[Federal Register Volume 89, Number 131 (Tuesday, July 9, 2024)]
[Notices]
[Pages 56400-56403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15055]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6467-N-01]


Waivers and Alternative Requirements for Community Development 
Block Grant Disaster Recovery (CDBG-DR) and Community Development Block 
Grant Mitigation (CDBG-MIT) Grantees

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

ACTION: Notice.

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SUMMARY: This notice governs Community Development Block Grant disaster 
recovery (CDBG-DR) and Community Development Block Grant mitigation 
(CDBG-MIT) funds awarded under several appropriations acts identified 
in the Table of Contents. Specifically, this notice includes waivers 
and alternative requirements for the States of North Carolina and 
Alaska in response to their submitted requests for waivers and 
alternative requirements for grants provided under the public laws 
cited in this notice. As further outlined below, this notice provides a 
waiver and alternative requirement to the State of North Carolina to 
align buyout requirements across the State's various CDBG-DR and CDBG-
MIT grants and a waiver and alternative requirement to the State of 
Alaska to increase the limit on planning costs for the State's CDBG-MIT 
funds. The Department has waived and established similar alternative 
requirements for other grantees in the past, so the waivers and 
alternative requirements described in this notice are not unique or 
precedent setting.

DATES: Applicability Date: July 15, 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 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. Public Law 114-254, 115-31, 115-123,

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115-254, and 116-20 Waivers and Alternative Requirements
III. Public Law 116-20 Waiver and Alternative Requirement
IV. Finding of No Significant Impact (FONSI)

I. Authority To Grant Waivers

    Each of the appropriations acts cited in the Table of Contents 
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.
    All waivers and alternative requirements authorized in this notice 
are based upon a determination by the Secretary that good cause exists, 
and that the waiver or alternative requirement is not inconsistent with 
the overall purposes of Title I of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCDA). The good cause 
for each waiver and alternative requirement is summarized in this 
notice.

II. Public Law 114-254, 115-31, 115-123, 115-254, and 116-20 Waivers 
and Alternative Requirements

    Waiver and Alternative Requirement for North Carolina's CDBG-DR and 
CDBG-MIT Buyout Programs (State of North Carolina only).
    The Department received a request and justification of good cause 
from the State of North Carolina to waive the requirement that only 
real property is eligible for acquisition in buyout activities, which 
limits the acquisition of manufactured, modular, or mobile housing 
units (MHUs). Given that the Department has already updated this 
provision for newer grants, allowing this waiver for North Carolina's 
older grants would merely align requirements across their grant 
portfolio. These newer, more flexible requirements published in the 
Federal Register on January 18, 2023 (88 FR 3212) and May 24, 2022 (87 
FR 31648) as Appendix B (``the Consolidated Notice'') allow CDBG-DR 
funds to be used to acquire homes that are MHUs, regardless of whether 
MHUs are considered real property under state law, as part of the 
acquisition of an MHU's underlying real property in a buyout activity.
    This waiver and alternative requirement, as further described 
below, applies to the State's CDBG-DR and CDBG-MIT funds allocated to 
the State under Public Law 114-254, 115-31, 115-123, 115-254, and 116-
20. These CDBG-DR and CDBG-MIT funds are subject to the requirements in 
the Federal Register notices published on January 18, 2017 (82 FR 
5591), November 21, 2016 (81 FR 83254) (the ``November 2016 Notice''), 
August 7, 2017 (82 FR 36812), January 27, 2020 (85 FR 4681), February 
9, 2018 (83 FR 5844) (the ``February 2018 Notice''), August 14, 2018 
(83 FR 40314), February 19, 2019 (84 FR 4836), June 20, 2019 (84 FR 
28848), August 30, 2019 (84 FR 45838) (the ``August 2019 Notice''), and 
January 6, 2021 (86 FR 561) (collectively, the ``Prior Notices'').
    The Prior Notices require the State to adhere to more stringent 
requirements for buyout activities undertaken with CDBG-DR and CDBG-MIT 
funds. Per these requirements, CDBG-DR and CDBG-MIT grantees 
undertaking buyout activities are required to adhere to the housing 
acquisition activity requirements at 42 U.S.C. 5305(a)(1) and the 
associated regulations at 24 CFR 570.201(a), which limit housing 
acquisition to real property. Further, the Prior Notices define the 
term ``buyout'' as the acquisition of property located in a floodway or 
floodplain that is intended to reduce risk from future flooding or the 
acquisition of properties in Disaster Risk Reduction Areas (DRRA), as 
designated by the grantee. Because the Prior Notices do not waive 
requirements at 42 U.S.C. 5305(a)(1) and the associated regulations at 
24 CFR 570.201(a), any buyout program is limited to the acquisition of 
real property or property considered to be part of a community's 
permanent housing stock when it includes acquisition of the underlying 
real property (i.e., land). However, 42 U.S.C. 5305(a)(1) and the 
associated regulations only permit the use of funds for MHUs under 
HUD's regulatory oversight, including HUD's Manufactured Home 
Construction and Safety Standards (``HUD Code'', 24 CFR part 3280) and 
therefore, exclude MHU's only built to state and local standards.
    Beginning with the application of the Consolidated Notice to CDBG-
DR funds, HUD waived the requirements at 42 U.S.C. 5305(a) to the 
extent necessary for the creation of a new eligible activity termed 
``buyouts.'' CDBG-DR grant funds subject to the requirements in the 
Consolidated Notice may be used for buyout activities defined as the 
acquisition of properties located in a floodway, floodplain, or other 
DRRA that is intended to reduce risk from future hazards. This means 
that CDBG-DR funds, subject to the requirements of the Consolidated 
Notice, may be used to acquire MHUs, that can sometimes be treated as 
personal property or do not meet the HUD Code, as part of the 
acquisition of an MHU's underlying real property in a buyout activity.
    The State of North Carolina has requested a waiver of the 
requirement that buyouts are limited to the acquisition of real 
property to allow the State to align its buyout activities with the 
flexibilities provided in the Consolidated Notice. The waiver and 
alternative requirement are necessary to allow the State to undertake 
buyout activities for MHUs that do not qualify as real property or meet 
the HUD Code to reduce the risk of future flooding to the State's 
housing stock and the administrative burden of managing different 
requirements for other buyout activities across its grant portfolio. 
The waiver and alternative requirement provided herein will help the 
State promote recovery and mitigation following Hurricanes Matthew and 
Florence by expanding its buyout programs to include MHUs in a DRRA and 
enable the State to move more homes and households out of harm's way.
    The State's waiver request notes that it is currently implementing 
its Strategic Buyout Program (SBP) with CDBG-DR and CDBG-MIT funds and 
that MHUs constitute a significant portion of the housing stock in the 
State, making up 25 percent of all housing stock in disaster-impacted 
areas. The State's request also points out the need to include the 
value of MHUs in buyout offers to equitably serve this population and 
reduce the risk of future damage to the State's MHU-housing stock, 
which also tends to be among the most vulnerable.
    The State plans to use its CDBG-DR and CDBG-MIT funding under 
Public Law 114-254, 115-31, 115-123, 115-254, and 116-20 for the 
implementation of its SBP, which began accepting applications in 
January 2020. The SBP is a voluntary buyout program that beneficiaries 
may apply for that provides funding for the purchase of eligible 
properties in a DRRA, resulting in a deed restriction that limits 
future development on the acquired parcel. Applicants and properties 
must meet the eligibility criteria set forth in the State's SBP Manual.
    After reviewing the State's request and based on the good cause 
provided herein, the Department is waiving 42 U.S.C. 5305(a)(1) and the 
buyout requirements established in the Prior Notices under section 
VI.B.35 of the November 2016 Notice (81 FR 83271), section VI.B.37 of 
the February 2018 Notice (83 FR 5863), and section V.B.4 of the August 
2019 Notice (84 FR 45864)

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for the State of North Carolina's Public Law 114-254, 115-31, 115-123, 
115-254, and 116-20 CDBG-DR and CDBG-MIT funds and establishing as an 
alternative requirement the requirements in section II.B.7. (including 
II.B.7.a.) of the January 18, 2023, Notice (88 FR 3212). Any buyouts of 
MHUs under this alternative requirement must include acquisition of the 
underlying real property.

III. Public Law 116-20 Waiver and Alternative Requirement

    Waiver and Alternative Requirement on Limitation of CDBG-MIT 
Planning Costs (State of Alaska only).
    The Department received a request and justification of good cause 
from the State of Alaska to increase the limit on planning costs from 
15 to 48 percent of its CDBG-MIT grant to implement a planning activity 
in the State's approved Action Plan. This request applies to the 
State's CDBG-MIT funds under Public Law 116-20 announced in the Federal 
Register notice published on January 6, 2021 (86 FR 561) (the ``January 
2021 Notice'') for a disaster occurring in 2018. The January 2021 
Notice included waivers and alternative requirements for grantees that 
received a CDBG-MIT allocation under Public Law 115-123 or 116-20 and 
required grantees to adhere to the relevant requirements of the Federal 
Register notices published on August 30, 2019 (84 FR 45838) (the 
``August 2019 Notice'') and on September 28, 2020 (85 FR 60821).
    The State is requesting that the Department modify paragraph 
V.A.8.b.(1) of the August 2019 Notice to accommodate its proposed 
planning activity. Specifically, the State is requesting the ability to 
use $1,086,800, or approximately 48 percent, of its CDBG-MIT grant 
amount to upgrade the Municipality of Anchorage's local vertical datum 
reference system to the National Spatial Reference System (NSRS). 
However, paragraph V.A.8.b.(1) of the August 2019 Notice and Section 
II.B. of the January 2021 Notice provide an alternative requirement 
that limits CDBG-MIT grantees to spending a maximum of 15 percent of 
their total grant amount or $750 million, whichever is less, on 
planning costs.
    The National Oceanic and Atmospheric Administration (NOAA) defines 
and manages the NSRS through its National Geodetic Survey. The NSRS 
serves as a consistent coordinate system that defines latitude, 
longitude, height, scale, gravity, and orientation throughout the 
United States. The NSRS includes a network of permanently marked 
points; a consistent, accurate, and up-to-date national shoreline; a 
network of Continuously Operating Reference Stations (CORS) which 
supports three-dimensional positioning activities; and a set of 
accurate models describing dynamic, geophysical processes that affect 
spatial measurements.
    The Municipality of Anchorage's existing network of vertical datum 
monuments (benchmarks) is not tied to the NSRS, references a superseded 
local mean sea level, has minimal compatibility with modern survey 
techniques that rely heavily on the use of GPS equipment, and is 
generally outdated and in poor condition. For the Municipality to adopt 
the NSRS datum, additional funding is needed to create an inventory of 
existing benchmarks, identify existing benchmarks that may be used in 
conjunction with the NSRS, establish new benchmarks in areas where few 
monuments exist, and conduct a project to establish NSRS positions on 
new and existing benchmarks referencing the Municipality of Anchorage 
datum. The State's planning activity will verify and update the GPS 
coordinates of all benchmarks within the Municipality of Anchorage, 
which is a National Geodetic Survey requirement for communities to 
participate in the modernized NSRS.
    After consulting with the Municipality of Anchorage, the Office of 
Emergency Management, the Office of Economic and Community Development 
(MOA/OECD), and other Federal partners, and reviewing its Mitigation 
Needs Assessment, the State determined it is critical to allocate funds 
to upgrade the local vertical datum reference system to the NSRS in 
order to support FEMA in remapping the Municipality's Special Flood 
Hazard Areas (SFHAs). Local and State Hazard Mitigation Plans identify 
flood risk as one of the most urgent potential hazards in the 
Municipality. However, existing flood hazard maps are inaccurate, which 
limits the Municipality's ability to mitigate risk through land-use 
planning, infrastructure, building codes, and other measures. Flood 
hazard and other spatial mapping currently rely on the local vertical 
datum reference system, which the November 30, 2018, earthquake made 
more inaccurate. Upgrading the local vertical datum reference system to 
the NSRS will enable coordination with FEMA to update the 
Municipality's SFHAs to accurately convey flood risks within the 
community, making it a strategic and high-impact project to mitigate 
disaster risks and reduce future losses.
    Further, FEMA has adopted the NSRS as the official datum of the 
National Flood Insurance Program and is moving to transition all Flood 
Insurance Studies and Flood Insurance Rate Maps (FIRMs) to the NSRS. 
The Municipality's adoption of the NSRS will conform to FEMA standards, 
increase the alignment of federally funded geospatial data sets with 
local projects, enable the use of GPS technology in local surveying, 
and provide specifications for not only updating flood maps, but also 
tsunami warning systems and other disaster resources.
    To reduce the risks and prioritize the protection of low- and 
moderate-income (LMI) persons, the State of Alaska also verified that 
at least 50 percent of its CDBG-MIT award will continue to be used 
exclusively for activities that benefit LMI persons through its Tsunami 
Alert System and Home Flood Mitigation Program.
    The August 2019 Notice and the January 2021 Notice waive section 
106(d) of the HCDA (42 U.S.C. 5306(d)) and 24 CFR 570.489(a)(1)(i) and 
(iii) and create an alternative requirement that limits CDBG-MIT 
grantees to spending a maximum of 15 percent of their total grant 
amount or $750 million, whichever is less, on planning costs.
    Based on the reasons stated above, HUD has determined that good 
cause exists to modify the alternative requirement in paragraph 
V.A.8.b.(1) of the August 2019 Notice and the third paragraph of 
Section II.B. of the January 2021 Notice to the extent necessary to 
permit eligible planning expenses up to 48 percent of the State's CDBG-
MIT grant amount. Additionally, to ensure that the State prioritizes 
activities benefitting LMI persons as described in its approved CDBG-
MIT Action Plan, the Department will continue to require that at least 
50 percent of the State's CDBG-MIT funds be expended on programs and 
projects that will benefit LMI persons.
    As a reminder, the State must continue to limit its administrative 
costs for the CDBG-MIT grant to 5 percent of its total grant award and 
5 percent of program income generated by the grant, as provided in 
Public Law 116-20, the August 2019 Notice, and the January 2021 Notice.

IV. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available online on HUD's CDBG-DR website at https://www.hud.gov/
program_offices/

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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.

Marion M. McFadden,
Principal Deputy Assistant Secretary for Community Planning and 
Development.
[FR Doc. 2024-15055 Filed 7-8-24; 8:45 am]
BILLING CODE 4210-67-P