Header:
TEXAS ADMINISTRATIVE CODE
TITLE 4. AGRICULTURE
PART 1. TEXAS DEPARTMENT OF AGRICULTURE
CHAPTER 30. COMMUNITY DEVELOPMENT
SUBCHAPTER A. TEXAS COMMUNITY DEVELOPMENT PROGRAM
DIVISION 1. ALLOCATION OF PROGRAM FUNDS
Date:
03/06/2014
Document:
§ 30.1. General Provisions
(a) Definitions and abbreviations. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Applicant--A unit of general local government which is preparing to submit or has submitted an application for Texas Community Development funds to the Department or to the Texas Department of Agriculture (TDA).
(2) Application--A written request for Texas Community Development Block Grant Program (TxCDBG) funds in the format required by the Department or by the TDA for Texas Capital Fund (TCF) applications.
(3) Community Development Block Grant nonentitlement area funds--The funds awarded to the State of Texas pursuant to the Housing and Community Development Act of 1974, Title I, as amended (42 United States Code §§ 5301 et seq.), and the regulations promulgated thereunder in 24 Code of Federal Regulations Part 570.
(4) Community--A unit of general local government.
(5) Contract--A written agreement, including all amendments thereto, executed by the Department, or by the TDA, and contractor which is funded with community development block grant nonentitlement area funds.
(6) Contractor--A unit of general local government with which the Department or the TDA has executed a contract.
(7) Department--Texas Department of Rural Affairs.
(8) Local government--A unit of general local government.
(9) Low-and moderate-income persons--Families and individuals whose incomes do not exceed 80 percent of the median income of the area involved, as defined under the United States Department of Housing and Urban Develop-ment § 8 Assisted Housing Program.
(10) Nonentitlement area--An area which is not a metropolitan city or part of an urban county as defined in 42 United States Code, § 5302.
(11) Poverty--The current official poverty line established by the Director of the Federal Office of Management and Budget.
(12) Primary beneficiary--A low or moderate income person.
(13) Regional review committee--A regional community development review committee, one of which is estab-lished in each of the 24 state planning regions established by the governor pursuant to Texas Local Government Code, § 391.003.
(14) Slum or blighted area--An area which has been designated a state enterprise zone, or an area within a mu-nicipality or county that is detrimental to the public health, safety, morals, and welfare of the municipality or county because the area:
(A) has a predominance of buildings or other improvements that are dilapidated, deteriorated, or obsolete due to age or other reasons;
(B) is prone to high population densities and overcrowding due to inadequate provision for open space;
(C) is composed of open land that, because of its location within municipal or county limits, is necessary for sound community growth through replatting, planning, and development for predominantly residential uses; or
(D) has conditions that exist due to any of the causes enumerated in subparagraphs (A) - (C) of this paragraph or any combination of those causes that: (i) endanger life or property by fire or other causes; or (ii) are conducive to:
(I) the ill health of the residents;
(II) disease transmission;
(III) abnormally high rates of infant mortality;
(IV) abnormally high rates of juvenile delinquency and crime; or
(V) disorderly development because of inadequate or improper platting for adequate residential development of lots, streets, and public utilities.
(15) Slum or blight, spot basis--A building which has been declared as a slum or blight and has multiple and unat-tended building code violations, and qualifies as slum or blighted on a spot basis under local law.
(16) Unemployed person--A person between the ages of 16 and 64, inclusive, who is not presently working but is seeking employment.
(17) Unit of general local government--An entity defined as a unit of general local government in 42 United States Code § 5302(a)(1), as amended.
(b) Overview--Community Development Block Grant nonentitlement area funds are distributed by the TxCDBG to eligible units of general local government in the following program areas:
(1) community development fund;
(2) Texas Capital fund. The Texas Capital Fund (TCF) is administered by the TDA under an interagency agreement with the Department. Applications for the TCF shall be submitted to the TDA.
(3) planning/capacity building fund;
(4) disaster relief fund;
(5) urgent need fund;
(6) colonia fund;
(7) small towns environment program fund;
(8) renewable energy demonstration pilot program; and
(9) community facilities fund.
(c) Types of applications.
(1) Single jurisdiction applications. An applicant may submit one application per TxCDBG fund, as outlined in sub-section (b) of this section, on its own behalf, or as a participant in a multi-jurisdictional application, per funding cycle (except as specified for the TCF, community development fund, colonia fund, and small towns environment program fund).
(A) A city may submit a single jurisdiction application that includes beneficiaries located within the extraterritorial jurisdiction of the city. However, the applicant must document that each activity benefiting persons located in its ex-traterritorial jurisdiction is meeting its community and housing development needs, including the needs of low and moderate income persons. A city cannot submit a single jurisdiction application that includes beneficiaries located inside the corporate city limits and outside of the city's extraterritorial jurisdiction. In this instance, the city and county in which the beneficiaries outside of the city's extraterritorial jurisdiction are located must submit the project as a multi-jurisdiction application.
(B) A county may submit an application on behalf of an incorporated city when the proposed application activities provide improvements to a public facility or service that is not owned or operated by the incorporated city and the persons benefiting from the application activities are located within the city's corporate city limits or the city's extra-territorial jurisdiction. If a county submits an application on behalf of an incorporated city, then the county and that city cannot submit another single jurisdiction application or be a participating jurisdiction in a multi-jurisdiction application submitted under the same TxCDBG fund category.
(C) An application from an eligible city or county for a project that would primarily benefit another city or county that was not meeting the TxCDBG application threshold requirements would be considered ineligible.
(2) Multi jurisdiction applications. Subject to each participating community satisfying the application requirements of the TxCDBG fund under which the application is submitted and this paragraph, an application will be accepted from two or more units of general local government if the application clearly demonstrates that the proposed activities will mutually benefit the residents of the communities applying for funds. A multi-jurisdiction application solely for admin-istrative convenience will not be accepted. Any community participating in a multi-jurisdiction application may not submit a single jurisdiction application under the project fund for which the multi-jurisdiction application was submit-ted. One of the participating communities must be primarily accountable to the Department and the TDA, in instances where the TCF is accessed, for financial compliance and program performance; however, all entities participating in the multi-jurisdiction application will be accountable for application threshold compliance. Only one unit of general local government may be the official applicant and this applicant must enter into a legally binding cooperation agreement with each participant that incorporates TxCDBG requirements. A proposed project which is located in more than one jurisdiction or in which beneficiaries from more than one jurisdiction will be counted must be submitted as a mul-ti-jurisdiction application (except as specified for the TCF and single jurisdiction applications described in paragraph (1)(A) - (C) of this subsection).
(d) Eligible location. Only projects or activities which are located in the nonentitlement areas of the state are eli-gible for funding under the TxCDBG. An exception to this requirement is Hidalgo County, an entitlement county, which is eligible for the colonia fund.
(e) Ineligible activities. Any type of activity not described or referred to in the Federal Housing and Community Development Act of 1974, § 5305(a) (42 United States Code §§ 5301 et seq.) is ineligible for funding under the TxCDBG.
(1) Specific ineligible activities include, but are not limited to: construction of buildings and facilities used for the general conduct of government (e.g., city halls and courthouses); new housing construction, except as described as eligible under the current TxCDBG application guides; the financing of political activities; purchases of construction equipment (except in limited circumstances under the small towns environment program); income payments, such as housing allowances; most operation and maintenance expenses (including smoke testing televising/video taping line work, or any other investigative method to determine the overall scope and location of the project work activities); pre-contract costs, except for costs incurred prior to submittal of an application and paid with local government or other funds for administrative consultant and engineering/architectural services and pre-agreement costs described in a TxCDBG contract; prisons/detention centers; government supported facilities; and racetracks.
(2) The following activities and/or uses are specifically ineligible under the TCF: monies may not be used for spec-ulation, investment or excess improvements over the minimum improvements needed for the business. TCF funds may not be utilized for refinancing or to repay the applicant, a local related economic development entity, the benefiting business or its owners and related parties for expenditures. Educational institutions, including but not limited to colleges and/or universities, and governmental entities may not qualify as the benefiting business. Ineligible infra-structure activities/improvements include, but are not limited to: landfills, incinerators, recycling facilities, machinery and equipment. Real estate improvements designed and/or built for a single, special or limited use or purpose are an ineligible use of funds. Real estate improvements do not include machinery and equipment used in the production and/or services marketed by the business.
(f) Citizen Participation.
(1) Public hearing requirements. For each public hearing scheduled and conducted by an applicant or contractor, the following public hearing requirements shall be followed.
(A) Notice of each hearing must be published in a newspaper having general circulation in the city or county at least 72 hours prior to each scheduled hearing. The published notice must include the date, time, and location of each hearing and the topics to be considered at each hearing. The published notice must be printed in both English and Spanish, if appropriate. Articles published in such newspapers which satisfy the content and timing requirements of this subparagraph will be accepted by the Department and, in the case of TCF hearings, by the TDA, in lieu of publication of notices. Notices should also be prominently posted in public buildings and distributed to local Public Housing Authorities and other interested community groups.
(B) Each public hearing shall be held at a time and location convenient to potential or actual beneficiaries, with accommodation for persons with disabilities. Persons with disabilities must be able to attend the hearings and an ap-plicant must make arrangements for individuals who require auxiliary aids or services if contacted at least two days prior to each hearing.
(C) When a significant number of non-English speaking residents can reasonably be expected to participate in a public hearing, an applicant or contractor shall provide an interpreter to accommodate the needs of the non-English speaking residents.
(2) Application requirements. Prior to submitting a formal application, an applicant for TxCDBG funding shall satisfy the following requirements.
(A) At least one public hearing shall be held prior to the preparation of its application and a public notice shall be published in a newspaper having general circulation in the city or county notifying the public of the availability of the application for public review prior to submitting its completed application to the Department and, in the case of TCF applications, to the TDA. The requirements described in this subparagraph are not applicable to applications submitted under the housing infrastructure fund.
(B) An applicant shall retain documentation of the hearing notices, a list of attendees at each hearing, minutes of the hearings, and any other records concerning the proposed use of funds for a period of three years or until the pro-ject, if funded, is closed out. Such records must be made available to the public in accordance with Texas Government Code, Chapter 552.
(C) The public hearing must include a discussion with citizens on the development of housing and community de-velopment needs, the amount of funding available, all eligible activities under the TxCDBG, the plans of the applicant to minimize displacement of persons and to assist persons actually displaced as a result of activities assisted with TxCDBG funds, and the use of past TxCDBG contract funds, if applicable. Citizens, with particular emphasis on persons of low and moderate income who are residents of slum and blight areas, shall be encouraged to submit their views and proposals regarding community development and housing needs. Local organizations that provide services or housing for low to moderate income persons, including but not limited to, the local or area Public Housing Authority, the local or area Health and Human Services office, and the local or area Mental Health and Mental Retardation office, must receive written notification concerning the date, time, location, and topics to be covered at the first public hearing. Citizens shall be made aware of the location where they may submit their views and proposals should they be unable to attend the public hearing. For submission of a housing infrastructure fund application, these requirements must be followed for the first public hearing.
(D) The notice announcing the availability of the application for public review must be published five days prior to the submission of the application and the published notice must include the fund category for which the application is submitted, the amount of funds requested, a description of the application activities, the location or locations of the application activities, and the location and hours when the application is available for review.
(E) Any public hearing held prior to submission of the application must be held after 5:00 p.m. on a weekday or at a convenient time on a Saturday or Sunday.
(3) Contractor requirements.
(A) A contractor must hold a public hearing concerning any substantial change, as determined by the Department and, in the case of TCF program changes, by the TDA, proposed to be made in the use of TxCDBG funds from one eligi-ble activity to another.
(B) Upon completion of its contract, the contractor shall hold a public hearing to review its program performance, including the actual use of the funds provided under the contract.
(C) A contractor shall retain documentation of the hearing notices, a list of attendees at each hearing, minutes of the hearings, and any other records concerning the actual use of funds for a period of three years after the contract is closed out. Such records must be made available to the public in accordance with Texas Government Code, Chapter 552.
(D) The public hearings must be held after 5:00 p.m. on a weekday or at a convenient time on a Saturday or Sun-day.
(4) Complaint procedures. Applicants and contractors must maintain written citizen complaint procedures that provide a timely written response to complaints and grievances. Citizens must be made aware of the location and hours at which they may obtain a copy of the written procedures.
(5) Technical assistance. An applicant shall provide technical assistance to groups representative of persons of low-and moderate-income that request such assistance in developing proposals for the use of TxCDBG funds. The level and type of assistance shall be determined by the applicant based upon the specific needs of its residents.
(g) Appeals. An applicant for funding under the TxCDBG, except for the Texas Capital Fund, may appeal the dispo-sition of its application in accordance with this subsection.
(1) The appeal may only be based on one or more of the following grounds.
(A) Misplacement of an application. All or a portion of an application is lost, misfiled, or otherwise misplaced by Department staff resulting in unequal consideration of the applicant's proposal.
(B) Mathematical error. In rating the application, the score on any selection criteria is incorrectly computed by the Department due to human or computer error.
(C) Other procedural error. The application is not processed by the Department in accordance with the application and selection procedures set forth in this subchapter. Procedural errors alleged to have been committed by a regional review committee may only be appealed in accordance with the provisions of § 255.8 of this title (relating to Regional Review Committees).
(2) The appeal must be submitted in writing to the TxCDBG of the Department no later than 30 days after the date the announcement of contract awards is published on the Department's website. The Department staff will evaluate the appeal and may either concur with the appeal and make an appropriate adjustment to the applicant's scores, or disagree with the appeal and prepare an appeal file for consideration by the Executive Director. The Executive Director then considers the appeal within 30 days and makes a decision.
(3) In the event the appeal is sustained and the corrected scores would have resulted in project funding, the ap-plication is approved and funded. If the appeal concerning an application is rejected, the office notifies the applicant of its decision, including the basis for rejection.
(4) Appeal of Executive Director's Decision to the Board.
(A) If the appealing party is not satisfied with the Executive Director's response to the appeal, it may appeal in writing directly to the Board within seven days after the date of the Executive Director's response. In order to be placed on the next agenda of the Board, the appeal must be received by the Department at least fourteen days prior to the next scheduled Board meeting. Appeals received after the fourteenth calendar day prior to the Board meeting will be scheduled for the next Board meeting. The Executive Director shall prepare an appeal file for the Board's review based on the information provided. If the appealing party receives additional information after the Executive Director has denied the appeal, but prior to the posting of the appeal, for Board consideration, the new information must be provided to the Executive Director for further consideration or the Board will not consider any information submitted by the applicant after the written appeal. New information will cause the deadlines in this subparagraph to begin again. The Board will review the appeal de novo and may consider any information properly considered by the Department in making its prior decision(s).
(B) Public comment. The Board hears public comment on the appeal under its usual procedures. Persons making public comment are not parties to the appeal and no rights accrue to them under this section or any other appeal process. Nothing in this section provides a right to appeal any decision made on an application if the appealing party does not have direct grounds to appeal.
(C) Possible actions regarding applications. In instances in which the appeal if sustained by the Board could have resulted in an award to the applicant, the application shall be approved by the Board contingent on the availability of funds. If the appeal is denied, the Department shall notify the applicant of the decision.
(h) Threshold requirements. An applicant must satisfy each of the following requirements in order to be eligible to apply for or to receive funding under the TxCDBG:
(1) Demonstrate the ability to manage and administer the proposed project, including meeting all proposed bene-fits outlined in its application. The applicant can meet this threshold by:
(A) Providing the roles and responsibilities of local staff designated to administer or work on the proposed project and a plan for project implementation;
(B) Indicating the intention to use a third-party administrator, if applicable;
(C) If local staff along with a third-party administrator, will jointly administer the proposed project, by providing the roles and responsibilities of the designated local staff; or
(D) TxCDBG management may determine that an applicant has or does not have the capacity to manage and ad-minister the proposed project based on an applicant's prior performance on a TxCDBG contract.
(2) Demonstrate the financial management capacity to operate and maintain any improvement made in conjunc-tion with the proposed project. The applicant can meet this threshold by:
(A) Providing the name of the financial person on the applicant's staff, or evidence that the applicant intends to contract services for financial oversight;
(B) Providing a statement certifying that financial records for the proposed project will be kept at an officially designated city/county site, accessible by the public, and will be adequately managed on a timely basis using generally accepted accounting principles; and/or
(C) TxCDBG management may determine that an applicant has or does not have the financial management capacity to operate and maintain any improvements made in conjunction with the proposed project based on a review of audited financial records, current financial status, or current financial management of a TxCDBG contract.
(3) Levy a local property tax or local sales tax option.
(4) Demonstrate satisfactory performance on previously awarded TxCDBG contracts. The applicant can meet this threshold by:
(A) Showing past responses, if applicable, to audit and monitoring issues (over the most recent 48 months before the application due date) within prescribed times as indicated in the Department's resolution letter(s);
(B) The presence of documentation related to past contracts (over the most recent 48 months before the applica-tion due date), through close-out monitoring and reporting, that the activity or service was made available to all in-tended beneficiaries, that low and moderate income persons were provided access to the service, or there has been adequate resolution of issues regarding beneficiaries served;
(C) The non-presence of any outstanding delinquent response to a written request from the Department regarding a request for repayment of funds to TxCDBG; or
(D) By not having at least one outstanding delinquent response to a written request from the Department re-garding compliance issues such as a request for closeout documents or any other required information.
(5) Resolve all outstanding compliance and audit findings related to previously awarded TxCDBG contracts and any other Department contracts. The applicant can meet this threshold if the applicant is actively participating in the resolution of any outstanding audit and/or monitoring issues by responding with substantial progress on outstanding issues within the time specified in the resolution process.
(6) Submit any past due audit to the Department.
(A) A community with one year's delinquent audit may be eligible to submit an application for funding by the es-tablished application deadline, but the TxCDBG may withhold the award or issuance of a contract until it receives a satisfactory audit. Applications for the colonia self-help center fund and the disaster relief/urgent need fund are ex-empt from this threshold.
(B) A community with two years of delinquent audits may not apply for additional funding and may not receive a funding recommendation. This applies to all funding categories under the Texas Community Development Block Grant Program. The colonia self-help centers fund may be exempt from this threshold, since funds for the self-help centers fund is included in the program's state budget appropriation. Failure to meet the threshold will be reported to the Texas Department of Housing and Community Affairs for review and recommendation. The disaster relief fund may be exempt from this threshold, but failure to meet this threshold will be forwarded to the Board for review and consider-ation.
(7) TxCDBG funds cannot be expended in any county that is designated as eligible for the Texas Water Develop-ment Board Economically Distressed Areas Program unless the county has adopted and is enforcing the Model Subdi-vision Rules established pursuant to § 16.343 of the Texas Water Code. An incorporated city that is located in a Texas Water Development Board Economically Distressed Areas Program eligible county that has not adopted, or is not en-forcing, the Model Subdivision Rules, may submit an application for TxCDBG funds. However, in lieu of county adoption of the Model Subdivision Rules, the incorporated city must adopt the Model Subdivision Rules prior to the expenditure of any TxCDBG funds by the incorporated city.
(8) Based on a pattern of unsatisfactory performance on previous TxCDBG contracts, unsatisfactory management and administration of previous TxCDBG contracts, or the presence of evidence that an applicant lacks financial man-agement capacity based on a review of official financial records and audits related to previous TxCDBG contracts, the Department, or TDA in the case of Texas Capital Fund applications, may determine that an applicant is ineligible to apply for TxCDBG funding even though at the application deadline date it meets the threshold and past performance requirements. The Department, or TDA in the case of Texas Capital Fund applications, will consider an applicant's per-formance during the most recent 48 months before an application due date to make the eligibility determination. An applicant would still remain eligible for funding under the disaster relief fund.
(i) Unmet benefits. Actions that may be taken against a contractor by the Department where the Department finds that the contractor did not provide the level of benefits specified in its contract include, but are not limited to:
(1) holding the contractor ineligible to apply for TxCDBG funds for a period of two program years or until any issue of restitution is resolved, whichever is longer;
(2) requiring the contractor to reimburse the Department for the difference between the amount of funds pro-vided for the level of benefits specified in the contract and the amount of funds actually expended in providing such level of benefits; and
(3) rescoring the contractor's application, and if the level of benefits actually provided by the contractor would have changed the funding recommendation, terminating the local government's contract.
(j) False information. If an applicant provides false information in any application which has the effect of increasing the applicant's competitive advantage, the number of beneficiaries, or the percentage of low to moderate income beneficiaries, the TxCDBG staff shall make a recommendation for action to the Executive Director of the Department. Actions that the Executive Director may take include, but are not limited to:
(1) Disqualification of the application and holding the locality ineligible to apply for TxCDBG funding for a period of at least one year not to exceed two program years;
(2) holding the applicant or contractor ineligible to apply for TxCDBG funds for a period of two program years or until any issue of restitution is resolved, whichever is longer; and
(3) terminating the local government's contract if the correct information would have changed the scores and re-sulted in a change in the rankings for purposes of funding. If the applicant provides false information in a TCF appli-cation, TDA staff shall make a recommendation for action to the appropriate TDA official. Actions that the TDA official may take, in consultation with TxCDBG, include, but are not limited to:
(A) Disqualification of the application and holding the locality ineligible to apply for TCF funding for a period of at least one year not to exceed two program years;
(B) holding the applicant or contractor ineligible to apply for TCF funds for a period of two program years or until any issue of restitution is resolved, whichever is longer; and
(C) terminating the local government's contract if the correct information would have changed the scores and re-sulted in a change in the rankings for purposes of funding.
(k) Substitution of standardized data. Any applicant that chooses to substitute locally generated data for stand-ardized information available to all applicants must use the survey instrument provided by the Department and must follow the procedures prescribed in the instructions to the survey instrument. This option does not apply to applica-tions submitted to the TCF.
(1) Only door-to-door surveys are allowed, unless an alternate method is approved in writing by the Department.
(2) Surveys, including signed tabulation sheets, signed surveys location sheets, all responses, and all non-responses must be submitted to the Department by the application deadline, for verification and spot-checking.
(3) A survey instrument that lacks information prescribed in the instructions to the survey instrument or which in-cludes conflicting information may be considered as a non-response for that family.
(4) The applicant must demonstrate a 100% effort in contacting households to be surveyed and obtain at least an 80% response rate for surveys.
(5) The TxCDBG program will not allow participants to use any surveys or survey questionnaires completed more than five (5) years prior to the current fund year to document the beneficiaries of a TxCDBG application (e.g., surveys completed on or after January 1, 2006 may be used for 2011 TxCDBG programs. The only exception to this rule is for biennial funds, at which point survey questionnaires remain eligible for both years awarded. For example, surveys completed on or after January 1, 2006 may be used for 2011/2012 Community Development Fund applications.) The survey must be in accordance with specific requirements established in the most recent application guide for the proposed project.
(l) Unobligated and recaptured funds. Deobligated funds, unobligated funds and program income generated by TCF projects shall be retained for expenditure in accordance with the Consolidated Plan. Program income derived from TCF projects will be used by the Department for eligible TxCDBG activities in accordance with the Consolidated Plan. Any deobligated funds, unobligated funds, program income, and unused funds from the current year's allocation or from previous years' allocations derived from any TxCDBG Fund, including program income recovered from TCF local revolving loan funds, and any reallocated funds which HUD has recaptured from Small Cities may be redistributed among the established current program year fund categories, for otherwise eligible projects. The selection of eligible projects to receive such funds is approved by the Department Executive Director and the Board on a priority needs basis with eligible disaster relief and urgent need projects as the highest priority; followed by established priority uses within existing fund categories or programs, any awards necessary to resolve appeals under fund categories requiring publication of contract awards in the Texas Register, TCF projects, special needs projects, projects in colonias, housing activities, and other projects as determined by the Department Executive Director. Other purposes or initiatives may be established as a priority use of such funds within existing fund categories or programs by the Board.
(m) Waivers. The Department may waive any provision of this subchapter upon its own motion, or upon an appli-cant's or contractor's written request for such a waiver if the Department finds that compelling circumstances exist outside the control of the applicant or contractor which justifies the approval of such a waiver. The Department shall not waive any provision hereof concerning the TCF program unless written request to do so is received from the Exec-utive Director of the TDA. The provisions of the foregoing sentence shall not apply to contracts other than those awarded and/or administered by the TDA for the Department. Issues related to audit requirements will be handled by the appropriate agency.
(n) Performance threshold requirements. In addition to the requirements of subsection (h) of this section, an ap-plicant must satisfy the following performance requirements in order to be eligible to apply for program funds. A con-tract is considered executed for the purposes of this subsection on the date stated in section 2 of such contract.
(1) Obligate at least 50% of the total TxCDBG funds awarded under an open TxCDBG contract within 12 months from the start date of the contract or prior to the application deadlines, have completed plans and specifications, and have received all applicable environmental approvals from TxCDBG covering this obligation. This threshold is applicable to TxCDBG contracts with an original 24-month contract period. To meet this threshold, 50% of the TxCDBG funds must be obligated through executed contracts for administrative services, engineering services, acquisition, construction, materials purchase, etc. Plans and specifications must be completed. The TxCDBG contract activities do not have to be 50% completed, nor do 50% of the TxCDBG contract funds have to be expended to meet this threshold. This threshold is applicable to previously awarded TxCDBG contracts under the community development fund, the community development supplemental fund, the community development-recovery (A & B portions combined), the colonia construction fund, the colonia planning fund, the non-border colonia fund the planning and capacity building fund, the disaster relief/urgent need fund, and small towns environment program (STEP) fund, except that is does not include STEP contracts awarded prior to February 1, 2010. This threshold is not applicable to previously awarded TxCDBG contracts under the TCF, the housing infrastructure fund, the housing rehabilitation fund, the colonia self-help centers fund, the colonia economically distressed area program fund, the Young v. Martinez fund, the disaster recovery initiative program, microenterprise loan fund, small business loan fund, the small towns environment program fund awarded prior to February 1, 2010, and renewable energy demonstration pilot program. This paragraph does not apply to a city or county that meets the eligibility criteria for current assistance from the TxCDBG disaster relief fund or for the Renewable Energy Demonstration Pilot Program. For community development-recovery awards with A & B contracts, both A & B contracts will be considered as though it were one combined contract.
(2) Submit to the Department the certificate of expenditures (COE) report showing the expended TxCDBG funds and a final drawdown for any remaining TxCDBG funds as required by the most recent edition of the TxCDBG Project Implementation Manual. Any reserved funds on the COE must be approved in writing by TxCDBG staff. To meet this threshold "expended" means that the construction and services covered by the TxCDBG funds are complete and a drawdown for the TxCDBG funds has been submitted prior to the application deadlines. This threshold will apply to an open TxCDBG contract with an original 24-month contract period and to TxCDBG contractors that have reached the end of the 24-month period prior to the application deadlines. This threshold is applicable to previously awarded TxCDBG contracts under the community development fund, community development supplemental fund, the community development-recovery (A & B portions combined), the colonia construction fund, the colonia planning fund, the non-border colonia fund, the planning and capacity building fund, the disaster relief/urgent need fund and small towns environment program (STEP) fund, except that is does not include STEP contracts awarded prior to February 1, 2010. This threshold is not applicable to previously awarded TxCDBG contracts under the TCF, the housing infrastructure fund, the housing rehabilitation fund, the colonia self-help centers fund, the colonia economically distressed area program fund, the Young v. Martinez fund, the disaster recovery initiative program, microenterprise loan fund, small business loan fund, the small towns environment program fund (original 24-month contract extended to 36-months) awarded prior to February 1, 2010, and renewable energy demonstration pilot program. This paragraph does not apply to a city or county that meets the eligibility criteria for current assistance from the TxCDBG disaster relief fund. For community development-recovery awards with A & B contracts, both A & B contracts will be considered as though it were one combined contract.
(3) TCF applicants may not have an existing contract with an award date in excess of 48 months prior to the ap-plication deadline date, regardless of extensions granted. If an existing contract requires an extension beyond the ini-tial term, TDA must be in receipt of the request for extension no less than 30 days prior to contract expiration date. If an existing contract expires prior to or on the new application deadline date, without an approved extension, TDA must be in receipt of complete closeout documentation for the existing contract, no less than 30 days prior to the new application deadline date (complete closeout documentation is defined in the most recent version of the TCF Imple-mentation Manual).
(4) Submit to the Department the certificate of expenditures (COE) report showing the expended TxCDBG funds and a final drawdown for any remaining TxCDBG funds as required by the most recent edition of the TxCDBG Project Implementation Manual. Any reserved funds on the COE must be approved in writing by TxCDBG staff. To meet this threshold "expended" means that the construction and services covered by the TxCDBG funds are complete and a drawdown for the TxCDBG funds has been submitted prior to the application deadlines. This threshold will apply to an open TxCDBG contract with an original 36-month contract period or a small towns environment program 24-month contract, extended to 36 months, and to TxCDBG contractors that have reached the end of the 36-month period prior to the application deadlines. This threshold is applicable to previously awarded TxCDBG contracts under the housing infrastructure fund (when the applicant is applying for the housing infrastructure fund competition) and the small towns environment program fund original 36-month contract or original 24-month contract, extended to 36 months. This threshold is not applicable to previously awarded TxCDBG contracts under the TCF, the housing rehabilitation fund, the colonia self-help centers fund, the colonia economically distressed area program fund, the Young v. Martinez fund, the disaster recovery initiative program the microenterprise loan fund, the small business loan fund, and renewable energy demonstration pilot program. This paragraph does not apply to a city or county that meets the eligibility criteria for current assistance from the TxCDBG disaster relief fund.
(o) Minority hiring/participation. It is the policy of the Department to encourage minority employment and par-ticipation among all applicants under the TxCDBG. All applicants to the TxCDBG are required to submit information documenting the level of minority participation as part of the application for funding.
(p) Revolving loan funds. A Revolving Loan Fund established through program income recovered from a TxCDBG contract must meet the requirements for Revolving Loan Funds described in the TxCDBG Final Statement, Consolidated Plan or Action Plan for the program year in which the original contract was awarded. Revolving Loan Funds are also subject to appropriate state and federal requirements, TxCDBG contract provisions, and the appropriate Revolving Loan Fund guidelines issued by the Department. The requirement in this section applies to all local Revolving Loan Funds (RLF) established from program income from Texas Capital Fund projects, housing projects and the Small Business Loan Fund. Funds retained in the local RLF must be committed within three years of the original TxCDBG contract programmatic close date. Every award from the RLF must be used to fund the same type of activity, for the same business, from which such income is derived. A local Revolving Loan Fund may retain a cash balance not greater than 33 percent of its total cash and outstanding loan balance. If the local government does not comply with the local RLF requirements, all program income retained in the local RLF and any future program income received from the pro-ceeds of the RLF must be returned to the State.
(q) Withdrawal of award.
(1) Should the applicant fail to substantiate or maintain the claims and statements made in the application upon which the award is based, including failure to maintain compliance with application thresholds in subsection (h)(1) - (4) of this section, within a period ending 90 days after the date of the TxCDBG's award letter to the applicant, the award will be immediately withdrawn by the TxCDBG (excluding the colonia self-help center awards).
(2) Should the applicant fail to execute the Department's award contract (excluding Texas Capital Fund and colonia self-help center contracts) within 60 days from the date of the letter transmitting the award contract to the applicant, the award will be withdrawn by the Department.
(r) Funds recaptured from withdrawn awards. For an award that is withdrawn from an application, the Department follows different procedures for the use of those recaptured funds depending on the fund category where the award is withdrawn.
(1) Funds recaptured under the community development fund from the withdrawal of an award made from the first year of the biennial funding are offered to the next highest ranked applicant from that region that was not rec-ommended to receive an award from the first year regional allocation. Funds recaptured under the community de-velopment fund from the withdrawal of an award made from the second year of the biennial funding are offered to the next highest ranked applicant from that region that was not recommended to receive full funding (the applicant recommended to receive marginal funding) from the second year regional allocation. Any funds remaining from the second year regional allocation after full funding is accepted by the second year marginal applicant are offered to the next highest ranked applicant from the region as long as the amount of funds still available exceeds the minimum community development fund grant amount. Any funds remaining from the second year regional allocation that are not accepted by an applicant from the region or that are not offered to an applicant from the region may be used for other TxCDBG fund categories and, if unallocated to another fund, are then subject to the procedures described in subsection (l) of this section.
(2) Funds recaptured under the planning and capacity building fund from the withdrawal of an award made from the first year of the biennial funding are offered to the next highest ranked applicant from that statewide competition that was not recommended to receive an award from the first year allocation. Funds recaptured under the planning and capacity building fund from the withdrawal of an award made from the second year of the biennial funding are offered to the next highest ranked applicant from that statewide competition that was not recommended to receive full funding (the applicant recommended to receive marginal funding) from the second year allocation. Any funds re-maining from the second year allocation after full funding is accepted by the second year marginal applicant are of-fered to the next highest ranked applicant from the statewide competition. Any funds remaining from the second year allocation that are not accepted by an applicant from the statewide competition or that are not offered to an applicant from the statewide competition may be used for other TxCDBG fund categories and, if unallocated to another fund, are then subject to the procedures described in subsection (l) of this section.
(3) Funds recaptured under the colonia construction component from the withdrawal of an award remain available to potential colonia program fund applicants during that program year to meet the 10 percent colonia set-aside requirement and, if unallocated within the colonia fund, may be used for other TxCDBG fund categories. Remaining unallocated funds are then subject to the procedures in subsection (l) of this section.
(4) Funds recaptured under the colonia planning component from the withdrawal of an award remain available to potential colonia program fund applicants during that program year to meet the 10 percent colonia set-aside re-quirement and, if unallocated within the colonia fund, may be used for other TxCDBG fund categories. Remaining un-allocated funds are then subject to the procedures in subsection (l) of this section.
(5) Funds recaptured under the program year allocation for the colonia economically distressed areas program fund from the withdrawal of an award remain available to potential colonia economically distressed areas program fund applicants during that program year. If there are an insufficient number of TWDB EDAP projects ready for Colonia Economically Distressed Areas Program (CEDAP) funding, the CEDAP funds may be transferred as appropriate. If unal-located within the colonia fund, may be used for other TxCDBG fund categories. Remaining unallocated funds are then subject to the procedures in subsection (l) of this section.
(6) Funds recaptured under the program year allocation for the disaster relief/urgent need fund from the with-drawal of an award are subject to the procedures described in subsection (l) of this section.
(7) Funds recaptured under the small towns environment program fund (STEP) from the withdrawal of an award will be made available in the next round of STEP competition following the withdraw date in the same program year. If the withdrawn award had been made in the last of the two competitions in a program year, the funds would go to the next highest scoring applicant in the same STEP competition. If there are no unfunded STEP applicants, then the re-captured funds would be available for other TxCDBG fund categories. Any unallocated STEP funds are subject to the procedures described in subsection (l) of this section.
(8) Funds recaptured under the Texas Capital Fund from the withdrawal of an award are subject to the procedures described in subsection (l) of this section.
(9) For both the community development fund, if there are no remaining unfunded eligible applications in the re-gion from the same biennial application period to receive the withdrawn funding, then the withdrawn funds are con-sidered as deobligated funds, subject to the procedures described in subsection (l) of this section.
(s) Readiness to proceed requirements: In order to determine that the project is ready to proceed, the applicant must provide in its application information that:
(1) Identifies the source of matching funds and provides evidence that the applicant has applied for any non-local matching funds, and for local matching funds, evidence that local matching funds would be available.
(2) Provides written evidence of a ratified, legally binding agreement, contingent upon award, between the appli-cant and the utility that will operate the project for the continual operation of the utility system as proposed in the application. For utility projects that require the applicant or service provider to obtain a certificate of convenience and necessity for the target area proposed in the application, provides written evidence that the Texas Commission on Environmental Quality has received the applicant or service provider's application.
(3) Where applicable, provide a written commitment from service providers, such as the local water or sewer util-ity, stating that they will provide the intended services to the project area if the project is constructed.
(t) Performance measures. Each applicant for TxCDBG funds and each city or county receiving a contract award shall provide applicable information requested in application guides, the grant contract, or the most recent edition of the TxCDBG project implementation manual that is required by the Department to report on Community Development Block Grant program performance measures promulgated by the Board, the Texas Legislature, and the U.S. Department of Housing and Urban Development.
(u) Street paving activities. Area benefit can be used to qualify street paving activities. However, for street paving activities with multiple and non-contiguous target areas, each target area must separately meet the principally benefit low and moderate income national program objective. At least 51% of the residents located in each non-contiguous target area must be low and moderate income persons. A target area that does not meet this requirement cannot be included in an application for TxCDBG funds. The only exception to this requirement is street paving eligible under the disaster relief fund.
(v) For any award made on or after September 1, 2005, any political subdivision that receives community devel-opment block grant program money targeted toward street improvement projects in eligible colonia areas must allo-cate not less than five percent but not more than 15 percent of the total amount of street improvement money to providing financial assistance to colonias within the political subdivision to enable the installation of adequate street lighting in those colonias if street lighting is absent or needed.
(w) The TxCDBG is under no obligation to approve any changes in a performance statement of a TxCDBG contract that would result in a program year score lower than originally used to make the award if the lower score would have initially caused that project to be denied funding. This does not apply to colonia self-help centers or the Texas Capital Fund.
(x) Any applicant's cash match included in the TxCDBG contract budget may not be obtained from any person or entity that provides contracted professional or construction-related services (other than utility providers) to the ap-plicant to accomplish the purpose described in the TxCDBG contract, in accordance with 24 CFR Part 570.
(y) If an audit becomes due after the award date, the Department may withhold the issuance of a contract until it receives a satisfactory audit. If a satisfactory audit is not received by the Department within four months of the audit due date, the Department may withdraw the award and re-allocate the funds in accordance with subsection (r) of this section (excludes the colonia self-help center awards and Texas Capital Fund awards).
(z) In order to administer a TxCDBG contract, the administrator (contracted administrators on behalf of the client community or the city or county staff of self-administering award recipients) must attend, and retain the completion certificate, from the most recent cycle of TxCDBG Project Implementation Manual workshops. (This requirement ex-cludes Texas Capital Fund and Colonia Self-Help Center Set-aside contracts.)
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