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SEC. 4.04 Recording Secretary. The Recording Secretary shall keep the minutes of all meetings of the Board and maintain the minute book, shall be the custodian of records and of the seal of the Corporation, shall give proper notice of meetings of Directors; and in general shall perform all the duties ordinarily incident to the office of corporation secretary and such other duties as may be assigned to him by the Secretary or by the General Manager. The Recording Secretary is expressly empowered to attest all signatures and to affix the seal to all documents the execution of which on behalf of the Corporation under its seal is duy authorized.

SEC. 4.05 General Counsel. The General Counsel of the Department shall be the General Counsel of the Corporation and perform all legal work for the Corporation.

SEC. 4.06 Operations. Except as otherwise authorized by the Secretary or by the Board, the operations of the Corporation shall be

carried out through the facilities and personnel of the Department of Housing and Urban Development.

ARTICLE 5-BOOKS AND RECORDS SEC. 5.01 Records and books. The Board of Directors shall cause to be kept records of all proceedings of Directors and such other records and books as shall be necessary and appropriate to the conduct of the corporate business. Such records and books and these Bylaws shall be kept at the principal office of the Corporation.

ARTICLE 6—AMENDMENTS SEC. 6.01 Amendments. These bylaws may be amended or altered by a majority vote, which majority must include the vote of the Secretary, of the Board of Directors at any meeting, provided that notice of such proposed amendment shal have been given in the notice given to the Directors of such meeting.

SUBCHAPTER B-ASSISTANCE FOR NEW COMMUNITIES

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Subpart Bm New Community Criteria and

Standards 710.5 General criteria for new communi

ties. 710.6 Specific characteristics of a new com

munity. 710.7 Other requirements for new com

munity development.
Subpart C--Financial and Economic Criteria

and Standards 710.8 Economic feasibility. 710.9 General financial plan and program. 710.10 Maximum Federal guarantee. 710.11 Land valuation, 710.12 Cost estimation. 710.13 Terms and conditions of borrowing. 710.14 Equity and working capital. 710.15 Security for the guarantee. 710.16 Terms and conditions of payment

under the guarantee.

Subpart D-Procedures 710.18 Preapplication proposal. 710.19 Application. 710.20 Project agreement. 710.21 Issuance of guaranteed obligations. 710.22 Project execution and monitoring.

Subpart E-Fee and Charge Schedule Sec. 710.24 Application charge. 710.25 Commitment charge. 710.26 Reopening charges. 710.27 Guarantee fee. 710.28 Annual fee. 710.29 Transfer charge.

AUTHORITY: The provisions of this part 710 issued under secs. 413, 7(d), 82 Stat. 517, 79 Stat. 670; 42 U.S.C. 3912, 3535(d).

SOURCE: The provisions of this part 710 appear at 36 F.R. 24733, Dec. 22, 1971, unless otherwise noted.

Subpart A-General § 710.1 Statement of applicable law.

(a) The New Communities Act of 1968 (42 U.S.C. 3901-3914) authorizes the Secretary of Housing and Urban Development to guarantee obligations issued by private developers to help finance new community development projects. It also authorizes the Secretary to make grants to State and local public bodies and agencies to supplement the Federal assistance that is otherwise available for certain water, sewer, or open-space projects if these projects are needed or desirable in connection with an approved new community project which will make available a substantial number of housing units for persons of low and moderate income. The amount of such grants may not exceed 20 percent of project costs, and since this is to supplement other Federal assistance, the projects must also meet the applicable requirements Cor regular grants under section 702 of the Housing and Urban Development Act of 1965, as amended (42 U.S.C. 3102); section 306(a) (2) of the Consolidated Farmers' Home Administration Act, as amended (7 U.S.C. 1926(a) (2)); or title VII of the Housing Act of 1961, as amended (42 U.S.C. 1500-1500e).

(b) The Act (1) amends section 202 (b) (4) of the Housing Amendments of 1955, as amended (42 U.S.C. 1492), to permit public facilities loans without regard to the population limits otherwise applicable for facilities serving a new community development; (2) amends section 24 of the Federal Reserve Act, as amended (12 U.S.C. 371), with regard to the authority of national banks to invest in obligations guaranteed under the Act; and (3) amends section 5(c) of the Home Owners Loan Act of 1933, as amended (12 U.S.C. 1464), with regard to the authority of the Federal savings and loan associations to invest in obligations guaranteed under the Act. The Secretary is also authorized to make comprehensive planning grants under section 701 of the Housing Act of 1954, as amended (40 U.S.C. 461), to official governmental planning agencies for planning in areas where rapid urbanization is expected to occur on land developed or to be developed as a new community approved under the Act.

(c) Additional assistance to new communities may be available under other Federal laws, even though they do not refer specifically to the Act or to new communities. For example, public bodies may receive Federal assistance for water and sewer and open space, schools, urban transit, and other facilities which serve new communities. Federal assistance for private sponsors would generally be available on the some basis as in other communities. For example, qualifying private sponsors may receive assistance for sales, rental, and cooperative housing projects for lower income families pursuant to sections 235 and 236 of the National Housing Act as amended (12 U.S.C. 1715z and 17152-1).

(d) It is the declared purpose of the Act to encourage the development of new communities that

(1) Contribute to the general betterment of living conditions through the improved quality of community development made possible by a consistent design for the provision of homes, commercial and industrial facilities, public and community facilities, and open spaces;

(2) Make substantial contributions to the sound and economic growth of the areas in which they are located;

(3) Provide needed additions to the general housing supply;

(4) Provide opportunities for innovation in housing and community development technology and in land use planning;

(5) Enlarge housing and employment opportunities by increasing the range of housing choice and providing new investment opportunities for industry and commerce;

(6) Encourage the maintenance and growth of a diversified local homebuilding industry; and

(7) Include, to the greatest extent feasible, the employment of new and improved technology, techniques, materials, and methods in housing construction, rehabilitation, and maintenance under programs administered by the Department of Housing and Urban Development with a view to reducing the cost of such construction, rehabilitation, and maintenance, and stimulating the increased and sustained production of housing under such programs. $710.2 Definitions.

For the purpose of the regulations in this part, the following terms shall mean:

(a) Act. The New Communities Act of 1968 (title IV of the Housing and Urban Development Act of 1968, 42 U.S.C. 39013914).

(b) Secretary. The Secretary of Housing and Urban Development or his authorized representative.

(c) Assistant Secretary. The Assistant Secretary for Community Planning and Management or his authorized representative.

(d) Developer. The private entity, approved by the Secretary to carry out a new community project, which issues obligations guaranteed or to be guaranteed under the Act.

(e) Project. The activities and undertakings required to carry out a plan or

com

plans for a new community approved by the Secretary under the Act.

(f) Land development. The process of grading land, making, installing, or constructing water lines and water supply installations, sewer lines, and sewage disposal installations, steam, gas, and electric lines and installations, roads, streets, curbs, gutters, sidewalks, storm drainage facilities, and other installations or work, whether on or off the site, which the Secretary deems necessary or desirable to prepare land for residential, commercial, industrial, or other uses, or to provide facilities for public or common use. The term “land development” shall not include any building unless it is (1) a building which is needed in connection with a water supply or sewage disposal installation or a steam, gas, or electric line or installation, or (2) a building, other than a school, which is to be owned and maintained jointly by the residents of the new community or is to be transferred to public ownership, but not prior to its completion.

(g) Actual costs. The costs (exclusive of rebates or discounts) incurred by a new community developer in carrying out the land development assisted under the Act. These costs may include amounts paid for labor, materials, construction contracts, land planning, engineers' and architects' fees, surveys, taxes, and interest during development, organizational and legal expenses, such allocation of general overhead expenses as is acceptable to the Secretary, and other items of expense incidental to development which may be approved by the Secretary. If the Secretary determines that there is an identity of interest between the new community developer and a contractor, there may be included as a part of actual costs an allowance for the contractor's profit in an amount deemed reasonable by the Secretary. $710.3 Information.

General information on the new community program and instructions for applying for assistance under this program, as well as information on other Federal programs which are related to new communities, may be obtained from the Assistant Secretary for Community Planning and Management, U.S. Department of Housing and Urban Development, Washington, D.C. 20410.

Subpart B-New Community Criteria

and Standards 8 710.5 General criteria for new

munities. In determining whether a given undertaking, otherwise eligible for assistance and consistent with the purposes of the Act, is a new community, the Secretary will apply the following general criteria:

(a) A new community must include most, if not all, of the basic activities normally associated with a city or town: Housing, education, cultural facilities, transportation, commerce, industry, and recreation.

(b) It must combine these varying activities in a balanced and harmonious whole, with a view to creating an environment that is an attractive place to live, work, and shop.

(c) It must have a favorable impact upon the growth and development of the area within which it is located in terms of conserving land, minimizing transportation problems, extending the range of housing choice for all who live or may in the future live in the area, promoting needed economic development, and creating new job opportunities.

(d) It must be designed for the fullest possible range of people and families of different compositions and incomes and must be open to members of all national, ethnic, and racial groups. 8 710.6 Specific characteristics of a new

community. (a) Size, location, and internal diversity-(1) Size. No minimum or maximum size is prescribed for a new community qualifying under the Act, but its size must be significant in comparison with existing developments and communities in the area in which it is located. A new community that would be too small to have an appreciable impact in or near a metropolitan area might qualify for assistance if it were located in a rural area and were approximately as large as other communities in the area.

(2) Location. A new community may be located in any kind of area: Urban urbanizing, or rural. Wherever located, a new community must have accessibility to highways, airports, or other public transportation facilities commensurate with its size and the anticipated requirements of its population, industry, and commerce.

(3) Relationship to surrounding de- maintenance of an accessible open-space velopment. If a new community involves network for

conservation, natural development which adds to an existing beauty, and recreation; and effectiveness community or to an existing residential, of measures to prevent environmental commercial, or industrial area, both the pollution and problems such as flooding old and new development will be con- and soil instability; sidered in determining whether the new (4) Adequacy of public facilities to community qualifies for assistance under serve community needs, including water the Act. To qualify, however, the new and sewer, schools, recreation, health development must be substantial, and facilities, streets, walkways, highways, the old and new elements must be care- and other transportation facilities; fully integrated. The resulting total new (5) Adequacy of controls and incencommunity must be planned as a whole

tives for promoting attractive land utiliand must be demonstrably different from zation, urban design and architecture; that which existed before. An addition to

(6) Phasing of all features of the plan existing development of housing alone,

on a schedule compatible with economic or commercial or industrial facilities

feasibility and geared to the timing of alone, will generally not be considered

land acquisition, development, and dissufficient for this purpose. Whether or position as reflected in the financial not the new community incorporates ex- plan; isting development, it should take ac

(7) The extent to which the plan concount of this development in internal tains innovative features; planning and site location decisions.

(8) Adequacy of provision for reloca(4) Internal diversity. Although a new

tion of existing residents and businesses community need not be completely self

to the extent required by the land use sufficient, it must provide in a single area

plan; and the housing, public and commercial fa

(9) Adaptability of the plan to the cilities, and job opportunities normally

various problems and alternatives which associated with a city or town. In deter

may arise as development proceeds. mining the degree of internal diversity

(c) Housing mix. A new community for a given site, consideration will be

must contain an adequate range of housgiven to adequacy of existing or pro

ing and a variety of housing types for jected facilities in the immediate area.

both sale and rental for people of all However, the community may not consist

incomes, ages, and family composition, simply of housing or of housing with a

including a substantial amount for minimum of commercial facilities sery

people of low and moderate income. The ing only the immediate needs of people

following factors, among others, will be for neighborhood shopping. Nor may a

considered in determining the sufficiency new community be predominantly an

of housing mix: Industrial or commercial development, with a minimum supply of new housing.

(1) Existing and projected distribu

tion of families by income and size for (b) Internal devel ment plan. A new

the region in which the project is community must have a general plan and

located; program for its ultimate development designed to create and maintain an at

(2) Existing and projected housing tractive and viable environment respon

supply and demand, particularly for lowsive to human needs. Among the factors

and moderate-income housing, in the which the Secretary will consider in

region and market area of the project;

and evaluating the plan are the following: (1) Suitability of the site for the pro

(3) Income and family characteristics posed uses, harmonious relationship of

of persons likely to be employed in the these uses with surrounding develop

new community. ment and their protection against Existing housing in standard condition adverse physical encroachment;

or proposed to be rehabilitated within (2) Effectiveness of the land use and the new community, as well as new contransportation plans and population struction, may be considered in deterdensity and distribution in promoting mining adequacy of housing balance. But harmonious interrelationships and opti- whether this housing is to be newly conmum internal accessibility;

structed or rehabilitated, the new com(3) Preservation and enhancement of munity plan must include reasonable asnatural features such as water bodies surances that the units planned will acand steep slopes; establishment and tually be provided. If the development of a new community to be carried out in the planning performed by the certified stages, sites for low and moderate income agency and the new community. housing shall be included in every major (f) Social elements. In order to assure residential stage.

that project reflects social considerations (d) Community services and govern- and human needs, new community plans ment. (1) A new community must be must reflect or incorporate the following: provided with a full range of govern- (1) Use of citizen advisory groups, ment and public services adequate to opinion surveys, or other methods of demeet the needs of all its residents. Such veloping a design and structure for the services may be provided by State or local new community that will be responsive government, by community organiza- to the needs of residents, both at the betions, or by other appropriate entities. ginning and, through continuing evaluIf public facilities or utilities are to be ation, at later stages of development: operated by a nonpublic body, rates and (2) Location and distribution of houscharges, capital structure, rate of return, ing types and price ranges so as to preand methods of operation of the facility vent segregation and afford full access or utility must be regulated by a public to facilities, and participation in activibody or by other means satisfactory to ties, of the community and neighborhood the Secretary.

by groups, families, and individuals of (2) A new community need not be or different economic, social, and racial constitute a separate political unit but backgrounds; may be governed through a county, city, (3) A program of citizen participation town, or other existing political jurisdic- in project activities, including use of tion. Where it is contemplated that a de- home associations and civic organizaveloper or a developer-controlled orga- tions appropriately formulated to supplenization or association will, during the ment, as necessary, opportunities offered course of development, perform func- by governmental or public institutions, tions normally performed by a general and to provide for full opportunity for unit of government, provision should be participation by renters and low-income made in the new community plan or residents; and plans for an orderly transfer of such

(4) Specific actions that may be functions to an appropriate govern- needed to promote high quality schools mental unit at an appropriate time. or to encourage or assure, as appropriate,

(e) Area planning and development. establishment of community colleges, The area within which a new community technical or vocational education cenis to be situated must be covered by a ters, adult education courses, and job comprehensive areawide plan or by on- retaining facilities. going planning promulgated or carried (g) Disclosure of certain interests. Deon by a duly authorized agency. The lo- velopers and contractors must disclose, cation of the new community and the in accordance with such procedures or internal development plan for the proj- forms as the Secretary may prescribe, all ect must be consistent with such compre- direct and indirect interests that may hensive plan or planning and must affect the arm's length character of any reflect consideration of any economic de- transactions relied upon to establish estivelopment programs, functional plans, mated or actual costs, or value, for purand public works programs of relevant

poses of determining the amount of Federal, State, regional, city, or county obligations to be guaranteed or the agencies for the area in which the new amount of the proceeds of such obligacommunity is located. The comprehen- tions that can be disbursed. Where such sive plan or planning for the area must, interests exist, the Secretary may fix in the Secretary's judgment, be suff- such special allowances or fees, or require ciently detailed to provide a reasonable

special accounting for costs, or take such basis for evaluating the relationship of

other actions as he may determine are the proposed new community to area

reasonable and appropriate in order to population trends, major transportation

prevent the guarantee of obligations, or facilities and development patterns, area

the disbursement of funds, in excessive

amounts. wide land use, systems for water and sewage, open space, and recreation. In § 710.7 Other requirements for those areas where there is an areawide

community development. planning agency certified by the Secre- (a) Capability of developer. (1) Only tary, consistency must be found between private developers are eligible for guar

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