9B-43.0045. Specific Requirements for Competitive Categories (Transferred)

(1) Program Requirements for Neighborhood Revitalization.

(a) The primary objective of the Neighborhood Revitalization category is to preserve and revitalize declining, primarily residential, low and moderate-income service area neighborhoods by addressing the major infrastructure problems contributing to such decline.

(b) Measurement of Program Impact. Specific criteria used to calculate the total 650 points for Program Impact are found in the Neighborhood Revitalization section of the application.

(c) Service Area Requirements.

1. An activity conducted in a primarily residential service area will be considered to benefit low-and moderate-income persons when at least 51 percent of the residents of that service area are low- and moderate-income persons. Such a service area must contain all households that will benefit from the activity. All activities shall meet the national objective of LMI benefit as specified in 24 C.F.R. s. 570.483(b), as effective on 6-6-10. Sewer and water hookups shall only be performed in a service area in conjunction with other activities. 

2. Any survey of the beneficiaries of a service area must correspond to the requirements established in paragraph 9B-43.0041(5)(b), F.A.C.

3. For activities where hookups or connections are required for beneficiary access to the public improvement (Direct Benefit), low and moderate income benefit shall be determined by the number of low and moderate income persons in households connected to and able to use the water, sewer or other infrastructure at the time of administrative closeout compared to the total number of persons who could be connected to the infrastructure. Evidence at the time of closeout must show:

a. The total number of persons in households in the service area, and

b. The total number of low and moderate income persons in households connected to the infrastructure, and

c. Document that the number of LMI persons in households connected to the infrastructure divided by the total number of beneficiaries for that activity in the service area equals at least 51 percent, or a larger percent if required to remain within the fundable range.

d. Eligibility for a hookup shall be based on verification of household income and sources not more than one year before the hookup is provided.

4. Area benefit activities as defined in 24 C.F.R. s. 570.483(b)(1)(i), as effective on 6-6-10, addressing the needs of elderly, handicapped or homeless beneficiaries are presumed to provide 51 percent low and moderate income benefit for scoring purposes unless a survey of the service area of such activity documents a higher percentage of benefit.

5. CDBG funded activities may not extend beyond the location of the last LMI beneficiary except where it is required for sound engineering, operation, or design as certified by a licensed engineer.

(2) Program Requirements for Housing.

(a) The primary objectives of the Housing category are to improve housing conditions or expand housing opportunities primarily for low and moderate income persons.

(b) Housing subgrant recipients must have a Department approved Housing Assistance Plan addressing the activities specified in the application.

(c) Low and Moderate Income Benefit for Housing.

1. Selection of beneficiaries or housing units need not take place during the application process, but may take place at any time during the subgrant application or implementation process. All beneficiaries must be low and moderate income persons pursuant to 24 C.F.R. s. 570.482, as effective on 6-6-10.

2. Activities involving rehabilitation or acquisition of property to provide housing shall be considered to directly benefit low and moderate income persons only to the extent that such housing shall, upon completion, be occupied by low and moderate income persons, and for rental units the units must be occupied by low and moderate income persons at affordable rents pursuant to 24 C.F.R. s. 92.252, incorporated herein by reference, as effective on 6-6-10.

3. Water or sewer hookups may be performed under this category as a complementary activity in conjunction with rehabilitation of a home. Water or sewer hookups must be performed under this category if there are no other activities besides the hookups other than related activities on the property required for the hookups, such as abandonment of a septic tank or modification of plumbing.

(d) The applicant shall adopt and implement procedures to fulfill regulatory and statutory requirements relating to Lead-Based Paint pursuant to 24 C.F.R. s. 570.487, 24 C.F.R. Section 35, Subparts B, J. and R, incorporated herein by reference, as effective on 6-6-10. The recipient is required to:

1. Prohibit use of lead-based paint;

2. Notify potential beneficiaries of the hazards of lead-based paint;

3. Inspect appropriate properties prior to initiating rehabilitation to determine if lead-based paint is present;

4. Undertake appropriate protection of workers and occupants during abatement;

5. Ensure proper clean up and disposal procedures are used;

6. Retain records of enforcement and monitoring for at least five years.

(e) Rehabilitation of all housing units addressed in any way with CDBG funds must be in compliance with the current Florida Building Code for Existing Buildings, as well as implementing local Building Codes and local Maintenance Codes. If housing units must be replaced, construction of new units must be in full compliance current Florida Building Code.

(f) When CDBG funds are expended to acquire property through a voluntary process for the purpose of assisting low and moderate-income households to relocate out of a 100 year floodplain, the following shall apply:

1. Future development of the property acquired shall be prohibited but uses which do not increase the property’s impervious surface are allowed;

2. The local government may retain title to the property or transfer the title to a land conservancy agency or program, subject to Department approval;

3. The beneficiaries shall agree in writing to relocate outside a 100 year floodplain; and

4. Any beneficiary or household who subsequently relocates at any time into a 100 year floodplain shall not be provided any direct benefit with CDBG funds at any future point in time and this restriction shall be noted in the relocation document signed by the beneficiaries in subparagraph (2)(f)3. above.

5. All structures on the property shall be demolished or relocated out of the floodplain.

(3) Program Requirements for Commercial Revitalization. Applications submitted under this category shall be designed to preserve and revitalize commercial areas, which serve primarily low and moderate income persons.

(a) Eligible activities. All activities must be geographically and physically located within the boundaries of the jurisdiction and the project area and be contiguous to or located on property that is primarily commercial as of the application deadline date. Unimproved property on which activities are proposed cannot be zoned for residential purposes only.

(b) Funds requested and approved for Commercial Revitalization activities shall not be used as grants or loans for working capital, inventory or supplies, or for interior repairs and renovations, except for repairs necessary to correct code violations or removal of architectural barriers to handicap access; and

(c) Service Area Requirements. Activities in Commercial Revitalization projects are considered to serve the entire jurisdiction in which they are to be undertaken, unless the applicant can justify a smaller service area (e.g., a CRA in a portion of a county). The applicant shall document, using census data or a survey, that least 51 percent of beneficiaries in the service area are low and moderate-income persons. A survey shall comply with the requirements specified in paragraph 9B-43.0041(5)(b), F.A.C.

(d) Requirements for Rehabilitation of Commercial Buildings. If CDBG funds will be used for rehabilitation of commercial buildings, the local government must prepare, receive Departmental approval, and then adopt procedures for providing rehabilitation assistance to building units occupied by businesses through the Rehabilitation of Commercial Buildings activity before requesting funds for that activity. The procedures shall include at a minimum, but not be limited to, the following:

1. Restrict the Rehabilitation of Commercial Buildings activity to commercial buildings within the project area pursuant to 24 C.F.R. Section 570.202(a)(3). Properties upon which or adjacent to where CDBG activities are undertaken shall not be zoned for residential purposes only;

2. Require all businesses receiving rehabilitation assistance to provide services, which are available to all the residents of the service area, thereby meeting the national objective of benefiting low and moderate-income persons;

3. Specify the terms and conditions under which the rehabilitation assistance will be provided.

4. Provide that all buildings to be rehabilitated, except as provided in subparagraph (3)(d)11. below, will be occupied at the time the assistance is provided or subject to a lease agreement such that the building will be occupied prior to closeout. The occupant shall be a legally constituted business with business, sales tax, and occupational licenses;

5. Provide that all contracts for rehabilitation over $2,000 will comply with the Davis-Bacon Act.

6. Provide that businesses residing in a building rehabilitated with CDBG funds shall comply with the provisions of 24 CFR 8, (HUD’s implementing regulation of Section 504 of the Rehabilitative Act of 1973 (29 U.S.C. Section 794), incorporated herein by reference, as it relates to employment discrimination and facility accessibility;

7. Provide that CDBG funds addressing those code violations specified in the application will be in compliance with all local and state building codes and standards;

8. Establish a process for recognizing potential conflicts of interest, making those conflicts publicly known, dealing with those conflicts on a local level, and requesting waivers of those conflicts when appropriate pursuant to 24 C.F.R. s. 570.489 and Chapters 112.311-112.3143, F.S. Additionally, provide that no building owner, lesser, lessee, tenant, or occupant, or employee or immediate relative of the same, either personally or corporately, shall serve as a contractor to be paid with CDBG funds for the rehabilitation of said building, nor shall they be paid for their own labor with CDBG funds for the rehabilitation of said building;

9. Establish a process for final inspection of a commercial structure after rehabilitation and a process for final acceptance of a contractor’s work on any grant funded activity and before the local government considers the rehabilitation completed.

10. The expenditure of CDBG funds per façade shall not exceed $22,000 in CDBG funds. A building on a corner containing a single business may be considered to have two facades. Buildings which have been previously subdivided or portioned may be addressed as separate facades only if the building is subdivided such that:

a. There are separate primary entrances for each business;

b. Each of the businesses has separate and distinct occupational and sales tax licenses.

11. The façade of a vacant building may be addressed only if it is part of an overall building façade renovation effort in a contiguous area.

12. CDBG funds may be expended on the roof of a privately owned commercial building only after the issuance of a bona fide code violation report and only after the rehabilitation of the façade, the removal of architectural barriers to handicap access in the entrances and the bathroom areas, and the correction of other documented code violations.

13. CDBG funds for Commercial Revitalization activities shall not be used as grants or loans for working capital, inventory or supplies, or for interior repairs and renovations, except for repairs necessary to correct code violations or removal of architectural barriers to handicap access and correction of architectural barriers to handicap access in public buildings located in the project area pursuant to the requirements of 24 C.F.R. Part 8, adopted herein by reference, as effective on 6-6-10.

(4) Program Requirements for Economic Development.

(a) Applications submitted under this category shall be for creation or retention of jobs, of which at least 51 percent are for low and moderate income persons. A governmental entity cannot be a Participating Party.

(b) Prohibited Uses of Funds.

1. Funds shall not be used for working capital, inventory or supplies.

2. Direct assistance to non-public entity shall not be in the form of a grant.

3. Funds cannot be used to purchase assets from any entity if any principal of the Participating Party owns an interest of 20 percent or more in that entity.

4. Funds cannot be used to build or develop infrastructure beyond that which is required as a prerequisite for the job creation by the Participating Party.

5. Funds shall not be used to refinance existing debt.

6. Funds cannot be used for a loan to a non-public entity which is determined not to be appropriate as defined in 24 C.F.R. s. 570.482(e), as effective on 6-6-10.

(c) Eligibility Requirements for Loans.

1. Determining Eligibility for loans to non-public entities. All Economic Development applications submitted to the Department shall be screened to determine if the amount of any loan assistance to a private, for-profit entity; a private, non-profit entity; a neighborhood based organization; a local development organization; or other non-profit entities is appropriate to carry out the Economic Development project. A financial underwriting analysis of the project shall be conducted to determine that the minimum amount of assistance is being requested, that the terms and interest rates are appropriate given the entity’s debt service capacity, and that the entity has the ability to meet the proposed debt service, given historical financial statements, data and reasonable projections of revenues and operating expenses, if applicable.

2. Applications which do not contain justification of the appropriateness of the assistance being requested shall be ineligible in accordance with federal law and federal guidelines and shall be ineligible for scoring as provided in Section 290.0475, F.S.

3. If based on the Department’s review of the financial underwriting analysis for the assistance, the funds requested exceeds the funds necessary, the application request shall be reduced by the Department.

4. The local government shall provide to the Department a financial underwriting analysis and other Participating Party documentation not required at the time of application. The underwriting analysis must meet the requirements of 24 C.F.R. s. 570.482(e), as effective on 6-6-10, and Appendix A. The underwriting analysis must be prepared by a certified public accountant, a commercial lending underwriter, a financial professional employed by the local government or the Participating Party, or some other financial or economic development professional, and shall verify:

a. That all project costs are reasonable;

b. That all sources of funding included in the application document their commitment to the project through written offers to fund with all contingencies stated;

c. That to the extent practicable, CDBG funds are not substituted for readily available non-federal financial support;

d. That the project is financially feasible;

e. That to the extent practicable, the return on owner’s equity investment shall not be unreasonably high; and

f. That to the extent practicable, CDBG funds will be disbursed on a pro-rata basis with other finances provided to the project.

5. Once this financial underwriting analysis and other required documentation has been provided by the local government, any material change, including changes in corporate or ownership structure, which affects the underlying assumptions upon which the local government relied will require that the analysis be re-evaluated by the local government and any assistance requested for the Participating Party must be adjusted if a “material change” has occurred.

6. For CDBG loans only, CDBG funds may be used to fund up to 50 percent of the cost of eligible activities at the job creation location. The administrative cost shall not be included in this calculation. Applications which do not meet this requirement shall lose their funding reservation.

(d) Eligibility Requirements for Infrastructure Projects.

1. Determination of eligibility for infrastructure projects shall be based on the type of activities proposed and documentation that benefit primarily to low and moderate-income persons shall occur.

2. Applications shall also document that the entity proposing to create jobs is financially viable based on accepted industry standards.

3. The applicant shall document that the route, scope, cost, and size of the components of the proposed infrastructure are the minimum necessary to provide for the needs of a Participating Party at a job creation location.

4. Job Commitment. Applicants shall document that the Participating Party has the financial capacity to meet its commitment to provide or retain the jobs specified in the application. Applications which do not contain evidence of the capacity to provide jobs shall be assessed a 251-point reduction of their program impact score and will lose their funding reservation.

5. Job Creation or Retention. The number of jobs proposed to be created or retained shall be such that the cost in CDBG funds per job is consistent with 24 C.F.R. s. 570.482(f)(2) and (f)(4), as effective on 6-6-10. Applications which do not meet the cost-per-job requirements shall lose their funding reservation.

6. Leveraging of CDBG Dollars. Non-CDBG public funds directly linked to the proposed project may be included for scoring purposes. Applicants shall include documentation that all funds to be used for leverage are available and committed to the project and will be in the form of cash, loans, or grants. For CDBG loans, funds expended on assets purchased prior to the date of site visit shall not be counted to meet the 50 percent non-CDBG match portion of the project costs. Match is not required for infrastructure only projects. In order to be eligible for scoring, only leveraged funds expended after the date of the site visit and prior to the date of submission of administrative closeout shall be counted except for the cost of CDBG application preparation paid by the local government.

(e) National Objective and Public Benefit Documentation.

1. In determining whether an activity will benefit low and moderate-income persons, the net effect of the completed activity shall be considered. In the Economic Development category, each activity shall meet a national objective pursuant to 24 C.F.R. s. 570.483(b)(4), as effective on 6-6-10.

a. New jobs. The determination of actual benefit to low and moderate income persons shall be made based on the number and percent of persons who, at the time they were hired, were low and moderate-income persons as defined herein.

b. Retained jobs. The determination of actual benefit to low and moderate income persons shall be made based on the number of low and moderate income persons employed in the jobs that would actually be lost to the labor market or the jobs that would reasonably be expected to turn over within the following two years and filled with LMI persons upon turn over. The calculation of jobs shall be determined as of the date the application is submitted.

c. Where job creation is the method of meeting a national objective for construction of a public improvement or facility, all jobs created or retained as a direct result of the construction of the public improvement or facility shall be considered. However, if the costs per job and the time period specified in 24 C.F.R. s. 570.482(f)(2)(i), as effective on 6-6-10, are attained, only those jobs created by businesses included in the application must be counted for the purpose of meeting a national objective.

2. Determination of Availability of Jobs to Low and Moderate Income Persons. To determine that the created or retained jobs will be made available to low and moderate-income persons, the local government or Participating Party shall ensure that:

a. Jobs will be created which do not require special skills that can only be acquired with substantial work experience, education beyond high school, or specialized work experience.

b. Training opportunities will be provided to make such jobs available to low and moderate income persons who would not otherwise qualify; and

c. The advertising and recruiting efforts are directed toward low and moderate income persons.

3. If a national objective is attained under the provisions of 24 C.F.R. s. 570.483(b)(4)(iv) or (v), incorporated by reference as effective on 6-6-10, demographic and/or census documentation must be provided with the application.

(f) Public improvement activities are also subject to the requirements of 24 C.F.R. s. 570.483(e)(1), as effective on 6-6-10. Activities to address the needs of those beneficiaries listed in 24 C.F.R. s. 570.483(b)(2)(ii)(A), as effective on 6-6-10, will be presumed to meet the national objective of benefit to low and moderate income persons if they are directly related to the job creation or retention activities.

(g) Program Impact Criteria for the Economic Development Category. Program Impact criteria for Economic Development shall be based on a maximum of 650 points.

(h) If the contract must be modified because of withdrawal of a Participating Party or a reduction in leverage or job numbers, the local government must amend the contract and remain within the fundable range. Substitution of Participating Parties will be allowed only if the substitute is a business desiring to locate at the proposed job creation location or a location that will use the same infrastructure proposed in the application. The substitute Participating Party shall sign a Participating Party agreement which includes an obligation to create the same number of jobs and expend the same amount of leverage.

(5) Program Requirements for Planning and Design Subgrants.

Planning and Design subgrants provide phased funding for a project. Funds are initially provided only for engineering design and related grant administration. After completion of biddable construction plans and specifications, funding is provided for construction phase costs by a subgrant amendment.

(a) A Planning and Design subgrant may be offered to an applicant in the Neighborhood or Commercial Revitalization category whose score is below the fundable range for full funding and did not receive readiness to proceeds points.

1. Planning and Design subgrants will be offered based on rank ordered scores, subject to available funding.

2. Preference for Planning and Design subgrants will be given to applications in the Neighborhood Revitalization category.

3. Only those local governments whose applications indicate they will consider Planning and Design funding will be offered such a subgrant.

4. Only those applications which meet all other program requirements will be considered for a Planning and Design subgrant.

(b) Each Planning and Design subgrant shall not exceed $70,000 and shall fund only the costs of engineering services required for the development of biddable construction plans and specifications and grant administration.

1. Engineering costs funded from the subgrant shall not exceed the RUS fee schedule for engineering (Table I, Table II, or proration of these tables, depending on the nature of the project) and applicable additional engineering services as defined in this rule.

2. Grant administrative costs funded by the subgrant shall not exceed six percent of the amount of the Planning and Design subgrant.

(c) After biddable construction plans and specifications are provided to the Department, the subgrant will be amended, as funds become available, for construction phase costs up to the maximum amount allowed for the jurisdiction.

(d) If biddable construction plans and specifications cannot be completed, the subgrant shall be closed out.

Rulemaking Authority 290.048 FS. Law Implemented 290.043, 290.044, 290.046 FS. History–New 6-6-10.