Section .0100 ‑ General Provisions

Link to law: http://reports.oah.state.nc.us/ncac/title 04 - commerce/chapter 19 - community assistance/subchapter l/subchapter l rules.html
Published: 2015

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SUBCHAPTER 19L ‑ NORTH CAROLINA COMMUNITY DEVELOPMENT

BLOCK GRANT PROGRAM

 

SECTION .0100 ‑ GENERAL PROVISIONS

 

04 NCAC 19L .0101          PROGRAM PURPOSE AND OBJECTIVE

The purpose of the North Carolina Community Development

Block Grant Program is to develop viable communities by providing decent

housing and a suitable living environment and by expanding economic

opportunities, principally for persons of low and moderate income.  Consistent

with this primary objective, Community Development Block Grant funds will be

directed towards the specific objectives found in the amended Housing and

Community Development Act of 1974, Section 101(c).

The assistance provided under this program is intended to

help local governments meet needs that are not currently being addressed in

their communities.  These funds shall not be used to replace local financing of

ongoing community development activities.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C. 5301; 42 U.S.C. 5306(d); 24 C.F.R. 570.489;

Eff. July, 1, 1982;

Amended Eff. March 1, 1986; October 1, 1984; March 1,

1984.

 

 

04 NCAC 19L .0102          AUTHORITY

 

History Note:        Authority G.S. 143‑323; 143B‑276;

42 U.S.C.A. 5306(d);

Eff. July 1, 1982;

Amended Eff. March 1, 1984;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0103          DEFINITIONS

(a)  "Act" means Title I of the Housing and

Community Development Act of 1974, P.L. 93‑383, as amended.

(b)  "Applicant" means a local government which

makes application pursuant to the provisions of this Subchapter.

(c)  "CDBG" means the State‑administered

Community Development Block Grant Program.

(d)  "Chief Elected Official" of a local

government means either the elected mayor of a city or the chairman of a county

board of commissioners.

(e)  "Community Development Program" means the

annual program of projects and activities to be carried out by the applicant

with funds provided under this Subchapter and other resources.

(f)  "Department" means the North Carolina

Department of Commerce.

(g)  "Division" means the Department of Commerce's

Division of Community Assistance.

(h)  "HUD" means the U.S. Department of Housing

and Urban Development.

(i)  "Local Government" means any unit of general

city or county government in the State.

(j)  Low‑income families are those with a family

income of 50 percent or less of median‑family income.  Moderate‑income

families are those with a family income greater than 50 percent and less than

or equal to 80 percent of median‑family income.  For purposes of such

terms, the area involved and median income shall be determined in the same

manner as provided for under the Act.

(k)  "Low‑ and Moderate‑Income

Persons" means members of families whose incomes are within the income

limits of low‑ and moderate‑income families as defined in Paragraph

(j) of this Rule.

(l)  "Metropolitan Area" means a standard

metropolitan statistical area, as established by the U.S. Office of Management

and Budget.

(m)  "Metropolitan City" means a city as defined

by Section 102(a)(4) of the Act.

(n)  "Project" means one or more activities

addressing either:

(1)           community revitalization needs; or

(2)           economic development needs; or

(3)           development of housing for persons of low‑

and moderate‑income; or

(4)                

urgent needs of the applicant; or

(5)           infrastructure needs; or

(6)           scattered site housing.

(o)  "Recipient" means a local government that has

been awarded a Community Development Block Grant and executed a Grant Agreement

with the Department.

(p)  "Scattered site" means acquisition,

clearance, relocation, historic preservation and building rehabilitation

activities which benefit low or moderate income persons or eliminate specific

conditions of blight or decay on a spot basis not located in a slum or blighted

area.

(q)  "Secretary" means the Secretary of Department

of Commerce or his designee.

(r)  "State" means the State of North Carolina.

(s)  "Urban County" means a county as defined by

Section 102(a)(6) of the Act.

(t)  The definitions in this Rule apply to terms used in

this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.481 ‑ 570.483;

Eff. July 1,

1982;

Amended Eff.

March 1, 1995; June 1, 1993; May 1, 1992; September 1, 1990;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0104          WAIVERS

The Secretary may issue a written waiver of any requirements

of this Subchapter not required by law whenever he determines that undue

hardship to recipients or beneficiaries will result from applying the

requirement and where application of the requirement would adversely affect the

purposes of the Act.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.480;

Eff. July 1, 1982;

Amended Eff. June 1, 1994.

 

 

 

04 NCAC 19L .0105          ELIGIBLE APPLICANTS

Eligible applicants are all local governments excluding

those designated as metropolitan cities or urban counties by Section 102(a)(4)

and (6) of the Act.  When two or more local governments submit a single application,

one of them must be identified in the application as the lead entity.

 

History Note:        Authority 143B‑10; 143B‑431;

42 U.S.C.A. 5306(d);

Eff. October 1, 1984;

Amended Eff. March 1, 1995; March 1, 1986.

 

 

 

04 NCAC 19L .0106          AMENDMENTS ADOPTED BY REFERENCE

All referenced federal documents in this Subchapter are

hereby adopted by reference to include any later amendments pursuant to G.S.

150B‑14(c).

 

History Note:        Authority 143B‑10; 143B‑431;

150B‑14;

Eff. April 1, 1989.

 

 

 

 

 

SECTION .0200 ‑ ELIGIBLE APPLICANTS

 

04 NCAC 19L .0201          GENERAL

 

History Note:        Authority 42 U.S.C.A. 5306(d);

Eff. July 1, 1982;

Amended Eff. March 1, 1984; April 1, 1983;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0202          APPLICATION IN BEHALF OF OTHERS

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5306(d); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Repealed Eff. April 1, 1983.

 

 

 

04 NCAC 19L .0203          JOINT APPLICATIONS

04 NCAC 19L .0204          LIMITATIONS

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5306(d); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. April 1, 1983;

Repealed Eff. March 1, 1984.

 

 

 

 

 

SECTION .0300 ‑ ELIGIBLE AND INELIGIBLE ACTIVITIES

 

04 NCAC 19L .0301          ELIGIBLE ACTIVITIES

This Subchapter incorporates by reference as eligible

activities those activities described in the Housing and Community Development

Act of 1974 as amended, including subsequent amendments and editions, under

Section 105 (a), "Eligible Activities," and in 24 CFR 570.482. 

Additional general guidance is found in 24 CFR 570.201‑206.  Copies of

these sections of federal law and regulation are available for public

inspection from the Division of Community Assistance.  Single copies are

available from this Division in Raleigh, North Carolina, for one dollar ($1.00)

each.

 

History Note:        Authority 143B‑10; 143B‑431;

42 U.S.C. 5305;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; March 1,

1986; March 1, 1984.

 

 

 

04 NCAC 19L .0302          INELIGIBLE ACTIVITIES

All activities not defined as eligible in Rule .0301 shall

be considered ineligible for assistance under this Subchapter.  A general guide

regarding ineligible activities is found in 24 CFR 570.207.  Copies of this federal

regulation are available for public inspection and may be obtained from the

Division of Community Assistance.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. September 1, 1990; March 1, 1986.

 

 

 

 

 

section .0400 – distribution of funds

 

04 NCAC 19L .0401          GENERAL

(a)  The Division shall designate specific due dates or open

periods of time for submission of grant applications under each category, based

on the amount of funds available and coordination with other federal program

funding cycles.  Urgent Needs applications may be submitted at any time.

(b)  In cases where the Division makes a procedural error in

the application selection process that, when corrected, would result in

awarding a score sufficient to warrant a grant award, the Division may

compensate that applicant at the earliest time sufficient funds become

available or with a grant in the next funding cycle.

(c)  Applicants may apply for funding under the grant

categories of Community Revitalization,  Housing Development, Scattered Site

Housing, Infrastructure, Demonstration Projects, Urgent Needs, and Economic

Development.  Applicants shall not apply for Contingency funding.  Contingency

awards may be made to eligible applicants in any category.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.483;

Eff. July 1,

1982;

Amended Eff.

August 1, 1998; March 1, 1986; October 1, 1984; March 1, 1984;

Temporary

Amendment Eff. January 1, 2001;

Amended Eff.

August 1, 2002.

 

04 NCAC 19L .0402          TYPES OF GRANTS

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5304(b)(3); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1984;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0403          SIZE AND USE OF GRANTS MADE TO

RECIPIENTS

(a)  There is no minimum grant amount which applicants may

request or be awarded.  Grant awards made to any one recipient shall not exceed

the following amount in each grant category: Community Revitalization:

Concentrated Needs subcategory - seven hundred thousand dollars ($700,000),

Infrastructure category ‑ eight hundred fifty thousand dollars

($850,000), and Scattered Site Housing category - four hundred thousand dollars

($400,000) Housing Development ‑ two hundred fifty thousand dollars

($250,000); Urgent Needs ‑ six hundred thousand dollars ($600,000); Contingency ‑ six hundred thousand dollars

($600,000).  Applicants shall not have a project or combination of

projects under active consideration for funding which exceeds one million two

hundred fifty thousand dollars ($1,250,000), except for Urgent Needs projects,

Demonstration projects, Capacity Building, and Scattered Site Housing. 

Applicants in the Community Revitalization category shall choose to apply for

either a Concentrated Needs award, or a Revitalization Strategy award.

(b)  No local government may receive more than a total of

one million two hundred fifty thousand dollars ($1,250,000) in CDBG funds in

the period that the state distributes its annual HUD allocation of CDBG funds;

except that local governments may also receive up to six hundred thousand

dollars ($600,000) for a project that addresses Urgent Needs and funds for one

demonstration project in addition to other grants awarded during the same time

period.

(c)  Concentrated Needs subcategory applicants may spend a

portion of their total grant amount to finance local option activities.  Up to

15 percent may be spent on eligible activities which do not need to be directly

related to proposed projects.  Job creation activities are not eligible local

option activities.  Local option activities shall not be competitively rated by

the Division, but may be limited to specific eligible activities.  Each local

option project must show that:

(1)           At least fifty‑one percent of the

CDBG funds proposed for each activity will benefit low‑ and moderate‑income

persons, except that CDBG funds may be used for acquisition, disposition, or

clearance of vacant units to address the national objective of prevention or

elimination of slums or blight; and

(2)           CDBG funds proposed for each activity will

address the national objective of benefiting low‑ and moderate‑income

persons, or aid in the prevention or elimination of slums or blight.

(d)  The Division may review grant requests to determine the

reasonableness and appropriateness of all proposed administrative and planning

costs.  Notwithstanding Rule .0910 of this Subchapter, grantees may not

increase their approved planning and administrative budgets without prior

Division approval.  In no case, may applicants budget and expend more than 18

percent of the sum of funds requested and program income for administrative and

planning activities for each project, except that demonstration funds may be

awarded for projects limited to planning activities only in which case all

funds will be spent for planning and administration.

(e)  Applicants may spend CDBG funds in those areas in which

the applicant has the legal authority to undertake project activities.

(f)  Grants to specific recipients shall be provided in

amounts commensurate with the size of the applicant's program.  In determining

appropriate grant amounts for each applicant, the Division may consider an

applicant's need, proposed activities, all proposed administrative and planning

costs, and ability to carry out the proposed activities.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.483; 42 U.S.C. 5301;

Eff. July 1,

1982;

Amended Eff. August 1, 1998; February 1, 1996; March 1,

1995; June 1, 1994; June 1, 1993;

June 1, 1992.

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0404          GRANT CATEGORY ALLOCATION

Each program year, funds shall be reserved for each grant

category.  When authorized by the General Assembly the Division may set aside

up to two percent for demonstration grants.  The remaining funds shall be distributed

by the Division to Community Revitalization grant applications unless otherwise

specified in the General Assembly.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C. 5304; 24 C.F.R. 570.482; 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; June 1, 1994; June 1, 1993;

May 1, 1992; April 1, 1990.

 

 

 

04 NCAC 19L .0405          MULTI‑YEAR GRANT COMMITMENTS

 

History Note:        Authority G.S. 143‑323; 24 C.F.R.

570.489; 24 C.F.R. 570.491;

Eff. July 1, 1982;

Repealed Eff. March 1, 1984.

 

 

 

04 NCAC 19L .0406          INDIVIDUAL GRANT AMOUNTS

 

History Note:        Authority G.S. 143‑323; 24 C.F.R.

570.489;

Eff. July 1, 1982;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0407          GENERAL APPLICATION REQUIREMENTS

(a)  Local governments shall submit applications as

prescribed by this Rule in order to be considered for funding.  Selection of

applications for funding shall be based primarily on information contained in

the application; thus applications must contain sufficient information for the

Division to rate them against the selection criteria.  In addition, the

following may be considered: information from any source which regards the

eligibility of the applicant or application; the legality or feasibility of

proposed activities; the applicant's compliance with application procedures

specified in this Subchapter or the accuracy of the information presented in

the application; evaluation of proposed projects by on‑site review; and

category‑specific information described in Sections .0500, .0700, .0800,

.1200, .1300, and .1700 of this Subchapter.  All applicants shall address their

projects to one of the following grant categories: Community Revitalization

(either Concentrated Needs, or Revitalization Strategies), Housing Development,

Urgent Needs, Demonstration, Scattered Site Housing, Infrastructure, and

Economic Development.  Applicants may apply in more than one grant category,

providing the total grant application and award does not exceed the maximum

limits described in Paragraphs (a) and (b) of Rule .0403 of this Section. 

Applicants shall submit an application that describes each project in

sufficient detail to be rated.

(b)  Applications must be received by the Division's

administrative offices in Raleigh before 5:00 p.m. on the submission date or

sent by mail and postmarked on the submission date.

(c)  Applicants must provide citizens with adequate

opportunity for meaningful involvement in the development of Community

Development Block Grant applications.  Specific citizen participation

guidelines are described further in Rule .1002 of this Subchapter.  If the

Division is aware of an applicant's failure to meet these citizen participation

requirements, the Division may not rate the application.

(d)  The Division may submit all CDBG applications and

environmental review records as may be required by the National Environmental

Policy Act and the State Environmental Policy Act to the State Clearinghouse of

the Department of Administration for review and comments.  The Division may

require each applicant to submit a written description of how the applicant

proposes to address each comment received from the State Clearinghouse.

(e)  The applicant shall certify to the Division that it

will comply with all applicable federal and state laws, regulations, rules and

Executive Orders.  Copies of these federal and state requirements are available

for public inspection from the Division.

(f)  Applicants must comply with the Housing and Community

Development Act of 1974 as amended, all applicable federal and state laws,

regulations, rules, and Executive Orders.

(g)  Application requirements described in this Rule .0407

do not apply to demonstration grants and Urgent Needs grants, except for

Paragraphs (a), (d), and (f).

(h)  For multi‑family rental housing activities, the

applicant must state in the application the standards it has adopted for

determining affordable rents for such activities.

(i)  Applicants that receive CDBG funding for projects may

charge the cost of application preparation to prior CDBG programs or to the

current program provided that procurement procedures consistent with 24 CFR

85.36 are followed.  No more than three thousand five hundred dollars ($3,500) may

be charged to the CDBG program for application preparation,

(j)  Applicants may apply for a Capacity Building grant in

any category except in the Urgent Needs and Demonstration Projects categories.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(a); 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; March 1, 1995; June 1, 1994;

June 1, 1993; June 1, 1992;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0408          SPECIAL ALLOCATIONS FROM HUD

Periodically the Department may receive from HUD special

allocations of CDBG funds that are separate from its annual funding allocation

to meet specific community development needs and priorities.  The Division will

consult with local officials and hold at least one public hearing prior to the

distribution of any special CDBG allocation.  The provisions of 4 NCAC 19L

shall apply to the administration of any special allocation, except where

otherwise required by a federal statute or regulation applicable to the special

allocation.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C. 5301;

Eff. August 1, 1983.

Amended Eff. June 1, 1993; September 1, 1990; March 1,

1986.

 

 

 

section .0500 – community revitalization projects

 

04 NCAC 19L .0501          DESCRIPTION

(a)  The Community Revitalization category includes

activities in which a majority of funds is directed towards improving,

preserving or developing residential areas.  All eligible CDBG activities may

be undertaken for the purpose of community revitalization.  Applications for

funding may involve single or multiple activities, addressing one or more needs

in the area.  All Community Revitalization activities, must be carried out

within defined project areas.  Community Revitalization funds shall be

distributed to eligible units of local government on a competitive basis. 

Community Revitalization projects shall be evaluated against other Community

Revitalization project proposals.

(b)  The Community Revitalization category includes a

subcategory for Revitalization Strategies activities which provides funds to

selected governments to address multiple need in high poverty areas.  This new

subcategory shall provide funding to help carry out a long term revitalization

strategy.  Up to three hundred fifty thousand dollars ($350,000) per year,

shall be awarded to eligible local government to carry out a strategy over

three to five years.  Revitalization Strategies funds may be used for any of

the following components as part of strategies to address high poverty arrears

in Tier 1/Tier 2 counties and non-entitlement municipalities with State

Development Zones: housing, public services, economic development, public

facilities, infrastructure.  Activities must be targeted toward a defined

geographical area that  has at least 25% poverty and must involve collaboration

with community/economic development organizations and partners. 

(c)  The Community Revitalization category includes a subcategory

for concentrated needs activities which provides funds for improving,

preserving, or developing residential neighborhoods.  Concentrated Needs may

not include more than one project.  A project may have two sub-areas.  Projects

may have single or multiple activities except a project may not have only water

and sewer activities.  The maximum award amount for a Concentrated Needs

application is seven hundred thousand dollars ($700,000).  The highest priority

is given to housing needs, substandard housing, lack of water/sewer, and the

second priority is given to neighborhood needs (streets and drainage). 

Concentrated needs funds can be used for rehabilitation, acquisition,

clearance, relocation, disposition, water and wastewater, and streets and drainage.

 

 History Note:       Authority

G.S. 143B‑10; 143B‑431; 42 U.S.C.A. 5301; 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; March 1, 1995; June 1, 1994;

June 1, 1993; October 1, 1990;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0502          ELIGIBILITY REQUIREMENTS

(a)  Applications for concentrated needs subcategory funds

must show that:

(1)           At least 51 percent of the CDBG funds

proposed for each project shall benefit low‑ and moderate‑income

persons, except that CDBG funds proposed for local option activities may be

used for acquisition, disposition, or clearance of vacant units to address the

national objective of prevention or elimination of slums or blight; and

(2)           CDBG funds proposed for each activity shall

meet a national objective as specified in HUD regulations previously

incorporated by reference, except that funds shall not be used to meet the

national objective of urgent need which is covered by Rule .0801 of this

Subchapter.

Applications that do not meet these eligibility requirements

shall not be rated or funded.  In designing projects which meet these

requirements, applicants must ensure that activities do not benefit moderate‑income

persons to the exclusion of low‑income persons.

(b)  Applicants for Revitalization Strategies subcategory

funds must show that:

(1)           the defined area

has at least 25% poverty as determined in the most recent decennial census and

defined in HUD CPD NOTICE 97-01 paragraph D section 2 third bullet as all of

census tracts/block numbering areas in the area have at least a 20% poverty

rate, and at least 90% of them have at least a 25% poverty rate; and the area

is primarily residential.    

(2)           CDBG funds proposed for acquisition,

clearance, and disposition of vacant units shall address a  national objective

of preventing or eliminating slums or blight.

(c)  Applicants shall have the capacity to administer a CDBG

program.  The Division may examine the following areas to determine capacity:

(1)           audit and monitoring findings on previously

funded Community Development Block Grant programs, and the applicant's fiscal

accountability as demonstrated in other state or federal programs or local

government financial reports; and

(2)           the rate of expenditure of funds and

accomplishments in previously funded CDBG programs.  Applicants that show a

lack of capacity shall not be rated or funded.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5301; 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; March 1, 1995; June 1, 1994;

June 1, 1993; September 1, 1990;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0503          APPLICATION CONTENTS

04 NCAC 19L .0504          FUNDING CYCLE

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5304(a)(1); 42 U.S.C.A. 5306; 24 C.F.R. 570.489;

24 C.F.R. 570.490;

Eff. July 1, 1982;

Amended Eff. March 1, 1984; April 1, 1983;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0505          SELECTION CRITERIA

Projects shall be evaluated and rated in accordance with the

following rating factors:

(1)           benefit to low and moderate income persons,

(2)           project severity of need,

(3)           project treatment of need,

(4)           appropriateness and feasibility of proposed project

activities, and

(5)           local commitment of funds and community efforts.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(a)(1); 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; March 1, 1995; June 1, 1993;

March 1, 1986; March 1, 1984.

 

 

 

04 NCAC 19L .0506          TARGETING

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5301; 24 C.F.R. 570.489;

Eff. July 1, 1982;

Repealed Eff. October 1, 1984.

 

 

 

 

 

SECTION .0600 ‑ ECONOMIC DEVELOPMENT PROJECTS

 

04 NCAC 19L .0601          DEFINITION

04 NCAC 19L .0602          ELIGIBILITY REQUIREMENTS

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5301; 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1984; April 1, 1983;

Repealed Eff. March 1, 1986.

 

 

 

04 NCAC 19L .0603          APPLICATION CONTENTS

04 NCAC 19L .0604          FUNDING CYCLE

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5304(a)(1); 42 U.S.C.A. 5306; 24 C.F.R. 570.489;

24 C.F.R. 570.490;

Eff. July 1, 1982;

Amended Eff. March 1, 1984; April 1, 1983;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0605          SELECTION CRITERIA

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5304(a)(1); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1984; April 1, 1983;

Repealed Eff. March 1, 1986.

 

 

 

04 NCAC 19L .0606          TARGETING

 

History Note:        Authority G.S. 143‑323; 24 C.F.R.

570.489;

Eff. July 1, 1982;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0607          PRELIMINARY AWARDS

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5301;

Eff. March 1, 1984;

Repealed Eff. March 1, 1986.

 

 

 

 

 

SECTION .0700 ‑ DEVELOPMENT PLANNING PROJECTS

 

04 NCAC 19L .0701          DEFINITION

04 NCAC 19L .0702          ELIGIBILITY REQUIREMENTS

 

History Note:        Authority G.S. 143‑323; 143B‑10;

42 U.S.C.A. 5301; 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. September 1, 1990; May 1, 1988; March 1,

1986; February 1, 1985;

Repealed Eff. May 1, 1992.

 

 

 

04 NCAC 19L .0703          APPLICATION CONTENTS

04 NCAC 19L .0704          FUNDING CYCLE

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5304(a)(1); 42 U.S.C.A. 5306; 24 C.F.R. 570.489;

24 C.F.R. 570.490;

Eff. July 1, 1982;

Amended Eff. March 1, 1984; April 1, 1983;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0705          SELECTION CRITERIA

 

History Note:        Authority G.S. 143‑323; 143B‑10;

42 U.S.C.A. 5304(a)(1); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1986; March 1, 1984; April 1, 1983;

Repealed Eff. May 1, 1992.

 

 

 

04 NCAC 19L .0706          DEFINITION

Demonstration grants are provided to assist local

governments to develop innovative strategies for addressing specific community

development needs and priorities.

 

History Note:        Authority G.S. 143-323; 143B-10; 42

U.S.C.A. 5301; 24 C.F.R. 570.489;

Eff. August 1, 1998.

 

 

 

04 NCAC 19L .0707          ELIGIBILITY REQUIREMENTS

(a)  Applications for Demonstration Projects must show that:

(1)           the proposed project meets a national

objective in accordance with 24 CFR 570.483; and

(2)           the proposed project meets the specific

purpose and priorities adopted by the General Assembly.

Applicants that do not meet these eligibility requirements

shall not be considered for funding.

(b)  Applicants shall have the capacity to administer a CDBG

program.  The Division may examine the following areas to determine capacity:

(1)           audit and monitoring findings on previously

funded Community Development Block Grant programs, and the applicant's fiscal

accountability as demonstrated in other state and federal programs or local

government financial reports; and

(2)           the rate of expenditure of funds and

accomplishments in previously funded CDBG programs.

Applicants that show a lack of capacity shall not be

considered for funding.

 

History Note:        Authority G.S. 143-323; 143B-10; 42

U.S.C.A. 5301; 24 C.F.R. 570.489;

Eff. August 1, 1998.

 

 

 

04 NCAC 19L .0708          SELECTION CRITERIA

Selection criteria for demonstration grants shall be:

(1)           Benefit to low and moderate income people.

(2)           Eligibility of activities.

(3)           Project feasibility.

 

History Note:        Authority G.S. 143-323; 143B-10; 42

U.S.C.A. 5301; 24 C.F.R. 570.489;

Eff. August 1, 1998.

 

 

 

 

SECTION .0800 ‑ URGENT NEEDS/CONTINGENCY PROJECTS

 

04 NCAC 19L .0801          DESCRIPTION

Urgent Needs grants are provided to localities to meet

certain community development needs that have a particular urgency because

conditions pose a serious and immediate threat to the health and welfare of the

community.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(b)(3); 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. March 1, 1986.

 

04 NCAC 19L .0802          ELIGIBILITY REQUIREMENTS

Urgent Needs grant applicants must meet all four of the

following eligibility requirements:

(1)           the need addressed by the application must have

arisen during the preceding 18‑month period and represent an imminent

threat to public health or safety;

(2)           the activity is designed to alleviate existing

conditions which pose a serious and immediate threat to the health or welfare

of the community which are of recent origin or which recently became urgent;

(3)           the applicant does not have sufficient local

resources; and

(4)           other financial resources are not available to

alleviate the urgent need.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(b)(3); 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; March 1, 1995; June 1, 1993;

March 1, 1986; March 1, 1984;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0803          APPLICATION CONTENTS

04 NCAC 19L .0804          FUNDING CYCLE

 

History Note:        Authority G.S. 143‑323; 42 U.S.C.A.

5304(b)(3); 42 U.S.C.A. 5306; 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1984;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .0805          SELECTION CRITERIA

Selection of Urgent Needs grant recipients will be based

upon availability of funds and eligibility requirements as presented in Rule

.0802 of this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(a)(1); 24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; March 1, 1986; October 1,

1984; April 1, 1983.

 

section .0900 – grant administration

 

04 NCAC 19L .0901          GRANT AGREEMENT

(a)  Upon approval of the application by the Division, a

written grant agreement shall be executed between the recipient and the

Division.  These Rules, the approved application, and any subsequent amendments

to the approved application shall become a part of the grant agreement.

(b)  The grant agreement in its original form and all

modifications thereto shall be kept on file in the office of the recipient in

accordance with Rule .0911 of this Section.

(c)  The Division may condition the grant agreement until

the recipient demonstrates compliance with all applicable laws and

regulations.  In the case of Housing Development and Revitalization Strategies

projects the grant agreement may be conditioned until legally binding

commitments have been obtained from all participating entities.

(d)  Neither CDBG nor non‑CDBG funds involved in a

project may be obligated, nor may any conditioned project activities begin

until the Division releases in writing any and all applicable conditions on the

project.  Recipients may incur costs prior to release of conditions with prior

Division approval in accordance with Rule .0908 of this Section.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.483;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; June 1, 1994; June 1, 1983;

September 1, 1990; May 1, 1998;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0902          METHOD OF ADMINISTRATION

(a)  Recipients may delegate to statutorily authorized

subrecipients the responsibility of undertaking or carrying out any specified

community development activities.  All entities so designated under this Paragraph

by recipients to undertake or carry out community development activities

pursuant to this Subchapter shall be considered subrecipients.

(b)  Recipients may contract with any person, association,

or corporation in undertaking specified community development activities.  All

contracts, shall be made in conformance with the procurement standards set

forth in Rule .0908 of this Section.  Rule .0908 does not apply to recipients

in the selection of subrecipients.

(c)  Subrecipients undertaking or carrying out community

development activities shall do so in conformance with Rule .0903, METHOD OF

PAYMENT; Rule .0906, FINANCIAL MANAGEMENT SYSTEMS; Rule .0907, PROGRAM INCOME;

Rule .0908, PROCUREMENT STANDARDS; Rule .0909, PROPERTY MANAGEMENT STANDARDS;

and Rule .0911, RECORDKEEPING.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

153A‑376(b); 160A‑456(b); 24 C.F.R. 570.488;

24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1995; June 1, 1993; March 1, 1986;

April 1, 1983.

 

 

 

04 NCAC 19L .0903          METHOD OF PAYMENT

(a)  Advance payments will be made by the Department to

recipients when the following conditions are met:

(1)           The recipient has

demonstrated to the Secretary, initially through certification in a form

prescribed by the Department and subsequently through performance, that

procedures have been established to insure a maximum of three banking days time

elapsing between the receipt of funds to it and its disbursement of such funds.

(2)           The recipient's financial

management system meets the standards for fund control and accountability

prescribed in Rule .0906 FINANCIAL MANAGEMENT SYSTEMS of this Subchapter.

(3)           No payment to the recipient

from the Department shall be for an amount less than one hundred dollars

($100.00).

(4)           All requests for advance

payments are required to meet immediate disbursing needs.

(b)  Recipients who do not meet or adhere to the conditions

in Paragraph (a) of this Rule will not receive advance payments.  Those

recipients will receive grant payments on a reimbursement basis.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489; 42 U.S.C.A. 5304(g);

Eff. July 1, 1982;

Amended Eff. March 1, 1995; June 1, 1993; September 1,

1990; April 1, 1989.

 

 

 

04 NCAC 19L .0904          ESCROW ACCOUNTS

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

159‑7 through 159‑38; 24 C.F.R. 570.494;

24 C.F.R. 570.496; 42 U.S.C.A. 5304(b),(d),(e);

Eff. July 1, 1982;

Amended Eff. May 1, 1992; March 1, 1984; April 1, 1983;

Repealed Eff. March 1, 1995.

 

 

 

04 NCAC 19L .0905          LUMP SUM DRAWDOWN FOR PROPERTY

REHABILITATION

 

History Note:        Authority G.S. 143‑323; 143B‑10;

42 U.S.C.A. 5304(g); 24 C.F.R. 570.489;

24 C.F.R. 570.494;

Eff. July 1, 1982;

Amended Eff. September 1, 1990;  May 1, 1988; March 1,

1984; April 1, 1983;

Repealed Eff. June 1, 1993.

 

 

 

04 NCAC 19L .0906          FINANCIAL MANAGEMENT SYSTEMS

Recipient financial management systems shall provide for

accurate, current and complete disclosure of the financial results of each

grant program in accordance with fiscal control and reporting requirements set

forth in G.S. 159, Article III, the Local Government Budget and Fiscal Control

Act.  Recipients shall meet the following requirements:

(1)           All grant funds shall be expended in accordance

with a budget ordinance or project ordinance adopted under G.S. 159‑8 and

G.S. 159‑13.2 respectively;

(2)           A recipient may deposit or invest all or part of

the cash balance of any grant fund; however, all interest earned shall be

returned to the Department in accordance with Rule .0907(c) of this Section;

(3)           Investment deposits shall be secured as provided in

G.S. 159‑31(b);

(4)           The recipient shall designate as its official

depositories one or more banks or trust companies in the State in accordance

with G.S. 159‑31(a);

(5)           All budgetary accounting for appropriations of grant

funds shall be in accordance with the procedures for incurring obligations and

disbursements as set forth in G.S. 159‑28;

(6)           Each recipient shall establish an accounting system

in accordance with G.S. 159‑26;

(7)           The recipient's finance officer, and each officer,

employee, or agent who handles or has in his custody more than one hundred

dollars ($100.00) of grant funds at any time, or who handles or has access to

the recipient's inventories, shall be bonded in accordance with G.S. 159‑29;

(8)           Each recipient shall maintain records that identify

adequately the source and application of funds for grant‑supported

activities.  These records shall contain information pertaining to federal

awards and authorizations, obligations, unobligated balances, assets,

liabilities, outlays, and income;

(9)           A system for procedures for procurement and

property management shall be provided in accordance with Rule .0908 and Rule

.0909 of this Section;

(10)         All cash receipts must be deposited with, or to the

credit of, the finance officer.  This includes program revenues, reimbursements

of travel, vendor payments or other items previously recorded as expenditures,

and all other grant monies from the Department;

(11)         Recipients must develop a systematic method to

assure timely and appropriate resolution of audit findings and recommendations;

(12)         Recipients shall require subgrantees to adopt the

standards set forth in this Rule;

(13)         Recipients shall comply with the Office of

Management and Budget Circular A‑87, entitled Cost Principles for State

and Local government, which is incorporated in these Rules by reference

including subsequent amendments and editions.  A copy of this circular is

available from the Division of Community Assistance, Raleigh, North Carolina. 

In applying OMB A‑87 the term "federal agency" shall mean the

Department;

(14)         Recipients shall record the receipt and expenditure

of project revenues from taxes, special assessments, evies, fines, etc., in

accordance with generally accepted accounting principles;

(15)         Subrecipients shall comply with the Office of

Management and Budget Circular A‑110, entitled Uniform Administrative

Requirements for Grants and other Agreements with Institutions of Higher

Education, Hospitals, and other Nonprofit Organizations which is incorporated

in these Rules by reference including subsequent amendments and editions.  A

copy of this circular is available from the Division of Community Assistance,

Raleigh, North Carolina.

 

History Note:        Authority G.S. 14‑234; 143B‑10;

143B‑431; 24 C.F.R. 570.489; 24 C.F.R. 570.496; 42 U.S.C.A.

5304(b),(d),(e);

Eff. July 1, 1982;

Amended Eff. August 1, 1998; June 1, 1994; June 1, 1993;

September 1, 1991; September 1, 1990. 

 

 

 

04 NCAC 19L .0907          PROGRAM INCOME

(a)  Definition.  Program Income is defined as gross income

earned by the recipient from grant supported activities.  Such earnings may

include, but not be limited to, sale of property, interest received from a loan

program, and the return of sales taxes on purchases made during the program. 

Receipts derived from the operation of a public work or facility, the

construction of which was assisted by this program, do not constitute program

income.  Income generated under the Development Loan Fund program, including

loan repayments, fees, lease payments does not constitute program income.

(b)  Unless the grant agreement provides otherwise,

recipients shall have no obligation to the Department with respect to royalties

received as a result of copyrights or patents produced under the grant or other

agreement.  Recipients must however, follow the procedures set forth in Rule

.0909 PROPERTY MANAGEMENT STANDARDS.

(c)  All interest earned on grant funds prior to

distribution shall be returned to the Department, except recipients may keep

one hundred dollars ($100.00) per year for administrative expenses in

accordance with 24 CFR 570.489(c)(2).

(d)  Recipients shall record the receipt and expenditure of

revenues (such as taxes, special assessments, levies, fines, etc.) as a part of

grant project transactions when such revenues are specifically earmarked for a

grant project in accordance with the grant agreement.

(e)  Unless otherwise required, program income generated by

a pre‑1986 grant may be retained by the recipient.  Program income is

identified by the grant year in which the activities which generated the

program income were funded.  Pre‑1986 program income shall be added to

funds committed to a current project and used for activities approved in the

project's application.  Pre‑1986 program income shall be expended prior

to requesting additional funds from the Department or shall be used in future

CDBG projects.

(f)  Program Income generated by grants made in 1986 or

afterwards shall be returned to the Department except when:

(1)           the recipient shall propose at the time of

application or at the time the program income is anticipated, a use or uses for

the projected program income, and

(2)           the Department determines that, at the time

of the proposal, the use of the projected program income meets federal

requirements prohibiting the state from recapturing the program income; or

(3)           the recipient, designated at the time of

the preliminary grant award as a "severely distressed county" pursuant

to G.S. 105‑130.40(c), or a city in such a county, wishes to retain the

program income to establish a local economic development revolving loan fund. 

Any activities that are eligible under Title I of the federal Housing and

Community Development Act of 1974, as amended, and that meet at least one of

the three national objectives of the Housing and Community Development Act may

be undertaken.  If the designation, pursuant to G.S. 105‑130.40(c), as a

"severely distressed county" is removed from a county, projects

having received at least a preliminary grant award prior to the removal of the

designation may continue to retain program income resulting from that grant as

provided in this subsection.  Provisions of 4 NCAC 19L .0913 apply at the time

of closeout; or

(4)           the program income is generated from an

Entrepreneurial Empowerment project, and the Department has approved the plan

for re-use of program income.

(g)  Income after closeout and not subject to Rule .0907(e)

and (f) of this Subchapter.

(1)           Except as may be otherwise provided under

the terms of the grant agreement or any closeout agreement, program income of

twenty-five thousand dollars ($25,000) or more received annually subsequent to

the CDBG Program closeout shall be used for any eligible activity pursuant to

Rule .0301 of this Subchapter.  Recipients must receive Division approval in

writing prior to obligation of program income under this Paragraph to determine

if the proposed use is plainly appropriate to meeting the recipient's needs and

objectives.  When income received is less than twenty-five thousand dollars

($25,000) annually, the recipient may spend the funds at the end of the 12

month period according to its own needs; and

(2)           Accurate records shall be kept on all

program income and reported annually to the Division when the annual amount

exceeds twenty-five thousand dollars ($25,000) and to determine when the

twenty-five thousand dollars ($25,000) threshold is exceeded subsequent to

grant closeout.

(h)  Program income generated under the Development Loan

Fund program, including loan repayments, fees, lease payments shall meet all

the requirements outlined in 24 CFR 570.489(e) and the contract between the

unit of local government and the Department of Housing and Urban Development.

 

History Note:        Filed as Temporary Amendment Eff. August

19, 1988 for a period of 180 days to expire on February 15, 1989;

Authority G.S. 143B-431; 153A-376; 160A-456; 24 C.F.R.

570.489(e);

Eff. July 1, 1982;

Amended Eff. August 1, 1998; March 1, 1995; June 1, 1993;

September 1, 1991; September 1, 1990.

 

 

 

04 NCAC 19L .0908          PROCUREMENT STANDARDS

(a)  Local governments shall follow the procurement

standards established in the Administrative Requirements for Grants and

Cooperative Agreements to State, Local and Federally Recognized Indian Tribal

Governments (24 C.F.R., Part 85) and HUD implementing regulations contained in

24 CFR 570.489(g), which explicitly prohibit cost plus a percentage of cost and

percentage of construction cost methods of contracting.  This Subchapter

incorporates by reference the federal law and regulations described in 24 CFR,

Part 85, 24 CFR 570.489(g), and 24 CFR 570.489(h), including subsequent

amendments and editions.  Copies of these sections of federal law and

regulation are available for public inspection from the Division of Community

Assistance.  Single copies are available from this Division in Raleigh, North

Carolina, for one dollar ($1.00) each.

(b)  Recipients may incur costs with written approval of the

Division for the procurement of supplies, equipment, construction and services

before the Grant Agreement between the recipient and the Division has been

executed.  In the case of program amendments, recipients may not incur costs

for the procurement of supplies, equipment, construction and services that are

the subject of the program amendment until the program amendment has been

approved in writing by the Division.  Recipients that incur costs prior to

execution of the grant agreement must ensure that the activities are eligible

and meet requirements of 24 CFR Part 58, Environmental Review.

(c)  Recipients must also comply with the North Carolina

General Statutes applicable to the procurement of supplies, equipment,

construction and services.  Relevant state laws include:

(1)           Conflict of Interest, G.S.

14‑234 (cities and counties);

(2)           Public Building Contracts,

G.S. 143‑128 through 135 (cities and counties); and

(3)           Model payment and

performance bond, G.S. 44A‑25 through 33 (cities and Counties).

(d)  Additional rules governing property acquisition are

found in this Subchapter under Rule .1003 ACQUISITION AND RELOCATION; Rule

.0907 PROPERTY MANAGEMENT STANDARDS; Rule .1001 EQUAL OPPORTUNITY; and Rule

.1006 LABOR STANDARDS.

(e)  The requirements of the Office of Management and Budget

Circular No. A‑87, Cost Principles for State and Local Governments, shall

apply to the procurement of materials and services funded in whole or in part

with CDBG funds.

 

History Note:        Authority G.S. 14‑234; 143‑128

through 143‑135; 143B‑431; 153A‑158;

153A‑163 through 153A‑165; 159‑15; 42

U.S.C.A. 5304(b)(4); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; April 1,

1989; March 1, 1984.

 

 

 

04 NCAC 19L .0909          PROPERTY MANAGEMENT STANDARDS

This Rule prescribes uniform standards governing the use and

disposition of property acquired in whole or in part with Community Development

Block Grant funds.

(1)           Definitions.

(a)           "Real property"

means land, including land improvements, structures and appurtenances thereto,

excluding movable machinery and equipment.

(b)           "Personal property"

means any kind of property except real property.  It may be tangible ‑

having physical existence, or intangible ‑ having no physical existence,

such as patents, inventions, and copyrights.

(c)           "Nonexpendable personal

property" means tangible personal property having a useful life of more

than one year and an acquisition cost of one thousand dollars ($1,000.00) or

more per unit.

(d)           "Expendable personal

property" refers to all tangible personal property other than

nonexpendable property.

(e)           "Acquisition cost of

purchased nonexpendable personal property" means the net invoice unit

price of the property including the cost of modifications, attachments,

accessories, or auxiliary apparatus necessary to make the property useable for

the purpose for which it was acquired.  Other charges such as the cost of

installation, transportation, taxes, duty, or protective in‑transit insurance,

shall be included or excluded from the unit acquisition cost in accordance with

the regular accounting practices.

(2)           Real Property.

(a)           Title to real property shall

vest in the recipient subject to the condition that the recipient shall use the

real property for the authorized purpose of the original grant as long as

needed.

(b)           The recipient shall obtain

prior approval by the Division for the use of the real property in other

projects when the recipient determines that the property is no longer needed

for the original grant purposes.  Use in other projects will be limited to

those under other federal and state grant programs, or programs that have

purposes consistent with those authorized for support by the Department.

(c)           When the real property is no

longer needed as provided in (a) and (b) of this Paragraph, the recipient shall

request disposition instructions from the Division, according to the following

rules:

(i)            The recipient may be

permitted to retain title after it compensates the program budget in an amount

computed by applying the CDBG percentage of participation in the cost of the

original project to the current fair market value of the property.

(ii)           The recipient may be

directed to sell the property under guidelines provided by the Division.

(3)           Nonexpendable Personal Property. 

Title to nonexpendable personal property whose acquisition cost is borne in

whole or part by Community Development Block Grant funds shall be vested in the

recipient subject to the following restrictions:

(a)           Use.  The recipient shall use

the property as long as there is a need for such property to accomplish the

objectives of the Housing and Community Development Act of 1974, as amended,

whether or not the recipient is supported by funds appropriated under this Act.

(b)           Disposition.  When the

recipient no longer needs the property as provided in this Rule, the property

may be used in accordance with the following standards:

(i)            Nonexpendable personal

property with a unit acquisition cost of less than one thousand dollars

($1,000) may be retained by the recipient for other programs or sold by the

recipients without reimbursement to the program budget.

(ii)           Nonexpendable personal

property with a unit acquisition cost of one thousand dollars ($1,000) or more

may be retained by the recipient for other uses provided that compensation is

made as program income in accordance with Rule .0907.  The amount of

compensation shall be computed by applying the percentage of CDBG participation

in the cost of the original project or program to the current fair market value

of the property.  If the recipient has no need for the property then it shall

dispose of the property in accordance with State law and proceeds shall be

considered as program income.

(c)           Property records shall be maintained

accurately and shall include:

(i)            a description of the

property;

(ii)           manufacturer's serial

number, model number, federal stock number, national stock number, or other

identification number;

(iii)          source of the property

including grant or other agreement number;

(iv)          acquisition date;

(v)           percentage of CDBG

participation in the cost of the project for which the property was acquired;

(vi)          location, use, and condition

of the property and the date the information was reported;

(vii)         unit acquisition cost; and

(viii)        ultimate disposition data,

including date of disposal and sales price or the method used to determine

current fair market value where a recipient compensates the Department for its

share.

(d)           A physical inventory of

property shall be taken annually to verify the existence, current utilization

and continued need for the property.  The results shall be reconciled with the

property records at least once every two years.  Any differences between the

quantities determined by the physical inspections and those shown in the

accounting records shall be investigated to determine the causes of the

differences.

(e)           Adequate maintenance

procedures shall be implemented to keep the property in good condition.

(f)            A control system shall be in

effect to insure adequate safeguards to prevent loss, damage, or theft of the

property.  Any loss, damage, or theft of nonexpendable property shall be

investigated and fully documented.

(g)           Where the recipient is

authorized or required to sell the property, proper sales procedures shall be

established which would provide for competition to the extent practicable and

result in the highest possible return.

(4)           Expendable Personal Property.  Title

to expendable personal property shall vest in the recipient upon acquisition. 

If there is a residual inventory of such property exceeding one thousand

dollars ($1,000) in total aggregate fair market value, upon termination or

completion of the grant and if the property is not needed for any other

federally sponsored project or program, the recipient shall retain the property

for use on nonfederally sponsored activities, or sell it, but must in either

case, compensate the program for its share.  The amount of compensation will be

computed in the same manner as nonexpendable personal property.

(5)           Intangible Property.

(a)           Inventions and patents.  If

any program produces patentable items, patent rights, processes, or inventions,

in the course of work sponsored by the Department, such fact shall be promptly

and fully reported to the Department.  Unless there is a prior agreement

between the recipient and the Department on disposition of such items, the

Department shall determine whether protection on the invention or discovery

shall be sought.  The Department will also determine how the rights in the

invention or discovery, including rights under any patent issued thereon, shall

be allocated and administrated in order to protect the public interest

consistent with "Government Patent Policy" (President's memorandum

for Heads of Executive Departments and Agencies, August 23, 1971, and Statement

of Government Patent Policy as printed in 36 FR 16889); and

(b)           Copyrights.  Except as

otherwise provided in the terms and conditions of the agreement, the author or

the recipient is free to copyright any books, publications, or other

copyrightable materials developed in the course of or under a Departmental

agreement, but the Department shall reserve a royalty‑free nonexclusive

and irrevocable right to reproduce, publish, or otherwise use, and to authorize

others to use, the work for government purposes.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(b)(4),(d)(2),(e); 24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; May 1,

1988; April 1, 1983.

 

 

 

04 NCAC 19L .0910          PROGRAM AMENDMENTS

(a)  Community development program amendments.  Recipients

shall request prior Division approval for all program amendments when:

(1)           The recipient proposes to

change the approved project budget amount for any activity by more than 10

percent of the total project amount;

(2)           The recipient proposes to

add or delete any activity or activities, change project locations, or change

the scope of the program or class of beneficiaries of previously approved

activities; and

(3)           The cumulative effect of a

number of smaller changes involving the approved activities exceeds 10 percent

of the total project amount.  In such instances, the recipient shall include in

its request for an amendment documentation describing the smaller changes

previously made, as well as those being proposed.  After the amendment is

approved by the Division, the accrual of smaller changes begins again.

(b)  Citizen Participation.  Recipients proposing amendments

and other changes to the approved application which require prior Division

approval pursuant to Paragraph (a) of this Rule shall hold one public hearing

in accordance with Paragraph (f) of Rule .1002, CITIZEN PARTICIPATION.

(c)  Citizen objections to the amendment.  Persons wishing

to object to the approval of an amendment by the Division shall make such

objection in writing to the Division in accordance with Paragraph (f) of Rule

.1002 CITIZEN PARTICIPATION.

(d)  Budget ordinance amendment.  Any amendment to the grant

program that involves a financial transaction shall comply with the provisions

set forth in G.S. 159‑15, Amendments to the Budget Ordinance.

(e)  All requests for program amendments that require prior

Division approval shall be submitted to the Division and include the following:

(1)           copy of the current budget

and proposed changes;

(2)           detailed narrative

description of the proposed changes and their effect upon the approved project;

(3)           maps showing any change in

location;

(4)           signature of approval by the

recipient's chief elected official on a form prescribed by the Division; and

(5)           other information

appropriate for evaluating the proposed amendment.

(f)  All requests for program amendments that require prior

Division approval may be submitted by the Division to the appropriate agency or

agencies for clearinghouse review.  Procedures for this review shall be in

accordance with Rule .1012 of this Subchapter.

(g)  All records of program amendments shall be kept on file

in accordance with Rule .0911 of this Section.

(h)  Division Review of Amendments.  In approving or denying

proposed amendments pursuant to Paragraph (a) of this Rule .0910, the Division

may consider the following factors:

(1)           amendments which include new

or significantly altered activities may be rated in accordance with the selection

criteria applicable at the time the original application was rated;

(2)           whether the proposed

amendment activities can be completed within the scheduled duration of the

project;

(3)           feasibility of the proposed

amendment; and

(4)           appropriateness of the

proposed amendment.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

159‑15; 159‑34; 42 U.S.C.A. 5304(a)(2),(d)(2);

24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; April 1,

1989; March 1, 1984.

 

 

 

04 NCAC 19L .0911          RECORDKEEPING

(a)  The Secretary of the Department of Commerce, the

Secretary of the Department of Housing and Urban Development, or any of their

duly authorized representatives shall have access to all books, accounts,

records, reports, files, and other papers or property of recipients or their

subgrantees and contractors pertaining to funds provided under this Subchapter

for the purpose of making surveys, audits, examinations, excerpts and

transcripts.

(b)  All Community Development Program records that are

public under G.S. 132 shall be made accessible to interested individuals and

groups during normal working hours, and shall be maintained at all times at the

recipient's local government office.

(c)  Financial records, supporting documents and all other

reports and records required under this Subchapter, and all other records

pertinent to the Community Development Program shall be retained by the

recipient for a period of five years from the date of the closeout of the

program, except as follows:

(1)           Records that are the subject of audit

findings shall be retained for five years or until such audit findings have

been resolved, whichever is later;

(2)           Records for nonexpendable property which

was acquired with Federal grant funds shall be retained for five years after

its final disposition;

(3)           Records for any displaced person shall be

retained for five years after he/she has received final payment;

(4)           Records pertaining to each real property

acquisition shall be retained for five years after settlement of the

acquisition, or until disposition of the applicable relocation records in

accordance with Subparagraph (3) of this Section, whichever is later; and

(5)           If a litigation, claim or audit is started

before the expiration of the five-year period, the records shall be retained

until all litigations, claims, or audit findings involving the records have

been resolved.

(d)  All records shall be sufficient to determine compliance

with the requirements and primary objectives of the Community Development Block

Grant Program and all other applicable laws and regulations.  All accounting

records shall be supported by source documentation and shall be in compliance

with Rule .0906 of this Section.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(d)(2),(e); 24 C.F.R. 570.490;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; June 1, 1993; September 1,

1990; May 1, 1988; April 1, 1983;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0912          AUDIT

(a)  The recipient's financial management systems shall

provide for audits to be made by the recipient or at the recipient's direction,

in accordance with the following:

(1)           The recipient shall provide for an audit of

its CDBG program on an annual basis for any fiscal year in which twenty‑five

thousand ($25,000) or more in CDBG funds are received in accordance with the

annual independent audit procedures set forth in G.S. 159‑34;

(2)           The CDBG program audit shall be performed

in conjunction with the regular annual independent audit of the recipient and

shall contain an examination of all financial aspects of the CDBG program as

well as a review of the procedures and documentation supporting the recipient's

compliance with applicable statutes and regulations;

(3)           CDBG program funds may only be used to pay

for the CDBG portion of the audit costs if more than three hundred thousand

dollars ($300,000) in all Federal Programs are used;

(4)           The recipient shall submit the Annual Audit

Report to the Division, including the information identified in Paragraph (b)

of this Rule, along with an Annual Performance Report as required by Rule .1101

of this Subchapter; and

(5)           The Division may require separate closeout

audits to be prepared by the recipient in accordance with Paragraph .0913(e) of

this Section.

(b)  Audits shall comply with the requirements set forth in

this Paragraph:

(1)           Audits shall include, at a minimum, an

examination of the systems of internal control, systems established to insure

compliance with laws and regulations affecting the expenditure of grant funds,

financial transactions and accounts, and financial statements and reports of

recipient organizations;

(2)           Financial statements shall include

footnotes, comments which identify the statements examined, the period covered,

identification of the various programs under which the recipient received CDBG

funds, and the amount of the awards received;

(3)           Audits shall be made in accordance with the

GENERAL ACCOUNTING OFFICE STANDARDS FOR AUDIT OF GOVERNMENTAL ORGANIZATIONS,

PROGRAMS, ACTIVITIES AND FUNCTIONS, THE GUIDELINES FOR FINANCIAL AND COMPLIANCE

AUDITS OF FEDERALLY ASSISTED PROGRAMS, any compliance supplements approved by

the Federal Office of Management and Budget (OMB), and generally accepted

auditing standards established by the American Institute of Certified Public

Accountants;

(4)           The audit shall include the auditor's

opinion as to whether the financial statements are fairly presented in

accordance with generally accepted accounting principles.  If an unqualified

opinion cannot be expressed, the auditor shall state the nature of the

qualification;

(5)           The auditors' comments on compliance and

internal control shall:

(A)          Include comments on weaknesses in and noncompliance

with the systems of internal control, separately identifying material

weaknesses;

(B)          Identify the nature and impact of any noted

instances of noncompliance with the terms of agreements and those provisions of

State or Federal laws and regulations that could have a material effect on the

financial statements and reports;

(C)          Contain an expression of positive assurance with

respect to compliance with requirements for tested items and negative assurance

for untested items;

(D)          Comment on the accuracy and completeness of

financial reports and claims for advances or reimbursement to Federal agencies;

(E)           Comment on corrective action taken or planned by

the recipient;

(6)           Work papers and reports shall be retained

for a minimum of five years from the date of the audit report unless the

auditor is notified in writing by the Division of the need to extend the

retention period based on changes in Federal regulations.  The audit work

papers shall be made available upon request to the Division and the General

Accounting Office or its designees;

(7)           If during the course of the audit, the

auditor becomes aware of irregularities in the recipient organization the

auditor shall promptly notify the Division and recipient management officials

about the level of involvement.  Irregularities include such matters as

conflicts of interest, falsification of records or reports, and

misappropriation of funds or other assets;

(8)           Selection of an independent auditor shall

be in accordance with Rule .0908 of this Section.

(c)  A "single audit," in which the regular

independent auditor will perform an audit of all compliance aspects for all

federal grants along with the regular financial audit of the recipient, is

permissible.  Where feasible, the recipient shall use the same auditor so that the

audit will include the financial and compliance work under a single plan in the

most economical manner.

(d)  Small audit firms and audit firms owned and controlled

by socially and economically disadvantaged individuals shall have the maximum

practicable opportunity to participate in the performance of contracts awarded

with CDBG funds.  Recipients shall take the following affirmative action to

further this goal:

(1)           Assure that small audit firms and audit

firms owned and controlled by socially and economically disadvantaged

individuals as defined in P.L. 95‑507 are used to the fullest extent

practicable;

(2)           Make information on forthcoming

opportunities available, and arrange time frames for the audit so as to

encourage and facilitate participation by small or disadvantaged firms;

(3)           Consider in the contract process whether

firms competing for larger audits intend to subcontract with small or

disadvantaged firms;

(4)           Encourage contracting with small or

disadvantaged audit firms which have traditionally audited government programs,

and in such cases where this is not possible, assure that these firms are given

consideration for audit subcontracting opportunities;

(5)           Encourage contracting with consortiums of

small or disadvantaged audit firms when a contract is too large for an

individual small or disadvantaged audit firm; and

(6)           Use the services and assistance, as

appropriate, of the Small Business Administration, and the Minority Business

Development Agency of the U.S. Department of Commerce in the solicitation and

utilization of small or disadvantaged audit firms.

(e)  All records, data, audit reports and files shall be

maintained in accordance with Rule .0909 of this Section, unless otherwise

stated in this Rule.

(f)  The provisions of this Rule do not limit the authority

of the Department to make audits of recipients' organizations.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

159‑34; 42 U.S.C.A. 5304(d)(2),(e); 24 C.F.R. 44.6; 24 C.F.R. 85.36(e);

24 C.F.R. 570.492;

Eff. April 1, 19983;

Amended Eff. June 1, 1994; June 1, 1993; September 1,

1990; May 1, 1988;

Temporary Amendment Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .0913          GRANT CLOSEOUTS

(a)  Initiation of closeout.  The Division will advise the

recipient to initiate closeout procedures when the Division determines, in

consultation with the recipient, that there are no impediments to closeout and

that the following criteria have been met or will be met shortly:

(1)           All costs to be paid with grant funds have

been incurred with the exception of closeout costs such as payment for the

final audit and any unsettled third‑party claims against the recipient. 

Costs are incurred when goods and services are received or contract work is

performed.  With respect to activities (such as rehabilitation of privately

owned properties) which are carried out by means of revolving loan accounts,

loan guarantee accounts, or similar mechanisms, costs shall be considered as

incurred at the time funds for such activities are drawn from the Department

and initially used for the purposes described in the approved Community

Development Program.  The phrase "initially used for the purposes

described in the approved Community Development Program" means the payment

of such funds for work actually performed and is not intended to mean the

initial deposit(s) of funds into the revolving loan account, loan guarantee

account, or similar mechanism (such as loan or grant escrow account);

(2)           The recipient shall submit to the Division

within 90 days after the date of completion of the grant all financial,

performance, and other reports required as a condition of the grant;

(3)           With respect to any grant for which an

Annual Performance Report is required pursuant to Rule .1101, for purposes of

the closeout, and has not been submitted or updated, the failure of a recipient

to submit or update as required will not preclude the Division from effecting a

grant closeout when such action is determined to be in the best interest of the

Division.  The failure or refusal by a recipient to comply with such

requirement shall be taken into account in the performance determination by the

Division in reviewing any future grant applications from the recipient.  Any

excess grant amount which is otherwise authorized to be retained by the

recipient shall be refunded to the Division in the event of a recipient's

failure to furnish the Annual Performance Report or update it as required under

this Rule;

(4)           Other responsibilities of the recipient

under the grant agreement and closeout agreement, applicable laws and

regulations appear to have been carried out satisfactorily, or the Division has

no further interest in keeping the grant agreement open for the purpose of

securing performance.  A final review of the recipient's compliance with the

grant agreement and any closeout agreement, applicable laws and regulations

will be made during the final audit or Division review in lieu of the final

audit pursuant to Paragraph (e) of this Rule.

(b)  Program Income.  The recipient shall account for any

program income in accordance with Rule .0907 of this Section.

(c)  Disposition of nonexpendable personal property.  The

recipient shall account for any nonexpendable personal property acquired with

grant funds in accordance with Rule .0909 of this Section entitled PROPERTY

MANAGEMENT STANDARDS and Rule .0907 of this Section entitled PROGRAM INCOME.

(d)  Disposition of real property.  Disposition of real

property shall be in accordance with the requirements of Rules .0909 and .0907

of this Section.

(e)  Audit.  Upon notification from the Division to initiate

closeout procedures, the recipient shall arrange for a final audit to be made

of its grant accounts and records in accordance with Rule .0912 of this

Section, and any other audit requirements of the Department hereafter in

effect.  The Division may determine that, due to the nature of the recipient's

program or the relatively small amount of funds which have not been audited, a

final audit is not required.  In such instances, the Division will notify the

recipient that the Department will perform necessary review of documentation

and activities to determine that claimed costs are valid program expenses and

that the recipient has met its other responsibilities under the grant

agreement.

(f)  Certificate of completion and final cost.  Upon

resolution of any findings in the final audit or, if the final audit is waived,

after the Division has performed the review of documentation described in

Paragraph (e) of this Rule, the recipient shall prepare a certificate of

completion and final cost, on a form prescribed by the Division, and submit it

to the Division.

(g)  Refund of excess grant funds.  Recipients shall refund

to the Department any cash advance in excess of the final grant amount, as

shown on the certificate of completion approved by the Division.  However,

recipients may request Division approval to use any excess grant funds to complete

additional eligible activities where at least fifty‑one percent of the

funds benefit low‑ and moderate‑income persons.  Division approval

must be obtained prior to such use of excess funds.

(h)  Termination of grant for mutual convenience.  Grant

assistance provided under this part may be cancelled, in whole or in part, by

the Division or the recipient, prior to the completion of the approved

Community Development Program, when both parties agree that the continuation of

the program no longer is feasible or would not produce beneficial results

commensurate with the further expenditure of funds.  The Division shall

determine whether an environmental review of the cancellation is required, and

if a review is required it shall be performed by the recipient.  The two

parties shall agree upon the termination conditions, including the effective

date and, in the case of partial terminations, the portion to be terminated. 

The recipient shall not incur new obligations for the terminated portion after

the effective date, and shall cancel as many outstanding obligations as

possible.  The Department shall allow full credit to the recipient for the

noncancelable obligations properly incurred by the recipient in carrying out

the program prior to termination.  The closeout policies and procedures

contained in this Rule shall apply in all such cases except where the total

grant is cancelled in its entirety, in which event only the provisions of

Paragraph (f) and (g) of this Rule shall apply.

(i) Termination for cause.  In cases in which the Secretary

terminates the recipient's entire grant, or the remaining balance thereof, in

accordance with Rule .1103 of this Subchapter, provisions of Paragraphs (f) and

(g) of this Rule shall apply.

(j)  The recipient shall hold a public hearing prior to

closeout of the CDBG program to assess the performance of the recipient in

accordance with Rule .1002 of this Subchapter.

(k)  All records of the closeout process shall be maintained

in accordance with Rule .0911 of this Section.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Eff. April 1, 1983;

Amended Eff. June 1, 1993; September 1, 1990; May 1,

1988; March 1, 1984.

 

 

 

04 NCAC 19L .0914          CONFLICT OF INTEREST

In all cases not governed under Rule .0908 of this Section

regarding procurement procedures, recipients shall meet the requirements of HUD

implementing regulations contained in 24 CFR 570.489(h).  For the purposes of

this Rule, the following definitions apply:

(1)           "family ties" means

spouse, parents, children, brother, sister, grandparents, grandchildren and the

step, half, and in‑law relationships;

(2)           "business ties" means an

officer, employee, agent, or any stockholder or shareholder holding at least 10

percent ownership of any firm, contract, or subcontract which benefits from

funding assistance under the grant agreement.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Eff. June 1, 1993.

 

 

 

 

SECTION .1000 ‑ COMPLIANCE REQUIREMENTS

 

04 NCAC 19L .1001          EQUAL OPPORTUNITY AND

NONDISCRIMINATION

No person shall on the grounds of race, color, national

origin, sex, religion, handicap or familial status be excluded from

participation in, be denied the benefit of, or be subjected to discrimination

under any program or activity funded in whole or in part with funds available

under this Subchapter.

(1)           Recipients shall meet the

requirements of:

(a)           The Civil Rights Act of 1964

(P.L. 88‑352) and specifically Title VI which provides that no person in

the United States shall on the grounds of race, color, or national origin, be

excluded from participation in, be denied the benefits of, or be otherwise

subject to discrimination under any program or activity which receives federal

funds;

(b)           The Civil Rights Act of 1968

(P.L. 90‑284) as amended, and specifically Title VIII which requires

recipients to administer all programs and activities relating to housing and

community development in a manner to affirmatively further fair housing, and

take action to affirmatively further fair housing in the sale and rental of

housing, the financing of housing, and the provision of brokerage services;

(c)           Section 109 of the Housing

and Community Development Act of 1974, as amended (P.L. 93‑383) which

provides that no person in the United States shall, on the grounds of race,

color, national origin, or sex, be excluded from participation in, be denied

the benefits of, or be subjected to discrimination under any program or

activity funded in whole or in part with funds provided under this Subchapter. 

Any prohibition against discrimination on the basis of age under the Age

Discrimination Act of 1975, as amended (42 U.S.C. 6101 et. seq.) or with

respect to any otherwise qualified handicapped individual as provided in

Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794),

shall also apply to any such program or activity;

(d)           Executive Order 11063, as

amended by Executive Order 12259, Leadership and Coordination of Fair Housing

in Federal Programs, requiring that programs and activities relating to housing

and urban development be administered in a manner to affirmatively further the

goals of Title VIII of the Civil Rights Act of 1968;

(e)           Executive order 11246, as

amended, which provides that no person shall be discriminated against on the

basis of race, color, religion, sex, or national origin in all phases of

employment during the performance of federal and federally assisted

construction contracts, and that affirmative action will be taken in all

aspects of personnel negotiations; and

(f)            Section 3, of the Housing

and Urban Development Act of 1968, (P.L. 90‑448) as amended, which

requires that to the greatest extent feasible, opportunities for training and

employment arising in connection with the planning and carrying out of any

project assisted under any federal block grant program be given to lower‑income

residents of the unit of local government, metropolitan area or nonmetropolitan

county in which the project is located and contracts for work in connection

with the project be awarded to eligible business concerns which are located in,

or owned in substantial part by persons residing in, the same metropolitan area

or nonmetropolitan county as of the project.

(2)           Recipients shall meet the

implementing requirements of:

(a)           Regulations under Title VI of

the Civil Rights Act of 1964, 24 C.F.R., Part 1 and 2;

(b)           Equal Employment Opportunity

under HUD Contracts and HUD Assisted Construction, 24 C.F.R. Part 130;

(c)           Employment Opportunities for

Businesses and Lower Income Persons In Connection With Assisted Projects, 24

C.F.R. 135; and

(d)           HUD implementing regulations

contained in 24 C.F.R. Part 107.

(3)           Local government recipients shall

meet the requirements of Title II of the Americans with Disabilities Act of

1990 (P.L. 101‑336) and its implementing regulations (28 CFR Part 35).

(4)           Recipients shall maintain records

and data and document compliance efforts as required by the laws and

regulations in this Rule including data on the racial, ethnic, and gender

characteristics of persons who are applicants for, participants in, or

beneficiaries of the program and shall comply with Rule .0911 of this

Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489; 24 C.F.R. 570‑490;

24 C.F.R. 570.496; 42 U.S.C.A. 1982; 42 U.S.C.A. 2000d et

seq.; 42 U.S.C. 5309;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; March 1, 1984.

 

 

 

04 NCAC 19L .1002          CITIZEN PARTICIPATION

(a)  Each applicant and recipient shall provide citizens

with an opportunity for meaningful involvement on a continuing basis and for

participation in the planning, implementation and assessment of the program.  Each

applicant and recipient shall provide information to citizens, hold public

hearings, provide for timely responses to citizens' complaints, and certify

that it is following a detailed Citizen Participation Plan as in (b) through

(h) of this Rule.  All public hearings shall be held by the governing board of

the applicant or recipient.

(b)  Citizen participation in the application process.

(1)           Each applicant for CDBG funds shall:

(A)          Solicit and respond in a timely manner to views and

proposals of citizens, particularly low‑ and moderate‑income

persons, members of minority groups, and residents of blighted areas where

activities are proposed.  Applicants shall respond in writing to written

citizen comments.  Responses shall be made within 10 calendar days of receipt

of the citizen comment, when practicable.

(B)          Provide technical assistance to facilitate citizen

participation, where requested.  The technical assistance shall be provided to

groups representative of persons of low‑ and moderate‑income that

request such assistance in developing proposals.  The level and type shall be

determined by the applicant.

(C)          Provide notices of public hearings in a timely

manner to all citizens and in such a way as to make them understandable to non‑English

speaking persons.  Hearings must be held at times and locations convenient to

potential or actual beneficiaries and with accommodations for persons with

disabilities.  A notice of the public hearing shall be published at least once

in the nonlegal section of a newspaper having general circulation in the area. 

The notice shall be published not less than ten days nor more than 25 days

before the date fixed for the hearing.  The notice of public hearing to obtain

citizens' views after the application has been prepared, but prior to the

submission of the application to the Division, shall contain a description of

the proposed project(s) including the proposed project location, activities to

be carried out, and the total costs of activities.  The notice of the public

hearing shall also contain the language for submitting objections contained in

the Part (b)(2)(A) of this Rule.

(D)          Schedule hearings to obtain citizens' views and to

respond to citizen proposals at times and locations which permit broad

participation, particularly by low‑ and moderate‑income persons,

members of minority groups, handicapped persons, and residents of blighted

neighborhoods and project areas.

(E)           Conduct one public hearing during the planning

process to allow citizens the opportunity to express views and proposals prior

to formulation of the application, except that applicants in the Urgent Needs

category are exempt from holding this public hearing.

(F)           Conduct one public hearing after the application

has been prepared but prior to submission of the application to the Division.

(2)           Submitting objections to the Division.

(A)          Persons wishing to object to the approval of an

application by the Division shall submit to the Division their objections in

writing.  The Division shall consider objections made only on the following

grounds:

(i)            The applicant's description of the needs and

objectives is plainly inconsistent with available facts and data,

(ii)           The activities to be undertaken are plainly

inappropriate to meeting the needs and objectives identified by the applicant,

and

(iii)          The application does not comply with the

requirements of this Subchapter or other applicable laws.

(B)          All objections shall include an identification of

the requirements not met.  In the case of objections made on the grounds that

the description of needs and objectives is plainly inconsistent with available

facts and data, the objection shall include the facts and data upon which the

objection is based.

(c)  Citizen Participation Plan.  Recipients shall develop

and adopt, by resolution of their governing board, a written citizen

participation plan developed in accordance with all provisions of this Rule and

which:

(1)           provides for and encourages citizen

participation with particular emphasis on participation by persons of low‑

and moderate‑income who are residents of slum and blight areas and of

areas in which CDBG funds are proposed to be used;

(2)           provides citizens with reasonable and

timely access to local meetings, information, and records relating to the

recipient's proposed and actual use of funds;

(3)           provides for technical assistance to groups

representative of persons of low‑ and moderate‑income that request

such assistance in accordance with Part (b)(1)(B) of this Rule;

(4)           provides for public hearings to obtain

citizen views and to respond to proposals and questions at all stages of the

community development program in accordance with Paragraphs (b), (f), and (g)

of this Rule;

(5)           provides a procedure for developing written

responses to written complaints and grievances within ten calendar days of

receipt of the complaint.  The procedure shall include all provisions of

Paragraph (d) of this Rule; and

(6)           identifies how the needs of non‑English

speaking residents will be met in the case of public hearings where a

significant number of non‑English speaking residents can be reasonably

expected to participate.

(d)  The recipient shall develop and adopt a written

complaint procedure to respond to citizen complaints involving the CDBG

program.  The complaint procedure shall be applicable through the life of the

grant and available to the general public.  It shall specify that the recipient

will respond in writing to written citizen complaints within 10 calendar days

of receipt of the complaint.  The procedure shall include a phone number for

further information or clarification on the complaint procedure and shall

identify any local procedures or appeals process that would normally be used by

the recipient to address citizen complaints.  The complaint procedure shall

also state that if a citizen lodging a complaint is dissatisfied with the local

response, then that person may direct the complaint to the North Carolina

Division of Community Assistance.

(e)  Citizen participation during program implementation. 

Citizens shall have the opportunity to comment on the implementation of a

Community Development Program throughout the term of the program.  Recipients

shall solicit and respond to the views and proposals of citizens in the same

manner as in Part (b)(1)(A) of this Rule.

(f)  Citizen participation in the program amendment process.

(1)           Recipient procedures.

(A)          Recipients proposing amendments which require prior

Division approval in accordance with Rule .0910 of this Subchapter shall to

conduct one public hearing prior to submission of the amendment to the Division

in the same manner as in Part (b)(1)(C) of this Rule.

(B)          Each recipient shall respond to citizen objections

and comments in the same manner as in Part (b)(1)(A) of this Rule.

(2)           Submitting Objections to the Division.

(A)          Persons wishing to object to the approval of an

amendment by the Division shall make such objection in writing.  The Division

shall consider objections made only on the following grounds:

(i)            The recipient's description of needs and

objectives is plainly inconsistent with available facts and data,

(ii)           The activities to be undertaken are plainly

inappropriate to meeting the needs and objectives identified by the recipient,

and

(iii)          The amendment does not comply with the

requirements of this Section or other applicable laws and regulations.

(B)          All objections shall include an identification of

the requirements not met.  In the case of objections made on the grounds that

the description of needs and objectives is plainly inconsistent with available

facts and data, the objection shall include the facts and data upon which the

objection is based.

(g)  Citizen participation in the program closeout process.

(1)           Recipients shall conduct one public hearing

to assess program performance during the grant closeout process and prior to

the actual closeout of the grant in the same manner as in Part (b)(1)(C) of

this Rule.

(2)           Recipients shall continue to solicit and

respond to citizen comment in the same manner as in Part (b)(1)(A) of this Rule

until such time as the grant program is closed.

(h)  Persons may submit written comments to the Division at

any time concerning the applicant's or recipient's failure to comply with the

requirements contained in this Subchapter.

(i)  All records of public hearings, citizens' comments,

responses to comments and other relevant documents and papers shall be kept in

accordance with Rule .0911 of this Subchapter.  All program records shall be

accessible to citizens in accordance with Rule .0911(b) of this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(a)(2); 24 C.F.R. 570.486;

Eff. July 1,

1982;

Amended Eff.

August 1, 1998; June 1, 1993; September 1, 1990; May 1, 1988; March 1, 1984;

Temporary

Amendment Eff. January 1, 2001;

Amended Eff.

August 1, 2002.

 

04 NCAC 19L .1003          ACQUISITION AND RELOCATION

(a)  The purpose of this Rule is to insure that owners of

real property to be acquired under the provisions of this Subchapter are

treated fairly and consistently, to encourage and expedite acquisition by agreements

with such owners, to minimize litigation and relieve congestion in the courts,

and to promote public confidence in governmental land acquisition; and to

insure that persons displaced as a result of CDBG‑assisted projects are

treated equitably so that such persons will not suffer disproportionate

injuries as a result of projects designed for the benefit of the public as a

whole.  Recipients shall follow the requirements of the Uniform Relocation

Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91‑646),

Sections 104(d) and 106(d)(5)(A) of Title I of the Housing and Community

Development Act of 1974, as amended, and HUD implementing regulations [24 CFR

570.488 and 570.496(a)].  This Subchapter incorporates by reference the federal

regulations described in 24 CFR 570.488 and 24 CFR 570.496(a), including

subsequent amendments and editions.  Copies of these laws and regulations are

available for public inspection from the Division of Community Assistance. 

Single copies are available from this Division in Raleigh, North Carolina, for

one dollar ($1.00) each.  The following definitions shall apply:

(1)           "HUD" means the

Department.

(2)           "Federal agency"

means the Department.

(3)           "State agency"

means the recipient of CDBG funds as defined in this Subchapter.

(b)  The recipient may provide relocation payments and

assistance for individuals, families, businesses, non profit organizations and

farm operations displaced by an activity that is not subject to the Uniform

Act.  The recipient also may provide relocation payments and other assistance

at levels above those established under the Uniform Act.  All such relocation

assistance not required by the Uniform Act must be determined by the recipient

to be appropriate to its community development program.  The recipient shall

adopt a written policy available to the public setting forth the relocation

payments and assistance it elects to provide and providing for equal payments,

and assistance within each class of displacees.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5301 and 5304(b)(4); 24 C.F.R. 570.488;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; April 1,

1983.

 

 

 

04 NCAC 19L .1004          ENVIRONMENTAL REVIEW

(a)  Applicants and recipients shall comply with the

policies of the National Environmental Policy Act of 1969 and all other

applicable provisions of Federal and State law which further the purposes of

such act (as specified in 24 C.F.R. Part 58).  This Subchapter incorporates by

reference 24 CFR Part 58, including subsequent amendments and editions.  Copies

of this federal regulation are available for public inspection from the

Division of Community Assistance.  Single copies are available from this

Division in Raleigh, North Carolina, for one dollar ($1.00) each.

(b)  Applicants and recipients shall assume the

responsibilities for environmental review, decision‑making, and other

actions which would otherwise apply to the Secretary, under NEPA and other

provisions of law which further the purposes of NEPA in accordance with section

104(f)(4) of Title I of the Housing and Community Development Act of 1974, as

amended and the implementing regulations at 24 C.F.R. Part 58.

(c)  Applicants and recipients shall meet the requirements

of the following Federal laws and regulations:

(1)           The National Environmental Policy Act of

1969 ("NEPA", 42 U.S.C. 4321 et seq., P.L. 91‑190) which

establishes national policy, goals, and procedures for protecting, restoring

and enhancing environmental quality;

(2)           Environmental Review Procedures for Title I

Community Development Block Grant Programs, (24 C.F.R. Part 58), which sets

forth the procedures for carrying out the environmental responsibilities under

NEPA;

(3)           Executive Order 11988, Floodplain

Management, May 24, 1977 (42 F.R. 26951 et seq.);

(4)           Executive Order 11990, Protection of

Wetlands, May 24, 1977 (42 F.R. 26961 et seq.);

(5)           The Coastal Zone Management Act of 1972,

(16 U.S.C. 1451 et seq.), as amended;

(6)           The Safe Drinking Water Act of 1974 (42

U.S.C. 201, 300(f) et seq., and 21 U.S.C. 349), as amended, particularly

concerning sole source aquifers;

(7)           The Endangered Species Act of 1973 (16

U.S.C. 1531 et seq.), as amended;

(8)           The Wild and Scenic Rivers Act of 1968 (16

U.S.C. 1271 et seq.), as amended;

(9)           The Clean Air Act (42 U.S.C. 7401 et seq.);

(10)         The Fish and Wildlife Coordination Act of

1958 as amended, (16 U.S.C. 661 et seq);

(11)         The Federal Water Pollution Control Act

(P.L. 92‑500);

(12)         HUD environmental criteria and standards (24

C.F.R. Part 51), and the Council on Environmental Quality Standards at 40

C.F.R. Part 1500‑1508;

(13)         The National Historic Preservation Act of

1966 (16 U.S.C. 470 et seq.) as amended;

(14)         Procedures for the Protection of Historic

and Cultural Properties, 36 CFR 800;

(15)         Executive Order 11593, Protection and

Enhancement of the Cultural Environment.  May 13, 1971 (36 F.R. 8921 et seq.);

(16)         The Reservoir Salvage Act of 1960 (16 U.S.C.

469 et seq.); as amended by the Archaeological and Historic Preservation Act of

1974; and

(17)         The Flood Disaster Protection Act of 1973

(42 U.S.C. 4001 et seq.), as amended.

(d)  The recipient shall meet the requirements of the

following State laws and rules where they are applicable to the provisions of

this Subchapter:

(1)           Chapter 113A of the General Statutes of

North Carolina, entitled Pollution Control and Environment;

(2)           G.S. 143‑215.108 which designates the

Environmental Management Commission as the issuing authority for air quality

permits;

(3)           G.S. 143‑215.1 which governs water

pollution permits and designates the Environmental Management Commission as the

issuing authority;

(4)           G.S. 121‑12, Protection of Properties

on the National Register, which requires consideration of project impact on any

property listed in the National Register; and

(5)           G.S. 70‑1 through 70‑3, Indian

Antiquities laws, which urges private landowners to refrain from excavation and

other actions leading to the destruction of Indian archaeological sites on

their property.  It also requires local governments to report the discovery of

artifacts and refrain from further excavation or construction when excavating

or constructing on public lands.

(e)  The recipient shall obtain all air pollution and water

pollution permits for a CDBG program pursuant to Paragraph (d) of this Rule.

(f)  All records and data shall be maintained pursuant to

Rule .0911 of this Subchapter.

 

History Note:        Authority G.S. 143‑215.1; 143‑215.108;

143B‑10; 143B‑431; 24 C.F.R. Part 58; 24 C.F.R.

570.487; 42 U.S.C.A. 4321 through 4370; 42 U.S.C.A.

5304(b)(4);

Eff. July 1, 1982;

Amended Eff. August 1, 1998; June 1, 1993; September 1,

1990; May 1, 1988; October 1, 1984.

 

 

 

04 NCAC 19L .1005          HISTORIC PRESERVATION

 

History Note:        Authority G.S. 70‑1 through 70‑3;

113A; 121‑12; 143‑323; 24 C.F.R. 570‑496;

42 U.S.C.A. 5304(b)(4); 42 U.S.C.A. 5321;

Eff. July 1, 1982;

Amended Eff. April 1, 1983;

Repealed Eff. October 1, 1984.

 

 

 

04 NCAC 19L .1006          LABOR STANDARDS

(a)  The following labor standards provisions outline the

responsibilities of the recipient concerning the payment of wages, contract

work hours, safety, health standards, and equal opportunity for programs

governed under this Subchapter.  Recipients must comply with the following

federal laws and regulations:

(1)           Davis‑Bacon Act (40

U.S.C.A. 276a).  This act requires that prevailing local wage levels be paid to

laborers and mechanics employed on construction work assisted with CDBG funds.

(2)           Contract Work Hours and

Safety Standards Act (40 U.S.C.A. 327 through 333).  Under this act, laborers

and mechanics employed by contractors and subcontractors on construction work

assisted with CDBG funds must receive overtime compensation at a rate not less

than one and one‑half the basic rate of pay for all hours worked in

excess of forty hours in any workweek.

Violators shall be liable for the unpaid wages and in

addition for liquidated damages computed in respect to each laborer or mechanic

employed in violation of the act.

(3)           Fair Labor Standards Act (29

U.S.C. 201 et seq.), requiring that covered employees be paid at least the

minimum prescribed wage, and also that they be paid one and one‑half

times their basic wage rate for all hours worked in excess of the prescribed

work‑week.

(4)           Federal anti‑kickback

laws (18 U.S.C. 874 and 40 U.S.C. 276a), which outlaws and prescribes criminal

penalties for "kickbacks" of wages in federally financed or assisted

construction activities.  Weekly statements of compliance and weekly payrolls

must be provided by all contractors and subcontractors.

(b)  The U.S. Secretary of Labor shall have the authority

and functions set forth in Reorganization Plan Number 14 of 1950 (15 F.R. 3176;

64 Stat. 1267 and Section 2 of the Act of June 13, 1934, (48 Stat. 948, Ch.

482) (40 U.S.C. 276c).

(c)  All contracts shall contain labor standards provisions

as required in this Rule.

(d)  Subparagraph (a)(1) and (4) of this Rule shall apply to

the rehabilitation of residential property only if such property is designed

for residential use of eight or more families or if eight or more single family

dwellings in the project area are owned in common and are located on contiguous

lots or parcels.

(e)  Recipients shall maintain records regarding compliance

with the laws and regulations cited in this Rule in accordance with Rule .0911

of this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.487; 40 U.S.C. 276(a) and 276(c); 40 U.S.C.A. 328; 42 U.S.C.A.

5310;

Eff. July 1, 1982;

Amended Eff. May 1, 1988; April 1, 1983.

 

 

 

04 NCAC 19L .1007          ARCHITECTURAL BARRIERS

All buildings or facilities (other than privately owned

residential structures) designed, constructed or altered with CDBG funds shall

be made accessible and useable to the physically handicapped.

(1)           Recipients must comply with the

following:

(a)           Architectural Barriers Act of

1968 (P.L. 90‑480).  This act requires recipients to insure that

buildings constructed or altered with CDBG funds (except private residential

structures) are readily accessible to the physically handicapped.

(b)           Minimum Guidelines and

Requirements for Accessible Design 36 C.F.R. Part 1190.  These regulations

establish guidelines for implementing the federal acts described in

Subparagraph (a) of this Paragraph.  The regulations provide technical

standards which must be met by recipients.

(c)           Americans with Disabilities

Act Accessibility Guidelines for Buildings and Facilities or the Uniform

Federal Accessibility Standards.

(2)           Recipients must comply with

provisions of the North Carolina Building Code, Volume I, Chapter 11‑X. 

These provisions describe minimum standards recipients must meet in

constructing or altering building and facilities, to make them assessable to

and useable by the physically handicapped.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.487; 29 U.S.C.A. 792;

36 C.F.R. Part 1190; 42 U.S.C.A. 4151 through 4157; 42

U.S.C.A. 5304 (b)(4);

28 C.F.R. 35.15;

Eff. July 1, 1982;

Amended Eff. June 1, 1993.

 

 

 

04 NCAC 19L .1008          HATCH ACT

All recipients shall comply with the Hatch Act (P.L. 76‑252)

as amended, which limits the political activities of employees.  This act

prevents recipients, local CDBG program officials or other personnel employed

by a CDBG program from undertaking certain political activities or from using

CDBG funds for political activities.  Generally, these activities include the

use of official authority to affect the results of an election or to coerce

employees to contribute to a political party or organization.  In addition,

personnel covered under this act may not be a candidate for elected office

unless candidacies are non‑partisan.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.487; 5 U.S.C.A. 1501 through 1508;

42 U.S.C.A. 5304 (b)(4);

Eff. July 1, 1982.

 

 

 

04 NCAC 19L .1009          HOUSING REHABILITATION

(a)  Grant assistance may be used for housing rehabilitation

activities eligible under Rule .0301 of this Subchapter.

(b)  The local government shall provide a work write up

which precisely defines the rehabilitation work to be undertaken to bring the

dwelling up to the following standards.  The dwelling:

(1)           shall contain a room or defined area for

the safe, sanitary storage and preparation of food.

(2)           shall contain a bathroom with permanently

affixed and properly operating fixtures.

(3)           shall have a one time treatment for insects

and pests.

(4)           shall have a structurally sound building

foundation system.

(5)           shall have structurally sound flooring

systems.

(6)           shall have structurally sound wall systems.

(7)           shall have a structurally sound roofing

system.

(8)           shall have at least two remotely located

doors for means of egress.

(9)           shall have electrical wiring and fixtures

that are safe and operating properly.

(10)         shall have plumbing fixtures and piping that

are safe and operating properly.

(11)         shall have a heating source capable of

heating the entire dwelling unit to 70 degrees Fahrenheit when the outside

temperature is 0 degrees.

(12)         shall contain a U.L. approved smoke detector

wired directly to the electrical panel with battery back up.

(c)  Construction or rehabilitation work on all dwelling

units, assisted entirely or partially with CDBG funds, shall comply with the

North Carolina State Building Code, Volumes I-X, as applicable.

(d)  Section 8 Housing Quality Standards shall not be

applicable when work is funded under Local Option Activities as described in

Rule .0403(c) of this Subchapter.

(e)  Housing rehabilitation activities must comply with the

following standards required under this Subchapter:

(1)           Lead‑based paint (Rule .1011); and

(2)           Equal opportunity (Rule .1001).

(f)  The recipient shall provide for benefits to any person

involuntarily and permanently displaced as a result of the use of CDBG

assistance to substantially rehabilitate property in accordance with 49 CFR

Part 24.

(g)  Homes inhabited by disabled or elderly persons must be

analyzed as to the physical needs of such persons.  Improvements such as

widened doorways, ramps, level entry and doorways, and grab bars in bath areas

must be installed if appropriate.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.487; 42 U.S.C.A. 5305(a);

Eff. July 1, 1982;

Amended Eff. August 1, 1998; May 1, 1988; March 1, 1984;

April 1, 1983.

 

 

 

04 NCAC 19L .1010          NATIONAL FLOOD INSURANCE PROGRAM

(a)  No CDBG funds shall be used for acquisition or

construction purposes as defined under section 3(a) of the Flood Disaster

Protection Act of 1973 (P.L. 93‑234) in any area that has been identified

as an area having special flood hazards, unless the recipient in such an area

is participating in the National Flood Insurance Program.

(b)  Recipients must comply with the Regulations

implementing the Flood Disaster Protection Act of 1973 (44 C.F.R. 60.3), unless

the recipient is participating in the National Flood Insurance Program.

(c)  The use of CDBG funds governed by this Subchapter for

acquisition or construction shall be subject to the mandatory purchase of flood

insurance requirements of Section 102(a) of the Flood Disaster Protection Act

of 1973 (P.L. 93‑234).

(d)  Records of participation in the National Flood

Insurance Program shall be maintained by the recipient pursuant to Rule .0911

of this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. Chapter X; 24 C.F.R. 570.487;

42 U.S.C.A. 4002 through 4027; 42 U.S.C.A. 5304(b)(4);

Eff. July 1, 1982;

Amended Eff. March 1, 1984.

 

 

 

04 NCAC 19L .1011          LEAD‑BASED PAINT

(a)  The recipient must comply with the Lead‑Based

Paint Poisoning Prevention Act [42 U.S.C. 4831(b)], 24 CFR Part 570.608, and 24

CFR Part 35, including provisions and subsequent amendments of the above:

(1)           prohibiting the use of lead‑based

paint;

(2)           requiring elimination of lead‑based

paint hazards; and

(3)           requiring notification of the hazards of

lead‑based paint poisoning to purchasers, owners and tenants of housing

constructed prior to 1978 which was acquired or rehabilitated with CDBG

assistance.

(b)  All construction contracts as described in this Rule

shall contain a provision prohibiting the use of lead based paint.

(c)  In lieu of the testing procedures set forth in the 1996

HUD Guidelines, the recipient may forego testing and abate all applicable

surfaces in accordance with the methods set out in the HUD regulations.

(d)  Lead-based paint hazard evaluation and abatement

activities financed with CDBG funds must be conducted by individuals and firms

that are certified in accordance with the applicable EPA and HUD requirements

for Lead Based Paint activities.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(b)(4); 42 U.S.C.A. 4821 through 4846;

Eff. July 1, 1982;

Amended Eff. August 1, 1998; June 1, 1994; June 1, 1993;

May 1, 1988.

 

 

 

 

04 NCAC 19L .1012          CLEARINGHOUSE REVIEW

(a)  Applications for funding under this Subchapter may be

submitted by the Division to the appropriate state clearinghouse agencies.

(b)  Comments containing any findings of inconsistency with

state or local plans, significant adverse urban impacts, noncompliance with

environmental laws, failure to provide equal opportunity or other comments that

require a response may result in disapproval or conditional approval of the

application by the Division.  Applicants must consider all findings and submit

to the Division a written statement indicating what action they plan to take as

a result of these findings.

(c)  Program amendments which must receive Division approval

pursuant to Rule .0910 Paragraph (a) of this Subchapter, may be submitted to

clearinghouse review in accordance with Paragraph (a) of this Rule.

(d)  All clearinghouse comments and responses shall be kept

in accordance with Rule .0911 of this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Eff. July 1, 1982;

Amended Eff. March 1, 1995; June 1, 1993; September 1,

1990; March 1, 1984.

 

 

 

04 NCAC 19L .1013          COMMUNITY DEVELOPMENT PLAN

(a)  Recipients shall develop a Community Development Plan

that identifies community development and housing needs, including the needs of

low‑ and moderate‑income persons, and activities to be undertaken

to meet such needs.

(b)  The Community Development Plan shall be maintained in

accordance with Rule .0911 of this Subchapter.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C. 5301;

Eff. March 1, 1984.

 

 

 

SECTION .1100 ‑ PERFORMANCE

 

04 NCAC 19L .1101          REPORTING

(a)  Recipients shall submit an Annual Performance Report at

the close of each fiscal year concurrently with the annual audit of the program

required by Rule .0912 of this Subchapter.  Failure to provide the APR and

audit within 60 days of the end of the fiscal year may be grounds for

withholding further grant payments until the APR and audit have been

submitted.  A performance report may also be required of the recipient prior to

the grant closeout pursuant to Rule .0913 of this Subchapter.

(b)  The Annual Performance Report and any other performance

report required prior to the grant closeout shall contain completed copies of

all forms and narratives requested by the Department.

(c)  Between the required performance reporting dates,

events may occur which have significant impact upon the project or program.  In

such cases, the recipient shall inform the Department as soon as the following

types of conditions become known:

(1)           Problems, delays, or adverse conditions

which will materially affect the ability to attain program objectives', prevent

the meeting of time schedules and goals, or preclude the attainment of project

work units by established time periods.  This disclosure shall be accompanied by

a statement of the action taken, or contemplated, and any Departmental

assistance needed to resolve the situation.

(2)           Favorable developments or events which

enable meeting time schedules and goals sooner than anticipated or producing

more work units than originally projected.

(d)  For both construction and nonconstruction grants,

recipients shall notify the Department promptly whenever the amount of CDBG

authorized funds is expected to exceed the needs of the recipient by more than

five thousand dollars ($5,000) or five percent of the Community Development

grant, whichever is greater.

(e)  Recipients shall submit such reports as may be

necessary, pursuant to the rules and regulations under Title VI, Civil Rights

Act of 1964; Title VIII, Civil Rights Act of 1968; Section 3 of the Housing and

Urban Development Act of 1968; Section 109 of the Housing and Community

Development Act of 1974, as amended; Executive Order 11246, as amended; and

Executive Order 11063.

(f)  Recipients will be required to report data annually as

specified by the Division for the state's Comprehensive Housing Affordability

Strategy (CHAS) for response by the Division to 24 CFR Part 91, State and Local

Housing Affordability Strategies.

(g)  Recipients shall submit other reports as outlined in

this Subchapter or as may be further required by the Division.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(b)(4); 24 C.F.R. Part 91;

24 C.F.R. 570.490; 24 C.F.R. 570.491;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; March 1,

1984.

 

 

 

04 NCAC 19L .1102          MONITORING BY THE RECIPIENT

Recipients shall constantly monitor the performance under

grant‑supported activities to assure that time schedules are being met,

projected work units by time periods are being accomplished, and other performance

goals are being achieved.  This review shall be made for each program,

function, or activity of each grant as set forth in the approved grant

application.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(d)(2),(e);

Eff. July 1, 1982.

 

 

 

04 NCAC 19L .1103          MONITORING BY THE DIVISION

(a)  The Secretary shall, in addition to the annual audit,

evaluate programs conducted under this Subchapter and their effectiveness in

meeting the objectives of the CDBG Program.

(b)  The Secretary may conduct such evaluation using

Division personnel, or by contract or other arrangement with public or private

agencies.  The evaluations will consist of site visits as frequently as

practical to:

(1)           Review Program accomplishments and

management control systems as outlined in Paragraph (d) of this Rule; and

(2)           Provide such technical assistance as may be

required.

(c)  Recipients may be required to supply data or make

available such records as are necessary for the accurate completion of these

evaluations, including, but not limited to the following:

(1)           the approved CDBG application and any

amendments thereto;

(2)           reports prepared by the recipient including

the performance report described in Rule .1101;

(3)           records maintained by the recipient

pursuant to Rule .0911;

(4)           results of the Division's monitoring of

recipient performance;

(5)           audit reports;

(6)           records of drawdowns; and

(7)           records of comments and complaints by

citizens and/or other organizations, or litigation.

(d)  Review criteria:

(1)           Substantial progress.  The Division will

review a recipient's performance to determine the recipient's progress in

carrying out approved activities and will take into account such factors as

expenditure of funds, obligation of funds, award of third party contracts, and

other measures of progress.  The Division will compare a recipient's progress

with that of other recipients of comparable size with similar activities and

grant amounts.  If a recipient's progress lags substantially behind that of

other similar recipients, further reviews may be conducted to determine the

reasons for a lack of progress.

(2)           Conformance with approved program.  The

Division will review a recipient's performance to determine whether the

activities undertaken during the period under review conform substantially to

the Community Development Program described in the application, including any

amendments approved by the Division.

(3)           Compliance.  The Division will review a

recipient's performance to determine whether the program carried out complies with

the requirements of the Act, this Subchapter, and other applicable laws and

regulations.

(4)           Continuing Capacity.  The Division will

review a recipient's performance to determine whether the recipient has a

continuing capacity to carry out the approved program in a timely manner.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(d)(2),(e); 24 C.F.R. 570.492;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; March 1,

1984.

 

 

 

04 NCAC 19L .1104          REMEDIES

(a)  When the Secretary determines on the basis of a review

of a recipient's performance that the objectives of the program, as well as the

objectives as described in its application, have not been met, the Secretary

may take one or more of the actions authorized in Paragraph (b) of this Rule. 

In each instance, the action taken will be designed to first, prevent a

continuance of the deficiency (lack of progress, nonconformance, noncompliance,

lack of continuing capacity); second, mitigate any adverse effects or

consequences of the deficiency to the extent possible under the circumstances;

and third, prevent a recurrence of the same or similar deficiencies.

(b)  The action that the Department or Division may take in

response to a negative review of a recipient's performance include:

(1)           Require the recipient to submit additional

information:

(A)          concerning the administrative, planning, budgeting,

management and evaluation functions to determine any reasons for lack of

progress;

(B)          explaining any actions being taken to correct or

remove the causes for delay;

(C)          documenting that activities undertaken were not in

conformance with the approved program or were in noncompliance with applicable

laws or regulations; and

(D)          demonstrating that the recipient has a continuing

capacity to carry out the approved program in a timely manner.

(2)           Require the recipient to submit progress

schedules for completing approved activities;

(3)           Issue a letter of warning that advises the

recipient of the deficiency and puts the recipient on notice that more serious

sanctions will be taken if the deficiency is not corrected or is repeated;

(4)           Instruct the recipient that a certification

will no longer be acceptable and that additional information or assurances will

be required;

(5)           Instruct the recipient to suspend,

discontinue or not incur costs for the affected activity;

(6)           Instruct the recipient to reprogram funds

from affected activities to other eligible activities; provided, that such

action shall not be taken in connection with any substantial violation of Rule

.1004 Environmental Requirements;

(7)           Instruct the recipient to reimburse the

recipient's program account or the Department in any amounts improperly

expended;

(8)           Change the method of payment from advance

payment to a reimbursement basis;

(9)           Condition the approval of a succeeding

year's application if there is substantial evidence of a lack of progress,

nonconformance, noncompliance, or a lack of continuing capacity.  In such

cases, the reasons for the conditional approval and the actions necessary to

remove the condition shall be as specified by the Division; and

(10)         Reduce the recipient's annual grant by up to

the amount conditionally approved where such condition or conditions have not

been satisfied.

(c)  When the Secretary determines, on the basis of a review

of a recipient's performance that objectives of the program as described in its

application have not been met, the Secretary may reduce, withhold funds or

withdraw the grant, except for funds already expended on otherwise eligible

activities which may not be recaptured or deducted from future grants.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.492;

Eff. July 1, 1982;

Amended Eff. June 1, 1993; September 1, 1990; April 1,

1983.

 

 

 

04 NCAC 19L .1105          ADMINISTRATIVE HEARINGS

(a)  Recipients may contest Departmental actions with

respect to this Subchapter under the Contested Case Hearing Procedures set

forth in G.S. 150B and 26 NCAC 3 ‑ Office of Administrative Hearings,

Hearings Division.

(b)  The Department may also commence contested case hearing

procedures against recipients pursuant to G.S. 150B and 26 NCAC 3 ‑

Office of Administrative Hearings, Hearings Division.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

Eff. July 1, 1982;

Amended Eff. September 1, 1990.

 

 

 

 

 

SECTION .1200 ‑ CONTINGENCY PROJECTS

 

04 NCAC 19L .1201          DESCRIPTION

Contingency projects are those projects which, in the

judgment of the Secretary, are deemed to meet community development needs of

the applicant.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.482;

Eff. March 1, 1986.

 

 

 

04 NCAC 19L .1202          ELIGIBILITY REQUIREMENTS

Applicants must meet the eligibility requirements described

in Rule .0502.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.482;

Eff. March 1, 1986;

Amended Eff. June 1, 1994; May 1, 1992.

 

 

 

04 NCAC 19L .1203          SELECTION CRITERIA

Consideration for contingency grants will be given to

applications at the discretion of the Secretary.  Applicants will be selected

for consideration by the Department.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

42 U.S.C.A. 5304(a)(1); 24 C.F.R. 570.482;

Eff. March 1, 1986;

Amended Eff. September 1, 1990.

 

 

 

 

 

section .1300 - HOUSING DEVELOPMENT PROJECTS

 

04 NCAC 19L .1301          dESCRIPTION

04 NCAC 19l .1302          ELIGIBILITY REQUIREMENTS

04 NCAC 19L .1303          SELECTION CRITERIA

 

History Note:        Authority G.S. 143B-10; 143B-431; 24

C.F.R. 570.482; 24 C.F.R. 570.483; 24 C.F.R. 570.489;

Eff. March 1, 1986;

Amended Eff. August 1, 1998; June 1, 1994 (Rule .1302,

.1303); June 1, 1993 (Rule .1302, .1303); May 1, 1992 (Rule .1301); September

1, 1990 (Rule .1302); April 1, 1990 (Rule .1302, .1303);

Repealed Eff. July 1, 2012.

 

SECTION .1400 ‑ ECONOMIC DEVELOPMENT PROJECTS

 

04 NCAC 19L .1401          DEFINITION

04 NCAC 19L .1402          ELIGIBILITY REQUIREMENTS

04 NCAC 19L .1403          SELECTION CRITERIA

04 NCAC 19L .1404          PRELIMINARY AWARDS

 

History Note:        Filed as a Temporary Repeal Eff. July 20,

1992 for a period of 180 days or until the

permanent rule becomes effective, whichever is sooner;

Authority G.S. 143‑323; 143B‑10; 42 U.S.C.A.

5301; 42 U.S.C.A. 5304(a)(1);

24 C.F.R. 570.489;

Eff. March 1, 1986;

Amended Eff. September 1, 1990; April 1, 1989; May 1,

1988;

Repealed Eff. November 2, 1992.

 

 

 

04 NCAC 19L .1405          SELECTION CRITERIA ‑ SMALL

BUSINESS LOAN PROGRAM

 

History Note:        Filed as a Temporary Repeal Eff. July 20,

1992 for a period of 180 days or until the

permanent rule becomes effective, whichever is sooner;

Authority G.S. 143‑323; 42 U.S.C.A. 5301; 24 C.F.R.

570.489;

Eff. April 1, 1989;

Repealed Eff. November 2, 1992.

 

 

 

 

 

SECTION .1500 ‑ INTERIM ASSISTANCE

 

04 NCAC 19L .1501          DESCRIPTION

04 NCAC 19L .1502          ELIGIBILITY REQUIREMENTS

04 NCAC 19L .1503          SELECTION CRITERIA

04 NCAC 19L .1504          FUNDS AVAILABLE

04 NCAC 19L .1505          PRELIMINARY AWARDS

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.482;

Eff. May 1, 1988;

Amended Eff. June 1, 1993; September 1, 1990;

Repealed Eff. June 1, 1994.

 

 

 

 

 

SECTION .1600 ‑ COMMUNITY INVESTMENT FOR ECONOMIC

OPPORTUNITY

 

04 NCAC 19L .1601          DESCRIPTION

04 NCAC 19L .1602          ELIGIBILITY REQUIREMENTS

04 NCAC 19L .1603          SELECTION CRITERIA

04 NCAC 19L .1604          PRELIMINARY AWARDS

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.482;

Eff. June 1, 1990;

Amended Eff. June 1, 1993;

Repealed Eff. June 1, 1994.

 

 

 

 

 

SECTION .1700 - SCATTERED SITE HOUSING CATEGORY

 

04 NCAC 19L .1701          DESCRIPTION

Grants under the Scattered Site Housing Category direct

activities toward one hundred percent low‑ and moderate‑income

persons.  Scattered Site Housing projects are limited to housing

rehabilitation, acquisition, disposition, clearance, and relocation

activities.  Scattered Site Housing activities may be carried out in any

location throughout the recipient's jurisdiction.  Scattered Site Housing funds

shall be distributed to eligible units of local governments in a three year

rotating basis and periodically based on distribution plans and prior

performance.

 

History Note:        Authority G.S. 143B‑10; 143B-431;

24 C.F.R. 570.483;

Eff. March 1,

1995;

Amended Eff.

August 1, 1998;

Temporary

Amendment Eff. January 1, 2001;

Amended Eff.

August 1, 2002.

 

04 NCAC 19L .1702          ELIGIBILITY REQUIREMENTS

(a)  Applications for Scattered Site Housing funds must show

that:

(1)           100 percent of the CDBG funds proposed for

each project will benefit low‑ and moderate‑income persons; and

(2)           CDBG funds proposed for each activity shall

meet a national objective as specified in HUD regulations previously

incorporated by reference, except that funds shall not be used to meet the

national objective of urgent need which is covered by Rule .0801 of this

Subchapter.

(b)  The Division may examine the following areas to

determine capacity:

(1)           audit and monitoring findings on previously

funded Community Development Block Grant programs, and the applicant’s fiscal

accountability as demonstrated in other state or federal programs or local

government financial reports; and

(2)           the rate of expenditure of funds and

accomplishments in previously funded CDBG programs.

Applicants that show a lack of capacity will not be rated or

funded.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.482; 24 C.F.R. 570.483;

Eff. March 1,

1995;

Amended Eff.

August 1, 1998;

Temporary

Amendment Eff. January 1, 2001;

Amended Eff.

August 1, 2002.

 

04 NCAC 19L .1703          SELECTION CRITERIA

Criteria for Scattered Site Housing awards are:

(1)           community need;

(2)           community impact;

(3)           project design;

(4)           financial feasibility;

(5)           year of eligibility;

(6)           distribution plan; and

(7)           participation process.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Eff. March 1,

1995;

Amended Eff.

August 1, 1998;

Temporary

Amendment Eff. January 1, 2001;

Amended Eff.

August 1, 2002.

 

SECTION .1800 - NORTH CAROLINA DEVELOPMENT LOAN FUND

 

04 ncac 19l .1801          GENERAL

(a)  The North Carolina Development Loan Fund is a loan

program for non-entitlement communities participating in the Small Cities

Community Development Block Grant program to access the Department of Housing

and Urban Development's Section 108 Guaranteed Loan Program.  The funds under

this program are loaned to units of local governments for projects meeting one

of the national objectives of benefitting low and moderate income persons,

eliminating slums and blight or addressing a community's urgent needs, as

defined in the Housing and Community Development Act of 1974 as amended.

(b)  The Division shall review applications from local

governments to the Department of Housing and Urban Development under the

Development Loan Fund program.  The review and approval must be made to pledge

future state CDBG allocation as additional collateral for the Development Loan

fund program.

(c)  The Division shall review applications for projects

with housing, commercial and mixed use components.  The Commerce Finance Center

shall review and approve economic development projects.

 

History Note:        Authority G.S. 143B-431; 153A-376;

160A-456; 24 C.F.R. 570  Subpart M;

Eff. August 1, 1998.

 

 

 

04 NCAC 19L .1802          ELIGIBLE ACTIVITIES

(a)  This section incorporates by reference as eligible

activities those activities described in the Housing and Community Development

Act of 1974, as amended, including subsequent amendments and editions under Section

108 and in 24 CFR 570.703.

(b)  G.S. 143B-431(d)(3) - further limits eligibility by

finding that hotels, motels, private recreational facilities, private

entertainment facilities and convention centers are ineligible for Development

Loan Funds.

(c)  Copies of these sections of state and federal law and

regulation are available for public inspection from the Division of Community

Assistance.

 

History Note:        Authority G.S. 143B-431; 24 C.F.R.

570.703;

Eff. August 1, 1998.

 

 

 

04 NCAC 19L .1803          ELIGIBILITY REQUIREMENTS

(a)  Applications for Development Loan Funds must show that:

(1)           All activities are eligible under state and

federal regulations; and

(2)           Development Loan Funds proposed for each

activity meet a national objective as specified by HUD regulations incorporated

by prior reference; and

(3)           The applicant has the capacity to

administer a Development Loan Fund project.

(b)  The Division must make the following findings prior to

an award:

(1)           A loan loss reserve is in place equal to

10% of the amount of the outstanding balance.

(2)           The approved loan may not take the total

amount of outstanding obligations under the Development Loan Fund to more than

twice the amount of the annual CDBG allocation.

 

History Note:        Authority G.S. 143B-431; 24 C.F.R. 570

Subpart M;

Eff. August 1, 1998.

 

 

 

04 NCAC 19L .1804          SIZE OF LOAN APPROVALS

(a)  Maximum and minimum loan amounts as set by the General

Assembly shall be published by the Division in the annual CDBG Consolidated

Plan Action Plan, part of the North Carolina Consolidated Plan.

(b)  Development Loan Funds approved shall not count toward

a community's receipt of CDBG funds in any program year as outlined in Rule

.0403 of this Subchapter.

 

History Note:        Authority G.S. 143B-431; 24 C.F.R. 570

Subpart M;

Eff. August 1, 1998.

 

 

 

04 NCAC 19L .1805          SELECTION CRITERIA

Projects will be evaluated and maybe approved in accordance

with the following selection factors:

(1)           Public benefit,

(2)           Project feasibility,

(3)           Cash flow of the project,

(4)           Collateral of the project.

 

History Note:        Authority G.S. 143B-431; 24 C.F.R. 570

Subpart M;

Eff. August 1, 1998.

 

 

 

 

 

 

SECTION .1900 - HURRICANE FLOYD RECOVERY ASSISTANCE

 

Codifier's Note:  This Section, 04 NCAC 19L .1900, has been

transferred and recodified as 14B NCAC 14 .0100, effective June 1, 2013.  See

Executive Order 8, Governor Michael Easley, July 6, 2001.

 

section .2000 - infrastructure

 

04 NCAC 19L .2001          DESCRIPTION

The infrastructure category includes activities in which

funds are directed toward improving existing infrastructure or providing new

infrastructure to existing neighborhoods with environmental or health problems;

and providing public infrastructure to low- and moderate-income persons.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Temporary Adoption Eff. January 1, 2001;

Amended Eff. August 1, 2002.

 

04 NCAC 19L .2002          ELIGIBILITY REQUIREMENTS

(a)  The only eligible activities in infrastructure are

related to public water and public wastewater (sewer) to benefit homes in

residential neighborhoods.  Street repairs only to the extent necessary to

repair surfaces dug up in laying pipe may be included in the public water sewer

budget line items.  Infrastructure may not include more than one project. 

Projects may carry out either public water or public wastewater (sewer)

activities or both.

(b)  Applicants must insure that each Infrastructure

activity benefits at least 51% low and moderate income persons.  Additionally,

applicants must ensure that activities do not benefit moderate income persons

to the exclusion of low income persons, and that all funds are spent in support

of a national objective.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Temporary

Adoption Eff. January 1, 2001;

Eff. August 1,

2002.

 

04 NCAC 19L .2003          SELECTION CRITERIA

Criteria for Infrastructure awards are:

(1)           severity of needs;

(2)           benefit to low and moderate income persons;

(3)           local commitment;

(4)           treatment of needs; and

(5)           appropriateness and feasibility.

 

History Note:        Authority G.S. 143B‑10; 143B‑431;

24 C.F.R. 570.489;

Temporary

Adoption Eff. January 1, 2001;

Eff. August 1,

2002.