Title 42, The Public Health and WelfareRelease 119-110

§9807 Financial Assistance Requirements

Title 42 › CHAPTER 105 — COMMUNITY SERVICES PROGRAMS › SUBCHAPTER I — COMMUNITY ECONOMIC DEVELOPMENT › Part A — Urban and Rural Special Impact Programs › § 9807

Last updated Sep 22, 2026|Official source

Summary

Federal funds for community economic development can only be given when the program meets a set of rules. The community group must be answerable to area residents through a governing board with at least 50% residents (boards of organizations owned or run by the group do not have to meet that resident rule). The program must link up with local planning and other community programs, provide technical help, and clearly further the program’s goals by filling needs that aren’t already being met. Projects should mostly be located in the served area, help people gain business and management skills and ownership, and be planned with strong resident, local business, and bank involvement. No one may be put to work on political party activities or on parts of facilities used for religious worship. Projects must not cause workers to lose jobs, break existing service contracts, or replace other funding. Pay and work conditions for training must be fair and help participants move up, and preference should go to low-income local residents. Training should, when possible, teach skills useful in other places too. Money cannot be used to move a business if that move would greatly increase unemployment where the business used to be. Before funding starts, the program must submit a detailed list of goals and a timetable, and future funding decisions will seriously consider how well the program met those goals and its schedule.

Full Legal Text

Title 42, §9807

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Conditions

The Secretary, under such regulations as the Secretary may establish, shall not provide financial assistance for any community economic development program under this part unless the Secretary determines that—

(1)such community development corporation is responsible to residents of the area served (A) through a governing body not less than 50 percent of the members of which are area residents; and (B) in accordance with such other guidelines as may be established by the Secretary, except that the composition of the governing bodies of organizations owned or controlled by the community development corporation need not be subject to such residency requirement;

(2)the program will be appropriately coordinated with local planning under this subchapter with housing and community development programs, with employment and training programs, and with other relevant planning for physical and human resources in the areas served;

(3)adequate technical assistance is made available and committed to the programs being supported;

(4)such financial assistance will materially further the purposes of this part;

(5)the applicant is fulfilling or will fulfill a need for services, supplies, or facilities which is otherwise not being met;

(6)all projects and related facilities will, to the maximum feasible extent, be located in the areas served;

(7)projects will, where feasible, promote the development of entrepreneurial and management skills and the ownership or participation in ownership of assisted businesses and housing, cooperatively or otherwise, by residents of the area served;

(8)projects will be planned and carried out with the fullest possible participation of resident or local businessmen and representatives of financial institutions, including participation through contract, joint venture, partnership, stock ownership or membership on the governing boards or advisory councils of such projects consistent with the self-help purposes of this subchapter;

(9)no participant will be employed on projects involving political parties, or the construction, operation, or maintenance of so much of any facility as is used or to be used for sectarian instruction or as a place for religious worship;

(10)the program will not result in the displacement of employed workers or impair existing contracts for services, or result in the substitution of Federal or other funds in connection with work that would otherwise be performed;

(11)the rates of pay for time spent in work training and education, and other conditions of employment, will be appropriate and reasonable in the light of such factors as the type of work, geographical region, and proficiency of the participant;

(12)the program will, to the maximum extent feasible, contribute to the occupational development or upward mobility of individual participants;

(13)preference will be given to low-income or economically disadvantaged residents of the areas served in filling jobs and training opportunities; and

(14)training programs carried out in connection with projects financed under this part shall be designed wherever feasible to provide those persons who successfully complete such training with skills which are also in demand in communities, neighborhoods, or rural areas other than those for which programs are established under this part.

(b)Relocations substantially increasing unemployment

Financial assistance under this section shall not be extended to assist in the relocation of establishments from one location to another if such relocation would result in a substantial increase in unemployment in the area of original location.

(c)Community economic development program; application; specification of goals

Financial assistance for commercial development under this part shall not be extended until the community economic development program that has applied for assistance under this subchapter has specified in some detail its development goals and its development timetable. The Secretary, in providing continued financial assistance to a community economic development program, shall give serious consideration to the experience such program has had in meeting development goals or in adhering to development timetables.

Reference

Citations & Metadata

Citation

42 U.S.C. § 9807

Title 42, The Public Health and Welfare

Last Updated

Sep 22, 2026

Release point: 119-110