[Federal Register Volume 71, Number 209 (Monday, October 30, 2006)]
[Notices]
[Pages 63337-63340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-8978]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5089-N-01]


Allocations and Waivers Granted to and Alternative Requirements 
for CDBG Disaster Recovery Grantees Under Chapter 9 of Title II of the 
Emergency Supplemental Appropriations Act for Defense, the Global War 
on Terror, and Hurricane Recovery, 2006

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of allocation, waivers, and alternative requirements.

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SUMMARY: This Notice advises the public of the allocations for grant 
funds for Community Development Block Grant (CDBG) disaster recovery 
grants for the purpose of assisting in the recovery in the most 
impacted and distressed areas related to the consequences of Hurricanes 
Katrina, Rita, and Wilma in the Gulf of Mexico in 2005. As described in 
the Supplementary Information section of this notice, HUD is authorized 
by statute to waive statutory and regulatory requirements and specify 
alternative requirements for this purpose, upon the request of the 
State grantees. This notice also describes the application and 
reporting waivers and the common alternative requirements for the 
grants made under the subject appropriations act.

DATES: Effective Date: November 6, 2006.

FOR FURTHER INFORMATION CONTACT: Jan C. Opper, Director, Disaster 
Recovery and Special Issues Division, Office of Block Grant Assistance, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 7286, Washington, DC 20410, telephone number (202) 708-3587. 
Persons with hearing or speech impairments may access this number via 
TTY by calling the Federal Information Relay Service at (800) 877-8339. 
FAX inquiries may be sent to Mr. Opper at (202) 401-2044. (Except for 
the ``800'' number, these telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Authority To Grant Waivers

    Chapter 9 of Title II of the Emergency Supplemental Appropriations 
Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 
(Pub. L. 109-234, approved June 15, 2006) (Public Law 109-234) 
appropriates $5.2 billion in Community Development Block Grant funds 
for necessary expenses related to disaster relief, long-term recovery, 
and restoration of infrastructure directly related to the consequences 
of the covered disasters. Public Law 109-234 authorizes the Secretary 
to waive, or specify alternative requirements for, any provision of any 
statute or regulation that the Secretary administers in connection with 
the obligation by the Secretary or use by the recipient of these funds 
and guarantees, except for requirements related to fair housing, 
nondiscrimination, labor standards, and the environment, upon a request 
by the State and a finding by the Secretary that such a waiver would 
not be inconsistent with the overall purpose of the statute. The 
following application and reporting waivers and alternative 
requirements are in response to requests from the States receiving an 
allocation under this notice.
    The Secretary finds that the following waivers and alternative 
requirements, as described below, are not inconsistent with the overall 
purpose of Title I of the Housing and Community Development Act of 
1974, as amended, or the Cranston-Gonzalez National Affordable Housing 
Act, as amended.
    Under the requirements of the Department of Housing and Urban 
Development Act, as amended (42 U.S.C. 3535(q)), regulatory waivers 
must be published in the Federal Register.
    Except as described in this and other notices applicable to this 
grant, statutory and regulatory provisions governing the Community 
Development Block Grant program for States, including those at 24 CFR 
part 570, shall apply to the use of these funds. In accordance with 
Public Law 109-234, HUD will reconsider every waiver in this notice on 
the two-year anniversary of the day this notice is published.

[[Page 63338]]

Allocations

    Public Law 109-234 (effective June 15, 2006) provides $5.2 billion 
of supplemental appropriation for the CDBG program for:

necessary expenses related to disaster relief, long-term recovery, and 
restoration of infrastructure in the most impacted and distressed areas 
related to the consequences of Hurricanes Katrina, Rita, or Wilma.

    The law further notes:

That funds provided under this heading shall be administered through an 
entity or entities designated by the Governor of each State. And that: 
No State shall receive more than $4.2 billion of the amount provided 
under this heading.

    As provided for in Public Law 109-234, the funds may not be used 
for activities reimbursable by or for which funds are made available by 
the Federal Emergency Management Agency or the Army Corps of Engineers. 
Further, none of the funds made available under this heading may be 
used by a State or locality as a matching requirement, share, or 
contribution for any other Federal program.
    Also as required by the law, not less than $1.0 billion of the $5.2 
billion appropriation less $27.0 million in administrative set-asides 
(which computes to 19.3311 percent of any State's allocation) shall be 
used for repair, rehabilitation, and reconstruction (including 
demolition, site clearance and remediation) of the affordable rental 
housing stock (including public and other HUD-assisted housing) in the 
impacted areas. Therefore, HUD is requiring that not less than 19.3311 
percent of each State's grant be used for these activities.
    From this supplemental appropriation, the Secretary is allocating 
funds as follows.

----------------------------------------------------------------------------------------------------------------
                                                                                              Allocation amount
                   State                                        Disaster                             ($)
----------------------------------------------------------------------------------------------------------------
Alabama....................................  Hurricane Katrina (FEMA-1605-DR).............           $21,225,574
Florida....................................  Hurricane Katrina (FEMA-1602-DR), Hurricane             100,066,518
                                              Wilma (FEMA-1609-DR).
Louisiana..................................  Hurricane Katrina (FEMA-1603-DR), Hurricane           4,200,000,000
                                              Rita (FEMA-1607-DR).
Mississippi................................  Hurricane Katrina (FEMA-1604-DR).............           423,036,059
Texas......................................  Hurricane Rita (FEMA-1606-DR)................           428,671,849
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------------------------------------------------------------------------
                                                         Minimum amount
                                                         for affordable
                         State                           rental housing
                                                               ($)
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Alabama...............................................        $4,103,146
Florida...............................................        19,344,001
Louisiana.............................................       811,907,984
Mississippi...........................................        81,777,703
Texas.................................................        82,867,166
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    The amounts in the table directly above are the minimum required 
for each State to use of its allocation from Public Law 109-234 for 
repair, rehabilitation, and reconstruction (including demolition, site 
clearance and remediation) of the affordable rental housing stock 
(including public and other HUD-assisted housing) in the impacted 
areas.
    In Louisiana, the Department has reviewed data chronicling the 
massive impact of the disasters on affordable rental housing, including 
public housing, in the areas of the State most affected by disasters. 
In light of the unprecedented housing needs resulting from the 
disasters, the Secretary is carrying out his statutory duty to ensure 
that priority has been given to identified affordable rental housing by 
providing an alternative requirement. HUD is requiring that, before the 
State of Louisiana expends any funds to meet the minimum requirement 
for affordable rental housing under this notice (see table above), the 
Governor of Louisiana shall demonstrate to the Secretary's satisfaction 
that the State will provide funds or has identified dedicated resources 
sufficient to meet the key disaster recovery needs for repair, 
rehabilitation, and reconstruction of affordable rental housing stock, 
including public housing, in the most impacted areas of the State.
    HUD invites each State receiving an allocation to submit an Action 
Plan for Disaster Recovery in accordance with this notice.
    The appropriations statute requires funds be used only for disaster 
relief, long-term recovery, and restoration of infrastructure in the 
most impacted and distressed areas related to the consequences of 
hurricanes in the Gulf of Mexico in 2005. The statute directs that each 
grantee will describe in its Action Plan for Disaster Recovery how the 
use of the grant funds gives priority to infrastructure development and 
rehabilitation and the rehabilitation and reconstruction of the 
affordable rental housing stock including public and other HUD-assisted 
housing. HUD will monitor compliance with this direction and may be 
compelled to disallow expenditures if it finds uses of funds are not 
disaster-related, or funds allocated duplicate other benefits.
    For the State of Louisiana, which suffered major impacts from two 
different hurricanes, HUD estimates that over 85 percent of the major 
and severe damage due to those storms is in the New Orleans-Metairie-
Bogalusa Metropolitan Area (Jefferson, Orleans, Plaquemines, St. 
Bernard, St. Charles, St. John the Baptist, and St. Tammany Parishes). 
HUD therefore expects that the State will target a substantial majority 
of its disaster recovery funds under Pub. L. 109-234 toward the 
disaster recovery needs in the New Orleans-Metairie-Bogalusa 
Metropolitan Area, and has included an alternative requirement to that 
effect.

Prevention of Fraud, Abuse, and Duplication of Benefits

    The statute also directs the Secretary to:

Establish procedures to prevent recipients from receiving any 
duplication of benefits and report quarterly to the Committees on 
Appropriations with regard to all steps taken to prevent fraud and 
abuse of funds made available under this heading including duplication 
of benefits.

    To meet this directive, HUD is pursuing five courses of action. 
First, this notice makes applicable specific reporting, written 
procedures, monitoring, and internal audit requirements for grantees. 
Second, to the extent its resources allow, HUD will institute risk 
analysis and on-site monitoring of grantee management of the grants and 
of the specific uses of funds. Third, HUD will be extremely cautious in 
considering any waiver related to basic financial management 
requirements. The standard, time-tested CDBG financial requirements 
will continue to apply. Fourth, HUD is collaborating with the HUD 
Office of Inspector General to plan and implement oversight of these 
funds. Fifth, HUD will follow the direction of the conference report, 
109-494, and apply $6 million of funds appropriated for the Working 
Capital Fund for ``immediate enhancement of the capabilities of the 
Disaster Recovery Grant Reporting system by building

[[Page 63339]]

additional electronic controls that will increase accountability while 
further decreasing the risk of fraud, waste, or abuse.''

Waiver Justification

    In general, waivers already granted to the States and alternative 
requirements already specified for CDBG disaster recovery grant funds 
provided under the Department of Defense Appropriations Act, 2006 (Pub. 
L. 109-148, approved December 30, 2005) (Appropriations Act) will also 
apply to grant funds provided under Public Law 109-234. This eliminates 
unnecessary inconsistencies in administration of the two grants and 
thus reduces the opportunities for technical errors. The notices in 
which these prior waivers and alternative requirements appear are 71 FR 
7666, published February 13, 2006 (all five States); 71 FR 34448 (for 
Alabama), 71 FR 34451 (for Mississippi), and 71 FR 34457 (for 
Louisiana), all published June 14, 2006; 71 FR 43622, published August 
1, 2006 (for Texas); 71 FR 51678 (for Florida), published August 30, 
2006; and 71 FR 62372 (for Mississippi), published October 24, 2006, 
except that the provisions of paragraph four of the latter notice do 
not apply to the funds allocated under Pub. L. 109-234.
    In addition to making applicable the requirements cited above, this 
notice specifies and provides for differences in program rules, 
waivers, or alternative requirements that are necessary due to the 
provisions of Public Law 109-234.
    The provisions of this notice do not apply to funds provided under 
the regular CDBG program. The provisions provide additional flexibility 
in program design and implementation and implement statutory 
requirements unique to this appropriation.

Application for Allocation

    The waivers and alternative requirements related to a State's 
application for its allocation are those delineated in a notice 
entitled, ``Allocations and Common Application and Reporting Waivers 
Granted to and Alternative Requirements for CDBG Disaster Recovery 
Grantees Under the Department of Defense Appropriations Act, 2006,'' 
published February 13, 2006 71 (FR 7666), with the changes noted below. 
HUD encourages each State receiving an allocation to submit an Action 
Plan for Disaster Recovery to HUD within 60 days of the publication 
date of this notice.
    New elements added to the State's Action Plan for Disaster Recovery 
include a description of how the State will give priority to 
infrastructure development and rehabilitation and how the State will 
give priority to the rehabilitation and reconstruction of the 
affordable rental housing stock including public and other HUD-assisted 
housing. The State must also explain how its choices for fund use will 
result in the State meeting the requirement to use not less than 
19.3311 percent of its allocation for repair, rehabilitation, and 
reconstruction (including demolition, site clearance and remediation) 
of the affordable rental housing stock (including public and other HUD-
assisted housing) in the impacted areas. The explanation should include 
how the State has considered the unique challenges that individuals 
with disabilities face in finding accessible and affordable housing.

Applicable Rules, Statutes, Waivers, and Alternative Requirements

    1. General note. Except as described in this notice, the statutory, 
regulatory, and notice provisions that shall apply to the use of these 
funds are:
    a. Those governing the funds appropriated under the Appropriations 
Act and already published in the Federal Register, including those in 
notices 71 FR 7666, published February 13, 2006 (for all five States); 
71 FR 34448 (for Alabama), 71 FR 34451 (for Mississippi), and 71 FR 
34457 (for Louisiana), all published June 14, 2006; 71 FR 43622 for 
Texas, published August 1, 2006; 71 FR 51678 (for Florida), published 
on August 30, 2006; and 71 FR 62372 (for Mississippi), published 
October 24, 2006, except that the provisions of paragraph four of the 
latter notice do not apply to the funds allocated under Public Law 109-
234; and
    b. Those governing the Community Development Block Grant program 
for States, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 
570.
    2. Action Plan additional elements. a. In addition to the waivers 
and alternative requirements published in the ``Allocations and Common 
Application and Reporting Waivers Granted to and Alternative 
Requirements for CDBG Disaster Recovery Grantees Under the Department 
of Defense Appropriations Act, 2006'' notice published February 13, 
2006, the disaster recovery grantees receiving funding under Public Law 
109-234 must add the items in paragraph b below to those described in 
paragraph number 7 on page 7669 of that notice regarding the 
information required in the State's overall plan for disaster recovery 
for use of funds under Public Law 109-234.
    b. The grantee's overall plan for disaster recovery will also 
include:
    (i) An explanation of how the State will give priority to the 
rehabilitation and reconstruction of the affordable rental housing 
stock including public and other HUD-assisted housing, a description of 
the activities the State plans to undertake with grant funds under this 
priority, and a description of the unique challenges that individuals 
with disabilities face in finding accessible and affordable housing;
    (ii) An explanation of how the State will give priority to 
infrastructure development and rehabilitation, and a description of the 
infrastructure activities it plans to undertake with grant funds; and
    (iii) An explanation of how the method of distribution or use of 
funds described in accordance with the applicable notices will result 
in the State meeting the requirement that at least 19.3311 percent of 
its allocation under this notice shall be used for repair, 
rehabilitation, and reconstruction (including demolition, site 
clearance and remediation) of the affordable rental housing stock 
(including public and other HUD-assisted housing) in the impacted 
areas.
    3. Note that use of grant funds must relate to the covered 
disaster(s). In addition to being eligible under 42 U.S.C. 5305(a) of 
this notice and meeting a CDBG national objective under the penultimate 
paragraph of 42 U.S.C. 5304(b)(3), Public Law 109-234 requires that 
activities funded under this notice must also be for necessary expenses 
related to disaster relief, long-term recovery, and restoration of 
infrastructure in the most impacted and distressed areas related to the 
consequences of Hurricanes Katrina, Rita, and Wilma in communities 
included in Presidential disaster declarations.
    4. Alternative Requirements Regarding Targeting in Louisiana. a. 
The State of Louisiana will target 70 percent of its disaster recovery 
funds under Pub. L. 109-234 towards the disaster recovery needs in the 
New Orleans-Metairie-Bogalusa Metropolitan Area; and
    b. Before the State of Louisiana expends any funds to meet the 
minimum requirement for affordable rental housing under this notice, 
the Governor of Louisiana shall demonstrate to the Secretary's 
satisfaction that the State will provide funds or has identified 
dedicated resources sufficient to meet the key disaster recovery needs 
for repair, rehabilitation, and reconstruction of affordable rental 
housing stock, including public housing

[[Page 63340]]

disaster recovery in the most impacted areas of the State.
    5. Information collection approval note. HUD has approval for 
information collection requirements in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3520) under OMB control number 
2506-0165, which expires August 31, 2007. In accordance with the 
Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a 
person required to respond to, a collection of information unless the 
collection displays a valid control number.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the disaster 
recovery grants under this notice are as follows: 14.219; 14.228.

Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is 
available for public inspection between 8 a.m. and 5 p.m. weekdays in 
the Office of the Rules Docket Clerk, Office of General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 10276, Washington, DC 20410-0500. Due to security measures at the 
HUD Headquarters building, please schedule an appointment to review the 
finding by calling the Regulations Division at (202) 708-3055 (this is 
not a toll-free number).

    Dated: October 25, 2006.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. 06-8978 Filed 10-26-06; 1:56 pm]
BILLING CODE 4210-67-P