Allocations, Common Application, Waivers, and Alternative Requirements for Community Development Block Grant Mitigation Grantees, 45838-45871 [2019-18607]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 84, Number 169 (Friday, August 30, 2019)]
[Notices]
[Pages 45838-45871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18607]



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Vol. 84

Friday,

No. 169

August 30, 2019

Part II





 Department of Housing and Urban Development





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Allocations, Common Application, Waivers, and Alternative Requirements 
for Community Development Block Grant Mitigation Grantees; Notice

Federal Register / Vol. 84 , No. 169 / Friday, August 30, 2019 / 
Notices

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6109-N-02]
RIN 2506-ZA02


Allocations, Common Application, Waivers, and Alternative 
Requirements for Community Development Block Grant Mitigation Grantees

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

ACTION: Notice.

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SUMMARY: This notice allocates $6.875 billion in Community Development 
Block Grant Mitigation (CDBG-MIT) funds to grantees recovering from 
qualifying 2015, 2016, and 2017 disasters. Funds allocated by this 
notice were made available by the Further Additional Supplemental 
Appropriations for Disaster Relief Requirements Act, 2018 (approved 
February 9, 2018) (the ``Appropriations Act''). This notice describes 
grant requirements and procedures, including waivers and alternative 
requirements, applicable to CDBG-MIT funds only. The Department 
acknowledges the governance and financial management challenges of the 
Commonwealth of Puerto Rico and the on-going capacity considerations in 
the U.S. Virgin Islands. Accordingly, the allocation of funds to the 
Commonwealth of Puerto Rico and the U.S. Virgin Islands for mitigation 
and electrical power system improvements shall be governed by 
subsequent notices in order to provide additional time to Puerto Rico 
and the U.S. Virgin Islands to work with the Department to address 
these issues.

DATES: Applicability Date: September 4, 2019.

FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Acting 
Director, Office of Block Grant Assistance, Community Planning and 
Development, Department of Housing and Urban Development, 451 7th 
Street SW, Room 7282, 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 Ms. Kome 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. Overview and Policy Objectives
II. Use of CDBG-MIT Funds
    A. Mitigation Definition
    B. Action Plan, Substantial Amendments, and Covered Projects
    C. Most Impacted and Distressed Areas
III. Allocations
IV. Overview of Grant Process
    V. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
    A. Grant Administration and Action Plan Requirements
    B. Housing and Related Floodplain Issues
    C. Infrastructure
    D. Economic Development
VI. Certifications and Collection of Information
VII. Duration of Funding
VIII. Catalog of Federal Domestic Assistance
IX. Finding of No Significant Impact

I. Overview and Policy Objectives

    The Further Additional Supplemental Appropriations for Disaster 
Relief Requirements Act, 2018 (Division B, Subdivision 1 of the 
Bipartisan Budget Act of 2018, Pub. L. 115-123, approved February 9, 
2018) (the ``Appropriations Act''), made available $28 billion in 
Community Development Block Grant disaster recovery (CDBG-DR) funds, 
and directed HUD to allocate not less than $12 billion for mitigation 
activities proportional to the amounts that CDBG-DR grantees received 
for qualifying disasters in 2015, 2016, and 2017. This notice 
accordingly allocates $6,875,044,000 in CDBG-MIT funds for mitigation 
activities consistent with the Appropriations Act.
    CDBG-MIT funds represent a unique and significant opportunity for 
grantees to use this assistance in areas impacted by recent disasters 
to carry out strategic and high-impact activities to mitigate disaster 
risks and reduce future losses. While it is impossible to eliminate all 
risks, CDBG-MIT funds will enable grantees to mitigate against disaster 
risks, while at the same time allowing grantees the opportunity to 
transform State and local planning.
    Through this allocation for mitigation, HUD seeks to:
     Support data-informed investments in high-impact projects 
that will reduce risks attributable to natural disasters, with 
particular focus on repetitive loss of property and critical 
infrastructure;
     Build the capacity of States and local governments to 
comprehensively analyze disaster risks and to update hazard mitigation 
plans through the use of data and meaningful community engagement;
     Support the adoption of policies that reflect local and 
regional priorities that will have long-lasting effects on community 
risk reduction, to include the risk reduction to community lifelines 
such as Safety and Security, Communications, Food, Water, Sheltering, 
Transportation, Health and Medical, Hazardous Material (management) and 
Energy (Power & Fuel); and future disaster costs (e.g., adoption of 
forward-looking land use plans that integrate the hazard mitigation 
plan, latest edition of the published disaster-resistant building codes 
and standards (to include wildland urban interface, flood and all 
hazards, ASCE-24, and ASCE-7 respectively), vertical flood elevation 
protection, and policies that encourage hazard insurance for private 
and public facilities); and
     Maximize the impact of available funds by encouraging 
leverage, private-public partnerships, and coordination with other 
Federal programs.
    The guiding structure and objectives established for CDBG-MIT funds 
bear similarities to other federal programs that address hazard 
mitigation, particularly FEMA's Hazard Mitigation Grant Program (HMGP). 
Accordingly, HUD has structured this notice and its requirements to 
complement HMGP policies and processes where possible. For example, 
both CDBG-MIT funds and FEMA HMGP funds require grantees to conduct a 
multi-hazard risk assessment to inform projects and programs. 
Additionally, grantee use of CDBG-MIT funds will be focused on 
effectively addressing risks to indispensable services that enable the 
continuous operation of critical business and government functions, and 
that are critical to the protection of human health and safety, or 
economic security, as described in section V.A.2.a.(1) of this notice.
    The Appropriations Act provides CDBG-MIT funds as a supplemental 
appropriation to the Community Development Block Grant (CDBG) program. 
Accordingly, the alignment of CDBG-MIT funds with other federal 
mitigation programs must also occur within the basic CDBG framework. 
The national objectives of the CDBG program are: (a) Providing benefit 
to low- and moderate-income persons; (b) preventing or eliminating slum 
and blighting conditions; or (c) addressing a severe and recently 
arising urgent community welfare or health need. Unlike other forms of 
Federal disaster recovery assistance, CDBG-DR and CDBG-MIT grants have 
a statutory focus on benefiting vulnerable lower-income people and 
communities and targeting the most impacted and distressed areas.
    The Appropriations Act requires that prior to the obligation of 
CDBG-DR funds by the Secretary, a grantee shall submit a plan to HUD 
for approval detailing the proposed use of all funds including the 
criteria for eligibility and how the use of these funds will address

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mitigation in the most impacted and distressed (MID) areas. The 
Appropriations Act also provides HUD with waiver authority that enabled 
HUD to modify the basic CDBG requirements to support hazard mitigation 
when needed. However, there are several statutory requirements under 
the basic CDBG framework (e.g., requirements related to labor 
standards, nondiscrimination, the environment and fair housing) which 
HUD is not authorized to waive. Because this framework will largely 
remain intact throughout this notice and to ensure compliance with all 
applicable program requirements, HUD strongly encourages grantees to 
designate the agency that administers its CDBG-DR funds to also 
administer this CDBG-MIT grant.
    The notice also balances the goals of aligning mitigation policies 
across federally-funded programs, maximizing efficiencies, and 
preserving critical aspects of the CDBG structure. As discussed in 
section V.A. of this notice, Grant Administration and Action Plan 
Requirements, grantees are encouraged to use CDBG-MIT planning funds to 
update the FEMA-approved Hazard Mitigation Plans (HMP) and are required 
to reference the applicable FEMA HMP in their action plan and describe 
how the HMP has informed the CDBG-MIT action plan. Grantees may also 
use these funds for planning activities, including but not limited to 
regional mitigation planning, the integration of mitigation plans with 
other planning initiatives, activities related to FEMA's Pre-Disaster 
Mitigation (PDM, to be renamed Building Resilient and Infrastructure 
Communities (BRIC) as part of implementation of section 1234 of the 
Disaster Recovery Reform Act of 2018, which amended section 203 of the 
Stafford Act (42 U.S.C. 5133)) and Flood Mitigation Assistance (FMA), 
modernizing building codes and regional land-use plans, and upgrading 
mapping, data, and other capabilities to better understand evolving 
disaster risks. For example, in wildland fire risk areas, grantees may 
use these funds to develop a Community Wildfire Protection Plan (CWPP). 
Additionally, State grantees are encouraged to use CDBG-MIT planning 
funds to meet the additional requirements for an enhanced HMP and for 
eligible CDBG-MIT activities that increase a grantee's capacity to 
participate in FEMA's HMGP Program Administration by States (PAS) 
initiative. This use of CDBG-MIT funds, in combination with FEMA HMGP 
assistance, will have long-term benefits by supporting high-quality 
mitigation planning, building a foundation for continuous coordination 
and data-driven outcomes, and providing common goals for selecting high 
impact projects across multiple programs and funding sources.
    HUD recognizes that this first-time appropriation of mitigation-
only CDBG funds may pose challenges to grantees in aligning their 
mitigation strategies and activities with their obligation to use most 
of their CDBG-MIT funds to benefit low- and moderate-income persons and 
to use the funds in the MID areas resulting from a disaster. 
Accordingly, this notice provides grantees with flexibility on the 
percentages related to a CDBG-MIT grant's overall benefit requirement 
and MID expenditure requirement. As with CDBG-DR, HUD encourages CDBG-
MIT grantees to consider a wide range of community development 
objectives related to recovery and economic resilience. This notice 
provides a waiver and establishes an alternative requirement to include 
new urgent need national objective criteria that are applicable to 
CDBG-MIT funds only, as described in section V.A.13. of this notice. 
This urgent need mitigation (UNM) national objective requires 
activities funded with the CDBG-MIT grant to result in measurable and 
verifiable reductions in the risk of loss of life and property from 
future disasters and yield community development benefits. The waiver 
and alternative requirement in section V.A.13. also explains that 
grantees shall not rely on the national objective criteria for 
elimination of slum and blighting conditions without approval from HUD, 
because this national objective generally is not appropriate in the 
context of mitigation activities.
    CDBG-MIT funds are to be used for distinctly different purposes 
than CDBG-DR funds. The amount of funding provided through this CDBG-
MIT allocation and the nature of the programs and projects that are 
likely to be funded requires that CDBG-MIT grantees and their 
subrecipients strengthen their program management capacity, financial 
management, and internal controls. Each grantee is required to 
strengthen its internal audit function, specify the criteria for 
subrecipient selection, increase subrecipient monitoring, and establish 
a process for promptly identifying and addressing conflicts under the 
grantee's conflict of interest policy. The Department also intends to 
establish special grant conditions for individual CDBG-MIT grants based 
upon the risks posed by the grantee, including risks related to the 
grantee's capacity to carry out the specific programs and projects 
proposed in its action plan. These conditions will be designed to 
provide additional assurances that mitigation programs are implemented 
in a manner to prevent waste, fraud, and abuse and that mitigation 
projects are effectively operated and maintained.
    While CDBG-DR and CDBG-MIT funding are valuable resources for long-
term recovery and mitigation in the wake of major disasters, HUD 
concurrently expects that grantees will take steps to set in place 
substantial governmental policies and infrastructure to enhance the 
impact of HUD-funded investments. In some instances, this goal may be 
achieved through the development and application of more stringent 
building and zoning codes which will help to limit damage from future 
severe weather events. It should be noted that these actions are 
eligible costs under CDBG-DR or CDBG-MIT funding.
    Consistent with prior CDBG-DR notices, HUD restates that disaster 
recovery is a partnership between Federal, state, and local government 
and CDBG-MIT grantees should invest in their own recovery. To sustain 
CDBG-MIT physical investments in the future, it is imperative that 
grantees collect and apply sufficient revenues for operation and 
maintenance costs in the outyears. HUD expects grantees to contribute 
to their recovery through the use of reserve or ``rainy day'' funds, 
borrowing authority, or retargeting of existing resources. The ultimate 
value of this mitigation funding appropriation is not limited to the 
projects and activities implemented with the funds but will also 
encompass how state and local partners are motivated to improve many of 
their governmental functions to better position jurisdictions to be 
resilient in the face of future disasters. HUD will examine how 
grantees plan to achieve this broader benefit and will promote best 
practices to future CDBG-DR grantees.
    It is the policy of the Administration that this first 
implementation of CDBG-MIT funding be implemented in a manner that 
mandates careful planning, adequate oversight, and increased reporting 
of anticipated and actual outcomes of the uses of the mitigation funds, 
to inform future Federal disaster mitigation efforts, to encourage 
private sector funding of mitigation projects, and to maximize the 
benefits of CDBG-MIT funding.
    The Administration cannot emphasize strongly enough the need for 
grantees to fully and carefully evaluate the projects that will be 
assisted with CDBG-MIT funds. One of the goals of CDBG-MIT is to set a 
nationwide standard that will

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help guide not just future Federal investments in mitigation and 
resilience activities--to include the mitigation of community 
lifelines, but state and local investments as well. The level of CDBG-
MIT funding available to most grantees cannot address the entire 
spectrum of known mitigation and resilience needs. Accordingly, HUD 
expects that grantees will rigorously evaluate proposed projects and 
activities and view them through several lenses before arriving at 
funding decisions, including ensuring that already committed public or 
private resources are not supplanted by CDBG-MIT funds.
    One such lens could be a thorough consideration of projects and 
activities encompassed within the applicable FEMA HMP and a judgment of 
whether those projects/activities represent targeted strategic 
investments for the grantee based on current or foreseeable risks. This 
judgment would stand in contrast to the funding of projects/activities 
identified in such plans where, for example, there has been no recent 
review of the risk reduction value of the investment or the project/
activity has been carried in the plan for years but has limited risk 
reduction value.
    A second lens could be a consideration of the status of necessary 
planning and permitting efforts. To ensure that CDBG-MIT investments 
have the highest possible impact on long-term mitigation and resilience 
needs, each grantee should conduct a careful status review of planning 
and permitting actions for proposed projects/activities and identify 
those that can move forward quickly. Concurrently, this exercise can 
help to identify Federal regulatory relief that is critical to helping 
clear the path for these projects/activities. In this vein, the 
Administration expects that grantees will conduct a review of and make 
necessary changes and exceptions to their own permitting and related 
processes to expedite funded projects/activities. In undertaking this 
analysis, grantees should not succumb to the urge to select projects/
activities solely because they are the most advanced in the planning 
and permitting process but should focus on high impact investments and 
a thorough understanding of what will be necessary to move those 
investments forward rapidly.
    The notice includes several waivers and alternative requirements 
typically established in CDBG-DR Federal Register notices but modified 
as necessary to reflect the distinct purpose of CDBG-MIT funds. The 
Department cannot anticipate every type of mitigation project or 
program that will be proposed by grantees, but these activity-based 
waivers and alternative requirements are intended to provide grantees 
with continued flexibility in the design and implementation of 
comprehensive mitigation programs and projects.
    For purposes of this notice, HUD is using the terms CDBG-MIT 
programs and projects to refer to the means by which grantees implement 
CDBG eligible activities. This notice also references the general 
categories of infrastructure and public facilities, housing, planning 
and administration, public services, and economic development that 
grantees often use to group activities in an action plan, in the DRGR 
action plan, and in quarterly performance reports.

II. Use of CDBG-MIT Funds

II. A. Mitigation Definition

    For the purposes of this notice, mitigation activities are defined 
as those activities that increase resilience to disasters and reduce or 
eliminate the long-term risk of loss of life, injury, damage to and 
loss of property, and suffering and hardship, by lessening the impact 
of future disasters.

II. B. Action Plan, Substantial Amendments, and Amendments for Covered 
Projects

    Before the Secretary obligates CDBG-MIT funds to a grantee, the 
Appropriations Act requires the grantee to submit a plan to HUD for 
approval detailing the proposed use of all funds. All or a portion of 
an action plan or substantial amendment will be substantially 
incomplete if the plan does not include the elements required by this 
notice. A grantee's use of CDBG-MIT funds must be consistent with its 
action plan.
    All CDBG-MIT activities must: (1) Meet the definition of mitigation 
activities above; (2) address the current and future risks as 
identified in the grantee's Mitigation Needs Assessment of most 
impacted and distressed areas (described below); (3) be CDBG-eligible 
activities under title I of the Housing and Community Development Act 
of 1974 (HCDA) or otherwise eligible pursuant to a waiver or 
alternative requirement; and (4) meet a national objective, including 
additional criteria for mitigation activities and Covered Projects. The 
action plan must describe how funded activities satisfy these 
requirements.
    As mentioned above, the action plan must include a risk-based 
Mitigation Needs Assessment that identifies and analyzes all 
significant current and future disaster risks and provides a 
substantive basis for the activities proposed. To complete this 
assessment, grantees must consult with other jurisdictions, the private 
sector and other government agencies, including State and local 
emergency management agencies that have primary responsibility for the 
administration of FEMA mitigation funds, including the State Hazard 
Mitigation Officer (SHMO), for HMGP alignment. Grantees must also use 
the most recent risk assessment completed or currently being updated 
through the FEMA HMP process to inform the use of CDBG-MIT funds. 
Therefore, the grantee must use the risks identified in the FEMA 
approved HMP as the starting point for its Mitigation Needs Assessment 
unless the jurisdiction is in the process of updating the HMP. If a 
jurisdiction is currently updating an expired HMP, the grantee 
administering the CDBG-MIT funds must consult with the agency 
administering the HMP update to identify the risks that will be 
included in the Mitigation Needs Assessment. The action plan must 
describe proposed allocations of CDBG-MIT funds that meet all of the 
requirements listed above in this section.
    To maximize the impact of all available funds, grantees must 
coordinate and align these CDBG-MIT funds with other mitigation 
projects funded by FEMA, the U.S. Army Corps of Engineers (USACE), the 
U.S. Forest Service, and other agencies as appropriate. For example, in 
wildland fire prone areas, this would include federal and state 
forestry and fire agencies that carry out activities related to fire 
risk reduction.
    Grantees must describe in their action plan how they have 
coordinated and will continue to coordinate with other partners who 
manage FEMA and USACE funds and describe the actions that they have 
taken to align their planned CDBG-MIT activities with other federal, 
state, and local mitigation projects and planning processes.
    To allow for a more detailed review of larger projects, this notice 
requires that infrastructure projects that also meet the definition of 
a Covered Project be included in an action plan or a substantial action 
plan amendment. For purposes of this notice, a Covered Project is 
defined as an infrastructure project having a total project cost of 
$100 million or more, with at least $50 million of CDBG funds 
(regardless of source (CDBG-DR, CDBG-National Disaster Resilience 
(NDR), CDBG-MIT, or CDBG)). For grantees that are considered by HUD to 
have ``unmitigated high risks'' that impact

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their ability to implement large scale projects, HUD may impose special 
grant conditions, including but not limited to a lower dollar threshold 
for the definition of a Covered Project.
    As described in section V.A.2.h. below, when a grantee proposes a 
Covered Project, the action plan or substantial amendment must include 
a description of the project and the information required for other 
CDBG-MIT activities (how it meets the definition of a mitigation 
activity, consistency with the Mitigation Needs Assessment provided in 
the grantee's action plan, eligibility under section 105(a) of the HCDA 
or a waiver or alternative requirement, and national objective, 
including additional criteria for mitigation activities). Additionally, 
the action plan must describe how the Covered Project meets additional 
criteria for national objectives for Covered Projects (described in 
V.A.13. below) including: Consistency with other mitigation activities 
in the same MID area; demonstrated long-term efficacy and 
sustainability of the project including its operations and maintenance; 
and a demonstration that the benefits of the Covered Project outweigh 
the costs (through the methods described in V.A.2.h.).

II. C. Most Impacted and Distressed Areas

    The Appropriations Act made CDBG-MIT funds available for eligible 
activities related to the mitigation of risks within the MID areas. 
This notice lists the HUD-identified MID areas for each CDBG-DR grantee 
receiving an allocation of CDBG-MIT funds. The HUD-identified MID areas 
for each CDBG-MIT grant are those identified by HUD in the following 
Federal Register notices for the grantee's 2015, 2016, or 2017 CDBG-DR 
grants (collectively, the ``Prior Notices''):
     2015 Disasters: 81 FR 39687; 82 FR 36812;
     2016 Disasters: 81 FR 83254; 82 FR 5591; 82 FR 36812; and
     2017 Disasters: 82 FR 61320; 83 FR 5844; 83 FR 40314.
    The amount of CDBG-MIT funding grantees must expend to mitigate 
risks within the HUD-identified MID areas is listed in Table 1. In some 
instances, HUD previously identified the entire jurisdiction of a 
grantee as the MID area. For all other CDBG-MIT grantees, HUD is 
requiring that at least 50 percent of all CDBG-MIT funds must be used 
for mitigation activities that address identified risks within the HUD-
identified MID areas. HUD will include 50 percent of a grantee's 
expenditures for grant administration in its determination that 50 
percent of the total award has been expended in the HUD identified MID 
areas. Additionally, expenditures for planning activities may be 
counted towards a grantee's 50 percent MID expenditure requirement, 
provided that the grantee describes in its action plan how those 
planning activities benefit the HUD identified MID areas.
    HUD may approve a grantee's request to add other areas to the HUD-
identified MID areas based upon the grantee's submission of a data-
driven analysis that illustrates the basis for designating the 
additional area as most impacted and distressed as a result of the 
qualifying disaster. As the HUD-identified MID areas for CDBG-MIT funds 
are the same as those identified for each grantee in the Prior Notices, 
a grantee seeking to amend its HUD-identified MID area for purposes of 
its CDBG-MIT grant, must also amend the HUD-identified MID area for its 
corresponding 2015, 2016, or 2017 CDBG-DR grant. Grantees proposing to 
add to the HUD-identified MID area for their existing CDBG-DR grant 
shall do so through a substantial amendment that includes a 
consideration of unmet housing recovery needs. The grantee must also 
undertake a substantial amendment to its CDBG-MIT action plan so that 
the HUD-identified MID areas are the same across both grants. The 
grantee may submit the substantial amendments for both grants 
simultaneously.
    Grantees may determine where to use the remaining 50 percent of the 
CDBG-MIT grant (the grantee-identified MID areas), but that portion of 
the grant must be used for mitigation activities that address 
identified risks within those areas that the grantee determines are 
most impacted and distressed resulting from the major disasters 
identified by the disaster numbers listed in Table 1. The grantee-
identified MID areas must be determined through the use of quantifiable 
and verifiable data.
    Grantee expenditures for eligible mitigation activities outside of 
the HUD-identified or grantee-identified MID area may be counted toward 
the MID area expenditure requirements provided that the grantee can 
demonstrate how the expenditure of CDBG-MIT funds outside of this area 
will measurably mitigate risks identified within the HUD-identified or 
grantee-identified MID area (e.g., upstream water retention projects to 
reduce downstream flooding in the HUD-identified MID area).
BILLING CODE 4210-67-P

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[GRAPHIC] [TIFF OMITTED] TN30AU19.000

BILLING CODE 4210-67-C
    In accordance with the Appropriations Act, HUD's allocation of 
CDBG-MIT funds is based on each grantee's proportional share of total

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CDBG-DR funds allocated for all eligible disasters in 2015, 2016, and 
2017.

IV. Overview of Grant Process

    The grant process outlined below aligns with the typical order 
employed for CDBG-DR grants. However, the Department recognizes the 
potentially broad range of mitigation activities that may be funded 
pursuant to this notice and the critical importance of coordinating 
those investments across multiple jurisdictions. Accordingly, the 
Department is providing extended time frames and mechanisms for on-
going citizen participation in the development and implementation of 
plans for mitigation activities funded pursuant to this notice.
    To begin expending CDBG-MIT funds, the following steps are 
necessary:
     Grantee develops or amends its citizen participation plan 
for disaster recovery per the requirements in section V.A.3 to provide 
for the mitigation funding.
     Grantee consults with stakeholders, including required 
consultation with affected local governments, Indian Tribes, and public 
housing authorities (as identified in section V.A.7.).
     In accordance with the requirements in section V.A.1.a., 
60 days prior to the deadline for the submission of an action plan as 
prescribed in section V.A.2.e, the grantee submits documentation for 
the certification of financial controls and procurement processes, and 
adequate procedures for grant management.
     Grantee publishes its action plan for mitigation on the 
grantee's required public website for no less than 45 calendar days to 
solicit public comment and convenes the required amount of public 
hearings on the proposed plan.
     Pursuant to the date prescribed in section V.A.2.e., 
grantee responds to public comment and submits its action plan (which 
includes Standard Form 424 (SF-424) and certifications), its 
implementation plan and capacity assessment submissions in accordance 
with the requirements in section V.A.1.b., and projection of 
expenditures and outcomes to HUD.
     Grantee requests and receives Disaster Recovery Grant 
Reporting (DRGR) system access (if the grantee does not already have 
DRGR access) and may enter activities into the DRGR system before or 
after submission of the action plan to HUD. Any activities that are 
changed as a result of HUD's review must be updated once HUD approves 
the action plan.
     HUD reviews (within 60 days from date of receipt) the 
action plan according to criteria identified for CDBG-MIT funds, and 
either approves or disapproves the plan. If the action plan is not 
approved, HUD will notify the grantee of the deficiencies. The grantee 
must then resubmit the action plan within 45 days of the notification.
     After the action plan is approved, HUD sends an action 
plan approval letter.
     Prior to transmittal of the grant agreement, HUD notifies 
grantees of its certification of the grantee's financial controls, 
procurement processes and grant management procedures and its 
acceptance of the implementation plan and capacity assessment.
     HUD sends the grant agreement to the grantee.
     Grantee signs and returns the grant agreement to HUD.
     Grantee posts the final HUD-approved action plan on its 
official website.
     HUD establishes the grantee's line of credit.
     Grantee enters the activities from its approved action 
plan into the DRGR system if it has not previously done so and submits 
its DRGR action plan to HUD (funds can be drawn from the line of credit 
only for activities that are established in the DRGR system).
     The grantee must publish (on its website) policies for 
programs and activities implemented by the grantee with CDBG-MIT funds.
     The grantee may draw down funds from the line of credit 
after the Responsible Entity completes applicable environmental 
review(s) pursuant to 24 CFR part 58 or as authorized by the 
Appropriations Act and, as applicable, receives from HUD the Authority 
to Use Grant Funds (AUGF) form and certification.
     Substantial amendments are subject to a 30-day public 
comment period, including posting to grantee's website, followed by a 
60-day review period for HUD.

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

    This section of the notice describes requirements imposed by the 
Appropriations Act, as well as waivers and alternative requirements 
that apply to the CDBG-MIT funds provided in the Appropriations Act. 
The waivers and alternative requirements provide flexibility in program 
design and implementation to support the prudent implementation of 
mitigation activities to lessen the impact of future disasters, while 
ensuring that statutory requirements are met. For each waiver and 
alternative requirement, the Secretary has determined that good cause 
exists, and the waiver or alternative requirement is not inconsistent 
with the overall purpose of title I of the HCDA.
    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, except for 
requirements related to fair housing, nondiscrimination, labor 
standards, and the environment. HUD also has regulatory waiver 
authority under 24 CFR 5.110, 91.600, and 570.5.
    Grantees may request additional waivers and alternative 
requirements from the Department as needed to address specific needs 
related to their mitigation activities. Grantee requests for waivers 
and alternative requirements must be accompanied by relevant data to 
support the request and must demonstrate to the satisfaction of the 
Department that there is good cause for the waiver or alternative 
requirement. Grantees must work with the assigned CPD representative to 
request any additional waivers or alternative requirements from HUD 
headquarters. Except where noted, the waivers and alternative 
requirements described below apply only to the CDBG-MIT funds. Under 
the requirements of the Appropriations Act, waivers and alternative 
requirements must be published in the Federal Register and are 
effective five days after publication. Considering the time necessary 
for the development and publication of Federal Register notices, 
grantees are advised to allow sufficient time for consideration, 
approval and publication of requests for waivers and alternative 
requirements.
    Except as described for CDBG-MIT funds, statutory and regulatory 
provisions governing the State CDBG program apply to States receiving a 
CDBG-MIT grant, including but not limited to, the principle of maximum 
feasible deference as provided at 24 CFR 570.480. In addition, except 
as provided herein, the statutory and regulatory provisions governing 
the Entitlement CDBG program apply only to local governments receiving 
a CDBG-MIT grant. Statutory provisions (title I of the HCDA) can be 
found at 42 U.S.C. 5301 et seq. State and Entitlement CDBG regulations 
can be found at 24 CFR part 570. References to the action plan in these 
regulations refer to the action plan required by this notice. All 
Federal Register notice references to timelines and/or deadlines are 
calendar days unless otherwise noted.

[[Page 45844]]

V.A. Grant Administration and Action Plan Requirements

    V.A.1. Pre-award evaluation of management and oversight of funds.
    The Administration intends to closely monitor all aspects of the 
CDBG-MIT effort. This approach fits with the view that the CDBG-MIT 
initiative will require a high level of interaction between HUD and 
grantees to ensure performance and compliance across the implementation 
spectrum. Consistent with this approach, HUD will place great focus on 
the question of whether grantees have developed and submitted CDBG-MIT 
plans consistent with the requirements for CDBG-MIT funds, with 
particular attention to implementation plans and capacity assessments. 
The Department encourages grantees to identify in their plan any 
management and administrative reforms that have or will be implemented 
to improve accountability and outcomes associated with the use of CDBG-
MIT funds.
    Consistent with 2 CFR part 200, HUD will use grant conditions to 
the fullest extent possible to effectuate grantee policies that will 
contribute not only to improved outcomes in the use of CDBG-MIT funding 
but also help strengthen grantee management practices and long-term 
resilience. The Department may, if warranted, restrict the availability 
of funds until such time as various grant conditions are met by 
individual grantees. Grantees are reminded that HUD may, at any time, 
add new grant conditions based on performance or lack thereof or may 
pursue remedies based on performance consistent with subpart O of the 
CDBG regulations (including corrective and remedial actions in 24 CFR 
570.910, 570.911, and 570.913) or under subpart I of the CDBG 
regulations at 24 CFR part 570.
    V.A.1.a. Certification of financial controls and procurement 
processes, and adequate procedures for proper grant management. The 
Appropriations Act requires that the Secretary certify, in advance of 
signing a grant agreement, that the grantee has in place proficient 
financial controls and procurement processes and has established 
adequate procedures to prevent any duplication of benefits as defined 
by section 312 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (Stafford Act), 42 U.S.C. 5155, to ensure timely 
expenditure of funds, maintain a comprehensive website regarding all 
mitigation activities assisted with these funds, and detect and prevent 
waste, fraud, and abuse of funds. To enable the Secretary to make this 
certification, each grantee must submit to HUD the certification 
documentation listed below. This information must be submitted 60 days 
prior to the deadline for the submission of an action plan. Grant 
agreements will not be executed until HUD has approved the grantee's 
certifications. Grantees must implement the CDBG-MIT grant consistent 
with the controls, processes and procedures as certified by HUD.
    For each of the items (1) through (6) below, the grantee must also 
provide a table that clearly indicates which agency and personnel are 
responsible for each task along with contact information. All grantees 
must certify to the accuracy of its documentation and must submit this 
certification with its action plan, as required in section VI.1.
    (1) Proficient financial management controls. The grantee must 
submit information upon which HUD can make the determination of 
proficient financial controls. A grantee has proficient financial 
management controls if each of the following criteria is satisfied:
    (a) Single audit report and consolidated annual financial report. 
The grantee submits its most recent single audit and consolidated 
annual financial report (CAFR), which indicates, in HUD's 
determination, that the grantee has no material weaknesses, 
deficiencies, or concerns that HUD considers to be relevant to the 
financial management of the grant. If the grantee's most recent single 
audit or CAFR identified material weaknesses or deficiencies, the 
grantee must provide documentation satisfactory to HUD showing how 
those weaknesses have been removed or are being addressed; and
    (b) Grantee assessment of its financial standards and completed 
Public Law 115-123 Financial Management and Grant Compliance 
Certification and supporting documentation. The grantee has assessed 
its financial standards and has submitted a completed Public Law 115-
123 Financial Management and Grant Compliance Certification (Compliance 
Certification) available on the HUD Exchange website at https://www.hudexchange.info/CDBG-MIT/CDBG-MIT-laws-regulations-and-federal-register-notices/, together with all documentation required in the 
Compliance Certification to comply with the requirements and standards 
of the Compliance Certification. The grantee must identify which 
sections of its financial standards address applicable questions in the 
Compliance Certification and must continue to maintain such standards 
until grant closeout.
    (2) Procurement processes/standards. HUD will determine whether the 
overall effect of the grantee's procurement processes/standards upholds 
the principles of full and open competition and whether the procurement 
processes/standards require an evaluation of the cost or price of the 
property or service. A grantee must submit its procurement policies and 
procedures and must demonstrate that the grantee will comply with the 
procurement requirements in section V.A.25. of this notice. The grantee 
must also provide a legal opinion that it has proficient procurement 
policies and procedures.
    A State has proficient procurement policies and processes if HUD 
determines that its procurement processes/standards uphold the 
principles of full and open competition and include an evaluation of 
the cost or price of the property or service, and if its procurement 
processes/standards either (a) adopted 2 CFR 200.318 through 200.326; 
or (b) follows its own procurement policies and procedures and 
establishes requirements for procurement policies and procedures for 
local governments and subrecipients based on full and open competition 
pursuant to 24 CFR 570.489(g), and the requirements applicable to the 
State, its local governments, and subrecipients include evaluation of 
the cost or price of the product or service; or (c) adopted 2 CFR 
200.317, meaning that it will follow its own State procurement policies 
and procedures and will evaluate the cost or price of the product or 
service, but impose 2 CFR 200.318 through 200.326 on its subrecipients.
    Local governments have proficient procurement policies and 
processes if those policies and processes are consistent with the 
specific applicable procurement standards identified in 2 CFR 200.318 
through 200.326. When the grantee provides a copy of its procurement 
standards, it must indicate the sections of its procurement standards 
that incorporate these provisions.
    (3) Duplication of benefits procedures. A grantee has adequate 
procedures to prevent the duplication of benefits if the grantee 
submits uniform processes that reflect the requirements of section 
V.A.24. of this notice, including: (a) Verifying all sources of 
assistance received by the grantee or applicant, as applicable, prior 
to the award of CDBG-MIT funds; (b) determining a grantee's or an 
applicant's remaining funding need(s) for CDBG-MIT assistance before 
committing funds or awarding assistance; and (c) requiring 
beneficiaries to enter into a signed agreement to repay any duplicative 
assistance if they later receive

[[Page 45845]]

additional assistance for the same purpose for which the CDBG-MIT award 
was provided. The grantee must identify a method to monitor compliance 
with the terms of the agreement for a reasonable period and must 
articulate this method in its written procedures, including the basis 
for the period of time in which the grantee will monitor for 
compliance. This agreement must also include the following language: 
``Warning: Any person who knowingly makes a false claim or statement to 
HUD may be subject to civil or criminal penalties under 18 U.S.C. 287, 
1001 and 31 U.S.C. 3729.''
    Policies and procedures of the grantee submitted to support the 
certification must provide that prior to the award of assistance, the 
grantee will use the best, most recent available data from FEMA, the 
Small Business Administration (SBA), insurers, and any other sources of 
local, state and federal sources of funding to prevent the duplication 
of benefits. In developing these policies and procedures, grantees are 
directed to the Federal Register notice published on June 20, 2019 
entitled, ``Updates to Duplication of Benefits Requirements Under the 
Stafford Act for Community Development Block Grant (CDBG) Disaster 
Recovery Grantees'' (2019 DOB Notice) (84 FR 28836). A grantee's 
policies and procedures are adequate if they reflect the treatment of 
loans that is consistent with the requirements of the Declined Loans 
Provision and the Disaster Recovery Reform Act (Pub. L. 115-254, 
Division D, ``DRRA '') as explained in section V.A.24. of this notice 
and the 2019 DOB Notice.
    (4) Timely expenditures. A grantee has adequate procedures to 
determine timely expenditures if it submits procedures that indicate 
the following to HUD: How the grantee will track expenditures each 
month; how it will monitor expenditures of its subrecipients; how it 
will account for and manage program income; how it will reprogram funds 
in a timely manner for activities that are stalled; how it will ensure 
that contracts and bills that require payment will be timely paid; how 
it will project expenditures of all CDBG-MIT funds within the period 
provided for in section V.A.26. of this notice; how it will ensure that 
its actual and projected expenditure of funds is accurately reported to 
HUD in its DRGR Quarterly Performance Report (QPR. The grantee shall 
also identify the personnel or organizational unit responsible for 
ensuring timely expenditures.
    (5) Comprehensive mitigation website linked to the grantee's 
disaster recovery website. A grantee has adequate procedures to 
maintain a comprehensive website regarding all disaster recovery and 
mitigation activities funded under the Prior Notices and this notice, 
if it submits procedures that indicate that the grantee will have a 
separate page dedicated to CDBG-MIT activities that includes the 
information described in section V.A.3.d. of this notice and any 
additional information subsequently required by HUD. The procedures 
must also indicate the frequency of website updates. At a minimum, a 
grantee must update its website monthly and must link its CDBG-MIT 
website with the website required for its CDBG-DR grant. Additionally, 
HUD may require grantees to publish additional reports or dashboards on 
the grantee's website.
    (6) Procedures to detect and prevent fraud, waste, and abuse. A 
grantee has adequate procedures to detect and prevent fraud, waste and 
abuse if it submits policies or procedures that enhance those 
previously certified by the Department for the grantee's CDBG-DR grant 
and if those policies or procedures include:
    (i) The criteria to be used to evaluate the capacity of potential 
subrecipients;
    (ii) The frequency with which the grantee will monitor other 
agencies of the grantee that will administer CDBG-MIT funds, how it 
will enhance its monitoring of subrecipients, contractors and other 
program participants, how and why monitoring is to be conducted and 
which items are to be monitored;
    (iii) Enhancements to the internal auditor function established for 
the grantee's CDBG-DR grant; or if the CDBG-MIT grant is to be 
administered by an agency that does not administer the CDBG-DR grant, 
how the internal auditor function is to be established and resourced. 
The internal audit function must provide both programmatic and 
financial oversight of grantee activities and the submission must 
include a document signed by the internal auditor that describes his or 
her role in detecting fraud, waste, and abuse. Additionally, grantees 
may, as a special grant condition, be required to submit internal audit 
reports directly to HUD;
    (iv) A conflict of interest policy and the process for promptly 
identifying and addressing such conflicts; and
    (v) Information on how the grantee will verify the accuracy of 
information provided by applicants.
    Instances of fraud, waste, and abuse should be referred to the HUD 
OIG Fraud Hotline (phone: 1-800-347-3735 or email: [email protected]).
    V.A.1.b. Implementation plan and capacity assessment. CDBG-MIT 
funds will typically require grantees to adopt new roles and 
responsibilities within their organization and to establish new working 
relationships with other entities external to the organization. Before 
signing a grant agreement, HUD requires each grantee to demonstrate 
that it has sufficient capacity to manage these funds and the 
associated risks. Evidence of grantee management capacity must be 
provided through the grantee's implementation plan and capacity 
assessment submissions. These submissions must meet the criteria in (1) 
and (2) below and must be submitted with the grantee's action plan. The 
grantee must certify to the accuracy of its documentation as required 
by section VI.1. of this notice. Grantees must implement the CDBG-MIT 
grant consistent with the implementation plan and capacity assessment 
as approved by HUD pursuant to this paragraph.
    A grantee has sufficient management capacity if it submits 
documentation showing that each of the following criteria are 
satisfied:
    (1) Timely information on application status. A grantee has 
adequate procedures to enable applicants to determine the status of 
their applications for mitigation assistance, at all phases, if its 
procedures indicate methods for communication (i.e., website, 
telephone, case managers, letters, etc.), ensure the accessibility and 
privacy of individualized information for all applicants, indicate the 
frequency of applicant status updates, and identify which personnel or 
agency is responsible for informing applicants of the status of 
applications.
    (2) Implementation plan. To enable HUD to assess risk as described 
in 2 CFR 200.205(c), the grantee must submit an implementation plan to 
the Department. The plan must describe the grantee's capacity to carry 
out mitigation activities, how it will address any capacity gaps, and 
how agency staff that administer CDBG-DR and CDBG-MIT funds will work 
with their counterparts who manage the grantee's FEMA-funded mitigation 
activities. If a grantee chooses to designate the agency that 
administers its FEMA funds as the entity for administration of its 
CDBG-MIT funds, the implementation plan must indicate how that agency 
will coordinate its activities with the agency that administers its 
CDBG-DR grant and will ensure compliance with all generally applicable 
CDBG requirements. HUD will determine a plan is adequate to reduce risk 
if, at a minimum it adequately addresses (a) through (e) below:

[[Page 45846]]

    (a) Capacity assessment. The grantee has assessed its capacity to 
carry out mitigation activities and has developed a timeline with 
milestones describing when and how the grantee will address all 
capacity gaps that are identified. The assessment must include a list 
of any open CDBG-DR findings and an update on the corrective actions 
undertaken to address each finding. HUD may include additional 
requirements in the grantee's grant terms and conditions to prevent 
similar findings for this grant.
    (b) Staffing. The plan shows that the grantee has accurately 
assessed staff capacity and identified adequate personnel who: Have 
documented experience in the timely development and implementation of 
mitigation programs particularly as it relates to activities in 
infrastructure, housing, and economic development (if applicable); are 
responsible for procurement/contract management, compliance with the 
regulations implementing Section 3 of the Housing and Urban Development 
Act of 1968 (24 CFR part 135) (Section 3), fair housing compliance, and 
environmental compliance; and are responsible for monitoring and 
quality assurance, and financial management. An adequate plan must also 
describe the agency's internal audit function, including responsible 
audit staff reporting independently to the chief elected official or 
executive officer or governing board of the designated administering 
entity. To help complete this exercise, grantees may choose to use the 
``Staffing Analysis Worksheet'' available on the HUD Exchange at 
https://www.hudexchange.info/programs/cdbg-dr/toolkits/program-launch/#capacity.
    (c) Internal and interagency coordination. The plan describes how 
the grantee will ensure effective communication and coordination 
between State and local departments and divisions involved in the 
design and implementation of mitigation planning and projects, 
including, but not limited to the following: Departments responsible 
for developing the HMP for applicable jurisdictions; departments 
implementing the HMGP; subrecipients responsible for implementing the 
grantee's action plan; and local and regional planning departments to 
ensure consistency and the integration of CDBG-MIT activities with 
those planning efforts.
    (d) Technical assistance. The grantee's implementation plan 
describes how it will procure and provide technical assistance for any 
personnel that the grantee does not employ at the time of action plan 
submission, and to fill gaps in knowledge or technical expertise 
required for successful and timely implementation where identified in 
the capacity assessment.
    (e) Accountability. The grantee's plan identifies the lead agency 
responsible for implementation of the CDBG-MIT grant and indicates that 
the head of that agency will report directly to the chief executive 
officer of the jurisdiction.
    During the course of the CDBG-MIT grant, HUD will continually 
monitor each grantee's use of funds to determine the grantee's 
adherence to and consistency with the plan, as well as meeting the 
performance and timeliness objectives therein. A material failure to 
comply with the grantee's implementation plan, as approved by HUD, will 
prompt HUD to exercise any of the corrective or remedial actions 
authorized pursuant to subpart O of the CDBG regulations (including 
corrective and remedial actions in 24 CFR 570.910, 570.911, and 
570.913) or under subpart I of the CDBG regulations at 24 CFR part 570.
    V.A.2. CDBG-MIT Action Plan waiver and alternative requirement. 
Requirements for CDBG action plans, in 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), 24 CFR 91.320, and 24 CFR 91.220, are waived for CDBG-MIT 
grants. Instead, grantees must submit to HUD an action plan for the use 
of CDBG-MIT funds which will describe programs and projects that 
conform to applicable requirements as specified for CDBG-MIT funds. The 
Secretary may disapprove an action plan as substantially incomplete if 
it is determined that the plan does not satisfy some or all the 
required elements identified for CDBG-MIT funds. HUD will monitor the 
grantee's actions and use of funds to determine the grantee's adherence 
to and consistency with the plan, as well as meeting the performance 
and timeliness objectives therein.
    V.A.2.a. Action plan. The action plan must identify how the 
proposed use of all funds: (1) Meets the definition of mitigation 
activities; (2) addresses the current and future risks as identified in 
the grantee's Mitigation Needs Assessment of most impacted and 
distressed areas as defined in section II.C.; (3) will be CDBG-eligible 
activities under title I of the HCDA or otherwise eligible pursuant to 
a waiver or alternative requirement; and (4) will meet a national 
objective, including additional criteria for mitigation activities and 
Covered Projects.
    The action plan must describe the impacts of the use of CDBG-MIT 
funds geographically by type at the lowest level practicable (e.g., 
county level, zip code, neighborhood, or census tract). A grantee must 
also identify any CDBG-MIT projects that are to be used in combination 
with CDBG-DR funds allocated to the grantee to address unmet disaster 
recovery needs. This combination of funds is possible because a 
mitigation project or program that meets the requirements for CDBG-MIT 
funds, remains eligible for CDBG-MIT funding even if it also responds 
to a remaining unmet recovery need of the qualified disasters.
    Several resources are available to grantees to assist in the 
development of the Mitigation Needs Assessment and corresponding 
proposed activities required in the action plan, as appropriate, 
including: The FEMA Hazard Mitigation Plan Resources website: https://www.fema.gov/hazard-mitigation-planning-resources; the FEMA State 
Mitigation Planning Resources website: https://www.fema.gov/state-mitigation-planning-resources; The FEMA State Mitigation Planning Key 
Topics Bulletins: https://www.fema.gov/media-library/assets/documents/115780; the FEMA Local Mitigation Planning Resources website: https://www.fema.gov/local-mitigation-planning-resources; the U.S. Forest 
Service's resources on wildland fire (https://www.fs.fed.us/managing-land/fire); and the National Interagency Coordination Center (NICC) 
which is the focal point for coordinating the mobilization of resources 
for wildland fire: https://www.nifc.gov/nicc/.
    Grantees that have a FEMA-approved standard State HMP pursuant to 
44 CFR 201.4, an enhanced HMP in accordance with 44 CFR 201.5 or other 
FEMA-approved mitigation plan, are required to use those plans and each 
plan's risk assessment to inform its response to the action plan 
requirements below. Grantees must reference these plans and indicate 
how the risks identified in the Mitigation Needs Assessment have been 
informed by the risks identified in the FEMA mitigation plan.
    Mitigation needs evolve over time and grantees are to amend the 
Mitigation Needs Assessment and action plan as conditions change, 
additional mitigation needs are identified, and additional resources 
become available.
    In addition to the waiver and alternative requirement established 
for CDBG-MIT action plans in this section of the notice, HUD is 
establishing an alternative requirement that grantees shall implement 
CDBG-MIT programs and projects in accordance with their action plan and 
with the descriptions provided by the grantee in the action

[[Page 45847]]

plan in response to elements (1) through (12) below:
    (1) A Mitigation Needs Assessment. Each grantee must assess the 
characteristics and impacts of current and future hazards identified 
through its recovery from the qualified disaster and any other 
Presidentially-declared disaster. Mitigation solutions designed to be 
resilient only for threats and hazards related to a prior disaster can 
leave a community vulnerable to negative effects from future extreme 
events related to other threats or hazards. When risks are identified 
among other vulnerabilities during the framing and design of mitigation 
projects, implementation of those projects can enhance protection and 
save lives, maximize the utility of scarce resources, and benefit the 
community long after the projects are complete. Accordingly, each 
grantee receiving a CDBG-MIT allocation must conduct a risk-based 
assessment to inform the use of CDBG-MIT funds to meet its mitigation 
needs, considering identified current and future hazards.
    Grantees must assess their mitigation needs in a manner that 
effectively addresses risks to indispensable services that enable 
continuous operation of critical business and government functions, and 
are critical to human health and safety, or economic security. The 
Mitigation Needs Assessment must quantitatively assess the significant 
potential impacts and risks of hazards affecting the following seven 
critical service areas, or community lifelines:

 Safety and Security
 Communications
 Food, Water, Sheltering
 Transportation
 Health and Medical
 Hazardous Material (Management)
 Energy (Power & Fuel)

    CDBG-MIT funds activities that ensure that these critical areas are 
made more resilient and are able to reliably function during future 
disasters, can reduce the risk of loss of life, injury, and property 
damage and accelerate recovery following a disaster.
    In the Mitigation Needs Assessment, each grantee must cite data 
sources and must at a minimum, use the risks identified in the current 
FEMA-approved state or local HMP. If a jurisdiction is currently 
updating an expired HMP, the grantee's agency administering the CDBG-
MIT funds must consult with the agency administering the HMP update to 
identify the risks that will be included in the Mitigation Needs 
Assessment. A grantee may identify additional risks that are not 
included in its jurisdiction's HMP but must at a minimum address the 
risks included in its jurisdiction's HMP. Grantees must include 
citations from the State or local HMP as evidence that the Mitigation 
Needs Assessment is consistent with such plan.
    In responding to this action plan requirement and presenting the 
required information, grantees must review and certify to HUD that they 
have considered, at a minimum, the following resources, as appropriate: 
FEMA Local Mitigation Planning Handbook: https://www.fema.gov/media-library-data/20130726-1910-25045-9160/fema_local_mitigation_handbook.pdf; DHS Office of Infrastructure 
Protection (https://www.dhs.gov/sites/default/files/publications/ip-fact-sheet-508.pdf); National Association of Counties, Improving 
Lifelines (2014): https://www.naco.org/sites/default/files/documents/NACo_ResilientCounties_Lifelines_Nov2014.pdf); the U.S. Forest 
Service's resources around wildland fire (https://www.fs.fed.us/managing-land/fire); the National Interagency Coordination Center 
(NICC) for coordinating the mobilization of resources for wildland 
fire: https://www.nifc.gov/nicc/; and HUD's CPD Mapping tool: https://egis.hud.gov/cpdmaps/).
    (2) Long-term planning and risk mitigation considerations. The 
grantee must describe how it plans to: Promote local and regional long-
term planning and implementation informed by its Mitigation Needs 
Assessment, including through the development and enforcement of 
building codes and standards (such as wildland urban interface; and 
flood and all hazards, including ASCE-24 and ASCE-7, as may be 
applicable), vertical flood elevation protection, and revised land use 
and zoning policies; coordinate with other planning efforts by local 
and regional entities to ensure alignment of CDBG-MIT activities with 
those plans; and support actions to promote an increase in hazard 
insurance coverage.
    For flood mitigation efforts: Grantees must consider high wind and 
continued sea level rise and ensure responsible floodplain and wetland 
management based on the history of flood mitigation efforts and the 
frequency and intensity of precipitation events. For wildfire 
mitigation efforts: Grantees must consider land-use plans that address 
density and quantity of development, as well as emergency access, 
landscaping, and water supply considerations. For tornado mitigation 
efforts: Grantees must consider promoting the construction and use of 
safe rooms and require or encourage wind engineering measures and 
construction techniques into building codes. CDBG-MIT funds may be used 
to reimburse planning and administrative costs for developing the 
action plan, including the Mitigation Needs Assessment, for the 
preparation or update of a State, local or tribal FEMA HMPs, and for 
compliance with environmental review and citizen participation 
requirements.
    (3) Connection of mitigation programs and projects to identified 
risks. For each proposed program or project in the action plan, the 
grantee must address how the program or project mitigates specific 
current and future risks identified in the Mitigation Needs Assessment.
    (4) Low- and moderate-income priority. Proposed mitigation programs 
and projects must prioritize the protection of low-and-moderate income 
(LMI) individuals. Each grantee must describe in its action plan how it 
will prioritize programs and projects that will protect LMI persons in 
order to meet the overall benefit requirement pursuant to this notice.
    Additionally, if the grantee's programs or projects will increase 
the resiliency of housing, the grantee must describe how the programs 
or projects will do so for housing that typically serves vulnerable 
populations, including the following housing: Transitional housing, 
permanent supportive housing, permanent housing serving individuals and 
families (including subpopulations) that are homeless and at-risk of 
homelessness, and public housing developments.
    Grantees must also assess how the use of CDBG-MIT funds may affect 
members of protected classes under fair housing and civil rights laws, 
racially and ethnically concentrated areas, as well as concentrated 
areas of poverty; will promote more resilient affordable housing and 
will respond to natural hazard related impacts.
    (5) Coordination of mitigation projects and leverage. Each grantee 
must propose mitigation programs or projects that advance long-term 
resilience to current and future hazards. Additionally, each grantee 
must align its CDBG-MIT programs or projects with other planned 
federal, state, regional, or local capital improvements. In order to 
meet these requirements, each grantee must describe how the proposed 
mitigation programs or projects will: (a) Advance long-term resilience; 
(b) align with other planned capital improvements; and (c) promote 
community-level and regional (e.g., multiple local jurisdictions) 
planning for current and future disaster recovery efforts and 
additional mitigation investments.

[[Page 45848]]

    Additionally, each grantee must describe how it will leverage CDBG-
MIT funds with other funding provided through public-private 
partnerships and by other Federal, State, local, private, and nonprofit 
sources to generate more effective and comprehensive mitigation 
outcomes. Examples of other Federal sources are additional funding 
provided by HUD, FEMA (specifically the Public Assistance Program, 
Individual Assistance Program, and Hazard Mitigation Grant Program), 
SBA (specifically the Disaster Loans program), Economic Development 
Administration, U.S. Army Corps of Engineers (USACE), the Department of 
Transportation, and the Department of Agriculture including the U.S. 
Forest Service's Good Neighbor Authority (GNA), Stewardship Contracts, 
and Wildfire Resilience Treatments. The grantee must describe how it 
will seek to maximize the outcomes of investments and the degree to 
which CDBG-MIT funds are effectively leveraged, including through 
public-private partnerships and a commitment of funding by the grantee. 
Grantees shall identify any leveraged funds for each activity in the 
DRGR system.
    (6) Plans to minimize displacement and ensure accessibility. Each 
grantee must describe how it plans to minimize displacement of persons 
or entities, and assist any persons or entities displaced through its 
mitigation activities (except for mitigation through voluntary buyout 
activities that are designed to move households out of harm's way). 
This description shall focus on proposed activities that may directly 
or indirectly result in displacement and the assistance that shall be 
required for those displaced. Grantees are reminded that they must take 
into consideration the functional needs of persons with disabilities in 
the relocation process. Guidance on relocation considerations for 
persons with disabilities may be found in Chapter 3 of HUD's Relocation 
Handbook 1378.0 (available on the HUD Exchange website at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/cpd/13780.
    (7) Maximum award amounts, necessary, and reasonable assistance. 
For each mitigation program providing a direct benefit to a person, 
household or business, the action plan must specify the maximum amount 
of assistance available to a beneficiary under each of the grantee's 
mitigation programs. A grantee may find it necessary to provide 
exceptions on a case-by-case basis to the maximum amount of assistance 
and must describe the process it will use to make such exceptions in 
its action plan. At minimum, each grantee must indicate that it will 
adopt policies and procedures governing maximum award amounts, describe 
how it will communicate the maximum amounts and any exceptions, how it 
will analyze the circumstances under which an exception is needed and 
how it will demonstrate that cost of providing assistance is necessary 
and reasonable. Each grantee must also indicate that it will make 
exceptions to the maximum award amounts when necessary to comply with 
federal accessibility standards or to reasonably accommodate a person 
with disabilities.
    (8) Natural infrastructure. Grantees are encouraged to develop a 
process to incorporate nature-based solutions and natural or green 
infrastructure in the selection and/or design of CDBG-MIT projects. 
Each grantee is encouraged to describe how it will consider natural 
infrastructure during the project selection process (e.g., alternatives 
and benefit-cost analysis); or propose projects and programs in the 
action plan that incorporate natural infrastructure. Natural or green 
infrastructure is defined as the integration of natural processes or 
systems (such as wetlands or land barriers) or engineered systems that 
mimic natural systems and processes into investments in resilient 
infrastructure, including, for example, using permeable pavements and 
amended soils to improve infiltration and pollutant removal.
    (9) Construction standards. Each grantee must describe how it will: 
(a) Emphasize quality, durability, energy efficiency, sustainability, 
and mold resistance, as applicable; (b) consider application of the 
Green Building Standards as amended from the Prior Notices and as 
explained in section V.B.1.a. of this notice; and (c) adhere to the 
advanced elevation requirements established in section V.B.1.d. of this 
notice, if applicable. For grantees addressing flood risks, the grantee 
must describe how it will document its decision to elevate structures 
and how it evaluated and determined the elevation to be cost reasonable 
relative to other alternatives or strategies, such as the demolition of 
substantially-damaged structures with reconstruction of an elevated 
structure on the same site, property buyouts, or infrastructure 
improvements to reduce the risk of loss of life and property.
    (10) Operation and maintenance plans. Each grantee must plan for 
the long-term operation and maintenance of infrastructure and public 
facility projects funded with CDBG-MIT funds. The grantee must describe 
in its action plan how it will fund long-term operation and maintenance 
for CDBG-MIT projects. Funding options might include State or local 
resources, borrowing authority or retargeting of existing financial 
resources. If operations and maintenance plans are reliant on any 
proposed changes to existing taxation policies or tax collection 
practices, those changes and relevant milestones should be expressly 
included in the action plan. Additionally, the grantee must describe 
any State or local resources that have been identified for the 
operation and maintenance costs of projects assisted with CDBG-MIT 
funds.
    (11) Cost verification. Each grantee must describe its controls for 
assuring that construction costs are reasonable and consistent with 
market costs at the time and place of construction. Grantees are 
encouraged to consider the use of an independent, qualified third-party 
architect, construction manager, or other professional (e.g., a cost 
estimator) to verify the planned project costs and cost changes to the 
contract (e.g., change orders) during implementation are reasonable. 
The method and degree of analysis may vary dependent upon the 
circumstances surrounding a particular project (e.g., project type, 
risk, costs), but the description, at a minimum, must address controls 
for CDBG-MIT infrastructure projects above a certain total project cost 
threshold identified by the grantee and for Covered Projects as defined 
for CDBG-MIT funds. More detailed cost verification requirements for 
Covered Projects are provided in section V.A.2.h. of this notice.
    (12) Building code and hazard mitigation planning. Grantees are 
encouraged to propose an allocation of CDBG-MIT funds for building code 
development and implementation, land use planning and/or hazard 
mitigation planning activities that may include but need not be limited 
to: (a) The development and implementation of modern and resilient 
building codes consistent with an identified model or standard, such as 
ASCE 24 and ASCE 7 as may be applicable, in order to mitigate against 
current and future hazards; (b) the development and implementation of 
land use plans to address natural hazards identified in the grantee's 
Mitigation Needs Assessment; (c) the update of State, local, or tribal 
FEMA HMPs, if necessary; (d) for states choosing to do so, the 
development of a FEMA-approved enhanced mitigation plan; or (e) the 
integration of mitigation plans with parallel CDBG-MIT planning 
efforts. If a grantee chooses to not allocate CDBG-MIT funds for these 
activities, the grantee must describe

[[Page 45849]]

other sources of funding identified for such activities. The grantee 
shall describe the specific building code, land use planning, hazard 
mitigation planning, or other activities to be funded with the CDBG-MIT 
grant or from other sources.
    V.A.2.b. Funds awarded directly to a State. For State grantees that 
choose to allocate funds directly to a local government or Indian 
tribe, the action plan shall describe the method of distribution of 
funds and/or descriptions of specific mitigation programs or projects 
the grantee will carry out directly. If the State will carry out 
activities directly, the description must include the requirements at 
(1) through (6) below:
    (1) How the Mitigation Needs Assessment will inform the grantee's 
funding determinations.
    (2) The threshold factors and grant size limits that are to be 
applied.
    (3) The projected uses for the CDBG-MIT funds, by responsible 
organization, activity, and geographic area, when the grantee carries 
out an activity directly.
    (4) For each proposed mitigation activity carried out directly, its 
respective CDBG activity eligibility category (or categories) and 
associated national objective(s), including additional criteria.
    (5) When funds are subgranted to local governments or Indian 
tribes, all criteria to be used to distribute funds to local 
governments or Indian tribes, including the relative importance of each 
criterion.
    (6) When applications are solicited for programs to be carried out 
directly, all criteria used to select applications for funding, 
including the relative importance of each criterion.
    V.A.2.c. Clarification of basic requirements for mitigation 
activities. Unlike CDBG-DR funds where grantees must demonstrate that 
their disaster recovery activities ``tie-back'' to the specific 
disaster and address a specific unmet recovery need for which the CDBG-
DR funds were appropriated, CDBG-MIT funds do not require such a ``tie-
back'' to the specific qualified disaster that has served as the basis 
for the grantee's allocation of CDBG-MIT funds. Grantees must instead 
demonstrate that CDBG-MIT activities: (1) Meet the definition of 
mitigation activities; (2) address the current and future risks as 
identified in the grantee's Mitigation Needs Assessment in the most 
impacted and distressed areas; (3) are CDBG-eligible activities under 
title I of the HCDA or otherwise eligible pursuant to a waiver or 
alternative requirement; and (4) meet a national objective, including 
additional criteria for mitigation activities and Covered Projects. The 
grantee can use CDBG-MIT funds for activities that meet these criteria 
even when it also responds to a remaining unmet recovery need arising 
from a qualified disaster that served as the basis for the grantee's 
CDBG-MIT allocation. Grantees may continue to categorize CDBG-MIT 
funds, to the extent appropriate, using the broader categories of 
activities that are associated with CDBG-DR awards: Infrastructure, 
economic development, housing, planning and administration, and public 
services.
    (1) Infrastructure. Typical infrastructure mitigation programs may 
include regional investments in risk reduction for flood, fire, wind 
and other hazards to develop disaster-resistant infrastructure; 
upgrading of water, sewer, solid waste, communications, energy, 
transportation, health and medical, and other public infrastructure to 
address specific, identified risks; financing multi-use infrastructure; 
and green or natural mitigation infrastructure development.
    (2) Economic development. Examples of eligible programs include 
assistance to businesses for the installation of disaster mitigation 
improvements and technologies; financing to support the development of 
technologies, systems and other measures to mitigate future disaster 
impacts; ``hardening'' of commercial areas and facilities; and 
financing critical infrastructure sectors to allow continued commercial 
operations during and after disasters. Grantees are also strongly 
encouraged to leverage CDBG-MIT funds in economic development through 
coordination with Opportunity Zones established within the grantee's 
jurisdiction.
    (3) Housing. Typical housing mitigation programs may include 
buyouts (potentially accompanied by additional housing or homeownership 
assistance for relocated families); elevation (which may be accompanied 
by rehabilitation, reconstruction, or new construction activities to 
support resilient housing); flood proofing; and wind, water, fire, 
earthquake retrofitting or ``hardening'' of single- and multi-family 
units to withstand future disasters.
    (4) Planning, administration and public services. As noted in 
section V.A.2.a.(12) of this notice, CDBG-MIT funds may be used for the 
development of modernized and resilient building codes and land use 
plans, for the development and updating of FEMA-approved HMPs and for 
the development of State enhanced mitigation plans. Grantees may also 
use the CDBG-MIT funds for planning activities that include the 
integration of mitigation planning with other local and regional 
mitigation community development, land use and other plans. CDBG-MIT 
funds may also be used to upgrade mapping, data and other capabilities 
to better understand evolving potential disaster risks.
    Grantees may also fund planning and public service activities 
necessary to reduce flood insurance premiums in the NFIP voluntary 
Community Rating System's (CRS) incentive program (https://www.fema.gov/national-flood-insurance-program-community-rating-system).
    Additional public service activities may include education and 
outreach campaigns designed to alert communities and beneficiaries to 
opportunities to further mitigate identified risks through insurance, 
best practices and other strategies.
    (5) Use of CDBG-MIT as match. As provided by the HCDA, CDBG-MIT 
funds may be used to meet a matching requirement, share, or 
contribution for any other Federal program when used to carry out an 
eligible CDBG-MIT activity. This includes mitigation grants 
administered by FEMA or USACE. By law, (codified in the HCDA as a note 
to 105(a)), the maximum amount of CDBG-MIT funds that may be 
contributed to a USACE project is $250,000. Note that the 
Appropriations Act prohibits the use of CDBG-MIT funds for any activity 
reimbursable by, or for which funds are also made available by FEMA or 
USACE. Grantees may only use CDBG-MIT funds to meet the match 
requirement of a program or project that meets the definition of a 
mitigation activity and other requirements of this notice and meet the 
eligibility requirements for a mitigation activity under the other 
federal program.
    V.A.2.d. Clarity of action plan. Every grantee must include 
sufficient information so that all interested parties 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 (and 
subsequent amendments) must include a single chart or table that 
illustrates, at the most practical level, how all funds are budgeted 
(e.g., by program, subrecipient, grantee-administered activity, or 
other category).
    V.A.2.e. Submission, review, and approval of action plan. The 
action plan (including SF-424 and certifications) must be submitted to 
HUD for review and approval. To ensure that grantees have adequate time 
to address the planning requirements of this notice and to ensure a 
comprehensive and effective review of initial CDBG-MIT

[[Page 45850]]

action plans, HUD is assigning each grantee to a cohort and will 
stagger the submission dates for those cohorts. Each of these grantees 
is in the early stage of implementing their long-term recovery efforts 
using CDBG-DR unmet needs funding and the extended timeframe will 
partially reduce the burden of developing a CDBG-MIT action plan while 
still launching broad recovery efforts. State grantees that are 
administering a CDBG-DR grant for a 2015 or 2016 disaster are viewed as 
having a greater amount of experience with both CDBG-DR requirements 
and aligning mitigation programs and projects with FEMA HMGP 
requirements. Local government CDBG-MIT grantees may need additional 
time to build capacity in order to ensure the alignment of CDBG-DR and 
FEMA HMGP funds. State grantees in receipt of CDBG-DR funds for only 
2017 disasters are properly focused on the timely implementation of 
recovery efforts in response to those disasters. HUD's capacity to 
assist grantees in the development of CDBG-MIT action plans and to 
review those plans in a timely manner also requires rolling dates for 
the submission of action plans. Accordingly, HUD will accept an action 
plan from cohorts no later than the dates identified below, unless the 
grantee has requested, and HUD has approved an extension of its target 
submission deadline:
     State CDBG-MIT grantees that currently administer CDBG-DR 
grants provided in response to a 2015 or 2016 disaster shall submit no 
later than February 3, 2020: Florida; Louisiana; North Carolina, South 
Carolina; Texas; and West Virginia.
     Local government CDBG-MIT grantees shall submit on no 
later than March 2, 2020: Columbia, SC; Lexington County, SC; Richland 
County, SC; Houston, TX; and San Marcos, TX.
     State CDBG-MIT grantees that currently administer only a 
CDBG-DR grant provided in response to a 2017 disaster shall submit no 
later than ln April 6, 2020: California; Georgia; and Missouri.
    HUD will review each action plan within 60 days from the date of 
receipt. HUD may disapprove an action plan as substantially incomplete 
if the action plan does not meet the requirements of this notice, 
including grant requirements imposed by applicable waivers and 
alternative requirements to address the Administration's policy 
priorities.
    V.A.2.f. Obligation and expenditure of funds. After HUD makes the 
required certifications and approves the action plan, a grant agreement 
obligating allocated funds to the grantee must be entered into between 
HUD and the grantee. Subsequently, HUD will establish the line of 
credit and the grantee will receive DRGR system access (if it does not 
already have DRGR system access). The grantee must also enter its 
action plan activities into the DRGR system in order to draw funds for 
those activities. HUD will provide clarifying guidance as to the 
content and format of the DRGR action plan, which will help reflect the 
unique qualities and requirements of CDBG-MIT activities and ensure 
clear and transparent communication to the public.
    Each activity must meet the applicable environmental requirements 
before any funds are committed to the activity, consistent with 24 CFR 
58.22. The grantee may not draw down funds from the line of credit for 
an activity until after the Responsible Entity (usually the grantee):
    (1) Completes required environmental review(s) pursuant to 24 CFR 
part 58 or adopts the environmental review performed by another federal 
agency, as authorized by the Appropriations Act; and
    (2) Receives from HUD or the Responsible Entity (as applicable) an 
approved Request for Release of Funds and certification.
    V.A.2.g. Amending the action plan. The grantee must amend its 
action plan to update its Mitigation Needs Assessment, modify or create 
new activities, or reprogram funds. Each amendment must be highlighted, 
or otherwise identified, within the context of the entire action plan. 
The beginning of every action plan amendment must include: (1) A 
section that identifies exactly what content is being added, deleted, 
or changed; (2) a chart or table that clearly illustrates where funds 
are coming from and where they are moving to; (3) a revised budget 
allocation table that reflects the entirety of all funds, as amended; 
and (4) a description of how the amendment is consistent with a 
grantee's Mitigation Needs Assessment. A grantee's current version of 
its entire action plan must be accessible for viewing as a single 
document at any given point in time, rather than the public or HUD 
having to view and cross-reference changes among multiple amendments.
    (1) Substantial amendment. The grantee must provide a 30-day public 
comment period and reasonable method(s) (including electronic 
submission) for receiving comments on substantial amendments. 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: The addition of a CDBG-MIT Covered Project; a 
change in program benefit or eligibility criteria; the addition or 
deletion of an activity; or the allocation or reallocation of a 
monetary threshold specified by the grantee in its action plan. The 
grantee may substantially amend the action plan if it follows the same 
procedures required for CDBG-MIT funds for the preparation and 
submission of an action plan, provided, however, that a substantial 
action plan amendment shall require a 30-day public comment period.
    (2) Nonsubstantial amendment. The grantee must notify HUD, but is 
not required to seek public comment, when it makes any plan amendment 
that is not substantial. HUD must be notified at least 5 business days 
before the amendment becomes effective. However, every amendment to the 
action plan (substantial and nonsubstantial) must be numbered 
sequentially and posted on the grantee's website. The Department will 
acknowledge receipt of the notification of nonsubstantial amendments 
via email within 5 business days. Nonsubstantial amendments shall be 
numbered in sequence with other nonsubstantial and substantial 
amendments and incorporated into the action plan.
    V.A.2.h. Additional action plan requirements for CDBG-MIT Covered 
Projects.
    Large-scale infrastructure projects that meet the definition of 
Covered Projects must be included in an action plan or substantial 
amendment. A Covered Project is an infrastructure project (as defined 
in V.A.2.h.(1) below) having a total project cost of $100 million or 
more, with at least $50 million of CDBG funds (regardless of source 
(CDBG-DR, CDBG-NDR, CDBG-MIT, or CDBG)).
    The Department recognizes that grantees may seek to use CDBG-MIT 
grants to implement large, transformative infrastructure projects that 
will provide long-term benefits and strengthen a community's resilience 
to future hazards. To support the successful implementation and 
operation of these large-scale projects, the Department is establishing 
alternative requirements that impose additional criteria for all CDBG-
MIT Covered Projects. All CDBG-MIT Covered Projects must meet the 
additional criteria to meet a national objective.
    (1) Definition of an infrastructure project. This section defines 
an infrastructure project as it relates to

[[Page 45851]]

Covered Projects only. For purposes of this section of the notice, an 
infrastructure project is defined as an activity or group of related 
activities that develop the physical assets that are designed to 
provide or support services to the general public in the following 
sectors: Surface transportation, including roadways, bridges, 
railroads, and transit; aviation; ports, including navigational 
channels; water resources projects; energy production and generation, 
including from fossil, renewable, nuclear, and hydro sources; 
electricity transmission; broadband; pipelines; stormwater and sewer 
infrastructure; drinking water infrastructure; and other sectors as may 
be determined by the Federal Permitting Improvement Steering Council. 
Further, consistent with HUD's NEPA implementing requirements at 24 CFR 
58.32(a), in responding to the requirements of this notice, a grantee 
must group together and evaluate as a single infrastructure project all 
individual activities which are related to one another, either on a 
geographical or functional basis, or are logical parts of a composite 
of contemplated infrastructure-related actions. Infrastructure 
improvements on private lands as authorized pursuant to section V.C.3 
and that also meet the definition of a Covered Project shall also be 
subject to the Covered Project requirements of this notice.
    (2) Covered Project action plan or substantial amendment 
requirements.
    The following must be provided for each Covered Project proposed in 
an action plan or a substantial amendment:
    (a) Project description and eligibility. A description of the 
Covered Project and how it meets the definition of a mitigation 
activity, including: Total project cost (including the CDBG-MIT grant 
as well as other federal resources for the project, such as funding 
provided by the Department of Transportation or FEMA); and CDBG 
eligibility under the HCDA or a waiver and alternative requirement 
(i.e., a citation to the paragraph in section 105 of the HCDA, 
applicable Federal Register notice, or a CDBG regulation).
    (b) Consistency with the Mitigation Needs Assessment. A description 
of how the Covered Project addresses the current and future risks in 
the MID areas as identified in the grantee's Mitigation Needs 
Assessment.
    (c) National objective, including additional criteria. The action 
plan must describe how the Covered Project will meet a national 
objective, including additional criteria for mitigation activities and 
Covered Projects. The national objectives for CDBG-MIT projects are 
described in section V.A.13. HUD has established additional criteria 
for Covered Projects that require a plan for long-term efficacy and 
fiscal sustainability, a demonstration that benefits of the project 
outweigh the costs, and a demonstration that the Covered Project is 
consistent with other mitigation activities in the same MID area, as 
described below in (i) through (iii):
    (i) Long-term efficacy and fiscal sustainability. A description of 
how the grantee plans to monitor and evaluate the efficacy and 
sustainability of the Covered Project, including its operation and 
maintenance of the Covered Project, how it will maintain documentation 
for the measurable outcomes or reduction in risk as discussed in 
section V.A.2.i. of this notice, and how it will reflect changing 
environmental conditions (such as sea level rise or development 
patterns) with risk management tools, and/or alter funding sources if 
necessary.
    (ii) Demonstration of benefits.
    (ii.a.) Demonstration of benefits through benefit cost analysis. 
The action plan or substantial amendment must describe how the benefits 
of the Covered Project outweigh the costs of the Covered Project. 
Benefits outweigh costs if the Benefit Cost Analysis (BCA) results in a 
benefit-to-cost ratio greater than 1.0 (which aligns with FEMA's BCA 
ratio).
    The action plan or substantial amendment must include a description 
of the methodology and the results of the BCA that has been conducted 
for the Covered Project. The grantee must indicate whether another 
Federal agency has rejected a BCA for the Covered Project (including 
any BCA for an earlier version of the current proposed Covered 
Project).
    Grantees and subrecipients may use FEMA-approved methodologies and 
tools to demonstrate the cost-effectiveness of their projects. FEMA has 
developed the BCA Toolkit to facilitate the process of preparing a BCA. 
Using the BCA Toolkit will ensure that the calculations are prepared in 
accordance with OMB Circular A-94 and FEMA's standardized 
methodologies. It is imperative to conduct a BCA early in the project 
development process to ensure the likelihood of meeting the cost-
effectiveness eligibility requirement.
    A non-FEMA BCA methodology may be used when: (1) A BCA has already 
been completed or is in progress pursuant to BCA guidelines issued by 
other Federal agencies such as the Army Corps or the Department of 
Transportation; (2) it addresses a non-correctable flaw in the FEMA-
approved BCA methodology; or (3) it proposes a new approach that is 
unavailable using the FEMA BCA Toolkit. In order for HUD to accept any 
BCA completed or in progress pursuant to another Federal agency's 
requirements, that BCA must account for economic development, community 
development and other social/community benefits or costs and the CDBG-
MIT project must be substantially the same as the project analyzed in 
the other agency's BCA.
    (ii.b.) Alternate demonstration of benefits. Alternatively, for a 
Covered Project that serves low- and moderate-income persons or other 
persons that are less able to mitigate risks or respond to and recover 
from disasters, the grantee may demonstrate that benefits outweigh 
costs if the grantee completes a BCA as described above and provides 
HUD with a benefit-to-cost ratio (which may be less than one) and a 
qualitative description of benefits that cannot be quantified but 
sufficiently demonstrate unique and concrete benefits of the Covered 
Project for low- and moderate-income persons or other persons that are 
less able to mitigate risks, or respond to and recover from disasters. 
This qualitative description may include a description of how the 
Covered Project will provide benefits such as enhancing a community's 
economic development potential, improving public health and or 
expanding recreational opportunities.
    The grantee shall include the BCA for a Covered Project, together 
with any qualitative description of benefits for projects benefitting 
low- and moderate-income persons and other persons that are less able 
to mitigate risks, or respond to and recover from disasters, as an 
appendix to the action plan or substantial amendment that proposes the 
project.
    (iii) Consistency with other mitigation activities. The grantee's 
action plan must demonstrate that the project is consistent with the 
other mitigation activities that the grantee will carry out with CDBG-
MIT funds in the MID area. To be consistent, the Covered Project must 
not increase the risk of loss of life or property in a way that 
undermines the benefits from other uses of CDBG-MIT funds in the MID.
    (3) HUD review of action plans and substantial amendments for 
Covered Projects. HUD will determine that a portion of an action plan 
or substantial amendment that proposes a Covered Project to be 
substantially incomplete if it does not meet the above criteria. In the 
course of reviewing an action plan or substantial amendment, HUD will 
advise a grantee of each deficiency and the grantee must revise the 
plan or

[[Page 45852]]

amendment to address the deficiency in order for HUD to resume 
consideration of this submission.
    (4) Implementation of Covered Projects. Prior to the grantee's 
execution of a contract for the construction, rehabilitation, or 
reconstruction of an approved Covered Project the grantee shall have:
    (a) Engaged an independent, third-party entity (e.g., a cost 
estimator) to verify the planned project costs and cost changes to the 
contract during implementation to determine the costs of the contract 
and any changes to the contract are reasonable;
    (b) Secured the certification of a licensed design professional 
stating that the project design or redesign meets a nationally 
recognized design and performance standard applicable to the project, 
including, if applicable, criteria recognized by FEMA for a project of 
its type, pursuant to FEMA's Hazard Mitigation Assistance Guidance and 
Hazard Mitigation Assistance Guidance Addendum; and
    (c) Established a plan for financing the operation and maintenance 
of the project during its useful life.
    V.A.2.i. Projection of expenditures and outcomes. Each grantee must 
submit projected expenditures and outcomes with the action plan. The 
projections must be based on each quarter's expected performance--
beginning with the quarter funds are available to the grantee and 
continuing each quarter until all funds are expended. The projections 
will enable HUD, the public, and the grantee to track proposed versus 
actual performance. The projections must also be clearly and 
conspicuously displayed on the grantee's website. If a grantee's 
performance indicates a pattern of deviation from projected 
expenditures and outcomes, HUD may review the grantee's capacity 
assessment and implementation plan and require an update to that plan 
or impose corrective actions to mitigate the risks associated with 
failure to meet projections. The published action plan must be amended 
for any subsequent changes, updates, or revision of the projections. 
Guidance on the preparation of projections is available on the HUD 
website: https://www.hudexchange.info/resource/3685/cdbg-dr-grantee-projections-of-expenditures-and-outcomes/.
    V.A.3. Citizen participation waiver and alternative requirement. To 
permit a more robust process and ensure mitigation activities are 
developed through methods that allow all stakeholders to participate, 
and because citizens recovering from disasters are best suited to 
ensure that grantees will be advised of any missed opportunities and 
additional risks that need to be addressed, provisions of 42 U.S.C. 
5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR 570.486, 24 Sec.  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. These revised requirements mandate public hearings (the number 
of which is based upon the amount of a grantee's CDBG-MIT allocation) 
across the HUD-identified MID areas and require the grantee to provide 
a reasonable opportunity (at least 45 days) for citizen comment and 
ongoing citizen access to information about the use of grant funds. The 
revised citizen participation requirements for CDBG-MIT grantees are:
    V.A.3.a. Publication of the action plan and opportunity for public 
comment. HUD continues to emphasize the importance of a robust citizen 
participation process, which shall include public hearings on the 
proposed action plan. Each grantee must either amend its existing 
citizen participation plan or adopt a new plan that incorporates the 
CDBG-MIT specific citizen participation requirements outlined in this 
section. The number of public hearings to be convened by a grantee 
shall be determined based upon the amount of the grantee's CDBG-MIT 
allocation: (1) CDBG-MIT grantees with allocations under $500 million, 
are required to hold at least two public hearings in the HUD-identified 
MID areas in order to obtain citizens' views and to respond to 
proposals and questions. At least one of these public hearings is to 
occur prior to a grantee's publication for public comment of its action 
plan on its website, and all hearings are to be convened at different 
locations within the MID area in locations that ensure geographic 
balance and maximum accessibility, (2) CDBG-MIT grantees with 
allocations of $500 million or more shall convene at least three public 
hearings in the HUD-identified MID areas to obtain citizens' views and 
to respond to proposals and questions. At least one of these public 
hearings is to occur prior to a grantee's publication for public 
comment of its action plan on its website, and all hearings are to be 
convened in different locations within the MID area in locations that 
ensure geographic balance and maximum accessibility, (3) CDBG-MIT 
grantees with allocations of $1 billion or more shall hold at least 
four public hearings in the HUD-identified MID area to obtain citizens' 
views and to respond to proposals and questions. At least two of these 
public hearings are to occur prior to a grantee's publication for 
public comment of its action plan on its website, and the hearings 
shall be held in different locations within the MID area in locations 
that ensure geographic balance and maximum accessibility. Public 
hearings must be held in facilities that are physically accessible to 
persons with disabilities. Existing federal requirements provide that 
where physical accessibility is not achievable, grantees must give 
priority to alternative methods of product or information delivery that 
offer programs and activities to qualified individuals with 
disabilities in the most integrated setting appropriate under HUD's 
implementing regulations for Section 504 of the Rehabilitation Act (See 
24 CFR part 8, subpart C).
    In addition to the above public hearings, before the grantee 
submits the action plan for this grant or any substantial amendment to 
the action plan to HUD, the grantee will publish the proposed plan or 
amendment. The manner of publication must include prominent posting on 
the grantee's official website 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 
mitigation must be navigable by citizens from the grantee's (or 
relevant agency's) 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. 
Grantees should also consider recording public hearings and making them 
available online for live viewing and creating archival video of the 
public meetings on the grantee's website. Plan publication efforts and 
public hearings must comply with civil rights requirements, including 
meeting the effective communications requirements under Section 504 of 
the Rehabilitation Act (see, 24 CFR 8.6) and the Americans with 
Disabilities Act (see 28 CFR 35.160); and must provide meaningful 
access for persons with Limited English Proficiency (LEP) (see HUD's 
LEP Guidance, 72 FR 2732 (2007)).
    Grantees are responsible for ensuring that all citizens have equal 
access to information about the CDBG-MIT programs, including persons 
with disabilities and persons with limited English proficiency (LEP). 
Each grantee must ensure that mitigation program information is 
available in the appropriate languages for the geographic areas to be 
served (see HUD's LEP

[[Page 45853]]

Guidance, 72 FR 2732 (2007)) and take appropriate steps to ensure 
effective communications with persons with disabilities under Section 
504 (see, 24 CFR 8.6) and the Americans with Disabilities Act (see 28 
CFR 35.106). Since State grantees receiving CDBG-MIT funds may make 
grants throughout the State, including to Entitlement communities, 
States should carefully evaluate the needs of persons with disabilities 
and those with limited English proficiency. In assessing its language 
needs for translation of notices and other vital documents for non-
English speaking residents, the grantee 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) and at: https://www.lep.gov/guidance/HUD_guidance_Jan07.pdf.
    V.A.3.b. Consideration of public comments. 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.
    V.A.3.c. Availability and accessibility of the action plan and the 
use of citizen advisory groups. The grantee must make the action plan, 
any substantial amendments, and all performance reports available to 
the public on its website and on request. In addition, the grantee must 
make these documents available in a form accessible to persons with 
disabilities and those with limited English proficiency. 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.
    Following approval of the action plan, each grantee shall form one 
or more citizen advisory committees that shall meet in an open forum 
not less than twice annually in order to provide increased transparency 
in the implementation of CDBG-MIT funds, to solicit and respond to 
public comment and input regarding the grantee's mitigation activities 
and to serve as an on-going public forum to continuously inform the 
grantee's CDBG-MIT projects and programs. The grantee may also choose 
to form one or more of these committees as part of its process for 
preparing the initial CDBG-MIT action plan submission to HUD.
    V.A.3.d. Public website. HUD is requiring grantees to maintain a 
public website which provides information accounting for how all CDBG-
MIT funds are used, managed and administered, including links to all 
action plans, action plan amendments, performance reports, CDBG-MIT 
citizen participation requirements, and activity/program information 
for activities described in the action plan, including details of all 
contracts and ongoing procurement policies. To meet this requirement, 
each grantee must make the following items available on its website: 
The action plan (including all amendments); each QPR (as created using 
the DRGR system); procurement policies and procedures; all executed 
contracts that will be paid with CDBG-MIT funds; and the status of 
services or goods currently being procured (e.g., phase of the 
procurement, requirements for proposals, etc.).
    V.A.3.e. Application status and transparency. For applications 
received for CDBG-MIT assistance, the grantee must provide multiple 
methods of communication, such as websites, toll-free numbers, or other 
means that provide applicants with timely information to determine the 
status of their application for assistance, as provided for section 
V.A.1.b.(1) of this notice.
    When a grantee seeks to competitively award CDBG-MIT funds, the 
grantee must publish on its CDBG-MIT website the eligibility 
requirements for such funding, all criteria to be used by the grantee 
in its selection of applications for funding (including the relative 
importance of each criterion) and the time frame for consideration of 
applications. The grantee shall maintain documentation to demonstrate 
that each funded and unfunded application was reviewed and acted upon 
by the grantee in accordance with the published eligibility 
requirements and funding criteria.
    V.A.3.f. Citizen complaints. The grantee will provide a timely 
written response to every citizen complaint. The response must be 
provided within 15 working days of the receipt of the complaint. 
Complaints regarding fraud, waste, or abuse of government funds should 
be forwarded to the HUD OIG Fraud Hotline (phone: 1-800-347-3735 or 
email: [email protected]).
    V.A.4. HUD performance review authorities and grantee reporting 
requirements in the Disaster Recovery Grant Reporting (DRGR) System.
    V.A.4.a. Performance review authorities. 42 U.S.C. 5304(e) 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 grantee has carried out its activities in a timely manner, 
whether the grantee's activities and certifications are carried out in 
accordance with the requirements and the primary objectives of the HCDA 
and other applicable laws, and whether the grantee has the continuing 
capacity to carry out those activities in a timely manner.
    This notice waives the requirements for submission of a performance 
report pursuant to 42 U.S.C. 12708(a), 24 CFR 91.520, and 24 CFR 
1003.506. Alternatively, HUD is requiring that grantees enter 
information in the DRGR system in sufficient detail to permit the 
Department's review of grantee performance on a quarterly basis through 
the QPR and to enable remote review of grantee data to allow HUD to 
assess compliance and risk. HUD-issued general and appropriation-
specific guidance for DRGR reporting requirements can be found on the 
HUD exchange at: https://www.hudexchange.info/programs/drgr/.
    V.A.4.b. DRGR action plan. Each grantee must enter its action plan 
for mitigation, including performance measures, into HUD's DRGR system. 
As more detailed information about uses of funds is identified by the 
grantee, it must be entered into the DRGR system at a level of detail 
that is sufficient to serve as the basis for acceptable performance 
reports and permits HUD review of compliance requirements. HUD will 
provide clarifying guidance as to the content and format of the DRGR 
action plan, which will help reflect the unique qualities and 
requirements of CDBG-MIT activities and ensure clear communication to 
the public.
    The action plan must also be entered into the DRGR system so that 
the grantee is able to draw its CDBG-MIT funds. The grantee may enter 
activities into the DRGR system before or after submission of the 
written action plan to HUD but will not be able to budget grant funds 
to these activities until after the grant agreement has been executed. 
To enter an activity into the DRGR system, the grantee must know the 
activity type, national objective, and the organization that will be 
responsible for the activity. In addition, a Data Universal Numbering 
System (DUNS) number must be entered into the system for each 
Responsible Organization identified in DRGR as carrying out a CDBG-MIT 
funded activity.
    A grantee will gain access to its line of credit upon review and 
approval of the initial DRGR action plan. Each activity entered into 
the DRGR system must also be categorized under a

[[Page 45854]]

``project.'' Typically, projects are based on groups of activities that 
accomplish a similar, broad purpose (e.g., housing, infrastructure, or 
economic development) or are based on an area of service (e.g., 
Community A). If a grantee describes just one program within a broader 
category (e.g., single family rehabilitation), that program is entered 
as a project in the DRGR system. Further, the budget of the program 
would be identified as the project's budget. If a grantee has only 
identified the Method of Distribution (MOD) upon HUD's approval of the 
published action plan, the MOD categories typically serve as the 
projects in the DRGR system, rather than activity groupings. Activities 
are added to MOD projects as specific CDBG-MIT programs and projects 
are identified for funding.
    V.A.4.c. Tracking oversight activities in the DRGR system; use of 
DRGR data for HUD review and dissemination. Each grantee must also 
enter into the DRGR system summary information on monitoring visits and 
reports, audits, and technical assistance it conducts as part of its 
oversight of its mitigation programs. The grantee's QPR will include a 
summary indicating the number of grantee oversight visits and reports 
(see subparagraph e. for more information on the QPR). HUD will use 
data entered into the DRGR action plan and the QPR, transactional data 
from the DRGR system, and other information provided by the grantee, to 
provide reports to Congress and the public, as well as 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 expenditures to 
determine compliance with administrative and public service caps 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 the Department's monitoring. Grantees must establish 
internal controls to ensure that no personally identifiable information 
shall be reported in DRGR.
    V.A.4.d. Tracking program income in the DRGR system. Grantees must 
use the DRGR system to draw grant funds. Grantees must also use the 
DRGR system to track program income receipts, disbursements, revolving 
loan funds, and leveraged funds (if applicable). If a State provides 
CDBG-MIT funds to a local government and permits local governments to 
retain program income, or a State permits subrecipients to retain 
program income prior to grant closeout, the grantee must establish 
program income accounts in the DRGR system. The DRGR system requires 
grantees to use program income before drawing additional grant funds 
and ensures that program income retained by one organization will not 
affect grant draw requests for other organizations.
    V.A.4.e. DRGR system Quarterly Performance Report (QPR). Each 
grantee must submit a QPR through the DRGR system no later than 30 days 
following the end of each calendar quarter. Within 3 days of submission 
to HUD, each QPR must be posted on the grantee's official website. In 
the event the QPR is rejected by HUD, the grantee must post the revised 
version, as approved by HUD, within 3 days of HUD approval. The 
grantee's first QPR is due after the first full quarter after HUD signs 
the grant agreement. For example, a grant agreement signed in April 
requires a QPR to be submitted by October 30. QPRs must be submitted on 
a quarterly basis until all funds have been expended and all 
expenditures and accomplishments have been reported. If a satisfactory 
report is not submitted in a timely manner, HUD may suspend access to 
CDBG-MIT funds until a satisfactory report is submitted, or may 
withdraw and reallocate funding if HUD determines, after notice and 
opportunity for a hearing, that the jurisdiction did not submit a 
satisfactory report.
    Each QPR will include information about the uses of funds in 
activities identified in the DRGR action plan during the applicable 
quarter. This includes, but is 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-MIT funds to be expended on each activity; beginning and 
actual completion dates of completed activities; achieved performance 
outcomes, such as number of housing units completed or number of low- 
and moderate-income persons served; and the race and ethnicity of 
persons assisted under direct-benefit activities. For all housing and 
economic development activities, the address of each CDBG-MIT assisted 
property must be recorded in the QPR. Grantees must not include such 
addresses in its public QPR; when entering addresses in the QPR, 
grantees must select ``Not Visible on PDF'' to exclude them from the 
report required to be posted on its website. The DRGR system will 
automatically display the amount of program income receipted, the 
amount of program income reported as disbursed, and the amount of grant 
funds disbursed in the QPR. Each grantee must include a description of 
actions taken in that quarter to affirmatively further fair housing, 
within the section titled ``Overall Progress Narrative'' in the DRGR 
system.
    V.A.5. Direct grant administration and means of carrying out 
eligible activities-applicable to State grantees only. Requirements at 
42 U.S.C. 5306(d) are waived to the extent necessary to allow a State 
to use its CDBG-MIT grant allocation directly to carry out State-
administered CDBG-MIT eligible activities, rather than distribute all 
funds to local governments. Pursuant to this waiver, the standard at 24 
CFR 570.480(c) and the provisions at 42 U.S.C. 5304(e)(2) will also 
include activities that the State carries out directly. Eligible CDBG-
MIT activities may be carried out by the State, subject to State law 
and consistent with the requirement of 24 CFR 570.200(f), through its 
employees, through procurement contracts, or through assistance 
provided under agreements with subrecipients. State grantees continue 
to be responsible for civil rights, labor standards, and environmental 
protection requirements, for compliance with 24 CFR 570.489 (g) and (h) 
relating to conflicts of interest and for compliance with 24 CFR 
570.489(m) relating to monitoring and management of subrecipients.
    A State grantee may also carry out activities in tribal areas. The 
State shall coordinate with the Indian tribe with jurisdiction over the 
tribal area when providing CDBG-MIT assistance to beneficiaries in 
tribal areas. A State grantee carrying out projects in tribal areas, 
either directly or through its employees, through procurement 
contracts, or through assistance provided under agreements with 
subrecipients, must obtain the consent of the Indian tribe with 
jurisdiction over the tribal area to allow the State to carry out or to 
fund CDBG-MIT projects in the area. Indian tribes that receive CDBG-MIT 
funding from a State grantee must comply with applicable 
nondiscrimination requirements (see 24 CFR 1003.601).
    For activities carried out by entities eligible under section 
105(a)(15) of the HCDA, such entities will be subject to the 
description of a nonprofit under that section rather than the 
description located in 24 CFR 570.204, even in a case in which the 
entity is receiving assistance through a local government that is an 
entitlement grantee.
    V.A.5.a. Use of administrative funds across multiple grants. The 
Additional Supplemental Appropriations for Disaster Relief Act, 2019 
(Pub. L. 116-20) approved June 6, 2019, authorizes

[[Page 45855]]

special treatment of grant administrative funds for grantees that 
received awards under certain CDBG-DR grants (this includes CDBG-MIT 
grants). Accordingly, grantees that received funds under Public Laws 
114-113, 114-223, 114-254, 115-31, 115-56, 115-123, and 115-254, or any 
future act may use eligible administrative funds (up to 5 percent of 
each grant award plus up to 5 percent of program income generated by 
the grant) appropriated by these acts without regard to the particular 
disaster appropriation from which such funds originated. If the grantee 
chooses to exercise this authority, the grantee must ensure that it has 
appropriate financial controls to ensure that the amount of grant 
administration expenditures for each of the aforementioned grants will 
not exceed 5 percent of the total grant award for each grant (plus 5 
percent of program income), review and modify its financial management 
policies and procedures regarding the tracking and accounting of 
administration costs, as necessary, and address the adoption of this 
treatment of administrative costs in the applicable portions of its 
Financial Management and Grant Compliance submissions as referenced in 
V.A.1.a.(1).b. Grantees are reminded that all costs incurred for 
administration must still qualify as an eligible administration 
expense. HUD will issue additional guidance on this provision that 
grantees will be required to follow to ensure compliance and maintain 
proper financial controls.
    V.A.5.b. Use of funds in response to Hurricane Matthew and 
Hurricane Florence (State of North Carolina and South Carolina only). 
Public Law 116-20 provides that grantees that received an allocation 
for mitigation funding provided by Public Law 115-123 in response to 
Hurricane Matthew may use the CDBG-MIT funds for the same activities, 
consistent with the requirements of the CDBG-MIT grant, in the most 
impacted and distressed areas related to Hurricane Florence. 
Expenditures in the HUD-identified MID areas for Hurricane Florence 
count toward the 50 percent expenditure requirement for HUD-identified 
MID areas outlined in section II.C. of this notice.
    V.A.6. Consolidated plan waiver. HUD is temporarily waiving the 
requirement for consistency with the consolidated plan (requirements at 
42 U.S.C. 12706, 24 CFR 91.325(a)(5) and 91.225(a)(5)), 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 submits its 
next full (3-5 year) consolidated plan, or for 24 months after the 
applicability date of this notice, whichever is sooner. If the grantee 
has not already updated its Analysis of Impediments to Fair Housing 
Choice or accepted Assessment of Fair Housing (AFH) in coordination 
with its post-waiver consolidated plan update, HUD strongly encourages 
the grantee do so to more accurately reflect housing conditions 
following the qualifying disaster(s) that served as the basis for the 
CDBG-MIT allocation.
    V.A.7. Requirement for consultation during plan preparation. 
Currently, the HCDA and HUD regulations require a State grantee to 
consult with affected local governments in nonentitlement 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)(2), and 24 CFR 91.110, and instituting the alternative 
requirement that States receiving a CDBG-MIT allocation consult with 
all disaster-affected local governments (including any CDBG Entitlement 
grantees), Indian tribes, and local public housing authorities in 
determining the use of funds. This ensures that State grantees 
sufficiently assess the impacts of all areas affected by the disaster. 
Additional guidance on consultation with local stakeholders can be 
found in the National Disaster Recovery Framework and its discussion of 
pre- and post-disaster planning at https://www.fema.gov/national-disaster-recovery-framework.
    Grantees must consult with States, Indian tribes, local 
governments, Federal partners, nongovernmental organizations, the 
private sector, and other stakeholders and affected parties in the 
surrounding geographic area to ensure consistency of the action plan 
with applicable regional redevelopment plans. As provided in sections 
V.A.1.b.(c) and V.A.2.a.(5), agencies that administer CDBG-MIT funds 
are required to consult with any separate agency of the jurisdiction 
that is responsible for development of the FEMA HMP for the grantee's 
jurisdiction, including coordinating with the State Hazard Mitigation 
Officer (SHMO).
    Grantees are advised to maintain documentation of all consultations 
required by this paragraph to demonstrate compliance with this 
requirement.
    V.A.8. Grant administration responsibilities and general 
administration cap.
    V.A.8.a. Grantee responsibilities. Each grantee shall administer 
its award in compliance with all applicable laws and regulations and 
shall be financially accountable for the use of all funds provided for 
CDBG-MIT funds.
    V.A.8.b. General administration cap. For all CDBG-MIT grantees, the 
CDBG program administration requirements must be modified to be 
consistent with the Appropriations Act. Accordingly, 5 percent of the 
grant and 5 percent of program income generated by the grant may be 
used for administrative costs by the grantee, units of general local 
government, or by subrecipients. Thus, the total of all costs 
classified as administrative for any CDBG-MIT grantee must be less than 
or equal to the 5 percent cap.
    (1) Combined technical assistance and administrative expenditures 
cap for States only. 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 of the 
grant amount plus 5 percent of program income generated by the grant. 
Under this alternative requirement, a State is limited to spending a 
maximum of 15 percent of its total grant amount or $750 million, 
whichever is less, on planning costs. Planning costs subject to this 
cap are those defined in 42 U.S.C. 5305(a)(12).
    V.A.9. Operation and maintenance waiver for CDBG-MIT program 
income. The provision of 24 CFR 570.207(b)(2) generally prohibits the 
use of CDBG funds for the repair, operation or maintenance of public 
facilities, improvements or services. With this first-time allocation 
of mitigation-only funds to CDBG-DR grantees, HUD seeks to help local 
government CDBG-MIT grantees to fulfill their commitment to fund the 
operation and maintenance of innovative projects financed with CDBG-MIT 
funds and to encourage new operating partnerships. HUD has determined 
that good cause exists for a waiver that will allow the limited use of 
CDBG-MIT program income to be used by CDBG-MIT grantees who are units 
of

[[Page 45856]]

local government, for the operation and maintenance of CDBG-MIT 
projects. Accordingly, HUD is waiving 24 CFR 570.207(b)(2) to the 
extent necessary to allow CDBG-MIT local government grantees to use 
program income generated by CDBG-MIT funds for the repair, operation, 
and maintenance of publicly owned projects financed with CDBG-MIT 
funds, as provided in section V.A.19.d. of this notice. This waiver 
shall apply only to program income generated by CDBG-MIT funds, and 
shall not apply to the initial disbursement of CDBG-MIT funds or to any 
CDBG-DR or CDBG funded activities or resulting CDBG-DR or CDBG program 
income.
    V.A.10. Planning-only activities-applicable to State grantees only. 
The Department notes that effective mitigation relies on some form of 
area-wide or comprehensive planning activity independent of the 
ultimate source of implementation funds. To assist State grantees, the 
Department is waiving the requirements at 24 CFR 570.483(b)(5) or 
(c)(3), which limit the circumstances under which the planning activity 
can meet a low- and moderate-income national objective. Instead, States 
must comply with 24 CFR 570.208(d)(4) when funding mitigation, 
planning-only grants, or directly administering planning activities 
that guide mitigation 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, which may include support for 
local and regional functional land-use plans, master plans, historic 
preservation plans, comprehensive plans, community recovery plans, 
resilience plans, development of building codes, zoning ordinances, and 
neighborhood plans. Such planning activities are strongly encouraged to 
be undertaken in partnership with local governments and regional 
planning entities, as these policies have critical impacts on long-term 
mitigation goals and objectives. Grantees are encouraged to fund 
planning activities that align and integrate with FEMA's pre-disaster 
mitigation grant program (PDM or BRIC) and to upgrade mapping, data, 
and other capabilities to better understand evolving disaster risks. 
Grantees may use CDBG-MIT funds to enhance and update real property 
registration and land information systems at the state and local level. 
Grantees are expected to have land information systems which are 
sufficient to track requirements on the use of CDBG-MIT funds that run 
with the land.
    State grantees are also encouraged to use CDBG-MIT planning funds 
to establish programs and policies that would allow them to perform at 
an enhanced level as defined by FEMA requirements, as well as to meet 
the documentation requirements for a FEMA Enhanced Hazard Mitigation 
Plan. Grantees may also partner with agency staff responsible for 
community floodplain management activities to participate in the 
National Flood Insurance Program's (NFIP) Community Rating System 
(CRS), which is a voluntary incentive program that recognizes 
floodplain management activities that exceed minimum NFIP requirements. 
Exceeding these requirements can result in discounted flood insurance 
premium rates which reflect a community's reduced flood risk. Plans 
shall include the required Mitigation Needs Assessment of disaster 
risks, including anticipated effects of future extreme weather events 
and other hazards, as described in section V.A.2.a.(1) of this notice. 
Additional resources to assist in this process are available on the HUD 
exchange website: https://www.hudexchange.info/programs/CDBG-MIT/resources/#natural-hazard-risk-and-resilience-tools.
    V.A.11. Overall benefit requirement. The primary objective of the 
HCDA 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)). This target is likely to be difficult to reach when 
grantees are pursuing community-wide or regional mitigation measures to 
protect entire regions or communities regardless of income. 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 570.200(a)(3), that 70 percent of 
funds be used for activities that benefit low- and moderate-income 
persons. Instead, 50 percent of CDBG-MIT funds must benefit low- and 
moderate-income persons. However, as provided in section V.A.2.a.(4), 
all grantees must prioritize the protection of LMI individuals, and 
describe in the action plan how their proposed programs and projects 
will reflect that priority.
    V.A.12. Use of the ``upper quartile'' or ``exception criteria'' for 
low- and moderate-income area benefit activities. Section 101(c) of the 
HCDA requires each funded activity to meet a national objective of the 
CDBG program, including the national objective of benefiting low- and 
moderate-income persons. Grantees may meet this national objective on 
an area basis, through an activity which is available to benefit all 
the residents of an area where at least 51 percent of the residents are 
low- and moderate income. In some cases, 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 fewer than one quarter of the 
populated-block groups in its jurisdiction contain 51 percent or more 
low- and moderate-income persons. In such a community, activities must 
serve an area that 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. CDBG-MIT grantees are required to use the most 
recent data available in implementing the exception criteria at https://www.hudexchange.info/programs/acs-low-mod-summary-data/acs-low-mod-summary-data-exception-grantees. The ``exception criteria'' apply to 
mitigation activities funded pursuant to this notice in jurisdictions 
covered by such criteria, including jurisdictions that receive 
mitigation funds from a State.V.A.13. National objective waivers and 
alternative requirements applicable to CDBG-MIT funds. The following 
waivers and alternative requirements modify national objective criteria 
to ensure that the use of CDBG-MIT funds is consistent with mitigation 
purposes required by the Appropriations Act.
    V.A.13.a. Additional criteria applicable to all mitigation 
activities

[[Page 45857]]

funded with CDBG-MIT funds. The provisions of 24 CFR 570.483(e) and 
570.208(d) are modified by an alternative requirement to add the 
following additional criteria for all mitigation activities funded with 
CDBG-MIT funds. To meet a national objective, all CDBG-MIT activities 
must:
    (i) Demonstrate the ability to operate for the useful life of the 
project. Each grantee must plan for the long-term operation and 
maintenance of infrastructure and public facility projects funded with 
CDBG-MIT funds. The grantee must have a plan to fund the long-term 
operation and maintenance for CDBG-MIT projects. Funding options might 
include State or local resources, borrowing authority, or retargeting 
of existing financial resources.
    (ii) Be consistent with other mitigation activities. The CDBG-MIT 
activity must be consistent with the other mitigation activities that 
the grantee will carry out with CDBG-MIT funds in the MID area. To be 
consistent, the CDBG-MIT activity must not increase the risk of loss of 
life or property in a way that undermines the benefits from other uses 
of CDBG-MIT funds in the MID.
    V.A.13.b. Additional criteria applicable to Covered Projects funded 
with CDBG-MIT funds. The provisions of 24 CFR 570.483(e) and 570.208(d) 
are modified by an alternative requirement to add the following 
additional criteria for Covered Projects funded with CDBG-MIT funds. To 
meet a national objective, all Covered Projects must:
    (i) Demonstrate long-term efficacy and fiscal sustainability. The 
grantee must demonstrate the long-term efficacy and sustainability of 
the Covered Project by documenting measurable outcomes or reduction in 
risk as discussed in section V.A.2.i. of this notice, and documenting 
how the Covered Project will reflect changing environmental conditions 
(such as sea level rise or development patterns) with risk management 
tools, and alter funding sources if necessary. The grantee also must 
establish a plan for the long-term operation and maintenance of the 
Covered Project and include a description of this plan in its action 
plan, as required by V.A.2.a.(10) and the additional criteria 
applicable to all CDBG-MIT activities.
    (ii) Demonstrably benefit the MID area. The benefits of the Covered 
Project must outweigh the costs of the Covered Project. Benefits 
outweigh costs if the BCA results in a benefit-to-cost ratio greater 
than 1.0. Alternatively, for a Covered Project that serves low- and 
moderate-income persons or other persons that are less able to mitigate 
risks or respond to and recover from disasters, benefits outweigh costs 
if the grantee supplements its BCA with a qualitative description of 
benefits that cannot be quantified but sufficiently demonstrate unique 
and concrete benefits of the Covered Project for low- and moderate-
income persons or other persons that are less able to mitigate risks, 
or respond to and recover from disasters. This qualitative description 
may include a description of how the Covered Project will provide 
benefits such as enhancing a community's economic development 
potential, improving public health and or expanding recreational 
opportunities. BCAs must be completed consistent with the requirements 
of paragraph V.A.2.h.(2)(c)(ii).
    V.A.13.c. Additional urgent need national objective criteria for 
CDBG-MIT Activities. In the context of disaster recovery and the 
allocation of CDBG-DR funds, the Department has historically provided 
waivers and established an alternative requirement to the urgent need 
national objective of the CDBG program as one means of helping 
communities to recover quickly. Specifically, the Department has waived 
the certification requirements for the documentation of urgent need, 
located at 24 CFR 570.208(c) and 24 CFR 570.483(d), recognizing that in 
the context of disaster recovery those requirements have proven 
burdensome and redundant.
    The Appropriations Act directs the Department to allocate CDBG-MIT 
funds to grantees that received CDBG-DR funds to assist in recovery 
from major federally declared disasters occurring in 2015, 2016 and 
2017. To reflect the direction of the Appropriations Act to allocate 
funds to grantees recovering from recent disasters and to address the 
demonstrable need for significant mitigation improvements by those 
grantees, the Department is waiving the criteria for the urgent 
national objective as provided at 24 CFR 570.208(c) and 24 CFR 
570.483(d) and is establishing an alternative requirement to include 
new urgent need national objective criteria for CDBG-MIT activities.
    To meet the alternative criteria for the urgent need mitigation 
(UNM) national objective, each grantee must document that the activity: 
(i) Addresses the current and future risks as identified in the 
grantee's Mitigation Needs Assessment of most impacted and distressed 
areas; and (ii) will result in a measurable and verifiable reduction in 
the risk of loss of life and property.
    To meet the UNM national objective criteria, grantees must 
reference in their action plan the risk identified in the Mitigation 
Needs Assessment that is addressed by the activity. Grantees must 
maintain documentation of the measurable and verifiable reduction in 
risk that will be achieved upon completion of the activity. Action 
plans must be amended, as necessary, to ensure that this information is 
included for each activity undertaken with CDBG-MIT funds.
    V.A.13.d. Additional LMI national objective criteria for CDBG-MIT 
activities. In addition to other applicable criteria, CDBG-MIT 
activities can also meet an LMI national objective if they meet the 
criteria established in an alternative requirement in section V.B.5. of 
this notice applicable to buyout activities (LMB) and housing 
incentives (LMHI).
    V.A.13.e. The UNM national objective and additional criteria for 
mitigation activities and Covered Projects shall be applicable only to 
funds allocated by this notice. Similarly, the alternative urgent need 
national objective criteria in the Prior Notices does not apply to 
CDBG-MIT funds.
    V.A.13.f. Unless a grantee has received prior approval from HUD, 
CDBG-MIT activities cannot meet the CDBG national objective for the 
elimination of slum and blight as provided at 24 CFR 570.208(b) and 24 
CFR 570.483(c). Grantees shall not rely on the national objective 
criteria for elimination of slum and blighting conditions without 
approval from HUD because this national objective generally is not 
appropriate in the context of mitigation activities.
    V.A.14. Waiver and alternative requirement for distribution to CDBG 
metropolitan cities and urban counties-applicable to State grantees 
only. 42 U.S.C. 5302(a)(7) (definition of ``nonentitlement area'') and 
provisions of 24 CFR part 570, including 24 CFR 570.480, are waived to 
permit a State to distribute CDBG-MIT funds to units of local 
government and Indian tribes.
    V.A.15. 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 requirements at 24 CFR 570.502, 
570.503, and 570.500(c) apply.
    V.A.16. Recordkeeping. When a State carries out activities 
directly, 24 CFR

[[Page 45858]]

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-MIT 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: (1) Enable HUD to make the applicable 
determinations described at 24 CFR 570.493; (2) make compliance 
determinations for activities carried out directly by the State; and 
(3) 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 (FHEO) purposes, 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. All grantees must report FHEO data in the 
DRGR system at the activity level.
    V.A.17. Change of use of real property, applicable to State 
grantees only. This alternative requirement conforms 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 ``State, unit of general local government (UGLG) or State 
subrecipient.''
    V.A.18. 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 CDBG-MIT grant: The State shall make 
reviews and audits, including on-site reviews of any subrecipients, 
designated public agencies, and local governments, as may be necessary 
or appropriate to meet the requirements of section 104(e)(2) of the 
HCDA, 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 local governments.
    Each CDBG-MIT grantee shall attend and require subrecipients to 
attend fraud related training provided by HUD OIG to assist in the 
proper management of CDBG-MIT grant funds. Additional information about 
this training will be posted on the HUD website.
    V.A.19. Program income alternative requirement. The Department is 
waiving applicable program income rules at 42 U.S.C. 5304(j) and 24 CFR 
570.489(e), 570.500 and 570.504 only to the extent necessary to provide 
additional flexibility to State and local government as described 
below. The alternative requirements provide guidance regarding the use 
of program income received before and after grant close out and address 
revolving loan funds.
    V.A.19.a. Definition of program income.
    (1) For purposes of this notice, ``program income'' is defined as 
gross income generated from the use of CDBG-MIT funds received by a 
State, local government, or a subrecipient of a State or local 
government, except as provided in subparagraph (d) of this paragraph. 
When income is generated by an activity that is only partially assisted 
with CDBG-MIT funds, the income shall be prorated to reflect the 
percentage of CDBG-MIT funds used (e.g., a single loan supported by 
CDBG-MIT 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-MIT funds.
    (b) Proceeds from the disposition of equipment purchased with CDBG-
MIT funds.
    (c) Gross income from the use or rental of real or personal 
property acquired by a State, local government, or subrecipient thereof 
with CDBG-MIT 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, local government, or subrecipient thereof, that was constructed 
or improved with CDBG-MIT funds.
    (e) Payments of principal and interest on loans made using CDBG-MIT 
funds.
    (f) Proceeds from the sale of loans made with CDBG-MIT funds.
    (g) Proceeds from the sale of obligations secured by loans made 
with CDBG-MIT funds.
    (h) Interest earned on program income pending disposition of the 
income, including interest earned on funds held in a revolving fund 
account.
    (i) Funds collected through special assessments made against 
nonresidential properties and properties owned and occupied by 
households not low- and moderate-income, where the special assessments 
are used to recover all or part of the CDBG-MIT portion of a public 
improvement.
    (j) Gross income paid to a State, local government, or a 
subrecipient thereof, from the ownership interest in a for-profit 
entity in which the income is in return for the provision of CDBG-MIT 
assistance.
    (2) ``Program income'' does not include the following:
    (a) The total amount of funds that is less than $35,000 received in 
a single year and retained by a State, local government, or a 
subrecipient thereof.
    (b) Amounts generated by activities eligible under section 
105(a)(15) of the HCDA and carried out by an entity under the authority 
of section 105(a)(15) of the HCDA.
    V.A.19.b. Retention of program income. State grantees may permit a 
local government or Indian tribe that receives or will receive program 
income to retain the program income but are not required to do so.
    V.A.19.c. Program income--use, close out, and transfer.
    (1) Program income received (and retained, if applicable) before or 
after close out of the CDBG-MIT grant that generated the program 
income, and used to continue mitigation activities, is treated as 
additional CDBG-MIT funds subject to the requirements of this notice 
and must be used for mitigation activities in accordance with the 
grantee's action plan. 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 sections V.A.19.d. and e.
    (2) In addition to the regulations addressing program income found 
at 24 CFR 570.489(e) and 570.504, the following rules apply: A State 
grantee may transfer program income to its annual CDBG program before 
close out of the grant that generated the program income. In addition, 
a State grantee may transfer program income before close out to any 
annual CDBG-funded activities carried out by a local government within 
the State. Program income received by a grantee after close out 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 received 
that is not used to continue the mitigation activity will not be 
subject to the waivers and alternative requirements of this notice. 
Rather, those funds will be subject to the grantee's regular CDBG 
program rules.
    V.A.19.d. Repair, operation and maintenance of certain CDBG-MIT 
projects.

[[Page 45859]]

    Local government CDBG-MIT grantees may use program income to 
reimburse its agencies for the repair, operation and maintenance of 
publicly owned and operated projects funded with CDBG-MIT funds, 
provided that: (1) The agency that owns and operates the project has 
entered into a written agreement with the grantee that commits the 
agency to providing not less than fifty percent of funds necessary for 
the annual repair, operating and maintenance costs of the project; and 
(2) the grantee adopts policies and procedures to provide for the 
grantee's regular, on-site inspection of the project in order to ensure 
its proper repair, operation and maintenance. State grantees may 
request a waiver from the Department for the use of program income for 
this purpose.
    V.A.19.e. Revolving loan funds. State grantees and local 
governments may establish revolving funds to carry out specific, 
identified mitigation 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 mitigation 
activities. These activities generate payments used to support other 
mitigation activities going forward. These payments to the revolving 
fund are program income and must be substantially disbursed from the 
revolving fund before additional CDBG-MIT grant funds are drawn from 
the U.S. Treasury for payments that could be funded from the revolving 
fund. Such program income is not required to be disbursed for 
nonrevolving fund activities.
    State grantees may also establish a revolving fund to distribute 
funds to local governments to carry out specific, identified mitigation 
activities. The same requirements, outlined above, apply to this type 
of revolving loan fund.
    A revolving fund established by a grantee or local government shall 
not be directly funded or capitalized with grant funds.
    V.A.20. Limitation on reimbursement. The provisions of 24 CFR 
570.489(b) are applied to permit a State grantee to charge to the grant 
eligible pre-award costs incurred by itself, its recipients or 
subrecipients (including public housing authorities (PHAs)) that are 
associated with CDBG-MIT funds and comply with grant requirements. A 
local government grantee is subject to the provisions of 24 CFR 
570.200(h) but may reimburse itself or its subrecipients for eligible 
pre-award costs that are associated with CDBG-MIT funds and comply with 
grant requirements. Section 24 CFR 570.200(h)(1)(i) will not apply to 
the extent that it requires pre-award activities to be included in a 
consolidated plan. Each grantee must include all pre-award activities 
in its action plan.
    Under the Prior Notices, grantees were permitted to charge to 
grants the pre-award and preapplication costs of homeowners, 
businesses, and other qualifying entities for certain eligible recovery 
costs they incurred within one year of a qualified disaster. Because 
the one-year period has passed for all grantees receiving an allocation 
pursuant to this notice and because CDBG-MIT funds are provided in 
order to reduce risks from future disasters, CDBG-MIT funds shall not 
be used to reimburse homeowners, businesses or entities (other than 
grantees, local governments, and subrecipients described above) for 
mitigation activities completed prior to the applicability date of this 
notice.
    V.A.21. Prohibition on forced mortgage payoff. In some instances, 
mortgage agreement terms require homeowners to repay the balance of the 
mortgage loan with assistance received to rehabilitate, reconstruct or 
elevate the home in order to make the home more resilient. CDBG-MIT 
funds, however, may not be used to repay a mortgage loan in whole or in 
part under this type of ``forced mortgage payoff'' provision. The 
ineligibility of a forced mortgage payoff with CDBG-MIT funds does not 
affect HUD's longstanding guidance that when other non-CDBG disaster 
assistance is taken by lenders for a forced mortgage payoff, those 
funds are not considered to be available to the homeowner and do not 
constitute a duplication of benefits.
    V.A.22. One-for-one replacement housing, relocation, and real 
property acquisition Requirements. Activities and projects undertaken 
with CDBG-MIT funds are subject to the Uniform Relocation Assistance 
and Real Property Acquisition Policies Act of 1970, as amended, (42 
U.S.C. 4601 et seq.) (``URA'') and section 104(d) of the HCDA (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 with respect to the use of CDBG-MIT 
funds:
    V.A.22.a. Section 104(d) one-for-one replacement. One-for-one 
replacement requirements at section 104(d)(2)(A)(i) and (ii) and (d)(3) 
of the HCDA and 24 CFR 42.375 are waived in connection with CDBG-MIT 
funds for lower-income dwelling units that are damaged by the disaster 
and not suitable for rehabilitation. The one-for-one replacement 
requirements generally apply to demolished or converted occupied and 
vacant occupiable lower-income dwelling units. This waiver exempts 
disaster-damaged units that meet the grantee's definition of ``not 
suitable for rehabilitation'' from the one-for-one replacement 
requirements. Before carrying out activities that may be subject to the 
one-for-one replacement requirements, the grantee must define ``not 
suitable for rehabilitation'' in its action plan or in policies and 
procedures governing these activities. A grantee with questions about 
one-for-one replacement requirements is encouraged to contact the HUD 
regional relocation specialist responsible for its jurisdiction.
    HUD is waiving the section 104(d) one-for-one replacement 
requirement for lower-income dwelling units that are damaged by the 
disaster and not suitable for rehabilitation because it does not 
account for the large, sudden changes that a major disaster may cause 
to the local housing stock, population, or economy. Further, 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 that are 
not suitable for rehabilitation can pose a threat to public health and 
safety and to economic development. Grantees must reassess 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 that the demolition and/or disposition of 
PHA-owned public housing units is covered by section 18 of the United 
States Housing Act of 1937, as amended, and 24 CFR part 970.
    V.A.22.b. Relocation assistance. The relocation assistance 
requirements at section 104(d)(2)(A) of the HCDA 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, as modified by this 
notice, for activities related to mitigation. Without this waiver, 
disparities exist in relocation assistance associated with activities 
typically funded by HUD and FEMA (e.g., buyouts and relocation). Both 
FEMA and CDBG funds are subject to the requirements of the URA; 
however, CDBG funds are subject to section 104(d), while FEMA funds are 
not. The URA provides at 49 CFR 24.402(b) that a displaced person is 
eligible to receive

[[Page 45860]]

a rental assistance payment that is calculated to cover a period of 42 
months. By contrast, section 104(d) allows a lower-income displaced 
person to choose between the URA rental assistance payment and a rental 
assistance payment calculated over a period of 60 months. This waiver 
of the section 104(d) relocation assistance requirements assures 
uniform and equitable treatment by setting the URA and its implementing 
regulations as the sole standard for relocation assistance for CDBG-MIT 
funds.
    V.A.22.c. Tenant-based rental assistance. The requirements of 
sections 204 and 205 of the URA, and 49 CFR 24.2(a)(6)(vii), 
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 payment 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 
comparable replacement dwellings are made available to the tenant 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 the grantee's actions whenever TBRA program subsidies are 
available but funds for cash replacement housing payments are limited 
and such payments are required by the URA to be based on a 42-month 
term.
    V.A.22.d. Arm's length voluntary purchase. The requirements at 49 
CFR 24.101(b)(2)(i) and (ii) are waived to the extent that they apply 
to an arm's length voluntary purchase carried out by a person who was 
allocated CDBG-MIT funds and 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 to implement mitigation activities. Grantees are reminded 
that tenants occupying real property acquired through voluntary 
purchase may be eligible for relocation assistance.
    V.A.22.e. Optional relocation policies. 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 level. Unlike the regular 
CDBG program, States may carry out mitigation activities directly or 
through subrecipients, but 24 CFR 570.606(d) does not account for this 
distinction. This waiver makes clear that grantees receiving CDBG-MIT 
funds may establish optional relocation policies or permit their 
subrecipients to establish separate optional relocation policies. This 
waiver is intended to provide grantees with maximum flexibility in 
developing optional relocation policies with CDBG-MIT funds.
    V.A.22.f. Waiver of Section 414 of the Stafford Act. Section 414 of 
the Stafford Act (42 U.S.C. 5181) provides that ``Notwithstanding any 
other provision of law, no person otherwise eligible for any kind of 
replacement housing payment under the Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970 (Pub. L. 91-646) [42 
U.S.C. 4601 et seq.] [``URA''] shall be denied such eligibility as a 
result of his being unable, because of a major disaster as determined 
by the President, to meet the occupancy requirements set by [the 
URA].'' Accordingly, homeowner occupants and tenants displaced from 
their homes because of the identified disaster and who would have 
otherwise been displaced as a direct result of any acquisition, 
rehabilitation, or demolition of real property for a federally-funded 
program or project may become eligible for a replacement housing 
payment notwithstanding their inability to meet occupancy requirements 
prescribed in the URA. Section 414 of the Stafford Act (including its 
implementing regulation at 49 CFR 24.403(d)(1)), is waived to the 
extent that it would apply to real property acquisition, rehabilitation 
or demolition of real property for a CDBG-MIT funded project commencing 
more than one year after the Presidentially declared disaster 
undertaken by the grantees, or subrecipients, provided that the project 
was not planned, approved, or otherwise underway prior to the disaster. 
For purposes of this paragraph, a CDBG-MIT funded project shall be 
determined to have commenced on the earliest of: (1) The date of an 
approved Request for Release of Funds and certification, or (2) the 
date of completion of the site-specific review when a program utilizes 
Tiering, or (3) the date of sign-off by the approving official when a 
project converts to exempt under 24 CFR 58.34(a)(12). The Department 
has surveyed other federal agencies' interpretation and implementation 
of Section 414 and found varying views and strategies for long-term, 
post-disaster projects involving the acquisition, rehabilitation, or 
demolition of disaster-damaged housing. The Secretary has the authority 
to waive provisions of the Stafford Act and its implementing 
regulations that the Secretary administers in connection with the 
obligation of funds made available by this notice, or the grantees' use 
of these funds. The Department has determined that good cause exists 
for a waiver and that such waiver is not inconsistent with the overall 
purposes of title I of the HCDA.
    (1) The waiver will simplify the administration of mitigation 
programs and projects and reduce the administrative burden associated 
with the implementation of Stafford Act Section 414 requirements for 
projects commencing more than one year after the date of the 
Presidentially declared disaster.
    (2) This waiver does not apply with respect to persons that meet 
the occupancy requirements to receive a replacement housing payment 
under the URA nor does it apply to persons displaced or relocated 
temporarily by other HUD-funded programs or projects. Such persons' 
eligibility for relocation assistance and payments under the URA is not 
impacted by this waiver.
    V.A.23. Environmental requirements.
    V.A.23.a. Clarifying note on the process for environmental release 
of funds when a State carries out activities directly. Usually, a State 
distributes CDBG funds to local governments 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, in addition to 
distributing funds to subrecipients. Thus, per 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.
    V.A.23.b. Adoption of another agency's environmental review. In 
accordance with the Appropriations Act, grant recipients of Federal 
funds that use such funds to supplement Federal assistance provided 
under sections 402, 403, 404, 406, 407, 408(c)(4) or 502 of the 
Stafford Act may adopt, without review or public comment, any 
environmental review, approval, or permit performed by a Federal 
agency, and such adoption shall satisfy the responsibilities of the 
recipient with respect to such environmental review, approval, or 
permit that is required by the HCDA. The grant recipient must notify 
HUD in writing of its decision to adopt another agency's environmental 
review. The grant recipient must retain a copy of the review in the 
grantee's environmental records.
    V.A.23.c. Unified federal review. Section 1106 of the Sandy 
Recovery

[[Page 45861]]

Improvement Act (Div. B of Pub. L. 113-2, enacted January 29, 2013) 
directed the establishment of an ``expedited and unified interagency 
review process to ensure compliance with environmental and historic 
requirements under Federal law relating to disaster recovery projects, 
in order to expedite the recovery process, consistent with applicable 
law.'' The process aims to coordinate environmental and historic 
preservation reviews to expedite planning and decision-making for 
disaster recovery projects, including mitigation projects undertaken to 
avert the impact of future disasters. Grantees receiving an allocation 
of CDBG-MIT funds are encouraged to participate in this process as one 
means of expediting the implementation of mitigation projects that will 
assist in recovery from future disasters. Tools for the unified federal 
review process (UFR) process can be found here: https://www.fema.gov/unified-federal-environmental-and-historic-preservation-review-presidentially-declared-disasters.
    V.A.23.d. Release of funds. In accordance with the Appropriations 
Act, and notwithstanding 42 U.S.C. 5304(g)(2), the Secretary may, upon 
receipt of a Request for Release of Funds and Certification, 
immediately approve the release of funds for an activity or project 
assisted with CDBG-MIT funds if the recipient has adopted an 
environmental review, approval, or permit under section V.A.23.b. 
above, or the activity or project is categorically excluded from review 
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.).
    V.A.23.e. Historic preservation reviews. To facilitate expedited 
historic preservation reviews under section 106 of the National 
Historic Preservation Act of 1966 (54 U.S.C. Section 306108), HUD 
strongly encourages grantees to allocate general administration funds 
to retain a qualified historic preservation professional and support 
the capacity of the State Historic Preservation Officer/Tribal Historic 
Preservation Officer to review CDBG-MIT projects. For more information 
on qualified historic preservation professional qualifications 
standards see https://www.nps.gov/history/local-law/arch_stnds_9.htm.
    V.A.23.f. Tiered environmental reviews. HUD encourages grantees as 
Responsible Entities to develop a Tiered approach to streamline the 
environmental review process for whenever the action plan contains a 
program with multiple, similar activities that will result in similar 
impacts (e.g. single-family housing programs). Tiering, as defined in 
40 CFR 1508.28, is a means of making the environmental review process 
more efficient by allowing parties to ``eliminate repetitive 
discussions of the same issues and to focus on the actual issues ripe 
for decision at each level of environmental review'' (40 CFR 1502.20). 
In addition, ``tiering is appropriate when there is a requirement to 
evaluate a policy of proposal in the early stages of development a 
policy or proposal in the early stages of development or when site-
specific analysis or mitigation is not currently feasible and a more 
narrow or focused analysis is better done at a later date'' (24 CFR 
58.15). Tiering is appropriate when a Responsible Entity is evaluating 
a single-family housing program with similar activities within a 
defined local geographic area and timeframe (e.g., rehabilitating 
single-family homes within a city district or county over the course of 
1 to 5 years) but where the specific sites and activities are not yet 
known.
    A tiered review consists of two stages: A broad-level review and 
subsequent site-specific reviews. The broad-level review will identify 
and evaluate the issues that can be fully addressed and resolved, 
notwithstanding possible limited knowledge of the project. In addition, 
it must establish the standards, constraints, and processes to be 
followed in the site-specific reviews. An 8-Step Decision Making 
Process for Floodplains and Wetlands, including early and final public 
notices can be completed on a county-wide basis for single-family 
housing programs funded with CDBG-MIT funds. As individual sites are 
selected for review, the site-specific reviews evaluate the remaining 
issues based on the policies established in the broad-level review. 
Together, the broad-level review and all site-specific reviews will 
collectively comprise a complete environmental review addressing all 
required elements. Public notice and the Request for Release of Funds 
(HUD-Form 7015.15) are processed at the broad-level, unless there are 
unanticipated impacts or impacts not adequately addressed in the prior 
review, eliminating the need for publication at the site-specific 
level. However, funds cannot be spent or committed on a specific site 
or activity until the site-specific review have been completed for the 
site.
    V.A.23.g. Discipline and accountability in the environmental review 
and permitting of infrastructure projects. Executive Order 13807, 
signed by the President on August 15, 2017, establishes a coordinated, 
predictable and transparent process for the review and permitting of 
infrastructure projects. E.O. 13807 requires Federal agencies to 
process environmental reviews and authorization decisions for ``major 
infrastructure projects'' as One Federal Decision (OFD). As CDBG-MIT 
grantees assume authority to conduct environmental reviews, they should 
implement the following elements of the OFD policy set forth in E.O. 
13807 for major infrastructure projects, and further clarified in M-19-
20 Guidance on the Applicability of E.O. 13807 to Responsible Entities 
Assuming Department of Housing and Urban Development Environmental 
Review Responsibilities [https://www.whitehouse.gov/wp-content/uploads/2019/06/M-19-20.pdf]. CDBG-MIT grantees should: (1) Seek to complete 
environmental reviews and authorization decisions for major 
infrastructure projects in not more than an average of two years, 
measured from the Notice of Intent (NOI) to prepare an Environmental 
Impact Statement (EIS) to the issuance of the Record of Decision (ROD); 
(2) Develop a Permitting Timetable that includes milestones for 
applicable environmental reviews and authorizations and is updated at 
least quarterly on the Permitting Dashboard 
(www.permits.performance.gov); (3) Coordinate with cooperating and 
participating Federal agencies, to develop a single EIS and coordinate 
a single ROD; (4) Seek to ensure that all necessary authorization 
decisions for the construction of the project are completed within 90 
days of issuance of the ROD; and (5) Seek to ensure that there is an 
effective process in place to elevate instances in which a Permitting 
Timetable milestone is missed or extended, or is anticipated to be 
missed or extended, to higher officials (including senior responsible 
entity leadership) for timely resolution, and that if follow such 
process.
    V.A.24. Duplication of benefits. Section 312 of the Stafford Act, 
as amended, generally 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 for which such person, business 
concern, or other entity has received financial assistance under any 
other program or from insurance or any other source. To comply with 
Section 312 and the requirement that all costs are necessary and 
reasonable, each grantee must ensure that each activity provides 
assistance to a person or entity only to the extent that the person or 
entity has a mitigation need that has not been fully met.
    Accordingly, grantees must comply with the requirements of the 2019 
DOB Notice. Requirements on CDBG-DR funds and CDBG-DR grants in the 
2019

[[Page 45862]]

DOB Notice shall apply equally to CDBG-MIT funds and CDBG-MIT grants. 
As described in the 2019 DOB Notice, all CDBG-MIT 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 Loan 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 applicant applied for and was approved, but declined 
assistance related to such major 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)).''
    The 2019 DOB Notice also implements requirements resulting from 
recent amendments to section 312 of the Stafford Act that only apply to 
CDBG-MIT grantees receiving an allocation as a result of disasters 
occurring in 2016 and 2017. FEMA, the agency that administers the 
Stafford Act, has advised that pursuant to recent amendments to Section 
312 of the Stafford Act in the DRRA, for disasters occurring between 
2016 and 2021, a loan is not a duplication of other forms of financial 
assistance, provided that all Federal assistance is used toward a loss 
suffered as a result of a major disaster or emergency. The most common 
source of loans for physical and economic disaster recovery losses and 
related mitigation measures that have historically constituted a 
duplication of benefits are loans offered by the U.S. Small Business 
Administration (SBA). CDBG-MIT grantees receiving an allocation as a 
result of a 2015 disaster are not subject to the provisions of DRRA.
    V.A.25. Procurement. State grantees must comply with the 
procurement requirements at 24 CFR 570.489(g) and evaluate the cost or 
price of the product or service. State grantees shall establish 
requirements for procurement policies and procedures for local 
governments and subrecipients based on full and open competition 
consistent with the requirements of 24 CFR 570.489(g), and shall 
require an evaluation of the cost or price of the product or service 
(including professional services like legal services or case 
management). Additionally, if the State agency designated as the 
administering agency chooses to provide funding to another State 
agency, the administering agency may specify in its procurement 
policies and procedures whether the agency implementing the program 
must follow the procurement policies and procedures that the 
administering agency is subject to, or whether the agency must follow 
the same policies and procedures to which other local governments and 
subrecipients are subject.
    Local government grantees in direct receipt of CDBG-MIT funds must 
comply with the specific applicable procurement standards identified in 
2 CFR 200.318 through 200.326 (subject to 2 CFR 200.110, as 
applicable).
    HUD may request periodic updates from any grantee that uses 
contractors. A contractor is a third-party person or organization from 
which the grantee acquires goods or services through a procurement 
process, consistent with the procurement requirements in the CDBG 
program regulations. HUD is establishing an additional alternative 
requirement for all contracts with contractors used to provide discrete 
services or deliverables only, as follows:
     The grantee (or procuring entity) is required to clearly 
state the period of performance or date of completion in all contracts;
     The grantee (or procuring entity) must incorporate 
performance requirements and liquidated damages or, for administrative 
and consultant contracts, penalties, into each procured contract. 
Contracts that describe work performed by general management consulting 
services need not adhere to this requirement; and
     The grantee (or procuring entity) may contract for 
administrative support but may not delegate or contract to any other 
party any inherently governmental responsibilities related to 
management of the grant, such as oversight, policy development, 
monitoring, internal auditing, and financial management.
    Technical assistance resources for procurement are available to 
grantees either through HUD staff or through technical assistance 
providers engaged by HUD or a grantee.
    V.A.26. Timely distribution of funds. The Appropriations Act, as 
amended, requires that funds provided under the Act be expended within 
two years of the date that HUD obligates funds to a grantee and 
authorizes the Office of Management and Budget (OMB) to provide a 
waiver of this requirement. OMB has provided HUD with a waiver of this 
two-year expenditure requirement. HUD is also waiving the provisions at 
24 CFR 570.494 and 24 CFR 570.902 regarding timely distribution and 
expenditure of funds and establishing an alternative requirement, 
providing that each grantee must expend fifty percent of its allocation 
of CDBG-MIT funds on eligible activities within six years of HUD's 
execution of the grant agreement and one hundred percent of its 
allocation within twelve years of HUD's execution of the grant 
agreement absent a waiver and alternative requirement as requested by 
the grantee and approved by HUD. A grantee request for a waiver of an 
expenditure deadline must document the grantee's progress in the 
implementation of the grant; outline the long-term nature and 
complexity of the mitigation programs and projects that have yet to be 
fully implemented; and propose an alternative deadline for the 
expenditure of the funds.
    V.A.27. 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-MIT activities and certifications in 
accordance with the requirements for CDBG-MIT funds, 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, and apply the corrective and remedial actions 
specified in section V.A.28. below.
    V.A.28. Corrective and remedial actions. To ensure compliance with 
the requirements of the Appropriations Act and to effectively 
administer CDBG-MIT grants in a manner that facilitates resilience, 
particularly the alternative requirements permitting States to act 
directly to carry out eligible activities, HUD is waiving 42 U.S.C. 
5304(e) to the extent necessary to establish the following alternative 
requirement: HUD may undertake corrective and remedial actions for 
States in accordance with the authorities applicable to entitlement 
grantees in subpart O (including corrective and remedial actions in 24 
CFR 570.910, 570.911, and 570.913) or under subpart I of the CDBG 
regulations at 24 CFR part 570. In response to a deficiency, HUD may 
issue a warning letter followed by a corrective action plan that may 
include a management plan which assigns responsibility for further 
administration of the grant to specific entities or persons. Failure to 
comply with a corrective action may result in the termination, 
reduction or limitation of payments to a grantee receiving CDBG-MIT 
funds.

[[Page 45863]]

    V.A.29. Noncompliance and grant conditions. Failure to implement a 
CDBG-MIT grant in accordance with a grantee's approved financial 
certification, the capacity and implementation plan, the action plan, 
as well as grant conditions established by the Department or other 
applicable requirements, shall constitute a performance deficiency. To 
correct that deficiency, the Department may exercise any of the 
corrective and remedial actions authorized in subpart O of the CDBG 
regulations (including corrective and remedial actions in 24 CFR 
570.910, 570.911, and 570.913) or under subpart I of the CDBG 
regulations at 24 CFR part 570. Grantees are advised that such remedies 
may include suspension of administrative funds as well as a reduction 
of the grantee's CDBG-MIT grant, its CDBG-DR grants, or its annual CDBG 
grant.
    The Department may also establish special grant conditions for 
individual CDBG-MIT grants to mitigate the risks posed by the grantee, 
including risks related to the grantee's capacity to carry out the 
specific programs and projects proposed in its action plan. These 
conditions will be designed to provide additional assurances that 
mitigation programs are implemented in a manner to prevent waste, 
fraud, and abuse and that mitigation projects are effectively operated 
and maintained.
    V.A.30. Reduction, withdrawal, or adjustment of a grant, or other 
appropriate action.
    Prior to a reduction, withdrawal, or adjustment of a CDBG-MIT 
grant, or other actions taken pursuant to this section, the recipient 
shall be notified of the proposed action and be given an opportunity 
for an informal consultation. Consistent with the procedures described 
for CDBG-MIT funds, the Department may adjust, reduce, or withdraw the 
CDBG-MIT grant or take other actions as appropriate, except for funds 
that have been expended for eligible, approved activities.
    V.A.31. Federal accessibility requirements. Grantees are reminded 
that the use of CDBG-MIT funds must meet accessibility standards, 
including, but not limited to, the Fair Housing Act, Section 504 of the 
Rehabilitation Act, and Titles II and III of the Americans with 
Disabilities Act. Grantees should review the Fair Housing Act 
Accessibility Guidelines at https://www.hud.gov/program_offices/fair_housing_equal_opp/disabilities/fhefhag, the Uniform Federal 
Accessibility Standards (UFAS) at https://www.hudexchange.info/resource/796/ufas-accessibility-checklist/, and the 2010 ADA Standards. 
The HUD notice on ``Nondiscrimination on the Basis of Disability in 
Federally Assisted Programs and Activities,'' 79 FR 29671 (May 23, 
2014), explains when HUD recipients can use 2010 ADA Standards with 
exceptions, as an alternative to UFAS to comply with Section 504.
    The following portion of the notice details the waivers and 
alternative requirements typically established in CDBG-DR Federal 
Register notices, modified as necessary to reflect the distinct purpose 
of CDBG-MIT funds. The Department continues to authorize these modified 
waivers and alternative requirements as this notice cannot anticipate 
every type of mitigation project that will be proposed by grantees. 
These activity-based waivers and alternative requirements are intended 
to provide grantees with continued flexibility in the design and 
implementation of comprehensive mitigation programs and projects. A 
program or project that meets these criteria is eligible for mitigation 
funding even when it also responds to a remaining unmet recovery need 
arising from a qualified disaster that served as the basis for its 
CDBG-MIT allocation.

V.B. Housing and Related Floodplain Issues

    V.B.1. Housing-related eligibility waivers. The broadening of 
eligible activities under the HCDA is necessary in the context of 
mitigation activities, to address the current and future risks arising 
from the disaster that qualified grantees for CDBG-MIT funds. As 
described in section II of this notice, all housing activities 
implemented with CDBG-MIT funds must include mitigation measures that 
address the current and future disaster risks as identified in the 
grantee's Mitigation Needs Assessment.
    Therefore, 42 U.S.C. 5305(a)(24)(A) and (D) is waived to the extent 
necessary to allow: (1) Homeownership assistance for households earning 
up to 120 percent of the area median income; and (2) down payment 
assistance for up to 100 percent of the down payment. While 
homeownership assistance may be provided to households earning up to 
120 percent of the area median income, only those funds used for 
households with up to 80 percent of the area median income may qualify 
as meeting the low- and moderate-income person benefit national 
objective.
    In addition, 42 U.S.C. 5305(a) and 24 CFR 570.207(b)(3) is waived 
and alternative requirements adopted to the extent necessary to permit 
new housing construction that addresses disaster risks identified in 
the grantee's Mitigation Needs Assessment and to require the following 
construction standards on structures constructed, reconstructed, or 
rehabilitated with CDBG-MIT funds as part of activities eligible under 
42 U.S.C. 5305(a). All references to ``substantial damage'' and 
``substantial improvement'' shall be as defined in 44 CFR 59.1 unless 
otherwise noted.
    V.B.1.a. Green building standard for replacement and new 
construction of residential housing. Grantees are encouraged to meet 
the Green Building Standard in this subparagraph for: (i) All new 
construction of residential buildings and (ii) all replacement of 
substantially damaged residential buildings. Replacement of residential 
buildings may include reconstruction (i.e., demolishing and rebuilding 
a housing unit on the same lot in substantially the same manner) and 
may include changes to structural elements such as flooring systems, 
columns, or load-bearing interior or exterior walls.
    V.B.1.b. Implementation of green building standard. For purposes of 
this notice, the Green Building Standard means that the grantee will 
consider meeting one of the following industry recognized standards for 
all construction covered by section V.B.1.a. above through 
implementation of one or more of the following programs: (i) ENERGY 
STAR (Certified Homes and Multifamily High-Rise), (ii) Enterprise Green 
Communities, (iii) LEED (New Construction, Homes, Midrise, Existing 
Buildings Operations and Maintenance, or Neighborhood Development), 
(iv) ICC-700 National Green Building Standard, (v) EPA Indoor AirPlus 
(ENERGY STAR a prerequisite) or (vi) any other equivalent comprehensive 
green building program acceptable to HUD. Grantees should identify, in 
each project file, which Green Building Standard will be used, if any, 
on any building covered by section V.B.1.a above.
    V.B.1.c. Standards for rehabilitation of nonsubstantially damaged 
residential buildings. For rehabilitation activities undertaken to 
address risks identified in the grantee's Mitigation Needs Assessment 
(other than that described in V.B.1.a above) grantees are encouraged to 
consider guidelines specified in the HUD CPD Green Building Retrofit 
Checklist, available at https://www.hudexchange.info/resource/3684/guidance-on-the-cpd-green-building-checklist/. Grantees are encouraged 
to incorporate these guidelines on the rehabilitation work undertaken, 
including the use of mold resistant products when replacing surfaces 
such as drywall. When older or

[[Page 45864]]

obsolete products are replaced as part of the rehabilitation work, it 
is encouraged that rehabilitation use ENERGY STAR-labeled, WaterSense-
labeled, or Federal Energy Management Program (FEMP)-designated 
products and appliances. For example, if the furnace, air conditioner, 
windows, and appliances are replaced, it is encouraged that the 
replacements be ENERGY STAR-labeled or FEMP-designated products; 
WaterSense-labeled products (e.g., faucets, toilets, showerheads) are 
recommended to be used when water products are replaced. Rehabilitated 
housing may also implement measures recommended in a Physical Condition 
Assessment (PCA) or Green Physical Needs Assessment (GPNA).
    V.B.1.d. Elevation standards for new construction, repair of 
substantial damage, or substantial improvement. The following elevation 
standards apply to new construction, repair of substantial damage, or 
substantial improvement of structures to mitigate risks identified in a 
grantee's Mitigation Needs Assessment, when those structures are 
located in an area delineated as a flood hazard area or equivalent in 
FEMA's data source identified in 24 CFR 55.2(b)(1). All structures, 
defined at 44 CFR 59.1, designed principally for residential use and 
located in the 100-year (or 1 percent annual chance) floodplain that 
receive assistance for new construction, repair of substantial damage, 
or substantial improvement, as defined at 24 CFR 55.2(b)(10), must be 
elevated with the lowest floor, including the basement, at least two 
feet above the base flood elevation. Alternatively, grantees may choose 
to adopt the design flood elevation standards of ASCE-24 if it results 
in an elevation higher than two feet above base flood elevation. Mixed-
use structures with no dwelling units and no residents below two feet 
above base flood elevation must be elevated or floodproofed, in 
accordance with FEMA floodproofing standards at 44 CFR 60.3(c)(3)(ii) 
or successor standard, up to at least two feet above base flood 
elevation.
    All Critical Actions, as defined at 24 CFR 55.2(b)(3), within the 
500-year (0.2 percent annual chance) floodplain must be elevated or 
floodproofed (in accordance with the FEMA standards) to the higher of 
the 500-year floodplain elevation or three feet above the 100-year 
floodplain elevation. If the 500-year floodplain is unavailable, and 
the Critical Action is in the 100-year floodplain, then the structure 
must be elevated or floodproofed at least three feet above the 100-year 
floodplain elevation. Critical Actions are defined as an ``activity for 
which even a slight chance of flooding would be too great, because such 
flooding might result in loss of life, injury to persons or damage to 
property.'' For example, Critical Actions include hospitals, nursing 
homes, police stations, fire stations and principal utility lines.
    For elevation activities, grantees are reminded that the elevation 
of structures must comply with all applicable federal accessibility 
standards outlined in section V.A.31.
    Applicable State, local, and tribal codes and standards for 
floodplain management that exceed these requirements, including 
elevation, setbacks, and cumulative substantial damage requirements, 
must be followed.
    V.B.1.e. Broadband infrastructure in housing. Any substantial 
rehabilitation, as defined by 24 CFR 5.100, or new construction of a 
building with more than four rental units must include installation of 
broadband infrastructure, except where the grantee documents that: (a) 
The location of the new construction or substantial rehabilitation 
makes installation of broadband infrastructure infeasible; (b) the cost 
of installing broadband infrastructure would result in a fundamental 
alteration in the nature of its program or activity or in an undue 
financial burden; or (c) the structure of the housing to be 
substantially rehabilitated makes installation of broadband 
infrastructure infeasible.
    V.B.2. Housing incentives in at-risk communities. 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 a 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. 
Each grantee 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, a 
grantee may require the housing incentive to be used for a particular 
purpose by the household receiving the assistance.
    In undertaking a large-scale migration or relocation recovery 
effort that is intended to move households out of high-risk areas, the 
grantee must consider how it can protect and sustain the impacted 
community and its assets. Grantees must also weigh the benefits and 
costs, including anticipated insurance costs, of redeveloping high-risk 
areas that were impacted by a disaster. Accordingly, grantees are 
prohibited from offering incentives to return households to disaster-
impacted floodplains.
    When undertaking housing incentive activities, to demonstrate that 
an incentive meets the low- and moderate-income housing national 
objective and the LMI national objective, grantees must meet all 
requirements of the HCDA and the criteria for the Low/Mod Housing 
Incentive (LMHI) national objectives for the use of housing incentives 
as described in section V.B.5. of this notice.
    V.B.3. Limitation on emergency grant payments--interim mortgage 
assistance. 42 U.S.C. 5305(a)(8), 24 CFR 570.207(b)(4), and 24 CFR 
1003.207(b)(4) are modified to the extent necessary to extend interim 
mortgage assistance to qualified individuals from 3 months to up to 20 
months. Interim mortgage assistance is typically used in conjunction 
with a buyout program, or when the rehabilitation or reconstruction to 
enhance the resiliency of single-family housing extends beyond 3 
months, during which mortgage payments may be due but the home is 
uninhabitable. Thus, this interim assistance will be critical for many 
households facing financial hardship during this period. Grantees may 
use interim housing mortgage assistance payments along with 
rehabilitation/reconstruction assistance to expedite mitigation 
assistance to homeowners but must establish performance milestones for 
the rehabilitation/reconstruction that are to be met by the homeowner 
to receive the interim mortgage assistance payments. A grantee using 
this alternative requirement must document, in its policies and 
procedures, how it will determine the amount of assistance to be 
provided is necessary and reasonable.
    V.B.4. Acquisition of real property; flood and other buyouts. CDBG-
MIT grantees may carry out property acquisition for a variety of 
purposes. However, the term ``buyouts'' for CDBG-MIT funds refers to 
acquisition of properties located in a floodway or floodplain that is 
intended to reduce risk from future flooding or the acquisition of 
properties in Disaster Risk

[[Page 45865]]

Reduction Areas as designated by the grantee and defined below. HUD is 
providing alternative requirements for consistency with the application 
of other Federal resources commonly used for this type of activity.
    Grantees are encouraged to use buyouts strategically, as a means of 
acquiring contiguous parcels of land for uses compatible with open 
space, recreational, natural floodplain functions, other ecosystem 
restoration, or wetlands management practices. To the maximum extent 
practicable, a grantee should avoid circumstances in which parcels that 
could not be acquired through a buyout remain alongside parcels that 
have been acquired through the grantee's buyout program. Grantees are 
reminded that real property acquisition with CDBG-MIT funding, 
including buyout, is subject to the URA, including the real property 
acquisitions requirements at 49 CFR part 24, subpart B, as modified at 
section V.A.22.b. of this notice.
    V.B.4.a. Clarification of ``buyout'' and ``real property 
acquisition'' activities.
    Grantees that choose to undertake a buyout program have the 
discretion to determine the appropriate valuation method, including 
paying either pre-disaster or post-disaster fair market value (FMV). In 
most cases, a program that provides pre-disaster FMV to buyout 
applicants provides compensation at an amount greater than the post-
disaster FMV. When the purchase price exceeds the current FMV, any 
CDBG-MIT funds in excess of the FMV are considered assistance to the 
seller, thus making the seller a beneficiary of CDBG-MIT assistance. If 
the seller receives assistance as part of the purchase price, this may 
have implications for duplication of benefits calculations or for 
demonstrating national objective criteria, as discussed below. However, 
a program that provides post-disaster FMV to buyout applicants merely 
provides the actual value of the property; thus, the seller is not 
considered a beneficiary of CDBG-DR assistance.
    Regardless of purchase price, all buyout activities are a type of 
acquisition of real property (as permitted by 42 U.S.C. 5305(a)(1)). 
However, only acquisitions that meet the definition of a ``buyout'' are 
subject to the post-acquisition land use restrictions imposed by this 
notice (section V.B.4.b. below). The key factor in determining whether 
the acquisition is a buyout is whether the intent of the purchase is to 
reduce risk of property damage in a floodplain or a Disaster Risk 
Reduction Area. To conduct a buyout in a Disaster Risk Reduction Area, 
the grantee must establish criteria in its policies and procedures to 
designate the area subject to the buyout, pursuant to the following 
requirements: (1) The hazard must have been caused or exacerbated by 
the Presidentially declared disaster for which the grantee received its 
CDBG-MIT allocation; (2) the hazard must be a predictable environmental 
threat to the safety and well-being of program beneficiaries, as 
evidenced by best available data (e.g. FEMA Repetitive Loss Data) and 
science; and (3) the Disaster Risk Reduction Area must be clearly 
delineated so that HUD and the public may easily determine which 
properties are located within the designated area.
    Real property acquisitions, including buyouts, undertaken with 
CDBG-DR and CDBG-MIT funds (even if funds are used only for acquisition 
costs other than the purchase price) are generally subject to the 
requirements in URA regulations at 49 CFR part 24, subpart B, unless 
they satisfy an exception at 49 CFR 24.101(b)(1)-(5). For acquiring 
entities with eminent domain authority, the most relevant exception is 
commonly 49 CFR 24.101(b)(1), which requires that the acquisition 
satisfy a four-part test. HUD is clarifying how the four-part test 
applies to buyouts conducted with CDBG-DR and CDBG-MIT funds. With 
respect to the buyout of properties, an ``intended, planned, or 
designated project area,'' as referenced at 49 CFR 24.101(b)(1)(ii), 
shall be an area for which a clearly defined end use has been 
determined at the time that the property is acquired, in which all or 
substantially all of the properties within the area must be acquired 
within an established time period as determined by the grantee or 
acquiring entity for the project to move forward. Where moving forward 
with a project does not depend upon acquiring specific sites within 
established timeframes for a clearly defined end use, there is not an 
``intended, planned or designated project area.'' To illustrate this 
point, a grantee or acquiring entity's buyout would satisfy the 
criteria in 49 CFR 24.101(b)(1)(ii) with respect to the acquisition of 
property in the following examples: (1) A broad buyout eligibility area 
is identified by the need to reduce risk, but no specific property must 
be acquired or (2) a clearly defined end use (i.e., more specific than 
the categories of open space, recreational, or floodplain and wetlands 
management practices--see V.B.4.b., below) has not been determined at 
the time of acquisition.
    Grantees are reminded that the distinction between buyouts and 
other types of acquisitions is important, because grantees may only 
redevelop an acquired property if the property is not acquired through 
a buyout program (i.e., the purpose of acquisition was something other 
than risk reduction). When properties are not acquired through a buyout 
program, the purchase price must be consistent with applicable uniform 
cost principles (and the pre-disaster FMV may not be used).
    V.B.4.b. Buyout requirements:
    (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 floodplain and 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 (e.g., a 
park, campground, or outdoor recreation area); (b) a rest room; or (c) 
a flood control structure, provided that structure does not reduce 
valley storage, increase erosive velocities, or increase flood heights 
on the opposite bank, upstream, or downstream and that the local 
floodplain manager approves, in writing, before the commencement of the 
construction of the structure.
    (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 or to repair damage or 
make improvements of any sort will be made by the owner of the buyout 
property (including subsequent owners) to any Federal entity in 
perpetuity.
    The entity acquiring the property may lease it to adjacent property 
owners or other parties, including nonprofit land conservation 
organizations, for compatible uses in return for a maintenance 
agreement. Although Federal policy encourages leasing rather than 
selling such property, the property may also be sold.
    In all cases, a deed restriction or covenant running with the 
property must require that the buyout property be dedicated and 
maintained for compatible uses in perpetuity.
    (4) Grantees have the discretion to determine an appropriate 
valuation method (including the use of pre-flood value or post-flood 
value as a basis for property value). However, in using CDBG-MIT funds 
for buyouts, the grantee must uniformly apply the valuation method it 
chooses.

[[Page 45866]]

    (5) All buyout activities must be classified using the ``buyout'' 
activity type in the DRGR system.
    (6) Any State grantee implementing a buyout program or activity 
must consult with affected local governments.
    (7) When undertaking buyout activities, to demonstrate that a 
buyout meets the low- and moderate-income housing national objective, 
grantees must meet all requirements of the HCDA, and applicable 
regulatory criteria described below. Grantees are encouraged to consult 
with HUD prior to undertaking a buyout program with the intent of using 
the low- and moderate-income housing (LMH) national objective. 42 
U.S.C. 5305(c)(3) provides that any assisted activity that involves the 
acquisition or rehabilitation of property to provide housing shall be 
considered to benefit persons of low- and moderate-income only to the 
extent such housing will, upon completion, be occupied by such persons. 
In addition, the State CDBG regulations at 24 CFR 570.483(b)(3), 
entitlement CDBG regulations at 24 CFR 570.208(a)(3), and Indian CDBG 
regulations at 24 CFR 1003.208(c) apply the LMH national objective to 
an eligible activity carried out for the purpose of providing or 
improving permanent residential structures that, upon completion, will 
be occupied by low- and moderate-income households. Therefore, a buyout 
program that merely pays homeowners to leave their existing homes does 
not result in a low- and moderate-income household occupying a 
residential structure and, thus, cannot meet the requirements of the 
LMH national objective. Buyout programs that assist low- and moderate-
income persons can be structured in one of the following ways:
    (a) The buyout program combines the acquisition of properties with 
another direct benefit--Low- and Moderate-Income housing activity, such 
as down payment assistance--that results in occupancy and otherwise 
meets the applicable LMH national objective criteria;
    (b) The program meets the low- and moderate-income area (LMA) 
benefit criteria as defined for CDBG-MIT funds, to demonstrate national 
objective compliance, provided that the grantee can document that the 
properties acquired through buyouts will be used in a way that benefits 
all of the residents in a particular area where at least 51 percent of 
the residents are low- and moderate-income persons. When using the area 
benefit approach, a grantee must define the service area based on the 
end use of the buyout properties; or
    (c) The program meets the criteria for the low- and moderate-income 
limited clientele national objective (LMC) and does not provide 
benefits that are available to all residents of the area. A buyout 
program could meet the national objective criteria for the limited 
clientele national objective if it restricts buyout program eligibility 
to exclusively low- and moderate-income persons, and the buyout 
provides an actual benefit to the low- and moderate-income sellers by 
providing pre-disaster valuation uniformly to those who participate in 
the program.
    (d) The program meets the criteria for the Low/Mod Buyout (LMB) or 
Low/Mod Housing Incentive (LMHI) national objectives for buyouts and 
the use of housing incentives as authorized in the Department's August 
7, 2017 Federal Register notice at 82 FR 36825 and described in section 
V.B.5. of this notice.
    V.B.4.c. Redevelopment of acquired properties.
    (1) A grantee may redevelop an acquired property as part of a 
mitigation activity if the property is not acquired through a buyout 
program and the purchase price is based on the property's post-disaster 
value, consistent with applicable cost principles (the pre-disaster 
value may not be used). In addition to the purchase price, grantees may 
opt to provide relocation assistance or housing incentives to the owner 
of a property that will be redeveloped if the property is purchased by 
a grantee or subrecipient through voluntary acquisition, and the 
owner's need for additional assistance is documented.
    (2) In carrying out acquisition activities, grantees must ensure 
they are in compliance with their long-term redevelopment plans and 
hazard mitigation plans.
    V.B.5. Additional LMI national objective criteria for buyouts and 
housing incentives. For CDBG-MIT funds, HUD is continuing its 
establishment of an alternative requirement to clarify the criteria 
under which buyout activities and housing incentives can meet an LMI 
national objective. Grantees authorized to use housing incentives for 
CDBG-MIT funds must follow guidelines outlined in section V.B.2. of 
this notice. The CDBG regulations limit activities that meet the LMI 
national objective to only the activities meeting the four established 
criteria in 24 CFR 570.208(a)(1) through (4) and 570.483(b)(1) through 
(4). Prior Federal Register notices have advised grantees of the 
criteria under which a buyout activity can meet an LMI housing (LMH) 
national objective (80 FR 72102). Notwithstanding that guidance, 
however, HUD has determined that providing CDBG-MIT grantees with an 
additional method to demonstrate how buyouts and housing incentives can 
assist LMI households, beyond those described in the previous notices, 
will ensure that grantees and HUD can account for and assess the 
benefit that CDBG-MIT assistance may have on LMI households when 
buyouts and housing incentives are used in long term recovery. Given 
the primary objective of the HCDA to assist low- and moderate- income 
persons, the Secretary has determined that there is good cause to 
establish an alternative requirement under which CDBG-MIT grantees are 
authorized to qualify the assistance provided to LMI persons through 
buyout and housing incentive programs. This alternative requirement 
recognizes that the benefits received by those individuals that accept 
buyout and housing incentive awards allow them to move from areas that 
are likely to be affected by future disasters.
    In addition to the existing criteria at 24 CFR 570.208(a)(1)-(4) 
and 570.483(b)(1)-(4), HUD is establishing an alternative requirement 
to include the two new LMI national objective criteria for buyouts 
(LMB) and housing incentives (LMHI) that benefit LMI households that 
use CDBG-MIT funding provided pursuant to CDBG-MIT requirements.
    For a buyout award or housing incentive to meet the new LMB and 
LMHI national objectives, grantees must demonstrate the following:
    (1) The CDBG-MIT funds have been provided for an eligible activity 
that benefits LMI households supporting their move from high risk 
areas. The following activities shall qualify under this criterion, and 
must also meet the eligibility criteria of the notices governing the 
use of the CDBG-MIT funds:
    (a) Low/Mod buyout (LMB). When CDBG-MIT funds are used for a buyout 
award to acquire housing owned by a qualifying LMI household, where the 
award amount (including optional relocation assistance) is greater than 
the post-disaster (current) fair market value of that property.
    (b) Low/Mod housing incentive (LMHI). When CDBG-MIT funds are used 
for a housing incentive award, tied to the voluntary buyout or other 
voluntary acquisition of housing owned by a qualifying LMI household, 
for which the housing incentive is for the purpose of moving outside of 
the affected floodplain or to a lower-risk area; or when the housing 
incentive is for the purpose of providing or

[[Page 45867]]

improving residential structures that, upon completion, will be 
occupied by an LMI household.
    (2) Activities that meet the above criteria will be considered to 
benefit low and moderate-income persons unless there is substantial 
evidence to the contrary. Any activities that meet the newly 
established national objective criteria described above will count 
towards the calculation of a CDBG-MIT grantee's overall LMI benefit.
    V.B.6. Alternative requirement for housing rehabilitation--
assistance for second homes. The Department is instituting an 
alternative requirement to the rehabilitation provisions at 42 U.S.C. 
5305(a)(4) as follows: Properties that serve as second homes are not 
eligible for rehabilitation assistance or housing incentives provided 
through a CDBG-MIT program. For CDBG-MIT funds, a second home is 
defined as a home that is not the primary residence of the owner, a 
tenant, or any occupant at the time of the storm or at the time of 
application for assistance. Grantees can verify a primary residence 
using a variety of documentation including, but not limited to, voter 
registration cards, tax returns, homestead exemptions, driver's 
licenses and rental agreements.
    V.B.7. Flood insurance. Grantees, recipients, and subrecipients 
must implement procedures and mechanisms to ensure that assisted 
property owners comply with all flood insurance requirements, including 
the purchase and notification requirements described below, prior to 
providing assistance. For additional information, please consult with 
the field environmental officer in the local HUD field office or review 
the guidance on flood insurance requirements on HUD's website.
    V.B.7.a. Flood insurance purchase requirements. HUD does not 
prohibit the use of CDBG-MIT funds for existing residential buildings 
in a Special Flood Hazard Area (or 100-year floodplain). However, 
Federal, State, local, and tribal 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 
of a property located in a Special Flood Hazard Area 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 (42 U.S.C. 4012a) mandates the purchase 
of flood insurance protection for HUD-assisted property within a 
Special Flood Hazard Area, when HUD assistance is used to finance 
acquisition or construction, including rehabilitation. HUD strongly 
recommends the purchase of flood insurance outside of a Special Flood 
Hazard Area for properties that have been damaged by a flood, to better 
protect property owners from the economic risks of future floods and 
reduce dependence on Federal disaster assistance in the future, but 
this is not a requirement.
    V.B.7.b. Federal assistance to owners remaining in a 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 conditioned 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 under applicable Federal law on such property. 
This means that a grantee may not provide CDBG-MIT assistance for the 
repair, replacement, or restoration of a property to a person who has 
failed to meet this requirement and must implement a process to check 
and monitor for compliance.
    (2) The Department is instituting an alternative requirement to 42 
U.S.C. 5305(a)(4) as follows: Grantees receiving CDBG-MIT funds are 
prohibited from providing CDBG-MIT assistance for the rehabilitation/
reconstruction of a house, if (a) the combined household income is 
greater than 120 percent AMI or the national median, (b) the property 
was located in a floodplain at the time of the disaster, and (c) the 
property owner did not maintain flood insurance on the damaged 
property, even when the property owner was not required to obtain and 
maintain such insurance. When a homeowner located in the floodplain 
allows their flood insurance policy to lapse, it is assumed that the 
homeowner is unable to afford insurance and/or is accepting 
responsibility for future flood damage to the home. HUD is establishing 
this alternative requirement to ensure that adequate recovery resources 
are available to assist lower income homeowners who reside in a 
floodplain but who are unlikely to be able to afford flood insurance. 
Higher income homeowners who reside in a floodplain, but who failed to 
secure or decided to not maintain their flood insurance, should not be 
assisted at the expense of those lower income households. Therefore, a 
grantee may only provide assistance for the rehabilitation or 
reconstruction of a house located in a floodplain if: (a) The homeowner 
had flood insurance at the time of the qualifying disaster and still 
has unmet recovery needs; or (b) the household earns less than the 
greater of 120 percent AMI or the national median and has unmet 
recovery needs.
    (3) Section 582 also imposes a responsibility on a grantee that 
receives CDBG-MIT funds or that designates annually appropriated CDBG 
funds for disaster recovery. That responsibility is to inform property 
owners receiving 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 in 
writing and to maintain such written notification in the documents 
evidencing the transfer of the property, and that the transferring 
owner may be liable if he or she fails to do so. These requirements are 
enumerated at https://uscode.house.gov/view.xhtml?req=granuleid:U.S.C.-prelim-title42-section5154a&num=0&edition=prelim.

V.C. Infrastructure and Other Nonresidential Structures

    V.C.1. Elevation of nonresidential structures. Nonresidential 
structures must be elevated to the standards described in this 
paragraph or floodproofed, in accordance with FEMA floodproofing 
standards at 44 CFR 60.3(c)(3)(ii) or successor standard, up to at 
least two feet above the 100-year (or 1 percent annual chance) 
floodplain and may include using structural or nonstructural methods to 
reduce or prevent damage; or, designing it to adapt to, withstand and 
rapidly recover flood a flood event. All Critical Actions, as defined 
at 24 CFR 55.2(b)(3), within the 500-year (or 0.2 percent annual 
chance) floodplain must be elevated or floodproofed (in accordance with 
the FEMA standards) to the higher of the 500-year floodplain elevation 
or three feet above the 100-year floodplain elevation. If the 500-year 
floodplain or elevation is unavailable, and the Critical Action is in 
the 100-year floodplain, then the structure must be elevated or 
floodproofed at least three feet above the 100-year floodplain 
elevation. Critical Actions are defined as an ``activity for which even 
a slight chance of flooding would be too great, because such flooding 
might result in loss of life, injury to persons or damage to 
property.'' For example, Critical Actions

[[Page 45868]]

include hospitals, nursing homes, police stations, fire stations and 
principal utility lines. Grantees are reminded that the elevation of 
structures must comply with all applicable federal accessibility 
standards outlined in section V.A.31.
    Non-structural infrastructure must be resilient to flooding. The 
vertical flood elevation establishes the level to which a facility must 
be resilient. This may include using structural or nonstructural 
methods to reduce or prevent damage; or, designing it to withstand and 
rapidly recover from a flood event. In selecting the appropriate 
resilience approach, grantees should consider several factors such as 
flood depth, velocity, rate of rise of floodwater, duration of 
floodwater, erosion, subsidence, the function or use and type of 
facility, and other factors.
    Applicable State, local, and tribal codes and standards for 
floodplain management that exceed these requirements, including 
elevation, setbacks, and cumulative substantial damage requirements, 
will be followed.
    V.C.2. Requirements for flood control structures. Grantees that use 
CDBG-MIT funds to assist flood control structures (i.e., dams and 
levees) are prohibited from using CDBG-MIT funds to enlarge a dam or 
levee beyond the original footprint of the structure that existed prior 
to the disaster event. Grantees that use CDBG-MIT funds for levees and 
dams are required to: (1) Register and maintain entries regarding such 
structures with the U.S. Army Corps of Engineers National Levee 
Database or National Inventory of Dams; (2) ensure that the structure 
is admitted in the U.S. Army Corps of Engineers Public Law 84-99 
Rehabilitation Program (Rehabilitation Assistance for Non-Federal Flood 
Control Projects); (3) ensure the structure is accredited under the 
FEMA National Flood Insurance Program; (4) enter into the DRGR system 
the exact location of the structure and the area served and protected 
by the structure; and (5) maintain file documentation demonstrating 
that the grantee has conducted a risk assessment prior to funding the 
flood control structure and documentation that the investment includes 
risk reduction measures. CDBG-MIT funds may be used on the construction 
or demolition of a dam, levee or other flood control structure provided 
that construction or demolition shall be demonstrated to be an eligible 
mitigation activity pursuant to the requirements of this notice. 
Rehabilitation of dams, levees or flood control structures are also 
eligible, provided that the rehabilitation is demonstrated to be an 
eligible mitigation activity and for dams and levees, that the 
rehabilitation may not exceed the original footprint of the structure 
as provided herein.
    V.C.3. Waiver and alternative requirement to permit certain 
improvements on private lands. The Department recognizes that in order 
to achieve broad based and regional mitigation outcomes, it may be 
necessary to fund certain improvements on private lands that will yield 
public mitigation benefits. For instance, a grantee may seek to fund 
improvements and implement stormwater management practices on mostly 
privately-owned land to prevent or minimize the impact of downstream 
flooding. Under the Department's regulations and the HCDA, however, not 
all of these activities may be eligible under section 105(a)(2) of the 
HCDA, which permits the acquisition, construction, reconstruction, or 
installation of public works, facilities, and site or other 
improvements. However, HUD recognizes that these improvements and 
management practices to be installed or applied on private lands can 
provide public benefits that are similar to the public benefits derived 
from public works, facilities, and other improvements generally 
eligible under section 105(a)(2). Accordingly, the Department is 
establishing a waiver and alternative requirement to expand section 
105(a)(2) of the HCDA and to waive the provisions of 24 CFR 570.201(c) 
and 24 CFR 570.202(a)(1) to the extent necessary to permit CDBG-MIT 
grantees to carry out activities that provide for improvements on 
private lands that can be demonstrated to have a measurable public 
mitigation benefit. This eligible activity includes the expenditure of 
CDBG-MIT funds for actions necessary to obtain mandatory environmental 
permits (if approved by the permitting agency). CDBG-MIT grantees must 
demonstrate at a program level that such payments are necessary and 
reasonable and are required to secure the permits needed to implement 
its CDBG-MIT project.
    V.C.4. Prohibiting assistance to private utilities. Funds made 
available under this notice may not be used to assist privately-owned 
utilities. A CDBG-MIT grantee that prioritizes a mitigation project 
where assistance to a privately-owned utility is necessary, may request 
a waiver of this prohibition.
    V.C.5. Prohibition on emergency response services. CDBG-MIT funds 
shall not be used for programs and projects to provide emergency 
response services. Emergency response services shall mean those 
services that are carried out in the immediate response to a disaster 
or other emergency in order to limit the loss of life and damage to 
assets by State and local governmental and nongovernmental emergency 
public safety, fire, law enforcement, emergency response, emergency 
medical (including hospital emergency facilities), and related 
personnel, agencies, and authorities. However, CDBG-MIT funds may be 
used for mitigation activities to enhance the resilience of facilities 
used to provide emergency response services, provided that such 
assistance is not used for buildings for the general conduct of 
government as defined at 24 CFR 570.3.

V.D. Economic Development

    V.D.1. National objective documentation for economic development 
activities. 24 CFR 570.483(b)(4)(i), 24 CFR 570.506(b)(5), and 24 CFR 
1003.208(d) are waived to allow the grantees receiving CDBG-MIT funds 
to identify the 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., the 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.
    V.D.2. Public benefit for certain economic development activities. 
The 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 two decades ago and 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), 24 CFR 570.209(b) and (d), and 24 CFR 
1003.302(c) for only those economic development activities designed to 
create or retain jobs or businesses (including, but not limited to, 
long-term, short-term, and

[[Page 45869]]

infrastructure projects). However, grantees shall collect and maintain 
documentation in the project file 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. Additionally, grantees shall report the total 
number of jobs created and retained and the applicable national 
objective in the DRGR system. Paragraph (g) of 24 CFR 570.482 is also 
waived to the extent these provisions are related to public benefit.
    V.D.3. Clarifying note on Section 3 resident eligibility and 
documentation requirements. The definition of ``low-income persons'' in 
12 U.S.C. 1701u and 24 CFR 135.5 is the basis for eligibility as a 
section 3 resident. A section 3 resident means: (1) A public housing 
resident; or (2) an individual who resides in the metropolitan area or 
nonmetropolitan county in which the section 3 covered assistance is 
expended, and who is: (i) A low-income person or (ii) a very-low-income 
person. Grantees should determine that an individual is eligible to be 
considered a section 3 resident if the annual wages or salary of the 
person are at, or under, the HUD-established income limit for a one-
person family for the jurisdiction--which is eighty percent of the 
median income for the area. This authority does not impact other 
section 3 resident eligibility requirements in 24 CFR 135.5. All direct 
recipients of CDBG-MIT funding must submit form HUD-60002 annually 
through the Section 3 Performance Evaluation and Registry System 
(SPEARS) which can be found on HUD's website: https://www.hud.gov/program_offices/fair_housing_equal_opp/section3/section3/spears.
    V.D.4. Waiver and modification of the job relocation clause to 
permit assistance to help a business return. 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, 24 CFR 570.482, 
and 24 CFR 1003.209 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.
    V.D.5. Prioritizing small businesses. To target assistance to small 
businesses, the Department is instituting an alternative requirement to 
the provisions at 42 U.S.C. 5305(a) to require grantees to prioritize 
assisting businesses that meet the definition of a small business as 
defined by SBA at 13 CFR part 121 or, for businesses engaged in 
``farming operations'' as defined at 7 CFR 1400.3, and that meet the 
United States Department of Agriculture Farm Service Agency (FSA), 
criteria that are described at 7 CFR 1400.500, which are used by the 
FSA to determine eligibility for certain assistance programs. HUD 
advises grantees to pursue sources of assistance other than CDBG-MIT 
funds in order to address needs arising from crop loss or other 
agricultural losses attributable to the disaster.
    V.D.6. Underwriting. Notwithstanding section 105(e)(1) of the HCDA, 
no CDBG-MIT funds may be provided to a for-profit entity for an 
economic development project under section 105(a)(17) unless such 
project has been evaluated and selected in accordance with guidelines 
developed by HUD pursuant to section 105(e)(2) for evaluating and 
selecting economic development projects. States and their subrecipients 
are required to comply with the underwriting guidelines in Appendix A 
to 24 CFR part 570 if they are using grant funds to provide assistance 
to a for-profit entity for an economic development project under 
section 105(a)(17) of the HCDA. The underwriting guidelines are found 
at Appendix A of Part 570. https://www.ecfr.gov/cgi-bin/text-idx?SID=88dced3d630ad9fd8ab91268dd829f1e&mc=true&node=ap24.3.570_1913.a&rgn=div9.
    V.D.7. Limitation on use of funds for eminent domain. No CDBG-MIT 
funds may be used to support any Federal, State, or local projects that 
seek to use the power of eminent domain, unless eminent domain is 
employed only for a public use. For purposes of this paragraph, public 
use shall not be construed to include economic development that 
primarily benefits private entities. Any use of funds for mass transit, 
railroad, airport, seaport or highway projects, as well as utility 
projects which benefit or serve the general public (including energy-
related, communication-related, water related and wastewater-related 
infrastructure), other structures designated for use by the general 
public or which have other common-carrier or public-utility functions 
that serve the general public and are subject to regulation and 
oversight by the government, and projects for the removal of an 
immediate threat to public health and safety or brownfields as defined 
in the Small Business Liability Relief and Brownfields Revitalization 
Act (Pub. L. 107-118) shall be considered a public use for purposes of 
eminent domain.

VI. Certifications and Collection of Information

    VI.1. Certifications waiver and alternative requirement. 24 CFR 
91.225 and 91.325 are waived. Each grantee receiving a direct 
allocation of CDBG-MIT funds must make the following certifications 
with its action plan:
    a. 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 CDBG-MIT funding.
    b. The grantee certifies its compliance with restrictions on 
lobbying required by 24 CFR part 87, together with disclosure forms, if 
required by part 87.
    c. The grantee certifies that the action plan is authorized under 
State and local law (as applicable) and that the grantee, and any 
entity or entities designated by the grantee, and any contractor, 
subrecipient, or designated public agency carrying out an activity with 
CDBG-MIT funds, 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. The grantee certifies that activities 
to be undertaken with CDBG-MIT funds are consistent with its action 
plan.
    d. 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 CDBG-MIT funds.
    e. 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.
    f. The grantee certifies that it is following a detailed citizen 
participation plan that satisfies the requirements of 24 CFR 91.115 or 
91.105 (except as provided for in notices providing waivers and 
alternative requirements for this grant). Also, each 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).

[[Page 45870]]

    g. State grantee certifies that it has consulted with affected 
local governments in counties designated in covered major disaster 
declarations in the non-entitlement, entitlement, and tribal areas of 
the State in determining the uses of funds, including the method of 
distribution of funding, or activities carried out directly by the 
State.
    h. The grantee certifies that it is complying with each of the 
following criteria:
    (1) Funds will be used solely for necessary expenses related to 
mitigation activities, as applicable, in the most impacted and 
distressed areas for which the President declared a major disaster in 
2015, 2016, or 2017 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-
MIT funds, the relevant action plan has been developed to give priority 
to activities that will benefit low- and moderate-income families.
    (3) The aggregate use of CDBG-MIT funds shall principally benefit 
low- and moderate-income families in a manner that ensures that at 
least 50 percent (or another percentage permitted by HUD in a waiver 
published in an applicable Federal Register notice) of the CDBG-MIT 
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-MIT funds by assessing any 
amount against properties 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) 
CDBG-MIT 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).
    i. 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), the Fair Housing Act (42 U.S.C. 3601-3619), and 
implementing regulations, and that it will affirmatively further fair 
housing.
    j. The grantee certifies that it has adopted and is enforcing the 
following policies, and, in addition, must certify that they will 
require local governments 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.
    k. The grantee certifies that it (and any subrecipient or 
administering entity) currently has or will develop and maintain the 
capacity to carry out mitigation activities, as applicable, in a timely 
manner and that the grantee has reviewed the respective requirements of 
this notice. The grantee certifies to the accuracy of its Public Law 
115-56 Financial Management and Grant Compliance certification 
checklist, or other recent certification submission, if approved by 
HUD, and related supporting documentation referenced at section V.A.1.a 
of this notice and its implementation plan and capacity assessment and 
related submissions to HUD referenced at section V.A.1.b.
    l. The grantee certifies that it considered the following resources 
in the preparation of its action plan, as appropriate: FEMA Local 
Mitigation Planning Handbook: https://www.fema.gov/media-library-data/20130726-1910-25045-9160/fema_local_mitigation_handbook.pdf; DHS Office 
of Infrastructure Protection: https://www.dhs.gov/sites/default/files/publications/ip-fact-sheet-508.pdf; National Association of Counties, 
Improving Lifelines (2014): https://www.naco.org/sites/default/files/documents/NACo_ResilientCounties_Lifelines_Nov2014.pdf; the National 
Interagency Coordination Center (NICC) for coordinating the 
mobilization of resources for wildland fire: https://www.nifc.gov/nicc/
); the U.S. Forest Service's resources around wildland fire (https://www.fs.fed.us/managing-land/fire); and HUD's CPD Mapping tool: https://egis.hud.gov/cpdmaps/.
    m. The grantee certifies that it will not use CDBG-MIT funds for 
any activity in an area identified as flood prone for land use or 
hazard mitigation planning purposes by the State, local, or tribal 
government or delineated as a Special Flood Hazard Area (or 100-year 
floodplain) 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. The relevant data source for this provision is the State, 
local, and tribal government land use regulations and hazard mitigation 
plans and the latest-issued FEMA data or guidance, which includes 
advisory data (such as Advisory Base Flood Elevations) or preliminary 
and final Flood Insurance Rate Maps.
    n. 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.
    o. The grantee certifies that it will comply with environmental 
requirements at 24 CFR part 58.
    p. The grantee certifies that it will comply with applicable laws.
    Warning: Any person who knowingly makes a false claim or statement 
to HUD may be subject to civil or criminal penalties under 18 U.S.C. 
287, 1001 and 31 U.S.C. 3729.

VII. Duration of Funding

    This notice requires each grantee to expend fifty percent of its 
CDBG-MIT grant on eligible activities within six years of HUD's 
execution of the grant agreement and one hundred percent of its grant 
within twelve years of HUD's execution of the agreement absent a waiver 
and alternative requirement as requested by the grantee and approved by 
HUD.

VIII. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the grants 
under this notice are as follows: 14.218 for Entitlement CDBG grantees 
and 14.228 for State CDBG grantees.

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 Federal 
Relay Service at 800-877-8339 (this is a toll-free number).


[[Page 45871]]


    Dated: August 23, 2019.
Benjamin Carson, Sr.,
Secretary.
[FR Doc. 2019-18607 Filed 8-29-19; 8:45 am]
BILLING CODE 4210-67-P