Code of Maine Rules
19 - DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT
498 - OFFICE OF TOURISM AND COMMUNITY DEVELOPMENT
Chapter 15 - COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: 1996
Section 498-15-5 - REDISTRIBUTION OF GRANT FUNDS

Universal Citation: 19 ME Code Rules ยง 498-15-5

Current through 2024-38, September 18, 2024

This section describes the methods by which any funds not distributed, disencumbered funds, additional funds received from HUD, and program income may be redistributed by the State.

A. ADMINISTRATIVE REDISTRIBUTION OF GRANT FUNDS

1. Local Government Grants from the State: Local governments receiving grants as a result of the 1996 CDBG program but unable to have their projects substantially underway (staff hired, environmental review complete, program costs obligated) within twelve months of the grant award, may have their grant canceled by the DECD. Unexpended grant funds may be added to any open CDBG contract, used to make additional awards in any 1996 CDBG program, or added to the available monies for the 1996 or 1997 competition.

Unexpended funds remaining in the grantee's CDBG account at grant closeout, funds remaining in a grantee's award but not drawndown upon grant closeout and funds returned to the DECD because of disallowed costs may be added to any open CDBG contract, used to make additional awards in any 1996 CDBG program or added to the available monies for the 1996 or 1997 competition.

2. Unallocated State Grants To Local Governments: Unallocated grant funds resulting from lack of adequate program competition or demand in any of the available 1996 CDBG programs may be added to any open CDBG contract, used to make additional awards in any 1996 CDBG program or added to the available monies for the 1996 or 1997 competition.

3. Basis for Redistribution: The decision on how to redistribute the types of funds described in Paragraphs 1 and 2 above will be made after staff evaluation of the following: the total funds available, requests for additional funding from current CDBG grantees, any applicants that received scores above the specified point threshold in 1996 competitions but did not receive funding and the possibility of holding additional competitions during the 1996 Program. Additional competitions will be held only as a last resort, and be limited to the Housing Assistance, Public Facility/Infrastructure, and Economic Development Infrastructure programs. In all cases, these additional competitions and the subsequent programs developed, will be subject to the 1996 Program Statement.

In the case of funds added to open grant(s), redistribution will give priority to grants needing additional CDBG funds in order to complete the activities described in their application to the DECD and secondly to grants for additional activities which meet the State and local community development objectives. In no case will the total of the original grant award and any redistributed funds to that grant, exceed the maximum grant award for that program.

4. State Grants from HUD

The 1996 CDBG Program Statement and the budgeted distribution of funds for specific set-aside categories is done without complete knowledge of the State's HUD allocation. The Program Statement is being created based upon a projected allocation of $12 million. The final HUD allocation may not be officially announced until January 1996.

In recognition of this situation, the program will distribute 1996 CDBG HUD allocated funds in excess of $12 million, up to $15.15 million, in the following manner:

Funds received will be allocated to budget set-aside programs in the following order. Amounts greater than a whole program, but less than the next program in the order, will be allocated in accordance with paragraphs 1, 2, and 3 above.

1. EDI $400,000

2. PFIG #1 400,000

3. HA 300,000

4. RAF 200,000

5. EDI 400,000

6. PFIG #2 250,000

7. HA 300,000

8. PFIG #1 400,000

9. EDI 400,000

10. PS 300,000

Funds in excess of $15.15 million will be distributed in accordance with sections 1, 2 and 3 from page 52.

The OCD may also set-aside additional HUD allocations for State Program Administration, State Technical Assistance, Regional Council Technical Assistance and Phase II Planning Grants.

All staff recommendations regarding redistribution of funds in the 1996 CDBG program will be subject to approval by the Director of the OCD.

B. PROGRAM INCOME

As used in this Final Statement, program income means the gross income received by a grantee from any grant-supported activity.

1. General Program Income Requirements:
(a) Program Income Received During the Grant Period: Program income may be retained by a grantee for a specific purpose or activity during the grant period provided the grantee submits an acceptable Program Income Plan, as described in Section 5(B)(1)(d) of this Final Statement. If not, the grantee must expend program income for all activities, prior to requesting additional grant funds for any activity.

(b) Program Income Received After the End of a Grant Period: Grantees must transfer all program income, at the end of a grant, to the most recent open grant. The funds are considered program income of the new grant.

Grantees that desire to retain program income received after the end of their last open CDBG grant, must submit a Program Income Plan as described in Section 5(B)(1)(d) of this Final Statement.

(c) Program Income Received by the State: Up to 2% of program income returned to the State may be used for administrative costs. The balance of program income (98%) will be used to fund new or previously committed CDBG obligations.

(d) Program Income Plan: Each grantee anticipating program income during or after the end of a grant period must submit a Program Income Plan to OCD. A Program Income Plan shall include the following:
(i) A description of the Title I eligible activities and National Objective(s) that will be funded with program income;

(ii) Documentation of the need for the program income in the activity proposed for reuse;

(iii) A schedule for the receipt and reuse of the program income;

(iv) A description of the grantee's administrative capacity to manage and track all program income received during and after a grant and to manage the activity to be funded with program income. The grantee must also indicate how much of the program income, not to exceed 10% in any program, will be used for administration of the program income.

(e) Program Income Plan Submission: The following schedules must be adhered to when submitting a program income plan:
(i) Housing Assistance, Public Facilities/Infrastructure, Public Service, Urgent Need, Reserved Grants, Micro-Loan, Economic Development Infrastructure during the Phase II process;

(ii) Development Fund: within forty-five (45) days of grant award;

(iii) Interim Finance Program: with the IFP application; and

(iv) Regional Assistance Fund: with the RAF application.

2. Special Program Requirements: special program requirements apply to the following programs:
(a) Development Fund Program Income: Except for those grantees who can adequately demonstrate the reuse of program income for the "same activity" that generated the program income, grantees will return the repayments to the State to be placed in a State CDBG Development Fund Revolving Loan Fund (RLF) Program.

For these purposes, "same activity" shall mean the same business that originally received CDBG assistance.

Loans made from the State RLF must be provided as grants to local governments for loans to businesses and/or developers, must undergo DECD's loan review process, and must meet the 51% low to moderate income benefit threshold.

(b) Interim Finance Program Income: The assignment of program income will be negotiated at the time of grant award.

(c) Regional Assistance Fund Program Income: The assignment of program income will be negotiated at the time of grant award.

(d) Micro-Loan Program Income: Grantees who demonstrate demand for additional Micro-Loan Program (MLP) eligible loans will be able to capitalize a MLP revolving loan fund with their MLP loan repayments. Grantees who do not close MLP loans to three or more different businesses or grantees who do not demonstrate demand for additional eligible loans will return MLP repayments to the DECD to be redistributed pursuant to Section 5. of the Program Statement.

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