Notice2022-10969
Allocations for Community Development Block Grant Disaster Recovery and Implementation of the CDBG-DR Consolidated Waivers and Alternative Requirements Notice
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Published
May 24, 2022
Issuing agencies
Housing and Urban Development Department
Abstract
On March 22, 2022, HUD allocated nearly $3 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funds appropriated by the Disaster Relief Supplemental Appropriations Act, 2022 for major disasters occurring in 2020 and 2021. This Allocation Announcement Notice identifies grant requirements for these funds, including requirements in HUD's CDBG-DR Consolidated Notice ("Consolidated Notice") (Appendix B), and some amendments to the Consolidated Notice that apply to CDBG-DR grants for disasters occurring in 2020 and 2021, as identified herein. The Consolidated Notice, as amended by this Allocation Announcement Notice, includes waivers and alternative requirements, relevant regulatory requirements, the grant award process, criteria for action plan approval, and eligible disaster recovery activities. This notice also includes a modification to the February 3, 2022 notice (87 FR 6364) that announced CDBG-DR grants for disasters occurring in 2020.
Full Text
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<title>Federal Register, Volume 87 Issue 100 (Tuesday, May 24, 2022)</title>
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[Federal Register Volume 87, Number 100 (Tuesday, May 24, 2022)]
[Notices]
[Pages 31636-31667]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-10969]
[[Page 31635]]
Vol. 87
Tuesday,
No. 100
May 24, 2022
Part II
Department of Housing and Urban Development
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Allocations for Community Development Block Grant Disaster Recovery and
Implementation of the CDBG-DR Consolidated Waivers and Alternative
Requirements; Notice
Federal Register / Vol. 87 , No. 100 / Tuesday, May 24, 2022 /
Notices
[[Page 31636]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6326-N-01]
Allocations for Community Development Block Grant Disaster
Recovery and Implementation of the CDBG-DR Consolidated Waivers and
Alternative Requirements Notice
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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SUMMARY: On March 22, 2022, HUD allocated nearly $3 billion in
Community Development Block Grant Disaster Recovery (CDBG-DR) funds
appropriated by the Disaster Relief Supplemental Appropriations Act,
2022 for major disasters occurring in 2020 and 2021. This Allocation
Announcement Notice identifies grant requirements for these funds,
including requirements in HUD's CDBG-DR Consolidated Notice
(``Consolidated Notice'') (Appendix B), and some amendments to the
Consolidated Notice that apply to CDBG-DR grants for disasters
occurring in 2020 and 2021, as identified herein. The Consolidated
Notice, as amended by this Allocation Announcement Notice, includes
waivers and alternative requirements, relevant regulatory requirements,
the grant award process, criteria for action plan approval, and
eligible disaster recovery activities. This notice also includes a
modification to the February 3, 2022 notice (87 FR 6364) that announced
CDBG-DR grants for disasters occurring in 2020.
DATES: Applicability Date: May 31, 2022
FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Director,
Office of Block Grant Assistance, Department of Housing and Urban
Development, 451 7th Street SW, Room 10166, Washington, DC 20410,
telephone number 202-708-3587. Persons with hearing or speech
impairments may access this number via TTY by calling the Federal Relay
Service at 800-877-8339. Facsimile inquiries may be sent to Ms. Kome at
202-708-0033. (Except for the''800'' number, these telephone numbers
are not toll-free). Email inquiries may be sent to
<a href="/cdn-cgi/l/email-protection#94f0fde7f5e7e0f1e6cbe6f1f7fbe2f1e6edd4fce1f0baf3fbe2"><span class="__cf_email__" data-cfemail="3a5e53495b494e5f4865485f59554c5f48437a524f5e145d554c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Allocations
II. Use of Funds
A. Action Plan Process for New CDBG-DR Grantees Under the
Appropriations Act (Pub. L. 117-43) for Disasters Occurring in 2021
B. Substantial Action Plan Amendment Process for Existing
Grantees Under the Appropriations Act (Pub. L. 117-43) for Disasters
Occurring in 2020 and 2021
C. Allocations of CDBG-DR Funds for Smaller Grants
D. Modifications of the February 3, 2022 notice (87 FR 6364)
III. Overview of Grant Process
A. Requirements Related to Administrative Funds
IV. Applicable Rules, Statutes, Waivers, and Alternative
Requirements
A. Grant Administration
V. Duration of Funding
VI. Catalog of Federal Domestic Assistance
VII. Finding of No Significant Impact
Appendix A: Allocation Methodology
Appendix B: CDBG-DR Consolidated Notice
I. Allocations
The Disaster Relief Supplemental Appropriations Act, 2022 (Pub. L.
117-43) approved September 30, 2021 (the ``Appropriations Act'') makes
available $5,000,000,000 in Community Development Block Grant Disaster
Recovery (CDBG-DR) funds. These CDBG-DR funds are for necessary
expenses for activities authorized under title I of the Housing and
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCDA)
related to disaster relief, long-term recovery, restoration of
infrastructure and housing, economic revitalization, and mitigation in
the ``most impacted and distressed'' (MID) areas resulting from a
qualifying major disaster in 2020 or 2021. In October 2021, HUD
allocated $2,051,217,000 in CDBG-DR funds from the Appropriations Act
to assist in long-term recovery from disasters occurring in 2020. In
March 2022, HUD allocated an additional $722,688,000 in CDBG-DR funds
from the Appropriations Act for disasters occurring in 2020 and
$2,213,595,000 in CDBG-DR funds from the Appropriations Act for
disasters occurring in 2021. The Appropriations Act requires HUD to
include with any final allocation for the total estimate of unmet need
an additional amount of 15 percent of that estimate for mitigation
activities that reduce risk in the MID areas (see Tables 1 and 3).
The Appropriations Act provides that grants shall be awarded
directly to a state, local government, or Indian tribe at the
discretion of the Secretary.
Pursuant to the Appropriations Act, HUD has identified the MID
areas based on the best available data for all eligible affected areas.
A detailed explanation of HUD's allocation methodology is provided in
Appendix A of this notice. To comply with requirements that all funds
are expended in MID areas, Lake Charles and Baton Rouge, LA; Detroit
and Dearborn, MI; Philadelphia, PA; Nashville-Davidson, TN; and
Houston, Dallas, and Fort Worth, TX must use 100 percent of the total
funds allocated to address unmet disaster needs or mitigation
activities within the HUD-identified MID areas identified in the last
column in Table 4. All other grantees must use at least 80 percent of
their allocations to address unmet disaster needs or mitigation
activities in the HUD-identified MID areas, as identified in the last
column of Tables 2 and 4. These grantees may use the remaining 20
percent of their allocation to address unmet disaster needs or
mitigation activities in those areas that the grantee determines are
``most impacted and distressed'' within an area that received a
presidential major disaster declaration identified by the FEMA disaster
numbers listed in column two of Tables 1 and 3. However, these grantees
are not precluded from spending 100 percent of their allocation in the
HUD-identified MID areas if they choose to do so. Detailed requirements
around MID areas are provided in section II.A.3. of the Consolidated
Notice.
Based on review of the impacts from the eligible disasters, and
estimates of unmet need, HUD made the following allocations:
[[Page 31637]]
Table 1--Allocations for Unmet Needs and Mitigation Activities Under Public Law 117-43 for Disasters Occuring in 2020
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CDBG-DR CDBG-DR
Allocation for mitigation set- Allocation for mitigation set- Total Total
unmet needs under aside amounts unmet needs aside for allocated allocated
Year FEMA disaster No. State Grantee the Feb 3, 2022 under the Feb under this amounts under under this under all
Notice from 3, 2022 notice notice from this notice notice from notices from
Public Law 117-43 from Public Public Law 117- from Public Public Law 117- Public Law 117-
($) Law 117-43 ($) 43 ($) Law 117-43 ($) 43 ($) 43 ($)
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2020..................... 4563, 4573.............. Alabama............ State of Alabama... $271,071,000 $40,661,000 $164,800,000 $24,720,000 $189,520,000 $501,252,000
2020..................... 4558, 4569.............. California......... State of California 201,046,000 30,157,000 0 0 0 231,203,000
2020..................... 4564.................... Florida............ State of Florida... 98,427,000 14,764,000 64,515,000 9,677,000 74,192,000 187,383,000
2020..................... 4557.................... Iowa............... State of Iowa...... 49,513,000 7,427,000 544,000 82,000 626,000 57,566,000
2020..................... 4559, 4570.............. Louisiana.......... State of Louisiana. 521,853,000 78,278,000 391,423,000 58,713,000 450,136,000 1,050,267,000
2020..................... 4547.................... Michigan........... State of Michigan.. 52,085,000 7,813,000 0 0 0 59,898,000
2020..................... 4576.................... Mississippi........ State of 24,757,000 3,713,000 7,143,000 1,071,000 8,214,000 36,684,000
Mississippi.
2020..................... 4562.................... Oregon............. State of Oregon.... 367,205,000 55,081,000 0 0 0 422,286,000
2020..................... 4473, 4560.............. Puerto Rico........ Commonwealth of * 155,794,000 28,832,000 0 0 0 184,626,000
Puerto Rico.
2020..................... 4476, 4541.............. Tennessee.......... State of Tennessee. 37,165,000 5,575,000 0 0 0 42,740,000
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Totals............... ........................ ................... ................... 1,778,916,000 272,301,000 628,425,000 94,263,000 722,688,000 2,773,905,000
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* Puerto Rico was allocated $36,424,000 from Public Law 116-20 (see 86 FR 569) for unmet needs related to one of the qualifying disasters listed in the first column (FEMA disaster no. 4473).
The grantee's CDBG mitigation set-aside in the sixth column was calculated as 15 percent of the total estimate for unmet needs allocated for this disaster (which includes the portions of
unmet need funded by Public Law 116-20 and by Public Law 117-43). The grantee's final allocation in the tenth column represents the total estimate for unmet needs for Puerto Rico's
qualifying disasters under Public Law 117-43, including the additional amount for the CDBG mitigation set-aside.
[[Page 31638]]
Table 2--Most Impacted and Distressed Areas for Disasters Occuring in 2020
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Updated minimum amount
under all notices from
Public Law 117-43 that
must be expended in the Updated ``Most Impacted and
Grantee HUD-identified ``most Distressed'' areas
impacted and
distressed'' areas in
column 3
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State of Alabama............................... $401,001,600 Baldwin, Mobile, and Escambia
Counties; 36545 (Clarke County).
State of California............................ 184,962,400 Butte, Napa, Santa Cruz, Los Angeles,
and Siskiyou Counties; 95448 (Sonoma
County), 95688 (Solano County), 93602
(Fresno County), 93664 (Fresno
County), 94558 (Napa County), 94574
(Napa County), 95404 (Sonoma County),
95409 (Sonoma County), and 96047
(Shasta County).
State of Florida............................... 149,906,400 Escambia and Santa Rosa Counties.
State of Iowa.................................. 46,052,800 Linn County.
State of Louisiana............................. 840,213,600 Allen, Beauregard, Caddo, Calcasieu,
Cameron, Jefferson Davis, Lafayette,
Natchitoches, Ouachita, and Rapides
Parishes; 70510 (Vermilion Parish);
70517 (St. Martin Parish), 70526
(Acadia Parish), 70570 (St. Landry
Parish), 71446 (Vernon Parish), and
70578 (Acadia Parish).
State of Michigan.............................. 47,918,400 Midland and Saginaw Counties; 48612
(Gladwin County).
State of Mississippi........................... 29,347,200 Harrison County; 39563 (Jackson
County).
State of Oregon................................ 337,828,800 Clackamas, Douglas, Jackson, Lane,
Lincoln, and Marion Counties; 97358
(Linn County).
Commonwealth of Puerto Rico.................... 147,700,800 Guanica, Ponce, and Yauco; 00624
(Penuelas Municipio), 00656
(Guayanilla Municipio), 00667 (Lajas
Municipio), and 00680 (Mayaguez
Municipio).
State of Tennessee............................. 34,192,000 37208 (Davidson County), 38501 (Putnam
County), and 37421 (Hamilton County).
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Table 3--Allocations for Unmet Needs and Mitigation Activities Under Public Law 117-43 for Disasters Occuring in 2021
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Allocation for Total
unmet needs CDBG-DR allocated
under this mitigation set- under this
Year FEMA disaster No. State Grantee notice from aside amounts notice from
Public Law 117- from Public Public Law 117-
43 ($) Law 117-43 ($) 43 ($)
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2021....................... 4610....................... California............ State of California... $12,835,000 $1,926,000 $14,761,000
2021....................... 4634....................... Colorado.............. State of Colorado..... 6,448,000 967,000 7,415,000
2021....................... 4595, 4630................. Kentucky.............. State of Kentucky..... 65,176,000 9,777,000 74,953,000
2021....................... 4606....................... Louisiana............. Lake Charles.......... 9,370,000 1,406,000 10,776,000
2021....................... 4606....................... Louisiana............. Baton Rouge........... 4,042,000 606,000 4,648,000
2021....................... 4611, 4606................. Louisiana............. State of Louisiana.... 1,106,388,000 165,958,000 1,272,346,000
2021....................... 4607....................... Michigan.............. Detroit............... 50,079,000 7,512,000 57,591,000
2021....................... 4607....................... Michigan.............. Dearborn.............. 14,202,000 2,130,000 16,332,000
2021....................... 4607....................... Michigan.............. State of Michigan..... 10,463,000 1,570,000 12,033,000
2021....................... 4626....................... Mississippi........... State of Mississippi.. 7,310,000 1,096,000 8,406,000
2021....................... 4617....................... North Carolina........ State of North 6,935,000 1,040,000 7,975,000
Carolina.
2021....................... 4614....................... New Jersey............ State of New Jersey... 198,562,000 29,784,000 228,346,000
2021....................... 4615....................... New York.............. New York City......... 163,455,000 24,518,000 187,973,000
2021....................... 4615....................... New York.............. State of New York..... 35,880,000 5,382,000 41,262,000
2021....................... 4618....................... Pennsylvania.......... Philadelphia.......... 85,827,000 12,874,000 98,701,000
2021....................... 4618....................... Pennsylvania.......... State of Pennsylvania. 20,132,000 3,020,000 23,152,000
2021....................... 4601....................... Tennessee............. Nashville-Davidson.... 4,479,000 672,000 5,151,000
2021....................... 4609....................... Tennessee............. State of Tennessee.... 22,089,000 3,314,000 25,403,000
2021....................... 4586....................... Texas................. Houston............... 26,344,000 3,952,000 30,296,000
2021....................... 4586....................... Texas................. Dallas................ 21,246,000 3,187,000 24,433,000
2021....................... 4586....................... Texas................. Fort Worth............ 14,447,000 2,167,000 16,614,000
2021....................... 4586....................... Texas................. State of Texas........ 22,945,000 3,442,000 26,387,000
2021....................... 4635....................... Washington............ State of Washington... 16,210,000 2,431,000 18,641,000
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Totals................. ........................... ...................... ...................... 1,924,864,000 288,731,000 2,213,595,000
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[[Page 31639]]
Table 4--Most Impacted and Distressed Areas for Disasters Occuring in 2021
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Minimum amount from
Public Law 117-43 that
must be expended in the
Grantee HUD-identified ``most ``Most Impacted and Distressed'' areas
impacted and
distressed'' areas
listed in column 3
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State of California............................ $11,808,800 Plumas County.
State of Colorado.............................. 5,932,000 80027 (Boulder County).
State of Kentucky.............................. 59,962,400 Graves and Hopkins Counties; 41339
(Breathitt County) and 42101 (Warren
County).
Lake Charles, LA............................... 10,776,000 Lake Charles, LA.
Baton Rouge, LA................................ 4,648,000 Baton Rouge, LA.
State of Louisiana............................. 1,017,876,800 Ascension, Assumption, Calcasieu, East
Baton Rouge, Jefferson, Lafourche,
Livingston, Orleans, Plaquemines, St.
Bernard, St. Charles, St. Helena, St.
James, St. John the Baptist, St.
Mary, St. Tammany, Tangipahoa,
Terrebonne, and Washington Parishes;
70764 & 70788 (Iberville Parish) and
70767 (West Baton Rouge Parish).
Detroit, MI.................................... 57,591,000 Detroit, MI.
Dearborn, MI................................... 16,332,000 Dearborn, MI.
State of Michigan.............................. 9,626,400 Wayne County.
State of Mississippi........................... 6,724,800 39563 (Jackson County).
State of North Carolina........................ 6,380,000 28716 (Haywood County).
State of New Jersey............................ 182,676,800 Bergen, Essex, Hudson, Middlesex,
Passaic, Somerset, and Union
Counties.
New York City, NY.............................. 150,378,400 Bronx, Queens, Kings, and Richmond
County.
State of New York.............................. 33,009,600 Westchester County.
Philadelphia, PA............................... 98,701,000 Philadelphia, PA.
State of Pennsylvania.......................... 18,521,600 Delaware and Montgomery Counties.
Nashville-Davidson, TN......................... 5,151,000 Nashville-Davidson, TN.
State of Tennessee............................. 20,322,400 Humphreys County.
Houston, TX.................................... 30,296,000 Houston, TX.
Dallas, TX..................................... 24,433,000 Dallas, TX.
Fort Worth, TX................................. 16,614,000 Fort Worth, TX.
State of Texas................................. 21,109,600 Dallas, Harris, and Tarrant Counties.
State of Washington............................ 14,912,800 98295 (Whatcom County).
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II. Use of Funds
This Allocation Announcement Notice outlines requirements that
apply to grantees receiving funds under this notice. Funds for 2021
disasters announced in this notice are subject to the requirements of
this Allocation Announcement Notice and the Consolidated Notice,
included as Appendix B, as amended. Grantees that receive funds for
2020 disasters under this notice and the February 3, 2022 notice (87 FR
6364) are subject to the requirements of this Allocation Announcement
Notice, the February 3, 2022 notice (87 FR 6364), as amended in section
II.D. of this notice, and the Consolidated Notice, included as Appendix
B, as amended. Sections III.A.1., III.A.1.a., and III.A.1.b. of this
Allocation Announcement Notice includes the instructions for a grantee
submitting an action plan for program administrative costs and will
replace the alternative requirement in the Consolidated Notice at
III.C.1. for purposes of accessing funds for program administrative
costs prior to the Secretary's certification.
To comply with the statutory requirement in the Appropriations Act,
grantees shall not use CDBG-DR funds for activities reimbursable by or
for which funds are made available by the Federal Emergency Management
Agency (FEMA) or the U.S. Army Corps of Engineers (USACE). Grantees
must verify whether FEMA or USACE funds are available prior to awarding
CDBG-DR funds to specific activities or beneficiaries. Grantees may use
CDBG-DR funds as the non-Federal match as described in section II.C.3.
of the Consolidated Notice.
II.A. Action Plan Process for New CDBG-DR Grantees Under the
Appropriations Act (Pub. L. 117-43) for Disasters Occurring in 2021
This section applies to CDBG-DR grantees that received allocations
announced in this notice for disasters occurring in 2021 and that did
not receive allocations announced in the February 3, 2022 notice (State
of Colorado; State of Kentucky; Lake Charles, LA; Baton Rouge, LA;
Detroit, MI; Dearborn, MI; State of North Carolina; State of New
Jersey; New York City, NY; State of New York; Philadelphia, PA; State
of Pennsylvania; Nashville-Davidson, TN; Houston, TX; Dallas, TX; Fort
Worth, TX; State of Texas; and the State of Washington).
The Appropriations Act requires that prior to the obligation of
CDBG-DR funds by the Secretary, a grantee shall submit a plan to HUD
for approval detailing the use of funds. The plan must include the
criteria for eligibility, and how the use of these funds will address
long-term recovery and restoration of infrastructure and housing,
economic revitalization, and mitigation in the MID areas. This notice
requires grantees to submit an action plan that addresses unmet
recovery needs and mitigation activities related to the disasters
identified in Table 3 for disasters occurring in 2021. Therefore, the
action plan submitted in response to this notice must describe uses and
activities that: (1) Are authorized under title I of the HCDA or
allowed by a waiver or alternative requirement; and (2) respond to
disaster-related impacts to infrastructure, housing, economic
revitalization, and mitigation in the MID areas. Requirements related
to action plans are provided in section III.C. of the Consolidated
Notice.
In accordance with the Appropriations Act, grantees must spend an
amount equal to 15 percent of their unmet need allocations, as outlined
in Table 3 for disasters occurring in 2021, for mitigation
[[Page 31640]]
activities as described in section IV.A.2. of this notice. Grantees
must also incorporate mitigation measures into their recovery
activities as required under section II.A.2. in the Consolidated
Notice. Grantees must conduct an assessment of community impacts and
unmet needs to inform the plan and guide the development and
prioritization of planned recovery activities, pursuant to section
III.C.1.a. of the Consolidated Notice. Additionally, with regard to the
funds provided for mitigation activities, grantees must also prepare a
mitigation needs assessment to inform their mitigation activities, as
described in section IV.A.2.a. of this notice.
II.B. Substantial Action Plan Amendment Process for Existing Grantees
Under the Appropriations Act (Pub. L. 117-43) for Disasters Occurring
in 2020 and 2021
This section applies to CDBG-DR grantees that received allocations
announced in this notice for disasters occurring in 2020 or 2021 and
also allocations announced in the February 3, 2022 notice (State of
Alabama; State of California; State of Florida; State of Iowa; State of
Louisiana; State of Michigan; State of Mississippi; and the State of
Tennessee).
Grantees identified in this section may submit a substantial
amendment to the Public Action Plan submitted in response to the
February 3, 2022 notice or may wait to submit one Public Action Plan
that includes all allocations announced in the February 3, 2022 notice
and this notice. Instructions and deadlines for both options are
covered in the following paragraph. This combined administrative
approach should ease grantee burden. When a Public Action Plan
describes the use of CDBG-DR allocations for disasters occurring in
both 2020 and 2021, HUD will make two grants, one for 2020 disasters
and one for 2021 disasters, and each grant will have separate purposes
and financial controls.
As of the applicability date of this notice, if the grantee has not
submitted an action plan to HUD in response to the February 3, 2022
notice, the grantee may include the previous allocation and this
allocation in the same Public Action Plan submission to cover
allocations for disasters occurring in 2020 and 2021. If a grantee
chooses to include both the previous allocation announced in the
February 3, 2022 notice and the allocation announced in this notice in
the same Public Action Plan submission, the grantee will follow the
required submission deadlines based on the applicability date of this
notice. The grantee must inform its HUD grant manager or CPD
Representative within 30 days of the applicability date of this notice
if it plans to exercise this option and submit one action plan that
includes both allocations. Grantees will follow the requirements in
section III.C.1. of the Consolidated Notice for that submission, which
requires grantees to use the Public Action Plan in HUD's Disaster
Recovery Grant Reporting (DRGR) system to submit their action plan and
submit within 120 days of the applicability date of this notice.
If a grantee does not exercise the option to submit one action plan
and instead submits a substantial amendment to its action plan for
funds in the February 3, 2022 notice to include the allocations
announced in this notice, the substantial amendment must be submitted
no later than 120 days after the initial action plan is approved, in
whole or in part, by HUD, or not later than 120 days after the
applicability date of this notice, whichever is later. The substantial
amendment must include the additional allocation of funds and address
the requirements of this notice.
Paragraph III.A.1.b. of the Consolidated Notice outlines when a
grantee can or cannot rely on its prior submissions to meet the
Financial Management and Grant Compliance Certification Requirements in
the Consolidated Notice. The Consolidated Notice allows a grantee to
rely on prior submissions ``unless it has been more than three years
since the executed grant agreement for the original CDBG-DR grant or a
subsequent grant is equal to or greater than ten times the amount of
the original CDBG-DR grant.'' Additionally, paragraph III.A.2.b. of the
Consolidated Notice provides the same criteria for when a grantee can
or cannot rely on its previously submitted implementation plan. The
Consolidated Notice allows a grantee to rely on a previously submitted
implementation plan ``unless it has been more than three years since
the executed grant agreement for the original CDBG-DR grant or the
subsequent grant is equal to or greater than ten times the amount of
its original CDBG-DR grant.'' No grantee receiving an allocation
announcement under both this notice and the February 3, 2022 notice
meets the three year or grant threshold criteria noted above.
Therefore, the grantees covered by this section (State of Alabama;
State of California; State of Florida; State of Iowa; State of
Louisiana; State of Michigan; State of Mississippi; and the State of
Tennessee) may rely on their prior submissions provided in response to
the Financial Management and Grant Compliance Certification
Requirements and the implementation plan in the Consolidated Notice.
HUD reminds grantees that it will continue to monitor all of the
grantee's submissions and updates made to policies and procedures and
its capacity assessment during the normal course of business. The
grantee must notify HUD of any substantial changes made to these
submissions.
In accordance with the Appropriations Act, grantees must spend an
amount that is equal to 15 percent of their unmet need allocation, as
outlined in Tables 1 and 3, for mitigation activities as described in
section IV.A.2. of this notice. Grantees must also incorporate
mitigation measures into their recovery activities as required under
section II.A.2. in the Consolidated Notice. Grantees must conduct or
update the assessment of community impacts and unmet needs to inform
the plan or substantial amendment and guide the development and
prioritization of planned recovery activities, pursuant to section
III.C.1.a. of the Consolidated Notice. Additionally, with regard to the
funds provided for mitigation activities, grantees must also prepare or
update a mitigation needs assessment to inform their mitigation
activities, as described in section IV.A.2.a. of this notice.
II.C. Allocations of CDBG-DR Funds for Smaller Grants
Paragraph III.C.1.b. of the Consolidated Notice requires that CDBG-
DR action plans ``demonstrate a reasonably proportionate allocation of
resources relative to areas and categories (i.e., housing, economic
revitalization, and infrastructure) of greatest needs identified in the
grantee's impact and unmet needs assessment or provide an acceptable
justification for a disproportional allocation.'' Additionally,
paragraph III.C.1.g. of the Consolidated Notice requires grantees to
``provide a budget for the full amount of the allocation that is
reasonably proportionate to its unmet needs (or provide an acceptable
justification for disproportional allocation) and is consistent with
the requirements to integrate hazard mitigation measures into all its
programs and projects.''
HUD recognizes that grantees receiving a relatively small
allocation of funds for 2021 disasters in this notice may most
effectively advance recovery by more narrowly targeting these limited
recovery and mitigation resources. Accordingly, for grantees receiving
an allocation of less than $20 million for 2021 disaster(s) in this
[[Page 31641]]
notice, HUD will consider the small size of the grant and HUD's
allocation methodology as acceptable justification for a grantee to
propose a disproportional allocation when the grantee is allocating
funds to address unmet affordable rental housing needs caused by or
exacerbated by the disaster(s). Grantees exercising this option must
continue to comply with the applicable requirements of this notice and
the Consolidated Notice, including the CDBG-DR mitigation set-aside
requirement in section IV.A.4. of this notice.
II.D. Modifications of the February 3, 2022 Notice (87 FR 6364)
This section of the notice applies to CDBG-DR grantees announced in
the February 3, 2022 notice (87 FR 6364) that received funding for a
disaster occurring in 2020. HUD is modifying the February 3, 2022
notice to be clear that the Appropriations Act requires HUD to include
with any final allocation for the total estimate of unmet need an
additional amount of 15 percent of that estimate for mitigation
activities and to include a technical correction to modify a waiver
citation.
II.D.1. HUD is deleting and replacing the third paragraph of
section II of the February 3, 2022 notice with the following:
In accordance with the Appropriations Act, grantees must spend
an amount equal to 15 percent of their unmet needs allocations, as
outlined in Table 1, for mitigation activities as described in
section IV.A.2. of this notice. Grantees must also incorporate
mitigation measures into its recovery activities as required under
section II.A.2. in the Consolidated Notice. Grantees must conduct an
assessment of community impacts and unmet needs to inform the plan
and guide the development and prioritization of planned recovery
activities, pursuant to section III.C.1.a. of the Consolidated
Notice. Additionally, with regard to the funds provided for
mitigation activities, grantees must also prepare a mitigation needs
assessment to inform their mitigation activities, as described in
section IV.A.2.a. of this notice.
II.D.2. HUD is deleting and replacing the third sentence in
paragraph III.A.1.b. of the February 3, 2022 notice with the following:
Additionally, HUD is waiving section 104 of the HCDA ((42 U.S.C.
5304, section 106 of the HCDA (42 U.S.C. 5306), section 210 of the
Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970 (URA) (42 U.S.C. 4630), section 305 of the URA (42
U.S.C. 4655), and regulations at 24 CFR 91.225(a)(2), (6), and (7),
91.225(b)(7), 91.325(a)(2), (6), and (7) and 24 CFR 42.325 only to
the extent necessary to allow grantees to receive a portion of their
allocation as a grant for program administrative costs before
submitting other statutorily required certifications.
III. Overview of Grant Process
III.A. Requirements Related to Administrative Funds
III.A.1. Action plan submittal for program administrative costs.
The Appropriations Act allows grantees receiving an award under this
notice to access funding for program administrative costs prior to the
Secretary's certification of financial controls and procurement
processes, and adequate procedures for proper grant management. To
implement this authority, the following alternative requirement will
replace the alternative requirement in the Consolidated Notice at
III.C.1.
If a grantee chooses to access funds for program administrative
costs prior to the Secretary's certification, it must first prepare an
action plan describing its use of funds for program administrative
costs, subject to the five percent cap on the use of grant funds for
such costs. Instead of following requirements in section III.C.1. of
the Consolidated Notice, which require grantees to use the Public
Action Plan in HUD's DRGR system to submit their action plans, grantees
will follow a different process to access funds for program
administrative costs prior to the Secretary's certification.
As part of the process of accessing funds for these costs, grantees
must submit to HUD an action plan describing their use of funds for
program administrative costs. The action plan will be developed outside
of DRGR and must include all proposed uses of funds for program
administrative costs incurred prior to a final action plan being
submitted and approved. The action plan for program administrative
costs must also include the criteria for eligibility and the amount to
be budgeted for that activity. If a grantee chooses to submit the
action plan for program administrative costs, the grantee should
calculate its need to cover program administrative costs over the life
of the grant and consider how much of its available program
administrative funds may be reasonably budgeted at this very early
stage of its grant lifecycle.
III.A.1.a. Publication of the action plan for program
administrative costs and opportunity for public comment. The grantee
must publish the proposed action plan for program administrative costs,
and substantial amendments to the plan, for public comment. To permit a
more streamlined process and ensure that grants for program
administrative costs are awarded in a timely manner in order to allow
grantees to more rapidly design and launch recovery activities,
provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR
570.486, 24 CFR 1003.604, 24 CFR 91.105(b) through (d), and 24 CFR
91.115(b) through (d), with respect to citizen participation
requirements, are waived and replaced by the alternative requirements
in section III.A.1. that apply only to action plans for program
administrative costs and substantial amendments to these plans.
Additionally, for these action plans only, grantees are not subject to
the Consolidated Notice action plan requirements in sections
III.B.2.i., III.C.2., III.C.3., III.C.6., and III.D.1.a.-c.
The manner of publication of the action plan for program
administrative costs must include prominent posting on the grantee's
official disaster recovery website and must afford residents, affected
local governments, and other interested parties a reasonable
opportunity to review the contents of the plan or substantial
amendment. Subsequent to publication of the action plan or substantial
amendment to that plan, the grantee must provide a reasonable time
frame (no less than seven days) and multiple methods (including
electronic submission) for receiving comments on the action plan or
substantial amendment for program administrative costs. At a minimum,
the topic of disaster recovery on the grantee's website, including the
posted action plan or substantial amendment, must be navigable by
interested parties from the grantee homepage and must link to the
disaster recovery website as required by section III.D.1.e. of the
Consolidated Notice. The grantee's records must demonstrate that it has
notified affected parties through electronic mailings, press releases,
statements by public officials, media advertisements, public service
announcements, and/or contacts with neighborhood organizations.
Grantees are not required to hold any public hearings on the proposed
action plan or substantial amendment for program administrative costs.
The grantee must consider all oral and written comments on the
action plan or any substantial amendment. Any updates or changes made
to the action plan in response to public comments should be clearly
identified in the action plan. A summary of comments on the plan or
amendment, and the grantee's response to each, must be included with
the action plan or substantial amendment. Grantee responses shall
address the substance of the comment rather than merely
[[Page 31642]]
acknowledge that the comment was received.
After the grantee responds to public comments, it will then submit
its action plan or substantial amendment for program administrative
costs (which includes Standard Form 424 (SF-424)) to HUD for approval.
There is no due date for this plan as it may be submitted any time
prior to the grantee's Public Action Plan. HUD will review the action
plan or substantial amendment for program administrative costs within
15 days from date of receipt and determine whether to approve the
action plan or substantial amendment to that plan per the criteria
identified in this notice.
III.A.1.b. Certifications waiver and alternative requirement.
Sections 104(b)(4), (c), and (m) of the HCDA (42 U.S.C. 5304(b)(4), (c)
& (m)), sections 106(d)(2)(C) & (D) of the HCDA (42 U.S.C.
5306(d)(2)(C) & (D)), and section 106 of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12706), and regulations at 24 CFR
91.225 and 91.325 are waived and replaced with the following
alternative. Each grantee choosing to submit an action plan for program
administrative costs must make the following certifications listed in
section III.F.7. of the Consolidated Notice and include them with the
submission of this plan: Paragraphs b., c., d., g., i., j., k., l., p.,
and q. Additionally, HUD is waiving section 104 of the HCDA ((42 U.S.C.
5304, section 106 of the HCDA (42 U.S.C. 5306), section 210 of the
Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970 (URA) (42 U.S.C. 4630), section 305 of the URA (42 U.S.C.
4655), and regulations at 24 CFR 91.225(a)(2), (6), and (7),
91.225(b)(7), 91.325(a)(2), (6), and (7) and 24 CFR 42.325 only to the
extent necessary to allow grantees to receive a portion of their
allocation as a grant for program administrative costs before
submitting other statutorily required certifications. Each grantee must
make all certifications included in section III.F.7. of the
Consolidated Notice and submit them to HUD when it submits its Public
Action Plan in DRGR described in III.C.1.
III.A.1.c. Submission of the action plan for program administrative
costs in DRGR. After HUD's approval of the action plan for program
administrative costs, the grantee enters the activities from its
approved action plan into the DRGR system if it has not previously done
so and submits its DRGR action plan to HUD (funds can be drawn from the
line of credit only for activities that are established in the DRGR
system). HUD will provide additional guidance (``Fact Sheet'') with
screenshots and step-by-step instructions describing the submittal
process for this DRGR action plan for program administrative costs.
This process will allow a grantee to access funds for program
administrative costs while the grantee begins developing its Public
Action Plan in DRGR as provided in section III.C.1. of the Consolidated
Notice.
If a grantee receiving funds in both this notice and the February
3, 2022 notice has already received approval of the action plan for
program administrative costs and received approval of the DRGR action
plan for program administrative costs, the grantee may submit an
amendment to HUD of its action plan for program administrative costs to
budget funds for additional administrative costs. Grantees may do this
by using the template provided on HUD's website here: <a href="https://www.hud.gov/program_offices/comm_planning/cdbg-dr/grantees">https://www.hud.gov/program_offices/comm_planning/cdbg-dr/grantees</a>. After HUD's
approval of the amended action plan for program administrative costs
and issuance of a grant agreement, the grantee will amend the
previously approved DRGR action plan for program administrative costs
to access or draw funds.
III.A.1.d. Incorporation of the action plan for program
administrative costs into the Public Action Plan. The grantee shall
describe the use of all grant funds for administrative costs in the
Public Action Plan required by section III.C.1. Use of grant funds for
administrative costs before approval of the Public Action Plan must be
consistent with the action plan for administrative costs. Once the
Public Action Plan is approved, the use of all grant funds must be
consistent with the Public Action Plan. Upon HUD's approval of the
Public Action Plan, the action plan for administrative costs shall only
be relevant to administrative costs charged to the grant before the
date of approval of the Public Action Plan.
III.A.2. Use of administrative funds across multiple grants. The
Appropriations Act authorizes special treatment of grant administrative
funds. Grantees that are receiving awards under this notice, and that
have received CDBG-DR or CDBG-MIT grants in the past or in any future
acts, may use eligible administrative funds (up to five percent of each
grant award plus up to five percent of program income generated by the
grant) appropriated by these acts for the cost of administering any
CDBG-DR or CDBG-MIT grant without regard to the particular disaster
appropriation from which such funds originated. If the grantee chooses
to exercise this authority, the grantee must have appropriate financial
controls to comply with the requirement that the amount of grant
administration expenditures for each CDBG-DR or CDBG-MIT grant will not
exceed five percent of the total grant award for each grant (plus five
percent of program income generated by the grant), review and modify
its financial management policies and procedures regarding the tracking
and accounting of administration costs, as necessary, and address the
adoption of this treatment of administrative costs in the applicable
portions of its Financial Management and Grant Compliance submissions
as referenced in section III.A.1. of the Consolidated Notice. Grantees
are reminded that all uses of funds for program administrative
activities must qualify as an eligible administration cost.
IV. Applicable Rules, Statutes, Waivers, and Alternative Requirements
The 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, except for
requirements related to fair housing, nondiscrimination, labor
standards, and the environment. This section of the notice and the
Consolidated Notice describe rules, statutes, waivers, and alternative
requirements that apply to allocations under this notice. For each
waiver and alternative requirement in this notice and incorporated
through the Consolidated Notice, the Secretary has determined that good
cause exists, and the waiver or alternative requirement is not
inconsistent with the overall purpose of title I of the HCDA. The
waivers and alternative requirements provide flexibility in program
design and implementation to support full and swift recovery following
eligible disasters, while ensuring that statutory requirements are met.
Grantees may request additional waivers and alternative
requirements from the Department as needed to address specific needs
related to their recovery and mitigation activities. Grantees should
work with the assigned CPD representative to request any additional
waivers or alternative requirements from HUD headquarters. Waivers and
alternative requirements described below apply to all grantees under
this notice. Under the requirements of the Appropriations Act, waivers
and alternative requirements are effective five days after they are
published in the Federal Register or on the website of the Department.
[[Page 31643]]
IV.A. Grant Administration
IV.A.1. Duplication of Benefits (DOB). HUD published a Federal
Register notice on June 20, 2019, titled, ``Updates to Duplication of
Benefits Requirements Under the Stafford Act for Community Development
Block Grant (CDBG) Disaster Recovery Grantees'' (84 FR 28836) (``2019
DOB Notice''), which revised the DOB requirements that apply to CDBG-DR
grants for disasters declared between January 1, 2015 and December 31,
2021. To comply with the Stafford Act and the Appropriations Act,
grantees must prevent the duplication of benefits and must have
adequate policies and procedures for this purpose. Accordingly,
grantees that received funds for disasters occurring in 2020 and 2021
must follow all requirements in the 2019 DOB Notice and the
requirements located in section IV.A. of the Consolidated Notice.
IV.A.2. CDBG-DR mitigation set-aside. The Appropriations Act
requires HUD to include in any allocation of CDBG-DR funds for unmet
needs an additional amount of 15 percent for mitigation activities
(``CDBG-DR mitigation set-aside''). Grantees should consult Tables 1
and 3 for the amount allocated specifically for the CDBG-DR mitigation
set-aside. For purposes of grants under this notice, mitigation
activities are defined as those activities that increase resilience to
disasters and reduce or eliminate the long-term risk of loss of life,
injury, damage to and loss of property, and suffering and hardship, by
lessening the impact of future disasters.
In the grantee's action plan, it must identify how the proposed use
of the CDBG-DR mitigation set-aside will: (1) Meet the definition of
mitigation activities; (2) address the current and future risks as
identified in the grantee's mitigation needs assessment in the MID
areas; (3) be CDBG-eligible activities under title I of the HCDA or
otherwise eligible pursuant to a waiver or alternative requirement; and
(4) meet a national objective.
Unlike recovery activities where grantees must demonstrate that
their activities ``tie-back'' to the specific disaster and address a
specific unmet recovery need for which the CDBG-DR funds were
appropriated, activities funded by the CDBG-DR mitigation set-aside do
not require such a ``tie-back'' to the specific qualified disaster that
has served as the basis for the grantee's allocation. Instead, grantees
must demonstrate that activities funded by the CDBG-DR mitigation set-
aside meet the provisions included as (1) through (4) in the prior
paragraph, to be eligible. Grantees must report activities as a ``MIT''
activity type in DRGR so that HUD and the public can determine that the
grantee has met the expenditure requirement for the CDBG-DR mitigation
set-aside.
Grantees may also meet the requirement of the CDBG-DR mitigation
set-aside by including eligible recovery activities that both address
the impacts of the disaster (i.e., have ``tie-back'' to the specific
qualified disaster) and incorporate mitigation measures into the
recovery activities. In section II.A.2.b. of the Consolidated Notice,
grantees are instructed to incorporate mitigation measures when
carrying out activities to construct, reconstruct, or rehabilitate
residential or non-residential structures with CDBG-DR funds as part of
activities eligible under 42 U.S.C. 5305(a) (including activities
authorized by waiver and alternative requirement). Additionally, in
section II.A.2.c. of the Consolidated Notice, grantees are required to
establish resilience performance metrics for those activities.
If grantees wish to count those activities towards the grantee's
CDBG-DR mitigation set-aside, grantees must: (1.) Document how those
activities and the incorporated mitigation measures will meet the
definition of mitigation, as provided above; and (2.) Report those
activities as a ``MIT'' activity type in DRGR so they are easily
tracked.
IV.A.2.a. Mitigation needs assessment. In addition to the
requirements prescribed in section III.C.1.a of the Consolidated Notice
that grantees must develop an impact and unmet needs assessment,
grantees receiving an award under this Allocation Announcement Notice
must also include in their action plan a mitigation needs assessment to
inform the activities funded by the CDBG-DR mitigation set-aside. Each
grantee must assess the characteristics and impacts of current and
future hazards identified through its recovery from the qualified
disaster and any other Presidentially declared disaster. Mitigation
solutions designed to be resilient only for threats and hazards related
to a prior disaster can leave a community vulnerable to negative
effects from future extreme events related to other threats or hazards.
When risks are identified among other vulnerabilities during the
framing and design of mitigation projects, implementation of those
projects can enhance protection and save lives, maximize the utility of
scarce resources, and benefit the community long after the projects are
complete.
Accordingly, each grantee receiving a CDBG-DR allocation under this
notice must conduct a risk-based assessment to inform the use of its
CDBG-DR mitigation set-aside considering identified current and future
hazards. Grantees must assess their mitigation needs in a manner that
effectively addresses risks to indispensable services that enable
continuous operation of critical business and government functions and
are critical to human health and safety or economic security. In the
mitigation needs assessment, each grantee must cite data sources and
must, at a minimum, use the risks identified in the current FEMA-
approved state or local Hazard Mitigation Plan (HMP). If a jurisdiction
is currently updating an expired HMP, the grantee's agency
administering the CDBG-DR funds must consult with the agency
administering the HMP update to identify the risks that will be
included in the assessment. Mitigation needs evolve over time and
grantees are to amend the mitigation needs assessment and action plan
as conditions change, additional mitigation needs are identified, and
additional resources become available.
IV.A.2.b. Connection of programs and projects to the mitigation
needs assessment. Grantees are required by section III.C.1.b. of the
Consolidated Notice to describe the connection between identified unmet
needs and the allocation of CDBG-DR resources. In a similar fashion,
the plan must provide a clear connection between a grantee's mitigation
needs assessment and its proposed activities in the MID areas funded by
the CDBG-DR mitigation set-aside (or outside in connection to the MID
areas as described in section II.A.3. of the Consolidated Notice). To
maximize the impact of all available funds, grantees are encouraged to
coordinate and align these funds with other projects funded with CDBG-
DR and CDBG-MIT funds, as well as other disaster recovery activities
funded by FEMA, USACE, the U.S. Forest Service, and other agencies as
appropriate. Grantees are encouraged to fund planning activities that
complement FEMA's Building Resilient Infrastructure and Communities
(BRIC) program and to upgrade mapping, data, and other capabilities to
better understand evolving disaster risks.
IV.A.3. Interchangeability of disaster funds. The Appropriations
Act gives the Secretary authority to authorize grantees that receive an
award in this Allocation Announcement Notice and under prior or future
appropriations to use those funds interchangeably and without
limitation for the same activities related to unmet recovery needs in
the MID areas resulting from a major disaster in the Appropriations Act
or in prior or future appropriation acts, when the MID
[[Page 31644]]
areas overlap and when the use of the funds will address unmet recovery
needs of major disasters in the Appropriations Act or in any prior or
future appropriation acts.
Based on this authority, the Secretary authorizes grantees
receiving a CDBG-DR grant under the Appropriations Act and prior or
future appropriation acts for activities authorized under title I of
the HCDA for a specific qualifying disaster(s) to use these funds
interchangeably and without limitation for the same activities in MID
areas resulting from a major disaster in prior or future appropriation
acts, as long as the MID areas overlap and the activities address unmet
needs of both disasters.
Grantees are reminded that expanding the eligible beneficiaries of
activities in an action plan funded by any prior or future acts to
include those impacted by the specific qualifying disaster(s) in this
notice requires the submission of a substantial action plan amendment
in accordance with section III.C.6. of the Consolidated Notice.
Additionally, all waivers and alternative requirements associated with
a CDBG-DR grant apply to the use of the funds provided by that grant,
regardless of which disaster the funded activity will address.
For example, if a grantee is receiving funds under this notice for
a disaster occurring in 2021 and the MID areas for the 2021 disaster
overlap with the MID areas for a disaster that occurred in 2017, the
grantee may choose to use the funds allocated under this notice to
address unmet needs of both the 2017 disaster and the 2021 disaster. In
doing so, the grantee must follow the rules and requirements outlined
in this notice. However, if the grantee chooses to use its CDBG-DR
grant awarded due to a disaster that occurred in 2017 to address unmet
needs of both that disaster and the 2021 disaster, the grantee must
follow the rules and requirements outlined in the Federal Register
notices applicable to its CDBG-DR grant for 2017 disasters.
V. Duration of Funding
The Appropriations Act makes the funds available for obligation by
HUD until expended. HUD waives the provisions at 24 CFR 570.494 and 24
CFR 570.902 regarding timely distribution and expenditure of funds and
establishes an alternative requirement providing that each grantee must
expend 100 percent of its allocation within six years of the date HUD
signs the grant agreement. HUD may extend the period of performance
administratively, if good cause for such an extension exists at that
time, as requested by the grantee, and approved by HUD. When the period
of performance has ended, HUD will close out the grant and any
remaining funds not expended by the grantee on appropriate programmatic
purposes will be recaptured by HUD.
VI. Federal Assistance Listings (Formerly Known as the CFDA Number)
The Catalog of Federal Domestic Assistance numbers for the disaster
recovery grants under this notice are as follows: 14.218; 14.228.
VII. 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(2)(C)). The FONSI is
available online on HUD's CDBG-DR website. 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).
Adrianne Todman,
Deputy Secretary.
Appendix A--Allocation of CDBG-DR Funds to Most Impacted and Distressed
Areas Due to Presidentially Declared Disasters Occurring in 2020 and
2021
Background
Public Law 117-43, Disaster Relief Supplemental Appropriations
Act, 2022, (approved September 30, 2022) appropriated $5 billion for
CDBG-Disaster Recovery (CDBG-DR) funds for disasters occurring in
2020 and 2021. The statutory text related to the allocation is as
follows:
``For an additional amount for ``Community Development Fund'',
$5,000,000,000, to remain available until expended, for necessary
expenses for activities authorized under title I of the Housing and
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) related
to disaster relief, long-term recovery, restoration of
infrastructure and housing, economic revitalization, and mitigation,
in the most impacted and distressed areas resulting from a major
disaster that occurred in 2020 or 2021 pursuant to the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.): Provided, That amounts made available under this
heading in this Act shall be awarded directly to the State, unit of
general local government, or Indian tribe (as such term is defined
in section 102 of the Housing and Community Development Act of 1974
(42 U.S.C. 5302)) at the discretion of the Secretary: Provided
further, That the Secretary shall allocate, using the best available
data, an amount equal to the total estimate for unmet needs for
qualifying disasters under this heading in this Act: Provided
further, That any final allocation for the total estimate for unmet
need made available under the preceding proviso shall include an
additional amount of 15 percent of such estimate for additional
mitigation: Provided further, That of the amounts made available
under this heading in this Act, no less than $1,610,000,000 shall be
allocated for major declared disasters that occurred in 2020 within
30 days of the date of enactment of this Act:''
Most Impacted and Distressed Areas
As with prior CDBG-DR appropriations, HUD is not obligated to
allocate funds for all major disasters occurring in the statutory
timeframes. HUD is directed to use the funds ``in the most impacted
and distressed areas.'' HUD has implemented this directive by
limiting CDBG-DR formula allocations to grantees with major
disasters that meet these standards:
(1) Individual Assistance/IHP designation. HUD has limited
allocations to those disasters where FEMA had determined the damage
was sufficient to declare the disaster as eligible to receive
Individual and Households Program (IHP) funding.
(2) Concentrated damage. HUD has limited its estimate of serious
unmet housing need to counties and zip codes with high levels of
damage, collectively referred to as ``most impacted areas.'' For
this allocation, HUD is defining most impacted areas as most
impacted counties--counties exceeding $10 million in serious unmet
housing needs--and most impacted Zip Codes--Zip Codes with $2
million or more of serious unmet housing needs. The calculation of
serious unmet housing needs is described below.
For disasters that meet the most impacted threshold described
above, the unmet need allocations are based on the following factors
summed together:
(1) Repair estimates for seriously damaged owner-occupied units
without insurance (with some exceptions) in most impacted areas
after FEMA and SBA repair grants or loans;
(2) Repair estimates for seriously damaged rental units occupied
by very low-income renters in most impacted areas;
(3) Repair and content loss estimates for small businesses with
serious damage denied by SBA; and
(4) The estimated local cost share for Public Assistance
Category C to G projects.
Methods for Estimating Serious Unmet Needs for Housing
The data HUD uses to calculate unmet needs for 2020 and 2021
qualifying disasters come from the FEMA Individual Assistance
program data on housing-unit damage as of February 10, 2022 and
reflect disasters occurring in 2020 and 2021.
The core data on housing damage for both the unmet housing needs
calculation and the concentrated damage are based on home inspection
data for FEMA's Individual Assistance program and SBA's disaster
loan program. HUD calculates ``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 and SBA.
[[Page 31645]]
Each of the FEMA inspected owner units are categorized by HUD
into one of five categories:
<bullet> Minor-Low: Less than $3,000 of FEMA inspected real
property damage.
<bullet> Minor-High: $3,000 to $7,999 of FEMA inspected real
property damage.
<bullet> Major-Low: $8,000 to $14,999 of FEMA inspected real
property damage and/or 1 to 3.9 feet of flooding on the first floor.
<bullet> Major-High: $15,000 to $28,800 of FEMA inspected real
property damage and/or 4 to 5.9 feet of flooding on the first floor.
<bullet> Severe: Greater than $28,800 of FEMA inspected real
property damage or determined destroyed and/or 6 or more feet of
flooding on the first floor.
When owner-occupied properties also have a personal property
inspection or only have a personal property inspection, HUD reviews
the personal property damage amounts such that if the personal
property damage places the home into a higher need category over the
real property assessment, the personal property amount is used. The
personal property-based need categories for owner-occupied units are
defined as follows:
<bullet> Minor-Low: Less than $2,500 of FEMA inspected personal
property damage.
<bullet> Minor-High: $2,500 to $3,499 of FEMA inspected personal
property damage.
<bullet> Major-Low: $3,500 to $4,999 of FEMA inspected personal
property damage or 1 to 3.9 feet of flooding on the first floor.
<bullet> Major-High: $5,000 to $9,000 of FEMA inspected personal
property damage or 4 to 5.9 feet of flooding on the first floor.
<bullet> Severe: Greater than $9,000 of FEMA inspected personal
property damage or determined destroyed and/or 6 or more feet of
flooding on the first floor.
To meet the statutory requirement of ``most impacted'' in this
legislative language, homes are determined to have a high level of
damage if they have damage of ``major-low'' or higher. That is, they
have a FEMA inspected real property damage of $8,000 or above,
personal property damage $3,500 or above, or flooding 1 foot or
above on the first floor.
Furthermore, a homeowner with flooding outside the one percent
risk flood hazard area is determined to have unmet needs if they
reported damage and no flood insurance to cover that damage. For
homeowners inside the one percent risk flood hazard area, homeowners
without flood insurance with flood damage below the greater of
national median or 120 percent of Area Median Income are determined
to have unmet needs. For non-flood damage, homeowners without hazard
insurance with incomes below the greater of national median or 120
percent of Area Median Income are included as having unmet needs.
The unmet need categories for these types of homeowners are defined
as above for real and personal property damage.
FEMA does not inspect rental units for real property damage so
personal property damage is used as a proxy for unit damage. Each of
the FEMA-inspected renter units are categorized by HUD into one of
five categories:
<bullet> Minor-Low: Less than $1,000 of FEMA inspected personal
property damage.
<bullet> Minor-High: $1,000 to $1,999 of FEMA inspected personal
property damage or determination of ``Moderate'' damage by the FEMA
inspector.
<bullet> Major-Low: $2,000 to $3,499 of FEMA inspected personal
property damage or 1 to 3.9 feet of flooding on the first floor or
determination of ``Major'' damage by the FEMA inspector.
<bullet> Major-High: $3,500 to $7,500 of FEMA inspected personal
property damage or 4 to 5.9 feet of flooding on the first floor.
<bullet> Severe: Greater than $7,500 of FEMA inspected personal
property damage or determined destroyed and/or 6 or more feet of
flooding on the first floor or determination of ``Destroyed'' by the
FEMA inspector.
To meet the statutory requirement of ``most impacted'' for
rental properties, homes are determined to have a high level of
damage if they have damage of ``major-low'' or higher. That is, they
have a FEMA personal property damage assessment of $2,000 or greater
or flooding 1 foot or above on the first floor.
Furthermore, landlords are presumed to have adequate insurance
coverage unless the unit is occupied by a renter with income less
than the greater of the Federal poverty level or 50 percent of the
area median income. Units occupied by a tenant with income less than
the greater of the poverty level or 50 percent of the area median
income are used to calculate likely unmet needs for affordable
rental housing.
The average cost to fully repair a home for a specific disaster
to code within each of the damage categories noted above is
calculated using the median real property damage repair costs
determined by the SBA for its disaster loan program based on a match
comparing FEMA and SBA inspections by each of the FEMA damage
categories described above.
Minimum multipliers are not less than the 25th percentile for
all Individual Assistance (IA) eligible disasters combined in
eligible disaster years at the time of the allocation calculation,
and maximum multipliers are not more than the 75th percentile for
all IA eligible disasters combined with data available as of the
allocation. Because SBA is inspecting for full repair costs, their
estimate 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 there is a match of fewer than 20 SBA
inspections to FEMA inspections for any damage category, the minimum
multiplier is used.
Mobile home multipliers are based on a multiplier that is the
same across all eligible disasters.
For each household determined to have serious unmet housing
needs (as described above), their estimated average unmet housing
need is equal to the average cost to fully repair a home to code
less assistance from FEMA and SBA provided for repair to the home,
based on the damage category (noted above).
Methods for Estimating Serious Unmet Economic Revitalization Needs
Based on SBA disaster loans to businesses using data for 2021
disasters from as of date February 22, 2022, HUD calculates the
median real estate and content loss by the following damage
categories for each state:
<bullet> Category 1: Real estate + content loss = below $12,000
<bullet> Category 2: Real estate + content loss = $12,000-$29,999
<bullet> Category 3: Real estate + content loss = $30,000-$64,999
<bullet> Category 4: Real estate + content loss = $65,000-$149,999
<bullet> Category 5: Real estate + content loss = $150,000 and above
For properties with real estate and content loss of $30,000 or
more, HUD calculates the estimated amount of unmet needs for small
businesses by multiplying the median damage estimates for the
categories above by the number of small businesses denied an SBA
loan, including those denied a loan prior to inspection due to
inadequate credit or income (or a decision had not been made), under
the assumption that damage among those denied at pre-inspection have
the same distribution of damage as those denied after inspection.
Methods for Estimating Unmet Infrastructure Needs
To calculate 2021 unmet needs for infrastructure projects, HUD
obtained FEMA cost estimates as of February 10, 2022, of the
expected local cost share to repair the permanent public
infrastructure (Categories C to G) to their pre-storm condition.
Allocation Calculation
Once eligible entities are identified using the above criteria,
the allocation to individual grantees represents their proportional
share of the estimated unmet needs. For the formula allocation, HUD
calculates total unmet recovery needs for eligible disasters as the
aggregate of:
<bullet> Serious unmet housing needs in most impacted counties
(owner and renter);
<bullet> Serious unmet business needs; and
<bullet> Unmet infrastructure need.
Note that for 2020 Disasters, the business and infrastructure
data were the same as for the October 2021 allocation, only the
housing need data were updated to reflect the more precise housing
data in February 2022 relative to the September 2021 housing data
used at the time.
Mitigation is calculated as 15 percent of the unmet need
calculation and then rounded to the nearest $1,000.
For disasters occurring in 2020 that previously received an
allocation, their grant amount is the greater of the amount
previously calculated or the new calculation with the updated
February 10th data for housing.
For 2021 disasters, the amount available for allocation was 60.4
percent of the estimated need plus mitigation calculated above, so
each grantee receives 60.4 percent of the calculated unmet needs and
mitigation.
Local Allocations
After calculating the disaster level allocation amounts, local
allocations are calculated for entitlement areas and proportionally
allocated among the entitlement areas and the state balance based on
the proportional share of serious unmet housing need in most
impacted areas. If entitlement areas represent 70 percent or more of
the serious unmet housing need from
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a particular disaster and the individual entitlement likely has
capacity to implement (as measured by the calculated award amount
not exceeding their regular CDBG grant by 20 times or more), then
local allocations are made to qualifying entitlement areas.
Amount Required for Allocating to Most Impacted and Distressed Areas
For most grantees, 80 percent of the funds allocated for a
disaster are to be spent in areas that HUD identifies as most
impacted or distressed, and the remaining 20 percent of funds can be
expended in areas that either HUD or the grantee designates as most
impacted and distressed. In most places where an entitlement is
within a county defined as a most impacted area, 100 percent of the
funds allocated locally will be spent in the entitlement.
Appendix B--The Consolidated Notice
CDBG-DR Consolidated Notice Waivers and Alternative Requirements
Table of Contents
I. Waivers and Alternative Requirements
II. Eligible Activities
A. Clarification of Disaster-Related Activities
B. Housing and Related Floodplain Issues
C. Infrastructure (Public Facilities, Public Improvements)
D. Economic Revitalization
III. Grant Administration
A. Pre-Award Evaluation of Management and Oversight of Funds
B. Administration, Planning, and Financial Management
C. Action Plan for Disaster Recovery Waiver and Alternative
Requirement
D. Citizen Participation Requirements
E. Program Income
F. Other General Waivers and Alternative Requirements
G. Ineligible Activities in CDBG-DR
IV. Other Program Requirements
A. Duplication of Benefits
B. Procurement
C. Use of the ``Upper Quartile'' or ``Exception Criteria''
D. Environmental Requirements
E. Flood Insurance Requirements
F. URA, Section 104(d) and Related CDBG Program Requirements
V. Performance Reviews
A. Timely Distribution and Expenditure of Funds
B. HUD's Review of Continuing Capacity
C. Grantee Reporting Requirements in the DRGR System
I. Waivers and Alternative Requirements
CDBG-DR grantees that are subject to this Consolidated Notice,
as indicated in each Federal Register notice that announces
allocations of the appropriated CDBG-DR funds (``Allocation
Announcement Notice''), must comply with all waivers and alternative
requirements in the Consolidated Notice, unless expressly made
inapplicable (e.g., a waiver that applies to states only does not
apply to units of general local governments and Indian tribes).
Except as described in applicable waivers and alternative
requirements, the statutory and regulatory provisions governing the
CDBG program (and for Indian tribes, the Indian CDBG program) shall
apply to grantees receiving a CDBG-DR allocation. Statutory
provisions (title I of the HCDA) that apply to all grantees can be
found at 42 U.S.C. 5301 et seq. and regulatory requirements, which
differ for each type of grantee, are described in each of the three
paragraphs below.
Except as modified, the State CDBG program rules shall apply to
state grantees receiving a CDBG-DR allocation. Applicable State CDBG
program regulations are found at 24 CFR part 570, subpart I. For
insular areas, HUD waives the provisions of 24 CFR part 570, subpart
F and imposes the following alternative requirement: Insular areas
shall administer their CDBG-DR allocations in accordance with the
regulatory and statutory provisions governing the State CDBG
program, as modified by the Consolidated Notice.
Except as modified, statutory and regulatory provisions
governing the Entitlement CDBG Program shall apply to unit of
general local government grantees (often referred to as local
government grantees in appropriations acts). Applicable Entitlement
CDBG Program regulations are found at 24 CFR part 570, as described
in 570.1(a).
Except as modified, CDBG-DR grants made by HUD to Indian tribes
shall be subject to the statutory provisions in title I of the HCDA
that apply to Indian tribes and the regulations in 24 CFR part 1003
governing the Indian CDBG program, except those requirements in part
1003 related to the funding application and selection process.
References to the action plan in the above regulations shall
refer to the action plan required by the Consolidated Notice and not
to the consolidated plan action plan required by 24 CFR part 91. All
references pertaining to timelines and/or deadlines are in terms of
calendar days unless otherwise noted.
II. Eligible Activities
II.A. Clarification of Disaster-Related Activities
CDBG-DR funds are provided for necessary expenses for activities
authorized under title I of the HCDA related to disaster relief,
long-term recovery, restoration of infrastructure and housing,
economic revitalization, and mitigation of risk associated with
activities carried out for these purposes, in the ``most impacted
and distressed'' areas (identified by HUD or the grantee) resulting
from a major disaster. All CDBG-DR funded activities must address an
impact of the disaster for which funding was allocated. Accordingly,
each activity must: (1) Address a direct or indirect impact from the
disaster in a most impacted and distressed area; (2) be a CDBG-
eligible activity (or be eligible under a waiver or alternative
requirement); and (3) meet a national objective. When appropriations
acts provide an additional allocation amount for mitigation of
hazard risks that does not require a connection to the qualifying
major disaster, requirements for the use of those funds will be
included in the Allocation Announcement Notice.
II.A.1. Documenting a Connection to the Disaster. Grantees must
maintain records that document how each funded activity addresses a
direct or indirect impact from the disaster. Grantees may do this by
linking activities to a disaster recovery need that is described in
the impact and unmet needs assessment in the action plan
(requirements for the assessment are addressed in section
III.C.1.a.). Sufficient documentation of physical loss must include
damage or rebuilding estimates, insurance loss reports, images, or
similar information that documents damage caused by the disaster.
Sufficient documentation for non-physical disaster-related impacts
must clearly show how the activity addresses the disaster impact,
e.g., for economic development activities, data about job loss or
businesses closing after the disaster or data showing how pre-
disaster economic stressors were aggravated by the disaster; or for
housing activities, a post-disaster housing analysis that describes
the activities that are necessary to address the post-disaster
housing needs.
II.A.2. Resilience and hazard mitigation. The Consolidated
Notice will help to improve long-term community resilience by
requiring grantees to fully incorporate mitigation measures that
will protect the public, including members of protected classes,
vulnerable populations, and underserved communities, from the risks
identified by the grantee among other vulnerabilities. This approach
will better ensure the revitalization of the community long after
the recovery projects are complete.
Accordingly, HUD is adopting the following alternative
requirement to section 105(a): Grantees may carry out the activities
described in section 105(a), as modified by waivers and alternative
requirements, to the extent that the activities comply with the
following:
II.A.2.a. Alignment with mitigation plans. Grantees must ensure
that the mitigation measures identified in their action plan will
align with existing hazard mitigation plans submitted to the Federal
Emergency Management Agency (FEMA) under section 322 of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5165) or other state, local, or tribal hazard mitigation plans.
II.A.2.b. Mitigation measures. Grantees must incorporate
mitigation measures when carrying out activities to construct,
reconstruct, or rehabilitate residential or non-residential
structures with CDBG-DR funds as part of activities eligible under
42 U.S.C. 5305(a) (including activities authorized by waiver and
alternative requirement). To meet this alternative requirement,
grantees must demonstrate that they have incorporated mitigation
measures into CDBG-DR activities as a construction standard to
create communities that are more resilient to the impacts of
recurring natural disasters and the impacts of climate change. When
determining which mitigation measures to incorporate, grantees
should design and construct structures to withstand existing and
future climate impacts expected to occur over the service life of
the project.
II.A.2.c. Resilience performance metrics. Before carrying out
CDBG-DR funded activities to construct, reconstruct, or rehabilitate
residential or non-residential
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structures, the grantee must establish resilience performance
metrics for the activity, including: (1) An estimate of the
projected risk to the completed activity from natural hazards,
including those hazards that are influenced by climate change (e.g.,
high winds destroying newly built homes), (2) identification of the
mitigation measures that will address the projected risks (e.g.,
using building materials that are able to withstand high winds), and
(3) an assessment of the benefit of the grantee's measures through
verifiable data (e.g., 10 newly built homes will withstand high
winds up to 100 mph).
II.A.3. Most impacted and distressed (MID) areas. Funds must be
used for costs related to unmet needs in the MID areas resulting
from qualifying disasters. HUD allocates funds using the best
available data that cover the eligible affected areas and identifies
MID areas. Grantees are required to use 80 percent of all CDBG-DR
funds to benefit the HUD-identified MID areas. The HUD-identified
MID areas and the minimum dollar amount that must be spent to
benefit those areas will be identified for each grantee in the
applicable Allocation Announcement Notice. If a grantee seeks to add
other areas to the HUD-identified MID area, the grantee must contact
its CPD Representative or CPD Specialist and submit the request with
a data-driven analysis that illustrates the basis for designating
the additional area as most impacted and distressed as a result of
the qualifying disaster.
Grantees may use up to five percent of the total grant award for
grant administration. Therefore, HUD will include 80 percent of a
grantee's expenditures for grant administration in its determination
that 80 percent of the total award has benefited the HUD-identified
MID area. Expenditures for planning activities may also be counted
towards the HUD-identified MID area requirement, if the grantee
describes in its action plan how those planning activities benefit
those areas.
HUD may identify an entire jurisdiction or a ZIP code as a MID
area. If HUD designates a ZIP code as a MID area for the purposes of
allocating funds, the grantee may expand program operations to the
whole county or counties that overlap with the HUD designated ZIP
code. A grantee must indicate the decision to expand eligibility to
the whole county or counties in its action plan.
Grantees must determine where to use the remaining amount of the
CDBG-DR grant, but that portion of the allocation may only be used
to address unmet needs and that benefit those areas that the grantee
determines are most impacted and distressed (``grantee-identified
MID areas'') within areas that received a presidential major
disaster declaration identified by the disaster numbers listed in
the applicable Allocation Announcement Notice. The grantee must use
quantifiable and verifiable data in its analysis, as referenced in
its action plan, to identify the MID areas where it will use the
remaining amount of CDBG-DR funds.
Grantee expenditures for eligible unmet needs outside of the
HUD-identified or grantee-identified MID areas are allowable,
provided that the grantee can demonstrate how the expenditure of
CDBG-DR funds outside of the MID areas will address unmet needs
identified within the HUD-identified or grantee-identified MID area
(e.g., upstream water retention projects to reduce downstream
flooding in the HUD-identified MID area).
II.B. Housing Activities and Related Floodplain Issues
Grantees may use CDBG-DR funds for activities that may include,
but are not limited to, new construction, reconstruction, and
rehabilitation of single-family or multifamily housing,
homeownership assistance, buyouts, and rental assistance. The
broadening of eligible CDBG-DR activities related to housing under
the HCDA is necessary following major disasters in which housing,
including large numbers of affordable housing units, have been
damaged or destroyed. The following waivers and alternative
requirements will assist grantees in addressing the full range of
unmet housing needs arising from a disaster.
II.B.1. New housing construction waiver and alternative
requirement. 42 U.S.C. 5305(a) and 24 CFR 570.207(b)(3) are waived
to the extent necessary to permit new housing construction, subject
to the following alternative requirement. When a CDBG-DR grantee
carries out a new housing construction activity, 24 CFR 570.202
shall apply and shall be read to extend to new construction in
addition to rehabilitation assistance. Private individuals and
entities must remain compliant with federal accessibility
requirements as well as with the applicable site selection
requirements of 24 CFR 1.4(b)(3) and 8.4(b)(5).
II.B.2. Construction standards for new construction,
reconstruction, and rehabilitation. HUD is adopting an alternative
requirement to require grantees to adhere to the applicable
construction standards in II.B.2.a. through II.B.2.d. when carrying
out activities to construct, reconstruct, or rehabilitate
residential structures with CDBG-DR funds as part of activities
eligible under 42 U.S.C. 5305(a) (including activities authorized by
waiver and alternative requirement). For purposes of the
Consolidated Notice, the terms ``substantial damage'' and
``substantial improvement'' shall be as defined in 44 CFR 59.1
unless otherwise noted.
II.B.2.a. Green and resilient building standard for new
construction and reconstruction of housing. Grantees must meet the
Green and Resilient Building Standard, as defined in this
subparagraph, for: (i) All new construction and reconstruction
(i.e., demolishing a housing unit and rebuilding it on the same lot
in substantially the same manner) of residential buildings and (ii)
all rehabilitation activities of substantially damaged residential
buildings, including changes to structural elements such as flooring
systems, columns, or load-bearing interior or exterior walls.
The Green and Resilient Building Standard requires that all
construction covered by the paragraph above and assisted with CDBG-
DR funds meet an industry-recognized standard that has achieved
certification under (i) Enterprise Green Communities; (ii) LEED (New
Construction, Homes, Midrise, Existing Buildings Operations and
Maintenance, or Neighborhood Development); (iii) ICC-700 National
Green Building Standard Green+ Resilience; (iv) Living Building
Challenge; or (v) any other equivalent comprehensive green building
program acceptable to HUD. Additionally, all such covered
construction must achieve a minimum energy efficiency standard, such
as (i) ENERGY STAR (Certified Homes or Multifamily High-Rise); (ii)
DOE Zero Energy Ready Home; (iii) EarthCraft House, EarthCraft
Multifamily; (iv) Passive House Institute Passive Building or
EnerPHit certification from the Passive House Institute US (PHIUS),
International Passive House Association; (v) Greenpoint Rated New
Home, Greenpoint Rated Existing Home (Whole House or Whole Building
label); (vi) Earth Advantage New Homes; or (vii) any other
equivalent energy efficiency standard acceptable to HUD. Grantees
must identify, in each project file, which of these Green and
Resilient Building Standards will be used for any building subject
to this paragraph. However, grantees are not required to use the
same standards for each project or building.
II.B.2.b. Standards for rehabilitation of nonsubstantially
damaged residential buildings. For rehabilitation other than the
rehabilitation of substantially damaged residential buildings
described in section II.B.2.a. above, grantees must follow the
guidelines specified in the HUD CPD Green Building Retrofit
Checklist.
Grantees must apply these guidelines to the extent applicable
for the rehabilitation work undertaken, for example, the use of mold
resistant products when replacing surfaces such as drywall. Products
and appliances replaced as part of the rehabilitation work, must be
ENERGY STAR-labeled, WaterSense-labeled, or Federal Energy
Management Program (FEMP)-designated products or appliances.
II.B.2.c. Elevation standards for new construction,
reconstruction, and rehabilitation of substantial damage, or
rehabilitation resulting in substantial improvements. The following
elevation standards apply to new construction, rehabilitation of
substantial damage, or rehabilitation resulting in substantial
improvement of residential structures located in an area delineated
as a special flood hazard area or equivalent in FEMA's data sources.
24 CFR 55.2(b)(1) provides additional information on data sources,
which apply to all floodplain designations. All structures, defined
at 44 CFR 59.1, designed principally for residential use, and
located in the one percent annual chance (or 100-year) floodplain,
that receive assistance for new construction, reconstruction,
rehabilitation of substantial damage, or rehabilitation that results
in substantial improvement, as defined at 24 CFR 55.2(b)(10), must
be elevated with the lowest floor, including the basement, at least
two feet above the one percent annual chance floodplain elevation
(base flood elevation). Mixed-use structures with no dwelling units
and no residents below two feet above base flood elevation, must be
elevated or floodproofed, in accordance with FEMA floodproofing
standards at 44 CFR 60.3(c)(3)(ii) or successor standard, up to at
least two feet above base flood elevation.
[[Page 31648]]
All Critical Actions, as defined at 24 CFR 55.2(b)(3), within
the 500-year (or 0.2 percent annual chance) floodplain must be
elevated or floodproofed (in accordance with FEMA floodproofing
standards at 44 CFR 60.3(c)(2)-(3) or successor standard) to the
higher of the 500-year floodplain elevation or three feet above the
100-year floodplain elevation. If the 500-year floodplain is
unavailable, and the Critical Action is in the 100-year floodplain,
then the structure must be elevated or floodproofed (in accordance
with FEMA floodproofing standards at 44 CFR 60.3(c)(2)-(3) or
successor standard) at least three feet above the 100-year
floodplain elevation. Critical Actions are defined as ``any activity
for which even a slight chance of flooding would be too great,
because such flooding might result in loss of life, injury to
persons or damage to property.'' For example, Critical Actions
include hospitals, nursing homes, emergency shelters, police
stations, fire stations, and principal utility lines.
In addition to other requirements in this section, grantees must
comply with applicable state, local, and tribal codes and standards
for floodplain management, including elevation, setbacks, and
cumulative substantial damage requirements. Grantees using CDBG-DR
funds as the non-Federal match in a FEMA-funded project may apply
the alternative requirement for the elevation of structures
described in section III.F.6. Structures that are elevated must meet
federal accessibility standards.
II.B.2.d. Broadband infrastructure in housing. Any substantial
rehabilitation, as defined by 24 CFR 5.100, reconstruction, or new
construction of a building with more than four rental units must
include installation of broadband infrastructure, except where the
grantee documents that: (i) The location of the new construction or
substantial rehabilitation makes installation of broadband
infrastructure infeasible; (ii) the cost of installing broadband
infrastructure would result in a fundamental alteration in the
nature of its program or activity, or in an undue financial burden;
or (iii) the structure of the housing to be substantially
rehabilitated makes installation of broadband infrastructure
infeasible.
II.B.3. Applicable affordability periods for new construction of
affordable rental housing. To meet the low- and moderate-income
housing national objective, rental housing assisted with CDBG-DR
funds must be rented to low- and moderate-income (LMI) households at
affordable rents, and a grantee must define ``affordable rents'' in
its action plan. Because the waiver and alternative requirement in
II.B.1. authorizes the use of grant funds for new housing
construction, HUD is imposing the following alternative requirement
to modify the low- and moderate-income housing national objective
criteria in 24 CFR 570.208(a)(3) and 570.483(b)(3) for activities
involving the new construction of affordable rental housing of five
or more units. For activities that will construct five or more
units, in addition to other applicable criteria in 24 CFR
570.208(a)(3) and 570.483(b)(3), in its action plan, a grantee must
define the affordability standards, including ``affordable rents,''
the enforcement mechanisms, and applicable timeframes, that will
apply to the new construction of affordable rental housing, i.e.,
when the activity will result in construction of five or more units,
the affordability requirements described in the action plan apply to
the units that will be occupied by LMI households. The minimum
timeframes and other related requirements acceptable for compliance
with this alternative requirement are the HOME Investment
Partnerships Program (HOME) requirements at 24 CFR 92.252(e),
including the table listing the affordability periods at the end of
24 CFR 92.252(e). Therefore, the grantee must adopt and implement
enforceable affordability standards that comply with or exceed
requirements at 24 CFR 92.252(e)(1) for the new construction of
affordable rental housing in structures containing five or more
units.
II.B.4. Affordability period for new construction of homes built
for LMI households. In addition to alternative requirements in
II.B.1., the following alternative requirement applies to activities
to construct new single-family units for homeownership that will
meet the LMI housing national objective criteria. Grantees must
establish affordability restrictions on all newly constructed
single-family housing (for purposes of the Consolidated Notice,
single-family housing is defined as four units or less), that, upon
completion, will be purchased and occupied by LMI homeowners. The
minimum affordability period acceptable for compliance are the HOME
requirements at 24 CFR 92.254(a)(4). If a grantee applies other
standards, the periods of affordability applied by a grantee must
meet or exceed the applicable HOME requirements in 24 CFR
92.254(a)(4) and the table of affordability periods directly
following that provision. Grantees shall establish resale or
recapture requirements for housing funded pursuant to this paragraph
and shall describe those requirements in the action plan or
substantial amendment in which the activity is proposed. The resale
or recapture requirements must clearly describe the terms of resale
or recapture and the specific circumstances under which resale or
recapture will be used. Affordability restrictions must be
enforceable and imposed by recorded deed restrictions, covenants, or
other similar mechanisms. The affordability restrictions, including
the affordability period requirements in this paragraph do not apply
to housing units newly constructed or reconstructed for an owner-
occupant to replace the owner-occupant's home that was damaged by
the disaster.
II.B.5. Homeownership assistance waiver and alternative
requirement. 42 U.S.C. 5305(a)(24) is waived and replaced with the
following alternative requirement:
``Provision of direct assistance to facilitate and expand
homeownership among persons at or below 120 percent of area median
income (except that such assistance shall not be considered a public
service for purposes of 42 U.S.C. 5305(a)(8)) by using such
assistance to--
(A) subsidize interest rates and mortgage principal amounts for
homebuyers with incomes at or below 120 percent of area median
income;
(B) finance the acquisition of housing by homebuyers with
incomes at or below 120 percent of area median income that is
occupied by the homebuyers;
(C) acquire guarantees for mortgage financing obtained by
homebuyers with incomes at or below 120 percent of area median
income from private lenders, meaning that if a private lender
selected by the homebuyer offers a guarantee of the mortgage
financing, the grantee may purchase the guarantee to ensure
repayment in case of default by the homebuyer. This subparagraph
allows the purchase of mortgage insurance by the household but not
the direct issuance of mortgage insurance by the grantee;
(D) provide up to 100 percent of any down payment required from
homebuyers with incomes at or below 120 percent of area median
income; or
(E) pay reasonable closing costs (normally associated with the
purchase of a home) incurred by homebuyers with incomes at or below
120 percent of area median income.''
While homeownership assistance, as described above, may be
provided to households with incomes at or below 120 percent of the
area median income, HUD will only consider those funds used for
households with incomes at or below 80 percent of the area median
income to qualify as meeting the LMI person benefit national
objective.
II.B.6. Limitation on emergency grant payments--interim mortgage
assistance. 42 U.S.C. 5305(a)(8), 24 CFR 570.201(e), 24 CFR
570.207(b)(4), and 24 CFR 1003.207(b)(4) are modified to extend
interim mortgage assistance (IMA) to qualified individuals from
three months to up to twenty months. IMA must be used in conjunction
with a buyout program, or the rehabilitation or reconstruction of
single-family housing, during which mortgage payments may be due but
the home is not habitable. A grantee using this alternative
requirement must document, in its policies and procedures, how it
will determine that the amount of assistance to be provided is
necessary and reasonable.
II.B.7. Buyout activities. CDBG-DR grantees may carry out
property acquisition for a variety of purposes, but buyouts are a
type of acquisition for the specific purpose of reducing the risk of
property damage. HUD has determined that creating a new activity and
alternative requirement for buyouts is necessary for consistency
with the application of other Federal resources commonly used for
this type of activity. Therefore, HUD is waiving 42 U.S.C. 5305(a)
and establishing an alternative requirement only to the extent
necessary to create a new eligible activity for buyouts. The term
``buyouts'' means the acquisition of properties located in a
floodway, floodplain, or other Disaster Risk Reduction Area that is
intended to reduce risk from future hazards. Grantees can designate
a Disaster Risk Reduction Area, as defined below.
Grantees carrying out buyout activities must establish an open
space management plan or equivalent, if one has not already been
established, before implementation. The plan must establish full
transparency about
[[Page 31649]]
the planned use of acquired properties post-buyout, or the process
by which the planned use will be determined and enforced.
Buyout activities are subject to all requirements that apply to
acquisition activities generally including but not limited to, the
Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970 (URA) (42 U.S.C. 4601, et seq.) and its implementing
regulations at 49 CFR part 24, subpart B, unless waived or modified
by alternative requirements. Only acquisitions that meet the
definition of a ``buyout'' are subject to the post-acquisition land
use restrictions imposed by the alternative requirement (II.B.7.a.
below). The key factor in determining whether the acquisition is a
buyout is whether the intent of the purchase is to reduce risk of
property damage from future flooding or other hazards in a floodway,
floodplain, or a Disaster Risk Reduction Area. A grantee that will
buyout properties in a Disaster Risk Reduction Area must establish
criteria in its policies and procedures to designate an area as a
Disaster Risk Reduction Area for the buyout, pursuant to the
following requirements:
(1) The area has been impacted by the hazard that has been
caused or exacerbated by the disaster for which the grantee received
its CDBG-DR allocation;
(2) the hazard identified must be a predictable environmental
threat to the safety and well-being of program beneficiaries,
including members of protected classes, vulnerable populations, and
underserved communities, as evidenced by the best available data
(e.g., FEMA Repetitive Loss Data, EPA's Environmental Justice
Screening and Mapping Tool, HHS's climate change related guidance
and data, etc.) and science (such as engineering and structural
solutions propounded by FEMA, USACE, other federal agencies, etc.);
and
(3) the area must be clearly delineated so that HUD and the
public may easily determine which properties are located within the
designated area.
Grantees may only redevelop an acquired property if the property
is not acquired through a buyout program (i.e., the purpose of
acquisition was something other than risk reduction). When
acquisitions are not acquired through a buyout program, the purchase
price must be consistent with 2 CFR part 200, subpart E--Cost
Principles (``cost principles'') and the pre-disaster fair market
value may not be used.
II.B.7.a. Buyout requirements:
(i) Property to be acquired or accepted must be located within a
floodway, floodplain, or Disaster Risk Reduction Area.
(ii) Any property acquired or accepted must be dedicated and
maintained in perpetuity for a use that is compatible with open
space, recreational, floodplain and wetlands management practices,
or other disaster-risk reduction practices.
(iii) No new structure will be erected on property acquired or
accepted under the buyout program other than:
(a) A public facility that is open on all sides and functionally
related to a designated open space (e.g., a park, campground, or
outdoor recreation area);
(b) a restroom; or
(c) a flood control structure, provided that:
(1) The structure does not reduce valley storage, increase
erosive velocities, or increase flood heights on the opposite bank,
upstream, or downstream; and
(2) the local floodplain manager approves the structure, in
writing, before commencement of construction of the structure.
(iv) After the purchase of a buyout property with CDBG-DR funds,
the owner of the buyout property (including subsequent owners) is
prohibited from making any applications to any Federal entity in
perpetuity for additional disaster assistance for any purpose
related to the property acquired through the CDBG-DR funded buyout,
unless the assistance is for an allowed use as described in
paragraph (ii) above. The entity acquiring the property may lease or
sell it to adjacent property owners or other parties for compatible
uses that comply with buyout requirements in return for a
maintenance agreement.
(v) A deed restriction or covenant running with the property
must require that the buyout property be dedicated and maintained
for compatible uses that comply with buyout requirements in
perpetuity.
(vi) Grantees must choose from one of two valuation methods
(pre-disaster value or post-disaster value) for a buyout program (or
a single buyout activity). The grantee must apply its valuation
method for all buyouts carried out under the program. If the grantee
determines the post-disaster value of a property is higher than the
pre-disaster value, a grantee may provide exceptions to its
established valuation method on a case-by-case basis. The grantee
must describe the process for such exceptions and how it will
analyze the circumstances to permit an exception in its buyout
policies and procedures. Each grantee must adopt policies and
procedures on how it will demonstrate that the amount of assistance
for a buyout is necessary and reasonable.
(vii) All buyout activities must be classified using the
``buyout'' activity type in the Disaster Recovery and Grant
Reporting (DRGR) system.
(viii) Any state grantee implementing a buyout program or
activity must consult with local or tribal governments within the
areas in which buyouts will occur.
II.B.8. Safe housing incentives in disaster-affected
communities. The limitation on eligible activities in section 42
U.S.C. 5305(a) is waived and HUD is establishing the following
alternative requirement to establish safe housing incentives as an
eligible activity. A safe housing incentive is any incentive
provided to encourage households to relocate to suitable housing in
a lower risk area or in an area promoted by the community's
comprehensive recovery plan. Displaced persons must receive any
relocation assistance to which they are entitled under other legal
authorities, such as the URA, section 104(d) of the HCDA, or those
described in the Consolidated Notice. The grantee may offer safe
housing incentives in addition to the relocation assistance that is
legally required.
Grantees must maintain documentation, at least at a programmatic
level, describing how the grantee determined the amount of
assistance for the incentive was necessary and reasonable, how the
incentive meets a national objective, and that the incentives are in
accordance with the grantee's approved action plan and published
program design(s). A grantee may require the safe housing incentive
to be used for a particular purpose by the household receiving the
assistance. However, this waiver does not permit a compensation
program meaning that funds may not be provided to a beneficiary to
compensate the beneficiary for an estimated or actual amount of loss
from the declared disaster. Grantees are prohibited from offering
housing incentives to a homeowner as an incentive to induce the
homeowner to sell a second home, consistent with the prohibition and
definition of second home in section II.B.12.
II.B.9. National objectives for buyouts and safe housing
incentives. Activities that assist LMI persons and meet the criteria
for the national objectives described below, including in II.B.10.,
will be considered to benefit LMI persons unless there is
substantial evidence to the contrary and will count towards the
calculation of a grantee's overall LMI benefit requirement as
described in section III.F.2. The grantee shall appropriately ensure
that activities that meet the criteria for any of the national
objectives below do not benefit moderate-income persons to the
exclusion of low-income persons.
When undertaking buyout activities, to demonstrate that a buyout
meets the low- and moderate-income housing (LMH) national objective,
grantees must meet all requirements of the HCDA, and applicable
regulatory criteria described below. 42 U.S.C. 5305(c)(3) provides
that any assisted activity that involves the acquisition of property
to provide housing shall be considered to benefit LMI persons only
to the extent such housing will, upon completion, be occupied by
such persons. In addition, 24 CFR 570.483(b)(3), 24 CFR
570.208(a)(3), and 24 CFR 1003.208(c) apply the LMH national
objective to an eligible activity carried out for the purpose of
providing or improving permanent residential structures that, upon
completion, will be occupied by LMI households.
A buyout program that merely pays homeowners to leave their
existing homes does not guarantee that those homeowners will occupy
a new residential structure. Therefore, acquisition-only buyout
programs cannot satisfy the LMH national objective criteria.
To meet a national objective that benefits a LMI person, buyout
programs can be structured in one of the following ways:
(1) The buyout activity combines the acquisition of properties
with another direct benefit--LMI housing activity, such as down
payment assistance--that results in occupancy and otherwise meets
the applicable LMH national objective criteria;
(2) The activity meets the low- and moderate-income area (LMA)
benefit criteria and documents that the acquired properties will
have a use that benefits all the residents in a particular area that
is primarily residential, where at least 51 percent of the
[[Page 31650]]
residents are LMI persons. Grantees covered by the ``exception
criteria'' as described in section IV.C. of the Consolidated Notice
may apply it to these activities. To satisfy LMA criteria, grantees
must define the service area based on the end use of the buyout
properties; or
(3) The program meets the criteria for the low- and moderate-
income limited clientele (LMC) national objective by restricting
buyout program eligibility to exclusively LMI persons and benefiting
LMI sellers by acquiring their properties for more than current fair
market value (in accordance with the valuation requirements in
section II.B.7.a.(vi)).
II.B.10. For LMI Safe Housing Incentive (LMHI). The following
alternative requirement establishes new LMI national objective
criteria that apply to safe housing incentive (LMHI) activities that
benefit LMI households. HUD has determined that providing CDBG-DR
grantees with an additional method to demonstrate how safe housing
incentive activities benefit LMI households will ensure that
grantees and HUD can account for and assess the benefit that CDBG-DR
assistance for these activities has on LMI households.
The LMHI national objective may be used when a grantee uses
CDBG-DR funds to carry out a safe housing incentive activity that
benefits one or more LMI persons. To meet the LMHI national
objective, the incentive must be (a.) tied to the voluntary
acquisition of housing (including buyouts) owned by a qualifying LMI
household and made to induce a move outside of the affected
floodplain or disaster risk reduction area to a lower-risk area or
structure; or (b.) for the purpose of providing or improving
residential structures that, upon completion, will be occupied by a
qualifying LMI household and will be in a lower risk area.
II.B.11. Redevelopment of acquired properties. Although
properties acquired through a buyout program may not be redeveloped,
grantees may redevelop other acquired properties. For non-buyout
acquisitions, HUD has not permitted the grantee to base acquisition
cost on pre-disaster fair market value. The acquisition cost must
comply with applicable cost principles and with the acquisition
requirements at 49 CFR 24, Subpart B, as revised by the Consolidated
Notice waivers and alternative requirements. In addition to the
purchase price, grantees may opt to provide optional relocation
assistance, as allowable under Section 104 and 105 of the HCDA (42
U.S.C. 5304 and 42 U.S.C. 5305) and 24 CFR 570.606(d), and as
expanded by section IV.F.5. of the Consolidated Notice, to the owner
of a property that will be redeveloped if: (a.) The property is
purchased by the grantee or subrecipient through voluntary
acquisition; and (b.) the owner's need for additional assistance is
documented. Any optional relocation assistance must provide equal
relocation assistance within each class of displaced persons,
including but not limited to providing reasonable accommodation
exceptions to persons with disabilities. See 24 CFR 570.606(d) for
more information on optional relocation assistance. In addition,
tenants displaced by these voluntary acquisitions may be eligible
for URA relocation assistance. In carrying out acquisition
activities, grantees must ensure they are in compliance with the
long-term redevelopment plans of the community in which the
acquisition and redevelopment is to occur.
II.B.12. Alternative requirement for housing rehabilitation--
assistance for second homes. HUD is instituting an alternative
requirement to the rehabilitation provisions at 42 U.S.C. 5305(a)(4)
as follows: Properties that served as second homes at the time of
the disaster, or following the disaster, are not eligible for
rehabilitation assistance or safe housing incentives. This
prohibition does not apply to acquisitions that meet the definition
of a buyout. A second home is defined for purposes of the
Consolidated Notice as a home that is not the primary residence of
the owner, a tenant, or any occupant at the time of the disaster or
at the time of application for CDBG-DR assistance. Grantees can
verify a primary residence using a variety of documentation
including, but not limited to, voter registration cards, tax
returns, homestead exemptions, driver's licenses, and rental
agreements. Acquisition of second homes at post-disaster fair market
value is not prohibited.
II.C. Infrastructure (Public Facilities, Public Improvements),
Match, and Elevation of Non-Residential Structures
HUD is adopting an alternative requirement to require grantees
to adhere to the applicable construction standards and requirements
in II.C.1., II.C.2. and II.C.4., which apply only to those eligible
activities described in those paragraphs.
II.C.1. Infrastructure planning and design. All newly
constructed infrastructure that is assisted with CDBG-DR funds must
be designed and constructed to withstand extreme weather events and
the impacts of climate change. To satisfy this requirement, the
grantee must identify and implement resilience performance metrics
as described in section II.A.2.
For purposes of this requirement, an infrastructure activity
includes any activity or group of activities (including acquisition
or site or other improvements), whether carried out on public or
private land, that assists the development of the physical assets
that are designed to provide or support services to the general
public in the following sectors: Surface transportation, including
roadways, bridges, railroads, and transit; aviation; ports,
including navigational channels; water resources projects; energy
production and generation, including from renewable, nuclear, and
hydro sources; electricity transmission; broadband; pipelines;
stormwater and sewer infrastructure; drinking water infrastructure;
schools, hospitals, and housing shelters; and other sectors as may
be determined by the Federal Permitting Improvement Steering
Council. For purposes of this requirement, an activity that falls
within this definition is an infrastructure activity regardless of
whether it is carried out under sections 105(a)(2), 105(a)(4),
105(a)(14), another section of the HCDA, or a waiver or alternative
requirement established by HUD. Action plan requirements related to
infrastructure activities are found in section III.C.1.e. of the
Consolidated Notice.
II.C.2. Elevation of nonresidential structure. Nonresidential
structures, including infrastructure, assisted with CDBG-DR funds
must be elevated to the standards described in this paragraph or
floodproofed, in accordance with FEMA floodproofing standards at 44
CFR 60.3(c)(3)(ii) or successor standard, up to at least two feet
above the 100-year (or one percent annual chance) floodplain. All
Critical Actions, as defined at 24 CFR 55.2(b)(3), within the 500-
year (or 0.2 percent annual chance) floodplain must be elevated or
floodproofed (in accordance with FEMA floodproofing standards at 44
CFR 60.3(c)(2)-(3) or successor standard) to the higher of the 500-
year floodplain elevation or three feet above the 100-year
floodplain elevation. If the 500-year floodplain or elevation is
unavailable, and the Critical Action is in the 100-year floodplain,
then the structure must be elevated or floodproofed at least three
feet above the 100-year floodplain elevation. Activities subject to
elevation requirements must comply with applicable federal
accessibility mandates.
In addition to the other requirements in this section, the
grantee must comply with applicable state, local, and tribal codes
and standards for floodplain management, including elevation,
setbacks, and cumulative substantial damage requirements. Grantees
using CDBG-DR funds as the non-Federal match in a FEMA-funded
project may apply the alternative requirement for the elevation of
structures described in section IV.D.5.
II.C.3. CDBG-DR funds as match. As provided by the HCDA, grant
funds may be used to satisfy a match requirement, share, or
contribution for any other Federal program when used to carry out an
eligible CDBG-DR activity. This includes programs or activities
administered by the FEMA or the U.S. Army Corps of Engineers
(USACE). By law, (codified in the HCDA as a note to section 105(a))
only $250,000 or less of CDBG-DR funds may be used for the non-
Federal cost-share of any project funded by USACE. Appropriations
acts prohibit the use of CDBG-DR funds for any activity reimbursable
by, or for which funds are also made available by FEMA or USACE.
In response to a disaster, FEMA may implement, and grantees may
elect to follow, alternative procedures for FEMA's Public Assistance
Program, as authorized pursuant to Section 428 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (``Stafford
Act''). Like other projects, grantees may use CDBG-DR funds as a
matching requirement, share, or contribution for Section 428 Public
Assistance Projects. For all match activities, grantees must
document that CDBG-DR funds have been used for the actual costs
incurred for the assisted project and for costs that are eligible,
meet a national objective, and meet other applicable CDBG
requirements.
II.C.4. Requirements for flood control structures. Grantees that
use CDBG-DR funds to assist flood control structures (i.e., dams and
levees) are prohibited from using CDBG-
[[Page 31651]]
DR funds to enlarge a dam or levee beyond the original footprint of
the structure that existed before the disaster event, without
obtaining pre-approval from HUD and any Federal agencies that HUD
determines are necessary based on their involvement or potential
involvement with the levee or dam. Grantees that use CDBG-DR funds
for levees and dams are required to: (1) Register and maintain
entries regarding such structures with the USACE National Levee
Database or National Inventory of Dams; (2) ensure that the
structure is admitted in the USACE PL 84-99 Program (Levee
Rehabilitation and Inspection Program); (3) ensure the structure is
accredited under the FEMA National Flood Insurance Program; (4)
enter the exact location of the structure and the area served and
protected by the structure into the DRGR system; and (5) maintain
file documentation demonstrating that the grantee has conducted a
risk assessment before funding the flood control structure and
documentation that the investment includes risk reduction measures.
II.D. Economic Revitalization and Section 3 Requirements on
Economic Opportunities
CDBG-DR funds can be used for CDBG-DR eligible activities
related to economic revitalization. The attraction, retention, and
return of businesses and jobs to a disaster-impacted area is
critical to long-term recovery. Accordingly, for CDBG-DR purposes,
economic revitalization may include any CDBG-DR eligible activity
that demonstrably restores and improves the local economy through
job creation and retention or by expanding access to goods and
services. The most common CDBG-DR eligible activities to support
economic revitalization are outlined in 24 CFR 570.203 and 570.204
and sections 105(a)(14), (15), and (17) of the HCDA.
Based on the U.S. Change Research Program's Fourth National
Climate Assessment, climate-related natural hazards, extreme events,
and natural disasters disproportionately affect LMI individuals who
belong to underserved communities because they are less able to
prepare for, respond to, and recover from the impacts of extreme
events and natural hazards, or are members of communities that have
experienced significant disinvestment and historic discrimination.
Therefore, HUD is imposing the following alternative requirement:
When funding activities under section 105(a) of the HCDA that
support economic revitalization, grantees must prioritize those
underserved communities that have been impacted by the disaster and
that were economically distressed before the disaster, as described
further below in II.D.1.
The term ``underserved communities'' refers to populations
sharing a particular characteristic, as well as geographic
communities, that have been systematically denied a full opportunity
to participate in aspects of economic, social, and civic life.
Underserved communities that were economically distressed before the
disaster include, but are not limited to, those areas that were
designated as a Promise Zone, Opportunity Zone, a Neighborhood
Revitalization Strategy Area, a tribal area, or those areas that
meet at least one of the distress criteria established for the
designation of an investment area of Community Development Financial
Institution at 12 CFR 1805.201(b)(3)(ii)(D).
Grantees undertaking an economic revitalization activity must
maintain supporting documentation to demonstrate how the grantee has
prioritized underserved communities for purposes of its activities
that support economic revitalization, as described below in II.D.1.
II.D.1. Prioritizing economic revitalization assistance--
alternative requirement. When funding activities outlined in 24 CFR
570.203 and 570.204 and sections 105(a)(14), (15), and (17) of the
HCDA, HUD is instituting an alternative requirement in addition to
the other requirements in these provisions to require grantees to
prioritize assistance to disaster-impacted businesses that serve
underserved communities and spur economic opportunity for
underserved communities that were economically distressed before the
disaster.
II.D.2. National objective documentation for activities that
support economic revitalization. 24 CFR 570.208(a)(4)(i)&(ii), 24
CFR 570.483(b)(4)(i)&(ii), 24 CFR 570.506(b)(5)&(6), and 24 CFR
1003.208(d) are waived to allow the grantees under the Consolidated
Notice to identify the LMI 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. This
method replaces the standard CDBG requirement--in which grantees
must review the annual wages or salary of a job in comparison to the
person's total household income and size (i.e., the number of
persons). Thus, this method streamlines the documentation process by
allowing the collection of wage data for each position created or
retained from the assisted businesses, rather than from each
individual household.
II.D.3. Public benefit for activities that support economic
revitalization. When applicable, the public benefit provisions set
standards for individual economic development activities (such as a
single loan to a business) and for the aggregate of all economic
development activities. Economic development activities support
economic revitalization. Currently, public benefit standards limit
the amount of CDBG assistance per job retained or created, or the
amount of CDBG assistance per LMI person to whom goods or services
are provided by the activity. These dollar thresholds can impede
recovery by limiting the amount of assistance the grantee may
provide to a critical activity.
HUD waives 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
570.209(b)(1), (2), (3)(i), (4), and 24 CFR 1003.302(c) for all
economic development activities. Paragraph (g) of 24 CFR 570.482 and
paragraph (c) and (d) under 570.209 are also waived to the extent
these provisions are related to public benefit. However, grantees
that choose to take advantage of this waiver in lieu of complying
with public benefit standards under the existing regulatory
requirements shall be subject to the following condition: Grantees
shall collect and maintain documentation in the project file on the
creation and retention of total jobs; the number of jobs within
appropriate salary ranges, as determined by the grantee; the average
amount of assistance provided per job, by activity or program; and
the types of jobs. Additionally, grantees shall report the total
number of jobs created and retained and the applicable national
objective in the DRGR system.
II.D.4. Clarifying note on Section 3 worker eligibility and
documentation requirements. Section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701u) (Section 3) applies to
CDBG-DR activities that are Section 3 projects, as defined at 24 CFR
75.3(a)(2). The purpose of Section 3 is to ensure that economic
opportunities, most importantly employment, generated by certain HUD
financial assistance shall be directed to low- and very low-income
persons, particularly those who are recipients of government
assistance for housing or residents of the community in which the
Federal assistance is spent. CDBG-DR grantees are directed to HUD's
guidance published in CPD Notice 2021-09, ``Section 3 of the Housing
and Urban Development Act of 1968, as amended by the Housing and
Community Development Act of 1992, final rule requirements for CDBG,
CDBG-CV, CDBG-DR, CDBG-Mitigation (CDBG-MIT), NSP, Section 108, and
RHP projects,'' as amended (<a href="https://www.hud.gov/sites/dfiles/OCHCO/documents/2021-09cpdn.pdf">https://www.hud.gov/sites/dfiles/OCHCO/documents/2021-09cpdn.pdf</a>). All direct recipients of CDBG-DR funding
must report Section 3 information through the DRGR system.
II.D.5. Waiver and modification of the job relocation clause to
permit assistance to help a business return. CDBG requirements
prevent program participants from providing assistance to a business
to relocate from one labor market area to another if the relocation
is likely to result in a significant loss of jobs in the labor
market from which the business moved. This prohibition can be a
critical barrier to reestablishing and rebuilding a displaced
employment base after a major disaster. Therefore, 42 U.S.C.
5305(h), 24 CFR 570.210, 24 CFR 570.482(h), and 24 CFR 1003.209, are
waived to allow a grantee to provide assistance to any business that
was operating in the disaster-declared labor market 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
another labor market area within the same state to continue
business.
II.D.6. Underwriting. Notwithstanding section 105(e)(1) of the
HCDA, no CDBG-DR funds may be provided to a for-profit entity for an
economic development project under section 105(a)(17) of the HCDA
unless such project has been evaluated and selected in accordance
with guidelines developed by HUD pursuant to section 105(e)(2) of
the HCDA for evaluating and selecting economic development projects.
Grantees and their subrecipients are required to comply with the
underwriting guidelines in Appendix A to 24 CFR part 570 if they are
using grant funds to provide assistance to a for-profit entity for
an
[[Page 31652]]
economic development project under section 105(a)(17) of the HCDA.
The underwriting guidelines are found at Appendix A of 24 CFR part
570.
II.D.7. Limitation on use of funds for eminent domain. CDBG-DR
funds may not be used to support any Federal, state, or local
projects that seek to use the power of eminent domain, unless
eminent domain is employed only for a public use. For purposes of
this paragraph, public use shall not be construed to include
economic development that primarily benefits private entities. The
following shall be considered a public use for the purposes of
eminent domain: Any use of funds for (1) mass transit, railroad,
airport, seaport, or highway projects; (2) utility projects that
benefit or serve the general public, including energy related,
communication-related, water related, and wastewater-related
infrastructure; (3) other structures designated for use by the
general public or which have other common-carrier or public-utility
functions that serve the general public and are subject to
regulation and oversight by the government; and (4) projects for the
removal of an immediate threat to public health and safety,
including the removal of a brownfield as defined in the Small
Business Liability Relief and Brownfields Revitalization Act (Pub.
L. 107-118).
III. Grant Administration
III.A. Pre-Award Evaluation of Management and Oversight of Funds
III.A.1. Certification of financial controls and procurement
processes, and adequate procedures for proper grant management.
Appropriations acts require that the Secretary certify that the
grantee has in place proficient financial controls and procurement
processes and has established adequate procedures to prevent any
duplication of benefits as defined by section 312 of the Stafford
Act, 42 U.S.C. 5155, to ensure timely expenditure of funds, to
maintain a comprehensive website regarding all disaster recovery
activities assisted with these funds, and to detect and prevent
waste, fraud, and abuse of funds.
III.A.1.a. Documentation requirements. To enable the Secretary
to make this certification, each grantee must submit to HUD the
certification documentation listed below. This information must be
submitted within 60 days of the applicability date of the Allocation
Announcement Notice, or with the grantee's submission of its action
plan in DRGR as described in section III.C.1, whichever date is
earlier. If required by appropriations acts, grant agreements will
not be executed until the Secretary has issued a certification for
the grantee. For each of the items (1) through (6) below
(collectively referred to as the ``Financial Management and Grant
Compliance Certification Requirements'') the grantee must certify to
the accuracy of its submission when submitting the Financial
Management and Grant Compliance Certification Checklist (the
``Certification Checklist''). The Certification Checklist is a
document that incorporates all of the Financial Management and Grant
Compliance Certification Requirements. Not all of the requirements
in (1) through (6) below are appropriate or applicable to Indian
tribes. Therefore, Indian tribes that receive an allocation directly
from HUD may request an alternative method to document support for
the Secretary's certification.
(1) Proficient financial management controls. A grantee has
proficient financial management controls if each of the following
criteria is satisfied:
(a) The grantee agency administering this grant submits its most
recent single audit and consolidated annual financial report (CAFR),
which in HUD's determination indicates that the grantee has no
material weaknesses, deficiencies, or concerns that HUD considers to
be relevant to the financial management of CDBG, CDBG-DR, or CDBG-
MIT funds. If the single audit or CAFR identified weaknesses or
deficiencies, the grantee must provide documentation satisfactory to
HUD showing how those weaknesses have been removed or are being
addressed.
(b) The grantee has completed and submitted the certification
documentation required in the applicable Certification Checklist.
The grantee's documentation must demonstrate that the standards meet
the requirements in the Consolidated Notice and the Certification
Checklist.
(2) Each grantee must provide HUD its procurement processes for
review, so HUD may evaluate the grantee's processes to determine
that they are based on principles of full and open competition. A
grantee's procurement processes must comply with the procurement
requirements at section IV.B.
(a) A state grantee has proficient procurement processes if HUD
determines that its processes uphold the principles of full and open
competition and include an evaluation of the cost or price of the
product or service, and if its procurement processes reflect that
it:
(i) Adopted 2 CFR 200.318 through 200.327;
(ii) follows its own state procurement policies and procedures
and establishes requirements for procurement processes for local
governments and subrecipients based on full and open competition
pursuant to 24 CFR 570.489(g), and the requirements for the state,
its local governments, and subrecipients include evaluation of the
cost or price of the product or service; or
(iii) adopted 2 CFR 200.317, meaning that it will follow its own
state procurement processes and evaluate the cost or price of the
product or service, but impose 2 CFR 200.318 through 200.327 on its
subrecipients.
(b) A local government grantee has proficient procurement
processes if the processes are consistent with the specific
applicable procurement standards identified in 2 CFR 200.318 through
200.327. When the grantee provides a copy of its procurement
processes, it must indicate the sections that incorporate these
provisions.
(c) An Indian tribe grantee has proficient procurement processes
if its procurement standards are consistent with procurement
requirements in 2 CFR part 200 imposed by 24 CFR 1003.501, and
additional procurement requirements in 1003.509(e) and 1003.510.
(3) Duplication of benefits. A grantee has adequate policies and
procedures to prevent the duplication of benefits (DOB) if the
grantee submits and identifies a uniform process that reflects the
requirements in section IV.A of the Consolidated Notice, including:
(a) Determining all disaster assistance received by the grantee
or applicant and all reasonably identifiable financial assistance
available to the grantee or applicant, as applicable, before
committing funds or awarding assistance;
(b) determining a grantee's or an applicant's unmet need(s) for
CDBG-DR assistance before committing funds or awarding assistance;
and
(c) requiring beneficiaries to enter into a signed agreement to
repay any duplicative assistance if they later receive additional
assistance for the same purpose for which the CDBG-DR award was
provided. The grantee must identify a method to monitor compliance
with the agreement for a reasonable period (i.e., a time period
commensurate with risk) and must articulate this method in its
policies and procedures, including the basis for the period during
which the grantee will monitor compliance. This agreement must also
include the following language: ``Warning: Any person who knowingly
makes a false claim or statement to HUD or causes another to do so
may be subject to civil or criminal penalties under 18 U.S.C. 2,
287, 1001 and 31 U.S.C. 3729.''
Policies and procedures of the grantee submitted to support the
certification must provide that before the award of assistance, the
grantee will use the best, most recent available data from FEMA, the
Small Business Administration (SBA), insurers, and any other sources
of local, state, and Federal sources of funding to prevent the
duplication of benefits.
(4) Timely expenditures. A grantee has adequate policies and
procedures to determine timely expenditures if it submits policies
and procedures that indicate the following to HUD: How it will track
and document expenditures of the grantee and its subrecipients (both
actual and projected reported in performance reports); how it will
account for and manage program income; how it will reprogram funds
in a timely manner for activities that are stalled; and how it will
project expenditures of all CDBG-DR funds within the period provided
for in section V.A.
(5) Comprehensive disaster recovery website. A grantee has
adequate policies and procedures to maintain a comprehensive
accessible website if it submits policies and procedures indicating
to HUD that the grantee will have a separate web page dedicated to
its disaster recovery activities assisted with CDBG-DR funds that
includes the information described at section III.D.1.d.-e. The
procedures must also indicate the frequency of website updates. At
minimum, grantees must update their website quarterly.
(6) Procedures to detect and prevent fraud, waste, and abuse. A
grantee has adequate procedures to detect and prevent fraud, waste,
and abuse if it submits procedures that indicate:
[[Page 31653]]
(a) How the grantee will verify the accuracy of information
provided by applicants;
(b) the criteria to be used to evaluate the capacity of
potential subrecipients;
(c) the frequency with which the grantee will monitor other
agencies of the grantee that will administer CDBG-DR funds, and how
it will monitor subrecipients, contractors, and other program
participants, and why monitoring is to be conducted and which items
are to be monitored;
(d) it has or will hire an internal auditor that provides both
programmatic and financial oversight of grantee activities, and has
adopted policies that describes the auditor's role in detecting
fraud, waste, and abuse, which policies must be submitted to HUD;
(e)(i) for states or grantees subject to the same requirements
as states, a written standard of conduct and conflicts of interest
policy that complies with the requirements of 24 CFR 570.489(g) and
(h) and subparagraph III.A.1.a(2)(a) of the Consolidated Notice,
which policy includes the process for promptly identifying and
addressing such conflicts;
(ii) for units of general local government or grantees subject
to the same requirements as units of general local government, a
written standard of conduct and conflicts of interest policy that
complies with 24 CFR 570.611 and 2 CFR 200.318, as applicable, which
includes the process for promptly identifying and addressing such
conflicts;
(iii) for Indian tribes, a written standard of conduct and
conflicts of interest policy that complies with 24 CFR 1003.606, as
applicable; and
(f) it assists in investigating and taking action when fraud
occurs within the grantee's CDBG-DR activities and/or programs. All
grantees receiving CDBG-DR funds for the first time shall attend and
require subrecipients to attend fraud related training provided by
HUD OIG, when offered, to assist in the proper management of CDBG-DR
grant funds. Instances of fraud, waste, and abuse should be referred
to the HUD OIG Fraud Hotline (phone: 1-800-347-3735 or email:
<a href="/cdn-cgi/l/email-protection#71191e051d181f14311904151e18165f161e07"><span class="__cf_email__" data-cfemail="157d7a61797c7b70557d60717a7c723b727a63">[email protected]</span></a>).
Following a disaster, property owners and renters are frequently
the targets of persons fraudulently posing as government employees,
creditors, mortgage servicers, insurance adjusters, and contractors.
The grantee's procedures must address how the grantee will make
CDBG-DR beneficiaries aware of the risks of contractor fraud and
other potentially fraudulent activity that can occur in communities
recovering from a disaster. Grantees must provide CDBG-DR
beneficiaries with information that raises awareness of possible
fraudulent activity, how the fraud can be avoided, and what local or
state agencies to contact to take action and protect the grantee and
beneficiary investment. The grantee's procedures must address the
steps it will take to assist a CDBG-DR beneficiary if the
beneficiary experiences contractor or other fraud. If the
beneficiary is eligible for additional assistance as a result of the
fraudulent activity and the creation of remaining unmet need, the
procedures must also address what steps the grantee will follow to
provide the additional assistance.
III.A.1.b. Relying on prior submissions--financial management
and grant compliance certification requirements. This section only
applies once a grantee has received a CDBG-DR grant through an
Allocation Announcement Notice that makes the Consolidated Notice
applicable. After that original grant, if a CDBG-DR grantee is
awarded a subsequent CDBG-DR grant, HUD will rely on the grantee's
prior submissions provided in response to the Financial Management
and Grant Compliance Certification Requirements in the Consolidated
Notice. HUD will continue to monitor the grantee's submissions and
updates made to policies and procedures during the normal course of
business. The grantee must notify HUD of any substantial changes
made to these submissions.
If a CDBG-DR grantee is awarded a subsequent CDBG-DR grant, and
it has been more than three years since the executed grant agreement
for the original CDBG-DR grant or a subsequent grant is equal to or
greater than ten times the amount of the original CDBG-DR grant,
grantees must update and resubmit the documentation required by
paragraph III.A.1.a. with the completed Certification Checklist to
enable the Secretary to certify that the grantee has in place
proficient financial controls and procurement processes, and
adequate procedures for proper grant management. However, the
Secretary may require any CDBG-DR grantee to update and resubmit the
documentation required by paragraph III.A.1.a., if there is good
cause to require it.
III.A.2. Implementation plan. HUD requires each grantee to
demonstrate that it has sufficient capacity to manage the CDBG-DR
funds and the associated risks. Grantees must evidence their
management capacity through their implementation plan submissions.
These submissions must meet the criteria below and must be submitted
within 120 days of the applicability date of the governing
Allocation Announcement Notice or with the grantee's submission of
its action plan, whichever is earlier, unless the grantee has
requested, and HUD has approved an extension of the submission
deadline.
III.A.2.a. To enable HUD to assess risk as described in 2 CFR
200.206, the grantee will submit an implementation plan to HUD. The
implementation plan must describe the grantee's capacity to carry
out the recovery and how it will address any capacity gaps. HUD will
determine that the grantee has sufficient management capacity to
adequately reduce risk if the grantee submits implementation plan
documentation that addresses (1) through (3) below:
(1) Capacity assessment. The grantee identifies the lead agency
responsible for implementation of the CDBG-DR award and indicates
that the head of that agency will report directly to the chief
executive officer of the jurisdiction. The grantee has conducted an
assessment of its capacity to carry out CDBG-DR recovery efforts and
has developed a timeline with milestones describing when and how the
grantee will address all capacity gaps that are identified. The
assessment must include a list of any open CDBG-DR findings and an
update on the corrective actions undertaken to address each finding.
(2) Staffing. The grantee must submit an organizational chart of
its department or division and must also provide a table that
clearly indicates which personnel or organizational unit will be
responsible for each of the Financial Management and Grant
Compliance Certification Requirements identified in section
III.A.1.a. along with staff contact information, if available (i.e.,
personnel responsible for conducting DOB analysis, timely
expenditure, website management, monitoring and compliance, and
financial management). The grantee must also submit documentation
demonstrating that it has assessed staff capacity and identified
positions for the purpose of: Case management in proportion to the
applicant population; program managers who will be assigned
responsibility for each primary recovery area; staff who have
demonstrated experience in housing, infrastructure (as applicable),
and economic revitalization (as applicable); staff responsible for
procurement/contract management, regulations implementing Section 3
of the Housing and Urban Development Act of 1968, as amended (24 CFR
part 75) (Section 3), fair housing compliance, and environmental
compliance. An adequate plan must also demonstrate that the internal
auditor and responsible audit staff report independently to the
chief elected or executive officer or board of the governing body of
any designated administering entity.
The grantee's implementation plan must describe how it will
provide technical assistance for any personnel that are not employed
by the grantee at the time of action plan submission, and to fill
gaps in knowledge or technical expertise required for successful and
timely recovery. State grantees must also include how it plans to
provide technical assistance to subgrantees and subrecipients,
including units of general local government.
(3) Internal and interagency coordination. The grantee's plan
must describe how it will ensure effective communication between
different departments and divisions within the grantee's
organizational structure that are involved in CDBG-DR-funded
recovery efforts, mitigation efforts, and environmental review
requirements, as appropriate; between its lead agency and
subrecipients responsible for implementing the grantee's action
plan; and with other local and regional planning efforts to ensure
consistency. The grantee's submissions must demonstrate how it will
consult with other relevant government agencies, including the State
Hazard Mitigation Officer (SHMO), State or local Disaster Recovery
Coordinator, floodplain administrator, and any other state and local
emergency management agencies, such as public health and
environmental protection agencies, that have primary responsibility
for the administration of FEMA or USACE funds.
III.A.2.b. Relying on prior submissions--Implementation plan.
This section only applies once a grantee has received a CDBG-DR
grant through an Allocation Announcement Notice that makes the
Consolidated Notice applicable. After that
[[Page 31654]]
original grant, if a CDBG-DR grantee is awarded a subsequent CDBG-DR
grant, HUD will rely on the grantee's implementation plan submitted
for its original CDBG-DR grant unless it has been more than three
years since the executed grant agreement for the original CDBG-DR
grant or the subsequent grant is equal to or greater than ten times
the amount of its original CDBG-DR grant.
If a CDBG-DR grantee is awarded a subsequent CDBG-DR grant, and
it has been more than three years since the executed grant agreement
for its original CDBG-DR grant or a subsequent grant is equal to or
greater than ten times the amount of the original CDBG-DR grant, the
grantee is to update and resubmit its implementation plan to reflect
any changes to its capacity, staffing, and coordination.
III.B. Administration, Planning, and Financial Management
III.B.1. Grant administration and planning.
III.B.1.a. Grantee responsibilities. Each grantee shall
administer its award in compliance with all applicable laws and
regulations and shall be financially accountable for the use of all
awarded funds. CDBG-DR grantees must comply with the recordkeeping
requirements of 24 CFR 570.506 and 24 CFR 570.490, as amended by the
Consolidated Notice waivers and alternative requirements. All
grantees must maintain records of performance in DRGR, as described
elsewhere in the Consolidated Notice.
III.B.1.b. Grant administration cap. Up to five percent of the
grant (plus five percent of program income generated by the grant)
can be used for administrative costs by the grantee, units of
general local government, or subrecipients. Thus, the total of all
costs classified as administrative for a CDBG-DR grant must be less
than or equal to the five percent cap (plus five percent of program
income generated by the grant). The cap for administrative costs is
subject to the combined technical assistance and administrative cap
for state grantees as discussed in section III.B.2.a.
III.B.1.c. Use of funds for administrative costs across multiple
grants. The Additional Supplemental Appropriations for Disaster
Relief Act, 2019 (Pub. L. 116-20) authorized special treatment for
eligible administrative costs for grantees that received awards
under Public Laws 114-113, 114-223, 114-254, 115-31, 115-56, 115-
123, 115-254, 116-20, or any future act. The Consolidated Notice
permits grantees to use eligible administrative funds (up to five
percent of each grant award plus up to five percent of program
income generated by the grant) for the cost of administering any of
these grants awarded under the identified Public Laws (including
future Acts) without regard to the particular disaster appropriation
from which such funds originated. To exercise this authority, the
grantee must ensure that it has appropriate financial controls to
guarantee that the amount of grant administration expenditures for
each of the aforementioned grants will not exceed five percent of
the total grant award for each grant (plus five percent of program
income generated by the grant). The grantee must review and modify
any financial management policies and procedures regarding the
tracking and accounting of administration costs as necessary.
III.B.1.d. Planning expenditures cap. Both state and local
government grantees are limited to spending a maximum of fifteen
percent of their total grant amount on planning costs. Planning
costs subject to the 15 percent cap are those defined in 42 U.S.C.
5305(a)(12) and more broadly in 24 CFR 570.205.
III.B.2. State grantees only.
III.B.2.a. Combined technical assistance and administrative cap
(state grantees only). The provisions of 42 U.S.C. 5306(d) and 24
CFR 570.489(a)(1)(i) and (iii), and 24 CFR 570.489(a)(2) shall not
apply to the extent that they cap administration and technical
assistance expenditures, limit a state's ability to charge a nominal
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. 42 U.S.C.
5306(d)(5) and (6) are waived and replaced with the alternative
requirement that the aggregate total for administrative and
technical assistance expenditures must not exceed five percent of
the grant, plus five percent of program income generated by the
grant.
III.B.2.b. Planning-only activities (state grantees only). The
State CDBG Program requires that, for planning-only grants, local
government grant recipients must document that the use of funds
meets a national objective. In the CDBG Entitlement Program, these
more general planning activities are presumed to meet a national
objective under the requirements at 24 CFR 570.208(d)(4). HUD notes
that almost all effective 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. To assist state grantees, HUD is waiving the
requirements at 24 CFR 570.483(b)(5) and (c)(3), which limit the
circumstances under which the planning activity can meet a low- and
moderate-income or slum-and-blight national objective. Instead, as
an alternative requirement, 24 CFR 570.208(d)(4) applies to states
when funding disaster recovery-assisted, planning-only grants, or
when directly administering planning activities that guide disaster
recovery. In addition, 42 U.S.C. 5305(a)(12) is waived to the extent
necessary so the types of planning activities that states may fund
or undertake are expanded to be consistent with those of CDBG
Entitlement grantees identified at 24 CFR 570.205.
III.B.2.c. Direct grant administration and means of carrying out
eligible activities (state grantees only). Requirements at 42 U.S.C.
5306(d) are waived to allow a state to use its disaster recovery
grant allocation directly to carry out state-administered activities
eligible under the Consolidated Notice, rather than distribute all
funds to local governments. Pursuant to this waiver and alternative
requirement, the standard at 24 CFR 570.480(c) and the provisions at
42 U.S.C. 5304(e)(2) will also include activities that the state
carries out directly. Activities eligible under the Consolidated
Notice may be carried out by a state, subject to state law and
consistent with the requirement of 24 CFR 570.200(f), through its
employees, through procurement contracts, or through assistance
provided under agreements with subrecipients. State grantees
continue to be responsible for civil rights, labor standards, and
environmental protection requirements, for compliance with 24 CFR
570.489(g) and (h), and subparagraph III.A.1.a.(2)(a) of the
Consolidated Notice relating to conflicts of interest, and for
compliance with 24 CFR 570.489(m) relating to monitoring and
management of subrecipients.
A state grantee may also carry out activities in tribal areas. A
state must coordinate with the Indian tribe with jurisdiction over
the tribal area when providing CDBG-DR assistance to beneficiaries
in tribal areas. State grantees carrying out projects in tribal
areas, either directly or through its employees, through procurement
contracts, or through assistance provided under agreements with
subrecipients, must obtain the consent of the Indian tribe with
jurisdiction over the tribal area to allow the state grantee to
carry out or to fund CDBG-DR projects in the area.
III.B.2.d. Waiver and alternative requirement for distribution
to CDBG metropolitan cities and urban counties (state grantees
only). 42 U.S.C. 5302(a)(7) (definition of ``nonentitlement area'')
and related provisions of 24 CFR part 570, including 24 CFR 570.480,
are waived to permit state grantees to distribute CDBG-DR funds to
units of local government and Indian tribes.
III.B.2.e. Use of subrecipients (state grantees only). Paragraph
III.B.2.c. provides a waiver and alternative requirement that a
state may carry out activities directly, including through
assistance provided under agreements with subrecipients. Therefore,
when states carry out activities directly through subrecipients, the
following alternative requirements apply: The state is subject to
the definition of subrecipients at 24 CFR 570.500(c) and must adhere
to the requirements for agreements with subrecipients at 24 CFR
570.503. Additionally, 24 CFR 570.503(b)(4) is modified to require
the subrecipient to comply with applicable uniform requirements, as
described in 24 CFR 570.502, except that the subrecipient shall
follow procurement requirements imposed by the state in accordance
with subparagraph III.A.1.a.(2) of the Consolidated Notice. When 24
CFR 570.503 applies, notwithstanding 24 CFR 570.503(b)(5)(i), units
of general local government that are subrecipients are defined as
recipients under 24 CFR part 58 and are therefore responsible
entities that assume environmental review responsibilities, as
described in III.F.5. Grantees are reminded that they are
responsible for providing on-going oversight and monitoring of
subrecipients and are ultimately responsible for subrecipient
compliance with all CDBG-DR requirements.
III.B.2.f. Recordkeeping (state grantees only). When a state
carries out activities directly, 24 CFR 570.490(b) is waived and the
following alternative provision shall apply: A state grantee shall
establish and maintain
[[Page 31655]]
such records as may be necessary to facilitate review and audit by
HUD of the state's administration of CDBG-DR funds, under 24 CFR
570.493 and reviews and audits by the state under III.B.2.h.
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:
(a) Enable HUD to make the applicable determinations described at 24
CFR 570.493; (b) make compliance determinations for activities
carried out directly by the state; and (c) show how activities
funded are consistent with the descriptions of activities proposed
for funding in the action plan and/or DRGR system. 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.
III.B.2.g. Change of use of real property (state grantees only).
This alternative requirement conforms the change of use of real
property rule to the waiver allowing a state to carry out activities
directly. For purposes of these grants, all references to ``unit of
general local government'' in 24 CFR 570.489(j), shall be read as
``state, local governments, or Indian tribes (either as
subrecipients or through a method of distribution), or other state
subrecipient.''
III.B.2.h. Responsibility for review and handling of
noncompliance (state grantees only). This change is in conformance
with the waiver allowing a 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: The state shall make
reviews and audits, including on-site reviews of any local
governments or Indian tribes (either as subrecipients or through a
method of distribution) designated public agencies, and other
subrecipients, as may be necessary or appropriate to meet the
requirements of section 104(e)(2) of the HCDA, as amended, and as
modified by the Consolidated 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 subrecipients,
designated public agencies, or local governments.
III.B.2.i. Consultation (state grantees only). Currently, the
HCDA and regulations require a state grantee to consult with
affected local governments in nonentitlement areas of the state in
determining the state's proposed method of distribution. HUD is
waiving 42 U.S.C. 5306(d)(2)(C)(iv), 42 U.S.C. 5306(d)(2)(D), 24 CFR
91.325(b)(2), and 24 CFR 91.110, and imposing an alternative
requirement that states receiving an allocation of CDBG-DR funds
consult with all disaster-affected local governments (including any
CDBG-entitlement grantees), Indian tribes, and any public housing
authorities in determining the use of funds. This approach ensures
that a state grantee sufficiently assesses the recovery needs of all
areas affected by the disaster.
III.C. Action Plan for Disaster Recovery Waiver and Alternative
Requirement
Requirements for CDBG actions plans, located at 42 U.S.C.
5304(a)(1), 42 U.S.C. 5304(m), 42 U.S.C. 5306(a)(1), 42 U.S.C.
5306(d)(2)(C)(iii), 42 U.S.C. 12705(a)(2), and 24 CFR 91.220 and
91.320, are waived for CDBG-DR grants. Instead, grantees must submit
to HUD an action plan for disaster recovery which will describe
programs and activities that conform to applicable requirements as
specified in the Consolidated Notice and the applicable Allocation
Announcement Notice. HUD will monitor the grantee's actions and use
of funds for consistency with the plan, as well as meeting the
performance and timeliness objectives therein. The Secretary will
disapprove all action plans that are substantially incomplete if it
is determined that the plan does not satisfy all of the required
elements identified in the Consolidated Notice and the applicable
Allocation Announcement Notice.
III.C.1. Action plan. The grantee's action plan must identify
the use of all funds--including criteria for eligibility and how the
uses address long-term recovery needs, restoration of infrastructure
and housing, economic revitalization, and the incorporation of
mitigation measures in the MID areas. HUD created the Public Action
Plan in DRGR which is a function that allows grantees to develop and
submit their action plans for disaster recovery directly into DRGR.
Grantees must use HUD's Public Action Plan in DRGR to develop all
CDBG-DR action plans and substantial amendments submitted to HUD for
approval. The Public Action Plan is different from the DRGR Action
Plan, which is a comprehensive description of projects and
activities in DRGR.
The grantee must describe the steps it will follow to make the
action plan, substantial amendments, performance reports, and other
relevant program materials available in a form accessible to persons
with disabilities and those with limited English proficiency (LEP).
All grantees must include sufficient information in its action plan
so that all interested parties will be able to understand and
comment on the action plan. The action plan (and subsequent
amendments) must include a single chart or table that illustrates,
at the most practical level, how all funds are budgeted (e.g., by
program, subrecipient, grantee-administered activity, or other
category). The grantee must certify, as required by section
III.F.7., that activities to be undertaken with CDBG-DR funds are
consistent with its action plan.
The action plan must contain:
III.C.1.a. An impact and unmet needs assessment. Each grantee
must develop an impact and unmet needs assessment to understand the
type and location of community needs and to target limited resources
to those areas with the greatest need. CDBG-DR grantees must conduct
an impact and unmet needs assessment to inform the use of the grant.
Grantees must cite data sources in the impact and unmet needs
assessment. At a minimum, the impact and unmet needs assessment
must:
<bullet> Evaluate all aspects of recovery including housing
(interim and permanent, owner and rental, single family and
multifamily, affordable and market rate, and housing to meet the
needs of persons who were experiencing homelessness pre-disaster),
infrastructure, and economic revitalization needs, while also
incorporating mitigation needs into activities that support recovery
as required in section II.A.2.;
<bullet> Estimate unmet needs to ensure CDBG-DR funds meet needs
that are not likely to be addressed by other sources of funds by
accounting for the various forms of assistance available to, or
likely to be available to, affected communities (e.g., projected
FEMA funds) and individuals (e.g., estimated insurance) and, using
the most recent available data, estimating the portion of need
unlikely to be addressed by insurance proceeds, other Federal
assistance, or any other funding sources;
<bullet> Assess whether public services (e.g., housing
counseling, legal advice and representation, job training, mental
health, and general health services) are necessary to complement
activities intended to address housing, infrastructure, and economic
revitalization and how those services would need to be made
accessible to individuals with disabilities including, but not
limited to, mobility, sensory, developmental, emotional, cognitive,
and other impairments;
<bullet> Describe the extent to which expenditures for planning
activities, including the determination of land use goals and
policies, will benefit the HUD-identified MID areas, as described in
section II.A.3.;
<bullet> Describe disaster impacts geographically by type at the
lowest level practicable (e.g., county/parish level or lower if
available for states, and neighborhood or census tract level for
cities); and
<bullet> Take into account the costs and benefits of
incorporating hazard mitigation measures to protect against the
specific identified impacts of future extreme weather events and
other natural hazards. This analysis should factor in historical and
projected data on risk that incorporates best available science
(e.g., the most recent National Climate Assessment).
Disaster recovery needs evolve over time and grantees must amend
the impact and unmet needs assessment and action plan as additional
needs are identified and additional resources become available. At a
minimum, grantees must revisit and update the impact and unmet needs
assessment when moving funds from one program to another through a
substantial amendment.
III.C.1.b. Connection of programs and projects to unmet needs.
The grantee must describe the connection between identified unmet
needs and the allocation of CDBG-DR resources. The plan must provide
a clear connection between a grantee's impact and unmet needs
assessment and its proposed programs and projects in the MID areas
(or outside in connection to the MID areas as described in section
II.A.3). Such description must demonstrate a reasonably
proportionate allocation of resources relative to areas and
categories (i.e., housing, economic revitalization, and
infrastructure) of greatest needs identified in the grantee's impact
and unmet needs assessment or provide an acceptable justification
for a disproportional
[[Page 31656]]
allocation, while also incorporating hazard mitigation measures to
reduce the impacts of recurring natural disasters and the long-term
impacts of climate change. Grantee action plans may provide for the
allocation of funds for administration and planning activities and
for public service activities, subject to the caps on such
activities as described in the Consolidated Notice.
III.C.1.c. Public housing, affordable rental housing, and
housing for vulnerable populations. Each grantee must include a
description of how it has analyzed, identified, and will address
(with CDBG-DR or other sources) the disaster-related rehabilitation,
reconstruction, and new construction needs in the MID-area of the
types of housing described below. Specifically, a grantee must
assess and describe how it will address unmet needs in the following
types of housing, subject to the applicable HUD program
requirements: Public housing, affordable rental housing (including
both subsidized and market rate affordable housing), and housing for
vulnerable populations (See Section III.C.1.c.iii below), including
emergency shelters and permanent housing for persons experiencing
homelessness, in the areas affected by the disaster. Grantees must
coordinate with local public housing authorities (PHA) in the MID
areas to ensure that the grantee's representation in the action plan
reflects the input of those entities as well as coordinating with
State Housing Finance agencies to make sure that all funding sources
that are available and opportunities for leverage are noted in the
action plan.
(i) Public housing: Describe unmet public housing needs of each
disaster-impacted PHA within its jurisdiction, if applicable. The
grantee must work directly with impacted PHAs in identifying
necessary and reasonable costs and ensuring that adequate funding
from all available sources is dedicated to addressing the unmet
needs of damaged public housing (e.g., FEMA, insurance, and funds
available from programs administered by HUD's Office of Public and
Indian Housing).
(ii) Affordable rental housing: Describe unmet affordable rental
housing needs for LMI households as a result of the disaster or
exacerbated by the disaster, including private market units
receiving project-based rental assistance or with tenants that
participate in the Section 8 Housing Choice Voucher Program, and any
other housing that is assisted under a HUD program in the MID areas.
Identify funding to specifically address these unmet needs for
affordable rental housing to LMI households. If a grantee is
proposing an allocation of CDBG-DR funds for affordable rental
housing needs, the action plan must, at a minimum, meet the
requirements described in II.B.3.
(iii) Housing for vulnerable populations: Describe how CDBG-DR
or other funding sources available will promote housing for
vulnerable populations, as defined in section III.C.1.d., in the MID
area, including how it plans to address: (1) Transitional housing,
including emergency shelters and housing for persons experiencing
homelessness, permanent supportive housing, and permanent housing
needs of individuals and families (including subpopulations) that
are experiencing or at risk of experiencing homelessness; (2) the
prevention of low-income individuals and families with children
(especially those with incomes below thirty percent of the area
median) from becoming homeless; (3) the special needs of persons who
are not experiencing homelessness but require supportive housing
(i.e., elderly, frail elderly, persons with disabilities (mental,
physical, developmental, etc.), victims of domestic violence,
persons with alcohol or other substance-use disorder, persons with
HIV/AIDS and their families, and public housing residents, as
identified in 24 CFR 91.315(e)).
III.C.1.d. Fair housing, civil rights data, and advancing
equity. The grantee must use its CDBG-DR funds in a manner that
complies with its fair housing and nondiscrimination obligations,
including title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d
et seq., the Fair Housing Act, 42 U.S.C. 3601-19, Section 504 of the
Rehabilitation Act of 1973, 29 U.S.C. 794, the Americans with
Disabilities Act of 1990, 42 U.S.C. 12131 et seq., and Section 109
of the HCDA, 42 U.S.C. 5309. To ensure that the activities performed
in connection with the action plan will comply with these
requirements, the grantee must provide an assessment of whether its
planned use of CDBG-DR funds will have an unjustified discriminatory
effect on or failure to benefit racial and ethnic minorities in
proportion to their communities' needs, particularly in racially and
ethnically concentrated areas of poverty, and how it will address
the recovery needs of impacted individuals with disabilities.
Grantees should also consider the impact of their planned use of
CDBG-DR funds on other protected class groups under fair housing and
civil rights laws, vulnerable populations, and other historically
underserved communities. For purposes of the Consolidated Notice,
HUD defines vulnerable populations as a group or community whose
circumstances present barriers to obtaining or understanding
information or accessing resources. In the action plan, grantees
should identify those populations (i.e., which protected class,
vulnerable population, and historically underserved groups were
considered) and how those groups can be expected to benefit from the
activities set forth in the plan consistent with the civil rights
requirements set forth above.
To perform such an assessment, grantees must include data for
the HUD-identified and grantee-identified MID areas that identifies
the following information, as it is available:
<bullet> Racial and ethnic make-up of the population, including
relevant sub-populations depending on activities and programs
outlined in the plan (this would include renters and homeowners if
eligibility is dependent on housing tenure) and the specific sub-
geographies in the MID areas in which those programs and activities
will be carried out;
<bullet> LEP populations, including number and percentage of
each identified group;
<bullet> Number and percentage of persons with disabilities;
<bullet> Number and percentage of persons belonging to Federally
protected classes under the Fair Housing Act (race, color, national
origin, religion, sex--which includes sexual orientation and gender
identity--familial status, and disability) and other vulnerable
populations as determined by the grantee;
<bullet> Indigenous populations and tribal communities,
including number and percentage of each identified group;
<bullet> Racially and ethnically concentrated areas and
concentrated areas of poverty; and
<bullet> Historically distressed and underserved communities;
Grantees must explain how the use of funds will reduce barriers
that individuals may face when enrolling in and accessing CDBG-DR
assistance, for example, barriers imposed by a lack of outreach to
their community or by the lack of information in non-English
languages or accessible formats for individuals with different types
of disabilities.
Grantees are strongly encouraged to include examples of how
their proposed allocations, selection criteria, and other actions
can be expected to advance equity for protected class groups.
Grantees are strongly encouraged to explain and provide examples of
how their actions can be expected to advance the following
objectives:
<bullet> Equitably benefit protected class groups in the MID
areas, including racial and ethnic minorities, and sub geographies
in the MID areas in which residents belonging to such groups are
concentrated;
<bullet> To the extent consistent with purposes and uses of
CDBG-DR funds, overcome prior disinvestment in infrastructure and
public services for protected class groups, and areas in which
residents belonging to such groups are concentrated, when addressing
unmet needs;
<bullet> Enhance for individuals with disabilities in the MID
areas (a) the accessibility of disaster preparedness, resilience, or
recovery services, including the accessibility of evacuation
services and shelters; (b) the provision of critical disaster-
related information in accessible formats; and/or (c) the
availability of integrated, accessible housing and supportive
services.
Grantees must identify the proximity of natural and
environmental hazards (e.g., industrial corridors, sewage treatment
facilities, waterways, EPA superfund sites, brownfields, etc.) to
affected populations in the MID area, including members of protected
classes, vulnerable populations, and underserved communities and
explore how CDBG-DR activities may mitigate environmental concerns
and increase resilience among these populations to protect against
the effects of extreme weather events and other natural hazards.
Grantees must also describe how their use of CDBG-DR funds is
consistent with their obligation to affirmatively further fair
housing. HUD regulations at 24 CFR 5.151 provide that affirmatively
furthering fair housing means taking meaningful actions, in addition
to combating discrimination, that overcome patterns of segregation
and foster inclusive communities free from barriers that restrict
access to opportunity based on
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protected characteristics. Specifically, affirmatively furthering
fair housing means taking meaningful actions that, taken together,
address significant disparities in housing needs and in access to
opportunity, replacing segregated living patterns with truly
integrated and balanced living patterns, transforming racially or
ethnically concentrated areas of poverty into areas of opportunity,
and fostering and maintaining compliance with civil rights and fair
housing laws.
State and local government grantees must submit a certification
to AFFH in accordance with 24 CFR 5.150, et seq. CDBG-DR grantees
must also comply with the recordkeeping requirements of 24 CFR
570.506 and 24 CFR 570.490(b), as amended by the Consolidated
Notice.
III.C.1.e. Infrastructure. In its action plan, each grantee must
include a description of how it plans to meet the requirements of
the Consolidated Notice, including how it will: Promote sound,
sustainable long-term recovery planning as described in this
section; adhere to the elevation requirements established in section
II.C.2.; and coordinate with local and regional planning efforts as
described in section III.B.2.i and III.D.1.a. All infrastructure
investments must be designed and constructed to withstand chronic
stresses and extreme events by identifying and implementing
resilience performance metrics as described in section II.A.2.c.
If a grantee is allocating funds for infrastructure, its
description must include:
(1) How it will address the construction or rehabilitation of
disaster-related systems (e.g., storm water management systems) or
other disaster-related community-based mitigation systems (e.g.,
using FEMA's community lifelines). State grantees carrying out
infrastructure activities must work with units of general local
government and Indian tribes in the MID areas to identify the unmet
needs and associated costs of needed disaster-related infrastructure
improvements;
(2) How mitigation measures and strategies to reduce natural
hazard risks, including climate-related risks, will be integrated
into rebuilding activities;
(3) The extent to which CDBG-DR funded infrastructure activities
will achieve objectives outlined in regionally or locally
established plans and policies that are designed to reduce future
risk to the jurisdiction;
(4) How the grantee will evaluate the costs and benefits in
selecting infrastructure projects to assist with CDBG-DR funds;
(5) How the grantee will align infrastructure investments with
other planned federal, state, or local capital improvements and
infrastructure development efforts, and will work to foster the
potential for additional infrastructure funding from multiple
sources, including state and local capital improvement projects in
planning, and the potential for private investment;
(6) How the grantee will employ adaptable and reliable
technologies to prevent premature obsolescence of infrastructure;
and
(7) How the grantee will invest in restoration of infrastructure
and related long-term recovery needs within historically underserved
communities that lacked adequate investments in housing,
transportation, water, and wastewater infrastructure prior to the
disaster.
III.C.1.f. Minimize Displacement. A description of how the
grantee plans to minimize displacement of persons or entities, and
assist any persons or entities displaced, and ensure accessibility
needs of displaced persons with disabilities. Specifically, grantees
must detail how they will meet the Residential Anti-displacement and
Relocation Assistance Plan (RARAP) requirements in section IV.F.7.
Grantees must indicate to HUD whether they will be amending an
existing RARAP or creating a new RARAP specific to CDBG-DR. Grantees
must meet the requirements related to the RARAP prior to
implementing any activity with CDBG-DR grant funds, such as buyouts
and other disaster recovery activities. Grantees must seek to
minimize displacement or adverse impacts from displacement,
consistent with the requirements of Section IV.F of the Consolidated
Notice, Section 104(d) of the HCDA (42 U.S.C. 5304(d)) and
implementing regulations at 24 CFR part 42, and 24 CFR 570.488 or 24
CFR 570.606, as applicable. Grantees must describe how they will
plan and budget for relocation activities in the action plan.
III.C.1.g. Allocation and award caps. The grantee must provide a
budget for the full amount of the allocation that is reasonably
proportionate to its unmet needs (or provide an acceptable
justification for disproportional allocation) and is consistent with
the requirements to integrate hazard mitigation measures into all
its programs and projects. The grantee shall provide a description
of each disaster recovery program or activity to be funded,
including the CDBG-DR eligible activities and national objectives
associated with each program and the eligibility criteria for
assistance. The grantee shall also describe the maximum amount of
assistance (i.e., award cap) available to a beneficiary under each
of the grantee's disaster recovery programs. A grantee may find it
necessary to provide exceptions on a case-by-case basis to the
maximum amount of assistance and must describe the process it will
use to make such exceptions in its action plan. At a minimum, each
grantee must adopt policies and procedures that communicate how it
will analyze the circumstances under which an exception is needed
and how it will demonstrate that the amount of assistance is
necessary and reasonable. Each grantee must also indicate in its
action plan that it will make exceptions to the maximum award
amounts when necessary, to comply with federal accessibility
standards or to reasonably accommodate a person with disabilities.
III.C.1.h. Cost controls and warranties. The grantee must
provide a description of the standards to be established for
construction contractors performing work in the jurisdiction and the
mechanisms to be used by the grantee to assist beneficiaries in
responding to contractor fraud, poor quality work, and associated
issues. Grantees must require a warranty period post-construction
with a formal notification to beneficiaries on a periodic basis
(e.g., 6 months and one month before expiration date of the
warranty). Each grantee must also describe its controls for assuring
that construction costs are reasonable and consistent with market
costs at the time and place of construction.
III.C.1.i. Resilience planning. Resilience is defined as a
community's ability to minimize damage and recover quickly from
extreme events and changing conditions, including natural hazard
risks. At a minimum, the grantee's action plan must contain a
description of how the grantee will: (a) Emphasize high quality
design, durability, energy efficiency, sustainability, and mold
resistance; (b) support adoption and enforcement of modern and/or
resilient building codes that mitigate against natural hazard risks,
including climate-related risks (e.g., sea level rise, high winds,
storm surge, flooding, volcanic eruption, and wildfire risk, where
appropriate and as may be identified in the jurisdiction's rating
and identified weaknesses (if any) in building code adoption using
FEMA's Nationwide Building Code Adoption Tracking (BCAT) portal),
and provide for accessible building codes and standards, as
applicable; (c) establish and support recovery efforts by funding
feasible, cost-effective measures that will make communities more
resilient against a future disaster; (d) make land-use decisions
that reflect responsible and safe standards to reduce future natural
hazard risks, e.g., by adopting or amending an open space management
plan that reflects responsible floodplain and wetland management and
takes into account continued sea level rise, if applicable, and (e)
increase awareness of the hazards in their communities (including
for members of protected classes, vulnerable populations, and
underserved communities) through outreach to the MID areas.
While the purpose of CDBG-DR funds is to recover from a
Presidentially declared disaster, integrating hazard mitigation and
resilience planning with recovery efforts will promote a more
resilient and sustainable long-term recovery. The action plan must
include a description of how the grantee will promote sound,
sustainable long-term recovery planning informed by a post-disaster
evaluation of hazard risk, including climate-related natural hazards
and the creation of resilience performance metrics as described in
paragraph II.A.2.c. of the Consolidated Notice. This information
should be based on the history of FEMA and other federally-funded
disaster mitigation efforts and, as appropriate, take into account
projected increases in sea level, the frequency and intensity of
extreme weather events, and worsening wildfires. Grantees must use
the FEMA-approved Hazard Mitigation Plan (HMP), Community Wildfire
Protection Plan (CWPP), or other resilience plans to inform the
evaluation, and it should be referenced in the action plan.
III.C.2. Additional action plan requirements for states. For
state grantees, the action plan must describe how the grantee will
distribute grant funds, either through specific programs and
projects the grantee will carry out directly (through employees,
contractors, or through subrecipients), or through a method of
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distribution of funds to local governments and Indian tribes (as
permitted by III.B.2.d.). The grantee shall describe how the method
of distribution to local governments or Indian tribes, or programs/
projects carried out directly, will result in long-term recovery
from specific impacts of the disaster.
All states must include in their action plan the information
outlined in (1) through (7) below (in addition to other information
required by section III.C.). For states using a method of
distribution, if some required information is unknown when the
grantee is submitting its action plan to HUD (e.g., the list of
programs or activities required by III.C.1.g. or the projected use
of CDBG-DR funds by responsible entity as required by subparagraph
(5) below), the grantee must update the action plan through a
substantial amendment once the information is known. If necessary to
comply with a statutory requirement that a grantee shall submit a
plan detailing the proposed use of all funds prior to HUD's
obligation of grant funds, HUD may obligate only a portion of grant
funds until the substantial amendment providing the required
information is submitted and approved by HUD.
(1) How the impact and unmet needs assessment informs funding
determinations, including the rationale behind the decision(s) to
provide funds to most impacted and distressed areas.
(2) When funds are subgranted to local governments or Indian
tribes (either as subrecipients or through a method of
distribution), all criteria used to allocate and award the funds
including the relative importance of each criterion (including any
priorities). If the criteria are unknown when the grantee is
submitting the initial action plan to HUD, the grantee must update
the action plan through a substantial amendment once the information
is known. The substantial amendment must be submitted and approved
before distributing the funds to a local government or Indian tribe.
(3) How the distribution and selection criteria will address
disaster-related unmet needs in a manner that does not have an
unjustified discriminatory effect based on race or other protected
class and ensure the participation of minority residents and those
belonging to other protected class groups in the MID areas. Such
description should include an assessment of who may be expected to
benefit, the timing of who will be prioritized, and the amount or
proportion of benefits expected to be received by different
communities or groups (e.g., the proportion of benefits going to
different locations within the MID or to homeowners versus renters).
(4) The threshold factors and recipient or beneficiary grant
size limits that are to be applied.
(5) The projected uses for the CDBG-DR funds, by responsible
entity, activity, and geographic area.
(6) For each proposed program and/or activity, its respective
CDBG activity eligibility category (or categories), national
objective(s), and what disaster-related impact is addressed, as
described in section II.A.1.
(7) When applications are solicited for programs carried out
directly, all criteria used to select applications for funding,
including the relative importance of each criterion, and any
eligibility requirements. If the criteria are unknown when the
grantee is submitting the initial action plan to HUD, the grantee
must update the action plan through a substantial amendment once the
information is known. The substantial amendment must be submitted
and approved before selecting applications.
III.C.3. Additional action plan requirements for local
governments. For local governments grantees, the action plan shall
describe specific programs and/or activities they will carry out.
The action plan must also describe:
(1) How the impact and unmet needs assessment informs funding
determinations, including the rationale behind the decision(s) to
provide funds to most impacted and distressed areas.
(2) All criteria used to select applications (including any
priorities), including the relative importance of each criterion,
and any eligibility requirements. If the criteria are unknown when
the grantee is submitting the initial action plan to HUD, the
grantee must update the action plan through a substantial amendment
once the information is known. The substantial amendment must be
submitted and approved before selecting applications.
(3) How the distribution and selection criteria will address
disaster-related unmet needs in a manner that does not have an
unjustified discriminatory effect and ensures the participation of
minority residents and those belonging to other protected class
groups in the MID areas, including with regards to who may benefit,
the timing of who will be prioritized, and the amount or proportion
of benefits expected to be received by different communities or
groups (e.g., the proportion of benefits going to different
locations within the MID or to homeowners versus renters).
(4) The threshold factors and grant size limits that are to be
applied.
(5) The projected uses for the CDBG-DR funds, by responsible
entity, activity, and geographic area.
(6) For each proposed program and/or activity, its respective
CDBG activity eligibility category (or categories), national
objective(s), and what disaster-related impact is addressed, as
described in section II.A.1. of the Consolidated Notice.
III.C.4. Waiver of 45-day review period for CDBG-DR action plans
to 60 days. HUD may disapprove an action plan or substantial action
plan amendment if it is incomplete. HUD works with grantees to
resolve or provide additional information during the review period
to avoid the need to disapprove an action plan or substantial action
plan amendments. There are several issues related to the action plan
as submitted that can be fully resolved via further discussion and
revision during an extended review period, rather than through HUD
disapproval of the plan, which in turn would require grantees to
take additional time to revise and resubmit their respective plan.
Therefore, the Secretary has determined that good cause exists and
waives 24 CFR 91.500(a) to extend HUD's action plan review period
from 45 days to 60 days.
The action plan (including SF-424 and certifications) must be
submitted to HUD for review and approval using DRGR. By submitting
required standard forms (that must be submitted with the action
plan), the grantee is providing assurances that it will comply with
statutory requirements, including, but not limited to civil rights
requirements. Applicants and recipients are required to submit
assurances of compliance with federal civil rights requirements. A
grantee will use DRGR's upload function to include the SF 424
(including SF 424B and SF 424D, as applicable) and certifications
with its action plan. Grantees receiving an allocation are required
to submit an action plan within 120 days of the applicability date
of the Allocation Announcement Notice, unless the grantee has
requested, and HUD has approved an extension of the submission
deadline. HUD will then review each action plan within 60 days from
the date of receipt.
During its review, HUD typically provides grantees with comments
on the submitted plan to avoid the need to disapprove an action plan
and offers a grantee the opportunity to make updates to the action
plan during the first forty-five days of HUD's initial sixty-day
review period. If a grantee wants to make updates to the action
plan
[…truncated; see source link]Indexed from Federal Register on May 24, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.