[Federal Register Volume 89, Number 64 (Tuesday, April 2, 2024)]
[Notices]
[Pages 22736-22738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06877]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6444-N-01]


Waiver for a Community Development Block Grant Disaster Recovery 
(CDBG-DR) Grantee

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 allocated to the Commonwealth of Puerto Rico 
pursuant to the Supplemental Appropriations for Disaster Relief 
Requirements Act, 2017, and the Further Additional Supplemental 
Appropriations for Disaster Relief Requirements Act, 2018, for major 
disasters occurring in 2017. In response to a request by the 
Commonwealth of Puerto Rico, this notice provides a waiver to use CDBG-
DR funds to satisfy the non-federal cost share for Federal Emergency 
Management Agency (FEMA) Public Assistance (PA) funded reconstruction 
and rehabilitation of houses of worship for grants provided to the 
Commonwealth.

DATES: Applicability Date: April 8, 2024.

FOR FURTHER INFORMATION CONTACT: Tennille Parker, Director, Office of 
Disaster Recovery, U.S. Department of Housing and Urban Development, 
451 7th Street SW, Room 7282, Washington, DC 20410, telephone number 
202-708-3587 (this is not a toll-free number). HUD welcomes and is 
prepared to receive calls from individuals who are deaf or hard of 
hearing, as well as from individuals with speech or communication 
disabilities. To learn more about how to make an accessible telephone 
call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Email inquiries may be sent to 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Authority to Grant Waivers
II. Pub. L. 115-56 and 115-123 Waiver
III. Finding of No Significant Impact (FONSI)

I. Authority to Grant Waivers

    The Supplemental Appropriations for Disaster Relief Requirements 
Act, 2017 (Division B, Pub. L. 115-56), approved September 8, 2017, and 
the Further Additional Supplemental Appropriations for Disaster Relief 
Requirements Act, 2018 (Division B, Subdivision 1, Pub. L. 115-123), 
approved February 9, 2018, 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 grant funds, 
except for requirements related to fair housing, nondiscrimination, 
labor standards, and the environment. HUD may also exercise its 
regulatory waiver authority under 24 CFR 5.110, 91.600, and 570.5.
    The waiver authorized in this notice is based upon a determination 
by the Secretary that good cause exists and that the waiver is not 
inconsistent with the overall purposes of title I of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCDA). The 
good cause for the waiver is summarized in this notice.

II. Pub. L. 115-56 and 115-123 Waiver

    Waiver to use CDBG-DR funds to satisfy the non-federal cost share 
for FEMA PA-funded reconstruction and rehabilitation of houses of 
worship (Commonwealth of Puerto Rico only).
    The Department has awarded CDBG-DR funds to the Commonwealth of 
Puerto Rico (``the Commonwealth'') under Public Laws 115-56 and 115-123 
to assist in the long-term recovery from the 2017 disasters, Hurricanes 
Irma and Maria. This notice waives requirements for CDBG-DR funds 
awarded to the Commonwealth under these two Public Laws.
    Many buildings in the Commonwealth, including houses of worship, 
suffered extensive damage in the wake of the two major hurricanes that 
occurred within the same month of September 2017. In the aftermath of 
the two hurricanes and other disasters, faith-based organizations 
(FBOs) have used churches and other principal places of worship to 
assist residents. Especially in smaller, rural communities of the 
Commonwealth, houses of worship often serve as shelters during and 
after disasters and as gathering places to obtain post-disaster 
assistance and information.
    In its current, amended action plan (Amendment 13 to the CDBG-DR 
action plan, effective October 9, 2023), the Commonwealth's Non-Federal 
Match Program (NFMP) uses CDBG-DR funds to meet the non-federal share 
obligations of other, federal disaster-relief assistance provided to 
the Commonwealth that is used for a variety of activities authorized 
under title I of the HCDA, including building reconstruction and 
rehabilitation costs authorized under 42 U.S.C. 5305(a)(4). For 
example, FEMA has approved the use of its PA funds to pay the federal 
cost share for the rehabilitation or reconstruction of disaster-damaged 
houses of worship, including sanctuaries, chapels, or other rooms that 
FBOs use as their principal place of worship. The Commonwealth seeks to 
use CDBG-DR funds through the NFMP, pursuant to 42 U.S.C. 5305(a)(4) 
and 5305(a)(9), to reimburse FBOs for the non-federal cost share 
associated with FEMA PA-funded reconstruction and rehabilitation of 
houses of worship damaged or destroyed by Hurricanes Irma and Maria. 
The regulation at 24 CFR 5.109 applies to CDBG-DR funds, and without a 
waiver, sections of this regulation either prohibit the use of CDBG-DR 
funds for these activities or impose costly and time-consuming 
accounting constraints that prevent the Commonwealth from using its 
CDBG-DR funds for these activities.
    The regulation at 24 CFR 5.109(j) prohibits the use of direct 
federal financial assistance for the acquisition, construction, or 
rehabilitation of sanctuaries, chapels, or other rooms that a HUD-
funded FBO uses as its principal place of worship. Where a structure is 
used for both eligible and explicitly

[[Page 22737]]

religious activities (including activities that involve overt religious 
content such as worship, religious instruction, or proselytization), 24 
CFR 5.109(j) also provides that direct federal financial assistance may 
not exceed the cost of the share of acquisition, construction, or 
rehabilitation attributable to eligible activities in accordance with 
the cost accounting requirements applicable to the HUD program or 
activity. The regulations at 24 CFR 5.109(e) state that if an 
organization engages in explicitly religious activities, the explicitly 
religious activities must be offered separately, in time or location, 
from the programs or activities supported by direct Federal financial 
assistance, and participation must be voluntary for the beneficiaries 
of the programs or activities that receive direct federal financial 
assistance. Without a waiver, 24 CFR 5.109(e) and (j) prohibit the 
Commonwealth from using CDBG-DR funds through the NFMP for 
reimbursement of the non-federal cost share either outright or because 
of burdensome and time-consuming cost accounting requirements.
    The Department may waive 24 CFR 5.109(e) and (j) only upon a 
determination of good cause. The Department would not be able to find 
good cause if it concluded the Commonwealth's proposed use of funds for 
NFMP activities will likely violate the Establishment Clause. Here, the 
Department has concluded that the Commonwealth's proposed use of CDBG-
DR funds would likely be constitutional and found good cause because 
the Commonwealth will use neutral, secular criteria in making funding 
decisions under the NFMP, including in the Commonwealth's assessments 
of whether NFMP activities meet a national objective. The Department's 
finding of good cause is additionally based on the fact that granting a 
waiver to allow CDBG-DR funds to be used as the non-federal match for 
projects that are otherwise eligible under FEMA's PA Program, will 
permit the grantee to align its recovery with the way in which FEMA PA 
funds are distributed and decrease the grantee's administrative burden. 
The Department's good-cause determination is based on the specific 
combination of facts and circumstances presented here, and similar 
waivers may not be permissible in other contexts.
    The Secretary's determination of good cause is based on the 
Department's review of the Commonwealth's waiver requests, the 
descriptions of the NFMP in the Commonwealth's current CDBG-DR action 
plan, the Commonwealth's program guidelines for the NFMP, including its 
criteria for making funding decisions under the NFMP, and other 
correspondence and communication with the Commonwealth (collectively 
referred to as the ``waiver requests and related correspondence''). The 
Commonwealth's waiver requests and related correspondence have provided 
HUD with a reasonable basis for concluding that the Commonwealth has 
adopted relevant, neutral, secular criteria to make its funding 
decisions because it has demonstrated that its funding decisions are 
made on the same terms and conditions, without regard to religion, and 
only for eligible entities that qualify under the NFMP.
    The Commonwealth's program guidelines shared with HUD indicate that 
it will make its eligibility determinations exclusively based on 
neutral and secular criteria including the availability of funds, the 
date of execution of a subrecipient's agreement, and whether a proposed 
project meets CDBG-DR requirements related to activity eligibility and 
one or more of the three national objectives, namely, to benefit low- 
and moderate-income families, aid in the prevention or elimination of 
slums or blight, and/or to meet community development needs having a 
particular urgency. Religion is not relevant to the Commonwealth's 
assessment of activity eligibility under 42 U.S.C. 5305(a)(4) and 
5305(a)(9) for payment of the non-federal cost share of the 
reconstruction and rehabilitation of houses of worship or any other 
building. Under these program guidelines, the Commonwealth determines 
whether a proposed project will meet a national objective before 
approving funds under the NFMP as part of its eligibility 
determinations and has indicated that it intends to apply either the 
urgent need or low- and moderate-income area benefit (LMA) national 
objectives for projects funded through its NFMP. Furthermore, the 
Commonwealth's waiver requests and related correspondence also 
demonstrate that it will use neutral, secular criteria for purposes of 
assessing compliance under these national objectives.
    The urgent need national objective criteria (i.e., activities that 
meet a community development need that has a particular urgency) that 
is applicable to the Commonwealth's CDBG-DR funds is established 
through a waiver and alternative requirement in paragraph VI.A.12. of 
the Federal Register notice published on February 9, 2018 (83 FR 5844) 
and does not take religion into consideration. Under the waiver and 
alternative requirement, assisted houses of worship will be in 
compliance with the urgent need national objective if the assisted 
structures fall within the type, scale, and location of the disaster-
related impacts identified to be addressed through the NFMP in the 
Commonwealth's action plan. Because the urgent need national objective 
criteria is a neutral, secular requirement that does not allow for the 
exercise of discretion with regard to religion, a determination by the 
Commonwealth that an activity is consistent with the urgent need waiver 
and alternative requirement is one that uses neutral, secular criteria.
    The requirements for the LMA national objective are found at 24 CFR 
570.483(b)(1)(i), and activities satisfy this requirement if an 
activity's benefits are available to all the residents in a particular 
area, where at least 51 percent of the residents are low- and moderate-
income persons. The Commonwealth's waiver requests and related 
correspondence with HUD identify neutral, secular reasons for the 
Commonwealth to determine that its use of CDBG-DR funds to reimburse 
the costs of reconstructing or rehabilitating houses of worship damaged 
by Hurricanes Irma and Maria will meet the LMA national objective. 
Specifically, the Commonwealth has indicated that FBOs used houses of 
worship in many distressed communities in the Commonwealth to provide 
childcare, foodbanks, or shelter for the homeless; FBOs in the 
Commonwealth served as ``first responders'' in low- to moderate-income 
communities where natural disasters occurred, and shrines, chapels, and 
other rooms that serve as primary places of worship were ``used for 
eligible activities outside of hours of worship''; and houses of 
worship in Puerto Rico ``are almost always found in the center of 
town'' and are of great importance to, especially, smaller communities, 
in part because the structures have ``served as shelters during and 
after . . . hurricanes'' and have been ``gathering places to obtain 
post-disaster assistance and information.'' These representations 
provide a reasonable basis for HUD's conclusion that the Commonwealth 
will use neutral, secular criteria in assessing whether funded 
activities would meet the LMA national objective requirement.
    Because HUD has concluded that the Commonwealth has adopted 
neutral, secular criteria to make its funding decisions under the NFMP, 
HUD has found good cause for the requested waiver, and waives 24 CFR 
5.109(e) and (j) only to allow the Commonwealth to use CDBG-DR funds to 
reimburse FBOs for the non-federal cost share associated with FEMA PA-
funded reconstruction

[[Page 22738]]

and rehabilitation of houses of worship damaged or destroyed by 
Hurricanes Irma and Maria through its NFMP pursuant to 42 U.S.C. 
5305(a)(4) and 5305(a)(9). This waiver is conditioned on the 
Commonwealth's compliance with the Establishment Clause, and is only 
available so long as the Commonwealth uses neutral and secular criteria 
in its funding decisions under the NFMP, including in its assessments 
of whether activities funded through the NFMP meet a national 
objective.

III. 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 online on HUD's CDBG-DR website at https://www.hud.gov/program_offices/comm_planning/cdbg-dr and 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). HUD welcomes 
and is prepared to receive calls from individuals who are deaf or hard 
of hearing, as well as individuals with speech or communication 
disabilities. To learn more about how to make an accessible telephone 
call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

Adrianne Todman,
Acting Secretary.
[FR Doc. 2024-06877 Filed 4-1-24; 8:45 am]
BILLING CODE 4210-67-P