(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.

(1) 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.

(0) 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.

(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.

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

REPEAL OF Subsection (d)(6)

Pub. L. 100-242, title V, § 515(g)(2), Feb. 5, 1988, 101 Stat. 1934, provided that, effective Oct. 1, 1989, subsection (d)(6) of this section is repealed.

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, § 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

1988-Subsec. (a). Pub. L. 100-242, § 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, § 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 re

covery 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, § 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, § 515(b), (g)(2), temporarily added par. (6), see Effective Date of 1988 Amendment note below.

Subsec. (f). Pub. L. 100-628, § 1084(a), substituted "5305" for "5304" after "activities under this section or section".

Pub. L. 100-242, § 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, § 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, § 516(a)(3), added pars. (2) to (7).

Subsec. (n)(1). Pub. L. 100-628, § 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, § 515(i), made amendment identical to Pub. L. 99-500 and 99-591. See 1986 Amendment note below.

Subsec. (r). Pub. L. 100-242, § 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, § 515(h), added subsec.

(s).

1987-Subsec. (n)(1). For amendment by § 106 of Pub. L. 100-202, see 1986 Amendment note below.

Subsec. (n)(2)(A). Pub. L. 100-202, § 101(f) [title I, § 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, § 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, § 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, § 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, § 121(c), inserted "neighborhood statistics areas," after “enumeration districts,".

Subsec. (c)(3)(C). Pub. L. 98-181, § 121(d), added cl. (C).

Subsec. (d)(1). Pub. L. 98-181, § 121(e), substituted "criteria for a national competition" for "criteria" in provisions preceding cl. (A).

Subsec. (i). Pub. L. 98-181, § 121(f), inserted provisions relating to applications by consortia of cities less than 50,000 population.

Subsecs. (p) to (r). Pub. L. 98-181, § 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, § 110(a)(1)–(3), added par. (7).

Subsec. (n). Pub. L. 96-399, § 110(b), added subsec.

(n).

Subsec. (o). Pub. L. 96-399, § 117(a), added subsec. (0).

1979-Subsec. (b). Pub. L. 96-153, § 104, designated existing provisions as par. (1) and added par. (2).

Subsec. (e). Pub. L. 96-153, § 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. (1), (m). Pub. L. 96-153, § 105, added subsecs. (1) and (m).

1978-Subsec. (c)(6). Pub. L. 95-557, § 103(g), added par. (6).

Subsec. (e). Pub. L. 95-557, § 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 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 sec-tion], 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) SunsetT 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 of this section 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 99-5911.

Amendment by Pub. L. 99-272 effective Oct. 18, 1986, see section 14001(e) of Pub. L. 99-272, set out as a Termination of General Revenue Sharing note under section 6701 of Title 31, Money and Finance.

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.

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 by Pub. L. 98-479, title I, § 101(b)(2), (3), Oct. 17, 1984, 98 Stat. 2220; Pub. L. 100-242, title V, §§ 521, 525, Feb. 5, 1988, 101 Stat. 1938, 1939, provided that:

"(a) For the purposes of this section:

"(1) The term ‘eligible neighborhood development activity' means

"(A) creating permanent jobs in the neighborhood;

"(B) establishing or expanding businesses within the neighborhood;

"(C) developing, rehabilitating, or managing neighborhood housing stock;

"(D) developing delivery mechanisms for essential services that have lasting benefit to the neighborhood; or

"(E) planning, promoting, or financing voluntary neighborhood improvement efforts.

"(2) The term 'eligible neighborhood development organization' means

"(A) an entity organized as a private, voluntary, nonprofit corporation under the laws of the State in which it operates;

"(B) an organization that is responsible to residents of its neighborhood through a governing body, not less than 51 per centum of the members of which are residents of the area served;

"(C) an organization that has conducted business for at least three years prior to the date of application for participation;

"(D) an organization that operates within an area that meets the requirements for Federal assistance under section 119 of the Housing and Community Development Act of 1974 [this section]; and

“(E) an organization that conducts one or more eligible neighborhood development activities that have as their primary beneficiaries low- and moderate-income persons, as defined in section 102(a)(20) of the Housing and Community Development Act of 1974 [section 5302(a)(20) of this title].

“(3) The term 'Secretary' means the Secretary of Housing and Urban Development.

"(b)(1) The Secretary shall carry out, in accordance with this section, a demonstration program to determine the feasibility of supporting eligible neighborhood development activities by providing Federal matching funds to eligible neighborhood development organizations on the basis of the monetary support such organizations have received from individuals, businesses, and nonprofit or other organizations in their neighborhoods prior to receiving assistance under this section.

"(2) The Secretary shall accept applications from eligible neighborhood development organizations for participation in the demonstration program. Eligible organizations may participate in more than one year of the program, but shall be required to submit a new application and to compete in the selection process for each program year. Not more than 30 per centum of the grants may be for multiyear awards.

"(3) From the pool of eligible neighborhood development organizations submitting applications for participation in a given program year, the Secretary shall select participating organizations in an appropriate number through a competitive selection process. To be selected, an applicant shall—

"(A) have demonstrated measurable achievements in one or more of the activities specified in subsection (a)(1);

"(B) specify a business plan for accomplishing one or more of the activities specified in subsection (a)(1); and

"(C) specify a strategy for achieving greater long term private sector support.

"(c) The Secretary shall award grants under this section among the eligible neighborhood development organizations submitting applications for such grants on the basis of

"(1) the degree of economic distress of the neighborhood involved;

"(2) the extent to which the proposed activities will benefit persons of low and moderate income;

"(3) the extent of neighborhood participation in the proposed activities, as indicated by the proportion of the households and businesses in the neighborhood involved that are members of the eligible neighborhood development organization involved;

and

"(4) the extent of voluntary contributions available for the purpose of subsection (e)(4), except that the Secretary shall waive the requirement of this subparagraph in the case of an application submitted by a small eligible neighborhood development organization, an application involving activities in a very low-income neighborhood, or an application that is especially meritorious.

"(d) The Secretary shall consult with an informal working group representative of eligible neighborhood organizations with respect to the implementation and evaluation of the program established in this section.

"(e)(1) The Secretary shall assign each participating organization a defined program year, during which time voluntary contributions from individuals, businesses, and nonprofit or other organizations in the neighborhood shall be eligible for matching.

"(2) Subject to paragraph (3), at the end of each three-month period occurring during the program year, the Secretary shall pay to each participating neighborhood development organization the product

of

“(A) the aggregate amount of voluntary contributions that such organization certifies to the satisfaction of the Secretary it received during such threemonth period; and

"(B) the matching ratio established for such test neighborhoods under paragraph (4).

"(3) The Secretary shall pay not more than $50,000 under this section to any participating neighborhood