[Federal Register Volume 85, Number 17 (Monday, January 27, 2020)]
[Notices]
[Pages 4681-4690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01204]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6182-N-01]


Allocations, Common Application, Waivers, and Alternative 
Requirements for Disaster Community Development Block Grant Disaster 
Recovery Grantees

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

ACTION: Notice.

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SUMMARY: This notice allocates a total of $3,831,428,000 in Community 
Development Block Grant disaster recovery (CDBG-DR) funds appropriated 
by the Supplemental Appropriations for Disaster Relief Act, 2018, and 
the Additional Supplemental Appropriations for Disaster Relief Act, 
2019. The combined amount of $3,831,428,000 in CDBG-DR funds is 
allocated by this notice for the purpose of assisting in long-term 
recovery from major disasters that occurred in 2017, 2018, and 2019. 
This notice also contains clarifications on waivers and alternative 
requirements that were included in the Prior Notices. Unless expressly 
limited to certain grantees, the amended waivers and alternative 
requirements apply to all CDBG-DR grants that are subject to the Prior 
Notices (previous grants for 2017 disasters and grants under this 
Notice).

DATES: Applicability Date: February 3, 2020.

FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Acting 
Director, Office of Block Grant Assistance, U.S. Department of Housing 
and Urban Development, 451 7th Street SW, Room 7282, Washington, DC 
20410, telephone number 202-708-3587. Persons with hearing or speech 
impairments may access this number via TTY by calling the Federal Relay 
Service at 800-877-8339. Facsimile inquiries may be sent to Ms. Kome at 
202-708-0033. (Except for the''800'' number, these telephone numbers 
are not toll-free.) Email inquiries may be sent to 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Allocations
II. Use of Funds
III. Overview of Grant Process
IV. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
V. Duration of Funding
VI. Catalog of Federal Domestic Assistance
VII. Finding of No Significant Impact
Appendix A: Allocation Methodology

[[Page 4682]]

I. Allocations

    Two public laws have been enacted that provide supplemental CDBG-DR 
appropriations. The Supplemental Appropriations for Disaster Relief 
Act, 2018 (Pub. L. 115-254, approved October 5, 2018) (2018 
Appropriations Act) made available $1,680,000,000 in CDBG-DR funds for 
major disasters declared in 2018. The Additional Supplemental 
Appropriations for Disaster Relief Act, 2019 (Pub. L. 116-20, approved 
June 6, 2019) (2019 Appropriations Act) made $2,431,000,000 in CDBG-DR 
funds available for major disasters occurring in 2017, 2018, or 2019, 
of which $431,000,000 is for grantees that received funds in response 
to disasters occurring in 2017. Based on the unmet needs allocation 
methodology outlined in Appendix A, this notice allocates 
$3,400,428,000 in CDBG-DR funds in accordance with the 2018 
Appropriations Act and the 2019 Appropriations Act (the ``2018 and 2019 
Appropriations Acts''), to address unmet disaster recovery needs 
through activities authorized under title I of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCDA) 
related to disaster relief, long-term recovery, restoration of 
infrastructure and housing, economic revitalization, and mitigation in 
the ``most impacted and distressed'' areas resulting from a qualifying 
major disaster in 2018 and 2019, as well as $431,000,000 for unmet 
infrastructure needs for 2017 disasters. Qualifying major disasters are 
those declared by the President pursuant to the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act of 1974 (42 U.S.C. 5121 et 
seq.) (Stafford Act) and identified in Table 1.
    When additional data becomes available for other disasters 
occurring in 2019, the remaining $272,072,000 from Public Law 116-20 
will be allocated for those disasters in a subsequent notice. In 
Federal Register notices published on February 9, 2018 at 83 FR 5844, 
August 14, 2018 at 83 FR 40314, February 19, 2019 at 84 FR 4836, and 
June 20, 2019 at 84 FR 28848 (the ``Prior Notices''), HUD described the 
applicable waivers and alternative requirements, relevant statutory and 
regulatory requirements, the grant award process, criteria for action 
plan approval, updates to duplication of benefits requirements, and 
eligible disaster recovery activities associated with grants for 2017 
disasters. This notice imposes the requirements of the Prior Notices, 
as amended by provisions in this notice, on the grants announced in 
this notice.
    In accordance with the 2018 and 2019 Appropriations Acts, 
$2,500,000 of the amounts these acts made available will be transferred 
to the Department's Office of Community Planning and Development (CPD), 
Program Office Salaries and Expenses, for necessary costs of 
administering and overseeing CDBG-DR grants under the 2018 and 2019 
Appropriations Acts. Additionally, in accordance with the 2019 
Appropriations Act, $5,000,000 is to be transferred to CPD to provide 
necessary capacity building and technical assistance to grantees that 
receive a CDBG-DR grant under the 2018 and 2019 Appropriations Acts or 
future acts. As mentioned above, the 2019 Appropriations Act requires 
HUD to allocate $431,000,000 to address unmet infrastructure needs for 
grantees that received an allocation for a disaster that occurred in 
2017, of which $331,442,114 shall be allocated to those grantees 
affected by Hurricane Maria.
    The 2018 and 2019 Appropriations Acts provide that grants shall be 
awarded directly to a State, unit of general local government, or 
Indian tribe at the discretion of the Secretary. Unless noted 
otherwise, the term ``grantee'' refers to the entity receiving a grant 
from HUD under this notice. To comply with statutory requirements that 
funds be used for disaster-related expenses in the most impacted and 
distressed areas, HUD allocates funds using the best available data 
that covers all the eligible affected areas.
    Grantees receiving an allocation of funds under this notice are 
subject to the requirements of the Prior Notices, as amended by this 
notice or by subsequent notices. Pursuant to the Prior Notices, each 
grantee receiving an allocation for a 2018 or 2019 disaster is required 
to primarily consider and address its unmet housing recovery needs. 
These grantees may, however, propose the use of funds for unmet 
economic revitalization and infrastructure needs unrelated to the 
grantee's unmet housing needs if the grantee demonstrates in its needs 
assessment that there is no remaining unmet housing need or that the 
remaining unmet housing need will be addressed by other sources of 
funds. Grantees receiving funds under this notice for an additional 
allocation for unmet infrastructure needs arising from a 2017 disaster 
must use those funds for unmet infrastructure needs.
    Table 1 (below) shows the major disasters that grants under this 
notice may address and the minimum amount of funds from the combined 
allocations under the 2018 and 2019 Appropriations Acts that must be 
expended in the HUD-identified most impacted and distressed areas. The 
information in this table is based on HUD's review of the impacts from 
the qualifying disasters and estimates of unmet need.

                                                Table 1--Allocations Under Public Laws 115-254 and 116-20
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                                                                                                                                        Minimum amount
                                                                                                                                         that must be
                                                                                 Unmet needs                       Total allocation      expended for
                                                                                 allocation       Unmet needs       for unmet needs     recovery in the
          Disaster year                Disaster No.             Grantee         under Public    allocation under   (Pub. L. 115-254     HUD-identified
                                                                                 Law 115-254   Public Law 116-20   and Pub. L. 116-     ``most impacted
                                                                                                                          20)          and distressed''
                                                                                                                                             areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
2017 Disasters (Additional Unmet  4344 & 4353...........  State of California              $0        $38,057,527         $38,057,527  (No less than
 Infrastructure Needs).                                                                                                                $30,446,000)
                                                                                                                                       Sonoma and
                                                                                                                                       Ventura counties:
                                                                                                                                       93108, 94558,
                                                                                                                                       95422, 95470, and
                                                                                                                                       95901 Zip Codes.
                                  4337 & 4341...........  State of Florida...               0         38,637,745          38,637,745  (No less than
                                                                                                                                       $30,910,000)
                                                                                                                                       Brevard, Broward,
                                                                                                                                       Clay, Collier,
                                                                                                                                       Duval,
                                                                                                                                       Hillsborough,
                                                                                                                                       Lee, Miami-Dade,
                                                                                                                                       Monroe, Orange,
                                                                                                                                       Osceola, Palm
                                                                                                                                       Beach, Polk, St.
                                                                                                                                       Lucie, and
                                                                                                                                       Volusia counties;
                                                                                                                                       32084, 32091,
                                                                                                                                       32136, 32145,
                                                                                                                                       33440, 33523,
                                                                                                                                       33825, 33870,
                                                                                                                                       33935, and 34266
                                                                                                                                       Zip Codes.
                                  4294, 4297, & 4338....  State of Georgia...               0         13,015,596          13,015,596  (No less than
                                                                                                                                       $10,412,000)
                                                                                                                                       31520, 31548, and
                                                                                                                                       31705 Zip Codes.
                                  4317..................  State of Missouri..               0          9,847,018           9,847,018  (No less than
                                                                                                                                       $7,878,000)
                                                                                                                                       63935, 63965,
                                                                                                                                       64850, 65616, and
                                                                                                                                       65775 Zip Codes.
                                  4336 & 4339...........  Commonwealth of                   0        277,853,230         277,853,230  ($277,853,230) All
                                                           Puerto Rico.                                                                Components of the
                                                                                                                                       Commonwealth of
                                                                                                                                       Puerto Rico.
                                  4335..................  U.S. Virgin Islands               0         53,588,884          53,588,884  ($53,588,884) All
                                                                                                                                       components of the
                                                                                                                                       U.S. Virgin
                                                                                                                                       Islands.
2018 Disasters..................  4413..................  State of Alaska....               0         35,856,000          35,856,000  (No less than
                                                                                                                                       $28,685,000)
                                                                                                                                       Anchorage
                                                                                                                                       Borough.

[[Page 4683]]

 
                                  4357..................  American Samoa.....      16,539,000          6,500,000          23,039,000  ($23,039,000) All
                                                                                                                                       components of
                                                                                                                                       American Samoa.
                                  4407 & 4382...........  State of California     491,816,000        525,583,000       1,017,399,000  (No less than
                                                                                                                                       $813,919,000)
                                                                                                                                       Butte Lake, Los
                                                                                                                                       Angeles, and
                                                                                                                                       Shasta Counties.
                                  4399..................  State of Florida...     448,023,000        287,530,000         735,553,000  (No less than
                                                                                                                                       $588,442,000)
                                                                                                                                       Bay, Calhoun,
                                                                                                                                       Gulf and Jackson
                                                                                                                                       Counties; 32321
                                                                                                                                       (Liberty), 32327
                                                                                                                                       (Wakulla), 32328
                                                                                                                                       (Franklin), 32346
                                                                                                                                       (Wakulla and
                                                                                                                                       Franklin), 32351
                                                                                                                                       (Gadsden), and
                                                                                                                                       32428
                                                                                                                                       (Washington) Zip
                                                                                                                                       Codes.
                                  4400..................  State of Georgia...      34,884,000          6,953,000          41,837,000  (No less than
                                                                                                                                       $33,470,000)
                                                                                                                                       39845 (Seminole)
                                                                                                                                       Zip Code.
                                  4366..................  Hawaii County, HI..      66,890,000         16,951,000          83,841,000  ($83,841,000)
                                                                                                                                       Hawaii County.
                                  4365..................  Kauai County, HI...               0          9,176,000           9,176,000  (No less than
                                                                                                                                       $7,341,000) 96714
                                                                                                                                       (Kauai) Zip Code.
                                  4393..................  State of North          336,521,000        206,123,000         542,644,000  (No less than
                                                           Carolina.                                                                   $434,115,000)
                                                                                                                                       Brunswick,
                                                                                                                                       Carteret,
                                                                                                                                       Columbus, Craven,
                                                                                                                                       Duplin, Jones,
                                                                                                                                       New Hanover,
                                                                                                                                       Onslow, Pender,
                                                                                                                                       and Robeson
                                                                                                                                       Counties; 28352
                                                                                                                                       (Scotland), 28390
                                                                                                                                       (Cumberland),
                                                                                                                                       28433 (Bladen),
                                                                                                                                       and 28571
                                                                                                                                       (Pamlico) Zip
                                                                                                                                       Codes.
                                  4396 & 4404...........  The Commonwealth of     188,652,000         55,294,000         243,946,000  (No less than
                                                           the Northern                                                                $195,157,000)
                                                           Mariana Islands.                                                            Saipan and Tinian
                                                                                                                                       Municipalities.
                                  4394..................  State of South           47,775,000         24,300,000          72,075,000  (No less than
                                                           Carolina.                                                                   $57,660,000)
                                                                                                                                       Horry and Marion
                                                                                                                                       counties; 29536
                                                                                                                                       (Dillon) Zip
                                                                                                                                       Code.
                                  4377..................  State of Texas.....      46,400,000         26,513,000          72,913,000  (No less than
                                                                                                                                       $58,330,000)
                                                                                                                                       Hidalgo County.
                                  4402..................  State of Wisconsin.               0         14,355,000          13,355,000  (No less than
                                                                                                                                       $12,284,000)
                                                                                                                                       53560 (Dane) Zip
                                                                                                                                       Code.
2019 Disasters..................  4441..................  State of Arkansas..               0          8,940,000           8,940,000  (No less than
                                                                                                                                       $7152,000) 71602
                                                                                                                                       (Jefferson) and
                                                                                                                                       72016 (Perry) Zip
                                                                                                                                       Codes.
                                  4421..................  State of Iowa......               0         96,741,000          96,741,000  (No less tan
                                                                                                                                       $77,393,000)
                                                                                                                                       Mills County;
                                                                                                                                       51640 (Fremont)
                                                                                                                                       Zip Code.
                                  4451..................  State of Missouri..               0         30,776,000          30,776,000  (No less than
                                                                                                                                       $24,621,000) St.
                                                                                                                                       Charles County;
                                                                                                                                       64437 (Holt) and
                                                                                                                                       65101 (Cole) Zip
                                                                                                                                       Codes.
                                  4420..................  State of Nebraska..               0        108,938,000         108,938,000  (No less than
                                                                                                                                       $87,150,000)
                                                                                                                                       Sarpy County;
                                                                                                                                       68025 (Dodge),
                                                                                                                                       68064 (Douglas)
                                                                                                                                       and 68069
                                                                                                                                       (Douglas) Zip
                                                                                                                                       Codes.
                                  4447..................  State of Ohio......               0         12,305,000          12,305,000  (No less than
                                                                                                                                       $9,844,000) 45426
                                                                                                                                       (Montgomery) Zip
                                                                                                                                       Code.
                                  4438..................  State of Oklahoma..               0         36,353,000          36,353,000  (No less than
                                                                                                                                       $29,082,000)
                                                                                                                                       Muskogee and
                                                                                                                                       Tulsa Counties;
                                                                                                                                       74946 (Sequoyah)
                                                                                                                                       Zip Code.
                                  4454 & 4466...........  State of Texas.....               0        212,741,000         212,741,000  (No less than
                                                                                                                                       $170,193,000)
                                                                                                                                       Cameron,
                                                                                                                                       Chambers, Harris,
                                                                                                                                       Jefferson,
                                                                                                                                       Liberty,
                                                                                                                                       Montgomery, and
                                                                                                                                       Orange Counties;
                                                                                                                                       78570 (Hildalgo)
                                                                                                                                       Zip Code.
                                                                              -------------------------------------------------------
    Total.......................  ......................  ...................   1,677,500,000      2,153,928,000       3,831,428,000  ..................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Pursuant to the 2018 and 2019 Appropriations Acts, HUD has 
identified the most impacted and distressed areas based on the best 
available data for all eligible affected areas. A detailed explanation 
of HUD's allocation methodology is provided in Appendix A of this 
notice.
    In some instances, HUD identified the entire jurisdiction of a 
grantee as the most impacted and distressed area. For all other 
grantees, at least 80 percent of the total funds provided to a grantee 
under this notice must address unmet disaster needs within the HUD-
identified most impacted and distressed areas, as identified in the 
last column in Table 1. Note that if HUD designates a ZIP Code for 2018 
and 2019 disasters as a most impacted and distressed area for purposes 
of allocating funds, the grantee may expand program operations to the 
whole county (county is indicated in parentheses next to the ZIP Code 
as a most impacted and distressed area. The grantee should indicate the 
decision to expand eligibility to the whole county in its action plan.
    A grantee may determine where to use the remaining 20 percent of 
the allocation, but that portion of the allocation may only be used to 
address unmet disaster needs in those areas that the grantee determines 
are ``most impacted and distressed'' and received a presidential major 
disaster declaration pursuant to the disaster numbers listed in Table 
1. A grantee may use up to 5 percent of the total grant award for grant 
administration and no more than 15 percent of the total grant award for 
planning activities. Therefore, HUD will include 80 percent of a 
grantee's expenditures for grant administration in its determination 
that 80 percent of the total award has been expended in the most 
impacted and distressed areas identified in Table 1. Additionally, 
expenditures for planning activities may be counted towards a grantee's 
80 percent expenditure requirement, provided that the grantee describes 
in its action plan how those planning activities benefit the HUD-
identified most impacted and distressed areas.

II. Use of Funds

    Funds allocated under this notice are subject to the requirements 
of the Prior Notices, as amended by this notice or subsequent notices. 
This notice outlines additional requirements imposed by the 2018 and 
2019 Appropriations Acts that apply to funds allocated under this 
notice.
    The 2018 and 2019 Appropriations Acts require that prior to the 
obligation of CDBG-DR funds a grantee shall submit a plan detailing the 
proposed use of all funds. The plan must include criteria for 
eligibility, and how the use of these funds will address long-term 
recovery and restoration of infrastructure and housing, economic 
revitalization, and mitigation in the most impacted and distressed 
areas. Therefore, the action plan submitted in response to this notice 
must describe

[[Page 4684]]

uses and activities that: (1) Are authorized under title I of the HCDA 
or allowed by a waiver or alternative requirement; and (2) respond to a 
disaster-related impact to infrastructure, housing, or economic 
revitalization in the most impacted and distressed areas, and if the 
grantee chooses to do so, how mitigation will be incorporated into 
recovery activities. To inform the plan, each grantee must conduct an 
assessment of community impacts and unmet needs and guide the 
development and prioritization of planned recovery activities, pursuant 
to section VI.A.2.a. of the February 9, 2018 notice (83 FR 5849).
    While CDBG-DR funding is a valuable resource for long-term recovery 
and mitigation in the wake of major disasters, HUD expects that 
grantees will take steps to set in place substantial State and local 
governmental policies to enhance the impact of HUD-funded investments 
and limit damage from future disasters. The Federal Register notice 
published February 9, 2018 (83 FR 5850), requires all grantees to 
describe how they plan to promote sound, sustainable long-term 
planning. HUD is encouraging wildfire-impacted grantees in particular 
to consider land-use plans that address density and quantity of 
development, as well as emergency access, landscaping, and water supply 
considerations. Grantees are reminded that they may use CDBG-DR funds 
for planning activities, including, but not limited to, developing a 
Community Wildfire Protection Plan (CWPP). Grantees are encouraged to 
review U.S. Forest Service's resources on wildland fire (https://www.fs.fed.us/managing-land/fire) and work with Federal and State 
forestry and fire agencies that carry out activities related to fire 
risk reduction, including upgrading mapping, data, and other 
capabilities to better manage wildland fire risk areas. To maximize the 
impact of all available funds, all grantees are encouraged to 
coordinate and align these funds with other projects funded with CDBG-
DR and CDBG-Mitigation funds, as well as other disaster recovery 
activities funded by the Federal Emergency Management Agency (FEMA), 
the U.S. Army Corps of Engineers (USACE), the U.S. Forest Service, and 
other agencies as appropriate.
    Grantees should note that a subsequent notice published on August 
14, 2018 (83 FR 40314), which clarifies and/or modifies requirements in 
the February 9, 2018 notice, applies to grantees receiving funds under 
this notice. Specifically, grantees should note the following 
clarifications and modifications in the August 14, 2018 notice 
governing the use of these funds: Allowing for unmet economic 
revitalization and infrastructure needs (83 FR 40314), which are 
addressed in section I in this notice; the use of terminology around an 
evaluation of the cost or price of a product or service (83 FR 40317); 
additional requirements for the comprehensive disaster recovery website 
(83 FR 40317); clarification of working capital to aid in recovery (83 
FR 40317); underwriting requirements (83 FR 40317); limitation of use 
of funds for eminent domain (83 FR 40317); increased public comment 
period (83 FR 40318); cost verification (83 FR 40318); additional 
criteria and specific conditions to mitigate risk (83 FR 40318-40319); 
the waiver of Section 414 of the Stafford Act as amended (83 FR 40319) 
and addressed in section IV.C.2. in this notice; modification of 
affordability periods for rental properties (83 FR 40320); 
clarification of the environmental review requirements (83 FR 40319); 
CDBG-DR housing assistance and FEMA's permanent and semi-permanent 
housing programs (83 FR 40320); rehabilitation and reconstruction cost-
effectiveness (83 FR 40321); infrastructure planning and design (83 FR 
40321); discipline and accountability in the environmental review and 
permitting of infrastructure projects (83 FR 40321); and CDBG-DR funds 
as match for FEMA 428 Public Assistance projects (83 FR 40321).
    Additionally, HUD published a notice on June 20, 2019 entitled, 
``Updates to Duplication of Benefits Requirements Under the Stafford 
Act for Community Development Block Grant (CDBG) Disaster Recovery 
Grantees'' (84 FR 28836) (2019 DOB Notice) and a second notice that 
implemented the 2019 DOB Notice by making corresponding amendments to 
the Prior Notices (Applicability of Updates to Duplication of Benefits 
Requirements Under the Stafford Act for Community Development Block 
Grant (CDBG) Disaster Recovery Grantees, published at 84 FR 28848) (the 
``Implementation Notice''). Those changes are explained in section 
IV.B.6. of this notice and in detail in the 2019 DOB Notice (84 FR 
28836).
    Finally, the February 9, 2018 notice was also amended by the 
February 19, 2019 notice (84 FR 4836) with a clarification on green 
building standards (84 FR 4844).

III. Overview of Grant Process

    Each grantee must submit an action plan for disaster recovery 
pursuant the requirements of section VI.A.2 of the February 9, 2018 
notice (83 FR 5849), as modified by the requirements of the August 14, 
2018 notice (83 FR 40314), not later than 120 days after the 
applicability date of this notice. All requirements of the Prior 
Notices related to the action plan submission shall apply, including 
the public comment period which was extended to not less than 30 
calendar days under the August 14, 2018 notice (83 FR 40318), and the 
manner of publication which must include prominent posting on the 
grantee's official website (83 FR 40317). Each grantee must publish the 
action plan in a manner that affords citizens, affected local 
governments, and other interested parties a reasonable opportunity to 
examine the contents and provide feedback. Each grantee must also 
submit the Financial Management and Grant Compliance submission and 
Pre-Award Implementation Plan pursuant to section VI.A.I of the 
February 9, 2018 notice. All deadlines for these submissions are 
determined by the applicability date of this notice.
    In the Prior Notices, the Department included its intention to 
establish special grant conditions for individual CDBG-DR grants based 
upon the risks posed by the grantee, including risks related to the 
grantee's capacity to carry out the specific programs and projects 
proposed in its action plan. As described in the Prior Notices, these 
conditions will be designed to provide additional assurances that 
programs are implemented in a manner to prevent waste, fraud, and abuse 
and the Department has established specific criteria and conditions for 
each grant award as provided for at 2 CFR 200.205 and 200.207(a), 
respectively, to mitigate the risks of the grant.
    To begin expending CDBG-DR funds, the grantee must follow the 
process outlined in the February 9, 2018 notice (83 FR 5846), unless 
otherwise amended below:
     Within 60 days of the applicability date of this notice 
(or when the grantee submits its action plan, whichever is earlier), 
submit documentation for the certification of financial controls and 
procurement processes and adequate procedures for grant management, as 
amended in section IV.B.1 of this notice. A grantee that received a 
certification of its financial controls and procurement processes 
pursuant to a 2016 or 2017 disaster may request that HUD rely on that 
certification for purposes of this allocation, provided, however, that 
grantees shall be required to provide updates to reflect any material 
changes in the submissions.
     Within 60 days of the applicability date of this notice 
(or when the grantee

[[Page 4685]]

submits its action plan, whichever is earlier), submit documentation 
for the implementation plan and capacity assessment.
     Additionally, all funds must be expended within 6 years of 
the date of obligation as described in section V of this notice.

III.A. Funds for Unmet Infrastructure Needs for Grantees That Received 
Allocations for 2017 Disasters

    Each grantee that received an allocation pursuant to Public Law 
115-56 or Public Law 115-123 for 2017 disasters and an additional 
allocation in this notice for unmet infrastructure needs is required to 
submit a substantial amendment to its current action plan required by 
the Prior Notices. The substantial amendment must be submitted no later 
than 90 days after the applicability date of this notice. The 
substantial amendment must include the additional allocation of funds 
and address the requirements of the Prior Notices, as amended by this 
notice. Each grantee must follow the applicable substantial amendment 
process pursuant to section III.B of the August 14, 2018 notice (83 FR 
40316). Based on the 2019 Appropriations Act, HUD will condition the 
availability of these funds for grantees that have entered into 
alternative procedures under section 428 of the Stafford Act as of the 
date of enactment of the 2019 Appropriations Act until such grantees 
have reached a final agreement on all fixed cost estimates within the 
timeline provided by FEMA.

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

    This section of the notice describes rules, statutes, waivers, and 
alternative requirements that apply to each grantee receiving an 
allocation under this notice. The Secretary has determined that good 
cause exists to apply each waiver and alternative requirement 
established in the Prior Notices to grantees receiving funds under this 
notice and that such waivers and alternative requirements are not 
inconsistent with the overall purpose of title I of the HCDA. The 
Secretary's determination of good cause extends to each waiver or 
alternative requirement as amended by this notice. Grantees are 
reminded that all fair housing and nondiscrimination requirements, as 
well as environmental and labor requirements, continue to apply. The 
following requirements apply only to the CDBG-DR funds appropriated 
under the 2018 and 2019 Appropriations Acts (unless otherwise noted) 
and not to funds provided under the annual formula State or Entitlement 
CDBG programs, the Indian Community Development Block Grant program, or 
those provided under any other component of the CDBG program, such as 
the Section 108 Loan Guarantee Program, or any previous CDBG-DR 
appropriations, unless otherwise noted.
    A grantee may request additional waivers and alternative 
requirements from the Department as needed to address specific needs 
related to its recovery activities, accompanied by data to support the 
request. Grantees should work with the assigned Community Planning and 
Development representatives to request any additional waivers or 
alternative requirements from HUD. Except where noted, the waivers and 
alternative requirements described below apply to all grantees under 
this notice. Pursuant to the requirements of the 2018 and 2019 
Appropriations Acts, waivers and alternative requirements are effective 
5 days after they are published in the Federal Register.
    Except as described in this notice or the Prior Notices, statutory 
and regulatory provisions governing the State CDBG program shall apply 
to State grantees receiving a CDBG-DR grant. Except as described in 
this notice or the Prior Notices, statutory and regulatory provisions 
governing the entitlement CDBG program shall apply to any local 
government receiving a CDBG-DR grant. Based on the Prior Notices' 
treatment of grantees in the CDBG Insular areas program, all references 
to states and State grantees shall include the Commonwealth of the 
Northern Mariana Islands and the American Samoa. State and Entitlement 
CDBG regulations can be found at 24 CFR part 570. References to the 
action plan in these regulations shall refer to the action plan for 
disaster recovery required by section VI.A.2 of the February 9, 2018 
notice. All references in this notice pertaining to timelines and/or 
deadlines are in terms of calendar days unless otherwise noted. The 
date of this notice shall mean the applicability date of this notice 
unless otherwise noted.

IV.A. Incorporation of Waivers and Alternative Requirements for Local 
Governments

    This notice extends the waivers and alternative requirements in the 
Prior Notices to states and local governments receiving grants under 
the 2018 and 2019 Appropriations Acts. Because the Prior Notices only 
govern grants to states, this notice amends the Prior Notices by adding 
regulations that apply to units of general local government the waivers 
previously granted by the Secretary (except in cases such as the timely 
distribution of funds, the consolidated plan waiver, or reimbursement 
where the Prior Notices already waive entitlement CDBG program 
regulations). Where requirements are different for units of general 
local government than the requirements applicable to states, this 
notice amends the Prior Notices to add the local government 
requirement.
    IV.A.1. The Secretary amends the following sections of the February 
9, 2018 notice to expand waivers to include waivers of the regulations 
that apply to local government grantees: In Section VI.A.2., Action 
Plan for Disaster Recovery waiver and alternative requirement, the 
Secretary waives 24 CFR 91.220; in section VI.A.4., Citizen 
participation waiver and alternative requirement, the Secretary waives 
24 CFR 91.105(b) and (c); and in section VI.A.12, Use of the urgent 
need national objective, the Secretary waives 24 CFR 570.208(c). 
Grantees are responsible for ensuring that all citizens have equal 
access to information about the programs, including persons with 
disabilities and limited English proficiency (LEP). This waiver does 
not affect the statutory and regulatory obligations of CDBG-DR grantees 
to affirmatively further fair housing. As part of the CDBG-DR action 
plan, all grantees must certify that they will affirmatively further 
fair housing. For CDBG-DR grantees, this means conducting an Analysis 
of Impediments to Fair Housing Choice (AI), taking appropriate actions 
to overcome the effects of any impediments identified through that 
analysis, and keeping records of these actions.
    IV.A.2. Procurement. This notice amends the sections of the 
February 9, 2018 notice to add additional requirements or to clarify 
procurement requirements that apply to local governments:
    Paragraph V.A.1.a.(2) is modified after the sentence that begins 
``A State grantee (including the Commonwealth of Puerto Rico and the 
U.S. Virgin Islands) has proficient procurement policies and processes 
if . . . '' to add the following sentence: ``A local government grantee 
has proficient procurement policies and processes if it follows 
procurement requirements in the Uniform Administrative Requirements at 
2 CFR 200.318 through 200.326, and imposes these requirements on its 
subrecipients.''
    Paragraph VI.A.26 of the February 9, 2018 notice is modified by 
adding after the first paragraph, ``Any local government receiving a 
CDBG-DR grant is subject to procurement requirements

[[Page 4686]]

in the Uniform Administrative Requirements at 2 CFR 200.318 through 
200.326.''

IV.B. Grant Administration

    IV.B.1. Certification of financial controls and procurement 
processes, and adequate procedures for proper grant management. The 
2018 and 2019 Appropriations Acts require that the Secretary certify, 
in advance of signing a grant agreement, that the grantee has in place 
proficient financial controls and procurement processes and has 
established adequate procedures to prevent any duplication of benefits 
as defined by section 312 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (Stafford Act), 42 U.S.C. 5155, to ensure 
timely expenditure of funds, maintain a comprehensive website regarding 
all activities assisted with these funds, and detect and prevent waste, 
fraud, and abuse of funds. To enable the Secretary to make this 
certification, each grantee must submit to HUD the Financial Management 
and Grant Compliance certification submission pursuant to section 
VI.A.1.a of the February 9, 2018 notice (83 FR 5847), as amended in 
this section.
    A grantee that received a certification of its financial controls 
and procurement processes pursuant to a 2016 or 2017 disaster may 
request that HUD rely on that certification for purposes of this grant, 
provided, however, that grantees shall be required to provide updates 
to reflect any material changes in the submissions. This information 
must be submitted within 60 days of the applicability date of this 
notice. The grant agreement will not be executed until HUD has approved 
the grantee's certifications. The grantee must implement the CDBG-DR 
grant consistent with the controls, processes, and procedures as 
certified by HUD. HUD is requiring each grantee to submit (or update 
and resubmit, as applicable) all policies and procedures pertaining to 
its duplication of benefits procedures as outlined below:
    (1) Duplication of benefits procedures. A grantee has adequate 
procedures to prevent the duplication of benefits if the grantee 
submits uniform processes that reflect the requirements of the February 
9, 2018 notice (83 FR 5860) and the 2019 DOB Notice (84 FR 28836), 
including: (a) Verifying all sources of assistance received by the 
grantee or applicant, as applicable, prior to the award of CDBG-DR 
funds; (b) determining a grantee's or an applicant's remaining funding 
need(s) for CDBG-DR assistance before committing funds or awarding 
assistance; and (c) requiring beneficiaries to enter into a signed 
agreement to repay any duplicative assistance if they later receive 
additional assistance for the same purpose for which the CDBG-DR award 
was provided. The grantee must identify a method to monitor compliance 
with the agreement for a reasonable period and must articulate this 
method in its written administrative procedures, including the basis 
for the period in which the grantee will monitor compliance. This 
agreement must also include the following language: ``Warning: Any 
person who knowingly makes a false claim or statement to HUD may be 
subject to civil or criminal penalties under 18 U.S.C. 287, 1001 and 31 
U.S.C. 3729.''
    Policies and procedures of the grantee submitted to support the 
certification must provide that prior to the award of assistance, the 
grantee will use the best, most recent available data from FEMA, the 
Small Business Administration (SBA), insurers, and any other sources of 
local, State and Federal sources of funding to prevent the duplication 
of benefits. In developing these policies and procedures, grantees are 
directed to the 2019 DOB Notice (84 FR 28836). To be adequate, a 
grantee's policies and procedures must reflect the treatment of loans 
that is consistent with the requirements of the Declined Loans 
Provision and the section 1210 of the Disaster Recovery Reform Act of 
2018 (DRRA) (division D of Pub. L. 115-254), as explained in section 
IV.B.6 of this notice and in the 2019 DOB Notice.
    IV.B.2. Procurement. Grantees must comply with procurement 
requirements for states or for local governments, as applicable, in the 
Prior Notices (as amended).
    IV.B.3. Use of administrative funds across multiple grants. The 
2019 Appropriations Act authorizes special treatment of grant 
administrative funds for grantees that received awards under certain 
CDBG-DR grants. Grantees that received awards under Public Laws 114-
113, 114-223, 114-254, 115-31, 115-56, 115-123, and 115-254, or any 
future act may use eligible administrative funds (up to 5 percent of 
each grant award plus up to 5 percent of program income generated by 
the grant) appropriated by these acts for the cost of administering any 
of these grants without regard to the particular disaster appropriation 
from which such funds originated. If the grantee chooses to exercise 
this authority, the grantee must ensure that it has appropriate 
financial controls to ensure that the amount of grant administration 
expenditures for each of the aforementioned grants will not exceed 5 
percent of the total grant award for each grant (plus 5 percent of 
program income), review and modify its financial management policies 
and procedures regarding the tracking and accounting of administration 
costs, as necessary, and address the adoption of this treatment of 
administrative costs in the applicable portions of its Financial 
Management and Grant Compliance submissions as referenced in section 
VI.A.1 of the February 9, 2018 notice (83 FR 5847-5848). Grantees are 
reminded that all costs incurred for administration must still qualify 
as an eligible administration expense.
    IV.B.4. Use of funds in response to Hurricane Matthew and Hurricane 
Florence (State of North Carolina and South Carolina only). The 2019 
Appropriations Act provides that grantees that received CDBG-DR grants 
under Public Laws 114-223, 114-254, and 115-31 in response to Hurricane 
Matthew, may use those funds interchangeably for the same activities 
that can be funded by CDBG-DR grants in the most impacted and 
distressed areas related to Hurricane Florence. Specifically, these 
CDBG-DR grants in response to Hurricane Matthew may be used 
interchangeably and without limitation for the same activities that can 
be funded by CDBG-DR grants in the most impacted and distressed areas 
related to Hurricane Florence. Additionally, all CDBG-DR grants under 
the 2018 and 2019 Appropriations Acts in response to Hurricane Florence 
may be used interchangeably and without limitation for the same 
activities in the most impacted and distressed areas related to 
Hurricane Matthew.
    Grantees are reminded that expanding the eligible beneficiaries of 
their Hurricane Matthew activities or programs to include those 
impacted by Hurricane Florence requires the submission of a substantial 
action plan amendment in accordance with section VI.A.2.g of the 
November 21, 2016 notice (81 FR 83254). Additionally, all waivers and 
alternative requirements associated with a CDBG-DR grant apply to the 
use of the funds provided by that grant, regardless of which disaster 
(Matthew or Florence) the funded activity will address.
    IV.B.5. One-for-One Replacement Housing, Relocation, and Real 
Property Acquisition Requirements. Grantees that received a CDBG-DR 
grant for 2018 or 2019 disasters under Public Laws 115-254 or 116-20 
(``current requirements'') are currently subject to different 
requirements with respect to One-for-One Replacement Housing, 
Relocation, and Real Property Acquisition Requirements, than grantees 
that received a CDBG-DR grant for previous

[[Page 4687]]

disasters pursuant to Public Laws 114-113, 114-223, 114-254, and 115-31 
(``previous requirements''). To avoid the administrative burden of 
implementing two different Uniform Relocation Assistance and Real 
Property Acquisition Act (URA) waivers and alternative requirements, 
HUD is authorizing grantees with CDBG-DR grants subject to the previous 
requirements to carry out its programs under the same (URA) 
requirements as is required for its grant(s) under the current 
requirements.
    HUD is authorizing grantees under Public Laws 114-113, 114-223, 
114-254, and 115-31 that also received a CDBG-DR grant under Public Law 
115-254 or 116-20 to either: (a) continue to follow One-for-One 
Replacement Housing, Relocation, and Real Property Acquisition 
Requirements as provided in section VI.A.19. of the November 21, 2016 
notice (81 FR 83266) for its Public Laws 114-113, 114-223, 114-254, and 
115-31 CDBG-DR grants; or (b) follow the requirements of section 
VI.A.23.a. through e. of the February 9, 2018 notice (83 FR 5858) for 
its Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants. 
The grantee's programs under the most recent Public Laws (Pub. L. 115-
254 or 116-20) are already required to follow the waiver and 
alternative requirement defined in the February 9, 2018 notice (83 FR 
5858). If a grantee chooses to follow option (b) above, then it must 
identify this approach in its policies and procedures related to that 
particular activity and consistently apply that option for all 
displaced persons affected by that activity.
    IV.B.6. Duplication of benefits. The Prior Notices described 
duplication of benefits (DOB) requirements in Section 312 of the 
Stafford Act and subjected grantees to the requirements of a notice 
published in the Federal Register on November 16, 2011, at 76 FR 71060 
(the ``2011 DOB Notice'').
    HUD subsequently published the 2019 DOB Notice, which revised the 
DOB requirements that apply to CDBG-DR grants for disasters declared 
between January 1, 2015, and December 31, 2021. HUD also published a 
separate notice that implemented the 2019 DOB Notice (84 FR 28848) (the 
``Implementation Notice'') by making corresponding amendments to the 
February 9, 2018 and August 14, 2018 notices. The amendments in the 
Implementation Notice provide that the 2019 DOB Notice shall supersede 
the 2011 DOB Notice for any new programs or activities submitted in an 
action plan or action plan amendment on or after June 25, 2019.
    Accordingly, grantees must comply with the requirements of the 
Prior Notices, including amendments in the Implementation Notice. 
Because the applicability date of this notice is after June 25, 2019, 
provisions of the Implementation Notice that apply only to grants made 
before June 25, 2019 do not apply to grants under the 2018 and 2019 
Appropriations Acts.
    IV.B.7. The waiver and alternative requirement in section VI.A.6. 
of the February 9, 2018 notice is replaced with the following language 
to include 2018 and 2019 disaster grantees: ``HUD is temporarily 
waiving the requirement for consistency with the consolidated plan 
(requirements at 42 U.S.C. 12706, 24 CFR 91.325(a)(5) and 
91.225(a)(5)), because the effects of a major disaster alter a 
grantee's priorities for meeting housing, employment, and 
infrastructure needs. In conjunction, 42 U.S.C. 5304(e), to the extent 
that it would require HUD to annually review grantee performance under 
the consistency criteria, is also waived. Grantees are encouraged to 
incorporate disaster-recovery needs into their consolidated plan 
updates as soon as practicable, but any unmet disaster-related needs 
and associated priorities must be incorporated into the grantee's next 
consolidated plan update no later than its Fiscal Year 2020 update for 
2017 disasters and Fiscal Year 2022 for 2018 and 2019 disasters.''

IV.C. Clarifications and Amendments for Grants Under Public Law 115-56, 
115-123, 115-254, and 116-20

    IV.C.1. Clarification on Affordability Periods and Amended 
Alternative Requirement. The Federal Register notice published on 
August 14, 2018 (83 FR 40320) imposed a 5-year affordability period on 
all newly constructed single-family housing units constructed with 
CDBG-DR funds. HUD intended to impose the affordability period only on 
single-family units constructed and sold by the grantee or its 
subrecipient through an affordable homeownership program. It was not 
intended to impose affordability restrictions where the beneficiary 
owned and occupied a home that was damaged by the disaster and the 
grantee then provides the owner-occupant with a newly constructed or 
reconstructed housing unit rather than rehabilitate the damaged home. 
HUD's intent was to impose affordability restrictions when CDBG-DR 
funds are used to expand housing stock, not to replace damaged units 
owned and occupied by a beneficiary. Therefore, HUD is amending 
paragraph IV.B.10 of the August 14, 2018 notice by replacing it in its 
entirety with the following:
    ``10. Affordability Period for CDBG-DR funded Homeownership 
Programs. Grantees receiving funds under this notice are required to 
implement a minimum 5-year affordability period on all newly 
constructed single-family housing made available for low- and moderate-
income homeownership through a CDBG-DR funded homeownership program. 
This notice requires any grantee implementing a CDBG-DR funded 
homeownership program to develop and impose affordability (i.e., resale 
or recapture) restrictions and to enforce those restrictions through 
recorded deed restrictions, covenants, or other similar mechanisms, for 
a period not less than 5 years. Grantees shall establish resale or 
recapture requirements for housing funded pursuant to this paragraph 
and shall describe those requirements in the action plan or substantial 
amendment in which the activity is proposed. The resale or recapture 
provisions must clearly describe the terms of the resale or recapture, 
the specific circumstances under which these provisions will be used, 
and how the provisions will be enforced. This affordability period does 
not apply to housing units newly constructed or reconstructed for an 
owner-occupant to replace an owner-occupied home that was damaged by 
the disaster.''
    IV.C.2. Clarification and Amendment on Section 414 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 
et seq.). The Federal Register notice published on February 19, 2019 
(84 FR 4842) provided a waiver and alternative requirement of Section 
414 for all grantees receiving a grant for a major disaster occurring 
in 2015, 2016, and 2017. This waiver and alternative requirements 
allowed grantees that received a grant(s) under Public Laws 114-113, 
114-223, 114-254, and 115-31 to carry out its programs under the same 
Section 414 requirements as its grant(s) under Public Laws 115-56 or 
115-123. To clarify this provision and extend the Section 414 waiver 
and alternative requirement to include grantees under those older 
Public Laws that are now receiving a grant under the 2018 and 2019 
Appropriations Acts for a major disaster in 2018 or 2019, HUD is 
amending paragraph IV.2 of the February 19, 2019 notice by replacing it 
in its entirety with the following:
    ``2. Waiver of Section 414 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.). Section 
414 of the Stafford Act (42 U.S.C. 5181) provides that

[[Page 4688]]

``Notwithstanding any other provision of law, no person otherwise 
eligible for any kind of replacement housing payment under the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 
1970 (Pub. L. 91-646) [42 U.S.C. 4601 et seq.] [``URA''] shall be 
denied such eligibility as a result of his being unable, because of a 
major disaster as determined by the President, to meet the occupancy 
requirements set by [the URA].'' Accordingly, homeowner occupants and 
tenants displaced from their homes as a result of the identified 
disaster and who would have otherwise been displaced, as a direct 
result of any acquisition, rehabilitation, or demolition of real 
property for a federally funded program or project, may become eligible 
for a replacement housing payment, notwithstanding their inability to 
meet occupancy requirements prescribed in the URA.
    Grantees that received a CDBG-DR grant for a major disaster in 
2015, 2016, or 2017 under Public Laws 114-113, 114-223, 114-254, or 
115-31, and a CDBG-DR grant for a 2017, 2018, or 2019 major disaster 
under Public Laws 115-56, 115-123, 115-254, or 116-20 are subject to 
different alternative requirements with respect to protections afforded 
to tenants and homeowners under Section 414 of the Stafford Act.
    To avoid the administrative burden of implementing two different 
URA alternative requirements, HUD is authorizing grantees under Public 
Laws 114-113, 114-223, 114-254, and 115-31 that also received a CDBG-DR 
grant under Public Law 115-56, 115-123, 115-254, or 116-20 to either: 
(a) Continue to follow Section 414 of the Stafford Act (or any grantee-
specific alternative requirement previously authorized by HUD) for its 
Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants; or 
(b) follow the waiver and alternative requirement described in the 
following paragraph for its Public Laws 114-113, 114-223, 114-254, and 
115-31 CDBG-DR grants. The grantee's programs under the most recent 
Public Laws (Pub. L. 115-56, 115-123, 115-254, or 116-20) are already 
required to follow the waiver and alternative requirement defined 
below. If a grantee chooses to follow option (b) above then it must 
identify this approach in its policies and procedures related to that 
particular activity, and consistently apply that option for all 
displaced persons affected by that activity.
    The waiver and alternative requirement is as follows: Section 414 
of the Stafford Act (including its implementing regulation at 49 CFR 
24.403(d)(1)), is waived to the extent that it would apply to real 
property acquisition, rehabilitation, or demolition of real property 
for a CDBG-DR funded project, undertaken by the grantee or 
subrecipient, commencing more than one (1) year after the 
Presidentially declared disaster, provided that the project was not 
planned, approved, or otherwise underway prior to the disaster. For 
purposes of this paragraph, a CDBG-DR funded project shall be 
determined to have commenced on the earliest of: (1) The date of an 
approved Release for Request of Funds (RROF) and certification, or (2) 
the date of completion of the site-specific review when a program 
utilizes tiered environmental reviews, or (3) the date of sign-off by 
the approving official when a project converts to exempt under 24 CFR 
58.34(a)(12). The Secretary has the authority to waive provisions of 
the Stafford Act and its implementing regulations that the Secretary 
administers in connection with the obligation of CDBG-DR funds covered 
under this waiver and alternative requirement, or the grantees' use of 
these funds. The Department has determined that good cause exists for a 
waiver and that such waiver is not inconsistent with the overall 
purposes of title I of the HCDA. The waiver will simplify the 
administration of the disaster recovery process and reduce the 
administrative burden associated with the implementation of Stafford 
Act Section 414 requirements for projects commencing more than one (1) 
year after the date of the Presidentially declared disaster, 
considering the majority of such persons displaced by the disaster will 
have returned to their dwellings or found another place of permanent 
residence. This waiver does not apply with respect to persons that meet 
the occupancy requirements to receive a replacement housing payment 
under the URA nor does it apply to persons displaced or relocated 
temporarily by other HUD-funded programs or projects. Such persons' 
eligibility for relocation assistance and payments under the URA is not 
impacted by this waiver.''
    IV.C.3 Clarification on Procurement and Use of Subrecipients for 
State grantees only. The Federal Register notice published on February 
9, 2018 (83 FR 5856) included a provision on the use of subrecipients 
that was applicable to State grantees only. In section VI.A.14. of that 
notice, HUD made 24 CFR 570.502, 570.503, and 570.500(c) applicable to 
states exercising their authority under the waiver to carry out 
activities directly. To eliminate any confusion regarding procurement 
requirements that are applicable to the State's subrecipients, HUD is 
clarifying that 24 CFR 570.502, 570.503, and 570.500(c) apply to states 
carrying out activities directly, except for procurement requirements 
as provided for in the February 9, 2018 notice. Specifically, when HUD 
allows a State grantee the flexibility in section VI.A.1.a.(2) of the 
February 9, 2018 notice to choose one of three options when developing 
its procurement policies and procedures, and in paragraph VI.A.26., 
which requires State grantees to establish procurement requirements for 
local governments and subrecipients, those provisions continue to apply 
and will determine those procurement provisions of 2 CFR part 200 that 
are applicable to a State's subrecipients.
    IV.C.4. Clarification on Acquisition of real property, flood, and 
other buyouts to include Wildfire-Impacted Grantees. The Federal 
Register notice published February 9, 2018 (83 FR 5863) describes how 
grantees may carry out property acquisitions for a variety of purposes 
and that they may carry out a buyout program in a Disaster Risk 
Reduction Area. HUD is clarifying this provision so that grantees 
understand that wildland fire risk areas may also be identified by the 
grantee as Disaster Risk Reduction areas. Accordingly, HUD is amending 
paragraph IV.B.37.a. of the February 9, 2018 notice by adding the 
following language to the end of that section:
    ``37. Clarification of ``Buyout'' and ``Real Property Acquisition'' 
activities.'' Wildland fire risk areas may also be identified by the 
grantee as Disaster Risk Reduction areas eligible for a buyout to 
reduce risk from future wildfires. Grantees are encouraged to carry out 
property acquisitions as a means of acquiring contiguous parcels of 
land for uses compatible with wildland-urban interface management 
practices. Grantees are also encouraged to take actions to promote an 
increase in hazard insurance coverage in the wildland fire risk 
areas.''

V. Duration of Funding

    The 2018 and 2019 Appropriations Acts make the funds available for 
obligation by HUD until expended. This notice requires each grantee to 
expend 100 percent of its CDBG-DR grant on eligible activities within 6 
years of HUD's obligation of funds under Public Laws 115-254 and 116-20 
pursuant to an executed grant agreement. Furthermore, consistent with 
31 U.S.C. 1555 and OMB Circular A-11, if the Secretary or the President 
determines

[[Page 4689]]

that the purposes for which the appropriation has been made have been 
carried out and no disbursements have been made against the 
appropriation for two consecutive fiscal years, any remaining balance 
will be made unavailable for obligation or expenditure. In such case, 
the funds shall not be available for obligation or expenditure for any 
purpose after the account is closed.

VI. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the disaster 
recovery grants under this notice are as follows: 14.228 for State CDBG 
grantees and 14.218 for Entitlement CDBG Grantees.

VII. Finding of No Significant Impact

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

    Dated: January 16, 2020.
Benjamin S. Carson, Sr.,
Secretary.

Appendix A--Detailed Methodology

Allocation of CDBG-DR Funds to Most Impacted and Distressed Areas Due 
to 2018 and 2019 Federally Declared Disasters

Background

    The FAA Reauthorization Act of 2018 (Pub. L. 115-254) enacted on 
October 5, 2018, appropriated $1,680,000,000 through the Community 
Development Block Grant disaster recovery (CDBG-DR) program. The 
statutory text related to the allocation is as follows:
    ``For an additional amount for ``Community Development Fund'', 
$1,680,000,000, to remain available until expended, for necessary 
expenses for activities authorized under title I of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) related 
to disaster relief, long-term recovery, restoration of 
infrastructure and housing, and economic revitalization in the most 
impacted and distressed areas resulting from a major disaster 
declared in 2018 pursuant to the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. 5121 et seq.): Provided, 
That funds shall be awarded directly to the State or unit of general 
local government at the discretion of the Secretary[.]''
    Public Law 116-20 appropriated $2,431,000,000 through the 
Community Development Block Grant disaster recovery (CDBG-DR) 
program. The statutory text related to the allocation is as follows:
    ``For an additional amount for ``Community Development Fund,'' 
$2,431,000,000, to remain available until expended, for necessary 
expenses for activities authorized under title I of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) related 
to disaster relief, long-term recovery, restoration of 
infrastructure and housing, economic revitalization, and mitigation 
in the most impacted and distressed areas resulting from a major 
disaster that occurred in 2018 or 2019 (except as otherwise provided 
under this heading) pursuant to the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.): 
Provided, That funds shall be awarded directly to the State, unit of 
general local government, or Indian tribe (as such term is defined 
in section 102 of the Housing and Community Development Act of 1974) 
at the discretion of the Secretary. . . Provided further, That of 
the amounts made available under this heading $431,000,000 shall be 
allocated to meet unmet infrastructure needs for grantees that 
received allocations for disasters that occurred in 2017 under this 
heading of division B of Public Law 115-56 and title XI of 
subdivision 1 of division B of Public Law 115-123, of which 
$331,442,114 shall be allocated to those grantees affected by 
Hurricane Maria:
    ``Provided further, That of the amounts made available under 
this heading, up to $5,000,000 shall be made available for capacity 
building and technical assistance . . . Provided further, That of 
the amounts made available under this heading and under the same 
heading in Public Law 115-254, up to $2,500,000 shall be 
transferred, in aggregate, to ``Department of Housing and Urban 
Development-- Program Office Salaries and Expenses--Community 
Planning and Development'' for necessary costs, including 
information technology costs, of administering and overseeing the 
obligation and expenditure of amounts under this heading[.]''

Most Impacted and Distressed Areas

    As with prior CDBG-DR appropriations, HUD is not obligated to 
allocate funds for all major disasters occurring in the statutory 
timeframes. HUD is directed to use the funds ``in the most impacted 
and distressed areas.'' HUD has implemented this directive by 
limiting CDBG-DR formula allocations to grantees with major 
disasters that meet three standards:
    (1) Individual Assistance/Individual and Households Program 
(IHP) designation. HUD has limited allocations to those disasters 
where FEMA had determined the damage was sufficient to declare the 
disaster as eligible to receive IHP funding.
    (2) Concentrated damage. HUD has limited its estimate of serious 
unmet housing needs to counties and ZIP Codes with high levels of 
damage, collectively referred to as ``most impacted areas.'' For 
this allocation, HUD is defining most impacted areas as either most 
impacted counties--counties exceeding $10 million in serious unmet 
housing needs--and most impacted Zip Codes--ZIP Codes with $2 
million or more of serious unmet housing needs. The calculation of 
serious unmet housing needs is described below.
    (3) Disasters meeting the most impacted threshold. Only 2018 and 
2019 disasters that meet this requirement for most impacted damage 
are funded if one or more county or ZIP Code meets the thresholds 
above. Note that this allocation only includes disasters declared as 
of October 4, 2019. Other 2019 disasters will be addressed in a 
future notice.
    For disasters that meet the most impacted threshold described 
above, the unmet need allocations are based on the following factors 
summed together:
    (1) Repair estimates for seriously damaged owner-occupied units 
without insurance (with some exceptions) in most impacted areas 
after FEMA and SBA repair grants or loans; an estimate for 
homeowners served by FEMA's Permanent Housing Construction program 
is also deducted from the homeowner unmet need estimate;
    (2) Repair estimates for seriously damaged rental units occupied 
by very low-income renters in most impacted areas;
    (3) Repair and content loss estimates for small businesses with 
serious damage denied by SBA; and
    (4) The estimated local cost share for Public Assistance 
Category C to G projects.

Methods for Estimating Serious Unmet Needs for Housing

    The data HUD uses to calculate unmet needs for 2018 qualifying 
disasters come from the FEMA Individual Assistance program data on 
housing-unit damage as of July 17, 2019. The data for 2019 
qualifying disasters is as of November 13, 2019.
    The core data on housing damage for both the unmet housing needs 
calculation and the concentrated damage are based on home inspection 
data for FEMA's Individual Assistance program and SBA's disaster 
loan program. HUD calculates ``unmet housing needs'' as the number 
of housing units with unmet needs times the estimated cost to repair 
those units less repair funds already provided by FEMA and SBA.
    Each of the FEMA inspected owner units are categorized by HUD 
into one of five categories:
     Minor-Low: Less than $3,000 of FEMA inspected real 
property damage.
     Minor-High: $3,000 to $7,999 of FEMA inspected real 
property damage.
     Major-Low: $8,000 to $14,999 of FEMA inspected real 
property damage and/or 1 to 3.9 feet of flooding on the first floor;
     Major-High: $15,000 to $28,800 of FEMA inspected real 
property damage and/or 4 to 5.9 feet of flooding on the first floor.

[[Page 4690]]

     Severe: Greater than $28,800 of FEMA inspected real 
property damage or determined destroyed and/or 6 or more feet of 
flooding on the first floor.
    When owner-occupied properties also have a personal property 
inspection or only have a personal property inspection, HUD reviews 
the personal property damage amounts such that if the personal 
property damage places the home into a higher need category over the 
real property assessment, the personal property amount is used as 
follows::
     Minor-Low: Less than $2,500 of FEMA inspected personal 
property damage.
     Minor-High: $2,500 to $3,499 of FEMA inspected personal 
property damage.
     Major-Low: $3,500 to $4,999 of FEMA inspected personal 
property damage or 1 to 3.9 feet of flooding on the first floor.
     Major-High: $5,000 to $9,000 of FEMA inspected personal 
property damage or 4 to 5.9 feet of flooding on the first floor.
     Severe: Greater than $9,000 of FEMA inspected personal 
property damage or determined destroyed and/or 6 or more feet of 
flooding on the first floor.
    To meet the statutory requirement of ``most impacted'' in this 
legislative language, homes are determined to have a high level of 
damage if they have damage of ``major-low'' or higher. That is, they 
have a FEMA inspected real property damage of $8,000 or above, 
personal property damage $3,500 or above, or flooding 1 foot or 
above on the first floor.
    Furthermore, a homeowner with flooding outside the 1 percent 
risk flood hazard area is determined to have unmet needs if they 
reported damage and no flood insurance to cover that damage. For 
homeowners inside the 1 percent risk flood hazard area, homeowners 
without flood insurance with flood damage below the greater of 
national median or 120 percent of Area Median Income are determined 
to have unmet needs. For non-flood damage, homeowners without hazard 
insurance with incomes below the greater of national median or 120 
percent of Area Median Income are included as having unmet needs.
    FEMA does not inspect rental units for real property damage so 
personal property damage is used as a proxy for unit damage. Each of 
the FEMA-inspected renter units are categorized by HUD into one of 
five categories:
     Minor-Low: Less than $1,000 of FEMA inspected personal 
property damage.
     Minor-High: $1,000 to $1,999 of FEMA inspected personal 
property damage.
     Major-Low: $2,000 to $3,499 of FEMA inspected personal 
property damage or 1 to 3.9 feet of flooding on the first floor.
     Major-High: $3,500 to $7,500 of FEMA inspected personal 
property damage or 4 to 5.9 feet of flooding on the first floor.
     Severe: Greater than $7,500 of FEMA inspected personal 
property damage or determined destroyed and/or 6 or more feet of 
flooding on the first floor.
    To meet the statutory requirement of ``most impacted'' for 
rental properties, homes are determined to have a high level of 
damage if they have damage of ``major-low'' or higher. That is, they 
have a FEMA personal property damage assessment of $2,000 or greater 
or flooding 1 foot or above on the first floor.
    Furthermore, landlords are presumed to have adequate insurance 
coverage unless the unit is occupied by a renter with income less 
than the greater of the Federal poverty level or 50 percent of 
median income. Units occupied by a tenant with income less than the 
greater of the poverty level or 50 percent of median income are used 
to calculate likely unmet needs for affordable rental housing.
    The average cost to fully repair a home for a specific disaster 
to code within each of the damage categories noted above is 
calculated using the median real property damage repair costs 
determined by the SBA for its disaster loan program for the subset 
of homes inspected by both SBA and FEMA for each eligible disaster.
    Minimum multipliers are not less than the 1st quarter median for 
all Individual Assistance (IA) eligible disasters combined in each 
disaster year at the time of the allocation calculation, and maximum 
multipliers are not more than the 4th quarter median for all IA 
eligible disasters combined in each disaster year with data 
available as of the allocation. Because SBA is inspecting for full 
repair costs, their estimate is presumed to reflect the full cost to 
repair the home, which is generally more than the FEMA estimates on 
the cost to make the home habitable. If there is a match of fewer 
than 20 SBA inspections to FEMA inspections for any damage category, 
the minimum multiplier is used.
    For each household determined to have unmet housing needs (as 
described above), their estimated average unmet housing need is 
equal to the average cost to fully repair a home to code less 
assistance from FEMA and SBA provided for repair to the home, based 
on their damage category (noted above).

Methods for Estimating Serious Unmet Economic Revitalization Needs

    Based on SBA disaster loans to businesses using data for 2018 
disasters from as of date July 17, 2019 and for 2019 disasters from 
as of the date November 14, 2019, HUD calculates the median real 
estate and content loss by the following damage categories for each 
state:

 Category 1: Real estate + content loss = below $12,000
 Category 2: Real estate + content loss = $12,000-$29,999
 Category 3: Real estate + content loss = $30,000-$64,999
 Category 4: Real estate + content loss = $65,000-$149,999
 Category 5: Real estate + content loss = $150,000 and above

    For properties with real estate and content loss of $30,000 or 
more, HUD calculates the estimated amount of unmet needs for small 
businesses by multiplying the median damage estimates for the 
categories above by the number of small businesses denied an SBA 
loan, including those denied a loan prior to inspection due to 
inadequate credit or income (or a decision had not been made), under 
the assumption that damage among those denied at pre-inspection have 
the same distribution of damage as those denied after inspection.

Methods for Estimating Unmet Infrastructure Needs

    To calculate 2018 and 2019 unmet needs for infrastructure 
projects, HUD obtained FEMA cost estimates (as of July 17, 2019 for 
the 2018 disasters and November 13, 2019 for 2019 disasters) of the 
expected local cost share to repair the permanent public 
infrastructure (Categories C to G) to their pre-storm condition.
    To calculate additional infrastructure unmet needs for 2017 
disasters, HUD compares the change in FEMA Category C to G local 
match cost estimates between March 2018 (when funds had been 
allocated under Pub. L. 115-23) and November 2019. For grantees 
impacted by Hurricane Maria--Puerto Rico and the Virgin Islands--the 
statutorily required allocation of $331,442,114 is allocated 
proportional based on their relative share of growth in Category C 
to G local match cost estimates. For other 2017 grantees where the 
November 2019 estimate exceeds the March 2018 estimate, each grantee 
is first increased dollar-for-dollar to their local match 
requirements. For any of the remaining funds of the required $431 
million for 2017 disasters, they are allocated to the non-Maria 
disasters that have been funded at 100 percent or less of 
infrastructure match needs proportional to their share of eligible 
grantees' November 2019 estimated infrastructure match needs.

Allocation Calculation

    Once eligible entities are identified using the above criteria, 
the allocation to individual grantees represents their proportional 
share of the estimated unmet needs. For the formula allocation, HUD 
calculates total unmet recovery needs for eligible 2018 and 2019 
disasters as the aggregate of:
     Serious unmet housing needs in most impacted counties;
     Serious unmet business needs; and
     Unmet infrastructure need.

Two jurisdictions have their unmet needs calculations adjusted due 
to unusual circumstances not covered in the standard methodology. 
First, Hawaii County in Hawaii has 76 homes that were not damaged 
but are completely surrounded by lava fields. HUD assumes that those 
homes will never be habitable and categorizes them as destroyed with 
no insurance for the serious unmet need calculation. Second, FEMA is 
administering its Permanent Housing Construction program in the 
Northern Marianas and expects to serve 455 homeowners with seriously 
damaged homes. As such, HUD subtracts the unmet needs of 455 
homeowners from the base estimate.

[FR Doc. 2020-01204 Filed 1-24-20; 8:45 am]
 BILLING CODE 4210-67-P