42 U.S.C. § 5318 — Urban development action grants

(a) The Secretary^* may give urban development action grants to severely economically distressed cities and urban counties to stimulate economic development and recovery. Congress authorized $225,000,000 for fiscal year 1988 and $225,000,000 for fiscal year 1989. Each appropriation remains available until spent.

(b)(1) Grants may go only to cities and urban counties that have shown results providing housing and equal housing and employment opportunity for low- and moderate-income people and minority-group members. The Secretary must issue criteria and minimum distress standards considering housing age, poverty, population^* lag, per-person-income growth, unemployment, job lag, and surplus labor. A qualifying city with fewer than 50,000 people that is not a metropolitan area’s central city and was eligible for fiscal year 1983 stays eligible until the Secretary revises its standards to include unemployment, job lag, or labor surplus, as soon as practicable after November 30, 1983. (2) A city or urban county^* missing the minimum standards may qualify if it meets the first sentence of paragraph (1) and contains the required distressed area. For a city of at least 50,000 people or an urban county, the area must consist of adjoining Census-defined areas with at least 10,000 people or 10 percent of the population, at least 70 percent of residents below 80 percent of local median income, and at least 30 percent below the national poverty level. For a smaller city, it must have at least 2,500 people or 10 percent of the city’s population, whichever is greater, and the same income percentages. No more than 20 percent of yearly funds may be used for grants under this paragraph.

(c) Applications under (1) must document subsection (b)(2) eligibility when applicable. Under (2), they must describe activities, estimated costs, general location, expected public and private resources and private-investment opportunities, and expected economic benefits. Under (3), the applicant must certify that before applying it held public hearings, analyzed effects on residents (especially low- and moderate-income residents) and the neighborhood, and made that analysis available to interested neighborhood people and organizations. Under (4), it must certify that it identified affected National Register properties, other affected properties that might meet the Interior Secretary’s listing criteria and supporting documentation, the project’s effects on those properties, and compliance with section 5320.

(d)(1) Except for subsection (b)(2) applicants, the Secretary must use national-competition criteria. They must compare economic distress using growth lag, poverty, and adjusted housing age; other relevant economic-deterioration factors; and (C)(i) private-investment leverage, (ii) permanent jobs compared with the grant, (iii) jobs accessible to lower-income people and minorities including unemployed people, (iv) jobs retained, (v) relief of the applicant’s most pressing employment or housing needs through reemployment in recently distressed skills, retraining, skilled-labor training, or decent low- and moderate-income housing in severe shortage. Housing counts only if at least 51 percent of all project^* funds go to dwelling units and related facilities and either at least 30 percent of those funds go to low- and moderate-income units or at least 20 percent of units made available with them are occupied by those people, whichever yields more units. The criteria also cover effects on the local fiscal base, committed State^* or local funds or incentives, and substantial physical and economic development, timely completion, and demonstrated housing and community-development performance. Additional consideration goes to projects in places without preliminary approval during the prior 12 months, and twice that consideration to places without approval during the prior 24 months; if several applications are pending, only the highest-scoring project gets it. (2) For subsection (b)(2) areas, criteria must compare economic deterioration and include at least paragraph (1)(C)’s criteria. (3) Point limits are 35 for (A), 35 for (B), 33 for (C), plus 1 point for (D)(i) or 2 for (D)(ii). (4) As far as practicable, each cycle uses 65 percent of funds with all paragraph (1) criteria and 35 percent only with (C) and (D). (5)(A) Within 30 days after the fiscal year starts, the Secretary must announce 2 or 3 competitions. (B) Each competition gets roughly the yearly amount divided by the number of competitions, plus unawarded and recaptured prior funds. (C) No city or county may receive over $10,000,000 until every fundable applicant receives a grant; then multiple-applicant places receive additional grants in rank order, with no more than one approval in each later series. (D) All grants, including subsection (b)(2) grants, are awarded in rank order.

(e) A subsection (b)(2) grant requires the project to be in the qualifying area, unless the Secretary finds no suitable site there, a directly adjacent site, and substantial economic benefit to that area; equivalent per-person basic services compared with similar higher-income areas; direct benefit to low- and moderate-income residents there; and a 20-percent contribution from the city or county’s own, State, or qualifying Federal funds. (f) Activities may include others consistent with this section beyond section 5305(a). Repaid grant funds must be used for eligible economic-development activities, and the applicant must annually report expected receipts and uses and the prior year’s use. (g) The Secretary must annually review and audit recipients, may adjust, reduce, withdraw, or otherwise act on funds, but may not recapture money already spent on eligible chapter activities.

(h)(1) A project without identified occupants may not use assistance to move an industrial or commercial plant or facility unless the Secretary finds no significant adverse unemployment or economic-base effect where it leaves. (2) A project with identified occupants may not facilitate a move from an eligible city, county, or subsection (p) community to the project’s location, or an expansion that reduces the operation in that source place. (3) Paragraph (2) does not apply when the Secretary finds no significant adverse employment or economic-base effect. (4) After notice of withholding, denial, or cancellation, the applicant gets at least 90 days to appeal to the Secretary. Nothing here or in legislative history implies that Congress’s policy is to facilitate business relocation. (5)(A) Money withdrawn, recaptured, or paid because of a violation or settlement goes as a grant to the place losing or reducing the operation. (B) It must help affected former workers through job training, retraining, and placement; excess goes to section 5305(a) community development. (C) This applies even to earlier amounts, but only to the extent provided by appropriations. (6) “Operation” includes a plant, equipment, facility, position, employment opportunity, production capacity, or product line. (7) Within 60 days after February 5, 1988, the Secretary must issue needed regulations, including criteria for significant adverse effects.

(i) At least 25 percent of funds must serve cities under 50,000 that are not metropolitan central cities. Nearby such cities may form consortia, including non-urban-county governments, to apply for an otherwise eligible city; consortia grants follow individual-city eligibility rules. (j) A grant requires a strong probability that the non-Federal investment would not occur without it and that it will not replace otherwise available non-Federal funds. (k) The Secretary must make the grant no larger than necessary for feasibility. (l) The Secretary may reduce or waive the closely-settled-town or township requirement in section 5302(a)(5)(B)(ii). (m) For property identified under (c)(4)(B), funds may not be committed unless the applicant certifies that the State historic-preservation officer and Interior Secretary had an opportunity to act under section 5320(b).

(n)(1) “City” includes Guam, American Samoa, the Northern Mariana Islands, the Virgin Islands, Indian tribes, and Kauai, Maui, and Hawaii Counties. (2) An Indian tribe^* must be on a reservation, a qualifying former Oklahoma reservation, or in an Alaskan Native Village, and must have been eligible under repealed chapter 67 of title 31. (o) If post-1983 appropriations are set aside or barred, later available money goes to section 5303, except specified October 1, 1993 and subsection (t) money may fund section 5308(q) grants. (p) A Secretary-approved unincorporated urban-county portion may qualify under (b)(2) if it meets (b)(1)’s first-sentence rule, (b)(2)(B) applied to its population, and the rest of this section. (q) Up to $2,500,000 yearly may fund technical-assistance grants to States, their agencies, university municipal advisory services, or State county or municipal associations to help subsection (i) local governments develop, apply for, and carry out eligible programs. (r) The Secretary may not discriminate based on housing, industrial, or commercial activity, or city versus urban-county applicant. (s) The fiscal-year-1988 and 1989 maximum per project is $10,000,000. (t) After an implementation notice, a grantee with unspent funds may, within 90 days or a later approved date, accept 33 percent or 25 percent and give up the balance. No obligated funds from April 11, 1994, through 90 days after the notice may be recaptured. The 33-percent option requires at least half for section 5308(q) activities paired with a loan guarantee at least twice that amount, the remainder for eligible economic development, and generally no more than half of those activity costs from the unspent money. The 25-percent option requires eligible economic development and generally no more than half of its costs from the unspent money. The Secretary may waive the half-cost limits for a severely distressed jurisdiction.