Economic Development: Section 2 - Program Information and Policies

Economic Development: Section 1- General Applicant Information
Economic Development: Section 3 - General Economic Development Component
Economic Development: Section 4 - Application Preparation and Forms
Economic Development: Section 5 - Attachments



This section of the Application contains a description of the general requirements and policies which are applicable to all CDAP projects.


All projects funded through the CDAP Economic Development Component must benefit at least 51.0 percent low-to-moderate income (LMI) persons that are either created and/or retained, as determined by HUD Section 8 Income Guidelines (ATTACHMENT B).  At the time of closeout of the project, 51.0 percent of the total number of actual jobs created and/or retained must benefit low-to-moderate income persons.

Job Creation -- If a project involves job creation, evidence of benefit can be documented in one of two ways.  The business must agree to:

a) obtain and keep on file for verification necessary information about the family income of the individual hired, through the use of the Employee Income Certification Form (see page 45 of this application guidebook); and/or

b) accept employment referrals through the local Illinois Employment and Training Center. 

Job Retention  --  If a project involves job retention, the Employee Income Certification Form must be completed by each existing employee to be retained as a result of the project and the original forms must be submitted as part of the application package.


 All applicants must provide for public participation.  A public hearing must be held prior to submission of an application and prior to passage of a local council resolution of support.  The Notice of Public Hearing must be published at least once in a newspaper of general circulation at least seven calendar days (excluding the date of publication) prior to the public hearing.  If this publication guideline is not met, the application will not be reviewed further.  The public hearing must cover:  (a) the amount of funds available; (b) the range of activities that may be undertaken; (c) the estimated amount proposed for activities that will benefit low-to-moderate income individuals; (d) plans for minimizing displacement as a result of the CDAP grant-assisted activities and to assist persons actually displaced, if applicable; and (e) a detailed prioritized list of community development needs.  Please note:  Specific community development needs must be described and prioritized in the certified minutes.  The minutes of the public hearing must be certified by the chief elected official or other authorized local officials, such as county clerk, city clerk, etc.  Efforts must be made to assure reasonable access to the public hearings by persons with disabilities.  In addition, public hearings shall be conducted in a manner to meet the needs of non-English speaking residents where a significant number of non-English speaking residents can reasonably be expected to participate.  Those attending the public hearing must be informed of where and how to access the applicant's CDAP records.  A copy of the public hearing attendance sheet, which identifies private citizens and local officials, must be included as part of the citizen participation document.  Subsequent to such meeting, a resolution of support from the local governing body must be passed that authorizes the local government to apply for funds.

Note:  Successful applicants must also conduct a close-out public hearing to review program performance and obtain citizen views regarding program activities and performance under the grant.  The same notice and publication requirements apply, as noted above.


Subsequent to Section 102 of the Housing and Urban Development Reform Act of 1989, a number of provisions ensure greater accountability and integrity in the way HUD and its grantees make funds available.  CDAP is one of the HUD programs covered by Section 102.  Applicants will be required to complete a disclosure form at the time of application, and if approved, update the form as required.


CDAP funds may be used to finance reasonable costs associated with general management, oversight and coordination of the project.  Such costs include, but are not limited to, salaries, travel costs, administrative services performed under third party contracts, including legal and audit services or other services required for administration of the grant, and under Financial Intermediary Agreements.

Planning and administration costs are eligible with the exception of pre-program costs, such as application preparation and local income survey costs.  Local governments should take into consideration staffing, and environmental review costs when determining administration need.  CDAP funds requested for grant administration should be detailed on the "CDAP Administration Costs Which Will Be Paid Out of CDAP" .  Administration budgets submitted may include the estimated cost of an audit to be conducted in accordance with the Comptroller General's Governmental Auditing Standards and the Single Audit Act, as amended by the Single Audit Act Amendments of  1996, and the Office of Management and Budget (OMB) Circular A-133, if applicable.   However, be advised that CDAP funds can only be used to pay for its portion of the costs of an audit when a "single audit" is required by A-133.  If a grantee expends less than $500,000 of federal funds in one fiscal year, a single audit is not required.  The grantee may still have to conduct an annual audit as required by state statute, but CDAP funds may not be used to pay for any portion of the audit costs.

The maximum amount of CDAP funds which will be allowed for grant administration for the respective program components is as follows:

Economic Development Component

For CDAP infrastructure improvement projects on behalf of businesses:


CDAP Grant Amount  

Percentage for Administration 

 $0    to    $50,000  


 $50,001   to  $250,000


 $250,001  to  $750,000

6% (not to exceed $30,000)

For financial assistance to businesses (i.e., working capital, machinery and equipment, etc.): 


CDAP Grant Amount  

Percentage for Administration 

$0 to $750,000




Each applicant must agree to comply with all applicable federal and state requirements.  These can have a significant impact on the costs and complexity of a project.  Applicants who receive a grant award will be expected to submit signed assurances that they will comply with all federal mandates.  Some areas which applicants must comply with include:

1. The National Environmental Policy Act (NEPA) establishes procedures for protecting the environment.  In order to use the CDAP funds awarded to a local government, the grantee has to comply with environmental procedures, standards and guidelines mandated by NEPA and all other applicable environmental regulations (e.g., prime farmland protection, historic preservation, floodplain hazards, etc.).  Applicants may conduct environmental reviews during the application phase.  Costs associated with the application phase review are reimbursable by the department for those applicants that are awarded a CDAP grant.  Please refer to Section III E for Instructions to initiate the early warning environmental review process.

2. The Interagency Wetland Policy Act of 1989 requires applicants to certify that the proposed project is compatible with established State of Illinois policy regarding wetlands (i.e., to minimize the destruction of existing wetlands in Illinois as a result of state and state-supported activity).

3. The Illinois Endangered Species Protection Act and the Illinois Natural Area Preservation Act require consultation with the Endangered Species Consultation Program of the Illinois Department of Natural Resources to assure compliance.  The consultation process must be implemented to avoid or minimize adverse impacts to state listed species and their essential habitats that may result from the actions of state and local units of government.  Applicants must certify the completion of the consultation process for all non-exempt proposed projects.

4. The Davis-Bacon Prevailing Wage Act requires the payment of prevailing wages for all construction funded in whole or in part with federal funds, including funds passed through to private firms.  If your project involves construction and/or equipment installation, you should contact the department so a determination can be made concerning the applicability of federal labor standards.

5. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1987 applies to federally assisted activities that involve the acquisition of real property or the displacement of persons, including displacement caused by rehabilitation and demolition activities.  Any person or business displaced as a direct result of federal assistance must be provided with Uniform Relocation benefits.

6. Equal Opportunity and Fair Housing Accessibility Laws require that CDAP grantees administer their project in a manner that affirmatively furthers equal opportunity and fair housing.  All CDAP grantees will be required to undertake specific activities to further fair housing.  CDAP grantees must assure all activities and services are accessible to persons with disabilities.

7. Section 3 under the Housing and Urban Development Act of 1968 requires recipients to give, to the greatest extent feasible and consistent with the existing federal state and local laws and regulations, job training, employment, contracting and other economic opportunities to Section 3 residents and Section 3 business concerns.


Successful applicants will receive a separate grant award document specifying terms and conditions of its grant.  It will include the following:

  • Scope of Work;
  • Special Grant Conditions, e.g., environmental, leverage, etc.;
  • Grant Budget; and
  • Program Assurances and Certifications.

In general, grantees will be expected to sign and return the grant award document within 30 days from the date of the letter transmitting the grant award document to the grantee.  Grantees are expected to meet all special grant conditions within 30 days of the grant award execution date.

No project costs may be incurred prior to authorization by the department, and release of funds will not occur without a fully executed grant award document and clearance of all special grant conditions.  It is important to note the following:

a) CDAP administrative costs may be incurred as of the date of the grant award letter;

b) Project costs (both CDAP and non-CDAP funds) may be incurred only after receiving a  grant award letter and meeting environmental review requirements;and

c) CDAP funds will not be disbursed until all special conditions are met.

NOTE: The grant could be terminated if  CDAP funds are incurred  prior to notification from the department that the grantee has satisfied the environmental review requirements.