Allocations, Common Application, Waivers, and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees; Electrical Power Systems in Puerto Rico and the U.S. Virgin Islands
| Published date | 22 June 2021 |
| Citation | 86 FR 32681 |
| Record Number | 2021-12934 |
| Section | Notices |
| Court | Housing And Urban Development Department |
Federal Register, Volume 86 Issue 117 (Tuesday, June 22, 2021)
[Federal Register Volume 86, Number 117 (Tuesday, June 22, 2021)]
[Notices]
[Pages 32681-32700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12934]
[[Page 32681]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6261-N-01]
Allocations, Common Application, Waivers, and Alternative
Requirements for Community Development Block Grant Disaster Recovery
Grantees; Electrical Power Systems in Puerto Rico and the U.S. Virgin
Islands
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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SUMMARY: On April 10, 2018, HUD allocated nearly $28 billion in
Community Development Block Grant disaster recovery (CDBG-DR) funds
appropriated by the Further Additional Supplemental Appropriations for
Disaster Relief Requirements Act, 2018. HUD allocated $10.03 billion
for the purpose of addressing unmet needs from disasters that occurred
in 2017; $2 billion for enhanced or improved electrical power systems
in Puerto Rico and the U.S. Virgin Islands; and $15.9 billion for
mitigation activities. This notice governs the use of the $2 billion
CDBG-DR allocation for enhanced or improved electrical power systems in
Puerto Rico and the U.S. Virgin Islands.
DATES: Applicability Date: June 28, 2021.
FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Director,
Office of Block Grant Assistance, 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. Overview and Policy Objectives
II. Allocation
III. Use of Funds
IV. Overview of the Grant Process
V. Applicable Rules, Statutes, Waivers, and Alternative Requirements
A. Grant Administration
B. Infrastructure and Other Nonresidential Structures
C. Certifications and Collection of Information
VI. Duration of Funding
VII. Catalog of Federal Domestic Assistance
VIII. Finding of No Significant Impact
I. Overview and Policy Objectives
The Further Additional Supplemental Appropriations for Disaster
Relief Requirements Act, 2018 (Division B, Subdivision 1 of the
Bipartisan Budget Act of 2018), (Pub. L. 115-123 approved February 9,
2018) (the ``Appropriations Act''), made available nearly $28 billion
in Community Development Block Grant disaster recovery (CDBG-DR) funds.
Of this amount, the Appropriations Act directed HUD to allocate not
less than $2 billion for electrical power system enhancements and
improvements for Puerto Rico and the U.S. Virgin Islands (USVI). This
notice establishes requirements for necessary expenses of electrical
power system enhancements and improvements (``electrical power system
improvements'') in the most impacted and distressed area as defined by
HUD in section II of this notice and as previously identified in the
allocation methodology published by HUD in the August 14, 2018 Federal
Register (83 FR 40314, 40323).
In 2017, Hurricanes Irma and Maria damaged significant elements of
the electricity systems in Puerto Rico and the USVI. Following the
hurricanes, five months of repairs were required in order to restore
power to the USVI, and approximately eleven months of repairs were
needed to restore power to Puerto Rico. CDBG-DR funds for electrical
power system improvements provide a unique and significant opportunity
for these grantees to carry out strategic and high-impact activities to
address necessary expenses and mitigate disaster risks to their
electrical power systems, improve system reliability, resiliency,
efficiency, sustainability and address each system's long-term
financial viability (electrical power system and electrical power
system improvements are defined in section V.A.8.a. in this notice).
The Department seeks to maximize the impact of these CDBG-DR funds by
encouraging the formation of public-private partnerships, partnerships
with local, community and neighborhood organizations, and through
enhanced coordination with other Federal programs. In the action plan
governing the use of these funds, grantees are also required to
describe how the funds will be used to address the needs of vulnerable
populations, protected classes, and underserved communities, how the
funded activities primarily benefit low- and moderate-income persons,
and how the planned improvements will be designed and implemented to
address the impacts of climate change.
The use of CDBG-DR funds for electrical power system improvements
requires careful planning, robust oversight, and coordination with
other Federal disaster recovery, mitigation, and sustainability efforts
to enhance the resiliency of grantee's electrical power systems, as an
integral component of the grantee's energy infrastructure. The
Department places great focus on and will give increased attention to
the financial and operational capacity of each grantee's subrecipients
and the departments and divisions of the grantee that may receive
funds, including public utilities that currently operate and maintain
each grantee's electrical power system. As described in section
V.A.1.b.(2), grantees must identify any management and operational
reforms that have been or will be implemented to improve the outcomes
associated with the use of CDBG-DR funds for electrical power system
improvements. The Administration also seeks to encourage private,
community, and philanthropic sector investments in electrical power
system improvements, and to maximize the long-term benefits of this
CDBG-DR funding to each grantee's jurisdiction.
II. Allocation
The Appropriations Act provides that grants shall be awarded
directly to a State, local government, or Indian tribe at the
discretion of the Secretary. To comply with statutory direction that
funds be used for disaster-related expenses in the most impacted and
distressed areas, 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 was previously
published in HUD's August 14, 2018 Federal Register notice at 83 FR
40323. For Puerto Rico and the USVI, all components of each
jurisdiction are considered most impacted and distressed for purposes
of the allocation identified in Table 1.
[[Page 32682]]
Table 1--Allocations for Electrical Power System Enhancements and
Improvements Under Public Law 115-123
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Electrical power system
Disaster No. Grantee allocation under Public
Law 115-123
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4339................... Commonwealth of Puerto $1,932,347,000
Rico.
4340................... U.S. Virgin Islands... 67,653,000
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III. Use of Funds
As required by the Appropriations Act, prior to HUD's obligation of
the funds to the grantee, a grantee shall submit a plan to HUD for
approval detailing the proposed use of all funds. The action plan
submitted in response to this notice must describe uses that (1) are
electrical power system improvements and satisfy all requirements for
electrical power system improvement activities as described in V.A.8.;
and (2) meet the criteria for a national objective, as established by
this notice.
Section V.A.8. of this notice establishes a waiver and alternative
requirement that creates electrical power system improvements as a
CDBG-DR eligible activity. As described in section V.A.2.a.(1) of this
notice, in the action plan, a grantee must assess the unmet needs for
the enhancement or improvement of their respective electrical power
system. The unmet needs assessment must inform the action plan and
guide the development and prioritization of planned activities to
improve each grantee's electrical power system. The action plan must
include the criteria to be used by the grantee to prioritize the
expenditure of CDBG-DR funds identified in this notice for the specific
components of its electrical power system and describe how the use of
these CDBG-DR funds will improve the cost-effectiveness, reliability,
resilience, efficiency, sustainability, and long-term financial
viability of its electrical power systems.
Puerto Rico is subject to the requirements of the State CDBG
program, as modified by applicable waivers and alternative
requirements. Section 102(a)(2) of the HCDA defines ``state'' to
include the Commonwealth of Puerto Rico (42 U.S.C. 5302(a)(2)). HUD
waives the provisions of 24 CFR part 570, subpart F to authorize the
USVI to administer its CDBG-DR allocation in accordance with the
regulatory and statutory provisions governing the State CDBG program,
as modified by this notice. This includes the requirement that the
aggregate total for administrative and technical assistance
expenditures by the USVI must not exceed 5 percent of any CDBG-DR grant
made pursuant to the Appropriations Act, plus 5 percent of program
income generated by the grant.
Funds allocated pursuant to this notice shall not be subject to
previous notices that govern CDBG-DR or CDBG Mitigation (CDBG-MIT)
funds awarded to Puerto Rico or the USVI. The use of other CDBG-DR
funds or CDBG-MIT funds, allocated pursuant to other notices for
electrical power system improvements, shall be subject to the
requirements of the notices governing the use of those funds and to the
requirements established in section V.B.4 of this notice.
All references in this notice pertaining to timelines and/or
deadlines are in terms of calendar days unless otherwise noted.
IV. Overview of Grant Process
The grant process outlined below aligns with the typical process
for awarding CDBG-DR grants. To begin expending CDBG-DR funds pursuant
to this notice, the following steps are required:
Grantee develops or amends its citizen participation plan
for disaster recovery to include the grant for electrical power system
improvements in accordance with the requirements in section V.A.3 of
this notice.
Grantee consults with stakeholders, including the required
consultation with the Federal members of the Energy Technical
Coordination Team (TCT) described in section V.A.2.e.(1) of this
notice, affected local government public utilities, rural electrical
cooperatives, regulators, commercial and industrial users of the
system, residential customers and public interest groups representing
residential customers of the system and others pursuant to section
V.A.6 of this notice.
Grantees under this notice have previously submitted
materials in support of the Department's certification of the
proficiency of its financial controls and procurements processes and
the adequacy of its 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 assisted mitigation activities, and detect and prevent waste,
fraud, and abuse of funds for purposes of its CDBG-MIT grant.
Accordingly, as described in section V.A.1.a., for CDBG-DR grants
governed by this notice, HUD will rely on the grantees' submissions and
certifications in support of the CDBG-MIT certifications, provided,
however, that each grantee shall be required to submit updates to
reflect any material changes in its certification submissions, as
necessary. Grantees must submit the required information within 60 days
of the applicability date of this notice.
Grantee publishes its action plan for electrical power
system improvements on the grantee's required disaster recovery website
for no less than 45 calendar days to solicit public comment and
convenes not less than two public hearings on the proposed plan. The
grantee may convene virtual hearings in lieu of in-person hearings,
pursuant to section V.A.3.b. of this notice.
Grantee responds to public comments and submits its action
plan within 120 days of the applicability date of this notice (which
includes Standard Form 424 (SF-424) and certifications), its
implementation plan and capacity assessment in accordance with the
requirements in section V.A.1.b, and projection of expenditures and
outcomes to HUD in accordance with V.A.2.g.
Grantee may begin to enter activities into the Disaster
Recovery Grant Reporting (DRGR) system before or after submission of
the action plan to HUD. Any activities that are changed as a result of
HUD's review must be updated once HUD approves the action plan.
HUD reviews (within 60 days from the date of receipt) the
action plan according to criteria identified in this notice, and either
approves or disapproves the plan.
HUD will send an action plan approval letter, grant
conditions, and an unsigned grant agreement to the grantee. If the
action plan is not approved, HUD will notify the grantee of the
deficiencies. The grantee must then
[[Page 32683]]
resubmit the action plan within 45 days of the notification.
Grantee must sign and return the grant agreement to HUD.
HUD will sign the grant agreement and establish the
grantee's CDBG-DR line of credit amount to reflect the total amount of
available funds. Grantee posts the final HUD-approved action plan on
its official website.
Grantee enters the activities from its approved action
plan into the DRGR system if it has not previously done so and submits
its DRGR action plan to HUD (funds can be drawn from the line of credit
only for activities that are established in the DRGR system).
Grantee may draw down CDBG-DR funds from its line of
credit after the Responsible Entity completes applicable environmental
review(s) pursuant to 24 CFR part 58 or adopts another Federal agency's
environmental review as authorized under the Appropriations Act, and,
as applicable, receives from HUD the Authority to Use Grant Funds
(AUGF) form.
Substantial amendments are subject to requirements in
V.A.2.d., including a 30-day public comment period and posting the
substantial amendment to the grantee's website followed by a 60-day
review period for HUD.
V. Applicable Rules, Statutes, Waivers, and Alternative Requirements
This section of the notice describes requirements established by
the Appropriations Act, as well as waivers and alternative requirements
that apply to the CDBG-DR funds for electrical power system
improvements. These waivers and alternative requirements provide
flexibility in program design and implementation to support the
grantees' prudent implementation of activities to address necessary
expenses and mitigate disaster risks to their electrical power systems,
improve system reliability, resiliency, efficiency, sustainability and
address each system's long-term financial viability, while ensuring
that statutory requirements are met. For each waiver and alternative
requirement, the Secretary has determined that good cause exists and
that the waivers and alternative requirements are not inconsistent with
the overall purpose of title I of the HCDA.
The Appropriations Act authorizes the Secretary to waive or specify
alternative requirements for any provision of any statute or regulation
that the Secretary administers in connection with the obligation by the
Secretary, or use by the recipient, of these funds, except for
requirements related to fair housing, nondiscrimination, labor
standards, and the environment. HUD also has regulatory waiver
authority under 24 CFR 5.110, 91.600, and 570.5.
Grantees may request additional waivers and alternative
requirements from the Department as needed to address specific needs
related to their electrical power system improvement activities.
Grantee requests for waivers and alternative requirements must be
accompanied by relevant data to support the request and must
demonstrate to the satisfaction of the Department that there is good
cause for the waiver or alternative requirement. Grantees must work
with their assigned HUD CPD representative to request additional
waivers or alternative requirements and such waivers and alternative
requirements shall be subject to approval by HUD headquarters. Except
when noted, the waivers and alternative requirements described below
apply only to CDBG-DR funds subject to the requirements of this notice.
Waivers and alternative requirements must be published in the Federal
Register and are effective five (5) days after publication.
Except as described for CDBG-DR funds, statutory and regulatory
provisions governing the State CDBG program shall apply to both Puerto
Rico and the USVI including but not limited to, the principle of
maximum feasible deference as provided at 24 CFR 570.480. Statutory
provisions for the State CDBG program (title I of the HCDA) can be
found at 42 U.S.C. 5301 et seq. State CDBG regulations can be found at
24 CFR part 570. References to the action plan in these regulations
refer to the action plan required by this notice.
V.A. Grant Administration and Action Plan Requirements
V.A.1. Pre-award evaluation of management and oversight of funds.
HUD plans to work with other Federal agencies and the grantee to
closely consult with and provide coordinated federal technical
assistance to the grantee in its planning and implementation of all
aspects of the electrical power system improvements to be funded with
CDBG-DR grants described in this notice. This coordinated Federal
technical assistance aligns with the view that these electrical power
system improvements by grantees will require a high level of
interaction between HUD, the grantee, and other Federal agencies in
order to ensure long-term performance and compliance. In establishing
an alternative eligible activity for electrical power system
improvements in section V.A.8.a. of this notice, HUD recognizes the
unique nature of the activities to be funded with this allocation, the
extent to which implementation of this activity is dependent upon each
grantee's public utility, and the financial management and program
risks to grantees that are presented by the on-going operational and
financial challenges of their respective public utilities. Accordingly,
HUD will also give increased attention to the financial and operational
capacity of each grantee's subrecipients, subgrantees, and any other
departments and divisions of the grantee that will carry out activities
funded with this grant, including each of the public utilities that
currently operate and maintain each grantee's electrical power system.
Consistent with 2 CFR part 200, HUD will use grant conditions to
reduce risk, to contribute to improved outcomes in the use of this
CDBG-DR funding, and to help strengthen grantee management practices
and improve the grantee's capacity to respond to future disasters.
Among the conditions which may be established are requirements for
notifying HUD of the planned disposition of components of the
electrical power system acquired or improved with CDBG-DR funds and for
the management of any program income resulting from such disposition
and standards for the procurement of electrical power system
improvements, including those established by the U.S. Department of
Agriculture's Rural Utility Service.
As electrical power system improvements necessarily rely on the
grantee's public utility, and for grantees that are considered by HUD
to have ``unmitigated high risks,'' that impact their ability to carry
out large-scale projects, HUD, in consultation with the U.S. Department
of Treasury, may consider possible grant conditions. These grant
conditions may include but are not limited to requiring the grantee to
provide periodic reports on how the expenditure of CDBG-DR funds is
contributing to the financial stability of the public utility including
steps the utility is taking (e.g., cost-cutting measures, increases in
operational efficiency, increases to customer base and investments of
public utility funds in the system).
The Department may, based on its assessment of risk, restrict the
availability of funds until such time as various grant conditions are
met by a grantee. Grantees are reminded that HUD may, at any time,
establish new grant conditions based on the risk arising from the
performance of a grantee or its subrecipients or may
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pursue remedies based on performance consistent with subpart O of the
CDBG regulations (including corrective and remedial actions in 24 CFR
570.910, 570.911, and 570.913) or under subpart I of the CDBG
regulations at 24 CFR part 570 in accordance with the waiver and
alternative requirement in V.A.20.
V.A.1.a. Certification of financial controls and procurement
processes, and adequate procedures for proper grant management. The
Appropriations Act requires 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 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. Sections V.A.1.a. and VI.1.k.
of the August 30, 2019 CDBG-MIT Federal Register notice (84 FR 45844-45
and 45869) required CDBG-MIT grantees to provide submissions that offer
evidence that its controls, processes, and procedures are proficient
and adequate, and a related certification from the grantee to the
Secretary. To enable the Secretary to make this certification, HUD will
rely on the grantee's submissions and certifications to the Secretary
previously provided for the grantee's CDBG-MIT grant, provided,
however, that HUD's approval will be conditioned on the requirement
that the grantee must update its previous submissions to reflect any
material changes.
If this CDBG-DR grant is to be administered by an agency that does
not administer a grantee's CDBG-MIT grant, the administering agency for
this CDBG-DR grant must submit the documentation for the certification
of financial controls and procurement processes, and adequate
procedures for proper grant management as described in Sections
V.A.1.a. of the August 30, 2019 CDBG-MIT Federal Register notice (84 FR
45844-45).
Grantees must submit the required information within 60 days of the
applicability date of this notice.
V.A.1.b. Implementation plan and capacity assessment. CDBG-DR funds
typically require grantees to adopt new roles and responsibilities
within their organization and to establish new working relationships
with other entities external to the organization. The use of CDBG-DR
funds for electrical power system improvements presents unique risks
for grantees, requiring enhanced levels of technical expertise and
close coordination among multiple agencies of the grantee, federal
agencies, public utilities, local governments, and other stakeholders.
Before signing a grant agreement, HUD requires each grantee to
demonstrate that it has sufficient capacity to manage these funds and
the associated risks.
Evidence of grantee management capacity must be provided through
the grantee's implementation plan and capacity assessment submitted
with the grantee's action plan. These submissions must meet the
criteria in (1) and (2) below. A grantee has sufficient management
capacity if it submits documentation showing that each of the following
criteria are satisfied:
(1) Timely information on applications. A grantee has adequate
procedures to enable applicants to determine the status of their
applications for CDBG-DR assistance, at all phases, if its procedures
indicate methods for communication (i.e., website, telephone, case
managers, letters, etc.), ensure the accessibility and privacy of
individualized information for all applicants, indicate the frequency
of applicant status updates, and identify which personnel or unit is
responsible for informing applicants of the status of CDBG-DR
applications.
(2) Implementation plan. To enable HUD to assess risk as described
in 2 CFR 200.206, the grantee must submit an implementation plan to the
Department. The plan must describe the grantee's capacity to carry out
electrical power system improvement activities, how it will address any
capacity gaps, and how agency staff of the grantee that administers
other CDBG-DR funds and CDBG-MIT funds will work with other agencies of
the grantee that administer the Federal Emergency Management Agency
(FEMA) funded mitigation and public assistance funds and other
Federally funded activities that support electrical power system
improvements. Additionally, grantees must identify any management and
operational reforms that have been or will be implemented by the
grantee or its planned subrecipients, subgrantees, and any other
agencies of the grantee that will carry out a portion of the grant, in
order to improve operational efficiency, accountability, and the
outcomes associated with the use of CDBG-DR funds for electrical power
system improvements. HUD will determine a plan is adequate to reduce
risk if, at a minimum, it adequately addresses (a) through (f) below:
(a) Capacity assessment. The grantee has assessed its capacity to
carry out electrical power system improvement activities and has
developed a timeline with milestones describing when and how the
grantee will address all capacity gaps that are identified. The
assessment must include a list of any open CDBG-DR or CDBG-MIT findings
by HUD or its Office of the Inspector General and an update on the
corrective actions undertaken to address each finding. HUD may include
additional requirements in the grantee's grant conditions to prevent
similar findings for this grant.
(b) Staffing. The plan shows that the grantee has accurately
assessed staff capacity and identified adequate personnel who have
documented experience in the timely development and implementation of
electrical power system improvements, including in particular, the
distribution, substation, and communication components of the system;
staff that are responsible for procurement and contract management,
including compliance with the regulations implementing Section 3 of the
Housing and Urban Development Act of 1968 (24 CFR part 75) (Section 3);
staff with experience and capacity in compliance with fair housing and
environmental requirements; and personnel responsible for monitoring,
quality assurance, and proper financial management. The grantee's
staffing plan may include the procurement of external consulting
services with expertise in the development and implementation of
electrical power system improvements. An adequate plan must also
describe the grantee's internal audit function and the extent to which
the internal audit function has been enhanced to account for the
technical and specialized nature of the electrical power system
improvements to be funded, including responsible audit staff reporting
independently to the chief elected official or executive officer or
governing board of the designated administering entity. To help
complete this staffing exercise, grantees may choose to use the
``Staffing Analysis Worksheet'' available on the HUD Exchange at
https://www.hudexchange.info/programs/cdbg-dr/toolkits/program-launch/#capacity.
(c) Internal and interagency coordination. The plan describes how
the grantee will ensure effective communication and coordination
between different departments and divisions within the grantee's
organizational structure and other grantee agencies and governmental
entities involved in the design and implementation of electrical power
system improvement planning and projects; agencies or divisions
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responsible for environmental reviews; grantee agencies responsible for
the development and implementation of components of the planned
electrical power system improvements; local and regional planning as
well as other agencies to be engaged by the grantee in order to ensure
consistency and the integration of CDBG-DR electrical power system
improvements with local and regional planning and development
activities. This includes the required consultation with the Federal
members of the TCT on the action plan as described in section
V.A.2.e.(1) of this notice. In order to illustrate compliance with the
requirement at V.A.2.e.(1), each grantee shall document in its
implementation plan its required consultations with the Federal members
of the TCT and its efforts to coordinate the various sources of federal
assistance provided for electrical power system improvements.
(d) Subrecipients, public utilities, and other entities. The
implementation plan must describe the criteria to be used by the
grantee to evaluate the capacity of all potential subrecipients or
other agencies of the grantee that will receive a subaward or otherwise
carry out activities funded with this grant, including criteria
specific to the designation of any public utility that is anticipated
to receive funding to implement electrical power system improvements.
These criteria shall include an evaluation of the capacity of
subrecipient or other entities to coordinate electrical power system
improvements with other infrastructure activities of the grantee.
The plan must also indicate how the grantee will monitor other
agencies of the grantee that will administer the funds, how the grantee
will enhance its monitoring of subrecipients, other agencies of the
grantee, contractors, and other program participants, how and why
monitoring is to be conducted, and which items are to be monitored.
(e) Technical assistance. The grantee's implementation plan
describes how it will procure and provide technical assistance for any
personnel that the grantee does not employ at the time of action plan
submission, and to fill their gaps in knowledge or technical expertise
required for successful and timely implementation where identified in
the capacity assessment.
(f) Accountability. The grantee's plan identifies the lead agency
responsible for implementation of the CDBG-DR grant and indicates that
the head of that agency will report directly to the chief executive
officer of the grantee.
HUD will monitor the grantee's use of funds for consistency with
the action plan, implementation plan and capacity assessment, and
whether a grantee meets the performance and timeliness objectives
established therein. A material failure to comply with the grantee's
approved action plan or implementation plan and capacity assessment
will prompt HUD to exercise any of the corrective or remedial actions
described in section V.A.20.
V.A.2. CDBG-DR Action Plan waiver and alternative requirement.
Requirements for CDBG action plans, in 42 U.S.C. 5304(a)(1), 42 U.S.C.
5304(m), 42 U.S.C. 5306(d)(2)(C)(iii), 42 U.S.C. 5306(a)(1), 42 U.S.C.
12705(a)(2), 24 CFR 91.320, and 24 CFR 91.220, are waived for these
CDBG-DR grants. Instead, grantees must submit to HUD a disaster
recovery action plan for electrical power system improvements which
will describe activities that conform to applicable requirements as
specified in this notice. The Secretary may disapprove an action plan
as substantially incomplete if it is determined that the plan does not
satisfy all the required elements identified in this notice.
V.A.2.a. Action Plan. The action plan must identify the proposed
use of all grant funds, including criteria of eligibility to be used by
the grantee to prioritize the expenditure of CDBG-DR funds for the
specific components of its electrical power system; how the uses
address necessary expenses related to disaster relief, long-term
recovery, restoration of infrastructure and housing, and economic
revitalization; and how the uses are to be determined to improve the
cost-effectiveness, reliability, resilience, efficiency, sustainability
and long-term financial viability of electrical power systems.
The use of funds shall be consistent with the electrical power
system unmet needs identified by the grantee in its action plan. Funds
dedicated for uses not described in accordance with this section will
not be obligated until the grantee submits, and HUD approves, an action
plan amendment programming the use of those funds, at the necessary
level of detail to allow the public and HUD to identify and understand
the use of all funds for specific activities. In the unmet needs
assessment and in its description of the connection of electrical power
system improvements to unmet needs, grantees shall reference any long-
term infrastructure plan of the grantee's public utility developed in
consultation with the FEMA, for the use of FEMA funds for electrical
power system improvements; or with any utility integrated resource plan
or other strategic plan adopted by the grantee for the development of
its energy infrastructure, as such plans may be amended from time to
time. The action plan must consider and incorporate, as appropriate,
electrical power system industry standards established by relevant
Federal agencies and related bodies, including, but not limited to,
requirements set by the USDA Rural Utilities Service (RUS), National
Institute of Standards and Technology, and North American Electrical
Reliability Corporation. In drafting the action plan, grantees shall
consult with the Federal members of the TCT as provided in section
V.A.2.e. of this notice. HUD will review and consider the comments from
the Federal members of the TCT, obtained by the grantee, on the action
plan.
HUD is establishing an additional alternative requirement that
grantees shall implement CDBG-DR electrical power system improvement
activities in accordance with their action plans and pursuant to the
descriptions provided by the grantee in the action plan in response to
elements (1) through (12) below. To the extent that the terms of any
concessionary agreement or receivership governing a public utility of
the grantee are not consistent with the requirements of this notice,
the terms of this notice shall continue to govern the CDBG-DR funds
subject to this notice and their use for electrical power system
improvements.
(1) Electrical Power System Unmet Needs Assessment. Each grantee
must develop an unmet needs assessment to inform the use of CDBG-DR
funds for electrical power system improvements. The action plan must
include an estimate of unmet needs based on planned electrical power
system improvements, including mitigation and resilience measures, that
are not likely to be addressed by other sources of funds. Grantees must
account for the various forms of assistance available to, or likely to
be available for such improvements, using the most recent available
data to estimate the portion of need unlikely to be addressed by
insurance proceeds, other Federal assistance, or any other funding
sources (thus producing an estimate of unmet need). Grantees must cite
data sources for the assessment. At a minimum, the unmet needs
assessment must: (i) Evaluate all aspects of the electrical power
system that were damaged by the disaster and that are at greatest risk
from future disasters; (ii) estimate unmet needs to ensure that CDBG-DR
funds are planned for uses that meet electrical power system needs that
are not likely to be addressed by FEMA or other sources of funds by
accounting for the various forms of assistance available to,
[[Page 32686]]
or likely to be available to, the grantee or its subrecipients (e.g.,
obligated and projected FEMA funds, public utility resources, other
grantee funds); and (iii) account for the costs of incorporating
mitigation and resilience measures to protect against the anticipated
effects of future extreme weather events and other natural hazards and
long-term risks and the costs of incorporating improvements to address
long term carbon reduction goals.
CDBG-DR funds may be used to reimburse planning and administrative
costs for developing the action plan, including the needs assessment,
environmental review, and citizen participation requirements. Although
the needs assessment for these CDBG-DR funds necessarily differs
somewhat from what is conducted by grantees for CDBG-DR allocations
provided for housing, infrastructure, and economic revitalization
needs, HUD has developed a Disaster Impact and Unmet Needs Assessment
Kit that may be helpful to grantees as a guide through a process for
identifying and prioritizing critical unmet needs for electrical power
system improvements. The Kit is available on the HUD Exchange website
at: https://www.hudexchange.info/resource/2870/disaster-impact-and-unmet-needs-assessment-kit/. In preparing the needs assessment,
grantees are advised to review the process and methodology previously
used to assess the grantee's unmet infrastructure needs for its recent
allocations of CDBG-DR funds for disaster recovery.
Electrical power system improvement needs evolve over time, and
grantees must amend the needs assessment and action plan as additional
resources become available, including through any additional needs that
may be identified through an infrastructure plan developed for the use
of FEMA Public Assistance funds for electrical power system
improvements, through any utility integrated resource plan for Puerto
Rico, and through any equivalent strategy or development plan adopted
by the USVI for its energy sector, as such strategy or plans may be
amended from time to time.
(2) Connection of Electrical Power System Improvements to Unmet
Needs and Expenditures. The grantee must address how the proposed
expenditures for each distinct functional component of its planned
electrical power system improvements, as identified in the definition
in section V.A.8.a.(ii) of this notice, addresses an estimated unmet
need identified in its electrical power system unmet needs assessment.
For each functional component, the grantee shall also identify the
amount of funds to be used as non-federal match for that component.
The grantee's action plan (and subsequent amendments) must include
a single chart or table that illustrates, at the most practical level,
how all funds are budgeted (e.g., by program, subrecipient, grantee-
administered activity, or other category) and that identifies each
component of the electrical power system to be funded. The budget shall
identify the pre-development, planning, construction, and installation
costs of each component; the percentage of funds to be expended for
each component; the percentage of funds for each component that are to
be expended as the non-Federal match for other Federal funds; and a
timeline for the full expenditure of each system component and for the
full grant allocation. Each grantee shall describe how its proposed
expenditures are consistent with any infrastructure plan developed by
the grantee's public utility in consultation with FEMA for the
expenditure of Public Assistance funds for electrical power system
improvements, with any utility integrated resource plan adopted by
Puerto Rico, and any strategy or development plan adopted by the USVI
for its energy sector, as such plans may be amended from time to time.
(3) Long-term Planning Considerations. The grantee must describe
how it plans to promote local and regional long-term planning and
development as informed by its electrical power system needs
assessment.
(4) Coordination of Electrical Power System Improvements and
Planned Leverage. Each grantee must describe how it will align its
electrical power system improvements with other planned improvements to
its other energy systems and its other infrastructure development
efforts and foster the potential for additional electrical power system
funding from multiple sources, such as leveraging other existing
capital improvement projects and the potential for private investment.
Grantees must describe how it plans to foster the potential to leverage
these CDBG-DR funds with other funding provided through public-private
partnerships and by other Federal, State, local, public utility,
private, and nonprofit sources to generate more effective and
comprehensive mitigation and electrical power system improvement
outcomes.
Examples of other Federal sources include funding provided by HUD,
FEMA (specifically the Public Assistance Program and the Hazard
Mitigation Grant Program), the Economic Development Administration,
U.S. Army Corps of Engineers (USACE), the Department of Transportation,
and the Department of Agriculture. The grantee must describe how it
will seek to maximize the outcomes of electrical power system
improvements and the degree to which CDBG-DR funds are effectively
leveraged, for example through public-private partnerships or
partnerships with local, community and neighborhood organizations and a
commitment of funding by the grantee. The grantee shall identify any
leveraged funds for each electrical power system improvement activity
in the DRGR system.
(5) Plans to Minimize Displacement and Ensure Accessibility. The
grantee must describe how it plans to minimize displacement of persons
or entities, and assist any persons or entities displaced through its
electrical power system improvement activities. This description shall
focus on proposed activities that may directly or indirectly result in
displacement and the assistance that shall be required for those
displaced. The grantee is reminded that it must take into consideration
the functional needs of persons with disabilities in the relocation
process. Guidance on relocation considerations for persons with
disabilities may be found in Chapter 3 of HUD's Relocation Handbook
1378.0 available on the HUD Exchange website at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/cpd/13780.
(6) Construction and Resiliency Standards. Each grantee must
describe how it plans to: (a) Emphasize quality, durability,
resiliency, energy efficiency and sustainability in its electrical
power system improvements; (b) promote sound, sustainable long-term
recovery planning informed by a post-disaster evaluation of hazard
risk, especially construction standards and land-use decisions that
reflect responsible floodplain and wetland management and take into
account continued sea level rise--this information should be based on
the history of FEMA flood mitigation efforts and take into account
projected increase in sea level (if applicable) and the frequency and
intensity of precipitation events; and (c) adhere to the elevation
requirements established in section V.B.1. of this notice, if
applicable. For grantees addressing flood risks, the grantee must
describe how it will document its decision to elevate structures
associated with its electrical power system improvements and how it
evaluated and
[[Page 32687]]
determined the elevation to be cost reasonable relative to other
alternatives or strategies, such as the demolition of substantially
damaged structures with reconstruction of an elevated structure on the
same site or infrastructure improvements to reduce the risk of loss of
life and property.
(7) Operation and Maintenance Plans. Each grantee must describe its
plan for ensuring the long-term operation and maintenance (O&M) of the
electrical power system improvements funded with CDBG-DR funds. The
grantee shall specify the non-CDBG sources of funding to be used for
the O&M of the electrical power system improvements, and the grantee's
plan and plans of its intended subrecipients to contribute to the
proposed electrical power system improvements with non-CDBG sources of
funding. The grantee shall describe how it will use reserve funds,
borrowing authority or retargeting of existing financial resources to
support the O&M plan, and how it plans to ensure that public utility
resources and other source of funding, as applicable, are committed to
the O&M of improvements assisted with CDBG-DR funds, over the useful
life of the improvements. The grantee must also describe in its action
plan how it plans to ensure and monitor funding of long-term O&M for
CDBG-DR electrical power system improvements. Funding options might
include grantee funds, local and public utility resources, borrowing
authority, or retargeting of other existing financial resources.
Grantees must describe any proposed changes to existing taxation
policies or collection practices, or changes to public utility revenue
billing and collection and other financing policies that are to be used
to support the O&M plan. If operations and maintenance plans are
reliant on any proposed changes to existing taxation policies, tax
collection practices, or changes to public utility revenue billing and
collection, those changes and relevant milestones should be expressly
included in the action plan. Additionally, the grantee must describe
any State, local, or other resources (e.g., public utility financing)
that have been identified for the operation and maintenance costs of
electrical power system improvements assisted with CDBG-DR funds.
With respect to this element of the action plan, HUD advises
grantee and subrecipients that HUD may impose a grant condition based
on risk that requires the grantee to establish or adopt standards for
O&M of the functional components of the electrical power system,
including recognized standards for vegetation management.
(8) Cost Verification. Each grantee must describe its controls for
assuring that electrical power system improvement costs, including
acquisition and construction costs, are reasonable and consistent with
market costs at the time and place of the acquisition or construction.
Grantees are encouraged to consider the use of an independent,
qualified third-party engineer, construction manager, or other
professional (e.g., a cost estimator) to verify the planned project
specifications and costs and any significant changes to the
specifications or costs of the contract (e.g., change orders) during
implementation are reasonable. The method and degree of analysis may
vary dependent upon the circumstances surrounding a particular project
(e.g., project type, risk, costs), but the description, at a minimum,
must address controls for CDBG-DR electrical power system improvements
above a certain total project cost threshold identified by the
grantee's cost verification requirements.
(9) Intergovernmental Coordination. Grantees must describe how it
will coordinate with other relevant governmental agencies of Puerto
Rico or the USVI, as applicable, units of local government, public
utilities and rural electrical cooperatives, and other entities, to
assure the consistency of all CDBG-DR funded electrical power system
improvements with other disaster recovery and mitigation planning and
development activities.
(10) Integration with Disaster Recovery and Mitigation Funds.
Grantees must describe how they will integrate the electrical power
system improvements into on-going and planned rebuilding, recovery, and
mitigation activities, and the extent to which the proposed electrical
power system improvement activities are consistent with the objectives
outlined in other CDBG-DR or CDBG-MIT action plans, and in regionally
or locally established plans and policies that are designed to reduce
future risks to the jurisdiction.
(11) Vulnerable Populations, Underserved Communities, and Low- and
Moderate-Income Persons. The grantee must assess how the use of the
CDBG-DR funds and its planning decisions will impact vulnerable
populations, protected classes under fair housing and civil rights
laws, and underserved communities that were economically distressed
prior to the disaster. Based on this assessment, grantees must describe
in the action plan whether their programs and projects will provide
electrical power system improvements to communities with concentrations
of vulnerable populations, including low-income rural areas, racially
and ethnically concentrated areas as well as concentrated areas of
poverty, and specify the activities that the grantees plans to
undertake to assist in providing lower electricity rates or increasing
reliability, quality, and durability of electrical infrastructure for
these populations or areas.
HUD generally defines vulnerable populations as a group or
community whose circumstances present barriers to obtaining or
understanding information or accessing resources, and grantees must
identify those populations in the action plan through their assessment.
The term ``underserved communities'' refers to populations sharing a
particular characteristic, as well as geographic communities, that have
been systematically denied a full opportunity to participate in aspects
of economic, social, and civic life.
The grantee shall also describe how the planned electrical power
system improvements will meet the overall benefit requirement for low-
and moderate-income benefit as provided in section V.A.8.c. of this
notice.
(12) Climate Considerations. Grantees must describe how the
electrical power system improvements will be designed and implemented
to address the impacts of climate change, including any nature-based
solutions and other improvements that will enhance the ability of the
grantee to implement renewable and clean energy sources and strategies,
and align with long-term goals for decarbonizing the electricity
sector. Nature-based solutions and improvements shall mean natural
processes or systems, or engineered systems that mimic natural systems
and processes, that are integrated into investments in electrical power
system improvements to enhance the resilience of the electrical power
system to future disasters.
V.A.2.b. Review and Approval of Action Plan. The action plan
(including SF-424 and certifications) must be submitted to HUD for
review and approval. Grantees must submit an action plan within 120
days of the applicability date of this notice, unless the grantee has
requested, and HUD has approved an extension of the submission
deadline. HUD will review each action plan within 60 days from the date
of receipt. The Secretary may disapprove an action plan as
substantially incomplete if it is determined that the action plan does
not meet the requirements of this notice.
[[Page 32688]]
V.A.2.c. Clarity of action plan. Every grantee must include
sufficient information so that all interested parties will be able to
understand and comment on the action plan and, if applicable, be able
to prepare responsive applications to the grantee.
V.A.2.d. Amending the action plan. The grantee must amend its
action plan to update its electrical power system needs assessment,
modify, or create new activities, or reprogram funds. Each amendment
must be highlighted, or otherwise identified, within the context of the
entire action plan. The beginning of every action plan amendment must
include: (1) A section that identifies exactly what content is being
added, deleted, or changed; (2) a chart or table that clearly
illustrates where funds are coming from and where they are moving to;
(3) a revised budget allocation table that reflects the entirety of all
funds, as amended; and (4) a description of how the amendment is
consistent with a grantee's electrical power system needs assessment.
Every amendment to the action plan (substantial and non-substantial)
must be numbered sequentially and posted on the grantee's website. A
grantee's current version of its entire action plan must be accessible
for viewing as a single document at any given point in time, rather
than the public or HUD having to view and cross-reference changes among
multiple amendments.
(1) Substantial amendment. The grantee must provide a 30-day public
comment period and reasonable method(s) (including electronic
submission) for receiving comments on such amendments. In its action
plan, each grantee must specify criteria for determining what changes
in the grantee's plan constitute a substantial amendment to the plan.
At a minimum, the following modifications will constitute a substantial
amendment: A change in program benefit or eligibility criteria; the
addition or deletion of an activity or of a component of the electrical
power system improvements; or the allocation or reallocation of a
monetary threshold specified by the grantee in its action plan. The
grantee may substantially amend the action plan if it follows the same
procedures required for CDBG-DR funds for the preparation and
submission of an action plan in this notice, provided, however, that a
substantial action plan amendment shall require a 30-day public comment
period and does not require public hearings.
(2) Non-substantial amendment. The grantee must notify HUD, but is
not required to seek public comment, when it makes any plan amendment
that is not substantial. HUD must be notified at least 5 business days
before the amendment becomes effective. The Department will acknowledge
receipt of the notification of non-substantial amendments via email
within 5 business days. Non-substantial amendments shall be numbered in
sequence with other non-substantial and substantial amendments and
incorporated into the action plan.
V.A.2.e. Additional consultation requirements. To encourage
effective coordination between the grantees and their Federal partners
in the planning and implementation of electrical power system
improvements, the alternative requirement in paragraph V.A.6. requires
the grantee to comply with the consultation requirements in this
section. Each grantee must consult not less than quarterly with the
Federal members of the Energy Technical Coordination Team (TCT), co-led
by FEMA and the U.S. Department of Energy (DOE). Such consultation
shall be required during the grant period of performance unless HUD
notifies the grantee that consultation is no longer required. HUD will
provide the grantee with instructions for consultation.
A grantee's consultation with the TCT must include soliciting and
considering input from the TCT's Federal members on one or more of the
areas defined below:
(1) The action plan required by this notice prior to the grantee's
publication of the plan and on any subsequent substantial amendments to
the action plan, including the grantee's proposed budget for electrical
power system improvements to be funded with CDBG-DR funds as described
in section V.A.2.a.(2) of this notice;
(2) The evaluation of the capacity of any public utility that will
receive a subaward or otherwise carry out a portion of the grant and
the mitigation of risk associated with the public utility's use of
CDBG-DR funds. Consultation with the TCT Federal members shall occur
before entering a subaward or other agreement with the public utility,
and shall include: (a) Providing the TCT Federal members with the
grantee's assessment of the public utility's financial and operational
capacity; (b) a request for recommendations for appropriate controls to
mitigate the financial management, program, and other risks of
noncompliance related to the public utility's use of Federal funding
for electrical power system improvements; and (c) a request for the
TCT's recommendations for improving the public utility's operational
capacity;
(3) The identification of opportunities to sequence and coordinate
permits and approvals necessary to carry out CDBG-DR funded electrical
power system improvement activities, including environmental reviews;
(4) The technical evaluation of proposed electrical power system
improvements using models and other sources of expert assistance
available through TCT Federal members; and
(5) The implementation of applicable electrical power system
industry standards and the commercial availability of system components
that the grantee proposes to fund.
HUD may engage with the individual federal agencies in the TCT to
provide additional technical support for grantee electrical power
system improvements, as needed. Notwithstanding the consultation and
advisory roles that may be provided by FEMA and DOE as co-agency TCT
leads, the Department of the Treasury as financial lead, and other
federal partner agencies, each federal agency shall retain the
authorities and responsibilities provided to that agency pursuant to
federal laws and regulations.
V.A.2.f. Waiver of 45-day review period for action plan and
substantial action plan amendments. The Department recognizes the
unique purposes and complex requirements of this CDBG-DR allocation for
electrical power system improvements and that these funds represent an
opportunity for grantees to use this assistance in areas impacted by
the 2017 disasters. While HUD may disapprove an action plan or
substantial action plan amendment if it is substantially incomplete or
for other reasons identified in 24 CFR 91.500, HUD works with grantees
to resolve or provide additional information during the review period
to avoid the need to disapprove an action plan or substantial action
plan amendments. There are often many issues related to the action plan
or substantial action plan amendments that can be fully resolved via
further discussion and revision during an extended review period,
rather than through HUD's disapproval of the action plan or amendments,
which in turn would require grantees to take additional time to revise
and resubmit their action plan or respective amendments and delay
recovery. As such, the Secretary has determined that good cause exists
and waives 24 CFR 91.500(a) to extend HUD's review period for action
plan and substantial amendments from 45 days to 60 days.
V.A.2.g. Projection of expenditures and outcomes. Each grantee must
submit projected expenditures and outcomes as part of the action plan.
The
[[Page 32689]]
projections must be based on each quarter's expected performance--
beginning with the quarter funds are available to the grantee and
continuing each quarter until all funds are expended. The projections
will enable HUD, the public, and the grantee to track proposed versus
actual performance. The projections must also be clearly and
conspicuously displayed on the grantee's website. If a grantee's
performance indicates a pattern of deviation from projected
expenditures and outcomes, HUD may review the grantee's capacity
assessment and implementation plan and require an update to that plan
or impose corrective actions to mitigate the risks associated with
failure to meet projections. The published action plan must be amended
for any subsequent changes, updates, or revision of the projections.
Guidance on the preparation of projections is available here: https://www.hudexchange.info/resource/5734/cdbg-dr-grantee-projections-of-expenditures-and-outcomes/.
V.A.3. Citizen participation waiver and alternative requirement. To
permit a more robust process and ensure that electrical power system
improvement activities are developed through methods that allow all
stakeholders to participate, and because citizens that are continuing
to recover from disasters are best suited to ensure that grantees will
be advised of any missed opportunities and additional risks that need
to be addressed, provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C.
12707, 24 CFR 570.486, 24 CFR 91.105(b) and (c), and 24 CFR 91.115(b)
and (c), with respect to citizen participation requirements, are waived
and replaced by the requirements below. The grantee is required to
provide a reasonable opportunity (at least 45 days) for citizen comment
and ongoing citizen access to information about the use of grant funds.
The revised citizen participation requirements for this notice include
sections V.A.3.a to V.A.3.e. below.
V.A.3.a. Publication of the action plan and opportunity for public
comment. HUD continues to emphasize the importance of a robust citizen
participation process, which shall include at least two public hearings
on the proposed action plan. The grantee must either amend its existing
citizen participation plan or adopt a new plan that incorporates the
electrical power system improvements through CDBG-DR funds with the
specific citizen participation requirements outlined in this section.
At least one of these public hearings is to occur prior to a grantee's
publication of its action plan on its website for public comment, and
unless the grantee conducts a virtual hearing pursuant to section
V.A.3.b. below, all hearings are to be convened at different locations
that reflect geographic balance and ensure maximum accessibility.
Before the grantee submits the action plan for this grant to HUD or
any substantial amendment to the action plan as provided in section
V.A.2.d. of this notice, the grantee will publish the proposed action
plan or amendment. The manner of publication must include prominent
posting on the grantee's official website and must afford citizens,
affected local governments, and other interested parties a reasonable
opportunity to examine the plan or amendment's contents. The topic of
electrical power system improvements, as part of the grantee's broader
disaster recovery efforts, must be navigable by citizens from the
grantee's (or relevant agency's) homepage.
Grantees are also encouraged to notify affected citizens through
electronic mailings, press releases, statements by public officials,
media advertisements, public service announcements, and/or contacts
with neighborhood organizations. Grantees should also consider
recording public hearings and making them available online for live
viewing and creating archival video of the public meetings on the
grantee's website. Plan publication efforts and public hearings must
comply with civil rights requirements, including meeting the effective
communications requirements under Section 504 of the Rehabilitation Act
(see, 24 CFR 8.6) and the Americans with Disabilities Act (see 28 CFR
35.160); and must provide meaningful access for persons with Limited
English Proficiency (LEP) (see HUD's LEP Guidance, 72 FR 2732 (2007)).
Grantees are responsible for ensuring that all citizens have equal
access to information about the CDBG-DR programs, including persons
with disabilities and persons with limited English proficiency (LEP).
Each grantee must ensure that electrical power system improvement
funding and program information is available in the appropriate
languages for the geographic areas to be served (see HUD's LEP
Guidance, March 16, 2007, 72 FR 2732) and take appropriate steps to
ensure effective communications with persons with disabilities under
Section 504 (see, 24 CFR 8.6) and the Americans with Disabilities Act
(see 28 CFR 35.106).
Since grantees receiving CDBG-DR funds may make grants throughout
the state, including to Entitlement communities, grantees should
carefully evaluate the needs of persons with disabilities and those
with limited English proficiency. In assessing its language needs for
translation of notices and other vital documents for non-English
speaking residents, the grantee should consult the Final Guidance to
Federal Financial Assistance Recipients Regarding Title VI, Prohibition
Against National Origin Discrimination Affecting Limited English
Proficient Persons, published on January 22, 2007, in the Federal
Register (72 FR 2732) and at: https://www.lep.gov/sites/lep/files/resources/HUD_guidance_Jan07.pdf.
V.A.3.b. Clarification on public hearings and consideration of
public comments. Public hearings required by this notice may include
virtual public hearings (alone, or in concert with an in-person
hearing) if the virtual hearing allows for questions in real time, with
answers coming directly from the grantee's representatives to all
``attendees,'' subject to the requirements of this paragraph. Virtual
hearings provide grantees with additional flexibility in the
implementation of CDBG-DR funds during the Coronavirus Disease (COVID-
19) pandemic to enable social distancing during the public health
emergency. Grantees subject to this notice may hold virtual hearings in
lieu of in-person public hearings to fulfill the public hearing
requirements in section V.A.3.a. of this notice.
For each virtual hearing, the grantee shall provide reasonable
notification and access for citizens in accordance with the grantee's
certifications, timely responses to all citizen questions and issues,
and public access to all questions and responses.
The grantee must consider all comments, received orally or in
writing, on the action plan or any substantial amendment. A summary of
these comments or views, and the grantee's response to each must be
submitted to HUD with the action plan or substantial amendment. Grantee
responses shall address the substance of the comment rather than merely
acknowledge that the comment was received.
V.A.3.c. Public website. HUD is requiring grantees to maintain a
public website which provides information accounting for how all CDBG-
DR funds for electrical power system improvements are used, managed,
and administered, including links to all action plans, action plan
amendments, performance reports, CDBG-DR citizen participation
requirements, and activity/program information for activities described
in the action plan, including details of all contracts and ongoing
procurement policies. To meet this requirement, each grantee must make
the following items available on its website: The action plan
(including all
[[Page 32690]]
amendments); each Quarterly Performance Report (QPR) (as created using
the DRGR system); procurement policies and procedures; all executed
contracts that will be paid with CDBG-DR funds; and the status of
services or goods currently being procured (e.g., a summary list of
procurements, the phase of the procurement, requirements for proposals,
and any liquidation of damages associated with a contractor's failure
or inability to implement the contract, etc.). The grantee should post
only contracts as defined in 2 CFR 200.1.
V.A.3.d. Application status and funding criteria. The grantee must
provide multiple methods of communication, such as websites, toll-free
numbers, or other means that provide applicants for CDBG-DR assistance
with timely information to determine the status of their application,
as provided for in section V.A.1.b.(1) of this notice.
When applications are solicited for programs carried out directly
by the grantee, all criteria used to select applications for funding,
including the relative importance of each criterion and the time frame
for consideration of applications must be included in the action plan.
When funds are subgranted to local governments or Indian tribes,
grantees must include all criteria used to distribute funds to local
governments or Indian tribes including the relative importance of each
criterion. The grantee shall maintain documentation to demonstrate that
each funded and unfunded application or response was reviewed and acted
upon by the grantee in accordance with the published eligibility
requirements and funding criteria in its action plan.
V.A.3.e. Citizen complaints. The grantee will provide a timely
written response to every citizen complaint. The response must be
provided within 15 working days of the receipt of the complaint.
Complaints regarding fraud, waste, or abuse of government funds should
be forwarded to the HUD OIG Fraud Hotline (phone: 1-800-347-3735 or
email: [email protected]).
V.A.4. HUD performance review authorities and grantee reporting
requirements in the Disaster Recovery Grant Reporting (DRGR) System.
V.A.4.a. Performance review authorities. 42 U.S.C. 5304(e) requires
that the Secretary shall, at least on an annual basis, make such
reviews and audits as may be necessary or appropriate to determine
whether the grantee has carried out its activities in a timely manner,
whether the grantee's activities and certifications are carried out in
accordance with the requirements and the primary objectives of the HCDA
and other applicable laws, and whether the grantee has the continuing
capacity to carry out those activities in a timely manner.
This notice waives the requirements for submission of a performance
report pursuant to 42 U.S.C. 12708(a), and 24 CFR 91.520.
Alternatively, HUD is requiring that grantees enter information in the
DRGR system in sufficient detail to permit the Department's review of
grantee performance on a quarterly basis through the QPR and to enable
remote review of grantee data to allow HUD to assess compliance and
risk. HUD-issued general and appropriation-specific guidance for DRGR
reporting requirements can be found on the HUD Exchange at: https://www.hudexchange.info/programs/drgr/.
V.A.4.b. DRGR action plan. Each grantee must enter its action plan
for disaster recovery, including performance measures, into HUD's DRGR
system. As more detailed information about uses of funds is identified
by the grantee, it must be entered into the DRGR system at a level of
detail that is sufficient to serve as the basis for acceptable
performance reports and permits HUD review of compliance requirements.
The action plan must also be entered into the DRGR system so that the
grantee is able to draw its CDBG-DR funds. The grantee may enter
activities into the DRGR system before or after submission of the
written action plan to HUD but will not be able to budget grant funds
to these activities until after the grant agreement has been signed. To
enter an activity into the DRGR system, the grantee must know the
activity type, national objective, and the organization that will be
responsible for the activity. In addition, a Data Universal Numbering
System (DUNS) number must be entered into the system for each
Responsible Organization identified in DRGR as carrying out a CDBG-DR
funded activity.
A grantee will gain access to its line of credit upon review and
approval of the initial DRGR action plan. Each activity entered into
the DRGR system must also be categorized under a ``project.''
Typically, projects are based on groups of activities that accomplish a
similar, broad purpose (e.g., housing, infrastructure, or economic
development) or are based on an area of service (e.g., Community A). If
a grantee describes only one program within a broader category (e.g.,
microgrids), that program is entered as a project in the DRGR system.
Further, the budget of the program would be identified as the project's
budget. If a grantee has only identified the Method of Distribution
(MOD) upon HUD's approval of the published action plan, the MOD
categories typically serve as the projects in the DRGR system, rather
than activity groupings. Activities are added to MOD projects as
specific CDBG-DR programs and projects are identified for funding.
V.A.4.c. Tracking oversight activities in the DRGR system; use of
DRGR data for HUD review and dissemination. Each grantee must also
enter into the DRGR system summary information on monitoring visits and
reports, audits, and technical assistance it conducts as part of its
oversight of its disaster recovery programs. The grantee's QPR will
include a summary indicating the number of grantee oversight visits and
reports (see V.A.4.e. for more information on the QPR). HUD will use
data entered into the DRGR action plan and the QPR, transactional data
from the DRGR system, and other information provided by the grantee, to
provide reports to Congress and the public, as well as to: (1) Monitor
for anomalies or performance problems that suggest fraud, abuse of
funds, and duplication of benefits; (2) reconcile budgets, obligations,
funding draws, and expenditures; (3) calculate expenditures to
determine compliance with administrative and public service caps and
the overall percentage of funds that benefit low- and moderate-income
persons; and (4) analyze the risk of grantee programs to determine
priorities for the Department's monitoring. Grantees must establish
internal controls to ensure that no personally identifiable information
shall be reported in DRGR.
V.A.4.d. Tracking program income in the DRGR system. Grantees must
use the DRGR system to draw grant funds. Grantees must also use the
DRGR system to track program income receipts, disbursements, revolving
loan funds, and leveraged funds (if applicable). If a grantee permits
subrecipients to retain program income prior to grant closeout, the
grantee must establish program income accounts in the DRGR system. The
DRGR system requires grantees to use program income before drawing
additional grant funds and ensures that program income retained by one
organization will not affect grant draw requests for other
organizations.
V.A.4.e. DRGR system Quarterly Performance Report (QPR). Each
grantee must submit a QPR through the DRGR system no later than 30 days
following the end of each calendar quarter. Within 3 days of submission
to HUD, each QPR must be posted on the grantee's official website. In
the event the QPR is rejected by HUD, the grantee must post the
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revised version, as approved by HUD, within 3 days of HUD approval. The
grantee's first QPR is due after the first full quarter after HUD signs
the grant agreement. For example, a grant agreement signed in April
requires a QPR to be submitted by October 30. QPRs must be submitted on
a quarterly basis until all funds have been expended and all
expenditures and accomplishments have been reported. If a satisfactory
report is not submitted in a timely manner, HUD may suspend access to
CDBG-DR funds until a satisfactory report is submitted, or may withdraw
and reallocate funding if HUD determines, after notice and opportunity
for a hearing, that the jurisdiction did not submit a satisfactory
report.
Each QPR will include information about the uses of funds in
activities identified in the DRGR action plan during the applicable
quarter. This includes, but is not limited to, the project name,
activity, location, and national objective; funds budgeted, obligated,
drawn down, and expended; the funding source and total amount of any
non-CDBG-DR funds to be expended on each activity; beginning and actual
completion dates of completed activities; achieved performance
outcomes, such as the number of low- and moderate-income persons
served; and the race and ethnicity of persons assisted under direct-
benefit activities. For electrical power system improvements installed
or applied on private lands, the address of each CDBG-DR assisted
property must be recorded in the QPR. Grantees must not include such
addresses in its public QPR; when entering addresses in the QPR, the
grantee must select ``Not Visible on PDF'' to exclude them from the
report required to be posted on its website. The DRGR system will
automatically display the amount of program income receipted, the
amount of program income reported as disbursed, and the amount of grant
funds disbursed in the QPR. In the section titled ``Overall Progress
Narrative'' in the DRGR system, the grantee must report on its
activities and progress in that quarter to implement steps necessary to
meet the low- and moderate-income national objective for electrical
power system improvements as provided in section V.A.8. of this notice.
Each grantee must also include a description of active steps it has
taken to affirmatively further fair housing, within the ``Overall
Progress Narrative'' section.
V.A.5. Direct grant administration and means of carrying out
eligible activities. Requirements at 42 U.S.C. 5306(d) are waived to
the extent necessary to allow each grantee to use its CDBG-DR grant
directly to carry out CDBG-DR eligible activities, rather than
distribute all funds to local governments. Pursuant to this waiver, the
standard at 24 CFR 570.480(c) and the provisions at 42 U.S.C.
5304(e)(2) will also include activities that the grantee carries out
directly. Eligible CDBG-DR activities may be carried out by the
grantee, subject to the grantee's laws and consistent with the
requirement of 24 CFR 570.200(f), through its employees, through
procurement contracts, or through assistance provided under agreements
with subrecipients. Each grantee continues to be responsible for civil
rights, labor standards, and environmental protection requirements, for
compliance with 24 CFR 570.489 (g) and (h) relating to conflicts of
interest and for compliance with 24 CFR 570.489(m) relating to
monitoring and management of subrecipients.
V.A.5.a. Use of administrative funds across multiple grants. The
Additional Supplemental Appropriations for Disaster Relief Act, 2019
(Pub. L. 116-20, approved June 6, 2019), authorizes special treatment
of grant administrative funds for grantees that receive grants under
certain CDBG-DR appropriations acts. Accordingly, grantees that
received CDBG-DR or CDBG-MIT funds 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 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 generated by the grant), review and modify
its financial management policies and procedures regarding the tracking
and accounting of administration costs, as necessary, and address the
adoption of this treatment of administrative costs in the applicable
portions of the submissions it makes to HUD to support HUD's
certifications as required by subsection V.A.1.a.
Grantees are reminded that all costs incurred for administration
must still qualify as an eligible administration expense. HUD will
issue additional guidance on this provision that grantees will be
required to follow to ensure compliance and maintain proper financial
controls.
V.A.6. Requirements for consultation. Currently, the HCDA and HUD
regulations require a state grantee to consult with affected local
governments in nonentitlement areas of the state in determining the
state's proposed method of distribution. HUD is waiving 42 U.S.C.
5306(d)(2)(C)(iv), 42 U.S.C. 5306(d)(2)(D), 24 CFR 91.325(b)(2), and 24
CFR 91.110, and instituting the following alternative requirements.
Each grantee that will receive an electrical power system improvement
grant under Public Law 115-123 shall consult with all disaster-affected
local governments (including any CDBG Entitlement grantees), Indian
tribes, and local public housing authorities in determining the use of
funds. This ensures that each grantee sufficiently assesses the impacts
of all areas affected by the disaster. Additionally, each grantee must
complete consultation with the Federal members of the TCT required by
section V.A.2.e. of this notice. Grantees must maintain documentation
of all consultations required by this paragraph to demonstrate
compliance with this requirement.
V.A.7. Grant Administration responsibilities and general
administration cap.
V.A.7.a. Grantee responsibilities. Each grantee shall administer
its award in compliance with all applicable laws and regulations and
shall be financially accountable for the use of all funds provided for
CDBG-DR funds.
V.A.7.b. General administration cap. For this allocation, the CDBG
program administration requirements must be modified to be consistent
with the Appropriations Act. Accordingly, 5 percent of the grant and 5
percent of program income generated by the grant may be used for
administrative costs by the grantee or by subrecipients. Thus, the
total of all costs classified as administrative for the grantee must be
less than or equal to the 5 percent cap.
(1) Combined technical assistance and administrative expenditures
cap. The provisions of 42 U.S.C. 5306(d), 24 CFR 570.489(a)(1)(i) and
(iii), and 24 CFR 570.489(a)(2) will not apply to the extent that they
cap administration and technical assistance expenditures, limit the
ability of each grantee to charge a nominal application fee for grant
applications for activities it carries out directly, and require a
dollar-for-dollar match of grantee funds for administrative costs
exceeding $100,000. 42 U.S.C. 5306(d)(5) and (6) are waived and
replaced with the alternative requirement that the aggregate total for
administrative and
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technical assistance expenditures must not exceed 5 percent of the
grant amount plus 5 percent of program income generated by the grant.
Under this alternative requirement, the grantee is limited to spending
a maximum of 15 percent of its total grant on planning costs. Planning
costs subject to this cap are those defined in 42 U.S.C. 5305(a)(12).
V.A.8. Purpose, eligibility, overall benefit, and national
objective alternative requirements.
V.A.8.a. Purpose. As stated in section III, the Appropriations Act
requires grantees to use funds for electrical power system
improvements. HUD encourages grantees to use CDBG-DR funds for
electrical power system improvements in a manner that leverages other
sources of federal and public utility funds to increase the long-term
impact of Federal investments on the electrical power system.
For purposes of this notice:
(i) An electrical power system shall be defined as an
interconnected or autonomous set of transmission lines, distribution
lines, substations, central power generation stations, other sources of
power, distributed energy resources, or enabling technologies and
services, such as industry standard billing, accounting information
technology, cybersecurity enhancements, microgrids and fuel transfer
delivery systems, that are necessary for the provision of reliable,
resilient, stable, and cost-effective electrical service; and
(ii) electrical power system improvements shall be defined as the
acquisition, construction, reconstruction, rehabilitation or
installation of facilities, improvements, or other components
(including interim assistance, and financing public or private
acquisition for reconstruction or rehabilitation, and reconstruction or
rehabilitation, of privately owned property) that are undertaken to
extend, upgrade, and otherwise enhance and improve the cost-
effectiveness, reliability, efficiency, sustainability, or long-term
financial viability of the grantee's electrical power system including
activities to increase the resilience of the electrical power system to
future disasters and to address the impacts of climate change.
The refinancing or paying down of debt shall be an electrical power
system improvement only for the purpose of acquiring a facility and
subject to the requirements of section V.B.3 of this notice.
To align with long term decarbonization goals, the term electrical
power system improvements, as applied to central power generating
stations, shall only include an improvement or replacement of a central
power generating station operating on the applicability date of this
notice if HUD, in consultation with DOE and EPA, determines that such
improvement or replacement will result in a net decrease in carbon
emissions from that generating power station at comparable levels of
operation. A central power generating station is defined as a large-
scale centralized facility for the generation of electricity that
qualifies as a ``major stationary source of air pollutants'' per the
requirements of 40 CFR part 70.
V.A.8.b. Eligibility. A grantee must use grant funds for electrical
power system improvements that satisfy all requirements for an
electrical power system improvement activity as described in V.A.8.a.
above. HUD will consider grantee requests for additional waivers and
alternative requirements if needed to carry out other activities that
enhance or improve their electrical power systems. All requests must
include supporting data that demonstrates the need for the waiver and
alternative requirement. Grantees should work with the assigned CPD
representative to request any additional waivers or alternative
requirements from HUD headquarters.
HUD is granting the following waiver and alternative requirement to
establish a new eligible activity, the electrical power systems
improvements activity. The Department has determined that the aggregate
of electrical power system improvements to be completed with CDBG-DR
funds subject to this notice are together, critical components of the
region's long-term recovery from Hurricane Maria and to the resilience
of the region to future weather events. HUD recognizes that the broad
scope of these activities may limit the ability of grantees to
categorize these CDBG-DR funds into discrete categories of CDBG
eligibility and to appropriately assign a CDBG national objective to
each component of the planned improvements. For grants under other
appropriations acts, HUD has established similar waivers to create an
eligible activity for large complex projects that are composed of
multiple activities that, in and of themselves, may not all be CDBG-
eligible, but which nonetheless contribute to the mitigation of
disaster risk and to long-term disaster recovery. This waiver will
similarly ease administration and facilitate the use of grant funds for
their intended purpose.
Accordingly, HUD is waiving section 105(a) (42 U.S.C. 5305(a)) of
the HCDA and establishing an alternative requirement only to the extent
necessary to create a new eligible activity, electrical power system
improvements, which shall be applicable only for the grant funded
pursuant to this notice. Under this activity, all uses of funds that
meet the definition of electrical power system improvements above and
comply with the alternative requirements below are both eligible under
this waiver and alternative requirement and meet the statutory purpose
of the funds. This activity includes the use of funds for payment of
the non-Federal share required in connection with a Federal grant-in-
aid program undertaken as part of an activity that meets the definition
of electrical power system improvements and otherwise complies with
grant requirements. This activity also includes relocation payments and
assistance for displaced individuals, families, businesses,
organizations, and farm operations, when determined by the grantee to
be appropriate.
Electrical power system improvements that can be demonstrated to
have a public benefit may be installed or applied on private lands. The
definition of an electrical power system and the use of funds for
electrical power system improvements shall not include ineligible
activities as provided at 24 CFR 570.207, including costs for the
operation and maintenance of the system. This definition and the use of
funds for electrical power system improvements shall also not include
the use of CDBG-DR funds for the operation and maintenance costs of a
public utility or the costs of fuel or energy purchase contracts in
effect prior to the applicability date of this notice. HUD encourages
grantees to use CDBG-DR funds for electrical power system improvements
in a manner that leverages other sources of federal and public utility
funds to increase the long-term impact of Federal investments on the
electrical power system.
V.A.8.c. Overall benefit and national objective requirements. The
primary objective of the HCDA is the ``development of viable urban
communities, by providing decent housing and a suitable living
environment and expanding economic opportunities, principally for
persons of low and moderate income'' (42 U.S.C. 5301(c)). Consistent
with the HCDA, this notice requires grantees to comply with the overall
benefit requirements in the HCDA and 24 CFR 570.484 that 70 percent of
funds be used for activities that benefit low- and moderate-income
persons. For purposes of this grant, HUD is establishing an alternative
requirement that the overall benefit test shall apply only to the use
of CDBG-DR
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funds provided under the Appropriations Act for electrical power system
improvements and related program income, and not to all CDBG funds
received by the grantee during another period selected by the grantee
in accordance with 570.484(a).
CDBG-DR electrical power system improvements will be considered to
meet the criteria for activities benefitting low- and moderate-income
persons--area benefit activities at 24 CFR 570.483(b)(1) if, at grant
closeout, they meet the following criteria unless there is substantial
evidence to the contrary. In assessing any such evidence, the full
range of direct effects of the assisted activity will be considered.
(The recipient shall appropriately ensure that activities that meet
these criteria do not benefit moderate income persons to the exclusion
of low-income persons.) The criteria are that at least 70 percent of
the grant funds allocated by this notice, not including planning and
administrative costs, have been used to:
(i) Provide at least fifty-one percent of the grantee's low- and
moderate-income residents with either a subsidized rate for electricity
below that charged to other residential ratepayers or a lower rate for
electricity than was charged prior to complete implementation of the
CDBG-DR funding electrical power system improvements; or
(ii) measurably improve the reliability of the electrical power
system in low- and moderate-income areas that are primarily
residential. For purposes of this paragraph, measurably improved
reliability shall mean a documented decrease in power supply
interruptions, excluding planned interruptions and interruptions caused
by major events. To document compliance with this national objective
criterion, a grantee's policies and procedures shall provide for the
measurement of improved reliability in low- and moderate income areas
that are primarily residential, using relevant legal and regulatory
standards, as amended from time to time, including those identified by
Puerto Rico Act 17-2019 (for Puerto Rico only), FEMA Section 1235(b)
Consensus-Based Codes and Standards, RUS Bulletins for Electric Power,
Institute of Electrical and Electronics Engineers (IEEE) standards and
guidance, EPA environmental protections, and, as appropriate, North
American Electric Reliability Corporation (NERC) standards and
guidance.
HUD will monitor the grantee and its subrecipients for the duration
of the grant to substantiate that the grantee is demonstrating adequate
progress in documenting CDBG-DR expenditures that will result in
subsidized or lower electricity costs of low- and moderate-income
residents, or improved reliability for low- and moderate-income areas,
as applicable.
Grantees may also use CDBG-DR funds allocated pursuant to this
notice to meet the urgent need national objective, pursuant to the
waiver and alternative requirement provided below. Unless a grantee has
received prior approval from HUD, CDBG-DR funds for electrical power
system improvements cannot meet the CDBG national objective for the
elimination of slum and blight as provided at 24 CFR 570.208(b) and 24
CFR 570.483(c). Grantees shall not rely on the national objective
criteria for elimination of slum and blighting conditions without
approval from HUD because this national objective generally is not
appropriate in the context of electrical power system improvements.
The CDBG certification requirements for documentation of urgent
need, located at 24 CFR 570.483(d), are waived for the grants under
this notice and replaced with the following alternative requirement. In
the context of disaster recovery, the standard urgent need
certification requirements may impede recovery. Since the Department
only provides CDBG-DR awards to grantees with documented disaster-
related impacts and each grantee is limited to spending funds only for
the benefit of areas that received a presidential disaster declaration
as identified in Table 1 of this notice, the following streamlined
alternative requirement recognizes the urgency in addressing serious
threats to community welfare following a major disaster. A grantee need
not issue formal certification statements to qualify an activity as
meeting the urgent need national objective. Instead, it must document
how each program and/or activity funded under the urgent need national
objective responds to a disaster-related impact. For each activity that
will meet an urgent need national objective, the grantee must reference
in its action plan needs assessment the type, scale, and location of
the disaster-related impacts that each program and/or activity is
addressing over the course of the applicable deadline for the
expenditure of obligated grant funds.
To meet the 70 percent overall benefit requirement, grantees may
also use the low- and moderate-income benefit national objective
criteria at 24 CFR 570.483(b) to the extent that an eligible activity
authorized by this notice qualifies under the criteria for that
national objective. At least 70 percent of the entire CDBG-DR grant
must be used for activities that benefit low- and moderate-income
persons.
V.A.9. Use of subrecipients. The State CDBG program rule does not
make specific provisions for the treatment of entities that the CDBG
Entitlement program calls ``subrecipients.'' The waiver allowing the
state to directly carry out activities creates a situation in which the
state may use subrecipients to carry out activities in a manner similar
to an entitlement community. Therefore, in taking advantage of the
waiver to carry out activities directly, grantees shall be subject to
the requirements at 24 CFR 570.503 and 570.500(c), except that in
compliance with 570.489(g), grantees shall establish procurement
requirements for local governments and subrecipients (which may or may
not include procurement provisions of 2 CFR part 200 that are
applicable to a grantee's subrecipients).
V.A.10. Recordkeeping. When a grantee receiving CDBG-DR grants for
electrical power system improvements under Public Law 115-123 carries
out activities directly, 24 CFR 570.490(b) is waived, and the following
alternative provision shall apply: The grantee shall establish and
maintain such records as may be necessary to facilitate review and
audit by HUD of the grantee's administration of CDBG-DR funds, under 24
CFR 570.493. Consistent with applicable statutes, regulations, waivers
and alternative requirements, and other Federal requirements, the
content of records maintained by the grantee shall be sufficient to:
(1) Enable HUD to make the applicable determinations described at 24
CFR 570.493; (2) make compliance determinations for activities carried
out directly by the grantee; and (3) show how activities funded are
consistent with the descriptions of activities proposed for funding in
the action plan and/or DRGR system. For fair housing and equal
opportunity (FHEO) purposes, as applicable, such records shall include
data on the racial, ethnic, and gender characteristics of persons who
are applicants for, participants in, or beneficiaries of the program.
The grantee must report FHEO data in the DRGR system at the activity
level.
V.A.11. Responsibility for review and handling of noncompliance.
This change is in conformance with the waiver allowing the grantee to
carry out activities directly. 24 CFR 570.492 is waived and the
following alternative requirement applies to grantees receiving CDBG-DR
grants for electrical power system improvements under Public Law 115-
123: The grantee shall make reviews and audits, including on-
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site reviews of any subrecipients, designated public agencies, local
governments and other entities as may be necessary or appropriate to
meet the requirements of section 104(e)(2) of the HCDA, as amended, and
as modified by this notice. In the case of noncompliance with these
requirements, the grantee shall take such actions as may be appropriate
to prevent a continuance of the deficiency, mitigate any adverse
effects or consequences, and prevent a recurrence. The grantee shall
establish remedies for noncompliance by any designated subrecipients,
public agencies, or local governments.
Each CDBG-DR grantee shall attend and require subrecipients to
attend fraud-related training provided by HUD OIG to assist in the
proper management of CDBG-DR grant funds. The prior participation of
the grantee or a subrecipient in this training for purposes of the
grantee's CDBG-MIT grant or CDBG-DR grants provided pursuant to Public
Laws 115-56 and 115-123 shall satisfy this requirement.
V.A.12. Relocation, and real property acquisition requirements.
Activities and projects undertaken with CDBG-DR funds are subject to
the Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970, as amended, (42 U.S.C. 4601 et seq.) (``URA'')
and section 104(d) of the HCDA (42 U.S.C. 5304(d)) (Section 104(d)).
The implementing regulations for the URA are at 49 CFR part 24. The
regulations for section 104(d) are at 24 CFR part 42, subpart C. The
Department recognizes that these waivers and alternative requirements
are likely to have limited application in a grantee's implementation of
electrical power system improvements. Nonetheless, in the course of
implementing electrical power system improvements, these waivers and
alternative requirements may continue to be necessary. For the purpose
of promoting the availability of decent, safe, and sanitary housing,
HUD is waiving the following URA and section 104(d) requirements with
respect to the use of CDBG-DR funds:
V.A.12.a. Relocation assistance. The relocation assistance
requirements at section 104(d)(2)(A) of the HCDA and 24 CFR 42.350 are
waived to the extent that they differ from the requirements of the URA
and implementing regulations at 49 CFR part 24, as modified by this
notice, for activities related to electrical power system improvements.
Without this waiver, disparities exist in relocation assistance
associated with activities typically funded by HUD and FEMA (e.g.,
acquisition and relocation). Both FEMA and CDBG funds are subject to
the requirements of the URA; however, CDBG funds are subject to section
104(d), while FEMA funds are not. The URA provides at 49 CFR 24.402(b)
that a displaced person is eligible to receive a rental assistance
payment that is calculated to cover a period of 42 months. By contrast,
section 104(d) allows a lower-income displaced person to choose between
the URA rental assistance payment and a rental assistance payment
calculated over a period of 60 months. This waiver of the section
104(d) relocation assistance requirements assures uniform and equitable
treatment by setting the URA and its implementing regulations as the
sole standard for relocation assistance for CDBG-DR funds.
V.A.12.b. Arm's length voluntary purchase. The requirements at 49
CFR 24.101(b)(2)(i) and (ii) are waived to the extent that they apply
to an arm's length voluntary purchase carried out by a person who was
allocated CDBG-DR funds and does not have the power of eminent domain,
in connection with the purchase and occupancy of a principal residence
by that person. Given the often-large-scale acquisition needs of
grantees, this waiver is necessary to reduce burdensome administrative
requirements to implement electrical improvement activities. Grantees
are reminded that tenants occupying real property acquired through
voluntary purchase may be eligible for relocation assistance.
V.A.12.c. Optional relocation policies. The regulation at 24 CFR
570.606(d) is waived to the extent that it requires optional relocation
policies to be established at the grantee level. Unlike the regular
CDBG program, States may carry out electrical improvement activities
directly or through subrecipients, but 24 CFR 570.606(d) does not
account for this distinction. This waiver makes clear that grantees
receiving CDBG-DR funds may establish optional relocation policies or
permit their subrecipients to establish separate optional relocation
policies. This waiver is intended to provide grantees with maximum
flexibility in developing optional relocation policies with CDBG-DR
funds.
V.A.12.d. Waiver of Section 414 of the Stafford Act. 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 ``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.
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 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 Request for Release of Funds and certification, (RROF/C), 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 Responsible Entity Agency 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 grantee's 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 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
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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.
V.A.13. Environmental requirements.
V.A.13.a. Clarifying note on the process for environmental release
of funds when a state carries out activities directly. Usually, a state
distributes CDBG funds to units of general local government and takes
on HUD's role in receiving environmental certifications from the grant
subrecipients and approving releases of funds. For this grant, HUD will
allow a grantee to also carry out activities directly, in addition to
distributing funds to subrecipients. Thus, per 24 CFR 58.4, when a
grantee carries out activities directly, the grantee must submit the
Certification and Request for Release of Funds to HUD for approval.
V.A.13.b. Adoption of another agency's environmental review. In
accordance with the Appropriations Act, grant recipients of Federal
funds that use such funds to supplement Federal assistance provided
under sections 402, 403, 404, 406, 407, 408(c)(4) or 502 of the
Stafford Act may adopt, without review or public comment, any
environmental review, approval, or permit performed by a Federal
agency, and such adoption shall satisfy the responsibilities of the
recipient with respect to such environmental review, approval, or
permit that is required by the HCDA.
The grant recipient must notify HUD in writing of its decision to
adopt another agency's environmental review. The notification must be
stated on an RROF/C Form 7015.15 and indicate that another Federal
agency's review is being adopted and include the name of the Federal
agency, the name of the project, and the date of the project's review.
In accordance with the Appropriations Act, and notwithstanding 42
U.S.C. 5304(g)(2), the Secretary may, upon receipt of a RROF/C,
immediately approve the release of funds for an activity or project
assisted with CDBG-DR funds if the recipient has adopted an
environmental review, approval, or permit, or the activity or project
is categorically excluded from review under the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.). The grant recipient must
retain a completed electronic or paper copy of the review in the
grantee's environmental records.
V.A.13.c. Unified federal review. Section 1106 of the Sandy
Recovery Improvement Act of 2013 (Div. B of Pub. L. 113-2, enacted
January 29, 2013) directed the establishment of an ``expedited and
unified interagency review process to ensure compliance with
environmental and historic requirements under Federal law relating to
disaster recovery projects, in order to expedite the recovery process,
consistent with applicable law.'' The process aims to coordinate
environmental and historic preservation reviews to expedite planning
and decision-making for disaster recovery projects. This can improve
the Federal Government's assistance to States, local, and tribal
governments; communities; families; and individual citizens as they
recover from future Presidentially declared disasters. Grantees
receiving an allocation of funds under this notice are encouraged to
participate in this process. Tools for the unified Federal review
process (UFR) process can be found here: https://www.fema.gov/emergency-managers/practitioners/environmental-historic/review/library.
V.A.13.d. Historic preservation reviews. To facilitate expedited
historic preservation reviews under section 106 of the National
Historic Preservation Act of 1966 (54 U.S.C. Section 306108), HUD
strongly encourages grantees to allocate general administration funds
to retain a qualified historic preservation professional and support
the capacity of the State Historic Preservation Officer/Tribal Historic
Preservation Officer to review CDBG-DR projects. For more information
on qualified historic preservation professional qualifications
standards see https://www.nps.gov/history/local-law/arch_stnds_9.htm.
As appropriate, grantees may use provisions in existing Section 106
Programmatic Agreements (PAs), i.e., the HUD Addendum to the FEMA PA
for Puerto Rico and the HUD Addendum to the FEMA PA for USVI, to
expedite Section 106 reviews. HUD and the grantee may also participate
in an interagency PA developed for the electric grid effort.
V.A.13.e. Tiered environmental reviews. HUD encourages grantees as
Responsible Entities to develop a Tiered approach to streamline the
environmental review process, as appropriate, for whenever the action
plan contains a program with multiple, similar activities that will
result in similar impacts. Tiering, as defined in 40 CFR 1508.1(ff), is
a means of making the environmental review process more efficient by
allowing parties to ``eliminate repetitive discussions of the same
issues, focus on the actual issues ripe for decision, and exclude from
consideration issues already decided or not yet ripe at each level of
environmental review'' (40 CFR 1501.11). In addition, ``[t]iering is
appropriate when there is a requirement to evaluate a policy or
proposal in the early stages of development or when site-specific
analysis or mitigation is not currently feasible and a more narrow or
focused analysis is better done at a later date'' (24 CFR 58.15).
A tiered review consists of two stages: A broad-level review and
subsequent site-specific reviews. The broad-level review will identify
and evaluate the issues that can be fully addressed and resolved,
notwithstanding possible limited knowledge of the project. In addition,
it must establish the standards, constraints, and processes to be
followed in the site-specific reviews. As individual sites are selected
for review, the site-specific reviews evaluate the remaining issues
based on the policies established in the broad-level review. Together,
the broad-level review and all site-specific reviews will collectively
comprise a complete environmental review addressing all required
elements. Public notice and the Request for Release of Funds (HUD-Form
7015.15) are processed at the broad level. However, funds cannot be
spent or committed on a specific site or activity until the site-
specific review has been completed for the site.
V.A.14. Duplication of benefits. Section 312 of the Stafford Act,
as amended, generally prohibits any person, business concern, or other
entity from receiving financial assistance with respect to any part of
a loss resulting from a major disaster for which such person, business
concern, or other entity has received financial assistance under any
other program or from insurance or any other source. To comply with
Section 312 and the requirement that all costs are necessary and
reasonable, each grantee must ensure that each activity provides
assistance to a person or entity only to the extent that the person or
entity has an electrical power system improvement need that has not
been fully met. Accordingly, grantees must comply with the requirements
of the Federal Register notice published on June 20, 2019, entitled,
``Updates to Duplication of Benefits Requirements Under the Stafford
Act for Community Development Block Grant (CDBG) Disaster Recovery
Grantees'' (2019 DOB Notice) (84 FR 28836). Requirements on CDBG-DR
funds and CDBG-DR grants in the 2019 DOB Notice shall apply equally to
CDBG-DR funds for electrical power system improvements. All CDBG-DR
grants for electrical power system improvements under the
Appropriations Act are subject to the
[[Page 32696]]
requirement under the tenth proviso following the Community Development
Fund heading of Public Law 115-123 (Declined Loans Provision) and the
requirements for its implementation in the 2019 DOB Notice. The
Declined Loan Provision states: ``Provided further, That with respect
to any such duplication of benefits, the Secretary and any grantee
under this section shall not take into consideration or reduce the
amount provided to any applicant for assistance from the grantee where
such applicant applied for and was approved, but declined assistance
related to such major disasters that occurred in 2014, 2015, 2016, and
2017 from the Small Business Administration under section 7(b) of the
Small Business Act (15 U.S.C. 636(b)).''
The 2019 DOB Notice also implements requirements regarding the
treatment of loans resulting from recent amendments to section 312 of
the Stafford Act that apply to CDBG-DR grants for electrical power
system improvements under the Appropriations Act until those provisions
sunset in 2023 as described in the 2019 DOB notice. FEMA, the agency
that administers the Stafford Act, has advised that pursuant to recent
amendments to Section 312 of the Stafford Act in the Disaster Recovery
Reform Act (Pub. L. 115-254, Division D), for disasters occurring
between 2016 and 2021, a loan is not a duplication of other forms of
financial assistance, provided that all Federal assistance is used
toward a loss suffered as a result of a major disaster or emergency.
V.A.15. Use of CDBG-DR funds as match for electrical power system
improvements. Pursuant to the waiver and alternative requirement in
section V.A.8. of this notice, CDBG-DR funds for electrical power
system improvements, may be used to meet a matching requirement, share,
or contribution for any other Federal program when used to carry out an
eligible CDBG-DR activity permitted by this notice. This includes
Public Assistance and other grants administered by FEMA as well as
grants provided by the U.S. Army Corps of Engineers (USACE) (by law, as
codified in the HCDA as a note to 42 U.S.C. 5305, the maximum amount of
CDBG-DR funds that may be contributed to a project funded by the USACE
is $250,000).
Grantees may only use CDBG-DR funds allocated pursuant to this
notice to meet the match requirement of an activity that meets the
definition of an electrical power system improvement and other
requirements of this notice. In considering the use of CDBG-DR funds as
match, grantees are further advised that the Appropriations Act
prohibits the use of CDBG-DR funds for any activity that is
reimbursable by, or for which funds are also made available by FEMA or
the USACE. The Department notes the substantial amount of FEMA Public
Assistance funding that has also been committed to electrical power
system improvements. Accordingly, grantees are advised that when CDBG-
DR funds for electrical power system improvements are used in
combination with FEMA or USACE funds, the grantee must document that
such CDBG-DR funds were not used to pay for costs that could be charged
to the FEMA or USACE award (although CDBG-DR funds may be used for
CDBG-DR eligible costs of the other Federal agency-funded award up to
the amount required for the non-Federal match and for costs that cannot
be charged to the FEMA or USACE award). Statutory order of assistance
provisions also prohibit the use of CDBG-DR funds to ``front'' costs
that will later be reimbursed with FEMA or USACE funds. CDBG-DR funds
may be used for the costs of compliance with CDBG-DR requirements that
cannot be charged to the FEMA or USACE grant. The grantee shall be
required to record in DRGR the expenditure of funds for the activity
for which the match is provided and to indicate that the funds were
used to meet a non-Federal match share requirement.
V.A.16. Procurement. Grantees must adhere to the following
procurement regulation and additional alternative requirement: Grantees
must comply with the procurement requirements at 24 CFR 570.489(g) and
evaluate the cost or price of the product or service. Grantees shall
establish requirements for procurement policies and procedures for
subrecipients based on full and open competition consistent with the
requirements of 24 CFR 570.489(g), and shall require an evaluation of
the cost or price of the product or service (including professional
services such as engineering).
Additionally, if the agency of the grantee that is designated as
the administering agency chooses to provide funding to another agency
of the grantee, the administering agency must specify in its
procurement policies and procedures whether the agency implementing the
program must follow the procurement policies and procedures that the
administering agency is subject to, or whether the agency must follow
the same policies and procedures to which other subrecipients are
subject.
V.A.17. Timely distribution of funds. The Appropriations Act, as
amended, requires that funds provided under the Act be expended within
two years of the date that HUD obligates funds to a grantee and
authorizes the Office of Management and Budget (OMB) to provide a
waiver of this requirement. OMB has provided HUD with a waiver of this
two-year expenditure requirement. HUD is also waiving the provisions at
24 CFR 570.494 and 24 CFR 570.902 regarding timely distribution and
expenditure of funds and establishing an alternative requirement,
providing that each grantee must expend one hundred percent of its
allocation within six years of HUD's execution of the grant agreement
absent a waiver and alternative requirement as requested by the grantee
and approved by HUD. A grantee request for a waiver of an expenditure
deadline must document the grantee's progress in the implementation of
the grant; outline the long-term nature and complexity of the
electrical power system improvement programs and projects that have yet
to be fully implemented; and propose an alternative deadline for the
expenditure of the funds.
V.A.18. Program income waiver and alternative requirement. The
Department is waiving applicable program income rules at 42 U.S.C.
5304(j) and 24 CFR 570.489(e), only to the extent necessary to provide
additional flexibility to grantees described below. The alternative
requirements include requirements regarding the use of program income
received before and after grant close out and address revolving loan
funds.
V.A.18.a. Definition of program income. For purposes of this
notice, ``program income'' is defined as gross income generated from
the use of CDBG-DR funds, except as provided in V.A.18.a(iv) and
V.A.18.b. and received by a grantee or a subrecipient (including Indian
tribes). When income is generated by an activity that is only partially
assisted with CDBG-DR funds, the income shall be prorated to reflect
the percentage of CDBG-DR funds used (e.g., a single loan supported by
CDBG-DR funds and other funds; a single parcel of land purchased with
CDBG funds and other funds). Program income includes, but is not
limited to, the following:
(i) Proceeds from the disposition by sale or long-term lease of
real property purchased or improved with CDBG-DR funds.
(ii) Proceeds from the disposition of equipment purchased with
CDBG-DR funds.
[[Page 32697]]
(iii) Gross income from the use or rental of real or personal
property acquired by a State, local government, or subrecipient thereof
with CDBG-DR funds, less costs incidental to generation of the income
(i.e., net income).
(iv) Net income from the use or rental of real property owned by a
State, local government, or subrecipient thereof, that was constructed
or improved with CDBG-DR funds.
(v) Payments of principal and interest on loans made using CDBG-DR
funds.
(vi) Proceeds from the sale of loans made with CDBG-DR funds.
(vii) Proceeds from the sale of obligations secured by loans made
with CDBG-DR funds.
(viii) Interest earned on program income pending disposition of the
income, including interest earned on funds held in a revolving fund
account.
(ix) Funds collected through special assessments made against
nonresidential properties and properties owned and occupied by
households not low- and moderate-income, where the special assessments
are used to recover all or part of the CDBG-DR portion of a public
improvement.
(x) Gross income paid to a state, local government, or a
subrecipient thereof, from the ownership interest in a for-profit
entity in which the income is in return for the provision of CDBG-DR
assistance.
V.A.18.b. Program income--does not include:
(i) The total amount of funds that is less than $35,000 received in
a single year and retained by a state, local government, or a
subrecipient thereof.
V.A.18.c. Retention of program income. Grantees may permit a local
government that receives or will receive program income to retain the
program income but are not required to do so.
V.A.18.d. Program income--use, close out, and transfer.
(i) Program income received (and retained, if applicable) before or
after close out of the grant that generated the program income, and
used to continue disaster recovery activities, is treated as additional
CDBG-DR funds subject to the requirements of this notice and must be
used in accordance with the grantee's action plan for disaster
recovery. To the maximum extent feasible, program income shall be used
or distributed before additional withdrawals from the U.S. Treasury are
made, except as provided V.A.18.e. below.
(ii) In addition to the regulations dealing with program income
found at 24 CFR 570.489(e) and 570.504(c) (for subrecipients), as
modified by the waivers and alternative requirements in this paragraph
V.A.18., the following rule applies:
(1) All program income received from CDBG-DR-funded electrical
power system improvements under this notice, including proceeds from
the disposition by sale or long-term lease of any component of the
electrical power system, remain subject to the requirements of this
notice and shall be used only for electrical power system improvements.
Program income, however, received after grant closeout pursuant to this
notice, may be held in trust by the grantee for the exclusive benefit
of low-income residents for the purpose of reducing electricity costs
to those residents through a subsidized electricity rate that is below
that provided to other residents, or through electricity rates that are
lower than was previously charged prior to completion of the electrical
power system improvements.
V.A.18.e. Revolving funds. A grantee may establish revolving funds
to carry out specific, identified activities. Grantees may also
establish a revolving fund to distribute funds to local governments or
tribes to carry out specific, identified activities. A revolving fund,
for this purpose, is a separate fund (with a set of accounts that are
independent of other program accounts) established to carry out
specific activities. These activities must generate payments used to
support similar activities going forward. These payments to the
revolving fund are program income and must be substantially disbursed
from the revolving fund before additional grant funds are drawn from
the U.S. Treasury for payments that could be funded from the revolving
fund. Such program income is not required to be disbursed for
nonrevolving fund activities. A revolving fund established by a CDBG-DR
grantee shall not be directly funded or capitalized with CDBG-DR grant
funds, pursuant to 24 CFR 570.489(f)(3).
V.A.19. Review of continuing capacity to carry out CDBG-funded
activities in a timely manner. If HUD determines that the grantee has
not carried out its CDBG-DR activities and certifications in accordance
with the requirements for CDBG-DR funds, HUD will undertake a further
review to determine whether or not the grantee has the continuing
capacity to carry out its activities in a timely manner. In making the
determination, the Department will consider the nature and extent of
the recipient's performance deficiencies, types of corrective actions
the recipient has undertaken, and the success or likely success of such
actions, and apply the corrective and remedial actions specified in
section V.A.20. below.
V.A.20. Corrective and remedial actions. To ensure compliance with
the requirements of the Appropriations Act and to effectively
administer CDBG-DR grants in a manner that facilitates resilience,
particularly the alternative requirements permitting the grantee to act
directly to carry out eligible activities, HUD is waiving 42 U.S.C.
5304(e) to the extent necessary to establish the following alternative
requirement: HUD may undertake corrective and remedial actions for the
grantee in accordance with the authorities applicable to entitlement
grantees in subpart O (including corrective and remedial actions in 24
CFR 570.910, 570.911, and 570.913) or under subpart I of the CDBG
regulations at 24 CFR part 570. In response to a deficiency, HUD may
issue a warning letter followed by a corrective action plan that may
include a management plan which assigns responsibility for further
administration of the grant to specific entities or persons. Failure to
comply with a corrective action may result in the termination,
reduction, or limitation of payments to a grantee receiving CDBG-DR
funds.
V.A.21. Noncompliance and grant conditions. Failure to implement a
CDBG-DR grant in accordance with a grantee's approved financial
certification, the capacity and implementation plan, the action plan,
as well as grant conditions established by the Department or other
applicable requirements, shall constitute a performance deficiency. To
correct that deficiency, the Department may exercise any of the
corrective and remedial actions authorized in subpart O of the CDBG
regulations (including corrective and remedial actions in 24 CFR
570.910, 570.911, and 570.913) or under subpart I of the CDBG
regulations at 24 CFR part 570. Grantees are advised that such remedies
may include suspension of administrative funds as well as a reduction
of the grantee's CDBG-DR grant or its annual CDBG grant.
The Department may also establish special grant conditions for
individual CDBG-DR grants to mitigate 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. These
conditions will be designed to provide additional assurances that
electrical power system improvements are implemented in a manner to
prevent waste, fraud, and abuse and that the funded electrical power
system improvements are effectively operated and maintained.
[[Page 32698]]
V.A.22. Reduction, withdrawal, or adjustment of a grant, or other
appropriate action. Prior to a reduction, withdrawal, or adjustment of
a CDBG-DR grant, or other actions taken pursuant to this section, the
recipient shall be notified of the proposed action and be given an
opportunity for an informal consultation. Consistent with the
procedures described for CDBG-DR funds, the Department may adjust,
reduce, or withdraw the CDBG-DR grant or take other actions as
appropriate, except for funds that have been expended for eligible,
approved activities.
V.A.23. Federal accessibility requirements. Grantees are reminded
that the use of CDBG-DR funds must meet accessibility standards,
including, but not limited to, the Fair Housing Act, Section 504 of the
Rehabilitation Act, and Titles II and III of the Americans with
Disabilities Act. Grantees should review the Fair Housing Act
Accessibility Guidelines at https://www.hud.gov/program_offices/fair_housing_equal_opp/disabilities/fhefhag, the Uniform Federal
Accessibility Standards (UFAS) at https://www.hudexchange.info/resource/796/ufas-accessibility-checklist/, and the 2010 ADA Standards.
The HUD notice on ``Nondiscrimination on the Basis of Disability in
Federally Assisted Programs and Activities,'' 79 FR 29671 (May 23,
2014), explains when HUD recipients can use 2010 ADA Standards with
exceptions, as an alternative to UFAS to comply with Section 504.
V.B. Infrastructure and Other Nonresidential Structures
V.B.1. Construction standard alternative requirement for elevation
of nonresidential structures. Nonresidential structures must be
elevated to the standards described in this paragraph or floodproofed,
in accordance with FEMA floodproofing standards at 44 CFR
60.3(c)(3)(ii) or successor standard, up to at least two feet above the
100-year (or 1 percent annual chance) floodplain. In addition,
structural or nonstructural methods may be used to reduce or prevent
damage, and the structure may be designed to adapt to, withstand and
rapidly recover from a flood event. All Critical Actions, as defined at
24 CFR 55.2(b)(3), within the 500-year (or 0.2 percent annual chance)
floodplain must be elevated or floodproofed (in accordance with the
FEMA standards) to the higher of the 500-year floodplain elevation or
three feet above the 100-year floodplain elevation. If the 500-year
floodplain or elevation is unavailable, and the Critical Action is in
the 100-year floodplain, then the structure must be elevated or
floodproofed at least three feet above the 100-year floodplain
elevation. Critical Actions are defined as an ``activity for which even
a slight chance of flooding would be too great, because such flooding
might result in loss of life, injury to persons or damage to
property.'' For example, Critical Actions include principal utility
lines, hospitals, nursing homes, police stations, and fire stations.
Grantee may, in the alternative, use a FEMA-approved flood standard
when each of the following conditions is in place: (i) CDBG-DR funds
are used as the non-federal match for FEMA assistance; (ii) the FEMA-
assisted activity, for which CDBG-DR funds will be used as match,
commenced prior to HUD's obligation of CDBG-DR funds to the grantee;
and (iii) the grantee has determined and demonstrated with records in
the activity file that implementation costs of the required CDBG-DR
elevation or flood proofing up to two feet (or three feet for critical
actions) is not reasonable as that term is defined in the applicable
cost principles at 2 CFR 200.404. Under this provision and criterion
(ii) above, HUD considers the FEMA-assisted activity to have
``commenced'' on the date on which the HUD grantee has incurred a
project cost that has been or will be charged to an approved FEMA PW.
This may include pre-award costs if FEMA determines that the costs are
eligible.
Non-structural infrastructure must be resilient to flooding. The
vertical flood elevation establishes the level to which a facility must
be resilient. This may include using structural or nonstructural
methods to reduce or prevent damage; or, designing it to withstand and
rapidly recover from a flood event. In selecting the appropriate
resilience approach, grantees should consider several factors such as
flood depth, velocity, rate of rise of floodwater, duration of
floodwater, erosion, subsidence, the function or use and type of
facility, and other factors.
Applicable state and local codes and standards for floodplain
management that exceed these requirements, including elevation,
setbacks, and cumulative substantial damage requirements, will be
followed. Grantees are reminded that the elevation of structures must
comply with all applicable Federal accessibility standards outlined in
section V.A.22.
Grantees, recipients, and subrecipients must implement procedures
and mechanisms to ensure that assisted property owners comply with all
flood insurance requirements, prior to providing assistance. For
additional information, please consult with the field environmental
officer in the local HUD field office or review the guidance on flood
insurance requirements on HUD's website.
V.B.2. Limitation of use of eminent domain. CDBG-DR funds may not
be used to support any Federal, state, or local projects that seek to
use the power of eminent domain, unless eminent domain is employed only
for a public use. For purposes of this paragraph, public use shall not
be construed to include economic development that primarily benefits
private entities. Any use of funds for mass transit, railroad, airport,
seaport or highway projects, as well as utility projects which benefit
or serve the general public (including energy related, communication-
related, water related, and wastewater-related infrastructure), other
structures designated for use by the general public or which have other
common-carrier or public-utility functions that serve the general
public and are subject to regulation and oversight by the government,
and projects for the removal of an immediate threat to public health
and safety or brownfields as defined in the Small Business Liability
Relief and Brownfields Revitalization Act (Pub. L. 107-118) shall be
considered a public use for purposes of eminent domain.
V.B.3. Refinancing or payment of debt for acquisition. Pursuant to
the definition of electrical power system improvements established in
section V.A.8.a.(ii) of this notice, the refinancing or paying down of
debt shall be eligible only for the purpose of acquiring a facility
only upon HUD's consultation with the federal agencies that comprise
the TCT, and a demonstration by the grantee that such acquisition is
critical to the improvement of the grantee's electrical power system
and to long term financial stability of the grantee's public utility
and will allow the grantee to meet a low- and moderate-income national
objective as established by this notice.
V.B.4. HUD consultation on use of other CDBG-DR and CDBG-MIT funds.
The unprecedented levels of HUD and other federal funding for disaster
recovery and mitigation provided to Puerto Rico and the USVI and the
specialized nature of the electrical power system improvement activity
funded pursuant to this notice, warrant additional consultation by HUD
with its federal partners when a grantee proposes to use other CDBG-DR
funds or CDBG-MIT funds for electrical power system improvement to
ensure that all funds are used for necessary expenses, as required by
the Appropriations Act.
[[Page 32699]]
Accordingly, grantees are prohibited from using CDBG-DR funds
previously obligated for recovery from a 2017 disaster or CDBG-MIT
funds for activities to enhance or improve electrical power systems
until HUD properly consults and coordinates with its Federal members
through the TCT on other Federally funded investments for this purpose.
This limitation includes a prohibition on the use of CDBG-DR or CDBG-
MIT funds to meet the matching requirement, share, or contribution for
any Federally funded project that is providing funding for electrical
power systems until HUD completes its consultation. HUD will inform the
grantee when its consultation has been completed.
V.B.5. Prohibiting assistance to private utilities. Funds made
available under this notice may not be used to assist privately-owned
utilities. A CDBG-DR grantee may seek a waiver of this prohibition when
it has identified an electrical power system improvement project that
is a priority and where assistance to a privately-owned utility is
demonstrated to be necessary to implement the project.
V.C. Certifications and Collection of Information
V.C.1. Certifications' waiver and alternative requirement. 24 CFR
91.325 is waived. Each grantee receiving a direct allocation under this
notice must make the following certifications with its action plan:
a. The grantee certifies that it has in effect and is following a
residential anti-displacement and relocation assistance plan in
connection with any activity assisted with funding under the CDBG
program.
b. The grantee certifies its compliance with restrictions on
lobbying required by 24 CFR part 87, together with disclosure forms, if
required by part 87.
c. The grantee certifies that the action plan for disaster recovery
is authorized under State and local law (as applicable) and that the
grantee, and any entity or entities designated by the grantee, and any
contractor, subrecipient, or designated public agency carrying out an
activity with CDBG-DR funds, possess(es) the legal authority to carry
out the program for which it is seeking funding, in accordance with
applicable HUD regulations and this notice. The grantee certifies that
activities to be undertaken with funds under this notice are consistent
with its action plan.
d. The grantee certifies that it will comply with the acquisition
and relocation requirements of the URA, as amended, and implementing
regulations at 49 CFR part 24, except where waivers or alternative
requirements are provided for in this notice.
e. The grantee certifies that it will comply with section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and
implementing regulations at 24 CFR part 135.
f. The grantee certifies that it is following a detailed citizen
participation plan that satisfies the requirements of 24 CFR 91.115
(except as provided for in notices providing waivers and alternative
requirements for this grant). Also, each local government receiving
assistance from a State grantee must follow a detailed citizen
participation plan that satisfies the requirements of 24 CFR 570.486
(except as provided for in notices providing waivers and alternative
requirements for this grant).
g. State grantee certifies that it has consulted with affected
local governments in counties designated in covered major disaster
declarations in the non-entitlement, entitlement, and tribal areas of
the State in determining the uses of funds, including the method of
distribution of funding, or activities carried out directly by the
State.
h. The grantee certifies that it is complying with each of the
following criteria:
(1) Funds will be used solely for necessary expenses of electrical
power system enhancements and improvements in the most impacted and
distressed areas as defined by HUD in section II of this notice.
(2) With respect to activities expected to be assisted with CDBG-DR
funds, the action plan has been developed so as to give the maximum
feasible priority to activities that will benefit low- and moderate-
income families.
(3) The aggregate use of CDBG-DR funds shall principally benefit
low- and moderate-income families in a manner that ensures that at
least 70 percent (or another percentage permitted by HUD in a waiver
published in an applicable Federal Register notice) of the grant amount
is expended for activities that benefit such persons.
(4) The grantee will not attempt to recover any capital costs of
public improvements assisted with CDBG-DR grant funds, by assessing any
amount against properties owned and occupied by persons of low- and
moderate-income, including any fee charged or assessment made as a
condition of obtaining access to such public improvements, unless: (a)
Disaster recovery grant funds are used to pay the proportion of such
fee or assessment that relates to the capital costs of such public
improvements that are financed from revenue sources other than under
this title; or (b) for purposes of assessing any amount against
properties owned and occupied by persons of moderate income, the
grantee certifies to the Secretary that it lacks sufficient CDBG funds
(in any form) to comply with the requirements of clause (a).
i. The grantee certifies that the grant will be conducted and
administered in conformity with title VI of the Civil Rights Act of
1964 (42 U.S.C. 2000d), the Fair Housing Act (42 U.S.C. 3601-3619), and
implementing regulations, and that it will affirmatively further fair
housing. An Indian tribe grantee certifies that the grant will be
conducted and administered in conformity with the Indian Civil Rights
Act.
j. The grantee certifies that it has adopted and is enforcing the
following policies, and, in addition, must certify that they will
require local governments that receive grant funds to certify that they
have adopted and are enforcing:
(1) A policy prohibiting the use of excessive force by law
enforcement agencies within its jurisdiction against any individuals
engaged in nonviolent civil rights demonstrations; and
(2) A policy of enforcing applicable State and local laws against
physically barring entrance to or exit from a facility or location that
is the subject of such nonviolent civil rights demonstrations within
its jurisdiction.
k. The grantee certifies that it (and any subrecipient or
administering entity) currently has or will develop and maintain the
capacity to carry out disaster recovery activities in a timely manner
and that the grantee has reviewed the requirements of this notice. The
grantee certifies to the accuracy of its previously submitted CDBG-MIT
Financial Management and Grant Compliance certification checklist and
addendums, or other recent certification submission, if approved by
HUD, and related supporting documentation referenced at V.A.1.a. in
this notice and Implementation Plan and Capacity Assessment and related
submissions to HUD referenced at V.A.1.b. of this notice.
l. The grantee certifies that it will not use CDBG-DR funds for any
activity in an area identified as flood prone for land use or hazard
mitigation planning purposes by the State, local, or tribal government
or delineated as a Special Flood Hazard Area (or 100-year floodplain)
in FEMA's most current flood advisory maps, unless it also ensures that
the action is designed or modified to minimize harm to or within the
floodplain, in accordance with Executive Order 11988 and 24 CFR part
55. The relevant data source for this provision is the State, local,
and tribal
[[Page 32700]]
government land use regulations and current hazard mitigation plans and
the latest-issued FEMA data or guidance, which includes advisory data
(such as Advisory Base Flood Elevations) or preliminary and final Flood
Insurance Rate Maps.
m. The grantee certifies that its activities concerning lead-based
paint will comply with the requirements of 24 CFR part 35, subparts A,
B, J, K, and R.
n. The grantee certifies that it will comply with environmental
requirements at 24 CFR part 58.
o. The grantee certifies that it will comply with applicable laws.
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.
VI. Duration of Funding
The Appropriations Act makes 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 Law 115-123 for electrical power
system improvements. HUD may extend the period of performance
administratively, if good cause for such an extension exists at that
time, as requested by the grantee, and approved by HUD. When the period
of performance has ended, HUD will close out the grant and any
remaining funds not expended by the grantee on appropriate programmatic
purposes will be recaptured by HUD.
VII. Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the grants
under this notice are as follows: 14.218 and 14.228.
VIII. 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 inspection on HUD's website and in-person for public
inspection between 8 a.m. and 5 p.m. weekdays in the Regulations
Division, Office of General Counsel, Department of Housing and Urban
Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500.
Due to security measures at the HUD Headquarters building, an advance
appointment to review the docket file must be scheduled by calling the
Regulations Division at 202-708-3055 (this is not a toll-free number).
Hearing- or speech-impaired individuals may access this number through
TTY by calling the Federal Relay Service at 800-877-8339 (this is a
toll-free number).
James Arthur Jemison II,
Principal Deputy Assistant Secretary for Community Planning and
Development.
[FR Doc. 2021-12934 Filed 6-21-21; 8:45 am]
BILLING CODE 4210-67-P
