nections and the local collection or distribution laterals.

(c) Grant assistance will not be provided to finance ordinary repairs or maintenance of existing facilities.

(d) Grant assistance will not be provided for the construction of "treatment works" as defined in the Federal Water Pollution Control Act (70 Stat. 506, 23 U.S.C. 1173).

3555.5 Requirements for assistance.

(a) An eligible project must be necessary to provide adequate water or sewer facilities for, and contribute to the improvement of the health or living standards of, the people in the community to be served by the project. The project must be

(1) Designed so that an adequate capacity will be available to serve the reasonably foreseeable growth needs of the area;

(2) Consistent with a program for a unified or officially coordinated areawide water or sewer facilities system as part of the comprehensively planned development of the area; and (3) Necessary to orderly community development.

(b) Prior to July 1, 1968, the Secretary may, in his discretion, make a grant with respect to an eligible project if the program for an areawide water or sewer facilities system is under active preparation but not yet completed, if the facility for which assistance is sought can reasonably be expected to be required as part of such an areawide program, and there is an urgent need for the facility.

(c) The Secretary is authorized to make a grant with respect to an eligible project for a sewer facility without regard to the requirements contained in this section in the case of a community which is eligible for an increased grant under § 555.3(b).

§ 555.6 Labor standards.

cordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5), and shall receive overtime compensation in accordance with and subject to the provisions of the Contract Work Hours Standards Act (40 U.S.C. 327332). The Secretary of Labor has, with respect to the labor standards specified in this section, the authority and functions set forth in Reorganization Plan Number 14 of 1950 (15 FR 3176, 5 U.S.C. 133z-15) and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. 276c). No such project shall be approved without first obtaining_adequate assurance that these labor standards will be maintained upon the construction work.

8555.7 Certification of projects for sewer

facilities.

Grant assistance may not be made available for a project for a sewer facility unless the Secretary of the Interior certifies to the Secretary that any waste material carried by the facility will be adequately treated so as to meet applicable Federal, State, interstate, or local water quality standards before such waste material is discharged into any public waterway.

§ 555.8 Application of other Federal laws.

(a) Grants authorized by section 702 of the Act are subject to provisions of:

(1) Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352, 42 U.S.C. 2000d), which provides that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, or be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving Federal financial assistance; and

(2) Title IV of the Housing and Urban Development Act of 1965 (42 U.S.C. 3071-3074), which requires that, as a condition of eligibility for assistance under section 702 of the Act, the applicant will follow certain prescribed policies in the acquisition of real property by eminent domain.

(b) An applicant for grant assistance under section 702 of the Act will be required to furnish satisfactory assurance that it will comply with the re

This part sets forth the criteria and procedures used in evaluating preliminary applications for Federal grant assistance to local public bodies and agencies for basic water and sewer facilities under the Act. The evaluation of preliminary applications described in this part does not result in a final decision by the Secretary to extend grant assistance to particular projects for the construction of such facilities. The provisions of this part of the regulations do not apply to projects involving New Communities, or such other critical or innovative projects as the Assistant Secretary for Comniunity Development may determine. The Department reserves the right to negotiate the modification of the scope of the proposed undertaking and/or

the amount of financial assistance requested. Further application procedures are described in § 556.18.

(42 U.S.C. 3535(d))

[37 FR 26415, Dec. 12, 1972]

§ 556.2 Definitions.

The

terms "Act", "development cost", "local public bodies and agencies", "Secretary", and "State" shall have the meanings given in § 555.2 of this chapter.

§ 556.3 Preliminary applications for assistance.

(a) Preliminary applications for grants for water and sewer facilities shall be submitted on Standard Form 101, to the appropriate HUD regional or area office having jurisdiction over the geographic area involved in the application. Copies of this form may be obtained on request from the regional or area office.

(b) In general, Standard Form 101 requests the legal name and address of the applicant (an eligible local public body or agency); a brief description of the proposed project and its purpose; a list of the localities to be served; the public interest and necessity for the project; and the proposed method of financing including the total project cost and the grant amount requested.

§ 556.4 Criteria for evaluating preliminary applications.

Criteria for evaluating preliminary applications are divided into the following major categories:

(a) Orderly growth and development.

(b) Financial need.

(c) Housing.

(d) Health.

(e) Local job and business opportunity.

(f) Community development. The elements considered in each category are described in the following sections, and the method of assigning rating points to each element or category is set forth. Points are awarded to each element or category in the following manner unless otherwise specifically indicated: If a statement under a particular element or category

"Service area" means the total geographic area for which the applicant has legal responsibility to provide services and facilities. "Rehabilitation" refers only to major items of construction; it does not include normal maintenance and repair. The phrase "increase the area served" refers to the provision of facilities in those portions of the service area which are not currently part of the existing system. A "basic system" is one which provides facilities within the service area where no facilities currently exist, but existing or proposed supporting facilities, e.g., water supply or sewage treatment, may be provided by other units of government.

(b) Capacity for future growth. (Select one):

Ability to finance the project on the basis of revenue bonds is computed at 6 percent interest over 25 years. If the estimated net revenue in an average year exceeds the total debt service costs for that year by a factor of 1.25, it is assumed that the project can be financed without the requested Federal aid, and the points will not be awarded.

(b) Relative median family income: The median family income of the service area of the proposed project compared to the median family income of the State in which the project is to be located is: (Select one):

5

10

"Reasonable foreseeable growth needs" are determined by the applicant as reflected in the functional planning and programing for the area. "Urgent need" refers to a need which, if not corrected in the next 5 years, can be expected to result in a critical need. A "critical need" refers to a need that should be satisfied immediately,

(4) $501-$1,500 below. (5) $1,501 or more below

2

4

6

8

10

Median family incomes for the service area and the State are to be obtained by utilizing the City-County Data Book or other census data. In those instances where the median family income for the area as determined from the source material appears inconsistent with the Department's knowledge of the community, adjacent area median family incomes will be considered.

(c) Non-Federal financial aid: (Value of this element is the sum of the values of (1) and (2).)

3

2

(2) Maintenance of existing, or assistance to proposed, decent, safe, and sanitary low and moderate income housing ........ (3) Assistance of significant areas of housing that is less than decent, safe, and sanitary. "Decent, safe, and sanitary housing" refers to housing that is in accordance with local housing standards in the area in which the project is to be located. "Low- and moderate-income housing" refers to housing with a fair niarket value that is equal to or less than the resultant of multiplying the section 235-236 maximum income for a family of four, as established by the Secretary for the county in which the project is located, by a factor of 3. "Low- and moderate-income housing" also refers to housing with an annual rental equal to or less than one-third of such section 235-236 maximum income.

(b) Accessibility of housing. (Select one):

Percent of housing in project area that will be accessible on a nondiscriminatory basis to families and individuals with low and moderate income is:

A "potential public health hazard" refers to a hazard which if not corrected can be expected to result in a dangerous lowering of environmental quality and health standards; e.g., malfunctioning septic tanks, polluted individual wells, or areas subject to inundation not more often than every 5 years but at least once every 10 years. A "demonstrated public health hazard" refers to hazards from existing sources which if not corrected, could result in disease of epidemic proportions (which sources are evidenced by epidemiological studies and reports), contamination of domestic water sources from any cause, the need to import water for any cause, and the inundation of the area more frequently than every 5 years. A “critical public health hazard" refers to a demonstrated public health hazard which must be resolved immediately, e.g., a desperate need for water, control of demonstrated causes of diseases of epidemic proportions, and the inundation of the area more frequently than once per year.

§ 556.14 Local job and business opportunities.

(Value of this category is the sum of paragraphs (a) to (e) of this section.)

(a) The project is needed for existing or proposed commercial or industrial development

(b) During the construction phase of the project, on-the-job training activities will be provided......

(c) The project will provide job opportunities for underemployed and unemployed persons...

(d) The project has provisions for small business participation

(e) The project has provisions for minority business participation.

2

2

2

2

2

"On-the-job training" refers to union or government sponsored apprenticeship or similar training programs. "Small businesses" refers to those contractors, including supply contractors, whose contractual abilities are limited

to $125,000 or less. In addition to information furnished on SF-101, the relationship of the project to commercial or industrial development in the area will be taken into account.

§ 556.16 Community development. The degree to which the project is necessary for undertaking other publicly supported community development activities ............... 1 to 5 "Community development activities" refers to those publicly supported physical development activities and those related social or economic development activities being carried out or to be carried out within a reasonable period of time in accordance with a locally determined or areawide plan or strategy. Factors taken into consideration may include the project's responsiveness to local needs and objectives, the economies possible through coordinated or joint action, and the degree of support by the appropriate unit(s) of local general-purpose government.

§ 556.18 Further application procedures.

(a) Preliminary applications that receive a comparatively high rating are placed on the potential project list by the regional or area office having jurisdiction over the geographic area to which the application relates. Then, depending upon the relative rating of the preliminary application among other such applications submitted to the area or regional office within any given period, the applicant may be asked to submit further application material, with supporting documentation, so that a final decision on the grant may be reached. Such application material is subject to further reviews to determine compliance of the application with basic eligibility and technical requirements.

(b) The relative rating of the preliminary application and remedial action by applicants are determined as follows: A minimum value that will permit funding within the area office is to be determined on the basis of aggregate scores of rated applications. When an SF-101 fails to receive the prescribed score for inclusion of the project on the potential project list, the application and supporting docu

(a) Purpose. This part sets forth criteria and procedures to be used in preliminary evaluation of applications for Federal loan assistance to local public bodies and agencies under the Public Facility Loans Program.

(b) Procedures. (1) Submissions will first be reviewed against four prerequisites. If any of these prerequisites are not met, the application will be rejected. If the application meets all prerequisites, it will be evaluated against the point rated criteria and assigned a point rating.

(2) Then, depending upon the relative rating of the application among other such applications pending in the area office, the applicant may be asked to submit further application material, with supporting documentation so that a final decision on the loan may be reached. Such application material is subject to reviews to deter