HHS-2021-ACF-OCS-EE-1965.pdf

Administration for Children and Families

Office of Community Services

Community Economic Development Projects

HHS-2021-ACF-OCS-EE-1965

Application Due Date: 07/12/2021

Due Date for Applications:

FY 2021: 07/12/2021

FY 2022: 05/23/2022

FY 2023: 05/22/2023

Community Economic Development Projects

HHS-2021-ACF-OCS-EE-1965

TABLE OF CONTENTS

Overview Executive Summary

I. Program Description II. Federal Award Information

III. Eligibility Information

1. Eligible Applicants

2. Cost Sharing or Matching

3. Other

IV. Application and Submission Information

1. Address to Request Application Package

2. Content and Form of Application Submission

3. Unique Entity Identifier and System for Award Management

(SAM)

4. Submission Dates and Times

5. Intergovernmental Review

6. Funding Restrictions

7. Other Submission Requirements

V. Application Review Information

1. Criteria

2. Review and Selection Process

3. Anticipated Announcement and Federal Award Dates

VI. Federal Award Administration Information

1. Federal Award Notices

2. Administrative and National Policy Requirements

3. Reporting

VII. HHS Awarding Agency Contact(s) VIII. Other Information

Department of Health & Human Services Administration for Children and Families

Funding Opportunity Title: Community Economic Development

Projects Announcement Type: Initial Funding Opportunity Number: HHS-2021-ACF-OCS-EE-1965 Primary CFDA Number: 93.570 Due Date for Applications: 07/12/2021

Due Date for Applications:

FY 2021: 07/12/2021

FY 2022: 05/23/2022

FY 2023: 05/22/2023

Executive Summary

Notice:

Applicants are strongly encouraged to read the entire funding opportunity announcement (FOA) carefully and observe the application formatting requirements listed in Section IV.2. Content and Form of Application Submission.

For more information on applying for grants, please visit "How to Apply for a Grant" on the ACF Grants & Funding Page at https://www.acf.hhs.gov/grants/howto.

For Fiscal Year (FY) 2021, the Department of Health and Human Services (HHS), Community and Economic Development (CED) program, administered by the Office of Community Services (OCS) in the Administration for Children and Families (ACF), will provide up to $13.6 million in grants ($800,000 maximum per project) to Community Development Corporations (CDCs) for projects designed to address the economic needs of individuals and families with low income, through the creation of employment and business opportunities.

The CED program seeks to fund projects that address the personal and community barriers that must be overcome for individuals with low incomes to become self-sufficient. Funds can be used for costs associated with participating business start-up or expansion activities, as consistent with the cost principles found at 45 CFR Part 75, Subpart E, provided that the expenditures result in the creation of positions that can be filled with individuals with low incomes.

OCS recognizes that many businesses supported with CED funds in the past have been put in jeopardy due to the COVID-19 pandemic. For the purposes of this FOA, eligible job creation efforts include the re-creation or restoration of full-time, full-year positions that were lost due to the COVID-19 pandemic. The training and placement of individuals in positions existing prior http://www.acf.hhs.gov/grants/howto to the start of the project, even positions guaranteed to individuals with low incomes through a formal agreement with an employer, is not considered job creation. The flexibilities involving the COVID-19 pandemic are only applicable for the FY 2021 FOA.

This is a standing FOA. It will be effective until canceled or changed by the Director of OCS.

I. Program Description

Statutory Authority Section 680(a)(2) of the CSBG Act, as amended, 42 U.S.C. § 9921(a)(2), authorizes the HHS Secretary to make grants on a competitive basis to private, non-profit organizations that are CDCs to provide technical and financial assistance for economic development activities designed to address the economic needs of low-income individuals and families by creating employment and business development opportunities.

The CED authority for construction and renovation is through annual appropriations, and the most recent language is located at Division H, Title II of the Consolidated Appropriations Act, 2021, Public Law 116-260.

Description The CED program recognizes that non-profit CDCs know their communities and can efficiently and effectively create new community economic development projects in their communities.

The objective of the program is to support businesses that develop new products, services, and commercial activities that result in new positions for individuals with low incomes. These positions should:

Be ready to implement at the time of award;

Lead to increased self-sufficiency for individuals and families with low incomes;

Create businesses and jobs in low-income communities that improve the livelihood of not only those who obtain those jobs but also the community itself; and Attract additional public and private funds to increase investment and quality of life in low-income communities.

Community buy-in is a critical aspect of the CED program as it helps to ensure that there is continued community support for the project, which will lead to sustained success of the project beyond the CED project period. In order to secure community buy-in and ensure that CDCs are effectively addressing the needs of their communities, it is critical that the Board of Directors for the governing organization include representation from the community in which the proposed project will be located. See Section III.1. Eligible Applicants.

NON-CONSTRUCTION PROJECTS

CED-funded projects can be non-construction projects that are ready to be implemented at the time of the grant award and completed during the assigned project period. The grant period for non-construction projects is 3 years. It is expected that all participating business expansion/creation and job creation for non-construction projects is completed and CED funds expended within the 3-year project period. Changes in direction in the final year of a project are discouraged. Applicants distinguish projects that are ready to implement at the time of award by providing evidence such as lending guidelines, sample loan agreements, commitment from identified participating businesses, etc., in the application.

Non-construction projects involve limited alteration or renovation, costing less than $250,000 to support participating business creation and/or expansion and job creation. Non-construction projects typically involve a loan(s) or equity investment(s) in participating business(es).

Business plans for CED projects that demonstrate they are ready to implement must include a realistic project plan with the following key elements:

1. A timeline that clearly demonstrates that the proposed project will be completed and all CED funding expended within the proposed grant.

2. A plan demonstrating that CED funds will be managed consistently with applicable federal regulations, including 45 CFR §§ 75.302 (Financial management and standards for financial management systems) and 75.322 (Intangible property and copyrights), whereas grantees must have control over and accountability for all funds, property, and other assets.

3. A proposal demonstrating how grantees will support participating business creation/expansion and job creation.

Note: When the applicant proposes to loan or invest money in a third-party participating business and this participating business is the property owner of record on any property purchased with such funds, the applicant’s ownership interest is in the note on the debt instrument or other security, rather than in the property itself. As such, the federal interest is in the debt instrument or security, and as intangible property, the federal interest in such property is subject to the 12-year rule set forth in annual appropriations law (see, e.g., the Consolidated Appropriations Act, 2021, Public Law 116-260).

Applicants proposing non-construction projects must propose to create at least a minimum number of jobs using the following formula:

[Total Amount of Federal CED Funds Awarded] divided by [$25,000] = [Minimum Number of Jobs to be Created].

For example, if a grantee is awarded $800,000 in federal CED funds, it must use that money to conduct activities that will create at least 32 jobs ($800,000 ÷ $25,000 = 32). For a table with examples of the minimum number of jobs based on specific award amounts, see Appendix A:

Sample Chart of Cost per Job Created at the end of this FOA. Note: An applicant’s score will not increase by proposing jobs above the required minimum.

CONSTRUCTION PROJECTS

CED-funded projects can be construction projects that are ready to be implemented at the time of the grant award and completed during the assigned project period. The grant period for construction projects is 5 years. It is expected that all participating business expansion/creation and job creation for construction projects is completed and CED funds expended within the 5-year grant period. Changes in direction in the final year of a project are discouraged.

Construction projects involve construction or renovation. For more information, see the Definition of Terms found later in this section. Construction projects typically include commercial real estate for lease or use by the gamut of small- and large-scale business operations. The CED program permits facility construction, as needed, to support participating business creation, expansion, and/or job creation.

Business plans for CED construction projects must include a realistic project plan with the following key elements:

1. A timeline that clearly demonstrates that the proposed construction project will be completed and all CED funding expended within the proposed grant period.

2. A plan demonstrating that CED funds will be managed consistently with applicable federal regulations, including 45 CFR §§ 75.302, 75.316, 75.317, 75.318, 75.320, 75.322, and 75.343, whereas grantees must have control over and accountability for all funds, property, and other assets.

3. A proposal demonstrating how grantees will use the property for the originally authorized purpose and will not encumber the property without prior approval from ACF. Please note that any encumbrance, (e.g., new financing, refinancing, or extensions of existing loans) with or without a subordination, requires deviation prior approval by the ACF Chief Grants Management Officer before federal funds are used for these purposes. This may delay the facility project.

4. Evidence that grantees are ready to begin construction upon award, including contracts or other third-party agreements with parties involved in the construction.

5. A proposal demonstrating how grantees will support participating business creation/expansion and job creation.

Applicants proposing construction projects must propose to create at least a minimum number of jobs using the following formula:

[Total Amount of Federal CED Funds Awarded] divided by [$30,000] = [Minimum Number of Jobs to be Created].

For example, if a grantee is awarded $800,000 in federal CED funds, it must use that money to conduct activities that will create at least 27 jobs ($800,000 ÷ $30,000 = 27). For a table with examples of the minimum number of jobs based on specific award amounts, see Appendix A:

Sample Chart of Cost per Job Created at the end of this FOA. Note: An applicant’s score will not increase by proposing jobs above the required minimum.

Note: Per language in the FY 2021 Consolidated Appropriations Act, in instances where the applicant proposes to loan money or have an equity investment in a third-party participating business, the applicant owns the note on the intangible property, not the real property itself. The third-party participating business is the property owner of record. As such, the federal interest is in the debt instrument, as an intangible property and not the property. The intangible property is subject to the 12-year rule set forth in the appropriations language. See Intangible Property for additional details. Any CED project with construction activities, regardless of whether the property is owned by the grantee or participating business, will be considered a construction project and granted a 60-month project period. However, prospective applicants are urged to read the federal requirements related to “real property” in this FOA carefully, as those apply to only projects where the grantee owns the property. It is important to note that short-term construction jobs associated with preparing for participating business start-up or expansion are not counted when determining the number of jobs created under the CED program, as they are designed to be temporary.

All environmental and historic preservation requirements must be fulfilled before award, or before allowing drawdown of funds. For ACF property-related policy and guidance, please refer to the ACF website at https://www.acf.hhs.gov/grants/real-property-and-tangible-personal-property. Also, to determine how real property requirements apply to CED projects please refer to https://www.acf.hhs.gov/ocs/policy-guidance/ced-acf-real-property-guidance-what-does-it-mean-my-ced-grant.

GENERAL PROGRAM ELEMENTS

Regardless of the type of project, financial documents must show that all necessary financing is in place and not contingent upon other financing sources, and that signed agreements are in place with the first identified borrower or investment and other project partner(s).

CED project applications are expected to demonstrate that the project budget includes all CED and non-CED funds needed to implement the project and result in the successful creation of jobs, as outlined in the proposed application. When non-CED financing is required to fully implement the project, evidence must be provided that all capital requirements have been met through financing, cash resources, or in-kind contributions. Additionally, program income, as defined in this funding opportunity, may be used to demonstrate the long-term sustainability of the project.

However, since CED projects should be ready for implementation at the time of the award, future program income cannot be used to meet the non-CED funding needs for project implementation.

While the focus of the program is on the creation of jobs for individuals with low incomes, as defined by the poverty guidelines published annually by HHS at https://aspe.hhs.gov/poverty-guidelines, ACF does not expect that 100 percent of the created jobs will necessarily be filled by individuals with low incomes. Often when a business is created or expanded, there is a need to hire high-level managers or other content experts with unique skills and/or experiences that may be more difficult to identify and recruit. For this reason, ACF only requires that a minimum of 75 percent of the newly created jobs be filled by individuals with low incomes.

ACF also expects that these jobs will support individuals with low incomes in achieving self-sufficiency, through wages, benefits, and opportunities for career growth.

Note: Consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Public Law 116-136, for FY 2020 and 2021 purposes of this FOA, ACF defines “low income” as an individual whose household income level does not exceed 200 percent of the official poverty guidelines, as found in the most recent revision of the HHS Poverty Guidelines published by HHS at https://aspe.hhs.gov/poverty-guidelines.

ELIGIBLE ACTIVITIES

CED funds may be used for the start-up or expansion activities of participating businesses, as consistent with the cost principles, as implemented in 45 CFR Part 75, Subpart E, provided that the expenditures result in the creation of positions that can be filled with individuals with low incomes. This includes:

Start-up capital for operating expenses, such as salaries, facilities, and equipment that https://www.acf.hhs.gov/grants/real-property-and-tangible-personal-property https://www.acf.hhs.gov/grants/real-property-and-tangible-personal-property https://www.acf.hhs.gov/ocs/policy-guidance/ced-acf-real-property-guidance-what-does-it-mean-my-ced-grant https://www.acf.hhs.gov/ocs/policy-guidance/ced-acf-real-property-guidance-what-does-it-mean-my-ced-grant https://aspe.hhs.gov/poverty-guidelines https://aspe.hhs.gov/poverty-guidelines https://aspe.hhs.gov/poverty-guidelines will be replaced by projected earnings;

Loans to identified, viable, participating businesses, and/or;

Equity or stock investment in identified viable, participating businesses.

CED projects may utilize multiple strategies as long as they result in the creation of full-time positions. See Definition of Terms for more details about each of the referenced strategies.

The training and placement of individuals in positions existing prior to the start of the project, even positions guaranteed to individuals with low incomes through a formal agreement with an employer, is not considered job creation.

Limited incubator development is allowable, as long as the applicant demonstrates the incubator will support participating businesses that demonstrate the financial capacity to create the agreed-upon jobs for individuals with low incomes within the proposed geographic location.

For more information about an incubator, see Definition of Terms found later in this section.

INELIGIBLE ACTIVITIES

CED grant funds may not be used for the following purposes:

Projects that include the reimbursement of pre-award costs.

Projects that provide subawards/pass-throughs.

Projects that use funding to capitalize loan loss reserve funds.

Project that use funds for loan(s) with balloon payments.

Projects that use CED funding to provide loan(s), where repayment of all loans funded with CED funds does not begin during the course of the funded project period.

Projects that create or expand microenterprise business training and technical assistance centers.

Projects that focus primarily on job training, job placement, and technical assistance.

Limited job training and job placement activities can only be supported in the context of training that is provided specifically for the new positions created. For example, funds can be used to train a cashier for a specific position that has been created but cannot be used to operate a general job training and placement program.

Projects that do not create new jobs that did not exist prior to the proposed CED project.

DEFINITION OF TERMS

The following definitions apply throughout this FOA, and applicants are strongly encouraged to review these carefully prior to submitting an application.

Alteration and Renovation (A&R) - For this opportunity, this is, generally, considered work that changes the interior arrangements or other physical characteristics of an existing facility or installed equipment so that it can be used more effectively for its currently designed purpose or adapted to an alternative use to meet a programmatic requirement. A&R may involve changes to interior dimensions, surfaces, or finishes; changes to the internal environment; changes to utility services (plumbing, electricity, gas, etc.); installation of fixed equipment (including casework, fume hoods, etc.); replacement, removal, or reconfiguration of walls, doors, frames, or windows in order to place equipment in a permanent location; making unfinished shell space suitable for purposes other than human or animal occupancy, such as storage; or, alterations to meet requirements for accessibility by individuals with physical disabilities. This type of work also may be referred to as improvements, conversion, rearrangements, reconversion, rehabilitation, remodeling, restoration, or modernization. It excludes construction; large-scale permanent improvements (major renovation); routine maintenance and repair; and, costs categorized as equipment costs per the recipient’s accounting system. HHS characterizes A&R projects as “minor” or “major,” depending on the type of activity proposed, the cost of the project, and whether it meets or exceeds the major renovation threshold. Note: “A&R” and “renovation” are used interchangeably. For more information see 45 CFR §; 75.308, 45 CFR §;

75.407, 45 CFR §; 75.436, 45 CFR §; 75.439, and HHS Grants Policy Statement (GPS) II-30, II -49, II97 to II 99, and B-2. See also Major Renovation and Minor Renovation for more information. OCS grant funds expended for major A&R (renovation) costs of facilities require filing of a Notice of Federal Interest (NFI).

Balloon Payment - A large loan payment agreed upon by the parties and due at the end of a mortgage, commercial loan, or other amortized loan. The balloon payment is not amortized over the life of the loan, and the remaining balance is the final repayment to the lender. Note: As noted in the definition of “loan,” repayment of all loans funded with CED funds must begin during the course of the funded project period and balloon payments are not allowed.

Board Approval - For the purposes of this FOA, “board approval” is a document authorizing the approval of the proposed project by the Board of Directors in order to ensure the goals and objectives of projects are community driven and in accordance with community-prioritized needs for job creation. This could be demonstrated through a board resolution, meeting notes, or other written documentation that records the decisions or actions of a CDC Board of Directors.

Board Resolution - Written document recording decisions or actions of a CDC Board of Directors recorded in the minutes of the organization. For the purposes of this FOA, a document authorizing the submission of the CED grant, to ensure the goals and objectives of projects are community driven and in accordance with community-prioritized needs for job creation, and submitted on behalf of the CDC.

Budget Period - Projects under CED awards are not divided into the typical 12-month intervals known as “budget periods.” All CED projects have only a single budget period, which is equal in length to the project period.

Capital Assets - As defined under 45 CFR § 75.2, “means tangible or intangible assets used in operations having a useful life of more than 1 year which are capitalized in accordance with generally accepted accounting principles (GAAP). Capital assets include the following: (1) Land, buildings (facilities), equipment, and intellectual property (including software) whether acquired by purchase, construction, manufacture, lease purchase, exchange, or through capital leases; and (2) Additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations or alterations to capital assets that materially increase their value or useful life (not ordinary repairs and maintenance).”

Capital Expenditure - As defined under 45 CFR § 75.2, “means expenditures to acquire capital assets or expenditures to make additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations, or alterations to capital assets that materially increase their value or useful life.” Please refer to HHS Grants Policy Statement (GPS) II-31 and II-35 for more information.

Community - Any geographic area defined by specific boundaries and the residents, https://www.govinfo.gov/app/details/CFR-2015-title45-vol1/CFR-2015-title45-vol1-sec75-308 https://www.govinfo.gov/app/details/CFR-2016-title45-vol1/CFR-2016-title45-vol1-sec75-407 https://www.govinfo.gov/app/details/CFR-2016-title45-vol1/CFR-2016-title45-vol1-sec75-407 https://www.govinfo.gov/app/details/CFR-2016-title45-vol1/CFR-2016-title45-vol1-sec75-436 https://www.govinfo.gov/app/details/CFR-2016-title45-vol1/CFR-2016-title45-vol1-sec75-439 https://www.hhs.gov/grants/grants/grants-policies-regulations/index.html https://www.hhs.gov/grants/grants/grants-policies-regulations/index.html businesses, and institutions within that geographical area.

Community Barriers - Conditions in a community that impede success in employment or self-employment of individuals with low incomes. Such conditions may include the following: lack of employment education and training programs; lack of public transportation; lack of markets;

unavailability of financing, insurance, or bonding; inadequate social services, such as employment services, child care, or job training; high incidence of crime; substance use disorder; inadequate health care; or environmental hazards, such as toxic dump sites or leaking underground tanks.

Community Development Corporation (CDC) - In accordance with section 680(a)(2) of the CSBG Act, 42 U.S.C. § 9921(a)(2), to be a qualified CDC, an organization must meet the following three conditions:

The organization must be a private non-profit with 501(c)(3) status;

The organization must have articles of incorporation or bylaws demonstrating that the

CDC has a principal purpose of planning, developing, or managing low-income housing or community development projects; and

The Board of Directors of the organization must have representation from community residents, business leaders, and civic leaders.

Note: The CDC designation does not need to be specified on any official documents as long as the three requirements stated earlier in this definition are met.

Community Economic Development (CED) - A process by which a community organizes its resources and capacities to attract capital to invest in physical, commercial, and business development in order to create job opportunities for its residents.

Construction - A new facility, building, or structure, including the installation of equipment, site preparation, landscaping, associated roads, parking, environmental mitigation and utilities, which provides space not previously available. It includes freestanding structures, additional wings or floors, enclosed courtyards or entryways, and any other means to provide usable space that did not previously exist (excluding temporary facilities). For more information, see 45 CFR §; 75.308, 45 CFR §; 75.407, and the Real Property Guidance. Note: Applicants proposing a construction project must provide evidence that they are ready to begin construction upon award by including contracts or other third-party agreements with parties involved in the construction. Also, an NFI must be filed if the project uses CED funding directly for construction of real property. The NFI must be filed within 10 business days of the expenditure of funds. See also the definition of Federal Interest.

Contract - A legal instrument by which a grantee purchases goods, services, or property needed to carry out the project or program under the CED grant award. The term as used in this part does not include a legal instrument, even if the non-federal entity considers it a contract, when the substance of the transaction meets the definition of a “grant award” or “subaward” (see Subaward).

Debt Instruments - Any financial documents that enable the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract. Types of debt instruments include notes, bonds, certificates, mortgages, leases, or other agreements between a lender and a https://www.govinfo.gov/app/details/CFR-2015-title45-vol1/CFR-2015-title45-vol1-sec75-308 https://www.govinfo.gov/app/details/CFR-2015-title45-vol1/CFR-2015-title45-vol1-sec75-308 https://www.govinfo.gov/app/details/CFR-2016-title45-vol1/CFR-2016-title45-vol1-sec75-407 https://www.acf.hhs.gov/real-property borrower.

Earnings - The net income of the participating business, which is the difference between its revenues, costs, and expenses, as shown on the profit and loss statement.

Employment Education and Training Program - A program that provides employment-directed education and/or training to individuals with low incomes, including Temporary Assistance for Needy Families (TANF) grantees, at-risk youth, public housing residents, displaced workers, persons who are homeless, and other individuals with low incomes.

Equity Investment - The provision of capital to an identified for-profit participating business entity for a specified purpose in return for a share of ownership evidenced by a formal equity investment agreement. This may involve the issuance of stock, as in an equity stock investment.

An equity investment may be either in a subsidiary for-profit corporation of the applicant or in an unaffiliated business.

Federal Interest - When used in connection with the acquisition, construction, or improvement of real property, equipment, or supplies under a federal award, the federal interest is a dollar amount that is the product of the following: (1) federal share of total project costs; and

(2) current fair market value of the property, improvements, or both, to the extent the costs of acquiring or improving the property were included as project costs. (See 45 CFR § 75.2.) Note:

For property owned by the grantee, the federal interest in real property does not expire when the project ends. It continues indefinitely although title vests in the grantee so long as the property is used for the originally authorized purpose.

When the real property is no longer needed for the purpose of the original project, grantees (and on behalf of partners) must submit the SF-429 Attachment C in GrantSolutions On-Line Data Collection (OLDC) system to request disposition instructions from the ACF GMO. (See 45 CFR § 75.318(e) and ACF Property Disposition Guidance).

Financial Feasibility/Viability - The component of the business plan demonstrating the financial ability of the grantee to achieve the project’s goals of creating permanent, full-time jobs for individuals with low incomes over the project period. Financial feasibility/viability is usually demonstrated using the following types of documentation: profit and loss forecasts or pro forma, cash flow projections, balance sheets, and sources and uses of funds statements.

Financially feasible/viable projects identify and explain earnings, fees, or other sources of revenues sufficient to provide for business operation and maintenance, a reasonable reserve, and debt payment for the purpose of job creation.

Financial Literacy Services - Delivery of information and tools that helps individuals make informed choices with regard to their personal finances. Such services typically focus on budgeting, credit, savings, and other matters relating to a household’s financial well-being.

Full-Time, Full-Year Position - A nonseasonal position requiring at least 30 hours of work per week. An aggregation of part-time positions to a full-time equivalent is not considered a full-time position.

Grant Award - The funding made available to an eligible organization after a competitive grant application process.

Grant Terms and Conditions - A statement of HHS and ACF regulations and policies, pursuant to federal law, that is attached to the Notice of Grant Award and that sets forth the https://www.acf.hhs.gov/grants/real-property-and-tangible-personal-property standard terms and conditions with which grantees are required to comply. Applicants are expected to provisionally sign the Statement of Grant Terms and Conditions as an acknowledgement that the official who is submitting an application for OCS funding has read and understands the terms and conditions applicable to the project, if awarded funding.

Incubator - A program to help start-up participating businesses flourish by providing support, resources, and business services and advice, normally in one physical location. Incubators that are established without a geographic location in the community are not supported by this announcement. Further, for the purposes of this announcement, limited incubator development is allowable as long as the applicant demonstrates the incubator will support participating businesses that demonstrate the financial capacity to create the agreed-upon jobs for individuals with low incomes within the proposed geographic location.

Indirect Costs - Costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.

In-Kind Contributions - These contributions may be in the form of real property, equipment, supplies, and/or other expendable property, or goods and services provided by non-governmental sources directly benefiting and specifically allocated to the project.

Intangible Property – As defined by 45 CFR § 75.2, intangible property means “property having no physical existence, such as trademarks, copyrights, patents and patent applications, and property, such as loans, notes, and other debt instruments, lease agreements, stock, and other instruments of property ownership (whether the property is tangible or intangible).” Note:

Per annual appropriations language (see e.g., Consolidated Appropriations Act, 2021, Public Law 116-260), grantees who use federal funding for intangible property or debt instruments must report to the federal government on the continued use of such funds up to 12 years after the end of the project.

Intervention - Any planned activity within a project that is intended to reduce personal barriers or community barriers to employment and can be formally evaluated. For example, job readiness training is an intervention.

Job Creation - New full-time, full-year positions for the project that did not exist prior to the start of the project and came about as a direct result of the investment of OCS funds in project activities, such as development of new business ventures, the expansion of existing participating businesses, or the development of new products and services. Note: This includes the recreation or restoration of full-time, full-year positions that were lost due to the COVID-19 pandemic.

These flexibilities are only applicable for the FY 2021 funding opportunity announcement. The training and placement of individuals in positions existing prior to the start of the project, even positions guaranteed to individuals with low incomes through a formal agreement with an employer, is not considered job creation.

Job Placement - Placing an individual in an existing vacant job of a business, service, or commercial activity not related to new development or expansion activity. All jobs supported by the project must meet the definition of new job creation, not job placement. Note: CED funds cannot be used solely for job placement, but limited job placement activities are permitted only in the context of filling the newly created positions with employees.

Job Training - For the purposes of this opportunity, “training” refers to group-based adult education and skill-building activities (e.g., workshops). It does not include consultations or technical assistance that is specifically customized or tailored to the needs of a particular business identified in the project. Note: CED funds cannot be used primarily for training, but limited job training activities can be supported only in the context of training that may be provided specifically to employees to fill the new positions created.

Less-Than-Arm’s-Length - Rental costs under “less-than-arm’s-length” leases are allowable only up to the amount as explained in 45 CFR § 75.465(b). For this purpose, a less-than- arm’s-length lease is one under which one party to the lease agreement is able to control or substantially influence the actions of the other. Such leases include, but are not limited to, those between the following:

1. Divisions of the non-federal entity;

2. The non-federal entity under common control through common officers, directors, or members; and

3. The non-federal entity and a director, trustee, officer, or key employee of the non-federal entity or an immediate family member, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest. For example, the non-federal entity may establish a separate corporation for the sole purpose of owning property and leasing it back to the non-federal entity.

4. Family members include one party with any of the following relationships to another party:

Spouse, and parents thereof;

Children, and spouses thereof;

Parents, and spouses thereof;

Siblings, and spouses thereof;

Grandparents and grandchildren, and spouses thereof;

Domestic partner and parents thereof, including domestic partners of any individual in 2 through 5 of this definition; and Any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

5. Rental costs under leases which are required to be treated as capital leases under GAAP are allowable only up to the amount (as explained in 45 CFR §75.465(b)) that would be allowed had the non-federal entity purchased the property on the date the lease agreement was executed. The provisions of GAAP must be used to determine whether a lease is a capital lease. Interest costs related to capital leases are allowable to the extent they meet the criteria in 45 CFR § 75.449. Unallowable costs include amounts paid for profit, management fees, and taxes that would not have been incurred had the non-federal entity purchased the property.

Letters of Support - A signed letter that describes an endorsement of the project from a local or regional government agency or community organization. The letter should describe any specific relationship the agency or organization has to the applicant, knowledge of the applicant’s experience and qualifications in business and job creation, and any in-kind or financial contributions to the project, if applicable.

Loan - Money provided to finance an eligible participating business borrower evidenced by a promissory note and loan agreement for a specified purpose to be repaid, with a stated rate of interest and within a specified period. Loans made to eligible participating businesses must be at or below market rate (or what commercial lenders would offer). This includes a distinct loan fund established exclusively for CED projects as a resource for loans, to finance eligible business development and operational activities that, when principal is repaid, is used to make new loans that support a similar purpose. In all instances, the first borrower must be identified along with the standards used for selection. Interest accrued on CED funds must be used to continue or expand the activities of the approved project. See also Federal Interest. Repayment of all loans funded with CED funds must begin during the course of the funded project period and a balloon payment is not allowed. No portion of a loan is forgivable.

Low-Income – Consistent with the CARES Act, Public Law 116-136, for FY 2020 and FY 2021 purposes of this FOA, ACF defines “low-income” as an individual whose household income level does not exceed 200 percent of the official poverty guidelines as found in the most recent revision of the HHS Poverty Guidelines published by HHS.

Major Renovation (A&R) – This is considered a structural change (e.g., to the foundation, roof, floor, or exterior or load-bearing walls of a facility, or an extension to an existing facility) to achieve the following: increase the floor area and/or change function and purpose of the facility. The major renovation threshold is: (1) $250,000 for a single renovation project; (2) budget revision for a renovation project in a budget period exceeding the lessor of $250,000 or 25% of the total approved budget (direct and indirect costs and both the federal and any nonfederal share); and, (3) cumulative costs for a renovation project exceeding the lesser of $250,000 or 25% of the total direct costs expected to be awarded in the period of performance.

This threshold applies to each land parcel, as described by the jurisdiction in which the property is located. Major A&R excludes acquisition and construction. The NFI must be filed within 10 business days of the expenditure of funds. See also Federal Interest.

Minor Renovation (A&R) - These are improvements to real property, which do not meet the definition of major renovation. Minor A&R excludes acquisition and construction.

Microenterprise - A commercial participating business with five or fewer employees, at least one of whom is the owner.

More Experienced Partner - A project partner that successfully meets all of the following requirements: is a CDC, has completed two or more CED projects, has completed one or more projects involving activities similar to the proposed project, and has experience with collaborative programming.

Need for Assistance - Physical, economic, social, financial, institutional, and/or other problem(s) requiring a solution.

Non-Profit Organization - Any corporation, trust, association, cooperative, or other organization, not including institutions of higher education, that (1) is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; (2) is not organized primarily for profit; and (3) uses its net proceeds to maintain, improve, and/or expand its operations. For this purpose, the term “non-profit organization” excludes colleges and universities; hospitals; state, local, and federally recognized Indian tribal governments; and those non-profit organizations listed in Appendix VIII to 45 CFR Part 75 – Non-Profit Organizations Exempt from Subpart E of Part 75.

Notice of Federal Interest (NFI) - A notice of public record that a grantee must file if it directly expends federal grant funds for acquisition, construction, or major alteration and renovation of real property. See also Federal Interest.

Notice of Award (NOA) - A legal document given to the intended organization that indicates that an award has been made and that funds may be requested from the designated HHS payment system or office. The notice of grant award shows the amount of federal funds authorized for obligation and the budget period for the approved project. Grantees will find this information helpful because it outlines the conditions of their grant awards.

Participating Business - A business that has been identified as a CED project participant having executed a third-party agreement with the CED applicant to create new, full-time, full-year jobs, at least 75 percent of which will be filled by individuals with low incomes. Proposed jobs are specifically identified in the third-party agreement.

Persistent Poverty County - A county in which 20 percent or more of the population has lived in poverty over the past 30 years according to the U.S. Census, as determined by the Economic Research Service (ERS) of the U.S. Department of Agriculture.

Personal Barriers - Those aspects of an individual’s personal situation that may impede success in obtaining and retaining employment. Barriers may include factors such as limited education, substance use disorder, insufficient life skills, criminal history, health problems, or disability.

Profit and Loss Statement - Financial report summarizing participating business revenues, expenses, and net income over a specified period of time.

Project - The scope of OCS activities described in the application for federal grant funds pursuant to this announcement.

Project Partner - Any individual, organization, or business entity participating in the project that is not the direct grantee of CED grant funds. Typical project partners include the following:

equity investors, donors, a more experienced partner, a wholly owned subsidiary, or a business entity to which the grantee makes a loan in support of grant purposes. Note: CED grantees must play a substantive role in the project. A grantee working with a project partner must actively monitor the project and ensure compliance with CED program requirements.

Project Period - The time during which the grantee may incur new obligations to carry out the work authorized under the federal award. For the CED program, non-construction projects will have a 3-year project period. Projects that involve construction will have a 5-year project period.

Promise Zone - Initiative to designate a number of high-poverty communities as Promise Zones, where the federal government will partner with and invest in communities to create jobs, leverage private investment, increase economic development activity, expand educational opportunities, and improve public safety. More information about the Promise Zones initiative is available at https://www.hud.gov/program_offices/field_policy_mgt/fieldpolicymgtpz.

Public Agency Partner - Public assistance and other agencies responsible for administering https://www.hud.gov/program_offices/field_policy_mgt/fieldpolicymgtpz child support enforcement, TANF, and employment education and training programs (e.g., the Department of Labor’s One-Stop Career Centers funded by the Employment and Training Administration).

Real Property - Defined by 45 CFR § 75.2 as “land, including land improvements, structures and appurtenances [affixed equipment] thereto, but excludes moveable machinery and equipment.” Please also reference HHSGPSII-35, Land or Building Acquisition, for more information at https://www.hhs.gov/sites/default/files/grants/grants/policies-regulations/hhsgp s107.pdf?language=es. Note: Grantees using federal funding directly for construction, renovations, or to acquire a facility or land for the project must file an NFI. See also Federal Interest. The federal share of real property, equipment, or supplies is that percentage of the property’s or supplies’ acquisition costs and any improvement expenditures paid with federal funds. This will be the same percentage as the federal share of the total costs under the award for the funding period in which the property was acquired (excluding the value of third party in-kind contributions).

Rural Community - For purposes of this FOA, bonus points will be awarded to projects that will create jobs in a rural community with a high rate of poverty, unemployment, or substance use disorder (as defined by the Office of Management and Budget [OMB]) or hire individuals with low income from a rural community to fill positions created. OMB designates counties as metropolitan, micropolitan, or neither. A “metro area” contains a core urban area of 50,000 or more population, and a “micro area” contains an urban core of at least 10,000 (but less than 50,000) population. All counties that are not part of a Metropolitan Statistical Area are considered rural. Micropolitan counties are considered non-metropolitan or rural along with all counties that are classified as neither. For more information on metro areas, see https://www .census.gov/programs-surveys/metro-micro/about.html.

Self-Employment - The employment status of an individual who owns and operates a for-profit business.

Self-Sufficiency - A state of being or status of an individual or family where, by reason of employment, eligibility for public assistance is replaced by the financial capacity to meet all basic needs.

Service Area - The community to be served by the funded project.

Site Control - Documented proof of the applicant’s ownership or control of the property where grant activities will be conducted. Proof of site control includes the following types of documentation: documentation of the specific property location (address, city, state);

documentation of a signed and dated deed or lease agreement between the applicant and property owner; or, documentation in the agreement of the terms of the agreement, use of premises, and description of the site (prior use or new property, square footage, use of space for the project).

Social Service Provider - Agencies and/or organizations that work with individuals with low incomes and can assist a grantee with filling the newly created positions with individuals with low incomes. Examples of social service providers include TANF, employment education and training programs (e.g., the Department of Labor’s Employment and Training Administration -funded One-Stop Career Centers), and local Child Support Enforcement agencies. These partnerships should be documented with signed third-party agreements, such as memorandums https://www.hhs.gov/sites/default/files/grants/grants/policies-regulations/hhsgps107.pdf?language=es https://www.hhs.gov/sites/default/files/grants/grants/policies-regulations/hhsgps107.pdf?language=es https://www.census.gov/programs-surveys/metro-micro/about.html https://www.census.gov/programs-surveys/metro-micro/about.html of understanding (MOUs), letters of commitment, or project partner agreements.

Sources and Uses of Funds Statement - A statement that identifies the committed sources of debt and equity financing and the specific categories of uses of funds associated with each of the sources for the project.

Stock - A share of ownership in a for-profit company. Stocks are sold to investors by a for-profit corporation to raise capital for the start-up and/or expansion of the business. Stock purchases by the grantee are equity investments. Such investments may be made by grantees in affiliated and nonaffiliated businesses.

Subaward - Subawards are not permitted under this FOA. A subaward (also known as a “pass-through”) is an award of financial assistance in the form of money, or property in lieu of money, made under an award by a grantee to an eligible subgrantee or by a subgrantee to a lower tier subgrantee. The term includes financial assistance when provided by any legal agreement, but does not include procurement of goods and services, nor does it include any form of assistance that is excluded from the definition of “award” in this section.