Allocations, Common Application, Waivers, and Alternative Requirements for Community Development Block Grant (CDBG) Disaster Recovery Grantees Under the Department of Housing and Urban Development Appropriations Act, 2012, 22583-22599 [2012-9094]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 77, Number 73 (Monday, April 16, 2012)]
[Notices]
[Pages 22583-22599]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9094]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5628-N-01]


Allocations, Common Application, Waivers, and Alternative 
Requirements for Community Development Block Grant (CDBG) Disaster 
Recovery Grantees Under the Department of Housing and Urban Development 
Appropriations Act, 2012

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

ACTION: Notice.

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SUMMARY: This Notice advises the public of the allocation of CDBG 
disaster recovery funds for the purpose of assisting recovery in the 
most impacted and distressed areas declared a major disaster in 2011 
under title IV of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5121 et seq.). As described in the 
SUPPLEMENTARY INFORMATION section of this Notice, HUD is authorized by 
statute and regulations to waive statutory and regulatory requirements 
and specify alternative requirements upon the request of a grantee. 
Therefore, this Notice describes applicable waivers and alternative 
requirements, as well as the application process, eligibility 
requirements, and relevant statutory provisions for grants provided 
under this Notice.

DATES: Effective Date: April 23, 2012.

FOR FURTHER INFORMATION CONTACT: Scott Davis, Director, Disaster 
Recovery and Special Issues Division, Office of Block Grant Assistance, 
Department of Housing and Urban Development, 451 7th Street SW., Room 
7286, Washington, DC 20410, telephone number 202-708-3587. Persons with 
hearing or speech impairments may access this number via TTY by calling 
the Federal Relay Service at 800-877-8339. Facsimile inquiries may be 
sent to Mr. Davis at 202-401-2044. (Except for the ``800'' number, 
these telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Allocations
II. Use of Funds
III. Prevention of Fraud, Abuse, and Duplication of Benefits
IV. Authority To Grant Waivers
V. Overview of Grant Process
VI. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
VII. Duration of Funding
VIII. Catalog of Federal Domestic Assistance
IX. Finding of No Significant Impact
Appendix A: Allocation Methodology

I. Allocations

    Section 239 of the Department of Housing and Urban Development 
Appropriations Act, 2012 (Pub. L. 112-55, approved November 18, 2011) 
(Appropriations Act) makes available up to $400 million, to remain 
available until expended, in CDBG funds for necessary expenses related 
to disaster relief, long-term recovery, restoration of infrastructure 
and housing, and economic revitalization in the most impacted and 
distressed areas resulting from a major disaster declared pursuant to 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 
1974 (42 U.S.C. 5121 et seq.) in 2011. The law provides that grants 
shall be awarded directly to a State or unit of general local 
government at the discretion of the Secretary.
    To comply with statutory direction that funds be used for disaster-
related expenses in the most impacted and distressed areas, HUD 
computes allocations based on data that are generally available and 
that cover all the eligible affected areas. Within states receiving an 
allocation in this Notice, the Department identified the ``most 
impacted and distressed areas'' as those counties that have more than 
$10 million in estimated unmet severe housing and business needs. If a 
CDBG entitlement jurisdiction accounts for $6 million or more of funds 
allocated within a state, it receives a direct award (due to its 
extraordinarily high level of localized unmet need, one non-entitlement 
jurisdiction (the city of Minot, ND) also receives a direct award under 
this Notice). Each local jurisdiction receiving a direct award lies 
within a county that meets the ``most impacted and distressed'' 
criterion.
    To ensure that funds are dedicated to the most impacted and 
distressed areas, 80 percent of the combined total of all the funds 
awarded within a state (this includes funds awarded directly to a State 
as well as those funds awarded directly to local governments) must be 
spent in the ``most impacted and distressed'' counties (i.e,. those 
identified by HUD as having more than

[[Page 22584]]

$10 million in estimated unmet severe housing and business needs). 
Since a local government receiving a direct grant allocation must spend 
the entirety of its grant within its jurisdiction, HUD has identified 
the remaining amount of each grant awarded directly to a State that 
must be expended within its ``most impacted'' counties in order to 
reach the 80 percent threshold (see Table 1). A more detailed 
explanation of HUD's allocation methodology is provided as Appendix A 
within this Notice.
    The principle behind the 80 percent rule is that each State 
received their allocation based on the estimated unmet needs in the 
most impacted counties (i.e., those counties with more than $10 million 
in severe unmet housing and business needs) and thus HUD is requiring 
that each State direct these limited resources toward those most 
impacted counties. Nonetheless, HUD recognizes that there may be 
circumstances where data regarding damage estimates are subsequently 
revised, highly localized damage may occur outside of the most impacted 
counties, or overall recovery would otherwise benefit from expenditures 
outside of those most impacted counties. As a result, HUD is permitting 
States to spend the portion of its award in excess of the 80 percent 
threshold to address recovery needs outside of its ``most impacted'' 
counties. However, these funds must still be spent within counties that 
received a Presidential disaster declaration in 2011.
    Based on a review of the impacts from Presidentially-declared 
disasters occurring in 2011, and estimates of unmet need, HUD is making 
the following allocations:

                                    Table 1--Allocations Under Pub. L. 112-55
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                                                                                           Minimum amount that
                                                                                         must be expended in the
       Disaster No.                  State                 Grantee         Allocation       ``most impacted''
                                                                                           counties identified
----------------------------------------------------------------------------------------------------------------
4020, 4031...............  New York................  State of New York.     $71,654,116  ($53,011,323)
                                                                                          Schoharie, Tioga,
                                                                                          Broome, Greene, and/or
                                                                                          Orange.
4020, 4031...............  New York................  Orange County, NY.      11,422,029  All funds must be spent
                                                                                          within jurisdiction.
4031.....................  New York................  Town of Union, NY.      10,137,818  All funds must be spent
                                                                                          within jurisdiction.
1981.....................  North Dakota............  State of North          11,782,684  ($0) Ward.
                                                      Dakota.
1981.....................  North Dakota............  City of Minot, ND.      67,575,964  All funds must be spent
                                                                                          within jurisdiction.
1971.....................  Alabama.................  State of Alabama..      24,697,966  ($13,584,750)
                                                                                          Tuscaloosa, Marion,
                                                                                          Jefferson and/or
                                                                                          DeKalb.
1971.....................  Alabama.................  City of Tuscaloosa      16,634,702  All funds must be spent
                                                                                          within jurisdiction.
1971.....................  Alabama.................  Jefferson County..       7,847,084  All funds must be spent
                                                                                          within jurisdiction.
1971.....................  Alabama.................  City of Birmingham       6,386,326  All funds must be spent
                                                                                          within jurisdiction.
1980, 4012...............  Missouri................  State of Missouri.       8,719,059  ($0) Jasper.
1980.....................  Missouri................  City of Joplin, MO      45,266,709  All funds must be spent
                                                                                          within jurisdiction.
4025, 4030...............  Pennsylvania............  State of                27,142,501  ($17,283,073) Bradford,
                                                      Pennsylvania.                       Dauphin, Columbia,
                                                                                          Wyoming, and/or
                                                                                          Luzerne.
4025, 4030...............  Pennsylvania............  Luzerne County, PA      15,738,806  All funds must be spent
                                                                                          within jurisdiction.
4030.....................  Pennsylvania............  Dauphin County, PA       6,415,833  All funds must be spent
                                                                                          within jurisdiction.
4029.....................  Texas...................  State of Texas....      31,319,686  ($25,055,749) Bastrop.
1995, 4001, 4022.........  Vermont.................  State of Vermont..      21,660,211  ($17,328,169)
                                                                                          Washington and/or
                                                                                          Windsor.
4021.....................  New Jersey..............  State of New            15,598,506  ($12,478,805) Passaic.
                                                      Jersey.
                                                                        ----------------
    Total................  ........................  ..................    $400,000,000  .......................
----------------------------------------------------------------------------------------------------------------

    As stated by the Appropriations Act, funds provided in today's 
Notice shall not adversely affect the amount of any non-disaster 
formula assistance received by a State or unit of general local 
government under the Community Development Fund. Unless noted 
otherwise, the term ``grantee'' refers to any grantee--whether State, 
city, or county--receiving a direct award under this Notice.

II. Use of Funds

    The Appropriations Act requires funds to be used only for specific 
disaster-related purposes. The law also requires that prior to the 
obligation of funds a grantee shall submit a plan detailing the 
proposed use of all funds, including criteria for eligibility and how 
the use of these funds will address long-term recovery. Thus, in an 
Action Plan for Disaster Recovery, grantees must describe uses and 
activities that are: (1) Authorized under title I of the Housing and 
Community Development Act of 1974 (HCD Act) or allowed by this Notice, 
and (2) a response to a disaster-related impact. To help meet these 
requirements, the Department expects each grantee to conduct an 
assessment of community impacts and unmet needs to guide the 
development and prioritization of planned recovery activities. 
Allocations of funding in each grantee's Action Plan should reflect the 
findings of that grantee's needs assessment. For more guidance on the 
needs assessment and the creation of the Action Plan, see paragraph 1 
under section VI of this Notice: ``Applicable Rules, Statutes, Waivers, 
and Alternative Requirements.''
    Additionally, as provided for in the HCD Act, funds may be used as 
a matching requirement, share, or contribution for any other Federal 
program. Funds may not be used for activities reimbursable by, or for 
which funds are made available by, the Federal Emergency Management 
Agency (FEMA), the U.S. Army Corps of Engineers (USACE), or the Small 
Business Administration (SBA).

III. Prevention of Fraud, Abuse, and Duplication of Benefits

    To prevent fraud, abuse of funds, mismanagement, and duplication of 
benefits under the Appropriations Act, this Notice includes specific 
reporting, written procedures, monitoring, and internal audit 
requirements applicable to each grantee. Departmental guidance to 
assist in preventing a duplication of benefits is provided at 76 FR 
71060 (published November 16, 2011) and in paragraph 26 in this Notice. 
Other reporting, procedural, and monitoring requirements are discussed 
in paragraphs 1 and 14, under section VI of this Notice: ``Applicable 
Rules, Statutes, Waivers, and Alternative Requirements.'' In addition, 
the Department will institute risk analysis and on-site monitoring of 
grantee management as well as collaborate with the HUD Office of 
Inspector General to

[[Page 22585]]

plan and implement oversight of these funds.

IV. Authority To Grant Waivers

    The Appropriations Act authorizes the Secretary to waive, or 
specify alternative requirements for any provision of any statute or 
regulation that the Secretary administers in connection with the 
obligation by the Secretary, or use by the recipient, of these funds 
and guarantees, except for requirements related to fair housing, 
nondiscrimination, labor standards, and the environment (including 
requirements concerning lead-based paint), upon: (1) A request by the 
grantee explaining why such a waiver is required to facilitate the use 
of such funds or guarantees, and (2) a finding by the Secretary that 
such a waiver would not be inconsistent with the overall purpose of the 
HCD Act. Regulatory waiver authority is also provided by 24 CFR 5.110, 
91.600, and 570.5.

V. Overview of Grant Process

    To begin expenditure of CDBG disaster recovery funds, the following 
expedited steps are necessary:
     Grantee adopts citizen participation plan for disaster 
recovery in accordance with the requirements of this Notice;
     Grantee publishes its Action Plan for Disaster Recovery on 
the grantee's official web site for no less than 7 calendar days to 
solicit public comment;
     Grantee responds to public comment and submits its Action 
Plan (which includes Standard Form 424 (SF-424) and certifications) to 
HUD no later than 90 days after the date of this Notice;
     HUD expedites review (allotted 45 days from date of 
receipt; however, completion of review is anticipated much sooner);
     HUD accepts the Action Plan and sends a cover letter, 
grant conditions, and signed grant agreement to the grantee;
     Grantee signs and returns the fully executed grant 
agreement;
     Grantee ensures that the final HUD-accepted Action Plan 
posted on its official Web site;
     HUD establishes the grantee's line of credit;
     Grantee requests and receives Disaster Recovery Grant 
Reporting (DRGR) system access (if the grantee does not already have 
it);
     If it has not already done so, grantee enters the 
activities from its published Action Plan into DRGR and submits it to 
HUD. (Funds can be drawn from the line of credit only for activities 
that are established in DRGR.)
     After the Responsible entity completes applicable 
environmental review(s) pursuant to 24 CFR part 58 and, as applicable, 
receives from HUD or the State an approved Request for Release of Funds 
and certification, the grantee may draw down funds from the line of 
credit.
     The grantee must begin to draw down funds no later than 
180 days after the date of this Notice.

VI. Applicable Rules, Statutes, Waivers, and Alternative Requirements

    The Secretary finds that the waivers and alternative requirements, 
as described in this Notice, are necessary to facilitate the use of 
these funds for the statutory purposes, and are not inconsistent with 
the overall purpose of the HCD Act or the Cranston-Gonzalez National 
Affordable Housing Act, as amended. Under the requirements of the 
Appropriations Act and the Department of Housing and Urban Development 
Reform Act of 1989 (the HUD Reform Act), regulatory waivers must be 
justified and published in the Federal Register.
    This section of the Notice describes applicable waivers and 
alternative requirements granted in response to requests from grantees. 
The following requirements provide additional flexibility in program 
design and implementation and implement statutory requirements unique 
to this appropriation. As a result, they apply only to the CDBG 
disaster recovery funds appropriated in the Appropriations Act, and not 
to funds provided under the annual formula State or Entitlement CDBG 
programs, or those provided under any other component of the CDBG 
program, such as the Neighborhood Stabilization Program.
    Grantees may request additional waivers from the Department as 
needed to address specific needs related to their recovery activities. 
The Department will respond to requests for waivers after working with 
the grantee to tailor its program(s) to best meet its needs. Except 
where noted, waivers and alternative requirements apply to all grantees 
under this Notice.
    Except as described in this Notice, statutory and regulatory 
provisions governing the State CDBG program shall apply to any State 
receiving an allocation under this Notice. Statutory and regulatory 
provisions governing the Entitlement CDBG program shall apply to any 
unit of general local government receiving a direct allocation in this 
Notice. Applicable statutory provisions can be found at 42 U.S.C. 5301 
et seq. Applicable State and entitlement regulations can be found at 24 
CFR part 570.
    1. Action Plan for Disaster Recovery waiver and alternative 
requirement. The traditional requirements for CDBG actions plans, 
located at 42 U.S.C. 12705(a)(2), 42 U.S.C. 5304(a)(1), 42 U.S.C. 
5304(m), 42 U.S.C. 5306(d)(2)(C)(iii), 24 CFR 91.220, and 24 CFR 91.320 
are waived for these disaster recovery grants. Instead, grantee must 
submit to HUD an Action Plan for Disaster Recovery. This streamlined 
plan will allow grantees to more quickly and effectively implement 
disaster recovery programs while conforming with statutory 
requirements. During the course of the grant, HUD will monitor the 
grantee's actions and use of funds for consistency with the plan, as 
well as meeting the performance and timeliness objectives therein.
    A. Action Plan. The Action Plan must identify the proposed use of 
all funds, including criteria for eligibility, and how the uses address 
long-term recovery needs. Due to the need to develop and submit an 
acceptable Action Plan in a timely manner, a grantee's Action Plan may 
program or budget a portion of funds toward a particular use with only 
a broad or general description of that use. However, HUD will not 
consider an Action Plan substantially complete unless at least 50 
percent of grant funds are articulated at the level of detail described 
in paragraphs (B) or (C) of this subsection, as applicable. Funds 
dedicated for uses not described in accordance with paragraphs (B) or 
(C) of this subsection will be restricted on the grantee's line of 
credit until the grantee submits, and HUD accepts, an Action Plan 
amendment programming the use of those funds at the necessary level of 
detail as described in paragraphs (B) or (C) of this subsection. Once 
the Action Plan amendment is accepted, and the Responsible entity 
completes an environmental review and obtains HUD approval of a Request 
for Release of Funds, as applicable, HUD will unblock the restricted 
funds and the grantee may begin to draw them down immediately. The 
grantee must program 100 percent of its grant funds at the necessary 
level of detail within 9 months of the date of this Notice.
    The Action Plan must contain:
    (1) An impact and unmet needs assessment. Development of a needs 
assessment to understand the type and location of community needs will 
enable grantees to target limited resources to areas with the greatest 
need. Grantees receiving an award under today's Notice must conduct a 
needs assessment to inform the allocation of CDBG disaster recovery 
resources. CDBG-DR funds may be used

[[Page 22586]]

to conduct the needs assessment. At a minimum, the needs assessment 
must evaluate three core aspects of recovery--housing (interim and 
permanent, owner and rental, single family and multifamily, affordable 
and market rate), infrastructure, and the economy (e.g., estimated job 
losses or tax revenue loss due to the disaster). The assessment must 
also take into account the various forms of assistance available to, or 
likely to be available to, affected communities (e.g., projected FEMA 
funds) and individuals (e.g., estimated insurance) to ensure CDBG 
disaster recovery funds meet needs that are not likely to be addressed 
by other sources of funds. The assessment must use the best available 
data and cite data sources.
    Impacts should be described geographically by type at the lowest 
level practicable (e.g., county level or lower if available). Grantees 
should use the most recent available data (e.g., from FEMA and SBA) and 
estimate the portion of need likely to be addressed by insurance 
proceeds, other federal assistance, or any other funding source (thus 
producing an estimate of unmet need).
    Disaster recovery needs evolve over time as the full impact of a 
disaster is realized and costs of damages transition from estimated to 
actual. Remaining recovery needs also evolve over time as they are met 
by dedicated resources. As a result, the needs assessment and Action 
Plan may be considered as a living document, which grantees may need to 
periodically update over time.
    (2) A description of how the grantee will promote (a) sound, 
sustainable long-term recovery planning informed by a post-disaster 
evaluation of hazard risk, especially land-use decisions that reflect 
responsible flood plain management, and (b) how it will coordinate with 
other local and regional planning efforts;
    (3) A description of how the grantee will leverage CDBG disaster 
recovery funds with funding provided by other federal, state, local, 
private, and non-profit sources to generate a more effective and 
comprehensive recovery. Examples of other federal sources are those 
provided by HUD, FEMA (specifically the Public Assistance Program, 
Individual Assistance Program, and Hazard Mitigation Grant Program), 
the Small Business Administration, Economic Development Administration, 
U.S. Army Corps of Engineers, and the U.S. Department of Agriculture. 
The grantee should seek to maximize the number of activities and the 
degree to which CDBG funds are leveraged. Leveraged funds shall be 
identified for each activity, as applicable, in the DRGR system;
    (4) A description of how the grantee will encourage construction 
methods that emphasize high quality, durability, energy efficiency, 
sustainability, and mold resistance, including how it will support 
adoption and enforcement of modern building codes and mitigation of 
hazard risk, where appropriate;
    (5) A description of how the grantee will encourage the provision 
of adequate, flood-resistant housing for all income groups, including a 
description of the activities it plans to undertake to address: (a) 
Transitional housing needs of homeless individuals and families 
(including subpopulations), (b) prevention of low-income individuals 
and families with children (especially those with incomes below 30 
percent of the area median) from becoming homeless, and (c) the special 
needs of persons who are not homeless but require supportive housing 
(e.g., elderly, persons with disabilities, persons with alcohol or 
other drug addiction, persons with HIV/AIDS and their families, and 
public housing residents, as identified in 24 CFR 91.315 (e) or 
91.215(e) as applicable); grantees should consider how planning 
decisions may affect racial, ethnic, and low-income concentrations. 
They should also consider ways to promote the availability of 
affordable housing in low-poverty, non-minority areas where appropriate 
and in response to disaster related impacts;
    (6) A description of how the grantee plans to minimize displacement 
of persons or entities, and assist any persons or entities displaced;
    (7) A description of how the grantee will handle program income, 
and the purpose(s) for which it may be used;
    (8) A description of monitoring standards and procedures that are 
sufficient to ensure program requirements, including nonduplication of 
benefits, are met and that provide for continual quality assurance and 
investigation. Grantees must also have an internal audit function with 
responsible audit staff reporting independently to the chief officer or 
board of the governing body of any designated administering entity;
    (9) A description of the steps the grantee will take to prevent 
fraud, abuse, and mismanagement of funds (including potential conflicts 
of interest and duplication of benefits). All such steps taken shall be 
identified quarterly in its performance report to HUD;
    (10) A description of how the grantee will provide for increasing 
the capacity of grant recipients, subrecipients, subgrantees, and any 
other entity responsible for administering activities under this grant;
    (11) A description of the connection between identified unmet needs 
and the allocation of CDBG disaster recovery resources by the grantee; 
and
    (12) A performance schedule. The Action Plan must include a 
performance schedule for carrying out programs and/or activities. The 
schedule should include projected performance (in terms of both 
expenditures and outcome measures) for the following activity types (at 
a minimum): (1) Housing, (2) infrastructure, (3) economic development, 
(4) planning and administration, and (5) other (if applicable). The 
Action Plan should also include a projected expenditure schedule for 
the entirety of the grant amount as a whole. Grantees may revise the 
performance schedule as needed via an Action Plan amendment to reflect 
any changes in programs or activities.
    B. Funds awarded to a State. A State's Action Plan shall describe 
the method of distribution of funds to units of local government and/or 
descriptions of specific programs or activities the State will carry 
out directly. The description must include:
    (1) How the needs assessment informed allocation determinations;
    (2) The threshold factors and grant size limits that are to be 
applied;
    (3) The projected uses for the CDBG disaster recovery funds, by 
responsible entity, activity, and geographic area, when the State 
carries out an activity directly;
    (4) For each proposed program and/or activity carried out directly, 
its respective CDBG activity eligibility category (or categories) as 
well as national objective(s).
    (5) How the method of distribution to local governments or 
programs/activities carried out directly will result in long-term 
recovery from specific impacts of the disaster.
    (6) When funds are allocated to units of local government, all 
criteria used to distribute funds to local governments including the 
relative importance of each criterion; and
    (7) When applications are solicited for programs carried out 
directly, all criteria used to select applications for funding, 
including the relative importance of each criterion.
    C. Funds awarded directly to a unit of general local government. 
The unit of local government shall describe specific programs and/or 
activities it will carry out. The Action Plan must describe:
    (1) How the needs assessment informed allocation determinations;
    (2) The threshold factors and grant size limits that are to be 
applied;

[[Page 22587]]

    (3) The projected uses for the CDBG disaster recovery funds, by 
responsible entity, activity, and geographic area;
    (4) How the projected uses of the funds will meet CDBG eligibility 
criteria and a national objective;
    (5) How the projected uses of funds will result in long-term 
recovery from specific impacts of the disaster; and
    (6) All criteria used to select applications, including the 
relative importance of each criterion.
    D. Clarification of disaster-related activities. All CDBG disaster 
recovery activities must clearly address an impact of the disaster for 
which funding was appropriated. Given the standard CDBG requirements, 
this means each activity must: (1) Be CDBG eligible (or receive a 
waiver), (2) meet a national objective, and (3) address a direct or 
indirect impact from the disaster in a Presidentially-declared county. 
A disaster-related impact can be addressed through any eligible CDBG 
activity.
    (1) Housing. Typical housing activities include new construction 
and rehabilitation of single family or multifamily units. Most often, 
grantees use CDBG disaster recovery funds to rehabilitate damaged homes 
and rental units. However, grantees may also fund new construction or 
rehabilitate units not damaged by the disaster if the activity clearly 
addresses a disaster-related impact. This impact can be demonstrated by 
the disaster's overall effect on the quality, quantity, and 
affordability of the housing stock and the resulting inability of that 
stock to meet post-disaster needs and population demands. The standard 
CDBG rehabilitation and reconstruction rules apply.
    (2) Infrastructure. Typical infrastructure activities include the 
repair, replacement, or relocation of damaged public facilities.
    (3) Economic Revitalization. Economic revitalization is not limited 
to activities that are ``special economic development'' activities 
under the HCD Act, or to activities that create or retain jobs. For 
CDBG disaster recovery purposes, economic revitalization can include 
any activity that demonstrably restores and improves some aspect of the 
local economy; the activity may address job losses, or negative impacts 
to tax revenues or businesses. Examples of eligible activities include 
providing loans and grants to businesses, funding job training, making 
improvements to commercial/retail districts, and financing other 
efforts that attract/retain workers in devastated communities. All 
economic revitalization activities must address an economic impact(s) 
caused by the disaster (e.g., loss of jobs, loss of public revenue). 
Through its needs assessment and Action Plan, the grantee should 
clearly identify the economic loss or need resulting from the disaster, 
and how the proposed activities will address that loss/need.
    (4) Preparedness and Mitigation. The Appropriations Act states that 
funds shall be used for recovering from a Presidentially-declared major 
disaster. As such, all activities must respond to the impacts of the 
declared disaster. HUD strongly encourages grantees to incorporate 
preparedness and mitigation measures into rebuilding activities, which 
helps to ensure that communities recover to be safer and stronger than 
prior to the disaster. Incorporation of these measures also reduces 
costs in recovering from future disasters. However, given the limited 
funding available and the language in the Appropriations Act, CDBG 
disaster recovery funds may not be used for activities that are solely 
designed to prepare for and/or mitigate the effects of a future 
disaster without any tie to rebuilding from the previous disaster.
    (5) Tie to the Disaster. Grantees must document in each project 
file how that activity is tied to the disaster for which it is 
receiving CDBG assistance.
    In regard to physical losses, damage or rebuilding estimates are 
often the most effective tool for demonstrating the connection to the 
disaster. For economic or other non-physical losses, post-disaster 
analyses or assessments may best document the relationship between the 
loss and the disaster.
    Note that grantees are not limited in their recovery to returning 
to pre-disaster conditions. Rather, grantees are encouraged to 
undertake activities in such a way that not only addresses the 
disaster-related impacts, but leaves communities better positioned to 
meet the needs of their post-disaster populations and prospects for 
growth.
    E. Use of funds for other disasters not covered by the 
Appropriations Act. CDBG disaster recovery funds awarded under this 
Notice may not be used to address an impact or need originating from a 
disaster not occurring in 2011. However, if a need that arose from a 
previous disaster was exacerbated by a 2011 disaster, funds under this 
Notice may be used. In addition, if an impact or need originating from 
a 2011 disaster is subsequently exacerbated by a future disaster, funds 
under this Notice may also be used.
    F. Use of the urgent need national objective. The traditional 
certification requirements for the documentation of urgent need, 
located at 24 CFR 570.208(c) and 24 CFR 570.483(d), are waived for the 
grants under this Notice. In the context of disaster recovery, these 
standard requirements may prove burdensome and redundant. Since the 
Department only provides CDBG disaster recovery awards to grantees with 
documented disaster-related impacts (as supported by data provided by 
FEMA, SBA, and other sources), and each grantee is limited to spending 
funds only in counties with a Presidential disaster declaration of 
recent origin respective to each appropriation, the following 
streamlined alternative requirement recognizes the inherent urgency in 
addressing the serious threat to community welfare following a major 
disaster.
    Grantees need not issue formal certification statements in order to 
qualify an activity as meeting the urgent need national objective. 
Instead, each grantee receiving a direct award under this Notice must 
document how all programs and/or activities funded under the urgent 
need national objective respond to a disaster-related impact identified 
by the grantee. This waiver and alternative requirement allows grantees 
to more effectively and quickly implement disaster recovery programs. 
Grantees may reference in their Action Plan the type, scale, and 
location of the disaster-related impacts that each program and/or 
activity is addressing.
    Grantees should identify these disaster-related impacts in their 
Action Plan needs assessment. The needs assessment should be updated as 
new or more detailed/accurate disaster-related impacts are known. 
Understanding that major disasters present unique challenges and that 
recovery can take years, it is not necessary for an activity to begin 
within 18 months of the disaster in order to use the urgent need 
national objective.
    Grantees should still be mindful to use the ``low- and moderate 
income person benefit'' national objective for all activities that 
qualify under such criteria. At least 50 percent of the entire CDBG 
disaster recovery grant award must be used for activities that benefit 
low- and moderate-income persons.
    G. Clarity of Action Plan. All grantees must include sufficient 
information so that citizens, units of general local government (where 
applicable), and other eligible subgrantees, subrecipients, or 
applicants will be able to understand and comment on the Action Plan 
and, if applicable, be able to prepare responsive applications to the 
grantee. The Action Plan must include a single chart or table that 
illustrates, at the most practical level, how all funds are budgeted 
(e.g., by program, subgrantee, grantee-

[[Page 22588]]

administered activity, or other category). An amount generally not to 
exceed ten percent of the total grant amount may be budgeted as a 
separate activity for the contingency of cost overruns and 
unanticipated unmet needs. Once a grantee expends 80 percent of its 
grant amount, it should program any remaining funds budgeted for 
contingency into an eligible activity in order to fully expend all 
funds by addressing unmet needs and close out the grant.
    In the case of Action Plan amendments, each amendment should 
constitute the entirety of the Action Plan, as amended. The beginning 
of every Action Plan amendment must include a section that identifies 
exactly what content is being added, deleted, or changed. This section 
must also include a chart or table that clearly illustrates where funds 
are coming from and where they are moving to. The Action Plan must 
include a revised budget allocation table that reflects the entirety of 
all funds, as amended. A grantee's most recent version of its entire 
Action Plan should be able to be accessed and viewed as a single 
document at any given point in time, rather than the public having to 
view and cross-reference changes among multiple amendments.
    H. Review of Action Plan; obligation and expenditure of funds. The 
Action Plan must be submitted to HUD (including Standard Form 424 (SF-
424) and certifications) within 90 days of the date of this Notice. HUD 
will expedite its review of each Action Plan--taking no more than 45 
days from the date of receipt. Once HUD accepts the Action Plan, it 
will then issue a grant agreement obligating all funds to the grantee. 
In addition, HUD will establish the line of credit and the grantee will 
receive DRGR access (if it does not have access already). The grantee 
must also enter its Action Plan activities into the DRGR system in 
order to draw funds against them. It may enter these activities into 
DRGR before or after submission of the Action Plan to HUD.
    All funds programmed or budgeted at a generalized level will be 
restricted from access on the grantee's line of credit. Once the 
generalized uses are described in an amended Action Plan at the 
necessary level of detail, they will be released by HUD and made 
available for use. After the Responsible Entity completes environmental 
review(s) pursuant to 24 CFR part 58 (as applicable) and receives from 
HUD or the State an approved Request for Release of Funds and 
certification (as applicable), the grantee may draw down funds from the 
line of credit for an activity. The disbursement of grant funds must 
begin no later than 180 days after the date of this Notice.
    I. Amending the Action Plan. Even after all funds have been 
programmed or budgeted in a grantee's Action Plan at the necessary 
level of detail, the grantee may continue to subsequently amend its 
plan as needed. As needs often change throughout the long-term recovery 
process, grantees may find it necessary to amend its Action Plan to 
update its needs assessment, modify activities, create new ones, or to 
re-program funds.
    2. Citizen participation waiver and alternative requirement. To 
permit a more streamlined process, and ensure disaster recovery grants 
are awarded in a timely manner, provisions of 42 U.S.C. 5304(a)(2) and 
(3), 42 U.S.C. 12707, 24 CFR 570.486, 24 CFR 91.105(b) and (c), and 24 
CFR 91.115(b) and (c), with respect to citizen participation 
requirements, are waived and replaced by the requirements below. The 
streamlined requirements do not mandate public hearings at a state, 
entitlement, or local government level, but do require providing a 
reasonable opportunity (at least 7 days) for citizen comment and 
ongoing citizen access to information about the use of grant funds. The 
streamlined citizen participation requirements for a grant administered 
under this Notice are:
    A. Before the grantee adopts the Action Plan for this grant or any 
substantial amendment to this grant, the grantee will publish the 
proposed plan or amendment (including the information required in this 
Notice for an Action Plan for Disaster Recovery). The manner of 
publication must include prominent posting on the grantee's official 
Web site and must afford citizens, affected local governments, and 
other interested parties a reasonable opportunity to examine the plan 
or amendment's contents. The topic of disaster recovery should be 
navigable by citizens from the grantee (or administering agency) 
homepage. Grantees are also encouraged to notify affected citizens 
through electronic mailings, press releases, statements by public 
officials, media advertisements, public service announcements, and/or 
contacts with neighborhood organizations.
    Despite the expedited process, grantees are still responsible for 
ensuring that all citizens have equal access to information about the 
programs, including persons with disabilities and limited English 
proficiency. Each grantee must ensure that program information is 
available in the appropriate languages for the geographic area served 
by the jurisdiction. This issue may be particularly applicable to 
States receiving an award under this Notice. Unlike grantees in the 
regular State CDBG program, State grantees under today's Notice may 
make grants throughout the state, including to entitlement communities. 
For assistance in ensuring that this information is available to LEP 
populations, recipients should consult the Final Guidance to Federal 
Financial Assistance Recipients Regarding Title VI, Prohibition Against 
National Origin Discrimination Affecting Limited English Proficient 
Persons published on January 22, 2007, in the Federal Register (72 FR 
2732).
    Subsequent to publication of the Action Plan, the grantee must 
provide a reasonable time frame and method(s) (including electronic 
submission) for receiving comments on the plan or substantial 
amendment. In its Action Plan, each grantee must specify criteria for 
determining what changes in the grantee's plan constitute a substantial 
amendment to the plan. At a minimum, the following modifications will 
constitute a substantial amendment: A change in program benefit or 
eligibility criteria; the allocation or re-allocation of more than $1 
million; or the addition or deletion of an activity. The grantee may 
substantially amend the Action Plan if it follows the same procedures 
required in this Notice for the preparation and submission of an Action 
Plan for Disaster Recovery. Prior to submission of a substantial 
amendment, the grantee is encouraged to work with its HUD 
representative to ensure the proposed change is consistent with this 
Notice, and all applicable regulations and Federal law.
    B. The grantee must notify HUD, but is not required to undertake 
public comment, when it makes any plan amendment that is not 
substantial. However, every amendment to the Action Plan (substantial 
and non-substantial) must be numbered sequentially and posted on the 
grantee's Web site. The Department will acknowledge receipt of the 
notification of non-substantial amendments via email within 5 business 
days.
    C. The grantee must consider all comments, received orally or in 
writing, on the Action Plan or any substantial amendment. A summary of 
these comments or views, and the grantee's response to each must be 
submitted to HUD with the Action Plan or substantial amendment.
    D. The grantee must make the Action Plan, any substantial 
amendments, and all performance reports available to the public on its 
Web site and on request. In addition, the grantee must make these

[[Page 22589]]

documents available in a form accessible to persons with disabilities 
and non-English-speaking persons. During the term of the grant, the 
grantee will provide citizens, affected local governments, and other 
interested parties with reasonable and timely access to information and 
records relating to the Action Plan and to the grantee's use of grant 
funds.
    E. The grantee will provide a timely written response to every 
citizen complaint. The response will be provided within 15 working days 
of the receipt of the complaint, if practicable.
    3. Direct grant administration and means of carrying out eligible 
activities--applicable to State grantees only. Requirements at 42 
U.S.C. 5306 are waived to the extent necessary to allow a State to use 
its disaster recovery grant allocation directly to carry out State-
administered activities eligible under this Notice, rather than 
distribute all funds to units of local government. In using statutory 
language similar to that used for prior CDBG supplemental 
appropriations, the Department believes Congress is signaling its 
intent that the States under this appropriation also be able to carry 
out activities directly. Pursuant to this waiver, the standard at 
section 570.480(c) will also include activities that the State carries 
out directly. Note that any city or county receiving a direct award 
under this Notice will be subject to the standard CDBG entitlement 
program regulations. Thus, the waiver and alternative requirement 
described here is inapplicable to local jurisdictions.
    Activities eligible under this Notice may be undertaken, subject to 
State law, by the grantee through its employees, through procurement 
contracts, or through loans or grants under agreements with 
subrecipients. Activities made eligible under section 105(a)(15) of the 
HCD Act, as amended, may only be undertaken by entities specified in 
that section, whether the assistance is provided to such an entity from 
the State or from a unit of general local government.
    4. Consolidated Plan waiver. HUD is waiving the requirement for 
consistency with the consolidated plan (requirements at 42 U.S.C. 
12706, 24 CFR 91.325(a)(5), 24 CFR 91.225(a)(5), 24 CFR 91.325(b)(2), 
and 24 CFR 91.225(b)(3)), because the effects of a major disaster alter 
a grantee's priorities for meeting housing, employment, and 
infrastructure needs. In conjunction, 42 U.S.C. 5304(e), to the extent 
that it would require HUD to annually review grantee performance under 
the consistency criteria, is also waived. However, this waiver applies 
only until the grantee first updates its full consolidated plan more 
than 30 months following the disaster. While grantees are encouraged to 
incorporate disaster-recovery needs into their consolidated plan 
updates as soon as practicable, any unmet disaster-related needs and 
associated priorities should be incorporated into the grantee's next 
consolidated plan update following the expiration of the 30-month 
waiver period. If not completed already, the grantee should update its 
Analysis of Impediments in coordination with its post-waiver 
consolidated plan update, so that it more accurately reflects housing 
conditions following the disaster.
    This waiver also allows the disaster recovery action plan for non-
entitlement communities to also serve as an abbreviated Consolidated 
Plan under the authority at 42 U.S.C. 12705(b) because the Secretary 
has determined that this is appropriate given the types and amounts of 
assistance the non-entitlement will receive for disaster purposes. For 
non-entitlement communities, HUD is also waiving 24 CFR part 91, 
subpart C to the extent that these provisions require elements that are 
not specifically required by this Notice.
    The waiver is granted consistent with the non-entitlement's 
existing submission of needs data for addressing housing and community 
development needs in the State's Consolidated Plan. Note that the 30 
month requirement does not apply to any non-entitlement community 
receiving funds under this Notice, however, it must update and amend 
its Action Plan within 18 months of the date of this Notice to include 
actions it plans to take to remove or ameliorate the negative effects 
of public policies that serve as barriers to affordable housing. Such 
policies, procedures and processes include, but are not limited to, 
land use controls, tax policies affecting land, zoning ordinances, 
building codes, fees and charges, growth limitations, and policies 
affecting the return on residential investment. Consistent with 
91.220(j), proposed plans or actions should be reviewed periodically to 
ensure they best respond to the barriers to affordable housing, as they 
exist at that time.
    5. Requirement for consultation during plan preparation. Currently, 
the statute and regulations require States to consult with affected 
units of local government in non-entitlement areas of the State in 
determining the State's proposed method of distribution. HUD is waiving 
42 U.S.C. 5306(d)(2)(C)(iv), 42 U.S.C. 5306(d)(2)(D), 24 CFR 91.325(b), 
and 24 CFR 91.110, with the alternative requirement that any State 
receiving an allocation under this Notice consult with all disaster-
affected units of general local government, including any CDBG-
entitlement communities, in determining the use of funds. This ensures 
State grantees sufficiently assess the recovery needs of all areas 
affected by the disaster. For local governments receiving a direct 
award under this Notice, HUD is waiving 24 CFR 91.100 with the 
alternative requirement that the jurisdiction should consult with 
adjacent units of general local government, including local government 
agencies with metropolitan-wide planning responsibilities, particularly 
for problems and solutions that go beyond a single jurisdiction.
    6. Overall benefit waiver and alternative requirement. The primary 
objective of the HCD Act is the ``development of viable urban 
communities, by providing decent housing and a suitable living 
environment and expanding economic opportunities, principally for 
persons of low and moderate income.'' 42 U.S.C. 5301(c). To carry out 
this objective, the statute requires that 70 percent of the aggregate 
of a regular CDBG program's funds be used to support activities 
benefitting low- and moderate-income persons. This target could be 
difficult to reach, and perhaps even impossible, for many communities 
affected by the 2011 disasters. Grantees under this Notice experienced 
disaster impacts that affected entire communities--regardless of 
income, and the existing requirement may prevent grantees from 
providing assistance to damaged areas of need.
    Therefore, this Notice waives the requirements at 42 U.S.C. 
5301(c), 42 U.S.C. 5304(b)(3)(A), 24 CFR 570.484, and 24 CFR 
570.200(a)(3), that 70 percent of funds be used for activities that 
benefit low- and moderate-income persons. Instead, 50 percent of funds 
must benefit low- and moderate-income persons. This provides grantees 
with greater flexibility to carry out recovery activities by allowing 
up to 50 percent of the grant to assist activities under the urgent 
need or prevention or elimination of slums or blight national 
objectives.
    7. Use of the ``upper quartile'' or ``exception criteria'' for low- 
and moderate-income area benefit activities--not applicable to all 
grantees. Section 105(c)(2)(A) of the HCD Act provides that ``In any 
case in which an assisted activity described in subsection (a) is 
designed to serve an area generally and is clearly designed to meet 
identified needs of persons of low and moderate income in such area, 
such

[[Page 22590]]

activity shall be considered to principally benefit persons of low and 
moderate income if * * * (ii) in any metropolitan city or urban county, 
the area served by such jurisdiction is within the highest quartile of 
all areas within the jurisdiction of such city or county in terms of 
the degree of concentration of persons of low and moderate income * * 
*'' HUD permits an exception to the low- and moderate-income area 
benefit requirement that an area contain at least 51 percent low- and 
moderate-income residents. This exception applies to entitlement 
communities that have few, if any, areas within their jurisdiction that 
have 51 percent or more low- and moderate-income residents. These 
communities are allowed to use a percentage less than 51 percent to 
qualify activities under the low- and moderate-income area benefit 
category. This exception is referred to as the ``exception criteria'' 
or the ``upper quartile''. A grantee qualifies for this exception when 
less than one quarter of the populated block groups in its 
jurisdictions contain 51 percent or more low- and moderate-income 
persons. In such communities, activities must serve an area which 
contains a percentage of low- and moderate-income residents that is 
within the upper quartile of all Census block groups within its 
jurisdiction in terms of the degree of concentration of low- and 
moderate-income residents. HUD assesses each grantee's census block 
groups to determine whether a grantee qualifies to use this exception 
and identifies the alternative percentage the grantee may use instead 
of 51 percent for the purpose of qualifying activities under the low- 
and moderate-income area benefit. HUD determines the lowest proportion 
a grantee may use to qualify an area for this purpose and advises the 
grantee accordingly.
    The Department has considered and granted the requests of Orange 
County, New York to apply the exception criteria to these disaster 
recovery grants. The Department also grants the request of the State of 
New Jersey to allow the following entitlement communities that have 
disaster declarations and total damage that exceeds $3,000,000 to apply 
the exception criteria for these disaster recovery grants: Passaic 
County, Bergen County, Morris County, Somerset County, Essex County, 
Middlesex County, and Monmouth County. HUD also waives section 
105(c)(2)(ii) of the HCD Act and the regulations at 570.208(a)(1)(ii) 
to the extent that they limit the exception criteria to any 
metropolitan city or urban county to allow the city of Minot, a non-
entitlement community, to utilize the exception criteria for the 
purpose of classifying activities under the low- and moderate-income 
area benefit national objective. HUD will provide data to the city of 
Minot on how this exception shall be applied.
    It must be noted that HUD annually updates the low- and moderate-
income summary data used to identify the exception criteria; disaster 
recovery grantees are required to use the most recent data available in 
implementing the exception criteria.
    8. Note on change to administration limitation. For all grantees 
under today's Notice, the annual CDBG program administration 
requirements must be modified to be consistent with the Appropriations 
Act, which allows up to 5 percent of the grant to be used for 
administrative costs, whether by the grantee, by entities designated by 
the grantee, by units of general local government, or by subrecipients. 
Thus, the total of all costs classified as administrative must be less 
than or equal to the 5 percent cap.
    A. For State grantees under this Notice, the provisions of 42 
U.S.C. 5306(d) and 24 CFR 570.489(a)(1)(i) and (iii) will not apply to 
the extent that they cap administration and technical assistance 
expenditures, limit a State's ability to charge a nominal application 
fee for grant applications for activities the State carries out 
directly, and require a dollar-for-dollar match of State funds for 
administrative costs exceeding $100,000. 42 U.S.C. 5306(d)(5) and (6) 
are waived and replaced with the alternative requirement that the 
aggregate total for administrative and technical assistance 
expenditures must not exceed 5 percent. States remain limited to 
spending a maximum of 20 percent of their total grant amount on a 
combination of planning and program administration costs. Planning 
costs subject to the 20 percent cap are those defined in 42 U.S.C. 
5305(a)(12).
    B. Any city or county receiving a direct award under this Notice is 
also subject to the 5 percent administrative cap. This 5 percent 
applies to all administrative costs--whether incurred by the grantee or 
its subrecipients. However, cities or counties receiving a direct 
allocation under this Notice also remain limited to spending 20 percent 
of their total allocation on a combination of planning and program 
administration costs.
    9. Planning-only activities--applicable to State grantees only. The 
annual State CDBG program requires that local government grant 
recipients for planning-only grants must document that the use of funds 
meets a national objective. In the State CDBG program, these planning 
grants are typically used for individual project plans. By contrast, 
planning activities carried out by entitlement communities are more 
likely to include non-project specific plans such as functional land-
use plans, master plans, historic preservation plans, comprehensive 
plans, community recovery plans, development of housing codes, zoning 
ordinances, and neighborhood plans. These plans may guide long-term 
community development efforts comprising multiple activities funded by 
multiple sources. In the entitlement program, these more general 
planning activities are presumed to meet a national objective under the 
requirements at 24 CFR 570.208(d)(4).
    The Department notes that almost all effective CDBG disaster 
recoveries in the past have relied on some form of area-wide or 
comprehensive planning activity to guide overall redevelopment 
independent of the ultimate source of implementation funds. Therefore, 
for State grantees receiving an award under this Notice, the Department 
is removing the eligibility requirements at 24 CFR 570.483(b)(5) or 
(c)(3). Instead, States must comply with 24 CFR 570.208(d)(4) when 
funding disaster recovery-assisted planning-only grants, or directly 
administering planning activities that guide recovery in accordance 
with the Appropriations Act. In addition, the types of planning 
activities that States may fund or undertake are expanded to be 
consistent with those of entitlement communities identified at 24 CFR 
570.205.
    10. Waiver and alternative requirement for distribution to CDBG 
metropolitan cities and urban counties--applicable to State grantees 
only. Section 5302(a)(7) of title 42, U.S.C. (definition of 
``nonentitlement area'') and provisions of 24 CFR part 570 that would 
prohibit a State from distributing CDBG funds to entitlement 
communities and Indian tribes under the CDBG program, are waived, 
including 24 CFR 570.480(a). Instead, the State may distribute funds to 
units of local government and Indian tribes.
    11. Use of subrecipients--applicable to State grantees only. The 
State CDBG program rule does not make specific provision for the 
treatment of entities that the CDBG Entitlement program calls 
``subrecipients.'' The waiver allowing the State to directly carry out 
activities creates a situation in which the State may use subrecipients 
to carry out activities in a manner similar to an entitlement 
community. Therefore, for States taking advantage of the waiver to 
carry out activities directly, the

[[Page 22591]]

requirements at 24 CFR 570.502, 570.503, and 570.500(c) apply, except 
that specific references to 24 CFR parts 84 and 85 must be included in 
subrecipient agreements. OMB Circular A-87 shall apply to States and 
any subrecipients of a State, whether carrying out activities directly 
or through the use of a subrecipient.
    12. Recordkeeping--applicable to State grantees only. When a State 
carries out activities directly, 24 CFR 570.490(b) is waived and the 
following alternative provision shall apply: The State shall establish 
and maintain such records as may be necessary to facilitate review and 
audit by HUD of the State's administration of CDBG disaster recovery 
funds under 24 CFR 570.493. Consistent with applicable statutes, 
regulations, waivers and alternative requirements, and other federal 
requirements, the content of records maintained by the State shall be 
sufficient to: Enable HUD to make the applicable determinations 
described at 24 CFR 570.493; make compliance determinations for 
activities carried out directly by the State; and show how activities 
funded are consistent with the descriptions of activities proposed for 
funding in the Action Plan and/or DRGR system. For fair housing and 
equal opportunity purposes, and as applicable, such records shall 
include data on the racial, ethnic, and gender characteristics of 
persons who are applicants for, participants in, or beneficiaries of 
the program.
    13. Change of use of real property--applicable to State grantees 
only. This waiver conforms to the change of use of real property rule 
to the waiver allowing a State to carry out activities directly. For 
purposes of this program, all references to ``unit of general local 
government'' in 24 CFR 570.489(j), shall be read as ``unit of general 
local government or State.''
    14. Responsibility for review and handling of noncompliance --
applicable to State grantees only. This change is in conformance with 
the waiver allowing the State to carry out activities directly. 24 CFR 
570.492 is waived and the following alternative requirement applies for 
any State receiving a direct award under this Notice: the State shall 
make reviews and audits, including onsite reviews of any subrecipients, 
designated public agencies, and units of general local government, as 
may be necessary or appropriate to meet the requirements of section 
104(e)(2) of the HCD Act, as amended, as modified by this Notice. In 
the case of noncompliance with these requirements, the State shall take 
such actions as may be appropriate to prevent a continuance of the 
deficiency, mitigate any adverse effects or consequences, and prevent a 
recurrence. The State shall establish remedies for noncompliance by any 
designated subrecipients, public agencies, or units of general local 
government.
    15. Housing-related eligibility waivers. The broadening of Section 
105(a)(24) of the HCD Act is necessary following major disasters in 
which large numbers of affordable housing units have been damaged or 
destroyed, as is the case of the disasters eligible under this Notice. 
Thus, in accordance with the grantees' requests, 42 U.S.C. 5305(a) is 
waived to the extent necessary to allow: (1) Homeownership assistance 
for households with up to 120 percent of the area median income, (2) 
down payment assistance for up to 100 percent of the down payment (42 
U.S.C. 5305(a)(24)(D)), and (3) new housing construction. While 
homeownership assistance may be provided to households with up to 120 
percent of the area median income, only those funds used to serve 
households with up to 80 percent of the area median income may qualify 
as meeting the low- and moderate-income person benefit national 
objective.
    16. Housing incentives to resettle in disaster-affected 
communities--not applicable to all grantees. Incentive payments are 
generally offered in addition to other programs or funding (such as 
insurance), to encourage households to relocate in a suitable housing 
development or an area promoted by the community's comprehensive 
recovery plan. For example, a grantee may offer an incentive payment 
(possibly in addition to a buyout payment) for households that 
volunteer to relocate outside of floodplain or to a lower-risk area.
    Therefore, 42 U.S.C. 5305(a) and associated regulations are waived 
to the extent necessary to allow the provision of housing incentives. 
These grantees must maintain documentation, at least at a programmatic 
level, describing how the amount of assistance was determined to be 
necessary and reasonable, and the incentives must be in accordance with 
the grantee's approved Action Plan and published program design(s). 
This waiver does not permit a compensation program. Additionally, if 
the grantee requires the incentives to be used for a particular purpose 
by the household receiving the assistance, then the eligible use for 
that activity will be that required use, not an incentive. This waiver 
does not apply to the following grantees: The city of Birmingham, 
Jefferson County, and the State of Texas.
    17. Limitation on emergency grant payments--not applicable to all 
grantees. 42 U.S.C. 5305(a)(8) is waived to extend interim mortgage 
assistance to qualified individuals from three months to up to 20 
months. The time required for a household to complete the rebuilding 
process may often extend beyond three months, during which mortgage 
payments may be due but the home is inhabitable. Thus, this interim 
assistance will be critical for many households facing financial 
hardship during this period. This waiver and alternative requirement do 
not apply to the following grantees: Jefferson County, city of 
Tuscaloosa, State of Missouri, and the State of Texas.
    18. Buildings for the general conduct of government--not applicable 
to all grantees. 42 U.S.C. 5305(a) is waived to the extent necessary to 
allow grantees to fund the rehabilitation or reconstruction of public 
buildings that are otherwise ineligible. HUD believes this waiver is 
consistent with the overall purposes of the HCD Act, and is necessary 
for many grantees to adequately address critical infrastructure needs 
created by the disaster. This waiver does not apply to the following 
grantees: City of Birmingham, Jefferson County, and the State of 
Missouri.
    Regardless of this waiver, CDBG disaster recovery funds allocated 
under this Notice may not be used for activities reimbursable by, or 
for which funds are made available by, FEMA or the Army Corps of 
Engineers.
    19. Waiver and modification of the job relocation clause to permit 
assistance to help a business return. Traditional CDBG requirements 
prevent program participants from providing assistance to a business to 
relocate from one labor market area to another--if the relocation is 
likely to result in a significant loss of jobs in the labor market from 
which the business moved. This prohibition can be a critical barrier to 
reestablishing and rebuilding a displaced employment base after a major 
disaster. Therefore, 42 U.S.C. 5305(h), 24 CFR 570.210, and 24 CFR 
570.482 are waived to allow a grantee to provide assistance to any 
business that was operating in the disaster-declared labor market area 
before the incident date of the applicable disaster and has since 
moved, in whole or in part, from the affected area to another State or 
to a labor market area within the same State to continue business.
    20. One-for-one replacement housing, relocation, and real property 
acquisition requirements. CDBG-assisted activities, programs and 
projects are subject to the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of

[[Page 22592]]

1970, as amended, (42 U.S.C. 4601 et seq.) (``URA'') and section 104(d) 
of the HCD Act (42 U.S.C. 5304(d)) (``Section 104(d)''). The 
implementing regulations for the URA are at 49 CFR part 24. The 
regulations for Section 104(d) are at 24 CFR part 42, subpart C.
    For the purpose of promoting the availability of decent, safe, and 
sanitary housing, HUD is waiving the following URA and Section 104(d) 
requirements for grantees under this Notice:
    A. One-for-one replacement requirements at 42 U.S.C. 
5304(d)(2)(A)(i)-(ii) and (d)(3) and 24 CFR 42.375 are waived for 
lower-income dwelling units that are damaged by the disaster and not 
suitable for rehabilitation. HUD is waiving this requirement because 
the requirement does not account for the large, sudden changes that a 
major disaster may cause to the local housing stock, population, or 
economy. Furthermore, the requirement may discourage grantees from 
converting or demolishing disaster-damaged housing when excessive costs 
would result from replacing all such units. Disaster-damaged housing 
structures, unsuitable for rehabilitation, can pose a threat to public 
health and safety and to economic revitalization. Grantees should re-
assess post-disaster population and housing needs to determine the 
appropriate type and amount of lower-income dwelling units to 
rehabilitate and/or rebuild. Grantees should note, however, that the 
demolition and/or disposition of Public Housing Authority-owned public 
housing units is covered by Section 18 of the United States Housing Act 
of 1937, as amended, and 24 CFR part 970.
    B. The Section 104(d) relocation assistance requirements at 42 
U.S.C. 5304(d)(2)(A) and 24 CFR 42.350 are waived to the extent that 
they differ from the requirements of the URA and implementing 
regulations at 49 CFR part 24 for activities related to disaster 
recovery.
    This waiver is necessary to eliminate disparities in rental 
assistance payments associated with activities typically funded by HUD 
and FEMA (e.g., buyouts and relocation). FEMA funds are subject to the 
requirements of the URA and, consequently, FEMA requires rental 
assistance payments for displaced persons to be calculated on the basis 
of an amount necessary to enable the displaced person to rent 
comparable replacement housing for a period of 42 months. CDBG funds 
are also subject to the URA requirements; however, unlike FEMA funds, 
they are also subject to the provisions of Section 104(d). Section 
104(d) requires that the calculation of rental assistance payments for 
displaced persons be made on the basis of 60 months. When a project is 
subject to both the URA and Section 104(d), the displaced person may 
choose to receive assistance under either authority. This waiver of the 
Section 104(d) requirements assures uniform and equitable treatment in 
getting the URA and its implementing regulations as the sole standard 
for relocation assistance under this Notice.
    C. The requirements at 49 CFR 24.101(b)(2)(i)-(ii) are waived to 
the extent that they apply to an arm's length voluntary purchase 
carried out by a person who does not have the power of eminent domain, 
in connection with the purchase and occupancy of a principal residence 
by that person. Given the often large-scale acquisition needs of 
grantees, this waiver is necessary to reduce burdensome administrative 
requirements following a disaster.
    D. The requirements at sections 204(a) and 206 of the URA, 49 CFR 
24.2(a)(6)(viii), 24.402(b)(2), and 24.404 are waived to the extent 
that they require the grantee to provide relocation assistance 
sufficient to reduce a low-income person's rent/utility costs to 30 
percent of household income post-displacement when the person had been 
paying rent in excess of 30 percent of household income without 
``demonstrable hardship'' before the project. Thus, to the extent that 
a tenant has been paying rent in excess of 30 percent of household 
income without demonstrable hardship, a reduction in rental assistance 
payments to 30 percent of household income would not be required. 
Before using this waiver, the grantee must establish a definition of 
``demonstrable hardship.''
    E. The requirements of sections 204 and 205 of the URA, and 49 CFR 
24.2(a)(6)(ix) and 24.402(b) are waived to the extent necessary to 
permit a grantee to meet all or a portion of a grantee's replacement 
housing financial assistance obligation to a displaced tenant by 
offering rental housing through a tenant-based rental assistance (TBRA) 
housing program subsidy (e.g., Section 8 rental voucher or 
certificate), provided that the tenant is provided referrals to 
comparable replacement dwellings in accordance with 49 CFR 24.204(a) 
where the owner is willing to participate in the TBRA program, and the 
period of authorized assistance is at least 42 months. Failure to grant 
this waiver would impede disaster recovery whenever TBRA program 
subsidies are available but funds for cash relocation assistance are 
limited. This waiver gives grantees an additional relocation resource 
option.
    F. The requirements at section 202(b) of the URA and 49 CFR 24.302, 
which require that a grantee offer a displaced person the option to 
receive a ``moving expense and dislocation allowance'' based on a 
schedule of allowances prepared by the Federal Highway Administration 
as an alternative to receiving payment for actual moving and related 
expenses, are waived. As an alternative, the grantee must establish and 
offer the person a ``moving expense and dislocation allowance'' under a 
schedule of allowances that is reasonable for the jurisdiction and that 
takes into account the number of rooms in the displacement dwelling, 
whether the person owns and must move the furniture, and, at a minimum, 
the kinds of expenses described in 49 CFR 24.301. Without this waiver 
and alternative requirement, disaster recovery may be impeded by 
requiring grantees to offer allowances that do not reflect current 
local labor and transportation costs. Persons displaced from a dwelling 
remain entitled to choose a payment for actual reasonable moving and 
related expenses if they find that approach preferable to the locally 
established ``moving expense and dislocation allowance.''
    G. The regulation at 24 CFR 570.606(d) is waived to the extent that 
it requires optional relocation policies to be established at the 
grantee or state recipient level. Unlike the regular CDBG program, 
States may carry out disaster recovery activities directly or through 
subrecipients. The regulation at 24 CFR 570.606(d) governing optional 
relocation policies does not account for this distinction. This waiver 
makes clear that local governments, including subrecipients, receiving 
CDBG disaster funds may establish separate optional relocation 
policies. This waiver is intended to provide States and local 
governments with maximum flexibility in developing optional relocation 
policies with CDBG disaster recovery funds.
    21. Program income alternative requirement. The Department is 
waiving applicable program income rules at 570.500(a) and (b), 570.504, 
42 USC 5304(j), and 570.489(e) to the extent necessary to provide 
additional flexibility as described under today's Notice. The 
alternative requirements provide guidance regarding the use of program 
income received before and after grant closeout and address revolving 
loan funds.
    A. Definition of program income.
    (1) For the purposes of this subpart, ``program income'' is defined 
as gross income generated from the use of CDBG funds, except as 
provided in

[[Page 22593]]

subparagraph D of this paragraph, and received by: (1) A State, unit of 
local government, or tribe, or (2) a subrecipient of a State, unit of 
general local government, or tribe. When income is generated by an 
activity that is only partially assisted with CDBG funds, the income 
shall be prorated to reflect the percentage of CDBG funds used (e.g., a 
single loan supported by CDBG funds and other funds; a single parcel of 
land purchased with CDBG funds and other funds). Program income 
includes, but is not limited to, the following:
    (a) Proceeds from the disposition by sale or long-term lease of 
real property purchased or improved with CDBG funds;
    (b) Proceeds from the disposition of equipment purchased with CDBG 
funds;
    (c) Gross income from the use or rental of real or personal 
property acquired by a State, unit of general local government, or 
tribe or subrecipient of a State, unit of general local government, or 
tribe with CDBG funds, less costs incidental to generation of the 
income (i.e., net income);
    (d) Net income from the use or rental of real property owned by a 
State, unit of general local government, or tribe or subrecipient of a 
State, unit of general local government, or tribe, that was constructed 
or improved with CDBG funds;
    (e) Payments of principal and interest on loans made using CDBG 
funds;
    (f) Proceeds from the sale of loans made with CDBG funds;
    (g) Proceeds from the sale of obligations secured by loans made 
with CDBG funds;
    (h) Interest earned on program income pending disposition of the 
income, but excluding interest earned on funds held in a revolving fund 
account;
    (i) Funds collected through special assessments made against 
properties owned and occupied by households not of low- and moderate-
income, where the special assessments are used to recover all or part 
of the CDBG portion of a public improvement; and
    (j) Gross income paid to a State, unit of local government, tribe, 
or paid to a subrecipient thereof from the ownership interest in a for-
profit entity in which the income is in return for the provision of 
CDBG assistance.
    (2) ``Program income'' does not include the following:
    (a) The total amount of funds which is less than $25,000 received 
in a single year and retained by a State, unit of local government, 
tribe, or retained by a subrecipient thereof;
    (b) Amounts generated by activities eligible under section 
105(a)(15) of the HCD Act and carried out by an entity under the 
authority of section 105(a)(15) of the HCD Act;
    B. Retention of program income. Per 24 CFR 570.504(c), a unit of 
government receiving a direct award under this Notice may permit a 
subrecipient to retain program income. State grantees may permit a unit 
of local government or tribe which receives or will receive program 
income to retain the program income, but are not required to do so.
    C. Program income--use, closeout, and transfer.
    (1) Program income received (and retained, if applicable) before or 
after closeout of the grant that generated the program income, and used 
to continue disaster recovery activities, is treated as additional 
disaster recovery CDBG funds subject to the requirements of this Notice 
and must be used in accordance with the grantee's Action Plan for 
Disaster Recovery. To the maximum extent feasible, program income shall 
be used or distributed before additional withdrawals from the U.S. 
Treasury are made, except as provided in subparagraph D of this 
paragraph.
    (2) In addition to the regulations dealing with program income 
found at 24 CFR 570.489(e) and 570.504, the following rules apply: 
Grantees may transfer program income before closeout of the grant that 
generated the program income to its annual CDBG program. In addition, 
State grantees may transfer program income before closeout to any 
annual CDBG-funded activities administered by a unit of general local 
government or Indian tribe within the State. Program income received by 
a grantee, or received and retained by a subgrantee, after closeout of 
the grant that generated the program income, may also be transferred to 
a grantee's annual CDBG award. In all cases, any program income that is 
not used to continue the disaster recovery activity that generated the 
program income ceases to be subject to the waivers and alternative 
requirements of this Notice.
    For nonentitlement communities without another ongoing CDBG grant 
received directly from HUD, program income on hand when the CDBG 
disaster recovery grant is closed by HUD, shall continue to be subject 
to the eligibility requirements and all other applicable provisions 
under this Notice until expended. Program income received after 
closeout by HUD of the CDBG disaster recovery grant shall not be 
governed by the provisions of this Notice, except that such income 
shall be used for activities that meet a CDBG national objective and 
the eligibility requirements described in section 105 of the HCD Act.
    D. Revolving loan funds. Units of general local government 
receiving a direct award under this Notice, State grantees, and units 
of local government or tribes (permitted by a State grantee) may 
establish revolving funds to carry out specific, identified activities. 
A revolving fund, for this purpose, is a separate fund (with a set of 
accounts that are independent of other program accounts) established to 
carry out specific activities. These activities generate payments, 
which will be used to support similar activities going forward. These 
payments to the revolving fund are program income and must be 
substantially disbursed from the revolving fund before additional grant 
funds are drawn from the U.S. Treasury for payments which could be 
funded from the revolving fund. Such program income is not required to 
be disbursed for non-revolving fund activities.
    State grantees may also establish a revolving fund to distribute 
funds to units of local government or tribes to carry out specific, 
identified activities. The same requirements, outlined above, apply to 
this type of revolving loan fund. Last, note that no revolving fund, 
established per this Notice, shall be directly funded or capitalized 
with CDBG disaster recovery grant funds.
    22. National Objective Documentation for Economic Development 
Activities. 24 CFR 570.483(b)(4)(i) and 570.208(a)(4)(i) are waived to 
allow the grantees under this Notice to identify low- and moderate-
income jobs benefit by documenting, for each person employed, the name 
of the business, type of job, and the annual wages or salary of the 
job. HUD will consider the person income-qualified if the annual wages 
or salary of the job is at or under the HUD-established income limit 
for a one-person family. This method replaces the standard CDBG 
requirement--in which grantees must review the annual wages or salary 
of a job in comparison to the person's total household income and size 
(i.e. number of persons). Thus, it streamlines the documentation 
process because it allows the collection of wage data for each position 
created or retained from the assisted businesses, rather than from each 
individual household.
    This alternative requirement has been granted on several prior 
occasions to CDBG disaster recovery grantees, and to date, those grants 
have not exhibited any issues of concern in calculating the benefit to 
low- and moderate-income persons. The Department believes this waiver 
is consistent with the HCD Act.
    23. Public benefit for certain economic development activities. The

[[Page 22594]]

public benefit provisions set standards for individual economic 
development activities (such as a single loan to a business) and for 
economic development activities in the aggregate. Currently, public 
benefit standards limit the amount of CDBG assistance per job retained 
or created, or the amount of CDBG assistance per low- and moderate-
income person to which goods or services are provided by the activity. 
These dollar thresholds were set more than a decade ago and, under 
disaster recovery conditions (which often require a larger investment 
to achieve a given result), can impede recovery by limiting the amount 
of assistance the grantee may provide to a critical activity.
    This Notice waives the public benefit standards at 42 U.S.C. 
5305(e)(3), 24 CFR 570.482(f)(1), (2), (3), (4)(i), (5), and (6), and 
24 CFR 570.209(b)(1), (2), (3)(i), (4), for economic development 
activities designed to create or retain jobs or businesses (including, 
but not limited to, long-term, short-term, and infrastructure 
projects). However, grantees shall report and maintain documentation on 
the creation and retention of total jobs; the number of jobs within 
certain salary ranges; the average amount of assistance provided per 
job, by activity or program; and the types of jobs. Paragraph (g) of 24 
CFR 570.482, and 24 CFR 570.209(c), and (d) are also waived to the 
extent these provisions are related to public benefit.
    24. Allow reimbursement for pre-agreement costs. The provisions of 
24 CFR 570.489(b) are applied to permit a State to reimburse itself for 
otherwise allowable costs incurred by itself or its subgrantees on or 
after the incident date of the covered disaster. Any unit of general 
local government receiving a direct allocation under this Notice is 
subject to the provisions of 24 CFR 570.200(h) but may reimburse itself 
or its subrecipients for otherwise allowable costs incurred on or after 
the incident date of the covered disaster. 24 CFR 570.200(h)(1)(i) will 
not apply to the extent that it requires pre-agreement activities to be 
included in a consolidated plan.
    The Department expects both State grantees and units of general 
local government receiving a direct award under this Notice to include 
all pre-agreement activities in their Action Plans.
    25. Clarifying note on the process for environmental release of 
funds when a State carries out activities directly. Usually, a State 
distributes CDBG funds to units of local government and takes on HUD's 
role in receiving environmental certifications from the grant 
recipients and approving releases of funds. For this grant, HUD will 
allow a State grantee to also carry out activities directly instead of 
distributing all program funds to subrecipients and/or subgrantees. 
According to the environmental regulations at 24 CFR 58.4, when a State 
carries out activities directly, the State must submit the 
certification and request for release of funds to HUD for approval.
    26. Duplication of benefits. In general, section 312 of the Robert 
T. Stafford Disaster Assistance and Emergency Relief Act (42 U.S.C. 
5155), as amended, prohibits any person, business concern, or other 
entity from receiving financial assistance with respect to any part of 
a loss resulting from a major disaster as to which he has received 
financial assistance under any other program or from insurance or any 
other source. In order to comply with this law, grantees must ensure 
that each activity provides assistance to a person or entity only to 
the extent that the person or entity has a disaster recovery need that 
has not been fully met.
    Given the often complex nature of this issue, the Department has 
published a separate Notice explaining the duplication of benefit 
requirements applicable to CDBG disaster recovery grantees; it can be 
found at 76 FR 71060 (published November 16, 2011). Grantees under 
today's Notice are hereby subject to 76 FR 71060 in full.
    27. Flood buyouts--not applicable to all grantees. Grantees under 
this notice are able to undertake property acquisition for a variety of 
purposes. However, the term ``buyouts'' as referenced in this Notice 
refers to acquisition of properties located in a floodway or floodplain 
that is intended to reduce risk from future flooding. HUD is providing 
alternative requirements for consistency with the application of other 
federal resources commonly used for this type of activity. The 
following alternative requirements do not apply to the city of 
Birmingham, and Jefferson County.
    A. For buyout activities, the following requirements apply:
    (1) Any property acquired, accepted, or from which a structure will 
be removed pursuant to the project will be dedicated and maintained in 
perpetuity for a use that is compatible with open space, recreational, 
or wetlands management practices;
    (2) no new structure will be erected on property acquired, accepted 
or from which a structure was removed under the acquisition or 
relocation program other than (a) a public facility that is open on all 
sides and functionally related to a designated open space; (b) a rest 
room; or (c) a structure that the local floodplain manager approves in 
writing before the commencement of the construction of the structure; 
and
    (3) after receipt of the assistance, with respect to any property 
acquired, accepted, or from which a structure was removed under the 
acquisition or relocation program, no subsequent application for 
additional disaster assistance for any purpose will be made by the 
recipient to any Federal entity.
    B. Grantees have the discretion to determine an appropriate 
valuation method (including the use of pre-flood value, post-flood 
value, or cost of reconstruction as a basis for property value). 
However, in using CDBG disaster recovery funds for buyouts, the grantee 
must uniformly apply whichever valuation method it chooses.
    C. All buyouts must still meet activity eligibility and national 
objective requirements.
    D. Grantees should identify all acquisition activities that are 
buyouts in the DRGR system.
    28. Flood insurance.
    A. Flood insurance purchase requirements. HUD does not prohibit the 
use of CDBG Disaster Assistance for existing residential buildings in 
the Special Flood Hazard Area (SFHA) (or ``100-year'' floodplain). 
However, Federal laws and regulations related to both flood insurance 
and floodplain management must be followed, as applicable. With respect 
to flood insurance, a HUD-assisted homeowner for a property located in 
the SFHA must obtain and maintain flood insurance in the amount and 
duration prescribed by FEMA's National Flood Insurance Program. Section 
102(a) of the Flood Disaster Protection Act of 1973 mandates the 
purchase of flood insurance protection for any HUD-assisted property 
within the SFHA.
    B. Future federal assistance to owners remaining in floodplain.
    (1) Section 582 of the National Flood Insurance Reform Act of 1994, 
as amended, (42 U.S.C. 5154a) prohibits flood disaster assistance in 
certain circumstances. In general, it provides that no federal disaster 
relief assistance made available in a flood disaster area may be used 
to make a payment (including any loan assistance payment) to a person 
for repair, replacement, or restoration for damage to any personal, 
residential, or commercial property if that person at any time has 
received federal flood disaster assistance that was conditional on the 
person first having obtained flood insurance under applicable federal 
law and the person has subsequently failed to obtain and maintain flood 
insurance as required

[[Page 22595]]

under applicable federal law on such property. (Section 582 is self-
implementing without regulations.) This means that a grantee may not 
provide disaster assistance for the abovementioned repair, replacement, 
or restoration to a person who has failed to meet this requirement.
    (2) Section 582 also implies a responsibility for a grantee that 
receives CDBG disaster recovery funds or that, under 42 U.S.C. 5321, 
designates annually appropriated CDBG funds for disaster recovery. That 
responsibility is to inform property owners receiving disaster 
assistance that triggers the flood insurance purchase requirement that 
they have a statutory responsibility to notify any transferee of the 
requirement to obtain and maintain flood insurance, and that the 
transferring owner may be liable if he or she fails to do so. These 
requirements are described below.
    (3) Duty to notify. In the event of the transfer of any property 
described in paragraph (5), the transferor shall, not later than the 
date on which such transfer occurs, notify the transferee in writing of 
the requirements to:
    (a) Obtain flood insurance in accordance with applicable federal 
law with respect to such property, if the property is not so insured as 
of the date on which the property is transferred; and
    (b) Maintain flood insurance in accordance with applicable federal 
law with respect to such property. Such written notification shall be 
contained in documents evidencing the transfer of ownership of the 
property.
    (4) Failure to notify. If a transferor fails to provide notice as 
described above and, subsequent to the transfer of the property:
    (a) The transferee fails to obtain or maintain flood insurance, in 
accordance with applicable federal law, with respect to the property;
    (b) The property is damaged by a flood disaster; and
    (c) Federal disaster relief assistance is provided for the repair, 
replacement, or restoration of the property as a result of such damage, 
the transferor shall be required to reimburse the Federal Government in 
an amount equal to the amount of the federal disaster relief assistance 
provided with respect to the property.
    (5) The notification requirements apply to personal, commercial, or 
residential property for which federal disaster relief assistance made 
available in a flood disaster area has been provided, prior to the date 
on which the property is transferred, for repair, replacement, or 
restoration of the property, if such assistance was conditioned upon 
obtaining flood insurance in accordance with applicable federal law 
with respect to such property.
    (6) The term ``Federal disaster relief assistance'' applies to HUD 
or other federal assistance for disaster relief in ``flood disaster 
areas.'' The term ``flood disaster area'' is defined in section 
582(d)(2) of the National Flood Insurance Reform Act of 1994, as 
amended, to include an area receiving a presidential declaration of a 
major disaster or emergency as a result of flood conditions.
    29. Procurement.
    A. Grants to States. Per 24 CFR 570.489(d), a State must have 
fiscal and administrative requirements for expending and accounting for 
all funds. Furthermore, per 24 CFR 570.489(g), a State shall establish 
requirements for procurement policies and procedures for units of 
general local government based on full and open competition. All 
subgrantees of a State (including units of general local government) 
are subject to the procurement policies and procedures required by the 
State.
    A State may meet the above requirements by adopting 24 CFR part 85. 
If a State has adopted part 85 in full, it must follow the same 
policies and procedures it uses when procuring property and services 
with its non-Federal funds. However, the State must ensure that every 
purchase order or other contract includes any clauses required by 
Federal statutes and executive orders and their implementing 
regulations per 24 CFR 85.36(a).
    If a State has not adopted 24 CFR 85.36(a), but has adopted 24 CFR 
85.36(b) through (i), the State and its subgrantees must follow State 
and local law (as applicable), so long as the procurements conform to 
applicable Federal law and the standards identified in 24 CFR 85.36(b) 
through (i).
    B. Direct grants to units of general local government. Any unit of 
general local government receiving a direct appropriation under today's 
Notice will be subject to 24 CFR 85.36(b) through (i).
    30. Timely distribution of funds. 24 CFR 570.494 and 24 CFR 570.902 
regarding timely distribution of funds are waived and replaced with 
alternative requirements under this Notice. HUD expects each grantee to 
expeditiously obligate and expend all funds, including any recaptured 
funds or program income, and to carry out activities in a timely 
manner. HUD will evaluate timeliness in relation to each grantee's 
established performance schedule as identified in its Action Plan.
    The Department will, absent substantial evidence to the contrary, 
deem a grantee to be carrying out its programs and activities in a 
timely manner if the schedule for carrying out its activities is 
substantially met.
    In determining the appropriate corrective action to take with 
respect to a HUD determination that a grantee is not carrying out its 
activities in a timely manner pursuant to this section, HUD will take 
into account the extent to which unexpended funds have been obligated 
by the grantee and its sub-recipients for specific activities at the 
time the finding is made and other relevant information.
    If a grantee is determined to be untimely pursuant to this section, 
and the grantee is again determined to be untimely 12 months following 
the initial determination, HUD may elect to recapture any unobligated 
funds and reallocate to another entity with the authority and capacity 
to carry out the remaining recovery activities, unless HUD determines 
that the untimeliness resulted from factors beyond the grantee's 
reasonable control.
    31. Performance review authorities. Section 104(e)(1) of the HCD 
Act requires that the Secretary shall, at least on an annual basis, 
make such reviews and audits as may be necessary or appropriate to 
determine whether the recipient has carried out its activities in a 
timely manner, whether the recipient has carried out those activities 
and its certifications in accordance with the requirements and the 
primary objectives of the Act and with other applicable laws, and 
whether the recipient has a continuing capacity to carry out those 
activities in a timely manner.
    The requirements for submission of a Performance Evaluation Report 
(PER) pursuant to 42 U.S.C. 12708 and 24 CFR 91.520 are waived. In the 
alternative, and to ensure consistency between grants allocated under 
this Notice and grants allocated previously under the CDBG disaster 
recovery program, HUD is requiring that:
    A. Each grantee must enter its Action Plan for Disaster Recovery, 
including performance measures, into HUD's DRGR system. As more 
detailed information about uses of funds is identified by the grantee, 
the grantee must enter such detail into DRGR, in sufficient detail to 
serve as the basis for acceptable performance reports.
    B. Each grantee must submit a quarterly performance report, as HUD 
prescribes, no later than 30 days following the end of each calendar 
quarter, beginning after the first full

[[Page 22596]]

calendar quarter after grant award and continuing until all funds have 
been expended and all expenditures have been reported. Each quarterly 
report will include information about the uses of funds during the 
applicable quarter including (but not limited to) the project name, 
activity, location, and national objective; funds budgeted, obligated, 
drawn down, and expended; the funding source and total amount of any 
non-CDBG disaster recovery funds to be expended on each activity; 
beginning and completion dates of activities; achieved performance 
outcomes such as number of housing units complete or number of low- and 
moderate-income persons benefiting; and the race and ethnic status of 
persons assisted under direct-benefit activities. Within the section 
titled ``Overall Progress Narrative'' in DRGR, grantees must include a 
description of the actions taken to affirmatively further fair housing.
    Quarterly reports to HUD must be submitted using HUD's DRGR system 
and, within 3 days of submission, be posted on the grantee's official 
Web site.
    C. Reporting requirements. Once each grantee enters its action Plan 
into the DRGR system, it must submit to HUD a projection of 
expenditures and outcomes (projected on a quarterly basis) for each 
major activity type in DRGR. This will enable HUD to track proposed 
versus actual performance in coordination with each grantee's 
submission of DRGR quarterly performance reports.
    D. In addition to providing these reports to Congress and the 
public, HUD will use them--in addition to transactional data from DRGR 
and other information provided by the grantee--to: (1) Monitor for 
anomalies or performance problems that suggest fraud, abuse of funds, 
and duplication of benefits; (2) reconcile budgets, obligations, 
funding draws, and expenditures; (3) calculate applicable 
administrative and public service limitations and the overall 
percentage of funds that benefit low- and moderate-income persons; and 
(4) analyze the risk of grantee programs to determine priorities for 
monitoring.
    32. Review of continuing capacity to carry out CDBG funded 
activities in a timely manner. If HUD determines that the grantee has 
not carried out its CDBG activities and certifications in accordance 
with the requirements and criteria described in this section, HUD will 
undertake a further review to determine whether or not the grantee has 
the continuing capacity to carry out its activities in a timely manner. 
In making the determination, the Department will consider the nature 
and extent of the recipient's performance deficiencies, types of 
corrective actions the recipient has undertaken, and the success or 
likely success of such actions.
    33. Corrective and remedial actions. HUD will undertake corrective 
and remedial actions in accordance with 24 CFR 570.910 and 24 CFR 
570.913.
    34. Reduction, withdrawal, or adjustment of a grant or other 
appropriate action. Prior to a reduction, withdrawal, or adjustment of 
a grant or other appropriate action, taken pursuant to this section, 
the recipient shall be notified of such proposed action and given an 
opportunity within a prescribed time period for an informal 
consultation.
    Consistent with the procedures described in this Notice, the 
Secretary may adjust, reduce or withdraw the grant or take other 
actions as appropriate, except that funds already expended on eligible 
approved activities shall not be recaptured.
    35. Certifications waiver and alternative requirement. Sections 
91.325 and 91.225 of title 24 of the Code of Federal Regulations are 
waived. Each State or unit of general local government receiving a 
direct allocation under this Notice must make the following 
certifications with its Action Plan:
    A. The grantee certifies that it will affirmatively further fair 
housing, which means that it will conduct an analysis to identify 
impediments to fair housing choice within its jurisdiction take 
appropriate actions to overcome the effects of any impediments 
identified through that analysis, and maintain records reflecting the 
analysis and actions in this regard. (See 24 CFR 570.487(b)(2) and 
570.601(a)(2).)
    B. The grantee certifies that it has in effect and is following a 
residential anti-displacement and relocation assistance plan in 
connection with any activity assisted with funding under the CDBG 
program.
    C. The grantee certifies its compliance with restrictions on 
lobbying required by 24 CFR part 87, together with disclosure forms, if 
required by part 87.
    D. The grantee certifies that the Action Plan for Disaster Recovery 
is authorized under State and local law (as applicable) and that the 
grantee, and any entity or entities designated by the grantee, 
possess(es) the legal authority to carry out the program for which it 
is seeking funding, in accordance with applicable HUD regulations and 
this Notice.
    E. The grantee certifies that activities to be undertaken with 
funds under this Notice are consistent with its Action Plan.
    F. The grantee certifies that it will comply with the acquisition 
and relocation requirements of the URA, as amended, and implementing 
regulations at 49 CFR part 24, except where waivers or alternative 
requirements are provided for in this Notice.
    G. The grantee certifies that it will comply with section 3 of the 
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and 
implementing regulations at 24 CFR part 135.
    H. The grantee certifies that it is following a detailed citizen 
participation plan that satisfies the requirements of 24 CFR 91.105 or 
91.115, as applicable (except as provided for in notices providing 
waivers and alternative requirements for this grant). Also, each unit 
of local government receiving assistance from a State grantee must 
follow a detailed citizen participation plan that satisfies the 
requirements of 24 CFR 570.486 (except as provided for in notices 
providing waivers and alternative requirements for this grant).
    I. Each State receiving a direct award under this Notice certifies 
that it has consulted with affected units of local government in 
counties designated in covered major disaster declarations in the non-
entitlement, entitlement, and tribal areas of the State in determining 
the method of distribution of funding.
    J. The grantee certifies that it is complying with each of the 
following criteria:
    (1) Funds will be used solely for necessary expenses related to 
disaster relief, long-term recovery, restoration of infrastructure and 
housing, and economic revitalization in the most impacted and 
distressed areas for which the President declared a major disaster in 
2011, pursuant to the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act of 1974 (42 U.S.C. 5121 et seq.).
    (2) With respect to activities expected to be assisted with CDBG 
disaster recovery funds, the Action Plan has been developed so as to 
give the maximum feasible priority to activities that will benefit low- 
and moderate-income families.
    (3) The aggregate use of CDBG disaster recovery funds shall 
principally benefit low- and moderate-income families in a manner that 
ensures that at least 50 percent of the grant amount is expended for 
activities that benefit such persons.
    (4) The grantee will not attempt to recover any capital costs of 
public improvements assisted with CDBG disaster recovery grant funds, 
by assessing any amount against properties

[[Page 22597]]

owned and occupied by persons of low- and moderate-income, including 
any fee charged or assessment made as a condition of obtaining access 
to such public improvements, unless: (A) Disaster recovery grant funds 
are used to pay the proportion of such fee or assessment that relates 
to the capital costs of such public improvements that are financed from 
revenue sources other than under this title; or (B) for purposes of 
assessing any amount against properties owned and occupied by persons 
of moderate income, the grantee certifies to the Secretary that it 
lacks sufficient CDBG funds (in any form) to comply with the 
requirements of clause (A).
    K. The grantee certifies that the grant will be conducted and 
administered in conformity with title VI of the Civil Rights Act of 
1964 (42 U.S.C. 2000d) and the Fair Housing Act (42 U.S.C. 3601-3619) 
and implementing regulations.
    L. The grantee certifies that it has adopted and is enforcing the 
following policies. In addition, States receiving a direct award must 
certify that they will require units of general local government that 
receive grant funds to certify that they have adopted and are 
enforcing:
    (1) A policy prohibiting the use of excessive force by law 
enforcement agencies within its jurisdiction against any individuals 
engaged in nonviolent civil rights demonstrations; and
    (2) A policy of enforcing applicable State and local laws against 
physically barring entrance to or exit from a facility or location that 
is the subject of such nonviolent civil rights demonstrations within 
its jurisdiction.
    M. Each State or unit of local government receiving a direct award 
under this Notice certifies that it (and any subrecipient or 
administering entity) has the capacity to carry out disaster recovery 
activities in a timely manner; or the State or unit of local government 
will develop a plan to increase capacity where such capacity is 
lacking.
    N. The grantee certifies that it will not use CDBG disaster 
recovery funds for any activity in an area delineated as a special 
flood hazard area in FEMA's most current flood advisory maps, unless it 
also ensures that the action is designed or modified to minimize harm 
to or within the floodplain, in accordance with Executive Order 11988 
and 24 CFR part 55.
    O. The grantee certifies that its activities concerning lead-based 
paint will comply with the requirements of 24 CFR part 35, subparts A, 
B, J, K, and R.
    P. The grantee certifies that it will comply with applicable laws.
    36. Information collection approval note. HUD has submitted 
documentation to OMB seeking emergency approval for information 
collection requirements in accordance with the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501-3520). The submission is under review by OMB 
and approval pending. In accordance with the Paperwork Reduction Act, 
HUD may not conduct or sponsor, nor is a person required to respond to, 
a collection of information, unless the collection displays a valid 
control number.

VII. Duration of Funding

    The Appropriations Act directs that these funds be available until 
expended. However, in accordance with 31 U.S.C. 1555, HUD shall close 
the appropriation account and cancel any remaining obligated or 
unobligated balance if the Secretary or the President determines that 
the purposes for which the appropriation has been made have been 
carried out and no disbursements have been made against the 
appropriation for 2 consecutive fiscal years. In such a case, the funds 
shall not be available for obligation or expenditure for any purpose 
after the account is closed.

VIII. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the disaster 
recovery grants under this Notice are as follows: 14.218; 14.228.

IX. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available for public inspection between 8 a.m. and 5 p.m. weekdays in 
the Regulations Division, Office of General Counsel, Department of 
Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500. Due to security measures at the HUD 
Headquarters building, an advance appointment to review the docket file 
must be scheduled by calling the Regulations Division at 202-708-3055 
(this is not a toll-free number). Hearing or speech-impaired 
individuals may access this number through TTY by calling the toll-free 
Federal Relay Service at 800-877-8339.

    Dated: April 9, 2012.
Mercedes M. M[aacute]rquez,
Assistant Secretary for Community Planning and Development.

Appendix A--Allocation Methodology

    This section describes the methods behind HUD's allocation of $400 
million in the 2011 CDBG Disaster Recovery Funds. Section 239 of Public 
Law 112-55, enacted on November 18, 2011, appropriates $400 million 
through the Community Development Block Grant (CDBG) program for:

* * * necessary expenses for activities authorized under title I of the 
Housing and Community Development Act of 1974 (Pub. L. 93-383) related 
to disaster relief, long-term recovery, restoration of infrastructure 
and housing, and economic revitalization in the most impacted and 
distressed areas resulting from a major disaster declared pursuant to 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.) in 2011; Provided, That funds shall be awarded 
directly to the State or unit of general local government at the 
discretion of the Secretary; * * *
    HUD allocates funds based on its estimate of the total unmet needs 
for infrastructure and the unmet needs for severe damage to businesses 
and housing that remain to be addressed in the most impacted counties 
after taking into account December 2011 data on insurance, FEMA 
assistance, and SBA disaster loans. To meet the statutory requirement 
that the funds be targeted to ``the most impacted or distressed 
areas,'' this allocation:
    (1) Limits funding to the states and counties with the highest 
level of severe unmet needs. Specifically, the calculation of unmet 
housing and business needs is limited only to those homes and 
businesses that experienced severe damage (see definitions below). That 
is, it excludes homes and businesses with minor or moderate damage that 
may have some unmet needs remaining. Further, to target funds to the 
most impacted or distressed areas, only counties with $10 million \1\ 
or more in severe unmet housing and business needs are used to 
determine a state's allocation. Thus, funding is provided based on the 
severe needs of

[[Page 22598]]

the most impacted counties in each state.
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    \1\ For the cut off thresholds used in this formula, minimum 
county need of $10 million in severe unmet housing and business 
needs, the $10 million minimum grant for a state (point 4), and the 
$6 million minimum grant for an entitlement jurisdiction (point 5a), 
these represent ``natural breaks'' in the distribution. That is, the 
next county, state or grantee on the list has a significant 
separation in need or estimated grant from the last county, state, 
or grantee included in the list.
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    (2) Factors in disaster related infrastructure repair costs 
statewide that are not reimbursed by FEMA Public Assistance. For all of 
these disasters, this is calculated as the 25 percent state match 
requirement.
    (3) Funds are allocated based on each state's share of total unmet 
needs. This is calculated as each state's proportional share of the sum 
of infrastructure and severe unmet housing and business needs from the 
most impacted counties.\2\
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    \2\ When calculating the grants, the internal weight between 
factors is maintained at the ratio of all severe unmet housing and 
business needs in all counties to unmet infrastructure needs in all 
counties.
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    (4) Restricts funding only to states that receive a minimum grant 
of $10 million or more. These funds are limited to only the states with 
the highest levels of unmet need. As such, funding is limited to states 
that would receive aggregate funding of $10 million or more based on 
their total unmet needs. The calculated grant amounts for states that 
would have received less than $10 million are provided to the states 
above $10 million through a pro-rata increase.
    (5) Specifies the counties and jurisdictions that are most impacted 
or distressed by:
    a. Providing direct funding to CDBG entitlement jurisdictions (and 
one nonentitlement city) with significant remaining severe unmet needs. 
Within a State, if an entitlement jurisdiction accounts for $6 million 
or more of the funding allocated to a State, it is allocated a direct 
grant (the $6 million threshold represents a ``natural break'' in 
funding among entitlement jurisdictions). Otherwise the funding is 
provided directly to the State. Due to its extraordinarily high level 
of localized need, one non-entitlement jurisdiction (Minot, ND) also 
receives a direct allocation.
    b. Directing that a minimum of 80% of the total funds allocated 
within a state, including those allocated directly to the State and to 
local governments, must be spent on the disaster recovery needs of the 
communities and individuals in the most impacted and distressed 
counties (i.e., those counties identified by HUD). The principle behind 
the 80 percent rule is that each state received its allocation based on 
the unmet needs in the most impacted counties (those counties with more 
than $10 million in severe unmet housing and business needs) and thus 
HUD will require that all grantees within a State direct these limited 
resources toward those most impacted counties.\3\ Nonetheless, HUD 
recognizes that there are likely circumstances where its data is 
incomplete, damage is highly localized outside of one of the heavily 
impacted counties, or recovery would otherwise benefit from 
expenditures outside of those most impacted counties and thus provides 
some flexibility to address those needs for State grantees. While local 
governments receiving direct grant allocations from HUD must spend 
their total grant within their own jurisdictions, HUD will allow a 
portion of the State non-entitlement grant to be spent outside of the 
most impacted counties, in an amount not to exceed that which yields 80 
percent of all funding within a state to be spent in the most impacted 
counties.
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    \3\ Each state receives funding based on all of infrastructure 
needs within a state, minus the infrastructure needs estimated to 
lie within entitlement jurisdictions receiving direct grants. In 
addition, each state also receives funding from all severe housing 
and business needs in the most impacted counties minus the estimated 
severe housing and business needs within entitlement jurisdictions 
receiving direct grants.
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    HUD will provide States with county level data on unmet needs to 
assist with their planning.
    Methods for estimating unmet needs for business, infrastructure, 
and housing: The data HUD staff have identified as being available to 
calculate unmet needs for the targeted disasters (major disasters with 
Presidential declaration issued in 2011 and for which FEMA individual 
assistance was available) come from the following data sources:
     FEMA Individual Assistance program data on housing unit 
damage, as of 12/20/2011;
     SBA for management of its disaster assistance loan program 
for housing repair and replacement, as of 12/21/2011;
     SBA for management of its disaster assistance loan program 
for business real estate repair and replacement as well as content 
loss, as of 12/22/2011; and
     FEMA estimated and obligated amounts under its Public 
Assistance program for permanent work, federal and state cost share, as 
of 12/20/2011.

Calculating Severe Unmet Housing Needs

    The core data on housing damage for both the unmet housing needs 
are based on home inspection data for FEMA's Individual Assistance 
program. For unmet housing needs, the FEMA data are supplemented by 
Small Business Administration data from its Disaster Loan Program. HUD 
calculates ``unmet housing needs'' as the number of housing units with 
unmet needs times the estimated cost to repair those units less repair 
funds already provided by FEMA and SBA, where:
     The owner-occupied units included in the unmet needs 
analysis are those determined by FEMA to be eligible for a repair or 
replacement grant.
     Each of the FEMA inspected owner-occupied units are 
classified by HUD into one of five categories:

 Minor-Low: Less than $3,000 of FEMA inspected damage
 Minor-High: $3,000 to $7,999 of FEMA inspected damage
 Major-Low: $8,000 to $14,999 of FEMA inspected damage
 Major-High: $15,000 to $28,800 of FEMA inspected damage
 Severe: Greater than $28,800 of FEMA inspected damage or 
determined destroyed.

    Only units in the Major-High and Severe categories are counted 
toward the severe unmet housing needs calculation.
     The rental units included in the unmet needs analysis are 
those assessed for personal property loss, near owner-occupied 
dwellings with major-high and severe damage, and where the tenant has 
an income of less than $20,000. The use of the $20,000 income cut-off 
for calculating rental unmet needs is intended to capture the loss of 
affordable rental housing.
     The average cost to fully repair a home for a specific 
disaster within each of the damage categories noted above is calculated 
using the median ratio between real property damage repair costs 
determined by the Small Business Administration for its disaster loan 
program and the FEMA assessment of real estate damage, for the subset 
of homes inspected by both SBA and FEMA. Because SBA inspects for full 
repair costs, it is presumed to reflect the full cost to repair the 
home, which is generally greater than FEMA estimations of the cost to 
make the home habitable. If fewer than 25 SBA inspections are made for 
homes within a FEMA damage category, the median ratio between SBA and 
FEMA assessment of damage in the category for that disaster has a cap 
applied at the 75th percentile of all damaged units for that category 
for all disasters and a floor applied at the 25th percentile. If there 
are no SBA inspections within a FEMA damage category, the national 
median ratio between SBA and FEMA assessment of damage within a FEMA 
damage category is used.
     To obtain estimates for unmet needs, only properties 
receiving a

[[Page 22599]]

FEMA grant are included in the calculation (since these are the cases 
assumed to have insufficient insurance coverage). Furthermore, the FEMA 
grant amount and all SBA loans are subtracted out of the total 
estimated damage to obtain a final unmet needs estimate.

Calculating Infrastructure Needs

    To best proxy unmet infrastructure needs, HUD uses data from FEMA's 
Public Assistance program on the state match requirement (usually 25 
percent of the estimated public assistance needs). This allocation uses 
only a subset of the Public Assistance damage estimates reflecting the 
categories of activities most likely to require CDBG funding above the 
Public Assistance and state match requirement. Those activities are 
categories: C-Roads and Bridges; D-Water Control Facilities; E-Public 
Buildings; F-Public Utilities; and G-Recreational-Other. Categories A 
(Debris Removal) and B (Protective Measures) are largely expended 
immediately after a disaster and reflect interim recovery measures 
rather than the long-term recovery measures for which CDBG funds are 
generally used. Because Public Assistance damage estimates are 
available only statewide (and not county), CDBG funding allocated by 
the estimate of unmet infrastructure needs are sub-allocated to 
counties and local jurisdictions based on each jurisdiction's 
proportion of unmet housing needs (categories minor-high to severe).

Calculating Economic Revitalization Needs

    Based on SBA disaster loans to businesses, HUD used the sum of real 
property and real content loss of small businesses not receiving an SBA 
disaster loan. This is adjusted upward by the proportion of 
applications that were received for a disaster that content and real 
property loss were not calculated because the applicant had inadequate 
credit or income. For example, if a state had 160 applications for 
assistance, 150 had calculated needs and 10 were denied in the pre-
processing stage for not enough income or poor credit, the estimated 
unmet need calculation would be increased as (1 + 10/160) * calculated 
unmet real content loss.
    Because applications denied for poor credit or income are the most 
likely measure of requiring the type of assistance available with CDBG 
recovery funds, the calculated unmet business needs for each state are 
adjusted upwards by the proportion of total applications that were 
denied at the pre-process stage because of poor credit or inability to 
show repayment ability. Similar to housing, estimated damage is used to 
determine what unmet needs will be counted as severe unmet needs. Only 
properties with total real estate and content loss in excess of $65,000 
are considered severe damage for purposes of identifying the most 
impacted areas.

Category 1: real estate + content loss = below 12,000
Category 2: real estate + content loss = 12,000-30,000
Category 3: real estate + content loss = 30,000-65,000
Category 4: real estate + content loss = 65,000-150,000
Category 5: real estate + content loss = above 150,000

    To obtain unmet business needs, the amount for approved SBA loans 
is subtracted out of the total estimated damage. Since SBA business 
needs are best measured at the county level, HUD estimates the 
distribution of needs to local entitlement jurisdictions based on the 
distribution of all unmet housing needs.

[FR Doc. 2012-9094 Filed 4-13-12; 8:45 am]
BILLING CODE 4210-67-P