Federal Register / Vol. 77, No. 73 / Monday, April 16, 2012 / Notices 22583 

11 inches, suitable for copying and 

electronic filing. If you submit 

comments by mail and would like to 

know that they reached the Facility, 

please enclose a stamped, self-addressed 

postcard or envelope. We will consider 

all comments and material received 

during the comment period and will 

address them accordingly. 

Viewing Comments and Documents 

To view comments, as well as 

documents mentioned in this Notice as 

being available in the docket, go to 

http://www.regulations.gov, click on the 

‘‘read comments’’ box, which will then 

become highlighted in blue. In the 

‘‘Keyword’’ box insert ‘‘USCG–2012– 

0029’’ and click ‘‘Search.’’ Click the 

‘‘Open Docket Folder’’ in the ‘‘Actions’’ 

column. You may also visit the DMF in 

Room W12–140 on the ground floor of 

the DOT West Building, 1200 New 

Jersey Avenue SE., Washington, DC 

20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. 

OIRA posts its decisions on ICRs 

online at http://www.reginfo.gov/public/ 

do/PRAMain after the comment period 

for each ICR. An OMB Notice of Action 

on each ICR will become available via 

a hyperlink in the OMB Control 

Number: 1625–New. 

Privacy Act 

Anyone can search the electronic 

form of comments received in dockets 

by the name of the individual 

submitting the comment (or signing the 

comment, if submitted on behalf of an 

association, business, labor union, etc.). 

You may review a Privacy Act statement 

regarding Coast Guard public dockets in 

the January 17, 2008, issue of the 

Federal Register (73 FR 3316). 

Previous Request for Comments 

This request provides a 30-day 

comment period required by OIRA. The 

Coast Guard published the 60-day 

notice (77 FR 6132, February 7, 2012) 

required by 44 U.S.C. 3506(c)(2). That 

Notice elicited no comments. 

Information Collection Requests 

Title: Coast Guard Exchange System 

Scholarship Application. 

OMB Control Number: 1625–New. 

Type of Request: New Collection. 

Respondents: Coast Guard 

dependents. 

Abstract: This information collected 

on this form allows the Coast Guard 

Exchange System Scholarship Program 

Committee to evaluate and rank 

scholarship applications in order to 

award the annual scholarships. 

Forms: CG–5687. 

Burden Estimate: The estimated 

burden is 30 hours per year. 

Dated: April 6, 2012. 

R. E. Day, 

Rear Admiral, U.S. Coast Guard, Assistant 

Commandant for Command, Control, 

Communications, Computers and 

Information Technology. 

[FR Doc. 2012–9008 Filed 4–13–12; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5628–N–01] 

Allocations, Common Application, 

Waivers, and Alternative Requirements 

for Community Development Block 

Grant (CDBG) Disaster Recovery 

Grantees Under the Department of 

Housing and Urban Development 

Appropriations Act, 2012 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, HUD. 

ACTION: Notice. 

SUMMARY: This Notice advises the public 

of the allocation of CDBG disaster 

recovery funds for the purpose of 

assisting recovery in the most impacted 

and distressed areas declared a major 

disaster in 2011 under title IV of the 

Robert T. Stafford Disaster Relief and 

Emergency Assistance Act (42 U.S.C. 

5121 et seq.). As described in the 

SUPPLEMENTARY INFORMATION section of 

this Notice, HUD is authorized by 

statute and regulations to waive 

statutory and regulatory requirements 

and specify alternative requirements 

upon the request of a grantee. Therefore, 

this Notice describes applicable waivers 

and alternative requirements, as well as 

the application process, eligibility 

requirements, and relevant statutory 

provisions for grants provided under 

this Notice. 

DATES: Effective Date: April 23, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Scott Davis, Director, Disaster Recovery 

and Special Issues Division, Office of 

Block Grant Assistance, Department of 

Housing and Urban Development, 451 

7th Street SW., Room 7286, Washington, 

DC 20410, telephone number 202–708– 

3587. Persons with hearing or speech 

impairments may access this number 

via TTY by calling the Federal Relay 

Service at 800–877–8339. Facsimile 

inquiries may be sent to Mr. Davis at 

202–401–2044. (Except for the ‘‘800’’ 

number, these telephone numbers are 

not toll-free.) 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Allocations 

II. Use of Funds 

III. Prevention of Fraud, Abuse, and 

Duplication of Benefits 

IV. Authority To Grant Waivers 

V. Overview of Grant Process 

VI. Applicable Rules, Statutes, Waivers, and 

Alternative Requirements 

VII. Duration of Funding 

VIII. Catalog of Federal Domestic Assistance 

IX. Finding of No Significant Impact 

Appendix A: Allocation Methodology 

I. Allocations 

Section 239 of the Department of 

Housing and Urban Development 

Appropriations Act, 2012 (Pub. L. 112– 

55, approved November 18, 2011) 

(Appropriations Act) makes available up 

to $400 million, to remain available 

until expended, in CDBG funds for 

necessary expenses 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 pursuant 

to the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act of 1974 

(42 U.S.C. 5121 et seq.) in 2011. The law 

provides that grants shall be awarded 

directly to a State or unit of general 

local government at the discretion of the 

Secretary. 

To comply with statutory direction 

that funds be used for disaster-related 

expenses in the most impacted and 

distressed areas, HUD computes 

allocations based on data that are 

generally available and that cover all the 

eligible affected areas. Within states 

receiving an allocation in this Notice, 

the Department identified the ‘‘most 

impacted and distressed areas’’ as those 

counties that have more than $10 

million in estimated unmet severe 

housing and business needs. If a CDBG 

entitlement jurisdiction accounts for $6 

million or more of funds allocated 

within a state, it receives a direct award 

(due to its extraordinarily high level of 

localized unmet need, one nonentitlement jurisdiction (the city of 

Minot, ND) also receives a direct award 

under this Notice). Each local 

jurisdiction receiving a direct award lies 

within a county that meets the ‘‘most 

impacted and distressed’’ criterion. 

To ensure that funds are dedicated to 

the most impacted and distressed areas, 

80 percent of the combined total of all 

the funds awarded within a state (this 

includes funds awarded directly to a 

State as well as those funds awarded 

directly to local governments) must be 

spent in the ‘‘most impacted and 

distressed’’ counties (i.e,. those 

identified by HUD as having more than 


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$10 million in estimated unmet severe 

housing and business needs). Since a 

local government receiving a direct 

grant allocation must spend the entirety 

of its grant within its jurisdiction, HUD 

has identified the remaining amount of 

each grant awarded directly to a State 

that must be expended within its ‘‘most 

impacted’’ counties in order to reach the 

80 percent threshold (see Table 1). A 

more detailed explanation of HUD’s 

allocation methodology is provided as 

Appendix A within this Notice. 

The principle behind the 80 percent 

rule is that each State received their 

allocation based on the estimated unmet 

needs in the most impacted counties 

(i.e., those counties with more than $10 

million in severe unmet housing and 

business needs) and thus HUD is 

requiring that each State direct these 

limited resources toward those most 

impacted counties. Nonetheless, HUD 

recognizes that there may be 

circumstances where data regarding 

damage estimates are subsequently 

revised, highly localized damage may 

occur outside of the most impacted 

counties, or overall recovery would 

otherwise benefit from expenditures 

outside of those most impacted 

counties. As a result, HUD is permitting 

States to spend the portion of its award 

in excess of the 80 percent threshold to 

address recovery needs outside of its 

‘‘most impacted’’ counties. However, 

these funds must still be spent within 

counties that received a Presidential 

disaster declaration in 2011. 

Based on a review of the impacts from 

Presidentially-declared disasters 

occurring in 2011, and estimates of 

unmet need, HUD is making the 

following allocations: 

TABLE 1—ALLOCATIONS UNDER PUB. L. 112–55 

Disaster No. State Grantee Allocation Minimum amount that must be expended in the ‘‘most 

impacted’’ counties identified 

4020, 4031 .......... New York ........... State of New York .............. $71,654,116 ($53,011,323) Schoharie, Tioga, Broome, Greene, and/ 

or Orange. 

4020, 4031 .......... New York ........... Orange County, NY ............ 11,422,029 All funds must be spent within jurisdiction. 

4031 .................... New York ........... Town of Union, NY ............. 10,137,818 All funds must be spent within jurisdiction. 

1981 .................... North Dakota ...... State of North Dakota ......... 11,782,684 ($0) Ward. 

1981 .................... North Dakota ...... City of Minot, ND ................ 67,575,964 All funds must be spent within jurisdiction. 

1971 .................... Alabama ............. State of Alabama ................ 24,697,966 ($13,584,750) Tuscaloosa, Marion, Jefferson and/or 

DeKalb. 

1971 .................... Alabama ............. City of Tuscaloosa .............. 16,634,702 All funds must be spent within jurisdiction. 

1971 .................... Alabama ............. Jefferson County ................. 7,847,084 All funds must be spent within jurisdiction. 

1971 .................... Alabama ............. City of Birmingham ............. 6,386,326 All funds must be spent within jurisdiction. 

1980, 4012 .......... Missouri .............. State of Missouri ................. 8,719,059 ($0) Jasper. 

1980 .................... Missouri .............. City of Joplin, MO ............... 45,266,709 All funds must be spent within jurisdiction. 

4025, 4030 .......... Pennsylvania ...... State of Pennsylvania ......... 27,142,501 ($17,283,073) Bradford, Dauphin, Columbia, Wyoming, 

and/or Luzerne. 

4025, 4030 .......... Pennsylvania ...... Luzerne County, PA ........... 15,738,806 All funds must be spent within jurisdiction. 

4030 .................... Pennsylvania ...... Dauphin County, PA ........... 6,415,833 All funds must be spent within jurisdiction. 

4029 .................... Texas ................. State of Texas .................... 31,319,686 ($25,055,749) Bastrop. 

1995, 4001, 4022 Vermont .............. State of Vermont ................. 21,660,211 ($17,328,169) Washington and/or Windsor. 

4021 .................... New Jersey ........ State of New Jersey ........... 15,598,506 ($12,478,805) Passaic. 

Total ............. ............................ ............................................. $400,000,000 

As stated by the Appropriations Act, 

funds provided in today’s Notice shall 

not adversely affect the amount of any 

non-disaster formula assistance received 

by a State or unit of general local 

government under the Community 

Development Fund. Unless noted 

otherwise, the term ‘‘grantee’’ refers to 

any grantee—whether State, city, or 

county—receiving a direct award under 

this Notice. 

II. Use of Funds 

The Appropriations Act requires 

funds to be used only for specific 

disaster-related purposes. The law also 

requires that prior to the obligation of 

funds a grantee shall submit a plan 

detailing the proposed use of all funds, 

including criteria for eligibility and how 

the use of these funds will address longterm recovery. Thus, in an Action Plan 

for Disaster Recovery, grantees must 

describe uses and activities that are: (1) 

Authorized under title I of the Housing 

and Community Development Act of 

1974 (HCD Act) or allowed by this 

Notice, and (2) a response to a disasterrelated impact. To help meet these 

requirements, the Department expects 

each grantee to conduct an assessment 

of community impacts and unmet needs 

to guide the development and 

prioritization of planned recovery 

activities. Allocations of funding in each 

grantee’s Action Plan should reflect the 

findings of that grantee’s needs 

assessment. For more guidance on the 

needs assessment and the creation of the 

Action Plan, see paragraph 1 under 

section VI of this Notice: ‘‘Applicable 

Rules, Statutes, Waivers, and 

Alternative Requirements.’’ 

Additionally, as provided for in the 

HCD Act, funds may be used as a 

matching requirement, share, or 

contribution for any other Federal 

program. Funds may not be used for 

activities reimbursable by, or for which 

funds are made available by, the Federal 

Emergency Management Agency 

(FEMA), the U.S. Army Corps of 

Engineers (USACE), or the Small 

Business Administration (SBA). 

III. Prevention of Fraud, Abuse, and 

Duplication of Benefits 

To prevent fraud, abuse of funds, 

mismanagement, and duplication of 

benefits under the Appropriations Act, 

this Notice includes specific reporting, 

written procedures, monitoring, and 

internal audit requirements applicable 

to each grantee. Departmental guidance 

to assist in preventing a duplication of 

benefits is provided at 76 FR 71060 

(published November 16, 2011) and in 

paragraph 26 in this Notice. Other 

reporting, procedural, and monitoring 

requirements are discussed in 

paragraphs 1 and 14, under section VI 

of this Notice: ‘‘Applicable Rules, 

Statutes, Waivers, and Alternative 

Requirements.’’ In addition, the 

Department will institute risk analysis 

and on-site monitoring of grantee 

management as well as collaborate with 

the HUD Office of Inspector General to 


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plan and implement oversight of these 

funds. 

IV. Authority To Grant Waivers 

The Appropriations Act authorizes 

the Secretary to waive, or specify 

alternative requirements for any 

provision of any statute or regulation 

that the Secretary administers in 

connection with the obligation by the 

Secretary, or use by the recipient, of 

these funds and guarantees, except for 

requirements related to fair housing, 

nondiscrimination, labor standards, and 

the environment (including 

requirements concerning lead-based 

paint), upon: (1) A request by the 

grantee explaining why such a waiver is 

required to facilitate the use of such 

funds or guarantees, and (2) a finding by 

the Secretary that such a waiver would 

not be inconsistent with the overall 

purpose of the HCD Act. Regulatory 

waiver authority is also provided by 24 

CFR 5.110, 91.600, and 570.5. 

V. Overview of Grant Process 

To begin expenditure of CDBG 

disaster recovery funds, the following 

expedited steps are necessary: 

• Grantee adopts citizen participation 

plan for disaster recovery in accordance 

with the requirements of this Notice; 

• Grantee publishes its Action Plan 

for Disaster Recovery on the grantee’s 

official web site for no less than 7 

calendar days to solicit public comment; 

• Grantee responds to public 

comment and submits its Action Plan 

(which includes Standard Form 424 

(SF–424) and certifications) to HUD no 

later than 90 days after the date of this 

Notice; 

• HUD expedites review (allotted 45 

days from date of receipt; however, 

completion of review is anticipated 

much sooner); 

• HUD accepts the Action Plan and 

sends a cover letter, grant conditions, 

and signed grant agreement to the 

grantee; 

• Grantee signs and returns the fully 

executed grant agreement; 

• Grantee ensures that the final HUDaccepted Action Plan posted on its 

official Web site; 

• HUD establishes the grantee’s line 

of credit; 

• Grantee requests and receives 

Disaster Recovery Grant Reporting 

(DRGR) system access (if the grantee 

does not already have it); 

• If it has not already done so, grantee 

enters the activities from its published 

Action Plan into DRGR and submits it 

to HUD. (Funds can be drawn from the 

line of credit only for activities that are 

established in DRGR.) 

• After the Responsible entity 

completes applicable environmental 

review(s) pursuant to 24 CFR part 58 

and, as applicable, receives from HUD 

or the State an approved Request for 

Release of Funds and certification, the 

grantee may draw down funds from the 

line of credit. 

• The grantee must begin to draw 

down funds no later than 180 days after 

the date of this Notice. 

VI. Applicable Rules, Statutes, Waivers, 

and Alternative Requirements 

The Secretary finds that the waivers 

and alternative requirements, as 

described in this Notice, are necessary 

to facilitate the use of these funds for 

the statutory purposes, and are not 

inconsistent with the overall purpose of 

the HCD Act or the Cranston-Gonzalez 

National Affordable Housing Act, as 

amended. Under the requirements of the 

Appropriations Act and the Department 

of Housing and Urban Development 

Reform Act of 1989 (the HUD Reform 

Act), regulatory waivers must be 

justified and published in the Federal 

Register. 

This section of the Notice describes 

applicable waivers and alternative 

requirements granted in response to 

requests from grantees. The following 

requirements provide additional 

flexibility in program design and 

implementation and implement 

statutory requirements unique to this 

appropriation. As a result, they apply 

only to the CDBG disaster recovery 

funds appropriated in the 

Appropriations Act, and not to funds 

provided under the annual formula 

State or Entitlement CDBG programs, or 

those provided under any other 

component of the CDBG program, such 

as the Neighborhood Stabilization 

Program. 

Grantees may request additional 

waivers from the Department as needed 

to address specific needs related to their 

recovery activities. The Department will 

respond to requests for waivers after 

working with the grantee to tailor its 

program(s) to best meet its needs. 

Except where noted, waivers and 

alternative requirements apply to all 

grantees under this Notice. 

Except as described in this Notice, 

statutory and regulatory provisions 

governing the State CDBG program shall 

apply to any State receiving an 

allocation under this Notice. Statutory 

and regulatory provisions governing the 

Entitlement CDBG program shall apply 

to any unit of general local government 

receiving a direct allocation in this 

Notice. Applicable statutory provisions 

can be found at 42 U.S.C. 5301 et seq. 

Applicable State and entitlement 

regulations can be found at 24 CFR part 

570. 

1. Action Plan for Disaster Recovery 

waiver and alternative requirement. The 

traditional requirements for CDBG 

actions plans, located at 42 U.S.C. 

12705(a)(2), 42 U.S.C. 5304(a)(1), 42 

U.S.C. 5304(m), 42 U.S.C. 

5306(d)(2)(C)(iii), 24 CFR 91.220, and 24 

CFR 91.320 are waived for these disaster 

recovery grants. Instead, grantee must 

submit to HUD an Action Plan for 

Disaster Recovery. This streamlined 

plan will allow grantees to more quickly 

and effectively implement disaster 

recovery programs while conforming 

with statutory requirements. During the 

course of the grant, HUD will monitor 

the grantee’s actions and use of funds 

for consistency with the plan, as well as 

meeting the performance and timeliness 

objectives therein. 

A. Action Plan. The Action Plan must 

identify the proposed use of all funds, 

including criteria for eligibility, and 

how the uses address long-term 

recovery needs. Due to the need to 

develop and submit an acceptable 

Action Plan in a timely manner, a 

grantee’s Action Plan may program or 

budget a portion of funds toward a 

particular use with only a broad or 

general description of that use. 

However, HUD will not consider an 

Action Plan substantially complete 

unless at least 50 percent of grant funds 

are articulated at the level of detail 

described in paragraphs (B) or (C) of this 

subsection, as applicable. Funds 

dedicated for uses not described in 

accordance with paragraphs (B) or (C) of 

this subsection will be restricted on the 

grantee’s line of credit until the grantee 

submits, and HUD accepts, an Action 

Plan amendment programming the use 

of those funds at the necessary level of 

detail as described in paragraphs (B) or 

(C) of this subsection. Once the Action 

Plan amendment is accepted, and the 

Responsible entity completes an 

environmental review and obtains HUD 

approval of a Request for Release of 

Funds, as applicable, HUD will unblock 

the restricted funds and the grantee may 

begin to draw them down immediately. 

The grantee must program 100 percent 

of its grant funds at the necessary level 

of detail within 9 months of the date of 

this Notice. 

The Action Plan must contain: 

(1) An impact and unmet needs 

assessment. Development of a needs 

assessment to understand the type and 

location of community needs will 

enable grantees to target limited 

resources to areas with the greatest 

need. Grantees receiving an award 

under today’s Notice must conduct a 

needs assessment to inform the 

allocation of CDBG disaster recovery 

resources. CDBG–DR funds may be used 


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to conduct the needs assessment. At a 

minimum, the needs assessment must 

evaluate three core aspects of recovery— 

housing (interim and permanent, owner 

and rental, single family and 

multifamily, affordable and market rate), 

infrastructure, and the economy (e.g., 

estimated job losses or tax revenue loss 

due to the disaster). The assessment 

must also take into account the various 

forms of assistance available to, or likely 

to be available to, affected communities 

(e.g., projected FEMA funds) and 

individuals (e.g., estimated insurance) 

to ensure CDBG disaster recovery funds 

meet needs that are not likely to be 

addressed by other sources of funds. 

The assessment must use the best 

available data and cite data sources. 

Impacts should be described 

geographically by type at the lowest 

level practicable (e.g., county level or 

lower if available). Grantees should use 

the most recent available data (e.g., from 

FEMA and SBA) and estimate the 

portion of need likely to be addressed 

by insurance proceeds, other federal 

assistance, or any other funding source 

(thus producing an estimate of unmet 

need). 

Disaster recovery needs evolve over 

time as the full impact of a disaster is 

realized and costs of damages transition 

from estimated to actual. Remaining 

recovery needs also evolve over time as 

they are met by dedicated resources. As 

a result, the needs assessment and 

Action Plan may be considered as a 

living document, which grantees may 

need to periodically update over time. 

(2) A description of how the grantee 

will promote (a) sound, sustainable 

long-term recovery planning informed 

by a post-disaster evaluation of hazard 

risk, especially land-use decisions that 

reflect responsible flood plain 

management, and (b) how it will 

coordinate with other local and regional 

planning efforts; 

(3) A description of how the grantee 

will leverage CDBG disaster recovery 

funds with funding provided by other 

federal, state, local, private, and nonprofit sources to generate a more 

effective and comprehensive recovery. 

Examples of other federal sources are 

those provided by HUD, FEMA 

(specifically the Public Assistance 

Program, Individual Assistance 

Program, and Hazard Mitigation Grant 

Program), the Small Business 

Administration, Economic Development 

Administration, U.S. Army Corps of 

Engineers, and the U.S. Department of 

Agriculture. The grantee should seek to 

maximize the number of activities and 

the degree to which CDBG funds are 

leveraged. Leveraged funds shall be 

identified for each activity, as 

applicable, in the DRGR system; 

(4) A description of how the grantee 

will encourage construction methods 

that emphasize high quality, durability, 

energy efficiency, sustainability, and 

mold resistance, including how it will 

support adoption and enforcement of 

modern building codes and mitigation 

of hazard risk, where appropriate; 

(5) A description of how the grantee 

will encourage the provision of 

adequate, flood-resistant housing for all 

income groups, including a description 

of the activities it plans to undertake to 

address: (a) Transitional housing needs 

of homeless individuals and families 

(including subpopulations), (b) 

prevention of low-income individuals 

and families with children (especially 

those with incomes below 30 percent of 

the area median) from becoming 

homeless, and (c) the special needs of 

persons who are not homeless but 

require supportive housing (e.g., elderly, 

persons with disabilities, persons with 

alcohol or other drug addiction, persons 

with HIV/AIDS and their families, and 

public housing residents, as identified 

in 24 CFR 91.315 (e) or 91.215(e) as 

applicable); grantees should consider 

how planning decisions may affect 

racial, ethnic, and low-income 

concentrations. They should also 

consider ways to promote the 

availability of affordable housing in 

low-poverty, non-minority areas where 

appropriate and in response to disaster 

related impacts; 

(6) A description of how the grantee 

plans to minimize displacement of 

persons or entities, and assist any 

persons or entities displaced; 

(7) A description of how the grantee 

will handle program income, and the 

purpose(s) for which it may be used; 

(8) A description of monitoring 

standards and procedures that are 

sufficient to ensure program 

requirements, including nonduplication 

of benefits, are met and that provide for 

continual quality assurance and 

investigation. Grantees must also have 

an internal audit function with 

responsible audit staff reporting 

independently to the chief officer or 

board of the governing body of any 

designated administering entity; 

(9) A description of the steps the 

grantee will take to prevent fraud, 

abuse, and mismanagement of funds 

(including potential conflicts of interest 

and duplication of benefits). All such 

steps taken shall be identified quarterly 

in its performance report to HUD; 

(10) A description of how the grantee 

will provide for increasing the capacity 

of grant recipients, subrecipients, 

subgrantees, and any other entity 

responsible for administering activities 

under this grant; 

(11) A description of the connection 

between identified unmet needs and the 

allocation of CDBG disaster recovery 

resources by the grantee; and 

(12) A performance schedule. The 

Action Plan must include a performance 

schedule for carrying out programs and/ 

or activities. The schedule should 

include projected performance (in terms 

of both expenditures and outcome 

measures) for the following activity 

types (at a minimum): (1) Housing, (2) 

infrastructure, (3) economic 

development, (4) planning and 

administration, and (5) other (if 

applicable). The Action Plan should 

also include a projected expenditure 

schedule for the entirety of the grant 

amount as a whole. Grantees may revise 

the performance schedule as needed via 

an Action Plan amendment to reflect 

any changes in programs or activities. 

B. Funds awarded to a State. A State’s 

Action Plan shall describe the method 

of distribution of funds to units of local 

government and/or descriptions of 

specific programs or activities the State 

will carry out directly. The description 

must include: 

(1) How the needs assessment 

informed allocation determinations; 

(2) The threshold factors and grant 

size limits that are to be applied; 

(3) The projected uses for the CDBG 

disaster recovery funds, by responsible 

entity, activity, and geographic area, 

when the State carries out an activity 

directly; 

(4) For each proposed program and/or 

activity carried out directly, its 

respective CDBG activity eligibility 

category (or categories) as well as 

national objective(s). 

(5) How the method of distribution to 

local governments or programs/ 

activities carried out directly will result 

in long-term recovery from specific 

impacts of the disaster. 

(6) When funds are allocated to units 

of local government, all criteria used to 

distribute funds to local governments 

including the relative importance of 

each criterion; and 

(7) When applications are solicited for 

programs carried out directly, all criteria 

used to select applications for funding, 

including the relative importance of 

each criterion. 

C. Funds awarded directly to a unit of 

general local government. The unit of 

local government shall describe specific 

programs and/or activities it will carry 

out. The Action Plan must describe: 

(1) How the needs assessment 

informed allocation determinations; 

(2) The threshold factors and grant 

size limits that are to be applied; 


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(3) The projected uses for the CDBG 

disaster recovery funds, by responsible 

entity, activity, and geographic area; 

(4) How the projected uses of the 

funds will meet CDBG eligibility criteria 

and a national objective; 

(5) How the projected uses of funds 

will result in long-term recovery from 

specific impacts of the disaster; and 

(6) All criteria used to select 

applications, including the relative 

importance of each criterion. 

D. Clarification of disaster-related 

activities. All CDBG disaster recovery 

activities must clearly address an 

impact of the disaster for which funding 

was appropriated. Given the standard 

CDBG requirements, this means each 

activity must: (1) Be CDBG eligible (or 

receive a waiver), (2) meet a national 

objective, and (3) address a direct or 

indirect impact from the disaster in a 

Presidentially-declared county. A 

disaster-related impact can be addressed 

through any eligible CDBG activity. 

(1) Housing. Typical housing 

activities include new construction and 

rehabilitation of single family or 

multifamily units. Most often, grantees 

use CDBG disaster recovery funds to 

rehabilitate damaged homes and rental 

units. However, grantees may also fund 

new construction or rehabilitate units 

not damaged by the disaster if the 

activity clearly addresses a disasterrelated impact. This impact can be 

demonstrated by the disaster’s overall 

effect on the quality, quantity, and 

affordability of the housing stock and 

the resulting inability of that stock to 

meet post-disaster needs and population 

demands. The standard CDBG 

rehabilitation and reconstruction rules 

apply. 

(2) Infrastructure. Typical 

infrastructure activities include the 

repair, replacement, or relocation of 

damaged public facilities. 

(3) Economic Revitalization. 

Economic revitalization is not limited to 

activities that are ‘‘special economic 

development’’ activities under the HCD 

Act, or to activities that create or retain 

jobs. For CDBG disaster recovery 

purposes, economic revitalization can 

include any activity that demonstrably 

restores and improves some aspect of 

the local economy; the activity may 

address job losses, or negative impacts 

to tax revenues or businesses. Examples 

of eligible activities include providing 

loans and grants to businesses, funding 

job training, making improvements to 

commercial/retail districts, and 

financing other efforts that attract/retain 

workers in devastated communities. All 

economic revitalization activities must 

address an economic impact(s) caused 

by the disaster (e.g., loss of jobs, loss of 

public revenue). Through its needs 

assessment and Action Plan, the grantee 

should clearly identify the economic 

loss or need resulting from the disaster, 

and how the proposed activities will 

address that loss/need. 

(4) Preparedness and Mitigation. The 

Appropriations Act states that funds 

shall be used for recovering from a 

Presidentially-declared major disaster. 

As such, all activities must respond to 

the impacts of the declared disaster. 

HUD strongly encourages grantees to 

incorporate preparedness and mitigation 

measures into rebuilding activities, 

which helps to ensure that communities 

recover to be safer and stronger than 

prior to the disaster. Incorporation of 

these measures also reduces costs in 

recovering from future disasters. 

However, given the limited funding 

available and the language in the 

Appropriations Act, CDBG disaster 

recovery funds may not be used for 

activities that are solely designed to 

prepare for and/or mitigate the effects of 

a future disaster without any tie to 

rebuilding from the previous disaster. 

(5) Tie to the Disaster. Grantees must 

document in each project file how that 

activity is tied to the disaster for which 

it is receiving CDBG assistance. 

In regard to physical losses, damage 

or rebuilding estimates are often the 

most effective tool for demonstrating the 

connection to the disaster. For economic 

or other non-physical losses, postdisaster analyses or assessments may 

best document the relationship between 

the loss and the disaster. 

Note that grantees are not limited in 

their recovery to returning to predisaster conditions. Rather, grantees are 

encouraged to undertake activities in 

such a way that not only addresses the 

disaster-related impacts, but leaves 

communities better positioned to meet 

the needs of their post-disaster 

populations and prospects for growth. 

E. Use of funds for other disasters not 

covered by the Appropriations Act. 

CDBG disaster recovery funds awarded 

under this Notice may not be used to 

address an impact or need originating 

from a disaster not occurring in 2011. 

However, if a need that arose from a 

previous disaster was exacerbated by a 

2011 disaster, funds under this Notice 

may be used. In addition, if an impact 

or need originating from a 2011 disaster 

is subsequently exacerbated by a future 

disaster, funds under this Notice may 

also be used. 

F. Use of the urgent need national 

objective. The traditional certification 

requirements for the documentation of 

urgent need, located at 24 CFR 

570.208(c) and 24 CFR 570.483(d), are 

waived for the grants under this Notice. 

In the context of disaster recovery, these 

standard requirements may prove 

burdensome and redundant. Since the 

Department only provides CDBG 

disaster recovery awards to grantees 

with documented disaster-related 

impacts (as supported by data provided 

by FEMA, SBA, and other sources), and 

each grantee is limited to spending 

funds only in counties with a 

Presidential disaster declaration of 

recent origin respective to each 

appropriation, the following 

streamlined alternative requirement 

recognizes the inherent urgency in 

addressing the serious threat to 

community welfare following a major 

disaster. 

Grantees need not issue formal 

certification statements in order to 

qualify an activity as meeting the urgent 

need national objective. Instead, each 

grantee receiving a direct award under 

this Notice must document how all 

programs and/or activities funded under 

the urgent need national objective 

respond to a disaster-related impact 

identified by the grantee. This waiver 

and alternative requirement allows 

grantees to more effectively and quickly 

implement disaster recovery programs. 

Grantees may reference in their Action 

Plan the type, scale, and location of the 

disaster-related impacts that each 

program and/or activity is addressing. 

Grantees should identify these 

disaster-related impacts in their Action 

Plan needs assessment. The needs 

assessment should be updated as new or 

more detailed/accurate disaster-related 

impacts are known. Understanding that 

major disasters present unique 

challenges and that recovery can take 

years, it is not necessary for an activity 

to begin within 18 months of the 

disaster in order to use the urgent need 

national objective. 

Grantees should still be mindful to 

use the ‘‘low- and moderate income 

person benefit’’ national objective for all 

activities that qualify under such 

criteria. At least 50 percent of the entire 

CDBG disaster recovery grant award 

must be used for activities that benefit 

low- and moderate-income persons. 

G. Clarity of Action Plan. All grantees 

must include sufficient information so 

that citizens, units of general local 

government (where applicable), and 

other eligible subgrantees, 

subrecipients, or applicants will be able 

to understand and comment on the 

Action Plan and, if applicable, be able 

to prepare responsive applications to 

the grantee. The Action Plan must 

include a single chart or table that 

illustrates, at the most practical level, 

how all funds are budgeted (e.g., by 

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administered activity, or other category). 

An amount generally not to exceed ten 

percent of the total grant amount may be 

budgeted as a separate activity for the 

contingency of cost overruns and 

unanticipated unmet needs. Once a 

grantee expends 80 percent of its grant 

amount, it should program any 

remaining funds budgeted for 

contingency into an eligible activity in 

order to fully expend all funds by 

addressing unmet needs and close out 

the grant. 

In the case of Action Plan 

amendments, each amendment should 

constitute the entirety of the Action 

Plan, as amended. The beginning of 

every Action Plan amendment must 

include a section that identifies exactly 

what content is being added, deleted, or 

changed. This section must also include 

a chart or table that clearly illustrates 

where funds are coming from and where 

they are moving to. The Action Plan 

must include a revised budget allocation 

table that reflects the entirety of all 

funds, as amended. A grantee’s most 

recent version of its entire Action Plan 

should be able to be accessed and 

viewed as a single document at any 

given point in time, rather than the 

public having to view and crossreference changes among multiple 

amendments. 

H. Review of Action Plan; obligation 

and expenditure of funds. The Action 

Plan must be submitted to HUD 

(including Standard Form 424 (SF–424) 

and certifications) within 90 days of the 

date of this Notice. HUD will expedite 

its review of each Action Plan—taking 

no more than 45 days from the date of 

receipt. Once HUD accepts the Action 

Plan, it will then issue a grant 

agreement obligating all funds to the 

grantee. In addition, HUD will establish 

the line of credit and the grantee will 

receive DRGR access (if it does not have 

access already). The grantee must also 

enter its Action Plan activities into the 

DRGR system in order to draw funds 

against them. It may enter these 

activities into DRGR before or after 

submission of the Action Plan to HUD. 

All funds programmed or budgeted at 

a generalized level will be restricted 

from access on the grantee’s line of 

credit. Once the generalized uses are 

described in an amended Action Plan at 

the necessary level of detail, they will 

be released by HUD and made available 

for use. After the Responsible Entity 

completes environmental review(s) 

pursuant to 24 CFR part 58 (as 

applicable) and receives from HUD or 

the State an approved Request for 

Release of Funds and certification (as 

applicable), the grantee may draw down 

funds from the line of credit for an 

activity. The disbursement of grant 

funds must begin no later than 180 days 

after the date of this Notice. 

I. Amending the Action Plan. Even 

after all funds have been programmed or 

budgeted in a grantee’s Action Plan at 

the necessary level of detail, the grantee 

may continue to subsequently amend its 

plan as needed. As needs often change 

throughout the long-term recovery 

process, grantees may find it necessary 

to amend its Action Plan to update its 

needs assessment, modify activities, 

create new ones, or to re-program funds. 

2. Citizen participation waiver and 

alternative requirement. To permit a 

more streamlined process, and ensure 

disaster recovery grants are awarded in 

a timely manner, provisions of 42 U.S.C. 

5304(a)(2) and (3), 42 U.S.C. 12707, 24 

CFR 570.486, 24 CFR 91.105(b) and (c), 

and 24 CFR 91.115(b) and (c), with 

respect to citizen participation 

requirements, are waived and replaced 

by the requirements below. The 

streamlined requirements do not 

mandate public hearings at a state, 

entitlement, or local government level, 

but do require providing a reasonable 

opportunity (at least 7 days) for citizen 

comment and ongoing citizen access to 

information about the use of grant 

funds. The streamlined citizen 

participation requirements for a grant 

administered under this Notice are: 

A. Before the grantee adopts the 

Action Plan for this grant or any 

substantial amendment to this grant, the 

grantee will publish the proposed plan 

or amendment (including the 

information required in this Notice for 

an Action Plan for Disaster Recovery). 

The manner of publication must include 

prominent posting on the grantee’s 

official Web site and must afford 

citizens, affected local governments, and 

other interested parties a reasonable 

opportunity to examine the plan or 

amendment’s contents. The topic of 

disaster recovery should be navigable by 

citizens from the grantee (or 

administering agency) homepage. 

Grantees are also encouraged to notify 

affected citizens through electronic 

mailings, press releases, statements by 

public officials, media advertisements, 

public service announcements, and/or 

contacts with neighborhood 

organizations. 

Despite the expedited process, 

grantees are still responsible for 

ensuring that all citizens have equal 

access to information about the 

programs, including persons with 

disabilities and limited English 

proficiency. Each grantee must ensure 

that program information is available in 

the appropriate languages for the 

geographic area served by the 

jurisdiction. This issue may be 

particularly applicable to States 

receiving an award under this Notice. 

Unlike grantees in the regular State 

CDBG program, State grantees under 

today’s Notice may make grants 

throughout the state, including to 

entitlement communities. For assistance 

in ensuring that this information is 

available to LEP populations, recipients 

should consult the Final Guidance to 

Federal Financial Assistance Recipients 

Regarding Title VI, Prohibition Against 

National Origin Discrimination 

Affecting Limited English Proficient 

Persons published on January 22, 2007, 

in the Federal Register (72 FR 2732). 

Subsequent to publication of the 

Action Plan, the grantee must provide a 

reasonable time frame and method(s) 

(including electronic submission) for 

receiving comments on the plan or 

substantial amendment. In its Action 

Plan, each grantee must specify criteria 

for determining what changes in the 

grantee’s plan constitute a substantial 

amendment to the plan. At a minimum, 

the following modifications will 

constitute a substantial amendment: A 

change in program benefit or eligibility 

criteria; the allocation or re-allocation of 

more than $1 million; or the addition or 

deletion of an activity. The grantee may 

substantially amend the Action Plan if 

it follows the same procedures required 

in this Notice for the preparation and 

submission of an Action Plan for 

Disaster Recovery. Prior to submission 

of a substantial amendment, the grantee 

is encouraged to work with its HUD 

representative to ensure the proposed 

change is consistent with this Notice, 

and all applicable regulations and 

Federal law. 

B. The grantee must notify HUD, but 

is not required to undertake public 

comment, when it makes any plan 

amendment that is not substantial. 

However, every amendment to the 

Action Plan (substantial and nonsubstantial) must be numbered 

sequentially and posted on the grantee’s 

Web site. The Department will 

acknowledge receipt of the notification 

of non-substantial amendments via 

email within 5 business days. 

C. The grantee must consider all 

comments, received orally or in writing, 

on the Action Plan or any substantial 

amendment. A summary of these 

comments or views, and the grantee’s 

response to each must be submitted to 

HUD with the Action Plan or substantial 

amendment. 

D. The grantee must make the Action 

Plan, any substantial amendments, and 

all performance reports available to the 

public on its Web site and on request. 

In addition, the grantee must make these 


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documents available in a form 

accessible to persons with disabilities 

and non-English-speaking persons. 

During the term of the grant, the grantee 

will provide citizens, affected local 

governments, and other interested 

parties with reasonable and timely 

access to information and records 

relating to the Action Plan and to the 

grantee’s use of grant funds. 

E. The grantee will provide a timely 

written response to every citizen 

complaint. The response will be 

provided within 15 working days of the 

receipt of the complaint, if practicable. 

3. Direct grant administration and 

means of carrying out eligible 

activities—applicable to State grantees 

only. Requirements at 42 U.S.C. 5306 

are waived to the extent necessary to 

allow a State to use its disaster recovery 

grant allocation directly to carry out 

State-administered activities eligible 

under this Notice, rather than distribute 

all funds to units of local government. 

In using statutory language similar to 

that used for prior CDBG supplemental 

appropriations, the Department believes 

Congress is signaling its intent that the 

States under this appropriation also be 

able to carry out activities directly. 

Pursuant to this waiver, the standard at 

section 570.480(c) will also include 

activities that the State carries out 

directly. Note that any city or county 

receiving a direct award under this 

Notice will be subject to the standard 

CDBG entitlement program regulations. 

Thus, the waiver and alternative 

requirement described here is 

inapplicable to local jurisdictions. 

Activities eligible under this Notice 

may be undertaken, subject to State law, 

by the grantee through its employees, 

through procurement contracts, or 

through loans or grants under 

agreements with subrecipients. 

Activities made eligible under section 

105(a)(15) of the HCD Act, as amended, 

may only be undertaken by entities 

specified in that section, whether the 

assistance is provided to such an entity 

from the State or from a unit of general 

local government. 

4. Consolidated Plan waiver. HUD is 

waiving the requirement for consistency 

with the consolidated plan 

(requirements at 42 U.S.C. 12706, 24 

CFR 91.325(a)(5), 24 CFR 91.225(a)(5), 

24 CFR 91.325(b)(2), and 24 CFR 

91.225(b)(3)), 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. 

However, this waiver applies only until 

the grantee first updates its full 

consolidated plan more than 30 months 

following the disaster. While grantees 

are encouraged to incorporate disasterrecovery needs into their consolidated 

plan updates as soon as practicable, any 

unmet disaster-related needs and 

associated priorities should be 

incorporated into the grantee’s next 

consolidated plan update following the 

expiration of the 30-month waiver 

period. If not completed already, the 

grantee should update its Analysis of 

Impediments in coordination with its 

post-waiver consolidated plan update, 

so that it more accurately reflects 

housing conditions following the 

disaster. 

This waiver also allows the disaster 

recovery action plan for non-entitlement 

communities to also serve as an 

abbreviated Consolidated Plan under 

the authority at 42 U.S.C. 12705(b) 

because the Secretary has determined 

that this is appropriate given the types 

and amounts of assistance the nonentitlement will receive for disaster 

purposes. For non-entitlement 

communities, HUD is also waiving 24 

CFR part 91, subpart C to the extent that 

these provisions require elements that 

are not specifically required by this 

Notice. 

The waiver is granted consistent with 

the non-entitlement’s existing 

submission of needs data for addressing 

housing and community development 

needs in the State’s Consolidated Plan. 

Note that the 30 month requirement 

does not apply to any non-entitlement 

community receiving funds under this 

Notice, however, it must update and 

amend its Action Plan within 18 months 

of the date of this Notice to include 

actions it plans to take to remove or 

ameliorate the negative effects of public 

policies that serve as barriers to 

affordable housing. Such policies, 

procedures and processes include, but 

are not limited to, land use controls, tax 

policies affecting land, zoning 

ordinances, building codes, fees and 

charges, growth limitations, and policies 

affecting the return on residential 

investment. Consistent with 91.220(j), 

proposed plans or actions should be 

reviewed periodically to ensure they 

best respond to the barriers to affordable 

housing, as they exist at that time. 

5. Requirement for consultation 

during plan preparation. Currently, the 

statute and regulations require States to 

consult with affected units of local 

government in non-entitlement areas of 

the State in determining the State’s 

proposed method of distribution. HUD 

is waiving 42 U.S.C. 5306(d)(2)(C)(iv), 

42 U.S.C. 5306(d)(2)(D), 24 CFR 

91.325(b), and 24 CFR 91.110, with the 

alternative requirement that any State 

receiving an allocation under this 

Notice consult with all disaster-affected 

units of general local government, 

including any CDBG-entitlement 

communities, in determining the use of 

funds. This ensures State grantees 

sufficiently assess the recovery needs of 

all areas affected by the disaster. For 

local governments receiving a direct 

award under this Notice, HUD is 

waiving 24 CFR 91.100 with the 

alternative requirement that the 

jurisdiction should consult with 

adjacent units of general local 

government, including local government 

agencies with metropolitan-wide 

planning responsibilities, particularly 

for problems and solutions that go 

beyond a single jurisdiction. 

6. Overall benefit waiver and 

alternative requirement. The primary 

objective of the HCD Act is the 

‘‘development of viable urban 

communities, by providing decent 

housing and a suitable living 

environment and expanding economic 

opportunities, principally for persons of 

low and moderate income.’’ 42 U.S.C. 

5301(c). To carry out this objective, the 

statute requires that 70 percent of the 

aggregate of a regular CDBG program’s 

funds be used to support activities 

benefitting low- and moderate-income 

persons. This target could be difficult to 

reach, and perhaps even impossible, for 

many communities affected by the 2011 

disasters. Grantees under this Notice 

experienced disaster impacts that 

affected entire communities—regardless 

of income, and the existing requirement 

may prevent grantees from providing 

assistance to damaged areas of need. 

Therefore, this Notice waives the 

requirements at 42 U.S.C. 5301(c), 42 

U.S.C. 5304(b)(3)(A), 24 CFR 570.484, 

and 24 CFR 570.200(a)(3), that 70 

percent of funds be used for activities 

that benefit low- and moderate-income 

persons. Instead, 50 percent of funds 

must benefit low- and moderate-income 

persons. This provides grantees with 

greater flexibility to carry out recovery 

activities by allowing up to 50 percent 

of the grant to assist activities under the 

urgent need or prevention or 

elimination of slums or blight national 

objectives. 

7. Use of the ‘‘upper quartile’’ or 

‘‘exception criteria’’ for low- and 

moderate-income area benefit 

activities—not applicable to all 

grantees. Section 105(c)(2)(A) of the 

HCD Act provides that ‘‘In any case in 

which an assisted activity described in 

subsection (a) is designed to serve an 

area generally and is clearly designed to 

meet identified needs of persons of low 

and moderate income in such area, such 


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activity shall be considered to 

principally benefit persons of low and 

moderate income if * * * (ii) in any 

metropolitan city or urban county, the 

area served by such jurisdiction is 

within the highest quartile of all areas 

within the jurisdiction of such city or 

county in terms of the degree of 

concentration of persons of low and 

moderate income * * *’’ HUD permits 

an exception to the low- and moderateincome area benefit requirement that an 

area contain at least 51 percent low- and 

moderate-income residents. This 

exception applies to entitlement 

communities that have few, if any, areas 

within their jurisdiction that have 51 

percent or more low- and moderateincome residents. These communities 

are allowed to use a percentage less than 

51 percent to qualify activities under the 

low- and moderate-income area benefit 

category. This exception is referred to as 

the ‘‘exception criteria’’ or the ‘‘upper 

quartile’’. A grantee qualifies for this 

exception when less than one quarter of 

the populated block groups in its 

jurisdictions contain 51 percent or more 

low- and moderate-income persons. In 

such communities, activities must serve 

an area which contains a percentage of 

low- and moderate-income residents 

that is within the upper quartile of all 

Census block groups within its 

jurisdiction in terms of the degree of 

concentration of low- and moderateincome residents. HUD assesses each 

grantee’s census block groups to 

determine whether a grantee qualifies to 

use this exception and identifies the 

alternative percentage the grantee may 

use instead of 51 percent for the 

purpose of qualifying activities under 

the low- and moderate-income area 

benefit. HUD determines the lowest 

proportion a grantee may use to qualify 

an area for this purpose and advises the 

grantee accordingly. 

The Department has considered and 

granted the requests of Orange County, 

New York to apply the exception 

criteria to these disaster recovery grants. 

The Department also grants the request 

of the State of New Jersey to allow the 

following entitlement communities that 

have disaster declarations and total 

damage that exceeds $3,000,000 to 

apply the exception criteria for these 

disaster recovery grants: Passaic County, 

Bergen County, Morris County, 

Somerset County, Essex County, 

Middlesex County, and Monmouth 

County. HUD also waives section 

105(c)(2)(ii) of the HCD Act and the 

regulations at 570.208(a)(1)(ii) to the 

extent that they limit the exception 

criteria to any metropolitan city or 

urban county to allow the city of Minot, 

a non-entitlement community, to utilize 

the exception criteria for the purpose of 

classifying activities under the low- and 

moderate-income area benefit national 

objective. HUD will provide data to the 

city of Minot on how this exception 

shall be applied. 

It must be noted that HUD annually 

updates the low- and moderate-income 

summary data used to identify the 

exception criteria; disaster recovery 

grantees are required to use the most 

recent data available in implementing 

the exception criteria. 

8. Note on change to administration 

limitation. For all grantees under 

today’s Notice, the annual CDBG 

program administration requirements 

must be modified to be consistent with 

the Appropriations Act, which allows 

up to 5 percent of the grant to be used 

for administrative costs, whether by the 

grantee, by entities designated by the 

grantee, by units of general local 

government, or by subrecipients. Thus, 

the total of all costs classified as 

administrative must be less than or 

equal to the 5 percent cap. 

A. For State grantees under this 

Notice, the provisions of 42 U.S.C. 

5306(d) and 24 CFR 570.489(a)(1)(i) and 

(iii) will not apply to the extent that 

they cap administration and technical 

assistance expenditures, limit a State’s 

ability to charge a nominal application 

fee for grant applications for activities 

the State carries out directly, and 

require a dollar-for-dollar match of State 

funds for administrative costs exceeding 

$100,000. 42 U.S.C. 5306(d)(5) and (6) 

are waived and replaced with the 

alternative requirement that the 

aggregate total for administrative and 

technical assistance expenditures must 

not exceed 5 percent. States remain 

limited to spending a maximum of 20 

percent of their total grant amount on a 

combination of planning and program 

administration costs. Planning costs 

subject to the 20 percent cap are those 

defined in 42 U.S.C. 5305(a)(12). 

B. Any city or county receiving a 

direct award under this Notice is also 

subject to the 5 percent administrative 

cap. This 5 percent applies to all 

administrative costs—whether incurred 

by the grantee or its subrecipients. 

However, cities or counties receiving a 

direct allocation under this Notice also 

remain limited to spending 20 percent 

of their total allocation on a 

combination of planning and program 

administration costs. 

9. Planning-only activities— 

applicable to State grantees only. The 

annual State CDBG program requires 

that local government grant recipients 

for planning-only grants must document 

that the use of funds meets a national 

objective. In the State CDBG program, 

these planning grants are typically used 

for individual project plans. By contrast, 

planning activities carried out by 

entitlement communities are more 

likely to include non-project specific 

plans such as functional land-use plans, 

master plans, historic preservation 

plans, comprehensive plans, community 

recovery plans, development of housing 

codes, zoning ordinances, and 

neighborhood plans. These plans may 

guide long-term community 

development efforts comprising 

multiple activities funded by multiple 

sources. In the entitlement program, 

these more general planning activities 

are presumed to meet a national 

objective under the requirements at 24 

CFR 570.208(d)(4). 

The Department notes that almost all 

effective CDBG disaster recoveries in the 

past have relied on some form of areawide or comprehensive planning 

activity to guide overall redevelopment 

independent of the ultimate source of 

implementation funds. Therefore, for 

State grantees receiving an award under 

this Notice, the Department is removing 

the eligibility requirements at 24 CFR 

570.483(b)(5) or (c)(3). Instead, States 

must comply with 24 CFR 570.208(d)(4) 

when funding disaster recovery-assisted 

planning-only grants, or directly 

administering planning activities that 

guide recovery in accordance with the 

Appropriations Act. In addition, the 

types of planning activities that States 

may fund or undertake are expanded to 

be consistent with those of entitlement 

communities identified at 24 CFR 

570.205. 

10. Waiver and alternative 

requirement for distribution to CDBG 

metropolitan cities and urban 

counties—applicable to State grantees 

only. Section 5302(a)(7) of title 42, 

U.S.C. (definition of ‘‘nonentitlement 

area’’) and provisions of 24 CFR part 

570 that would prohibit a State from 

distributing CDBG funds to entitlement 

communities and Indian tribes under 

the CDBG program, are waived, 

including 24 CFR 570.480(a). Instead, 

the State may distribute funds to units 

of local government and Indian tribes. 

11. Use of subrecipients—applicable 

to State grantees only. The State CDBG 

program rule does not make specific 

provision for the treatment of entities 

that the CDBG Entitlement program 

calls ‘‘subrecipients.’’ The waiver 

allowing the State to directly carry out 

activities creates a situation in which 

the State may use subrecipients to carry 

out activities in a manner similar to an 

entitlement community. Therefore, for 

States taking advantage of the waiver to 

carry out activities directly, the 


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requirements at 24 CFR 570.502, 

570.503, and 570.500(c) apply, except 

that specific references to 24 CFR parts 

84 and 85 must be included in 

subrecipient agreements. OMB Circular 

A–87 shall apply to States and any 

subrecipients of a State, whether 

carrying out activities directly or 

through the use of a subrecipient. 

12. Recordkeeping—applicable to 

State grantees only. When a State carries 

out activities directly, 24 CFR 

570.490(b) is waived and the following 

alternative provision shall apply: The 

State shall establish and maintain such 

records as may be necessary to facilitate 

review and audit by HUD of the State’s 

administration of CDBG disaster 

recovery funds under 24 CFR 570.493. 

Consistent with applicable statutes, 

regulations, waivers and alternative 

requirements, and other federal 

requirements, the content of records 

maintained by the State shall be 

sufficient to: Enable HUD to make the 

applicable determinations described at 

24 CFR 570.493; make compliance 

determinations for activities carried out 

directly by the State; and show how 

activities funded are consistent with the 

descriptions of activities proposed for 

funding in the Action Plan and/or DRGR 

system. For fair housing and equal 

opportunity purposes, and as 

applicable, such records shall include 

data on the racial, ethnic, and gender 

characteristics of persons who are 

applicants for, participants in, or 

beneficiaries of the program. 

13. Change of use of real property— 

applicable to State grantees only. This 

waiver conforms to the change of use of 

real property rule to the waiver allowing 

a State to carry out activities directly. 

For purposes of this program, all 

references to ‘‘unit of general local 

government’’ in 24 CFR 570.489(j), shall 

be read as ‘‘unit of general local 

government or State.’’ 

14. Responsibility for review and 

handling of noncompliance 

—applicable to State grantees only. This 

change is in conformance with the 

waiver allowing the State to carry out 

activities directly. 24 CFR 570.492 is 

waived and the following alternative 

requirement applies for any State 

receiving a direct award under this 

Notice: the State shall make reviews and 

audits, including onsite reviews of any 

subrecipients, designated public 

agencies, and units of general local 

government, as may be necessary or 

appropriate to meet the requirements of 

section 104(e)(2) of the HCD Act, as 

amended, as modified by this Notice. In 

the case of noncompliance with these 

requirements, the State shall take such 

actions as may be appropriate to prevent 

a continuance of the deficiency, mitigate 

any adverse effects or consequences, 

and prevent a recurrence. The State 

shall establish remedies for 

noncompliance by any designated 

subrecipients, public agencies, or units 

of general local government. 

15. Housing-related eligibility waivers. 

The broadening of Section 105(a)(24) of 

the HCD Act is necessary following 

major disasters in which large numbers 

of affordable housing units have been 

damaged or destroyed, as is the case of 

the disasters eligible under this Notice. 

Thus, in accordance with the grantees’ 

requests, 42 U.S.C. 5305(a) is waived to 

the extent necessary to allow: (1) 

Homeownership assistance for 

households with up to 120 percent of 

the area median income, (2) down 

payment assistance for up to 100 

percent of the down payment (42 U.S.C. 

5305(a)(24)(D)), and (3) new housing 

construction. While homeownership 

assistance may be provided to 

households with up to 120 percent of 

the area median income, only those 

funds used to serve households with up 

to 80 percent of the area median income 

may qualify as meeting the low- and 

moderate-income person benefit 

national objective. 

16. Housing incentives to resettle in 

disaster-affected communities—not 

applicable to all grantees. Incentive 

payments are generally offered in 

addition to other programs or funding 

(such as insurance), to encourage 

households to relocate in a suitable 

housing development or an area 

promoted by the community’s 

comprehensive recovery plan. For 

example, a grantee may offer an 

incentive payment (possibly in addition 

to a buyout payment) for households 

that volunteer to relocate outside of 

floodplain or to a lower-risk area. 

Therefore, 42 U.S.C. 5305(a) and 

associated regulations are waived to the 

extent necessary to allow the provision 

of housing incentives. These grantees 

must maintain documentation, at least 

at a programmatic level, describing how 

the amount of assistance was 

determined to be necessary and 

reasonable, and the incentives must be 

in accordance with the grantee’s 

approved Action Plan and published 

program design(s). This waiver does not 

permit a compensation program. 

Additionally, if the grantee requires the 

incentives to be used for a particular 

purpose by the household receiving the 

assistance, then the eligible use for that 

activity will be that required use, not an 

incentive. This waiver does not apply to 

the following grantees: The city of 

Birmingham, Jefferson County, and the 

State of Texas. 

17. Limitation on emergency grant 

payments—not applicable to all 

grantees. 42 U.S.C. 5305(a)(8) is waived 

to extend interim mortgage assistance to 

qualified individuals from three months 

to up to 20 months. The time required 

for a household to complete the 

rebuilding process may often extend 

beyond three months, during which 

mortgage payments may be due but the 

home is inhabitable. Thus, this interim 

assistance will be critical for many 

households facing financial hardship 

during this period. This waiver and 

alternative requirement do not apply to 

the following grantees: Jefferson County, 

city of Tuscaloosa, State of Missouri, 

and the State of Texas. 

18. Buildings for the general conduct 

of government—not applicable to all 

grantees. 42 U.S.C. 5305(a) is waived to 

the extent necessary to allow grantees to 

fund the rehabilitation or reconstruction 

of public buildings that are otherwise 

ineligible. HUD believes this waiver is 

consistent with the overall purposes of 

the HCD Act, and is necessary for many 

grantees to adequately address critical 

infrastructure needs created by the 

disaster. This waiver does not apply to 

the following grantees: City of 

Birmingham, Jefferson County, and the 

State of Missouri. 

Regardless of this waiver, CDBG 

disaster recovery funds allocated under 

this Notice may not be used for 

activities reimbursable by, or for which 

funds are made available by, FEMA or 

the Army Corps of Engineers. 

19. Waiver and modification of the job 

relocation clause to permit assistance to 

help a business return. Traditional 

CDBG requirements prevent program 

participants from providing assistance 

to a business to relocate from one labor 

market area to another—if the relocation 

is likely to result in a significant loss of 

jobs in the labor market from which the 

business moved. This prohibition can be 

a critical barrier to reestablishing and 

rebuilding a displaced employment base 

after a major disaster. Therefore, 42 

U.S.C. 5305(h), 24 CFR 570.210, and 24 

CFR 570.482 are waived to allow a 

grantee to provide assistance to any 

business that was operating in the 

disaster-declared labor market area 

before the incident date of the 

applicable disaster and has since 

moved, in whole or in part, from the 

affected area to another State or to a 

labor market area within the same State 

to continue business. 

20. One-for-one replacement housing, 

relocation, and real property acquisition 

requirements. CDBG-assisted activities, 

programs and projects are subject to the 

Uniform Relocation Assistance and Real 

Property Acquisition Policies Act of 


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1970, as amended, (42 U.S.C. 4601 et 

seq.) (‘‘URA’’) and section 104(d) of the 

HCD Act (42 U.S.C. 5304(d)) (‘‘Section 

104(d)’’). The implementing regulations 

for the URA are at 49 CFR part 24. The 

regulations for Section 104(d) are at 24 

CFR part 42, subpart C. 

For the purpose of promoting the 

availability of decent, safe, and sanitary 

housing, HUD is waiving the following 

URA and Section 104(d) requirements 

for grantees under this Notice: 

A. One-for-one replacement 

requirements at 42 U.S.C. 

5304(d)(2)(A)(i)–(ii) and (d)(3) and 24 

CFR 42.375 are waived for lowerincome dwelling units that are damaged 

by the disaster and not suitable for 

rehabilitation. HUD is waiving this 

requirement because the requirement 

does not account for the large, sudden 

changes that a major disaster may cause 

to the local housing stock, population, 

or economy. Furthermore, the 

requirement may discourage grantees 

from converting or demolishing 

disaster-damaged housing when 

excessive costs would result from 

replacing all such units. Disasterdamaged housing structures, unsuitable 

for rehabilitation, can pose a threat to 

public health and safety and to 

economic revitalization. Grantees 

should re-assess post-disaster 

population and housing needs to 

determine the appropriate type and 

amount of lower-income dwelling units 

to rehabilitate and/or rebuild. Grantees 

should note, however, that the 

demolition and/or disposition of Public 

Housing Authority-owned public 

housing units is covered by Section 18 

of the United States Housing Act of 

1937, as amended, and 24 CFR part 970. 

B. The Section 104(d) relocation 

assistance requirements at 42 U.S.C. 

5304(d)(2)(A) and 24 CFR 42.350 are 

waived to the extent that they differ 

from the requirements of the URA and 

implementing regulations at 49 CFR part 

24 for activities related to disaster 

recovery. 

This waiver is necessary to eliminate 

disparities in rental assistance payments 

associated with activities typically 

funded by HUD and FEMA (e.g., 

buyouts and relocation). FEMA funds 

are subject to the requirements of the 

URA and, consequently, FEMA requires 

rental assistance payments for displaced 

persons to be calculated on the basis of 

an amount necessary to enable the 

displaced person to rent comparable 

replacement housing for a period of 42 

months. CDBG funds are also subject to 

the URA requirements; however, unlike 

FEMA funds, they are also subject to the 

provisions of Section 104(d). Section 

104(d) requires that the calculation of 

rental assistance payments for displaced 

persons be made on the basis of 60 

months. When a project is subject to 

both the URA and Section 104(d), the 

displaced person may choose to receive 

assistance under either authority. This 

waiver of the Section 104(d) 

requirements assures uniform and 

equitable treatment in getting the URA 

and its implementing regulations as the 

sole standard for relocation assistance 

under this Notice. 

C. The requirements at 49 CFR 

24.101(b)(2)(i)–(ii) are waived to the 

extent that they apply to an arm’s length 

voluntary purchase carried out by a 

person who does not have the power of 

eminent domain, in connection with the 

purchase and occupancy of a principal 

residence by that person. Given the 

often large-scale acquisition needs of 

grantees, this waiver is necessary to 

reduce burdensome administrative 

requirements following a disaster. 

D. The requirements at sections 204(a) 

and 206 of the URA, 49 CFR 

24.2(a)(6)(viii), 24.402(b)(2), and 24.404 

are waived to the extent that they 

require the grantee to provide relocation 

assistance sufficient to reduce a lowincome person’s rent/utility costs to 30 

percent of household income postdisplacement when the person had been 

paying rent in excess of 30 percent of 

household income without 

‘‘demonstrable hardship’’ before the 

project. Thus, to the extent that a tenant 

has been paying rent in excess of 30 

percent of household income without 

demonstrable hardship, a reduction in 

rental assistance payments to 30 percent 

of household income would not be 

required. Before using this waiver, the 

grantee must establish a definition of 

‘‘demonstrable hardship.’’ 

E. The requirements of sections 204 

and 205 of the URA, and 49 CFR 

24.2(a)(6)(ix) and 24.402(b) are waived 

to the extent necessary to permit a 

grantee to meet all or a portion of a 

grantee’s replacement housing financial 

assistance obligation to a displaced 

tenant by offering rental housing 

through a tenant-based rental assistance 

(TBRA) housing program subsidy (e.g., 

Section 8 rental voucher or certificate), 

provided that the tenant is provided 

referrals to comparable replacement 

dwellings in accordance with 49 CFR 

24.204(a) where the owner is willing to 

participate in the TBRA program, and 

the period of authorized assistance is at 

least 42 months. Failure to grant this 

waiver would impede disaster recovery 

whenever TBRA program subsidies are 

available but funds for cash relocation 

assistance are limited. This waiver gives 

grantees an additional relocation 

resource option. 

F. The requirements at section 202(b) 

of the URA and 49 CFR 24.302, which 

require that a grantee offer a displaced 

person the option to receive a ‘‘moving 

expense and dislocation allowance’’ 

based on a schedule of allowances 

prepared by the Federal Highway 

Administration as an alternative to 

receiving payment for actual moving 

and related expenses, are waived. As an 

alternative, the grantee must establish 

and offer the person a ‘‘moving expense 

and dislocation allowance’’ under a 

schedule of allowances that is 

reasonable for the jurisdiction and that 

takes into account the number of rooms 

in the displacement dwelling, whether 

the person owns and must move the 

furniture, and, at a minimum, the kinds 

of expenses described in 49 CFR 24.301. 

Without this waiver and alternative 

requirement, disaster recovery may be 

impeded by requiring grantees to offer 

allowances that do not reflect current 

local labor and transportation costs. 

Persons displaced from a dwelling 

remain entitled to choose a payment for 

actual reasonable moving and related 

expenses if they find that approach 

preferable to the locally established 

‘‘moving expense and dislocation 

allowance.’’ 

G. The regulation at 24 CFR 

570.606(d) is waived to the extent that 

it requires optional relocation policies 

to be established at the grantee or state 

recipient level. Unlike the regular CDBG 

program, States may carry out disaster 

recovery activities directly or through 

subrecipients. The regulation at 24 CFR 

570.606(d) governing optional 

relocation policies does not account for 

this distinction. This waiver makes clear 

that local governments, including 

subrecipients, receiving CDBG disaster 

funds may establish separate optional 

relocation policies. This waiver is 

intended to provide States and local 

governments with maximum flexibility 

in developing optional relocation 

policies with CDBG disaster recovery 

funds. 

21. Program income alternative 

requirement. The Department is waiving 

applicable program income rules at 

570.500(a) and (b), 570.504, 42 USC 

5304(j), and 570.489(e) to the extent 

necessary to provide additional 

flexibility as described under today’s 

Notice. The alternative requirements 

provide guidance regarding the use of 

program income received before and 

after grant closeout and address 

revolving loan funds. 

A. Definition of program income. 

(1) For the purposes of this subpart, 

‘‘program income’’ is defined as gross 

income generated from the use of CDBG 

funds, except as provided in 


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subparagraph D of this paragraph, and 

received by: (1) A State, unit of local 

government, or tribe, or (2) a 

subrecipient of a State, unit of general 

local government, or tribe. When 

income is generated by an activity that 

is only partially assisted with CDBG 

funds, the income shall be prorated to 

reflect the percentage of CDBG funds 

used (e.g., a single loan supported by 

CDBG funds and other funds; a single 

parcel of land purchased with CDBG 

funds and other funds). Program income 

includes, but is not limited to, the 

following: 

(a) Proceeds from the disposition by 

sale or long-term lease of real property 

purchased or improved with CDBG 

funds; 

(b) Proceeds from the disposition of 

equipment purchased with CDBG funds; 

(c) Gross income from the use or 

rental of real or personal property 

acquired by a State, unit of general local 

government, or tribe or subrecipient of 

a State, unit of general local 

government, or tribe with CDBG funds, 

less costs incidental to generation of the 

income (i.e., net income); 

(d) Net income from the use or rental 

of real property owned by a State, unit 

of general local government, or tribe or 

subrecipient of a State, unit of general 

local government, or tribe, that was 

constructed or improved with CDBG 

funds; 

(e) Payments of principal and interest 

on loans made using CDBG funds; 

(f) Proceeds from the sale of loans 

made with CDBG funds; 

(g) Proceeds from the sale of 

obligations secured by loans made with 

CDBG funds; 

(h) Interest earned on program income 

pending disposition of the income, but 

excluding interest earned on funds held 

in a revolving fund account; 

(i) Funds collected through special 

assessments made against properties 

owned and occupied by households not 

of low- and moderate-income, where the 

special assessments are used to recover 

all or part of the CDBG portion of a 

public improvement; and 

(j) Gross income paid to a State, unit 

of local government, tribe, or paid to a 

subrecipient thereof from the ownership 

interest in a for-profit entity in which 

the income is in return for the provision 

of CDBG assistance. 

(2) ‘‘Program income’’ does not 

include the following: 

(a) The total amount of funds which 

is less than $25,000 received in a single 

year and retained by a State, unit of 

local government, tribe, or retained by a 

subrecipient thereof; 

(b) Amounts generated by activities 

eligible under section 105(a)(15) of the 

HCD Act and carried out by an entity 

under the authority of section 105(a)(15) 

of the HCD Act; 

B. Retention of program income. Per 

24 CFR 570.504(c), a unit of government 

receiving a direct award under this 

Notice may permit a subrecipient to 

retain program income. State grantees 

may permit a unit of local government 

or tribe which receives or will receive 

program income to retain the program 

income, but are not required to do so. 

C. Program income—use, closeout, 

and transfer. 

(1) Program income received (and 

retained, if applicable) before or after 

closeout of the grant that generated the 

program income, and used to continue 

disaster recovery activities, is treated as 

additional disaster recovery CDBG 

funds subject to the requirements of this 

Notice and must be used in accordance 

with the grantee’s Action Plan for 

Disaster Recovery. To the maximum 

extent feasible, program income shall be 

used or distributed before additional 

withdrawals from the U.S. Treasury are 

made, except as provided in 

subparagraph D of this paragraph. 

(2) In addition to the regulations 

dealing with program income found at 

24 CFR 570.489(e) and 570.504, the 

following rules apply: Grantees may 

transfer program income before closeout 

of the grant that generated the program 

income to its annual CDBG program. In 

addition, State grantees may transfer 

program income before closeout to any 

annual CDBG-funded activities 

administered by a unit of general local 

government or Indian tribe within the 

State. Program income received by a 

grantee, or received and retained by a 

subgrantee, after closeout of the grant 

that generated the program income, may 

also be transferred to a grantee’s annual 

CDBG award. In all cases, any program 

income that is not used to continue the 

disaster recovery activity that generated 

the program income ceases to be subject 

to the waivers and alternative 

requirements of this Notice. 

For nonentitlement communities 

without another ongoing CDBG grant 

received directly from HUD, program 

income on hand when the CDBG 

disaster recovery grant is closed by 

HUD, shall continue to be subject to the 

eligibility requirements and all other 

applicable provisions under this Notice 

until expended. Program income 

received after closeout by HUD of the 

CDBG disaster recovery grant shall not 

be governed by the provisions of this 

Notice, except that such income shall be 

used for activities that meet a CDBG 

national objective and the eligibility 

requirements described in section 105 of 

the HCD Act. 

D. Revolving loan funds. Units of 

general local government receiving a 

direct award under this Notice, State 

grantees, and units of local government 

or tribes (permitted by a State grantee) 

may establish revolving funds to carry 

out specific, identified activities. A 

revolving fund, for this purpose, is a 

separate fund (with a set of accounts 

that are independent of other program 

accounts) established to carry out 

specific activities. These activities 

generate payments, which will be used 

to support similar activities going 

forward. These payments to the 

revolving fund are program income and 

must be substantially disbursed from 

the revolving fund before additional 

grant funds are drawn from the U.S. 

Treasury for payments which could be 

funded from the revolving fund. Such 

program income is not required to be 

disbursed for non-revolving fund 

activities. 

State grantees may also establish a 

revolving fund to distribute funds to 

units of local government or tribes to 

carry out specific, identified activities. 

The same requirements, outlined above, 

apply to this type of revolving loan 

fund. Last, note that no revolving fund, 

established per this Notice, shall be 

directly funded or capitalized with 

CDBG disaster recovery grant funds. 

22. National Objective Documentation 

for Economic Development Activities. 

24 CFR 570.483(b)(4)(i) and 

570.208(a)(4)(i) are waived to allow the 

grantees under this Notice to identify 

low- and moderate-income jobs benefit 

by documenting, for each person 

employed, the name of the business, 

type of job, and the annual wages or 

salary of the job. HUD will consider the 

person income-qualified if the annual 

wages or salary of the job is at or under 

the HUD-established income limit for a 

one-person family. This method 

replaces the standard CDBG 

requirement—in which grantees must 

review the annual wages or salary of a 

job in comparison to the person’s total 

household income and size (i.e. number 

of persons). Thus, it streamlines the 

documentation process because it 

allows the collection of wage data for 

each position created or retained from 

the assisted businesses, rather than from 

each individual household. 

This alternative requirement has been 

granted on several prior occasions to 

CDBG disaster recovery grantees, and to 

date, those grants have not exhibited 

any issues of concern in calculating the 

benefit to low- and moderate-income 

persons. The Department believes this 

waiver is consistent with the HCD Act. 

23. Public benefit for certain 

economic development activities. The 


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public benefit provisions set standards 

for individual economic development 

activities (such as a single loan to a 

business) and for economic 

development activities in the aggregate. 

Currently, public benefit standards limit 

the amount of CDBG assistance per job 

retained or created, or the amount of 

CDBG assistance per low- and moderateincome person to which goods or 

services are provided by the activity. 

These dollar thresholds were set more 

than a decade ago and, under disaster 

recovery conditions (which often 

require a larger investment to achieve a 

given result), can impede recovery by 

limiting the amount of assistance the 

grantee may provide to a critical 

activity. 

This Notice waives the public benefit 

standards at 42 U.S.C. 5305(e)(3), 24 

CFR 570.482(f)(1), (2), (3), (4)(i), (5), and 

(6), and 24 CFR 570.209(b)(1), (2), (3)(i), 

(4), for economic development activities 

designed to create or retain jobs or 

businesses (including, but not limited 

to, long-term, short-term, and 

infrastructure projects). However, 

grantees shall report and maintain 

documentation on the creation and 

retention of total jobs; the number of 

jobs within certain salary ranges; the 

average amount of assistance provided 

per job, by activity or program; and the 

types of jobs. Paragraph (g) of 24 CFR 

570.482, and 24 CFR 570.209(c), and (d) 

are also waived to the extent these 

provisions are related to public benefit. 

24. Allow reimbursement for preagreement costs. The provisions of 24 

CFR 570.489(b) are applied to permit a 

State to reimburse itself for otherwise 

allowable costs incurred by itself or its 

subgrantees on or after the incident date 

of the covered disaster. Any unit of 

general local government receiving a 

direct allocation under this Notice is 

subject to the provisions of 24 CFR 

570.200(h) but may reimburse itself or 

its subrecipients for otherwise allowable 

costs incurred on or after the incident 

date of the covered disaster. 24 CFR 

570.200(h)(1)(i) will not apply to the 

extent that it requires pre-agreement 

activities to be included in a 

consolidated plan. 

The Department expects both State 

grantees and units of general local 

government receiving a direct award 

under this Notice to include all preagreement activities in their Action 

Plans. 

25. Clarifying note on the process for 

environmental release of funds when a 

State carries out activities directly. 

Usually, a State distributes CDBG funds 

to units of local government and takes 

on HUD’s role in receiving 

environmental certifications from the 

grant recipients and approving releases 

of funds. For this grant, HUD will allow 

a State grantee to also carry out 

activities directly instead of distributing 

all program funds to subrecipients and/ 

or subgrantees. According to the 

environmental regulations at 24 CFR 

58.4, when a State carries out activities 

directly, the State must submit the 

certification and request for release of 

funds to HUD for approval. 

26. Duplication of benefits. In general, 

section 312 of the Robert T. Stafford 

Disaster Assistance and Emergency 

Relief Act (42 U.S.C. 5155), as amended, 

prohibits any person, business concern, 

or other entity from receiving financial 

assistance with respect to any part of a 

loss resulting from a major disaster as to 

which he has received financial 

assistance under any other program or 

from insurance or any other source. In 

order to comply with this law, grantees 

must ensure that each activity provides 

assistance to a person or entity only to 

the extent that the person or entity has 

a disaster recovery need that has not 

been fully met. 

Given the often complex nature of this 

issue, the Department has published a 

separate Notice explaining the 

duplication of benefit requirements 

applicable to CDBG disaster recovery 

grantees; it can be found at 76 FR 71060 

(published November 16, 2011). 

Grantees under today’s Notice are 

hereby subject to 76 FR 71060 in full. 

27. Flood buyouts—not applicable to 

all grantees. Grantees under this notice 

are able to undertake property 

acquisition for a variety of purposes. 

However, the term ‘‘buyouts’’ as 

referenced in this Notice refers to 

acquisition of properties located in a 

floodway or floodplain that is intended 

to reduce risk from future flooding. 

HUD is providing alternative 

requirements for consistency with the 

application of other federal resources 

commonly used for this type of activity. 

The following alternative requirements 

do not apply to the city of Birmingham, 

and Jefferson County. 

A. For buyout activities, the following 

requirements apply: 

(1) Any property acquired, accepted, 

or from which a structure will be 

removed pursuant to the project will be 

dedicated and maintained in perpetuity 

for a use that is compatible with open 

space, recreational, or wetlands 

management practices; 

(2) no new structure will be erected 

on property acquired, accepted or from 

which a structure was removed under 

the acquisition or relocation program 

other than (a) a public facility that is 

open on all sides and functionally 

related to a designated open space; (b) 

a rest room; or (c) a structure that the 

local floodplain manager approves in 

writing before the commencement of the 

construction of the structure; and 

(3) after receipt of the assistance, with 

respect to any property acquired, 

accepted, or from which a structure was 

removed under the acquisition or 

relocation program, no subsequent 

application for additional disaster 

assistance for any purpose will be made 

by the recipient to any Federal entity. 

B. Grantees have the discretion to 

determine an appropriate valuation 

method (including the use of pre-flood 

value, post-flood value, or cost of 

reconstruction as a basis for property 

value). However, in using CDBG disaster 

recovery funds for buyouts, the grantee 

must uniformly apply whichever 

valuation method it chooses. 

C. All buyouts must still meet activity 

eligibility and national objective 

requirements. 

D. Grantees should identify all 

acquisition activities that are buyouts in 

the DRGR system. 

28. Flood insurance. 

A. Flood insurance purchase 

requirements. HUD does not prohibit 

the use of CDBG Disaster Assistance for 

existing residential buildings in the 

Special Flood Hazard Area (SFHA) (or 

‘‘100-year’’ floodplain). However, 

Federal laws and regulations related to 

both flood insurance and floodplain 

management must be followed, as 

applicable. With respect to flood 

insurance, a HUD-assisted homeowner 

for a property located in the SFHA must 

obtain and maintain flood insurance in 

the amount and duration prescribed by 

FEMA’s National Flood Insurance 

Program. Section 102(a) of the Flood 

Disaster Protection Act of 1973 

mandates the purchase of flood 

insurance protection for any HUDassisted property within the SFHA. 

B. Future federal assistance to owners 

remaining in floodplain. 

(1) Section 582 of the National Flood 

Insurance Reform Act of 1994, as 

amended, (42 U.S.C. 5154a) prohibits 

flood disaster assistance in certain 

circumstances. In general, it provides 

that no federal disaster relief assistance 

made available in a flood disaster area 

may be used to make a payment 

(including any loan assistance payment) 

to a person for repair, replacement, or 

restoration for damage to any personal, 

residential, or commercial property if 

that person at any time has received 

federal flood disaster assistance that was 

conditional on the person first having 

obtained flood insurance under 

applicable federal law and the person 

has subsequently failed to obtain and 

maintain flood insurance as required 


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under applicable federal law on such 

property. (Section 582 is selfimplementing without regulations.) This 

means that a grantee may not provide 

disaster assistance for the 

abovementioned repair, replacement, or 

restoration to a person who has failed to 

meet this requirement. 

(2) Section 582 also implies a 

responsibility for a grantee that receives 

CDBG disaster recovery funds or that, 

under 42 U.S.C. 5321, designates 

annually appropriated CDBG funds for 

disaster recovery. That responsibility is 

to inform property owners receiving 

disaster assistance that triggers the flood 

insurance purchase requirement that 

they have a statutory responsibility to 

notify any transferee of the requirement 

to obtain and maintain flood insurance, 

and that the transferring owner may be 

liable if he or she fails to do so. These 

requirements are described below. 

(3) Duty to notify. In the event of the 

transfer of any property described in 

paragraph (5), the transferor shall, not 

later than the date on which such 

transfer occurs, notify the transferee in 

writing of the requirements to: 

(a) Obtain flood insurance in 

accordance with applicable federal law 

with respect to such property, if the 

property is not so insured as of the date 

on which the property is transferred; 

and 

(b) Maintain flood insurance in 

accordance with applicable federal law 

with respect to such property. Such 

written notification shall be contained 

in documents evidencing the transfer of 

ownership of the property. 

(4) Failure to notify. If a transferor 

fails to provide notice as described 

above and, subsequent to the transfer of 

the property: 

(a) The transferee fails to obtain or 

maintain flood insurance, in accordance 

with applicable federal law, with 

respect to the property; 

(b) The property is damaged by a 

flood disaster; and 

(c) Federal disaster relief assistance is 

provided for the repair, replacement, or 

restoration of the property as a result of 

such damage, the transferor shall be 

required to reimburse the Federal 

Government in an amount equal to the 

amount of the federal disaster relief 

assistance provided with respect to the 

property. 

(5) The notification requirements 

apply to personal, commercial, or 

residential property for which federal 

disaster relief assistance made available 

in a flood disaster area has been 

provided, prior to the date on which the 

property is transferred, for repair, 

replacement, or restoration of the 

property, if such assistance was 

conditioned upon obtaining flood 

insurance in accordance with applicable 

federal law with respect to such 

property. 

(6) The term ‘‘Federal disaster relief 

assistance’’ applies to HUD or other 

federal assistance for disaster relief in 

‘‘flood disaster areas.’’ The term ‘‘flood 

disaster area’’ is defined in section 

582(d)(2) of the National Flood 

Insurance Reform Act of 1994, as 

amended, to include an area receiving a 

presidential declaration of a major 

disaster or emergency as a result of 

flood conditions. 

29. Procurement. 

A. Grants to States. Per 24 CFR 

570.489(d), a State must have fiscal and 

administrative requirements for 

expending and accounting for all funds. 

Furthermore, per 24 CFR 570.489(g), a 

State shall establish requirements for 

procurement policies and procedures 

for units of general local government 

based on full and open competition. All 

subgrantees of a State (including units 

of general local government) are subject 

to the procurement policies and 

procedures required by the State. 

A State may meet the above 

requirements by adopting 24 CFR part 

85. If a State has adopted part 85 in full, 

it must follow the same policies and 

procedures it uses when procuring 

property and services with its nonFederal funds. However, the State must 

ensure that every purchase order or 

other contract includes any clauses 

required by Federal statutes and 

executive orders and their 

implementing regulations per 24 CFR 

85.36(a). 

If a State has not adopted 24 CFR 

85.36(a), but has adopted 24 CFR 

85.36(b) through (i), the State and its 

subgrantees must follow State and local 

law (as applicable), so long as the 

procurements conform to applicable 

Federal law and the standards identified 

in 24 CFR 85.36(b) through (i). 

B. Direct grants to units of general 

local government. Any unit of general 

local government receiving a direct 

appropriation under today’s Notice will 

be subject to 24 CFR 85.36(b) through 

(i). 

30. Timely distribution of funds. 24 

CFR 570.494 and 24 CFR 570.902 

regarding timely distribution of funds 

are waived and replaced with 

alternative requirements under this 

Notice. HUD expects each grantee to 

expeditiously obligate and expend all 

funds, including any recaptured funds 

or program income, and to carry out 

activities in a timely manner. HUD will 

evaluate timeliness in relation to each 

grantee’s established performance 

schedule as identified in its Action 

Plan. 

The Department will, absent 

substantial evidence to the contrary, 

deem a grantee to be carrying out its 

programs and activities in a timely 

manner if the schedule for carrying out 

its activities is substantially met. 

In determining the appropriate 

corrective action to take with respect to 

a HUD determination that a grantee is 

not carrying out its activities in a timely 

manner pursuant to this section, HUD 

will take into account the extent to 

which unexpended funds have been 

obligated by the grantee and its subrecipients for specific activities at the 

time the finding is made and other 

relevant information. 

If a grantee is determined to be 

untimely pursuant to this section, and 

the grantee is again determined to be 

untimely 12 months following the 

initial determination, HUD may elect to 

recapture any unobligated funds and 

reallocate to another entity with the 

authority and capacity to carry out the 

remaining recovery activities, unless 

HUD determines that the untimeliness 

resulted from factors beyond the 

grantee’s reasonable control. 

31. Performance review authorities. 

Section 104(e)(1) of the HCD Act 

requires that the Secretary shall, at least 

on an annual basis, make such reviews 

and audits as may be necessary or 

appropriate to determine whether the 

recipient has carried out its activities in 

a timely manner, whether the recipient 

has carried out those activities and its 

certifications in accordance with the 

requirements and the primary objectives 

of the Act and with other applicable 

laws, and whether the recipient has a 

continuing capacity to carry out those 

activities in a timely manner. 

The requirements for submission of a 

Performance Evaluation Report (PER) 

pursuant to 42 U.S.C. 12708 and 24 CFR 

91.520 are waived. In the alternative, 

and to ensure consistency between 

grants allocated under this Notice and 

grants allocated previously under the 

CDBG disaster recovery program, HUD 

is requiring that: 

A. Each grantee must enter its Action 

Plan for Disaster Recovery, including 

performance measures, into HUD’s 

DRGR system. As more detailed 

information about uses of funds is 

identified by the grantee, the grantee 

must enter such detail into DRGR, in 

sufficient detail to serve as the basis for 

acceptable performance reports. 

B. Each grantee must submit a 

quarterly performance report, as HUD 

prescribes, no later than 30 days 

following the end of each calendar 

quarter, beginning after the first full 


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calendar quarter after grant award and 

continuing until all funds have been 

expended and all expenditures have 

been reported. Each quarterly report 

will include information about the uses 

of funds during the applicable quarter 

including (but not limited to) the project 

name, activity, location, and national 

objective; funds budgeted, obligated, 

drawn down, and expended; the 

funding source and total amount of any 

non-CDBG disaster recovery funds to be 

expended on each activity; beginning 

and completion dates of activities; 

achieved performance outcomes such as 

number of housing units complete or 

number of low- and moderate-income 

persons benefiting; and the race and 

ethnic status of persons assisted under 

direct-benefit activities. Within the 

section titled ‘‘Overall Progress 

Narrative’’ in DRGR, grantees must 

include a description of the actions 

taken to affirmatively further fair 

housing. 

Quarterly reports to HUD must be 

submitted using HUD’s DRGR system 

and, within 3 days of submission, be 

posted on the grantee’s official Web site. 

C. Reporting requirements. Once each 

grantee enters its action Plan into the 

DRGR system, it must submit to HUD a 

projection of expenditures and 

outcomes (projected on a quarterly 

basis) for each major activity type in 

DRGR. This will enable HUD to track 

proposed versus actual performance in 

coordination with each grantee’s 

submission of DRGR quarterly 

performance reports. 

D. In addition to providing these 

reports to Congress and the public, HUD 

will use them—in addition to 

transactional data from DRGR and other 

information provided by the grantee— 

to: (1) Monitor for anomalies or 

performance problems that suggest 

fraud, abuse of funds, and duplication 

of benefits; (2) reconcile budgets, 

obligations, funding draws, and 

expenditures; (3) calculate applicable 

administrative and public service 

limitations and the overall percentage of 

funds that benefit low- and moderateincome persons; and (4) analyze the risk 

of grantee programs to determine 

priorities for monitoring. 

32. Review of continuing capacity to 

carry out CDBG funded activities in a 

timely manner. If HUD determines that 

the grantee has not carried out its CDBG 

activities and certifications in 

accordance with the requirements and 

criteria described in this section, HUD 

will undertake a further review to 

determine whether or not the grantee 

has the continuing capacity to carry out 

its activities in a timely manner. In 

making the determination, the 

Department will consider the nature and 

extent of the recipient’s performance 

deficiencies, types of corrective actions 

the recipient has undertaken, and the 

success or likely success of such 

actions. 

33. Corrective and remedial actions. 

HUD will undertake corrective and 

remedial actions in accordance with 24 

CFR 570.910 and 24 CFR 570.913. 

34. Reduction, withdrawal, or 

adjustment of a grant or other 

appropriate action. Prior to a reduction, 

withdrawal, or adjustment of a grant or 

other appropriate action, taken pursuant 

to this section, the recipient shall be 

notified of such proposed action and 

given an opportunity within a 

prescribed time period for an informal 

consultation. 

Consistent with the procedures 

described in this Notice, the Secretary 

may adjust, reduce or withdraw the 

grant or take other actions as 

appropriate, except that funds already 

expended on eligible approved activities 

shall not be recaptured. 

35. Certifications waiver and 

alternative requirement. Sections 91.325 

and 91.225 of title 24 of the Code of 

Federal Regulations are waived. Each 

State or unit of general local government 

receiving a direct allocation under this 

Notice must make the following 

certifications with its Action Plan: 

A. The grantee certifies that it will 

affirmatively further fair housing, which 

means that it will conduct an analysis 

to identify impediments to fair housing 

choice within its jurisdiction take 

appropriate actions to overcome the 

effects of any impediments identified 

through that analysis, and maintain 

records reflecting the analysis and 

actions in this regard. (See 24 CFR 

570.487(b)(2) and 570.601(a)(2).) 

B. The grantee certifies that it has in 

effect and is following a residential antidisplacement and relocation assistance 

plan in connection with any activity 

assisted with funding under the CDBG 

program. 

C. The grantee certifies its compliance 

with restrictions on lobbying required 

by 24 CFR part 87, together with 

disclosure forms, if required by part 87. 

D. The grantee certifies that the 

Action Plan for Disaster Recovery is 

authorized under State and local law (as 

applicable) and that the grantee, and 

any entity or entities designated by the 

grantee, possess(es) the legal authority 

to carry out the program for which it is 

seeking funding, in accordance with 

applicable HUD regulations and this 

Notice. 

E. The grantee certifies that activities 

to be undertaken with funds under this 

Notice are consistent with its Action 

Plan. 

F. The grantee certifies that it will 

comply with the acquisition and 

relocation requirements of the URA, as 

amended, and implementing regulations 

at 49 CFR part 24, except where waivers 

or alternative requirements are provided 

for in this Notice. 

G. The grantee certifies that it will 

comply with section 3 of the Housing 

and Urban Development Act of 1968 (12 

U.S.C. 1701u), and implementing 

regulations at 24 CFR part 135. 

H. The grantee certifies that it is 

following a detailed citizen 

participation plan that satisfies the 

requirements of 24 CFR 91.105 or 

91.115, as applicable (except as 

provided for in notices providing 

waivers and alternative requirements for 

this grant). Also, each unit of local 

government receiving assistance from a 

State grantee must follow a detailed 

citizen participation plan that satisfies 

the requirements of 24 CFR 570.486 

(except as provided for in notices 

providing waivers and alternative 

requirements for this grant). 

I. Each State receiving a direct award 

under this Notice certifies that it has 

consulted with affected units of local 

government in counties designated in 

covered major disaster declarations in 

the non-entitlement, entitlement, and 

tribal areas of the State in determining 

the method of distribution of funding. 

J. The grantee certifies that it is 

complying with each of the following 

criteria: 

(1) Funds will be used solely for 

necessary expenses related to disaster 

relief, long-term recovery, restoration of 

infrastructure and housing, and 

economic revitalization in the most 

impacted and distressed areas for which 

the President declared a major disaster 

in 2011, pursuant to the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act of 1974 (42 U.S.C. 5121 

et seq.). 

(2) With respect to activities expected 

to be assisted with CDBG disaster 

recovery funds, the Action Plan has 

been developed so as to give the 

maximum feasible priority to activities 

that will benefit low- and moderateincome families. 

(3) The aggregate use of CDBG disaster 

recovery funds shall principally benefit 

low- and moderate-income families in a 

manner that ensures that at least 50 

percent of the grant amount is expended 

for activities that benefit such persons. 

(4) The grantee will not attempt to 

recover any capital costs of public 

improvements assisted with CDBG 

disaster recovery grant funds, by 

assessing any amount against properties 


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1For the cut off thresholds used in this formula, 

minimum county need of $10 million in severe 

unmet housing and business needs, the $10 million 

minimum grant for a state (point 4), and the $6 

million minimum grant for an entitlement 

jurisdiction (point 5a), these represent ‘‘natural 

breaks’’ in the distribution. That is, the next county, 

state or grantee on the list has a significant 

separation in need or estimated grant from the last 

county, state, or grantee included in the list. 

owned and occupied by persons of lowand moderate-income, including any fee 

charged or assessment made as a 

condition of obtaining access to such 

public improvements, unless: (A) 

Disaster recovery grant funds are used to 

pay the proportion of such fee or 

assessment that relates to the capital 

costs of such public improvements that 

are financed from revenue sources other 

than under this title; or (B) for purposes 

of assessing any amount against 

properties owned and occupied by 

persons of moderate income, the grantee 

certifies to the Secretary that it lacks 

sufficient CDBG funds (in any form) to 

comply with the requirements of clause 

(A). 

K. The grantee certifies that the grant 

will be conducted and administered in 

conformity with title VI of the Civil 

Rights Act of 1964 (42 U.S.C. 2000d) 

and the Fair Housing Act (42 U.S.C. 

3601–3619) and implementing 

regulations. 

L. The grantee certifies that it has 

adopted and is enforcing the following 

policies. In addition, States receiving a 

direct award must certify that they will 

require units of general local 

government that receive grant funds to 

certify that they have adopted and are 

enforcing: 

(1) A policy prohibiting the use of 

excessive force by law enforcement 

agencies within its jurisdiction against 

any individuals engaged in nonviolent 

civil rights demonstrations; and 

(2) A policy of enforcing applicable 

State and local laws against physically 

barring entrance to or exit from a facility 

or location that is the subject of such 

nonviolent civil rights demonstrations 

within its jurisdiction. 

M. Each State or unit of local 

government receiving a direct award 

under this Notice certifies that it (and 

any subrecipient or administering 

entity) has the capacity to carry out 

disaster recovery activities in a timely 

manner; or the State or unit of local 

government will develop a plan to 

increase capacity where such capacity is 

lacking. 

N. The grantee certifies that it will not 

use CDBG disaster recovery funds for 

any activity in an area delineated as a 

special flood hazard area in FEMA’s 

most current flood advisory maps, 

unless it also ensures that the action is 

designed or modified to minimize harm 

to or within the floodplain, in 

accordance with Executive Order 11988 

and 24 CFR part 55. 

O. The grantee certifies that its 

activities concerning lead-based paint 

will comply with the requirements of 24 

CFR part 35, subparts A, B, J, K, and R. 

P. The grantee certifies that it will 

comply with applicable laws. 

36. Information collection approval 

note. HUD has submitted 

documentation to OMB seeking 

emergency approval for information 

collection requirements in accordance 

with the Paperwork Reduction Act of 

1995 (44 U.S.C. 3501–3520). The 

submission is under review by OMB 

and approval pending. In accordance 

with the Paperwork Reduction Act, 

HUD may not conduct or sponsor, nor 

is a person required to respond to, a 

collection of information, unless the 

collection displays a valid control 

number. 

VII. Duration of Funding 

The Appropriations Act directs that 

these funds be available until expended. 

However, in accordance with 31 U.S.C. 

1555, HUD shall close the appropriation 

account and cancel any remaining 

obligated or unobligated balance if the 

Secretary or the President determines 

that the purposes for which the 

appropriation has been made have been 

carried out and no disbursements have 

been made against the appropriation for 

2 consecutive fiscal years. In such a 

case, the funds shall not be available for 

obligation or expenditure for any 

purpose after the account is closed. 

VIII. Catalog of Federal Domestic 

Assistance 

The Catalog of Federal Domestic 

Assistance numbers for the disaster 

recovery grants under this Notice are as 

follows: 14.218; 14.228. 

IX. Finding of No Significant Impact 

A Finding of No Significant Impact 

(FONSI) with respect to the 

environment has been made in 

accordance with HUD regulations at 24 

CFR part 50, which implement section 

102(2)(C) of the National Environmental 

Policy Act of 1969 (42 U.S.C. 

4332(2)(C)). The FONSI is available for 

public inspection between 8 a.m. and 5 

p.m. weekdays in the Regulations 

Division, Office of General Counsel, 

Department of Housing and Urban 

Development, 451 7th Street SW., Room 

10276, Washington, DC 20410–0500. 

Due to security measures at the HUD 

Headquarters building, an advance 

appointment to review the docket file 

must be scheduled by calling the 

Regulations Division at 202–708–3055 

(this is not a toll-free number). Hearing 

or speech-impaired individuals may 

access this number through TTY by 

calling the toll-free Federal Relay 

Service at 800–877–8339. 

Dated: April 9, 2012. 

Mercedes M. Ma ́ rquez, 

Assistant Secretary for Community Planning 

and Development. 

Appendix A—Allocation Methodology 

This section describes the methods 

behind HUD’s allocation of $400 million 

in the 2011 CDBG Disaster Recovery 

Funds. Section 239 of Public Law 112– 

55, enacted on November 18, 2011, 

appropriates $400 million through the 

Community Development Block Grant 

(CDBG) program for: 

* * * necessary expenses for activities 

authorized under title I of the Housing 

and Community Development Act of 

1974 (Pub. L. 93–383) 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 pursuant 

to the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act (42 

U.S.C. 5121 et seq.) in 2011; Provided, 

That funds shall be awarded directly to 

the State or unit of general local 

government at the discretion of the 

Secretary; * * * 

HUD allocates funds based on its 

estimate of the total unmet needs for 

infrastructure and the unmet needs for 

severe damage to businesses and 

housing that remain to be addressed in 

the most impacted counties after taking 

into account December 2011 data on 

insurance, FEMA assistance, and SBA 

disaster loans. To meet the statutory 

requirement that the funds be targeted 

to ‘‘the most impacted or distressed 

areas,’’ this allocation: 

(1) Limits funding to the states and 

counties with the highest level of severe 

unmet needs. Specifically, the 

calculation of unmet housing and 

business needs is limited only to those 

homes and businesses that experienced 

severe damage (see definitions below). 

That is, it excludes homes and 

businesses with minor or moderate 

damage that may have some unmet 

needs remaining. Further, to target 

funds to the most impacted or distressed 

areas, only counties with $10 million 1

or more in severe unmet housing and 

business needs are used to determine a 

state’s allocation. Thus, funding is 

provided based on the severe needs of 


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2When calculating the grants, the internal weight 

between factors is maintained at the ratio of all 

severe unmet housing and business needs in all 

counties to unmet infrastructure needs in all 

counties. 

3Each state receives funding based on all of 

infrastructure needs within a state, minus the 

infrastructure needs estimated to lie within 

entitlement jurisdictions receiving direct grants. In 

addition, each state also receives funding from all 

severe housing and business needs in the most 

impacted counties minus the estimated severe 

housing and business needs within entitlement 

jurisdictions receiving direct grants. 

the most impacted counties in each 

state. 

(2) Factors in disaster related 

infrastructure repair costs statewide that 

are not reimbursed by FEMA Public 

Assistance. For all of these disasters, 

this is calculated as the 25 percent state 

match requirement. 

(3) Funds are allocated based on each 

state’s share of total unmet needs. This 

is calculated as each state’s proportional 

share of the sum of infrastructure and 

severe unmet housing and business 

needs from the most impacted 

counties.2

(4) Restricts funding only to states 

that receive a minimum grant of $10 

million or more. These funds are limited 

to only the states with the highest levels 

of unmet need. As such, funding is 

limited to states that would receive 

aggregate funding of $10 million or 

more based on their total unmet needs. 

The calculated grant amounts for states 

that would have received less than $10 

million are provided to the states above 

$10 million through a pro-rata increase. 

(5) Specifies the counties and 

jurisdictions that are most impacted or 

distressed by: 

a. Providing direct funding to CDBG 

entitlement jurisdictions (and one 

nonentitlement city) with significant 

remaining severe unmet needs. Within a 

State, if an entitlement jurisdiction 

accounts for $6 million or more of the 

funding allocated to a State, it is 

allocated a direct grant (the $6 million 

threshold represents a ‘‘natural break’’ 

in funding among entitlement 

jurisdictions). Otherwise the funding is 

provided directly to the State. Due to its 

extraordinarily high level of localized 

need, one non-entitlement jurisdiction 

(Minot, ND) also receives a direct 

allocation. 

b. Directing that a minimum of 80% 

of the total funds allocated within a 

state, including those allocated directly 

to the State and to local governments, 

must be spent on the disaster recovery 

needs of the communities and 

individuals in the most impacted and 

distressed counties (i.e., those counties 

identified by HUD). The principle 

behind the 80 percent rule is that each 

state received its allocation based on the 

unmet needs in the most impacted 

counties (those counties with more than 

$10 million in severe unmet housing 

and business needs) and thus HUD will 

require that all grantees within a State 

direct these limited resources toward 

those most impacted counties.3

Nonetheless, HUD recognizes that there 

are likely circumstances where its data 

is incomplete, damage is highly 

localized outside of one of the heavily 

impacted counties, or recovery would 

otherwise benefit from expenditures 

outside of those most impacted counties 

and thus provides some flexibility to 

address those needs for State grantees. 

While local governments receiving 

direct grant allocations from HUD must 

spend their total grant within their own 

jurisdictions, HUD will allow a portion 

of the State non-entitlement grant to be 

spent outside of the most impacted 

counties, in an amount not to exceed 

that which yields 80 percent of all 

funding within a state to be spent in the 

most impacted counties. 

HUD will provide States with county 

level data on unmet needs to assist with 

their planning. 

Methods for estimating unmet needs 

for business, infrastructure, and 

housing: The data HUD staff have 

identified as being available to calculate 

unmet needs for the targeted disasters 

(major disasters with Presidential 

declaration issued in 2011 and for 

which FEMA individual assistance was 

available) come from the following data 

sources: 

• FEMA Individual Assistance 

program data on housing unit damage, 

as of 12/20/2011; 

• SBA for management of its disaster 

assistance loan program for housing 

repair and replacement, as of 12/21/ 

2011; 

• SBA for management of its disaster 

assistance loan program for business 

real estate repair and replacement as 

well as content loss, as of 12/22/2011; 

and 

• FEMA estimated and obligated 

amounts under its Public Assistance 

program for permanent work, federal 

and state cost share, as of 12/20/2011. 

Calculating Severe Unmet Housing 

Needs 

The core data on housing damage for 

both the unmet housing needs are based 

on home inspection data for FEMA’s 

Individual Assistance program. For 

unmet housing needs, the FEMA data 

are supplemented by Small Business 

Administration data from its 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, where: 

• The owner-occupied units included 

in the unmet needs analysis are those 

determined by FEMA to be eligible for 

a repair or replacement grant. 

• Each of the FEMA inspected owneroccupied units are classified by HUD 

into one of five categories: 

• Minor-Low: Less than $3,000 of 

FEMA inspected damage 

• Minor-High: $3,000 to $7,999 of 

FEMA inspected damage 

• Major-Low: $8,000 to $14,999 of 

FEMA inspected damage 

• Major-High: $15,000 to $28,800 of 

FEMA inspected damage 

• Severe: Greater than $28,800 of FEMA 

inspected damage or determined 

destroyed. 

Only units in the Major-High and 

Severe categories are counted toward 

the severe unmet housing needs 

calculation. 

• The rental units included in the 

unmet needs analysis are those assessed 

for personal property loss, near owneroccupied dwellings with major-high and 

severe damage, and where the tenant 

has an income of less than $20,000. The 

use of the $20,000 income cut-off for 

calculating rental unmet needs is 

intended to capture the loss of 

affordable rental housing. 

• The average cost to fully repair a 

home for a specific disaster within each 

of the damage categories noted above is 

calculated using the median ratio 

between real property damage repair 

costs determined by the Small Business 

Administration for its disaster loan 

program and the FEMA assessment of 

real estate damage, for the subset of 

homes inspected by both SBA and 

FEMA. Because SBA inspects for full 

repair costs, it is presumed to reflect the 

full cost to repair the home, which is 

generally greater than FEMA 

estimations of the cost to make the 

home habitable. If fewer than 25 SBA 

inspections are made for homes within 

a FEMA damage category, the median 

ratio between SBA and FEMA 

assessment of damage in the category for 

that disaster has a cap applied at the 

75th percentile of all damaged units for 

that category for all disasters and a floor 

applied at the 25th percentile. If there 

are no SBA inspections within a FEMA 

damage category, the national median 

ratio between SBA and FEMA 

assessment of damage within a FEMA 

damage category is used. 

• To obtain estimates for unmet 

needs, only properties receiving a 


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FEMA grant are included in the 

calculation (since these are the cases 

assumed to have insufficient insurance 

coverage). Furthermore, the FEMA grant 

amount and all SBA loans are 

subtracted out of the total estimated 

damage to obtain a final unmet needs 

estimate. 

Calculating Infrastructure Needs 

To best proxy unmet infrastructure 

needs, HUD uses data from FEMA’s 

Public Assistance program on the state 

match requirement (usually 25 percent 

of the estimated public assistance 

needs). This allocation uses only a 

subset of the Public Assistance damage 

estimates reflecting the categories of 

activities most likely to require CDBG 

funding above the Public Assistance and 

state match requirement. Those 

activities are categories: C–Roads and 

Bridges; D–Water Control Facilities; E– 

Public Buildings; F–Public Utilities; and 

G–Recreational-Other. Categories A 

(Debris Removal) and B (Protective 

Measures) are largely expended 

immediately after a disaster and reflect 

interim recovery measures rather than 

the long-term recovery measures for 

which CDBG funds are generally used. 

Because Public Assistance damage 

estimates are available only statewide 

(and not county), CDBG funding 

allocated by the estimate of unmet 

infrastructure needs are sub-allocated to 

counties and local jurisdictions based 

on each jurisdiction’s proportion of 

unmet housing needs (categories minorhigh to severe). 

Calculating Economic Revitalization 

Needs 

Based on SBA disaster loans to 

businesses, HUD used the sum of real 

property and real content loss of small 

businesses not receiving an SBA 

disaster loan. This is adjusted upward 

by the proportion of applications that 

were received for a disaster that content 

and real property loss were not 

calculated because the applicant had 

inadequate credit or income. For 

example, if a state had 160 applications 

for assistance, 150 had calculated needs 

and 10 were denied in the preprocessing stage for not enough income 

or poor credit, the estimated unmet 

need calculation would be increased as 

(1 + 10/160) * calculated unmet real 

content loss. 

Because applications denied for poor 

credit or income are the most likely 

measure of requiring the type of 

assistance available with CDBG recovery 

funds, the calculated unmet business 

needs for each state are adjusted 

upwards by the proportion of total 

applications that were denied at the preprocess stage because of poor credit or 

inability to show repayment ability. 

Similar to housing, estimated damage is 

used to determine what unmet needs 

will be counted as severe unmet needs. 

Only properties with total real estate 

and content loss in excess of $65,000 are 

considered severe damage for purposes 

of identifying the most impacted areas. 

Category 1: real estate + content loss = 

below 12,000 

Category 2: real estate + content loss = 

12,000–30,000 

Category 3: real estate + content loss = 

30,000–65,000 

Category 4: real estate + content loss = 

65,000–150,000 

Category 5: real estate + content loss = 

above 150,000 

To obtain unmet business needs, the 

amount for approved SBA loans is 

subtracted out of the total estimated 

damage. Since SBA business needs are 

best measured at the county level, HUD 

estimates the distribution of needs to 

local entitlement jurisdictions based on 

the distribution of all unmet housing 

needs. 

[FR Doc. 2012–9094 Filed 4–13–12; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5580–N–03] 

Department of Housing and Urban 

Development Summary of Public 

Comments, Response to Public 

Comments, and Final 2012–2015 

Environmental Justice Strategy 

AGENCY: Office of Sustainable Housing 

and Communities, HUD. 

ACTION: Notice. 

SUMMARY: On September 30, 2011, HUD 

posted its draft environmental justice 

strategy and requested public comment. 

This notice summarizes public 

comments submitted in response to 

HUD’s draft environmental justice 

strategy, offers response to comments, 

and announces the release of HUD’s 

final Environmental Justice Strategy. 

The changes in the final strategy reflect 

HUD’s consideration of the public 

comments received and HUD’s effort to 

improve and expand its commitment to 

avoiding disproportionately high and 

adverse human health or environmental 

effects on minority and low-income 

populations, as well as creating 

geographies of opportunity. The final 

strategy is posted at http:// 

portal.hud.gov/hudportal/HUD?src=/ 

program_offices/ 

sustainable_housing_communities. 

FOR FURTHER INFORMATION CONTACT: 

Sunaree Marshall, Office of Sustainable 

Housing and Communities, Department 

of Housing and Urban Development, 

451 Seventh Street SW., Room 10180, 

Washington, DC 20410, telephone 

number 202–402–6011 (this is not a tollfree number). Persons with hearing or 

speech impairments may access these 

numbers through TTY by calling the 

toll-free Federal Relay Service at 800– 

877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On September 30, 2011, HUD 

published for public comment a draft 

Environmental Justice Strategy for 2012 

through 2015. HUD is committed to 

meeting the goals of Executive Order 

12898, ‘‘Federal Actions to Address 

Environmental Justice in Minority 

Populations and Low-Income 

Populations,’’ which states that each 

federal agency, with the law as its guide, 

should make environmental justice part 

of its mission. In this regard, HUD has 

developed its Environmental Justice 

Strategy (EJ Strategy). HUD’s EJ Strategy 

is a four-year plan to address 

environmental justice concerns and 

increase access to environmental 

benefits through HUD policies, 

programs, and activities. 

The release of HUD’s EJ Strategy is 

part of the latest step in a larger 

Administration-wide effort to ensure 

strong protection from environmental 

and health hazards for all. In August 

2011, federal agencies signed the 

‘‘Memorandum of Understanding on 

Environmental Justice and Executive 

Order 12898’’ (EJ MOU), which 

committed each agency to, among other 

things, finalizing an EJ strategy and 

releasing annual implementation 

reports. Links to the other federal EJ 

Strategies are available on the 

Environmental Justice Interagency 

Workgroup (IWG) Web page at http:// 

www.epa.gov/environmentaljustice/ 

interagency/index.html. 

Now that its strategy is final, HUD 

will continue to work with the IWG and 

other federal partners to engage 

stakeholders through outreach, 

education, and stakeholder events and 

respond to public comments through its 

annual implementation reports. 

II. Final Strategy: Changes to the 

September 30, 2011 Draft EJ Strategy 

This final strategy follows publication 

of the September 30, 2011 draft strategy 

and takes into consideration the public 

comments received. The public 

comment period on the draft strategy 

closed on November 23, 2011, after 

HUD extended the deadline from the 


emcdonald on DSK29S0YB1PROD with NOTICES