Additional Allocations for Midwest Flood Community Development Block Grant (CDBG) Disaster Recovery Grantees under the Supplemental Appropriations Act, 2008

AGENCY:

Office of the Secretary, HUD.

ACTION:

Notice of allocations.

SUMMARY:

This notice advises the public of the second allocation of CDBG disaster recovery grants for the purpose of assisting in the recovery in areas covered by a declaration of major disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) as a result of natural disasters that were recent as of the law's enactment in June 2008. 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 the state grantees. This notice also describes how a state receiving an allocation may implement the common application, eligibility, and administrative waivers and the common alternative and statutory requirements for the grants.

DATES:

Effective Date: December 24, 2008.

FOR FURTHER INFORMATION CONTACT:

Jessie Handforth Kome, 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 through TTY by calling the Federal Information Relay Service at 800-877-8339. Facsimile inquiries may be sent to Ms. Kome at 202-401-2044. (Except for the “800” number, the telephone numbers are not toll free.)

SUPPLEMENTARY INFORMATION:

Authority to Grant Waivers

The Supplemental Appropriations Act, 2008 (Pub. L. 110-252, approved June 30, 2008) (Supplemental Appropriations Act) appropriates $300 million, to remain available until expended, in CDBG funds for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in areas covered by a 2008 declaration of major disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.). The Supplemental 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 a request by the state and a finding by the Secretary that such a waiver would not be inconsistent with the overall purpose of the statute. Additionally, regulatory waiver authority is provided by 24 CFR 5.110, 91.600, and 570.5.

On September 11, 2008, at 73 FR 52870, the Department published its initial allocation for grant funds for the CDBG disaster recovery grants funded under the Supplemental Appropriations Act. In that notice, the Department noted that it would make two allocations, one to the three most affected states and a second when HUD had more information to better determine the needs of each state under this appropriation. Today's Federal Register notice allocates the balance of the $300 million allocation under the Supplemental Appropriations Act. Under the requirements of 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.

Except as described in this notice, statutory and regulatory provisions governing the CDBG program for states, including those at 24 CFR part 570, shall apply to the use of these funds. In accordance with the Supplemental Appropriations Act, HUD will reconsider every waiver granted under this notice on the 2-year anniversary of the day this notice is published.

Additional Waivers

Each state receiving an allocation may request additional waivers from the Department as needed to address the specific needs related to that state's recovery activities. The Department will respond separately to state requests for waivers of provisions not covered in this notice, after working with the state to tailor the program to best meet the unique disaster recovery needs in its impacted areas.

Allocations

The Supplemental Appropriations Act provides $300 million of supplemental appropriation for the CDBG program for:

Necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in areas covered by a declaration of major disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) as a result of recent natural disasters.

The law further notes:

That funds provided under this heading shall be administered through an entity or entities designated by the Governor of each state. Provided further, that funds allocated under this heading shall not adversely affect the amount of any formula assistance received by a state under this heading: Provided further, that each state may use up to five percent of its allocation for administrative costs.

Table 1, shown below, lists the states receiving an allocation. Based on preliminary data, Iowa, Indiana, and Wisconsin received initial allocations for a subset of the funds. Those allocations were announced on August 4, 2008, and are included in the Table.

The appropriation calls for funding “recent natural disasters.” Since this appropriation was enacted on June 30, 2008, HUD has interpreted the language of “recent natural disasters” to be the 16 major natural disasters with an incident and declared date in May or June of 2008. There were no declared disasters in April 2008, which allows for a “natural break.” This limited the eligibility for an allocation to the 16 disasters shown in Table 1.

For the 16 natural disasters, HUD calculated “unmet needs” for housing, business, and infrastructure recovery. Unmet needs are defined as follows:

1. Unmet housing needs. The number of housing units with unmet needs times the estimated cost to repair those units (less repair funds already provided by the Federal Emergency Management Agency (FEMA)). Data were provided by FEMA on October 1, 2008, and by the Small Business Administration (SBA) on October 3, 2008. Unmet housing needs are calculated using three “levels of FEMA damage”—$8,001 to $15,000; $15,001 to $28,800; and greater than $28,800. Unmet housing needs exist where:

a. The number of owner-occupied units with unmet needs equals: Units FEMA inspectors determined would require more than $8,000 to become habitable and that were determined by FEMA to be eligible for a repair or replacement grant (up to $28,800).

b. The number of rental units with unmet needs equals: Units that FEMA inspectors determined would require more than $8,000 to become habitable times the “unmet need rate” of owners. That is, if 50 percent of owner-occupied dwellings had damage not being covered by insurance or an SBA loan for a particular disaster, HUD assumes that 50 percent of rental units had damage not covered by insurance or an SBA loan.

c. The average cost to fully repair the home equals: The average real-property damage repair cost determined by the SBA for its disaster loan program (less the repair grant amount from FEMA) for the subset of homes inspected by SBA. Because SBA is inspecting for full-repair costs, it is a better estimate of the true cost to repair.

2. Unmet business needs. The sum of real-property and real-content loss of small businesses applying for an SBA disaster loan as verified by SBA inspectors, less the real-property and real-content loss approved for an SBA loan. Data were provided by the SBA on October 3, 2008.

3. Unmet infrastructure needs. The sum of the “non-federal share” of costs eligible for funding under FEMA's Public Assistance program. This reflects the greater of the current FEMA estimate of costs or the amount specifically determined eligible through FEMA's Public Assistance Worksheets. Data were provided by FEMA as of October 22, 2008.

Waiver Justification

The waivers, alternative requirements, and statutory changes described in the September 11, 2008, notice apply to the CDBG supplemental disaster recovery funds appropriated in the Supplemental Appropriations Act, not to funds provided under the regular CDBG program. These actions provide additional flexibility in program design and implementation and implement statutory requirements unique to this appropriation. The September 11, 2008, notice provides further justification for the waivers.

Application for Allocations Under the Supplemental Appropriations Act

The waivers and alternative requirements streamline the pre-grant process and set the guidelines for states' applications requesting their allocations. A state receiving an allocation under this notice will be granted the waivers and alternative requirements provided in the September 11, 2008, notice if the state requests in writing that HUD grant it the waivers and alternative requirements of that notice and describes good cause why such waivers should be granted. HUD encourages each grantee that receives an allocation under this notice to submit an Action Plan for Disaster Recovery to HUD as soon as practicable following an allocation announcement. By March 13, 2009, if a state has: (1) Failed to submit a substantially complete application, (2) submitted an application for less than its total allocation, or (3) waived its rights to the entire allocation, HUD may notify the state of the reduction in its allocation amount and proceed to reallocate the funds to another state receiving disaster recovery funds under this notice.

Applicable Rules, Statutes, Waivers, and Alternative Requirements

1. General note. Prerequisites to a grantee's receipt of CDBG disaster recovery assistance include adoption of a citizen participation plan; publication of its proposed Action Plan for Disaster Recovery; public notice and comment; and submission of an Action Plan for Disaster Recovery to HUD, including certifications. Except as described in this notice, statutory and regulatory provisions governing the CDBG program for states, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570, shall apply to the use of these funds.

2. The waivers provided in the September 11, 2008, notice will be granted and the alternative requirements of that notice provided to a state that receives an allocation of grant funds under this notice and that requests in writing that HUD grant it the waivers and alternative requirements of that notice and describes good cause for granting such waivers.

Duration of Funding

Availability of funds provisions in 31 U.S.C. 1551-1557, added by section 1405 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510), limit the availability of certain appropriations for expenditure. This limitation may not be waived. However, the Supplemental Appropriations Act for these grants directs that these funds be available until expended unless, in accordance with 31 U.S.C. 1555, the Department determines that the purposes for which the appropriation has been made have been carried out and no disbursement has been made against the appropriation for 2 consecutive fiscal years. In such case, the Department shall close out the grant prior to expenditure of all funds.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this notice are as follows: 14.219; 14.228.

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). 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 Information Relay Service at 800-877-8339.