effect of such compliance by the Secretary upon the procedures and timing for processing and taking action on applications for assistance under the Act. Interested individuals should consult the above-cited issuances for detailed policies and procedures.

(b) General procedures for Compliance. (1) Draft environmental impact statement. (i) Preparation. Based upon an analysis of the application submitted in accordance with § 720.44 and such other information as may be needed for this purpose, the General Manager shall prepare a draft environmental impact statement addressing the issues set forth in section 102(2) (c) of NEPA (42 U.S.C. 4332(c)) and in accordance with applicable policies, guidelines and procedures pursuant thereto. Normally draft statements will be prepared within 60 days after receipt by the General Manager of a complete application. Such time period is, however, subject to adjustment depending on the complexity of the Project, the existence of unusual environmental issues, and the adequacy of the information included in the application.

(ii) Circulation. After internal clearance within the Department in accordance with HUD regulations (normally up to 30 days), the draft statement will be circulated for review and comment to relevant Federal, State, and local agencies and made available to the public. The period for comment is 45 days subject to extensions of up to 15 additional days, if necessary, upon request to HUD.

(2) Final environmental impact statement. Based upon consideration of the comments on the draft statement and such other analyses as may have been performed, the General Manager shall prepare a final environmental impact statement. The final statement shall include a discussion of problems and objections, if any, raised by reviewing agencies and the public and a statement of the disposition of issues involved. The final statement, together with comments, shall be filed with the CEQ, sent to appropriate agencies, and made available to the public. The period for comment on the final statement is 30 days from the date of filing with the CEQ.

(3) Offer of commitment. For purposes of compliance with NEPA and CEQ guidelines, the "major Federal action significantly affecting the quality of the human environment" is the offer of commitment as described in § 720.46. In accordance with applicable regulations, no

offer of commitment shall be made sooner than 90 days after a draft statement has been circulated, nor sooner than 30 days after the final statement has been filed with the CEQ, sent to appropriate agencies, and made available to the public.

(c) Exceptions to compliance procedures. Exceptions to the above procedures are permitted, under unusual circumstances, by the CEQ guidelines. Circumstances which might warrant such an exception should be brought to the attention of the General Manager by the applicant as soon as possible.

(d) Issuance of environmental impact statement during project execution. Any proposed change in the Development Plan of an approved Project which, in the determination of the Secretary, would constitute a "major Federal action significantly affecting the quality of the human environment" shall require circulation of an environmental impact statement. No approval of such a change shall be made until after full compliance with the review procedures of NEPA and CEQ guidelines.

(b) Offer of commitment. If the General Manager's determination referred to in § 720.44 is favorable to the applicant, the Secretary (acting through the Corporation) may address a letter to the applicant stating, in effect, that based upon the information contained in the applicant's preapplication and application and any other information which may have been reviewed by the Secretary, the Secretary is prepared to enter into a Project Agreement regarding (i) a Determination of Eligibility, or (ii) the guarantee of a specified maximum principal amount of debt obligations to be issued by the Developer. Such offer shall be subject to approval by the Secretary of:

(1) The initial investors (in the case of a private sale of such obligations) or the terms and conditions of the underwriting (in the case of a public sale of such obligations) if the debt obligations are not sold to the Federal Financing Bank (§ 720.28(b));

(2) The rate of interest to be borne by such obligations or the formula by which such rate shall be determined if such obligations are not purchased by the Federal Financing Bank;

(3) The repayment and maturity provisions of such obligations;

(4) The specific measures for the protection of the security interests of the United States, and release of liens, and payment of taxes;

(5) All other terms and conditions of the financing arrangements which affect the interests of the United States; and

(6) Such further conditions as the Secretary may prescribe.

(c) Acceptance of offer of commitment. The offer of commitment shall expire 120 days after the issuance thereof unless accepted by the applicant during such period by payment of the commitment charge specified in § 720.81(b) and by meeting such conditions to acceptance as the Secretary may impose. The Secretary may in his discretion extend the expiration date of the offer of commitment. Within 120 days after the expiration of such offer of commitment, the applicant may request in writing to the Secretary, accompanied by tender of the commitment charge and the reopening charge as specified in § 720.81 (b) and (c), that the offer be reopened. If the Secretary in his discretion approves such a request, the offer may be accepted by the applicant. An accepted offer of commitment shall remain effective as a commitment to enter into a Project Agreement pursuant to § 720.47 for six (6) months, at which time the commitment shall expire unless the applicant has taken all steps that the Secretary determines to be required under this Part as a prerequisite to the execution of such Project Agreement or unless such six (6) month period is extended at the discretion of the Secretary.

§ 720.47 Project agreement and other agreements.

(a) Project Agreement. Following acceptance of the offer of commitment by the applicant (§ 720.46(c)), and before or simultaneously with the making of any guarantee or Determination of Eligibility, the Developer shall be required to enter into a Project Agreement satisfactory to the Secretary. The Project Agreement shall set forth the understandings of the Secretary and the Developer with respect to implementation of the entire Project during the development period.

The Project Agreement shall also set forth the Developer's agreement to carry out the Project in accordance with application documents and other information and plans, as approved or deemed relevant by the Secretary, and the Secretary's agreement to guarantee debt obligations of the Developer issued pursuant to those plans, subject to the limitations set forth in the Act, these Regulations and the Project Agreement. The Project Agreement (or a related agreement) shall further include:

(1) An express covenant to the effect that the United States' interest in the Project is not limited to its financial interest, but extends to accomplishment of the public purposes of the Act;

(2) A Development Plan setting forth the objectives, plans and undertakings of the Developer over specific time periods to assure the Secretary of compliance with the purposes of the Act and with these Regulations as they may be amended during the development period and to protect the Secretary's financial interest as guarantor of the debt obligations;

(3) Provisions setting forth the duties and responsibilities of the Developer with respect to parts or portions of the Project which will not be carried out by the Developer;

(4) Provisions governing the security to be provided to the United States;

(5) Provisions setting forth the rights and remedies of the United States in the event of default, including rights to seek injunctive or other equitable relief;

(6) Special provisions as necessary to assure compliance with environmental, equal opportunity, relocation, historic preservation, barrier-free, labor standards, and other particular requirements;

(7) Duties of the Developer to provide information, data, and reports as required by the Secretary; maintain adequate books and records; and permit and provide as necessary for inspections and on-site examinations by or on behalf of the Secretary; and

(8) Such other provisions as the Secretary may require as necessary or appropriate to assure adherence to the Project as approved, to the provisions of the Act or of these Regulations, or to protect the United States against loss.

(b) Other agreements. The Developer, and such other parties as the Secretary shall designate, shall execute, simultaneously with the Project Agreement,

an Indenture, and such other documents as may be appropriate, all of which shall be satisfactory to the Secretary.

§ 720.48 Issuance of guaranteed obligations.

Pursuant to the Project Agreement (§ 720.47) and upon satisfaction of the conditions specified in such Agreement, the Secretary shall endorse his guarantee upon debt obligations duly issued by the Developer pursuant to a purchase or underwriting agreement approved by the Secretary. The guarantee fee specified in § 720.81(d) shall be paid at the time any guarantee is made, subject to waiver in whole or in part, at the discretion of the Secretary, in the case of debt obligations issued by a Public Developer.

(a) Applications. Developers whose debt obligations have been guaranteed under the Act in an amount less than the statutory maximum of $50,000,000 per Project, may submit to the General Manager an application for additional guarantee assistance, subject to this maximum. The application shall be prepared in accordance with instructions of the General Manager who shall commence review of such application upon receipt of the application charge specified in § 720.81(a). The application shall contain sufficient information, supporting documentation, and analysis to enable the Secretary, acting through the Corporation, to make a determination as to whether or not the Developer and the Project meet the requirements of the Act, these Regulations, and other policies of the Secretary and the Corporation. Applications shall be in a form specified in instructions issued by the General Manager and may be submitted in stages or parts so that basic obstacles to issuance of an offer of commitment can be identified early in the application process.

(b) Additional information. In addition to consideration of the application, the Secretary, acting through the Corporation, may base his determination of whether to provide additional guarantee assistance on:

(1) A revaluation of the security;

(2) The results of one or more market studies commissioned or undertaken by the Secretary;

(3) An audit report on the Project prepared by a certified public accountant, or public accountant licensed by a

regulatory authority of a State or other political subdivision prior to December 31, 1970, under instructions approved by the Secretary; and

(4) Such other information, reports and analyses as the Secretary may deem appropriate.

(c) Processing requirements. The provisions of §§ 720.43 (b), 720.45 (d), 720.46 and 720.47 shall be applicable to the processing of applications for additional guarantee assistance.

§ 720.50

Projects initiated under the New Communities Act of 1968.

A Developer to whom a commitment of guarantee assistance has been offered under the New Communities Act of 1968 (42 U.S.C. 3901 et seq.) may elect, as to any outstanding portion of such commitment, to proceed under the Act and this Part or to proceed under the New Communities Act of 1968 and the regulations issued thereunder. If the Developer elects to proceed under the Act, it may do so only after the Secretary has determined that the Developer and the Project have satisfied all requirements of the Act and have met the standards and criteria of these Regulations. All preapplication proposals, applications, and materials in support thereof, submitted in respect of Projects for which no commitment has been offered under the New Communities Act of 1968, shall be deemed submitted under the Act and this Part.

Subpart D-Project Execution and
Monitoring

§ 720.60 Applicability of this Subpart. This Subpart is applicable to the monitoring of Projects which have received a guarantee or a Determination of Eligibility.

(d) To facilitate the retrieval and assembly of relevant data, statistics and information in a uniform format for the purpose of:

(1) Analyzing Project problems and experiences;

(2) Evaluating program effectiveness with respect to overall new community program goals and in conjunction with national urban growth policy;

(3) Making comparisons among Projects; and

(4) Developing basic educational and training materials for Developers, institutions and others interested and involved in new community development.

(e) To encourage evaluation and monitoring of the Project by the Developer, independent of Federal requirements, pursuant to sound management practices. § 720.62 Inspection.

The Secretary shall be afforded access to the Project site and to the records of the Developer and Subsidiaries at all reasonable times for purposes of inspection and monitoring of Project development.

§ 720.63

Reporting requirements.

(a) General requirement. To ensure that the Project is being executed in a manner consistent with the objectives of the Act and as provided in the Project Documents, the Developer shall be required to submit periodic financial and non-financial reports and projections on Project execution.

(b) Financial reports. Financial reports shall be prepared and submitted according to requirements of $720.32 (p) except that Projects receiving a Determination of Eligibility shall follow these requirements as adapted by the Secretary to the organizational and financial structure of the Developer and described in Project Documents.

(c) Non-financial reports. Non-financial reports, consisting of statistical and narrative information in a format specified by the Secretary, will be prepared and submitted as set forth in the Project Documents.

(d) Other reports. Other reports and studies specifically required by the Secretary are identified in Project Documents. In addition, the Developer shall furnish to the Secretary any reports or analyses reviewing or evaluating any aspect of the Project undertaken by, for or on behalf of the Developer, any Federal, State or Local Public Body or any

other Person as well as such other information with respect to the Project as the Secretary may from time to time request.

(e) Special notification requirements. The Developer shall ascertain and give immediate notice to the Secretary of any facts or conditions which may adversely and substantially affect or impede the implementation of the Project, including: (1) notice of litigation affecting (i) the status or powers of, or ownership interests in the Developer or any Restricted Affiliate, (ii) outstanding debt obligations, (iii) Project property or (iv) Project requirements; (2) changes in laws, ordinances or official plans related to the Project; (3) major damage to Project property; (4) work stoppages for longer than five business days on any part of the Project; (5) defaults on contracts or sub-contracts covering Project activities and (6) changes in financial conditionof any shareholder, principal or partner of the Developer.

§ 720.64 Internal monitoring and evaluation.

(a) Internal reporting and monitoring. The Developer shall develop an internal reporting and monitoring system to meet its own management needs which is compatible with requirements and guidelines established by the Secretary.

(b) Developer's evaluation. The Developer shall undertake evaluation as an integral part of its monitoring activities in order to provide a continuing assessment of performance and development progress measured against approved goals and projections.

(c) Secretary's evaluation. The Secretary may contract with outside experts, undertake field surveys, and make use of other Federal agencies for the purpose of evaluating approved Projects. § 720.65

Amendments and waivers.

Development Plans, financial requirements and all other terms and conditions in the Project Agreement, Indenture and other Project Documents that do not specifically require the consent of all or a portion of the holders of the guaranteed debt obligations that were initially approved by the Secretary, may be amended or waived. All proposals by the Developer for amendments or waivers shall be submitted to the Secretary for approval. The Secretary may recommend or require such amendments,

modifications or waivers as he shall deem necessary or desirable to ensure the financial viability of the Project, to protect the security interests of the United States or to otherwise preserve his ability to carry out the purposes of the Act. § 720.66 Remedies of the Secretary.

(a) General. The Secretary shall have the remedies set forth in the Project Documents, together with such other remedies as are available at law or equity.

(b) Foreclosure. (1) When an event occurs which, under the Project Documents, entitles the Secretary or the Trustee to foreclose against any of the real property subject to the lien of the Indenture, the Secretary or the Trustee may foreclose in full or in part, regardless of whether acceleration of maturity of any outstanding guaranteed debt obligations has occurred.

(2) The Secretary shall have no obligation to accelerate the maturity of any guaranteed debt obligations regardless of the amount realized from foreclosure.

(c) Extinguishment. (1) The authority to extinguish granted to the Secretary under 42 U.S.C. 4527(3) and under the Project Documents may be exercised by the Secretary to extinguish rights and equities of redemption.

(2) No compensation shall be payable to any party on account of the extinguishment of any of such party's rights.

(d) Deed in lieu of foreclosure. The Secretary may accept a deed-in-lieu of foreclosure upon terms and conditions satisfactory to him.

Subpart E-Other Assistance

§ 720.70 Applicability of this Subpart. This Subpart applies to assistance, other than guarantee assistance, available under the Act and other provisions of law to assist in carrying out Projects for which guarantee assistance has been provided under the Act or for which a Determination of Eligibility has been nade.

§ 720.71 Multiple forms of assistance.

The award of any form of assistance provided under this Subpart shall not in itself exclude the availability of any other form of assistance under this Subpart. The availability of any form of assistance under this Subpart is not conditioned upon action taken with respect to any other form of assistance under this Subpart.

§ 720.72 Supplementary grants.

Following are the general requirements and procedures applicable to supplementary grants for public facilities as described in § 720.1(b) (2).

(a) Application for basic grant. The first step in applying for a supplementary grant is the submission of an application for a grant (referred to herein as the "basic grant") under one of the statutory authorities cited in § 720.1(b) (2) (i). Such application and the subsequent processing and approval thereof must be in accordance with the requirements of the Federal agency responsible for the administration of the basic grant program. No application for a supplementary grant shall be accepted by the General Manager unless an application for the corresponding basic grant has been made.

(b)

Application for supplementary grant. An application for a supplementary grant, in a form prescribed by the General Manager, shall only be made to the General Manager at or subsequent to the time an application for the corresponding basic grant is made. A copy of the application for the basic grant shall accompany the application for the supplementary grant.

(c) Approval of supplementary grant. A supplementary grant shall be approved only if:

(1) The Secretary determines that the facility proposed to be assisted by the supplementary grant is necessary or desirable for carying out a Project:

(2) The related basic grant has been approved by the basic granting agency; and

(3) A Project Agreement has been entered into for the Project which the facility is intended to serve.