[Federal Register Volume 84, Number 33 (Tuesday, February 19, 2019)]
[Notices]
[Pages 4836-4846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02695]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6136-N-01]


Waivers, Alternative Requirements and Extensions for Community 
Development Block Grant Disaster Recovery Grantees

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

ACTION: Notice.

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SUMMARY: This notice governs Community Development Block Grant disaster 
recovery (CDBG-DR) funds awarded under several appropriations. 
Specifically, this notice provides waivers and establishes alternative 
requirements for certain grantees that have submitted waiver requests 
for grants provided pursuant to Public Laws 112-55, 113-2, 114-113, 
114-223, 114-254, 115-31, 115-56 and 115-123. This notice also provides 
further clarification on the application of the green building 
standards established by the Department for 2017 CDBG-DR grantees in 
the February 9, 2018 Federal Register notice (83 FR 5844). 
Additionally, this notice addresses the availability of an alternative 
requirement to Section 414 of the Stafford Act and other URA provisions 
for grantees that received an allocation of CDBG-DR funds under Public 
Laws 114-113, 114-223, 114-254, and 115-31.

DATES: Applicability Date: February 25, 2019.

FOR FURTHER INFORMATION CONTACT: Claudette Fernandez, Director, Office 
of Block Grant Assistance, Department of Housing and Urban Development, 
451 7th Street SW, Room 7286, Washington, DC 20410, telephone number 
202-708-3587. Persons with hearing or speech disability may access this 
number via TTY/VRS by calling the Federal Relay Service at 800-877-
8339. Facsimile inquiries may be sent to Ms. Fernandez 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. Public Law 112-55 Waivers and Alternative Requirements
II. Public Law 113-2 Extensions, Waivers and Alternative 
Requirements
III. Public Law 114-113 and 115-31 Waivers and Alternative 
Requirements
IV. Public Law 114-113, 114-223, 114-254 and 115-31 Waivers and 
Alternative Requirements
V. Public Law 114-223, 114-254 and 115-31 Waivers and Alternative 
Requirements
VI. Public Law 115-56 and 115-123 Waivers and Alternative 
Requirements
VII. Catalog of Federal Domestic Assistance
VIII. Finding of No Significant Impact

I. Public Law 112-55 Waivers and Alternative Requirements

New LMI National Objective Criteria for Buyouts and Housing Incentives 
(New York State only)

    New York State was awarded $71,654,166 of CDBG-DR funds under 
Public Law 112-55 for recovery from Hurricane Irene and Tropical Storm 
Lee (77 FR 22583) and $4,416,882,000 of CDBG-DR funds under Public Law 
113-2 for recovery from Hurricane Sandy. This section of the notice 
specifies waivers and alternative requirements and modifies 
requirements for CDBG-DR funds awarded to New York State under Public 
Law 112-55 to allow the State to better coordinate recovery efforts 
across multiple CDBG-DR allocations.
    Public Law 112-55 authorizes the Secretary to waive or specify 
alternative requirements for any provision of any statute or regulation 
that the Secretary administers in connection with HUD's obligation or 
use by the recipient of these funds (except for requirements related to 
fair housing, nondiscrimination, labor standards, and the environment). 
Regulatory waiver authority is also provided by 24 CFR 5.110, 91.600, 
and 570.5. As required by Public Law 112-55, waivers and alternative 
requirements provided in this paragraph are in response to a request by 
New York State explaining why the waiver is required to facilitate the 
use of the funds and based upon a determination by the Secretary that 
good cause exists and that the waiver or alternative requirement is not 
inconsistent with the overall purposes of title I of the Housing and 
Community Development Act of 1974, as amended (HCDA).
    The Department's April 16, 2012 notice authorized New York State to 
carry out ``buyouts,'' which for purposes of grants under Public Law 
112-55, are a type of acquisition activity limited to acquisition of 
properties located in a

[[Page 4837]]

floodway or floodplain that is intended to reduce risk from future 
flooding. The April 16, 2012 notice prohibits redevelopment of property 
acquired through buyouts and imposes other requirements on the use of 
CDBG-DR funds for this activity. This same notice also waives 42 U.S.C. 
5305(a) and associated regulations to allow New York State to offer 
housing incentives. Housing incentives are usually offered to encourage 
households to relocate to a suitable housing development or to an area 
promoted by the community's comprehensive recovery plan and may be 
provided in addition to acquisition or buyout awards.
    The Federal Register notices governing New York State's grants for 
disasters occurring in 2012 also included waivers and alternative 
requirements authorizing similar buyout and housing incentive 
activities.
    The Department's December 27, 2017 notice (82 FR 61320) provided an 
alternative requirement that established criteria under which buyout 
activities and housing incentives related to recovery from New York 
State's 2012 disasters (and other specified disasters) can meet a low- 
and moderate-income (LMI) national objective (82 FR 61322). HUD defined 
these alternative national objective criteria as Low/Mod Buyout (LMB) 
and Low/Mod Housing Incentive (LMHI). In that Federal Register notice, 
HUD did not make the LMB and LMHI criteria applicable to New York 
State's grant under the Consolidated and Further Continuing 
Appropriations Act, 2012 (Pub. L. 112-55), because Public Law 112-55 
only permits HUD to grant waivers and alternative requirements upon a 
request by a grantee receiving funds under that appropriation.
    The State has now requested that HUD establish the alternative 
requirement for meeting an LMI national objective for buyout activities 
and housing incentives carried out with CDBG-DR funds under Public Law 
112-55. New York State is currently using the new national objective 
criteria for the buyout program funded with CDBG-DR funds awarded under 
Public Law 113-2. The State contends that granting this waiver and 
alternative requirement for its grant under Public Law 112-55 ``will 
ensure a consistency of approach between the grants and allow. . . [the 
State] to account for the benefits provided to LMI households through 
these important, long term recovery activities.'' The LMB and LMHI 
national objective criteria will provide a valuable method to 
demonstrate how these program activities assist LMI households.
    Based on the above, in addition to the existing national objective 
criteria at 24 CFR 570.483(b)(1)-(4), HUD is establishing this 
alternative requirement to add additional national objective criteria 
for activities benefiting low and moderate income persons to allow New 
York State to use the LMB and LMHI national objective criteria 
described in section II of the Department's December 27, 2017 notice to 
demonstrate a national objective for buyout activities and housing 
incentives it carries out under its Public Law 112-55 CDBG-DR award.

II. Public Law 113-2 Extensions, Waivers and Alternative Requirements

    This section of the notice applies to certain grantees that 
received an allocation of funds appropriated under Public Law 113-2, 
which ultimately made available $15.2 billion in CDBG-DR funds for 
necessary expenses related to disaster relief, long-term recovery, 
restoration of infrastructure and housing, and economic revitalization 
due to Hurricane Sandy and other eligible events in calendar years 
2011, 2012, and 2013.
    Public Law 113-2 authorizes the Secretary to waive or specify 
alternative requirements for any provision of any statute or regulation 
that the Secretary administers in connection with HUD's obligation or 
use by the recipient of these funds (except for requirements related to 
fair housing, nondiscrimination, labor standards, and the environment). 
Waivers and alternative requirements are based upon a determination by 
the Secretary that good cause exists and that the waiver or alternative 
requirement is not inconsistent with the overall purposes of title I of 
the HCDA. Regulatory waiver authority is also provided by 24 CFR 5.110, 
91.600, and 570.5.
    For the waivers and alternative requirements described in this 
section of notice, the Secretary has determined that good cause exists 
and that the waivers and alternative requirements are not inconsistent 
with the overall purposes of title I of the HCDA. Grantees under Public 
Law 113-2 may request waivers and alternative requirements from the 
Department as needed to address specific needs related to their 
recovery activities. Public Law 113-2 also authorizes the Department to 
provide waivers and establish alternative requirements absent a request 
from a CDBG-DR grantee.
    1. Additional eligible activities for the extension of expenditure 
deadlines. The Disaster Relief Appropriations Act, 2013 (Pub. L. 113-2) 
requires grantees to expend CDBG-DR funds within 24 months of the date 
on which the Department obligates funds to a grantee and authorizes the 
Office of Management and Budget (OMB) to grant a waiver of the 24-month 
expenditure deadline. OMB authorized the Department to provide CDBG-DR 
grantees with expenditure deadline extensions for activities that are 
inherently long-term and where it would be impracticable to expend 
funds within the 24-month period and still achieve program missions, up 
to an amount approved by OMB.
    In the May 11, 2015 notice (80 FR 26942), the Department 
established the process and criteria for the submission of expenditure 
deadline extension requests for CDBG-DR grantees in receipt of funds 
under Public Law 113-2. Section III of the May 11, 2015 notice 
established four categories of disaster recovery activities that would 
be eligible for an extension of the 24-month expenditure deadline: 
Public facilities and improvements; housing; economic revitalization; 
and grant administration. Since the publication of the May 11, 2015 
notice, the Department has reviewed and acted on expenditure deadline 
extension requests from several CDBG-DR grantees. As recovery 
activities approach completion and with a requirement that all CDBG-DR 
funds provided under Public Law 113-2 be expended no later than 
September 30, 2022, the Department has determined that additional 
categories of disaster recovery activities that are not identified in 
the May 11, 2015 notice are also inherently long-term in nature, and 
present implementation challenges that make it impracticable for 
grantees to achieve disaster recovery program missions within the 24-
month expenditure deadline. The Department, for instance, recognizes 
that many Public Law 113-2 grantees are engaged in long term planning 
activities to enhance the resiliency of their jurisdiction to future 
disasters. Similarly, the Department has determined that certain public 
service activities, most notably various job training initiatives, 
continue to play an important role in grantee post-disaster economic 
recovery efforts. These types of activities therefore warrant inclusion 
in the activities that may qualify for an extension of the 24-month 
expenditure deadlines. The Department, however, shall only extend 
planning and public service activities that are authorized in a 
grantee's action plan as of the applicability date of this notice. 
Accordingly, the Department is replacing section III of the May 11, 
2015 notice with the following:


[[Page 4838]]


``III. Eligible Activities
    The National Disaster Recovery Framework acknowledges that long-
term recovery is inherently a multi-year process. The Department 
recognizes that grantees allocate a significant portion of CDBG-DR 
funds to complex and large-scale programs and projects that are long-
term in nature and that planning and public services are often critical 
components of long-term recovery. The Department also recognizes that 
grantees will require CDBG-DR administrative funds to conduct grant 
closeout and engage in ongoing program oversight, and that these 
efforts will inevitably extend beyond the twenty-four-month expenditure 
deadline that applies to each obligation.
    Within the amounts waived by OMB as not being subject to the 
expenditure deadline, the Department will limit its consideration of 
expenditure deadline extension requests to certain types of eligible 
disaster recovery activities undertaken by grantees which are 
determined to be long-term in nature. The Department will consider 
grantee programs and projects within the following six categories for 
expenditure deadline extensions:
     Public facilities and improvements. Typical public 
facilities and improvement activities include the rehabilitation, 
replacement, or relocation of damaged public facilities and 
improvements, as well as investments to increase the resiliency of 
those facilities and improvements.
     Housing. Typical housing activities include new 
construction, elevation, and rehabilitation of single family or 
multifamily residential units.
     Economic revitalization. Economic revitalization 
activities often include the provision of loans and grants to small 
businesses, job training programs, the construction of education 
facilities to teach technical skills, making improvements to commercial 
or retail districts, and financing other efforts that attract and 
retain workers in disaster-impacted communities.
     Grant administration. Typical administrative activities 
include salaries, wages, and related costs of grantee or subrecipient 
staff and others engaged in program management, monitoring, and 
evaluation. Administrative costs are limited by the Appropriations Act 
to five percent of each grantee's total allocation.
     Public Services. Public service activities typically 
include employment services (e.g., job training), fair housing 
counseling, and education programs.
     Planning. Planning activities often include community 
development plans, functional plans (e.g., for resiliency) and capacity 
building activities.''
    2. Change in the Substantial Amendment Criteria.
    The Department's March 5, 2013 notice (78 FR 14329) established the 
criteria for substantial amendments to action plans for disaster 
recovery and included the requirement that an allocation or re-
allocation of more than $1 million would constitute a substantial 
amendment. Grantees awarded funds under Public Law 113-2 are nearing 
the end of their recovery programs and are moving towards the eventual 
closeout of their CDBG-DR awards. Whereas grantees in the earliest 
stages of recovery rely more often on estimated activity budgets, 
grantees approaching closeout rely more on actual budgets and more 
routinely reallocate funds between activities and projects as their 
budgets transition from estimates of program costs to actual costs. 
Accordingly, to provide grantees with increased flexibility in the 
reallocation of CDBG-DR funds and consistent with the Department's 
definition of a substantial amendment for 2015, 2016 and 2017 CDBG-DR 
grantees, the Department is deleting the third paragraph of section 
VI.A.3.a. of the March 5, 2013 notice and establishing the following 
new definition of a substantial amendment for all grantees allocated 
funds under Public Law 113-2:

    ``Subsequent to publication of the action plan, the grantee must 
provide a reasonable time frame and method(s) (including electronic 
submission) for receiving comments on the plan or substantial 
amendment. 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; the allocation or reallocation of a monetary threshold 
amount as specified by the grantee in its action plan; or a change 
in the monetary threshold amount above which allocations or 
reallocations trigger a substantial amendment. The grantee may 
substantially amend the action plan if it follows the same 
procedures required in this Notice for the preparation and 
submission of an action plan for Disaster Recovery. Prior to 
submission of a substantial amendment, the grantee is encouraged to 
work with its HUD representative to ensure the proposed change is 
consistent with this Notice, and other requirements made applicable 
by the Federal award.''

    If a grantee chooses to change the threshold amount established by 
HUD in the March 5, 2013 notice ($1 million), a grantee shall undertake 
a substantial amendment to make changes to its monetary threshold above 
which allocations and reallocations constitute a substantial amendment. 
Once that substantial amendment is approved by HUD, the grantee shall 
apply the new definition of a substantial amendment.
    3. Buildings for the general conduct of government (City of Minot, 
North Dakota only).
    The Department's June 7, 2016 notice (81 FR 36557) established the 
requirements for grantees receiving CDBG-DR funds through the National 
Disaster Resilience Competition (CDBG-NDR), under Public Law 113-2. The 
city of Minot was awarded a CDBG-NDR grant of $74,340,770 and its 
approved Phase 2 application included an allocation of $3,750,000 for 
the relocation of its City Hall.
    The city's existing City Hall and its emergency communications 
center are in the city's flood inundation area and within the most 
recent FEMA-identified flood plain. The city plans to use CDBG-NDR 
grant funds to acquire a building for the City Hall, emergency 
communications center, and for the Center for Technical Education that 
will also be established pursuant to the city's approved Phase 2 CDBG-
NDR application. The importance of the City Hall relocation with the 
emergency police dispatch center is further reflected in the city's 
commitment of $1 million of its own funds to this aspect of the CDBG-
NDR award.
    To implement this portion of the city's CDBG-NDR award, the city 
has requested a waiver of 42 U.S.C. 5305(a)(2), which excludes 
acquisition, construction, reconstruction, or installation of buildings 
for the general conduct of government from eligible public facilities 
activities. The Department has determined that the city's waiver 
request is consistent with the underlying premise and purpose of the 
city's CDBG-NDR grant and is approving the requested waiver to 
authorize the expenditure of CDBG-NDR grant funds for the acquisition, 
rehabilitation and reuse of a commercial office structure for use as 
its primary governmental offices, consistent with the city's approved 
Phase 2 CDBG-NDR application. Therefore, HUD is waiving the prohibition 
on buildings for the general conduct of government in 42 U.S.C. 
5305(a)(2) and associated regulations at 24 CFR 570.207(a) to permit 
the City of Minot to carry out the public facility activity referred to 
as City Hall and comprised of activities as outlined in the city's 
CDBG-NDR application and approved CDBG-NDR action plan.
    4. Clarification that certain actions constitute part of new 
construction and

[[Page 4839]]

disposition activities associated with relocation of the Isle de Jean 
Charles community (State of Louisiana only). The Department awarded the 
State of Louisiana $92,629,249 in CDBG-NDR funds, of which $48,373,249 
was to enable the community on the Isle de Jean Charles (IDJC) to 
relocate to a new and more resilient community. As part of this award, 
the State grantee will construct new housing on land it acquires for 
relocation purposes. This housing will be transferred to former 
residents of the Isle de Jean Charles community that relocate to the 
new community.
    In its approved application for CDBG-NDR funds, the State noted 
that IDJC has experienced a 98 percent loss of land since 1955, with 
only 320 acres remaining of what was a 22,400-acre island in 1955. The 
State's Phase 1 application notes that the island's residents will 
relocate to a new community, but as long as the island itself exists, 
the residents will retain their property on the island for ceremonial, 
cultural, historic and recreational uses. The Phase 1 application also 
notes that the connecting road to the island will very soon be 
impassible and that access will then be available only by boat.
    To implement the IDJC portion of its grant, the State of Louisiana 
has explored a variety of voluntary relocation assistance options to 
facilitate the movement of island residents to the planned new 
community. Both the State and IDJC community have indicated that to 
effectively relocate as many island residents as possible, it is 
critical to provide those residents with continued access to their 
property for ceremonial, cultural, historic and recreational uses for 
the finite remaining life of the island.
    While it is important to permit the community's continued access to 
the island for these limited purposes, it is also important to take 
reasonable measures to ensure that the land is no longer used for 
primary residences or otherwise developed in ways that frustrate the 
purposes of the grant to relocate the community to a safer area. The 
current residents of the island will continue to own their property on 
the island. However, as a condition of receiving newly constructed 
housing, the State plans to restrict owners' use of their former land 
on the island as a primary residence. The State indicates that it may 
need to record mortgage liens or limited real property interests such 
as easements or deed restrictions on the property of relocated island 
residents to restrict the use of the island land as a primary 
residence.
    For this reason, HUD is clarifying that costs incurred by the State 
to establish and record mortgage liens or limited real property 
interests on the island to restrict the use of the land as a primary 
residence are eligible costs that may be charged to the grant as part 
of the State's new construction and disposition activities to relocate 
island residents. HUD considers the costs incurred to restrict 
continued use of the island property as a primary residence to meet the 
same national objective as the new construction and disposition 
activities. HUD is also clarifying that since the actions to limit use 
as a primary residence are undertaken as a condition of new 
construction and disposition activities to provide relocated residents 
with more resilient housing, the actions are not undertaken as part of 
acquisition activities that trigger buyout requirements.
    The State should impose conditions on assistance to relocate island 
residents that are consistent with the purpose of the CDBG-NDR award. 
Specifically, the State should prohibit new construction, 
reconstruction, and major rehabilitation on the property and prohibit 
use of the property as a primary residence. CDBG-NDR funds may not be 
used for rehabilitation of structures on the island. However, if the 
State chooses to permit limited, minor rehabilitation of structures on 
the property with other, non-grant funds to allow for the continued 
interim use of the property for ceremonial, cultural, historic and 
recreational uses, the State should specify in its policies and 
procedures the allowable activities that would constitute a minor 
rehabilitation. Under the second homes prohibition established for all 
CDBG-NDR grantees in the June 7, 2016 notice (81 FR 36578), the State 
may not provide CDBG-NDR funds for rehabilitation of residential 
structures on the island.
    5. Rental Assistance Waiver extension (State of New Jersey only). 
In the Department's August 15, 2016 notice (81 FR 54114), the State of 
New Jersey was granted a waiver for the use of CDBG-DR funds for rental 
assistance for New Jersey homeowners in the Rehabilitation, 
Reconstruction, Elevation and Mitigation (RREM) Program and the Low and 
Moderate-Income (LMI) Homeowners Rebuilding Program (LMI Program). In 
the State of New Jersey, more than 7,600 homeowners have participated 
in the State's RREM Program or the LMI Program to rebuild their Sandy-
damaged homes. Nearly 6,400 of those homeowners have completed 
construction; however, the approximately 1,200 remaining participants, 
many of whom are LMI households, are still in the construction phase 
due to insufficient funding to complete the project, contractor 
disputes or delays associated with the re-opening of certain claims 
under the National Flood Insurance Program. While undergoing 
rehabilitation of their homes, most of these applicants are required to 
continue to make payments for the mortgage on the home in addition to 
paying rent for alternative housing during the rehabilitation. The 
August 15, 2016 notice waived the requirements at section 105(a)(8) of 
the HCDA to the extent necessary to allow the State of New Jersey to 
use up to $30 million of its CDBG-DR allocation to provide up to 21 
months of rental assistance through its Rental Assistance Program (RAP) 
to eligible RREM and LMI program applicants. The State estimates that 
approximately 200 of the 400 current RAP recipients in both 
rehabilitation programs will exhaust their maximum 21 months of RAP 
assistance in January 2019. The State is taking several actions to 
close out RAP and address the remaining rehabilitations of these homes. 
To address the continuing need of RREM and LMI program participants, 
the State of New Jersey will submit a substantial amendment to allocate 
an additional $50 million to its housing rehabilitation programs to 
assist participants in the completion of their homes. The State also 
indicates that it has increased its project management support to the 
remaining homeowner-managed construction projects to accelerate 
completions. To date, the State has only disbursed $11.6 million of the 
$30 million allowed under the previous waiver for RAP assistance and 
has not requested an increase to this cap. Without the waiver provided 
herein, the State could not continue to use CDBG-DR funds for these 
payments to individuals or families.
    Accordingly, to allow the State of New Jersey to continue RAP and 
to assist homeowners in completing the rehabilitation of their homes, 
HUD is extending its original waiver granted in the August 15, 2016 
notice to allow the State to use up to $30 million of its CDBG-DR 
allocation to provide RAP assistance to eligible RREM and LMI program 
applicants for an additional 19 months, for a total of 40 months. The 
State must implement this alternative requirement consistent with the 
approach outlined in its requests and as described herein. This waiver 
and alternative requirement shall remain in effect until June 30, 2022, 
after which

[[Page 4840]]

the State will no longer be able to use CDBG-DR funds for any RAP 
assistance.
    6. Waiver and alternative requirement to permit certain activities 
as part of the Iowa Watershed Approach (State of Iowa only). The 
Department awarded the State of Iowa $96,887,177 in CDBG-NDR funds to 
support the Iowa Watershed Approach, a holistic watershed-scale program 
designed to sustain the State's agricultural economy while protecting 
vulnerable residents and communities. HUD funding will enable several 
watersheds to form Watershed Management Authorities, which will develop 
hydrological assessment and watershed plans, and implement pilot 
projects in the upper and lower watersheds, as well as invest in more 
resilient, healthy homes in Dubuque.
    As part of the Iowa Watershed Approach, the State's NDR application 
proposed to fund subrecipients to install improvements and implement 
stormwater management practices on mostly privately-owned agricultural 
land to collect and hold back water in times of increased rain to 
prevent or minimize the impact of downstream flooding. To the extent 
some of these activities take place on privately-owned land, all of the 
activities may not be eligible under section 105(a)(2) of the HCDA, 
which permits the acquisition, construction, reconstruction, or 
installation of public works, facilities, and site or other 
improvements. However, HUD recognizes that the improvements and planned 
management practices to be installed or applied on private lands 
provide public benefits that are similar to the public benefits derived 
from public works, facilities, and other improvements generally 
eligible under section 105(a)(2). Accordingly, the Department is 
approving a waiver and alternative requirement to expand section 
105(a)(2) of the HCDA to the extent necessary to permit Iowa to carry 
out the activities described in its NDR application by installing 
improvements and implementing stormwater management practices for the 
purpose of preventing downstream flooding. This eligible activity 
includes the expenditure of CDBG-NDR funds for actions necessary to 
obtain mandatory environmental permits (if approved by the permitting 
agency). The State must demonstrate at a program level that such 
payments are necessary and reasonable and are required in order to 
secure the permits needed to implement its CDBG-NDR project.

III. Public Law 114-113 and 115-31 Waivers and Alternative Requirements

    This section of the notice applies to grantees that received an 
allocation for a major disaster in 2015 and 2016 under Public Law 114-
113 and Public Law 115-31. Public Laws 114-113 and 115-31 authorize the 
Secretary to waive or specify alternative requirements for any 
provision of any statute or regulation that the Secretary administers 
in connection with the obligation by the Secretary, or use by the 
recipient, of these funds, except for requirements related to fair 
housing, nondiscrimination, labor standards, and the environment. 
Regulatory waiver authority is also provided by 24 CFR 5.110, 91.600, 
and 570.5. As required by Public Laws 114-113 and 115-31, waivers and 
alternative requirements provided in this section are based upon a 
determination by the Secretary that good cause exists and that the 
waiver or alternative requirement is not inconsistent with the overall 
purposes of title I of the HCDA.
    1. Most Impacted and Distressed Area Requirements (South Carolina 
and Texas only).
    This paragraph amends the Department's August 7, 2017 notice, which 
allocated additional CDBG-DR funds for qualified disasters that 
occurred in 2015. Table 2 of the August 7, 2017 notice indicates the 
HUD-identified ``most impacted and distressed'' (MID) areas impacted by 
the qualified disasters and the amounts that each grantee is required 
to expend in the MID areas. The notice required that at least 80 
percent of the total combined funds provided within each State address 
unmet needs within the HUD-identified MID areas. The methodology, 
however, that HUD used to calculate the required amount to be expended 
in the MID areas for South Carolina and Texas was not correct. For the 
State of South Carolina, the amount established for its MID area 
expenditures did not account for CDBG-DR funds that would also be 
expended by Lexington County, Columbia, and Richland County as CDBG-DR 
grantees. For the State of Texas, the MID area expenditure calculation 
should have been based on a consideration of damage data received by 
HUD from December 2016, or fuller data received in May 2017. The MID 
calculation in the August 7, 2017 notice for Texas, however, only 
reflects the consideration of the December 2016 data. Therefore, this 
notice replaces Table 2 of the August 7, 2017 notice to reflect the 
corrected MID area expenditure amounts for the States of South Carolina 
and Texas:

             Table 2--Qualifying 2015 and 2016 Disasters and ``Most Impacted and Distressed'' Areas
----------------------------------------------------------------------------------------------------------------
                                                                    Minimum amount that must be expended for
        FEMA disaster No.                    Grantee             recovery in the HUD-identified ``most impacted
                                                                             and distressed'' areas
----------------------------------------------------------------------------------------------------------------
                                                 2015 Disasters
----------------------------------------------------------------------------------------------------------------
4241                              Lexington County (Urban       ($5,038,000) Lexington County Urban County
                                   County), SC.                  Jurisdiction.
4241                              Columbia, SC................  ($6,166,000) Columbia.
4241                              Richland County, SC.........  ($7,254,000) Richland County Urban County
                                                                 Jurisdiction.
4241                              State of South Carolina.....  ($20,205,200) Charleston, Dorchester, Florence,
                                                                 Georgetown and Clarendon Counties.
4223, 4245                        Houston, TX.................  ($20,532,000) City of Houston.
4223, 4245                        San Marcos, TX..............  ($8,714,000) City of San Marcos.
4223, 4245, 4272                  State of Texas..............  ($13,248,400) Harris, Hays, Hidalgo, and Travis
                                                                 Counties.
----------------------------------------------------------------------------------------------------------------
                                                 2016 Disasters
----------------------------------------------------------------------------------------------------------------
4263, 4277                        State of Louisiana..........  ($41,148,000) East Baton Rouge, Livingston,
                                                                 Ascension, Tangipahoa, Ouachita, Lafayette,
                                                                 Vermilion, Acadia, Washington, and St. Tammany
                                                                 Parishes.
4273                              State of West Virginia......  ($36,476,000) Kanawha, Greenbrier, Clay, and
                                                                 Nicholas Counties.
4266, 4269, 4272                  State of Texas..............  ($13,304,800) Harris, Newton, Montgomery, Fort
                                                                 Bend, and Brazoria Counties.
4285                              State of North Carolina.....  ($30,380,800) Robeson, Cumberland, Edgecombe,
                                                                 and Wayne Counties.
4286                              State of South Carolina.....  ($23,824,800) Marion and Horry Counties.

[[Page 4841]]

 
4280, 4283                        State of Florida............  ($47,468,000) St. Johns County.
----------------------------------------------------------------------------------------------------------------

    2. Waiver and alternative requirement for 70 percent overall low- 
and moderate-income benefit requirement (Lexington County, South 
Carolina only). This paragraph specifies a waiver and alternative 
requirement for CDBG-DR funds awarded to Lexington County under Public 
Laws 114-113 and 115-31 in order to allow the County to meet the unmet 
needs of residents in the HUD-defined MID areas. Lexington County was 
allocated $16,332,000 of CDBG-DR funds under Public Law 114-113 and was 
awarded an additional $5,038,000 under Public Law 115-31, both for 
recovery from 2015 severe storms and flooding (81 FR 39687 and 82 FR 
36812).
    The overall benefit requirement established by the HCDA requires 
that 70 percent of the aggregate of a grantee's CDBG-DR fund 
expenditures shall be used to support activities benefitting low- and 
moderate-income persons. Under certain circumstances, it can be 
difficult for grantees working in disaster recovery to meet this 
overall benefit test, because disasters do not always affect low- and 
moderate-income (LMI) areas and this requirement can therefore (in some 
cases) limit a grantee's ability to assist the MID areas resulting from 
the disaster. The Department's June 17, 2016 notice maintained the 70 
percent overall benefit requirement for all CDBG-DR grantees receiving 
funds under Public Law 114-113 but provided grantees with the option of 
submitting a request to HUD for a lower overall benefit requirement. 
Specifically, the notice allows a grantee to request to further reduce 
its overall benefit requirement if it submitted a justification that, 
at a minimum: (a) Identifies the planned activities that meet the needs 
of its low- and moderate-income population; (b) describes proposed 
activity(ies) and/or program(s) that will be affected by the 
alternative requirement, including their proposed location(s) and 
role(s) in the grantee's long-term disaster recovery plan; (c) 
describes how the activities/programs identified in (b) prevent the 
grantee from meeting the 70 percent requirement; and (d) demonstrates 
that LMI persons' disaster-related needs have been sufficiently met and 
that the needs of non-LMI persons or areas are disproportionately 
greater, and that the jurisdiction lacks other resources to serve them.
    Lexington County submitted a request to establish a lower overall 
benefit requirement based on the above criteria. In its request, the 
County contends that its three established programs: Minor Residential 
Rehabilitation, Residential Buyout and Public Infrastructure 
Improvement, will meet all the unmet housing needs of its LMI 
population in the county. Specifically, in its Residential Buyout 
program the County has worked to prioritize the needs of LMI persons in 
its four identified Disaster Reduction Risk Areas who are most at-risk 
to repetitive flooding damage. The majority of the applications the 
County received for its Minor Residential Rehabilitation program were 
in the eligible buyout areas and were encouraged to move to the 
Residential Buyout program. After three years of public outreach, the 
County ultimately had 135 applications that were either eligible for 
its Minor Residential Rehabilitation program or its Residential Buyout 
program, and the County will be able to assist them all. Of the 135 
eligible applications, 52 of those households are LMI. According to 
data provided by the County, once the Minor Residential Rehabilitation 
and Residential Buyout programs are completed it will have addressed 
all LMI unmet needs in those two programs.
    The County's Public Infrastructure program is still in the design 
phase, but the County's unmet needs analysis has shown that the 
projects left to be funded involve damaged bridges and improvements 
needed for storm water management systems. The County's analysis shows 
that while LMI persons will likely benefit from all of its public 
infrastructure projects, none of the bridges that need repair are in 
areas that will qualify as LMI areas under the applicable national 
objective criteria. However, the improvements to the storm water 
management systems will benefit an LMI area, will be leveraged with 
additional federal and private funds, and will incorporate buyout 
properties into the program. The County plans to allocate around 
$300,000 to repair the damaged bridges and over $1 million to improve 
storm water management systems.
    To enable the County to undertake the activities it has determined 
to be most critical for its recovery, and to ensure that LMI persons 
are sufficiently served or assisted, HUD is granting a waiver and 
alternative requirement to reduce the overall benefit requirement from 
70 percent to not less than 50 percent of the County's total allocation 
of CDBG-DR funds. This is a limited waiver modifying sections 101(c) 
and 104(b)(3)(A) of the HCDA and 24 CFR 570.200(a)(3) only to the 
extent necessary to reduce the LMI overall benefit requirement that the 
County of Lexington must meet when carrying out activities identified 
in its approved action plan from 70 percent to not less than 50 percent 
of the grantee's allocations of CDBG-DR funds under Public Laws 114-113 
and 115-31. Based on the analysis submitted by the County, the 
Secretary finds a compelling need for this reduction due to the 
circumstances outlined in the County's request. In particular, HUD 
notes that the County has accepted applications in its buyout and 
housing program for three years following the disaster event, with 
significant amounts of public outreach during that time to ensure that 
it reached all affected communities including: updates on its disaster 
recovery website, neighborhood meetings and public presentations at 
County council meetings.

IV. Public Law 114-113, 114-223, 114-254 and 115-31 Waivers and 
Alternative Requirements

    This section of the notice applies to grantees that received an 
award for a major disaster in 2015, 2016, or 2017 under Public Law 114-
113, Public Law 114-223, Public Law 114-254 or Public Law 115-31, and 
an award for a 2017 major disaster under Public Laws 115-56 or 115-123.
    1. Planning and Administration Expenditures. Grantees that received 
an allocation for a major disaster in 2015, 2016, or 2017 under Public 
Law 114-113, Public Law 114-223, Public Law 114-254 or Public Law 115-
31, and an award for a 2017 major disaster under Public Laws 115-56 or 
115-123, are subject to different requirements with respect to 
determining how planning and administrative funds will be accounted for 
in the requirement that 80 percent of the total grant award be

[[Page 4842]]

expended in the HUD-identified ``most impacted and distressed'' areas. 
To avoid the administrative burden of tracking MID area expenditures 
differently between different grants, HUD is authorizing grantees under 
Public Laws 114-113, 114-223, 114-254 and 115-31 to follow the 
provisions of the Department's February 9, 2018 notice. Specifically, 
for these grantees and for allocations pursuant to the above Public 
Laws, HUD will include 80 percent of a grantee's expenditures for grant 
administration in its determination that 80 percent of the total award 
has been expended in the MID areas. HUD will include expenditures for 
planning activities towards a grantee's 80 percent expenditure 
requirement only if the grantee amends its action plan to include a 
description of how those planning activities benefit the HUD-identified 
MID areas.
    2. Waiver of Section 414 of the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. 5121 et seq.). Section 414 of 
the Stafford Act (42 U.S.C. 5181) provides that ``Notwithstanding any 
other provision of law, no person otherwise eligible for any kind of 
replacement housing payment under the Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970 (Pub. L. 91-646) [42 
U.S.C. 4601 et seq.] [``URA''] shall be denied such eligibility as a 
result of his being unable, because of a major disaster as determined 
by the President, to meet the occupancy requirements set by [the 
URA].'' Accordingly, homeowner occupants and tenants displaced from 
their homes as a result of the identified disaster and who would have 
otherwise been displaced, as a direct result of any acquisition, 
rehabilitation, or demolition of real property for a federally funded 
program or project, may become eligible for a replacement housing 
payment, notwithstanding their inability to meet occupancy requirements 
prescribed in the URA.
    Grantees that received an allocation for a major disaster in 2015, 
2016, or 2017 under Public Laws 114-113, 114-223, 114-254 or 115-31, 
and an award for a 2017 major disaster under Public Laws 115-56 or 115-
123, are subject to different requirements with respect to protections 
afforded to tenants and homeowners under Section 414 of the Stafford 
Act. The Department issued a waiver of Section 414 for all grantees 
receiving an allocation for a 2017 major disaster under Public Laws 
115-56 and 115-123 and provided an alternative requirement in the 
Department's February 9, 2018 notice (83 FR 5844), as amended and 
replaced by language in the August 14, 2018 notice (83 FR 40314) that 
did not apply to grantees receiving an allocation for a major disaster 
in 2015, 2016, or 2017 under Public Laws 114-113, 114-223, 114-254 or 
115-31.
    To avoid the administrative burden of implementing two different 
sets of URA requirements, HUD is authorizing grantees under Public Laws 
114-113, 114-223, 114-254 and 115-31 that also received an award under 
Public Law 115-56 or 115-123 to either: (a) Continue to follow Section 
414 of the Stafford Act (or any grantee-specific alternative 
requirement previously authorized by HUD); or (b) follow the 
alternative requirement of this section as previously established for 
Public Law 115-56 and 115-123, if the relevant activity has not yet 
received a Request for Release of Funds (RROF) as of the applicability 
date of this Notice. If a grantee chooses to follow option (b) above 
then it must identify this approach in its policies and procedures 
related to that particular activity, and consistently apply that option 
for all displaced persons affected by that activity.
    This waiver and alternative requirement is as follows: Section 414 
of the Stafford Act (including its implementing regulation at 49 CFR 
24.403(d)(1)), is waived to the extent that it would apply to real 
property acquisition, rehabilitation or demolition of real property for 
a CDBG-DR funded project, undertaken by the grantee or subrecipient, 
commencing more than one 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 RROF and 
certification, or (2) the date of completion of the site-specific 
review when a program utilizes tiered environmental reviews, or (3) the 
date of sign-off by the approving official when a project converts to 
exempt under 24 CFR 58.34(a)(12). The Secretary has the authority to 
waive provisions of the Stafford Act and its implementing regulations 
that the Secretary administers in connection with the obligation of 
CDBG-DR funds covered under this waiver and alternative requirement, or 
the grantees' use of these funds. The Department has determined that 
good cause exists for a waiver and that such waiver is not inconsistent 
with the overall purposes of title I of the HCDA. The waiver will 
simplify the administration of the disaster recovery process and reduce 
the administrative burden associated with the implementation of 
Stafford Act Section 414 requirements for projects commencing more than 
one year after the date of the Presidentially declared disaster, 
considering the majority of such persons displaced by the disaster will 
have returned to their dwellings or found another place of permanent 
residence. This waiver does not apply with respect to persons that meet 
the occupancy requirements to receive a replacement housing payment 
under the URA nor does it apply to persons displaced or relocated 
temporarily by other HUD-funded programs or projects. Such persons' 
eligibility for relocation assistance and payments under the URA is not 
impacted by this waiver.
    3. One-for-One Replacement Housing, Relocation, and Real Property 
Acquisition Requirements.
    Similar to the Section 414 waiver above, grantees that have 
received an allocation of CDBG-DR funds for 2017 disasters under Public 
Law 115-56 and 115-123 are currently subject to different requirements 
with respect to One-for-One Replacement Housing, Relocation, and Real 
Property Acquisition Requirements, than grantees that received an 
allocation of CDBG-DR funds for 2015, 2016 and 2017 disasters pursuant 
to Public Laws 114-113, 114-223, 114-254, and 115-31. To avoid the 
administrative burden of implementing two different sets of URA 
requirements, HUD is authorizing grantees under Public Laws 114-113, 
114-223, 114-254, or 115-31that also received an award under Public Law 
115-56 or 115-123, to either continue to follow the section on One-for-
One Replacement Housing, Relocation, and Real Property Acquisition 
Requirements as provided in Section VI.A.19. of the June 17, 2016 
notice (81 FR 39700) and Section VI.A.19. of the November 21, 2016 
notice (81 FR 83266); or (b) follow the requirements of the same 
section in Section VI.A.23.a. through e. (excluding Section VI.A.23.f.) 
of the February 9, 2018 notice (83 FR 5858), if the relevant activity 
has not yet received a Request for Release of Funds (RROF) as of the 
applicability date of this Notice. If a grantee chooses to follow 
option (b) above then it must identify this approach in its policies 
and procedures related to that particular activity, and consistently 
apply that option for all displaced persons affected by that activity.
    The provisions in Section VI.A.23.a. through e. of the February 9, 
2018 notice governing One-for-One Replacement Housing, Relocation, and 
Real Property Acquisition Requirements are not

[[Page 4843]]

amended but are restated below for reference:

    ``23. One-for-One Replacement Housing, 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 HCD Act (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. 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 allocated under this 
notice:
    a. Section 104(d) one for one replacement. One-for-one 
replacement requirements at section 104(d)(2)(A)(i) and (ii) and 
(d)(3) of the HCD Act and 24 CFR 42.375 are waived in connection 
with funds allocated under this notice for lower-income dwelling 
units that are damaged by the disaster and not suitable for 
rehabilitation. The section 104(d) one-for-one replacement 
requirements generally apply to demolished or converted occupied and 
vacant occupiable lower-income dwelling units. This waiver exempts 
disaster-damaged units that meet the grantee's definition of ``not 
suitable for rehabilitation'' from the one-for-one replacement 
requirements. Before carrying out activities that may be subject to 
the one-for-one replacement requirements, the grantee must define 
``not suitable for rehabilitation'' in its action plan or in 
policies and procedures governing these activities. A grantee with 
questions about the one-for-one replacement requirements is 
encouraged to contact the HUD regional relocation specialist 
responsible for its jurisdiction. HUD is waiving the section 104(d) 
one-for-one replacement requirement for lower-income dwelling units 
that are damaged by the disaster and not suitable for rehabilitation 
because it does not account for the large, sudden changes that a 
major disaster may cause to the local housing stock, population, or 
economy. Further, the requirement may discourage grantees from 
converting or demolishing disaster-damaged housing when excessive 
costs would result from replacing all such units. Disaster-damaged 
housing structures that are not suitable for rehabilitation can pose 
a threat to public health and safety and to economic revitalization. 
Grantees should reassess post-disaster population and housing needs 
to determine the appropriate type and amount of lower-income 
dwelling units to rehabilitate and/or rebuild. Grantees should note 
that the demolition and/or disposition of PHA-owned public housing 
units is covered by section 18 of the United States Housing Act of 
1937, as amended, and 24 CFR part 970.
    b. Relocation assistance. The relocation assistance requirements 
at section 104(d)(2)(A) of the HCD Act 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 disaster recovery. Without this 
waiver, disparities exist in relocation assistance associated with 
activities typically funded by HUD and FEMA (e.g., buyouts 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 under this notice.
    c. Tenant-based rental assistance. The requirements of sections 
204 and 205 of the URA, and 49 CFR 24.2(a)(6)(vii), 24.2(a)(6)(ix), 
and 24.402(b) are waived to the extent necessary to permit a grantee 
to meet all or a portion of a grantee's replacement housing payment 
obligation to a displaced tenant by offering rental housing through 
a tenant-based rental assistance (TBRA) housing program subsidy 
(e.g., Section 8 rental voucher or certificate), provided that 
comparable replacement dwellings are made available to the tenant in 
accordance with 49 CFR 24.204(a) where the owner is willing to 
participate in the TBRA program, and the period of authorized 
assistance is at least 42 months. Failure to grant this waiver would 
impede disaster recovery whenever TBRA program subsidies are 
available but funds for cash replacement housing payments are 
limited and such payments are required by the URA to be based on a 
42-month term.
    d. 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 uses 
funds allocated under this notice 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 following a disaster. 
Grantees are reminded that tenants occupying real property acquired 
through voluntary purchase may be eligible for relocation 
assistance.
    e. 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 disaster recovery 
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 under this notice may establish 
optional relocation policies or permit their subrecipients to 
establish separate optional relocation policies. This waiver is 
intended to provide States with maximum flexibility in developing 
optional relocation policies with CDBG- DR funds.''

V. Public Law 114-223, 114-254 and 115-31 Waivers and Alternative 
Requirements

    This paragraph of the notice applies to the State of Louisiana, 
which received allocations for major disasters in 2016 under Public 
Laws 114-223, 114-254 and 115-31. The Department may grant a waiver 
pursuant to the authority provided under the above appropriations, 
which authorize the Secretary to waive or specify alternative 
requirements for any provision of any statute or regulation that the 
Secretary administers in connection with HUD's obligation or use by the 
recipient of these funds (except for requirements related to fair 
housing, non-discrimination, labor standards, and the environment). As 
required by Public Laws 114-223, 114-254 and 115-31, the waiver and 
alternative requirement provided in this paragraph is based upon a 
determination by the Secretary that good cause exists and that the 
waiver or alternative requirement is not inconsistent with the overall 
purposes of title I of the HCDA.
    Rental assistance to tenants--42 U.S.C. 5305(a)(8) is modified to 
permit rental assistance for up to 24 months (State of Louisiana only).
    The Department has received a request from the State of Louisiana 
to provide up to 24 months of tenant-based rental assistance (TBRA) to 
households impacted by a covered disaster when those households do not 
meet the definition of a ``displaced person'' under the URA. Existing 
CDBG regulations allow these payments to cover rent and utilities for a 
short period of time as a public service activity under 42 U.S.C. 
5305(a)(8), but these payments cannot extend for so long that they no 
longer qualify as an eligible public service activity. Following a 
disaster, however, households may be forced to abandon their residences 
and may be unable to return if the damage to the units have made them 
uninhabitable. Furthermore, scarcity of affordable replacement units in 
the recovery period following a disaster, and security and utility 
deposits can further exacerbate affordability concerns for tenants. 
This waiver and alternative requirement will provide additional time to 
stabilize persons or households in permanent housing and is consistent 
with the goal of preventing homelessness.
    Due to the severe flooding that occurred in 2016, the housing stock 
and shelters in several parishes of the State were severely damaged or 
destroyed.

[[Page 4844]]

The State notes that thousands of families continue to be doubled up 
with family and friends, facing eviction, in temporary housing 
conditions, including FEMA trailers that will be removed or have rents 
increased in the near future. The damage from the flooding diminished 
the opportunities for homeless or at-risk persons or households to 
independently establish re-housing. This waiver and alternative 
requirement will provide additional time to stabilize persons or 
households in permanent housing. The goal of this waiver and 
alternative requirement is to prevent homelessness and provide 
additional time to stabilize persons or households in permanent housing 
along with supportive services. In developing the policies and 
procedures for the Rapid Rehousing program, the State must list the 
services to be provided and outline a referral process that will enable 
the targeted households to apply to live in affordable housing units, 
including those that are created under other CDBG-DR funded programs.
    The use of CDBG-DR funds for this purpose advances the Department's 
priority to support forward-thinking solutions to help communities that 
are struggling to house and serve persons and families that are 
homeless or at risk of homelessness as a result of a disaster. For the 
reasons above, HUD is expanding the definition of public service at 42 
U.S.C. 5305(a)(8) to include the following activity: Provision of 
rental assistance to disaster-impacted households for up to 24 months. 
This activity is subject to the 15 percent cap on public services.
    In implementing this waiver and alternative requirement, the State 
must document in its policies and procedures how it will determine that 
the amount of assistance to be provided is necessary and reasonable and 
not duplicative of any other funding source, including insurance. 
Additionally, the State is reminded that any rental assistance provided 
by FEMA must first be exhausted prior to providing CDBG-DR funds for 
this purpose. Eligible assistance includes rental assistance and 
utility payments and may also include rental costs (i.e., security 
deposits and utility deposits) when the grantee determines that such 
payments are necessary and reasonable to help prevent a household from 
being homeless.
    A homeowner receiving any form of CDBG-DR interim mortgage 
assistance that may be offered by the State is not eligible for rental 
assistance as authorized by this section. This waiver and alternative 
requirement shall expire on September 30, 2022.

VI. Public Law 115-56 and 115-123 Waivers and Alternative Requirements

    This section of the notice authorizes waivers and alternative 
requirements for certain grantees that received an allocation of funds 
appropriated under Public Laws 115-56 and 115-123, which together made 
available $17.4 billion in CDBG-DR funds for necessary expenses related 
to disaster relief, long-term recovery, restoration of infrastructure 
and housing, and economic revitalization due to qualified disasters 
that occurred in calendar year 2017.
    Public Laws 115-56 and 115-123 both authorize the Secretary to 
waive or specify alternative requirements for any provision of any 
statute or regulation that the Secretary administers in connection with 
HUD's obligation or use by the recipient of these funds (except for 
requirements related to fair housing, nondiscrimination, labor 
standards, and the environment). As required by these appropriations, 
each waiver and alternative requirement in this section is based upon a 
determination by the Secretary that good cause exists and that the 
waiver or alternative requirement is not inconsistent with the overall 
purposes of title I of the HCDA.
    1. Clarification of the Green Building Standards. The Department's 
February 9, 2018 notice (83 FR 5844) included the requirement for the 
application of green building standards that have applied to CDBG-DR 
awards since 2013. Section VI.B.32. of the February 9, 2018 notice 
requires grantees to meet the green building standards for ``(i) All 
new construction of residential buildings and (ii) all replacement of 
substantially damaged residential buildings.'' Section VI.B.32. 
subparagraph b. of the February 9, 2018 notice includes a list of green 
building standards that grantees may adopt and asks grantees to 
identify which green building standard it will use to meet the 
requirements. Some grantees have interpreted this requirement to mean 
that they must choose only one of the specified green building 
standards and must apply that one standard to all CDBG-DR funded 
activities that are subject to the requirement. HUD's requirement, 
however, is only intended to require grantees to identify which green 
building standard it will meet for each project. It is not intended to 
require grantees to limit themselves to using only one of the 
authorized standards. To clarify HUD's intention, HUD is replacing 
section VI.B.32. subparagraph b. of the February 9, 2018 notice with 
the following:

    ``b. Meaning of Green Building Standard. For purposes of this 
notice, the Green Building Standard means the grantee will require 
all construction covered by subparagraph a., above, to meet an 
industry-recognized standard that has achieved certification under 
at least one of the following programs: (i) ENERGY STAR (Certified 
Homes or Multifamily High-Rise), (ii) Enterprise Green Communities, 
(iii) LEED (New Construction, Homes, Midrise, Existing Buildings 
Operations and Maintenance, or Neighborhood Development), (iv) ICC-
700 National Green Building Standard, (v) EPA Indoor AirPlus (ENERGY 
STAR a prerequisite), or (vi) any other equivalent comprehensive 
green building program acceptable to HUD. Grantees must identify, in 
each project file, which Green Building Standard will be used on any 
building covered by subparagraph a., along with a checklist or other 
documentation demonstrating the elements of the chosen standard have 
been followed. This will allow grantees flexibility in the 
implementation of this requirement and will also allow HUD to 
readily identify the authorized standard chosen for each building.''

    2. Waiver to increase tourism and business marketing cap 
(Commonwealth of Puerto Rico only). In the August 14, 2018 notice, the 
Department granted the Commonwealth of Puerto Rico a waiver to create a 
new eligible activity to use up to $15,000,000 of CDBG-DR funds for 
tourism marketing activities to promote travel and to attract new 
businesses to disaster-impacted areas, consistent with the amount 
allocated by the Commonwealth in the action plan submitted to HUD 
pursuant to the February 9, 2018 notice. This notice increases the 
amount by $10,000,000, allowing the Commonwealth to use up to 
$25,000,000 in CDBG-DR funds to promote travel and to attract new 
businesses to disaster-impacted areas. This additional $10,000,000 in 
CDBG-DR funds represents a substantial and necessary infusion of CDBG-
DR resources to sustain the following unmet tourism marketing and 
business promotion needs identified in the Commonwealth's prior waiver 
request: (1) Advertising and publicity to correct and update public 
perception of Puerto Rico as a tourism destination and location for new 
business investment; and (2) sales promotion and publicity to update 
professional planners' perceptions of the destination and its ability 
to host business events (e.g., conventions, quarterly sales 
conferences, corporate meetings, association conferences) and new 
businesses. As the Commonwealth of Puerto Rico is proposing advertising 
and marketing activities rather than direct assistance to tourism-
dependent and other businesses, and because the measures of long-term 
benefit from the

[[Page 4845]]

proposed activities must be derived using indirect means, 42 U.S.C. 
5305(a) is waived only to the extent necessary to expand the tourism 
and business marketing eligible activity to permit no more than 
$25,000,000 for assistance for tourism and business marketing 
activities to promote travel and to attract new businesses to disaster-
impacted areas. No elected officials or candidates for political office 
shall appear in tourism or business marketing materials financed with 
CDBG-DR funds. Given the importance of tourism and new business 
investment to the overall economy, HUD is authorizing this use of funds 
without regard to unmet housing need.
    This waiver will expire two years after the Commonwealth first 
draws CDBG-DR funds under the allocation of CDBG-DR funds provided in 
the February 9, 2018 notice. The requirements of the August 14, 2018 
notice for the Commonwealth apply to all amounts used for tourism and 
business marketing, including the additional $10,000,000 permitted by 
this waiver. The Commonwealth cannot use its CDBG-DR tourism 
expenditures to supplant Commonwealth or local government funds for 
tourism and business marketing activities, and it must develop metrics 
in its action plan that will demonstrate the impact of its CDBG-DR 
tourism and business marketing expenditures.
    The Commonwealth shall coordinate its tourism promotion and 
business marketing activities with its designated Opportunity Zones.
    3. Waiver and alternative requirement for homeowner mortgage 
assistance (Commonwealth of Puerto Rico only). The widespread damage to 
the Commonwealth's housing stock following Hurricane Maria has also 
negatively impacted the Commonwealth's housing market. Elderly 
homeowners in particular have experienced new difficulties in meeting 
their mortgage obligations. To assist these homeowners during the 
period of recovery, HUD is expanding the definition of public service 
at 42 U.S.C. 5305(a)(8) to include this activity and allow the 
Commonwealth to use up to $5,000,000 of CDBG-DR funds for the purpose 
of paying arrearages on taxes and insurance for Home Equity Conversion 
Mortgages (HECM) insured by the Federal Housing Administration, 
provided such arrearages have been incurred by the homeowner following 
and not before the qualified disaster and that such payments serve only 
to make the homeowner current in his/her required tax and insurance 
payments for the HECM.
    Payments pursuant to this paragraph shall be made by the 
Commonwealth to: (1) The HECM servicer where the HECM servicer advanced 
taxes and insurance payments on behalf of the borrower, or (2) to the 
local taxing authority and/or property insurer on behalf of the 
borrower. The Commonwealth is reminded that as a public service 
activity, the HECM assistance authorized herein is subject to the 15 
percent cap on the use of CDBG-DR for public service activities. This 
waiver and alternative requirement shall expire two years after the 
date on which the Commonwealth first draws CDBG-DR funds for the 
purpose of providing the assistance authorized herein.
    4. Rental assistance to tenants--42 U.S.C. 5305(a)(8) is modified 
to permit rental assistance to tenants for up to 24 months 
(Commonwealth of Puerto Rico only).
    The Department has received a request from the Commonwealth of 
Puerto Rico to provide up to 24 months of tenant-based rental 
assistance (TBRA) to households impacted by a covered disaster when 
those households do not meet the definition of a ``displaced person'' 
under the URA. Existing CDBG regulations allow these payments to cover 
rent and utilities for a short period as a public service under 42 
U.S.C. 5305(a)(8), but these payments cannot extend for so long that 
they are no longer qualify as an eligible public service activity. 
Following a disaster, however, households may be forced to abandon 
their residences and may be unable to return if the damage to the units 
have made them uninhabitable. Furthermore, scarcity of affordable 
replacement units in the recovery period following a disaster, and 
security and utility deposits can further exacerbate affordability 
concerns for tenants. This alternative requirement will provide 
additional time to stabilize persons or households in permanent housing 
and is consistent with the goal of preventing homelessness.
    As a result of Hurricanes Maria and Irma, rental units across the 
Commonwealth were seriously damaged or destroyed and affordable rental 
housing units are urgently needed, especially for the elderly who are 
in need of rental assistance. Many elderly residents are at immediate 
risk of becoming homeless because they cannot afford to pay rent 
without assistance. The goal of this waiver is to prevent and minimize 
the time disaster-impacted households are homeless by providing rental 
assistance and re-housing services, and by linking the households with 
services that can help them become stable and self-sufficient. In 
developing the policies and procedures for this TBRA program, the 
Commonwealth must list services to be provided and outline a referral 
process that will enable the targeted households to apply to live in 
affordable housing units, including those that are created under other 
CDBG-DR funded programs. The Commonwealth must clearly demonstrate in 
its action plan the concrete steps it will take to prevent households 
from becoming homeless after the exhaustion of the CDBG-DR TBRA 
assistance.
    The use of CDBG-DR funds for this purpose advances the Department's 
priority to support forward-thinking solutions to help communities that 
are struggling to house and serve persons and families that are 
homeless or at risk of homelessness as a result of a disaster. For the 
reasons above, HUD is expanding the definition of public service at 42 
U.S.C. 5305(a)(8) to include the following activity: Provision of 
rental assistance to disaster-impacted households for up to 24 months. 
This activity is subject to the 15 percent cap on public services.
    In implementing this alternative requirement, the Commonwealth must 
document, in its policies and procedures, how it will determine that 
the amount of assistance to be provided is necessary and reasonable and 
not duplicative of any other funding source. Additionally, the 
Commonwealth is reminded that any rental assistance provided by FEMA or 
insurance must first be exhausted prior to providing CDBG-DR funds for 
this purpose. Eligible assistance includes rental assistance and 
utility payments and may also include rental costs (i.e., security 
deposits and utility deposits) when the grantee determines that such 
payments are necessary and reasonable to help prevent a household from 
being homeless.
    A homeowner receiving any form of CBDG-DR interim mortgage 
assistance that may be offered by the Commonwealth is not eligible for 
rental assistance as authorized by this section. This waiver and 
alternative requirement shall expire on September 30, 2022.
    5. Waiver to increase tourism marketing cap to further permit some 
activities in support of the tourism industry (U.S. Virgin Islands 
only). In the Department's August 14, 2018 notice, HUD granted the U.S. 
Virgin Islands (USVI) a waiver to spend up to $5,000,000 of CDBG-DR 
funds on tourism marketing activities to promote travel to disaster-
impacted areas related to the effects of Hurricanes Irma and Maria, 
consistent with the amount allocated by the USVI in the action plan

[[Page 4846]]

submitted to HUD pursuant to the February 9, 2018 notice.
    The USVI is seeking a waiver request to allow it to spend an 
additional $20,000,000 on activities to promote tourism within those 
same areas, for a combined total of $25,000,000. This increase in 
funding for tourism marketing activities is based upon the USVI 
Department of Tourism's identification of specific travel and tourism 
niches in which the USVI is acknowledged to be competitive, including 
sports and adventure; meetings, incentives, conferences and 
exhibitions; and destination weddings and honeymoons.
    Accordingly, 42 U.S.C. 5305(a) is waived only to the extent 
necessary to make eligible use of no more than $25,000,000 for 
assistance for tourism marketing, provided the assisted activities are 
designed to support tourism to the disaster-impacted areas related to 
the effects of Hurricanes Irma and Maria. This waiver will expire two 
years after the USVI first draws CDBG-DR funds under the allocation of 
CDBG-DR funds provided in the February 9, 2018 notice. The requirements 
of the August 14, 2018 notice for the USVI apply to all amounts used 
for tourism marketing, including the additional $20,000,000 permitted 
by this waiver. These include requirements for the USVI to develop 
metrics in its action plan that will demonstrate the impact of its 
CDBG-DR tourism expenditures and that no elected officials or 
candidates for political office shall appear in tourism marketing 
materials financed with CDBG-DR funds. Any CDGB-DR tourism expenditures 
may not supplant USVI or local government funds for tourism marketing.
    The USVI shall coordinate its tourism promotion and marketing 
activities with its designated Opportunity Zones.
    6. Rental assistance to tenants--42 U.S.C. 5305(a)(8) is modified 
to permit rental assistance to tenants for up to 24 months (U.S. Virgin 
Islands only).
    The Department has received a request from the USVI to provide up 
to 24 months of tenant-based rental assistance (TBRA) to households 
impacted by a covered disaster when those households do not meet the 
definition of a ``displaced person'' under the URA. Existing CDBG 
regulations allow these payments to cover rent and utilities for a 
short period as a public service under 42 U.S.C. 5305(a)(8), but these 
payments cannot extend for so long that they are no longer a public 
service. Following a disaster, however, households may be forced to 
abandon their residences and may be unable to return if the damage to 
the units have made them uninhabitable. Furthermore, scarcity of 
affordable replacement units in the recovery period following a 
disaster, and security and utility deposits can further exacerbate 
affordability concerns for tenants. This waiver and alternative 
requirement will provide additional time to stabilize persons or 
households in permanent housing and is consistent with the goal of 
preventing homelessness.
    Many of the homeowners in USVI own their homes outright or reside 
in long-standing familiar homes. This practice has allowed them to live 
on very low, fixed expenses each month and therefore these homeowners 
may not have the means to pay rent at a different location while their 
home is under repair. Additionally, many homeowners have either 
expended their FEMA temporary assistance and rental assistance provided 
by insurance or did not qualify for any rental assistance in the first 
place. Thus, temporary rental assistance for homeowners is necessary to 
prevent displacement and/or homelessness while these homes are repaired 
or reconstructed. The goal of this waiver and alternative requirement 
is to prevent and minimize the time households are homeless as a result 
of the disaster by providing rental assistance and re-housing services. 
In developing the policies and procedures for the rental assistance 
program, the grantee must list services to be provided and outline a 
referral process that will enable the targeted households to apply to 
live in affordable housing units, including those that are created 
under other CDBG-DR funded programs. Grantees must also clearly 
demonstrate in its action plan the concrete steps it will take to 
prevent households from becoming homeless after the exhaustion of CDBG-
DR TBRA assistance.
    The use of CDBG-DR funds for this purpose advances the Department's 
priority to support forward-thinking solutions to help communities that 
are struggling to house and serve persons and families that are 
homeless or at risk of homelessness as a result of a disaster. For the 
reasons above, HUD is expanding the definition of public service at 42 
U.S.C. 5305(a)(8) to include the following activity: provision of 
rental assistance to disaster-impacted households for up to 24 months. 
This activity is subject to the 15 percent cap on public services.
    In implementing this waiver and alternative requirement, the USVI 
must document, in its policies and procedures, how it will determine 
that the amount of assistance to be provided is necessary and 
reasonable and not duplicative of any other funding source, including 
insurance. Additionally, the USVI is reminded that any rental 
assistance provided by FEMA must first be exhausted prior to providing 
CDBG-DR funds for this purpose. Eligible assistance includes rental 
assistance and utility payments and may also include rental costs 
(i.e., security deposits and utility deposits) when the grantee 
determines that such payments are necessary and reasonable to help 
prevent a household from being homeless.
    A homeowner receiving any form of CBDG-DR interim mortgage 
assistance that may be offered by the USVI is not eligible for rental 
assistance as authorized by this section. This waiver and alternative 
requirement shall expire on September 30, 2022.

VII. 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 for 
Entitlement CDBG grantees and 14.228 for State CDBG grantees.

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 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: February 8, 2019.
David Woll, Jr.,
Acting Assistant Secretary, Office of Community Planning and 
Development.
[FR Doc. 2019-02695 Filed 2-15-19; 8:45 am]
 BILLING CODE 4210-67-P