[Federal Register Volume 59, Number 101 (Thursday, May 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12821]
[[Page Unknown]]
[Federal Register: May 26, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development
[Docket No. N-94-3783; FR-3710-N-01]
Notice of UDAG Retention and Recapture Programs
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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SUMMARY: This Notice announces the implementation of the HUD Retention
and Recapture Programs (collectively the ``Program'') described in
section 119(t) of the Housing and Community Development Act of 1974, as
amended (the ``Act''). Funds retained through recipient participation
in the Retention Program shall be used to increase and enhance the use
of section 108(q) economic development grants (subject to HUD approval
of such section 108(q) grants and related section 108 loan guarantees)
or for economic development activities eligible under Title I of the
Act. Funds available to the Secretary under section 119 of the Act as
of October 1, 1993, or relinquished to HUD pursuant to the Retention
and Recapture Agreement, may be used by HUD in accordance with the
provisions of section 119(o) of the Act, including the making of
section 108(q) grants in support of section 108 loan guarantees.
This Notice contains information about the purpose of the Program,
including its duration; and recipient rights and responsibilities under
the Program. The Notice also informs UDAG recipients how to respond to
the Notice.
DATES: The Retention Program is in effect from May 26, 1994, and
expires on August 24, 1994; (the ``Expiration Date''). Thereafter,
recipients shall no longer have any right to enter into an agreement
with the Secretary for the purpose of participating in the Retention
Program. The Secretary will not recapture any unexpended funds before
the Expiration Date.
ADDRESSES: The written agreement by the recipient to participate in the
Retention Program and its unconditional and irrevocable release to the
Secretary of the remainder of the UDAG funds under its grant in
accordance with the provisions of section 119(t) of the Act must be
received at HUD's Office of Economic Development, Office of Community
Planning and Development, 451 Seventh Street, SW., room 7136,
Washington, DC 20410, Attn: Mr. Roy O. Priest, Director, on or before
the Expiration Date.
FOR FURTHER INFORMATION CONTACT: Roy O. Priest, Director, at the above
address; (202) 708-2290; TDD for the hearing- or speech-impaired, (202)
708-2565. Inquiries may also be faxed to (202) 708-7543. (These are not
toll-free numbers.)
SUPPLEMENTARY INFORMATION:
I. Purpose and Substantive Description
The purpose of this Notice is to establish criteria and grant
conditions under the Retention Program for the use by UDAG recipients
of a percentage of the remaining unexpended balance under their UDAG
grant agreements for economic development activities under a new grant
agreement under section 119(t). The Notice implements the amendments
made to section 119 of the Act by section 232(c) of the Multifamily
Housing Property Disposition Reform Act (Pub. L. 103-233, approved
April 11, 1994).
II. Affected UDAG Grants
UDAG grants with unexpended grant funds remaining on the date of
the issuance of this Notice are affected by this Notice. In particular,
the following types of grants are directly affected:
(1) UDAG grants which are in default. These include, for example,
grants where (i) the required legally binding commitments (LBCs) have
not been approved by HUD; (ii) the recipient has violated the terms and
conditions of the UDAG grant agreement pertaining to the payment of
wages pursuant to the Davis-Bacon requirements, applicable
environmental laws, rules, regulations, etc., or other requirements of
the grant agreement; (iii) the recipient/developer of the project has
failed to complete its work pertaining to the project within the
timeframe set forth in the grant agreement; (iv) the developer is in
bankruptcy or is insolvent and unable to proceed with the development
of the project; or (v) there is a default by the developer under the
terms of a superior mortgage and/or a foreclosure by a lender on the
project.
(2) UDAG grants which are not in default on or before the
Expiration Date but have not had all the required LBCs approved by HUD.
(3) UDAG grants which have received HUD approval of all required
LBCs but which still have unexpended grant funds remaining as of the
date of the issuance of this Notice, or are in default, and the
unexpended grant funds cannot be spent before the Expiration Date. This
does not include active grants which are not in default and for which
it is expected that the grant funds will be expended after the
Expiration Date.
For all such affected grants, the recipient may agree with the
Secretary on or before the Expiration Date to retain a percentage of
the unexpended funds for use under a Retention and Recapture Agreement
in accordance with the provisions of section 119(t) of the Act within a
timeframe to be established by the Secretary in the agreement (see
Section III(3) of this Notice), provided the recipient shall relinquish
any and all claims whatsoever to the balance of the grant funds, which
will be recaptured by the Secretary.
III. Retention Program
This Notice permits UDAG recipients to elect to retain the
percentages specified below of the grant funds which remain unexpended
upon the date of the issuance of this Notice for use by the recipient
as follows:
(1) Thirty-three percent (33%) of such unexpended amounts if:
(a) The recipient agrees to expend not less than one-half of the
amount retained for activities to be authorized pursuant to a grant
approved by HUD under section 108(q) of the Act and to expend such
funds in conjunction with a loan guarantee approved by HUD under
section 108 of the Act at least equal to twice the amount of the funds
received (application must be made for such loan guarantee within six
(6) months of the Expiration Date and such approvals must be granted by
HUD within twelve (12) months after the Expiration Date); and
(b) (i) The recipient agrees to use the remainder of the amount
retained for economic development activities eligible under Title I of
the Act; and
(ii) Except when waived by the Secretary in the case of a severely
distressed jurisdiction, not more than one-half of the costs of
activities under this subparagraph (b) are paid for from such
unexpended amounts; or
(2) Twenty-five percent (25%) of such unexpended amounts if:
(a) The recipient agrees to expend such funds for economic
development activities eligible under Title I of the Act; and
(b) Except when waived by the Secretary in the case of a severely
distressed jurisdiction, not more than one-half of the costs of such
activities are paid for from such unexpended amount.
A ``severely distressed jurisdiction'' is one in which (i) the
family poverty rate was equal to or greater than 125 percent of the
national family poverty rate during the calendar year for which the
most recent data are available, as determined according to information
of the Bureau of the Census, or (ii) per capita income was less than 75
percent of the national per capita income during the calendar year for
which the most recent data are available, as determined according to
information of the Bureau of the Census.
(3) All UDAG grant funds retained by the recipient under the
provisions of subparagraph (1)(a) of this Section III must be expended
by the recipient for the activities set forth therein within the period
of time to be established under the section 108(q) grants.
(4) If and when approved by HUD, all funds retained by the
recipient under the provisions of subparagraphs (1)(b)(i) and (2) of
this Section III must be actually expended by the recipient for the
activities set forth therein within twenty-four (24) months from the
Expiration Date.
(5) Failure by the recipient to expend such retained grant funds
for the aforesaid purposes within the applicable time period shall be a
default under the terms of the Retention and Recapture Agreement.
(6) The expenditure by the recipient of the retained funds will be
subject to applicable regulations and requirements for the particular
use, i.e., for section 108(q) grants, the use will be subject to
approval of the section 108(q) grant and thereafter to applicable
regulations and requirements for the activities approved; and for funds
to be used for economic development activities under Title I, all
regulations and requirements applicable to the use of CDBG funds for
such activities will apply.
IV. Retention and Recapture Agreement
The Retention and Recapture Agreement shall supersede the Grant
Agreement insofar as the same pertains to the funds retained by the
recipient. Copies of the form of the Retention and Recapture Agreement
can be obtained by the recipients from HUD's Office of Economic
Development, at the address and telephone numbers listed at the
beginning of this Notice, thirty (30) days after the date of
publication of this Notice. Recipients who elect to retain a percentage
of the unexpended grant funds, as set forth above, must indicate in the
agreement the percentage it elects to retain and cause the signed
agreement to be received by the Secretary on or before the Expiration
Date.
In the event any affected recipient shall fail to elect to
participate in the Retention Program on or before the Expiration Date,
the Secretary intends to terminate after the Expiration Date grant
agreements which are in default, and proceed to recover any unspent
UDAG funds in accordance with the provisions of the Act. Unspent (or
unexpended) UDAG funds means UDAG funds not obligated by the recipient
and/or developer for reimbursement of eligible costs paid or incurred
on the UDAG project on or before the Expiration Date. UDAGs not in
default or not being closed out will not be recaptured except as
permitted by the Act. HUD will make technical assistance available upon
request by any affected recipient regarding any UDAG grants, to discuss
the recipient's options under this Notice, or regarding any projects
proposed to be initiated pursuant to the Retention and Recapture
Agreement.
Dated: May 19, 1994.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 94-12821 Filed 5-25-94; 8:45 am]
BILLING CODE 4210-29-P
