
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC5318]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 69--COMMUNITY DEVELOPMENT
 
Sec. 5318. Urban development action grants


(a) Authorization; purpose; amount

    The Secretary is authorized to make urban development action grants 
to cities and urban counties which are experiencing severe economic 
distress to help stimulate economic development activity needed to aid 
in economic recovery. There are authorized to be appropriated to carry 
out this section $225,000,000 for fiscal year 1988, and $225,000,000 for 
fiscal year 1989. Any amount appropriated under this subsection shall 
remain available until expended.

(b) Eligibility of cities and urban counties; criteria and standards; 
        regulations

    (1) Urban development action grants shall be made only to cities and 
urban counties which have, in the determination of the Secretary, 
demonstrated results in providing housing for low- and moderate-income 
persons and in providing equal opportunity in housing and employment for 
low- and moderate-income persons and members of minority groups. The 
Secretary shall issue regulations establishing criteria in accordance 
with the preceding sentence and setting forth minimum standards for 
determining the level of economic distress of cities and urban counties 
for eligibility for such grants. These standards shall take into account 
factors such as the age of housing; the extent of poverty; the extent of 
population lag; growth of per capita income; and the extent of 
unemployment, job lag, or surplus labor. Any city that has a population 
of less than 50,000 persons and is not the central city of a 
metropolitan area, and that was eligible for fiscal year 1983 under this 
paragraph for assistance under this section, shall continue to be 
eligible for such assistance until the Secretary revises the standards 
for eligibility for such cities under this paragraph and includes the 
extent of unemployment, job lag, or labor surplus as a standard of 
distress for such cities. The Secretary shall make such revision as soon 
as practicable following November 30, 1983.
    (2) A city or urban county which fails to meet the minimum standards 
established pursuant to paragraph (1) shall be eligible for assistance 
under this section if it meets the requirements of the first sentence of 
such paragraph and--
        (A) in the case of a city with a population of fifty thousand 
    persons or more or an urban county, contains an area (i) composed of 
    one or more contiguous census tracts, enumeration districts, 
    neighborhood statistics areas, or block groups, as defined by the 
    United States Bureau of the Census, having at least a population of 
    ten thousand persons or 10 per centum of the population of the city 
    or urban county; (ii) in which at least 70 per centum of the 
    residents have incomes below 80 per centum of the median income of 
    the city or urban county; and (iii) in which at least 30 per centum 
    of the residents have incomes below the national poverty level; or
        (B) in the case of a city with a population of less than fifty 
    thousand persons, contains an area (i) composed of one or more 
    contiguous census tracts, enumeration districts, neighborhood 
    statistics areas, or block groups or other areas defined by the 
    United States Bureau of the Census or for which data certified by 
    the United States Bureau of the Census are available having at least 
    a population of two thousand five hundred persons or 10 per centum 
    of the population of the city, whichever is greater; (ii) in which 
    at least 70 per centum of the residents have incomes below 80 per 
    centum of the median income of the city; and (iii) in which at least 
    30 per centum of the residents have incomes below the national 
    poverty level.

The Secretary shall use up to, but not more than, 20 per centum of the 
funds appropriated for use in any fiscal year under this section for the 
purpose of making grants to cities and urban counties eligible under 
this paragraph.

(c) Applications; documentation of eligibility; proposed plan; assurance 
        of notice and comment; assurance of consideration on historical 
        landmarks

    Applications for assistance under this section shall--
        (1) in the case of an application for a grant under subsection 
    (b)(2) of this section, include documentation of grant eligibility 
    in accordance with the standards described in that subsection;
        (2) set forth the activities for which assistance is sought, 
    including (A) an estimate of the costs and general location of the 
    activities; (B) a summary of the public and private resources which 
    are expected to be made available in connection with the activities, 
    including how the activities will take advantage of unique 
    opportunities to attract private investment; and (C) an analysis of 
    the economic benefits which the activities are expected to produce;
        (3) contain a certification satisfactory to the Secretary that 
    the applicant, prior to submission of its application, (A) has held 
    public hearings to obtain the views of citizens, particularly 
    residents of the area in which the proposed activities are to be 
    carried out; (B) has analyzed the impact of these proposed 
    activities on the residents, particularly those of low and moderate 
    income, of the residential neighborhood, and on the neighborhood in 
    which they are to be carried out; and (C) has made available the 
    analysis described in clause (B) to any interested person or 
    organization residing or located in the neighborhood in which the 
    proposed activities are to be carried out; and
        (4) contain a certification satisfactory to the Secretary that 
    the applicant, prior to submission of its application, (A) has 
    identified all properties, if any, which are included on the 
    National Register of Historic Places and which, as determined by the 
    applicant, will be affected by the project for which the application 
    is made; (B) has identified all other properties, if any, which will 
    be affected by such project and which, as determined by the 
    applicant, may meet the criteria established by the Secretary of the 
    Interior for inclusion on such Register, together with documentation 
    relating to the inclusion of such properties on the Register; (C) 
    has determined the effect, as determined by the applicant, of the 
    project on the properties identified pursuant to clauses (A) and 
    (B); and (D) will comply with the requirements of section 5320 of 
    this title.

(d) Mandatory selection criteria; award of points; distribution of 
        funds; number of competitions per year; use of distress 
        conditions data by urban counties

    (1) Except in the case of a city or urban county eligible under 
subsection (b)(2) of this section, the Secretary shall establish 
selection criteria for a national competition for grants under this 
section which must include--
        (A) the comparative degree of economic distress among 
    applicants, as measured (in the case of a metropolitan city or urban 
    county) by the differences in the extent of growth lag, the extent 
    of poverty, and the adjusted age of housing in the metropolitan city 
    or urban county;
        (B) other factors determined to be relevant by the Secretary in 
    assessing the comparative degree of economic deterioration in cities 
    and urban counties;
        (C) the following other criteria:
            (i) the extent to which the grant will stimulate economic 
        recovery by leveraging private investment;
            (ii) the number of permanent jobs to be created and their 
        relation to the amount of grant funds requested;
            (iii) the proportion of permanent jobs accessible to lower 
        income persons and minorities, including persons who are 
        unemployed;
            (iv) the extent to which the project will retain jobs that 
        will be lost without the provision of a grant under this 
        section;
            (v) the extent to which the project will relieve the most 
        pressing employment or residential needs of the applicant by--
                (I) reemploying workers in a skill that has recently 
            suffered a sharp increase in unemployment locally;
                (II) retraining recently unemployed residents in new 
            skills;
                (III) providing training to increase the local pool of 
            skilled labor; or
                (IV) producing decent housing for low- and moderate-
            income persons in cases where such housing is in severe 
            shortage in the area of the applicant, except that an 
            application shall be considered to produce housing for low- 
            and moderate-income persons under this clause only if such 
            application proposes that (a) not less than 51 percent of 
            all funds available for the project shall be used for 
            dwelling units and related facilities; and (b) not less than 
            30 percent of all funds used for dwelling units and related 
            facilities shall be used for dwelling units to be occupied 
            by persons of low and moderate income, or not less than 20 
            percent of all dwelling units made available to occupancy 
            using such funds shall be occupied by persons of low and 
            moderate income, whichever results in the occupancy of more 
            dwelling units by persons of low and moderate income;

            (vi) the impact of the proposed activities on the fiscal 
        base of the city or urban county and its relation to the amount 
        of grant funds requested;
            (vii) the extent to which State or local Government \1\ 
        funding or special economic incentives have been committed; and
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    \1\ So in original. Probably should not be capitalized.
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            (viii) the extent to which the project will have a 
        substantial impact on physical and economic development of the 
        city or urban county, the proposed activities are likely to be 
        accomplished in a timely fashion with the grant amount 
        available, and the city or urban county has demonstrated 
        performance in housing and community development programs; and

        (D) additional consideration for projects with the following 
    characteristics:
            (i) projects to be located within a city or urban county 
        which did not receive a preliminary grant approval under this 
        section during the 12-month period preceding the date on which 
        applications are required to be submitted for the grant 
        competition involved; and
            (ii) twice the amount of the additional consideration 
        provided under clause (i) for projects to be located in cities 
        or urban counties which did not receive a preliminary grant 
        approval during the 24-month period preceding the date on which 
        applications under this section are required to be submitted for 
        the grant competition involved.

    If a city or urban county has submitted and has pending more than 
    one application, the additional consideration provided by 
    subparagraph (D) of the preceding sentence shall be available only 
    to the project in such city or urban county which received the 
    highest number of points under subparagraph (C) of such sentence.

    (2) For the purpose of making grants with respect to areas described 
in subsection (b)(2) of this section, the Secretary shall establish 
selection criteria, which must include (A) factors determined to be 
relevant by the Secretary in assessing the comparative degree of 
economic deterioration among eligible areas, and (B) such other criteria 
as the Secretary may determine, including at a minimum the criteria 
listed in paragraph (1)(C) of this subsection.
    (3) The Secretary shall award points to each application as follows:
        (A) not more than 35 points on the basis of the criteria 
    referred to in paragraph (1)(A);
        (B) not more than 35 points on the basis of the criteria 
    referred to in paragraph (1)(B);
        (C) not more than 33 points on the basis of the criteria 
    referred to in paragraph (1)(C); and
        (D)(i) 1 additional point on the basis of the criterion referred 
    to in paragraph (1)(D)(i); or
        (ii) 2 additional points on the basis of the criterion referred 
    to in paragraph (1)(D)(ii).

    (4) The Secretary shall distribute grant funds under this section so 
that to the extent practicable during each funding cycle--
        (A) 65 percent of the funds is first made available utilizing 
    all of the criteria set forth in paragraph (1); and
        (B) 35 percent of the funds is then made available solely on the 
    basis of the factors referred to in subparagraphs (C) and (D) of 
    paragraph (1).

    (5)(A) Within 30 days of the start of each fiscal year, the 
Secretary shall announce the number of competitions for grants to be 
held in that fiscal year. The number of competitions shall be not less 
than two nor more than three.
    (B) Each competition for grants described in any clause of 
subparagraph (A) shall be for an amount equal to the sum of--
        (i) approximately the amount of the funds available for such 
    grants for the fiscal year divided by the number of competitions for 
    those funds;
        (ii) any funds available for such grants in any previous 
    competition that are not awarded; and
        (iii) any funds available for such grants in any previous 
    competition that are recaptured.

    (C) Notwithstanding any other provision of this section, in each 
competition for grants under this section, no city or urban county may 
be awarded a grant or grants in an amount in excess of $10,000,000 until 
all cities and urban counties which submitted fundable applications have 
been awarded a grant. If funds are available for additional grants after 
each city and urban county submitting a fundable application is awarded 
one or more grants under the preceding sentence, then additional grants 
shall be made so that each city or urban county that has submitted 
multiple applications is awarded one additional grant in order of 
ranking, with no single city or urban county receiving more than one 
grant approval in any subsequent series of grant determinations within 
the same competition.
    (D) All grants under this section, including grants to cities and 
urban counties described in subsection (b)(2) of this section, shall be 
awarded in accordance with subparagraph (C) so that all grants under 
this section are made in order of ranking.

(e) Limitations on power of Secretary to approve grants; waiver

    The Secretary may not approve any grant to a city or urban county 
eligible under subsection (b)(2) of this section unless--
        (1) the grant will be used in connection with a project located 
    in an area described in subsection (b)(2) of this section, except 
    that the Secretary may waive this requirement where the Secretary 
    determines (A) that there is no suitable site for the project within 
    that area, (B) the project will be located directly adjacent to that 
    area, and (C) the project will contribute substantially to the 
    economic development of that area;
        (2) the city or urban county has demonstrated to the 
    satisfaction of the Secretary that basic services supplied by the 
    city or urban county to the area described in subsection (b)(2) of 
    this section are at least equivalent, as measured by per capita 
    expenditures, to those supplied to other areas within the city or 
    urban county which are similar in population size and physical 
    characteristics and which have median incomes above the median 
    income for the city or urban county;
        (3) the grant will be used in connection with a project which 
    will directly benefit the low- and moderate-income families and 
    individuals residing in the area described in subsection (b)(2) of 
    this section; and
        (4) the city or urban county makes available, from its own funds 
    or from funds received from the State or under any Federal program 
    which permits the use of financial assistance to meet the non-
    Federal share requirements of Federal grant-in-aid programs, an 
    amount equal to 20 per centum of the grant to be available under 
    this section to be used in carrying out the activities described in 
    the application.

(f) Permissibility of consistent but unenumerated activities; report on 
        use of repaid grant funds for economic development activities

    Activities assisted under this section may include such activities, 
in addition to those authorized under section 5305(a) of this title, as 
the Secretary determines to be consistent with the purposes of this 
section. In any case in which the project proposes the repayment to the 
applicant of the grant funds, such funds shall be made available by the 
applicant for economic development activities that are eligible 
activities under this section or section 5305 of this title. The 
applicant shall annually provide the Secretary with a statement of the 
projected receipt and use of repaid grant funds during the next year 
together with a report acceptable to the Secretary on the use of such 
funds during the most recent preceding full fiscal year of the 
applicant.

(g) Annual review and audit; adjustments, withdrawals and reduction 
        permitted

    The Secretary shall, at least on an annual basis, make reviews and 
audits of recipients of grants under this section as necessary to 
determine the progress made in carrying out activities substantially in 
accordance with approved plans and timetables. The Secretary may adjust, 
reduce, or withdraw grant funds, or take other action as appropriate in 
accordance with the findings of these reviews and audits, except that 
funds already expended on eligible activities under this chapter shall 
not be recaptured or deducted from future grants made to the recipient.

(h) Limitations on grants for industrial or commercial relocations or 
        expansions; appeal of denial or cancellation of assistance; 
        grants to adversely affected individuals

                      (1) Speculative projects

        No assistance may be provided under this section for projects 
    intended to facilitate the relocation of industrial or commercial 
    plants or facilities from one area to another, unless the Secretary 
    finds that the relocation does not significantly and adversely 
    affect the unemployment or economic base of the area from which the 
    industrial or commercial plant or facility is to be relocated. The 
    provisions of this paragraph shall apply only to projects that do 
    not have identified intended occupants.

           (2) Projects with identified intended occupants

        No assistance may be provided or utilized under this section for 
    any project with identified intended occupants that is likely to 
    facilitate--
            (A) a relocation of any operation of an industrial or 
        commercial plant or facility or other business establishment--
                (i) from any city, urban county, or identifiable 
            community described in subsection (p) of this section, that 
            is eligible for assistance under this section; and
                (ii) to the city, urban county, or identifiable 
            community described in subsection (p) of this section, in 
            which the project is located; or

            (B) an expansion of any such operation that results in a 
        reduction of any such operation in any city, county, or 
        community described in subparagraph (A)(i).

                 (3) Significant and adverse effect

        The restrictions established in paragraph (2) shall not apply if 
    the Secretary determines that the relocation or expansion does not 
    significantly and adversely affect the employment or economic base 
    of the city, county, or community from which the relocation or 
    expansion occurs.

                 (4) Appeal of adverse determination

        Following notice of intent to withhold, deny, or cancel 
    assistance under paragraph (1) or (2), the Secretary shall provide a 
    period of not less than 90 days in which the applicant can appeal to 
    the Secretary the withholding, denial, or cancellation of 
    assistance. Notwithstanding any other provision of this section, 
    nothing in this section or in any legislative history related to the 
    enactment of this section may be construed to permit an inference or 
    conclusion that the policy of the Congress in the urban development 
    action grant program is to facilitate the relocation of businesses 
    from one area to another.

        (5) Assistance for individuals adversely affected by 
                           prohibited relocations

        (A) Any amount withdrawn by, recaptured by, or paid to the 
    Secretary due to a violation (or a settlement of an alleged 
    violation) of this subsection (or of any regulation issued or 
    contractual provision entered into to carry out this subsection) by 
    a project with identified intended occupants shall be made available 
    by the Secretary as a grant to the city, county, or community 
    described in subsection (p) of this section, from which the 
    operation of an industrial or commercial plant or facility or other 
    business establishment relocated or in which the operation was 
    reduced.
        (B)(i) Any amount made available under this paragraph shall be 
    used by the grantee to assist individuals who were employed by the 
    operation involved prior to the relocation or reduction and whose 
    employment or terms of employment were adversely affected by the 
    relocation or reduction. The assistance shall include job training, 
    job retraining, and job placement.
        (ii) If any amount made available to a grantee under this 
    paragraph is more than is required to provide assistance under 
    clause (i), the grantee shall use the excess amount to carry out 
    community development activities eligible under section 5305(a) of 
    this title.
        (C)(i) The provisions of this paragraph shall be applicable to 
    any amount withdrawn by, recaptured by, or paid to the Secretary 
    under this section, including any amount withdrawn, recaptured, or 
    paid before the effective date of this paragraph.
        (ii) Grants may be made under this paragraph only to the extent 
    of amounts provided in appropriation Acts.

                           (6) Definition

        For purposes of this subsection, the term ``operation'' includes 
    any plant, equipment, facility, position, employment opportunity, 
    production capacity, or product line.

                           (7) Regulations

        Not later than 60 days after February 5, 1988, the Secretary 
    shall issue such regulations as may be necessary to carry out the 
    provisions of this subsection. Such regulations shall include 
    specific criteria to be used by the Secretary in determining whether 
    there is a significant and adverse effect under paragraph (3).

(i) Minimum percentage of funds to be allocated to certain noncentral 
        cities; application by consortia of cities of less than 50,000 
        population

    Not less than 25 per centum of the funds made available for grants 
under this section shall be used for cities with populations of less 
than fifty thousand persons which are not central cities of a 
metropolitan statistical area. The Secretary shall encourage cooperation 
by geographically proximate cities of less than 50,000 population by 
permitting consortia of such cities, which may also include county 
governments that are not urban counties, to apply for grants on behalf 
of a city that is otherwise eligible for assistance under this section. 
Any grants awarded to such consortia shall be administered in compliance 
with eligibility requirements applicable to individual cities.

(j) Grant contingent on factors related to non-Federal funds

    A grant may be made under this section only where the Secretary 
determines that there is a strong probability that (1) the non-Federal 
investment in the project would not be made without the grant, and (2) 
the grant would not substitute for non-Federal funds which are otherwise 
available to the project.

(k) Duty of Secretary to minimize amount

    In making grants under this section, the Secretary shall take such 
steps as the Secretary deems appropriate to assure that the amount of 
the grant provided is the least necessary to make the project feasible.

(l) Power of Secretary to waive requirement that town or township be 
        closely settled

    For purposes of this section, the Secretary may reduce or waive the 
requirement in section 5302(a)(5)(B)(ii) of this title that a town or 
township be closely settled.

(m) Notice to State historic preservation officer and Secretary of the 
        Interior required with regard to affected landmark property; 
        opportunity for comment

    In the case of any application which identifies any property in 
accordance with subsection (c)(4)(B) of this section, the Secretary may 
not commit funds with respect to an approved application unless the 
applicant has certified to the Secretary that the appropriate State 
historic preservation officer and the Secretary of the Interior have 
been provided an opportunity to take action in accordance with the 
provisions of section 5320(b) of this title.

(n) Territories, tribes, and certain Hawaiian counties included in term 
        ``city''

    (1) For the purposes of this section, the term ``city'' includes 
Guam, American Samoa, the Northern Mariana Islands, the Virgin Islands, 
and Indian tribes. Such term also includes the counties of Kauai, Maui 
and Hawaii in the State of Hawaii.
    (2) The Secretary may not approve a grant to an Indian tribe under 
this section unless the tribe (A) is located on a reservation, or on 
former Indian reservations in Oklahoma as determined by the Secretary of 
the Interior, or in an Alaskan Native Village, and (B) was an eligible 
recipient under chapter 67 of title 31 prior to the repeal of such 
chapter.

(o) Special provisions for years after 1983

    If no amounts are set aside under, or amounts are precluded from 
being appropriated for this section for fiscal years after fiscal year 
1983, any amount which is or becomes available for use under this 
section after fiscal year 1983 shall be added to amounts appropriated 
under section 5303 of this title, except that amounts available to the 
Secretary for use under this subsection as of October 1, 1993, and 
amounts released to the Secretary pursuant to subsection (t) of this 
section may be used to provide grants under section 5308(q) of this 
title..\2\
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    \2\ So in original.
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(p) Unincorporated portions of urban counties

    An unincorporated portion of an urban county that is approved by the 
Secretary as an identifiable community for purposes of this section is 
eligible for a grant under subsection (b)(2) of this section if such 
portion meets the eligibility requirements contained in the first 
sentence of subsection (b)(1) of this section and the requirements of 
subsection (b)(2)(B) of this section (applied to the population of the 
portion of the urban county) and if it otherwise complies with the 
provisions of this section.

(q) Technical assistance grants

    Of the amounts appropriated for purposes of this section for any 
fiscal year, not more than $2,500,000 may be used by the Secretary to 
make technical assistance grants to States or their agencies, municipal 
technical advisory services operated by universities, or State 
associations of counties or municipalities, to enable such entities to 
assist units of general local government described in subsection (i) of 
this section in developing, applying for assistance for, and 
implementing programs eligible for assistance under this section.

(r) Nondiscrimination by Secretary against type of activity or applicant

    In utilizing the discretion of the Secretary when providing 
assistance and applying selection criteria under this section, the 
Secretary may not discriminate against applications on the basis of (1) 
the type of activity involved, whether such activity is primarily 
housing, industrial, or commercial; or (2) the type of applicant, 
whether such applicant is a city or urban county.

(s) Maximum grant amount for fiscal years 1988 and 1989

    For fiscal years 1988 and 1989, the maximum grant amount for any 
project under this section is $10,000,000.

(t) UDAG retention program

    If a grant or a portion of a grant under this section remains 
unexpended upon the issuance of a notice implementing this subsection, 
the grantee may enter into an agreement, as provided under this 
subsection, with the Secretary to receive a percentage of the grant 
amount and relinquish all claims to the balance of the grant within 90 
days of the issuance of notice implementing this subsection (or such 
later date as the Secretary may approve). The Secretary shall not 
recapture any funds obligated pursuant to this section during a period 
beginning on April 11, 1994, until 90 days after the issuance of a 
notice implementing this subsection. A grantee may receive as a grant 
under this subsection--
        (1) 33 percent of such unexpended amounts if--
            (A) the grantee agrees to expend not less than one-half of 
        the amount received for activities authorized pursuant to 
        section 5308(q) of this title and to expend such funds in 
        conjunction with a loan guarantee made under section 5308 of 
        this title at least equal to twice the amount of the funds 
        received; and
            (B)(i) the remainder of the amount received is used for 
        economic development activities eligible under this chapter; and
            (ii) except when waived by the Secretary in the case of a 
        severely distressed jurisdiction, not more than one-half of the 
        costs of activities under subparagraph (B) are derived from such 
        unexpended amounts; or

        (2) 25 percent of such unexpended amounts if--
            (A) the grantee agrees to expend such funds for economic 
        development activities eligible under this chapter; and
            (B) except when waived by the Secretary in the case of a 
        severely distressed jurisdiction, not more than one-half of the 
        costs of such activities are derived from such unexpended 
        amount.

(Pub. L. 93-383, title I, Sec. 119, as added Pub. L. 95-128, title I, 
Sec. 110(b), Oct. 12, 1977, 91 Stat. 1125; amended Pub. L. 95-557, title 
I, Sec. 103(g), (h), Oct. 31, 1978, 92 Stat. 2084; Pub. L. 96-153, title 
I, Secs. 104, 105, Dec. 21, 1979, 93 Stat. 1102, 1104; Pub. L. 96-399, 
title I, Secs. 110(a), (b), 117(a), Oct. 8, 1980, 94 Stat. 1619, 1623; 
Pub. L. 97-35, title III, Sec. 308(a), Aug. 13, 1981, 95 Stat. 392; Pub. 
L. 98-181, title I, Sec. 121, Nov. 30, 1983, 97 Stat. 1168; Pub. L. 98-
454, title VI, Sec. 601(c), Oct. 5, 1984, 98 Stat. 1736; Pub. L. 98-479, 
title II, Sec. 203(l)(3), Oct. 17, 1984, 98 Stat. 2231; Pub. L. 99-272, 
title XIV, Sec. 14001(b)(6), Apr. 7, 1986, 100 Stat. 329; Pub. L. 99-
500, Sec. 101(g), Oct. 18, 1986, 100 Stat. 1783-242, and Pub. L. 99-591, 
Sec. 101(g), Oct. 30, 1986, 100 Stat. 3341-242; Pub. L. 100-202, 
Secs. 101(f) [title I, Sec. 101], 106, Dec. 22, 1987, 101 Stat. 1329-
187, 1329-193, 1329-433; Pub. L. 100-242, title V, Secs. 501(c), 515(a)-
(d), (g)(2)-(i), 516(a), Feb. 5, 1988, 101 Stat. 1923, 1930-1934; Pub. 
L. 100-404, title I, Aug. 19, 1988, 102 Stat. 1020; Pub. L. 100-628, 
title X, Sec. 1084, Nov. 7, 1988, 102 Stat. 3277; Pub. L. 103-233, title 
II, Sec. 232(b), (c)(1), Apr. 11, 1994, 108 Stat. 367.)

                       References in Text

    For effective date of this paragraph, referred to in subsec. 
(h)(5)(C)(i), see section 516(b) of Pub. L. 100-242, set out as an 
Effective Date of 1988 Amendment note below.
    Chapter 67 of title 31, referred to in subsec. (n)(2)(B), was 
repealed by Pub. L. 99-272, title XIV, Sec. 14001(a)(1), Apr. 7, 1986, 
100 Stat. 327.

                          Codification

    Pub. L. 99-591 is a corrected version of Pub. L. 99-500.
    Amendment of subsec. (n)(1) by Pub. L. 99-500 and 99-591 is based on 
provisions under the headings ``Management and Administration'' and 
``Administrative Provision'' in title I of H.R. 5313 [Department of 
Housing and Urban Development--Independent Agencies Appropriations Act, 
1987], as incorporated by reference by section 101(g) of Pub. L. 99-500 
and 99-591, and enacted into law by section 106 of Pub. L. 100-202.


                               Amendments

    1994--Subsec. (o). Pub. L. 103-233, Sec. 232(b), inserted before 
period at end ``, except that amounts available to the Secretary for use 
under this subsection as of October 1, 1993, and amounts released to the 
Secretary pursuant to subsection (t) of this section may be used to 
provide grants under section 5308(q) of this title.''
    Subsec. (t). Pub. L. 103-233, Sec. 232(c)(1), added subsec. (t).
    1988--Subsec. (a). Pub. L. 100-242, Sec. 501(c), substituted ``There 
are authorized to be appropriated to carry out this section $225,000,000 
for fiscal year 1988, and $225,000,000 for fiscal year 1989. Any amount 
appropriated under this subsection shall remain available until 
expended.'' for ``Of the total amount approved in appropriation Acts 
under section 5303 of this title for each of the fiscal years 1982 and 
1983, not more than $500,000,000 shall be available for each of the 
fiscal years 1982 and 1983 for grants under this section. There are 
authorized to be appropriated to carry out the provisions of this 
section not to exceed $440,000,000 for each of the fiscal years 1984, 
1985, and 1986, and any amount appropriated under this sentence shall 
remain available until expended.''
    Subsec. (d)(1). Pub. L. 100-242, Sec. 515(a), inserted dash before 
``(A)'', indented subpars. (A) and (B), struck out ``as the primary 
criterion,'' in subpar. (A) and ``and'' at end of subpar. (B), added 
subpars. (C) and (D), and struck out former subpar. (C) which read as 
follows: ``at least the following other criteria: demonstrated 
performance of the city or urban county in housing and community 
development programs; the extent to which the grant will stimulate 
economic recovery by leveraging private investment; the number of 
permanent jobs to be created and their relation to the amount of grant 
funds requested; the proportion of permanent jobs accessible to lower 
income persons and minorities, including persons who are unemployed; the 
impact of the proposed activities on the fiscal base of the city or 
urban county and its relation to the amount of grant funds requested; 
the extent to which State or local government funding or special 
economic incentives have been committed; and the feasibility of 
accomplishing the proposed activities in a timely fashion within the 
grant amount available.''
    Subsec. (d)(3) to (5). Pub. L. 100-242, Sec. 515(b), added pars. (3) 
to (5).
    Subsec. (d)(5)(C), (D). Pub. L. 100-404 added subpars. (C) and (D).
    Subsec. (d)(6). Pub. L. 100-242, Sec. 515(b), (g)(2), temporarily 
added par. (6), see Effective Date of 1988 Amendment note below.
    Subsec. (f). Pub. L. 100-628, Sec. 1084(a), substituted ``5305'' for 
``5304'' after ``activities under this section or section''.
    Pub. L. 100-242, Sec. 515(c), inserted at end ``In any case in which 
the project proposes the repayment to the applicant of the grant funds, 
such funds shall be made available by the applicant for economic 
development activities that are eligible activities under this section 
or section 5304 of this title. The applicant shall annually provide the 
Secretary with a statement of the projected receipt and use of repaid 
grant funds during the next year together with a report acceptable to 
the Secretary on the use of such funds during the most recent preceding 
full fiscal year of the applicant.''
    Subsec. (h)(1). Pub. L. 100-242, Sec. 516(a)(1), (2), designated 
existing provision as par. ``(1) Speculative projects'' and inserted at 
end ``The provisions of this paragraph shall apply only to projects that 
do not have identified intended occupants.''
    Subsec. (h)(2) to (7). Pub. L. 100-242, Sec. 516(a)(3), added pars. 
(2) to (7).
    Subsec. (n)(1). Pub. L. 100-628, Sec. 1084(b), directed that subsec. 
(n)(1) of this section as similarly amended first by provisions made 
effective by section 101(g) of Pub. L. 99-500 and Pub. L. 99-591 [see 
1986 Amendment note below and Codification note above] and later by 
section 515(i) of Pub. L. 100-242 [see below] is amended to read as if 
the amendment by Pub. L. 100-242 had not been enacted.
    Pub. L. 100-242, Sec. 515(i), made amendment identical to Pub. L. 
99-500 and 99-591. See 1986 Amendment note below.
    Subsec. (r). Pub. L. 100-242, Sec. 515(d), amended subsec. (r) 
generally. Prior to amendment, subsec. (r) read as follows: ``In 
providing assistance under this section, the Secretary may not 
discriminate among programs on the basis of the particular type of 
activity involved, whether such activity is primarily a neighborhood, 
industrial, or commercial activity.''
    Subsec. (s). Pub. L. 100-242, Sec. 515(h), added subsec. (s).
    1987--Subsec. (n)(1). For amendment by Sec. 106 of Pub. L. 100-202, 
see 1986 Amendment note below.
    Subsec. (n)(2)(A). Pub. L. 100-202, Sec. 101(f) [title I, Sec. 101], 
inserted ``, or on former Indian reservations in Oklahoma as determined 
by the Secretary of the Interior,'' after ``reservation''.
    1986--Subsec. (n)(1). Pub. L. 99-500 and 99-591, Sec. 101(g), as 
enacted by Pub. L. 100-202, inserted at end ``Such term also includes 
the counties of Kauai, Maui and Hawaii in the State of Hawaii.'' See 
Codification note above.
    Subsec. (n)(2)(B). Pub. L. 99-272 substituted ``was an eligible 
recipient under chapter 67 of title 31 prior to the repeal of such 
chapter'' for ``is an eligible recipient under chapter 67 of title 31''.
    1984--Subsec. (n)(1). Pub. L. 98-454 inserted reference to American 
Samoa and the Northern Mariana Islands.
    Subsec. (n)(2). Pub. L. 98-479 substituted ``chapter 67 of title 
31'' for ``the State and Local Fiscal Assistance Act of 1972''.
    1983--Subsec. (a). Pub. L. 98-181, Sec. 121(a), inserted 
authorizations for appropriations not to exceed $440,000,000 for each of 
the fiscal years 1984, 1985, and 1986.
    Subsec. (b)(1). Pub. L. 98-181, Sec. 121(b), substituted ``the 
extent of unemployment, job lag, or surplus labor'' for ``where data are 
available, the extent of unemployment and job lag'', and inserted 
provisions for continued eligibility for assistance of any city with a 
population of less than 50,000 persons, other than a central city of a 
metropolitan area, which until the Secretary revises the standards for 
eligibility for such cities and includes the extent of unemployment, job 
lag, or labor surplus as a standard of distress for such cities, and 
provisions requiring the Secretary to make such revision as soon as 
possible following Nov. 30, 1983.
    Subsec. (b)(2)(A)(i), (B)(i). Pub. L. 98-181, Sec. 121(c), inserted 
``neighborhood statistics areas,'' after ``enumeration districts,''.
    Subsec. (c)(3)(C). Pub. L. 98-181, Sec. 121(d), added cl. (C).
    Subsec. (d)(1). Pub. L. 98-181, Sec. 121(e), substituted ``criteria 
for a national competition'' for ``criteria'' in provisions preceding 
cl. (A).
    Subsec. (i). Pub. L. 98-181, Sec. 121(f), inserted provisions 
relating to applications by consortia of cities less than 50,000 
population.
    Subsecs. (p) to (r). Pub. L. 98-181, Sec. 121(g), added subsecs. (p) 
to (r).
    1981--Pub. L. 97-35 substantially restructured and reorganized 
provisions, made changes in nomenclature and phraseology, and revised 
purposes, selection criteria and standards, application procedures, 
approval powers of Secretary, covered activities, limitations, 
allocation computations, funding prerequisites, amounts for grants, 
waivers, notice requirements, applicable definitions, and special 
provisions for years after 1983.
    1980--Subsec. (c)(7). Pub. L. 96-399, Sec. 110(a)(1)-(3), added par. 
(7).
    Subsec. (n). Pub. L. 96-399, Sec. 110(b), added subsec. (n).
    Subsec. (o). Pub. L. 96-399, Sec. 117(a), added subsec. (o).
    1979--Subsec. (b). Pub. L. 96-153, Sec. 104, designated existing 
provisions as par. (1) and added par. (2).
    Subsec. (e). Pub. L. 96-153, Sec. 104(b), designated existing 
provisions as par. (1) and substituted ``(1) Except in the case of a 
city or urban county eligible under subsection (b)(2) of this section, 
in establishing criteria'' for ``In establishing criteria'' in opening 
sentence, redesignated existing cls. (1) to (3) as (A) to (C), and added 
pars. (2) and (3).
    Subsecs. (l), (m). Pub. L. 96-153, Sec. 105, added subsecs. (l) and 
(m).
    1978--Subsec. (c)(6). Pub. L. 95-557, Sec. 103(g), added par. (6).
    Subsec. (e). Pub. L. 95-557, Sec. 103(h), inserted ``impact of the 
proposed urban development action program on the residents, particularly 
those of low and moderate income, of the residential neighborhood, and 
on the neighborhood, in which the program is to be located'' after 
``objectives of this chapter''.


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-233 applicable with respect to any amounts 
made available to carry out subchapter II (Sec. 12721 et seq.) of 
chapter 130 of this title after Apr. 11, 1994, and any amounts made 
available to carry out that subchapter before that date that remain 
uncommitted on that date, with Secretary to issue any regulations 
necessary to carry out such amendment not later than end of 45-day 
period beginning on that date, see section 209 of Pub. L. 103-233, set 
out as a note under section 5301 of this title.


                    Effective Date of 1988 Amendment

    Section 515(f), (g) of Pub. L. 100-242 provided that:
    ``(f) Regulations.--The Secretary of Housing and Urban Development 
shall issue such regulations as may be necessary to carry out the 
amendments made by this section [amending this section]. Such 
regulations shall be published for comment in the Federal Register not 
later than 60 days after the date of enactment of this Act [Feb. 5, 
1988]. The provisions of section 119(d)(1)(D), section 119(d)(3), and 
section 119(d)(4) of the Housing and Community Development Act of 1974 
[subsec. (d)(1)(D), (3), (4) of this section], shall take effect on the 
date of enactment of this Act.
    ``(g) Applicability.--
        ``(1) In general.--The amendments made by this section [amending 
    this section] shall be applicable to the making of urban development 
    action grants that have not received the preliminary approval of the 
    Secretary of Housing and Urban Development before the date on which 
    final regulations issued by the Secretary under subsection (f) 
    become effective. For the fiscal year in which the amendments made 
    by this section become applicable, such amendments shall only apply 
    with respect to the aggregate amount awarded for such grants on or 
    after such effective date.
        ``(2) Sunset of urban county competition rule.--Effective 
    October 1, 1989, section 119(d)(6) of the Housing and Community 
    Development Act of 1974 [subsec. (d)(6) of this section] is 
    repealed.''
    Section 516(b) of Pub. L. 100-242 provided that: ``Except as 
otherwise provided in section 119(h)(5) of the Housing and Community 
Development Act of 1974 [subsec. (h)(5) of this section] (as added by 
subsection (a)), the amendments made by this section [amending this 
section] shall be applicable to urban development action grants that 
have not received the preliminary approval of the Secretary of Housing 
and Urban Development before the date of the enactment of this Act [Feb. 
5, 1988].''


                    Effective Date of 1986 Amendments

    Section 106 of Pub. L. 100-202 provided that the amendment made by 
Pub. L. 99-500 and 99-591 is effective on date of enactment [Oct. 18, 
1986] of the ``pertinent joint resolution'' making continuing 
appropriations for fiscal year 1987 [Pub. L. 99-500 and 99-591].
    Amendment by Pub. L. 99-272 effective Oct. 18, 1986, see section 
14001(e) of Pub. L. 99-272.


                    Effective Date of 1981 Amendment

    Section 308(c) of Pub. L. 97-35 provided that: ``The amendments made 
by subsections (a) and (b) [amending this section and section 5320 of 
this title] shall become effective on the effective date of regulations 
implementing such subsections. As soon as practicable, but not later 
than January 1, 1982, the Secretary shall issue such final rules and 
regulations as the Secretary determines are necessary to carry out such 
subsections.''


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-557 effective Oct. 1, 1978, see section 104 
of Pub. L. 95-557, set out as a note under section 1709 of Title 12, 
Banks and Banking.


                             Effective Date

    Section effective Oct. 1, 1977, see section 114 of Pub. L. 95-128, 
set out as an Effective Date of 1977 Amendment note under section 5301 
of this title.


   Implementation of Urban Development Action Grant Retention Program

    Section 232(c)(2) of Pub. L. 103-233 provided that: ``Not later than 
10 days after the date of enactment of this Act [Apr. 11, 1994], the 
Secretary shall, by notice published in the Federal Register, which 
shall take effect upon publication, establish such requirements as may 
be necessary to implement the amendments made by this subsection 
[amending this section].''


   New Towns Demonstration Program for Emergency Relief of Los Angeles

    Pub. L. 102-550, title XI, Oct. 28, 1992, 106 Stat. 3927, as amended 
by Pub. L. 105-362, title VII, Sec. 701(g), Nov. 10, 1998, 112 Stat. 
3287, provided that:
``SEC. 1101. AUTHORITY.
    ``To provide for the revitalization and renewal of inner city 
neighborhoods in the areas of Los Angeles, California, that were damaged 
by the civil disturbances during April and May of 1992, and to 
demonstrate the effectiveness of new town developments in revitalizing 
and restoring depressed and underprivileged inner city neighborhoods, 
the Secretary of Housing and Urban Development shall, to the extent or 
in such amounts as are provided in appropriation Acts, make any 
assistance authorized under this title available under this title to 
units of general local government, governing boards, and eligible 
mortgagors in accordance with the provisions of this title.
``SEC. 1102. NEW TOWN PLAN.
    ``(a) Requirement.--The Secretary may make assistance available 
under this title only in connection with, and according to the 
provisions of a new town plan developed and established by a governing 
board under section 1107 and approved under subsection (d) of this 
section. In developing such plans, the governing board shall consult 
with representatives of the units of general local government within 
whose boundaries are located any portion of the new town demonstration 
area for the demonstration program to be carried out under such plan.
    ``(b) Eligible New Town Demonstration Areas.--A new town plan under 
this section shall provide for carrying out a new town development 
demonstration providing assistance available under this title within a 
new town demonstration area, which shall be a geographic area defined in 
the new town plan--
        ``(1) that is one of pervasive poverty, unemployment, and 
    general distress;
        ``(2) that has an unemployment rate of not less than 1.5 times 
    the national unemployment rate for the 2 years preceding approval of 
    the new town plan;
        ``(3) that has a poverty rate of not less than 20 percent during 
    such 2-year period;
        ``(4) for which not less than 70 percent of the households 
    living in the area have incomes below 80 percent of the median 
    income of households of the unit of general local government in 
    which they are located;
        ``(5) that has a shortage of adequate jobs for residents; and
        ``(6) that is located--
            ``(A) in or near the City or County of Los Angeles, in the 
        State of California; and
            ``(B) within an area for which the President, pursuant to 
        title IV or V of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act [42 U.S.C. 5170 et seq., 5191 et seq.], 
        declared that a major disaster or emergency existed for purposes 
        of such Act [42 U.S.C. 5121 et seq.], as a result of the civil 
        disturbances involving acts of violence occurring on or after 
        April 29, 1992, and before May 6, 1992.
    ``(c) Contents.--Each new town plan shall include the following 
information:
        ``(1) Governing board.--A description of the members and 
    purposes of the governing board that developed the plan, the manner 
    in which members of the governing board were selected, and the 
    businesses, agencies, interests, and community ties of each member 
    of the governing board.
        ``(2) New town demonstration area.--A definition and description 
    of the new town demonstration area for the new town development 
    demonstration to be assisted under this title.
        ``(3) Target community.--A description of the economic, social, 
    racial, and ethnic characteristics of the population of the 
    neighborhood or area in which the new town demonstration area is 
    located.
        ``(4) Agreements.--Agreements that the governing board will 
    carry out the new town demonstration program in accordance with the 
    requirements of this title.
        ``(5) Housing units.--A description of the number, size, 
    location, cost, style, and characteristics of rental and 
    homeownership housing units to be developed under the new town 
    demonstration program, any financing for developing such housing, 
    and the amount of assistance necessary under section 1105 for 
    developing the housing under the program.
        ``(6) Jobs.--A description of the number, types, and duration of 
    any new jobs that will be created in the new town demonstration area 
    and surrounding areas as a result of the demonstration program, and 
    of any job training activities and apprenticeship programs to be 
    made available in connection with the program.
        ``(7) Social services.--A description of the social and 
    supportive services to be made available under the demonstration 
    program to residents of housing assisted under the demonstration 
    program pursuant to section 1103(d) and to residents of the new town 
    demonstration area.
        ``(8) Supplemental resources.--A description of any funds, 
    assistance, in-kind contributions, and other resources to be made 
    available in connection with the demonstration program, including 
    the sources and amounts of any private capital resources and non-
    Federal funds required under section 1103(h).
        ``(9) Contractors and developers.--A listing of the contractors 
    and developers who potentially will carry out any construction and 
    rehabilitation work for development of housing under the 
    demonstration program and the expected costs involved in hiring such 
    contractors and developers.
        ``(10) Financing for homebuyers.--A description of any mortgage 
    lenders who have indicated that they will make financing available 
    to families purchasing housing developed under the demonstration 
    program through mortgages eligible for insurance under section 1104 
    and proposed terms of such mortgages.
        ``(11) Commitments.--Evidence of any commitments entered into 
    for making any of the resources described in paragraphs (6) through 
    (8) available in connection with the demonstration program.
        ``(12) Presale requirements.--A description of commitments made 
    to purchase not less than 50 percent of the housing to be developed 
    under the demonstration program for purchase by the occupant and to 
    rent not less than 50 percent of the rental dwelling units to be 
    developed under the demonstration program.
        ``(13) Community development activities.--A description of the 
    community development activities to be carried out with assistance 
    under section 1106, the amount of assistance necessary under such 
    section for such activities, and of the projected uses of such 
    assistance.
    ``(d) Review and Approval.--
        ``(1) Submission.--Not later than the expiration of the 6-month 
    period beginning on the date of the enactment of this Act [Oct. 28, 
    1992], a governing board shall submit a new town plan under this 
    section to the chief executive officers of each unit of general 
    local government within whose boundaries is located any portion of 
    the new town demonstration area described under the plan of the 
    board.
        ``(2) Approval.--For a plan to be eligible for assistance 
    available under this title, the chief executive officer of all units 
    of general local government to whom the new town plan is submitted 
    shall approve the plan at a public meeting after the plan has been 
    made publicly available for a period of not less than 30 days. A 
    governing board may resubmit for approval any plan returned by any 
    such chief executive officer to the governing board, and such chief 
    executive officer may, upon returning the plan indicate any 
    modifications necessary for approval. A new town plan may not be 
    approved unless such chief executive officers determine that the 
    membership of the governing board submitting the plan is constituted 
    in accordance with section 1107 and the governing board is capable 
    of carrying out the plan.
        ``(3) Amendment.--An approved new town plan for the 
    demonstration program developed by the governing board may be 
    amended by the board by obtaining approval of the amendment in the 
    manner provided under this subsection for approval of plans. If the 
    chief executive officer of the unit of general local government does 
    not approve or return the amended plan within 30 days of submission, 
    the amended plan shall be considered to be approved for purposes of 
    this subsection.
``SEC. 1103. NEW TOWN DEVELOPMENT DEMONSTRATION PROGRAM REQUIREMENTS.
    ``(a) In General.--Each of the 2 new town development demonstration 
programs selected for assistance under this title under section 1102 
shall be carried out, by the governing board submitting the new town 
plan for the demonstration program, in accordance with such plan (and 
any approved amendments of such plans) and shall be subject to the 
requirements under this section.
    ``(b) Local Participation.--With respect to any activities carried 
out under the demonstration program, the program shall give preference 
in awarding contracts, purchasing materials, acquiring services, and 
obtaining assistance or training, to contractors, businesses, 
developers, professionals, and other establishments located or having 
offices within the new town demonstration area.
    ``(c) Housing.--
        ``(1) Number of units.--The demonstration program shall 
    construct or renovate not less than 1,500 dwelling units in the new 
    town demonstration area, of which not less than 60 percent shall be 
    units available for purchase by the occupant.
        ``(2) Affordability.--Units of varying sizes and costs shall be 
    designed and developed under the demonstration program so that the 
    program provides housing affordable to families of varying incomes 
    not exceeding 115 percent of the median income for the area in which 
    the new town demonstration area is located, including very low- and 
    low-income families (as such terms are defined in section 3(b) of 
    the United States Housing Act of 1937 [42 U.S.C. 1437a(b)]).
        ``(3) Homeownership units.--Dwelling units developed under the 
    demonstration program for purchase by the occupant shall initially 
    be sold at prices affordable to families eligible to purchase such 
    units. Such units shall be available for purchase only by families 
    having incomes not exceeding the amount specified in paragraph (2). 
    The demonstration shall develop 2-, 3-, and 4-bedroom units for 
    purchase.
        ``(4) Rental units.--Dwelling units developed under the 
    demonstration program that are to be available for rental shall 
    include family-type units and single bedroom and efficiency units 
    designed for elderly occupants. Such units shall be available for 
    occupancy only by families who (upon initial occupancy) have incomes 
    of (A) less than 60 percent of the median income for the area, or 
    (B) less than $20,000. Occupant families shall pay not more than 30 
    percent of the family income for rent.
    ``(d) Social Services.--The demonstration program shall provide for 
appropriate social and supportive services to be made available to 
residents of housing assisted under the demonstration program and to 
other residents of the new town demonstration area, which may include 
rental and homeownership counseling, child care, job placement, 
educational programs, recreational and health care facilities and 
programs, and other appropriate services.
    ``(e) Job Creation and Training.--The demonstration program shall 
provide, to the extent practicable, that activities in connection with 
the demonstration program, including development of housing under 
subsection (c) and community development activities assisted under 
section 1106, shall employ and provide job training opportunities for 
residents of the housing assisted under the demonstration program and 
other residents of the new town demonstration area.
    ``(f) Financing.--The demonstration program shall provide for 
coordination with banks, credit unions, and other mortgage lenders to 
make financing available to purchasers of units developed under the 
demonstration program through mortgages eligible for insurance under 
section 1104, and shall give preference to such mortgage lenders who 
have offices located within or near the new town demonstration area.
    ``(g) Support Facilities.--The demonstration program shall 
encourage, facilitate, and provide for development of appropriate 
support facilities to serve residents in the housing developed under the 
program, including infrastructure and commercial facilities.
    ``(h) Non-Federal Funds.--The governing board carrying out the 
demonstration program shall ensure that not less than 25 percent of the 
total amounts used to carry out the demonstration program is provided 
from non-Federal sources, including State or local government funds, any 
salary paid to staff to carry out the demonstration program, the value 
of any time, services, and materials donated to carry out the program, 
the value of any donated building, and the value of any lease on a 
building.
``SEC. 1104. FEDERAL MORTGAGE INSURANCE.
    ``(a) In General.--Pursuant to title II and section 251 of the 
National Housing Act [12 U.S.C. 1707 et seq., 1715z-16], the Secretary 
shall (to the extent authority is available pursuant to subsection (d)) 
insure mortgages under this section involving properties upon which are 
located dwelling units described in section 1103(c)(3) of this Act that 
are developed under the new town demonstration programs carried out 
pursuant to this title.
    ``(b) Mortgage Terms.--Mortgages insured under this section shall--
        ``(1) provide for periodic adjustments in the effective rate of 
    interest charged, which--
            ``(A) for the first 5 years of the mortgage, shall be an 
        annual rate of not more than 7 percent; and
            ``(B) after the expiration of such 5-year period, may 
        increase on an annual basis, but--
                ``(i) shall be limited, with respect to any single 
            interest rate increase, to not more than a 10-percent 
            increase in the annual percentage rate; and
                ``(ii) may not be increased at any time to a rate 
            greater than the rate necessary at such time to fully 
            amortize the outstanding loan balance over the term of the 
            mortgage; and
        ``(2) have a maturity of 35 years from the date of the beginning 
    of the amortization of the mortgage.
    ``(c) Board Approval.--The Secretary may provide insurance under 
this section for a mortgage only if the governing board for the 
demonstration program for the new town demonstration area in which the 
property subject to the mortgage is located has indicated to the 
Secretary approval of the mortgage in connection with the demonstration 
program.
    ``(d) Insurance Authority.--To the extent provided in appropriation 
Acts, the Secretary shall use any authority provided pursuant to section 
531(b) of the National Housing Act [12 U.S.C. 1735f-9(b)] to enter into 
commitments to insure loans and mortgages under this section in fiscal 
years 1993 and 1994 with an aggregate principal amount not exceeding 
such sums as may be necessary to carry out the demonstration under this 
title. Mortgages insured under this section shall not be considered for 
purposes of the aggregate limitation on the number of mortgages insured 
under section 251 of the National Housing Act [12 U.S.C. 1715z-16] 
specified in subsection (c) of such section.
``SEC. 1105. SECONDARY SOFT MORTGAGE FINANCING FOR HOUSING.
    ``(a) In General.--The Secretary shall, to the extent amounts are 
provided in appropriation Acts under subsection (e), provide assistance 
under this section through the governing boards carrying out the new 
town demonstration programs under this section to assist in the 
development of housing under the program.
    ``(b) Use.--Any assistance provided under this section shall be used 
only for costs in planning, developing, constructing, and rehabilitating 
housing under the demonstration program available for rental or purchase 
by the occupant. The governing board shall determine, according to the 
new town plan for the demonstration program, the allocation of amounts 
of assistance provided under this section.
    ``(c) Amount.--The Secretary may not provide assistance under this 
section for the development of housing under a demonstration program in 
an amount exceeding $50,000 per dwelling unit assisted.
    ``(d) Second Mortgage.--
        ``(1) In general.--Assistance under this section shall be repaid 
    in accordance with this subsection. Repayment of the amount of any 
    assistance provided with respect to--
            ``(A) any building containing rental units, or
            ``(B) any dwelling unit available for purchase by the 
        occupant that is developed under a demonstration program,
    shall be secured by a second mortgage held by the Secretary on the 
    property involved.
        ``(2) Terms.--During the period ending upon repayment of the 
    assistance as provided in this subsection, any building containing 
    rental units that is provided assistance under this section shall be 
    used as rental housing subject to the requirements of section 
    1103(c)(4). During the period ending upon repayment of the 
    assistance as provided in this subsection, any dwelling unit made 
    available for purchase by the occupant that is provided assistance 
    under this section may be sold only to a family having an income not 
    exceeding the amount specified in section 1103(c)(2).
        ``(3) Interest.--Any assistance provided under this section for 
    a building or dwelling unit shall bear interest at a rate equivalent 
    to the rate for the most recently marketable obligations issued by 
    the United States Treasury have terms of 10 years. The interest on 
    such assistance shall be required to be repaid only upon sale of the 
    building.
        ``(4) Discounted repayment.--The assistance provided under this 
    section for any building containing rental units or any dwelling 
    unit available for purchase by the occupant shall be considered to 
    have been repaid for purposes of this subsection if the original 
    purchaser of the building or the dwelling unit pays to the Secretary 
    an amount equal to 50 percent of the amount of the assistance 
    provided under this section.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated for fiscal years 1993 and 1994 such sums as may be 
necessary for providing assistance under this section.
``SEC. 1106. COMMUNITY DEVELOPMENT ASSISTANCE.
    ``(a) In General.--The Secretary shall provide assistance under this 
section, to the extent amounts are provided in appropriation Acts under 
subsection (h), to units of general local government to address vital 
unmet needs and to promote the creation of jobs and economic development 
in connection with the new town demonstration programs carried out under 
this title.
    ``(b) Eligible Units of General Local Government.--Assistance may be 
provided under this section only to units of general local government--
        ``(1) within whose boundaries are located any portion of the new 
    town demonstration areas described under the new town demonstration 
    plans for the demonstration programs carried out under this title;
        ``(2) that make the certifications to the Secretary required 
    under subsection (c); and
        ``(3) that will comply with a residential antidisplacement and 
    relocation assistance plan described in subsection (d).
    ``(c) Required Certifications.--The certifications referred to in 
subsection (b)(2) shall be certifications that--
        ``(1) the assistance will be conducted and administered in 
    conformity with the Civil Rights Act of 1964 [42 U.S.C. 2000a et 
    seq.] and the Civil Rights Act of 1968 [see Short Title note set out 
    under section 3601 of this title], and the unit of general local 
    government will affirmatively further fair housing;
        ``(2) the projected use of funds has been developed in a manner 
    that gives maximum feasible priority to activities which are 
    designed to meet community development needs that have been delayed 
    because of the lack of fiscal resources of the unit of general local 
    government or which are designed to address conditions that pose a 
    serious and immediate threat to the health or welfare of the 
    community;
        ``(3) any projected use of funds for public services will 
    benefit primarily low- and moderate-income families;
        ``(4) the unit of general local government will not attempt to 
    recover any capital costs of public improvements assisted in whole 
    or part under this section by assessing any amount against 
    properties owned and occupied by persons of low- and moderate-
    income, including any fee charged or assessment made as a condition 
    of obtaining access to such public improvements, unless--
            ``(A) funds received under this section are used to pay the 
        proportion of such fee or assessment that relates to the capital 
        costs of such public improvements that are financed from revenue 
        sources other than under this section; or
            ``(B) for purposes of assessing any amount against 
        properties owned and occupied by persons of moderate income, the 
        grantee certifies to the Secretary that it lacks sufficient 
        funds received under this section to comply with the 
        requirements of subparagraph (A); and
        ``(5) the unit of general local government will comply with the 
    other provisions of this title and with other applicable laws.
    ``(d) Antidisplacement and Relocation Plan.--
        ``(1) Contents.--The residential antidisplacement and relocation 
    assistance plan referred to in subsection (b)(3) shall, in 
    connection with activities assisted under this section--
            ``(A) provide that, in the event of such displacement--
                ``(i) governmental agencies or private developers shall 
            provide, within the same community, comparable replacement 
            dwellings for the same number of occupants as could have 
            been housed in the occupied and vacant occupiable low- and 
            moderate-income dwelling units demolished or converted to a 
            use other than for housing for low- and moderate-income 
            persons, and provide that such replacement housing may 
            include existing housing assisted with project based 
            assistance provided under section 8 of the United States 
            Housing Act of 1937 [42 U.S.C. 1437f];
                ``(ii) such comparable replacement dwellings shall be 
            designed to remain affordable to persons of low- and 
            moderate-income for 10 years from the time of initial 
            occupancy;
                ``(iii) relocation benefits shall be provided for all 
            low- or moderate-income persons who occupied housing 
            demolished or converted to a use other than for low- or 
            moderate-income housing, including reimbursement for actual 
            and reasonable moving expenses, security deposits, credit 
            checks, and other moving-related expenses, including any 
            interim living costs; and in the case of displaced persons 
            of low- and moderate-income, provide either--
          ``(I) compensation sufficient to ensure that, for a 5-year 
                period, the displaced families shall not bear, after 
                relocation, a ratio of shelter costs to income that 
                exceeds 30 percent; or
          ``(II) if elected by a family, a lump-sum payment equal to the 
                capitalized value of the benefits available under 
                subclause (I) to permit the household to secure 
                participation in a housing cooperative or mutual housing 
                association; and
                ``(iv) persons displaced shall be relocated into 
            comparable replacement housing that is--
          ``(I) decent, safe, and sanitary;
          ``(II) adequate in size to accommodate the occupants;
          ``(III) functionally equivalent; and
          ``(IV) in an area not subject to unreasonably adverse 
                environmental conditions; and
            ``(B) provide that persons displaced shall have the right to 
        elect, as an alternative to the benefits under this subsection, 
        to receive benefits under the Uniform Relocation Assistance and 
        Real Property Acquisition Policies Act of 1970 [42 U.S.C. 4601 
        et seq.] if such persons determine that it is in their best 
        interest to do so; and
            ``(C) provide that where a claim for assistance under 
        subparagraph (A)(iv) is denied by the unit of general local 
        government, the claimant may appeal to the Secretary, and that 
        the decision of the Secretary shall be final unless a court 
        determines the decision was arbitrary and capricious.
        ``(2) Exception.--Paragraphs (1)(A)(i) and (1)(A)(ii) shall not 
    apply in any case in which the Secretary finds, on the basis of 
    objective data, that there is available in the area an adequate 
    supply of habitable affordable housing for low- and moderate-income 
    persons. A determination under this paragraph shall be final and 
    nonreviewable.
    ``(e) Eligible Activities.--Activities assisted with amounts 
provided under this section may include only the following activities:
        ``(1) Acquisition of real property.--The acquisition of real 
    property (including air rights, water rights, and other interests 
    therein) that is located within the new town demonstration area and 
    is--
            ``(A) blighted, deteriorated, undeveloped, or 
        inappropriately developed from the standpoint of sound community 
        development and growth;
            ``(B) appropriate for rehabilitation activities;
            ``(C) appropriate for the preservation or restoration of 
        historic sites, the beautification of urban land, the 
        conservation of open spaces, natural resources, and scenic 
        areas, the provision of recreational opportunities, or the 
        guidance of urban development;
            ``(D) to be used for the provision of public works, 
        facilities, and improvements eligible for assistance under this 
        section;
            ``(E) to be used as a facility for coordinating and 
        providing activities and services for high risk youth (as such 
        term is defined in section 509A [now 517] of the Public Health 
        Service Act [42 U.S.C. 290bb-23]); or
            ``(F) to be used for other public purposes.
        ``(2) Construction of public works and facilities.--The 
    acquisition, construction, rehabilitation, or installation of public 
    works or public facilities within the new town demonstration area, 
    including buildings for the general conduct of government and 
    facilities for coordinating and providing activities and services 
    for high risk youth (as such term is defined in section 509A [now 
    517] of the Public Health Service Act).
        ``(3) Clearance and rehabilitation of buildings.--The clearance, 
    removal, and rehabilitation of buildings and improvements located 
    within the new town demonstration area, including interim 
    assistance, assistance for facilities for coordinating and providing 
    activities and services for high risk youth (as such term is defined 
    in section 509A [now 517] of the Public Health Service Act), and 
    assistance to privately owned buildings and improvements.
        ``(4) Provision of public services and housing.--
            ``(A) Public services.--The provision of public services 
        within the new town demonstration area that are concerned with 
        job training and retraining, health care and education, crime 
        prevention, drug abuse treatment and rehabilitation, child care, 
        education, and recreation, which may include the provision of 
        public health and public safety vehicles.
            ``(B) Housing activities.--The acquisition and 
        rehabilitation of housing for low- and moderate-income families 
        within the new town demonstration area, except that any grantee 
        that uses amounts received under this section for housing 
        activities under this subparagraph shall make not less than 15 
        percent of the amount used for such housing activities available 
        only for community housing development organizations and 
        nonprofit organizations (as such terms are defined in section 
        104 of the Cranston-Gonzalez National Affordable Housing Act [42 
        U.S.C. 12704]) for such activities;
            ``(C) Limitation.--Not more than 25 percent of the amount of 
        any assistance provided under this section (including program 
        income) to any unit of general local government may be used for 
        activities under this paragraph.
        ``(5) Relocation assistance.--Relocation payments and assistance 
    for individuals, families, business, and organizations that are 
    displaced as a result of activities assisted under this title.
        ``(6) Payment of administrative expenses.--Payment of reasonable 
    administrative costs associated with activities assisted under this 
    section and any expenses of developing the new town plan under 
    section 1102.
    ``(f) Allocation of Assistance.--The Secretary may not provide more 
than 50 percent of any amounts appropriated under this section in 
connection with any one of the 2 new town demonstration programs carried 
out under this title.
    ``(g) Other Requirements.--The provisions of subsections (f), (g), 
and (h) of section 104, subsections (c) and (d) of section 105, section 
107, 108, 109, and 110 of the bill, H.R. 4073, 102d Congress (as 
reported on March 14, 1992 [May 14, 1992, H. Rept. No. 102-524], by the 
Committee on Banking, Finance and Urban Affairs of the House of 
Representatives), shall apply to grantees receiving assistance under 
this section.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated for fiscal years 1993 and 1994 such sums as may be 
necessary for assistance under this section.
``SEC. 1107. GOVERNING BOARDS.
    ``(a) Purpose.--For purposes of this title, a governing board shall 
be a board organized for the purpose of developing a new town plan under 
this title and carrying out a new town development demonstration under 
this title.
    ``(b) Membership.--Each governing board shall consist of not less 
than 10 members, who shall include--
        ``(1) residents of the area in which the new town demonstration 
    area under the plan developed by the board is located;
        ``(2) owners of business in such area;
        ``(3) leaders or participants in community groups in such area; 
    and
        ``(4) representatives of financial institutions located or 
    having offices in such area.
    ``(c) Organization.--A governing board may organize itself and 
conduct business in the manner that the board determines is appropriate 
to carry out the new town development demonstration under this title.
``SEC. 1108. REPORTS.
    ``Each governing board carrying out a new town development 
demonstration under this title shall submit to the Congress a copy of 
the new town plan of the governing board, upon the approval of that plan 
under section 1102(d).
``SEC. 1109. DEFINITIONS.
    ``For purposes of this title:
        ``(1) Demonstration program.--The terms `demonstration program' 
    and `program' mean a new town development demonstration program 
    receiving assistance under this title, which is carried out within a 
    new town demonstration area by a governing board.
        ``(2) Governing board.--The term `governing board' means a board 
    established under section 1107.
        ``(3) New town demonstration area.--The term `new town 
    demonstration area' means the area defined in a new town plan in 
    which the new town development demonstration under the plan is to be 
    carried out.
        ``(4) New town plan.--The terms `new town plan' and `plan' mean 
    a plan under section 1102 developed by a governing board.
        ``(5) Unit of general local government.--The term `unit of 
    general local government' means any city, county, town, township, 
    parish, village, or other general purpose political subdivision of 
    the State of California.''


                     Reports of Comptroller General

    Section 515(e) of Pub. L. 100-242 provided that:
    ``(1)(A) Not later than the expiration of the 1-year period 
following the date of enactment of this Act [Feb. 5, 1988] and every 3 
years thereafter, the Comptroller General of the United States shall 
prepare and submit to the Congress a comprehensive report evaluating the 
eligibility standards and selection criteria applicable under section 
119 of the Housing and Community Development Act of 1974 [this section].
    ``(B) Such report shall evaluate in detail the standards and 
criteria specified in such section that measure the level or comparative 
degree of economic distress of cities and urban counties and the effect 
of the grants awarded on the basis of such standards and criteria on 
stimulating the maximum economic development activity.
    ``(C) Such report shall also evaluate in detail the extent to which 
the economic and social data utilized by the Secretary in awarding 
grants under such section is current and accurate, and shall compare the 
data used by the Secretary with other available data. The Comptroller 
General shall make recommendations to the Congress on whether or not 
other data should be collected by the Federal Government in order to 
fairly and accurately distribute grants under such section based on the 
level or comparative degree of economic distress. The Comptroller 
General shall also make recommendations on whether or not existing data 
should be collected more frequently in order to ensure that timely data 
is used to evaluate grant applications under such section.
    ``(2) Not later than the expiration of the 3-month period following 
the date of the final competition for grants for fiscal year 1988 under 
section 119 of the Housing and Community Development Act of 1974 [this 
section], the Comptroller General of the United States shall prepare and 
submit to the Congress a comprehensive report describing the effect of 
the amendments made by this section [amending this section] on--
        ``(A) the targeting of grant funds to cities and urban counties 
    having the highest level or degree of economic distress;
        ``(B) the distribution of grants [sic] funds among regions of 
    the United States;
        ``(C) the number and types of projects receiving grants;
        ``(D) the per capita funding levels for each city, urban county, 
    or identifiable community described in subsection (p) of such 
    section 119, receiving assistance under such section 119; and
        ``(E) the stimulation of the maximum economic development 
    activity.''


                 Neighborhood Development Demonstration

    Section 123 of Pub. L. 98-181, as amended, which provided for a 
demonstration program to determine the feasibility of supporting 
eligible neighborhood development activities by providing Federal 
matching funds to eligible neighborhood development organizations, was 
transferred to section 5318a of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 5302, 5304, 5305, 5307, 
5313, 5318a, 5320, 11501, 12705 of this title; title 12 section 1715z; 
title 26 section 144.
