Applicability of Updates to Duplication of Benefits Requirements Under the Stafford Act for Community Development Block Grant (CDBG) Disaster Recovery Grantees, 28848-28850 [2019-13146]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 84, Number 119 (Thursday, June 20, 2019)]
[Notices]
[Pages 28848-28850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13146]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6169-N-02]


Applicability of Updates to Duplication of Benefits Requirements 
Under the Stafford Act for Community Development Block Grant (CDBG) 
Disaster Recovery Grantees

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

ACTION: Notice.

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SUMMARY: Elsewhere in the Federal Register, the Department published 
the notice '' Updates to Duplication of Benefits Requirements Under the 
Stafford Act for Community Development Block Grant (CDBG) Disaster 
Recovery Grantees,'' which reflects the requirements of recent CDBG 
disaster recovery (CDBG-DR) supplemental appropriations acts and 
amendments to the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act. This notice makes conforming amendments to notices 
governing CDBG-DR grants received in response to a disaster declared 
between January 1, 2015 and December 31, 2017. It advises existing 
grantees of the applicability of the revised duplication of benefits 
notice to their existing CDBG-DR activities.

DATES: Applicability Date: June 25, 2019.

FOR FURTHER INFORMATION CONTACT: Claudette Fernandez, Director, Office 
of Block Grant Assistance, Department of Housing and Urban Development, 
451 7th Street SW, Room 10166, Washington, DC 20410, telephone number 
202-708-5287. 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 Ms. Fernandez at 202-708-0033. 
(Except for the''800'' number, these telephone numbers are not toll-
free). Email inquiries may be sent to [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Applicability
III. Conforming Amendments to Federal Register Notices and CPD 
Notices
IV. Catalog of Federal Domestic Assistance
V. Finding of No Significant Impact

I. Introduction

    Federal Register notices governing Community Development Block 
Grant disaster recovery (CDBG-DR) grants received in response to major 
disasters occurring in 2015, 2016, and 2017 require grantees to comply 
with the notice ''Clarification to Duplication of Benefits Requirements 
Under the Stafford Act for Community Development Block Grant (CDBG) 
Disaster Recovery Grantees'' (November 16, 2011, 76 FR 71060) (2011 DOB 
Notice).
    Elsewhere in the Federal Register, the Department has published the 
notice ``Updates to Duplication of Benefits Requirements Under the 
Stafford Act for Community Development Block Grant (CDBG) Disaster 
Recovery Grantees'' (2019 DOB Notice). The 2019 DOB Notice updates the 
2011 DOB Notice in part to reflect the requirements of recent CDBG-DR 
supplemental appropriations acts and amendments to the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121-
5207) (the Stafford Act).
    This notice amends notices governing CDBG-DR grants in response to 
major disasters occurring in 2015, 2016, and 2017 to impose the 
requirements of the 2019 DOB Notice in lieu of the 2011 DOB notice for: 
(a) New programs and activities added to the action plan after the date 
of this notice; and (b) existing programs and activities, to the extent 
that the grantee amends its action plan to change its treatment of 
loans in accordance with the 2019 DOB Notice.

II. Applicability and Waiver Authority

    This notice only applies to CDBG-DR grants made in response to 
major disasters occurring in 2015, 2016, and 2017. Authority for the 
grants was provided under the ``Community Development Fund'' heading in 
the following appropriations acts: Public Laws 114-113; 114-223; 114-
254; 115-31; 115-56; and 115-123.
    These appropriations acts provide that the Secretary may 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 the use by the recipient of these funds 
(except for requirements related to fair housing, nondiscrimination, 
labor standards, and the environment). As required by the 
appropriations acts, waivers and alternative requirements provided in 
this notice are based upon a determination by the Secretary that good 
cause exists and that the waiver or alternative requirement is not 
inconsistent with the overall purposes of title I of the Housing and 
Community Development Act of 1974.

III. Conforming Amendments to Federal Register Notices and CPD Notices

    This notice amends the following notices that apply to the grants 
(Prior Federal Register Notices).
     2015 Disasters: 81 FR 39687 (as amended by 82 FR 36812);
     2016 Disasters: 81 FR 83254 (as amended by 82 FR 5591 and 
82 FR 36812); and
     2017 Disasters: 82 FR 61320 (as amended by 83 FR 5844 and 
83 FR 40314).
    This notice also amends the following notice published by the 
Office of Community Planning and Development (CPD):
     CPD Notice 2015-07, ``Guidance for Charging Pre-
Application Costs of Homeowners, Businesses, and Other Qualifying 
Entities to CDBG Disaster Recovery Grants.''
    This notice makes the following changes to the Prior Notices:
     The 2019 DOB Notice shall supersede the 2011 DOB Notice 
for any new activities submitted to HUD in an action plan or action 
plan amendment on or after the effective date of this notice, and for 
existing activities, to the extent that the grantee amends its action 
plan to change its treatment of loans in accordance with the 2019 DOB 
Notice. If a grantee opts to revise its policies and procedures for one 
or more existing programs that were included in an action plan for 
disaster recovery before the effective date of this notice, the grantee 
must amend its action plan to reflect any resulting changes in benefits 
to program participants or to correct any resulting inconsistencies 
with duplication of benefits policies described in the action plan.
     The 2011 DOB Notice shall continue to apply to activities 
that were included in an action plan for disaster recovery before the 
effective date of this notice and were not amended to change treatment 
of loans in accordance with the 2019 DOB Notice.
     Grants are subject to the requirement under the tenth 
proviso following the Community Development Fund heading of Public Law 
115-123 (Declined Loans Provision) and the requirements for its 
implementation in the 2019 DOB Notice. The Declined Loans Provision 
states: ``Provided further, That with respect to any such duplication 
of benefits, the Secretary and any grantee under this section shall not 
take into consideration or reduce the amount provided to any applicant 
for assistance from the grantee where such

[[Page 28849]]

applicant applied for and was approved, but declined assistance related 
to such major declared disasters that occurred in 2014, 2015, 2016, and 
2017 from the Small Business Administration under section 7(b) of the 
Small Business Act (15 U.S.C. 636(b)).''
     For grants in response to disasters occurring in 2016 and 
2017 only, grantees are subject to the duplication of benefits 
provision in section 312 of the Stafford Act, as amended by section 
1210 of the Disaster Recovery Reform Act of 2018 (DRRA) (division D of 
Pub. L. 115-254), and the related provisions of the 2019 DOB Notice.
     Before making a grant, the Secretary must issue a 
certification that the grantee has adequate procedures to prevent the 
duplication of benefits. This notice amends the Prior Notices to make 
conforming amendments to the standard for determining which policies 
and procedures are adequate to prevent the duplication of benefits. 
Specifically, a grantee's policies and procedures are adequate if they 
reflect treatment of loans that is consistent with the requirements of 
the Declined Loans Provision and the DRRA. Grantees must use the most 
recent data available from FEMA and SBA to make a duplication of 
benefits determination, including a determination of whether a loan is 
a duplication. Grantees that revise their duplication of benefits 
policies and procedures to conform to the requirements of this notice 
and the 2019 DOB Notice must resubmit their policies and procedures to 
HUD for review. The grantee must amend or update policies and 
procedures that HUD determines are inadequate.
     The Prior Notices are amended to remove the prohibition on 
use of CDBG-DR funds to repay an SBA home or business loan. CDBG-DR 
funds may be used to reimburse CDBG-DR eligible costs that were paid 
with subsidized loan proceeds in accordance with the 2019 DOB Notice. 
However, grantees are not required to reimburse the costs paid with 
subsidized loan proceeds and may design their eligibility criteria to 
appropriately meet the needs within their most impacted and distressed 
areas.
     The Prior Notices are amended to add the following waivers 
and alternative requirements:
    Waiver to require additional information in the grantee's Action 
Plan for Disaster Recovery. For the Prior Notices, HUD is amending the 
waivers of requirements for CDBG actions plans, located at 42 U.S.C. 
5304(a)(1), 42 U.S.C. 5304(m), 42 U.S.C. 5306(d)(2)(C)(iii), 42 U.S.C. 
5306(a)(1), 42 U.S.C. 12705(a)(2), and 24 CFR 91.320, are waived for 
these disaster recovery grants. In addition to the waivers and 
alternative requirements in the Prior Notices, HUD is adding the 
following additional alternative requirement: Grantees action plans 
must include the information required by this notice and the 2019 DOB 
notice.
    Waiver to permit payment of limited interest costs. Section 105(a) 
is waived to the extent it limits activities to only those activities 
listed in section 105(a)(1)--(26), and HUD is imposing the following 
alternative requirement to create a new eligible activity to allow the 
use of CDBG-DR to pay interest due on subsidized loans in limited 
circumstances described in this paragraph. Homeowners, businesses, and 
other entities that received subsidized loans to pay the costs of 
eligible rehabilitation, demolition, and reconstruction of single 
family, multifamily, and nonresidential buildings (including commercial 
properties) are eligible for reimbursement, subject to the requirements 
of the 2019 DOB Notice, the Prior Notices, and CPD Notice 2015-07 (as 
may be amended or replaced from time to time). When the grantee 
reimburses homeowners, businesses, or other entities for these costs, 
the grantee may also pay any outstanding interest due on the portion of 
the principal of subsidized loans used to pay the costs eligible for 
reimbursement. CDBG-DR funds cannot be used to pay fees or the portion 
of interest attributable to activities that are ineligible for 
reimbursement.
    Waiver and alternative reporting requirement. In addition to other 
reports required pursuant to the Prior Notices, one year from the 
approval of the substantial action plan amendment required for the use 
of CDBG-DR funds to reimburse subsidized loan costs as provided in 
Federal Register notice entitled ``Updates to Duplication of Benefits 
Requirements Under the Stafford Act for Community Development Block 
Grant (CDBG) Disaster Recovery Grantees,'' the grantee shall submit to 
HUD an assessment and supporting data that provides: (i) The total 
amount of CDBG-DR funds used for the reimbursement of SBA and other 
subsidized loans; (ii) the total number of households and the number of 
low-to moderate-income households that have been reimbursed; and (iii) 
data on each individual household that was reimbursed for its SBA loan 
costs, including the household's FEMA Registrant ID, the SBA loan 
number, the amount of the initial SBA real property loan; the amount of 
the initial SBA personal property loan; the amount of the loan costs 
paid by CDBG-DR; and the household's income.
    This notice makes the following amendment to CPD Notice 2015-07:
     The requirement that ``Grantees may only charge the costs 
for rehabilitation, demolition, and reconstruction of single family, 
multifamily, and nonresidential buildings, including commercial 
properties, owned by private individuals and entities, incurred before 
the owner applies to a CDBG-DR grantee, recipient, or subrecipient for 
CDBG-DR assistance'' is revised. This requirement was imposed when 
loans were considered a duplication. Grantees and applicants did not 
contemplate the availability of CDBG-DR assistance for costs paid with 
subsidized loans. For grantees that have accepted applications for the 
reimbursement of costs paid with a subsidized loan prior to the 
implementation date of this notice, the date of application for 
reimbursement shall be the effective date of the action plan amendment 
that authorizes such reimbursement, or if a new application is received 
after the action plan amendment, the date of application shall be the 
date that the new application is submitted. For grantees in receipt of 
CDBG-DR funds for 2016 or 2017 disasters, the provision of CPD-Notice 
2015-07 that limits reimbursement to those costs incurred within one 
year of the disaster shall not apply to reimbursement of costs paid by 
a subsidized loan.

IV. 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 for units of 
local government; 14.228 for States.

V. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332). 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

[[Page 28850]]

or speech-impaired individuals may access this number through TTY by 
calling the toll-free Federal Relay Service at 800-877-8339.

    Dated: June 14, 2019.
Brian D. Montgomery,
Acting Deputy Secretary.
[FR Doc. 2019-13146 Filed 6-19-19; 8:45 am]
BILLING CODE 4210-67-P