[Federal Register Volume 86, Number 3 (Wednesday, January 6, 2021)]
[Notices]
[Pages 569-576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-29262]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6182-N-02]


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

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 $85,291,000 in Community 
Development Block Grant disaster recovery (CDBG-DR) funds appropriated 
by the Additional Supplemental Appropriations for Disaster Relief Act, 
2019 (the Act). The $85,291,000 in CDBG-DR funds allocated by this 
notice is for the purpose of assisting in long-term recovery from major 
disasters that occurred in 2018 and 2019. The allocations in this 
notice add to the funding previously allocated in the January 27, 2020 
notice for these disasters. The Act requires HUD to allocate any funds 
not identified for long-term recovery from major disasters to be 
allocated for mitigation activities for 2018 disasters. Accordingly, 
under a separate notice, HUD will allocate the remaining $185,730,000 
of funds available under the Act for mitigation activities in the most 
impacted and distressed areas resulting from a major disaster that 
occurred in 2018. This notice also contains a waiver and alternative 
requirement addressing the income limits applicable to the Commonwealth 
of Puerto Rico for its CDBG-DR and CDBG-MIT grants. Additionally, this 
notice also provides additional flexibility to CDBG-DR grantees as they 
continue their disaster recovery efforts while also responding to the 
Coronavirus Disease 2019 (COVID-19) pandemic.

DATES: Applicability Date: January 11, 2021.

FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Acting 
Director, Office of Block Grant Assistance, Department of Housing and 
Urban Development, 451 7th Street SW, Room 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 
Information 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 
<a href="/cdn-cgi/l/email-protection#5d39342e3c2e29382f022f383e322b382f241d352839733a322b"><span class="__cf_email__" data-cfemail="d0b4b9a3b1a3a4b5a28fa2b5b3bfa6b5a2a990b8a5b4feb7bfa6">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Allocations
II. Use of Funds
III. Overview of Grant Process
    A. Appropriations Act (Pub. L. 116-20) Action Plan Process
    B. Action Plan Substantial Amendment Process To Incorporate 
Additional Funds
IV. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
    A. Grant Administration
    B. Waiver and Alternative Requirement Related to Adjusted Income 
Limits for Grants Under Public Laws 115-56, 115-123, and 116-20 
(Commonwealth of Puerto Rico only)

[[Page 570]]

    C. Waiver and Alternative Requirement Related to Tourism and 
Business Marketing (Commonwealth of Puerto Rico and U.S. Virgin 
Islands Only)
V. Duration of Funding
VI. Catalog of Federal Domestic Assistance
VII. Finding of No Significant Impact
Appendix A: Allocation Methodology

I. Allocations

    The Additional Supplemental Appropriations for Disaster Relief Act, 
2019 (Pub. L. 116-20, approved June 6, 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 was for grantees that 
received funds in response to disasters occurring in 2017. In the 
January 27, 2020 Federal Register notice (``January 2020 Notice'') HUD 
allocated $2,153,928,000 in CDBG-DR funds in accordance with the 
Appropriations Act for major disasters occurring in 2018 and 2019, and 
for unmet infrastructure needs for 2017 disasters, as well as 
$1,677,500,000 in accordance with the Supplemental Appropriations for 
Disaster Relief Act, 2018 (Pub. L. 115-254, approved October 5, 2018) 
(Prior Appropriation) for major disasters occurring in 2018.
    This notice allocates an additional $85,291,000 from the 
Appropriations Act 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. 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.
    HUD has 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, 2018, and 2019 disasters in 
the following Federal Register notices (``Prior Notices''): February 9, 
2018 at 83 FR 5844, August 14, 2018 at 83 FR 40314, February 19, 2019 
at 84 FR 4836, June 20, 2019 at 84 FR 28848, January 27, 2020 at 85 FR 
4681,\1\ August 17, 2020 at 85 FR 50041, and September 28, 2020 at 85 
FR 60821. CDBG-DR funds allocated pursuant to this notice are subject 
to the requirements of the Prior Notices, as amended by provisions in 
this notice.
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    \1\ The Federal Register published minor corrections to Table 1 
of the January 27, 2020 notice in a notice published on February 21, 
2020, at 85 FR 10182.
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    The Appropriations Act provides 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.
    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.
    Table 1 (below) shows the major disasters that grants under this 
notice may address and the minimum amount of funds from the 
Appropriations Act and Prior Appropriations that must be expended in 
the HUD-identified most impacted and distressed (MID) 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 for 2018 & 2019 Disasters
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                                                                                                                                 Minimum combined amount
                                                                  Allocation      Allocation                                     from Public Law 115-254
                                                                 under Public    under Public     Unmet needs      Combined       and Public Law 116-20
                                                                  Law 115-254     Law 116-20      allocation    allocation for    that must be expended
    Disaster year      Disaster Nos.           Grantee            (covered by     (covered by    under Public     unmet needs   for unmet needs recovery
                                                                  the January     the January     Law 116-20     (Pub. L. 115-    in the HUD identified
                                                                   27, 2020        27, 2020       (covered by    254 and 116-      ``most impacted and
                                                                    notice)         notice)      this notice)         20)          distressed'' areas
                                                                                                                                      listed herein
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2018................            4366  Hawaii County, HI.......     $66,890,000     $16,951,000     $23,720,000    $107,561,000  ($107,561,00) Hawaii
                                                                                                                                 County.
2018................     4396 & 4404  Commonwealth of the          188,652,000      55,294,000      10,378,000     254,324,000  (No less than
                                       Northern Mariana                                                                          203,459,200) Saipan and
                                       Islands.                                                                                  Tinian Municipalities.
2019................     4454 & 4466  State of Texas..........               0     212,741,000      14,769,000     227,510,000  (No less than
                                                                                                                                 182,008,000) Cameron,
                                                                                                                                 Chambers, Harris,
                                                                                                                                 Jefferson, Liberty,
                                                                                                                                 Montgomery, and Orange
                                                                                                                                 Counties; 78570
                                                                                                                                 (Hildalgo) Zip Code.
2019................            4473  Commonwealth of Puerto                 0               0      36,424,000      36,424,000  (No less than
                                       Rico.                                                                                     29,139,200) Guanica
                                                                                                                                 Municipio; Zip Codes:
                                                                                                                                 00656 (Guayanilla
                                                                                                                                 Municipio), 00698
                                                                                                                                 (Yauco Municipio), and
                                                                                                                                 00728 (Ponce
                                                                                                                                 Municipio).
                                                               ----------------------------------------------------------------
    Totals..........  ..............  ........................     255,542,000     284,986,000      85,291,000     625,819,000
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    Pursuant to the Appropriations Act, HUD has identified the MID 
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 has identified the 
entire jurisdiction of a grantee as the HUD-identified MID 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 MID areas, as identified in the last column in Table 
1. Note that if HUD designates a zip code as a MID area for purposes of 
allocating funds, the grantee may carry out activities within the whole 
county (county is indicated in parentheses next to the zip code) as a 
MID area. The grantee should indicate the decision to carry out 
activities throughout the whole county in its action plan.
    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

[[Page 571]]

MID 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 
MID areas.
    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 that received a presidential 
major disaster declaration pursuant to the disaster numbers listed in 
Table 1.

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 
Appropriations Act that apply to funds allocated under this notice.
    The Appropriations Act requires 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 MID areas. Therefore, the action plan submitted in response to 
this notice must describe 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 MID 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 on February 9, 2018 requires all grantees to describe how 
they plan to promote sound, sustainable long-term planning (83 FR 
5850). To maximize the impact of all available funds, grantees are 
encouraged to coordinate and align CDBG-DR funds under this notice with 
activities funded with other CDBG-DR and CDBG-MIT 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.
    For convenience, Table 2 (below) identifies clarifications and 
modifications to the requirements in the February 9, 2018 notice.

Table 2--Rules, Waivers, and Alternative Requirements Established in the
                              Prior Notices
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         Citation           Rules, waivers, and alternative requirements
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                         August 14, 2018 notice
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83 FR 40314..............  Allowing for unmet economic revitalization
                            and infrastructure needs; also addressed in
                            section I of this notice.
83 FR 40317..............  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..............  Working capital to aid in recovery.
83 FR 40317..............  Underwriting requirements.
83 FR 40317..............  Limitation of use of funds for eminent
                            domain.
83 FR 40318..............  Increased minimum public comment period for
                            action plans and substantial amendments.
83 FR 40318..............  Cost verification.
83 FR 40318..............  Additional specific criteria and conditions
                            to mitigate risk.
83 FR 40319..............  Waiver of Section 414 of the Stafford Act, as
                            amended and addressed in section IV.C.2. of
                            the January 27, 2020 notice (85 FR 4687).
83 FR 40319..............  Clarification of the environmental review
                            requirements.
83 FR 40320..............  Modification of affordability periods for
                            rental properties.
83 FR 40320..............  CDBG-DR housing assistance and FEMA's
                            permanent and semi-permanent housing
                            programs.
83 FR 40321..............  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..............  CDBG-DR funds as match for FEMA 428 Public
                            Assistance projects.
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                          June 20, 2019 notice
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84 FR 28836..............  Updates to Duplication of Benefits
                            Requirements Under the Stafford Act for
                            Community Development Block Grant (CDBG)
                            Disaster Recovery Grantees (entire notice).
84 FR 28848..............  Applicability of Updates to Duplication of
                            Benefits Requirements Under the Stafford Act
                            for Community Development Block Grant (CDBG)
                            Disaster Recovery Grantees (only portions
                            described in the January 27, 2020 notice (85
                            FR 4687).
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                        February 19, 2019 notice
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84 FR 4844...............  Clarification of green building standards.
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                         January 27, 2020 notice
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85 FR 4685...............  HUD will condition the availability of funds
                            for unmet infrastructure needs for 2017
                            disasters allocated to grantees that have
                            entered into alternative procedures under
                            section 428 of the Stafford Act.
85 FR 4685...............  Incorporation of waivers and alternative
                            requirements for local government grantees.
85 FR 4686...............  Use of administrative funds across multiple
                            grants.
                           One-for-one replacement housing, relocation
                            and real property acquisition requirements
                            for multiple grants.
85 FR 4687...............  Duplication of benefits changes.

[[Page 572]]

 
85 FR 4687...............  Consolidated plan consistency requirements.
85 FR 4687...............  Clarification on affordability periods.
85 FR 4687...............  Clarification and amendment on section 414 of
                            Robert T. Stafford Disaster Relief and
                            Emergency Assistance Act.
85 FR 4688...............  Clarification on procurement requirements.
85 FR 4688...............  Clarification on acquisition of real
                            property, flood and other buyouts to include
                            wildfire-impacted grantees.
------------------------------------------------------------------------
                         August 17, 2020 notice
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85 FR 50042..............  Extension of administrative deadlines to
                            provide flexibility to CDBG-DR grantees as
                            they respond to the impacts of the COVID-19
                            pandemic.
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                        September 28, 2020 notice
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85 FR 60822..............  Waiver and Alternative Requirements for Use
                            of FEMA-Approved Elevation Standards for
                            Nonresidential Structures.
85 FR 60823..............  Use of the ``Upper Quartile'' or ``Exception
                            Criteria'' for Low- and Moderate-Income Area
                            Benefit Activities (State of Texas only).
85 FR 60824..............  Use of Standardized Area Median Income (State
                            of Texas only).
85 FR 60827..............  Authorizing Tourism and Business Marketing
                            Assistance Activities (The Northern Mariana
                            Islands only).
85 FR 60827..............  Financial Certification Requirements under
                            Public Laws 115-254 and 116-20.
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III. Overview of Grant Process

III.A. Appropriations Act (Pub. L. 116-20) Action Plan Process

    A grantee receiving an allocation under this notice for disasters 
occurring in 2019 (Commonwealth of Puerto Rico) must submit an action 
plan per the requirements in 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 210 days after the 
applicability date of this notice, unless the grantee has requested, 
and HUD has approved an extension of this submission deadline. 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). Posting 
information online may not always be an effective way to solicit public 
comment, particularly in areas with extensive damage limiting the 
public's access to electricity, internet, and cellular service as a 
result of the disaster. Grantees should consider other ways to 
effectively solicit public comment, in addition to posting information. 
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. 
Plan publication efforts must meet the effective communications 
requirements of 24 CFR 8.6 and other fair housing and civil rights 
requirements, such as the effective communication requirements under 
the Americans with Disabilities Act.
    The grantee must submit an Implementation Plan and a Capacity 
Assessment that satisfies the requirements of paragraphs VI.A.1.b.(1) 
and (2) of the February 9, 2018 notice (83 FR 5848) titled 
Implementation Plan and Capacity Assessment.
    The grantee must submit information to support the Secretary's 
certification of proficient financial controls and procurement 
processes and adequate procedures for proper grant management required 
by the Appropriations Act. The grantee can submit all of the 
information required by section VI.A.1.a. of the February 9, 2018 
notice (83 FR 5847), paragraphs (1)-(6), as updated and amended by 
section IV.B.1. of the January 2020 Notice to impose additional 
requirements related to the duplication of benefits (85 FR 4686) using 
the ``Pub. L. 116-20 and 115-254 CDBG-DR Financial Management and Grant 
Compliance Certification Checklist'' posted on HUD's website. 
Alternatively, the grantee may request that HUD rely on the submissions 
made in response to section V.A.1.a. in the August 30, 2019 Main CDBG-
MIT Notice (84 FR 45844), as modified by the January 27, 2020 CDBG-MIT 
Notice allocating funds to the Commonwealth of Puerto Rico (85 FR 
4676), to support a new HUD certification for purposes of this 
allocation, provided, however, that HUD's approval will be conditioned 
on the requirement that the grantee must update its previous 
submissions to reflect any material changes. The grantee can use the 
``Pub. L. 116-20 and 115-254 CDBG-DR Financial Management and Grant 
Compliance Certification Checklist'' Addendum A and B posted on HUD's 
website to notify HUD of its intention to rely on previous submissions.
    For purposes of the Implementation Plan and Capacity Assessment and 
submissions to support the Secretary's certification, the submission 
deadlines were amended by section II of the August 17, 2020 notice to 
provide flexibility to CDBG-DR grantees as they also respond to the 
impacts of the COVID-19 pandemic. Grantees must submit the required 
information within 150 days of the applicability date of this notice.
    In the Prior Notices, the Department stated 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 that the Department has established specific criteria and 
conditions for each grant award as provided for at 2 CFR 200.206 and 
200.208,\2\ respectively, to mitigate the risks of the grant.
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    \2\ Revisions to 2 CFR part 200 became effective on November 12, 
2020 (85 FR 49506). In the Prior Notices, the references to 
requirements for the review of grantee risk and specific conditions 
were in 2 CFR 200.205 and 200.207, respectively. The revised 2 CFR 
part 200 regulations apply to funds allocated by this notice.

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[[Page 573]]

III.B. Action Plan Substantial Amendment Process To Incorporate 
Additional Funds

    Each grantee that received an allocation for 2018 or 2019 disasters 
under the January 2020 Notice and this notice (Commonwealth of the 
Northern Mariana Islands; Hawaii County, HI; and the State of Texas) is 
required to submit a substantial amendment to the action plan that was 
submitted in response to the January 2020 Notice.
    The substantial amendment must be submitted not later than 180 days 
after the initial action plan is approved in whole or in part by HUD or 
not later than 180 days after the applicability date of this notice, 
whichever is later, unless the grantee has requested, and HUD has 
approved an extension of this submission deadline. The substantial 
amendment must include the additional allocation of funds and address 
the requirements of this notice.
    Grantees that received allocations under the January 2020 Notice 
for 2018 and 2019 disasters submitted information described in section 
VI.A.1. of the February 9, 2018 notice (as amended and updated by 
section IV.B.1. of the January 27, 2020 notice, 85 FR 4686). These 
submissions supported the Secretary's evaluation of grantee capacity 
and the Secretary's certification of proficient financial controls and 
procurement processes and adequate procedures for proper grant 
management required by the Appropriations Act. Rather than resubmit the 
same information for allocations under this notice, grantees receiving 
a second allocation for 2018 and 2019 disasters are required to update 
submissions for their first allocations to reflect any material 
changes. This includes updates to: (a) The information required by 
section VI.A.1.a. of the February 9, 2018 notice (83 FR 5847), 
paragraphs (1)-(6), as updated and amended by section IV.B.1. of the 
January 2020 Notice (85 FR 4686); and (b) to the Implementation Plan 
and Capacity Assessment that satisfies paragraphs (1) and (2) in 
section VI.A.1.b. of the February 9, 2018 notice (83 FR 5848). HUD will 
consider these updates before granting funds allocated by this notice. 
The submission deadlines were amended by section II of the August 17, 
2020 notice to provide flexibility to CDBG-DR grantees as they also 
respond to the impacts of the COVID-19 pandemic. Grantees must submit 
the required information within 150 days of the applicability date of 
this notice.
    III.B.1. Timeline for Action Plan Substantial Amendment. 
Additionally, each grantee that received an allocation under the 
January 2020 Notice for 2018 and 2019 disasters must meet the following 
requirements to substantially amend its action plan. These steps are 
only applicable to this substantial amendment process to add the 
additional allocation under this notice.
    <bullet> Grantee must consult with affected citizens, stakeholders, 
local governments, and public housing authorities to determine updates 
to its needs assessment (as described in paragraph A.7 of section VI of 
the February 9, 2018 Notice (83 FR 5854)).
    <bullet> Grantee must amend its action plan to update its impact 
and needs assessment, modify or create new activities, or reprogram 
funds in accordance with requirements for substantial amendments in the 
Prior Notices. Each amendment must be highlighted, or otherwise 
identified within the context of the entire action plan. The beginning 
of every substantial amendment must include a: (1) Section that 
identifies exactly what content is being added, deleted, or changed; 
(2) chart or table that clearly illustrates where funds are coming from 
and where they are moving to; and (3) a revised budget allocation table 
that reflects all funds.
    <bullet> Grantee must publish the substantial amendment to its 
previously approved action plan for disaster recovery in a manner that 
affords citizens, affected local governments, and other interested 
parties a reasonable opportunity to examine the amendment's contents 
and provide feedback, in accordance with requirements published in 
paragraph IV.A.3. of the August 14, 2018 Notice (83 FR 40318). The 
manner of publication must include, at a minimum, prominent posting on 
the grantee's official website for not less than 30 calendar days for 
public comment.
    <bullet> Grantee must respond to public comment and submit its 
substantial amendment to HUD (together with SF-424 and certifications 
required by Section VI.E. of the February 9, 2018 Notice) no later than 
180 days after the grantee's action plan is approved in whole or in 
part by HUD or not later than 180 days after the applicability date of 
this notice, whichever comes later.
    <bullet> HUD will review the substantial amendment within 45 days 
from date of receipt and determine whether to approve the substantial 
amendment per criteria identified in this notice and the Prior Notices.
    <bullet> HUD will send a substantial amendment approval letter, 
revised grant conditions, and an unsigned grant agreement to the 
grantee. If the substantial amendment is not approved, HUD will send a 
letter identifying the substantial amendment deficiencies; the grantee 
must then re-submit the substantial amendment within 45 days of the 
notification letter.
    <bullet> Grantee must ensure that the HUD-approved substantial 
amendment and HUD-approved action plan are posted prominently on its 
official website. Each grantee's current version of its entire action 
plan (including amendments) must be accessible for viewing as a single 
document at any given point in time, rather than the public or HUD 
having to view and cross-reference changes among multiple amendments.
    <bullet> Grantee must enter the activities from its published 
substantial amendment into the Disaster Recovery Grant Reporting (DRGR) 
system and submit the updated DRGR action plan (revised to reflect the 
HUD-approved substantial amendment) to HUD within the DRGR system.
    <bullet> Grantee must sign and return the grant agreement to HUD.
    <bullet> HUD will sign the grant agreement and establish the 
grantee's CDBG-DR line of credit amount to reflect the total amount of 
available funds.
    <bullet> Grantee may draw down CDBG-DR funds from its line of 
credit after the Responsible Entity completes applicable environmental 
review(s) pursuant to 24 CFR part 58, or adopts another Federal 
agency's environmental review as authorized under the Appropriations 
Act and the Prior Appropriation, and, as applicable, receives from HUD 
or the state the Authority to Use Grant Funds (AUGF) form and 
certification.
    <bullet> Grantee must amend and submit its projection of CDBG-DR 
expenditures and performance outcomes with the substantial amendment.

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 (unless otherwise noted). 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

[[Page 574]]

as environmental and labor requirements, continue to apply. The 
following requirements apply only to the CDBG-DR funds appropriated 
under the Appropriations Act (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 are reminded that requirements related to 
nondiscrimination cannot be waived. 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 Appropriations Acts, waivers and alternative requirements are 
effective five 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 and statutory and 
regulatory provisions governing the entitlement CDBG program shall 
apply to any local government receiving a CDBG-DR grant. 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 this notice and the Prior 
Notices.
    HUD amends the Prior Notices and waives the provisions of 24 CFR 
part 570, subpart F to authorize the Commonwealth of the Northern 
Mariana Islands and American Samoa to administer its CDBG-DR allocation 
in accordance with the regulatory and statutory provisions governing 
the State CDBG program, as modified by rules, statutes, waivers, and 
alternative requirements made applicable by Federal Register notices. 
This includes the requirement that the aggregate total for 
administrative and technical assistance expenditures by the 
Commonwealth of the Northern Mariana Islands and American Samoa must 
not exceed 5 percent of any CDBG-DR grant made pursuant to the 
Appropriations Act, plus 5 percent of program income generated by the 
grant. Also, HUD extends the waivers and alternative requirements in 
the Prior Notices to Hawaii County, which is subject to requirements 
imposed in 24 CFR part 570, subpart F. However, because the Prior 
Notices do not include waivers and alternative requirements to the 
provisions in 24 CFR part 570, subpart F, HUD amends the Prior Notices 
and waives 24 CFR 570.420(c), 24 CFR 570.431(a), and 24 CFR 570. 431(b) 
for Hawaii and Kauai Counties. The Department has determined that good 
cause exists for these waivers and that such waivers are not 
inconsistent with the overall purposes of title I of the HCDA.
    Additionally, the February 9, 2018 notice required state grantees 
and subrecipients to attend fraud-related training provided by HUD OIG 
to assist in the proper management of CDBG-DR grant funds. With this 
notice, HUD is applying this provision to local government grantees 
allocated funds under the Prior Notices or this 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. Grant Administration

    IV.A.1. Use of administrative funds across multiple grants. The 
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 submissions described in sections III.A. or 
III.B. of this notice that meet the requirements of section VI.A.1.a. 
of the February 9, 2018 notice (83 FR 5847), paragraphs (1)-(6), as 
updated and amended by section IV.B.1. of the January 2020 Notice (85 
FR 4686). Grantees can address this through the submission of the 
``Pub. L. 116-20 and 115-254 CDBG-DR Financial Management and Grant 
Compliance Certification Checklist'' Addendum B available on HUD's 
website. Grantees are reminded that all costs incurred for 
administration must still qualify as an eligible administration 
expense.

IV.B. Waiver and Alternative Requirement Related to Adjusted Income 
Limits for Grants Under Public Laws 115-56, 115-123, and 116-20 
(Commonwealth of Puerto Rico Only)

    In the August 14, 2018 notice (83 FR 40320), HUD provided the 
following adjustment to Puerto Rico's income limits in accordance with 
section 102(a)(20)(B) of the HCDA:
    ``Section 102(a)(20) of the HCDA defines `persons of low- and 
moderate-income' and `low- and moderate-income persons.' Subparagraph 
(B) of this definition authorizes the Secretary to establish for any 
area percentages of median income that are higher or lower than the 
percentages defined as `low- and moderate-income' under 102(a)(20)(A), 
if the Secretary finds such variations to be necessary because of 
unusually high or low family incomes in such areas. Due to the 
unusually low incomes in Puerto Rico, residents that meet the CDBG 
program definition of `low- and moderate-income' by having incomes of 
80 percent AMI or less, also remain below the Federal poverty level. 
Therefore, the Department is increasing the income limits for low- and 
moderate-income persons in Puerto Rico, which will be listed in income 
tables posted on HUD's website. Under this adjustment, Puerto Rico may 
use these alternative income limits when determining that activities 
undertaken with CDBG-DR funds meet the low- and moderate-income benefit 
CDBG national objective criteria. These income limits apply only to the 
use of CDBG-DR funds under this notice and the Prior Notice.''
    In order to ensure consistency with the use of CDBG-DR funds that 
are governed by alternative income limits authorized by the Department, 
the Department is extending the income limit adjustments of the August 
14, 2018 notice to all CDBG-DR funds allocated under Public Laws 115-
56, 115-123, and 116-20 and to CDBG-MIT funds allocated to Puerto Rico 
for mitigation

[[Page 575]]

activities under Public Law 115-123. Under this extension, Puerto Rico 
may use these alternative income limits when determining that 
activities undertaken with CDBG-DR or CDBG-MIT funds meet the low- and 
moderate-income benefit CDBG national objective criteria. HUD will 
continue to post the applicable income tables online.
    In addition, Puerto Rico may currently choose to take advantage of 
the waiver HUD issued in the February 9, 2018 notice (83 FR 5861) and 
the August 30, 2019 notice (84 FR 45863) to provide homeownership 
assistance for households earning up to 120 percent of the area median 
income (AMI). For consistency with HUD's alternative income limits 
because of the unusually low incomes in Puerto Rico, the Department 
finds that good cause exists to make similar adjustments to the income 
limits for homeownership assistance activities authorized by the waiver 
in the February 9, 2018 notice. Therefore, HUD waives 42 U.S.C. 
5302(a)(20) to the extent necessary to add the following alternative 
requirement. When HUD establishes percentages of median income that are 
higher or lower than the percentages defined as `low- and moderate-
income' under section 102(a)(20)(A) of the HCDA, HUD may also apply the 
same adjustments to revise other income limits that apply to the use of 
grant funds (with adjustments for smaller and larger families). For 
Puerto Rico, this alternative requirement authorizes HUD to annually 
publish adjusted income limits that apply whenever grant requirements 
necessitate the calculation of 120 percent of AMI. This waiver applies 
to Puerto Rico's allocation of funds under the Prior Notices under 
Public Laws 115-56 and 115-123, funding for mitigation activities under 
Public Law 115-23, and funding allocated under this notice or any other 
notice under Public Law 116-20.

IV.C. Waiver and Alternative Requirement Related to Tourism and 
Business Marketing (Commonwealth of Puerto Rico and U.S. Virgin Islands 
Only)

    In the August 14, 2018 notice (83 FR 40322), the Department granted 
the Commonwealth of Puerto Rico a waiver and alternative requirement to 
create a new eligible tourism and marketing activity to use up to 
$15,000,000 of CDBG-DR funds to promote the Commonwealth in general or 
specific communities, consistent with the amount allocated by the 
Commonwealth to promote travel and to attract new businesses to 
disaster-impacted areas in the action plan submitted to HUD pursuant to 
the February 9, 2018 notice. Additionally, in the August 14, 2018 
notice (83 FR 40322), HUD granted the U.S. Virgin Islands (USVI) a 
waiver and alternative requirement to spend up to $5,000,000 of CDBG-DR 
funds on tourism marketing activities to promote the Territory in 
general or specific components of the islands, consistent with the 
amount allocated by the USVI in the action plan submitted to HUD 
pursuant to the February 9, 2018 notice. HUD granted these waivers and 
alternative requirements to support economic recovery in areas that 
depend on the tourism industry following Hurricanes Irma and Maria. HUD 
increased each grantee's cap on allowable tourism marketing activities 
to $25 million to benefit disaster-impacted areas in a notice published 
February 19, 2019 (84 FR 4844-45).''
    Both of these waivers and alternative requirements expire two years 
after the grantees' first draw of CDBG-DR funds under the respective 
allocations. For both Puerto Rico and USVI, it is two years after their 
first draw of funds allocated in the February 9, 2018 notice. HUD has 
determined that the rapidly emerging needs of states and local 
governments in responding to the COVID-19 pandemic provides good cause 
to allow extensions of the expiration date for these waivers and 
alternative requirements established in Federal Register notices 
published on August 14, 2018 (83 FR 40322) and February 19, 2019 (84 FR 
4844-45), as referenced above. In response to the COVID-19 pandemic, 
HUD is providing a one-year extension of the previously established 
expiration deadlines for these two grantees.

V. Duration of Funding

    The Appropriations Act makes 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 initial obligation of funds under Public Laws 115-254 and 116-20 
for a 2018 or 2019 disaster pursuant to an executed grant agreement. 
HUD may extend the period of performance administratively, if good 
cause for such an extension exists at that time, as requested by the 
grantee and approved by HUD. When the period of performance has ended, 
HUD will close out the grant and any remaining funds not expended by 
the grantee on appropriate programmatic purposes will be recaptured by 
HUD.

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 online on HUD's website 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). Hearing- or speech-
impaired individuals may access this number through TTY by calling the 
Federal Information Relay Service at 800-877-8339 (this is a toll-free 
number).

John Gibbs,
Principal Deputy Assistant Secretary for Community Planning and 
Development.

Appendix A--Detailed Methodology

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

Background

    Public Law 116-20 appropriated $2,431,000,000 through the 
Community Development Block Grant Disaster Recovery (CDBG-DR) 
program. The funds were to be used to address specific 
infrastructure needs of select 2017 disasters and remaining unmet 
disaster recovery needs for disasters in 2018 and 2019, and then 
provide any remaining funds to support mitigation activities for 
2018 disasters. On December 3rd, HUD announced allocations for all 
but $272 million of available funds.
    The remaining $272 million have been held pending complete data 
for the remaining disasters of 2019 as well as updates to other 
select disasters of 2018 and 2019 due to extraordinary 
circumstances.

Methodology

    Using data received from FEMA and the Small Business 
Administration (SBA) on May 11, 2020, HUD updated unmet needs for a 
select set of disasters in 2018 and 2019. The updated unmet needs 
are only for extraordinary circumstances:

[[Page 576]]

    <bullet> Hawaii County, HI (DR 4366, an additional $23,720,000). 
Extraordinary circumstance: At the time of the December 2019 
allocation FEMA Public Assistance (PA) estimates were still being 
discussed with state officials. The PA estimate at the time of the 
2019 allocation was just $1.5 million with local match (``unmet 
need'') of $378,000. The updated data from FEMA is that DR 4366 has 
$96 million in Category C to G needs with a $24 million match 
requirement which substantially increases unmet needs.
    <bullet> Northern Marianas (DR 4396 and DR 4404, an additional 
$10,378,000). Extraordinary circumstance: FEMA's Permanent Housing 
Construction (PHC) program is seldom activated by FEMA so it 
requires a special consideration for HUD's calculation of unmet 
needs. In HUD's December 3rd allocation announcement we had reduced 
the housing needs estimate for the Northern Marianas based on a FEMA 
early estimate that 455 homes would be repaired or replaced by the 
PHC program and thus would not need CDBG-DR assistance. At the time, 
the program was in its early implementation and the number of homes 
served was expected to change. Due to the unusual nature of this 
FEMA program, HUD requested from FEMA in May 2020 a revised estimate 
of how many homes would be served. That revised FEMA PHC estimate is 
that 300 homes are now expected to be served by PHC instead of the 
previously estimated 455 homes. This reduction in the FEMA PHC leads 
to an increase in the Northern Marianas unmet CDBG-DR need estimate 
by 155 homes.
    <bullet> Texas (DR 4466, an additional $14,769,000). 
Extraordinary circumstance: This disaster was declared on October 
4th and the data used for the December 3rd allocation had been 
extracted from FEMA's systems on November 15, 2019. In general, 
HUD's experience is that FEMA data is most complete for the purpose 
of calculating CDBG-DR unmet needs approximately 90 days after a 
disaster declaration. DR 4466 was the only disaster in 2019 that had 
been declared within 90 days of the November 15th data extraction. 
For this reason, HUD requested a refresh of the FEMA data for DR 
4466 which identified 252 additional homes with serious damage than 
had been identified in the prior allocation leading to the increased 
estimate of need.
    <bullet> Puerto Rico (DR 4473, $36,424,000). Extraordinary 
circumstance: On December 28, 2019, Puerto Rico experienced a major 
disaster (DR 4473) that has continued for some months with 
continuing after-shocks. This is a disaster occurring in both 2019 
and 2020. Because it initially occurred in 2019 it is eligible for 
funding from Public Law 116-20. However, this disaster is on-going. 
FEMA had closed the application period for the IHP program but due 
to a serious after-shock on May 2, 2020, FEMA reopened the 
application period for this disaster. This allocation is based on 
the data before FEMA reopened the application period.

[FR Doc. 2020-29262 Filed 1-5-21; 8:45 am]
BILLING CODE 4210-67-P


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