82 FR 5591 - Allocations, Common Application, Waivers, and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 82, Issue 11 (January 18, 2017)

This notice allocates $1,805,976,000 in Community Development Block Grant disaster recovery (CDBG-DR) funds appropriated by the Further Continuing and Security Assistance Appropriations Act, 2017 for the purpose of assisting long-term recovery in Florida, Louisiana, North Carolina, South Carolina, Texas, and West Virginia. This allocation of CDBG-DR supplements funds appropriated by the Continuing Appropriation Act, 2017. It provided $500 million in CDBG-DR funding that has been allocated to Louisiana, Texas, and West Virginia in response to qualifying disasters. In HUD's Federal Register notice published on November 21, 2016, at 81 FR 83254 (the Prior Notice), HUD described that allocation and applicable waivers and alternative requirements, relevant statutory and regulatory requirements, the grant award process, criteria for action plan approval, and eligible disaster recovery activities. Grantees receiving an allocation of funds under this notice are subject to the requirements of the Prior Notice, including provisions of the Prior Notice amended herein.

[Federal Register Volume 82, Number 11 (Wednesday, January 18, 2017)]
[Notices]
[Pages 5591-5595]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01007]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6012-N-01]


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

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

ACTION: Notice.

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SUMMARY: This notice allocates $1,805,976,000 in Community Development 
Block Grant disaster recovery (CDBG-DR) funds appropriated by the 
Further Continuing and Security Assistance Appropriations Act, 2017 for 
the purpose of assisting long-term recovery in Florida, Louisiana, 
North Carolina, South Carolina, Texas, and West Virginia. This 
allocation of CDBG-DR supplements funds appropriated by the Continuing 
Appropriation Act, 2017. It provided $500 million in CDBG-DR funding 
that has been allocated to Louisiana, Texas, and West Virginia in 
response to qualifying disasters. In HUD's Federal Register notice 
published on November 21, 2016, at 81 FR 83254 (the Prior Notice), HUD 
described that allocation and applicable waivers and alternative 
requirements, relevant statutory and regulatory requirements, the grant 
award process, criteria for action plan approval, and eligible disaster 
recovery activities. Grantees receiving an allocation of funds under 
this notice are subject to the requirements of the Prior Notice, 
including provisions of the Prior Notice amended herein.

DATES: Effective Date: January 23, 2017.

[[Page 5592]]


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

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Allocations
II. Use of Funds
III. Grant Amendment Process
IV. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
V. Duration of Funding
VI. Catalog of Federal Domestic Assistance
VII. Finding of No Significant Impact
Appendix A: Allocation Methodology

I. Allocations

    Section 101 of the Further Continuing and Security Assistance 
Appropriations Act, 2017 (division A of Pub. L. 114-254, approved 
December 10, 2016) amended the Continuing Appropriations Act, 2017 
(division C of Pub. L. 114-223) by adding a new section 192 that makes 
available $1,808,976,000 in Community Development Block Grant (CDBG) 
funds for necessary expenses for activities authorized under title I of 
the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et 
seq.) related to disaster relief, long-term recovery, restoration of 
infrastructure and housing, and economic revitalization in the most 
impacted and distressed areas resulting from a major disaster declared 
in 2016 and occurring prior to December 10, 2016. Qualifying major 
disasters are declared by the President pursuant to the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act of 1974 (42 
U.S.C. 5121 et seq.) (Stafford Act). The following allocations of funds 
appropriated by section 192 are in addition to the $500 million 
appropriated by section 145(a) and allocated in the Prior Notice. 
Section 192 specifies that these additional funds are subject to the 
same authority and conditions as those in section 145(a), except the 
major disaster must have occurred prior to December 10, 2016.
    Section 145(a) provides that grants shall be awarded directly to a 
State or unit of general local government at the discretion of the 
Secretary. The Secretary has elected to award funds only to States in 
this notice. Unless noted otherwise, the term ``grantee'' refers to the 
State receiving an award from HUD under this notice. To comply with the 
statutory requirement that funds be used for disaster-related expenses 
in the most impacted and distressed areas, HUD allocates funds using 
the best available data that cover all of the eligible affected areas.
    Section 192(b) permits HUD to use up to $3,000,000 of the 
appropriated amount for necessary costs, including information 
technology costs, of administering and overseeing the obligation and 
expenditure of amounts made available by sections 145(a) and 192. The 
Department is deducting the full $3,000,000, resulting in a total of 
$1,805,976,000 available for allocation.
    Based on further review of the impacts from the eligible disasters, 
and estimates of unmet need, HUD is making the following allocations:

                                  Table 1--Allocations Under Public Law 114-245
----------------------------------------------------------------------------------------------------------------
                                                                                             Minimum amount that
                                                                                            must be expended for
                                                                                            recovery in the HUD-
          Disaster No.                           Grantee                     Allocation       identified ``most
                                                                                                impacted and
                                                                                             distressed'' areas
----------------------------------------------------------------------------------------------------------------
4263, 4277.....................  State of Louisiana....................     $1,219,172,000  ($975,337,600) East
                                                                                             Baton Rouge,
                                                                                             Livingston,
                                                                                             Ascension,
                                                                                             Tangipahoa,
                                                                                             Ouachita,
                                                                                             Lafayette,
                                                                                             Lafayette,
                                                                                             Vermilion, Acadia,
                                                                                             Washington, and St.
                                                                                             Tammany Parishes.
4266, 4269, 4272...............  State of Texas........................        177,064,000  ($141,651,200)
                                                                                             Harris, Newton,
                                                                                             Montgomery, Fort
                                                                                             Bend, and Brazoria
                                                                                             Counties.
4273...........................  State of West Virginia................         87,280,000  ($69,824,000)
                                                                                             Kanawha and
                                                                                             Greenbrier
                                                                                             Counties.
4285...........................  State of North Carolina...............        198,553,000  ($158,842,400)
                                                                                             Robeson,
                                                                                             Cumberland,
                                                                                             Edgecombe, and
                                                                                             Wayne Counties.
4286...........................  State of South Carolina...............         65,305,000  ($52,244,000) Marion
                                                                                             County.
4280, 4283.....................  State of Florida......................         58,602,000  ($46,881,600) St.
                                                                                             Johns County.
                                                                        -------------------
    Total......................  ......................................      1,805,976,000  ....................
----------------------------------------------------------------------------------------------------------------

    Use of funds for all grantees is limited to unmet recovery needs 
from the major disasters identified in Table 1. Please note that in 
addition to the FEMA disaster numbers listed in the Prior Notice for 
the State of Texas, the State may also expend its allocation of funds 
from the Prior Notice on FEMA disaster number DR-4272.
    Table 1 also shows the HUD-identified ``most impacted and 
distressed'' areas impacted by the disasters. At least 80 percent of 
the total funds provided to each State under this notice must address 
unmet needs within the HUD-identified ``most impacted and distressed'' 
areas, as identified in the last column in Table 1. For grantees that 
received an allocation under the Prior Notice, 80 percent of both 
allocations may be used to address unmet needs within the HUD-
identified ``most impacted and distressed'' areas that are identified 
in Table 1 of this notice. Grantees may determine where the remaining 
20 percent may be spent by identifying areas it determines to be ``most 
impacted and distressed.'' A detailed explanation of HUD's allocation 
methodology is provided at Appendix A.

II. Use of Funds

    Funds allocated under this notice and funds allocated pursuant to 
the Prior Notice are subject to the requirements of the Prior Notice, 
including the provisions of the Prior Notice as amended herein. As a 
reminder, section 145(a) requires that prior to the obligation of CDBG-
DR funds, a grantee shall submit a plan to HUD for approval detailing 
the proposed use of all funds, including criteria for eligibility, and 
how the use of these funds will address long-term recovery and 
restoration of infrastructure and housing and economic revitalization 
in the most impacted and distressed areas. This action plan for 
disaster recovery must describe uses and activities that: (1) Are 
authorized under title I of the Housing and Community Development Act 
of 1974 (HCD Act) or allowed by a waiver or alternative requirement 
(see section IV., below); and (2) respond to disaster-

[[Page 5593]]

related impact to infrastructure, housing, and economic revitalization 
in the most impacted and distressed areas. To inform the plan, grantees 
must conduct an assessment of community impacts and unmet needs to 
guide the development and prioritization of planned recovery 
activities, pursuant to paragraph A.2.a. in section VI of the Prior 
Notice, as amended in this notice.
    Pursuant to the Prior Notice, each grantee is required to expend 
100 percent of its allocation of CDBG-DR funds on eligible activities 
within 6 years of HUD's execution of the grant agreement.

III. Overview of Grant Process

    To begin expenditure of CDBG-DR funds, grantees must complete the 
expedited steps outlined in Section V. Overview of Grant Process in the 
Prior Notice. As stated below at paragraph IV.1.a, the deadlines 
established by the Prior Notice are now determined by the effective 
date of this notice.

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

    This section of the notice describes rules, statutes, waivers, and 
alternative requirements that apply to grantees receiving an allocation 
under this notice. All funds allocated by the Prior Notice and this 
notice are subject to the requirements of the Prior Notice, including 
provisions of the Prior Notice as amended herein. Further, the 
Secretary has determined that good cause exists for each waiver and 
alternative requirement established in the Prior Notice and that the 
waivers and alternative requirements are not inconsistent with the 
overall purpose of the HCD Act. The Secretary's determination extends 
to each waiver or alternative requirement amended by this notice.
    Grantees may request additional waivers and alternative 
requirements from the Department as needed to address specific needs 
related to their recovery activities. Except where noted, waivers and 
alternative requirements described below apply to all grantees under 
this notice. Waivers and alternative requirements are effective five 
days after they are published in the Federal Register.
    1. Incorporation of waivers, alternative requirements, and 
statutory changes previously described. The waivers and alternative 
requirements provided in the Prior Notice apply to the awards under 
this notice, except as modified herein. These waivers and alternative 
requirements provide additional flexibility in program design and 
implementation to support full and swift recovery following the 
disasters, while also ensuring that statutory requirements are met. The 
requirements of the Prior Notice and this notice apply only to the 
CDBG-DR funds appropriated in sections 145(a) and 192.
    The following clarifications or modifications apply to grantees in 
receipt of an allocation under this notice and to funds allocated under 
the Prior Notice:
    a. All deadlines for the submission of the Secretary's 
certification, risk analysis, or the action plan referenced in the 
Prior Notice are now determined by the effective date of this notice. 
This means that the deadlines established by the Prior Notice for the 
submission of the Secretary's certification, risk analysis and action 
plan, as well as other deadlines, are extended to deadlines established 
by this notice. This allows grantees receiving an allocation of funds 
under both the Prior Notice and this notice to submit a single action 
plan and other documents governing both allocations.
    b. Paragraph VI.A.2.a.6 of the Prior Notice at 81 FR 83258 is 
amended by revising the action plan requirement to identify a maximum 
amount of assistance available to beneficiaries under each program. In 
addition to the requirement described in the Prior Notice, for any 
residential rehabilitation or reconstruction program, grantees must 
establish a process by which it assesses the cost effectiveness of each 
rehabilitation or reconstruction project undertaken to assist a 
household. The requirement is amended by adding the following:

    A description of the maximum amount of assistance available to a 
beneficiary under each of the grantee's disaster recovery programs. 
Additionally, for any residential rehabilitation or reconstruction 
program funded under this notice, each grantee must have policies 
and procedures to assess the cost effectiveness of each proposed 
project undertaken to assist a household, including criteria for 
determining when the cost of the rehabilitation or reconstruction of 
the unit will not be cost-effective relative to other means of 
assisting the property-owner, including through buyout or 
acquisition of the property, or the construction of area-wide 
protective infrastructure, rather than individual building 
mitigation solutions designed to protect individual structures. For 
example, as the grantee is designing its program, it might choose as 
comparison criteria the rehabilitation costs derived from the RS 
Means Residential Cost Data and costs to buyout or acquire the 
property as a means of determining whether or not to fund a 
rehabilitation project
    A grantee may find it necessary to provide exceptions on a case-
by-case basis to the maximum amount of assistance or cost 
effectiveness criteria and must describe the process it will use to 
make such exceptions in its policies and procedures. Each grantee 
must adopt policies and procedures that communicate how it will 
analyze the circumstances under which an exception is needed and how 
it will demonstrate that the amount of assistance is necessary and 
reasonable. All CDBG-DR expenditures remain subject to the cost 
principles in 2 CFR part 200, including the requirement that costs 
be necessary and reasonable for the performance of the grantee's 
CDBG-DR grant.

    c. Paragraph VI.A.2.a.7 of the Prior Notice at 81 FR 83258 is 
amended by rewriting and clarifying the action plan requirements for 
the descriptions of long-term recovery and hazard mitigation planning 
and addressing specific predevelopment principles as outlined in the 
Federal Resource Guide for Infrastructure Planning and Design, as 
follows:

    A description of how the grantee plans to:
    (a) Promote sound, sustainable long-term recovery planning 
informed by a post-disaster evaluation of hazard risk, especially 
land-use decisions that reflect responsible flood plain management 
and take into account continued sea level rise, if applicable. This 
information should be based on the history of FEMA flood mitigation 
efforts, and take into account projected increase in sea level (if 
applicable) and frequency and intensity of precipitation events, 
which are not considered in current FEMA maps and National Flood 
Insurance Program premiums;
    (b) Adhere to the advanced elevation requirements established in 
paragraph B. of section VI of the Prior Notice;
    (c) Coordinate with local and regional planning efforts to 
ensure consistency, including how the grantee will promote 
community-level and/or regional (e.g., multiple local jurisdictions) 
post-disaster recovery and mitigation planning;
    (d) For infrastructure allocations, the grantee must also 
describe:
    i. How mitigation measures will be integrated into rebuilding 
activities and the extent to which infrastructure activities funded 
through this grant will achieve objectives outlined in regionally or 
locally established plans and policies that are designed to reduce 
future risk to the jurisdiction;
    ii. How infrastructure activities will be informed by a 
consideration of the costs and benefits of the project;
    iii. How the State will seek to ensure that infrastructure 
activities will avoid disproportionate impact on vulnerable 
communities and create opportunities to address economic inequities 
facing local communities;
    iv. How the State align investments with other planned state or 
local capital improvements and infrastructure development efforts, 
and will work to foster the potential for additional infrastructure 
funding from multiple sources, including existing state and local 
capital improvement projects in planning, and the potential for 
private investment; and

[[Page 5594]]

    v. The extent to which the State will employ adaptable and 
reliable technologies to guard against premature obsolescence of 
infrastructure.
    Additional guidance on predevelopment principles are described 
in the Federal Resource Guide for Infrastructure Planning and 
Design: (http://portal.hud.gov/hudportal/documents/huddoc?id=BAInfraResGuideMay2015.pdf)

    The action plan must also provide for the use of CDBG-DR funds to 
develop a disaster recovery and response plan that addresses long-term 
recovery and pre- and post-disaster hazard mitigation, if one does not 
currently exist.

V. Duration of Funding

    Section 192 directs that these funds be available until expended. 
However, consistent with OMB Circular A-11, if the Secretary or the 
President determines that the purposes for which the appropriation has 
been made have been carried out and no disbursements have been made 
against the appropriation for two consecutive fiscal years, any 
remaining unobligated balance will be made unavailable for obligation 
or expenditure.

VI. Catalog of Federal Domestic Assistance

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

VII. Finding of No Significant Impact

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

    Dated: January 9, 2017.
Nani A. Coloretti,
Deputy Secretary.

Appendix A--Allocation of CDBG-DR Funds to Most Impacted and Distressed 
Areas Due to 2016 Federally Declared Disasters Thru December 10, 2016

Background

    Section 145(a) of Division C of the Continuing Appropriations 
Act, 2017 (P. L.114-223, Division C), enacted on September 29, 2016, 
appropriated $500,000,000 through the Community Development Block 
Grant disaster recovery (CDBG-DR) program for necessary expenses for 
authorized activities related to disaster relief, long-term 
recovery, restoration of infrastructure and housing, and economic 
revitalization in the most impacted and distressed areas resulting 
from a major disaster declared in 2016 but prior to September 29, 
2016. Section 145(a) of P. L. 114-223, Division C stated:
    SEC. 145. (a) In addition to the amount otherwise provided by 
section 101 for the ``Community Planning and Development, Community 
Development Fund,'' there is appropriated $500,000,000 for an 
additional amount for fiscal year 2016, to remain available until 
expended, for necessary expenses for activities authorized under 
title I of the Housing and Community Development Act of 1974 (42 
U.S.C. 5301 et seq.) related to disaster relief, long-term recovery, 
restoration of infrastructure and housing, and economic 
revitalization in the most impacted and distressed areas resulting 
from a major disaster declared in 2016, and which the disaster 
occurred prior to the date of enactment of this Act, pursuant to the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.): Provided, That funds shall be awarded directly 
to the State or unit of general local government at the discretion 
of the Secretary: . . .
    Subsequently, section 101 of the Further Continuing and Security 
Assistance Appropriations Act, 2017 (division A of Pub. L. 114-254, 
approved December 10, 2016) (Appropriations Act) amended the 
Continuing Appropriations Act, 2017 (division C of Public Law 114-
223) by adding a new section 192. Section 192(a) appropriates 
$1,808,976,000 in CDBG-DR funding for the same purposes, authorities 
and conditions as section 145(a) for major disasters declared in 
2016 but prior to December 10, 2016. Section 192(b) authorizes HUD 
to deduct $3,000,000 from this amount for the cost of administering 
both appropriations, resulting in a total of $1,805,976,000 
available for allocation.
    Combined, the two appropriations make $2,305,976,000 available 
for allocation, effectively matching HUD's November 2016 estimate 
for serious unmet repair or replacement needs.

Most Impacted and Distressed Areas

    As with prior CDBG-DR appropriations, HUD is not obligated to 
allocate section 192 funds for all major disasters declared in 2016 
but prior to December 10, 2016. Relying on the language of section 
145(a), HUD is directed to use the funds ``in the most impacted and 
distressed areas.'' HUD has implemented this directive by limiting 
CDBG-DR formula allocations to jurisdictions with major disasters 
that meet three standards:
    (1) Individual Assistance/IHP designation. HUD has limited 
allocations to those disasters where FEMA had determined the damage 
was sufficient to declare the disaster as eligible to receive 
Individual and Households Program (IHP) funding. President Obama 
signed P.L. 114-254 into law on December 10, 2016, and 45 disasters 
had received major declarations in calendar year 2016 by that date. 
Only 17 of 45 disasters that were declared in 2016 have an IHP 
designation.
    (2) Concentrated damage. HUD has limited the allocations to 
counties with high levels of damage. For this allocation, HUD is 
using the amount of serious unmet housing need as its measure of 
concentrated damage and limits the data used for the allocation only 
to counties exceeding a ``natural break'' in the data for their 
total amount of serious unmet housing needs. For purposes of this 
allocation, the serious unmet housing needs break at the county 
level occurs at $13 million. Serious unmet housing needs are 
calculated as the additional cost to repair the most damaged homes 
after subtracting out insurance, FEMA, and SBA assistance.
    (3) Natural break. Among disasters with data meeting the first 
two thresholds, HUD identifies a natural break in calculated serious 
unmet recovery needs and funds only the jurisdictions that have 
substantially higher unmet needs than other jurisdictions. The 
jurisdictions clearing this threshold as a result of major disasters 
declared since January 1, 2016 now includes Florida, North Carolina, 
and South Carolina as a result of Hurricane Hermine or Hurricane 
Matthew, as well as Louisiana, Texas, and West Virginia which were 
qualified for funds appropriated by section 145(a) as a result of 
major disasters declared prior to September 29, 2016.
    These allocations are thus based on the unmet costs to repair 
seriously damaged properties and infrastructure in the counties with 
more than $13 million of serious unmet housing needs. These do not 
capture expected resiliency costs, although grantees may choose to 
use the CDBG funds for resiliency expenses. The estimated damage is 
based on the following factors:
    (1) Seriously damaged owner occupied units without insurance 
repair estimate in Most Impacted Counties after FEMA, Insurance, and 
SBA;
    (2) Seriously damaged rental units occupied by renters with 
income less than $20,000 repair estimate in Most Impacted Counties 
after FEMA, Insurance, and SBA;
    (3) Small businesses denied by SBA repair estimate; and
    (4) The state match requirement to address the FEMA estimates 
for repair of permanent infrastructure in the FEMA Public Assistance 
program (categories C to G).

Methods for Estimating Unmet Needs for Housing

    The data HUD staff have identified as being available to 
calculate unmet needs for

[[Page 5595]]

qualifying disasters come from the FEMA Individual Assistance 
program data on housing-unit damage as of December 9, 2016.
    The core data on housing damage for both the unmet housing needs 
calculation and the concentrated damage are based on home inspection 
data for FEMA's Individual Assistance program. HUD calculates 
``unmet housing needs'' as the number of housing units with unmet 
needs times the estimated cost to repair those units less repair 
funds already provided by FEMA, where:
    Each of the FEMA inspected owner units are categorized by HUD 
into one of five categories:
     Minor-Low: Less than $3,000 of FEMA inspected real 
property damage.
     Minor-High: $3,000 to $7,999 of FEMA inspected real 
property damage.
     Major-Low: $8,000 to $14,999 of FEMA inspected real 
property damage.
     Major-High: $15,000 to $28,800 of FEMA inspected real 
property damage and/or 4 to 6 feet of flooding on the first floor.
     Severe: Greater than $28,800 of FEMA inspected real 
property damage or determined destroyed and/or 6 or more feet of 
flooding on the first floor.
    To meet the statutory requirement of ``most impacted'' in this 
legislative language, homes are determined to have a high level of 
damage if they have damage of ``major-low'' or higher. That is, they 
have a real property FEMA inspected damage of $8,000 or flooding 
over 1 foot. Furthermore, a homeowner is determined to have unmet 
needs if they reported damage and no insurance to cover that damage.
    FEMA does not inspect rental units for real property damage so 
personal property damage is used as a proxy for unit damage. Each of 
the FEMA inspected renter units are categorized by HUD into one of 
five categories:
     Minor-Low: Less than $1,000 of FEMA inspected personal 
property damage.
     Minor-High: $1,000 to $1,999 of FEMA inspected personal 
property damage.
     Major-Low: $2,000 to $3,499 of FEMA inspected personal 
property damage.
     Major-High: $3,500 to $7,499 of FEMA inspected personal 
property damage or 4 to 6 feet of flooding on the first floor.
     Severe: Greater than $7,500 of FEMA inspected personal 
property damage or determined destroyed and/or 6 or more feet of 
flooding on the first floor.
    For rental properties, to meet the statutory requirement of 
``most impacted'' in this legislative language, homes are determined 
to have a high level of damage if they have damage of ``major-low'' 
or higher. That is, they have a FEMA personal property damage 
assessment of $2,000 or greater or flooding over 1 foot. 
Furthermore, landlords are presumed to have adequate insurance 
coverage unless the unit is occupied by a renter with income of 
$20,000 or less. Units are occupied by a tenant with income less 
than $20,000 are used to calculate likely unmet needs for affordable 
rental housing.
    The average cost to fully repair a home for a specific disaster 
to code within each of the damage categories noted above is 
calculated using the average real property damage repair costs 
determined by the Small Business Administration for its disaster 
loan program for the subset of homes inspected by both SBA and FEMA 
for 2011 to 2013 disasters. Because SBA is inspecting for full 
repair costs, it is presumed to reflect the full cost to repair the 
home, which is generally more than the FEMA estimates on the cost to 
make the home habitable.
    For each household determined to have unmet housing needs (as 
described above), their estimated average unmet housing need less 
assumed assistance from FEMA, SBA, and insurance was calculated at 
$27,455 for major damage (low); $45,688 for major damage (high); and 
$59,493 for severe damage.

Methods for Estimating Unmet Infrastructure Needs

    To best proxy unmet infrastructure needs, HUD uses data from 
FEMA's Public Assistance program on the expected State match 
requirement (usually 25 percent of the estimated public assistance 
needs, it is 10 percent for DR-4277 in Louisiana). This allocation 
uses only a subset of the Public Assistance damage estimates 
reflecting the categories of activities most likely to require CDBG 
funding above the Public Assistance and State match requirement. 
Those activities are categories: C, Roads and Bridges; D, Water 
Control Facilities; E, Public Buildings; F, Public Utilities; and G, 
Recreational--Other. Categories A (Debris Removal) and B (Protective 
Measures) are largely expended immediately after a disaster and 
reflect interim recovery measures rather than the long-term recovery 
measures for which CDBG funds are generally used.

Methods for Estimating Unmet Economic Revitalization Needs

    Based on SBA disaster loans to businesses, HUD calculates the 
median real estate and content loss by the following damage 
categories for each state:

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

    For properties with real estate and content loss of $30,000 or 
more, HUD calculates the estimated amount of unmet needs for small 
businesses by multiplying the median damage estimates for the 
categories above by the number of small businesses denied an SBA 
loan, including those denied a loan prior to inspection due to 
inadequate credit or income (or a decision had not been made), under 
the assumption that damage among those denied at pre-inspection have 
the same distribution of damage as those denied after inspection.

Allocation Calculation

    Once eligible entities are identified using the above criteria, 
the allocation to individual grantees represents their proportional 
share of the estimated unmet needs. For the formula allocation, HUD 
calculates total serious unmet recovery needs as the aggregate of:
     Serious unmet housing needs in most impacted counties.
     Serious unmet business needs.
     The estimated local match requirement for the repair of 
infrastructure estimated for FEMA's Public Assistance program.
    Natural break for most impacted disasters. HUD limits funded 
disasters to those with that have substantially higher unmet needs 
than other jurisdictions. Florida, Louisiana, North Carolina, South 
Carolina, Texas, and West Virginia each have aggregate unmet needs 
in excess of $50,000,000, an amount that is higher than other 
jurisdictions affected by major disasters declared between January 1 
and December 10, 2016.

[FR Doc. 2017-01007 Filed 1-17-17; 8:45 am]
 BILLING CODE 4210-67-P