Notice2022-13179
Waivers and Alternative Requirements for Community Development Block Grant Disaster Recovery (CDBG-DR) and Community Development Block Grant Mitigation (CDBG-MIT) Grantees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 21, 2022
Issuing agencies
Housing and Urban Development Department
Abstract
This notice governs Community Development Block Grant disaster recovery (CDBG-DR) and Community Development Block Grant mitigation (CDBG-MIT) funds awarded under several appropriations acts identified in the Table of Contents. Specifically, this notice provides waivers and establishes alternative requirements for certain CDBG-DR grantees that have submitted waiver requests for grants provided under the public laws cited in this notice.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 118 (Tuesday, June 21, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 118 (Tuesday, June 21, 2022)]
[Notices]
[Pages 36869-36876]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-13179]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6316-N-01]
Waivers and Alternative Requirements for Community Development
Block Grant Disaster Recovery (CDBG-DR) and Community Development Block
Grant Mitigation (CDBG-MIT) Grantees
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice governs Community Development Block Grant disaster
recovery (CDBG-DR) and Community Development Block Grant mitigation
(CDBG-MIT) funds awarded under several appropriations acts identified
in the Table of Contents. Specifically, this notice provides waivers
and establishes alternative requirements for certain CDBG-DR grantees
that have submitted waiver requests for grants provided under the
public laws cited in this notice.
DATES: Applicability Date: June 27, 2022.
FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Director,
Office of Block Grant Assistance, U.S. Department of Housing and Urban
Development, 451 7th Street SW, Room 7282, Washington, DC 20410,
telephone number 202-708-3587. Persons with hearing or speech
impairments may access this number via TTY by calling the toll-free
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#c8aca1bba9bbbcadba97baadaba7beadbab188a0bdace6afa7be"><span class="__cf_email__" data-cfemail="096d607a687a7d6c7b567b6c6a667f6c7b7049617c6d276e667f">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Authority to Grant Waivers
II. Public Law 107-38, 107-73, 107-117, 107-206 Waivers and
Alternative Requirements
III. Public Law 113-2 Waivers and Alternative Requirements
IV. Public Law 115-254 and 116-20 Waivers and Alternative
Requirements
V. Public Law 115-123 and 116-20 Waivers and Alternative
Requirements
VI. Public Law 115-56, 115-123, 115-254, 116-20 Grant Requirements
VII. Public Law 115-56 and 115-123 Waivers and Alternative
Requirements
VIII. Public Law 115-56, 115-123, and 116-20 Waivers and Alternative
Requirements
IX. Public Law 116-20 Waivers and Alternative Requirements
X. Flexibilities for Grants Under Recent Appropriations Acts
(Affects Multiple Grantees)
XI. Finding of No Significant Impact (FONSI)
I. Authority To Grant Waivers
Each of the appropriations acts cited in the Table of Contents
authorize 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 grant funds, except for requirements related to
fair housing, nondiscrimination, labor standards, and the environment.
HUD may also exercise its regulatory waiver authority under 24 CFR
5.110, 91.600, and 570.5.
All waivers and alternative requirements authorized in this notice
are based upon a determination by the Secretary that good cause exists,
and that the waiver or alternative requirement is not inconsistent with
the overall purposes of title I of the Housing and Community
Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCDA). The good cause
for each waiver and alternative requirement is summarized in this
notice.
II. Public Law 107-38, 107-73, 107-117, 107-206 Waivers and Alternative
Requirements
Waiver to Allow the Lower Manhattan Development Corporation (LMDC)
To Transfer Remaining Property Acquired and Cleared With CDBG-DR Funds
in Exchange for Other Property Interests.
Provisions of four public laws (the 9/11 Appropriations Acts)
govern the CDBG-DR funds provided in response to the terrorist attacks
of September 11, 2001: Public Law 107-38, 107-73, 107-117, and 107-206.
These 9/11 Appropriations Acts have funded three CDBG-DR grants: $700
million awarded to the New York State Development Corporation d/b/a
Empire State Development (ESD); and two grants of $2.0 billion and $783
million, respectively, awarded to LMDC. ESD is a political subdivision
and public benefit corporation of the State of New York and LMDC is a
subsidiary of ESD. LMDC administers CDBG-DR funds allocated to the
organization for emergency expenses and economic revitalization in
response to the September 11, 2001, terrorist attacks in New York City.
LMDC is charged with assisting New York City in recovering from the
terrorist attacks on the World Trade Center (WTC), in part by working
with the Port Authority of New York and New Jersey (Port Authority).
Previously, in the January 17, 2017 Federal Register notice (82 FR
4911), the Department granted a waiver of 24 CFR 570.489(j) for good
cause and
[[Page 36870]]
established an alternative requirement ``to the extent necessary to
allow LMDC to transfer the portions of 130 and 140 Liberty Street
necessary to finalize the WTC Vehicle Security Center, Liberty Park,
and the St. Nicholas National Shrine at the World Trade Center to the
Port Authority without reimbursing the CDBG-DR program for the fair
market value of the properties . . . [and] to permit LMDC to acquire
from the Port Authority property on the World Trade Center site, via
long-term lease and purchase, sufficient to carry out the memorial and
cultural facilities on the World Trade Center site that are
contemplated in the GPP and LMDC's applicable Action Plan, as
amended.'' (82 FR 4913).
The January 2017 waiver and alternative requirement contemplated
several property exchanges that were consistent with LMDC's approved
CDBG-DR action plan and amendments. LMDC used CDBG-DR funds to acquire
and clear real property identified in the World Trade Center Memorial
and Cultural Program General Project Plan (GPP) as 130 Liberty Street
and 140 Liberty Street. Specifically, to enable LMDC to fully implement
its Memorial Program and to enable the Port Authority to pursue its
Redevelopment Program, LMDC and the Port Authority would exchange real
property interests. The Port Authority would provide LMDC or its
designee with a lease (up to 99 years) and purchase option for Port
Authority-owned property that would be used for memorial and cultural
facilities that are part of LMDC's Memorial Program. The overall
exchange would allow the LMDC to facilitate use of what was originally
Port Authority property for the Memorial Museum and a performing arts
center.
The January 2017 waiver and alternative requirement permitted an
exchange for the portion of the 130 and 140 Liberty Street necessary
for the WTC Vehicle Security Center, and it also contemplated that HUD
would need to extend the waiver for additional activities. It provided
that ``HUD must waive certain regulations applicable to the reuse of
130 and 140 Liberty Street to facilitate the current exchange between
LMDC and the Port Authority and future development of the rest of the
130 Liberty Street site. The current transfer of property to the Port
Authority explicitly excludes that portion of 130 Liberty Street that
is labeled as ``Tower 5'' on Attachment 1 to the GPP as LMDC will
retain the Tower 5 site for future transfer and redevelopment.'' (82 FR
4912).
Since January 2017, LMDC and the Port Authority have solidified
their plans for the second phase of the property transfer. Therefore,
for the reasons described in this notice and in the January 2017
notice, the Department has determined that good cause exists to extend
the January 2017 waiver and alternative requirement modifying 24 CFR
570.489(j) to encompass the second phase of the proposed property
exchanges between LMDC and the Port Authority for the remainder of 130
and 140 Liberty Street (the Tower 5 site). LMDC and its designees will
receive the Port Authority-owned properties to be used for memorial and
cultural facilities that are part of LMDC's Memorial Program (as
described in the January 2017 waiver and alternative requirement).
Specifically, LMDC's designee, the National September 11 Memorial &
Museum (further known as The World Trade Center Memorial Foundation,
Inc.) will obtain a lease and purchase option for the Memorial Museum
site and a different LMDC designee received a similar lease (up to 99
years) and purchase option for the site of a performing arts center.
To complete the property transfer, LMDC will transfer fee title of
the Tower 5 site to the ESD, and ESD will facilitate payment of
compensation to the Port Authority for land that the Port Authority
provided for the memorial and cultural facilities. ESD will lease the
Tower 5 site to a developer. The Port Authority will receive
compensation in the form of rent paid under a 99-year ground lease for
the Tower 5 site by a developer (equal to the value of the originally
planned commercial use of the Tower 5 site plus 25 percent of any rent
paid in excess of that amount) and the remainder interest at the end of
the lease term.
As outlined in the January 2017 waiver and alternative requirement,
the Department finds that the properties involved in this transfer
present unique valuation difficulties. A restricted appraisal report
and opinion letter by an appraiser engaged by LMDC estimates that the
parcels subject to the exchange are of proximate value. The restricted
appraisal report and opinion letter nonetheless also notes the
difficulties in establishing current fair market valuations of the
various parts of this transaction. In addition, the strong desire of
all parties (including HUD) to facilitate and conclude redevelopment
progress on and adjacent to the World Trade Center site more than
twenty years after the events of September 11, 2001, creates a
situation in which this waiver and alternative requirement represent
the most practical and feasible path forward.
For the reasons described in this notice and in the January 2017
notice, HUD finds that good cause exists to waive 24 CFR 570.489(j) and
to expand the alternative requirement previously given to the extent
necessary to permit LMDC to transfer fee title to the Tower 5 site to
ESD and to permit ESD to compensate the Port Authority as described
above. As a condition of this waiver and alternative requirement, if
the rental income from the Tower 5 site's development exceeds the value
of the originally planned commercial use of the Tower 5 site, 75
percent of the excess will be paid to LMDC and designated as program
income and 25 percent of the excess will be paid to the Port Authority.
Following closeout of LMDC's grant, LMDC's share will be paid to the
City in accordance with 67 FR 36017. For purposes of this waiver and
alternative requirement, HUD has determined that amounts paid to the
Port Authority do not constitute program income to the CDBG-DR grant.
Additionally, the property acquired by LMDC or its designees on the
World Trade Center site will be subject to CDBG-DR programmatic
requirements upon transfer to LMDC or its designee. HUD recognizes the
phased nature of the transactions contemplated by various parties
pursuant to this alternative requirement. However, as part of this
alternative requirement, if LMDC does not acquire property that is
sufficient to carry out the memorial and cultural facilities on the
World Trade Center site as contemplated in the GPP and LMDC's
applicable action plan, as amended, before LMDC closes out its grants,
HUD may pursue appropriate remedial actions. This expanded waiver and
alternative requirement are necessary to facilitate and conclude LMDC's
use of CDBG-DR funds for its Memorial Program.
III. Public Law 113-2 Waivers and Alternative Requirements
Clarification on Citizen participation waiver and alternative
requirement (CDBG-DR grantees only).
This waiver applies to certain grantees that received an allocation
of funds appropriated under the Disaster Relief Appropriations Act,
2013 (Pub. L. 113-2), which ultimately made available $15.2 billion in
CDBG-DR funds for necessary expenses related to disaster relief, long-
term recovery, restoration of infrastructure and housing, and economic
revitalization due to Hurricane Sandy and other eligible events in
calendar years 2011, 2012, and 2013. The Department's Federal Register
notices for Public Law 113-2 included requirements for CDBG-
[[Page 36871]]
DR grantees that must be followed for substantial amendments to a CDBG-
DR action plan. Section VI.4. of the November 18, 2013 notice (78 FR
69104) and Section V.5 of the June 3, 2014 notice (79 FR 31964) require
grantees to hold a public hearing on a substantial action plan
amendment and to also publish the substantial action plan amendment for
public comment for 30 days prior to submission to HUD. For recent
allocations, HUD has not required grantees to hold public hearings for
substantial action plan amendments, and this additional requirement
adds administrative burden on grantees that have expended most of the
funds allocated under Pub. L. 113-2. For these reasons, HUD has
determined there is good cause to remove the requirement from both
Section VI.4. of the November 18, 2013 notice and Section V.5. of the
June 3, 2014 notice that requires public hearings on substantial action
plan amendments. Grantees are still required to follow the remaining
requirements for citizen participation and public comment for
substantial action plan amendments in Section VI.4. of the November 18,
2013 notice, and Section V.5. of the June 3, 2014 notice, including
posting the amendments for 30 days for public comment.
IV. Public Law 115-254 and 116-20 Waivers and Alternative Requirements
IV.A. Base Flood Elevation Requirement and Reimbursement in the
``Homeowner Reimbursement Program'' (State of Texas only).
The Department has awarded the State of Texas $46,400,000 of CDBG-
DR funds under Public Law 115-254 and $26,513,000 of CDBG-DR funds
under Public Law 116-20, for recovery from disasters occurring in 2018;
and $227,510,000 of CDBG-DR funds under Public Law 116-20 for recovery
from disasters occurring in 2019. These funds have been provided for
necessary expenses related to disaster relief, long term recovery,
restoration of infrastructure and housing, economic revitalization, and
mitigation due to a qualified disaster. This waiver and alternative
requirement modifies the requirements for CDBG-DR funds awarded to the
State of Texas under Public Laws 115-254 and 116-20. The State of Texas
has submitted a request and justification for the waiver and
alternative requirements provided herein to facilitate the use of the
funds.
The state is implementing a Homeowner Reimbursement Program
designed to assist homeowners in recovering up to $50,000 in out-of-
pocket expenses paid by the homeowner for residential rehabilitation
due to the disasters occurring in 2018 and 2019. To be eligible for
this program, the state's rules require the home be the owner's primary
residence and the eligible rehabilitation must have been completed
prior to the program's application launch date of April 24, 2021.
Because the state's response and recovery efforts commenced on the
dates of the disasters and before CDBG-DR assistance was available,
some homeowners participating in the state's Homeowner Reimbursement
Program may have rehabilitated their homes to meet FEMA program
requirements and local elevation requirements, rather than the CDBG-DR
program requirements.
Some homeowners seeking assistance from the state's Homeowner
Reimbursement Program elevated their homes to meet the requirements of
their municipalities but did not elevate their homes to meet HUD's
requirement that residential structures be elevated to at least two
feet above base flood elevation . Because these homeowners did not
anticipate receiving CDBG-DR assistance, the state is requesting a
waiver to reimburse homeowners that are otherwise eligible for
assistance but elevated their homes to comply with FEMA program
requirements and the local jurisdiction's elevation requirements, which
may be lower than the HUD-mandated standard to elevate to base flood
elevation plus two feet.
HUD's February 9, 2018 Federal Register notice provides that: ``All
structures, defined at 44 CFR 59.1, designed principally for
residential use and located in the 100-year (or 1 percent annual
chance) floodplain that receive assistance for new construction, repair
of substantial damage, or 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 base flood elevation.'' (83 FR
5861).
Based on the reasons stated above, HUD finds that good cause exists
to waive the provision of the Federal Register notice requiring the two
feet above base flood elevation for homeowners seeking reimbursement in
the state's Homeowner Reimbursement Program, and to establish an
alternative requirement to permit the state to reimburse those
homeowners for costs of rehabilitation completed before the program's
application launch date, subject to the following requirements:
<bullet> The homeowner complied with applicable FEMA requirements
and the elevation requirement of the local jurisdiction.
<bullet> The activity is eligible under title I of the HCDA or by
waiver and is consistent with all other requirements of CPD notice 15-
07: Guidance for Charging Pre-Application Costs of Homeowners,
Businesses, and Other Qualifying Entities to CDBG Disaster Recovery
Grants.
<bullet> The activity meets a CDBG-DR national objective and
otherwise complies with CDBG-DR requirements not waived by this
section.
<bullet> For each grant, the state uses not less than 70 percent of
the aggregate CDBG-DR grant for activities that benefit low- and
moderate-income persons.
The state must ensure that all costs charged to this program and to
the CDBG-DR grants are necessary and reasonable expenses related to
disaster recovery.
IV.B. Requirement to Primarily Consider and Address Unmet Housing
Recovery Needs (The Northern Mariana Islands only).
The Department has awarded $188,652,000 of CDBG-DR funds under
Public Law 115-254 and $65,672,000 under Public Law 116-20, for a
combined allocation of $254,324,000 to the Commonwealth of the Northern
Mariana Islands (CNMI) for recovery from 2018 disasters.
The CNMI has requested that HUD ease restrictions in existing
notices to allow for the use of CDBG-DR funds for the rehabilitation
and reconstruction of the Northern Marianas College (NMC) by modifying
the requirements in the February 9, 2018 notice at 83 FR 5844, August
14, 2018 notice at 83 FR 40314, and then re-stated in the January 27,
2020 notice at 85 FR 4682, that each grantee primarily consider and
address its unmet housing recovery needs. Specifically, the January 27,
2020, notice states that, ``Pursuant to the Prior Notices, each grantee
receiving an allocation for a 2018 or 2019 disaster is required to
primarily consider and address its unmet housing recovery needs. These
grantees may, however, propose the use of funds for unmet economic
revitalization and infrastructure needs unrelated to the grantee's
unmet housing needs if the grantee demonstrates in its needs assessment
that there is no remaining unmet housing need or that the remaining
unmet housing need will be addressed by other sources of funds.''
NMC lost 37 out of its 39 classrooms as a result of Super Typhoon
Yutu in 2018. The college offers a number of degrees, as well as Adult
Basic Education, Workforce Development and Certificate Training. A
number of other federal agencies are also providing funding for NMC
campus projects, including a Student Center funded
[[Page 36872]]
through the U.S. Department of Education, a Workforce Development and
Training Center and a Center for Research Extension and Development
funded through the Economic Development Authority, and a Gymnasium and
Collateral Equipment/Content funded by FEMA. The construction of NMC's
classrooms, as a public college, would otherwise be CDBG-DR eligible
and is critical to the CNMI and its residents for many reasons. As the
only public college on the island, the improvements will encourage
enrollment growth, prevent outmigration, improve access to quality
education on the island, and strengthen the position of the college for
purposes of accreditation. CNMI also indicates any loss of NMC students
would adversely impact the CNMI economy and community.
Based on these reasons, HUD has determined that good cause exists
to modify the provisions in the February 9, 2018 notice (83 FR 5849),
the August 14, 2018 notice (83 FR 40314), and re-stated in the January
27, 2020 notice at 85 FR 4682, that require a grantee to primarily
consider and address its unmet housing recovery needs with its CDBG-DR
funds or demonstrate there is no remaining unmet housing need or that
the remaining unmet housing need will be addressed by other sources of
funds. HUD is modifying those provisions for CNMI only, so that the
grantee is subject to the following requirements: without regard to the
housing priority identified in the notices cited above, CNMI may use
amounts consistent with the amount in the CNMI's action plan and
substantial amendments submitted to and approved by HUD to rehabilitate
and reconstruct buildings for classrooms at NMC and complement the
already significant other Federal investments in the reconstruction of
the college. These amounts are subject to other applicable
requirements, including the requirement that CDBG-DR funds may not be
used for activities reimbursable by or for which funds are made
available by FEMA or the US Army Corps of Engineers (USACE). As with
other activities, the grantee must verify whether FEMA or USACE funds
are available prior to awarding CDBG-DR funds to this activity. The
housing priority remains in place for all other activities carried out
by CNMI.
IV.C. Extension of Waiver and Alternative Requirement Related to
Tourism and Business Marketing (The Northern Marianas only).
The Commonwealth of the Northern Marianas (CNMI) has submitted a
request for an extension of HUD's previously granted waiver and
alternative requirement authorizing activities related to tourism and
business marketing, to revise the expiration date for the waiver and
alternative requirement to December 31, 2023. The previously granted
waiver and alternative requirement would expire January 11, 2023.
Accordingly, HUD hereby grants the waiver and alternative requirement
described in this notice for a revised expiration date of December 31,
2023.
In section VIII.A. of the Federal Register notice published on
September 28, 2020 (85 FR 60821), the Department granted CNMI a waiver
of 42 U.S.C. 5305(a) to the extent necessary to create a new eligible
activity and use up to $10,000,000 of CDBG-DR funds for tourism and
marketing activities to promote travel and to attract new businesses to
disaster-impacted areas (without regard to housing need), consistent
with the amount in CNMI's action plan and substantial amendments
submitted to and approved by HUD. HUD required the waiver and
alternative requirement to expire two years after CNMI's first draw of
its CDBG-DR funds allocated in the Federal Register notice published on
January 27, 2020 (85 FR 4681).
Tourism is a significant part of CNMI's economy and was severely
impacted by Super Typhoon Yutu and further impacted by the COVID-19
pandemic. The current expiration date of the waiver and alternative
requirements limits the ability of CNMI to use the CDBG-DR funds during
its peak tourism season in 2023, interrupting economic development
gains made by CNMI in its use of CDBG-DR funds for disaster recovery.
As a result, the Secretary has determined that good cause exists to
extend the waiver and alternative requirement described above, so that
CNMI may continue to carry out tourism and marketing activities
permitted by the waiver and alternative requirement until December 31,
2023. The cap on the activity costs remains unchanged. The grantee can
expend no more than $10,000,000 on activities authorized by the
extended waiver and alternative requirement. HUD may further extend the
waiver and alternative requirements administratively, if requested by
CNMI, for good cause.
V. Public Law 115-123 and 116-20 Waivers and Alternative Requirements
Amendment to the One-for-One Replacement Housing Alternative
Requirements for CDBG-MIT Grants.
The Department's August 30, 2019 Federal Register notice (84 FR
45838) and its January 6, 2021 notice (86 FR 561) included waivers and
alternative requirements for grantees that received a CDBG-MIT
allocation under Public Laws 115-123 or 116-20. The August 30, 2019
notice included a one-for-one replacement housing waiver and
alternative requirement for CDBG-MIT grantees and this notice modifies
that requirement. Section V.A.22.a. of the notice (84 FR 45859) waives
the one-for-one replacement requirements at section 104(d)(2)(A)(i) and
(ii) and (d)(3) of the HCDA and 24 CFR 42.375 in connection with CDBG-
MIT funds for lower income dwelling units that are damaged by the
disaster and not suitable for rehabilitation, as defined by the
grantee. This waiver and alternative requirement was limited to only
disaster-damaged lower-income units that are demolished or converted
and not suitable for rehabilitation. The Department, however,
recognizes that the purposes of the CDBG-MIT grants are forward looking
and are generally not for purposes of recovery from a previous
disaster. CDBG-MIT funds are instead to be used to address current and
future risks to lessen the impact of future disasters. With that
purpose in mind, grantees are not required to demonstrate that their
CDBG-MIT activities ``tie-back'' to the specific disaster and address a
specific unmet recovery need for which funds were allocated. CDBG-MIT
grantees therefore may be undertaking activities that remove housing
units that are not damaged by a previous disaster but still constitute
an eligible use of CDBG-MIT funds, because those activities must meet
the requirement that they are moving people or property out of harm's
way or otherwise lessening the impact of future disasters on residents
of those units.
CDBG-MIT grantees are required to document how all activities
funded by their CDBG-MIT grant meet the definition of mitigation
activities, which as stated in the August 30, 2019 notice means 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. Grantees are prohibited from funding activities
with CDBG-MIT funds that fail to meet the definition of mitigation
activities in the August 30, 2019 notice. Based on the goals and
requirements of the CDBG-MIT funds and articulated in the August 30,
2019 notice, there is good cause to amend the one-for-one replacement
alternative requirements for CDBG-MIT grants. Accordingly, HUD is
deleting the provisions of the previous waiver and alternative
[[Page 36873]]
requirement and replacing the paragraph at V.A.22.a. in its entirety.
This new language will not apply retroactively and will only apply to
the eligible CDBG-MIT activities identified below, as of the
applicability date of this notice.
V.A.22.a. Section 104(d) one-for-one replacement.
One-for-one replacement housing requirements at section
104(d)(2)(A)(i) and (ii) and (d)(3) of the Housing and Community
Development Act of 1974 (HCDA) and 24 CFR 42.375 are waived for all
demolished or converted lower-income dwelling units that are CDBG-MIT
eligible to permanently move people and/or property out of harm's way
as part of a housing mitigation activity, such as a buyout, that
addresses a risk identified in a grantee's risk-based Mitigation Needs
Assessment. This waiver exempts lower-income dwelling units that meet
the grantee's definition of ``not suitable for replacement'' from the
one-for-one replacement requirements, since CDBG-MIT grantees may be
undertaking activities that remove housing units that are not damaged
by a previous disaster but still are necessary to address mitigation
risk. Before carrying out activities that may be subject to the one-
for-one replacement requirements, the grantee must define ``not
suitable for replacement'' in its action plan or in policies and
procedures governing these activities. When working to move people and/
or property out of harm's way, requiring replacement housing units to
be located within the same neighborhood can be inconsistent with the
purposes of the CDBG-MIT grants and is not always feasible because
these areas have been identified to have current and future disaster
risks, as described in the grantee's Mitigation Needs Assessment. HUD
is providing this waiver in recognition that grantees are using CDBG-
MIT funds for mitigation needs based on a Mitigation Needs Assessment
that identifies and analyzes all significant current and future
disaster risks as the basis for undertaking the proposed demolition or
conversion activities consistent with the goals of the CDBG-MIT funds.
Even when using CDBG-MIT funds, grantees must reassess post-
disaster population and housing needs relative to the Mitigation Needs
Assessment to determine the appropriate type and amount of lower-income
dwelling units to rehabilitate or reconstruct. Grantees must include
this analysis in their program files with a description of how CDBG-MIT
funds or other sources, including CDBG-DR funds, will be used to
address housing and mitigation needs for residents of lower-income
dwelling units. Grantees should note that the demolition and/or
disposition of public housing units continue to be subject to section
18 of the United States Housing Act of 1937, as amended, and 24 CFR
part 970.
VI. Public Law 115-56, 115-123, 115-254, and 116-20 Grant Requirements
Certification and Supporting Documentation for CDBG-DR and CDBG-MIT
Grants for Disasters Occurring in 2015 through 2019.
Typically, appropriations acts require the Secretary to certify, in
advance of signing a grant agreement, 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, maintain a comprehensive website
regarding all disaster recovery activities assisted with these funds,
and detect and prevent waste, fraud, and abuse of funds. To enable the
Secretary to make this certification, each grantee must submit to HUD
the certification documentation described in the applicable Federal
Register notice governing the funds.
Over the life of a grant, HUD expects a grantee to modify and
update its policies and procedures to implement effective recovery
programs. In Federal Register notices published on February 9, 2018 at
83 FR 5844, August 14, 2018 at 83 FR 40314, August 30, 2019 at 84 FR
47528, January 27, 2020 at 85 FR 4681, and January 6, 2021 at 86 FR 561
and 86 FR 569, HUD describes the necessary steps each grantee must
complete for the Secretary's certification for CDBG-DR and CDBG-MIT
funds provided in response to qualifying disasters occurring in 2015
through 2019. For all CDBG-DR funds subject to the February 9, 2018
notice, HUD requires grantees to ``adhere to the controls, processes,
and procedures described in the grantee's financial controls and
procurement processes documentation submitted in response to the
certification, unless amended with HUD's approval'' (83 FR 5846).
Additionally, the January 27, 2020 notice requires grantees to
``implement the CDBG-DR grant consistent with the controls, processes,
and procedures as certified by HUD'' (85 FR 4686). For all CDBG-MIT
funds subject to the August 30, 2019 notice, HUD states that ``failure
to implement a CDBG-MIT grant in accordance with a grantee's approved
financial certification . . . shall constitute a performance
deficiency'' (84 FR 45863).
HUD has determined that it is not necessary nor prudent for the
agency to approve every change made to the supporting documentation
submitted to support the Secretary's certification during the life of
the grant or to require the grantee to implement funds per the initial
submission. Instead, HUD is now establishing a modified requirement for
all CDBG-DR and CDBG-MIT grantees subject to the notices cited in the
previous paragraph. In lieu of submitting all changes for approval, a
grantee must notify HUD of any substantial changes made to the
supporting documentation submitted to support the Secretary's
certification after the grant agreement has been signed by HUD and the
grantee. Over the life of the grant, HUD will monitor the grantee for
compliance with its submission and any updates made by the grantee. All
updates must be retained and identified in the grantee's files,
together with dates of applicability, so that HUD can determine which
policies and procedures the grantee was following at any point in time.
The grantee is required to adhere to its supporting documentation, as
amended, until the closeout of the grant. HUD finds this change to be
necessary to expedite recovery once the Secretary has completed a
certification based on the grantee's supporting documentation, and a
grant agreement has been signed by both parties.
VII. Public Law 115-56 and 115-123 Waivers and Alternative Requirements
Base Flood Elevation Requirement and Reimbursement in the
``Homeowner Reimbursement Program'' (State of Texas--Harris County and
City of Houston Only).
The Department awarded $5,024,215,000 under Public Law 115-56 and
$652,175,000 under Public Law 115-123 to the State of Texas for
recovery from Hurricane Harvey for necessary expenses related to
disaster relief, long term recovery, restoration of infrastructure and
housing, economic revitalization, and mitigation. This section of the
notice specifies waivers and alternative requirements and modifies
requirements for CDBG-DR funds awarded to the State of Texas under
Public Laws 115-56 and 115-123. In the Federal Register notice
published on September 28, 2020 at 85 FR 60825, the Department provided
a waiver and alternative requirement permitting the State of Texas to
reimburse homeowners that are otherwise eligible for assistance but who
elevated their homes to comply with the local jurisdiction's freeboard
requirements, which may be lower than
[[Page 36874]]
the HUD-mandated standard to elevate to base flood elevation plus 2
feet (the ``September 2020 waiver''). The State of Texas has submitted
a request to extend the September 2020 waiver to also include two local
governments awarded funds by the state: Harris County and the City of
Houston, as described below.
The state awarded funds to Harris County and the City of Houston to
develop their own disaster recovery programs. Both Harris County and
the City of Houston are implementing homeowner reimbursement programs:
Harris County's Homeowner Reimbursement Program and the City of
Houston's Reimbursement Option in their Harvey Homeowner Assistance
Program. These programs are designed to assist homeowners in recovering
out-of-pocket expenses paid by the homeowner for residential
rehabilitation due to Hurricane Harvey. Both programs' eligibility
requirements require that the home be the owner's primary residence and
the eligible rehabilitation costs must have been incurred prior to the
owner's application to the program or December 31, 2020, whichever is
earlier. Because the state, county, and city's Hurricane Harvey
response and recovery efforts commenced on the date of the disaster and
before CDBG-DR assistance was available, some homeowners participating
in these homeowner reimbursement programs may have repaired their homes
to meet FEMA's program requirements and the local jurisdiction's
elevation requirements, rather than HUD's Federal Register notice
requirements. The elevation requirements in the Federal Register notice
require that residential structures be elevated to at least 2 feet
above base flood elevation. Because the homeowners did not anticipate
receiving CDBG-DR assistance, the state is requesting that HUD extend
the September 28, 2020 waiver to include its subrecipients'
reimbursement programs.
Based on the reasons cited above, HUD finds that good cause exists
to modify the September 2020 waiver to include homeowners seeking
reimbursement in the Harris County and City of Houston's homeowner
reimbursement programs and permit the city and county to reimburse
those homeowners for costs of rehabilitation incurred before
application of the homeowner to the program or December 31, 2020,
whichever is earlier, subject to the following requirements:
<bullet> The homeowner's reimbursed rehabilitation costs complied
with the elevation requirement of the local jurisdiction.
<bullet> The activity is eligible under title I of the HCDA or by
waiver and is consistent with CPD-15-07: Guidance for Charging Pre-
Application Costs of Homeowners, Businesses, and Other Qualifying
Entities to CDBG Disaster Recovery Grants.
<bullet> The activity meets a CDBG-DR national objective and
otherwise complies with CDBG-DR requirements not waived by this
section.
<bullet> The state uses not less than 70 percent of the aggregate
CDBG-DR grant for activities that benefit low- and moderate-income
persons.
The state must ensure that all costs charged to this program and to
the CDBG-DR grant are necessary and reasonable expenses related to
disaster recovery.
VIII. Public Law 115-56, 115-123, and 116-20 Waivers and Alternative
Requirements
Buildings for the General Conduct of Government Waiver and
Alternative Requirement (Commonwealth of Puerto Rico only).
The Department awarded $1,507,179,000 of CDBG-DR funds under Public
Law 115-56, $8,220,783,000 of CDBG-DR funds and $8,285,284,000 of CDBG-
MIT funds under Public Law 115-123, and $277,853,230 of CDBG-DR funds
under Public Law 116-20 to the Commonwealth of Puerto Rico for recovery
from Hurricanes Irma and Maria for necessary expenses related to
disaster relief, long term recovery, restoration of infrastructure and
housing, economic revitalization, and mitigation.
With these funds, Puerto Rico is implementing its Non-Federal Match
Program (NFMP) designed to assist in the local non-Federal cost share
of infrastructure projects across all 78 municipalities that are
eligible under FEMA Public Assistance Category of Work E (buildings).
Puerto Rico is also implementing a Community Revitalization Program
(CRP) to reinvigorate its urban centers and key community programs.
Included in both programs is a group of projects that are considered
buildings for the general conduct of government, as defined in 42
U.S.C. 5302(a)(21). The subject buildings often function as both city
halls and government centers, which provide important recovery-related
services, such as permit evaluation and coordination and may also
include facilities that are designed to detect public health threats
and support local and regional emergency response that primarily serves
low- and moderate-income areas.
To implement the above programs and to assist in the recovery of
its 78 municipalities, Puerto Rico has requested a waiver of 42 U.S.C.
5305(a)(2), which prohibits acquisition, construction, reconstruction,
or installation of buildings for the general conduct of government as
eligible public facilities activities. The Secretary has determined
that there is good cause to grant this waiver as these buildings are
necessary for these municipalities to adequately address critical
infrastructure needs created by the disaster, help disaster recovery by
reinvigorating its urban centers and key community programs, and help
coordinate resilience and mitigation efforts across Puerto Rico.
Therefore, HUD is waiving the prohibition on buildings for the general
conduct of government at 42 U.S.C. 5305(a)(2) and associated
regulations at 24 CFR 570.207(a) to permit the Commonwealth of Puerto
Rico to carry out the construction, reconstruction, and rehabilitation
of public improvements or facilities on buildings for the general
conduct of government within the NFMP or CRP programs, subject to the
following requirements. All CDBG-DR funded activities must address a
direct or indirect impact from the major disaster in a most impacted
and distressed area resulting from the major disaster. The grantee is
prohibited from using CDBG-DR or CDBG-MIT funds for buildings that do
not provide services all year around and is prohibited from using funds
for buildings that are used exclusively as emergency operations
centers.
IX. Public Law 116-20 Waivers and Alternative Requirements for the
Commonwealth of Puerto Rico
Aligning requirements for the Commonwealth of Puerto Rico's 2019
CDBG-DR allocation with the requirements of its 2020 CDBG-DR allocation
(Commonwealth of Puerto Rico only).
The Department allocated the Commonwealth of Puerto Rico
$36,424,000 under Public Law 116-20 for recovery from earthquakes
(``2019 CDBG-DR Grant'') and $184,626,000 under Public Law 117-43 for
recovery from earthquakes and Tropical Storm Isaias (``2020 CDBG-DR
Grant'') for necessary expenses related to disaster relief, long term
recovery, restoration of infrastructure and housing, economic
revitalization, and mitigation.
HUD has described the relevant statutory and regulatory
requirements, including all applicable waivers and alternative
requirements, that apply to Puerto Rico's 2019 CDBG-DR Grant in
[[Page 36875]]
the following Federal Register notices (``PR's Prior Notices''):
February 9, 2018 at 83 FR 5844, August 14, 2018 at 83 FR 40314,
February 19, 2019 at 84 FR 4836, June 20, 2019 at 84 FR 28848, January
27, 2020 at 85 FR 4681,1 August 17, 2020 at 85 FR 50041, and September
28, 2020 at 85 FR 60821, and January 6, 2021 at 86 FR 569.
Though HUD allocated some of the 2020 CDBG-DR funds for the same
major disaster assisted by the 2019 CDBG-DR Grant, HUD established
different requirements for the use of the 2020 CDBG-DR Grant in the
February 3, 2022 Federal Register notice at 87 FR 6364, which includes
a CDBG-DR Consolidated Notice as Appendix B (the ``Consolidated
Notice''). The February 3, 2022 notice (including the Consolidated
Notice) describes the waivers and alternative requirements, applicable
statutory and regulatory requirements, the grant award process,
criteria for action plan approval, and eligible disaster recovery
activities for the use of the 2020 CDBG-DR Grant funds.
To ease the administrative burden of managing two grants that are
tied to the same disaster, HUD has determined that there is good cause
to allow Puerto Rico to manage these grants under a single action plan
and a single set of requirements (to the extent permitted by governing
appropriations acts). Implementing this change will allow the grantee
to follow a single set of requirements and submit a single action plan
for the uses of both the existing 2019 CDBG-DR Grant under Public Law
116-20 and the new 2020 CDBG-DR Grant under Public Law 117-43, while
each grant remains separate, with separate financial controls, and some
other distinctions.
To do this, HUD is imposing the following modifications of the
requirements of PR's Prior Notices for the 2019 CDBG-DR grant:
1. Puerto Rico must submit its action plan for the 2020 CDBG-DR
Grant in accordance with the Consolidated Notice at section III.C.1.
(87 FR 6379) using the Public Action Plan in the Disaster Recovery
Grant Reporting (DRGR) system. Even though section III.C.1. is written
for the 2020 CDBG-DR grant, under the terms of the waiver and
alternative requirement, the Grantee's Public Action Plan shall also
describe the use of all grant funds for the 2019 CDBG-DR grant in its
Public Action Plan required by section III.C.1. of the Consolidated
Notice. Together, the description of the use of funds allocated for
2020 disasters and the use of funds under the 2019 CDBG-DR Grant shall
be described in a single action plan (the Public Action Plan) that
substantially amends the 2019 CDBG-DR action plan. Puerto Rico will
then be able to download the single action plan and post it for public
comment on its disaster recovery website to meet the public comment
requirements for 2019 and 2020 disasters. The deadline for that
submission is 120 days after the applicability date of the February 3,
2022 notice. Based on the requirements in the February 3, 2022 notice,
Puerto Rico may submit its Public Action Plan (a single document that
describes the use of 2020 CDBG-DR Grant and 2019 CDBG-DR Grant),
earlier than that date or may request an extension of the submission
deadline to submit at a later date, if HUD approves the request.
2. Once the Public Action Plan that contains a description of all
2019 and 2020 CDBG-DR funds is approved, Puerto Rico's 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 that described the
use of the 2019 CDBG-DR grant shall only be relevant to costs charged
to the 2019 CDBG grant before the date of approval of the Public Action
Plan.
3. Once the Public Action Plan is approved, except as identified
below, Puerto Rico's 2019 CDBG-DR grant will no longer be subject to
any provisions in PR's Prior Notices and the use of 2019 and 2020 CDBG-
DR Grants shall be subject to the requirements of February 3, 2022
notice (including the Consolidated Notice) provisions, as may be
amended from time to time. The exceptions are as follows:
a. The 2019 CDBG-DR Grant is not subject to the following
provisions of the February 3, 2022 Notice (including the Consolidated
Notice) that implement statutory authorities specific to Public Law
117-43 or are related to requirements that were previously met: Section
I (Allocations), requirements in section II (Use of Funds) related to
the CDBG-DR mitigation set-aside, III. (Requirements Related to
Administrative Funds), IV.A.2. (CDBG-DR mitigation set-aside), IV.A.3.
(Interchangeability of Disaster Funds), and the provisions of the
Consolidated Notice that direct grantees to make pre-award submissions
(section III.A. ``Pre-Award Evaluation of Management and Oversight of
Funds'' of the Consolidated Notice (87 FR 6376).
b. PR's Prior Notices (as modified by section VII of this notice)
continue to govern all requirements for the 2017 Unmet Infrastructure
Needs Grant and the following requirements for the 2019 CDBG-DR grant:
HUD's allocations for 2019 disasters and allocation methodology, the
requirements that governed the grantee's pre-grant submissions to
support the Secretary's certifications, the grantee's submissions
describing its implementation plan and capacity assessment, the
identified major disasters and MID areas for the 2019 CDBG-DR Grant,
and the use of administrative funds across multiple grants (section
IV.B.3. of the notice published Jan. 27, 2020).
X. Flexibilities for Grants Under Recent Appropriations Acts (Affects
Multiple Grantees)
Recent appropriations acts have provided CDBG-DR grantees with
additional flexibilities. This section notifies grantees, the public,
and oversight entities of these flexibilities. The new statutory
authorities supersede any requirements to the contrary in Federal
Register notices or grant agreements governing awards that are subject
to the new statutory provisions.
Public Law 117-43 authorizes the Secretary to permit grantees that
received funds under Public Law 117-43 and under prior or future
appropriations for activities related to unmet recovery needs in the
MID areas resulting from a major disaster to use those funds
interchangeably and without limitation for the same activities related
to unmet recovery needs in the MID areas resulting from another major
disaster in Public Law 117-43 or in prior or future appropriation acts,
when the MID areas overlap and when the use of the funds will address
unmet recovery needs of both major disasters. The Secretary authorized
this use of funds and implemented this requirement for all grantees
that received a grant under Public Law 117-43. This authorization is
published in section IV.A.3. of the Federal Register notice published
on February 3, 2022 at 87 FR 6368 and in section IV.A.3. of the Federal
Register notice published on May 24, 2022 at 87 FR 31643.
Under these authorizations, grantees may use CDBG-DR funds that
they were awarded under Public Law 117-43 and under prior and future
appropriations acts interchangeably and without limitation for eligible
activities authorized by title I of the HCDA, as modified by applicable
waivers and alternative requirements, if:
(a) The activities support recovery in the overlapping portions of
MID areas resulting from major disasters assisted under both
appropriations (if applicable Federal Register notices do not specify
MID areas for a major disaster, the MID areas are those areas covered
by the President's major disaster declaration); and
[[Page 36876]]
(b) The use of the funds will address unmet recovery needs of both
major disasters. Consistent with Congressional intent to increase the
speed of recovery and ease administrative burdens, HUD will evaluate
whether the use of funds in the overlapping MID areas will address
unmet recovery needs of both major disasters at the highest reasonable
level. For CDBG-DR grants, this will be evaluated at the action plan
level (not by evaluating unmet needs of individual beneficiaries).
Accordingly, before using funds for a disaster other than the major
disaster for which the funds were awarded, a CDBG-DR grantee must
describe in its action plan that governs the use of the funds how the
combined use of all funds under both appropriations will address unmet
recovery needs of both major disasters.
Public Law 117-43 also provides flexibility for grantees receiving
funds under Public Law 117-43 and under prior or future acts to use
grant funds for administrative costs across multiple grants. HUD
implemented this requirement for all grantees affected by the provision
in section III.A.2. of the Federal Register notice published on
February 3, 2022, at 87 FR 6367 and in section III.A.2. of the Federal
Register notice published on May 24, 2022, at 87 FR 31642.
Public Law 116-20 authorized grantees that received grants under
Public Laws 114-113, 114-223, 114-254, 115-31, 115-56, 115-123, 115-
254, and 116-20 or any future act to use eligible administrative funds
(up to 5 percent of each grant plus up to 5 percent of program income
generated by the grant) appropriated by these acts for the cost of
administering any of these grants without regard to the particular
disaster appropriation from which such funds originated. HUD
implemented this requirement for all affected grantees in section
IV.B.3. of the Federal Register notice published on January 27, 2020,
at 85 FR 4686. This flexibility is also codified at 42 U.S.C. 5122
note.
Section 432 of the Transportation, Housing and Urban Development,
and Related Agencies Appropriations Act, 2022 (Pub. L. 117-103)
extended the expenditure deadline to September 30, 2025, for grants
made available under Public Law 113-2.
XI. 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.
[FR Doc. 2022-13179 Filed 6-17-22; 8:45 am]
BILLING CODE 4210-67-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on June 21, 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.