[Federal Register Volume 89, Number 14 (Monday, January 22, 2024)]
[Notices]
[Pages 3942-3948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01116]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6412-N-01]


Waivers and Alternative Requirements for Community Development 
Block Grant Disaster Recovery (CDBG-DR) and Community Development Block 
Grant National Disaster Resilience (CDBG-NDR) Grantees

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

ACTION: Notice.

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SUMMARY: This notice governs Community Development Block Grant disaster 
recovery (CDBG-DR) and Community Development Block Grant National 
Disaster Resilience (CDBG-NDR) funds awarded under several 
appropriations acts identified in the Table of Contents. Specifically, 
this notice provides waivers and establishes alternative requirements 
for certain CDBG-DR and CDBG-NDR grantees that have submitted requests 
for waivers and alternative requirements for grants provided under the 
public laws cited in this notice.

DATES: Applicability Date: January 29, 2024.

FOR FURTHER INFORMATION CONTACT: Tennille Parker, Director, Office of 
Disaster Recovery, U.S. Department of

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Housing and Urban Development, 451 7th Street SW, Room 7282, 
Washington, DC 20410, telephone number 202-708-3587 (this is not a 
toll-free number). HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as individuals 
with speech or communication disabilities. To learn more about how to 
make an accessible telephone call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Email inquiries 
may be sent to <a href="/cdn-cgi/l/email-protection#7b1f12081a080f1e0924091e18140d1e09023b130e1f551c140d"><span class="__cf_email__" data-cfemail="65010c1604161100173a1700060a1300171c250d10014b020a13">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Authority To Grant Waivers
II. Public Law 113-2 Waivers and Alternative Requirements
III. Public Law 115-123 Waivers and Alternative Requirements
IV. Public Law 116-20 Waivers and Alternative Requirements
V. Finding of No Significant Impact (FONSI)

I. Authority To Grant Waivers

    Each of the appropriations acts cited in the Table of Contents 
authorize the Secretary to waive, or specify alternative requirements 
for, any provision of any statute or regulation that the Secretary 
administers in connection with the obligation by the Secretary, or use 
by the recipient, of grant funds, except for requirements related to 
fair housing, nondiscrimination, labor standards, and the environment. 
HUD may also exercise its regulatory waiver authority under 24 CFR 
5.110, 91.600, and 570.5.
    All waivers and alternative requirements authorized in this notice 
are based upon a determination by the Secretary that good cause exists 
and that the waiver or alternative requirement is not inconsistent with 
the overall purposes of title I of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCDA). The good cause 
for each waiver and alternative requirement is summarized in this 
notice.

II. Public Law 113-2 Waivers and Alternative Requirements

II.A. Isle de Jean Charles Waiver and Alternative Requirement for 
Eligibility and National Objective Compliance and Use of Program Income 
(State of Louisiana Only)

    The Federal Register notice published on June 7, 2016 (81 FR 36557) 
announced the allocation of approximately $1 billion of CDBG-NDR funds 
appropriated pursuant to Public Law 113-2 for competitive awards 
through the National Disaster Resilience Competition (NDRC). Through 
the NDRC, HUD awarded CDBG-NDR funds to 13 states and local governments 
to implement innovative and replicable activities to increase the 
resilience of communities to future disasters. HUD awarded $92.6 
million in CDBG-NDR funds to the State of Louisiana, including $48.3 
million to implement the Isle de Jean Charles (IDJC) Relocation. 
Additionally, HUD published a Federal Register notice on February 19, 
2019 (84 FR 4836) that included a clarification of certain actions 
being taken by the State as part of the relocation of the IDJC 
community.
    The State is using its CDBG-NDR funds to support the voluntary 
resettlement of current and former residents of the flood-prone Isle de 
Jean Charles to a new and more resilient inland community (the ``IDJC 
Resettlement Project''). In 1955, Isle de Jean Charles was a 22,400-
acre island. At the time of the CDBG-NDR award, IDJC had lost 98 
percent of its land due to subsidence, with only 320 acres remaining. 
The goals of the IDJC Resettlement Project are to move residents out of 
harm's way, to engage the Isle de Jean Charles community residents in 
the design of the new community, to identify means by which the new 
community can be financially sustainable, and to safeguard the 
preservation and continuity of IDJC's diverse cultural identities and 
traditions.
    In the Federal Register notice published on February 19, 2019, HUD 
clarified that costs required to restrict the use of land as a primary 
residence are eligible costs of the State's new construction and 
disposition activities for relocating island residents. (84 FR at 
4839). HUD also clarified that the placement of restrictions and 
limitations on the use of land as a primary residence is a condition of 
the new construction and disposition activities to relocate IDJC 
residents out of harm's way into more resilient housing, and not 
acquisition activities triggering buyout requirements. Since the award 
of the CDBG-NDR funds, the State has moved forward in the planning and 
development of the new community, New Isle, and has identified several 
challenges related to the eligibility of some project activities and 
the timeline for certain activities to meet a national objective, as 
provided in the CDBG-NDR notice (81 FR 36557). The State has also 
identified challenges associated with maintaining the affordability of 
New Isle for resettled residents.
    II.A.1. Background and support for the waivers and alternative 
requirements necessary for the IDJC Resettlement Project.
    The resettlement of the Isle de Jean Charles community and the 
development of the more resilient New Isle community is a unique effort 
by the State of Louisiana to demonstrate, with the support of CDBG-NDR 
funds, how communities nationwide may implement the voluntary 
resettlement of a community with diverse cultural identities and 
traditions, when confronted with repetitive disaster-related losses of 
land mass due to climate change. The IDJC Resettlement Project has the 
potential to serve as a model for other communities seeking to manage 
the retreat and resettlement of communities threatened by climate 
change.
    Almost every IDJC household qualifies as low- or moderate-income, 
many are elderly and on fixed incomes, and nearly all will face 
increased overall expenses in relocating from IDJC. The State has 
therefore requested the following waivers and alternative requirements 
to address the challenges related to the eligibility and carrying out 
of activities, meeting of a national objective within the approved 
period of performance, and use of program income for the IDJC 
Resettlement Project.
    The Department finds that there is good cause for the waivers and 
alternative requirements in this section because they are necessary to 
facilitate the IDJC Resettlement Project, which HUD anticipates will 
serve as a model for communities pursuing the resettlement of low- and 
moderate-income residents to lower-risk areas, and further the State's 
recovery goal of a holistic approach to resettlement of a diverse and 
culturally rich community.
    II.A.2. Activity eligibility of the Isle de Jean Charles 
Resettlement Project.
    In rare instances, when necessary to achieve recovery goals, HUD 
has previously granted waivers and alternative requirements to allow a 
grantee to treat a large complex project with multiple components that 
contribute to long-term recovery and resilience as a single eligible 
activity. HUD has determined that the components of the IDJC 
Resettlement Project are largely eligible CDBG-NDR activities but that 
the complexity of managing multiple separate eligible activities as 
components of the overall relocation would detrimentally delay the 
timeline of this critical recovery project. Therefore, based on the 
good cause determination described in paragraph II.A.1. and to further 
facilitate an efficient implementation of the IDJC Resettlement 
Project, HUD is waiving section 105(a) of the HCDA (42 U.S.C. 5305(a)), 
as amended, to the extent

[[Page 3944]]

necessary to create the new eligible activity of the ``IDJC 
Resettlement Project,'' comprised of the Residential Assistance Fund 
(the ``Fund'') described in the next paragraph, as well as the 
acquisition, infrastructure, housing, economic development, and public 
service activities described in the State's current, HUD-approved, 
amended CDBG-NDR action plan. The IDJC Resettlement Project eligible 
activity is subject to the alternative requirements described below.
    The State indicated that one of the new activities of the IDJC 
Resettlement Project eligible activity will be the establishment of the 
Fund. The State plans to use CDBG-NDR funds, CDBG-NDR program income 
generated by economic development activities at New Isle, and other 
sources to capitalize the Fund. The State indicated that the Fund will 
be used to assist New Isle homeowners with certain monthly costs (e.g., 
termite treatment, property insurance, and flood insurance) to maintain 
the affordability and stability of the New Isle community. HUD 
recognizes that the relocated residents of the New Isle community will 
have new expenses than those incurred while living in IDJC and may 
require additional short-term assistance to maintain their new homes in 
New Isle. The Department therefore has determined that the State's use 
of CDBG-NDR for the Fund advances the Department's priority to support 
forward-thinking solutions to help low- and moderate-income households, 
facing the imminent threat of sea level rise attributable to climate 
change, to relocate to new, more resilient, and affordable communities.
    Accordingly, under the waiver provided above to establish the IDJC 
Resettlement Project as a single new eligible CDBG-NDR activity, the 
State may use CDBG-NDR funds and program income to assist low and 
moderate-income New Isle residents relocated from the IDJC community 
with allowable housing costs for up to five years, meaning no 
beneficiary may receive more than a total of 5 years of this type of 
assistance or up to a specific amount, as determined by the State, to 
maintain the stability and affordability of New Isle and resettlement 
of relocated IDJC residents. HUD is also establishing an alternative 
requirement that no assistance shall be provided for this purpose until 
the State submits a substantial action plan amendment for its CDBG-NDR 
grant. The substantial action plan amendment must include the 
following:
    1. A budget for the Fund,
    2. Identify eligible costs under the Fund,
    3. Describe how identified costs are allowable in accordance with 2 
CFR part 200, subpart E,
    4. Describe the criteria that will be used to select beneficiaries 
and determine the amount of assistance under the Fund,
    5. The mechanisms and process to provide the assistance,
    6. How the State will oversee and monitor the administration and 
use of the Fund, and
    7. How the State will ensure public transparency regarding the 
provision of assistance and use of the Fund.
    Additionally, CDBG-NDR funds and program income, including any 
portion used to finance the Fund, shall not be used to compensate 
beneficiaries for losses from disaster-related impacts.
    Finally, as an alternative requirement, and in addition to all 
other modifications which constitute a substantial amendment requiring 
HUD approval as described in the Federal Register notice published on 
August 7, 2017 (82 FR 36812 at 36819), the deletion of the Fund or any 
activity that is part of the ``IDJC Resettlement Project'' as described 
in the State's current, HUD-approved, amended CDBG-NDR action plan, or 
the addition of any other activities as part of the ``IDJC Resettlement 
Project'' constitute a substantial amendment requiring HUD approval.
    II.A.3. National objective compliance for the IDJC Resettlement 
Project.
    The additional regulatory waivers and alternative requirements 
provided in this section enable the State to accomplish its goals for 
the IDJC Resettlement Project. The IDJC Resettlement Project aims to 
foster the growth of the New Isle's residents and address their 
housing, economic, and service needs. The IDJC Resettlement Project is 
not merely replacing the relocated households' homes, but is also 
carrying out acquisition, infrastructure, housing, economic 
development, and public service activities intended to create a 
sustainable, long-term community for these relocated residents. For 
these reasons and based on the good cause provided in paragraph 
II.A.1., the Department waives the criteria in 24 CFR 570.483(b) for 
the IDJC Resettlement Project eligible activity only and establishes 
the following alternative requirement for the criteria as a means of 
addressing the objective of benefitting low- and moderate-income (LMI) 
persons. To demonstrate that the IDJC Resettlement Project eligible 
activity addresses the objective of benefitting LMI persons, the State 
must meet all the applicable criteria described below:
    1. The State must determine the actual service area benefiting from 
the IDJC Resettlement Project, in accordance with the regulations. The 
service area must be primarily residential in character with related 
cultural and recreational components (e.g., community centers with 
cultural components);
    2. The State must complete the housing units for occupancy by the 
households that are part of the original IDJC resettlement (at least 34 
units of housing) and document that at least 70 percent of those 
households qualify as LMI;
    3. The State must complete the community center, marketplace, 
recreational facilities, parks, and additional site improvements, as 
described in its approved action plan, as part of the New Isle 
community;
    4. That State must require its Partners (as defined in the National 
Disaster Resilience Competition Phase 2 Notice of Funding Availability) 
and subrecipients to document that any economic development activities 
funded through the IDJC Resettlement Project are complete and will 
increase economic opportunity, primarily for LMI persons, through the 
creation of permanent jobs. The State may presume that any jobs created 
are held by or made available to a low- or moderate-income person, if 
the economic development activities are located in the New Isle 
community;
    5. The State must submit a sustainability plan with its substantial 
action plan amendment adding the Fund as an activity, that is then 
approved by HUD. The sustainability plan must include prominent posting 
on the State's official website and must afford citizens, affected 
local governments, and other interested parties a reasonable 
opportunity to examine the plan. The State must notify affected 
citizens through electronic mailings, press releases, statements by 
public officials, media advertisements, public service announcements, 
and/or contacts with organizations located in or serving the target 
area or neighborhood. At a minimum, the sustainability plan must 
include the following information:
    a. An estimate of the amount of taxes and insurance required for 
each home per year;
    b. A detailed description of the process and timeline for New Isle 
residents to pay for housing costs that were once covered by the Fund, 
after their assistance from the Fund has ended (i.e., reaches 5 years 
of assistance or maximum amount set by the State)

[[Page 3945]]

and/or the State concludes its use of the Fund;
    c. A description of other financial resources, if any, that will be 
available to support beneficiaries with housing costs after the State 
concludes use of the Fund;
    d. A detailed description of how the State will inform 
beneficiaries about the Fund, terms and conditions for Fund assistance, 
and the beneficiaries' financial responsibilities after assistance from 
the Fund ends; and
    e. How the State will detect and prevent fraud, waste, and abuse in 
the administration and use of the Fund.
    II.A.4. Clarification on Public Services for the Isle de Jean 
Charles Resettlement Project.
    Additionally, the Federal Register notice published on June 7, 2016 
(81 FR 36557) waives 42 U.S.C. 5305(e)(3), 24 CFR 570.482(f)(1), (2), 
(3), (4)(i), (5), and (6), including the public benefit standards at 24 
CFR 570.482(g), for economic development activities designed to create 
or retain jobs or businesses. This waiver continues to apply to the 
State's CDBG-NDR grant.
    Finally, all public services carried out as part of the IDJC 
Resettlement Project shall be exempt from the cap on public service 
expenditures found in section 105(a)(8) of the HCDA (42 U.S.C. 
5305(a)), as amended.

II.B. Waivers and Alternative Requirements for New Jersey's CDBG-DR 
Grant Under Public Law 113-2 (State of New Jersey Only)

    In the Federal Register notices published on March 5, 2013 (78 FR 
14329) (the ``March 2013 Notice''), November 18, 2013 (78 FR 69104) 
(the ``November 2013 Notice''), and October 16, 2014 (79 FR 62182) (the 
``October 2014 Notice''), HUD awarded a total of $4,174,110,000 in 
CDBG-DR funds to the State of New Jersey for recovery from Superstorm 
Sandy from Public Law 113-2 of which $380,000,000 were for Rebuild by 
Design (RBD) also under Public Law 113-2.
    The Federal Register notice published on May 24, 2022 (87 FR 31636) 
(the ``May 2022 Notice'') announced the allocation of $228,346,000 of 
CDBG-DR funds under Public Law 117-43 (the ``2022 Appropriations Act'') 
and the Federal Register notice published on January 18, 2023 (87 FR 
3198) (the ``January 2023 Notice'') announced the allocation of 
$149,229,000 of CDBG-DR funds under Public Law 117-180 (the ``2023 
Appropriations Act'') for a total of $377,575,000 in CDBG-DR funds to 
the State of New Jersey for recovery from Tropical Storm Ida 
(collectively referred to as ``the Appropriations Acts''). The 2022 
Appropriations Act gives the Secretary authority to authorize grantees 
receiving a CDBG-DR grant under the 2022 Appropriations Acts and prior 
or future appropriation acts for activities authorized under title I of 
the HCDA for a specific qualifying disaster(s) to use these funds 
interchangeably and without limitation for the same activities in the 
most impacted and distressed (MID) areas resulting from a major 
disaster in prior or future appropriation acts, as long as the MID 
areas overlap and the activities address unmet needs of both disasters.
    Based on this authority, New Jersey's CDBG-DR grants for Tropical 
Storm Ida and its CDBG-DR grants for Superstorm Sandy may be used 
interchangeably and without limitation for the same activities in MID 
areas resulting from Superstorm Sandy or Tropical Storm Ida, if the MID 
areas of both disasters overlap and the activities address unmet needs 
of both disasters, as described in the May 2022 Notice and the January 
2023 Notice. The State has requested, and HUD is providing the 
following waivers and alternative requirements to the State of New 
Jersey to carry out activities that will benefit Tropical Storm Ida 
beneficiaries. Both waivers and alternative requirements provided 
herein will help the State to expedite the delivery of assistance 
through programs that address the same activities related to unmet 
recovery needs resulting from Superstorm Sandy and Tropical Storm Ida 
in the MID areas that overlap. The grantee must describe its use of 
funds in both its CDBG-DR action plans for Superstorm Sandy and 
Tropical Storm Ida.
    II.B.1. Waiver to Allow the Use of CDBG-DR Funds Provided Under 
Public Law 113-2 for Rental Assistance (State of New Jersey only).
    The State's request notes that after Superstorm Sandy, the State 
identified a significant shortage of rental housing as a result of the 
storm, particularly in the MID areas, with rental stock being virtually 
non-existent. HUD and the State have evaluated the State's program 
budgets and the State has forecasted expenditures to determine that the 
State's Superstorm Sandy related unmet needs will be satisfied with the 
existing programs in place, while impacts related to Tropical Storm Ida 
have created new unmet rental needs that have further exacerbated 
issues associated with the COVID-19 pandemic.
    Prior to Tropical Storm Ida, New Jersey's housing conditions were 
already under significant strain from the ongoing national housing 
crisis and supply chain issues from the COVID-19 pandemic. These issues 
combined with the subsequent impacts of the storm drastically escalated 
the State's housing and homelessness crises. At the time of the State's 
waiver request, the risk of eviction in New Jersey was greater than 
anywhere else in the country as 393,000 households were delinquent on 
their rent. These eviction pressures are faced primarily by residents 
of color, households with children, and in urban areas--including those 
disaster-impacted urban areas--where low-income populations are 
particularly vulnerable. In the State, more than 25 percent of renter 
households are extremely low income and 73 percent of these extremely 
low-income renters suffer from severe housing cost burden.
    Due to the impacts of Tropical Storm Ida, over 8,000 homeowners and 
4,500 renters experienced major to severe damage to their homes, as 
defined by HUD. The State of New Jersey has prioritized housing 
rehabilitation that will primarily benefit LMI households, through a 
phased approach for its homeowner program and by limiting its 
rehabilitation of rental housing to housing that will be affordable to 
LMI households. However, these units will take several years to be 
fully repaired and accessible. During that time, LMI residents residing 
in the MID areas could face unaffordable rents on top of an affordable 
housing crisis. Rents in the HUD MID-areas have considerably increased 
since Tropical Storm Ida. From 2021 to the anticipated launch of the 
State's CDBG-DR programs in 2023, rents in the HUD MID areas will have 
increased in some counties by over 10 percent and are expected to 
continue to rise over the next two to three years.
    The State plans to use its CDBG-DR funds under Public Law 113-2 to 
offer rental assistance and utility payments in the form of direct 
payments to homeowners or renters who are displaced and homeless or at-
risk of homelessness as a result of the impacts of Tropical Storm Ida 
when such assistance payments are part of a homelessness prevention, 
intermediate housing, or rapid rehousing program activity, including 
intermediate housing during the repair and reconstruction of homes.
    After reviewing the State's request and based on the good cause 
that the waiver and alternative requirements will help homeowners and 
renters that are displaced and impacted by Tropical Storm Ida to obtain 
and remain in housing that is in limited supply due to New Jersey's 
ongoing housing and homelessness crises, the Department is imposing an 
alternative requirement to waive and modify 42 U.S.C. 5305(a)(8)

[[Page 3946]]

to expand the definition of public service to include the following 
activity: provision of rental assistance (e.g. rent, security deposits, 
and utility deposits) and utility payments for up to 24 months for the 
State of New Jersey's funds provided under Public Law 113-2 to address 
unmet needs from Tropical Storm Ida, subject to the following 
alternative requirements.
    This activity is subject to the 15 percent cap on public services, 
and no beneficiary may receive more than a total of 24 months of rental 
assistance and utility payments. A homeowner receiving any form of 
CDBG-DR interim mortgage assistance that may be offered by the State is 
not eligible for rental assistance or utility payments, as authorized 
by this waiver and alternative requirement.
    The State must determine that the rental assistance and utility 
payments are needed because the household moved from their primary 
residence due to rehabilitation or reconstruction needs from Tropical 
Storm Ida, the household is experiencing or is at risk of experiencing 
homelessness and the assistance is part of a homelessness prevention or 
rapid rehousing program or activity, or other disaster-related 
pressures on the housing market necessitate the assistance to support 
the household's recovery.
    While this waiver and alternative requirement will allow the State 
to provide rental assistance and utility payments to households 
impacted by Tropical Storm Ida, this does not relieve the State of the 
duty to comply with other applicable requirements relating to the 
temporary relocation or displacement of households. If a household 
meets the definition of a ``displaced person'' under the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 
1970, as amended, (42 U.S.C. 4601 et seq.) (``URA'') or Section 104(d) 
of the HCDA (42 U.S.C. 5304(d)) (``Section 104(d)''), the State must 
provide the displaced person with any relocation assistance to which 
they are entitled under law, including but not limited to assistance 
authorized under the URA or Section 104(d), pursuant to those 
requirements in the applicable notices, as modified by the waiver of 
Section 414 of the Stafford Act in Section II.B.2., below.
    The goals of this waiver and alternative requirement are to prevent 
and minimize the time households are experiencing or are at risk of 
experiencing homelessness as a result of the qualifying disaster and to 
provide additional time to stabilize persons or households in permanent 
housing through the use of CDBG-DR funds for rental assistance and 
utility payments. The use of CDBG-DR funds for each of these purposes 
advances the Department's priority to support forward-thinking 
solutions to help communities that are struggling to house and serve 
persons and families that are homeless or at risk of homelessness as a 
result of a disaster.
    When providing rental assistance and utility payments to 
beneficiaries who are at risk of homelessness, the State must clearly 
demonstrate in their action plan the concrete steps they will take to 
prevent households from becoming homeless after the exhaustion of the 
CDBG-DR rental assistance. In addition, in developing their policies 
and procedures, the State must list services to be provided and outline 
a referral process that will enable the targeted households to apply to 
live in affordable housing units, including those that are created 
under other CDBG-DR funded programs.
    HUD has previously certified the State's procedures to detect 
fraud, waste, and abuse prior to the obligation of Superstorm Sandy 
funding. To fortify these requirements and achieve a targeted use of 
funds and to safeguard against fraud, the State must amend the 
provisions in its policies and procedures to show how the State will 
verify the accuracy of information provided by applicants to its rental 
assistance and utility payment program, how the State will document 
that the applicant used the funds for only the eligible uses defined in 
its action plan or the program's policies and procedures, and how the 
State will detect and prevent fraud, waste, and abuse in its rental 
assistance and utility payment programs. The State must document, in 
its policies and procedures, how it will determine the basis of the 
rental assistance and utility payments award for each household 
assisted and that the amount of the assistance to be provided is 
necessary and reasonable and not duplicative of any other funding 
source, including insurance. To comply with the order of assistance 
requirements in the Appropriations Acts, any rental or temporary 
housing assistance provided by or made available by the Federal 
Emergency Management Agency (FEMA) must first be exhausted prior to 
providing CDBG-DR funds to a household for the uses permitted by this 
waiver and alternative requirement.
    II.B.2. Waiver of Section 414 of the Stafford Act (42 U.S.C. 5181 
(State of New Jersey only).
    The State of New Jersey has requested a waiver of section 414 of 
the Stafford Act (42 U.S.C. 5181), as amended, for real property 
acquisition, rehabilitation, and demolition of real property for CDBG-
DR activities funded by Public Law 113-2 that will address the unmet 
housing needs from Tropical storm Ida.
    Section 414 of the Stafford Act provides that ``Notwithstanding any 
other provision of law, no person otherwise eligible for any kind of 
replacement housing payment under the Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970 (Pub. L. 91-646) [42 
U.S.C. 4601 et seq.] [(``URA'')] shall be denied such eligibility as a 
result of his being unable, because of a major disaster as determined 
by the President, to meet the occupancy requirements set by [the 
URA].'' Accordingly, homeowner occupants and tenants displaced from 
their homes as a result of an identified disaster and who would have 
otherwise been displaced as a direct result of any acquisition, 
rehabilitation, or demolition of real property for a federally funded 
program or project may become eligible for a replacement housing 
payment notwithstanding their inability to meet occupancy requirements 
prescribed in the URA.
    The State has requested a waiver of section 414 of the Stafford Act 
to better align its CDBG-DR grants funded by Public Law 113-2 for 
Superstorm Sandy with its grants funded by the 2022 and 2023 
Appropriations Acts. The State contends that this waiver, granted for 
all funds under the 2022 and 2023 Appropriations Acts, will allow it to 
implement its programs for Tropical storm Ida beneficiaries 
consistently, whether the program is being funded under Public Law 113-
2 or the 2022 and 2023 Appropriations Acts.
    HUD provided the waiver for grants under the 2022 and 2023 
Appropriations Acts to simplify the administration of the disaster 
recovery process and reduce the administrative burden associated with 
the implementation of section 414 requirements for projects commencing 
more than one year after the date of the Presidentially declared 
disaster considering most of such persons displaced by the disaster 
will have returned to their dwellings or found another place of 
permanent residence.
    Therefore, the Department has determined that good cause exists for 
a waiver for the State's funds under Public Law 113-2 and waives 
section 414 of the Stafford Act and its implementing regulation at 49 
CFR 24.403(d)(1) to the extent that they would apply to real property 
acquisition, rehabilitation, or demolition of real property for a CDBG-
DR funded project commencing more

[[Page 3947]]

than one year after the date of Tropical Storm Ida undertaken by the 
State, or its subrecipients, provided that the project was not planned, 
approved, or otherwise underway before the date of the disaster.
    For purposes of this waiver, a CDBG-DR funded project shall be 
determined to have commenced on the earliest of: (1) the date of an 
approved Request for Release of Funds and certification; (2) the date 
of completion of the site-specific review when a program utilizes 
Tiering; or (3) the date of sign-off by the approving official when a 
project converts to exempt under 24 CFR 58.34(a)(12).
    This waiver does not apply with respect to persons that meet the 
occupancy requirements to receive a replacement housing payment under 
the URA nor does it apply to persons displaced or relocated temporarily 
by other HUD-funded programs or projects. Such persons' eligibility for 
relocation assistance and payments under the URA is not impacted by 
this waiver.

III. Public Law 115-123 Waivers and Alternative Requirements

Revision of Electrical Power System Consultation Requirements 
(Commonwealth of Puerto Rico and U.S. Virgin Islands Only)

    The Federal Register notice published on June 22, 2021 (86 FR 
32681) (the ``June 2021 Notice'') established the requirements for the 
nearly $28 billion in CDBG-DR funds approved February 9, 2018 by the 
Further Additional Supplemental Appropriations for Disaster Relief 
Requirements Act, 2018 (Pub. L. 115-123), including $2 billion for 
enhanced or improved electrical power systems in the Commonwealth of 
Puerto Rico (the Commonwealth) and the U.S. Virgin Islands (USVI) to 
address the impact of Hurricanes Irma and Maria on each grantee's 
electrical power system.
    Because of the unique purpose of this $2 billion allocation of 
CDBG-DR funds, in recognition of the many Federal agencies that would 
be providing assistance to the Commonwealth and the USVI to enhance and 
improve each jurisdiction's electrical power system, and because of the 
historical and on-going fiscal and operational challenges of each of 
the public utilities that operate the Commonwealth and USVI systems, 
the June 2021 Noticeestablished a number of on-going coordination 
requirements unique to this allocation.
    In February 2020, FEMA and the U.S. Department of Energy (DOE) 
established Energy Technical Coordination Teams (``TCT'') at each 
jurisdiction as a formal mechanism for coordination among the numerous 
local and Federal entities involved in electricity grid recovery to 
facilitate decision making and ensure the best use of expertise, 
solutions, and funds in the implementation of energy recovery 
activities. Section V.A.2.e. of the June 2021 Notice requires each 
grantee to consult at least quarterly with its respective TCT on one or 
more of the following areas: on the action plan required by the June 
2021 Notice for the use of the CDBG-DR funds and any substantial 
amendments to that plan; the evaluation of the capacity of any public 
utility that will receive CDBG-DR funds to carry out improvements; the 
identification of opportunities to sequence and coordinate on permits 
and approvals necessary to carry out CDBG-DR funded electrical power 
system improvement activities, including environmental reviews; the 
technical evaluation of proposed electrical power system improvements; 
and implementation of applicable electrical power system industry 
standards and the commercial availability of system components that the 
grantee proposed to fund.
    To ensure the coordination of electrical power system improvements 
that may be funded from each grantee's other allocations of CDBG-DR and 
CDBG mitigation (CDBG-MIT) funds provided in response to Hurricanes 
Irma and Maria, the June 2021 Notice also prohibits the use of other 
CDBG-DR and CDBG-MIT funds for electrical power system improvements 
until HUD consults and coordinates with its Federal members through the 
TCTs. The June 2021 Notice also provides that HUD shall determine when 
the required consultations previously noted shall be deemed complete.
    Since the publication of the June 2021 Notice, each grantee has 
proactively engaged with its respective TCT on a wide range of issues 
associated with its planned and on-going electrical power system 
improvements. In January 2022, HUD, FEMA, and DOE also executed a 
memorandum of understanding establishing a framework outside of the TCT 
for coordination and providing technical assistance to the 
Commonwealth. Additionally, following Hurricane Fiona, the 
Administration announced the formation of a Puerto Rico Grid Recovery 
and Modernization Team, to be led by DOE, to coordinate Federal grid 
recovery and modernization efforts.
    In recognition of these developments and the critical importance of 
accelerating electrical power system improvements following the 
devastating impact of Hurricane Fiona in September 2022, HUD finds good 
cause to waive and revise the consultation requirements of its June 
2021 Notice as follows:
    Upon approval by HUD of an action plan providing for the use of a 
grantee's total allocation of funds for electrical power system 
improvements as provided by the June 2021 Notice:

    (1) Paragraph V.A.2.e of the June 2021 Notice, and as referenced 
elsewhere in the June 2021 Notice, with respect to TCT consultation 
shall no longer apply; provided that, at the request of HUD, each 
grantee shall engage with its TCT to provide updates on its 
implementation of CDBG-DR, CDBG-MIT, and other Federal funding for 
electrical power system improvements until grant closeout; and
    (2) The consultation requirements at paragraph V.B.4 of the June 
2021 Notice that prohibits grantees from using other CDBG-DR and 
CDBG-MIT funds provided in response to Hurricanes Irma and Maria for 
activities to enhance or improve electrical power systems until HUD 
consults and coordinates with its Federal members through the TCT 
shall no longer apply.

    HUD will continue to engage its Federal partners directly in 
providing ongoing technical assistance to each grantee and in 
monitoring each grantee's use of all CDBG-DR and CDBG-MIT funds used 
for electrical power system improvements. HUD will also continue to 
engage its Federal partners through the TCTs, the Recovery Support 
Function Leadership Group (RSFLG) energy subgroup, and other forums.

IV. Public Law 116-20 Waivers and Alternative Requirements

Waiver and Alternative Requirement for 70 Percent Overall Low- and 
Moderate-Income Benefit Requirement (State of California Only)

    The Federal Register notice published on January 27, 2020 (85 FR 
4681) (``January 2020 Notice'') included an allocation of $38,057,527 
appropriated under the Additional Supplemental Appropriations for 
Disaster Relief Act, 2019 (Pub. L. 116-20) to the State of California 
for recovery from 2017 wildfires and 2017-2018 wildfires, flooding, 
mudflows, and debris flows. These funds have been provided to meet the 
unmet infrastructure recovery needs in the HUD-defined MID areas. Prior 
to this award, HUD also allocated $124,155,000 under Public Law 115-123 
to the State for recovery from the same disasters in the Federal 
Register notice published on August 14, 2018 (83 FR 40314).
    The overall benefit requirement established by the HCDA requires 
that 70 percent of the aggregate of a grantee's

[[Page 3948]]

CDBG-DR fund expenditures shall be used to support activities 
benefiting LMI persons. Under certain circumstances, it can be 
difficult for grantees working in disaster recovery to meet this 
overall benefit test because the MID areas resulting from a disaster 
may not be low- and moderate-income areas, and this requirement can 
therefore (in some exceptional cases) limit a grantee's ability to 
assist those affected by the disaster. The January 2020 Notice 
maintained the 70 percent overall benefit requirement for all CDBG-DR 
grantees receiving funds under Public Law 116-20 and the notice imposed 
the requirements of the February 9, 2018 notice (83 FR 5844) 
(``February 2018 Notice''), which provides grantees with the option of 
submitting a request to HUD for a lower overall benefit requirement. 
Specifically, the February 2018 Notice allows a grantee to request to 
further reduce its overall benefit requirement if it submitted a 
justification that, at a minimum: (a) identifies the planned activities 
that meet the needs of its low- and moderate-income population; (b) 
describes proposed activity(ies) and/or program(s) that will be 
affected by the alternative requirement, including their proposed 
location(s) and role(s) in the grantee's long-term disaster recovery 
plan; (c) describes how the activities/programs identified in (b) 
prevent the grantee from meeting the 70 percent requirement; and (d) 
demonstrates that low- and moderate-income persons' disaster-related 
needs have been sufficiently met and that the needs of non-LMI persons 
or areas are disproportionately greater, and that the jurisdiction 
lacks other resources to serve them.
    The State submitted a request to establish a lower overall benefit 
requirement based on the above criteria. In its request, the State 
contends that its two established programs: Owner-Occupied 
Rehabilitation and Reconstruction Program (OOR) and Multifamily Housing 
Program funded under Public Law 115-123 will meet the unmet needs of 
its LMI populations. Specifically, in its OOR program, the State has 
prioritized the needs of LMI persons and estimates that the program 
will expend at least 90 percent of funds for the benefit of LMI 
households. The Multifamily Housing Program is limited to projects that 
meet the LMI National Objective criteria, and the State estimates the 
program will expend 100 percent of funds for the benefit of LMI 
households. Based on these estimates, the total projected LMI benefit 
percentage for the State's allocation under Public Law 115-123 will be 
96 percent, which demonstrates the State's commitment to meeting the 
needs of its LMI populations. While the Department evaluates overall 
benefit for each grant separately, the allocations from Public Laws 
115-123 and 116-20 support recovery from the same disasters in the same 
MID areas, and the total projected LMI benefit percentage when 
combining the allocations would be 82 percent.
    The State's allocation under Public Law 116-20 was limited to allow 
the State to only address its unmet infrastructure recovery needs. For 
this allocation, the State expanded its original Infrastructure Program 
proposed in its initial action plan to include standalone 
infrastructure projects and FEMA Hazard Mitigation Grant Program Non-
Federal match activities in addition to FEMA Public Assistance non-
federal match projects.
    When considering its unmet infrastructure needs, the State 
indicated in its request that the total LMI percentage of the 
population in the HUD-identified MID areas is 42 percent, and the City 
of Clearlake is the only jurisdiction that is a MID area and would also 
qualify as an eligible LMI area. To address the needs of LMI households 
throughout the MID areas, the State prioritized infrastructure projects 
in MID areas that would benefit LMI areas through its Notice of Intent 
(NOI) process where eligible applicants submitted proposed 
infrastructure projects to meet the unmet infrastructure need in their 
community. The State also conducted extensive outreach to potential 
applicants by hosting multiple webinars and holding office hours for 
months during and after the NOI process. Despite these efforts, the 
State's CDBG-DR funded infrastructure program only received nine 
project applications from four eligible applicants: City of Clearlake, 
City of Santa Rosa, Santa Barbara County, and Sonoma County. Of the 
nine applications, three projects qualify for the LMI national 
objective, and all LMI projects will derive from a single eligible 
applicant, the City of Clearlake, leading to the allocation's total 
projected LMI benefit percentage being 38 percent.
    To enable the State to undertake the activities it has determined 
to be the most critical for its recovery and LMI households in the MID 
areas, HUD is granting a waiver and alternative requirement to reduce 
the overall benefit requirement from 70 percent to not less than 38 
percent of the State's total allocation of CDBG-DR funds for its unmet 
infrastructure recovery needs. This is a limited waiver modifying 
sections 101(c) and 104(b)(3)(A) of the HCDA and 24 CFR 570.200(a)(3) 
only to the extent necessary to reduce the LMI overall benefit 
requirement that the State must meet when carrying out activities 
identified in its approved action plan from 70 percent to not less than 
38 percent of the grantee's allocation of CDBG-DR funds under Public 
Law 116-20 for its unmet infrastructure recovery needs. Based on the 
analysis submitted by the State, the Secretary finds good cause for 
this waiver and alternative requirement due to the circumstances 
outlined in the State's request. In particular, HUD notes that the 
State had demonstrated that it has sufficiently addressed LMI unmet 
recovery needs through both its CDBG-DR allocations awarded under 
Public Laws 115-123 and 116-20, conducted significant amounts of public 
outreach when determining LMI unmet infrastructure needs, and 
prioritized and selected infrastructure projects serving LMI areas, 
even though the LMI percentage of the MID areas was only 42 percent.

V. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available online on HUD's CDBG-DR website at https://www.hud.gov/program_offices/comm_planning/cdbg-dr and for public inspection between 
8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of 
General Counsel, Department of Housing and Urban Development, 451 7th 
Street SW, Room 10276, Washington, DC 20410-0500. Due to security 
measures at the HUD Headquarters building, an advance appointment to 
review the docket file must be scheduled by calling the Regulations 
Division at 202-708-3055 (this is not a toll-free number). HUD welcomes 
and is prepared to receive calls from individuals who are deaf or hard 
of hearing, as well as individuals with speech or communication 
disabilities. To learn more about how to make an accessible telephone 
call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

Adrianne Todman,
Deputy Secretary.
[FR Doc. 2024-01116 Filed 1-19-24; 8:45 am]
BILLING CODE 4210-67-P


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