Guidance and Instructions for Extension Requests of 24-Month Expenditure Deadline for Community Development Block Grant Disaster Recovery (CDBG-DR) Grantees, 26942-26945 [2015-11260]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 80, Number 90 (Monday, May 11, 2015)]
[Notices]
[Pages 26942-26945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-11260]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5696-N-14]


Guidance and Instructions for Extension Requests of 24-Month 
Expenditure Deadline for Community Development Block Grant Disaster 
Recovery (CDBG-DR) Grantees

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

ACTION: Notice.

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SUMMARY: This Notice advises Community Development Block Grant disaster 
recovery (CDBG-DR) grantees with grants pursuant to the Disaster Relief 
Appropriations Act, 2013 (the Appropriations Act) of the process and 
requirements associated with grantee requests for an extension of the 
24-month expenditure deadline for specific portions of funds obligated 
under the Appropriations Act.

DATES: Effective Date: May 18, 2015.

FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, 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. Gimont at 202-401-2044. 
(Except for the ``800'' number, these telephone numbers are not toll-
free.) Email inquiries may be sent to disaster_recovery@hud.gov.

SUPPLEMENTARY INFORMATION: 

[[Page 26943]]

Table of Contents

I. Applicability
II. Background
III. Eligible Activities
IV. Timeline for Submission
V. Requirements for Submission
VI. Submission Process
VII. Criteria for Approval
VIII. Applicable Rules and Considerations
IX. Applicability to National Disaster Resilience Competition and 
Rebuild by Design Projects
X. Catalog of Federal Domestic Assistance
XI. Finding of No Significant Impact

I. Applicability

    The requirements of this Notice are applicable to all CDBG disaster 
recovery (CDBG-DR) grants funded pursuant to the Disaster Relief 
Appropriations Act, 2013 (Pub. L. 113-2, approved January 29, 2013) and 
do not apply to any CDBG-DR grants funded pursuant to other 
supplemental appropriations.

II. Background

    The Appropriations Act made available $16 billion in CDBG-DR 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.) 
(Stafford Act), due to Hurricane Sandy and other eligible events in 
calendar years 2011, 2012, and 2013. On March 1, 2013, the President 
issued a sequestration order pursuant to section 251A of the Balanced 
Budget and Emergency Deficit Control Act, as amended (2 U.S.C. 901a), 
and reduced the amount of funding for CDBG-DR grants under the 
Appropriations Act to $15.18 billion. To date, a total of $15.18 
billion has been allocated or set aside: $13 billion in response to 
Hurricane Sandy, $514 million in response to disasters occurring in 
2011 or 2012, $655 million in response to 2013 disasters, and $1 
billion set aside for the National Disaster Resilience Competition.
    This Notice establishes submission instructions for expenditure 
deadline extension requests and other related requirements for grantees 
in receipt of allocations under the Appropriations Act, which are 
described within the Federal Register Notices published by HUD on March 
5, 2013 (78 FR 14329), April 19, 2013 (78 FR 23578), May 29, 2013 (78 
FR 32262), August 2, 2013 (78 FR 46999), November 18, 2013 (78 FR 
69104), December 16, 2013 (78 FR 76154), March 27, 2014 (79 FR 17173), 
June 3, 2014 (79 FR 31964), July 11, 2014 (79 FR 40133), October 7, 
2014 (79 FR 60490), October 16, 2014 (79 FR 62182), January 8, 2015 (80 
FR 1039), and April 2, 2015 (80 FR 17772) referred to collectively in 
this Notice as the ``Prior Notices.'' The requirements of the Prior 
Notices continue to apply, except as modified by this Notice.\1\
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    \1\ Links to the Prior Notices, the text of the Appropriations 
Act, and additional guidance prepared by HUD for CDBG-DR grants, are 
available on the HUD Exchange Web site: https://www.hudexchange.info/cdbg-dr/cdbg-dr-laws-regulations-and-federal-
register-notices/.
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    The Appropriations Act requires HUD to obligate all funds provided 
under the Appropriations Act by September 30, 2017. The Appropriations 
Act also requires that grantees expend funds within 24 months of the 
date on which HUD obligates funds to a grantee. Funds are obligated to 
a grantee on the date that HUD signs a grantee's CDBG- DR grant 
agreement or grant agreement amendment obligating additional funds. 
Each obligation carries its own expenditure deadline. For each 
obligation to a grantee, any funds remaining in the grantee's line of 
credit from that obligation at the time of the expenditure deadline for 
that obligation will be returned to the U.S. Treasury, or if before 
September 30, 2017, will be recaptured by HUD. In all instances, 
grantees must continue to meet the requirements for Federal cash 
management at 24 CFR 85.20(a)(7), as may be amended, and therefore may 
not draw down funds in advance of need to attempt to comply with the 
expenditure deadline in accordance with HUD's long-standing 
implementation of this requirement.
    Section 904(c) of the Appropriations Act authorizes the Office of 
Management and Budget (OMB) to grant waivers of the 24-month 
expenditure deadline. To implement this provision of the Appropriations 
Act, OMB requested Federal agencies receiving an appropriation under 
the Appropriations Act to identify categories of activities that could 
be subject to a waiver of the 24-month expenditure deadline. OMB also 
requested that agencies estimate, for each category of activity, the 
total amount of funds provided under the Appropriations Act that would 
likely require a waiver. HUD submitted an analysis of different 
categories of CDBG-DR activities that would likely necessitate a waiver 
of the expenditure deadline to OMB. OMB authorized HUD to provide CDBG-
DR grantees with expenditure deadline extensions for activities that 
are inherently long-term and where it would be impracticable to expend 
funds within the 24-month period and still achieve program missions.
    Although HUD has authority to grant extensions of the 24-month 
expenditure deadline up to amounts approved by OMB for each of the 
activity categories described in Section III of this Notice, grantees 
are advised that 31 U.S.C. 1552(a) continues to apply to funds 
appropriated under the Appropriations Act. Specifically, CDBG-DR funds 
are to remain available for expenditure for five years following the 
period of availability for obligation. All funds under the 
Appropriations Act, including those subject to a waiver of the 
expenditure deadline, must be expended by September 30, 2022. Any grant 
funds that have not been disbursed by September 30, 2022, will be 
canceled and will no longer be available for disbursement to the 
grantee for obligation or expenditure for any purpose.

III. Eligible Activities

    The National Disaster Recovery Framework acknowledges that long-
term recovery is inherently a multi-year process. HUD recognizes that 
grantees allocate a significant portion of CDBG-DR funds to complex and 
large-scale programs and projects that are long-term in nature. HUD 
also recognizes that grantees will require CDBG-DR administrative funds 
to conduct grant closeout and engage in ongoing program oversight, and 
that these efforts will inevitably extend beyond the 24-month 
expenditure deadline that applies to each obligation.
    As authorized by OMB, HUD will limit its consideration of 
expenditure deadline extension requests to certain types of eligible 
disaster recovery activities undertaken by grantees. HUD will consider 
grantee programs and projects within the following four categories for 
expenditure deadline extensions:
     Public facilities and improvements. Typical public 
facilities and improvement activities include the rehabilitation, 
replacement, or relocation of damaged public facilities and 
improvements, as well as investments to increase the resilience of 
those facilities and improvements.
     Housing. Typical housing activities include new 
construction, elevation, and rehabilitation of single family or 
multifamily residential units.
     Economic revitalization. Economic revitalization 
activities often include the provision of loans and grants to small 
businesses, job training programs, the construction of education 
facilities to teach technical skills, making improvements to commercial 
or retail

[[Page 26944]]

districts, and financing other efforts that attract and retain workers 
in disaster-impacted communities.
     Grant administration. Typical administrative activities 
include salaries, wages, and related costs of grantee or subrecipient 
staff and others engaged in program management, monitoring, and 
evaluation. Administrative costs are limited by the Appropriations Act 
to five percent of each grantee's total allocation.

IV. Timeline for Submission

    The process for any funds that the grantee believes will not be 
expended by the 24-month expenditure deadline, as outlined in Section 
III of each of the prior Federal Register Notices published by HUD on 
March 5, 2013 (78 FR 14329), May 29, 2013 (78 FR 32262), November 18, 
2013 (78 FR 69104), December 16, 2013 (78 FR 76154), June 3, 2014 (79 
FR 31964), and October 16, 2014 (79 FR 62185), is hereby revised as 
follows:

    ``The Appropriations Act requires that funds be expended within 
two years of the date HUD obligates funds to a grantee; and funds 
are obligated to a grantee upon HUD's signing of a grantee's CDBG-DR 
grant agreement. In its Action Plan, a grantee must demonstrate how 
funds will be fully expended within two years of obligation and HUD 
must obligate all funds not later than September 30, 2017. For any 
funds that the grantee believes will not be expended by the 24-month 
deadline and that it desires to retain, the grantee must submit an 
extension request in a form acceptable to HUD not less than 120 
calendar days in advance of the date of the expenditure deadline on 
those funds justifying why it is necessary to extend the deadline 
for a specific portion of the funds. In consideration of the 
timeline for funds with expenditure deadlines in 2015, extension 
requests for those funds must be submitted to HUD not less than 60 
calendar days in advance of the date of the expenditure deadline on 
those funds. OMB has provided HUD with authority to act on grantee 
extension requests but grantees are cautioned that such extensions 
may not be approved. If granted, extensions will be published in the 
Federal Register. Funds remaining in the grantee's line of credit at 
the time of its expenditure deadlines will be recaptured by HUD.''

V. Requirements for Submission

    Grantees seeking an extension of the 24-month deadline for a 
project or program must provide HUD with detailed information on the 
compelling legal, policy, or operational challenges that prevent the 
grantee from meeting the expenditure deadline as well as identify the 
proposed date for the full expenditure of the specified portion of 
funds.
    To expedite the review process, HUD has developed a CDBG-DR 
Expenditure Deadline Extension Request template. Grantees must submit 
one template per program or project for which a revised expenditure 
deadline is being requested. In certain cases, HUD may request that a 
grantee resubmit this template at a project-level if information 
provided at the programmatic level is insufficient for HUD to assess 
whether the request meets HUD's criteria for approving an extension, as 
outlined in Section VII below. This template will ensure that each 
request captures all of the requirements outlined in this Notice. The 
template will be posted at: https://www.hudexchange.info/cdbg-dr/. 
Each grantee must include the following elements, as delineated within 
the CDBG-DR Expenditure Deadline Extension Request template, as part of 
its submission:
    (1) A description of the individual program or project for which an 
extension is being requested, including information on relevant 
Disaster Recovery Grant Reporting System (DRGR) activity(ies).
    (2) An explanation for why an extension is being requested, 
including all relevant and compelling statutory, regulatory, policy, or 
operational challenges, and how the extension will promote a more 
effective and efficient recovery effort.
    (3) Description of how the provision of an extension would reduce 
the likelihood of waste, fraud, and abuse, if applicable.
    (4) An identification of all community stakeholders (including 
state or local entities, subrecipients, nonprofits, and civic 
organizations) to be affected by the expenditure deadline extension, 
their role in program or project implementation, and the impact, if 
any, of the extension on these stakeholders.
    (5) A revised expenditure deadline for the CDBG-DR funds budgeted 
for the program or project (i.e. the DRGR `end date') as well as a 
projection of quarterly expenditures for the program or project for 
which the waiver is requested, including incremental dollar amounts and 
percentage of funds budgeted for each DRGR activity. This information 
is required in order for HUD to ensure grantee compliance with revised 
expenditure deadlines in the DRGR system.
    (6) A description of the risks associated with not receiving the 
requested extension, such as the estimated percentage of funds which 
would be at risk of recapture or specific recovery needs that would not 
be met if the particular program or project cannot be completed or 
undertaken.
    (7) A description of the monitoring process and internal controls 
that the grantee and any subrecipients will implement to ensure 
compliance with the revised expenditure deadline.

VI. Submission Process

    The submission of any grantee expenditure deadline extension 
request is subject to the following requirements:
     Grantee submits the completed CDBG-DR Expenditure Deadline 
Extension Request template and any attachments to HUD in order to 
request consideration of the extension request not less than 120 
calendar days in advance of the expenditure deadline on the funds (or 
60 days for funds expiring in calendar year 2015).
     HUD reviews the extension request within 45 (or sooner for 
funds expiring in calendar year 2015) calendar days from date of 
receipt and approves the request based on the parameters outlined in 
Section VII of this Notice.
     HUD sends an extension request approval letter to the 
grantee. HUD may disapprove the request if it is determined that it 
does not meet the requirements of this Notice. If the request is not 
approved, a letter will be sent identifying its deficiencies; the 
grantee must then re-submit the request within 30 calendar days (or 10 
days for funds expiring in the calendar year 2015) of the notification 
letter;
     Within 30 calendar days of HUD's approval, the grantee 
amends its Action Plan for disaster recovery to reflect the approval of 
the revised expenditure deadline. HUD considers any Action Plan 
amendments to reflect revised activity expenditure timelines to be non-
substantial amendments.
     Immediately following this amendment, the grantee updates 
its DRGR Action Plan to reflect the revised `end date' for each DRGR 
activity covered by the approved waiver.
     If approved, HUD will publish the extension approval in 
the Federal Register. HUD will consolidate grantee extension approvals 
for publication. Therefore, extension approval is effective as of the 
date of the extension request approval letter, rather than as of the 
effective date of the published Federal Register notice.

VII. Criteria for Approval

    Under the authority provided to HUD by OMB, HUD will consider 
expenditure deadline extension requests for projects or programs based 
on the Secretary's determination that the extension is necessary and 
that the request meets the conditions set forth by OMB. HUD will assess 
extension requests using the following criteria:
    (1) The program or project must be approved in the grantee's Action 
Plan

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for disaster recovery prior to the grantee's submission of an 
expenditure deadline extension request to HUD.
    (2) The CDBG-DR funds associated with the program or project must 
have been obligated by HUD through a grant agreement, and, therefore, 
be subject to an established expenditure deadline.
    (3) The information submitted on the CDBG-DR Expenditure Deadline 
Extension Request template is comprehensive and complete to the 
satisfaction of HUD, as outlined in Section V of this Notice.
    (4) The revised expenditure deadline for the CDBG-DR funds budgeted 
for the program or project (i.e. the DRGR `end date') as well as the 
projection of quarterly expenditures are determined to be achievable 
based on the grantee's past performance and expenditure rate.
    (5) The grantee's capacity to implement monitoring processes and 
internal controls as outlined by the grantee in the template are 
sufficient to ensure compliance with the revised expenditure deadline.
    (6) The grantee has demonstrated that it has evaluated all 
reasonable alternatives prior to determining that an extension is the 
only remaining viable alternative.
    (7) HUD can determine, based on the grantee's submission, that the 
program or project covered by the request satisfies the OMB criteria 
for activities that are long-term by design, where it is impracticable 
to expend funds within the 24-month period and achieve program 
missions, and any other criteria imposed by OMB.
    Regardless of the criteria outlined in this section, HUD retains 
the authority to deny requested extensions or to provide alternative 
expenditure deadlines to those proposed by grantees.

VIII. Applicable Rules and Considerations

    This section of the Notice describes other requirements that 
grantees should consider prior to requesting an extension of the of the 
24-month expenditure deadline for CDBG-DR programs and projects.
    1. Urgent need national objective certification requirements. In 
HUD's March 5, 2013 Notice (78 FR 14329), grantees receiving funds 
under the Appropriations Act were provided a waiver of the 
certification requirements for the documentation of the urgent need 
national objective, located atSec. Sec.  570.208(c) and 570.483(d), 
until two years after the date HUD obligates funds to a grantee. 
Grantees seeking a waiver of the expenditure deadline may 
simultaneously seek an extension of the urgent need certification 
waiver. However, a grantee's request for an urgent need waiver must 
demonstrate to HUD that an extension of the urgent need certification 
waiver for those funds is necessary for recovery and that that 
remaining needs remain urgent, despite the passage of time since the 
disaster. HUD may grant a waiver under the authority provided in the 
Appropriations Act authorizing the Secretary to waive, or specify 
alternative requirements for, any provision of any statute or 
regulation that the Secretary administers in connection with HUD's 
obligation or use by the recipient of these funds (except for 
requirements related to fair housing, nondiscrimination, labor 
standards, and the environment) based upon a determination by the 
Secretary that good cause exists and that the waiver or alternative 
requirement is not inconsistent with the overall purposes of Title I of 
the HCD Act. If approved, the extension of the urgent need 
certification waiver will only become effective after its publication 
in in the Federal Register.
    2. Expenditure deadline extensions are program- and project-
specific. Any revised expenditure deadline is specific to the program 
or project as identified in the approval letter from HUD. Grantees may 
not reallocate funds with a revised expenditure deadline to other 
recovery programs or projects without HUD authorization. In order to 
reallocate such funds, the grantee must request an additional extension 
through the process described in Section VI of this Notice. Grant 
balances not used for a program or project that receives an expenditure 
deadline waiver will be canceled if the expenditure deadline on those 
funds has passed.
    3. Modifications to revised expenditure deadlines. Under limited 
circumstances and subject to 31 U.S.C. 1552(a), HUD may authorize 
grantees to further extend the expenditure deadlines associated with 
recovery programs and projects. In order to revise the expenditure 
deadline on these funds, the grantee must request an additional 
extension through the process described in Section VI of this Notice.

IX. Applicability to National Disaster Resilience Competition and 
Rebuild by Design Projects

    National Disaster Resilience Competition Projects. Projects that 
are funded under the Notice of Funding Availability (NOFA) for the 
National Disaster Resilience Competition (NDRC) (FR-5800-N-29) are not 
subject to the requirements of this Notice. Grantees may instead 
request extensions of the 24-month expenditure deadline for those 
projects pursuant to the requirements of the NOFA, as may be amended.
    Rebuild by Design Projects. HUD will also consider extension 
requests for funds allocated for Rebuild by Design (RBD) Projects, 
funded under the eligible ``Rebuild by Design'' activity in Section 
VII.4.c. of the Notice published on October 16, 2014, subject to any 
other criteria imposed by OMB. Requests for an extension of the 
expenditure deadline for RBD Project funds shall be submitted pursuant 
to the submission process outlined in Section VI of this Notice but 
instead of submitting the CDBG-DR Expenditure Deadline Extension 
Request template, grantee submission requests must contain the 
information required of extension requests under the headline 
``Expenditure Deadline Waivers'' in Appendix E to the NDRC NOFA, as may 
be amended.

X. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number for the disaster 
recovery grants under this Notice is as follows: 14.269.

XI. 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.

    Date: May 4, 2015.
Harriet Tregoning,
Principal Deputy Assistant, Secretary for Community Planning and 
Development.
[FR Doc. 2015-11260 Filed 5-8-15; 8:45 am]
 BILLING CODE 4210-67-P