[Federal Register Volume 60, Number 37 (Friday, February 24, 1995)]
[Notices]
[Pages 10430-10435]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4448]




[[Page 10429]]

_______________________________________________________________________

Part II





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Assistant Secretary for Community Planning and 
Development



_______________________________________________________________________



Economic Development Initiative; Funding Availability and Program 
Guidelines; Notice

Federal Register / Vol. 60, No. 37 / Friday, February 24, 1995 / 
Notices 
[[Page 10430]] 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Community Planning and 
Development
[Docket No. N-95-3878; FR 3874-N-01]


Notice of Funding Availability (NOFA) and Program Guidelines for 
the Economic Development Initiative (EDI)

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

SUMMARY: This NOFA announces the availability of funds for grants under 
Section 108(q) of the Housing and Community Development Act of 1974, as 
amended. HUD reserves the right to award grants under this NOFA up to 
the maximum amount authorized by law. As of the date of this NOFA and 
subject to funding availability, HUD intends to award up to $50 million 
in EDI funds.
    Communities that are authorized to obtain Section 108 loan 
guarantee commitments to carry out qualifying projects may also be 
eligible under this NOFA to receive EDI grants. EDI grants are used to 
enhance the security of the Section 108 guaranteed loan or to improve 
the feasibility of proposed projects through techniques such as 
interest rate subsidies, loan loss reserves, etc. The NOFA sets out 
program guidelines that will govern the application, application 
review, and award process for this round of EDI grants.

DATES: Applications are due in HUD Headquarters at the address stated 
below under ``Addresses,'' by April 28, 1995 (the ``deadline date''). 
HUD will not accept applications that are submitted to HUD via 
facsimile (FAX) transmission. Applications that are mailed prior to the 
deadline date but not received within ten (10) days after that date 
will be deemed to have been received by that date if postmarked by the 
United States Postal Service by no later than April 25, 1995. Overnight 
delivery items received after the deadline date 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 April 27, 1995.

ADDRESSES: On and prior to the deadline date, completed applications 
will be accepted at the following address: Processing and Control Unit, 
Room 7255, Office of Community Planning and Development, Department of 
Housing and Urban Development, 451 Seventh Street, SW, Washington, D.C. 
20410, Attention: EDI Grant. At close of business on the deadline date, 
completed applications will also be received in the South lobby of the 
Department of Housing and Urban Development at the above address 
(inquire at the security guard desk). However, any application received 
by the Office of Community Planning and Development in Headquarters, 
Washington, DC, by the deadline date will be accepted.

FOR FURTHER INFORMATION CONTACT: Paul Webster, Director, Financial 
Management Division, Office of Block Grant Assistance, Department of 
Housing and Urban Development, Room 7178, Washington, DC 20410. 
Telephone (202) 708-1871. The TDD number is (202) 708-2565. (These are 
not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    The information collection requirements related to this program 
have been approved by the Office of Management and Budget (OMB) and 
assigned the approval number 2506-0153.

I. Purpose and Substantive Description

    (A) Authority. Title I, Housing and Community Development Act of 
1974, as amended, (42 U.S.C. 5301-5320) (the ``Act''); 24 CFR part 570.
    (B) Definitions.
    CDBG funds means, in addition to those funds specified at 
Sec. 570.3(e), grant funds received pursuant to Section 108(q).
    Economic Development Initiative (EDI) means the provision of 
economic development grant assistance under Section 108(q) of the Act, 
as authorized by Section 232 of the Multifamily Housing Property 
Disposition Reform Act of 1994 (P.L. 103-233) (the ``1994 Act'').
    Economic development project means an activity or activities 
(including mixed use projects with housing components) that are 
eligible under the Act and under 24 CFR Sec. 570.703, and that increase 
economic opportunity for persons of low- and moderate-income or that 
stimulate or retain businesses or jobs or that otherwise lead to 
economic revitalization.
    Empowerment Zone or Enterprise Community means an urban area so 
designated by the Secretary pursuant to 24 CFR part 597 (see January 
12, 1995 final rule, 60 FR 3034).
    Qualifying Empowerment Zone or Enterprise Community area means an 
urban area designated as an Empowerment Zone or Enterprise Community 
pursuant to 24 CFR part 597 or nominated by one or more local 
governments and the State or States in which it is located for 
consideration of designation as an Empowerment Zone or Enterprise 
Community pursuant to 24 CFR part 597. The area need not have been 
designated an Empowerment Zone or Enterprise Community by the Secretary 
to be a qualifying empowerment zone or enterprise community area, but 
if it was not so designated it must meet the eligibility requirements 
for a nominated area pursuant to 24 CFR part 597, subpart B.
    Strategic Plan means a strategy developed and agreed to by the 
nominating local government(s) and State(s) and submitted in partial 
fulfillment of the application requirements for designation as an 
Empowerment Zone or Enterprise Community pursuant to 24 CFR Part 597.
    Unless otherwise defined herein, terms defined in 24 CFR part 570 
and used in this NOFA shall have the respective meanings given thereto 
in that part.
    (C) Background.
    EDI is intended to complement and enhance the Section 108 Loan 
Guarantee program (see 24 CFR Secs. 570.700-710 for regulations 
governing the Section 108 program). This provision of the Community 
Development Block Grant (CDBG) program provides communities with a 
source of financing for economic development, housing rehabilitation, 
and large scale physical development projects. HUD is authorized 
pursuant to Section 108 to guarantee notes issued by CDBG entitlement 
communities and non-entitlement units of general local government 
eligible to receive funds under the State CDBG program. Regulations 
governing the Section 108 program are found at 24 CFR part 570, subpart 
M.
    The Section 108 program is authorized at $2.054 billion in loan 
guarantee authority in Fiscal Year 1995. Under this program communities 
(and States, if applicable) pledge future years' CDBG allocations as 
security for loans guaranteed by HUD. The full faith and credit of the 
United States is pledged to the payment of all guarantees made under 
Section 108. The Section 108 program, however, does not require CDBG 
funds to be escrowed for loan repayment. This means that a community 
can continue to spend its existing allocation for other CDBG purposes, 
unless needed for loan repayment. The purpose of EDI grant funds is to 
further minimize the [[Page 10431]] potential loss of future CDBG 
allocations:
    (1) By strengthening the economic feasibility of the projects 
financed with Section 108 funds (and thereby increasing the probability 
that the project will generate enough cash to repay the guaranteed 
loan),
    (2) By directly enhancing the security of the guaranteed loan, or
    (3) Through a combination of these or other risk mitigation 
techniques.
    HUD envisions that the following project structures could be 
typical:
    Funding reserves--The cash flow generated by an economic 
development project may be expected to be relatively ``thin'' in the 
early stages of the project. The EDI grant can make it possible for 
debt service or operating reserves to be established in a way that does 
not jeopardize the economic feasibility of the project.
    An example is a supermarket or neighborhood shopping center that is 
designed to provide basic services and jobs for residents in a 
distressed neighborhood. The public entity must be prepared for the 
Section 108 loan repayments required during the time period after 
completion of construction and during the lease-up phase when the 
shopping center is not fully leased and generating sufficient revenues 
to support the Section 108 loan repayments. It may therefore require 
the developer to establish with a trustee a reserve account (or 
accounts) that would be available to cover operating expenses and/or 
debt service during this lease-up period. While such reserves are 
commonplace, their cost may be so high as to make an already risky 
neighborhood shopping center project economically infeasible. The 
increased cost resulting from establishing such reserves may be 
defrayed by the EDI grant. As with the letter of credit example below, 
such reserves protect the CDBG program against the risk that CDBG funds 
will have to be used to cover shortfalls in the intended source for 
repayment of the Section 108 loan.
    Another example would be a community that used EDI grant funds and 
Section 108 loan funds to create an economic development loan fund 
administered by a community based development organization, such as a 
community development financial institution (CDFI) when eligible to 
undertake the proposed Section 108/EDI eligible activities. Under this 
example, a CDFI could use EDI grant funds together with Section 108 
funds to capitalize the CDFI to make community economic development 
loans, and/or the EDI grant could serve as security for any defaults in 
loans made with the Section 108 proceeds.
    Over-collateralizing the Section 108 loan--The use of EDI grant 
funds may be structured in appropriate cases so as to improve the 
chances that cash flow will be sufficient to cover debt service on the 
Section 108 loan and directly to enhance the guaranteed loan. One 
technique for accomplishing this approach is over-collateralization of 
the Section 108 loan.
    An example is the creation of a loan pool made up of Section 108 
and EDI grant funds. The community would make loans to various 
businesses at an interest rate equal to or greater than the rate on the 
Section 108 loan. The total loan portfolio would be pledged to the 
repayment of the Section 108 loan. If the total loan repayments from 
the loan fund were twice the amount of the debt service on the Section 
108 loan, the community could accumulate a loan loss reserve that would 
mitigate virtually any risk to future CDBG funds.
    Direct enhancement of the security of the Section 108 loan--The EDI 
grant can be used to cover the cost of providing enhanced security. An 
example of how the EDI grant can be used for this purpose is by using 
the grant funds to cover the cost of a standby letter of credit, issued 
in favor of HUD. This letter of credit will be available to fund 
amounts due on the Section 108 loan if other sources fail to 
materialize and will, thus, serve to protect the public entity's future 
CDBG funds.
    Provision of financing to for-profit businesses at a below market 
interest rate--While the rates on loans guaranteed under Section 108 
are only slightly above the rates on comparable U.S. Treasury 
obligations, they may nonetheless be higher than can be afforded by 
businesses in severely economically distressed neighborhoods. The EDI 
grant can be used to make Section 108 financing affordable.
    For example, a community's strategic plan to stabilize the economic 
viability of a severely distressed neighborhood may include providing 
loan assistance to both new and existing businesses at very low 
interest rates for some period of time until each business has reached 
a stabilized and profitable level of operation. EDI grant funds could 
serve to ``buy down'' the interest rate up front, or make full or 
partial interest payments, allowing the businesses to be financially 
viable in the early start-up period not otherwise possible with Section 
108 alone. This strategy would be particularly useful where a community 
was undertaking a large commercial/retail project in a distressed 
neighborhood to act as a catalyst for other development in the area. 
The use of EDI/Section 108 funds for financing the commercial/retail 
project along with providing financial assistance to neighboring new or 
existing businesses within the target area would create complementary 
economic activity and enhance the financial viability of all assisted 
activities.
    A combination of these techniques--An applicant could employ a 
combination of these or other techniques in order to implement a 
strategy that carries out an economic development project.
    Additionally, 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, as amended 
by an interim rule published on June 30, 1994 (59 FR 33866). Section 3 
requires that 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 be directed to low- and very-low income 
persons. The eligible activities for which funding is provided under 
this NOFA are consistent with the objectives of section 3. Public 
entities awarded funds under this NOFA and that intend to use the funds 
for housing rehabilitation, housing construction, or other public 
construction must comply with the applicable requirements of the 
interim regulations published on June 30, 1994.
    (D) Timing of Grant Awards.
    To the extent a full Section 108 application is submitted with the 
EDI grant application, the Section 108 application will be evaluated 
concurrently with the request for EDI grant funds. Note that EDI grant 
assistance cannot be used to support a Section 108 loan guarantee 
approved prior to the date of the publication of this NOFA. (See II.B. 
of this NOFA.) However, the EDI grant may be awarded prior to HUD 
approval of the Section 108 commitment if HUD determines that such 
award will further the purposes of the Act. HUD notification to the 
grantee of the amount and conditions (if any) of EDI funds awarded 
based upon review of the EDI application shall constitute an obligation 
of grant funds, subject to compliance with the conditions of award and 
execution of a grant agreement.
    (E) Limitations on Grant Amounts.
    HUD expects to approve EDI grant amounts for approvable 
applications at a range of ratios of EDI grant funds awarded to new 
Section 108 loan [[Page 10432]] guarantee commitments. For example, an 
applicant could request an EDI grant of $1 million and propose to 
leverage $10 million in new Section 108 loan guarantee commitments. 
Other applicants could request an EDI grant of $1 million and propose 
to only leverage $1 million in new Section 108 loan guarantee 
commitments. However, in no event will HUD make an award in which the 
amount of EDI funds awarded exceeds the amount of new Section 108 
commitments. Of course, even in the first example above, applicants 
remain free to propose a greater leverage ratio of new Section 108 to 
EDI grant funds, for example $12 million of new Section 108 to $1 
million of EDI grant funds. Those requesting the higher ratios of EDI 
grant funds to new Section 108 loan guarantee commitments should 
indicate in their application why the higher ratio is necessary for 
their proposed project. This explanation will be considered as part of 
the rating for need under the selection criterion at paragraph 
II.(C)((2).
    HUD reserves the right to determine a minimum and a maximum amount 
of any EDI award or 108 award per applicant, application or project and 
to modify requests accordingly. In the case of an applicant that has 
received a prior EDI grant award, the Department reserves the right to 
consider the amount of the previous EDI award and the grant amount 
requested in response to this NOFA and to adjust the amount of an EDI 
award under this NOFA, including, if appropriate, not making an award.
    In the event the applicant is awarded an EDI 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. HUD reserves the right 
to reduce or de-obligate the EDI award if approvable Section 108 loan 
guarantee applications are not submitted by the grantee in the required 
amounts on a timely basis. Any requested modifications must be within 
the scope of the original EDI application. If any additional EDI grant 
monies from this or previous EDI NOFAs become available, HUD may fund 
additional applicants in accordance with this NOFA during Fiscal Year 
1995 or may add any deobligated funds to funds available for any future 
EDI competitions.
    In the case of requested amendments to an approved Section 108 loan 
guarantee commitment (as further discussed in paragraph II.B.), the EDI 
assistance approved will be based on the increased amount of Section 
108 loan guarantee assistance.
    (F) Eligibility to apply for grant assistance.
    Any public entity eligible to apply for Section 108 loan guarantee 
assistance pursuant to Sec. 570.702 may apply for grant assistance 
under Section 108(q). ELIGIBLE APPLICANTS ARE CDBG ENTITLEMENT UNITS OF 
GENERAL LOCAL GOVERNMENT AND NON-ENTITLEMENT UNITS OF GENERAL LOCAL 
GOVERNMENT ELIGIBLE TO RECEIVE LOAN GUARANTEES UNDER Sec. 570.702. Note 
that effective January 25, 1995, non-entitlement communities in the 
states of New York and Hawaii were authorized to apply to HUD for 
Section 108 loans (see 59 FR 47,510, published December 27, 1994). Thus 
non-entitlement communities in all 50 states are now eligible to 
participate in the Section 108 and EDI programs.
    (G) Eligible activities.
    EDI grant funds may be used for:
    (1) Activities listed at Sec. 570.703, provided such activities are 
carried out as part of an economic development project. If the 
applicant is awarded points for activities and projects under selection 
criterion II.(C)(6)(b) (Proposals Addressing Special Need), the 
applicant is required to continue to use any funds awarded for such 
activities and projects under this NOFA and Program Guidelines to 
benefit the Qualifying Empowerment Zone or Enterprise Community area.
    (2) Payment of costs of private financial guaranty insurance 
policies, letters of credit, or other credit enhancements for the notes 
or other obligations guaranteed by HUD pursuant to Section 108, 
provided such notes or obligations are used to finance an economic 
development project. Such enhancements shall be specified in the 
contract required by Sec. 570.705(b)(1), and shall be satisfactory in 
form and substance to HUD for security purposes.
    (3) The payment of principal or interest due (including such 
servicing, underwriting, or other costs as may be authorized by HUD) on 
the notes or other obligations guaranteed pursuant to the Section 108 
loan guarantee program.
    (H) Catalogue of Federal Domestic Assistance (CFDA). The EDI 
program has not been assigned a CFDA number as of the date of this 
NOFA. Please insert the letters ``EDI'' on the SF 424 as appropriate.

II. The Application Process

    Public entities seeking EDI assistance must make a specific request 
for that assistance, in accordance with this NOFA. The EDI application 
shall be accompanied by a request for a Section 108 loan guarantee 
commitment, as further described in Section II.B. of this NOFA below. 
Application guidelines for the Section 108 program are found at 
Sec. 570.704.
    (A) Timing of submission.
    Applications for EDI assistance shall be received at HUD 
Headquarters in the manner described under ``Dates'' and ``Addresses'' 
above.
    (B) Submission requirements.
    (1) The EDI application (an original and two copies) shall be 
accompanied by a request for loan guarantee assistance under Section 
108. The 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 Sec. 570.704(b);
    (b) A brief description (not to exceed three pages) 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 EDI selection (EDI 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) If applicable, a copy of a Section 108 loan guarantee approval 
document with grant number and date of approval (which was approved 
after the date of this NOFA, except in conjunction with a previous EDI 
award); or
    (d) 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. However, any amount of Section 
108 loan guarantee authority approved before the date of this NOFA is 
not eligible to be used in conjunction with an EDI grant under this 
NOFA. Further, a Section 108 loan guarantee amount that is required to 
be used in conjunction with a prior EDI grant award, whether or not the 
Section 108 loan guarantee has been approved as of the date of this 
NOFA, is not eligible for an EDI award under this NOFA. For example, if 
a community has a previously approved Section 108 loan guarantee 
commitment of $12 million, even if none of the funds have been 
utilized, or if the community had previously been awarded an EDI grant 
of $1 million and had certified that it will submit a Section 108 loan 
application for $10 million in support of that EDI grant, the 
community's application under this NOFA must propose to increase the 
amount of its total Section [[Page 10433]] 108 loan guarantee 
commitments beyond those amounts (the $12 million or $10 million in 
this example) to which it has previously agreed.
    (2) In addition, an application for EDI grant funds shall include 
the following:
    (a) SF 424, Application for Federal Assistance.
    (b) The certification regarding lobbying required under 24 CFR part 
87 (Appendix A). The applicant may use the lobbying certification 
published with this NOFA.
    (c) A narrative statement describing the activities that will be 
carried out with the EDI grant funds and explaining how the use of EDI 
grant funds meets the criteria in paragraph II.(C) below. The narrative 
statement shall not exceed two 8.5'' by 11'' pages for the description 
of the activities to be carried out with the EDI grant funds and one 
page for each of the listed selection criteria.
    (3) Where relevant, applications shall be deemed to include a copy 
of the strategic plan for community revitalization previously submitted 
to HUD as part of a Federal Empowerment Zone or Enterprise Community 
application pursuant to a Notice inviting applications, published on 
January 18, 1994 at 59 FR 2711.
    (C) Selection Criteria.
    All applications will be considered for selection based on the 
following criteria that demonstrate the quality of the proposed project 
or activities, and the applicant's creativity, capacity and commitment 
to obtain maximum benefit from the EDI funds, in accordance with the 
purposes of the Act.
    (1) Distress--(up to 20 points). In evaluating this criterion, HUD 
will consider the level of distress in the immediate community to be 
served by the project and the jurisdiction applying for assistance. 
Note that in the first EDI competition in September 1994, the poverty 
rate was often considered the best indicator of distress levels, 
although the applicant may demonstrate the level of distress with other 
factors indicative of distress such as income, unemployment, drug use, 
homelessness and other indicators of distress.
    (2) Extent of need for EDI assistance to financially support the 
Section 108 loan and the project-- (up to 15 points). In evaluating 
this criterion, HUD will consider the extent to which the applicant's 
response demonstrates the financial need and feasibility of the project 
and the leverage ratio of EDI grant funds to Section 108 loan proceeds. 
Additionally, the score may be increased within this criterion to the 
extent other funds (public or private) are leveraged. This may include 
factors such as:
    (i) Project costs and financial requirements.
    (ii) The amount of any debt service or operating reserve accounts 
to be established in connection with the economic development project.
    (iii) The reasonableness of the costs of any credit enhancement 
paid with EDI grant funds.
    (iv) The amount of program income (if any) to be received each year 
during the repayment period for the guaranteed loan.
    (v) 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).
    (vi) Underwriting guidelines used (or expected to be used) in 
determining project feasibility.
    (vii) The extent to which federal funds provided as a result of the 
Federal Empowerment Zone/Enterprise Community designation process may 
be utilized for the proposed EDI project.
    (viii) The extent to which the EDI grant is proposed to leverage 
the proposed Section 108 loan guarantee commitments and other economic 
development activities. Applicants that use their EDI grant to leverage 
more 108 commitments are expected to receive more points under this 
subcriterion (viii).
    (ix) Other relevant information.
    Note that if the applicant proposes a generic loan fund to assist a 
certain category of project or businesses, the applicant should 
demonstrate why the use of Section 108 loans to assist such businesses 
would not be financially feasible without EDI grant assistance.
    (3) The extent to which the proposed activities effectively support 
important National interests-- (up to 15 points). These activities 
include:
    (i) The provision of jobs for low- and moderate-income individuals 
with special consideration for participants in any of the following 
programs: Jobs Training Partnership Act (JTPA), Jobs Opportunities for 
Basic Skills (JOBS), or Aid to Families with Dependent Children (AFDC);
    (ii) The provision of jobs for participants in Unemployment 
Insurance programs;
    (iii) The provision of jobs for residents of Public and Indian 
Housing or other assisted housing units;
    (iv) The provision of jobs for homeless persons;
     (v) The provision of jobs that provide clear opportunities for 
promotion for low- and moderate-income individuals, such as through the 
provision of training;
     (vi) The establishment, stabilization, or expansion of 
microenterprises that employ low- and moderate-income individuals;
     (vii) The stabilization or revitalization of a neighborhood that 
is predominantly low- and moderate-income;
     (viii) The provision of assistance to a community development 
financial institution whose service area is predominantly low- and 
moderate-income;
     (ix) The provision of assistance to a neighborhood-based nonprofit 
organization serving a neighborhood that is predominantly low- and 
moderate-income;
     (x) The provision of employment opportunities that are an integral 
component of a community's strategy to promote spatial deconcentration 
of low- and moderate-income and minority families;
     (xi) The provision of assistance to business(es) that operate(s) 
within a census tract (or block numbering area) that has at least 20 
percent of its residents who are in poverty; or
     (xii) Other innovative approaches that provide substantial benefit 
to low- and moderate-income persons.
    (4) Quality of the plan--(up to 60 points). HUD will consider the 
quality of the applicant's plan for the use of EDI funds and Section 
108 loans, including the extent to which the applicant's proposed plan 
for the effective use of EDI grant/Section 108 loan guarantee will 
address its described need in the applicant's immediate community and/
or its jurisdiction, and the extent to which the plan is logically, 
feasibly, and substantially likely to achieve its stated purpose.
    (5) The capacity or potential of the public entity to successfully 
carry out the plan--(up to 15 points). This may include factors such as 
the applicant's performance in the administration of its CDBG program; 
its previous experience, if any, in administering a section 108 loan 
guarantee; its performance and capacity in carrying out economic 
development projects; its ability to conduct prudent underwriting; its 
capacity to manage and service loans made with the guaranteed loan 
funds or EDI grant funds; and, if applicable, its capacity to manage 
projects under this NOFA along with any federal funds awarded as a 
result of a federal urban Empowerment Zone/Enterprise Community 
designation.
    (6) Applicants will be rated on both criteria (a) and (b) (if 
applicable) below, but will receive points for only the higher rated 
criterion of the two, but not both. [[Page 10434]] 
    (a) The extent to which the proposed plan follows a comprehensive 
and coordinated approach in addressing the community and economic 
development needs of the public entity and furthers neighborhood 
revitalization--(up to 20 points).

      OR

    (b) Proposals Addressing Special Need --(Applicants to which this 
criterion does not apply need not respond thereto.) (up to 20 points). 
Of the 20 points under this factor, one point will be awarded to 
applicants that received a federal urban Empowerment Zone or Enterprise 
Community designation and up to 19 additional points will be awarded to 
applicants that propose EDI and Section 108 loan assisted activities 
that will benefit the applicant's Qualifying Empowerment Zone or 
Enterprise Community area and are consistent with the applicant's 
Strategic Plan; and
    (7) Innovation and creativity--(up to 20 points). The extent to 
which the applicant incorporated innovation and/or creativity in the 
design and proposed implementation of the proposed activities carried 
out with Section 108/EDI funds.
    Selection Process--Once scores are assigned, 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, however, HUD, in its sole discretion, may 
choose to award EDI assistance to a lower rated approvable application 
over a higher rated application in order to increase the level of 
geographic diversity of grants approved under this part. As discussed 
in paragraph I.E. above, HUD reserves the right to determine a minimum 
and a maximum amount of any EDI award or Section 108 commitment per 
applicant, application or project and to modify requests accordingly. 
In addition, if HUD determines that an application rated, ranked and 
fundable could be funded at a lesser EDI 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 
EDI award and/or increase the Section 108 loan guarantee commitment, if 
necessary, in accordance with such determination.
    HUD may decide not to award the full amount of EDI grant funds 
available under this NOFA and may make any remaining amounts available 
under a future NOFA.
    Timing of grant awards--To the extent full Section 108 applications 
are submitted concurrently with the EDI grant application, HUD's 
approval of the related Section 108 loan guarantee commitment will in 
most cases be granted contemporaneously with EDI grant approval. 
However, the EDI grant may be awarded prior to HUD approval of the 
Section 108 commitment if HUD determines that such award will further 
the purposes of the Act. EDI funds shall not be disbursed to the public 
entity before the issuance of the related Section 108 guaranteed 
obligations.

III. Technical Assistance

    To the extent permitted by law, HUD may advise applicants of 
technical deficiencies in the EDI applications after submission and 
permit them to be corrected. Technical deficiencies relate only to 
items, such as a failure to submit or sign a required certification, 
that would not improve the substantive quality of the application 
relative to the selection criteria . Applicants will have 14 calendar 
days from the date HUD notifies the applicant of any such technical 
deficiency to submit the appropriate information in writing to HUD. At 
any time during the selection process, which began with preparation of 
this NOFA, HUD staff is limited in the assistance it is permitted to 
provide regarding applications for EDI grants, due to the requirements 
of the HUD Reform Act. The assistance and advice that can be provided 
includes such activities as explaining and responding to questions 
about program regulations, identification of those parts of an 
application that need substantive improvement, the dates by which 
decisions will be made and the procedures that are required to be 
performed to process an application. The term ``technical assistance'' 
however, does not include advising the applicant how to make 
substantive improvements in its application that will affect ratings.
    In addition, any information published in the Federal Register and 
in this NOFA, and any information that has been made public through a 
means other than the Federal Register or NOFA, may be discussed.
    HUD staff will be available throughout the EDI application period 
to provide extensive advice and assistance, as is currently provided, 
to develop 108 loan applications since the 108 program is not subject 
to the HUD Reform Act. Staff providing such assistance may provide 
technical advice to the EDI selection panel but in no case will such 
staff participate in the panel's voting process for EDI awards under 
this NOFA.

IV. Other Matters

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
implementing section 102(2)(C) of the National Environmental Policy Act 
of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is 
available for public inspection and copying between 7:30 am and 5:30 pm 
weekdays at the Office of the Rules Docket Clerk, 451 Seventh Street, 
SW, Room 10276, Washington, DC 20410.

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 offers financial assistance 
to units of general local government, none of its provisions will have 
an effect on the relationship between the Federal Government and the 
States, or the States' 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.

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 
[[Page 10435]] 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.

Prohibition Against Lobbying of HUD Personnel

    Section 13 of the Department of Housing and Urban Development Act 
(42 U.S.C. 3537b) contains two provisions dealing with efforts to 
influence HUD's decisions with respect to financial assistance. The 
first imposes disclosure requirements on those who are typically 
involved in these efforts--those who pay others to influence the award 
of assistance or the taking of a management action by the Department 
and those who are paid to provide the influence. The second restricts 
the payment of fees to those who are paid to influence the award of HUD 
assistance, if the fees are tied to the number of housing units 
received or are based on the amount of assistance received, or if they 
are contingent upon the receipt of assistance. HUD's regulation 
implementing section 13 is codified at 24 CFR part 86. If readers are 
involved in any efforts to influence the Department in these ways, they 
are urged to read the final rule, particularly the examples contained 
in Appendix A of the rule.
    Any questions concerning the rule should be directed to the Office 
of Ethics, Room 2158, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington DC 20410-3000. Telephone: (202) 708-
3815 (voice/TDD). (This is not a toll-free number.) Forms necessary for 
compliance with the rule may be obtained from the local HUD Office.


    Dated: February 16, 1995.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.

Certification Regarding Lobbying

Certification for Contracts, Grants, Loans and Cooperative 
Agreements

    The undersigned certifies, to the best of his or her knowledge 
and belief, that:
    (1) No Federal appropriated funds have been paid or will be 
paid, by or on behalf of the undersigned, to any person for 
influencing or attempting to influence an officer or employee of an 
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 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, the undersigned shall complete and 
submit Standard Form-LLL, ``Disclosure Form to Report Lobbying,'' in 
accordance with its instructions.
    (3) The undersigned shall require that the language 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.
    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.

Signed:----------------------------------------------------------------

Date:------------------------------------------------------------------

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(Print name and title)

24 CFR Part 87, Appendix A

[FR Doc. 95-4448 Filed 2-21-95; 8:45 am]
BILLING CODE 4210-29-P