Section 498-16-5 - REDISTRIBUTION OF GRANT FUNDSThis section describes the methods by which undistributed funds, disencumbered funds, additional funds received from HUD, and program income may be redistributed by the State.
A. ADMINISTRATIVE REDISTRIBUTION OF GRANT FUNDS1. Local Government Grants from the State: Local governments receiving grants as a result of the 1997 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 1997 CDBG program, or added to the available monies for the 1997 or 1998 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 1997 CDBG program or added to the available monies for the 1997 or 1998 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 1997 CDBG programs may be added to any open CDBG contract, used to make additional awards in any 1997 CDBG program or added to the available monies for the 1997 or 1998 competition.3. Basis for Redistribution: The decision to redistribute funds 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 1997 competitions but did not receive funding and the possibility of holding additional competitions during the 1997 Program. In all cases, these additional competitions and the subsequent programs developed, will be subject to the 1997 Program Statement. In the case of funds added to open grants, redistribution will give priority to grants needing additional CDBG funds 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.
B. PROGRAM INCOME As used in this Proposed 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. 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.
(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 must submit a Program Income Plan to OCD. The 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, Business Assistance, Downtown Revitalization, Urgent Need, 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: (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.19- 498 C.M.R. ch. 16, § 5