposal for the use of CDBG funds and Section 108

[[Page 64202]]

guaranteed loans to address the applicant's economic and community 
development needs, and the extent to which the canal-related 
development proposal is logically, feasibly, and substantially likely 
to achieve its stated purpose. In evaluating feasibility, HUD will also 
consider the extent to which the proposal includes public/private 
partnerships, i.e. the involvement of groups such as nonprofit 
organizations, developers, financial institutions, and others integral 
to the implementation of the project.
    (6) Impact of the project in utilizing the canal or related 
waterways to economically and physically revitalize the area.
    b. Extent of Need for CDBG Assistance to Financially Support the 
Section 108 Loans and the Project--(up to 20 points). HUD will use the 
following information to evaluate this criterion. In utilizing this 
information, HUD will consider the extent to which the applicant's 
response demonstrates the financial need for the CDBG grant to support 
financially the loans guaranteed by the Section 108 Loan Guarantee 
commitments. Note that if the applicant proposes a generic loan fund to 
assist a certain category of project or business, the applicant should 
demonstrate the impact of the use of the CDBG funds to assist the 
project and the relationship of those funds to the use of Section 108 
loans. Relevant information may include:
    (1) Project costs and financial requirements;
    (2) The amount of any debt service or operating reserve accounts to 
be established in connection with the development project;
    (3) The reasonableness of the costs of any credit enhancement paid 
with CDBG grant funds;
    (4) The amount of program income (if any) to be received each year 
during the repayment period for the guaranteed loans;
    (5) Interest rates on those loans to third parties (other than 
subrecipients) (either as an absolute rate or as a plus/minus spread to 
the Section 108 rate);
    (6) Underwriting guidelines used (or expected to be used) in 
determining project feasibility;
    (7) The amount of anticipated ``cash flow'' the project is 
projected to generate that will be available to make debt service 
payments on the Section 108--guaranteed loans; and
    (8) Other relevant information.
    c. The Extent to Which the Proposal, Compared to Other Canal-
Related Development Proposals Submitted Pursuant to this NOFA, 
Leverages Other Non-Federal Public and Private Resources, in Addition 
to Loan Funds Guaranteed Under the Section 108 Loan Guarantee Program--
(up to 20 points). Leveraged funds include State and local public 
funding and private financing.
    d. The Capacity or Potential Capacity of the CDBG applicant and the 
Section 108 Public Entities to Carry Out the Plan Successfully--(up to 
20 points). This may include factors such as the applicant's 
performance in the administration of its CDBG, HOME, or other programs; 
its previous experience, if any, in administering a Section 108 Loan 
Guarantee or CDBG grant; its performance and capacity in carrying out 
development projects; its ability to conduct prudent underwriting; its 
capacity to manage and service loans made with the guaranteed loan 
funds or CDBG grant funds; and its capacity to carry out its projects 
and programs in a timely manner. The applicant should also describe any 
recent experience it has had in carrying out programs similar to the 
one proposed in the application.
    The capacity of subrecipients, nonprofit organizations, and other 
entities that have a role in implementing the proposed program will be 
included in this review. HUD may rely on information from performance 
reports, financial status information, monitoring reports, audit 
reports and other information available to HUD in making its 
determination under this criterion.
    e. Place-based factor--(5 points). The Secretary's Representative 
for New York/New Jersey will award 5 points to those proposals that 
demonstrate that the canal-related development project proposed to be 
funded under this NOFA is part of and follows an applicant's existing 
comprehensive and coordinated strategic plan for community and economic 
revitalization.
    4. Fair Housing and Equal Opportunity Evaluation--(up to 15 
points). Documentation for the 15 points for these items is the 
responsibility of the applicant. Claims of outstanding performance must 
be based upon actual accomplishments. Clear, precise documentation will 
be required. Maps must have a census tract (CT) or block numbering area 
(BNA), and they must be in accordance with the 1990 Census data. 
Additionally, maps must identify the locations of areas with minorities 
by census tract or BNA. If there are no minority areas, applicants must 
state so on the map. Only population data from the 1990 Census will be 
acceptable for purposes of this section.
    Please note that a ``minority'' is a person belonging to, or 
culturally identified as, a member of any one of the following racial/
ethnic categories: Black, Hispanic, Asian or Pacific Islander, and 
American Indian or Alaskan Native. For the purposes of this section, 
the term ``minority'' does not include women as a separate category.
    Counties claiming points under this criterion must use county-wide 
statistics (excluding entitlement communities). In the case of joint 
applications, points will be awarded based on the performance of the 
lead entity only.
    The following will be used to judge outstanding performance in 
these areas. Please note that points for outstanding performance may be 
claimed under each criterion:
    a. Housing Achievements--(up to 12 points total).
    (1) Provision of Assisted Housing--(up to 6 points). Providing 
assisted housing for low- and moderate-income families, located in a 
manner which provides housing choice in areas outside of minority or 
low- and moderate-income concentrations.
    Points will be awarded if both of the following criteria are met:
    (a) More than one-third of the housing assistance provided by the 
applicant in the last five (5) years (excluding Section 8 existing and 
housing assistance provided in place) has been in census tracts (CT) or 
block numbering areas (BNA) having a percentage of minority population 
which is less than the minority population in the community as a whole; 
and
    (b) With regard to the Section 8 Existing Housing program, a 
community must show the location (CT or BNA) of its currently occupied 
family units by race/ethnicity. Points will be awarded if more than 
one-half of the minority assisted families occupy units in areas which 
have a lower percentage of minority population than that of the 
community as a whole.
    A community with no minorities must show the extent to which its 
assisted housing is located outside areas of concentrations of low- and 
moderate-income persons. In order to receive points under this 
criteria, applicants should follow the process outlined in (a) and (b) 
above, substituting low- and moderate-income persons and families for 
minority persons or families. Applicants addressing the first criterion 
must use a map indicating the location of all assisted housing and a 
narrative indicating the number of units and the type of assisted 
housing. The map also must show the general location of low- and 
moderate-income households and minority households, giving the numbers 
and percentages for both.
    To qualify as housing assistance provided, the units being claimed 
must be part of a project located outside minority or lower income 
concentrated

[[Page 64203]]

areas which has, at a minimum, received a firm commitment from the 
funding agency.
    (c) Points also may be awarded for efforts which enable low- and 
moderate-income persons to remain in their neighborhood when such 
neighborhoods are experiencing revitalization and substantial 
displacement as a result of private reinvestment. Applicants requesting 
points under this criterion would not need to meet the requirements of 
(a) and (b) in order to receive points. Points will be awarded if more 
than one-half of the families displaced were able to remain in their 
original neighborhood through the assistance of the applicant. 
Applicants must show that:

--The neighborhood experienced revitalization;
--The amount of displacement was substantial;
--Displacement was caused by private reinvestment;
--Low- and moderate-income persons were permitted to remain in the 
neighborhood as a result of action taken by the applicant.

    If the community is inhabited predominantly by persons who are 
members of minority and/or low-income groups, points will be awarded if 
there is a balanced distribution of assisted housing throughout the 
community.
    (2) Implementation of a Fair Housing Action Plan--(up to 6 points).
    The applicant must describe how it has implemented a Fair Housing 
Action Plan of its own or participated in a regional or countywide Fair 
Housing Action Plan. For the purposes of this NOFA, a Fair Housing 
Action Plan is a document that delineates specific actions to address 
fair housing problems in the area covered by the applicant. The plan 
should list Fair Housing actions, set priorities and time period for 
completion and include measures against which performance shall be 
evaluated, identify resources from local, State, and private agencies 
and organizations that have agreed to finance or support fair housing 
actions, and define the responsibilities of each group or organization. 
If the applicant is implementing a Fair Housing Plan, the application 
must include the plan being implemented, the actions taken to implement 
the plan, and the actions taken to address the fair housing problems. 
The applicant should provide written documentation of commitments from 
all involved parties.
    b. Equal Opportunity Employment--(up to 3 points). Under this 
factor, the applicant must document that its percentage of minority 
permanent full-time employees is greater than the percentage of 
minorities within the county or the community, whichever is higher. 
Applicants with no full-time employees may claim points based on part-
time employment provided that they document that the only permanent 
employment is on a part-time basis.
    c. Entrepreneurial Efforts and Local Equal Employment. HUD 
encourages the use of minority contracting, although it will not be 
used as an evaluation factor in this NOFA.

D. Selection Process

    All applications will be ranked in order of points assigned, with 
the applications receiving more points ranking above those receiving 
fewer points. Applications will be funded in rank order.
    As discussed in section I.C.5. of this NOFA, above, HUD reserves 
the right to determine a minimum and a maximum amount of any CDBG award 
or Section 108 commitment per applicant, application, or project, the 
amount or number of years for which multiyear CDBG funding is proposed, 
and to modify requests accordingly. In addition, if HUD determines that 
an application rated, ranked, and fundable could be funded at a lesser 
CDBG grant amount than requested, consistent with feasibility of the 
funded project or activities and the purposes of the Act, HUD reserves 
the right to reduce the amount of the CDBG award and/or increase or 
decrease the Section 108 Loan Guarantee commitments, if necessary, in 
accordance with such determination.
    HUD may decide not to award the full amount of CDBG grant funds 
available under this NOFA, and may make any remaining amounts available 
under a future NOFA.
    To review and rate applications, HUD will establish a panel 
consisting predominantly of HUD employees assigned to the New York 
Field Offices. HUD will appoint HUD's New York/New Jersey State 
Secretary's Representative to rate selection criterion II.C.3.e.-- 
``Place-based factor.'' HUD may also include other HUD staff and 
persons not currently employed by HUD to obtain certain expertise and 
outside points of view, including views from other Federal agencies.

E. Timing of Grant Awards

    To the extent full Section 108 applications are submitted 
concurrently with the CDBG grant application, HUD's approval of the 
related Section 108 Loan Guarantee commitments will in most cases be 
granted contemporaneously with CDBG grant approval. However, the CDBG 
grant may be awarded prior to HUD approval of the Section 108 
commitments if HUD determines that such award will further the purposes 
of the Act. CDBG funds shall not be disbursed to the public entity 
before the issuance of the related Section 108 guaranteed obligations. 
CDBG awards will be announced within 30 days of the application due 
date, which is January 2, 1997.

F. Program Administration

    In order to be consistent with the local nature of the program, 
funds awarded under this NOFA will be administered by the New York 
State CPD Office.

G. Funding Award Process

    In accordance with section 102 of the HUD Reform Act and HUD's 
regulation at 24 CFR part 4, HUD will notify the public, by notice 
published in the Federal Register, of all award decisions made by HUD 
under this competition. In accordance with the requirements of section 
102 of the Reform Act and HUD's regulations at 24 CFR part 4, HUD also 
will ensure that documentation and other information regarding each 
application submitted under this Notice of Funding availability is 
sufficient to indicate the basis upon which assistance was provided or 
denied. Additionally, in accordance with the Reform Act and the 
regulations, HUD will make this material available for public 
inspection for a period of five years, beginning not less than 30 
calendar days after the date on which assistance is provided.

III. Technical Assistance

    Prior to the application deadline, the New York Offices will 
provide technical assistance on request to individual applicants, 
including explaining and responding to questions regarding program 
regulations and the NOFA. In addition, HUD will conduct informational 
meetings around the State to discuss the Small Cities program, and will 
conduct application workshops in conjunction with these meetings. HUD 
employees are prohibited in these sessions, however, from advising 
applicants how to make substantive improvements to their applicants and 
from disclosing other covered selection information described at 24 CFR 
4.26. Please contact the Buffalo or New York Offices for further 
information regarding these meetings. In order to ensure that the 
application deadline is met, it is strongly suggested that applicants 
begin preparing their applications immediately and not wait for the 
informational meetings.

[[Page 64204]]

IV. Corrections to Deficient Applications

    Under no circumstances will HUD accept from the applicant 
unsolicited information regarding the application after the application 
deadline has passed.
    HUD may advise applicants of technical deficiencies in applications 
and permit them to be corrected. A technical deficiency would be an 
error or oversight which, if corrected, would not alter, in either a 
positive or negative fashion, the review and rating of the application. 
Examples of curable technical deficiencies would be a failure to submit 
the proper certifications or failure to submit an application 
containing an original signature by an authorized official. Situations 
not considered curable would be, for example, a failure to submit 
program impact descriptions.
    HUD will notify applicants in writing of any curable technical 
deficiencies in applications. Applicants will have 14 calendar days 
from the date of HUD's correspondence to reply and correct the 
deficiency. If the deficiency is not corrected within this time period, 
HUD will reject the application as incomplete.
    Applicants should note that if an abbreviated consolidated plan is 
not submitted, the failure to submit a it in a timely manner is not 
considered a curable deficiency.

V. Other Matters

Environmental Impact

    In accordance with 24 CFR 50.19(c)(5) of HUD's regulations (as 
issued in a final rule on September 27, 1996 (61 FR 50914), this NOFA 
provides funding under, and does not alter environmental requirements 
of, a regulation previously published in the Federal Register. 
Therefore, this NOFA is categorically excluded from the requirements of 
the National Environmental Policy Act. The environmental review 
provisions of this regulation are in 24 CFR 570.604.

Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this NOFA 
will not have substantial, direct effects on States, on their political 
subdivisions, or on their relationship with the Federal Government, or 
on the distribution of power and responsibilities between them and 
other levels of government. While the NOFA will provide financial 
assistance through the Small Cities program to New York State, none of 
its provisions will have an effect on the relationship between the 
Federal Government and New York State, or the State's political 
subdivisions.

Family

    The General Counsel, as the Designated Official for Executive Order 
12606, The Family, has determined that the policies announced in this 
NOFA would not have the potential for significant impact on family 
formation, maintenance, and general well-being within the meaning of 
the Order. No significant change in existing HUD policies and programs 
will result from issuance of this NOFA, as those policies and programs 
relate to family concerns.

Section 102 of the HUD Reform Act

    Section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 (HUD Reform Act) and the final rule codified at 24 
CFR part 4, subpart A, published on April 1, 1996 (61 FR 1448), contain 
a number of provisions that are designed to ensure greater 
accountability and integrity in the provision of certain types of 
assistance administered by HUD. On January 14, 1992, HUD published, at 
57 FR 1942, a notice that also provides information on the 
implementation of section 102. The documentation, public access, and 
disclosure requirements of section 102 are applicable to assistance 
awarded under this NOFA as follows:
    Documentation and public access requirements. HUD will ensure that 
documentation and other information regarding each application 
submitted pursuant to this NOFA are sufficient to indicate the basis 
upon which assistance was provided or denied. This material, including 
any letters of support, will be made available for public inspection 
for a five-year period beginning not less than 30 days after the award 
of the assistance. Material will be made available in accordance with 
the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing 
regulations at 24 CFR part 15. In addition, HUD will include the 
recipients of assistance pursuant to this NOFA in its Federal Register 
notice of all recipients of HUD assistance awarded on a competitive 
basis.
    Disclosures. HUD will make available to the public for five years 
all applicant disclosure reports (HUD Form 2880) submitted in 
connection with this NOFA. Update reports (also Form 2880) will be made 
available along with the applicant disclosure reports, but in no case 
for a period less than three years. All reports--both applicant 
disclosures and updates--will be made available in accordance with the 
Freedom of Information Act (5 U.S.C. 552) and HUD's implementing 
regulations at 24 CFR part 15.

Section 103 of the HUD Reform Act

    Section 103 of the Department of Housing and Urban Development 
Reform Act of 1989, and HUD's implementing regulation codified at 
subpart B of 24 CFR part 4, applies to the funding competition 
announced today. These requirements continue to apply until the 
announcement of the selection of successful applicants. HUD employees, 
including those conducting technical assistance sessions or workshops 
and those involved in the review of applications and in the making of 
funding decisions, are limited by section 103 from providing advance 
information to any person (other than an authorized employee of HUD) 
concerning funding decisions, or from otherwise giving any applicant an 
unfair competitive advantage. Persons who apply for assistance in this 
competition should confine their inquiries to the subject areas 
permitted under section 103 and subpart B of 24 CFR part 4.
    Applicants or employees who have ethics related questions should 
contact the HUD Ethics Law Division at (202) 708-3815.

(This is not a toll-free number.)

Prohibition Against Lobbying Activities

    The use of funds awarded under this NOFA is subject to the 
disclosure requirements and prohibitions of section 319 of the 
Department of Interior and Related Agencies Appropriations Act for 
Fiscal Year 1990 (31 U.S.C. 1352) and the implementing regulations at 
24 CFR part 87. These authorities prohibit recipients of Federal 
contracts, grants, or loans from using appropriated funds for lobbying 
the Executive or Legislative Branches of the Federal Government in 
connection with a specific contract, grant, or loan. The prohibition 
also covers the awarding of contracts, grants, cooperative agreements, 
or loans unless the recipient has made an acceptable certification 
regarding lobbying. Under 24 CFR part 87, applicants, recipients, and 
subrecipients of assistance exceeding $100,000 must certify that no 
Federal funds have been or will be spent on lobbying activities in 
connection with the assistance.


[[Page 64205]]


    Dated: November 22, 1996.

Andrew Cuomo,
Assistant Secretary for Community Planning and Development.

Certification Required By Title I of the Housing and Community 
Development Act of 1974, as Amended, With Respect to the Community 
Development Block Grant Program
    In accordance with the Housing and Community Development Act of 
1974, as amended, the Applicant certifies that:
    (a) It possesses legal authority to make a grant submission and to 
execute a community development and housing program;
    (b) Its governing body has duly adopted or passed as an official 
act a resolution, motion or similar action authorizing the person 
identified as the official representative of the applicant to submit 
the subject application and all understandings and assurances contained 
therein, and directing and authorizing the person identified as the 
official representative of the applicant to act in connection with the 
submission of the application and to provide such additional 
information as may be required;
    (c) Prior to submission of its application to HUD, the applicant 
has met the citizen participation requirements of 24 CFR 570.431;
    (d) It is following a detailed citizen participation plan which:
    (1) Provides for and encourages citizen participation, with 
particular emphasis on participation by persons of low and moderate 
income who are residents of slum and blighted areas in which funds are 
proposed to be used, and provides for participation of residents in low 
and moderate income neighborhoods as defined by the local jurisdiction;
    (2) Provides citizens with reasonable and timely access to local 
meetings, information, and records relating to the applicant's proposed 
use of funds, as required by the regulations of the Secretary, and 
relating to the actual use of funds under the Act;
    (3) Provides for technical assistance to groups representative of 
persons of low and moderate income that request such assistance in 
developing proposals with the level and type of assistance to be 
determined by the applicant;
    (4) Provides for public hearings to obtain citizen views and to 
respond to proposals and questions at all stages of the community 
development program, including at least the development of needs, the 
review of proposed activities, and review of program performance, which 
hearings shall be held after adequate notice, at times and locations 
convenient to potential or actual beneficiaries, and with accommodation 
for the handicapped;
    (5) Provides for a timely written answer to written complaints and 
grievances, within 15 working days where practicable; and
    (6) Identifies how the needs of non-English speaking residents will 
be met in the case of public hearings where a significant number of 
non-English speaking residents can be reasonably expected to 
participate;
    (e) The grant will be conducted and administered in compliance 
with:
    (1) Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 42 
U.S.C. 2000d et seq.); and
    (2) The Fair Housing Act (42 U.S.C. 3601-20);
    (f) It will affirmatively further fair housing;
    (g) It has developed its application so as to give maximum feasible 
priority to activities which benefit low and moderate income families 
or aid in the prevention or elimination of slums or blight; the 
application may also include activities which the applicant certifies 
are designed to meet other community development needs having a 
particular urgency because existing conditions pose a serious and 
immediate threat to the health or welfare of the community, and where 
other financial resources are not available to meet such needs; except 
that the grant shall principally benefit persons of low and moderate 
income in a manner that ensures that not less than 70 percent of such 
funds are used for activities that benefit such persons;
    (h) It has developed a community development plan for the grant 
period which identifies community development and housing needs and 
specifies both short and long term community development objectives 
that have been developed in accordance with the primary objective and 
requirements of the Act;
    (i) Any proposed housing activities are consistent with its 
abbreviated Consolidated Plan submitted or being submitted to HUD for 
approval pursuant to 24 CFR 570.420(d) and 24 CFR 91.235.
    (j) It will not attempt to recover any capital costs of public 
improvements assisted in whole or in part with funds provided under 
section 106 of the Act or with amounts resulting from a guarantee under 
section 108 of the Act by assessing any amount against properties owned 
and occupied by persons of low and moderate income, including any fee 
charged or assessment made as a condition of obtaining access to such 
public improvements, unless:
    (1) Funds received under section 106 of the Act are used to pay the 
proportion of such fee or assessment that relates to the capital costs 
of such public improvements that are financed from revenue sources 
other than under Title I of the Act; or
    (2) For purposes of assessing any amount against properties owned 
and occupied by persons of moderate income, the applicant certifies to 
the Secretary that it lacks sufficient funds received under section 106 
of the Act to comply with the requirements of subparagraph (1) above;
    (k) Its notification, inspection, testing and abatement procedures 
concerning lead-based paint will comply with 24 CFR 570.608;
    (l) It will comply with the acquisition and relocation requirements 
of the Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970, as amended, as required under 24 CFR 570.606(b) 
and Federal implementing regulations; and the requirements in 24 CFR 
570.606(c) governing the residential antidisplacement and relocation 
assistance plan under section 104(d) of the Act (including a 
certification that the applicant is following such a plan); and the 
relocation requirements of 24 CFR 570.606(d) governing optional 
relocation assistance under section 105(a)(11) of the Act;
    (m) It has adopted and is enforcing:
    (1) A policy prohibiting the use of excessive force by law 
enforcement agencies within its jurisdiction against any individuals 
engaged in nonviolent civil rights demonstrations; and
    2. A policy of enforcing applicable State and local laws against 
physically barring entrance to or exit from a facility or location 
which is the subject of such nonviolent civil rights demonstrations 
within its jurisdiction;
    (n) To the best of its knowledge and belief:
    (1) No Federal appropriated funds have been paid or will be paid, 
by or on behalf of it, to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, 
an officer or employee of Congress, or an employee of a Member of 
Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement;
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for

[[Page 64206]]

influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this Federal 
contract, grant, loan, or cooperative agreement, it will complete and 
submit Standard Form-LLL, ``Disclosure Form to Report Lobbying,'' in 
accordance with its instructions; and
    (3) It will require that the language of paragraph (n) of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly;
    (o) It will or will continue to provide a drug-free workplace by:
    (1) Publishing a statement notifying employees that the unlawful 
manufacture, distribution, dispensing, possession, or use of a 
controlled substance is prohibited in the applicant's workplace and 
specifying the actions that will be taken against employees for 
violation of such prohibition;
    (2) Establishing an ongoing drug-free awareness program to inform 
employees about--
    (a) The dangers of drug abuse in the workplace;
    (b) The applicant's policy of maintaining a drug-free workplace;
    (c) Any available drug counseling, rehabilitation, and employee 
assistance programs; and
    (d) The penalties that may be imposed upon employees for drug abuse 
violations occurring in the workplace;
    (3) Making it a requirement that each employee to be engaged in the 
performance of the grant be given a copy of the statement required by 
paragraph (1);
    (4) Notifying the employee in the statement required by paragraph 
(1) that, as a condition of employment under the grant, the employee 
will--
    (a) Abide by the terms of the statement; and
    (b) Notify the employer in writing of his or her conviction for a 
violation of a criminal drug statute occurring in the workplace no 
later than five calendar days after such conviction;
    (5) Notifying the agency in writing, within ten calendar days after 
receiving notice under subparagraph (4)(b) from an employee or 
otherwise receiving actual notice of such conviction. Employers of 
convicted employees must provide notice, including position title, to 
every grant officer or other designee on whose grant activity the 
convicted employee was working, unless the Federal agency has 
designated a central point for the receipt of such notices. Notice 
shall include the identification number(s) of each affected grant;
    (6) Taking one of the following actions, within 30 calendar days of 
receiving notice under subparagraph (4)(b), with respect to any 
employee who is so convicted--
    (a) Taking appropriate personnel action against such an employee, 
up to and including termination, consistent with the requirements of 
the Rehabilitation Act of 1973, as amended; or
    (b) Requiring such employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for such purposes 
by a Federal, State, or local health, law enforcement, or other 
appropriate agency;
    (7) Making a good faith effort to continue to maintain a drug-free 
workplace through implementation of paragraphs (1),(2), (3), (4), (5) 
and (6).
    (8) The applicant may insert in the space provided below the 
site(s) for the performance of work done in connection with the 
specific grant:

Place of Performance (Street address, city, county, state, zip code)
      
----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

    Check ____ if there are workplaces on file that are not identified 
here; and
    (p) It will comply with the other provisions of the Act and with 
other applicable laws.

----------------------------------------------------------------------
Signature

----------------------------------------------------------------------
Title

----------------------------------------------------------------------
Date
Appendix to CDBG Certifications
Instructions Concerning Lobbying and Drug-Free Workplace Requirements

A. Lobbying Certification--Paragraph n

    This certification is a material representation of fact upon which 
reliance was placed when this transaction was made or entered into. 
Submission of this certification is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required certification shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

B. Drug-Free Workplace Certification--Paragraph o

    1. By signing and/or submitting this application or grant 
agreement, the applicant is providing the certification set out in 
paragraph (o).
    2. The certification set out in paragraph (o) is a material 
representation of fact upon which reliance is placed when the agency 
awards the grant. If it is later determined that the applicant 
knowingly rendered a false certification, or otherwise violates the 
requirements of the Drug-Free Workplace Act, HUD, in addition to any 
other remedies available to the Federal Government, may take action 
authorized under the Drug-Free Workplace Act.
    3. For applicants other than individuals, Alternate I applies. 
(This is the information to which applicants certify).
    4. For applicants who are individuals, Alternate II applies. (Not 
applicable to CDBG applicants.)
    5. Workplaces under grants, for applicants other than individuals, 
need not be identified on the certification. If known, they may be 
identified in the grant application. If the applicant does not identify 
the workplaces at the time of application, or upon award, if there is 
no application, the applicant must keep the identity of the 
workplace(s) on file in its office and make the information available 
for Federal inspection. Failure to identify all known workplaces 
constitutes a violation of the applicant's drug-free workplace 
requirements.
    6. Workplace identifications must include the actual address of 
buildings (or parts of buildings) or other sites where work under the 
grant takes place. Categorical descriptions may be used (e.g., all 
vehicles of a mass transit authority or State highway department while 
in operation, State employees in each local unemployment office, 
performers in concert halls or radio stations).
    7. If the workplace identified to the agency changes during the 
performance of the grant, the applicant shall inform the agency of the 
change(s), if it previously identified the workplaces in question (see 
paragraph five).
    8. Definitions of terms in the Nonprocurement Suspension and 
Debarment common rule and Drug-Free Workplace common rule apply to this 
certification. Applicants' attention is called, in particular, to the 
following definitions from these rules:
    ``Controlled substance'' means a controlled substance in Schedules 
I through V of the Controlled Substances

[[Page 64207]]

Act (21 U.S.C. 812) and as further defined by regulation (21 CFR 
1308.11 through 1308.15);
    ``Conviction'' means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes;
    ``Criminal drug statute'' means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance;
    ``Employee'' means the employee of a applicant directly engaged in 
the performance of work under a grant, including: (i) All ``direct 
charge'' employees; (ii) all ``indirect charge'' employees unless their 
impact or involvement is insignificant to the performance of the grant; 
and (iii) temporary personnel and consultants who are directly engaged 
in the performance of work under the grant and who are not on the 
applicant's payroll. This definition does not include workers not on 
the payroll of the applicant (e.g., volunteers, even if used to meet a 
matching requirement; consultants or independent contractors not on the 
applicant's payroll; or employees of subrecipients or subcontractors in 
covered workplaces).

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[FR Doc. 96-30440 Filed 11-25-96; 11:03 am]
BILLING CODE 4210-29-C