[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Notices]
[Pages 61320-61323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27960]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6074-N-01]


Allocations, Common Application, Waivers, and Alternative 
Requirements for Community Development Block Grant Disaster Recovery 
Grantees; State of Texas Allocation

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice.

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SUMMARY: This notice allocates $57,800,000 of Community Development 
Block Grant disaster recovery (CDBG-DR) funds to the State of Texas in 
response to Hurricane Harvey. This allocation is made pursuant to the 
requirements of Public Law 115-31. This notice also makes a technical 
correction to the previously established alternative requirement on the 
low- and moderate- income national objective criteria for grantees 
undertaking CDBG-DR buyouts and housing incentives.

DATES: Applicable: January 2, 2018.

FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Acting 
Director, Office of Block Grant Assistance, Department of Housing and 
Urban Development, 451 7th Street, SW, Room 10166, Washington, DC 
20410, telephone number 202-708-3587. Persons with hearing or speech 
impairments may access this number via TTY by calling the Federal Relay 
Service at 800-877-8339. Facsimile inquiries may be sent to Ms. Kome at 
202-401-2044. (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. 2017 Allocations
    A. Background
    B. Use of Funds
    C. Grant Process
    D. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
    E. Duration of Funding
II. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
III. Catalog of Federal Domestic Assistance
IV. Finding of No Significant Impact

I. 2017 Allocations

A. Background

    Congress appropriated $400 million in CDBG-DR funds for necessary 
expenses for activities authorized under title I of the Housing and 
Community Development Act of 1974 (HCDA) related to disaster relief, 
long-term recovery, restoration of infrastructure and housing, and 
economic revitalization in the most impacted and distressed areas 
resulting from a qualifying major disaster declared by the President 
pursuant to the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act of 1974 (Stafford Act) (42 U.S.C. 5121 et seq.) in 2015, 
2016, 2017 or later.
    Of this amount, HUD previously allocated $342,200,000 to areas 
impacted by disasters in 2015 and 2016. The $57,800,000 allocated under 
this notice is the remaining amount from $400 million appropriated 
under Public Law 115-31.
    Public Law 115-31 specifies that the funds allocated for disasters 
in 2017 or later must be allocated and used under the same authority 
and conditions as those applicable to CDBG-DR funds appropriated by 
Public Law 114-223. Therefore, the funds allocated to the State of 
Texas under this notice are subject to the authority and conditions of 
Public Law 114-223 and the requirements, waivers, and alternative 
requirements applicable to CDBG-DR funds appropriated under Public Law 
114-223 provided in HUD's Federal Register notices published on 
November 21, 2016, January 18, 2017, and August 7, 2017. These Federal 
Register notices describe the allocation and applicable waivers and 
alternative requirements, relevant statutory and regulatory 
requirements, grant award process, criteria for Action Plan approval, 
and eligible disaster recovery activities for the qualifying disaster.

[[Page 61321]]

    Section III.A. of HUD's August 7, 2017 Federal Register notice 
provided that HUD would not evaluate a 2017 disaster for qualification 
to receive CDBG-DR funds until: (i) The major disaster has been 
declared eligible for the Federal Emergency Management Agency's (FEMA) 
Public Assistance (PA) Program and Individual and Households (IHP) 
Program; (ii) FEMA has approved Individual Assistance applications 
totaling at least $13 million in IHP financial assistance for the 
declared disaster in a single county; and (iii) four months have passed 
since the disaster declaration that made IHP available, or the IHP 
registration period is closed, whichever comes first. Section III. A. 
iii. was intended to allow time for HUD to gather data needed to 
validate that a disaster met the eligibility thresholds established in 
the methodology. However, HUD has already received sufficient data to 
show these thresholds were far exceeded by Hurricane Harvey, and thus, 
the Department is rescinding section III. A. iii. of the August 7, 2017 
notice to expedite this allocation.
    Section III.A. also provided that HUD would use the detailed 
methodology specified in Appendix A of the January 18, 2017 notice and 
make allocations equal to the lesser of 100 percent of the serious 
unmet needs or the remaining funds available from Public Law 115-31. 
Using updated data HUD received from the Federal Emergency Management 
Agency (FEMA) and the Small Business Administration (SBA), the unmet 
needs in Texas far exceed this allocation of the remaining $57,800,000 
available from Public Law 115-31. A detailed explanation of HUD's 
allocation methodology applicable to the $57,800,000 is provided at 
Appendix A of the January 18, 2017 notice.

 Table 1--Qualifying 2017 Disaster and ``Most Impacted and Distressed''
                                  Area
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                                                    Minimum amount that
                                                    must be expended for
                                                    recovery in the HUD-
       FEMA Disaster No.             Grantee         identified ``most
                                                        impacted and
                                                     distressed'' areas
------------------------------------------------------------------------
                             2017 Disasters
------------------------------------------------------------------------
4332..........................  State of Texas...  Harris County
                                                    ($46,240,000).
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    The grantee's use of funds is limited to unmet recovery needs from 
Hurricane Harvey (FEMA Disaster No. 4332). Table 2 shows the HUD-
identified ``most impacted and distressed'' areas impacted by the 
identified disaster. At least 80 percent of the $57,800,000 must 
address unmet needs within Harris County, Texas, which is the ``most 
impacted and distressed'' area, as identified by HUD. Texas may spend 
the remaining 20 percent in Harris County or in other areas the grantee 
determines to be ``most impacted and distressed'' that a received a 
presidential disaster declaration pursuant to the disaster number 
listed in Table 1.

B. Use of Funds

    Public Law 115-31 requires funds to be used only for specific 
disaster recovery related purposes. This allocation provides funds to 
the State of Texas for authorized disaster recovery efforts associated 
with Hurricane Harvey. Section III of the August 7, 2017 notice 
describes the requirements governing the submission of action plans 
required for 2017 disasters. However, the State of Texas previously 
completed a CDBG-DR action plan for 2016 disasters and that action plan 
is subject to the same requirements applicable to this allocation. Due 
to the severity of Hurricane Harvey and to help ensure funds reach 
those affected in a timely manner, HUD will allow Texas to adopt and 
incorporate into its Action Plan, for the funds allocated under this 
notice, any relevant information from the action plan that it 
previously completed for its 2016 disaster allocation. Additionally, 
the scale of analysis for this allocation may be commensurate with the 
amount of the allocation and the limited data available this soon after 
the disaster. Accordingly, section III. B. of the August 7, 2017 notice 
is deleted and replaced with the following:

B. Use of Funds

    Grantees receiving an allocation of funds under Public Law 115-31 
for 2017 and later disasters pursuant to a subsequent notice are 
subject to the requirements of the November 21, 2016 notice, as 
amended, which require that prior to the obligation of CDBG-DR funds, a 
grantee shall submit a plan to HUD for approval detailing the proposed 
use of all funds, including criteria for eligibility, and how the use 
of these funds will address long-term recovery and restoration of 
infrastructure and housing and economic revitalization in the most 
impacted and distressed areas. The grantee's Action Plan for 2017 
disasters may adopt and incorporate applicable sections and any other 
relevant information from its Action Plan for 2016 disasters, 
previously submitted pursuant to the November 21, 2016 notice or 
January 18, 2017 notice. The grantee must include updated information 
specific to the 2017 disasters, such as its analysis of unmet needs and 
use of funds to address these needs. The Action Plan for 2017 disasters 
must describe uses and activities for all funds that: (1) Are 
authorized under title I of the Housing and Community Development Act 
of 1974 (HCDA) or allowed by a waiver or alternative requirement; and 
(2) respond to disaster-related impact to infrastructure, housing, and 
economic revitalization in the most impacted and distressed areas. To 
inform the Action Plan, the grantee must conduct an updated assessment 
of community impacts and unmet needs to guide the development and 
prioritization of planned recovery activities, pursuant to paragraph 
A.2.a. in section VI of the November 21, 2016, notice, as amended. 
However, the scale of analysis for this allocation may be commensurate 
with the amount of the allocation and the limited data available.
    Public Law 115-31 requires the Secretary to certify, in advance of 
signing a grant agreement, that the grantee has in place proficient 
financial controls and procurement processes and has established 
adequate procedures to prevent any duplication of benefits as defined 
by section 312 of the Stafford Act, ensure timely expenditure of funds, 
maintain comprehensive websites regarding all disaster recovery 
activities assisted with these funds, and detect and prevent waste, 
fraud, and abuse of funds. The November 21, 2016 notice further 
required grantees to submit risk analysis documentation and to certify 
to its capacity to administer CDBG-DR funds. To provide a basis for 
these certifications, grantees were required to submit documentation to 
the Department demonstrating compliance with the stated requirements of 
the

[[Page 61322]]

statute and corresponding notice. The Department will not require 
grantees to resubmit its previous documentation to support the 
Secretary's required certification before signing the grant agreement 
for funds under Public Law 115-31 for 2017 disasters. Instead, grantees 
receiving an allocation of funds under Public Law 115-31 for 2017 
disasters may submit a new certification to HUD indicating that its 
submissions in response to the certification requirements of the 
November 21, 2016 notice for its CDBG-DR grant for 2016 disasters 
remain unchanged, and the policies and procedures on which HUD based 
its certification for 2016 disasters are adopted and will apply to the 
grantee's CDBG-DR grant allocation for 2017 disasters. Alternatively, 
grantees may provide a supplement updating its previous submissions in 
response to the certification requirements of the November 21, 2016 
notice to indicate any changes that will apply to the use of funds for 
2017 disasters, and will submit a certification that its submissions 
remain unchanged, except as indicated.
    Pursuant to the November 21, 2016 notice, as amended, a grantee 
receiving an allocation of funds for 2017 disasters in a subsequent 
notice is also required to expend 100 percent of its allocation of 
CDBG-DR funds on eligible activities within 6 years of HUD's execution 
of the grant agreement.
    A grantee receiving an allocation of funds for 2017 disasters will 
be subject to the grant process provided for in section V. of the 
November 21, 2016 notice, as amended. The grantee and HUD will execute 
a separate grant agreement for funds for 2017 disasters.

C. Grant Process

    To receive funds allocated by this notice, Texas may adopt and 
incorporate applicable sections and any other relevant information from 
its approved Action Plan for 2016 disasters, and include any additional 
information, as appropriate, to address recovery from Hurricane Harvey. 
In developing the resulting Action Plan for Hurricane Harvey (Public 
Law 115-31), Texas must meet the grant process requirements from the 
November 21, 2016 notice, which include the following:
     Consult with affected citizens, stakeholders, local 
governments, and public housing authorities to assess needs;
     Publish the resulting Action Plan for Hurricane Harvey 
(Pub. L. 115-31) in accordance with the requirements set forth in 
section VI.A.4.a of the November 21, 2016 notice, including the 
requirement to prominently post the Action Plan on its official website 
for no less than 14 calendar days. The grantee must also ensure equal 
access for persons with disabilities and persons with limited English 
proficiency. The manner of publication must afford citizens, affected 
local governments, and other interested parties a reasonable 
opportunity to examine the Action Plan contents and provide feedback;
     Respond to public comment and submit its resulting Action 
Plan for 2017 disasters to HUD no later than 90 days after the 
effective date of this notice;
     Enter the activities from its published Action Plan for 
Hurricane Harvey (Pub. L. 115-31) into the Disaster Recovery Grant 
Reporting (DRGR) system and submit the updated DRGR Action Plan to HUD 
within the system;
     Sign and return the grant agreement to HUD;
     Ensure that the HUD approved Action Plan for Hurricane 
Harvey (Pub. L. 115-31) is posted prominently on its official website; 
and
     Amend its published Action Plan for Hurricane Harvey (Pub. 
L. 115-31) to include its projection of expenditures and outcomes 
within 90 days of the Action Plan approval.
    HUD will review Texas's resulting Action Plan for Hurricane Harvey 
(Pub. L. 115-31) within 45 days from date of receipt and determine 
whether to approve the plan per criteria identified in this notice and 
all applicable prior notices. HUD will then send an approval letter, 
grant conditions, and an unsigned grant agreement to the grantee. If 
the state's Action Plan is not approved, a letter will be sent 
identifying its deficiencies and the state must then re-submit the plan 
within 45 days of the notification letter.
    Once HUD signs the grant agreement and revises the grantee's line 
of credit amount, the state may draw down funds from the line of credit 
after the Responsible Entity completes applicable environmental 
review(s) pursuant to 24 CFR part 58 or as authorized by Public Law 
115-31 and, as applicable, receives from HUD or the state an approved 
Request for Release of Funds and certification.

D. Applicable Rules, Statutes, Waivers, and Alternative Requirements

    The funds allocated under this notice are subject to the waivers 
and alternative requirements provided in the November 21, 2016, January 
18, 2017, and August 7, 2017 notices governing the award of CDBG-DR 
funds to 2016 grantees. These waivers and alternative requirements 
provide additional flexibility in program design and implementation to 
support full and swift recovery following the disasters, while also 
ensuring that statutory requirements are met. Texas may request 
additional waivers and alternative requirements from the Department, as 
needed, to address specific needs related to its recovery activities. 
Waivers and alternative requirements are effective five days after they 
are published in the Federal Register.

E. Duration of Funding

    Public Law 115-31 provides that these funds will remain available 
until expended. However, consistent with 31 U.S.C. 1555 and OMB 
Circular A-11, if the Secretary or the President determines that the 
purposes for which the appropriation has been made have been carried 
out and no disbursements have been made against the appropriation for 
two consecutive fiscal years, any remaining balance will be made 
unavailable for obligation or expenditure. Consistent with the November 
21, 2016, January 18, 2017, and August 7, 2017 notices, the provisions 
at 24 CFR 570.494 and 24 CFR 570.902 regarding timely distribution of 
funds are waived and replaced with alternative requirements. Grantees 
must expend 100 percent of their allocation of CDBG-DR funds on 
eligible activities within 6 years of HUD's execution of the grant 
agreement.

II. Applicable Rules, Statutes, Waivers, and Alternative Requirements

    This section of the notice provides a technical correction to the 
previously established alternative requirement on the low- and 
moderate- income (LMI) national objective criteria for grantees 
undertaking buyouts and housing incentives with CDBG-DR funding 
provided by Public Laws 113-2, 114-113, 114-223, 114-254 and 115-31.
    The Federal Register notice published by the Department on August 
7, 2017 (82 FR 36812) established additional opportunities for CDBG-DR 
grantees to meet the LMI national objective with respect to assistance 
provided to LMI persons through buyouts and housing incentives. After 
the publication of that notice, HUD determined that the language used 
would make it difficult for grantees to meet those objectives. 
Accordingly, starting at the fifth paragraph of Section V, the August 
7, 2017 notice is amended to read:
    For a buyout award or housing incentive to meet the new LMB and 
LMHI national objectives, grantees must demonstrate the following:

[[Page 61323]]

    (1) The CDBG-DR funds have been provided for an eligible activity 
that benefits LMI households by supporting their move from high risk 
areas. The following activities shall qualify under this criterion, and 
must also meet the eligibility criteria of the notices governing the 
use of the CDBG-DR funds:
    (a) Low/Mod Buyout (LMB). When CDBG-DR funds are used for a buyout 
award to acquire housing owned by a qualifying LMI household, where the 
award amount is greater than post-disaster (current) fair market value 
of that property;
    (b) Low/Mod Housing Incentive (LMHI). When CDBG-DR funds are used 
for a housing incentive award, tied to the voluntary buyout or other 
voluntary acquisition of housing owned by a qualifying LMI household, 
for which the housing incentive is for the purpose of moving outside of 
the affected floodplain or to a lower-risk area; or when the housing 
incentive is for the purpose of providing or improving residential 
structures that, upon completion, will be occupied by an LMI household.
    (2) Activities that meet the above criteria will be considered to 
benefit low- and moderate-income persons unless there is substantial 
evidence to the contrary.
    Any activities that meet the newly established national objective 
criteria described above will count towards the calculation of a CDBG-
DR grantee's overall LMI benefit to comply with the primary objective 
described in 24 CFR 570.200(a)(3) and 24 CFR 570.484(b). Grantees 
receiving an allocation of CDBG-DR funds pursuant to the following 
appropriations acts must specifically request a waiver and alternative 
requirement from HUD in order apply the new national objective criteria 
established in this section of the notice: Public Law 109-148, 109-234, 
and 110-116 (Katrina, Rita, and Wilma); Public Law 110-252 and 110-328 
(2008 Disasters), Public Law 111-112 (2010 disasters), and Public Law 
112-55 (2011 disasters).

III. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the disaster 
recovery grants under this notice are as follows: 14.218; 14.228; and 
14.269.

IV. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available for public inspection between 8 a.m. and 5 p.m. weekdays in 
the Regulations Division, Office of General Counsel, Department of 
Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500. Due to security measures at the HUD 
Headquarters building, an advance appointment to review the docket file 
must be scheduled by calling the Regulations Division at 202-708-3055 
(this is not a toll-free number). Hearing- or speech-impaired 
individuals may access this number through TTY by calling the Federal 
Relay Service at 800-877-8339 (this is a toll-free number).

    Dated: December 20, 2017.
Neal J. Rackleff,
Assistant Secretary for Community Planning and Development.
[FR Doc. 2017-27960 Filed 12-26-17; 8:45 am]
 BILLING CODE 4210-67-P