[Federal Register Volume 75, Number 217 (Wednesday, November 10, 2010)]
[Notices]
[Pages 69097-69112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28421]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5452-N-01]
Allocations and Common Application and Reporting Waivers Granted
to and Alternative Requirements for Community Development Block Grant
(CDBG) Disaster Recovery Grantees Under the Supplemental Appropriations
Act, 2010 (Pub. L. 111-212)
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of allocations, waivers, and alternative requirements.
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SUMMARY: This Notice advises the public of the allocation of CDBG
disaster recovery funds for the purpose of assisting the recovery
efforts in areas declared a major disaster under title IV of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.) as a result of the severe storms and flooding that
occurred from March through May, 2010. As described in the
SUPPLEMENTARY INFORMATION section of this Notice, HUD is authorized by
statute and regulations to waive statutory and regulatory requirements
and specify alternative requirements upon the request of a grantee.
Therefore, this Notice describes applicable waivers and alternative
requirements, as well as the application process, eligibility
requirements, and relevant statutory provisions for grants provided
under this Notice.
DATES: Effective Date: November 15, 2010.
FOR FURTHER INFORMATION CONTACT: Scott Davis, Director, Disaster
Recovery and Special Issues Division, Office of Block Grant Assistance,
Department of Housing and Urban Development, 451 7th Street, SW., Room
7286, Washington, DC 20410, telephone number 202-708-3587. Persons with
hearing or speech impairments may access this number via TTY by calling
the Federal Information Relay Service at 800-877-8339. Facsimile
inquiries may be sent to Mr. Davis at 202-401-2044. (Except for the
``800'' number, these telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Authority To Grant Waivers
The Supplemental Appropriations Act, 2010 (Pub. L. 111-212,
approved July 29, 2010) appropriates $100 million, to remain available
until expended, in CDBG funds for necessary expenses related to
disaster relief, long-term recovery, and restoration of infrastructure,
housing, and economic revitalization in areas affected by severe storms
and flooding from March 2010 through May 2010 for which the President
declared a major disaster covering an entire State, or States with more
than 20 counties declared major disasters, under title IV of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act of 1974 (42
U.S.C. 5121 et seq.).
The Supplemental Appropriations Act authorizes the Secretary to
waive, or specify alternative requirements for any provision of any
statute or regulation that the Secretary administers in connection with
the obligation by the Secretary, or use by the recipient, of these
funds and guarantees, except for requirements related to fair housing,
nondiscrimination, labor standards, and the environment (including
requirements concerning lead-based paint), upon: (1) A request by the
grantee explaining why such a waiver is required to facilitate the use
of such funds or guarantees, and (2) a finding by the Secretary that
such a waiver would not be inconsistent with the overall purpose of
Title I of the Housing and Community Development Act of 1974 (HCD Act).
Regulatory waiver authority is also provided by 24 CFR 5.110, 91.600,
and 570.5.
The Secretary finds that the following waivers and alternative
requirements, as described below, are necessary to facilitate the use
of these funds for the statutory purposes, and are not inconsistent
with the overall purpose of Title I of the HCD Act or the Cranston-
Gonzalez National Affordable Housing Act, as amended. Under the
requirements of the Supplemental Appropriations Act and the Department
of Housing and Urban Development Reform Act of 1989 (the HUD Reform
Act), regulatory waivers must be justified and published in the Federal
Register.
Allocations
This Notice makes available $50 million of the $100 million
appropriation for the CDBG program for necessary expenses related to
disaster relief, long-term recovery, and restoration of infrastructure,
housing, and economic revitalization in areas affected by severe storms
and flooding that occurred from March 2010 through May 2010, for which
the President declared a major disaster covering an entire State, or
States with more than 20 counties declared major disasters, under title
IV of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act of 1974 (42 U.S.C. 5121 et seq.).
The Supplemental Appropriations Act further notes:
That funds shall be awarded directly to the State or unit of
general local government at the discretion of the Secretary * * *
Provided further, that funds allocated under this heading shall not
adversely affect the amount of any formula assistance received by a
State or subdivision thereof under the Community Development Fund:
Provided further, that a State or subdivision thereof may use up to
5 percent of its allocation for administrative costs * * *
Almost all of the prior appropriations to the CDBG disaster
recovery program have required funds to be administered through an
entity or entities designated by the Governor of each State. In
contrast, the Supplemental Appropriations Act, 2010, states that funds
may be awarded directly to a State or unit of general local government,
at the discretion of the Secretary. Based on the eligible date range
specified by Congress,
[[Page 69098]]
communities affected by the relevant disasters, and estimates of unmet
need, HUD has determined that, in addition to Tennessee, Rhode Island,
and Kentucky, multiple units of general local government will also
receive a direct allocation under today's Notice. Therefore, except as
described in this Notice, statutory and regulatory provisions governing
the State CDBG program shall apply to any State receiving an allocation
under this Notice, while statutory and regulatory provisions governing
the CDBG entitlement program shall apply to any unit of general local
government receiving a direct allocation in this Notice. Applicable
State and entitlement regulations can be found at 24 CFR part 570.
Unless noted otherwise, the term ``grantee'' refers to any grantee--
whether State, city, or county--receiving a direct award under this
Notice.
HUD computes allocations based on data that are generally available
and that cover all the eligible affected areas. As a result, HUD is
making the following allocations in today's Notice:
Table 1--Initial Allocations Under Pub. L. 111-212
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Disaster No. State Grantee Allocation
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1912................................... Kentucky.................. State Government.......... $13,000,000
1894................................... Rhode Island.............. City of Cranston.......... 1,277,067
1894................................... Rhode Island.............. City of Warwick........... 2,787,697
1894................................... Rhode Island.............. State Government.......... 8,935,237
1909................................... Tennessee................. City of Memphis........... 2,031,645
1909................................... Tennessee................. Nashville-Davidson County. 10,731,831
1909................................... Tennessee................. Shelby County............. 1,212,788
1909................................... Tennessee................. State Government.......... 10,023,735
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Total.............................. .......................... .......................... 50,000,000
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Please see Appendix A for a complete description of the allocation
methodology.
Subsequent to this Notice, HUD will make a final review of long-
term disaster recovery needs for all States or subdivisions thereof
affected by the disasters that occurred between March and May, 2010, to
allocate the remaining $50 million. This review will include unmet
housing, infrastructure, and economic revitalization needs.
The Supplemental Appropriations Act requires funds to be used only
for specific purposes. The statute directs that each grantee will
describe, in an Action Plan for Disaster Recovery, criteria for
eligibility and how the use of the grant funds will address long-term
recovery, and restoration of infrastructure, housing, and economic
revitalization. HUD will monitor compliance with this directive and may
disallow expenditures if it finds that funds duplicate other benefits
or do not meet a statutory purpose. HUD encourages grantees to contact
their assigned HUD offices for guidance in complying with these
requirements during development of their Action Plans for Disaster
Recovery.
As provided for in the Supplemental Appropriations Act, funds may
be used as a matching requirement, share, or contribution for any other
Federal program. However, the funds may not be used for activities
reimbursable by, or for which funds are made available by, the Federal
Emergency Management Agency (FEMA) or the Army Corps of Engineers.
Prevention of Fraud, Abuse, and Duplication of Benefits
To prevent fraud, abuse of funds, and duplication of benefits under
the Supplemental Appropriations Act, this Notice includes specific
reporting, written procedures, monitoring, and internal audit
requirements applicable to each grantee. Please see the note regarding
duplication of benefits at paragraph 27. Also see paragraph 5, sections
B-D, under ``Applicable Rules, Statutes, Waivers, and Alternative
Requirements; Pre-Grant Process,'' for these requirements. In addition,
the Department will: (1) Institute risk analysis and on-site monitoring
of grantee management of the grants and of the specific uses of funds,
(2) be extremely cautious in considering any waiver related to basic
financial management requirements; the standard, time-tested CDBG
financial requirements will continue to apply, and (3) collaborate with
the HUD Office of Inspector General to plan and implement oversight of
these funds.
Waiver Justification
This section of the Notice briefly describes the basis for each
waiver and related alternative requirements, if any. Each grantee under
today's Notice may request additional waivers from the Department as
needed to address specific needs related to its recovery activities.
The Department will respond to requests for waivers of provisions not
covered in this Notice, after working with the grantee to tailor its
program(s) to best meet its disaster recovery needs.
Each grantee under today's Notice receives an annual CDBG
allocation, and therefore has a consolidated plan, citizen
participation plan, monitoring plan, and has made CDBG certifications.
To facilitate the timeliness of assistance, and expedite community
recovery, HUD encourages each grantee to carry out its CDBG disaster
recovery activities, to the extent possible, in the context of its
ongoing community development programs (for example, by selecting
activities consistent with the consolidated plan, by providing overall
benefit to at least 70 percent low- and moderate-income persons, and by
holding hearings or meetings to solicit public comment).
The waivers, alternative requirements, and statutory changes
described in this Notice apply only to the CDBG supplemental disaster
recovery funds appropriated in the Supplemental Appropriations Act, and
not to funds provided under the regular CDBG program or those provided
under any other component of the CDBG program, such as the Neighborhood
Stabilization Program. These actions provide additional flexibility in
program design and implementation and implement statutory requirements
unique to this appropriation.
The following application and reporting waivers and alternative
requirements are in response to requests from each grantee under this
Notice.
Application for Allocations Under the Supplemental Appropriations Act,
2010
These waivers and alternative requirements streamline the pre-grant
process and set guidelines for each
[[Page 69099]]
grantee's application. HUD encourages each grantee that receives an
allocation to submit an Action Plan for Disaster Recovery to HUD as
soon as practicable following this Notice. Please see paragraph 5 under
``Applicable Rules, Statutes, Waivers, and Alternative Requirements;
Pre-Grant Process,'' for more detailed information regarding the Action
Plan requirements.
Overall Benefit to Low- and Moderate-Income Persons
The primary objective of Title I of the HCD Act and of the funding
program of each grantee is the ``development of viable urban
communities, by providing decent housing and a suitable living
environment and expanding economic opportunities, principally for
persons of low and moderate income.'' 42 U.S.C. 5301(c). The statute
goes on to require that 70 percent of the aggregate of a regular CDBG
program's funds be used to support activities benefitting low- and
moderate-income persons. Many communities that have suffered a
Presidentially-declared disaster find this target difficult, if not
impossible, to reach. Furthermore, previous disasters, and disasters
covered by the Supplemental Appropriations Act, 2010, affect entire
communities regardless of income, often causing extensive damage to
community structures, housing occupied by persons and families of
varying incomes, and infrastructure. Disaster-affected communities are
also often faced with the dissolution, or relocation of income-
producing jobs.
Therefore, today's Notice provides grantees with greater
flexibility to carry out recovery activities and grants an overall
benefit waiver that allows for up to 50 percent of the grant to assist
activities under the urgent need, or prevention or elimination of slums
or blight, national objectives, rather than the 30 percent allowed
under the regular CDBG programs.
HUD may provide additional waivers of this requirement only if the
Secretary specifically finds a compelling need to further reduce or
eliminate the percentage requirement. The requirement that each
activity meet one of the three national objectives of the CDBG program
is not waived.
Expanded Distribution and Direct Action
The waivers and alternative requirements allowing distribution of
funds by a State to entitlement communities and Indian tribes, and to
allow a State to carry out activities directly, rather than distribute
all funds to units of local government, are consistent with waivers
granted for previous, similar CDBG disaster recovery supplemental
appropriations. HUD believes that, in using statutory language similar
to that used for prior CDBG supplemental appropriations, Congress is
signaling its intent that the States under this appropriation also be
able to carry out activities directly. Therefore, HUD is waiving
program requirements in order to support this intent. HUD is also
including in this Notice the necessary complementary waivers and
alternative requirements related to subrecipients to ensure proper
management and disposition of funds during grant execution and at
closeout.
Please note that any city or county receiving a direct award under
today's Notice will be subject to the standard entitlement regulations.
Thus, the waiver and alternative requirement allowing a State to carry
out activities directly are inapplicable and unnecessary.
Use of Subrecipients
The State CDBG program rule does not make specific provision for
the treatment of entities called ``subrecipients'' in the CDBG
entitlement program. The waiver allowing the State to directly carry
out activities creates a situation in which the State may use
subrecipients to carry out activities in a manner similar to an
entitlement community. HUD and its Office of Inspector General have
long identified the use of subrecipients as a practice that increases
the risk of abuse of funds. However, HUD's experience is that this risk
can be successfully managed by following the CDBG entitlement
requirements and related guidance. Therefore, a State taking advantage
of the waiver to carry out activities directly must follow the
alternative requirements drawn from the CDBG entitlement rule and
specified in this Notice whenever using a subrecipient. Any city or
county receiving a direct award under today's Notice is subject to the
standard CDBG entitlement regulations regarding subrecipients.
Consistency With the Consolidated Plan
HUD is waiving the requirement for consistency with the
consolidated plan because the effects of a major disaster usually alter
a grantee's priorities for meeting housing, employment, and
infrastructure needs. To emphasize that uses of grant funds must be
consistent with the overall purposes of the HCD Act, HUD is limiting
the scope of the waiver for consistency with the consolidated plan; the
waiver applies only until the grantee first updates its strategic plan
priorities (and the full consolidated plan) following the disaster. At
that time, the grantee should also update its Analysis of Impediments,
so that it more accurately reflects the impacts of the disaster.
Action Plan for Disaster Recovery
HUD is waiving the CDBG action plan requirements and substituting
an Action Plan for Disaster Recovery. This will allow rapid
implementation of disaster recovery grant programs and ensure
conformance with provisions of the Supplemental Appropriations Act.
Where possible, the Action Plan for Disaster Recovery, including
certifications, should not repeat common action-plan elements the
grantee has already committed to carry out as part of its annual CDBG
submission.
Any grantee receiving an allocation under this Notice will be
responsible for compliance with Federal requirements. During the course
of the grant, HUD will monitor the grantee's actions and use of funds
for consistency with the Action Plan. The grantee may submit an initial
partial Action Plan and amend it one or more times subsequently until
the Action Plan describes uses for the total grant amount. An Action
Plan may also be amended to modify activities.
Citizen Participation
The citizen participation waiver and alternative requirements will
permit a more streamlined public process, but one that still provides
for reasonable public notice, appraisal, examination, and comment on
the activities proposed for the use of CDBG disaster recovery grant
funds. The waiver removes the requirement at both the grantee and grant
recipient levels for public hearings or meetings as the method for
disseminating information or collecting citizen comments.
The CDBG program normally requires a grantee to solicit comments
from its citizens for at least 30 days before it submits an annual
action plan to HUD, which then has 45 days to accept or reject the
plan. To expedite the process and to ensure that the disaster recovery
grants are awarded in a timely manner, while preserving reasonable
citizen participation, HUD is waiving the requirement that the grantee
follow its citizen participation plan to the extent necessary to allow
a grantee to submit an Action Plan for Disaster Recovery in an
expedited manner. HUD is shortening the minimum time for citizen
comments and is requiring the proposed Action Plan for Disaster
Recovery, and any amendment thereof, to be posted on the grantee's
official Web site as the plan or amendment is
[[Page 69100]]
developed, published, and submitted to HUD.
In combination, this Notice's alternative requirements provide the
following expedited steps for disaster recovery grants:
Proposed Action Plan for Disaster Recovery published via
the usual methods and on the grantee's official Web site for no less
than 7 calendar days of public comment;
Final Action Plan posted on the Internet and submitted to
HUD (grant application includes Standard Form 424 (SF-424) and
certifications; other parts of the Action Plan may initially be
submitted through the Department's Disaster Recovery Grant Reporting
(DRGR) system, or by mailing/e[dash]mailing a paper copy);
HUD expedites review;
HUD accepts the plan and prepares a cover letter, grant
agreement, and grant conditions;
Grant agreement signed by HUD and immediately transmitted
to the grantee;
Grantee signs and returns the grant agreement;
HUD establishes the line of credit and the grantee
requests and receives DRGR access (if the grantee does not already have
it);
If it has not already done so, grantee enters the Action
Plan into DRGR and submits it to HUD. (Funds can be drawn from the line
of credit only for an activity that is established in an Action Plan in
DRGR.)
After completing the environmental review(s) pursuant to 24 CFR
part 58 and, as applicable, receiving from HUD or the State an approved
Request for Release of Funds and certification, the grantee may draw
down funds from the line of credit.
The Department expects each grantee to make a reasonable effort to
notify all affected citizens that the Action Plan is available for
comment. Examples of a reasonable effort include electronic mailings,
press releases, statements by public officials, media advertisements,
and personal contacts with neighborhood representatives. Grantees are
cautioned that, despite the expedited application and plan process,
they are still responsible for ensuring that all citizens have equal
access to information about the programs, including persons with
disabilities. In addition, each grantee must ensure that program
information is available in the appropriate languages for the
geographic area served by the jurisdiction. This issue may be
particularly applicable to States receiving an award under this Notice.
Unlike grantees in the regular State CDBG program, State grantees under
today's Notice may make grants throughout the State, including into
CDBG entitlement areas if these entitlements are included in a relevant
disaster declaration. Thus, State CDBG staff may not be aware of
limited-English-proficient (LEP) speaking populations in those
metropolitan jurisdictions. For assistance in ensuring that this
information is available to LEP populations, recipients should consult
the Final Guidance to Federal Financial Assistance Recipients Regarding
Title VI, Prohibition Against National Origin Discrimination Affecting
Limited English Proficient Persons published on January 22, 2007, in
the Federal Register (72 FR 2732).
Administration Limitation
For all State grantees under today's Notice, the annual State CDBG
program administration requirements must be modified to be consistent
with the Supplemental Appropriations Act, which allows up to 5 percent
of the grant to be used for administrative costs, whether by the State,
by entities designated by the State, by units of general local
government, or by subrecipients. The provisions at 42 U.S.C. 5306(d)
and 24 CFR 570.489(a)(1)(i) and (iii) will not apply to any State
grantee to the extent that they cap administration expenditures and
require a dollar-for-dollar match of State funds for administrative
costs exceeding $100,000. However, a State under today's Notice may
fund planning activities that exceed the 5 percent limitation on
general administrative costs. HUD does not waive 24 CFR 570.489(a)(3),
which allows a State to spend up to 20 percent of its total allocation
on a combination of planning and program administration costs.
Any city or county receiving a direct award under today's Notice is
also subject to the 5 percent administrative cap. This 5 percent
applies to all administrative costs--whether incurred by the grantee or
its subrecipients. However, the provisions at 24 CFR 570.200(g) allow a
city or county to fund planning activities that may exceed the 5
percent general administration cap. Thus, similar to a State grantee, a
city or county receiving a direct allocation under today's Notice is
allowed to spend 20 percent of its total allocation on a combination of
planning and program administration costs.
Planning
The annual State CDBG program requires that local government grant
recipients for planning-only grants must document that the use of funds
meets a national objective. In the State CDBG program, these planning
grants are typically used for individual project plans. By contrast,
planning activities carried out by entitlement communities are more
likely to include non-project specific plans such as functional land-
use plans, master plans, historic preservation plans, comprehensive
plans, community recovery plans, development of housing codes, zoning
ordinances, and neighborhood plans. These plans may guide long-term
community development efforts comprising multiple activities funded by
multiple sources. In the annual entitlement program, these more general
stand-alone planning activities are presumed to meet a national
objective under the requirements at 24 CFR 570.208(d)(4). The
Department notes that almost all effective CDBG disaster recoveries in
the past have relied on some form of area-wide or comprehensive
planning activity to guide overall redevelopment independent of the
ultimate source of implementation funds. Therefore, for State grantees
receiving an award under this Notice, the Department is removing the
eligibility requirements at 24 CFR 570.483(b)(5) or (c)(3). Instead,
States must comply with 24 CFR 570.208(d)(4) when funding disaster
recovery-assisted planning-only grants, or directly administering
planning activities that guide recovery in accordance with the
Supplemental Appropriations Act. 24 CFR 570.208(d)(4) will apply to any
city or county receiving a direct allocation under this Notice.
Reporting
HUD is waiving the annual reporting requirement. In the alternative
and to ensure consistency between grants allocated under today's Notice
and grants allocated previously under the CDBG disaster recovery
program, HUD is requiring quarterly reports from each grantee on the
uses of the awarded funds, the funded activities, and other various
aspects. HUD will use many of the data elements to exercise oversight
for compliance with the requirements of this Notice and for prevention
of fraud, abuse of funds, and duplication of benefits. To collect these
data elements, HUD is requiring each grantee to report to HUD quarterly
using the online DRGR system, which uses a streamlined, Internet-based
format. Grantees will also use DRGR to record obligations and to make
draws of funds from the line of credit established for each grant. HUD
will use transactional data from DRGR, and grantee reports, to: (1)
Monitor for anomalies or performance problems that suggest fraud, abuse
of funds, and duplication of benefits; (2) reconcile
[[Page 69101]]
budgets, obligations, funding draws, and expenditures; (3) calculate
applicable administrative and public service limitations and the
overall percent of benefit to low- and moderate-income persons; and (4)
report to Congress and the public. Furthermore, the grantee reports and
DRGR will be used as a basis for risk analysis in determining a
monitoring plan.
The grantee must post the quarterly report on an Internet site for
its citizens within 3 business days of the report's submission to HUD.
Eligibility--Housing Related
The broadening of the Section 105(a)(24) of the 1974 Act, and a
waiver of Section 105(a) is necessary following major disasters in
which large numbers of affordable housing units have been damaged or
destroyed, as is the case of the disasters eligible under this Notice.
Thus, in accordance with the grantees' requests, the following is
eligible: New housing construction, homeownership assistance for
families whose income is up to 120 percent of median income, and
payment of up to 100 percent of a housing down payment. These
modifications will allow each grantee to implement mixed-use housing
recovery programs included in its HUD-accepted action plan.
In addition, Metropolitan Nashville and Davidson County has stated
that it may be necessary for the community to offer incentives to
promote suitable housing development or resettlement in accordance with
its comprehensive recovery plan. Generally, incentives are offered in
addition to other programs or funding (such as insurance), to try to
influence individual residential location decisions, when these
decisions are in doubt. For example, a grantee may offer an incentive
payment (possibly in addition to buyouts) for households that volunteer
to relocate within a particular period of time, or who choose to
resettle outside a 100- or 500-year floodplain.
In the past, the State of New York successfully used an incentive
program to induce rapid and stable resettlement of lower Manhattan
following September 11, 2001. Also, the city of Grand Forks, North
Dakota, provided a very affordable soft-second loan as an incentive to
help induce households to resettle within the city during its recovery.
Therefore, Metropolitan Nashville and Davidson County may provide
housing incentives so long as it maintains documentation, at least at a
programmatic level, describing how the amount of assistance was
determined to be necessary and reasonable. The Department is waiving 42
U.S.C. 5305(a) and associated regulations to make this use of grant
funds eligible. Please note that this waiver does not permit a
compensation program. Additionally, if the Entitlement grantee requires
the incentives to be used for a particular purpose by the household
receiving the assistance, then the activity will be that required use,
and not considered as an incentive.
Eligibility--Emergency Grant Payments
Upon its request, HUD is waiving 42 U.S.C. 5305(a) so that
Metropolitan Nashville and Davidson County may extend interim mortgage
assistance to qualified individuals for up to 20 months. Several
hundred families are in the position of paying a mortgage and rent
while awaiting reconstruction or the implementation of a FEMA-funded
hazard mitigation program. Thus, this interim assistance will be
critical for many households facing financial hardship.
Eligibility--Buildings for the General Conduct of Government
Grantees under this Notice (except for the State of Tennessee) have
requested a limited waiver of the prohibition on funding buildings for
the general conduct of government. HUD has considered the request and
agrees that it is consistent with the overall purposes of the 1974 Act
for each requesting grantee to be able to use the grant funds under
this notice to repair or reconstruct buildings used for the general
conduct of government. Provided that the building is selected in
accordance with the method described in the grantee's Action Plan for
Disaster Recovery, and it has been determined that the building has
substantial value in promoting disaster recovery. However, as stated by
the Supplemental Appropriations Act, funds allocated under today's
Notice may not be used for activities reimbursable by, or for which
funds are made available by, FEMA or the Army Corps of Engineers.
Anti-Pirating
The limited waiver of the job relocation requirements allows a
grantee to provide assistance to a business located in another State,
or another labor market area within the same State, if the business was
displaced from a declared area and wishes to return. This waiver is
necessary to allow a grantee affected by a major disaster to
reestablish and rebuild its employment base. This waiver will not apply
to the City of Cranston.
Relocation Requirements
The grantees have indicated that they plan to engage in, or wish to
facilitate, voluntary acquisition and relocation activities (in a form
often called ``buyouts''), by using waivers related to acquisition and
relocation requirements under the Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970, as amended, (42 U.S.C.
4601 et seq.) (URA), and the replacement of housing and relocation
assistance provisions under section 104(d) of the HCD Act (42 U.S.C.
5304(d)). The grantees believe these waivers will more effectively
assist displaced persons in a timely and efficient manner.
CDBG funds are Federal financial assistance. Therefore, CDBG-
assisted programs or projects are subject to the URA and the
government-wide implementing regulations at 49 CFR part 24. The URA's
protection and assistance apply to acquisitions of real property and
displacements resulting from the acquisition, rehabilitation, or
demolition of real property for CDBG-assisted programs or projects. The
URA provides assistance and protections to individuals and businesses
affected by Federal or federally-assisted projects. HUD is waiving the
following URA requirements to help promote accessibility to suitable,
decent, safe, and sanitary housing for victims of severe storms and
flooding that occurred from March through May, 2010.
The acquisition requirements of the URA and implementing
regulations are waived so that they do not apply to an arm's length
voluntary purchase carried out by a person who does not have the
authority to acquire by power of eminent domain, in connection with the
purchase and occupancy of a principal residence by that person. The
failure to suspend these requirements would impede disaster recovery
and may result in windfall payments.
A limited waiver is granted of the URA's implementing regulations
to the extent that they require grantees to provide URA financial
assistance sufficient to reduce the displaced person's post-
displacement rent/utility cost to 30 percent of household income. The
failure to suspend these one-size fits-all requirements could impede
disaster recovery. To the extent that a tenant has been paying rent in
excess of 30 percent of household income without demonstrable hardship,
rental assistance payments to reduce tenant costs to 30 percent would
not be required.
The URA and implementing regulations are waived to the extent
necessary to permit a grantee to meet all or a portion of a grantee's
replacement housing financial assistance obligation
[[Page 69102]]
to a displaced renter by offering rental housing through a tenant-based
rental assistance (TBRA) housing program subsidy (e.g., Section 8
rental voucher or certificate), provided that the tenant is also
provided with referrals to suitable, available rental replacement
dwellings where the owner is willing to participate in the TBRA
program, and the period of authorized assistance is at least 42 months.
Failure to grant this waiver would impede disaster recovery whenever
TBRA program subsidies are available but funds for cash relocation
assistance are limited. This waiver gives grantees an additional
relocation resource option.
The URA and implementing regulations are waived to the extent that
they require a grantee to offer a person displaced from a dwelling the
option to receive a ``moving expense and dislocation allowance'' based
on the current schedule of allowances prepared by the Federal Highway
Administration. In the alternative, the grantee must establish and
offer the person a moving expense and dislocation allowance under a
schedule of allowances that is reasonable for the jurisdiction and
takes into account the number of rooms in the displacement dwelling,
whether the person owns and must move the furniture, and, at a minimum,
the kinds of expenses described in 49 CFR 24.301. Failure to suspend
and provide alternative requirements in this case would impede disaster
recovery by requiring grantees to offer allowances that do not reflect
current local labor and transportation costs. Persons displaced from a
dwelling remain entitled to choose a payment for actual reasonable
moving and related expenses if they find that approach preferable to
the locally established moving expense and dislocation allowance.
In addition to the URA waivers, HUD is waiving requirements of
section 104(d) of the HCD Act dealing with one-for-one replacement of
lower-income dwelling units demolished or converted in connection with
a CDBG-assisted development project for housing units damaged by one or
more disasters. HUD is waiving this requirement because it does not
take into account the large, sudden changes a major disaster may cause
to the local housing stock, population, or local economy. Further, the
requirement does not take into account the threats to public health and
safety and to economic revitalization that may be caused by the
presence of disaster-damaged housing structures that are unsuitable for
rehabilitation. As it stands, the requirement would impede disaster
recovery and discourage grantees from converting or demolishing
disaster-damaged housing because of excessive costs that would result
from replacing all such units within the specified time frame. HUD is
also waiving the relocation assistance requirements contained in
section 104(d) of the HCD Act to the extent that they differ from those
of the URA (42 U.S.C. 4601 et seq.). This change will simplify
implementation while preserving statutory protections for persons
displaced by projects assisted with CDBG disaster recovery grant funds.
Some disaster recovery CDBG funds may be used to support programs
receiving FEMA funding, e.g. buyouts and relocation activities. The
statutory requirements of the URA are also applicable to the
administration of FEMA mitigation funding, and disparities in rental
assistance payments for activities funded by HUD and FEMA will thus be
eliminated. FEMA is subject to the requirements of the URA. Pursuant to
this authority, FEMA requires that rental assistance payments be
calculated on the basis of the amount necessary to lease or rent
comparable housing for a period of 42 months. HUD is also subject to
these requirements, but is also covered by alternative relocation
provisions authorized under 42 U.S.C. 5304(d)(2)(A)(iii) and (iv), and
implementing regulations at 24 CFR 42.350. These alternative relocation
benefits, available to low- and moderate-income displacees opting to
receive them in certain HUD programs, require the calculation of
similar rental assistance payments on the basis of 60 months, rather
than 42 months, thereby creating a disparity between the available
benefits offered by HUD and FEMA (although not always an actual cash
difference). The waiver assures uniform and equitable treatment by
allowing the URA benefits requirements to be the standard for
assistance under this Notice.
Program Income
The waivers and alternative requirements pertaining to program
income are most significant for State grantees under this Notice. Prior
to 2002, program income earned on disaster recovery grants was usually
considered program income in accordance with the rules of the regular
State CDBG program of the applicable grantee. As a result, the funds
lost their disaster recovery identity, and thereby lost use of the
waivers and streamlined alternative requirements.
The HCD Act provides that a unit of general local government in
receipt of CDBG funds from a State can retain program income if it uses
the funds for additional eligible activities under the annual CDBG
program; although the Act also states that under certain circumstances,
a State may require the program income to be returned.
This Notice waives the existing statute and regulations to give
each State grantee, in all circumstances, the choice of whether a unit
of general local government receiving a distribution of CDBG disaster
recovery funds and using program income for activities in the Action
Plan may retain this income and use it for additional disaster recovery
activities.
Additionally, this Notice addresses the use of program income for
both State grantees, and units of general local government receiving a
direct allocation under today's Notice. Any program income to the
disaster recovery grant generated by activities undertaken directly by
the grantee or its agent(s) will retain the original disaster recovery
grant's alternative requirements and waivers and remain under the
grantee's discretion until grant closeout. At closeout, any program
income on hand or received subsequently will become program income to
the grantee's annual CDBG program. The alternative requirements provide
all the necessary conforming changes to the program income regulations.
Economic Development
Grantees under today's Notice (except for Shelby County) have asked
to apply individual salaries or wages-per-job and the income limits for
a household of one when documenting the national objective for business
assistance activities. This method would replace the usual CDBG
standard of total household income and income limits by total household
size. The grantees have asserted that this proposed documentation would
be simpler and quicker for participating lenders to administer, easier
to verify, and would not misrepresent the amount of low- and moderate-
income benefit provided. Upon consideration, HUD is granting this
waiver. CDBG disaster recovery grantees received this waiver following
September 11, 2001, the Gulf Coast hurricanes of 2005, and the
Presidentially-declared 2008 disasters. Due to the significant breadth
of many State and local economic development programs, this waiver will
play a key role in streamlining the documentation process because it
allows collection of wage data for each position created or retained
from the assisted businesses, rather than from each individual
household.
In addition to national objective documentation, grantees under
today's
[[Page 69103]]
Notice (except for the State of Tennessee) have requested a waiver of
the standard public benefit provisions. The public benefit provisions
set standards for individual economic development activities (such as a
single loan to a business) and for economic development activities in
the annual aggregate. Currently, public benefit standards limit the
amount of CDBG assistance per job retained or created, or the amount of
CDBG assistance per low- and moderate-income person to which goods or
services are provided by the activity. These dollar thresholds were set
more than a decade ago and, under disaster recovery conditions (which
often require a larger investment to achieve a given result), can
impede recovery by limiting the amount of assistance the grantee may
provide to a critical activity. Requesting grantees will make public in
their Action Plans the disaster recovery needs each activity is
addressing and the public benefits expected.
After consideration, today's Federal Register Notice waives the
public benefit standards for the cited activities, except that each
grantee requesting the waiver shall report and maintain documentation
on the creation and retention of: (a) Total jobs, (b) number of jobs
within certain salary ranges, (c) the average amount of assistance per
job by activity or program, and (d) the types of jobs. As a conforming
change for the same activities or programs, HUD is also waiving
paragraph (g) of 24 CFR 570.482 and paragraph (c) of 24 CFR 570.209 to
the extent these provisions are related to public benefit.
Certifications
HUD is waiving the standard CDBG certifications and substituting an
alternative requirement for certifications that are tailored to the
CDBG disaster recovery grants.
Applicable Rules, Statutes, Waivers, and Alternative Requirements; Pre-
Grant Process
Unless stated otherwise, the following waivers and alternative
requirements apply to any State or unit of general local government
receiving a direct award under this Notice.
1. General note. Prerequisites to a grantee's receipt of CDBG
disaster recovery assistance include: (1) Adoption of a citizen
participation plan; (2) publication of a proposed Action Plan for
Disaster Recovery; (3) public notice and comment; and (4) submission to
HUD of an Action Plan for Disaster Recovery, including certifications.
Except as described in this Notice, statutory and regulatory provisions
governing the State CDBG program shall apply to any State receiving an
allocation under this Notice, while statutory and regulatory provisions
governing the CDBG entitlement program shall apply to any unit of
general local government receiving a direct allocation in this Notice.
Applicable statutory provisions can be found at 42 U.S.C. 5301 et seq.
Applicable State and entitlement provisions can be found at 24 CFR part
570.
2. Overall benefit waiver and alternative requirement. The
requirements at 42 U.S.C. 5301(c), 42 U.S.C. 5304(b)(3)(A), 24 CFR
570.484, and 24 CFR 570.200(a)(3), that 70 percent of funds are for
activities that benefit low- and moderate-income persons are waived to
stipulate that at least 50 percent of a grant's funds are for
activities that principally benefit low-and moderate-income persons.
3. Direct grant administration and means of carrying out eligible
activities--applicable to State grantees only. Requirements at 42
U.S.C. 5306 are waived to the extent necessary to allow a State to use
its disaster recovery grant allocation directly to carry out State-
administered activities eligible under this Notice. Activities eligible
under this Notice may be undertaken, subject to State law, by the
grantee through its employees, or through procurement contracts, or
through loans or grants under agreements with subrecipients. Unless a
waiver provides otherwise, activities made eligible under section
105(a)(15) of the HCD Act, as amended, may only be undertaken by
entities specified in that section, whether the assistance is provided
to such an entity from the State or from a unit of general local
government.
4. Consolidated Plan waiver. Requirements at 42 U.S.C. 12706, 24
CFR 91.325(a)(5), and 24 CFR 91.225(a)(5), that housing activities
undertaken with CDBG funds be consistent with the consolidated plan,
are waived. Further, 42 U.S.C. 5304(e), to the extent that it would
require HUD to annually review grantee performance under the
consistency criteria, is also waived. These waivers apply only until
the grantee first updates its strategic plan priorities (and the full
consolidated plan) following the disaster. At that time, the grantee
must also update its Analysis of Impediments, so that it more
accurately reflects the impacts of the disaster.
5. Action Plan waiver and alternative requirement. The requirements
at 42 U.S.C. 12705(a)(2), 42 U.S.C. 5304(a)(1), 42 U.S.C. 5304(m), 42
U.S.C. 5306(d)(2)(C)(iii), 24 CFR 1003.604, 24 CFR 91.220, and 24 CFR
91.320 are waived for these disaster recovery grants. Each State or
unit of general local government receiving a direct award under this
Notice must submit to HUD an Action Plan for Disaster Recovery that
describes:
A. The effects of the covered disasters, especially in the most
affected areas and populations, and the greatest recovery needs
resulting from the covered disasters that have not been addressed by
insurance proceeds, other Federal assistance, or any other funding
source;
B. The grantee's overall plan for disaster recovery including:
(1) How it will promote sound short- and long-term recovery
planning at the State (if applicable) and local levels, especially
land-use decisions that reflect responsible flood plain management,
removal of regulatory barriers to reconstruction, and coordination with
planning requirements of other local, State and Federal programs and
entities;
(2) How it will leverage CDBG disaster recovery funds with funding
provided by other HUD programs, FEMA (and specifically the Hazard
Mitigation Grant Program), the Small Business Administration, the Army
Corps of Engineers, the U.S. Department of Agriculture, and other
State, local, private, and non-profit sources to generate a more
effective and comprehensive recovery;
(3) How it will encourage construction methods that emphasize high
quality, durability, energy efficiency, sustainability, and mold
resistance, including how it will support adoption and enforcement of
modern building codes and mitigation of flood risk, where appropriate;
and
(4) How it will provide or encourage provision of adequate, flood-
resistant housing for all income groups that lived in the disaster-
affected areas prior to the incident date(s) of the applicable
disaster(s), including a description of the activities it plans to
undertake to address emergency shelter and transitional housing needs
of homeless individuals and families (including subpopulations), to
prevent low-income individuals and families with children (especially
those with incomes below 30 percent of median) from becoming homeless,
to help homeless persons make the transition to permanent housing and
independent living, and to address the special needs of persons who are
not homeless identified in accordance with 24 CFR 91.315(e) or 24 CFR
91.215(e) (as applicable);
C. Monitoring standards and procedures that are sufficient to
ensure program requirements, including nonduplication of benefits, are
met and
[[Page 69104]]
that provide for continual quality assurance, investigation, and
internal audit functions with responsible staff reporting independently
to the Governor of the State or, at a minimum, to the chief officer of
the governing body of any designated administering entity;
D. A description of the steps the grantee will take to avoid or
mitigate occurrences of fraud, abuse, and mismanagement, especially
with respect to accounting, procurement, and accountability. Also, a
description of how it will provide for increasing the capacity for
implementation and compliance of local government grant recipients,
subrecipients, subgrantees, contractors, and any other entity
responsible for administering activities under this grant; and
E. Projected uses of funds.
(1) Funds awarded to a State; method of distribution. A State's
method of distribution shall describe the method of allocating funds to
units of local government and descriptions of specific programs or
projects the State will carry out directly, as applicable. The
descriptions will include:
(a) When funds are allocated to units of local government, all
criteria used to distribute funds, including: (1) The relative
importance of each criterion, (2) a description of how the disaster
recovery grant resources will be allocated among all funding
categories, and (3) the threshold factors and grant size limits that
are to be applied; and
(b) The projected uses for the CDBG disaster recovery funds, by
responsible entity, activity, and geographic area, when the State
carries out an activity directly;
(c) How the method of distribution to local governments or use of
funds described in accordance with the above subparagraphs will result
in eligible uses of grant funds related to long-term recovery from
specific effects of the disaster(s), and/or restoration of
infrastructure, housing, and economic revitalization.
(2) Funds awarded directly to a unit of general local government.
The unit of local government shall describe specific programs and
projects it will carry out. The Action Plan will describe:
(a) How the disaster recovery grant resources will be allocated and
the relative importance of all criteria by which projects are selected;
and
(b) The threshold factors and grant size limits that are to be
applied; and
(c) The projected uses for the CDBG disaster recovery funds, by
responsible entity, activity, and geographic area; and
(d) How the use of funds described in accordance with the above
subparagraphs will result in eligible uses of grant funds related to
long-term recovery from specific effects of the disaster(s), or
restoration of infrastructure, housing, and economic revitalization.
(3) Clarity of Action Plan. All grantees must include sufficient
information so that citizens, units of general local government (where
applicable), and other eligible subgrantees or subrecipients will be
able to understand and comment on the Action Plan and, if applicable,
be able to prepare responsive applications to the grantee. If a grantee
submits an action plan that includes sufficient detail and clarity for
only a portion of the allocation, HUD may still issue a grant agreement
for the entire grant amount. However, HUD will restrict access to the
portion of the funds for which the grantee has not clearly described
eligible activities.
6. Citizen participation waiver and alternative requirement.
Provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR
570.486, 24 CFR 91.105(b), and 24 CFR 91.115(b), with respect to
citizen participation requirements, are waived and replaced by the
requirements below. The streamlined requirements do not mandate public
hearings at a State, entitlement, or local government level, but do
require providing a reasonable opportunity (at least 7 days) for
citizen comment and ongoing citizen access to information about the use
of grant funds. The streamlined citizen participation requirements for
a grant administered under this Notice are:
A. Before the grantee adopts the Action Plan for this grant or any
substantial amendment to this grant, the grantee will publish the
proposed plan or amendment (including the information required in this
Notice for an Action Plan for Disaster Recovery). The manner of
publication must include prominent posting on the State, local, or
other relevant Internet site and must afford citizens, affected local
governments, and other interested parties a reasonable opportunity to
examine the plan or amendment's contents. Subsequent to publication,
the grantee must provide a reasonable time frame and method(s)
(including electronic submission) for receiving comments on the plan or
substantial amendment. The grantee's plans to minimize displacement of
persons or entities, and to assist any persons or entities displaced,
must be published with the Action Plan.
B. Each grantee will specify in its Action Plan criteria for
determining what changes in the grantee's activities constitute a
substantial amendment to the plan. At a minimum, adding or deleting an
activity or changing the planned beneficiaries of an activity will
constitute a substantial change. The grantee may modify or
substantially amend the Action Plan if it follows the same procedures
required in this Notice for the preparation and submission of an Action
Plan for Disaster Recovery. Prior to submission of a substantial
amendment, the grantee is encouraged to work with the Department to
ensure the proposed change is consistent with this Notice, and all
applicable regulations and Federal law.
C. The grantee must notify HUD, but is not required to notify the
public, when it makes any plan amendment that is not substantial. The
Department may acknowledge receipt of the notification via e-mail
within 5 business days.
D. The grantee must consider all comments received on the Action
Plan or any substantial amendment. A summary of the comments and the
grantee's response to each must be submitted to HUD with the Action
Plan or substantial amendment.
E. The grantee must make the Action Plan, any substantial
amendments, and all performance reports available to the public on the
Internet and on request. In addition, the grantee must make these
documents available in a form accessible to persons with disabilities
and non-English-speaking persons. During the term of this grant, the
grantee will provide citizens, affected local governments, and other
interested parties with reasonable and timely access to information and
records relating to the Action Plan and to the grantee's use of this
grant.
F. The grantee will provide a timely written response to every
citizen complaint. The response will be provided within 15 working days
of the receipt of the complaint, if practicable.
7. Modify requirement for consultation with local governments--
applicable to State grantees only. Currently, the statute and
regulations require consultation with affected units of local
government in the non-entitlement areas of the State regarding the
State 's proposed method of distribution. HUD is waiving 42 U.S.C.
5306(d)(2)(C)(iv), 24 CFR 91.325(b), and 24 CFR 91.110, with the
alternative requirement that any State receiving an allocation under
this Notice consult with all disaster-affected units of general local
government, including any CDBG-entitlement communities, in determining
the use of funds.
8. Note on change to administration limitation. Up to 5 percent of
the grant amount may be used for administrative costs.
[[Page 69105]]
A. The provisions of 42 U.S.C. 5306(d) and 24 CFR 570.489(a)(1)(i)
and (iii) will not apply to the extent that they cap State
administration expenditures, limit a State's ability to charge a de
minimis application fee for grant applications for activities the State
carries out directly, and require a dollar-for-dollar match of State
funds for administrative costs exceeding $100,000. HUD does not waive
24 CFR 570.489(a)(3), which will allow the State to carry out planning
activities that may exceed the 5 percent limitation on general
administrative costs.
B. Any city or county receiving a direct award under today's Notice
is also subject to the 5 percent administrative cap. This 5 percent
applies to all administrative costs--whether incurred by the grantee or
its subrecipients. To the extent necessary, HUD retains the provisions
of 24 CFR 570.200(g) which allow a city or county to fund planning
activities that may exceed the 5 percent general administration cap.
Thus, similar to a State grantee, a city or county receiving a direct
allocation under today's Notice is ultimately limited to spending 20
percent of its total allocation on a combination of planning and
program administration costs.
9. Planning activities. For CDBG disaster recovery-assisted general
planning activities that will guide recovery in accordance with the
Supplemental Appropriations Act, the State CDBG program rules at 24 CFR
570.483(b)(5) and (c)(3) are waived and the presumption at 24 CFR
570.208(d)(4) applies for any State grantee under this Notice. 24 CFR
570.208(d)(4) will apply to any unit of general local government that
receives a direct allocation under this Notice.
10. Waiver and alternative requirement for distribution to CDBG
metropolitan cities and urban counties--applicable to State grantees
only.
A. Section 5302(a)(7) of title 42, U.S.C. (definition of
``nonentitlement area'') and provisions of 24 CFR part 570 that would
prohibit a State from distributing CDBG funds to UGLGs regardless of
their status in the entitlement CDBG program and to Indian tribes, are
waived, including 24 CFR 570.480(a), to the extent that such provisions
limit the distribution of funds to units of local government located in
entitlement areas, and to State or federally recognized Indian tribes.
Instead, the State is required to distribute funds to activities
assisting a declared county or counties and eligible under this Notice
without regard to the status of a local government or Indian tribe
under any other CDBG program.
B. Additionally, because the State grantees under this
appropriation have requested a waiver to carry out activities directly,
HUD is applying the regulations at 24 CFR 570.480(c) with respect to
the basis for HUD determining whether the State has failed to carry out
its certifications so that such basis shall be that the State has
failed to carry out its certifications in compliance with applicable
program requirements.
11. Use of subrecipients--applicable to State grantees only. The
following alternative requirement applies for any activity that a State
carries out directly by funding a subrecipient:
A. 24 CFR 570.503, except that specific references to 24 CFR parts
84 and 85 need not be included in subrecipient agreements.
B. 24 CFR 570.502(a), in instances where a State's subrecipients
are governmental entities, except that HUD recommends, but does not
require, application of the requirements at 24 CFR part 85.
C. 24 CFR 570.502(b), in instances where a State's subrecipients
are not governmental entities, except that HUD recommends, but does not
require, application of the requirements at 24 CFR part 84.
12. Recordkeeping--applicable to State grantees only. Recognizing
that the State may carry out activities directly, 24 CFR 570.490(b) is
waived in such a case and the following alternative provision shall
apply: The State shall establish and maintain such records as may be
necessary to facilitate review and audit by HUD of the State's
administration of CDBG disaster recovery funds under 24 CFR 570.493.
Consistent with applicable statutes, regulations, waivers and
alternative requirements, and other Federal requirements, the content
of records maintained by the State shall be sufficient to: Enable HUD
to make the applicable determinations described at 24 CFR 570.493; make
compliance determinations for activities carried out directly by the
State; and show how activities funded are consistent with the
descriptions of activities proposed for funding in the Action Plan. For
fair housing and equal opportunity purposes, and as applicable, such
records shall include data on the racial, ethnic, and gender
characteristics of persons who are applicants for, participants in, or
beneficiaries of the program.
13. Change of use of real property--applicable to State grantees
only. This waiver conforms the change of use of real property rule to
the waiver allowing a State to carry out activities directly. For
purposes of this program, in 24 CFR 570.489(j), (j)(1), and the last
sentence of (j)(2), ``unit of general local government'' shall be read
as ``unit of general local government or State .''
14. Responsibility for review and handling of noncompliance --
applicable to State grantees only. This change is in conformance with
the waiver allowing the State to carry out activities directly. 24 CFR
570.492 is waived and the following alternative requirement applies for
any State receiving a direct award under this Notice: The State shall
make reviews and audits, including onsite reviews of any subrecipients,
designated public agencies, and units of general local government, as
may be necessary or appropriate to meet the requirements of section
104(e)(2) of the HCD Act, as amended, as modified by this Notice. In
the case of noncompliance with these requirements, the State shall take
such actions as may be appropriate to prevent a continuance of the
deficiency, mitigate any adverse effects or consequences, and prevent a
recurrence. The State shall establish remedies for noncompliance by any
designated public agencies or units of general local governments and
for its subrecipients.
15. Waiver of performance report and alternative requirement. The
requirements for submission of a Performance Evaluation Report (PER)
pursuant to 42 U.S.C. 12708 and 24 CFR 91.520 are waived. The
alternative requirement is that:
A. Each grantee must submit its Action Plan for Disaster Recovery,
including performance measures, into HUD's Internet-based DRGR system.
(The signed certifications and the SF-424 must be, and the initial
Action Plan for Disaster Recovery may be, submitted in hard copy.) As
additional information about uses of funds becomes available to the
grantee, the grantee must enter such detail into DRGR, in sufficient
detail to serve as the basis for acceptable performance reports.
B. Each grantee must submit a quarterly performance report, as HUD
prescribes, no later than 30 days following each calendar quarter,
beginning after the first full calendar quarter after grant award and
continuing until all funds have been expended and all expenditures
reported. Each quarterly report will include information about the uses
of funds during the applicable quarter including (but not limited to)
the project name, activity, location, and national objective; funds
budgeted, obligated, drawn down, and expended; the
[[Page 69106]]
funding source and total amount of any non-CDBG disaster funds;
beginning and ending dates of activities; and performance measures such
as numbers of low- and moderate-income persons or households
benefiting. Quarterly reports to HUD must be submitted using HUD's
Internet-based DRGR system and, within 3 days of submission, be posted
on the grantee's official Internet site open to the public.
16. Housing-related eligibility waivers. 42 U.S.C. 5305(a) is
waived to the extent necessary to allow: (1) Homeownership assistance
for households with up to 120 percent of area median income, (2)
downpayment assistance for up to 100 percent of the down payment (42
U.S.C. 5305(a)(24)(D)), and (3) new housing construction.
17. Housing incentives to resettle in disaster-affected
communities. 42 U.S.C. 5305(a) and associated regulations are waived to
the extent necessary to make eligible incentives to resettle in
Metropolitan Nashville and Davidson County. The incentives must be in
accordance with Metropolitan Nashville and Davidson County's approved
Action Plan and published program design(s). Furthermore, the
Entitlement grantee must maintain documentation, at least at a
programmatic level, describing how the amount of assistance was
determined to be necessary and reasonable. Please note that this waiver
does not permit a compensation program. Additionally, if the
Entitlement grantee requires the incentives to be used for a particular
purpose by the household receiving the assistance, then the activity
will be that required use, and not considered as an eligible incentive.
18. Limitation on emergency grant payments. 42 U.S.C. 5305(a) is
waived so that Metropolitan Nashville and Davidson County can extend
interim mortgage assistance to qualified individuals for up to 20
months.
19. Buildings for the general conduct of government. 42 U.S.C.
5305(a) is waived to the extent necessary to allow the grantee to fund
the rehabilitation or reconstruction of public buildings that are
otherwise ineligible and that are selected in accordance with its
approved Action Plan for Disaster Recovery and that are determined have
substantial value in promoting disaster recovery. Please note that this
waiver is inapplicable to the State of Tennessee.
20. Waiver and modification of the job relocation clause to permit
assistance to help a business return. 42 U.S.C. 5305(h), 24 CFR
570.210, and 24 CFR 570.482 are hereby waived only to allow the grantee
to provide assistance under this grant to any business that was
operating in the covered disaster area before the incident date of the
applicable disaster and has since moved, in whole or in part, from the
affected area to another State or to a labor market area within the
same State to continue business. Please note that this waiver and
modification is inapplicable to the City of Cranston.
21. URA provisions.
A. One-for-one replacement requirements at 42 U.S.C. 5304(d)(2) and
(d)(3), and 24 CFR 42.375(a) are waived for lower-income dwelling
units: (1) Damaged by the disaster, (2) for which CDBG funds are used
for conversion or demolition, and (3) which are not suitable for
rehabilitation.
B. Relocation assistance requirements at 42 U.S.C. 5304(d)(2)(A)
and 24 CFR 42.350 are waived, to the extent that they differ from those
of the URA and its implementing regulation at 49 CFR part 24, for
activities involving buyouts and other activities covered by the URA
and related to disaster recovery activities assisted by the funds
covered by this Notice and included in an approved Action Plan.
C. The requirements at 49 CFR 24.101(b)(2)(i)-(ii) are waived to
the extent that they apply to an arm's length voluntary purchase
carried out by a person who does not have the power of eminent domain,
in connection with the purchase and occupancy of a principal residence
by that person.
D. The requirements at sections 204(a) and 206 of the URA, 49 CFR
24.2, 24.402(b)(2), and 24.404 are waived to the extent that they
require the State to provide URA financial assistance sufficient to
reduce the displaced person's post-displacement rent/utility cost to 30
percent of household income.
To the extent that a tenant has been paying rent in excess of 30
percent of household income without demonstrable hardship, rental
assistance payments to reduce tenant costs to 30 percent would not be
required. Before using this waiver, the State must establish a
definition of ``demonstrable hardship.''
E. The requirements of sections 204 and 205 of the URA, and 49 CFR
24.402(b) are waived to the extent necessary to permit a grantee to
meet all or a portion of a grantee's replacement housing financial
assistance obligation to a displaced tenant by offering rental housing
through a TBRA housing program subsidy (e.g., Section 8 rental voucher
or certificate), provided that the tenant is also provided referrals to
suitable, available rental replacement dwellings where the owner is
willing to participate in the TBRA program, and the period of
authorized assistance is at least 42 months.
F. The requirements of section 202(b) of the URA and 49 CFR 24.302
are waived to the extent that they require a grantee to offer a person
displaced from a dwelling the option to receive a ``moving expense and
dislocation allowance'' based on the current schedule of allowances
prepared by the Federal Highway Administration, provided that the
grantee establishes and offers the person a moving expense and
dislocation allowance under a schedule of allowances that is reasonable
for the jurisdiction and takes into account the number of rooms in the
displacement dwelling, whether the person owns and must move the
furniture, and, at a minimum, the kinds of expenses described in 49 CFR
24.301.
22. Program income alternative requirement.
A. Units of general local government receiving a direct allocation
under this Notice. Any unit of general local government receiving a
direct allocation under this award will be subject to 24 CFR 570.500
and 24 CFR 570.504. However, please note:
(1) Program income that is received and retained by the unit of
local government before closeout of the grant (that generated the
program income), is treated as additional disaster recovery CDBG funds
and is subject to the requirements of this Notice.
(2) Program income that is received and retained by the unit of
local government after closeout of the grant (that generated the
program income), but that is used to continue the disaster recovery
activity that generated the program income, is subject to the waivers
and alternative requirements of this Notice.
B. State grantees under this Notice. 42 U.S.C. 5304(j), and 24 CFR
570.489(e) are waived to the extent necessary to allow additional
flexibility in the administration of program income.
(1) Program income.
(a) For the purposes of this subpart, ``program income'' is defined
as gross income generated from the use of CDBG funds, except as
provided in paragraph (a)(2) of this section, and received by: (1) A
State, unit of local government, or tribe, or (2) a subrecipient of a
State, unit of general local government, or tribe. When income is
generated by an activity that is only partially assisted with CDBG
funds, the income shall be prorated to reflect the percentage of CDBG
funds used (e.g., a single loan supported by CDBG funds and other
funds; a single parcel of land purchased with CDBG funds and other
funds).
[[Page 69107]]
Program income includes, but is not limited to, the following:
(i) Proceeds from the disposition by sale or long-term lease of
real property purchased or improved with CDBG funds;
(ii) Proceeds from the disposition of equipment purchased with CDBG
funds;
(iii) Gross income from the use or rental of real or personal
property acquired by the unit of general local government or a tribe or
subrecipient of a State, a tribe, or a unit of general local government
with CDBG funds, less the costs incidental to the generation of the
income;
(iv) Gross income from the use or rental of real property owned by
a State, tribe, or the unit of general local government or a
subrecipient of a State, tribe, or unit of general local government,
that was constructed or improved with CDBG funds, less the costs
incidental to the generation of the income;
(v) Payments of principal and interest on loans made using CDBG
funds;
(vi) Proceeds from the sale of loans made with CDBG funds;
(vii) Proceeds from the sale of obligations secured by loans made
with CDBG funds;
(viii) Interest earned on program income pending disposition of the
income, but excluding interest earned on funds held in a revolving fund
account;
(ix) Funds collected through special assessments made against
properties owned and occupied by households not of low- and moderate-
income, where the special assessments are used to recover all or part
of the CDBG portion of a public improvement; and
(x) Gross income paid to a State, tribe, unit of local government,
or subrecipient from the ownership interest in a for-profit entity
acquired in return for the provision of CDBG assistance.
(b) ``Program income'' does not include the following:
(i) The total amount of funds which is less than $25,000 received
in a single year and retained by a unit of local government, tribe, or
subrecipient;
(ii) Amounts generated by activities eligible under section
105(a)(15) of the HCD Act and carried out by an entity under the
authority of section 105(a)(15) of the HCD Act;
(c) A State may permit a unit of local government or tribe which
receives or will receive program income to retain the program income,
subject to the requirements of paragraph B(1)(c)(ii) of this section.
In the alternative, the State may require the unit of local government
or tribe to pay the program income to the State.
(i) Program income paid to a State. Program income that is paid to
the State or received by the State is treated as additional disaster
recovery CDBG funds subject to the requirements of this Notice and must
be used by the State or distributed to units of general local
government (if applicable) in accordance with the applicable Action
Plan for Disaster Recovery. To the maximum extent feasible, program
income shall be used or distributed before the grantee makes additional
withdrawals from the U.S. Treasury, except as provided in paragraph (b)
of this section.
(ii) Program income retained by a unit of local government or
tribe.
(A) Program income that is received and retained by the unit of
local government or tribe before closeout of the grant (that generated
the program income), is treated as additional disaster recovery CDBG
funds and is subject to the requirements of this Notice.
(B) Program income that is received and retained by the unit of
local government or tribe after closeout of the grant (that generated
the program income), but that is used to continue the disaster recovery
activity that generated the program income, is subject to the waivers
and alternative requirements of this Notice.
(C) All other program income is subject to the requirements of 42
U.S.C. 5304(j) and subpart I of 24 CFR part 570.
(D) Unit of local government or tribes, to the maximum extent
feasible, should disburse program income that is subject to the
requirements of this Notice before requesting additional funds from the
grantee for activities, except as provided in paragraph (b) of this
section.
(2) Revolving funds.
(a) The State may establish or permit a unit of local government or
tribe to establish revolving funds to carry out specific, identified
activities. A revolving fund, for this purpose, is a separate fund
(with a set of accounts that are independent of other program accounts)
established to carry out specific activities. These activities generate
payments, which will be used to support similar activities going
forward. These payments to the revolving fund are program income and
must be substantially disbursed from the revolving fund before
additional grant funds are drawn from the U.S. Treasury for revolving
fund activities. Such program income is not required to be disbursed
for non-revolving fund activities.
(b) The State may also establish a revolving fund to distribute
funds to units of local government or tribes to carry out specific,
identified activities. A revolving fund, for this purpose, is a
separate fund (with a set of accounts that are independent of other
program accounts) established to fund grants to units of local
government to carry out specific activities. These activities generate
payments to the fund so that additional grants can be made to units of
local government to carry out similar activities going forward. Program
income in the revolving fund must be disbursed from the fund before
additional grant funds are drawn from the U.S. Treasury for payments to
units of local government that could be funded from the revolving fund.
(c) A revolving fund established by the State shall not be directly
funded or capitalized with grant funds.
(3) Transfer of program income. Notwithstanding other provisions of
this Notice, the State may transfer program income before closeout of
the grant that generated the program income to its own annual CDBG
program or to any annual CDBG-funded activities administered by a unit
of local government or Indian tribe within the State .
(4) Program income on hand at the State or at its subrecipients at
the time of grant closeout by HUD, and program income received by the
grantee after such grant closeout, shall be program income to the most
recent annual CDBG program grant.
23. National Objective Documentation for Economic Development
Activities. 24 CFR 570.483(b)(4)(i) and 570.208(a)(4)(i) are waived to
allow the grantees under this Notice (except for Shelby County) to
establish low- and moderate-income jobs benefit by documenting, for
each person employed, the name of the business, type of job, and the
annual wages or salary of the job. HUD will consider the person income-
qualified if the annual wages or salary of the job is at or under the
HUD-established income limit for a one-person family.
24. Public benefit for certain economic development activities. For
economic development activities designed to create or retain jobs or
businesses (including, but not limited to, long-term, short-term, and
infrastructure projects), the public benefit standards at 42 U.S.C.
5305(e)(3), 24 CFR 570.482(f)(1), (2), (3), (4)(i), (5), and (6), and
24 CFR 570.209(b)(1), (2), (3)(i), (4) are waived. However, grantees
shall report and maintain documentation on the creation and retention
of total jobs; the number of jobs within certain salary ranges; the
average amount of assistance provided
[[Page 69108]]
per job, by activity or program; and the types of jobs. Paragraph (g)
of 24 CFR 570.482, and 24 CFR 570.209(c), and (d) are also waived to
the extent these provisions are related to public benefit. Please note
that these waivers and alternative requirements will not apply to the
State of Tennessee.
25. Allow reimbursement for pre-agreement costs. The provisions of
24 CFR 570.489(b) are applied to permit a State to reimburse itself for
otherwise allowable costs incurred on or after the incident date of the
covered disaster. Any unit of general local government receiving a
direct allocation under this Notice is subject to the provisions of 24
CFR 570.200(h) but may reimburse itself for otherwise allowable costs
incurred on or after the incident date of the covered disaster. 24 CFR
570.200(h)(1)(i) will not apply to the extent that it requires pre-
agreement activities to be included in a consolidated plan.
The Department expects both State grantees and units of general
local government receiving a direct award under this Notice to include
all pre-agreement activities in their Action Plans.
26. Clarifying note on the process for environmental release of
funds when a State carries out activities directly. Usually, a State
distributes CDBG funds to units of local government and takes on HUD's
role in receiving environmental certifications from the grant
recipients and approving releases of funds. For this grant, HUD will
allow a State grantee to also carry out activities directly instead of
distributing them to other governments. According to the environmental
regulations at 24 CFR 58.4, when a State carries out activities
directly, the State must submit the certification and request for
release of funds to HUD for approval.
27. Duplication of benefits. In general, section 312 of the Robert
T. Stafford Disaster Assistance and Emergency Relief Act (42 U.S.C.
5155), as amended, prohibits any person, business concern, or other
entity from receiving financial assistance with respect to any part of
a loss resulting from a major disaster as to which he has received
financial assistance under any other program or from insurance or any
other source.
In order to comply with this law, grantees should ensure that each
program provides assistance to a person or entity only to the extent
that the person or entity has a disaster recovery need that has not
been fully met. Generally, all sources of assistance should be included
in this needs analysis, including, but not limited to, funds received
(or to be received) via insurance, FEMA, the SBA, other local, State,
or Federal programs, or recovery support from private charity
organizations. However, the Stafford Act prohibition on duplication of
disaster recovery assistance does not require the ultimate CDBG award
to be reduced by: (1) Private loans; (2) funds provided for a general,
non-specific purpose, i.e. ``disaster recovery''; and (3) other assets
or lines of credit available to a homeowner or a business owner. This
last category includes, but is not limited to, the following: Checking
or savings accounts, stocks, bonds, mutual funds, pension or retirement
benefits, credit cards, mortgages or lines of credit, and life
insurance. Please note that these items may be held in the name of an
individual, or in the name of a business. (Of course, such other
resources may be considered as the grantee determines, in accordance
with the principles of cost circular OMB A-87, the necessary and
appropriate amount of assistance to provide to achieve program
purposes.)
In general, please note that CDBG disaster recovery funds should
not be used to pay down an SBA loan. Rather, if need remains after an
SBA loan has been executed, additional CDBG funds may be used to
address that need. However, in certain situations (to be determined and
defined by each grantee), SBA loans may be paid down, upon inclusion of
this activity in a HUD-accepted Action Plan or Action Plan Amendment.
Last, the Supplemental Appropriations Act stipulates that funds may
not be used for activities reimbursable by, or for which funds have
been made available by, FEMA or by the Army Corps of Engineers.
28. Note that use of grant funds must relate to the purposes of the
Supplemental Appropriations Act, 2010. In addition to being eligible
under 42 U.S.C. 5305(a) or this Notice, and meeting a CDBG national
objective, the Supplemental Appropriations Act requires that activities
funded under this Notice must be necessary expenses related to disaster
relief, long-term recovery, and restoration of infrastructure, housing,
and economic revitalization in areas affected by severe storms and
flooding from March through May, 2010, for which the President declared
a major disaster covering an entire State, or States with more than 20
counties declared major disasters, under title IV of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act of 1974 (42
U.S.C. 5121 et seq.).
29. Notes on flood buyouts.
A. Payment of pre-flood values for buyouts. Grant recipients under
this Notice have the discretion to pay pre-flood or post-flood values
for the acquisition of properties located in a floodway or floodplain.
In using CDBG disaster recovery funds for such acquisitions, the
grantee must uniformly apply whichever valuation method it chooses.
B. Ownership and maintenance of acquired property. Any property
acquired with disaster recovery grants funds being used to match FEMA
Section 404 Hazard Mitigation Grant Program funds is subject to section
404(b)(2) of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, which requires that such property be
dedicated and maintained in perpetuity for a use that is compatible
with open space, recreational, or wetlands management practices. In
addition, with minor exceptions, no new structure may be erected on the
property and no subsequent application for Federal disaster assistance
may be made for any purpose. The acquiring entity may want to lease
such property to adjacent property owners or other parties for
compatible uses in return for a maintenance agreement. Although Federal
policy encourages leasing rather than selling such property, the
property may be sold. In all cases, a deed restriction or covenant
running with the land must require that the property be dedicated and
maintained for compatible uses in perpetuity. HUD urges grantees
carrying out buyouts with funds under this Notice to consider
implementing the same or similar use restrictions on properties
acquired under CDBG-assisted buyouts.
C. Future Federal assistance to owners remaining in floodplain.
(1) Section 582 of the National Flood Insurance Reform Act of 1994,
as amended, (42 U.S.C. 5154a) prohibits flood disaster assistance in
certain circumstances. In general, it provides that no Federal disaster
relief assistance made available in a flood disaster area may be used
to make a payment (including any loan assistance payment) to a person
for repair, replacement, or restoration for damage to any personal,
residential, or commercial property if that person at any time has
received Federal flood disaster assistance that was conditional on the
person first having obtained flood insurance under applicable Federal
law and the person has subsequently failed to obtain and maintain flood
insurance as required under applicable Federal law on such property.
(Section 582 is self-implementing without regulations.) This means that
a grantee may not provide disaster assistance for the
[[Page 69109]]
abovementioned repair, replacement, or restoration to a person who has
failed to meet this requirement.
(2) Section 582 also implies a responsibility for a grantee that
receives CDBG disaster recovery funds or that, under 42 U.S.C. 5321,
designates annually appropriated CDBG funds for disaster recovery. That
responsibility is to inform property owners receiving disaster
assistance that triggers the flood insurance purchase requirement that
they have a statutory responsibility to notify any transferee of the
requirement to obtain and maintain flood insurance, and that the
transferring owner may be liable if he or she fails to do so. These
requirements are described below.
(3) Duty to notify. In the event of the transfer of any property
described in paragraph d., the transferor shall, not later than the
date on which such transfer occurs, notify the transferee in writing of
the requirements to:
(a) Obtain flood insurance in accordance with applicable Federal
law with respect to such property, if the property is not so insured as
of the date on which the property is transferred; and
(b) Maintain flood insurance in accordance with applicable Federal
law with respect to such property. Such written notification shall be
contained in documents evidencing the transfer of ownership of the
property.
(4) Failure to notify. If a transferor fails to provide notice as
described above and, subsequent to the transfer of the property:
(a) The transferee fails to obtain or maintain flood insurance, in
accordance with applicable Federal law, with respect to the property;
(b) The property is damaged by a flood disaster; and
(c) Federal disaster relief assistance is provided for the repair,
replacement, or restoration of the property as a result of such damage,
the transferor shall be required to reimburse the Federal Government in
an amount equal to the amount of the Federal disaster relief assistance
provided with respect to the property.
D. The notification requirements apply to personal, commercial, or
residential property for which Federal disaster relief assistance made
available in a flood disaster area has been provided, prior to the date
on which the property is transferred, for repair, replacement, or
restoration of the property, if such assistance was conditioned upon
obtaining flood insurance in accordance with applicable Federal law
with respect to such property.
E. The term ``Federal disaster relief assistance'' applies to HUD
or other Federal assistance for disaster relief in ``flood disaster
areas.'' The term ``flood disaster area'' is defined in section
582(d)(2) of the National Flood Insurance Reform Act of 1994, as
amended, to include an area receiving a presidential declaration of a
major disaster or emergency as a result of flood conditions.
30. Procurement.
A. Grants to States. Per 24 CFR 570.489(d), a State must have
fiscal and administrative requirements for expending and accounting for
all funds. Furthermore, per 24 CFR 570.489(g), a State shall establish
requirements for procurement policies and procedures for units of
general local government based on full and open competition. All
subgrantees of a State (including units of general local government)
are subject to the procurement policies and procedures required by the
State.
A State may meet the above requirements by adopting 24 CFR part 85.
If a State has adopted part 85 in full, it must follow the same
policies and procedures it uses when procuring property and services
with its non-Federal funds. However, the State must ensure that every
purchase order or other contract includes any clauses required by
Federal statutes and executive orders and their implementing
regulations per 24 CFR 85.36(a).
If a State has not adopted 24 CFR 85.36(a), but has adopted 24 CFR
85.36(b)-(i), the State and its subgrantees must follow State and local
law (as applicable), so long as the procurements conform to applicable
Federal law and the standards identified in 24 CFR 85.36(b)-(i).
B. Direct grants to units of general local government. Any unit of
general local government receiving a direct appropriation under today's
Notice will be subject to 24 CFR 85.36(b) through (i).
31. Timely distribution of funds. 24 CFR 570.494 and 24 CFR 570.902
regarding timely distribution of funds are waived. However, HUD expects
each grantee to expeditiously obligate and expend all funds, including
any recaptured funds or program income, and to carry out activities in
a timely manner.
32. Information collection approval note. HUD has approval for
information collection requirements in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3520) under OMB control number
2506-0165. In accordance with the Paperwork Reduction Act, HUD may not
conduct or sponsor, nor is a person required to respond to, a
collection of information, unless the collection displays a valid
control number.
33. Certifications waiver and alternative requirement. Sections
91.325 and 91.225 of title 24 of the Code of Federal Regulations are
waived. Each State or unit of general local government receiving a
direct allocation under this Notice must make the following
certifications prior to receiving a CDBG disaster recovery grant:
A. The grantee certifies that it will affirmatively further fair
housing, which means that it will conduct an analysis to identify
impediments to fair housing choice within its jurisdiction, take
appropriate actions to overcome the effects of any impediments
identified through that analysis, and maintain records reflecting the
analysis and actions in this regard. (See 24 CFR 570.487(b)(2).)
B. The grantee certifies that it has in effect and is following a
residential anti-displacement and relocation assistance plan in
connection with any activity assisted with funding under the CDBG
program.
C. The grantee certifies its compliance with restrictions on
lobbying required by 24 CFR part 87, together with disclosure forms, if
required by part 87.
D. The grantee certifies that the Action Plan for Disaster Recovery
is authorized under State and local law and that the grantee, and any
entity or entities designated by the State, possess(es) the legal
authority to carry out the program for which it is seeking funding, in
accordance with applicable HUD regulations and this Notice.
E. The grantee certifies that it will comply with the acquisition
and relocation requirements of the URA, as amended, and implementing
regulations at 49 CFR part 24, except where waivers or alternative
requirements are provided for this grant.
F. The grantee certifies that it will comply with section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and
implementing regulations at 24 CFR part 135.
G. The grantee certifies that it is following a detailed citizen
participation plan that satisfies the requirements of 24 CFR 91.105 or
91.115, as applicable (except as provided for in notices providing
waivers and alternative requirements for this grant). Also, each unit
of local government receiving assistance from the grantee must follow a
detailed citizen participation plan that satisfies the requirements of
24 CFR 570.486 (except as provided for in notices
[[Page 69110]]
providing waivers and alternative requirements for this grant).
H. Each State receiving a direct award under this Notice certifies
that it has consulted with affected units of local government in
counties designated in covered major disaster declarations in the non-
entitlement, entitlement, and tribal areas of the State in determining
the method of distribution of funding.
I. The grantee certifies that it is complying with each of the
following criteria:
(1) Funds will be used solely for necessary expenses related to
disaster relief, long-term recovery, and restoration of infrastructure,
housing, and economic revitalization in areas affected by severe storms
and flooding that occurred between March and May, 2010, for which the
President declared a major disaster covering an entire State, or States
with more than 20 counties declared major disasters, under title IV of
the Robert T. Stafford Disaster Relief and Emergency Assistance Act of
1974 (42 U.S.C. 5121 et seq.).
(2) With respect to activities expected to be assisted with CDBG
disaster recovery funds, the Action Plan has been developed so as to
give the maximum feasible priority to activities that will benefit low-
and moderate-income families.
(3) The aggregate use of CDBG disaster recovery funds shall
principally benefit low- and moderate-income families in a manner that
ensures that at least 50 percent of the amount is expended for
activities that benefit such persons during the designated period.
(4) The grantee will not attempt to recover any capital costs of
public improvements assisted with CDBG disaster recovery grant funds,
by assessing any amount against properties owned and occupied by
persons of low-and moderate-income, including any fee charged or
assessment made as a condition of obtaining access to such public
improvements, unless: (A) Disaster recovery grant funds are used to pay
the proportion of such fee or assessment that relates to the capital
costs of such public improvements that are financed from revenue
sources other than under this title; or (B) for purposes of assessing
any amount against properties owned and occupied by persons of moderate
income, the grantee certifies to the Secretary that it lacks sufficient
CDBG funds (in any form) to comply with the requirements of clause (A).
J. The grantee certifies that the grant will be conducted and
administered in conformity with title VI of the Civil Rights Act of
1964 (42 U.S.C. 2000d) and the Fair Housing Act (42 U.S.C. 3601-3619)
and implementing regulations.
K. The grantee certifies that it has and that it will require UGLGs
that receive grant funds to certify that they have adopted and are
enforcing:
(1) A policy prohibiting the use of excessive force by law
enforcement agencies within its jurisdiction against any individuals
engaged in nonviolent civil rights demonstrations; and
(2) A policy of enforcing applicable State and local laws against
physically barring entrance to or exit from a facility or location that
is the subject of such nonviolent civil rights demonstrations within
its jurisdiction.
L. Each State receiving a direct award under this Notice certifies
that each State grant recipient or administering entity has the
capacity to carry out disaster recovery activities in a timely manner,
or the State has a plan to increase the capacity of any State grant
recipient or administering entity that lacks such capacity.
M. The grantee certifies that it will not use CDBG disaster
recovery funds for any activity in an area delineated as a special
flood hazard area in FEMA's most current flood advisory maps, unless it
also ensures that the action is designed or modified to minimize harm
to or within the floodplain, in accordance with Executive Order 11988
and 24 CFR part 55.
N. The grantee certifies that it will comply with applicable laws.
Duration of Funding
Availability of funds provisions in 31 U.S.C. 1551-1557, added by
section 1405 of the National Defense Authorization Act for Fiscal Year
1991 (Pub. L. 101-510), limit the availability of certain
appropriations for expenditure. This limitation may not be waived.
However, the Supplemental Appropriations Act for these grants directs
that these funds be available until expended unless, in accordance with
31 U.S.C. 1555, HUD determines that the purposes for which the
appropriation has been made have been carried out and no disbursement
has been made against the appropriation for 2 consecutive fiscal years.
In such a case, HUD shall close out the grant prior to expenditure of
all funds.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the disaster
recovery grants under this Notice are as follows: 14.218; 14.228.
Finding of No Significant Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment has been made in accordance with HUD regulations at 24 CFR
part 50, which implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is
available for public inspection between 8 a.m. and 5 p.m. weekdays in
the Regulations Division, Office of General Counsel, Department of
Housing and Urban Development, 451 7th Street, SW., Room 10276,
Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, an advance appointment to review the docket file
must be scheduled by calling the Regulations Division at 202-708-3055
(this is not a toll-free number). Hearing or speech-impaired
individuals may access this number through TTY by calling the toll-free
Federal Information Relay Service at 800-877-8339.
Appendix A--Allocation Methodology Detail
HUD determined that only four States met the statutory
requirements for funding eligibility under Pub. L. 111-212:
Tennessee, Rhode Island, Kentucky, and Nebraska each had federally
declared disasters due to both flooding and severe storms that
occurred between March 1 and May 31, 2010 where either the whole
State or at least 20 counties were declared by the President to be
major disasters.
HUD made preliminary estimates of unmet needs for each State. In
total, HUD estimated across the four disasters nearly $694 million
in remaining unmet needs after taking into account losses already
covered by insurance, FEMA Public Assistance, FEMA Individual
Assistance, and SBA Business Disaster Loans (see Table 1). With only
$50 million allocated by this Notice, awards were made to the three
States with the greatest unmet needs--Tennessee, Rhode Island, and
Kentucky.
Table 1--Preliminary Estimates of Unmet Needs
----------------------------------------------------------------------------------------------------------------
State Housing Infrastructure Business Total
----------------------------------------------------------------------------------------------------------------
Tennessee............................... $363,412,407 $64,907,061 $108,349,875 $536,669,343
Rhode Island............................ 54,111,522 3,290,878 23,910,814 81,313,214
Kentucky................................ 60,379,939 3,540,307 10,899,431 74,819,677
[[Page 69111]]
Nebraska................................ 0 1,186,985 0 1,186,985
-----------------------------------------------------------------------
Total............................... 477,903,868 72,925,231 143,160,120 693,989,220
----------------------------------------------------------------------------------------------------------------
For Tennessee, Rhode Island, and Kentucky, the amount of unmet
needs substantially exceeded the amount available for allocation.
Therefore, today's Notice allocated $13 million to both Rhode Island
and Kentucky, and $24 million to Tennessee. These base allocations
were designed to address a part of the unmet needs existing in each
State.
The substate allocations were made to entitlement jurisdictions
within the State based on their proportional share of need within
the State, provided that no grant to a local government would be
less than $1 million.
Table 2--Formula Allocations
----------------------------------------------------------------------------------------------------------------
Disaster No. State Grantee Allocation
----------------------------------------------------------------------------------------------------------------
1912................................... Kentucky.................. State Government.......... $13,000,000
1894................................... Rhode Island.............. City of Cranston.......... 1,277,067
1894................................... Rhode Island.............. City of Warwick........... 2,787,697
1894................................... Rhode Island.............. State Government.......... 8,935,237
1909................................... Tennessee................. City of Memphis........... 2,031,645
1909................................... Tennessee................. Nashville-Davidson County. 10,731,831
1909................................... Tennessee................. Shelby County............. 1,212,788
1909................................... Tennessee................. State Government.......... 10,023,735
----------------
Total.............................. .......................... .......................... 50,000,000
----------------------------------------------------------------------------------------------------------------
Available Data
The Department identified available data to calculate ``relative
damage and anticipated assistance from Federal sources'' from the
following sources:
FEMA Individual Assistance program data on housing unit
damage;
SBA for management of its disaster assistance loan
program for housing repair and replacement;
SBA for management of its disaster assistance loan
program for business real estate repair and replacement as well as
content loss; and
FEMA estimated and obligated amounts under its Public
Assistance program, Federal and State cost share.
Calculating Unmet Housing Needs
The core data on housing damage for both the unmet housing needs
calculation and the concentrated damage were based on home
inspection data for FEMA's Individual Assistance program. For unmet
housing needs, the FEMA data were supplemented by Small Business
Administration data from its Disaster Loan Program. HUD calculated
``unmet housing needs'' as the number of housing units with unmet
needs times the estimated cost to repair those units less repair
funds already provided by FEMA, where:
The number of owner-occupied units with unmet needs
were units FEMA housing inspectors determined would require more
than $3,000 to become habitable AND were determined by FEMA to be
eligible for a repair or replacement grant (now up to $30,300,
earlier disasters in the year had a cap of $28,800). In general,
when HUD refers to units ``seriously damaged'', it is referring to
unit with a FEMA damage assessment of $3,000 or greater.
The number of rental units with unmet needs were units
FEMA housing inspectors determined received more than $1,000 in
personal property damage AND were occupied by households with an
income reported to FEMA of less than $20,000. The use of the $20,000
income cut-off for calculating rental unmet needs is intended to
capture the loss of affordable rental housing.
Each of the FEMA inspected units were categorized by
HUD into one of five categories:
[cir] Minor-Low: Less than $3,000 of FEMA inspected damage.
[cir] Minor-High: $3,000 to $7,999 of FEMA inspected damage.
[cir] Major-Low: $8,000 to $14,999 of FEMA inspected damage.
[cir] Major-High: $15,000 to $28,800 of FEMA inspected damage.
[cir] Severe: Greater than $28,800 of FEMA inspected damage or
determined destroyed.
(Please note that FEMA has recently raised its maximum grant
amount above $28,800. For this allocation, HUD continued to use the
$28,800 as the threshold to be consistent with past allocations.
FEMA no longer estimates the cost to repair rental properties, it
only estimates the cost to replace the personal property of renters.
Based on a comparison of personal property loss to real property
repair loss of homeowners, HUD has made a rough calculation that
personal property loss of renters of $7,500 or greater equates to
Severe real property damage; $3,500 to $7,499 equates to Major-High
damage; $2,000 to $3,499 equals Major-Low damage; $1,000 to $1,999
equals Minor-High damage; and less than $1,000 equals Minor-Low
damage.)
The average cost to fully repair a home for a specific
disaster within each of the damage categories noted above was
calculated using the average real property damage repair costs
determined by the Small Business Administration for its disaster
loan program for the subset of homes inspected by both SBA and FEMA.
Because SBA was inspecting for full repair costs, it is presumed to
reflect the full cost to repair the home, which is generally more
than the FEMA estimates on the cost to make the home habitable. If
fewer than 100 SBA inspections were made for homes within a FEMA
damage category, the estimated damage amount in the category for
that disaster has a cap applied at the 75th percentile of all
damaged units for that category for all disasters and has a floor
applied at the 25th percentile.
The base amount of unmet housing needs was then
increased by 20 percent to reflect an assumed premium associated
with the additional costs needed to run a repair program with CDBG
funding.
Calculating Infrastructure Needs
Unmet infrastructure need was calculated as the required match
portion for the public assistance program for the categories of
activities most likely to require CDBG funding above the Public
Assistance and State Match requirement. Those activities were
categories: C-Roads and Bridges; D-Water Control Facilities; E-
Public Buildings; F-Public Utilities; and G-Recreational-Other.
Categories A (Debris Removal) and B (Protective Measures) were
largely expended immediately after a disaster and reflect interim
recovery measures rather than the long-term recovery measures the
CDBG funds are generally used for. Not all disasters have the same
match requirements under Public Assistance. Each State 's match
unmet need infrastructure was calculated at the FEMA determined
match requirement.
[[Page 69112]]
Calculating Economic Revitalization Needs
Based on SBA disaster loans to businesses, HUD used the sum of
real property and real content loss of small businesses not
receiving an SBA disaster loan. This was adjusted upward by the
proportion of applications that were received for a disaster that
content and real property loss were not calculated because the
applicant had inadequate credit or income. For example, if a State
had 160 applications for assistance, 150 had calculated needs and 10
were denied in the pre-processing stage for not enough income or
poor credit, the estimated unmet need calculation would be increased
as (1 + 10/160) * calculated unmet real content loss.
Because applications denied for poor credit or income are the
most likely measure of requiring the type of assistance available
with CDBG recovery funds, the calculated unmet business needs for
each State were adjusted upwards by the proportion of total
application that were denied at the pre-process stage because of
poor credit or inability to show repayment ability.
Dated: November 3, 2010.
Mercedes M. M[aacute]rquez,
Assistant Secretary for Community Planning and Development.
[FR Doc. 2010-28421 Filed 11-9-10; 8:45 am]
BILLING CODE 4210-67-P