Notice of Program Rules, Waivers, and Alternative Requirements Under the CARES Act for Community Development Block Grant Program Coronavirus Response…
Summary
A notice from the U.S. Department of Housing and Urban Development (HUD) Office of Community Planning and Development setting out program rules, waivers and alternative requirements for Community Development Block Grant funds under the CARES Act (CDBG–CV funds) and for annual formula CDBG grants awarded in fiscal years 2019 and 2020. It was published in the Federal Register on August 20, 2020 (Vol. 85, No. 162) and is applicable August 7, 2020. Of the $5 billion in CDBG–CV funds made available by the CARES Act, HUD must allocate up to $2 billion using the formula it used for fiscal year 2020 CDBG grants, and it will use $10,000,000 for technical assistance. The CARES Act flexibilities summarized in the notice include letting grantees reimburse allowable costs of eligible activities and eliminating the public services cap for coronavirus-related activities.
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Cite this document
“Notice of Program Rules, Waivers, and Alternative Requirements Under the CARES Act for Community Development Block Grant Program Coronavirus Response….”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/notice-of-program-rules-waivers-and-alternative-requirements-under-the-1f72417a3e/
, SHA-256 cea905487bb5b352477f5c7f7ae0e868087dec9de0e0ce03a42369713bf0fb1c.Full text
Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51457
• N–SUMHSS, an annual census of of both mental health treatment facility listing on a continuous basis in
substance use and mental health facilities and substance use treatment 2021, 2022 and 2023. Also included in
treatment facilities which collects facilities. this request is the Between Cycle N–
descriptive data on the location, scope The information in N–SUMHSS and SUMHSS data collection (N–SUMHSS
of services provided, and operational I–BHS is needed to assess the nature BC), to be conducted between annual
characteristics of all known substance and extent of these resources, to identify surveys to collect information on new
use and mental health treatment gaps in services, and to provide a facilities for inclusion in the Treatment
facilities in the United States and database for treatment referrals. Locator. N–SUMHSS BC use is an
jurisdictions, and on utilization of The request for OMB approval will abbreviated N–SUMHSS survey
services by means of a single-day count include a request to conduct the N– questionnaire.
of clients in treatment; and SUMHSS survey which includes facility The estimated annual burden for the
• I–BHS data collection activities characteristics and services and one-day I–BHS and BHSIS activities is as
associated with updating the inventory client counts and to update the I–BHS follows:
Responses
Type of respondent Number of Total Hours per Total burden Total hour
per Wage rate
and activity respondents responses response hours cost
respondent
States:
I–BHS Online 1 ............. 56 75 4,200 0.08 336 $23 $7,728
State Subtotal ....... 56 ........................ 4,200 ........................ 336 ........................ 7,728
Facilities:
I–BHS application 2 ...... 800 1 800 0.08 64 19.40 1,242
Augmentation screener 1,300 1 1,300 0.08 104 19.40 2,018
N–SUMHSS question-
naire (either SU or
MH) ........................... 32,000 1 32,000 0.67 21,333 47.95 1,022,917
N–SUMHSS (both SU
and MH) .................... 5,000 1 5,000 1.17 5,833 47.95 279,692
N–SUMHSS BC ........... 1,000 1 1,000 0.58 580 47.95 27,811
Facility Subtotal .... 40,100 ........................ 40,100 ........................ 27,914 ........................ 1,333,680
Total ............... 40,156 ........................ 44,300 ........................ 28,250 ........................ 1,341,408
1 States use the I–BHS Online system to submit information on newly licensed/approved facilities and on changes in facility name, address,
status, etc.
2 New facilities complete and submit the online I–BHS application form in order to get listed on the Inventory.
Written comments and DEPARTMENT OF HOUSING AND CDBG–CV and CDBG grants. This notice
recommendations for the proposed URBAN DEVELOPMENT also describes conforming waivers and
information collection should be sent alternative requirements for other
[Docket No. FR–6218–N–01] formula programs included in the
within 30 days of publication of this
notice to www.reginfo.gov/public/do/ Notice of Program Rules, Waivers, and consolidated planning regulations in 24
PRAMain. Find this particular Alternative Requirements Under the CFR part 91.
information collection by selecting CARES Act for Community DATES: Applicable: August 7, 2020.
‘‘Currently under 30-day Review—Open Development Block Grant Program FOR FURTHER INFORMATION CONTACT:
for Public Comments’’ or by using the Coronavirus Response Grants, Fiscal Jessie Handforth Kome, Director, Office
search function. Year 2019 and 2020 Community of Block Grant Assistance, Office of
Development Block Grants, and for Community Planning and Development,
Carlos Graham,
Other Formula Programs Department of Housing and Urban
Social Science Analyst.
AGENCY: Office of the Assistant
Development, 451 7th Street SW, Room
[FR Doc. 2020–18220 Filed 8–19–20; 8:45 am]
Secretary for Community Planning and 7282, Washington, DC 20410, telephone
BILLING CODE 4162–20–P
Development, HUD. number 202–708–3587. Persons with
hearing or speech impairments may
ACTION: Notice.
access this number via TTY by calling
SUMMARY: This notice describes the the Federal Relay Service at 800–877–
program rules, statutory and regulatory 8339. Facsimile inquiries may be sent to
waivers, and alternative requirements Ms. Kome at 202–708–0033. Except for
applicable to supplemental Community the ‘‘800’’ number, these telephone
Development Block Grant (CDBG) funds numbers are not toll-free. Questions
made available to prevent, prepare for, regarding the CDBG–CV program may
and respond to coronavirus (CDBG–CV be submitted to
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funds) and to annual formula CDBG CPDQuestionsAnswered@hud.gov.
grants awarded in fiscal years 2019 and Interested parties may also visit HUD’s
2020. Except as otherwise described in website at https://www.hud.gov/
this notice and the CARES Act, the program_offices/comm_planning for
statutory and regulatory provisions updated information and resources.
governing the CDBG program apply to SUPPLEMENTARY INFORMATION:
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51458 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
Table of Contents This notice is broken into sections. • Allows states and local
I. Overview and Background
Section II provides a general overview governments to reimburse allowable
II. Summary of Special Authorities Under the of the CDBG–CV and CDBG program costs of eligible activities regardless of
CARES Act flexibilities provided by the CARES Act. the date the costs were incurred.
II.A. Program Modifications in the CARES Section III describes the allocations,
II.B. Authority To Grant Waivers and
Act grant procedures, program flexibilities,
II.B. Authority To Grant Waivers and
Alternative Requirements
waivers, and alternative requirements
Alternative Requirements applicable to CDBG–CV grants. Section The CARES Act authorizes the
III. CDBG–CV Grants IV describes the program flexibilities, Secretary to waive, or specify alternative
III.A. Allocations of CDBG–CV Funds waivers, and alternative requirements requirements for, any provision of any
III.A.1. First Allocation statute or regulation that the Secretary
III.A.2. Additional Allocations
that apply to fiscal years 2019 and 2020
CDBG grants used to prevent, prepare administers in connection with the use
III.A.3. Reallocation.
III.B. CDBG–CV Grant Rules, Waivers, and for, and respond to coronavirus or that of CDBG–CV grants, fiscal year 2020
Alternative Requirements affect other aspects of program CDBG grants, and fiscal year 2019 CDBG
III.B.1. General Grant Requirements administration. Other sections contain grants to prevent, prepare for, and
III.B.2. Responsible Use of CARES Act administrative information related to respond to coronavirus or that affect
Funds this notice. other aspects of program administration
III.B.3. Overview of Process To Receive for the fiscal year 2019 and 2020 CDBG
CDBG–CV Grants II. Summary of Special Authorities grants, except for requirements related
III.B.4. Application for Grant Funds and Under the CARES Act to fair housing, nondiscrimination, labor
Citizen Participation
The CARES Act modifies some CDBG standards, and the environment, upon a
III.B.5. Allowable Costs, Eligible Activities
and National Objectives program rules and authorizes the finding by the Secretary that any such
III.B.6. Other Program Requirements Secretary of HUD to grant waivers and waivers or alternative requirements are
III.B.7. Period of Performance, Timeliness, alternative requirements. Accordingly, necessary to expedite or facilitate the
and Closeout this notice describes how requirements use of such amounts to prevent, prepare
III.B.8. Reporting of the CDBG program are modified for for, and respond to coronavirus.
III.B.9. Duplication of Benefits CDBG–CV grants, fiscal year 2020 CDBG Additional waiver authority is provided
III.B.10 Citizenship Requirements grants under the Department of Housing in 24 CFR 5.110 and 91.600. In
IV. Fiscal Year 2019 and Fiscal Year 2020 accordance with these provisions, HUD
CDBG Grants
and Urban Development Appropriations
Act, 2020 (Pub. L. 116–94), and fiscal may waive regulatory provisions
IV.A. General Requirements
IV.B. Flexibilities, Waivers, and year 2019 CDBG grants under the (subject to statutory limitations) for
Alternative Requirements Department of Housing and Urban good cause.
IV.B.1. Timeliness Development Appropriations Act, 2019 As required by the CARES Act, the
IV.B.2. Consolidated Plan, Citizen (Pub. L. 116–6). For ease of reference, Secretary has considered the waivers
Participation, and CAPER citations in this notice include and alternative requirements in this
IV.B.3. Flexibilities that Apply to parentheticals indicating whether a notice and finds that there is good cause
Coronavirus-Related Activities. CDBG program statute or regulation for each and that each is necessary to
IV.B.4. Provisions That Do Not Apply to expedite or facilitate the use of grant
FY 19 and FY 20 Grants.
applies to entitlement grants, state
grants, insular area grants, or grants to funds to prevent, prepare for, and
I. Overview and Background nonentitlement counties in Hawaii. respond to coronavirus.
On January 21, 2020, the Centers for Where citations do not include Hawaii III. CDBG–CV Grants
Disease Control and Prevention (CDC) counties or insular areas, the additional
citation is not necessary because the This section describes the CDBG–CV
confirmed the first case in the United allocations to states and units of general
States of a coronavirus known by cited entitlement CDBG regulation
applies to insular areas and Hawaii local government (including insular
several names, including novel areas), the process to access grant funds,
coronavirus, and SARS–CoV–2, and counties in addition to entitlement
grantees. and the rules, waivers, and alternative
which causes the disease commonly requirements that apply to CDBG–CV
referred to as COVID–19. On March 27, II.A. Program Modifications in the grants.
2020, President Trump signed the CARES Act
Coronavirus Aid, Relief, and Economic III.A. Allocations of CDBG–CV Funds
Security Act (Pub. L. 116–136) (CARES The Community Development Fund
Of the $5 billion made available by
Act). The CARES Act makes available heading in title XII of Division B of the
the CARES Act, HUD will use
$5 billion in CDBG coronavirus CARES Act modifies some CDBG
$10,000,000 to make technical
response (CDBG–CV) funds to prevent, program requirements to provide
assistance awards to provide an
prepare for, and respond to coronavirus. immediate support for coronavirus
immediate increase in capacity building
In the CARES Act and this notice, the efforts. The modifications are described
and technical assistance to support the
term ‘‘coronavirus’’ means SARS–CoV– in more detail in Section III, and are the
use of CDBG–CV grants and CDBG
2 or another coronavirus with pandemic following:
grants to prevent, prepare for, and
potential. • Permits a public comment period of respond to coronavirus.
The nation faces significant public no less than 5 days when citizen The remaining funds will be allocated
health and economic challenges related participation is required. as described in sections III.A.1. and
to this respiratory disease. To address • Permits grantees to develop III.A.2.
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these challenges, CDBG–CV and CDBG expedited citizen participation
grants are a flexible source of funding procedures and to hold virtual public III.A.1. First Allocation
that can be used to pay costs that are not hearings when necessary for public The CARES Act requires HUD to
covered by other sources of assistance, health reasons. allocate up to $2 billion in CDBG–CV
particularly to benefit persons of low • Eliminates the public services cap funds using the same formula that it
and moderate income. for coronavirus-related activities. used to allocate fiscal year 2020 CDBG
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51459
grants pursuant to section 106 of the HUD will publish additional third III.B.1. General Grant Requirements
Housing and Community Development round allocations and a description of CDBG–CV grants are subject to the
Act of 1974 (42 U.S.C. 5306). HUD made the allocation formulas on HUD’s requirements of the CARES Act, the
this first CDBG–CV allocation on April website at https://www.hud.gov/ authorities and conditions imposed on
2, 2020, 24 days before the 30-day program_offices/comm_planning/ fiscal year 2020 CDBG grants, and the
allocation deadline in the CARES Act, budget/fy20/ and will provide a link to mandatory provisions of this notice and
in the amount of $2 billion. The this site in any press release announcing waivers and alternative requirements.
allocations are available on HUD’s an allocation. Except as otherwise described, grantees
website at https://www.hud.gov/
III.A.3. Reallocation must comply with statutory and
program_offices/comm_planning/
regulatory provisions governing the
budget/fy20/. Under Section 106 of the Housing and CDBG program. These include
III.A.2. Additional Allocations Community Development Act of 1974 regulations at: 24 CFR part 570 subpart
(HCD Act) (42 U.S.C. 5306), HUD I (states); 24 CFR part 570 subparts A,
The CARES Act requires HUD to reallocates annual formula CDBG funds
make a second round of CDBG–CV C, D, E, F, J, K, and O for CDBG
that cannot be distributed to grantees (entitlements, nonentitlement Hawaii
allocations within 45 days of enactment when it allocates the next fiscal year’s
of the CARES Act. HUD is required to counties and insular areas).
appropriation of annual formula CDBG To facilitate the use of CDBG–CV
make this allocation in the amount of $1 funding. Given the immediate need for
billion directly to states and insular funds in accordance with the grant
coronavirus assistance, the Department requirements, HUD is imposing an
areas to prevent, prepare for, and is specifying the following alternative
respond to coronavirus within the state alternative requirement that the
requirement to sections 106I and (d)(3)I definitions of CDBG funds in 24 CFR
or insular area. HUD made this second (42 U.S.C. 5306I and 5306(d)(3)I), and
round of CDBG–CV allocations on May 570.3 (entitlements) and 24 CFR
the reallocation provisions of 24 CFR 570.481(a)(2) (states) include CDBG–CV
11, 2020, in the amount of $1 billion. 570.4(a), 570.420I, 570.429(d)(2), and
The allocations and methodology are funds. This alternative requirement
570.442(b), to expedite the use of any applies the requirements in 24 CFR part
available on HUD’s website at: https://
funds that may become available for 570 to the use of CDBG–CV funds,
www.hud.gov/program_offices/comm_
reallocation. except as modified by rules, waivers,
planning/budget/fy20/. The second
CDBG–CV allocations were based on If a jurisdiction receiving an and alternative requirements applicable
factors identified in the CARES Act: allocation of CDBG–CV funds fails to to CDBG–CV grants.
Public health needs, risk of transmission apply for funding in accordance with CDBG–CV grant agreements will
of coronavirus, number of coronavirus the requirements of this notice by impose requirements by incorporating
cases compared to the national average, August 16, 2021 (the deadline program rules, waivers, and alternative
economic and housing market established by the CARES Act) or HUD requirements (including those
disruptions, and other factors, as is unable to distribute funds to a grantee published in memoranda, in this and
determined by the Secretary, using best for another reason, HUD may notify the any future notices).
available data. jurisdiction of the cancellation of all or Grantees should not assume that their
The CARES Act authorized HUD to part of its allocation amount. Funds that normal CDBG funding distribution
allocate the remaining $2 billion in are not awarded to jurisdictions under procedures are adequate to swiftly
CDBG–CV funds, minus the $10 million the formulas described in paragraphs distribute and use CDBG–CV grants. For
set aside for technical assistance, on a III.A.1. and III.A.2. may be reallocated example, if a grantee’s existing policies
rolling basis. The CARES Act provides based on factors identified in the mandate lengthy processes to select
that the remaining $2 billion shall be CARES Act, as determined by the activities or complete procurements,
distributed directly to states or units of Secretary. If made, reallocations will be grantees should try to expedite actions
general local government, at the published on HUD’s website. with local waiver authorities or
discretion of the Secretary, according to III.B. CDBG–CV Grant Rules, Waivers, emergency procedures that may be
a formula based on factors to be and Alternative Requirements available without state or local
determined by the Secretary, rulemaking. In addition, urban counties
prioritizing risk of transmission of This section describes program that normally distribute CDBG funds on
coronavirus, number of coronavirus flexibilities in the CARES Act and a proportional basis among all
cases compared to the national average, provides waivers and alternative participating jurisdictions should
and economic and housing market requirements to expedite or facilitate the consider whether their normal
disruptions resulting from coronavirus. use of CDBG–CV funds. The rules, procedures would result in funding
The District of Columbia is defined as waivers, and alternative requirements awards that are too small to be used
a metropolitan city under the Housing described in this section only apply to expeditiously and productively by the
and Community Development Act of CDBG–CV grants (as specified in this participating jurisdictions.
1974 and not as a state or insular area. section) and in some cases to fiscal year
As such, it was not eligible for funding 2019 and fiscal year 2020 CDBG grants III.B.2. Responsible Use of CARES Act
under the Round 2 $1 billion allocation. (as specified in section IV) and program Funds
To ensure national geographic coverage income (as specified in sections CDBG–CV funds are subject to
in Round 2, HUD made an allocation III.B.5.(f)(iv) and III.B.6.(a)). The CARES additional measures designed to prevent
from the third round of funding to the Act statutory flexibilities, waivers, and fraud, waste, and abuse. HUD will
District of Columbia simultaneously alternative requirements do not apply to conduct regular oversight and
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with the second round because the other sources of CDBG funds (even if monitoring activities to determine that
District met the geographic criteria for used in conjunction with CDBG–CV use of CDBG–CV funds is consistent
the third round of allocations and was funds, fiscal year 2019 CDBG funds, or with grant requirements and limited to
the only geographic area in the nation fiscal year 2020 CDBG funds) except as the necessary and reasonable costs of
that was not covered by the second otherwise described in section activities to prevent, prepare for, and
round of allocations. IV.B.3.(b). respond to coronavirus. Measures to
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51460 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
increase transparency and does not preclude grantees from from HUD the Authority to Use Grant
accountability include: applying by submitting a FY 2020 Funds (AUGF) form and certification.
• Regular reporting on the use of Action Plan that includes the CDBG–CV
CDBG–CV funds, including reporting III.B.4. Application for Grant Funds and
funds. If the grantee chooses to include
that may be required by the CARES Act Citizen Participation
CDBG–CV grant funds in its annual
to conduct audits and reviews of action plan for FY 2020 funds, the This section III.B.4. describes the
programs, operations, and expenditures grantee must comply with action plan CDBG program flexibilities in the
relating to funds under the CARES Act submission procedures in 24 CFR part CARES Act and additional waivers and
and the Coronavirus response (see 91 (including consultation and a public alternative requirements that HUD
section III.B.8. for information on hearing), as modified by the waiver and granted to facilitate or expedite the
reporting requirements); and alternative requirements in paragraph process to amend consolidated plans
• a requirement that grantees prevent III.B.4.(a)(iv), which apply the CARES and apply for CDBG–CV grants.
the duplication of benefits that is caused Act citizen participation flexibilities to
when a person, household, business, or all consolidated plan formula grant III.B.4.(a) Expedited Citizen
other entity receives financial assistance programs. Participation and Virtual Hearings
from multiple sources for the same The following procedures apply The CARES Act permits grantees to
purpose, and the total assistance is more regardless of whether the grantee adopt expedited citizen participation
than the total need (see section III.B.9. applies for CDBG–CV funds through an procedures and hold virtual hearings for
for information on duplication of action plan or action plan substantial consolidated plan submissions for
benefits). amendment: CDBG–CV funds and for CDBG grants
• Rather than wait to apply until for fiscal years 2019 and 2020. Section
III.B.3. Overview of Process To Receive
HUD allocates all available CDBG–CV III.B.4.(a)(iii) includes a corollary waiver
CDBG–CV Grants
funds, HUD recommends that grantees and alternative requirement to permit
On April 2, 2020, HUD published the apply as soon as possible for CDBG–CV states to extend these flexibilities to
first round of CDBG–CV allocations on funds that HUD has allocated. Grantees units of general local government and
the hud.gov website and notified receiving subsequent allocations can
jurisdictions of their allocation insular areas. Section III.B.4.(a)(iv)
make substantial amendments to apply includes a corollary waiver and
amounts. On April 9, 2020, John Gibbs, for subsequent allocation amounts after
Acting Assistant Secretary for alternative requirement extending these
they are announced. flexibilities to other consolidated plan
Community Planning and Development, • All grantees may adopt and use
issued a memorandum with the subject, formula programs.
expedited procedures to draft, propose,
‘‘CARES Act Flexibilities for CDBG modify, or amend consolidated plans for III.B.4.(a)(i) Citizen Participation,
Funds Used to Support Coronavirus CDBG–CV and fiscal year 2019 and 2020 Public Notice and Comment Period. The
Response and plan amendment waiver’’ CDBG grants as described in section CARES Act authorizes a CDBG–CV
(‘‘April 9 memorandum’’), available at III.B.4. These expedited procedures grantee to adopt and utilize expedited
https://www.hud.gov/sites/dfiles/CPD/ amend the grantee’s citizen procedures to prepare, propose, modify,
documents/CARES-Act-Flexibilities- participation plan and require it be or amend its consolidated plan,
CDBG-Funds-Used-Support- published for no less than 5 calendar notwithstanding sections 104(a)(2),
Coronavirus-Response.pdf. The days to solicit public comment. (a)(3), and (c) of the HCD Act (42 U.S.C.
memorandum advised grantees to Expedited procedures may include 5304(a)(2), (a)(3), and (c)) and section
amend or prepare consolidated plan virtual hearings, as described in section 105 of the Cranston-Gonzalez National
submissions for CDBG–CV grants as III.B.4.(a)(ii). Affordable Housing Act (NAHA, at 42
soon as possible. Grantees may have • The grantee must publish its U.S.C. 12705). The expedited
partially or fully completed the application for CDBG–CV funds procedures may permit virtual hearings,
application process before HUD (whether through a new action plan or as described in section III.B.4.(a)(ii),
publishes this notice. action plan substantial amendment) for whenever a public hearing is required
The April 9 memorandum also no less than 5 calendar days to solicit by 24 CFR 91.105 (entitlements), 91.115
granted waivers to expedite this process public comment. The comment period (states), 570.431 (Hawaii counties),
of applying for CDBG–CV funds by can run concurrently with the comment 570.441 (insular areas), or by the
permitting application for a grantee’s period on changes to add expedited grantee’s citizen participation plan.
share of the first $2 billion through a procedures to the citizen participation Expedited procedures adopted by the
substantial amendment to a grantee’s plan. The grantee must respond to grantee shall provide citizens with
most recent annual action plan (the public comments. notice and a reasonable opportunity to
most recent year may be the 2019 • The grantee must submit its comment of no less than 5 days.
annual action plan). These waivers and application for CDBG–CV funds to HUD Expedited procedures must be
alternative requirements describing the for review in accordance with 24 CFR published for no less than 5 calendar
content of a substantial amendment to 91.500. To receive a CDBG–CV grant, a days to solicit public comment, and
add CDBG–CV allocations to the most grantee must also submit a SF–424, SF– once adopted, become part of the
recent annual action plan are in section 424D and the certifications at 24 CFR grantee’s citizen participation plan. The
III.B.4.(b)(i). 91.225(a) and (b) or 24 CFR 91.325(a) public comment period for
Submitting a substantial amendment and (b) and 24 CFR 91.425. incorporating expedited procedures into
may speed access to grant funds because • HUD and the grantee will enter a the citizen participation plan may run
consultation and public hearings are not grant agreement and HUD will establish concurrently with the public comment
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required (although 24 CFR 570.441I(2) the grantee’s line of credit. period on a proposed CDBG–CV
requires insular areas to hold a public • The grantee may draw funds from substantial amendment or other
hearing for amendments, section the line of credit after the Responsible proposed consolidated plan
III.B.4.(a)(iii) waives this requirement Entity completes applicable submissions for CDBG–CV funds and
for CDBG–CV substantial amendments). environmental review(s) pursuant to 24 fiscal year 2019 and 2020 CDBG grants.
However, the April 9 memorandum CFR part 58 and, as applicable, receives Consolidated plan submissions for other
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programs are addressed in section aurally delivered information available clarifying that by authorizing states to
III.B.4.(a)(iv). to individuals who are deaf or hard or adopt expedited citizen participation
The CARES Act modifies the annual hearing, and visually delivered procedures, the CARES Act authorized
formula CDBG program requirement materials available to individuals who expedited procedures and virtual public
that a grantee must solicit comments are blind or have low vision. The type hearings for citizen participation by
from its citizens for a period of at least of auxiliary aid or service necessary to units of general local government that
30 days before it submits a substantial ensure effective communication will receive CDBG–CV funds from a state
amendment or an annual action plan to vary in accordance with the method of through a method of distribution. This
HUD. communication used by the individual; is because 24 CFR 91.115I requires
III.B.4.(a)(ii) Virtual Hearings. For as the nature, length, and complexity of states to include citizen participation
long as national or local health the communication involved; and the requirements for units of general local
authorities recommend social distancing context in which the communication is government in its own citizen
and limiting public gatherings for public taking place. In determining what types participation plan. Expedited
health reasons, the CARES Act of auxiliary aids and services are procedures must still describe how
authorizes the grantee to hold virtual necessary, a grantee shall give primary units of local governments receiving
hearings in lieu of in-person public consideration to the requests of funds from the state will meet the
hearings for CDBG–CV grants and for individuals with disabilities. In order to citizen participation requirements in 24
fiscal year 2019 and 2020 CDBG grants be effective, auxiliary aids and services CFR 570.486.
(virtual hearings for other consolidated should be provided in accessible Additionally, HUD is waiving the
plan formula programs are addressed in formats, in a timely manner, and in such requirement in 570.441I(2) that an
section III.B.4.(a)(iv)). All virtual a way as to protect the privacy and insular area must hold a public hearing
hearings held under the authority independence of the individual with a on a substantial amendment. Instead,
provided by the CARES Act shall disability. For virtual hearings, such HUD is imposing an alternative
provide reasonable notification and steps should include ensuring that requirement to permit the insular area to
access for citizens in accordance with information is provided on an accessible adopt expedited requirements by
the grantee’s certifications, timely website, that emails and other digital modifying its citizen participation plan
responses from local officials to all notifications are accessible, and that the to replace the hearing if it provides
citizen questions and issues, and public application or platform used to host the community residents with reasonable
access to all questions and responses. hearing is also accessible. Additional notice and an opportunity to comment
Therefore, grantees may use online services such as audio description or on substantial amendments to the
platforms to hold virtual hearings that captioning may also be needed to consolidated plan or annual action plan.
facilitate public access to all questions provide effective communication in a III.B.4.(a)(iv) Extension of CARES Act
and responses and provide timely digital context. Helpful guidelines for Flexibilities to All Consolidated Plan
responses from local officials. ensuring the accessibility of web-based Formula Programs (CDBG, CDBG–CV,
Additionally, grantees must take and digital materials are available HOME, HOPWA, HTF, ESG) and Section
appropriate actions to encourage the through the World Wide Web 108 Loan Guarantees. The CARES Act
participation of all residents, including Consortium’s Web Accessibility altered consolidated plan citizen
the elderly, minorities, persons with Initiative at https://www.w3.org/WAI/. participation requirements for some
limited English proficiency, as well as Examples of auxiliary aids and services CDBG–CV grants, fiscal year 2019 and
persons with disabilities, consistent that may be necessary when conducting 2020 annual formula CDBG grants, and
with the jurisdiction’s citizen hearings online can be found at 28 CFR Emergency Solutions Grant
participation plan. 35.104. supplemental CARES Act (ESG–CV)
The CARES Act does not modify Grantees must also take reasonable grants. It did not modify citizen
nondiscrimination requirements. steps to provide meaningful access to participation for other annual formula
Consistent with 24 CFR 91.105 persons with limited English CDBG and ESG grants, Section 108 Loan
(entitlements) and 91.115 (states), and proficiency consistent with Title VI of Guarantees, or for HOME Investment
24 CFR 570.431 (Hawaii counties) and the Civil Rights Act. To ascertain their Partnerships (HOME), Housing Trust
570.441 (insular areas), a jurisdiction is obligations, grantees should conduct the Fund (HTF), and Housing Opportunities
expected to take whatever actions are four-factor analysis set forth in HUD’s for Persons With AIDS (HOPWA)
appropriate to encourage the limited English proficiency guidance formula programs before fiscal year
participation of all its citizens in virtual found at https://www.hud.gov/sites/ 2019.
and in-person hearings, including documents/FINALLEP2007.PDF, which On April 1, 2020, HUD issued two
minorities and persons with limited may be covered by grantees’ Language waivers to modify citizen participation
English proficiency, as well as persons Assistance Plan, recognizing that the requirements for consolidated plan
with disabilities. Whether hearings are use of the internet to conduct such a substantial amendments for CDBG, ESG,
in-person or virtual, grantees must take hearing may change the analysis. For HOME, HTF, and HOPWA. The first
appropriate steps to ensure effective virtual or online hearings, such services eliminated the 30-day minimum for the
communication with persons with may also include translation of required public comment period for
disabilities consistent with the documents and captioning or substantial amendments, provided that
requirements of accessibility laws, such interpretation in the appropriate no less than 5 days are provided for
as Section 504 of the Rehabilitation Act language(s). More information on the public comments on each substantial
and the Americans with Disabilities Act. four-factor analysis and other amendment concerning the proposed
The grantee must provide appropriate requirements can be found at https:// uses of CDBG, HOME, HTF, HOPWA, or
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auxiliary aides and services where www.hud.gov/sites/documents/ ESG funds. The second allowed grantees
necessary to afford individuals with FINALLEP2007.PDF. to determine what constitutes
hearing and vision impairments an III.B.4.(a)(iii) Modifications to citizen reasonable notice and opportunity to
equal opportunity to access and participation requirements for local comment, given their circumstances, for
participate in such hearings. These may governments that receive funds from the 2020 program year. The waivers
include effective methods that make States and for insular areas. HUD is were published in a memorandum
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51462 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
signed by Acting Assistant Secretary simplifying the process of requesting submissions for ESG–CV funds because
John Gibbs on March 31, 2020. It is and obtaining federal funds available to HUD cannot waive the minimum
available at: https://www.hud.gov/sites/ the jurisdictions (60 FR 1878, published requirements the CARES Act imposed
dfiles/CPD/documents/Availability-of- January 5, 1995). on CDBG grantees. Therefore, this
Waivers-of-CPD-Grant-Program-and- Therefore, HUD is waiving provisions waiver and alternative requirement does
Consolidated-Plan-Requirements-to- at 24 CFR 91.105(b)(4), (c)(2) and (k), 24 not alter or expand the authority for
Prevent-the-Spread-of-COVID-19-and- CFR 91.115(b)(4), (c)(2) and (i), 24 CFR ESG grantees to omit the citizen
Mitigate-Economic-Impacts-Caused-by- 91.401, 24 CFR 570.431, 24 CFR participation and consultation
COVID-19.pdf. 570.441, and 24 CFR 570.704 to the requirements for consolidated plan
HUD is now issuing waivers and extent necessary to permit the following submissions that only pertain to ESG
alternative requirements to expedite alternative requirement: CDBG, HOME, CARES Act (ESG–CV) funding.
procedures to modify citizen HTF, HOPWA, and ESG grantees may
participation plans for all 2020 fiscal modify their citizen participation plans III.B.4.(b) CDBG–CV Application
year consolidated plan and annual to adopt expedited procedures that Content and Submission
action plan submissions that pertain to apply when the grantees prepare, III.B.4.(b)(i). CDBG–CV Application
ESG, HOME, HTF, and HOPWA formula propose, modify, or amend any Content, Submission, Consistency with
programs. The waivers are necessary to consolidated plan submissions that Other Portions of Consolidated Plan. In
effectively implement the CARES Act contain uses of CDBG–CV funds or uses the April 9 memorandum, HUD issued
flexibilities offered to CDBG grantees of fiscal year 2019 or 2020 CDBG funds a waiver and alternative requirement
because planning and annual action to prevent, prepare for, and respond to that permits a grantee to apply for
plan consolidated plan submissions for coronavirus. The expedited procedures CDBG–CV funds by submitting a
CDBG–CV and CDBG grants are must, at a minimum, provide citizens substantial amendment to its most
inextricably linked with the with notice and a reasonable recently approved annual action plan.
consolidated plan submissions for ESG, opportunity to comment of no less than Grantees may also apply for CDBG–CV
HOME, HTF, and HOPWA. 5 days. funds in a future annual action plan
In 1995, HUD published the Additionally, HUD is waiving submission.
consolidated plan regulation at 24 CFR provisions at 24 CFR 91.105(b) and I, 24 As part of the application submission,
part 91. The consolidated plan replaced CFR 91.115(b) and I, 24 CFR 91.401, and HUD is temporarily waiving the
the following separate application and 24 CFR 570.431, 570.441, and requirements (found at 42 U.S.C. 12706
planning submissions: The 570.486(a) to the extent necessary to and 24 CFR 91.325(a)(5) and
Comprehensive Housing Affordability establish the following alternative 91.225(a)(5)) that grantees certify that
Strategy (CHAS), enacted by NAHA at requirement. For as long as national or the housing activities to be undertaken
42 U.S.C. 12701, the Community local health authorities recommend with CDBG, HOME, ESG, and HOPWA
Development Plan requirements, added social distancing and limiting public funds are consistent with the strategic
to the CDBG program by NAHA (42 gatherings for public health reasons, plan portion of the consolidated plan.
U.S.C. 5304), the CDBG final statement, CDBG, ESG, HOME, HTF, and HOPWA HUD is imposing a related alternative
the HOME program description, and the grantees, and units of general local requirement that allows grantees to
ESG and HOPWA applications. In 2015, government receiving CDBG funds from submit those certifications when the
HUD published an interim rule that state or insular area CDBG grantees, may grantee submits its next full (3–5 year)
added HTF to the consolidated planning hold virtual hearings in lieu of in- consolidated plan due after the 2020
regulations. States and units of general person public hearings to fulfill public program year. Grantees may not have
local government (including insular hearing requirements imposed by 42 considered the needs associated with
areas) that apply for Section 108 loan U.S.C. 12707(a)(3) and the regulations at CDBG–CV funds when developing their
guarantees pursuant to 24 CFR 570.704 24 CFR part 91 and 24 CFR part 570, or current consolidated plan strategic plan
may also be required to include the use by the grantee’s citizen participation and needs assessment.
of guaranteed loan funds in their plan. In conjunction, HUD is temporarily
consolidated plans. For each virtual hearing, a grantee waiving 42 U.S.C. 5304I to the extent
Grantees that apply for CDBG–CV or shall provide reasonable notification that it requires HUD to annually review
CDBG funds as part of their 3–5 year and access for citizens in accordance grantee performance under the
consolidated plan or annual action plan with the grantee’s certifications, timely consistency criteria. This waiver also
submissions cannot reasonably take responses from local officials to all only applies until the grantee submits
advantage of the expedited CARES Act citizen questions and issues, and public its next full (3–5 year) consolidated plan
citizen participation requirements access to all questions and responses. due after the 2020 program year.
unless the other programs included in Therefore, grantees may use online Applying through a substantial
these submissions are subject to the platforms to hold virtual hearings that amendment to the most recent action
same expedited requirements. Creating a provide public access to questions and plan. If the CDBG–CV application is
separate application process for CDBG– responses and provide timely responses submitted as a substantial amendment
CV and CDBG funds would add time from local officials. This alternative to the most recent annual action plan,
and complications that are likely to requirement is only applicable to the substantial amendment must
delay the availability of funds and consolidated planning submissions include the CDBG–CV allocation as an
undermine the purpose of the CARES describing the use of fiscal year 2019 or available resource for the year. The
Act provisions to expedite assistance. 2020 annual formula funds for CDBG, amendment must include the proposed
Further, separating CDBG planning and ESG, HOME, HTF, and HOPWA, or for use of all funds and how the funds will
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applications would thwart several of the CDBG–CV or ESG–CV funds provided be used to prevent, prepare for, and
reasons cited for the consolidated under the CARES Act. respond to coronavirus. To permit this
planning rule, e.g., providing HUD cannot modify requirements for expedited application process, in the
comprehensive information on the CDBG grantees to mirror the elimination April 9 memorandum HUD waived
jurisdiction that is easy to understand of citizen participation for substantial statutory provisions at 42 U.S.C.
and reducing paperwork and amendments and new consolidated plan 12705(a)(2) to the extent they require
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51463
updates to the housing and homeless hearing) apply to grantees that choose to and the annual Action Plan for fiscal
needs assessment, (24 CFR 91.205 and submit CDBG–CV applications by year 2019 and 2020 CDBG funds. This
91.405), housing market analysis (24 including CDBG–CV funds in a new deadline supersedes the August 16,
CFR 91.210 and 91.410), and strategic annual action plan submission. Content 2020 deadline established by 24 CFR
plan (24 CFR 91.215 and 91.415. HUD of action plans is described at 24 CFR 91.15 in accordance with section 116(b)
also waived 24 CFR 91.220 91.220 (entitlements), 91.320 (states), of the HCD Act.
(entitlements) and 91.320 (states), to the and 24 CFR 570.440 (insular areas).
extent those regulations limit the action Applying for additional CDBG–CV III.B.5. Allowable Costs, Eligible
plan to a specific program year, to allocations. The waivers and alternative Activities and National Objectives
permit grantees to prepare substantial requirements in the April 9 This section describes modifications
amendments to their most recent annual memorandum apply to all allocations of to the CDBG program requirements that
action plan (including their 2019 annual CDBG–CV funds. HUD encourages address allowability of costs that can be
action plan). grantees to apply for additional charged to CDBG–CV grants.
In the April 9 memorandum, HUD allocations of CDBG–CV funds as they
III.B.5.(a) Use of Funds for CARES Act
also issued a waiver and alternative are announced by submitting substantial
Purposes
requirement to 24 CFR 91.505 to amendments to their most recent annual
facilitate the use of the CDBG–CV funds action plan. Grantees are advised that an The grantee is required to use all
to the extent necessary to require application for an additional allocation CDBG–CV funds for CDBG-eligible
submission of the substantial of CDBG–CV funds should be submitted activities that are carried out to prevent,
amendment to HUD for review in as a substantial amendment to the prepare for, and respond to coronavirus.
accordance with 24 CFR 91.500, and annual action plan that describes the CDBG–CV grants cannot be used for any
required that, to receive a CDBG–CV first CDBG–CV allocation. other purpose. This requirement is
grant, a grantee must also submit a SF– An application submitted as a discussed more fully in section
424, SF–424D, and the certifications at substantial amendment must include III.B.5.(f), which discusses eligible
24 CFR 91.225(a) and (b) (entitlements) the CDBG–CV allocation as an available activities.
or 24 CFR 91.325(a) and (b) (states). resource for the year and include the Additionally, HUD weighed the
HUD is now adding to the waivers in proposed use of all funds and how the purpose of the CARES Act to prevent,
the April 9 memorandum as follows. funds will be used to prevent, prepare prepare for, and respond to coronavirus
The abbreviated consolidated plan for, and respond to coronavirus. with the intent of Congress expressed in
regulations for insular areas at 24 CFR HUD strongly encourages grantees to section 101I of the HCD Act (42 U.S.C.
570.440(i) are waived to the extent apply for allocations through substantial 5301I) that CDBG funds not be utilized
necessary to impose the same amendments as they are announced. to reduce substantially the amount of
alternative requirements in the April 9, However, grantees that have not local financial support for community
2020 waiver, so that if an insular area submitted applications for CDBG–CV development activities below the level
applies for CDBG–CV funds by funds when additional allocations are of such support prior to the availability
submitting a substantial amendment to announced may submit a single of such assistance. Given the extreme
an abbreviated consolidated plan, the application for all allocations as a and unexpected downturn in local and
following requirements apply. The substantial amendment to the most national economic conditions, local
substantial amendment must include recent annual action plan, or as part of resources are strained. Jurisdictions
the CDBG–CV allocation as an available a new annual action plan. must provide new and expanded
resource for the year. The amendment III.B.4.(b)(ii). Content of CDBG–CV support with fewer resources. Therefore,
must include the proposed use of all application for States Acting Directly. HUD has concluded that when CDBG
funds and how the funds will be used The waiver and alternative requirement funding is used for purposes of the
to prevent, prepare for, and respond to in paragraph III.B.6.(b)(i) permit states CARES Act, it is not considered to
coronavirus. The grantee must submit to carry out activities directly. substantially replace the amount of local
the substantial amendment to HUD for Therefore, HUD is granting the financial support previously provided to
review in accordance with 24 CFR following waiver and alternative community development activities.
91.500, and to receive a CDBG–CV requirement to amend 24 CFR 91.320(d)
grant, it must submit a SF–424, SF– and 24 CFR 91.320(k)(1)(i) to the extent III.B.5.(b) Reimbursements
424D and the certifications at 24 CFR necessary to require a state to submit a The CARES Act provides that CDBG–
570.440I. description of a method of distribution CV funds may be used to cover or
If CDBG–CV funds are included in a and include a list of the use of all funds reimburse allowable costs of activities to
substantial amendment to the most for activities it will carry out directly, prevent, prepare for, and respond to
recently submitted annual action plan, and how the use of the funds will coronavirus incurred by a state or
existing cooperation agreements prevent, prepare for, and respond to locality regardless of the date on which
between a local government and an coronavirus. A state that has already such costs were incurred. This authority
urban county governing other CDBG submitted its application for CDBG–CV is broader than the authority to
funds in the most recently submitted funds may amend its annual action plan reimburse costs with other CDBG funds.
annual action plan (for purposes of that describes the use of CDBG–CV The term ‘‘locality’’ is not defined by
either an urban county or a joint funds to modify its description of a the CARES Act, the HCD Act, or the
program) will automatically cover method of distribution and include a list CDBG program regulations. For
CDBG–CV funding as well. These of the use of all funds for activities it purposes of CDBG–CV grants, a
cooperation agreements will continue to will carry out directly, and how the use ‘‘locality’’ shall mean units of general
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apply to the use of CDBG–CV funds for of the funds will prevent, prepare for, local government, as defined in section
the duration of the CDBG–CV grant. and respond to coronavirus. 102 of the HCD Act.
Applying through a new annual III.B.4.(b)(iii). Deadline to Apply for The CARES Act also requires that all
action plan submission. The action plan Assistance. Under the CARES Act, the costs reimbursed with CDBG–CV funds
submission procedures in 24 CFR part deadline is August 16, 2021, for grantees be allowable costs, meaning they
91 (including consultation and a public to submit their CDBG–CV action plan comply with all grant requirements.
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51464 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
Therefore, HUD is adopting the requirement at 570.200(h)(1)(i) and (ii) reimbursed with CDBG–CV or other
following waivers and alternative that the activity for which costs are HUD funds.
requirements to 24 CFR 570.200(h) and incurred must be included in a
III.B.5.(c) Terms and Conditions Made
570.489(b) to facilitate the use of CDBG– consolidated plan action plan or
Applicable by the CARES Act
CV funds to reimburse allowable costs amended consolidated plan action plan
by modifying current regulations that before incurring the costs. Instead, the The CARES Act subjects CDBG–CV
are inconsistent with CARES Act activity for which costs were incurred funds to the authorities and conditions
reimbursement authority and imposing must be included in the grantee’s applicable to annual CDBG grants for
safeguards to help ensure the CDBG–CV application before CDBG–CV fiscal year 2020. Therefore, the
allowability of all costs charged to the funds are used to reimburse those costs. following requirements apply to CDBG–
CDBG–CV grant: Or, if the use of CDBG–CV funds for CV grants:
Grantees shall not reimburse costs reimbursements is not included in the III.B.5.(c)(i). Limitations on Use of
incurred before January 21, 2020, CDBG–CV application, this use may be Funds for Eminent Domain. The grantee
without written approval from HUD’s included in a subsequent amendment to shall ensure that no CDBG–CV funds are
Office of Block Grant Assistance the annual action plan that describes the used to support any Federal, state, or
(OBGA), by emailing the contact person use of the CDBG–CV funds (following local projects that seek to use the power
listed at the beginning of this notice. the grantee’s citizen participation plan of eminent domain, unless eminent
HUD is imposing a presumption that procedures for amendments). To domain is employed only for a public
costs of activities undertaken before facilitate the use of funds provided use. For the purposes of this
January 21, 2020, the date the CDC under a one-time grant rather than an requirement, public use shall not be
confirmed the first case of coronavirus annual appropriation, HUD is waiving construed to include economic
in the United States in the State of development that primarily benefits
the time limitation and the monetary
Washington,1 are highly unlikely to be private entities. Any use of funds for
limitation on reimbursements in
eligible for reimbursement because they mass transit, railroad, airport, seaport or
570.200(h)(1)(v) and (vi) and related
likely are not costs to prevent, prepare highway projects as well as utility
provisions at 570.200(h)(2). HUD is not
for, and respond to coronavirus. The projects which benefit or serve the
waiving the requirement at
need to pay for coronavirus-related costs general public (including energy-
570.200(h)(1)(iii) to comply with the
incurred after this date far exceeds the related, communication-related, water-
environmental review procedures stated
amount of CDBG–CV funds available. related and wastewater-related
in 24 CFR part 58.
HUD cautions that it will only consider infrastructure), other structures
All grantees may authorize designated for use by the general public
granting written approval in subrecipients to incur pre-award costs
extraordinary cases where the clear link or which have other common-carrier or
in accordance with pre-agreement cost public-utility functions that serve the
to the purposes of the CARES Act is authority under 24 CFR 570.489(b)
documented by substantial evidence general public and are subject to
(states) and pre-award cost authority regulation and oversight by the
provided to HUD by the grantee. under 24 CFR 570.200(h) (entitlements),
Inquiries related to this requirement can government, and projects for the
as modified above. Consistent with the removal of an immediate threat to
be submitted to the contact identified waiver and alternative requirement in
above for this notice. public health and safety or brownfield
paragraph III.B.6.(b)(i) that authorizes as defined in the Small Business
HUD is waiving the requirements of states to act directly, the provisions of
570.200(h) and 570.489(b) to the extent Liability Relief and Brownfields
24 CFR 570.489(b) are waived to the Revitalization Act (Pub. L. 107–118)
necessary to authorize a grantee to extent necessary to authorize a state to
permit reimbursement of pre- shall be considered a public use for
charge to the grant pre-agreement costs purposes of eminent domain.
application costs of subrecipients, units of its subrecipients in addition to the III.B.5.(c)(ii). Prohibition on Certain
of general local government, and itself, pre-agreement costs of units of general Funds Transfers. The Grantee or unit of
in addition to pre-agreement and pre- local government, in accordance with general local government that directly or
award costs. However, an procedures established by the state and indirectly receives CDBG–CV funds may
environmental review must be subject to the requirements that apply to not sell, trade, or otherwise transfer all
performed and a release of funds must pre-agreement costs of units of general or any such portion of such funds to
be obtained in accordance with 24 CFR local government in 24 CFR 570.489(b), another such entity in exchange for any
part 58 prior to committing CDBG–CV and the requirements that apply to the other funds, credits or non-Federal
funds to reimburse such costs. After the use of CDBG–CV funds. considerations, but must use such funds
grantee signs a CDBG–CV agreement it
While provisions of 24 CFR for activities eligible under title I of the
may reimburse a unit of general local
570.489(b) requiring compliance with HCD Act or permitted by waiver and
government or subrecipient for costs
24 CFR part 58 do not apply prior to an alternative requirements that apply to
incurred before the unit of general local
application for CDBG–CV funds, a unit the use of CDBG–CV funds.
government or subrecipient applies to
of general local government or state III.B.5.(c)(iii). E.O. 12372—Special
the grantee for assistance.
must document compliance with the Contract Condition. Notwithstanding
For grantees subject to the entitlement
environmental review requirements at any other provision governing CDBG–
CDBG regulation at 24 CFR 570.200(h),
24 CFR part 58 following the CV funds, no funds may be obligated or
the following waivers and alternative
application to the state or unit of general expended for the planning or
requirements apply: In lieu of the
local government for funding and prior construction of water or sewer facilities
effective date described at 570.200(h),
to reimbursement of pre-application until receipt of written notification from
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the grantee shall use the date in box 4
costs, per 24 CFR 570.200(h)(1)(iii) and HUD of the release of funds on
of form HUD–7082, Funding Approval/
24 CFR 570.489(b). If a grantee cannot completion of the review procedures
Agreement. HUD is waiving the
meet all requirements at 24 CFR part 58 required under Executive Order (E.O.)
1 See CDC Press Release at: https://www.cdc.gov/ and cannot demonstrate there was no 12372, Intergovernmental Review of
media/releases/2020/p0121-novel-coronavirus- environmental harm committed, the Federal Programs, and HUD’s
travel-case.html. pre-application costs cannot be implementing regulations at 24 CFR part
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51465
52. The recipient shall also complete the Entitlement grantees must maintain pursuant to section 501(b) of the Robert
review procedures required under E.O. records required by 24 CFR T. Stafford Disaster Relief and
12372 and 24 CFR part 52 and receive 570.506(b)(12) to document: (1) The Emergency Assistance Act, 42 U.S.C.
written notification from HUD of the nature and degree of seriousness of the 5121–5207 (the ‘‘Stafford Act’’). (The
release of funds before obligating or condition requiring assistance and the President subsequently approved
expending any funds for any new or timing of its development; (2) evidence additional major disaster declarations
revised activity for the planning or that the recipient certified that the for states); or
construction of water or sewer facilities CDBG activity was designed to address • Referral to the effective date of a
not previously reviewed under E.O. the urgent need; and (3) evidence grantee’s own local or state emergency
12372 and implementing regulations. confirming that other financial declaration.
III.B.5.(c)(iv). Mandatory Evaluation resources to alleviate the need were not Criteria 3: Is the grantee or unit of
of Special Economic Development available. The State CDBG general local government unable to
Activities. CDBG–CV funds may not be recordkeeping requirements at 24 CFR finance the activity on its own, and are
provided to a for-profit entity pursuant 570.490 require states and state other sources of funds are not available
to section 105(a)(17) of the Act unless recipients to maintain records to to carry out the activity? The extreme
such activity or project has been demonstrate compliance with the urgent needs of local governments resulting
need criteria. from coronavirus in the United States
evaluated and selected in accordance
The following information provides outweigh available resources, despite
with Appendix A to 24 CFR 570—
guidance on how a grantee may satisfy the extraordinary level of assistance
‘‘Guidelines and Objectives for
existing recordkeeping requirements for provided to states and units of general
Evaluating Project Costs and Financial
the urgent need national objective local government under the CARES Act.
Requirements.’’ Given the likelihood
criteria in addition to a grantee’s or unit Therefore, documentation that the
that CDBG–CV funds will be used to
of general local government’s activity will prevent, prepare for, and
assist businesses needing working
certification and a state’s determination respond to the coronavirus may be used
capital financing for everyday
(or state’s certification, if the state is to demonstrate that a grantee or unit of
operations, such as payroll costs, HUD
acting directly): general local government is unable to
intends to provide advice or technical Criteria 1: Is the activity designed to finance the activity on its own.
assistance on the application of the alleviate existing conditions? For All CDBG–CV grantees are required to
guidelines and objectives set forth in CDBG–CV grants, the records the establish and maintain adequate
Appendix A to such assistance. HUD grantee maintains to demonstrate that procedures to prevent any duplication
will consider providing advice or the activity was designed to alleviate of benefits for assisted activities (as
technical assistance in recognition of existing conditions can be the same discussed in section III.B.9. of this
the differences in underwriting records used to show that grant funds notice). To demonstrate that no
assistance for the wide range of were used to prevent, prepare for, and financial assistance has been received or
economic development projects respond to coronavirus, as required by is available to pay costs charged to a
permitted under section 105(a)(17) (as the CARES Act. CDBG–CV grant, a grantee may
implemented at 24 CFR 570.203(b)). Criteria 2: Does the condition pose a demonstrate that no other funds are
III.B.5.(d) National Objectives serious and immediate threat to the available for an activity by maintaining
health or welfare of the community that records of compliance with mandatory
III.B.5.(d)(i) Use of Urgent Need is of recent origin or that recently duplication of benefits requirements
National Objective. HUD has received became urgent? In light of the severity described in section III.B.9.
questions regarding the records of coronavirus and the urgency of the All grantees are reminded to consider
necessary to document that a grantee’s nation in addressing its impacts, how the use of the urgent need national
activities to prevent, prepare for, and pursuant to 24 CFR 570.208I objective will affect their compliance
respond to coronavirus satisfy the (entitlements) or 24 CFR 570.483(d) with the CDBG ‘‘overall benefit’’
urgent need national objective. To meet (states), a grantee may certify that the requirements discussed in paragraph
the urgent need national objective activity is designed to alleviate existing III.B.5.(d)(iv).
criteria at 24 CFR 570.208I conditions which pose a serious and III.B.5.(d)(ii) Modification of Location-
(entitlements) and 570.483(d) (states), a immediate threat to the health or Based Presumption of LMI Benefit for
grantee (or in the case of the State CDBG welfare of the community within 18 Job Creation and Retention National
program, a unit of general local months following a date determined by Objective Criteria. To facilitate the use
government or a state, if the state is one of the following three methods: of funds for economic development,
carrying out activities directly as • Referral to a U.S. Department of HUD is removing the higher poverty rate
authorized by section III.B.6.(b)(i)) must Health and Human Services issued required in some cases for central
certify that: (1) The activity is designed press release declaring a public health business districts, which is not required
to alleviate existing conditions; (2) those emergency for the entire United States by statute. HUD is instituting an
existing conditions pose a serious and found at https://www.hhs.gov/about/ alternative requirement to modify the
immediate threat to the health or news/2020/01/31/secretary-azar- regulations at 24 CFR 570.208(a)(4)(v)
welfare of the community and are of declares-public-health-emergency-us- (entitlement) and 24 CFR
recent origin or recently became urgent; 2019-novel-coronavirus.html. The 570.483(b)(4)(v) (state) by deleting the
and (3) that the grantee, state, or unit of declaration was retroactive to January criteria at 24 CFR 570.208(a)(4)(v)(B)
general local government is unable to 27, 2020; (entitlement) and 24 CFR
finance the activity on its own, and that • Referral to the President’s 570.483(b)(4)(v)(B) (state). Under this
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other sources of funds are not available. declaration of the ongoing Coronavirus alternative requirement, for purposes of
The State CDBG regulation at 24 CFR Disease 2019 (COVID–19) pandemic as the LMI job creation/retention national
570.483(d) requires the state’s an emergency of sufficient severity and objective at 24 CFR 570.208(a)(4) and 24
determination of these elements in magnitude to warrant an emergency CFR 570.483(b)(4), a census tract
addition to the unit of general local declaration for all states, tribes, qualifies for the presumptions under the
government’s certification. territories, and the District of Columbia criteria established in regulations at 24
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51466 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
CFR 570.208(a)(4)(v) and 24 CFR and respond to coronavirus. HUD is also remain in place to the extent that they
570.483(b)(4)(v) if the poverty rate is at modifying related recordkeeping require the grantee to ensure that 70
least 20 percent and if it evidences requirements at 24 CFR 570.506(b)(7) percent of its CDBG–CV grant be
pervasive poverty and general distress (entitlement) and the jointly agreed expended for activities that benefit LMI
using the criteria described in 24 CFR upon requirements referenced in 24 CFR persons. As an alternative requirement,
570.208(a)(4)(v)(C) (entitlement) and 24 570.490 (state) by adding the following however, HUD is requiring that grantees
CFR 570.483(b)(4)(v)(C) (states). additional presumption: The recipient must demonstrate compliance with the
This alternative requirement may substitute records showing the type overall benefit requirement separately
eliminates a requirement that census of job and the annual wages or salary of for a grantee’s total CDBG–CV grant
tracts that contain at least a portion of the job in lieu of maintaining records allocation and not in combination with
a central business district must have a showing the person’s family size and annual formula CDBG funding or
poverty rate of at least 30 percent before income to demonstrate that the person commitments under the Section 108
residents and businesses in the tract are who filled or held/retained the job was Loan Guarantee program.
entitled to a presumption of low- and a low- or moderate-income person, Under this alternative requirement,
moderate-income (LMI) benefit. HUD when required by paragraph 24 CFR there is no option for grantees to select
has determined that eliminating the 30 570.506(b)(5)(i)(B), (b)(5)(ii)(C), the timeframe for compliance. HUD
percent requirement for tracts that (b)(6)(iii) or (b)(6)(v) (entitlement) or the previously instructed grantees to submit
contain central business districts will requirements referenced in 24 CFR certifications required by 24 CFR 91.225
standardize the required poverty rate to 570.490 (state). HUD will consider the (entitlements) or 24 CFR 91.325 (states).
meet the presumption regardless of person income-qualified if the annual The regulations at 24 CFR
where the persons or the business is wages or salary of the job is equal to or 91.225(b)(4)(ii) and 24 CFR
located, which facilitates the use of less than the Section 8 low-income limit 91.325(b)(4)(ii) require grantees to
grant funds to assist desperate established by HUD for a one-person certify that the aggregate use of CDBG
businesses. Central business districts are family. Under this alternative funds will comply with the overall
hubs that contain many coronavirus- requirement, a grantee will have benefit requirement during a period
affected businesses and facilitating substantially reduced documentation specified by the jurisdiction, consisting
assistance to businesses that seek to requirements because they will be of one, two, or three specific
retain jobs is consistent with the working with assisted businesses rather consecutive program years. Under this
purposes of the CARES Act. than each person, and potentially their alternative requirement, grantees are not
Standardizing the poverty rate for the households, who received a job. required to carry out the grant
LMI benefit presumption may help to III.B.5.(d)(iv) Overall Benefit to LMI consistent with the mandatory overall
avoid wholesale collapse of central Persons. HUD is establishing an benefit certification because HUD has
business districts at a when many alternative requirement to modify the changed the requirement related to
businesses have closed or at risk of calculation of overall LMI benefit, so overall benefit.
closing due to insufficient revenues. that compliance with the requirement is
III.B.5.(d)(iii) LMI Job Creation and III.B.5.(e) Public Benefit
separated from the annual formula
Retention Records. HUD is establishing CDBG program calculation of overall III.B.5.(e)(i) Elimination of Aggregate
the following waiver and alternative benefit. Overall LMI benefit for CDBG– Public Benefit Test. HUD is waiving the
requirement to facilitate and expedite CV grants will be calculated based on standard for aggregate public benefit
assistance to coronavirus-affected the percentage of the CDBG–CV grant that applies to economic development
businesses by streamlining national that benefits LMI persons. This activities described in 24 CFR
objective criteria and recordkeeping alternative requirement is consistent 570.209(b)(1)–(2) (entitlement) and in 24
requirements for activities that benefit with the idea that one-time, CFR 570.482(f)(2)–(3) (state). The public
LMI persons by retaining or creating supplemental funding should not skew benefit standards were designed to
jobs. The normal job creation and the calculation of overall benefit for use require that economic development
retention recordkeeping requirements of annual formula CDBG grants and activities, in the aggregate, provide an
consider family income when guaranteed loan funds. This appropriate amount of public benefit
determining whether a beneficiary is a modification expedites and facilitates based on the amount of CDBG funds
person of low or moderate income, but the use of funds in part by enabling used. Given the clear benefit derived
these requirements are likely to be grantees to best plan which activities from addressing economic disruptions
burdensome during a time when will benefit LMI persons. due to coronavirus, CDBG–CV grantees
unemployment has surged and family Section 101I of the HCD Act (42 can adequately demonstrate public
income is more difficult to document. U.S.C. 5301I) establishes the primary benefit based on the individual public
Collection of income information objective of the HCD Act: the benefit standards, as modified by
directly from assisted businesses can ‘‘development of viable urban waivers and alternative requirements in
streamline assistance. Therefore, communities, by providing decent section III.B.5.(e)(ii).
notwithstanding that the definitions of housing and a suitable living Therefore, to facilitate and expedite
low-income person and moderate- environment and expanding economic the use of CDBG–CV funds for
income person in 24 CFR 570.3 are opportunities, principally for persons of coronavirus-related economic
based on family income, for purposes of low and moderate income.’’ CDBG–CV development activities, HUD is waiving
meeting the national objective criteria grants are subject to the requirement the aggregate public benefit standards at
for job creation or retention at 24 CFR that 70 percent of funds are for activities 24 CFR 570.209(b)(1)–(2) (entitlement)
570.208(a)(4) and 24 CFR 570.483(b)(4), that benefit LMI persons. The and 24 CFR 570.482(f)(2)–(3) (state). In
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HUD is imposing the following waiver requirements at 42 U.S.C. 5301I, 42 granting this waiver, HUD notes that
and alternative requirement: Grantees U.S.C. 5304(b)(3)(A), 24 CFR based on the growing number of urgent
and employers may consider 570.200(a)(3) (entitlements and requests for economic development
individuals that apply for or hold jobs nonentitlement counties in Hawaii), 24 assistance, particularly from small
to be members of one-person families CFR 570.420(d)(2)–(3) (insular areas), business, grantees are likely to have
for activities that prevent, prepare for, and 24 CFR 570.484 (states) shall difficulty determining the appropriate
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amount of CDBG assistance, in the coronavirus. By law, use of funds for III.B.5.(f)(i) Extension of Emergency
aggregate, for their current and next any other purpose is unallowable. To Payments. HUD is providing an
program years. satisfy these purposes, grantees may alternative requirement to extend the
III.B.5.(e)(ii) Modification of assist activities that respond to direct period that grantees can make
Individual Public Benefit Standards. To effects, such as the need to rehabilitate emergency grant payments on behalf of
facilitate the use of grant funds by a building to add isolation rooms for individuals and families. Normally,
providing greater leeway to grantees to recovering coronavirus patients. A CDBG funds may not be used for income
identify the most advantageous means grantee may also undertake activities to payments, which are not included
of providing economic development address indirect effects of the virus, among eligible activities in section
assistance, HUD is modifying the such as the economic and housing 105(a) of the HCD Act for states, and
individual public benefit standards. market disruptions caused by social which are expressly prohibited by 24
HUD is imposing a waiver and distancing measures and stay at home CFR 570.207(b)(4) in the Entitlement
alternative requirement to establish an orders implemented to prevent the CDBG regulations. The phrase income
alternative means by which grantees can spread of coronavirus. payments means a series of subsistence-
demonstrate public benefit from the use Some activities clearly tie back to the type grant payments made to an
of CDBG–CV funds for individual purposes of the CARES Act, such as individual or family for items such as
special economic development public services, economic development food, clothing, housing (rent or
activities. and microenterprise assistance, public mortgage) or utilities, but excludes
Certain economic development facilities, and the rehabilitation of emergency payments made over a
activities described in 24 CFR 570.209 private buildings to provide housing. period of up to three consecutive
(entitlement) and in 24 CFR However, HUD is not prohibiting months to the provider of such items or
570.482(f)(1) (state) are subject to grantees from carrying out any services on behalf of an individual or
individual public benefit standards at particular CDBG eligible activity family.
24 CFR 570.209(b)(3) (entitlement) and described in the HCD Act and the part Coronavirus has had a massive impact
24 CFR 570.482(f)(4) (state). Grantees 570 regulations, because other CDBG on families’ ability to work for pay,
must satisfy these public benefit eligible activities, such as acquisition, make rent or mortgage payments, access
standards to show that the amount of can justifiably be used to fulfill the or pay for food, clothing, and basic
CDBG funds used for individual CARES Act purposes depending upon utilities, and access many other
economic development activities is the circumstances. essential items and services. To help
appropriate relative to the benefit to the To remain consistent with the individuals and families address these
public from those activities. structure of a block grant program and challenges, HUD is waiving section
HUD is waiving the individual the flexibility of CDBG to provide 105(a)(8) of the HCD Act and 24 CFR
standards at 24 CFR 570.209(b)(3) and multiple avenues to achieve the 570.207(b)(4) only to the extent
24 CFR 570.482(f)(4) and imposing the purposes of the CARES Act, HUD is necessary to establish the following
following alternative requirement. For implementing the limitation that funds alternative requirement: CDBG–CV
activities subject to the public benefit be used for the coronavirus-related funds may be used to provide
standards, grantees must document that: purposes of the CARES Act by requiring emergency payments for individuals or
(a) The activity will create or retain at grantees to document the use of funds families impacted by coronavirus for
least one full-time equivalent, to prevent, prepare for, and respond to items such as food, clothing, housing
permanent job per $85,000 of CDBG coronavirus, rather than by expressly (emergency rental assistance or
funds used; (b) the activity will provide prohibiting grantees from undertaking mortgage assistance) or utilities for up to
goods or services to residents of an area any of the eligible activities described in six consecutive months.
such that the number of LMI persons the HCD Act. HUD cautions grantees Emergency payments must be made to
residing in the area served by the that the recordkeeping requirements of the provider of such items or services on
assisted businesses amounts to at least this notice require clear documentation behalf of an individual or family, and
one LMI person per $1,700 of CDBG that all uses of funds satisfy the not directly to an individual or family
funds used; or (c) the assistance was statutory purposes of the CARES Act. in the form of income payments, debit
provided due to business disruption The current needs to prevent, prepare cards, or similar direct income
related to coronavirus (in which case, for, and respond to coronavirus may payments. CDBG–CV grantees must
no monetary standard applies because require use of CDBG–CV funds for ensure that proper documentation is
HUD has determined that there is uncommon activities. HUD is preparing maintained to ensure that all costs
sufficient public benefit derived from a series of technical assistance products incurred are eligible. Grantees using this
the provision of assistance to stabilize or that describe opportunities to quickly alternative requirement must document,
sustain businesses in the grantee’s deploy CDBG–CV funds to address in their policies and procedures, how
jurisdiction that suffer disruption due to immediate needs. As this technical they will determine the amount of
coronavirus, and that facilitation of assistance is developed, it will be assistance to be provided is necessary
business assistance for this purpose may posted on the CDBG–CV page on the and reasonable.
help to avoid complete economic https://www.hud.gov/program_offices/ III.B.5.(f)(ii) Opportunity Zones and
collapse within the grantee’s comm_planning/cdbg_programs_covid- Related Flexibilities for Economic
jurisdiction). This alternative 19. Development. To facilitate and expedite
requirement does not modify the When identifying eligible activities to the use of grant funds for economic
requirements related to eligible be carried out with CDBG–CV funds, development during this time of
activities and national objectives grantees can reduce the potential for extraordinary need, HUD is clarifying
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criteria. duplication of benefits by designing the existing requirements and adopting
activities that address needs not covered an alternative requirement that expands
III.B.5.(f) Eligible Activities by other sources of financial assistance. economic development activities that
Grantees may use CDBG–CV funds More information on requirements to can be carried out with CDBG–CV
only for those activities carried out to prevent the duplication of benefits is funds. HUD is adopting this alternative
prevent, prepare for, and respond to described in section III.B.9. requirement because the entitlement
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51468 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
regulations at 24 CFR 570.203(b) projects through a financing However, the entitlement CDBG
describe some financing mechanisms for mechanism. The nonprofit may pass regulation at 24 CFR 570.207(b)(1)
economic development, but do not assistance through a financing (which may be used as guidance by state
provide an exhaustive list of the forms mechanism to another entity based on grantees), allows grantees to purchase or
of support grantees can provide to the language in section 105(a)(15) of the to pay depreciation in accordance with
private, for-profit businesses and to HCD Act. Grantees subject to 2 CFR part 200, subpart E, for personal
nonprofits for special economic entitlement regulations must document property, fixtures, and equipment when
development activities. Many economic that the assisted nonprofit is serving the necessary when such items constitute
development activities are carried out in development needs of the jurisdiction all or part of a public service. Examples
conjunction with other forms of and that the assistance is used for a of use of equipment that constitute all
assistance and Federal tax-based community economic development or part of a public service include
programs that help provide additional project that is necessary to prevent, equipment and supplies owned by the
sources of financing for economic prepare for, and respond to coronavirus. grantee or subrecipient that provides the
development, particularly in LMI areas. III.B.5.(f)(iii) Public Services Cap. The public service, e.g., ventilators or other
HUD wants to facilitate the ability for CARES Act provides that medical equipment and supplies that
grantees to use CDBG–CV funds to fill notwithstanding section 105(a)(8) of the will be used in providing health care at
financing gaps that cannot be met by HCD Act (42 U.S.C. 5305(a)(8)), there a field clinic, or a vehicle outfitted with
other sources and quickly launch shall be no per centum limitation for the medical equipment to provide mobile
critical economic development projects, use of funds for public services health care.
particularly in Opportunity Zones and activities to prevent, prepare for, and III.B.5.(f)(v). Clarification on
other target areas, without taking the respond to coronavirus. The CARES Act Application of Requirements in 2 CFR
time to seek additional clarification provides this flexibility for all CDBG– part 200. In response to the coronavirus
from HUD on activity eligibility for CV funds and CDBG funds appropriated pandemic, the Office of Management
individual projects. in fiscal years 2019 and 2020 to the and Budget (OMB) released two
First, this notice clarifies an existing extent that grantees use these funds to memoranda that allow Federal agencies
requirement of economic development carry out public service activities to to grant exceptions to some
activities that grantees may carry out prevent, prepare for, and respond to requirements under 2 CFR part 200, the
pursuant to 24 CFR 570.203(b) coronavirus. Uniform Administrative Requirements,
(entitlement) or section 105(a)(17) of the Following enactment of the CARES
Cost Principles and Audit Requirements
HCD Act (state). Grantees may provide Act, the public services cap described in
for Federal Awards. HUD reminds
assistance to an economic development section 105(a)(8) of the HCD Act and 24
grantees that the flexibilities in these
project through a for-profit entity that CFR 570.201I has no effect on CDBG–CV
grants. Program income generated by the memoranda do not automatically apply
passes the funds through a financing
use of CDBG–CV funds is given special to grantees. HUD has not approved class
mechanism (e.g., Qualified Opportunity
treatment, as discussed in III.B.6.(a). exceptions to 2 CFR part 200 for CDBG–
Funds and New Markets Tax Credit
Therefore, notwithstanding the CV grants or CDBG grants, so the
(NMTC) investment vehicles). The
provisions of section 105(a)(8) of the requirements in 2 CFR part 200
regulations at 24 CFR 570.203(b) already
HCD Act, program income is not a continue to apply.
list forms of support by which grantees
can provide assistance to private, for- consideration for purposes of The OMB memoranda were for
profit businesses where the assistance is determining the amount of CDBG–CV limited purposes and were not intended
appropriate to carry out an economic funds that can be expended on public to cover all grantees and activities. The
development project. HUD has services. The calculation of the public March 9, 2020 memorandum, M–20–11,
previously interpreted this provision to services cap for fiscal year 2020 and Administrative Relief for Recipients and
allow for CDBG assistance to NMTC 2019 annual formula CDBG grants is Applicants of Federal Financial
investment vehicles. This clarification discussed in section IV.B.4.(a). Assistance Directly Impacted by the
makes clear that such assistance through III.B.5.(f)(iv) Other Public Services Novel Coronavirus (COVID–19)
any financing mechanism (which is not Considerations. HUD reminds grantees (available at https://
limited to NMTC investment vehicles) is to comply with other requirements in www.whitehouse.gov/wp-content/
eligible under 24 CFR 570.203(b). The section 105(a)(8) of the HCD Act, and for uploads/2020/03/M-20-11.pdf), allows
regulation also does not apply to states, grantees subject to entitlement CDBG Federal agencies to grant class
but states may consider 24 CFR regulations, 24 CFR 570.201I. Namely, exceptions in instances where the
570.203(b), as clarified by the following CDBG–CV funds may only be used for agency has determined that the purpose
alternative requirement, as guidance in those public service activities that are of the Federal awards is to support the
the same way that they may consider new or that represent a quantifiable continued research and services
other Entitlement CDBG regulations. increase above the level of an existing necessary to carry out the emergency
HUD is not waiving 24 CFR service that has been provided by or on response related to COVID–19. The
570.203(b) (entitlement) or section behalf of the unit of general local March 19, 2020 memorandum, M–20–
105(a)(17) (state), and other statutory government (through funds raised by 17, Administrative Relief for Recipients
and regulatory requirements remain in the unit or received by the unit from the and Applicants of Federal Financial
place. state in which it is located) in the 12 Assistance Directly Impacted by the
Second, this notice establishes an calendar months before the submission Novel Coronavirus (COVID–19) due to
alternative requirement that expands the of the action plan, unless the Secretary Loss of Operations (available at https://
authority in section 105(a)(15) of the finds that the discontinuation of such www.whitehouse.gov/wp-content/
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HCD Act and 24 CFR 570.204 to permit services was the result of events not uploads/2020/03/M-20-17.pdf) allows
grantees subject to entitlement CDBG within the control of the unit of general HUD to make class exceptions for an
regulations to assist nonprofit local government. expanded scope of recipients affected by
organizations serving the development Additionally, grantees are reminded the loss of operational capacity and
needs of their jurisdiction by carrying that the purchase of personal property increased costs due to the COVID–19
out community economic development and equipment is generally ineligible. crisis. OMB indicated that it would
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51469
reassess the authority granted by these HUD is issuing the waivers and necessary to allow a state to use its
memoranda within 90 days. alternative requirements in this section CDBG–CV funds for eligible activities
based in part on information in requests that the state carries out directly. The
III.B.6. Other Program Requirements
from states and in part to implement standard at 24 CFR 570.480I and the
III.B.6.(a) Program Income provisions of the CARES Act that permit provisions at section 104I(2) of the HCD
To expedite use of grant funds, HUD grant funds allocated to states to be used Act (42 U.S.C. 5304I(2)) are modified to
is clarifying the requirements for CDBG– in entitlement areas. also include activities that the state
CV grants on the treatment of program HUD has determined that this waiver carries out directly. Section 106(d) of
and alternative requirement will the HCD Act is not otherwise waived,
income at 24 CFR 570.504 (entitlement)
facilitate and expedite the use of CDBG– except as provided in this notice.
and 24 CFR 570.489I–(f) (state) that is
CV funds by supporting states in their A state may carry out eligible
generated by the use of CDBG–CV
roles as significant coordinators of activities directly, consistent with the
funds. The receipt and expenditure of
statewide and regional activities to entitlement program requirement of 24
program income that is generated by the
prevent, prepare for, and respond to CFR 570.200(f), through its employees,
use of CDBG–CV funds shall be treated
coronavirus. Additionally, these waivers through procurement contracts, or
as annual formula CDBG program
and alternative requirements are through assistance provided under
income and recorded as part of the
designed to reduce administrative costs agreements with subrecipients. Pursuant
financial transactions of the annual
and streamline the delivery of assistance to section 102I of the HCD Act, one or
formula CDBG grant program. This by maintaining a single set of grant more public agencies may be designated
clarification will facilitate expenditures requirements for all CDBG–CV by the chief executive officer of a state
of CDBG–CV grant funds for their allocations. to undertake activities assisted under
intended purpose, while continuing to These waivers and alternative this chapter. A state is responsible for
maintain appropriate controls on the requirements are only available to a ensuring that CDBG–CV funds are used
use of program income. state if it complies with the following in accordance with all program
III.B.6(a)(i) Use of program income alternative requirements in this requirements. The use of interagency
before annual formula CDBG grant paragraph and in III.B.6.(b)(ii)–(iv): agreements, subrecipient agreements
funds. Any program income generated Nonentitlement set aside: A state (including agreements with Indian
from the use of CDBG–CV funds will be must set aside a portion of its grant for tribes and designated public agencies, as
receipted in HUD’s Integrated use by nonentitlement units of general described in section III.B.6.(b)(ii)) or
Disbursement and Information System local government. The nonentitlement contracts does not relieve the state of
(IDIS) as program income to the annual set aside must be no less than an this responsibility. States are
formula CDBG grant program. amount equal to the state’s first CDBG– responsible for determining the
III.B.6(a)(ii) Inapplicability of float- CV allocation and may be from any adequacy of performance under
funded activities. Based on the portion of the state’s additional CDBG– subrecipient agreements and procured
treatment of income generated from the CV allocation. This limitation is contracts, and for taking appropriate
use of CDBG–CV funds as annual imposed for consistency with the action when performance problems
formula CDBG program income, HUD is CDBG–CV formulas, which include a arise. State grantees continue to be
waiving 24 CFR 570.301(b) and section direct allocation to entitlement areas responsible for civil rights, labor
104(h) of the HCD Act for CDBG–CV and to states on behalf of standards, and environmental
grants. HUD is imposing the following nonentitlement areas to prevent, prepare protection requirements, for compliance
alternative requirement: Grantees shall for, and respond to coronavirus. The with all applicable requirements,
not use CDBG–CV funds for float- nonentitlement set aside fulfills the including conflict of interest provisions
funded activities or guarantees. intent reflected by the formula to in 24 CFR 570.489(g) and (h).
III.B.6(a)(iii) Retention of program address needs in urban and rural areas, The national objective criteria in 24
income by subrecipients. A grantee may while giving states the flexibility to CFR 570.483 are modified by the
permit subrecipients (including units of determine how to expend each following alternative requirement when
general local government receiving allocation as it is made based on needs states carry out activities directly: The
funds from a state) to retain program within its jurisdiction. state must fulfill all requirements that
income from the use of CDBG–CV funds Inclusion in CDBG–CV Application: A 570.483 imposes on units of general
under this paragraph if the amount held state’s proposal to act directly and to local government to demonstrate
does not exceed the subrecipient’s distribute or use CDBG–CV funds in compliance with national objective
projected cash needs for CDBG activities entitlement areas must be published for criteria.
including activities to prevent, prepare public comment in its application for The recordkeeping requirements at 24
for, and respond to coronavirus. CDBG–CV funds or in a subsequent CFR 570.490(b) are waived when states
substantial amendment to the annual carry out activities directly, and the
III.B.6.(b) Rules Applicable to State following alternative requirement shall
CDBG–CV Grants action plan that includes the CDBG–CV
funds. apply: The state shall establish and
The paragraphs in this section apply Activities carried out in tribal areas: maintain such records as may be
only to State CDBG–CV grantees. A state grantee may carry out activities necessary to facilitate review and audit
III.B.6.(b)(i) Direct Action by States. in tribal areas. States carrying out by HUD of the state’s administration of
The waivers and alternative projects in tribal areas through CDBG–CV funds, under 24 CFR 570.493.
requirements in this section and in employees, contractors, or subrecipients Consistent with applicable statutes,
sections III.B.6.(b)(ii)–(iv) permit a state must obtain the consent of the Indian regulations, waivers and alternative
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grantee to use a portion of its funds to tribe with jurisdiction over the tribal requirements, and other Federal
act directly to carry out activities area. requirements, the content of records
through employees, contractors, and Other conforming changes: maintained by the state shall be
subrecipients in all geographic areas Requirements at section 106(d) of the sufficient to: (1) Enable HUD to make
within its jurisdiction, including HCD Act (42 U.S.C. 5306(d)) and 24 CFR the applicable determinations described
entitlement areas and tribal populations. 570.480(g) are waived to the extent at 24 CFR 570.493; (2) make compliance
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51470 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
determinations for activities carried out definition of subrecipient at 24 CFR acs-low-mod-summary-data-exception-
directly; and (3) show how activities 570.500(c) applies when states carry out grantees/.
funded are consistent with the activities through subrecipients, and the III.B.6.(b)(v) Elimination of State
descriptions of activities proposed for requirements of 24 CFR 570.489(g) (as Administrative Match. To expedite the
funding in the CDBG–CV application. modified by section III.B.6.(b)(i)) shall use of CDBG–CV funds, HUD is waiving
For fair housing and equal opportunity apply. the requirement for matching state
(FHEO) purposes, as applicable, such For purposes of this alternative administrative funds, subject to the
records shall include data on the race, requirement, the definition of requirements of section III.B.6.(b)(vi)
ethnicity, and sex of persons who are subrecipients at 24 CFR 570.500I is below. Requiring states to match
applicants for, participants in, or modified to expressly include Indian administrative funds may considerably
beneficiaries of the activity. tribes. Indian tribes that receive CDBG– slow down the expenditure of CDBG–
The change of use of real property CV funding from a state grantee must CV funds in states struggling to
rule at 24 CFR 570.489(j) is modified to comply with the Indian Civil Rights Act accurately project and adjust their
include instances when a state carries (Title II of the Civil Rights Act of 1968, budgets given the challenges caused by
out activities directly. All references to 25 U.S.C. 1301 et seq.). This conforming coronavirus. The requirements at 42
‘‘unit of general local government’’ shall requirement is necessary because the U.S.C. 5306(d)(3)(A) and 24 CFR
be read as ‘‘state, unit of general local state CDBG regulations do not anticipate 570.489(a) are waived to the extent
government (UGLG) or state states distributing funds through means necessary to eliminate the state match
subrecipient.’’ other than a method of distribution to requirement for general administrative
To include instances when a state units of general local government. costs.
carries out activities directly, 24 CFR III.B.6.(b)(iii) Activities Carried Out by
III.B.6.(b)(vi) Cap on State
570.492 is waived and the following States in Entitlement Areas. The
Administrative Costs and Technical
alternative requirement applies: The provisions of 24 CFR 570.486(c) are
Assistance. Pursuant to 24 CFR
state shall make reviews and audits, waived to the extent that they allow
570.489(a)(3)(iii), a state and its funded
including on-site reviews of any States, either directly or through units of
units of general local government and
subrecipients and local governments, as general local government, to use CDBG–
subrecipients are, in aggregate,
may be necessary or appropriate to meet CV funding for activities located in
permitted to expend no more than 20
the requirements of section 104I(2) of entitlement areas without contribution
the HCD Act, as amended. In the case from the entitlement jurisdiction, percent of the CDBG–CV grant for
of noncompliance with these consistent with the waiver and planning, management, and
requirements, the state shall take such alternative requirements in sections administrative costs. Under 42 U.S.C.
actions as may be appropriate to prevent III.B.6.(b)(i) and (ii). HUD is granting 5306(d)(5) and (6) and 24 CFR
a continuance of the deficiency, mitigate this waiver to facilitate and expedite the 570.489(a)(1) a state may not directly
any adverse effects or consequences, use of grant funds for consistency and use more than $100,000 plus 3 percent
and prevent a recurrence. The state shall ease of administration by granting the of its annual grant for administrative
establish remedies for noncompliance same geographic flexibilities to all and technical assistance costs
by any subrecipients or local allocations of CDBG–CV funds, since combined. HUD is waiving 42 U.S.C.
governments. they will be administered under a single 5306(d)(5) and (6) and 24 CFR
To include instances when a state grant. 570.489(a)(1) and establishing an
carries out activities directly in III.B.6.(b)(iv) Use of the ‘‘upper alternative requirement that a state may
accordance with the waiver in this quartile’’ or ‘‘exception criteria’’ for LMI use up to 7 percent of its CDBG–CV
paragraph, 24 CFR 570.489(g) is area benefit activities. Section grant combined for general
modified to revise the requirement that 105(c)(2)(A) of the HCD Act authorizes administration and technical assistance
‘‘[t]he state shall establish requirements HUD to permit an exception to the LMI costs; of that 7 percent, a state may use
for procurement policies and area benefit national objective criteria up to 5 percent of CDBG–CV funds for
procedures for units of general local that are normally satisfied when at least general administration costs and up to
government’’ so that it applies to ‘‘units 51 percent of the population of an area 2 percent of the grant for technical
of general local government and are persons of low and moderate assistance activities. The remainder of
subrecipients.’’ To facilitate grant income. HUD is clarifying how this the amount may be used by units of
administration by adopting state-wide ‘‘exception criteria’’ applies when State general local government for
procurement policies, a state agency CDBG–CV grantees carry out activities administrative and technical assistance
designated to oversee the use of all its in entitlement jurisdictions as costs, provided that a state and its
CDBG–CV funds pursuant to section authorized by section III.B.6.(b)(iii). If funded units of general local
102I of the HCD Act may impose its the area in which the activity is carried government and subrecipients expend
procurement requirements on all uses of out would benefit from the ‘‘exception no more than 20 percent of the CDBG–
CDBG–CV funds by the state, including criteria’’ that permit a grantee to use a CV grant for planning, management, and
by other state agencies that administer percentage less than 51 percent to administrative costs. A grantee must
a portion of the CDBG–CV grants, so qualify activities under the LMI area meet this alternative requirement over
long as those requirements comply with benefit criteria, those exception criteria the life of its grant, as amended to
24 CFR 570.489(g). apply to the use of CDBG–CV funds by incorporate additional allocations of
III.B.6.(b)(ii) Use of Subrecipients by a state the same way that they apply to CDBG–CV funds.
States (Including Nonprofits and the use of CDBG funds by the CDBG–CV grant funds shall not be
Tribes). HUD is adopting the following entitlement grantee in the same area. used to pay planning and program
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alternative requirement that shall apply CDBG–CV grantees are required to use administrative costs allocable to another
when states carry out activities directly: the most recent data available in grant under the CDBG annual formula
States carrying out activities through implementing the exception criteria. For program; however, CDBG–CV funds
subrecipients must comply with 24 CFR more information on the data set, please may be used to pay costs that benefit
570.489(m) relating to monitoring and visit https://www.hudexchange.info/ both the CDBG–CV grant and another
management of subrecipients. The programs/acs-low-mod-summary-data/ CDBG award and can be distributed
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51471
between the grants in proportions that CDBG–CV grants. Additionally, CDBG– Certification and Request for Release of
may be reasonably approximated. CV funds shall not be included in the Funds to HUD for approval.
III.B.6.(b)(vii) Procurement. Except as compliance determination of the III.B.6.(d)(iii) Clarifying note on
described in section III.B.6. to program year obligation test applicable emergency environmental review
accommodate states acting directly, this to annual formula CDBG funds. procedures. HUD’s environmental
notice does not modify procurement Additionally, program income, review regulations in 24 CFR part 58
requirements at 24 CFR 570.489(g) for regardless of the source funding of the include two provisions that may be
state grantees. As discussed above, the activity that generated the income, shall relevant to environmental review
local procurement policies and be included in the compliance procedures for activities to prevent,
procedures that apply to the use of determination of the administrative and prepare for, and respond to coronavirus.
annual formula CDBG grant funds may planning cost cap applicable to annual The first is 24 CFR 58.34(a)(10), which
not be nimble enough to accommodate formula CDBG grants and program provides an exemption for certain
this urgent need to quickly procure income, separately from CDBG–CV activities undertaken in response to a
goods and services necessary to carry funds. national or locally declared public
out eligible activities. HUD recommends CDBG–CV grant funds shall not be health emergency. Except for the
that CDBG–CV grantees review their used to pay planning and program applicable requirements of 24 CFR 58.6,
existing procurement policies to explore administrative costs allocable to another a responsible entity does not have to
the potential use of state or local waiver grant under the CDBG annual formula comply with the requirements of part 58
authority and emergency procedures program; however, CDBG–CV funds or undertake any environmental review,
that may expedite procurement may be used to pay costs that benefit consultation or other action under
processes. both the CDBG–CV grant and another NEPA and the other provisions of law
Additionally, if the grantee plans to CDBG award and can be distributed or authorities cited in 24 CFR 58.5 for
use CDBG–CV grants to carry out between the grants in proportions that exempt activities or projects consisting
eligible activities that satisfy non- may be reasonably approximated. solely of exempt activities. Exempt
Federal cost share requirements under activities include assistance for
section 105(a)(9) of the HCD Act, the III.B.6.(d) Compliance With
temporary or permanent improvements
grantee should consider modifying Environmental Review Requirements
that do not alter environmental
procurement policies to authorize III.B.6.(d)(i) Overview of conditions and are limited to protection,
grantees to use procurement policies Environmental Review Requirements. repair, or restoration activities necessary
and procedures of the agencies paying Environmental regulations at 24 CFR only to control or arrest the effects from
the Federal cost share of the activity, to 58.22 prohibit CDBG grantees, a imminent threats to public safety.
the extent that those policies and recipient, and any other participant in The second is a streamlined public
procedures are consistent with the the development process from notice and comment period in the
procurement requirements on the use of committing HUD or non-HUD funds to regulation at 24 CFR 58.33, which may
CDBG–CV funds. Modifying a project until the environmental apply in some cases for emergency
procurement policies to allow the use of compliance review process has been activities undertaken to prevent, prepare
procurement requirements imposed by successfully completed or until receipt for, and respond to coronavirus. The
other Federal grants is easier for state of the Authority to Use Grant Funds, if application of these two provisions
grantees, but entitlement grantees that applicable. In addition, neither a following a presidentially-declared or
anticipate use of a substantial amount of recipient nor any participant in the locally-declared public health
CDBG–CV funds to satisfy non-Federal development process may commit non- emergency is discussed in the Notice,
cost share may also be able to adopt a HUD funds on or undertake an activity Guidance on conducting environmental
similar provision where the other or project if the activity or project would review pursuant to 24 Part 58 for
Federal granting agency imposes the have an adverse environmental impact activities undertaken in response to the
procurement requirements in 2 CFR part or limit the choice of reasonable public health emergency as a result of
200. alternatives. Therefore, it is very COVID–19 posted at https://
important for grantees to begin and www.hud.gov/sites/dfiles/OCHCO/
III.B.6.(c) Rules for Entitlements, Insular complete any required environmental documents/2020-07cpdn.pdf.
Areas, and Nonentitlement Hawaii compliance review as soon as possible.
Counties Grantees are urged to contact their Field III.B.6.(e) Compliance With Labor Laws
III.B.6.(c)(i) Administrative and Environmental Officer for more CDBG–CV grants are subject to the
Planning Cost Caps. To expedite the use information about environmental review Davis-Bacon prevailing wage
of grant funds, HUD is waiving requirements. requirements imposed by section 110(a)
requirements of 24 CFR 570.200(g) that III.B.6.(d)(ii) Clarifying note on the of the HCD Act. HUD cannot waive this
are inconsistent with the treatment of process for environmental release of or other labor laws. Under regulations of
program income in section III.B.6.(a) funds when a State carries out activities the Department of Labor (DOL) at 29
and the treatment of CDBG–CV funds as directly. Usually, a state distributes CFR 1.6(g), where Federal assistance is
a standalone grant. The following CDBG funds to local governments and not approved prior to contract award (or
alternative requirement applies to grants takes on HUD’s role in receiving the beginning of construction if there is
subject to subpart D (entitlement grants environmental certifications from the no contract award), Davis-Bacon wage
and grants to the nonentitlement grant recipients and approving releases rates apply retroactively to the
counties of the State of Hawaii): No of funds. Under the waiver and beginning of construction and must be
more than 20 percent of the total CDBG– alternative requirement in paragraph incorporated retroactively in the
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CV grant shall be expended for planning III.B.6.(b), HUD will allow a State contract specifications. However, if
and program administrative costs, as CDBG–CV grantee to carry out activities there is no evidence that the owner
defined in 24 CFR 570.205 and 24 CFR directly in addition to distributing funds intended to apply for the CDBG–CV
570.206, respectively. There is no to subrecipients. Thus, per 24 CFR 58.4, assistance prior to the contract award or
program year obligation test for when a state carries out activities the start of the construction, HUD may
planning and administrative costs of directly, the state must submit the request that DOL allow prospective,
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51472 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
rather than retroactive, application of III.B.7. Period of Performance, generated from CDBG–CV activities will
the Davis-Bacon wage rates. DOL may Timeliness, and Closeout be included in timely expenditure
allow prospective application of Davis- III.B.7.(a) Period of Performance compliance determinations for each
Bacon requirements where it finds that entitlement grantee’s annual formula
it is necessary and proper in the public CDBG–CV grantees must expend all CDBG program. Grantees should
interest to prevent injustice or undue CDBG–CV funds (including CDBG–CV consider the potential effects of
hardship and it finds no intent to apply funds from additional allocations that additional program income to
for the federal assistance before contract are obligated by HUD through compliance with timeliness
award or the start of construction. The amendments to the grant agreement) requirements applicable to their annual
CDBG–CV Grantee should contact a within the 6-year period of performance formula CDBG grant program when they
HUD Labor Relations Specialist if such established by the CDBG–CV grant select and design CDBG–CV assisted
a situation arises. agreement. HUD is imposing this period activities.
of performance to ensure the use of
III.B.6.(f) Relationship to Section 108 CDBG–CV funds to prevent, prepare for, III.B.7.(c) Closeout
Loan Guarantees and respond to coronavirus. The CDBG To facilitate the use of grant funds in
Under the Section 108 Loan regulations at 24 CFR 570.200(k) and 24 a timely manner, HUD is waiving the
Guarantee Program, CDBG grantees can CFR 570.480(h) permit HUD to establish CDBG closeout regulations at 24 CFR
borrow up to five times their most a period for expenditure and 570.509 for grantees subject to
performance in a grant agreement that is entitlement regulations and imposing an
recent CDBG grant by issuing federally
shorter than the normal 8-year period. alternative requirement that HUD will
guaranteed notes. To ensure that CDBG–
HUD is exercising its authority to close out grants in accordance with
CV funds are used for the purposes
establish a 6-year period of performance grant closeout requirements of 2 CFR
authorized by the CARES Act, HUD is
and expenditure deadline in the CDBG– 200.343. This approach is consistent
issuing the following alternative
CV grant agreement. Grant funds are not with the state regulation at 24 CFR
requirement to sections 108(b) and (c) of
available for expenditure after the 570.489(o). This will help all grantees to
the HCD Act (42 U.S.C. 5308(c)): CDBG–
period of performance. In addition, to expend grant funds within a short
CV funds shall not be factored into a
further ensure the expedited use of the timeframe designed to maximize the
grantee’s Section 108 borrowing
funds, HUD is imposing an alternative ability of CDBG–CV funds to prevent,
authority. requirement that each grantee must prepare for, and respond to coronavirus.
A grantee may use CDBG–CV funds to expend at least 80 percent of all CDBG– Grantees subject to this alternative
make a direct payment of principal, CV funds (including CDBG–CV funds requirement must submit all financial,
interest, or any fees due under a Section from additional allocations that are performance, and other reports as
108 note only if the use of funds is to obligated by HUD through amendments required by 24 CFR 91.520.
prevent, prepare for, and respond to to the grant agreement) no later than the In general, HUD expects all grantees
coronavirus. The necessity of such use end of the third year of the period of to comply with all grant requirements
shall be documented by the grantee or performance established by the CDBG– and fully close out a grant at the end of
the subrecipient that provided the CV grant agreement. If this three-year the period of performance. However,
assistance (e.g., if Section 108 funds requirement is not met, and evidence HUD recognizes that there are many
were used by the grantee to provide meeting the criteria for extension things that could disrupt a grantee’s
assistance to a for-profit business in the described in section III.B.7.(c) below is intended timeline for activity
form of a loan and the business is not provided, an amount equivalent to completion: Litigation, disasters, limited
unable to make a payment due to the the difference between the total amount construction seasons due to weather, or
reduction in revenue caused by expended at the end of the third year other extenuating circumstances.
coronavirus, any restructuring of that and 80 percent of all CDBG–CV funds Therefore, HUD may authorize an
loan must be supported by modification will be recaptured from the CDBG–CV extension of the three-year expenditure
to loan documents that document the grant. requirement or the overall period of
relationship to coronavirus). When performance if the grantee provides
CDBG–CV funds are used to subsidize III.B.7.(b) Timeliness evidence of such extenuating
or replace principal, interest, or fees due CDBG–CV grants are available for circumstances that would warrant the
under a loan previously made with limited purposes under the CARES Act. extension and that they could
guaranteed loan funds as part of an They are subject to a shortened period demonstrate they would meet all
activity to assist a for-profit or a of performance. Under section program requirements within the
subrecipient, and the CDBG–CV III.B.6.(a), program income generated by extended expenditure period or period
assistance is necessary to respond to the the use of CDBG–CV funds is treated as of performance.
impact of coronavirus (e.g., a third-party program income to a grantee’s annual HUD may consider, in closing out
business borrower whose loan is the formula CDBG program. For these CDBG–CV grants, any requirements that
intended source for repayment of a reasons, HUD is waiving to the extent remain applicable after closeout. These
Section 108 loan is not collecting necessary to allow HUD to determine may include authority for HUD to
sufficient revenue due to local public that every grantee has circumstances monitor the recipient’s compliance and
health conditions), the documentation beyond its reasonable control the timely performance after the closeout of the
that the original assisted activity performance enforcement actions found award with respect to requirements that
satisfies national objective criteria shall at 24 CFR 570.902 (entitlement timely are applicable after closeout, and HUD
be sufficient to demonstrate that the use expenditure), and 24 CFR 570.494 (state may take findings of noncompliance
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of the guaranteed loan funds and the timely distribution). CDBG–CV funds into account, with the closeout process,
additional CDBG–CV assistance meet a will not be included in determining as unsatisfactory performance of the
CDBG national objective. compliance with the requirements of 24 recipient, in the consideration of any
This alternative requirement does not CFR 570.902 and 570.494. However, as future grant made under title I of the
limit the Secretary’s authority under program income to the grantees’ annual HCD Act. Examples of requirements that
section 108I of the HCD Act. formula CDBG programs, income may survive closeout include: (i)
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51473
Closeout costs (e.g., audit costs) and and will need to be reviewed against response, prevention, or preparation
costs resulting from contingent current program practices. The needs of LMI persons.
liabilities described in the closeout Department will work in coordination HUD will provide advice and
agreement; (ii) use of real property with OMB to ensure that this technical assistance to grantees to
assisted with CDBG funds in accordance requirement can be fulfilled by facilitate compliance with this
with program regulations; (iii) taking recipients of CARES Act funding in a requirement.
measures that are adequate to enforce manner that utilizes to the greatest III.B.10 Citizenship Requirements
and implement mandatory flood extent possible existing reporting
insurance coverage requirements; and streams, providing the necessary Please note that the U.S. Department
(iv) other provisions included in the transparency and accountability with of Homeland Security, U.S. Citizenship
grant closeout agreement. minimal additional burden. If additional and Immigration Services provides that
reporting is necessary, further advice or the Immigration Reform and Control
III.B.8. Reporting Act, 8 U.S.C. 1324a et seq. prohibits
technical assistance will be provided by
The reporting requirements that apply the Department. employers from hiring and employing
to the use of annual formula CDBG an individual for employment in the
grants also apply to CDBG–CV grants. III.B.9. Duplication of Benefits U.S. knowing that the individual is not
Section 104I of the HCD Act requires The CARES Act requires HUD to authorized with respect to such
that the Secretary shall, at least on an ensure that there are adequate employment. This generally applicable
annual basis, make such reviews and procedures in place to prevent any law also applies to CDBG grantees and
audits as may be necessary or duplication of benefits as required by their subrecipients and/or contractors/
appropriate to determine whether the section 312 of the Stafford Act, as subcontractors (including relating to
grantee has carried out its activities in amended by section 1210 of the Disaster employees recruited under Section 3).
a timely manner, whether the grantee’s Recovery Reform Act of 2018 (division For more information, please see
activities and certifications are carried https://www.uscis.gov/i-9-central/form-
D of Public Law 115–254; 42 U.S.C.
out in accordance with the requirements i-9-resources/handbook-for-employers-
5121 et seq.).
and the primary objectives of the HCD m-274/10-why-employers-must-verify-
Duplication of benefits occurs when employment-authorization-and-identity-
Act and other applicable laws, and
Federal financial assistance is provided of-new-employees and https://
whether the grantee has the continuing
to a person or entity through a program www.uscis.gov/i-9-central/legal-
capacity to carry out those activities in
to address losses resulting from a requirements-and-enforcement.
a timely manner.
Federally-declared emergency or
III.B.8.(a) General Reporting disaster, and the person or entity has IV. Fiscal Year 2019 and Fiscal Year
Requirements received (or would receive, by acting 2020 CDBG Grants
Reporting requirements for CDBG–CV reasonably to obtain available IV.A. General Requirements
grantees can be found at 42 U.S.C. assistance) financial assistance for the
same costs from any other source Except as described in this notice or
12708(a), 24 CFR 91.520, 24 CFR other applicable waivers and alternative
570.507 (entitlement), 24 CFR 570.440(j) (including insurance), and the total
amount received exceeds the total need requirements, the statutory and
(insular areas), and 24 CFR 570.491 regulatory provisions governing the
(state). for those costs.
A grantee is required to develop and CDBG program apply to fiscal year 2019
III.B.8.(b) Additional CARES Act maintain adequate procedures to and 2020 CDBG grants, including
Reporting regulations at 24 CFR part 570 subpart
prevent a duplication of benefits that
I (states), 24 CFR part 570 subparts A,
Section 15011 of the CARES Act address (individually or collectively)
C, D, E, J, K, and O (entitlements), and
requires that recipients of $150,000 or each activity or program. A grantee’s
24 CFR subpart F (insular areas and
more of CARES Act funding submit, not policies and procedures are not
Hawaii counties).
later than 10 days after the end of each adequate unless they include, at a
calendar quarter, a report containing: minimum: (1) A requirement that any IV.B. Flexibilities, Waivers, and
Information regarding the amount of person or entity receiving CDBG–CV Alternative Requirements
funds received; the amount of funds assistance (including subrecipients and The following rules, waivers, and
obligated or expended for each project direct beneficiaries) must agree to repay alternative requirements apply to fiscal
or activity; a detailed list of all such assistance that is determined to be year 2019 and 2020 CDBG grants. These
projects or activities, including a duplicative; and (2) a method of include statutory authorities included in
description of the project or activity; assessing whether the use of CDBG–CV the CARES Act and other waivers and
and detailed information on any funds will duplicate financial assistance alternative requirements or
subcontracts or subgrants awarded by that is already received or is likely to be clarifications that HUD is making for
the recipient. As outlined in OMB received by acting reasonably to fiscal year 2019 and 2020 grants.
memorandum M–20–21, evaluate need and the resources
Implementation Guidance for available to meet that need. IV.B.1. Timeliness
Supplement Funding in Response to the Most CARES Act assistance programs Because of the coronavirus many local
Coronavirus Disease (COVID–19) have more limited durations for governments are operating under
(available at https:// availability of assistance or a more extenuating circumstances and may
www.whitehouse.gov/wp-content/ limited scope of eligible activities or need additional time for certain
uploads/2020/04/Implementation- entities than does CDBG–CV. HUD administrative requirements, HUD is
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Guidance-for-Supplemental-Funding- strongly encourages each CDBG–CV suspending for fiscal year 2020 all
Provided-in-Response.pdf), existing grantee to become familiar with the corrective actions, sanctions, and
reporting requirements are anticipated range of available assistance and uses informal consultations for timeliness
to meet the requirements of Section and apply its more flexible CDBG–CV effective January 21, 2020. Grantees are
15011, but the content and format for assistance to unmet needs or to gaps, advised that this suspension does not
this reporting is still under development with special attention to the coronavirus eliminate the timely expenditure
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51474 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices
requirements set forth in 24 CFR a jurisdiction’s program year. The HCD Act and 24 CFR 570.201(e) has no
570.902 (entitlements). HUD will waiver was granted under HUD’s effect on assistance available to the
continue to run expenditure reports and regulatory waiver authority at 24 CFR grantee for fiscal years 2019 and 2020,
will continue to notify grantees of 5.110 and 24 CFR 91.600. Under this including the program income that
deficiencies. memorandum, for program year 2019 would normally be included in the
Based on government restrictions, CAPERs, the requirement that grantees grantee’s calculation of the program
closures, shelter-in-place orders, and submit a performance report within 90 income cap for fiscal years 2019 or
social distancing guidance related to days after the close of a jurisdiction’s 2020, when the grantee uses CDBG grant
coronavirus, HUD has determined that program year is waived, subject to the funds to prevent, prepare for, and
all entitlement grantees have factors condition that within 180 days after the respond to coronavirus. For fiscal years
beyond their reasonable control that, to close of a jurisdiction’s program year the 2019 and 2020, the cap shall still be
HUD’s satisfaction, impact the carrying jurisdiction shall submit its calculated and shall apply to public
out of CDBG-assisted activities in a performance report. service activities carried out for
timely manner. As a result, HUD has activities that do not prevent, prepare
determined that corrective actions IV.B.2.(d) Other Consolidated Planning
for, and respond to coronavirus.
related to timeliness are not appropriate Waivers
Additionally, CDBG–CV grant funds
at this time. HUD will monitor changing HUD is temporarily waiving the shall not be included in the public
conditions. Before the end of the fiscal requirement for consistency with the service cap compliance determination
year, HUD will determine whether to consolidated plan (requirements at 42 which is applicable to annual formula
extend this suspension for all or a U.S.C. 12706 and 24 CFR 91.325(a)(5) CDBG funds used for activities not
portion of fiscal year 2021. HUD may and 91.225(a)(5)) when fiscal year 2019 related to coronavirus.
consider regional and local conditions and 2020 CDBG funds are used to Program income generated by the use
when determining when to begin prevent, prepare for, and respond to of CDBG–CV grants is considered
scheduling informal consultations. coronavirus, because grantees may not program income to the grantee’s annual
have considered the needs associated formula CDBG program, as discussed in
IV.B.2. Consolidated Plan, Citizen with this special purpose funding when section III.B.6.(a).
Participation, and CAPER developing their current consolidated The public services cap imposed by
IV.B.2.(a) Expedited Citizen plan strategic plan and needs section 105(a)(8) of the HCD Act applies
Participation and Virtual Hearings assessment. In conjunction, HUD is to ‘‘the amount of any assistance to a
Section III.B.4.(a) of section III apply temporarily waiving 42 U.S.C. 5304(e) unit of general local government (or in
to all fiscal year 2019 and 2020 annual to the extent that it would require HUD the case of nonentitled communities not
formula CDBG grants, regardless of the to annually review grantee performance more than 15 per centum statewide)
use of funds. This section describes the under the consistency criteria. These under this title including program
program flexibilities provided by the waivers apply only until the grantee income’’ (emphasis added). The CARES
CARES Act related to Expedited Citizen submits its next full (3–5 year) Act provision that removes the public
Participation and Virtual Hearings. consolidated plan due after the 2020 services cap applies to all ‘‘activities to
Where this section refers to CDBG–CV program year. prevent, prepare for, and respond to
funds, it shall apply equally to fiscal HUD is imposing a related alternative coronavirus’’ for the CDBG–CV grants
years 2019 and 2020 CDBG grants. requirement. The regulations at 24 CFR and fiscal year 2019 and 2020 annual
91.225(b)(5) (entitlements) and 24 CFR formula CDBG grants. The activities for
IV.B.2.(b). Deadline To Submit 91.325(b)(5) (states) require grantees to grants are described in each grantee’s
Consolidated Plans and FY 2020 Annual certify that the housing activities to be annual action plan required by 24 CFR
Action Plans undertaken with CDBG, HOME, ESG, 91.220 (entitlements), 24 CFR 91.320
The deadline for grantees to submit and HOPWA funds are consistent with (states), or 24 CFR 570.440 and 24 CFR
action plans and other updates to their the strategic plan portion of the 91.235 (insular areas). In these
consolidated plans submissions for consolidated plan. Under this regulations, the activities for grants
fiscal years 2019 and 2020 to include alternative requirement, grantees are not include activities carried out with grant
CDBG–CV funds is August 16, 2021. required to carry out the portions of funds and program income expected to
their fiscal year 2019 and 2020 annual be made available. Therefore, removing
IV.B.2.(c) CAPER Extension the cap in section 105(a)(8) of the HCD
formula CDBG grants that are used to
On May 7, 2020, Acting Assistant prevent, prepare for, and respond to Act for activities to prevent, prepare for,
Secretary John Gibbs issued a coronavirus in a manner consistent with and respond to coronavirus also
memorandum to all Community the certifications in 24 CFR 91.225(b)(5) removes the public services cap on the
Planning and Development Field Office and 24 CFR 91.325(b)(5), because HUD use of the program income, and removes
Directors, Deputy Directors and Program has changed the requirement related to the corresponding regulatory cap in 24
Managers with the subject ‘‘Availability consistency. CFR 570.201(e) (entitlements) for
of a Waiver and Alternate Requirement CDBG–CV funds and fiscal year 2019
for the Consolidated Annual IV.B.3. Flexibilities That Apply to and 2020 funds used to prevent, prepare
Performance and Evaluation Report Coronavirus-Related Activities for, and respond to coronavirus.
(Performance Report) for Community The following flexibilities apply to all Program income generated by the use
Planning and Development (CPD) Grant fiscal year 2019 and 2020 CDBG grants of CDBG–CV grants is considered
Programs in Response to the Spread of when those grants are used for activities program income to the grantee’s annual
Coronavirus.’’ This memorandum to prevent, prepare for, and respond to formula CDBG program, as discussed in
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authorized a waiver of the regulatory coronavirus. section III.B.6.(a). Additionally, program
requirement at 24 CFR 91.520(a) that IV.B.3.(a) Calculation of the Public income, regardless of the source funding
grantees submit a performance report Services Cap. As described in paragraph of the activity that generated the
known as the Consolidated Annual III.B.5.(f)(iii), following enactment of the income, shall be included in the
Performance and Evaluation Report CARES Act, the public services cap compliance determination of the public
(CAPER) within 90 days of the end of described in section 105(a)(8) of the service cap applicable to the annual
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Notices 51475
formula CDBG grants and program • III.B.1. General Grant Requirements between 8 a.m. and 5 p.m. weekdays in
income, separately from CDBG–CV • III.B.2. Responsible Use of CARES the Regulations Division, Office of
funds. For purposes of calculating the Act Funds General Counsel, Department of
public services cap, the treatment of • III.B.3. Overview of Process to Housing and Urban Development, 451
program income generated by the Receive CDBG–CV Grants 7th Street SW, Room 10276,
CDBG–CV grant and received (i.e., • III.B.4.(b) CDBG–CV Application Washington, DC 20410–0500. Due to
documented in IDIS) by the annual Content and Submission security measures at the HUD
formula CDBG program shall be • III.B.5.(a) Use of Funds for CARES Headquarters building, an advance
considered as any other program income Act Purposes appointment to review the docket file
received by the annual formula CDBG • III.B.5.(b) Reimbursements must be scheduled by calling the
program. • III.B.5.(c) Terms and Conditions Regulations Division at 202–708–3055
IV.B.3.(b) Provisions in Section III that Made Applicable by the CARES Act (this is not a toll-free number). Hearing-
apply to Coronavirus-Related Activities. • III.B.5.(d)(iv) Overall Benefit to LMI or speech-impaired individuals may
The following provisions in Section III Persons. access this number through TTY by
apply to the use of fiscal year 2019 and • III.B.6.(a) Program Income calling the Federal Relay Service at 800–
2020 CDBG funds for activities to • III.B.6.(b) Rules Applicable to State 877–8339 (this is a toll-free number).
prevent, prepare for, and respond to CDBG–CV Grants
coronavirus; these provisions shall also • III.B.6.(c) Rules for Entitlements, John Gibbs,
apply to the use of Section 108 Insular Areas, and Nonentitlement Assistant Secretary for Community Planning
guaranteed loan funds when they are Hawaii Counties and Development.
• III.B.6.(d)(ii) Clarifying note on the [FR Doc. 2020–18242 Filed 8–19–20; 8:45 am]
used together with fiscal year 2019 and
process for environmental release of BILLING CODE 4210–67–P
2020 CDBG funds for activities to
funds when a state carries out activities
prevent, prepare for, and respond to
directly.
coronavirus. Where these paragraphs
• III.B.6.(e) Compliance with Labor DEPARTMENT OF THE INTERIOR
refer to CDBG–CV funds, they shall
Laws
apply equally to fiscal years 2019 and
• III.B.6.(f) Relationship to Section [FWS–R4–ES–2020–N106;
2020 CDBG grants. FVHC98220410150–XXX–FF04H00000]
108 Loan Guarantees
• III.B.5.(d)(i) Use of Urgent Need
• III.B.7. Period of Performance,
National Objective. Louisiana Trustee Implementation
Timeliness, and Closeout
• III.B.5.(d)(ii) Modification of Group Deepwater Horizon Oil Spill
• III.B.8. Reporting
Location-Based Presumption of LMI Paperwork Reduction Act: The Draft Restoration Plan and
Benefit for Job Creation and Retention information collection requirements in Environmental Assessment #7:
National Objective Criteria. this notice have been approved by the Wetlands, Coastal, and Nearshore
• III.B.5.(d)(iii) LMI Job Creation and Habitats; and Birds
Office of Management and Budget
Retention Records.
(OMB) under the Paperwork Reduction AGENCY: Department of the Interior.
• III.B.5.(e)(i) Elimination of
Act of 1995 (44 U.S.C. 3501–3520) and ACTION: Notice of availability; request
Aggregate Public Benefit Test.
• III.B.5.(e)(ii) Modification of assigned OMB Control Number 2506– for public comments.
Individual Public Benefit Standards. 0085. In accordance with the Paperwork
Reduction Act, HUD may not conduct or SUMMARY: In accordance with the Oil
• III.B.5.(f)(i) Extension of Emergency
sponsor, and a person is not required to Pollution Act of 1990 (OPA); the
Payments.
• III.B.5.(f)(ii) Opportunity Zones and respond to, a collection of information National Environmental Policy Act of
Related Flexibilities for Economic unless the collection displays a 1969 (NEPA); the Final Programmatic
Development. currently valid OMB control number. Damage Assessment Restoration Plan
• III.B.5.(f)(iii) Public Services Cap. Catalog of Federal Domestic and Final Programmatic Environmental
• III.B.5.(f)(iv) Other Public Services Assistance: The Catalog of Federal Impact Statement (Final PDARP/PEIS)
Considerations. Domestic Assistance numbers for the and Record of Decision; and the Consent
• III.B.5.(f)(v) Clarification on CDBG–CV grants under the CARES Act Decree, the federal and state natural
Application of Cost Principles. are: 14.218 (Community Development resource trustee agencies for the
• III.B.6.(d)(iii) Clarifying note on Block Grants/Entitlement Grants); Louisiana Trustee Implementation
emergency environmental review 14.225 (Community Development Block Group (LA TIG) have prepared the
procedures. Grants/Special Purpose Grants/Insular Louisiana Trustee Implementation
• III.B.9. Duplication of Benefits Areas); and 14.228 (Community Group Draft Restoration Plan #7 and
(applies for programs and activities with Development Block Grants/State’s Environmental Assessment: Wetlands,
annual formula CDBG funds when the Program and Non-Entitlement Grants in Coastal and Nearshore Habitats; and
grantee uses these funds to carry out Hawaii) (formerly CDBG Grant/Small Birds (RP/EA #7). In the Draft RP/EA #7,
programs to respond to losses caused by Cities Program). the LA TIG proposes projects to help
disasters and emergencies). Environmental Impact: A Finding of restore bird habitat and marshes injured
• III.B.10. Citizenship Requirements. No Significant Impact (FONSI) with as a result of the Deepwater Horizon
respect to the environment has been (DWH) oil spill in the Louisiana
IV.B.4. Provisions That Do Not Apply to made in accordance with HUD Restoration Area under the ‘‘Wetlands,
FY 19 and FY 20 Grants regulations at 24 CFR part 50, which Coastal and Nearshore Habitats’’ and
Waivers and alternative requirements implement section 102(2)(C) of the ‘‘Birds’’ restoration types described in
jbell on DSKJLSW7X2PROD with NOTICES
and other provisions in the following National Environmental Policy Act of the Final PDARP/PEIS. The
paragraphs of Section III do not apply to 1969 (42 U.S.C. 4332(2)(C)). The FONSI approximate cost to implement the LA
fiscal year 2019 CDBG Grants and fiscal is available for inspection at HUD’s TIG’s proposed project with five
year 2020 CDBG grants: Funding Opportunities web page at: preferred alternatives is $234,100,000.
• III.A. Allocations of CDBG–CV https://www.hud.gov/grants/. The We invite public comments on the Draft
Funds FONSI is available for public inspection RP/EA #7.
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