Allocations, Common Application, Waivers, and Alternative Requirements for Disaster Community Development Block Grant Disaster Recovery Grantees
| Published date | 27 January 2020 |
| Citation | 85 FR 4681 |
| Record Number | 2020-01204 |
| Section | Notices |
| Court | Housing And Urban Development Department |
Federal Register, Volume 85 Issue 17 (Monday, January 27, 2020)
[Federal Register Volume 85, Number 17 (Monday, January 27, 2020)]
[Notices]
[Pages 4681-4690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01204]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6182-N-01]
Allocations, Common Application, Waivers, and Alternative
Requirements for Disaster Community Development Block Grant Disaster
Recovery Grantees
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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SUMMARY: This notice allocates a total of $3,831,428,000 in Community
Development Block Grant disaster recovery (CDBG-DR) funds appropriated
by the Supplemental Appropriations for Disaster Relief Act, 2018, and
the Additional Supplemental Appropriations for Disaster Relief Act,
2019. The combined amount of $3,831,428,000 in CDBG-DR funds is
allocated by this notice for the purpose of assisting in long-term
recovery from major disasters that occurred in 2017, 2018, and 2019.
This notice also contains clarifications on waivers and alternative
requirements that were included in the Prior Notices. Unless expressly
limited to certain grantees, the amended waivers and alternative
requirements apply to all CDBG-DR grants that are subject to the Prior
Notices (previous grants for 2017 disasters and grants under this
Notice).
DATES: Applicability Date: February 3, 2020.
FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Acting
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 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
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Allocations
II. Use of Funds
III. Overview of Grant Process
IV. Applicable Rules, Statutes, Waivers, and Alternative
Requirements
V. Duration of Funding
VI. Catalog of Federal Domestic Assistance
VII. Finding of No Significant Impact
Appendix A: Allocation Methodology
[[Page 4682]]
I. Allocations
Two public laws have been enacted that provide supplemental CDBG-DR
appropriations. The Supplemental Appropriations for Disaster Relief
Act, 2018 (Pub. L. 115-254, approved October 5, 2018) (2018
Appropriations Act) made available $1,680,000,000 in CDBG-DR funds for
major disasters declared in 2018. The Additional Supplemental
Appropriations for Disaster Relief Act, 2019 (Pub. L. 116-20, approved
June 6, 2019) (2019 Appropriations Act) made $2,431,000,000 in CDBG-DR
funds available for major disasters occurring in 2017, 2018, or 2019,
of which $431,000,000 is for grantees that received funds in response
to disasters occurring in 2017. Based on the unmet needs allocation
methodology outlined in Appendix A, this notice allocates
$3,400,428,000 in CDBG-DR funds in accordance with the 2018
Appropriations Act and the 2019 Appropriations Act (the ``2018 and 2019
Appropriations Acts''), to address unmet disaster recovery needs
through 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'' areas resulting from a qualifying
major disaster in 2018 and 2019, as well as $431,000,000 for unmet
infrastructure needs for 2017 disasters. Qualifying major disasters are
those declared by the President pursuant to the Robert T. Stafford
Disaster Relief and Emergency Assistance Act of 1974 (42 U.S.C. 5121 et
seq.) (Stafford Act) and identified in Table 1.
When additional data becomes available for other disasters
occurring in 2019, the remaining $272,072,000 from Public Law 116-20
will be allocated for those disasters in a subsequent notice. In
Federal Register notices published on February 9, 2018 at 83 FR 5844,
August 14, 2018 at 83 FR 40314, February 19, 2019 at 84 FR 4836, and
June 20, 2019 at 84 FR 28848 (the ``Prior Notices''), HUD described the
applicable waivers and alternative requirements, relevant statutory and
regulatory requirements, the grant award process, criteria for action
plan approval, updates to duplication of benefits requirements, and
eligible disaster recovery activities associated with grants for 2017
disasters. This notice imposes the requirements of the Prior Notices,
as amended by provisions in this notice, on the grants announced in
this notice.
In accordance with the 2018 and 2019 Appropriations Acts,
$2,500,000 of the amounts these acts made available will be transferred
to the Department's Office of Community Planning and Development (CPD),
Program Office Salaries and Expenses, for necessary costs of
administering and overseeing CDBG-DR grants under the 2018 and 2019
Appropriations Acts. Additionally, in accordance with the 2019
Appropriations Act, $5,000,000 is to be transferred to CPD to provide
necessary capacity building and technical assistance to grantees that
receive a CDBG-DR grant under the 2018 and 2019 Appropriations Acts or
future acts. As mentioned above, the 2019 Appropriations Act requires
HUD to allocate $431,000,000 to address unmet infrastructure needs for
grantees that received an allocation for a disaster that occurred in
2017, of which $331,442,114 shall be allocated to those grantees
affected by Hurricane Maria.
The 2018 and 2019 Appropriations Acts provide that grants shall be
awarded directly to a State, unit of general local government, or
Indian tribe at the discretion of the Secretary. Unless noted
otherwise, the term ``grantee'' refers to the entity receiving a grant
from HUD under this notice. To comply with statutory requirements that
funds be used for disaster-related expenses in the most impacted and
distressed areas, HUD allocates funds using the best available data
that covers all the eligible affected areas.
Grantees receiving an allocation of funds under this notice are
subject to the requirements of the Prior Notices, as amended by this
notice or by subsequent notices. 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. Grantees receiving funds under this notice for an additional
allocation for unmet infrastructure needs arising from a 2017 disaster
must use those funds for unmet infrastructure needs.
Table 1 (below) shows the major disasters that grants under this
notice may address and the minimum amount of funds from the combined
allocations under the 2018 and 2019 Appropriations Acts that must be
expended in the HUD-identified most impacted and distressed areas. The
information in this table is based on HUD's review of the impacts from
the qualifying disasters and estimates of unmet need.
Table 1--Allocations Under Public Laws 115-254 and 116-20
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Minimum amount
that must be
Unmet needs Total allocation expended for
allocation Unmet needs for unmet needs recovery in the
Disaster year Disaster No. Grantee under Public allocation under (Pub. L. 115-254 HUD-identified
Law 115-254 Public Law 116-20 and Pub. L. 116- ``most impacted
20) and distressed''
areas
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2017 Disasters (Additional Unmet 4344 & 4353........... State of California $0 $38,057,527 $38,057,527 (No less than
Infrastructure Needs). $30,446,000)
Sonoma and
Ventura counties:
93108, 94558,
95422, 95470, and
95901 Zip Codes.
4337 & 4341........... State of Florida... 0 38,637,745 38,637,745 (No less than
$30,910,000)
Brevard, Broward,
Clay, Collier,
Duval,
Hillsborough,
Lee, Miami-Dade,
Monroe, Orange,
Osceola, Palm
Beach, Polk, St.
Lucie, and
Volusia counties;
32084, 32091,
32136, 32145,
33440, 33523,
33825, 33870,
33935, and 34266
Zip Codes.
4294, 4297, & 4338.... State of Georgia... 0 13,015,596 13,015,596 (No less than
$10,412,000)
31520, 31548, and
31705 Zip Codes.
4317.................. State of Missouri.. 0 9,847,018 9,847,018 (No less than
$7,878,000)
63935, 63965,
64850, 65616, and
65775 Zip Codes.
4336 & 4339........... Commonwealth of 0 277,853,230 277,853,230 ($277,853,230) All
Puerto Rico. Components of the
Commonwealth of
Puerto Rico.
4335.................. U.S. Virgin Islands 0 53,588,884 53,588,884 ($53,588,884) All
components of the
U.S. Virgin
Islands.
2018 Disasters.................. 4413.................. State of Alaska.... 0 35,856,000 35,856,000 (No less than
$28,685,000)
Anchorage
Borough.
[[Page 4683]]
4357.................. American Samoa..... 16,539,000 6,500,000 23,039,000 ($23,039,000) All
components of
American Samoa.
4407 & 4382........... State of California 491,816,000 525,583,000 1,017,399,000 (No less than
$813,919,000)
Butte Lake, Los
Angeles, and
Shasta Counties.
4399.................. State of Florida... 448,023,000 287,530,000 735,553,000 (No less than
$588,442,000)
Bay, Calhoun,
Gulf and Jackson
Counties; 32321
(Liberty), 32327
(Wakulla), 32328
(Franklin), 32346
(Wakulla and
Franklin), 32351
(Gadsden), and
32428
(Washington) Zip
Codes.
4400.................. State of Georgia... 34,884,000 6,953,000 41,837,000 (No less than
$33,470,000)
39845 (Seminole)
Zip Code.
4366.................. Hawaii County, HI.. 66,890,000 16,951,000 83,841,000 ($83,841,000)
Hawaii County.
4365.................. Kauai County, HI... 0 9,176,000 9,176,000 (No less than
$7,341,000) 96714
(Kauai) Zip Code.
4393.................. State of North 336,521,000 206,123,000 542,644,000 (No less than
Carolina. $434,115,000)
Brunswick,
Carteret,
Columbus, Craven,
Duplin, Jones,
New Hanover,
Onslow, Pender,
and Robeson
Counties; 28352
(Scotland), 28390
(Cumberland),
28433 (Bladen),
and 28571
(Pamlico) Zip
Codes.
4396 & 4404........... The Commonwealth of 188,652,000 55,294,000 243,946,000 (No less than
the Northern $195,157,000)
Mariana Islands. Saipan and Tinian
Municipalities.
4394.................. State of South 47,775,000 24,300,000 72,075,000 (No less than
Carolina. $57,660,000)
Horry and Marion
counties; 29536
(Dillon) Zip
Code.
4377.................. State of Texas..... 46,400,000 26,513,000 72,913,000 (No less than
$58,330,000)
Hidalgo County.
4402.................. State of Wisconsin. 0 14,355,000 13,355,000 (No less than
$12,284,000)
53560 (Dane) Zip
Code.
2019 Disasters.................. 4441.................. State of Arkansas.. 0 8,940,000 8,940,000 (No less than
$7152,000) 71602
(Jefferson) and
72016 (Perry) Zip
Codes.
4421.................. State of Iowa...... 0 96,741,000 96,741,000 (No less tan
$77,393,000)
Mills County;
51640 (Fremont)
Zip Code.
4451.................. State of Missouri.. 0 30,776,000 30,776,000 (No less than
$24,621,000) St.
Charles County;
64437 (Holt) and
65101 (Cole) Zip
Codes.
4420.................. State of Nebraska.. 0 108,938,000 108,938,000 (No less than
$87,150,000)
Sarpy County;
68025 (Dodge),
68064 (Douglas)
and 68069
(Douglas) Zip
Codes.
4447.................. State of Ohio...... 0 12,305,000 12,305,000 (No less than
$9,844,000) 45426
(Montgomery) Zip
Code.
4438.................. State of Oklahoma.. 0 36,353,000 36,353,000 (No less than
$29,082,000)
Muskogee and
Tulsa Counties;
74946 (Sequoyah)
Zip Code.
4454 & 4466........... State of Texas..... 0 212,741,000 212,741,000 (No less than
$170,193,000)
Cameron,
Chambers, Harris,
Jefferson,
Liberty,
Montgomery, and
Orange Counties;
78570 (Hildalgo)
Zip Code.
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Total....................... ...................... ................... 1,677,500,000 2,153,928,000 3,831,428,000 ..................
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Pursuant to the 2018 and 2019 Appropriations Acts, HUD has
identified the most impacted and distressed 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.
In some instances, HUD identified the entire jurisdiction of a
grantee as the most impacted and distressed area. For all other
grantees, at least 80 percent of the total funds provided to a grantee
under this notice must address unmet disaster needs within the HUD-
identified most impacted and distressed areas, as identified in the
last column in Table 1. Note that if HUD designates a ZIP Code for 2018
and 2019 disasters as a most impacted and distressed area for purposes
of allocating funds, the grantee may expand program operations to the
whole county (county is indicated in parentheses next to the ZIP Code
as a most impacted and distressed area. The grantee should indicate the
decision to expand eligibility to the whole county in its action plan.
A grantee may determine where to use the remaining 20 percent of
the allocation, but that portion of the allocation may only be used to
address unmet disaster needs in those areas that the grantee determines
are ``most impacted and distressed'' and received a presidential major
disaster declaration pursuant to the disaster numbers listed in Table
1. A grantee may use up to 5 percent of the total grant award for grant
administration and no more than 15 percent of the total grant award for
planning activities. 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 been expended in the most
impacted and distressed areas identified in Table 1. Additionally,
expenditures for planning activities may be counted towards a grantee's
80 percent expenditure requirement, provided that the grantee describes
in its action plan how those planning activities benefit the HUD-
identified most impacted and distressed areas.
II. Use of Funds
Funds allocated under this notice are subject to the requirements
of the Prior Notices, as amended by this notice or subsequent notices.
This notice outlines additional requirements imposed by the 2018 and
2019 Appropriations Acts that apply to funds allocated under this
notice.
The 2018 and 2019 Appropriations Acts require that prior to the
obligation of CDBG-DR funds a grantee shall submit a plan detailing the
proposed use of all funds. The plan must include 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 most impacted and distressed
areas. Therefore, the action plan submitted in response to this notice
must describe
[[Page 4684]]
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 a
disaster-related impact to infrastructure, housing, or economic
revitalization in the most impacted and distressed areas, and if the
grantee chooses to do so, how mitigation will be incorporated into
recovery activities. To inform the plan, each grantee must conduct an
assessment of community impacts and unmet needs and guide the
development and prioritization of planned recovery activities, pursuant
to section VI.A.2.a. of the February 9, 2018 notice (83 FR 5849).
While CDBG-DR funding is a valuable resource for long-term recovery
and mitigation in the wake of major disasters, HUD expects that
grantees will take steps to set in place substantial State and local
governmental policies to enhance the impact of HUD-funded investments
and limit damage from future disasters. The Federal Register notice
published February 9, 2018 (83 FR 5850), requires all grantees to
describe how they plan to promote sound, sustainable long-term
planning. HUD is encouraging wildfire-impacted grantees in particular
to consider land-use plans that address density and quantity of
development, as well as emergency access, landscaping, and water supply
considerations. Grantees are reminded that they may use CDBG-DR funds
for planning activities, including, but not limited to, developing a
Community Wildfire Protection Plan (CWPP). Grantees are encouraged to
review U.S. Forest Service's resources on wildland fire (https://www.fs.fed.us/managing-land/fire) and work with Federal and State
forestry and fire agencies that carry out activities related to fire
risk reduction, including upgrading mapping, data, and other
capabilities to better manage wildland fire risk areas. To maximize the
impact of all available funds, all grantees are encouraged to
coordinate and align these funds with other projects funded with CDBG-
DR and CDBG-Mitigation funds, as well as other disaster recovery
activities funded by the Federal Emergency Management Agency (FEMA),
the U.S. Army Corps of Engineers (USACE), the U.S. Forest Service, and
other agencies as appropriate.
Grantees should note that a subsequent notice published on August
14, 2018 (83 FR 40314), which clarifies and/or modifies requirements in
the February 9, 2018 notice, applies to grantees receiving funds under
this notice. Specifically, grantees should note the following
clarifications and modifications in the August 14, 2018 notice
governing the use of these funds: Allowing for unmet economic
revitalization and infrastructure needs (83 FR 40314), which are
addressed in section I in this notice; the use of terminology around an
evaluation of the cost or price of a product or service (83 FR 40317);
additional requirements for the comprehensive disaster recovery website
(83 FR 40317); clarification of working capital to aid in recovery (83
FR 40317); underwriting requirements (83 FR 40317); limitation of use
of funds for eminent domain (83 FR 40317); increased public comment
period (83 FR 40318); cost verification (83 FR 40318); additional
criteria and specific conditions to mitigate risk (83 FR 40318-40319);
the waiver of Section 414 of the Stafford Act as amended (83 FR 40319)
and addressed in section IV.C.2. in this notice; modification of
affordability periods for rental properties (83 FR 40320);
clarification of the environmental review requirements (83 FR 40319);
CDBG-DR housing assistance and FEMA's permanent and semi-permanent
housing programs (83 FR 40320); rehabilitation and reconstruction cost-
effectiveness (83 FR 40321); infrastructure planning and design (83 FR
40321); discipline and accountability in the environmental review and
permitting of infrastructure projects (83 FR 40321); and CDBG-DR funds
as match for FEMA 428 Public Assistance projects (83 FR 40321).
Additionally, HUD published a notice on June 20, 2019 entitled,
``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) and a second notice that
implemented the 2019 DOB Notice by making corresponding amendments to
the Prior Notices (Applicability of Updates to Duplication of Benefits
Requirements Under the Stafford Act for Community Development Block
Grant (CDBG) Disaster Recovery Grantees, published at 84 FR 28848) (the
``Implementation Notice''). Those changes are explained in section
IV.B.6. of this notice and in detail in the 2019 DOB Notice (84 FR
28836).
Finally, the February 9, 2018 notice was also amended by the
February 19, 2019 notice (84 FR 4836) with a clarification on green
building standards (84 FR 4844).
III. Overview of Grant Process
Each grantee must submit an action plan for disaster recovery
pursuant the requirements of section VI.A.2 of the February 9, 2018
notice (83 FR 5849), as modified by the requirements of the August 14,
2018 notice (83 FR 40314), not later than 120 days after the
applicability date of this notice. All requirements of the Prior
Notices related to the action plan submission shall apply, including
the public comment period which was extended to not less than 30
calendar days under the August 14, 2018 notice (83 FR 40318), and the
manner of publication which must include prominent posting on the
grantee's official website (83 FR 40317). Each grantee must publish the
action plan in a manner that affords citizens, affected local
governments, and other interested parties a reasonable opportunity to
examine the contents and provide feedback. Each grantee must also
submit the Financial Management and Grant Compliance submission and
Pre-Award Implementation Plan pursuant to section VI.A.I of the
February 9, 2018 notice. All deadlines for these submissions are
determined by the applicability date of this notice.
In the Prior Notices, the Department included its intention to
establish special grant conditions for individual CDBG-DR grants based
upon the risks posed by the grantee, including risks related to the
grantee's capacity to carry out the specific programs and projects
proposed in its action plan. As described in the Prior Notices, these
conditions will be designed to provide additional assurances that
programs are implemented in a manner to prevent waste, fraud, and abuse
and the Department has established specific criteria and conditions for
each grant award as provided for at 2 CFR 200.205 and 200.207(a),
respectively, to mitigate the risks of the grant.
To begin expending CDBG-DR funds, the grantee must follow the
process outlined in the February 9, 2018 notice (83 FR 5846), unless
otherwise amended below:
Within 60 days of the applicability date of this notice
(or when the grantee submits its action plan, whichever is earlier),
submit documentation for the certification of financial controls and
procurement processes and adequate procedures for grant management, as
amended in section IV.B.1 of this notice. A grantee that received a
certification of its financial controls and procurement processes
pursuant to a 2016 or 2017 disaster may request that HUD rely on that
certification for purposes of this allocation, provided, however, that
grantees shall be required to provide updates to reflect any material
changes in the submissions.
Within 60 days of the applicability date of this notice
(or when the grantee
[[Page 4685]]
submits its action plan, whichever is earlier), submit documentation
for the implementation plan and capacity assessment.
Additionally, all funds must be expended within 6 years of
the date of obligation as described in section V of this notice.
III.A. Funds for Unmet Infrastructure Needs for Grantees That Received
Allocations for 2017 Disasters
Each grantee that received an allocation pursuant to Public Law
115-56 or Public Law 115-123 for 2017 disasters and an additional
allocation in this notice for unmet infrastructure needs is required to
submit a substantial amendment to its current action plan required by
the Prior Notices. The substantial amendment must be submitted no later
than 90 days after the applicability date of this notice. The
substantial amendment must include the additional allocation of funds
and address the requirements of the Prior Notices, as amended by this
notice. Each grantee must follow the applicable substantial amendment
process pursuant to section III.B of the August 14, 2018 notice (83 FR
40316). Based on the 2019 Appropriations Act, HUD will condition the
availability of these funds for grantees that have entered into
alternative procedures under section 428 of the Stafford Act as of the
date of enactment of the 2019 Appropriations Act until such grantees
have reached a final agreement on all fixed cost estimates within the
timeline provided by FEMA.
IV. Applicable Rules, Statutes, Waivers, and Alternative Requirements
This section of the notice describes rules, statutes, waivers, and
alternative requirements that apply to each grantee receiving an
allocation under this notice. The Secretary has determined that good
cause exists to apply each waiver and alternative requirement
established in the Prior Notices to grantees receiving funds under this
notice and that such waivers and alternative requirements are not
inconsistent with the overall purpose of title I of the HCDA. The
Secretary's determination of good cause extends to each waiver or
alternative requirement as amended by this notice. Grantees are
reminded that all fair housing and nondiscrimination requirements, as
well as environmental and labor requirements, continue to apply. The
following requirements apply only to the CDBG-DR funds appropriated
under the 2018 and 2019 Appropriations Acts (unless otherwise noted)
and not to funds provided under the annual formula State or Entitlement
CDBG programs, the Indian Community Development Block Grant program, or
those provided under any other component of the CDBG program, such as
the Section 108 Loan Guarantee Program, or any previous CDBG-DR
appropriations, unless otherwise noted.
A grantee may request additional waivers and alternative
requirements from the Department as needed to address specific needs
related to its recovery activities, accompanied by data to support the
request. Grantees should work with the assigned Community Planning and
Development representatives to request any additional waivers or
alternative requirements from HUD. Except where noted, the waivers and
alternative requirements described below apply to all grantees under
this notice. Pursuant to the requirements of the 2018 and 2019
Appropriations Acts, waivers and alternative requirements are effective
5 days after they are published in the Federal Register.
Except as described in this notice or the Prior Notices, statutory
and regulatory provisions governing the State CDBG program shall apply
to State grantees receiving a CDBG-DR grant. Except as described in
this notice or the Prior Notices, statutory and regulatory provisions
governing the entitlement CDBG program shall apply to any local
government receiving a CDBG-DR grant. Based on the Prior Notices'
treatment of grantees in the CDBG Insular areas program, all references
to states and State grantees shall include the Commonwealth of the
Northern Mariana Islands and the American Samoa. State and Entitlement
CDBG regulations can be found at 24 CFR part 570. References to the
action plan in these regulations shall refer to the action plan for
disaster recovery required by section VI.A.2 of the February 9, 2018
notice. All references in this notice pertaining to timelines and/or
deadlines are in terms of calendar days unless otherwise noted. The
date of this notice shall mean the applicability date of this notice
unless otherwise noted.
IV.A. Incorporation of Waivers and Alternative Requirements for Local
Governments
This notice extends the waivers and alternative requirements in the
Prior Notices to states and local governments receiving grants under
the 2018 and 2019 Appropriations Acts. Because the Prior Notices only
govern grants to states, this notice amends the Prior Notices by adding
regulations that apply to units of general local government the waivers
previously granted by the Secretary (except in cases such as the timely
distribution of funds, the consolidated plan waiver, or reimbursement
where the Prior Notices already waive entitlement CDBG program
regulations). Where requirements are different for units of general
local government than the requirements applicable to states, this
notice amends the Prior Notices to add the local government
requirement.
IV.A.1. The Secretary amends the following sections of the February
9, 2018 notice to expand waivers to include waivers of the regulations
that apply to local government grantees: In Section VI.A.2., Action
Plan for Disaster Recovery waiver and alternative requirement, the
Secretary waives 24 CFR 91.220; in section VI.A.4., Citizen
participation waiver and alternative requirement, the Secretary waives
24 CFR 91.105(b) and (c); and in section VI.A.12, Use of the urgent
need national objective, the Secretary waives 24 CFR 570.208(c).
Grantees are responsible for ensuring that all citizens have equal
access to information about the programs, including persons with
disabilities and limited English proficiency (LEP). This waiver does
not affect the statutory and regulatory obligations of CDBG-DR grantees
to affirmatively further fair housing. As part of the CDBG-DR action
plan, all grantees must certify that they will affirmatively further
fair housing. For CDBG-DR grantees, this means conducting an Analysis
of Impediments to Fair Housing Choice (AI), taking appropriate actions
to overcome the effects of any impediments identified through that
analysis, and keeping records of these actions.
IV.A.2. Procurement. This notice amends the sections of the
February 9, 2018 notice to add additional requirements or to clarify
procurement requirements that apply to local governments:
Paragraph V.A.1.a.(2) is modified after the sentence that begins
``A State grantee (including the Commonwealth of Puerto Rico and the
U.S. Virgin Islands) has proficient procurement policies and processes
if . . . '' to add the following sentence: ``A local government grantee
has proficient procurement policies and processes if it follows
procurement requirements in the Uniform Administrative Requirements at
2 CFR 200.318 through 200.326, and imposes these requirements on its
subrecipients.''
Paragraph VI.A.26 of the February 9, 2018 notice is modified by
adding after the first paragraph, ``Any local government receiving a
CDBG-DR grant is subject to procurement requirements
[[Page 4686]]
in the Uniform Administrative Requirements at 2 CFR 200.318 through
200.326.''
IV.B. Grant Administration
IV.B.1. Certification of financial controls and procurement
processes, and adequate procedures for proper grant management. The
2018 and 2019 Appropriations Acts require that the Secretary 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 Robert T. Stafford Disaster Relief and
Emergency Assistance Act (Stafford Act), 42 U.S.C. 5155, to ensure
timely expenditure of funds, maintain a comprehensive website regarding
all 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 Financial Management
and Grant Compliance certification submission pursuant to section
VI.A.1.a of the February 9, 2018 notice (83 FR 5847), as amended in
this section.
A grantee that received a certification of its financial controls
and procurement processes pursuant to a 2016 or 2017 disaster may
request that HUD rely on that certification for purposes of this grant,
provided, however, that grantees shall be required to provide updates
to reflect any material changes in the submissions. This information
must be submitted within 60 days of the applicability date of this
notice. The grant agreement will not be executed until HUD has approved
the grantee's certifications. The grantee must implement the CDBG-DR
grant consistent with the controls, processes, and procedures as
certified by HUD. HUD is requiring each grantee to submit (or update
and resubmit, as applicable) all policies and procedures pertaining to
its duplication of benefits procedures as outlined below:
(1) Duplication of benefits procedures. A grantee has adequate
procedures to prevent the duplication of benefits if the grantee
submits uniform processes that reflect the requirements of the February
9, 2018 notice (83 FR 5860) and the 2019 DOB Notice (84 FR 28836),
including: (a) Verifying all sources of assistance received by the
grantee or applicant, as applicable, prior to the award of CDBG-DR
funds; (b) determining a grantee's or an applicant's remaining funding
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 and must articulate this
method in its written administrative procedures, including the basis
for the period in 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 may be
subject to civil or criminal penalties under 18 U.S.C. 287, 1001 and 31
U.S.C. 3729.''
Policies and procedures of the grantee submitted to support the
certification must provide that prior to 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. In developing these policies and procedures, grantees are
directed to the 2019 DOB Notice (84 FR 28836). To be adequate, a
grantee's policies and procedures must reflect the treatment of loans
that is consistent with the requirements of the Declined Loans
Provision and the section 1210 of the Disaster Recovery Reform Act of
2018 (DRRA) (division D of Pub. L. 115-254), as explained in section
IV.B.6 of this notice and in the 2019 DOB Notice.
IV.B.2. Procurement. Grantees must comply with procurement
requirements for states or for local governments, as applicable, in the
Prior Notices (as amended).
IV.B.3. Use of administrative funds across multiple grants. The
2019 Appropriations Act authorizes special treatment of grant
administrative funds for grantees that received awards under certain
CDBG-DR grants. Grantees that received awards under Public Laws 114-
113, 114-223, 114-254, 115-31, 115-56, 115-123, and 115-254, or any
future act may use eligible administrative funds (up to 5 percent of
each grant award 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. If the grantee chooses to exercise
this authority, the grantee must ensure that it has appropriate
financial controls to ensure that the amount of grant administration
expenditures for each of the aforementioned grants will not exceed 5
percent of the total grant award for each grant (plus 5 percent of
program income), 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
VI.A.1 of the February 9, 2018 notice (83 FR 5847-5848). Grantees are
reminded that all costs incurred for administration must still qualify
as an eligible administration expense.
IV.B.4. Use of funds in response to Hurricane Matthew and Hurricane
Florence (State of North Carolina and South Carolina only). The 2019
Appropriations Act provides that grantees that received CDBG-DR grants
under Public Laws 114-223, 114-254, and 115-31 in response to Hurricane
Matthew, may use those funds interchangeably for the same activities
that can be funded by CDBG-DR grants in the most impacted and
distressed areas related to Hurricane Florence. Specifically, these
CDBG-DR grants in response to Hurricane Matthew may be used
interchangeably and without limitation for the same activities that can
be funded by CDBG-DR grants in the most impacted and distressed areas
related to Hurricane Florence. Additionally, all CDBG-DR grants under
the 2018 and 2019 Appropriations Acts in response to Hurricane Florence
may be used interchangeably and without limitation for the same
activities in the most impacted and distressed areas related to
Hurricane Matthew.
Grantees are reminded that expanding the eligible beneficiaries of
their Hurricane Matthew activities or programs to include those
impacted by Hurricane Florence requires the submission of a substantial
action plan amendment in accordance with section VI.A.2.g of the
November 21, 2016 notice (81 FR 83254). 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
(Matthew or Florence) the funded activity will address.
IV.B.5. One-for-One Replacement Housing, Relocation, and Real
Property Acquisition Requirements. Grantees that received a CDBG-DR
grant for 2018 or 2019 disasters under Public Laws 115-254 or 116-20
(``current requirements'') are currently subject to different
requirements with respect to One-for-One Replacement Housing,
Relocation, and Real Property Acquisition Requirements, than grantees
that received a CDBG-DR grant for previous
[[Page 4687]]
disasters pursuant to Public Laws 114-113, 114-223, 114-254, and 115-31
(``previous requirements''). To avoid the administrative burden of
implementing two different Uniform Relocation Assistance and Real
Property Acquisition Act (URA) waivers and alternative requirements,
HUD is authorizing grantees with CDBG-DR grants subject to the previous
requirements to carry out its programs under the same (URA)
requirements as is required for its grant(s) under the current
requirements.
HUD is authorizing grantees under Public Laws 114-113, 114-223,
114-254, and 115-31 that also received a CDBG-DR grant under Public Law
115-254 or 116-20 to either: (a) continue to follow One-for-One
Replacement Housing, Relocation, and Real Property Acquisition
Requirements as provided in section VI.A.19. of the November 21, 2016
notice (81 FR 83266) for its Public Laws 114-113, 114-223, 114-254, and
115-31 CDBG-DR grants; or (b) follow the requirements of section
VI.A.23.a. through e. of the February 9, 2018 notice (83 FR 5858) for
its Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants.
The grantee's programs under the most recent Public Laws (Pub. L. 115-
254 or 116-20) are already required to follow the waiver and
alternative requirement defined in the February 9, 2018 notice (83 FR
5858). If a grantee chooses to follow option (b) above, then it must
identify this approach in its policies and procedures related to that
particular activity and consistently apply that option for all
displaced persons affected by that activity.
IV.B.6. Duplication of benefits. The Prior Notices described
duplication of benefits (DOB) requirements in Section 312 of the
Stafford Act and subjected grantees to the requirements of a notice
published in the Federal Register on November 16, 2011, at 76 FR 71060
(the ``2011 DOB Notice'').
HUD subsequently published the 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. HUD also published a
separate notice that implemented the 2019 DOB Notice (84 FR 28848) (the
``Implementation Notice'') by making corresponding amendments to the
February 9, 2018 and August 14, 2018 notices. The amendments in the
Implementation Notice provide that the 2019 DOB Notice shall supersede
the 2011 DOB Notice for any new programs or activities submitted in an
action plan or action plan amendment on or after June 25, 2019.
Accordingly, grantees must comply with the requirements of the
Prior Notices, including amendments in the Implementation Notice.
Because the applicability date of this notice is after June 25, 2019,
provisions of the Implementation Notice that apply only to grants made
before June 25, 2019 do not apply to grants under the 2018 and 2019
Appropriations Acts.
IV.B.7. The waiver and alternative requirement in section VI.A.6.
of the February 9, 2018 notice is replaced with the following language
to include 2018 and 2019 disaster grantees: ``HUD is temporarily
waiving the requirement for consistency with the consolidated plan
(requirements at 42 U.S.C. 12706, 24 CFR 91.325(a)(5) and
91.225(a)(5)), because the effects of a major disaster alter a
grantee's priorities for meeting housing, employment, and
infrastructure needs. In conjunction, 42 U.S.C. 5304(e), to the extent
that it would require HUD to annually review grantee performance under
the consistency criteria, is also waived. Grantees are encouraged to
incorporate disaster-recovery needs into their consolidated plan
updates as soon as practicable, but any unmet disaster-related needs
and associated priorities must be incorporated into the grantee's next
consolidated plan update no later than its Fiscal Year 2020 update for
2017 disasters and Fiscal Year 2022 for 2018 and 2019 disasters.''
IV.C. Clarifications and Amendments for Grants Under Public Law 115-56,
115-123, 115-254, and 116-20
IV.C.1. Clarification on Affordability Periods and Amended
Alternative Requirement. The Federal Register notice published on
August 14, 2018 (83 FR 40320) imposed a 5-year affordability period on
all newly constructed single-family housing units constructed with
CDBG-DR funds. HUD intended to impose the affordability period only on
single-family units constructed and sold by the grantee or its
subrecipient through an affordable homeownership program. It was not
intended to impose affordability restrictions where the beneficiary
owned and occupied a home that was damaged by the disaster and the
grantee then provides the owner-occupant with a newly constructed or
reconstructed housing unit rather than rehabilitate the damaged home.
HUD's intent was to impose affordability restrictions when CDBG-DR
funds are used to expand housing stock, not to replace damaged units
owned and occupied by a beneficiary. Therefore, HUD is amending
paragraph IV.B.10 of the August 14, 2018 notice by replacing it in its
entirety with the following:
``10. Affordability Period for CDBG-DR funded Homeownership
Programs. Grantees receiving funds under this notice are required to
implement a minimum 5-year affordability period on all newly
constructed single-family housing made available for low- and moderate-
income homeownership through a CDBG-DR funded homeownership program.
This notice requires any grantee implementing a CDBG-DR funded
homeownership program to develop and impose affordability (i.e., resale
or recapture) restrictions and to enforce those restrictions through
recorded deed restrictions, covenants, or other similar mechanisms, for
a period not less than 5 years. 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
provisions must clearly describe the terms of the resale or recapture,
the specific circumstances under which these provisions will be used,
and how the provisions will be enforced. This affordability period does
not apply to housing units newly constructed or reconstructed for an
owner-occupant to replace an owner-occupied home that was damaged by
the disaster.''
IV.C.2. Clarification and Amendment on Section 414 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
et seq.). The Federal Register notice published on February 19, 2019
(84 FR 4842) provided a waiver and alternative requirement of Section
414 for all grantees receiving a grant for a major disaster occurring
in 2015, 2016, and 2017. This waiver and alternative requirements
allowed grantees that received a grant(s) under Public Laws 114-113,
114-223, 114-254, and 115-31 to carry out its programs under the same
Section 414 requirements as its grant(s) under Public Laws 115-56 or
115-123. To clarify this provision and extend the Section 414 waiver
and alternative requirement to include grantees under those older
Public Laws that are now receiving a grant under the 2018 and 2019
Appropriations Acts for a major disaster in 2018 or 2019, HUD is
amending paragraph IV.2 of the February 19, 2019 notice by replacing it
in its entirety with the following:
``2. Waiver of Section 414 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.). Section
414 of the Stafford Act (42 U.S.C. 5181) provides that
[[Page 4688]]
``Notwithstanding any other provision of law, no person otherwise
eligible for any kind of replacement housing payment under the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of
1970 (Pub. L. 91-646) [42 U.S.C. 4601 et seq.] [``URA''] shall be
denied such eligibility as a result of his being unable, because of a
major disaster as determined by the President, to meet the occupancy
requirements set by [the URA].'' Accordingly, homeowner occupants and
tenants displaced from their homes as a result of the identified
disaster and who would have otherwise been displaced, as a direct
result of any acquisition, rehabilitation, or demolition of real
property for a federally funded program or project, may become eligible
for a replacement housing payment, notwithstanding their inability to
meet occupancy requirements prescribed in the URA.
Grantees that received a CDBG-DR grant for a major disaster in
2015, 2016, or 2017 under Public Laws 114-113, 114-223, 114-254, or
115-31, and a CDBG-DR grant for a 2017, 2018, or 2019 major disaster
under Public Laws 115-56, 115-123, 115-254, or 116-20 are subject to
different alternative requirements with respect to protections afforded
to tenants and homeowners under Section 414 of the Stafford Act.
To avoid the administrative burden of implementing two different
URA alternative requirements, HUD is authorizing grantees under Public
Laws 114-113, 114-223, 114-254, and 115-31 that also received a CDBG-DR
grant under Public Law 115-56, 115-123, 115-254, or 116-20 to either:
(a) Continue to follow Section 414 of the Stafford Act (or any grantee-
specific alternative requirement previously authorized by HUD) for its
Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants; or
(b) follow the waiver and alternative requirement described in the
following paragraph for its Public Laws 114-113, 114-223, 114-254, and
115-31 CDBG-DR grants. The grantee's programs under the most recent
Public Laws (Pub. L. 115-56, 115-123, 115-254, or 116-20) are already
required to follow the waiver and alternative requirement defined
below. If a grantee chooses to follow option (b) above then it must
identify this approach in its policies and procedures related to that
particular activity, and consistently apply that option for all
displaced persons affected by that activity.
The waiver and alternative requirement is as follows: Section 414
of the Stafford Act (including its implementing regulation at 49 CFR
24.403(d)(1)), is waived to the extent that it would apply to real
property acquisition, rehabilitation, or demolition of real property
for a CDBG-DR funded project, undertaken by the grantee or
subrecipient, commencing more than one (1) year after the
Presidentially declared disaster, provided that the project was not
planned, approved, or otherwise underway prior to the disaster. For
purposes of this paragraph, a CDBG-DR funded project shall be
determined to have commenced on the earliest of: (1) The date of an
approved Release for Request of Funds (RROF) and certification, or (2)
the date of completion of the site-specific review when a program
utilizes tiered environmental reviews, or (3) the date of sign-off by
the approving official when a project converts to exempt under 24 CFR
58.34(a)(12). The Secretary has the authority to waive provisions of
the Stafford Act and its implementing regulations that the Secretary
administers in connection with the obligation of CDBG-DR funds covered
under this waiver and alternative requirement, or the grantees' use of
these funds. The Department has determined that good cause exists for a
waiver and that such waiver is not inconsistent with the overall
purposes of title I of the HCDA. The waiver will simplify the
administration of the disaster recovery process and reduce the
administrative burden associated with the implementation of Stafford
Act Section 414 requirements for projects commencing more than one (1)
year after the date of the Presidentially declared disaster,
considering the majority of such persons displaced by the disaster will
have returned to their dwellings or found another place of permanent
residence. This waiver does not apply with respect to persons that meet
the occupancy requirements to receive a replacement housing payment
under the URA nor does it apply to persons displaced or relocated
temporarily by other HUD-funded programs or projects. Such persons'
eligibility for relocation assistance and payments under the URA is not
impacted by this waiver.''
IV.C.3 Clarification on Procurement and Use of Subrecipients for
State grantees only. The Federal Register notice published on February
9, 2018 (83 FR 5856) included a provision on the use of subrecipients
that was applicable to State grantees only. In section VI.A.14. of that
notice, HUD made 24 CFR 570.502, 570.503, and 570.500(c) applicable to
states exercising their authority under the waiver to carry out
activities directly. To eliminate any confusion regarding procurement
requirements that are applicable to the State's subrecipients, HUD is
clarifying that 24 CFR 570.502, 570.503, and 570.500(c) apply to states
carrying out activities directly, except for procurement requirements
as provided for in the February 9, 2018 notice. Specifically, when HUD
allows a State grantee the flexibility in section VI.A.1.a.(2) of the
February 9, 2018 notice to choose one of three options when developing
its procurement policies and procedures, and in paragraph VI.A.26.,
which requires State grantees to establish procurement requirements for
local governments and subrecipients, those provisions continue to apply
and will determine those procurement provisions of 2 CFR part 200 that
are applicable to a State's subrecipients.
IV.C.4. Clarification on Acquisition of real property, flood, and
other buyouts to include Wildfire-Impacted Grantees. The Federal
Register notice published February 9, 2018 (83 FR 5863) describes how
grantees may carry out property acquisitions for a variety of purposes
and that they may carry out a buyout program in a Disaster Risk
Reduction Area. HUD is clarifying this provision so that grantees
understand that wildland fire risk areas may also be identified by the
grantee as Disaster Risk Reduction areas. Accordingly, HUD is amending
paragraph IV.B.37.a. of the February 9, 2018 notice by adding the
following language to the end of that section:
``37. Clarification of ``Buyout'' and ``Real Property Acquisition''
activities.'' Wildland fire risk areas may also be identified by the
grantee as Disaster Risk Reduction areas eligible for a buyout to
reduce risk from future wildfires. Grantees are encouraged to carry out
property acquisitions as a means of acquiring contiguous parcels of
land for uses compatible with wildland-urban interface management
practices. Grantees are also encouraged to take actions to promote an
increase in hazard insurance coverage in the wildland fire risk
areas.''
V. Duration of Funding
The 2018 and 2019 Appropriations Acts make the funds available for
obligation by HUD until expended. This notice requires each grantee to
expend 100 percent of its CDBG-DR grant on eligible activities within 6
years of HUD's obligation of funds under Public Laws 115-254 and 116-20
pursuant to an executed grant agreement. Furthermore, consistent with
31 U.S.C. 1555 and OMB Circular A-11, if the Secretary or the President
determines
[[Page 4689]]
that the purposes for which the appropriation has been made have been
carried out and no disbursements have been made against the
appropriation for two consecutive fiscal years, any remaining balance
will be made unavailable for obligation or expenditure. In such case,
the funds shall not be available for obligation or expenditure for any
purpose after the account is closed.
VI. Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the disaster
recovery grants under this notice are as follows: 14.228 for State CDBG
grantees and 14.218 for Entitlement CDBG Grantees.
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 for public inspection between 8 a.m. and 5 p.m. weekdays in
the Regulations Division, Office of General Counsel, U.S. Department of
Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, an advance appointment to review the docket file
must be scheduled by calling the Regulations Division at 202-708-3055
(this is not a toll-free number). Hearing- or speech-impaired
individuals may access this number through TTY by calling the Federal
Relay Service at 800-877-8339 (this is a toll-free number).
Dated: January 16, 2020.
Benjamin S. Carson, Sr.,
Secretary.
Appendix A--Detailed Methodology
Allocation of CDBG-DR Funds to Most Impacted and Distressed Areas Due
to 2018 and 2019 Federally Declared Disasters
Background
The FAA Reauthorization Act of 2018 (Pub. L. 115-254) enacted on
October 5, 2018, appropriated $1,680,000,000 through the Community
Development Block Grant disaster recovery (CDBG-DR) program. The
statutory text related to the allocation is as follows:
``For an additional amount for ``Community Development Fund'',
$1,680,000,000, 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, and economic revitalization in the most
impacted and distressed areas resulting from a major disaster
declared in 2018 pursuant to the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5121 et seq.): Provided,
That funds shall be awarded directly to the State or unit of general
local government at the discretion of the Secretary[.]''
Public Law 116-20 appropriated $2,431,000,000 through the
Community Development Block Grant disaster recovery (CDBG-DR)
program. The statutory text related to the allocation is as follows:
``For an additional amount for ``Community Development Fund,''
$2,431,000,000, 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 2018 or 2019 (except as otherwise provided
under this heading) pursuant to the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.):
Provided, That funds 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)
at the discretion of the Secretary. . . Provided further, That of
the amounts made available under this heading $431,000,000 shall be
allocated to meet unmet infrastructure needs for grantees that
received allocations for disasters that occurred in 2017 under this
heading of division B of Public Law 115-56 and title XI of
subdivision 1 of division B of Public Law 115-123, of which
$331,442,114 shall be allocated to those grantees affected by
Hurricane Maria:
``Provided further, That of the amounts made available under
this heading, up to $5,000,000 shall be made available for capacity
building and technical assistance . . . Provided further, That of
the amounts made available under this heading and under the same
heading in Public Law 115-254, up to $2,500,000 shall be
transferred, in aggregate, to ``Department of Housing and Urban
Development-- Program Office Salaries and Expenses--Community
Planning and Development'' for necessary costs, including
information technology costs, of administering and overseeing the
obligation and expenditure of amounts under this heading[.]''
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 three standards:
(1) Individual Assistance/Individual and Households Program
(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 IHP funding.
(2) Concentrated damage. HUD has limited its estimate of serious
unmet housing needs 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 either 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.
(3) Disasters meeting the most impacted threshold. Only 2018 and
2019 disasters that meet this requirement for most impacted damage
are funded if one or more county or ZIP Code meets the thresholds
above. Note that this allocation only includes disasters declared as
of October 4, 2019. Other 2019 disasters will be addressed in a
future notice.
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; an estimate for
homeowners served by FEMA's Permanent Housing Construction program
is also deducted from the homeowner unmet need estimate;
(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 2018 qualifying
disasters come from the FEMA Individual Assistance program data on
housing-unit damage as of July 17, 2019. The data for 2019
qualifying disasters is as of November 13, 2019.
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.
Each of the FEMA inspected owner units are categorized by HUD
into one of five categories:
Minor-Low: Less than $3,000 of FEMA inspected real
property damage.
Minor-High: $3,000 to $7,999 of FEMA inspected real
property damage.
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;
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.
[[Page 4690]]
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 as
follows::
Minor-Low: Less than $2,500 of FEMA inspected personal
property damage.
Minor-High: $2,500 to $3,499 of FEMA inspected personal
property damage.
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.
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.
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 1 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 1 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.
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:
Minor-Low: Less than $1,000 of FEMA inspected personal
property damage.
Minor-High: $1,000 to $1,999 of FEMA inspected personal
property damage.
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.
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.
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.
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
median income. Units occupied by a tenant with income less than the
greater of the poverty level or 50 percent of 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 for the subset
of homes inspected by both SBA and FEMA for each eligible disaster.
Minimum multipliers are not less than the 1st quarter median for
all Individual Assistance (IA) eligible disasters combined in each
disaster year at the time of the allocation calculation, and maximum
multipliers are not more than the 4th quarter median for all IA
eligible disasters combined in each disaster year 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.
For each household determined to have 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 their damage category (noted above).
Methods for Estimating Serious Unmet Economic Revitalization Needs
Based on SBA disaster loans to businesses using data for 2018
disasters from as of date July 17, 2019 and for 2019 disasters from
as of the date November 14, 2019, HUD calculates the median real
estate and content loss by the following damage categories for each
state:
Category 1: Real estate + content loss = below $12,000
Category 2: Real estate + content loss = $12,000-$29,999
Category 3: Real estate + content loss = $30,000-$64,999
Category 4: Real estate + content loss = $65,000-$149,999
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 2018 and 2019 unmet needs for infrastructure
projects, HUD obtained FEMA cost estimates (as of July 17, 2019 for
the 2018 disasters and November 13, 2019 for 2019 disasters) of the
expected local cost share to repair the permanent public
infrastructure (Categories C to G) to their pre-storm condition.
To calculate additional infrastructure unmet needs for 2017
disasters, HUD compares the change in FEMA Category C to G local
match cost estimates between March 2018 (when funds had been
allocated under Pub. L. 115-23) and November 2019. For grantees
impacted by Hurricane Maria--Puerto Rico and the Virgin Islands--the
statutorily required allocation of $331,442,114 is allocated
proportional based on their relative share of growth in Category C
to G local match cost estimates. For other 2017 grantees where the
November 2019 estimate exceeds the March 2018 estimate, each grantee
is first increased dollar-for-dollar to their local match
requirements. For any of the remaining funds of the required $431
million for 2017 disasters, they are allocated to the non-Maria
disasters that have been funded at 100 percent or less of
infrastructure match needs proportional to their share of eligible
grantees' November 2019 estimated infrastructure match needs.
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 2018 and 2019
disasters as the aggregate of:
Serious unmet housing needs in most impacted counties;
Serious unmet business needs; and
Unmet infrastructure need.
Two jurisdictions have their unmet needs calculations adjusted due
to unusual circumstances not covered in the standard methodology.
First, Hawaii County in Hawaii has 76 homes that were not damaged
but are completely surrounded by lava fields. HUD assumes that those
homes will never be habitable and categorizes them as destroyed with
no insurance for the serious unmet need calculation. Second, FEMA is
administering its Permanent Housing Construction program in the
Northern Marianas and expects to serve 455 homeowners with seriously
damaged homes. As such, HUD subtracts the unmet needs of 455
homeowners from the base estimate.
[FR Doc. 2020-01204 Filed 1-24-20; 8:45 am]
BILLING CODE 4210-67-P
