Reconsideration of Waivers Granted to and Alternative Requirements for the State of Mississippi's CDBG Disaster Recovery Grant Under the Department of Defense Emergency Supplemental Appropriations To Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, 75733-75738 [E8-29426]
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Federal Register / Vol. 73, No. 240 / Friday, December 12, 2008 / Notices
Program to the individuals listed in
Section VII of the October 10, 2008,
Section 202 Demonstration PreDevelopment Grant Program NOFA. For
technical assistance in downloading and
submitting an application package
through https://www.grants.gov/
applicants/apply_for_grants.jsp, contact
the Grants.gov Help Desk at 1–800–518–
GRANTS, or by sending an e-mail to
support@grants.gov.
27032), the Notice of HUD’s FY2008
SuperNOFA for HUD’s Discretionary
Programs; Correction for Section 202
and Section 811 Programs published on
June 9, 2008 (72 FR 32592), and Section
IV of the Section 202 Demonstration
Pre-Development Grant Program NOFA
published on October 10, 2008 (72 FR
60312), for further information about
application, submission, and timely
receipt requirements.
On
October 10, 2008 (73 FR 60312), HUD
published its NOFA for the Section 202
Demonstration Pre-Development Grant
Program, and established December 16,
2008 as the deadline date for the
submission of applications. Through the
NOFA, HUD is making available
approximately $20 million for predevelopment grants to private nonprofit
organizations and consumer
cooperatives in connection with the
development of housing under the
Section 202 Supportive Housing for the
Elderly program. HUD stated in the
October 10, 2008, NOFA that funding
awards under the Section 202
Demonstration Pre-Development Grant
program would be restricted to
applicants selected for Fund
Reservation Awards under the FY2008
Section 202 Supportive Housing for the
Elderly program.
Today’s Federal Register publication
extends the deadline date for the
submission of applications for the
Section 202 Demonstration PreDevelopment Grant program to February
18, 2009. Similarly, HUD extending the
deadline for applicants to submit
requests for waivers from the electronic
application submission requirements to
February 11, 2009. HUD is extending
the application submission deadline
date to permit it to complete selections
under FY2008 Section 202 Supportive
Housing for the Elderly program. This
extension will ensure that ineligible
Section 202 applicants need not go
through the expense of preparing and
submitting an application for funding
under the Section 202 Demonstration
Pre-Development Grant program if they
are not eligible to receive this funding.
Dated: December 5, 2008.
Brian D. Montgomery,
Assistant Secretary for Housing—Federal
Housing Commissioner.
[FR Doc. E8–29425 Filed 12–11–08; 8:45 am]
SUPPLEMENTARY INFORMATION:
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Deadline for Applications
The application deadline date for the
Section 202 Demonstration PreDevelopment Grant Program is February
18, 2009. All applications must be
received and validated by Grants.gov no
later than 11:59:59 p.m. Eastern Time on
the application deadline date. Refer to
the General Section of the SuperNOFA
published on March 19, 2008 (72 FR
14882), the FY2008 SuperNOFA
published on May 12, 2008 (72 FR
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BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5251–N–01]
Reconsideration of Waivers Granted to
and Alternative Requirements for the
State of Mississippi’s CDBG Disaster
Recovery Grant Under the Department
of Defense Emergency Supplemental
Appropriations To Address Hurricanes
in the Gulf of Mexico, and Pandemic
Influenza Act, 2006
Office of the Secretary, HUD.
Notice of reconsidered waivers,
alternative requirements, and statutory
program requirements.
AGENCY:
ACTION:
SUMMARY: This notice describes HUD’s
reconsideration of some of the
additional waivers and alternative
requirements applicable to the
Community Development Block Grant
(CDBG) disaster recovery grant provided
to the State of Mississippi for the
purpose of assisting in the recovery in
the most impacted and distressed areas
related to the consequences of
Hurricane Katrina in 2005. HUD
previously published an allocation and
application notice on February 13, 2006,
applicable to this grant and four others
under the same appropriation, and
reconsidered the waivers in that notice
on August 8, 2008. The original June 14,
2006, notice has now been reconsidered
and all waivers are being retained, with
the exception of some of the overall
benefit waivers.
DATES: Effective Date: December 17,
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 Seventh Street,
SW., Room 7286, Washington, DC
20410–7000, telephone number 202–
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75733
708–3587. Persons with hearing or
speech impairments may access this
number via TTY by calling the Federal
Information Relay Service at 800–877–
8339. Facsimile inquiries may be sent to
Ms. Kome at 202–401–2044. (Except for
the ‘‘800’’ number, these telephone
numbers are not toll free.)
SUPPLEMENTARY INFORMATION:
Authority To Grant Waivers
The Department of Defense,
Emergency Supplemental
Appropriations To Address Hurricanes
in the Gulf of Mexico, and Pandemic
Influenza Act, 2006 (Pub. L. 109–148,
approved December 30, 2005) (the 2006
Act) appropriated $11.5 billion in CDBG
funds for necessary expenses related to
disaster relief, long-term recovery, and
restoration of infrastructure directly
related to the consequences of the
covered disasters. The State of
Mississippi received an allocation of
$5,058,185,000 from this appropriation.
The 2006 Act authorized 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, 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. The law further provided
that the Secretary may waive the
requirement that activities benefit
persons of low and moderate income,
except that at least 50 percent of the
funds granted must benefit primarily
persons of low and moderate income,
unless the Secretary otherwise makes a
finding of compelling need.
Additionally, regulatory waiver
authority is provided by 24 CFR 5.110.
The following waivers and alternative
requirements came in response to
written requests from the State of
Mississippi and are being retained, with
the exception of some of the overall
benefit waivers, after reconsideration.
The Secretary has found that the
following waivers and alternative
requirements, as described below, are
not inconsistent with the overall
purpose of 42 U.S.C. 5301 et seq., Title
I of the Housing and Community
Development Act of 1974, as amended
(the 1974 Act); or of 42 U.S.C. 12704 et
seq., the Cranston-Gonzalez National
Affordable Housing Act, as amended.
Under the requirements of the
Department of Housing and Urban
Development Act, as amended (42
U.S.C. 3535(q)), regulatory waivers must
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be published in the Federal Register.
The Department is also using this notice
to provide information about other ways
in which the requirements for this grant
vary from regular CDBG program rules.
Therefore, HUD is using this notice to
make public alternative requirements
and to note the applicability of disaster
recovery-related statutory provisions.
Compiling this information in a single
notice creates a helpful resource for
Mississippi grant administrators and
HUD field staff. Waivers and alternative
requirements regarding the common
application and reporting process for all
grantees under the 2006 Act were
published in a prior notice published
February 13, 2006 (71 FR 7666) and
retained in a notice published on
August 8, 2008 (73 FR 46312).
Except as described in notices
regarding this grant, the 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.
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Descriptions of Changes
This section of the notice briefly
describes the basis for each waiver and
provides an explanation of related
alternative requirements, if additional
explanation is necessary.
Except as provided in the October 30,
2006, and August 8, 2008, notices, the
waivers, alternative requirements, and
statutory changes apply only to the
CDBG supplemental disaster recovery
funds appropriated in the 2006 Act and
allocated to the State of Mississippi.
These actions provide additional
flexibility in program design and
implementation and note statutory
requirements unique to this
appropriation.
Eligibility
Eligibility—housing related. The
waiver of section 105(a) that allows new
housing construction and of section
105(a)(24) to allow homeownership
assistance for families whose income is
up to 120 percent of median income and
payment of up to 100 percent of a
housing downpayment is necessary
following major disasters in which large
numbers of affordable housing units
have been damaged or destroyed, as is
the case in the disaster eligible under
this notice. The state requested that
HUD broaden the section 105(a)(24)
waiver to allow it to serve families with
income up to 120 percent of median
income to implement its Long Term
Workforce Housing program in
accordance with its accepted Action
Plan for Disaster Recovery.
General planning activities use
entitlement presumption. The annual
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state CDBG program requires that local
government grant recipients of
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,
historic preservation plans,
comprehensive plans, development of
housing codes, and neighborhood plans
related to guiding long-term community
development efforts comprising
multiple activities funded by multiple
sources. In the annual entitlement
program, these more general stand-alone
planning activities are presumed to
meet a national objective under the
requirements at 24 CFR 570.208(d)(4).
The Department noted 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, the
Department has removed the eligibility
requirement that CDBG disaster
recovery assisted planning-only grants
or state directly administered planning
activities that will guide recovery in
accordance with the appropriations act,
must comply with the state CDBG
program rules at 24 CFR 570.483(b)(5) or
(c)(3).
Compensation for disaster-related
losses. The state is providing
compensation to homeowners who lived
outside the floodplain and whose homes
were damaged by flooding during the
covered disasters, if the homeowners
agreed to meet the stipulations of the
published program design. The state is
also providing compensation to
homeowners affected by the disaster in
other circumstances, under Phase II and
other aspects of the state’s homeowner
compensation program. The Department
has waived the 1974 Act and associated
regulations to make this use of grant
funds eligible.
Anti-pirating. The limited waiver of
the anti-pirating requirements allowed
the flexibility to provide assistance to a
business located in another state or
market area within the same state if the
business was displaced from a declared
area within the state by the disaster and
the business wishes to return. This
waiver is necessary to allow a grantee
affected by a major disaster to rebuild its
employment base.
Program Income
A combination of CDBG provisions
limited the flexibility available to the
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state for the use of program income.
Prior to 2002, program income earned
on disaster recovery grants was usually
program income in accordance with the
rules of the regular CDBG program of
the applicable state and lost its disaster
recovery grant identity, thus losing use
of the waivers and streamlined
alternative requirements. Also, the state
CDBG program rule and law are
designed for a program in which the
state distributes all funds rather than
carrying out activities directly. The 1974
Act specifically provides for a local
government receiving CDBG grants from
a state to retain program income if it
uses the funds for additional eligible
activities under the annual CDBG
program. The 1974 Act allows the state
to require return of the program income
to the state under certain circumstances.
The notice waived the existing statute
and regulations to give the state, in all
circumstances, the choice of whether or
not a local government receiving a
distribution of CDBG disaster recovery
funds and using program income for
activities in the Action Plan could retain
this income and use it for additional
disaster recovery activities. In addition,
the notice allowed program income to
the disaster recovery grant generated by
activities undertaken directly by the
state or its agent(s) to retain the original
disaster recovery grant’s alternative
requirements and waivers and to remain
under the state’s discretion until grant
closeout, at which point any program
income on hand or received
subsequently would become program
income to the state’s annual CDBG
program. The alternative requirements
provide all the necessary conforming
changes to the program income
regulations.
Relocation Requirements
HUD provided and is continuing a
limited waiver of the relocation
requirements. HUD waived the one-forone replacement of low- and moderateincome housing units demolished or
converted using CDBG funds
requirement for housing units damaged
by one or more disasters. HUD has
waived this requirement because it did
not take into account the large, sudden
changes a major disaster may cause to
the local housing stock, population, or
local economy.
Further, the requirement did not take
into account the threats to public health
and safety and to economic
revitalization that may be caused by the
presence of disaster-damaged structures
that are unsuitable for rehabilitation.
Left unchanged, the requirement could
have impeded disaster recovery and
discouraged grantees from acquiring,
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converting, or demolishing disasterdamaged housing because of excessive
costs that would have resulted from
replacing all such units within the
specified time frame.
HUD also waived the relocation
benefits requirements contained in
Section 104(d) of the 1974 Act to the
extent they differ from those of the
Uniform Relocation Assistance and Real
Properties Acquisition Act of 1970 (42
U.S.C. 4601 et seq.). This change
simplifies implementation while
preserving statutory protections for
persons displaced by projects assisted
with CDBG disaster recovery grant
funds.
Overall Benefit
The waivers related to overall benefit
in Mississippi were published in several
previous notices. Because the waivers
are inextricably interrelated and have
common alternative requirements, HUD
is reconsidering all of them at this point,
as the reconsideration of the first of
them is now required. The State
complied fully with the alternative data
collection requirements included with
the original waivers and collected
income information for all of its direct
benefit activities, regardless of overall
benefit waivers. This data, and the
State’s completion of the initial
budgeting of all of its disaster recovery
grant funds, provided HUD with enough
information to determine whether the
State still has the statutorily mandated
‘‘compelling need’’ for each of those
previously granted waivers.
A CDBG grantee uses its grant funds
for eligible activities, such as
rehabilitation of a single house,
construction of a water and sewer line,
providing childcare through a particular
program, or making a loan to a small
business. Each activity must
demonstrate benefit by meeting one of
the three national objectives of the
CDBG program. These national
objectives are:
(1) Provide benefit to low- and
moderate-income persons (low/mod
activities);
(2) prevent or eliminate slums or
blight (slum/blight activities); or
(3) address urgent community needs
for which no other funding exists
(urgent need activities).
For purposes of reporting to HUD, the
funds and performance of some types of
activities, such as single family housing,
may be aggregated. For example,
Mississippi has been reporting quarterly
on its single-family homeowner
compensation program under two
categories, one that aggregates activity
performance and costs for payments to
low- and moderate-income households
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and one that aggregates payments made
under the urgent need national
objective.
The regular CDBG program also
subtotals the funds used for each
national objective and compares the
subtotals to the overall grant amount
(minus general administration and
planning costs) in a test called overall
benefit. To meet the overall benefit test,
the percentage of funds a grantee has
expended for the subtotal of individual
activities that meet the national
objective of benefit to low- and
moderate-income persons must be at
least 70 percent of the total funds used
for all activities (excluding general
administration and planning costs).
For the CDBG supplemental grants for
recovery from the consequences of
Hurricanes Katrina, Rita, and Wilma,
HUD granted two kinds of overall
benefit waivers. The first kind is
common to all five state grantees.
Published February 13, 2006, this
waiver lowered the overall benefit
threshold from 70 percent to 50 percent
for each of the recovery grants under
Public Law 109–148. The same waiver
was made October 30, 2006, for the
recovery grants under Public Law 109–
234. These waivers were reconsidered
and republished August 8, 2008.
Therefore, absent an additional waiver,
50 percent of each Gulf Coast recovery
grant governed by those notices must
support activities that meet the low- and
moderate-income national objective.
The second kind of waiver granted for
Gulf Coast recovery grants was only
requested by the State of Mississippi
and only then for the first recovery grant
made under Public Law 109–148, not
for the second grant. Between October
2006 and July 2008, Mississippi
requested multiple additional waivers of
the overall benefit requirement for its
first grant and HUD provided some
limited approvals for specific activities.
The standard that Congress provided
for granting an overall benefit waiver for
a disaster recovery grant is ‘‘compelling
need’’ for the waiver. HUD denied
several blanket waiver requests for the
overall benefit test primarily because
the State had not yet budgeted enough
of its grant to allow HUD to weigh the
necessity for a blanket waiver.
The additional waivers HUD granted
provided that specified activities
undertaken by Mississippi would not be
considered in calculating the overall
benefit test if such consideration would
cause the State to fail to meet the
requirement. Each of these waivers is
only needed if the State needs the
activity to continue its recovery and the
State would be in noncompliance with
the overall benefit provision without the
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75735
waiver. To determine if the State is in
compliance with the overall benefit
requirement, HUD calculates the overall
benefit test as usual by excluding all
planning and general administration
activities, and then removing the funds
applied to waivered slum/blight or
urgent need activities one at a time until
the State passes the test. To facilitate
this process, HUD required the State to
keep beneficiary data for each activity
despite the waivers. (Note that, although
the Disaster Recovery Grant Reporting
(DRGR) system is used to collect the
benefit information, it only calculates
the overall benefit test as usual, not as
waived. The effects of the waiver on
compliance must be manually
determined. Therefore, the
automatically calculated percentages in
the published reports are technically
inaccurate.) In the notices, HUD linked
all of the Mississippi-only overall
benefit waivers to specific, named and
dated action plans. This means that
when the State substantially amends an
activity under the waiver, that waiver
no longer applies to the funds removed
from the original activity. This occurred
frequently as the budget for Phase I of
the homeowner compensation program
decreased in size from over $3 billion to
about $1.5 billion and as the State
completed other reprogramming from
undersubscribed activities.
At this time, using budgets and data
provided by the State, HUD has
calculated that the State is likely to
achieve approximately 40 percent
overall benefit for the whole grant
(before applying the waivers). Next,
based on the information available prior
to publication of this notice, HUD has
performed the overall benefit test by
removing an activity at a time, in the
date order in which the waivers were
granted. If, at any point in the
calculation the State would clearly be in
compliance with the overall benefit
requirement without further waivers,
then there can be no compelling need
for subsequent waivers.
HUD calculates that, if the original
waivers for three activities launched
early in the recovery that now have been
completed or nearly completed in
reliance on those waivers (homeowner
compensation Phase 1, assistance to
private utilities, and windpool
payments) remain without change, then
the State will pass the overall benefit
test with the remaining grant funds as
they are currently budgeted. This
conclusion removes the compelling
need for the waivers granted for other
activities and they are hereby rescinded,
as shown in the table below.
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Activity or program
Original waiver date
Regional Infrastructure Program ..................................
Economic Development and Community Revitalization.
Regional Infrastructure Program—Master Plan and
Emergency Infrastructure.
Ratepayer and Windpool Mitigation .............................
August 24, 2007 (72 FR 48808) .................................
March 6, 2007 (72 FR 10020) .....................................
Waiver rescinded.
Waiver rescinded.
October 24, 2006 (71 FR 62372) ................................
Waiver rescinded.
October 24, 2006 (71 FR 62372) ................................
Compensation for housing loss ....................................
June 14, 2006 (71 FR 34457) .....................................
Waiver retained as originally
granted.
Waiver retained for Phase 1 Urgent Need activities.
HUD notes that the change in the
status of these waivers will require no
changes in the State’s currently
budgeted and operating programs
beyond the stipulated attention on the
part of the State to addressing the
recovery needs of low- and moderateincome persons in the required
proportions for the remainder of its
activities.
The original waiver notices include
greater detail about the State’s requests
and the waivers and alternative
requirements. The specific notices to
reference are:
• 71 FR 34457, published June 14,
2006;
• 71 FR 62372, published October 24,
2006;
• 72 FR 10020, published March 6,
2007; and
• 72 FR 48808, published August 24,
2007.
Timely Distribution of Funds
The state CDBG program regulation
regarding timely distribution of funds is
at 24 CFR 570.494. This provision is
designed to work in the context of an
annual program in which almost all
grant funds are distributed to units of
general local government. Because the
State may have used its disaster
recovery grant funds to carry out
activities directly, and because Congress
expressly allowed this grant to be
available until expended, HUD waived
this requirement. However, HUD still
expects the State of Mississippi to
expeditiously obligate and expend all
funds, including any recaptured funds
or program income, in carrying out
activities in a timely manner.
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Waivers and Alternative Requirements
1. Program income waivers and
alternative requirement. 42 U.S.C.
5304(j) and 24 CFR 570.489(e) are
waived to the extent that they conflict
with the rules stated in the program
income alternative requirement below.
The following alternative requirement
applies instead.
(a) Program income. (1) For the
purposes of this subpart, ‘‘program
income’’ is defined as gross income
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received by a state, a unit of general
local government, a tribe, or a
subrecipient of a unit of general local
government or a tribe that was generated
from the use of CDBG funds, except as
provided in paragraph (a)(2) of this
section. 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:
(i) Proceeds from the disposition by
sale or long-term lease of real property
purchased or improved with CDBG
funds;
(ii) Proceeds from the disposition of
equipment purchased with CDBG funds;
(iii) Gross income from the use or
rental of real or personal property
acquired by the unit of general local
government or tribe or subrecipient of a
state, a tribe, or a unit of general local
government with CDBG funds, less the
costs incidental to the generation of the
income;
(iv) Gross income from the use or
rental of real property owned by a state,
tribe, or the unit of general local
government or a subrecipient of a state,
tribe, or unit of general local
government, that was constructed or
improved with CDBG funds, less the
costs incidental to the generation of the
income;
(v) Payments of principal and interest
on loans made using CDBG funds;
(vi) Proceeds from the sale of loans
made with CDBG funds;
(vii) Proceeds from the sale of
obligations secured by loans made with
CDBG funds;
(viii) Interest earned on program
income pending disposition of the
income, but excluding interest earned
on funds held in a revolving fund
account;
(ix) 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
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Reconsideration status
all or part of the CDBG portion of a
public improvement; and
(x) Gross income paid to a state, tribe,
or a unit of general local government or
subrecipient from the ownership
interest in a for-profit entity acquired in
return for the provision of CDBG
assistance.
(2) ‘‘Program income’’ does not
include the following:
(i) The total amount of funds which
is less than $25,000 received in a single
year that is retained by a unit of general
local government, tribe, or subrecipient;
(ii) Amounts generated by activities
eligible under section 105(a)(15) of the
1974 Act and carried out by an entity
under the authority of section 105(a)(15)
of the Act.
(3) The state may permit the unit of
general local government or tribe that
receives or will receive program income
to retain the program income, subject to
the requirements of paragraph (a)(3)(ii)
of this section, or the state may require
the unit of general local government or
tribe to pay the program income to the
state.
(i) Program income paid to the state.
Program income that is paid to the state
or received by the state is treated as
additional disaster recovery CDBG
funds subject to the requirements of this
notice and must be used by the state or
distributed to units of general local
government in accordance with the
state’s Action Plan for Disaster
Recovery. To the maximum extent
feasible, program income shall be used
or distributed before the state makes
additional withdrawals from the United
States Treasury, except as provided in
paragraph (b) of this section.
(ii) Program income retained by a unit
of general local government or tribe.
(A) Program income that is received
and retained by the unit of general local
government or tribe before closeout of
the grant that generated the program
income is treated as additional disaster
recovery CDBG funds and is subject to
the requirements of this notice.
(B) Program income that is received
and retained by the unit of general local
government or tribe after closeout of the
grant that generated the program
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income, but that is used to continue the
disaster recovery activity that generated
the program income, is subject to the
waivers and alternative requirements of
this notice.
(C) All other program income is
subject to the requirements of 42 U.S.C.
5304(j) and subpart I of 24 CFR part 570.
(D) The state shall require units of
general local government or tribes, to
the maximum extent feasible, to
disburse program income that is subject
to the requirements of this notice before
requesting additional funds from the
state for activities, except as provided in
paragraph (b) of this section.
(b) Revolving funds.
(1) The state may establish or permit
units of general local government or
tribes to 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 that, in turn, generate
payments to the fund for use in carrying
out such activities. 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 United States Treasury for revolving
fund activities. Such program income is
not required to be disbursed for
nonrevolving fund activities.
(2) The state may also establish a
revolving fund to distribute funds to
units of general local government or
tribes 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
fund grants to units of general local
government to carry out specific
activities which, in turn, generate
payments to the fund for additional
grants to units of general local
government to carry out such activities.
Program income in the revolving fund
must be disbursed from the fund before
additional grant funds are drawn from
the Treasury for payments to units of
general local government that could be
funded from the revolving fund.
(3) A revolving fund established by
either the state or unit of general local
government shall not be directly funded
or capitalized with grant funds.
(c) Transfer of program income.
Notwithstanding other provisions of this
notice, the state may transfer program
income before closeout of the grant that
generated the program income to its
own annual CDBG program or to any
annual CDBG-funded activities
administered by a unit of general local
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17:56 Dec 11, 2008
Jkt 217001
government or Indian tribe within the
state.
(d) Program income on hand at the
state or its subrecipients at the time of
grant closeout by HUD and program
income received by the state after such
grant closeout shall be program income
to the most recent annual CDBG
program grant of the state.
2. Housing-related eligibility waivers.
42 U.S.C. 5305(a) is waived to the extent
necessary to allow homeownership
assistance for households with up to
120 percent of area median income and
downpayment assistance for up to 100
percent of the downpayment (42 U.S.C.
5305(a)(24)(D)) and to allow new
housing construction.
3. Compensation for loss of housing.
42 U.S.C. 5305(a) is waived to the extent
necessary to allow compensation for
unreimbursed loss of housing caused by
the disaster. The grantee must undertake
any compensation activity in
accordance with the state’s approved
action plan and published program
design.
4. Planning requirements. For CDBG
disaster-recovery-assisted general
planning activities that will guide
recovery in accordance with the 2006
Act, the state CDBG program rules at 24
CFR 570.483(b)(5) and (c)(3) are waived
and the presumption at 24 CFR
570.208(d)(4) applies.
5. Waiver and modification of the
anti-pirating clause to permit assistance
to help a business return. 42 U.S.C.
5305(h) and 24 CFR 570.482(h) are
hereby waived only to allow the grantee
to provide assistance under this grant to
any business that was operating in the
covered disaster area before the incident
date of Hurricane Katrina 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.
6. Waiver of one-for-one replacement
of units damaged by disaster. 42 U.S.C.
5304(d)(2)(A)(i)–(ii) and 42 U.S.C.
5304(d)(2)(A)(iii)–(iv) are waived to
remove the one-for-one replacement
requirements for occupied and vacant,
occupiable lower-income dwelling units
that may be demolished or converted to
a use other than for housing; and to
remove the relocation benefits
requirements contained at 42 U.S.C.
5304(d) to the extent they differ from
those of the Uniform Relocation Act.
Also, 24 CFR 42.375 is waived to
remove the requirements implementing
the above-mentioned statutory
requirements regarding replacement of
housing and 24 CFR 42.350, to the
extent that these regulations differ from
the regulations contained in 49 CFR part
24. These requirements are waived
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
75737
provided the grantee assures HUD it
will use all resources at its disposal to
ensure no displaced homeowner will be
denied access to decent, safe, and
sanitary suitable replacement housing
because he or she has not received
sufficient financial assistance.
7. Overall benefit. 42 U.S.C. 5301(c)
and 5304(b)(3), and 24 CFR 570.484 and
24 CFR 91.325(b)(4)(ii), with respect to
the overall benefit requirement, were
waived June 14 and October 24, 2006;
and March 6 and August 24, 2007, for
the CDBG disaster recovery grant
covered by this notice, to the extent
necessary to permit Mississippi to carry
out activities specified in each notice
provided that the state must give
reasonable priority for the balance of its
funds to activities that will primarily
benefit persons of low and moderate
income.
a. After the required reconsideration,
HUD is retaining waivers granted under
71 FR 34460 paragraph 7, and 71 FR
62374 paragraph 4, to the extent
necessary to allow the retention of the
overall benefit waiver for the ratepayer
mitigation and windpool activities.
b. After the required reconsideration,
the Department no longer finds
compelling need for, and is therefore
rescinding, the waivers granted under
71 FR 62374 paragraph 4, to the extent
that the waiver originally was granted
for the Regional Infrastructure
Program—Master Plan and Emergency
Infrastructure; 72 FR 10021 paragraph 5,
to the extent that it covers the Economic
Development and Community
Revitalization program; and 72 FR
48811 paragraph 2, to the extent that it
covers the Regional Infrastructure
Program. HUD continues to expect the
grantee to maintain low- and moderateincome benefit documentation for each
activity providing such benefit.
8. Waiver of requirement for timely
distribution of funds. 24 CFR 570.494
regarding timely distribution of funds is
waived.
9. Note on the eligibility of providing
funds to Enterprise and Local Initiatives
Support Corporation (LISC) for certain
purposes. The appropriations statute
provides that the states of Louisiana and
Mississippi may each use up to
$20,000,000 (with up to $400,000 each
for technical assistance) from funds
made available under this heading for
LISC and the Enterprise Foundation for
activities authorized by section 4 of the
HUD Demonstration Act of 1993 (Pub.
L. 103–120, 42 U.S.C. 9816 note), as in
effect immediately before June 12, 1997,
and for activities authorized under
section 11 of the Housing Opportunity
Program Extension Act of 1996 (Pub. L.
104–120, 42 U.S.C. 12805 note),
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Federal Register / Vol. 73, No. 240 / Friday, December 12, 2008 / Notices
including demolition, site clearance and
remediation, and program
administration.
10. Non-Federal Cost Sharing of Army
Corps of Engineers Projects. Public Law
105–276, Title II, Oct. 21, 1998, 112
Stat. 2478, provided in part that: ‘‘For
any fiscal year, of the amounts made
available as emergency funds under the
heading ‘Community Development
Block Grants Fund’ and
notwithstanding any other provision of
law, not more than $250,000 may be
used for the non-Federal cost-share of
any project funded by the Secretary of
the Army through the Corps of
Engineers.’’
Finding of No Significant Impact
A Finding of No Significant Impact
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
Finding of No Significant Impact 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 Seventh Street,
SW., Room 10276, Washington, DC
20410–0500. Due to security measures
at the HUD Headquarters building,
please schedule an appointment to
review the finding by calling the
Regulations Division at (202) 708–3055
(this is not a toll-free number).
Dated: November 24, 2008.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. E8–29426 Filed 12–11–08; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5217–N–03]
Notice of Regulatory Waiver Requests
Granted for the Third Quarter of
Calendar Year 2008
AGENCY:
Office of the General Counsel,
HUD.
jlentini on PROD1PC65 with NOTICES
ACTION:
Notice.
SUMMARY: Section 106 of the Department
of Housing and Urban Development
Reform Act of 1989 (the HUD Reform
Act) requires HUD to publish quarterly
Federal Register notices of all
regulatory waivers that HUD has
approved. Each notice covers the
quarterly period since the previous
Federal Register notice. The purpose of
this notice is to comply with the
VerDate Aug<31>2005
17:56 Dec 11, 2008
Jkt 217001
requirements of section 106 of the HUD
Reform Act. This notice contains a list
of regulatory waivers granted by HUD
during the period beginning on July 1,
2008, and ending on September 30,
2008.
FOR FURTHER INFORMATION CONTACT: For
general information about this notice,
contact Aaron Santa Anna, Assistant
General Counsel for Regulations, Office
of General Counsel, Department of
Housing and Urban Development, 451
7th Street, SW., Room 10276,
Washington, DC 20410–0500, telephone
number 202–708–3055 (this is not a tollfree number). Persons with hearing- or
speech-impairments may access this
number through TTY by calling the tollfree Federal Information Relay Service
at 800–877–8339.
For information concerning a
particular waiver that was granted and
for which public notice is provided in
this document, contact the person
whose name and address follow the
description of the waiver granted in the
accompanying list of waivers that have
been granted in the third quarter of
calendar year 2008.
SUPPLEMENTARY INFORMATION: Section
106 of the HUD Reform Act added a
new section 7(q) to the Department of
Housing and Urban Development Act
(42 U.S.C. 3535(q)), which provides
that:
1. Any waiver of a regulation must be
in writing and must specify the grounds
for approving the waiver;
2. Authority to approve a waiver of a
regulation may be delegated by the
Secretary only to an individual of
Assistant Secretary or equivalent rank,
and the person to whom authority to
waive is delegated must also have
authority to issue the particular
regulation to be waived;
3. Not less than quarterly, the
Secretary must notify the public of all
waivers of regulations that HUD has
approved, by publishing a notice in the
Federal Register. These notices (each
covering the period since the most
recent previous notification) shall:
a. Identify the project, activity, or
undertaking involved;
b. Describe the nature of the provision
waived and the designation of the
provision;
c. Indicate the name and title of the
person who granted the waiver request;
d. Describe briefly the grounds for
approval of the request; and
e. State how additional information
about a particular waiver may be
obtained.
Section 106 of the HUD Reform Act
also contains requirements applicable to
waivers of HUD handbook provisions
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
that are not relevant to the purpose of
this notice.
This notice follows procedures
provided in HUD’s Statement of Policy
on Waiver of Regulations and Directives
issued on April 22, 1991 (56 FR 16337).
In accordance with those procedures
and with the requirements of section
106 of the HUD Reform Act, waivers of
regulations are granted by the Assistant
Secretary with jurisdiction over the
regulations for which a waiver was
requested. In those cases in which a
General Deputy Assistant Secretary
granted the waiver, the General Deputy
Assistant Secretary was serving in the
absence of the Assistant Secretary in
accordance with the office’s Order of
Succession.
This notice covers waivers of
regulations granted by HUD from July 1,
2008, through September 30, 2008. For
ease of reference, the waivers granted by
HUD are listed by HUD program office
(for example, the Office of Community
Planning and Development, the Office
of Fair Housing and Equal Opportunity,
the Office of Housing, and the Office of
Public and Indian Housing, etc.). Within
each program office grouping, the
waivers are listed sequentially by the
regulatory section of title 24 of the Code
of Federal Regulations (CFR) that is
being waived. For example, a waiver of
a provision in 24 CFR part 58 would be
listed before a waiver of a provision in
24 CFR part 570.
Where more than one regulatory
provision is involved in the grant of a
particular waiver request, the action is
listed under the section number of the
first regulatory requirement that appears
in 24 CFR and that is being waived. For
example, a waiver of both § 58.73 and
§ 58.74 would appear sequentially in the
listing under § 58.73.
Waiver of regulations that involve the
same initial regulatory citation are in
time sequence beginning with the
earliest-dated regulatory waiver.
Should HUD receive additional
information about waivers granted
during the period covered by this report
(the third quarter of calendar year 2008)
before the next report is published (the
fourth quarter of calendar year 2008),
HUD will include any additional
waivers granted for the third quarter in
the next report.
Accordingly, information about
approved waiver requests pertaining to
HUD regulations is provided in the
Appendix that follows this notice.
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[Federal Register Volume 73, Number 240 (Friday, December 12, 2008)]
[Notices]
[Pages 75733-75738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-29426]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5251-N-01]
Reconsideration of Waivers Granted to and Alternative
Requirements for the State of Mississippi's CDBG Disaster Recovery
Grant Under the Department of Defense Emergency Supplemental
Appropriations To Address Hurricanes in the Gulf of Mexico, and
Pandemic Influenza Act, 2006
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of reconsidered waivers, alternative requirements, and
statutory program requirements.
-----------------------------------------------------------------------
SUMMARY: This notice describes HUD's reconsideration of some of the
additional waivers and alternative requirements applicable to the
Community Development Block Grant (CDBG) disaster recovery grant
provided to the State of Mississippi for the purpose of assisting in
the recovery in the most impacted and distressed areas related to the
consequences of Hurricane Katrina in 2005. HUD previously published an
allocation and application notice on February 13, 2006, applicable to
this grant and four others under the same appropriation, and
reconsidered the waivers in that notice on August 8, 2008. The original
June 14, 2006, notice has now been reconsidered and all waivers are
being retained, with the exception of some of the overall benefit
waivers.
DATES: Effective Date: December 17, 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 Seventh
Street, SW., Room 7286, Washington, DC 20410-7000, telephone number
202-708-3587. Persons with hearing or speech impairments may access
this number via TTY by calling the Federal Information Relay Service at
800-877-8339. Facsimile inquiries may be sent to Ms. Kome at 202-401-
2044. (Except for the ``800'' number, these telephone numbers are not
toll free.)
SUPPLEMENTARY INFORMATION:
Authority To Grant Waivers
The Department of Defense, Emergency Supplemental Appropriations To
Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act,
2006 (Pub. L. 109-148, approved December 30, 2005) (the 2006 Act)
appropriated $11.5 billion in CDBG funds for necessary expenses related
to disaster relief, long-term recovery, and restoration of
infrastructure directly related to the consequences of the covered
disasters. The State of Mississippi received an allocation of
$5,058,185,000 from this appropriation. The 2006 Act authorized 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, 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. The law further provided that the Secretary may waive
the requirement that activities benefit persons of low and moderate
income, except that at least 50 percent of the funds granted must
benefit primarily persons of low and moderate income, unless the
Secretary otherwise makes a finding of compelling need. Additionally,
regulatory waiver authority is provided by 24 CFR 5.110. The following
waivers and alternative requirements came in response to written
requests from the State of Mississippi and are being retained, with the
exception of some of the overall benefit waivers, after
reconsideration.
The Secretary has found that the following waivers and alternative
requirements, as described below, are not inconsistent with the overall
purpose of 42 U.S.C. 5301 et seq., Title I of the Housing and Community
Development Act of 1974, as amended (the 1974 Act); or of 42 U.S.C.
12704 et seq., the Cranston-Gonzalez National Affordable Housing Act,
as amended.
Under the requirements of the Department of Housing and Urban
Development Act, as amended (42 U.S.C. 3535(q)), regulatory waivers
must
[[Page 75734]]
be published in the Federal Register. The Department is also using this
notice to provide information about other ways in which the
requirements for this grant vary from regular CDBG program rules.
Therefore, HUD is using this notice to make public alternative
requirements and to note the applicability of disaster recovery-related
statutory provisions. Compiling this information in a single notice
creates a helpful resource for Mississippi grant administrators and HUD
field staff. Waivers and alternative requirements regarding the common
application and reporting process for all grantees under the 2006 Act
were published in a prior notice published February 13, 2006 (71 FR
7666) and retained in a notice published on August 8, 2008 (73 FR
46312).
Except as described in notices regarding this grant, the 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.
Descriptions of Changes
This section of the notice briefly describes the basis for each
waiver and provides an explanation of related alternative requirements,
if additional explanation is necessary.
Except as provided in the October 30, 2006, and August 8, 2008,
notices, the waivers, alternative requirements, and statutory changes
apply only to the CDBG supplemental disaster recovery funds
appropriated in the 2006 Act and allocated to the State of Mississippi.
These actions provide additional flexibility in program design and
implementation and note statutory requirements unique to this
appropriation.
Eligibility
Eligibility--housing related. The waiver of section 105(a) that
allows new housing construction and of section 105(a)(24) to allow
homeownership assistance for families whose income is up to 120 percent
of median income and payment of up to 100 percent of a housing
downpayment is necessary following major disasters in which large
numbers of affordable housing units have been damaged or destroyed, as
is the case in the disaster eligible under this notice. The state
requested that HUD broaden the section 105(a)(24) waiver to allow it to
serve families with income up to 120 percent of median income to
implement its Long Term Workforce Housing program in accordance with
its accepted Action Plan for Disaster Recovery.
General planning activities use entitlement presumption. The annual
state CDBG program requires that local government grant recipients of
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,
historic preservation plans, comprehensive plans, development of
housing codes, and neighborhood plans related to guiding long-term
community development efforts comprising multiple activities funded by
multiple sources. In the annual entitlement program, these more general
stand-alone planning activities are presumed to meet a national
objective under the requirements at 24 CFR 570.208(d)(4). The
Department noted that almost all effective CDBG disaster recoveries in
the past have relied on some form of area-wide or comprehensive
planning activity to guide overall redevelopment independent of the
ultimate source of implementation funds. Therefore, the Department has
removed the eligibility requirement that CDBG disaster recovery
assisted planning-only grants or state directly administered planning
activities that will guide recovery in accordance with the
appropriations act, must comply with the state CDBG program rules at 24
CFR 570.483(b)(5) or (c)(3).
Compensation for disaster-related losses. The state is providing
compensation to homeowners who lived outside the floodplain and whose
homes were damaged by flooding during the covered disasters, if the
homeowners agreed to meet the stipulations of the published program
design. The state is also providing compensation to homeowners affected
by the disaster in other circumstances, under Phase II and other
aspects of the state's homeowner compensation program. The Department
has waived the 1974 Act and associated regulations to make this use of
grant funds eligible.
Anti-pirating. The limited waiver of the anti-pirating requirements
allowed the flexibility to provide assistance to a business located in
another state or market area within the same state if the business was
displaced from a declared area within the state by the disaster and the
business wishes to return. This waiver is necessary to allow a grantee
affected by a major disaster to rebuild its employment base.
Program Income
A combination of CDBG provisions limited the flexibility available
to the state for the use of program income. Prior to 2002, program
income earned on disaster recovery grants was usually program income in
accordance with the rules of the regular CDBG program of the applicable
state and lost its disaster recovery grant identity, thus losing use of
the waivers and streamlined alternative requirements. Also, the state
CDBG program rule and law are designed for a program in which the state
distributes all funds rather than carrying out activities directly. The
1974 Act specifically provides for a local government receiving CDBG
grants from a state to retain program income if it uses the funds for
additional eligible activities under the annual CDBG program. The 1974
Act allows the state to require return of the program income to the
state under certain circumstances. The notice waived the existing
statute and regulations to give the state, in all circumstances, the
choice of whether or not a local government receiving a distribution of
CDBG disaster recovery funds and using program income for activities in
the Action Plan could retain this income and use it for additional
disaster recovery activities. In addition, the notice allowed program
income to the disaster recovery grant generated by activities
undertaken directly by the state or its agent(s) to retain the original
disaster recovery grant's alternative requirements and waivers and to
remain under the state's discretion until grant closeout, at which
point any program income on hand or received subsequently would become
program income to the state's annual CDBG program. The alternative
requirements provide all the necessary conforming changes to the
program income regulations.
Relocation Requirements
HUD provided and is continuing a limited waiver of the relocation
requirements. HUD waived the one-for-one replacement of low- and
moderate-income housing units demolished or converted using CDBG funds
requirement for housing units damaged by one or more disasters. HUD has
waived this requirement because it did not take into account the large,
sudden changes a major disaster may cause to the local housing stock,
population, or local economy.
Further, the requirement did not take into account the threats to
public health and safety and to economic revitalization that may be
caused by the presence of disaster-damaged structures that are
unsuitable for rehabilitation. Left unchanged, the requirement could
have impeded disaster recovery and discouraged grantees from acquiring,
[[Page 75735]]
converting, or demolishing disaster-damaged housing because of
excessive costs that would have resulted from replacing all such units
within the specified time frame.
HUD also waived the relocation benefits requirements contained in
Section 104(d) of the 1974 Act to the extent they differ from those of
the Uniform Relocation Assistance and Real Properties Acquisition Act
of 1970 (42 U.S.C. 4601 et seq.). This change simplifies implementation
while preserving statutory protections for persons displaced by
projects assisted with CDBG disaster recovery grant funds.
Overall Benefit
The waivers related to overall benefit in Mississippi were
published in several previous notices. Because the waivers are
inextricably interrelated and have common alternative requirements, HUD
is reconsidering all of them at this point, as the reconsideration of
the first of them is now required. The State complied fully with the
alternative data collection requirements included with the original
waivers and collected income information for all of its direct benefit
activities, regardless of overall benefit waivers. This data, and the
State's completion of the initial budgeting of all of its disaster
recovery grant funds, provided HUD with enough information to determine
whether the State still has the statutorily mandated ``compelling
need'' for each of those previously granted waivers.
A CDBG grantee uses its grant funds for eligible activities, such
as rehabilitation of a single house, construction of a water and sewer
line, providing childcare through a particular program, or making a
loan to a small business. Each activity must demonstrate benefit by
meeting one of the three national objectives of the CDBG program. These
national objectives are:
(1) Provide benefit to low- and moderate-income persons (low/mod
activities);
(2) prevent or eliminate slums or blight (slum/blight activities);
or
(3) address urgent community needs for which no other funding
exists (urgent need activities).
For purposes of reporting to HUD, the funds and performance of some
types of activities, such as single family housing, may be aggregated.
For example, Mississippi has been reporting quarterly on its single-
family homeowner compensation program under two categories, one that
aggregates activity performance and costs for payments to low- and
moderate-income households and one that aggregates payments made under
the urgent need national objective.
The regular CDBG program also subtotals the funds used for each
national objective and compares the subtotals to the overall grant
amount (minus general administration and planning costs) in a test
called overall benefit. To meet the overall benefit test, the
percentage of funds a grantee has expended for the subtotal of
individual activities that meet the national objective of benefit to
low- and moderate-income persons must be at least 70 percent of the
total funds used for all activities (excluding general administration
and planning costs).
For the CDBG supplemental grants for recovery from the consequences
of Hurricanes Katrina, Rita, and Wilma, HUD granted two kinds of
overall benefit waivers. The first kind is common to all five state
grantees. Published February 13, 2006, this waiver lowered the overall
benefit threshold from 70 percent to 50 percent for each of the
recovery grants under Public Law 109-148. The same waiver was made
October 30, 2006, for the recovery grants under Public Law 109-234.
These waivers were reconsidered and republished August 8, 2008.
Therefore, absent an additional waiver, 50 percent of each Gulf Coast
recovery grant governed by those notices must support activities that
meet the low- and moderate-income national objective.
The second kind of waiver granted for Gulf Coast recovery grants
was only requested by the State of Mississippi and only then for the
first recovery grant made under Public Law 109-148, not for the second
grant. Between October 2006 and July 2008, Mississippi requested
multiple additional waivers of the overall benefit requirement for its
first grant and HUD provided some limited approvals for specific
activities.
The standard that Congress provided for granting an overall benefit
waiver for a disaster recovery grant is ``compelling need'' for the
waiver. HUD denied several blanket waiver requests for the overall
benefit test primarily because the State had not yet budgeted enough of
its grant to allow HUD to weigh the necessity for a blanket waiver.
The additional waivers HUD granted provided that specified
activities undertaken by Mississippi would not be considered in
calculating the overall benefit test if such consideration would cause
the State to fail to meet the requirement. Each of these waivers is
only needed if the State needs the activity to continue its recovery
and the State would be in noncompliance with the overall benefit
provision without the waiver. To determine if the State is in
compliance with the overall benefit requirement, HUD calculates the
overall benefit test as usual by excluding all planning and general
administration activities, and then removing the funds applied to
waivered slum/blight or urgent need activities one at a time until the
State passes the test. To facilitate this process, HUD required the
State to keep beneficiary data for each activity despite the waivers.
(Note that, although the Disaster Recovery Grant Reporting (DRGR)
system is used to collect the benefit information, it only calculates
the overall benefit test as usual, not as waived. The effects of the
waiver on compliance must be manually determined. Therefore, the
automatically calculated percentages in the published reports are
technically inaccurate.) In the notices, HUD linked all of the
Mississippi-only overall benefit waivers to specific, named and dated
action plans. This means that when the State substantially amends an
activity under the waiver, that waiver no longer applies to the funds
removed from the original activity. This occurred frequently as the
budget for Phase I of the homeowner compensation program decreased in
size from over $3 billion to about $1.5 billion and as the State
completed other reprogramming from undersubscribed activities.
At this time, using budgets and data provided by the State, HUD has
calculated that the State is likely to achieve approximately 40 percent
overall benefit for the whole grant (before applying the waivers).
Next, based on the information available prior to publication of this
notice, HUD has performed the overall benefit test by removing an
activity at a time, in the date order in which the waivers were
granted. If, at any point in the calculation the State would clearly be
in compliance with the overall benefit requirement without further
waivers, then there can be no compelling need for subsequent waivers.
HUD calculates that, if the original waivers for three activities
launched early in the recovery that now have been completed or nearly
completed in reliance on those waivers (homeowner compensation Phase 1,
assistance to private utilities, and windpool payments) remain without
change, then the State will pass the overall benefit test with the
remaining grant funds as they are currently budgeted. This conclusion
removes the compelling need for the waivers granted for other
activities and they are hereby rescinded, as shown in the table below.
[[Page 75736]]
----------------------------------------------------------------------------------------------------------------
Activity or program Original waiver date Reconsideration status
----------------------------------------------------------------------------------------------------------------
Regional Infrastructure Program.... August 24, 2007 (72 FR Waiver rescinded.
48808).
Economic Development and Community March 6, 2007 (72 FR 10020) Waiver rescinded.
Revitalization.
Regional Infrastructure Program-- October 24, 2006 (71 FR Waiver rescinded.
Master Plan and Emergency 62372).
Infrastructure.
Ratepayer and Windpool Mitigation.. October 24, 2006 (71 FR Waiver retained as originally granted.
62372).
Compensation for housing loss...... June 14, 2006 (71 FR 34457) Waiver retained for Phase 1 Urgent Need
activities.
----------------------------------------------------------------------------------------------------------------
HUD notes that the change in the status of these waivers will
require no changes in the State's currently budgeted and operating
programs beyond the stipulated attention on the part of the State to
addressing the recovery needs of low- and moderate-income persons in
the required proportions for the remainder of its activities.
The original waiver notices include greater detail about the
State's requests and the waivers and alternative requirements. The
specific notices to reference are:
71 FR 34457, published June 14, 2006;
71 FR 62372, published October 24, 2006;
72 FR 10020, published March 6, 2007; and
72 FR 48808, published August 24, 2007.
Timely Distribution of Funds
The state CDBG program regulation regarding timely distribution of
funds is at 24 CFR 570.494. This provision is designed to work in the
context of an annual program in which almost all grant funds are
distributed to units of general local government. Because the State may
have used its disaster recovery grant funds to carry out activities
directly, and because Congress expressly allowed this grant to be
available until expended, HUD waived this requirement. However, HUD
still expects the State of Mississippi to expeditiously obligate and
expend all funds, including any recaptured funds or program income, in
carrying out activities in a timely manner.
Waivers and Alternative Requirements
1. Program income waivers and alternative requirement. 42 U.S.C.
5304(j) and 24 CFR 570.489(e) are waived to the extent that they
conflict with the rules stated in the program income alternative
requirement below. The following alternative requirement applies
instead.
(a) Program income. (1) For the purposes of this subpart, ``program
income'' is defined as gross income received by a state, a unit of
general local government, a tribe, or a subrecipient of a unit of
general local government or a tribe that was generated from the use of
CDBG funds, except as provided in paragraph (a)(2) of this section.
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:
(i) Proceeds from the disposition by sale or long-term lease of
real property purchased or improved with CDBG funds;
(ii) Proceeds from the disposition of equipment purchased with CDBG
funds;
(iii) Gross income from the use or rental of real or personal
property acquired by the unit of general local government or tribe or
subrecipient of a state, a tribe, or a unit of general local government
with CDBG funds, less the costs incidental to the generation of the
income;
(iv) Gross income from the use or rental of real property owned by
a state, tribe, or the unit of general local government or a
subrecipient of a state, tribe, or unit of general local government,
that was constructed or improved with CDBG funds, less the costs
incidental to the generation of the income;
(v) Payments of principal and interest on loans made using CDBG
funds;
(vi) Proceeds from the sale of loans made with CDBG funds;
(vii) Proceeds from the sale of obligations secured by loans made
with CDBG funds;
(viii) Interest earned on program income pending disposition of the
income, but excluding interest earned on funds held in a revolving fund
account;
(ix) 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
(x) Gross income paid to a state, tribe, or a unit of general local
government or subrecipient from the ownership interest in a for-profit
entity acquired in return for the provision of CDBG assistance.
(2) ``Program income'' does not include the following:
(i) The total amount of funds which is less than $25,000 received
in a single year that is retained by a unit of general local
government, tribe, or subrecipient;
(ii) Amounts generated by activities eligible under section
105(a)(15) of the 1974 Act and carried out by an entity under the
authority of section 105(a)(15) of the Act.
(3) The state may permit the unit of general local government or
tribe that receives or will receive program income to retain the
program income, subject to the requirements of paragraph (a)(3)(ii) of
this section, or the state may require the unit of general local
government or tribe to pay the program income to the state.
(i) Program income paid to the state. Program income that is paid
to the state or received by the state is treated as additional disaster
recovery CDBG funds subject to the requirements of this notice and must
be used by the state or distributed to units of general local
government in accordance with the state's Action Plan for Disaster
Recovery. To the maximum extent feasible, program income shall be used
or distributed before the state makes additional withdrawals from the
United States Treasury, except as provided in paragraph (b) of this
section.
(ii) Program income retained by a unit of general local government
or tribe.
(A) Program income that is received and retained by the unit of
general local government or tribe before closeout of the grant that
generated the program income is treated as additional disaster recovery
CDBG funds and is subject to the requirements of this notice.
(B) Program income that is received and retained by the unit of
general local government or tribe after closeout of the grant that
generated the program
[[Page 75737]]
income, but that is used to continue the disaster recovery activity
that generated the program income, is subject to the waivers and
alternative requirements of this notice.
(C) All other program income is subject to the requirements of 42
U.S.C. 5304(j) and subpart I of 24 CFR part 570.
(D) The state shall require units of general local government or
tribes, to the maximum extent feasible, to disburse program income that
is subject to the requirements of this notice before requesting
additional funds from the state for activities, except as provided in
paragraph (b) of this section.
(b) Revolving funds.
(1) The state may establish or permit units of general local
government or tribes to 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 that, in
turn, generate payments to the fund for use in carrying out such
activities. 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 United States Treasury for
revolving fund activities. Such program income is not required to be
disbursed for nonrevolving fund activities.
(2) The state may also establish a revolving fund to distribute
funds to units of general local government or tribes 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 fund grants to units of general local
government to carry out specific activities which, in turn, generate
payments to the fund for additional grants to units of general local
government to carry out such activities. Program income in the
revolving fund must be disbursed from the fund before additional grant
funds are drawn from the Treasury for payments to units of general
local government that could be funded from the revolving fund.
(3) A revolving fund established by either the state or unit of
general local government shall not be directly funded or capitalized
with grant funds.
(c) Transfer of program income. Notwithstanding other provisions of
this notice, the state may transfer program income before closeout of
the grant that generated the program income to its own annual CDBG
program or to any annual CDBG-funded activities administered by a unit
of general local government or Indian tribe within the state.
(d) Program income on hand at the state or its subrecipients at the
time of grant closeout by HUD and program income received by the state
after such grant closeout shall be program income to the most recent
annual CDBG program grant of the state.
2. Housing-related eligibility waivers. 42 U.S.C. 5305(a) is waived
to the extent necessary to allow homeownership assistance for
households with up to 120 percent of area median income and downpayment
assistance for up to 100 percent of the downpayment (42 U.S.C.
5305(a)(24)(D)) and to allow new housing construction.
3. Compensation for loss of housing. 42 U.S.C. 5305(a) is waived to
the extent necessary to allow compensation for unreimbursed loss of
housing caused by the disaster. The grantee must undertake any
compensation activity in accordance with the state's approved action
plan and published program design.
4. Planning requirements. For CDBG disaster-recovery-assisted
general planning activities that will guide recovery in accordance with
the 2006 Act, the state CDBG program rules at 24 CFR 570.483(b)(5) and
(c)(3) are waived and the presumption at 24 CFR 570.208(d)(4) applies.
5. Waiver and modification of the anti-pirating clause to permit
assistance to help a business return. 42 U.S.C. 5305(h) and 24 CFR
570.482(h) are hereby waived only to allow the grantee to provide
assistance under this grant to any business that was operating in the
covered disaster area before the incident date of Hurricane Katrina 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.
6. Waiver of one-for-one replacement of units damaged by disaster.
42 U.S.C. 5304(d)(2)(A)(i)-(ii) and 42 U.S.C. 5304(d)(2)(A)(iii)-(iv)
are waived to remove the one-for-one replacement requirements for
occupied and vacant, occupiable lower-income dwelling units that may be
demolished or converted to a use other than for housing; and to remove
the relocation benefits requirements contained at 42 U.S.C. 5304(d) to
the extent they differ from those of the Uniform Relocation Act. Also,
24 CFR 42.375 is waived to remove the requirements implementing the
above-mentioned statutory requirements regarding replacement of housing
and 24 CFR 42.350, to the extent that these regulations differ from the
regulations contained in 49 CFR part 24. These requirements are waived
provided the grantee assures HUD it will use all resources at its
disposal to ensure no displaced homeowner will be denied access to
decent, safe, and sanitary suitable replacement housing because he or
she has not received sufficient financial assistance.
7. Overall benefit. 42 U.S.C. 5301(c) and 5304(b)(3), and 24 CFR
570.484 and 24 CFR 91.325(b)(4)(ii), with respect to the overall
benefit requirement, were waived June 14 and October 24, 2006; and
March 6 and August 24, 2007, for the CDBG disaster recovery grant
covered by this notice, to the extent necessary to permit Mississippi
to carry out activities specified in each notice provided that the
state must give reasonable priority for the balance of its funds to
activities that will primarily benefit persons of low and moderate
income.
a. After the required reconsideration, HUD is retaining waivers
granted under 71 FR 34460 paragraph 7, and 71 FR 62374 paragraph 4, to
the extent necessary to allow the retention of the overall benefit
waiver for the ratepayer mitigation and windpool activities.
b. After the required reconsideration, the Department no longer
finds compelling need for, and is therefore rescinding, the waivers
granted under 71 FR 62374 paragraph 4, to the extent that the waiver
originally was granted for the Regional Infrastructure Program--Master
Plan and Emergency Infrastructure; 72 FR 10021 paragraph 5, to the
extent that it covers the Economic Development and Community
Revitalization program; and 72 FR 48811 paragraph 2, to the extent that
it covers the Regional Infrastructure Program. HUD continues to expect
the grantee to maintain low- and moderate-income benefit documentation
for each activity providing such benefit.
8. Waiver of requirement for timely distribution of funds. 24 CFR
570.494 regarding timely distribution of funds is waived.
9. Note on the eligibility of providing funds to Enterprise and
Local Initiatives Support Corporation (LISC) for certain purposes. The
appropriations statute provides that the states of Louisiana and
Mississippi may each use up to $20,000,000 (with up to $400,000 each
for technical assistance) from funds made available under this heading
for LISC and the Enterprise Foundation for activities authorized by
section 4 of the HUD Demonstration Act of 1993 (Pub. L. 103-120, 42
U.S.C. 9816 note), as in effect immediately before June 12, 1997, and
for activities authorized under section 11 of the Housing Opportunity
Program Extension Act of 1996 (Pub. L. 104-120, 42 U.S.C. 12805 note),
[[Page 75738]]
including demolition, site clearance and remediation, and program
administration.
10. Non-Federal Cost Sharing of Army Corps of Engineers Projects.
Public Law 105-276, Title II, Oct. 21, 1998, 112 Stat. 2478, provided
in part that: ``For any fiscal year, of the amounts made available as
emergency funds under the heading `Community Development Block Grants
Fund' and notwithstanding any other provision of law, not more than
$250,000 may be used for the non-Federal cost-share of any project
funded by the Secretary of the Army through the Corps of Engineers.''
Finding of No Significant Impact
A Finding of No Significant Impact 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 Finding of No Significant
Impact 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 Seventh Street, SW.,
Room 10276, Washington, DC 20410-0500. Due to security measures at the
HUD Headquarters building, please schedule an appointment to review the
finding by calling the Regulations Division at (202) 708-3055 (this is
not a toll-free number).
Dated: November 24, 2008.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. E8-29426 Filed 12-11-08; 8:45 am]
BILLING CODE 4210-67-P