Rules and Regulations. Notice of waivers and alternative requirements

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BILLING CODE 3510-DS-P 72 43 Tuesday, March 6, 2007 Notices Part III Department of Housing and Urban Development Additional Waivers Granted to and Alternative Requirements for the State of Louisiana Under Public Laws 109-148 and 109-234; Notice DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT [Docket No. FR-5089-N-03] Additional Waivers Granted to and Alternative Requirements for the State of Louisiana Under Public Laws 109-148 and 109-234 AGENCY: Office of the Secretary, HUD. ACTION:

Notice of waivers and alternative requirements. SUMMARY: As described in the Supplementary Information section of this Notice, HUD is authorized by statute to waive statutory and regulatory requirements and specify alternative requirements for this grant, upon the request of the state grantee. This Notice describes the additional waivers for the disaster recovery grants made to the state of Louisiana under the subject appropriations acts. DATES: *Effective Date:* March 12, 2007.

FOR FURTHER INFORMATION CONTACT: Clifford Taffet, Acting Director, Disaster Recovery and Special Issues Division, Office of Block Grant Assistance, Department of Housing and Urban Development, Room 7286, 451 Seventh Street, SW., Washington, DC 20410, telephone number

(202)708-2684. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at

(800)877-8339. FAX inquiries may be sent to Mr. Taffet at

(202)708-1744. (Except for the “800” number, these telephone numbers are not toll-free.) SUPPLEMENTARY INFORMATION: Authority To Grant Waivers The first federal fiscal year 2006 supplemental appropriation for the Community Development Block Grant

(CDBG)program was the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 (Pub. L. 109-148, approved December 30, 2005). The second 2006 supplemental appropriation was Chapter 9 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (Pub. L. 109-234, approved June 15, 2006) which appropriates $5.2 billion in Community Development Block Grant funds for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure directly related to the consequences of the covered disasters. The 2006 Acts authorize the Secretary to waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or use by the recipient of these funds and guarantees, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, upon a request by the State and a finding by the Secretary that such a waiver would not be inconsistent with the overall purpose of the statute. The following waivers and alternative requirements for funds provided under either 2006 Act are in response to requests from the State of Louisiana. A waiver or alternative requirement will apply to assistance provided under either Act unless otherwise specified in this Notice. The Secretary finds that the following waivers and alternative requirements, as described below, are not inconsistent with the overall purpose of Title I of the Housing and Community Development Act of 1974, as amended, or the Cranston-Gonzalez National Affordable Housing Act, as amended. Under the requirements of the Department of Housing and Urban Development Act, as amended (42 U.S.C. 3535(q)), regulatory waivers must be published in the **Federal Register** . Except as described in this and other notices applicable to this grant, statutory and regulatory provisions governing the Community Development Block Grant program for states, including those at 24 CFR part 570, shall apply to the use of these funds. In accordance with the appropriations acts, HUD will reconsider every waiver in this Notice on the two-year anniversary of the day this Notice is published. Waiver Justification In general, waivers already granted to the state of Louisiana and alternative requirements already specified for CDBG disaster recovery grant funds provided under Public Law 109-148 and Public Law 109-234 apply. The notices in which these prior waivers and alternative requirements applicable to Louisiana appear are 71 FR 7666, published February 13, 2006; 71 FR 34451, published June 14, 2006; and 71 FR 63337, published October 30, 2006. The provisions of this Notice do not apply to funds provided under the regular CDBG program. The provisions provide additional flexibility in program design and implementation and implement statutory requirements unique to these appropriations. *Eligibility—buildings for the general conduct of government.* The state requested additional flexibility in the previously granted alternative requirement that permitted funding the cost share for the FEMA Public Assistance or Hazard Mitigation Grant Program when disaster recovery CDBG funds assist buildings for the general conduct of government. The requested change will allow the state to fund more than just the amount of the FEMA cost share for a project in this activity category. The change will also permit use of grant funds for allowable rehabilitation, construction, or reconstruction costs in otherwise FEMA eligible projects when these costs are ineligible for FEMA assistance, such as the costs to assist rehabilitation or reconstruction of qualifying buildings that were underinsured or uninsured, and to allow funding to bring a selected building up to code or to allow it to receive a certificate of occupancy and be put into service. HUD considered the state's request and agreed that it is consistent with the overall purposes of the 1974 Act for the state to be allowed to use the grant funds under this notice to fund critical projects involving repair of buildings for the general conduct of government that the state has selected in accordance with the method described in its HUD-approved Action Plan for Disaster Recovery and that the state has determined have substantial value in promoting disaster recovery, even if the funding provided under this notice assists some costs that do not qualify as cost share for the FEMA Public Assistance or Mitigation programs. *Eligibility—Research Commercialization and Educational Enhancement.* According to the state's proposed Action Plan amendment, the Research Commercialization and Educational Enhancement

(RCCE)Program is “intended to restore the economic impact of scientific and technology research facilities within higher education institutions in the most severely affected areas.” Activities under this program may include, but are not limited to, stipends for students, related training, purchase of critical equipment, stipends for research professionals, and development of a master strategic plan for meeting the program's intent. Normally, HUD provides funds to a research institution or a university either to increase its capacity to carry out a CDBG activity such as rehabilitation of housing, to carry out specific research, or to provide training. By contrast, the RCEE program is directed at stabilizing and increasing research and education sector employment and functions themselves. The state has stated that this sector was a significant regional job generator before the covered disasters, that Hurricane Katrina and its aftermath critically damaged many aspects of the research sector, and that the RCEE program is a critical component of the state's long-term economic recovery. To accomplish its stated intention, the State is funding strategic planning followed by a pilot assistance program for research institutions located in the most impacted areas. At HUD's request, the state has agreed that this planning process will identify critical performance measures for this program so that all parties involved can assess the usefulness of the RCEE model as part of overall disaster recovery. The RCEE program design does not break down neatly into CDBG eligibility categories. Portions of the RCEE program are eligible CDBG activities, such as training (public services) and strategic planning. Other portions, especially the stipends and other direct support for retaining key faculty researchers, are outside the usual CDBG realm, although modeled on other government research and endowment grant programs. Program staff will be coordinating the various types of assistance into a coherent whole, moving between supporting eligible and currently ineligible activities. To avoid bureaucratic hair-splitting that does not advance long-term disaster recovery or protect against fraud, waste, or abuse of funds, HUD is providing a waiver and alternative requirement to create the eligible activity called Louisiana Research Commercialization and Educational Enhancement to include all activities carried out in accordance with the RCEE program described in the HUD-approved Action Plan, beginning with the amendment introducing this program, approved January 3, 2007. (The allowable cost provisions of applicable OMB Circulars still apply, as do statutory prohibitions on duplications of benefit with other forms of assistance, such as Federal programs.) *Documentation of low- and moderate-income household benefit for multi-unit housing projects.* Rehabilitation and reconstruction of housing is an eligible CDBG activity. HUD has already granted the state an eligibility waiver to allow new construction of housing. Now the state has requested a related waiver to allow it to fund multi-unit projects and to measure benefit to low- and moderate-income households in such projects in a manner more supportive of mixed income housing than the structure basis required by 24 CFR 570.483(b)(3). (Under the cited regulation, the general rule is that at least 51 percent of the residents of an assisted structure must be income eligible.) HUD has reviewed other housing assistance programs that measure benefit differently: By the housing unit. Under the unit approach, one or more of the units in a structure must house income-eligible families, but the remainder of the units may be market rate, so long as the proportion of assistance provided compared to the overall project budget is no more than the proportion of units that will be occupied by income-eligible households compared to the number of units in the overall project. In other words, the rule under the structure approach is that a dollar of CDBG assistance to a structure means that 51 percent of the units must meet income requirements. Under the proportional units approach, the number of income-eligible units is proportional to the amount of assistance provided. Based on HUD experience, the second approach is generally more compatible with large-scale development of mixed-income housing. There is HUD precedent for using the proportional unit basis in two programs familiar to the state:

(1)The CDBG program rule has a built-in exception that allows limited use of the unit basis for multi-unit non-elderly new construction structures with between 20 and 50 percent low- and moderate- income occupancy, and

(2)the HOME Investment Partnerships program, HUD's primary housing production program, successfully uses its own variation on the proportional unit approach. After review of the state's Action Plan for Disaster Recovery and learning more about the state's intention to encourage mixed-income housing development, HUD has determined that it is consistent with the overall purposes of the 1974 Act to provide the state the requested additional flexibility in measuring program benefit. Therefore, the waiver and alternative requirements allow the state a choice. The state may measure benefit within a housing development project

(1)according to the existing CDBG requirements,

(2)according to the HOME program requirements at 24 CFR 92.205(d) or

(3)according to the modified CDBG alternative requirements specified in this notice, which extend the CDBG exception noted above. The state must select and use just one method for each project. For these purposes, the term “project” will have the same meaning as in the HOME program at 24 CFR 92.2. Unlike the HOME program, the CDBG program does not regulate the maximum amount of assistance per unit, require unit and income reviews in the years following initial occupancy, require a specific form of subsidy layering review, or define affordability. The state is reminded, however, that CDBG does require that costs be necessary and reasonable and that the state must develop procedures and documentation to ensure that its housing investments meet this requirement. The state must also meet all civil rights and fair housing requirements. *Eligibility—Operating Subsidy for Affordable Rental Housing.* The State requested a waiver to allow a Project-Based Rental Subsidy

(PBRA)and assistance to establish operating reserves to encourage developers to rebuild rental and mixed-income housing in the areas that suffered the greatest disaster impact. The subsidy funding, which is “Piggyback” funding generally designed to be linked to the use of housing tax credits or funding under another of the rental programs delineated in the State's HUD approved Action Plan for Disaster Recovery, targets housing for low-income and very-low-income families and is limited in amount to the difference between the rents that a project is projected to need to sustain itself, and a specified lower level that can be reasonably afforded by the tenants. With its affordable rental programs, the State proposes to address specific barriers unique to the affordable rental programs outlined by the State's Action Plan (see The Road Home Housing Programs described in the State's Action Plan for Disaster Recovery) such as the lack of affordability in the most heavily damaged areas, the lack of permanent financing for mixed-income rentals, and the need for more risk-tolerant pre-development capital. In its Road Home programs, the State has set a high priority on deep affordability for some rental units and on placing these units within mixed-income communities wherever feasible. The state has included new scoring factors in the Piggyback tax credit selection process that reflect these priorities and that emphasize long-term viability and reduce operating costs. According to the state, the biggest remaining challenge in providing rental units affordable to very low-income households is the difference between what tenants can afford to pay and the projected cost of operating the units. The state has researched existing housing models, and concluded that the Piggyback model and the small rental and homeless programs described in the Road Home are needed to ensure production of affordable units. The state believes it has a critical need for income-targeted rental housing production programs. Although the state has made financing available for rental housing construction, it believes that it will need also to provide operating subsidy options for some projects to ensure they are affordable to very low-income households. HUD agrees that keeping housing affordable to very low-income households over time may require additional operating subsidy after construction is complete. To allow the state flexible options, HUD will allow CDBG assistance for subsidizing operating costs using PBRA and funding initial operating reserves in the context of the Road Home rental programs as described in the Action Plan. The Department encourages the State to avoid using CDBG for operating subsidies if other financing is available or if the project can reasonably be structured to achieve and maintain its target affordability without the operating subsidy. HUD recommends that the State establish written requirements for income eligibility, maximum rents, utility allowances, structure quality, and affirmative marketing of projects. HUD also recommends that inflation adjustments set by the State generally not exceed the Section 8 allowable adjustments. HUD recommends that, in implementing PBRA funding, the State acquire and maintain the expertise equivalent to the role of a tax credit administrator whose responsibilities will include, but not be limited to, making PBRA payments to procured developers and compliance control of eligibility determinations. Due to the distinctive and potentially high-risk nature of this eligibility waiver, HUD recommends that such expertise be maintained throughout the life of the program to ensure the prevention of fraud, abuse of funds, and duplication of benefits. HUD reminds the state of the regulatory requirement for annual financial audits of its programs, and of the **Federal Register** Notice 71 FR 7666 and 71 FR 73337 requirements that its entire program be under the purview of an internal auditor. *Eligibility—Homeless Prevention and Rapid Rehousing.* The State has requested an eligibility waiver to allow it to implement a Homeless Prevention and Rapid Rehousing Program using funds designated for homeless activities in its Action Plan. The principle of this program model is to minimize the time a family is homeless by providing re-housing assistance, rental assistance, and linking the family to services designed to help it become stable and self-sufficient. The State's request notes that it has modeled its program on the rapid rehousing program approach that the National Alliance to End Homelessness has endorsed as a national best practice. The State also notes that as a consequence of Hurricanes Katrina and Rita: “Thousands of families today are doubled up with family and friends, facing eviction, in temporary housing conditions affordable only with time limited FEMA rental assistance, or living in FEMA trailer villages—unsure what they are going to do when assistance runs out.” The State needs an eligibility waiver for the rental assistance and utility payments that are paid for up to two years on behalf of homeless and at-risk households. The proposed program also includes rental and utility deposits and back payments for housing when the State determines that such payments are necessary to help prevent a family from becoming homeless. To the extent the existing CDBG program rules explicitly allow payments for these purposes, the program establishes a shorter time limitation (three months) and generally discourages or disallows back payments. The State's proposed program will measurably advance the Department's priority on supporting forward-thinking solutions to help communities that are struggling to house and serve persons and families that are homeless or at risk of homelessness because of the effects of Hurricanes Katrina and Rita. Therefore, this Notice grants the eligibility waiver as requested. *Documentation of low- and moderate-income benefit and public benefit for certain economic development activities.* For some of its economic development programs, the state has requested one waiver to allow it to provide alternate documentation of low- and moderate-income benefit, and another waiver to extend the public benefit standard waiver granted in **Federal Register** Notice 71 FR 7666 for the Bridge Loan Program to the economic development activities from Action Plan Amendments 2 and 8 and to FEMA public assistance cost share infrastructure projects carried out for the purpose of creating or retaining jobs. For the national objective documentation for the business assistance activities, the state has asked to be able to apply individual salaries or wages per job and the income limits for a household of one, rather than the usual CDBG standard of total household income and the limits by total household size. The state asserts that its proposed documentation will be simpler and quicker for its participating lenders to administer, easier to verify, and will not misrepresent the amount of low- and moderate-income benefit provided. Further, for the Bridge Loan Program and for infrastructure projects carried out to create or retain jobs or businesses, the state argues for this approach because it considers these critical recovery activities that need the most streamlined approach to documentation that is consistent with prudent management. On review and following several discussions with state staff, HUD accepts the state's arguments for the activities and programs cited above, and is granting the waiver as requested. HUD is granting this waiver because of the magnitude of the disaster. However, because the validity of this approach has not been verified systematically, HUD may not grant similar waivers in the future. The public benefit provisions set standards for individual economic development activities (such as a single loan to a business) and for economic development activities in the annual aggregate. Currently, public benefit standards limit the amount of CDBG assistance per job retained or created, or the amount of CDBG assistance per low- and moderate-income person to which goods or services are provided by the activity. Essentially, the public benefit standards are a proxy for all the other possible public benefits provided by an assisted activity. These dollar thresholds were set more than a decade ago and under disaster recovery conditions (which often require a larger investment to achieve a given result), can be too low and thus impede recovery by limiting the amount of assistance the grantee may provide to a critical activity. The State has made public in its Action Plan the disaster recovery needs each activity is addressing and the public benefits expected. After consideration, this Notice waives the public benefit standards for the cited activities, except that the State shall report and maintain documentation on the creation and retention of

(a)total jobs,

(b)number of jobs within certain salary ranges,

(c)the average amount of assistance per job and activity or program, and

(c)the types of jobs. As a conforming change for the same activities or programs, HUD is also waiving paragraph

(g)of 24 CFR 570.482 to the extent its provisions are related to public benefit. *Voluntary acquisition under the Piggyback Program.* In connection with the State's Low Income Housing Tax Credit Piggyback Program, various developers obtained options for the acquisition of specific properties to create mixed income rental housing and workforce housing projects to replace rental housing lost during the hurricanes. The options were obtained on a voluntary basis by developers without the use or threat of eminent domain and prior to the availability of federal funding. However, since these projects will now be receiving CDBG disaster funding assistance, the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, (42 U.S.C. 4601 *et seq.* ) (the URA) will apply where the property acquisition has not been completed. The state has requested a waiver related to acquisition requirements under the URA for specific projects with existing options. The state has asked that HUD permit the waivers to help complete the acquisition of property and promote the replacement of housing in a timely and efficient manner. The state believes that these waivers will have little impact on those persons who voluntarily entered into these option agreements prior to the availability of federal funding. CDBG funds are federal financial assistance so their use in projects that involve acquisition of property for a federally assisted project, or that involve acquisition, demolition, or rehabilitation that force a person to move permanently, are subject to the URA and the government-wide implementing regulations found at 49 CFR part 24. The URA provides assistance and protections to individuals and businesses affected by federal or federally assisted projects. HUD is waiving the following URA requirements to help promote accessibility to suitable decent, safe, and sanitary housing for victims of Hurricanes Katrina and Rita: The acquisition requirements of the URA and implementing regulations so that they do not apply to an arm's length voluntary purchase carried out by a person that does not have the power of eminent domain, in connection with the purchase of properties for the projects listed in the waiver below. According to the state, the failure to suspend these requirements would impede disaster recovery. This waiver would not affect any lawful occupants of the affected projects, in terms of relocation assistance and payments, and would only waive certain transaction-related requirements vis a vis the project owners. Applicable Rules, Statutes, Waivers, and Alternative Requirements 1. *General note.* Except as described in this Notice, the statutory, regulatory, and notice provisions that shall apply to the use of these funds are: a. those governing the funds appropriated under Public Law 109-148 and Public Law 109-234 and already published in the **Federal Register** , including those in Notices 71 FR 7666, published February 13, 2006; 71 FR 34451, published June14, 2006; and 71 FR 63337, published October 30, 2006. b. those governing the Community Development Block Grant program for states, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570. 2. *Buildings for the general conduct of government.* Waiver 11 of notice 71 FR 34451 is replaced with the following: 42 U.S.C. 5305(a) and 24 CFR 507.207(a)(1) are waived to the extent necessary to allow the state to use the grant funds under this notice to fund the rehabilitation or reconstruction of public buildings that are otherwise ineligible and that the state selects in accordance with its approved Action Plan for Disaster Recovery and that the State has determined have substantial value in promoting disaster recovery. 3. *Eligibility—Louisiana Research Commercialization and Educational Enhancement program (RCEE)* . Activities carried out in accordance with the HUD approved Action Plan for the RCEE program approved January 3, 2007, are eligible. 4. *Documentation of low- and moderate-income benefit for multi-unit housing projects.* HUD will consider assistance for a multi-unit housing project involving new construction, acquisition, reconstruction, or rehabilitation to benefit low- and moderate-income households in the following circumstances: (a)(i) The CDBG assistance defrays the development costs of a housing project providing eligible permanent residential units that, upon completion, will be occupied by low- and moderate-income households; and

(ii)if the project is rental, the units occupied by low and moderate income households will be leased at affordable rents. The grantee or unit of general local government shall adopt and make public its standards for determining “affordable rents” for this purpose; and

(iii)The proportion of the total cost of developing the project to be borne by CDBG funds is no greater than the proportion of units in the project that will be occupied by low- and moderate-income households; or

(b)When CDBG funds defray the development costs of eligible permanent residential units, such funds shall be considered to benefit low and moderate income persons if the grantee follows the provisions of 24 CFR 92.205(d); or

(c)The requirements of 24 CFR 570.483(b)(3) are met.

(d)The state must select and use just one method for each project.

(e)The term “project” will be defined as in the HOME program at 24 CFR 92.2.

(f)If the state applies option

(a)or

(b)above to a housing project, 24 CFR 570.483(b)(3) is waived for that project. 5. *Waiver to permit operating subsidies for affordable rental housing.* 42 U.S.C. 5305(a) is waived to the extent necessary to make eligible the Road Home project-based rental assistance program included in the state's HUD-approved Action Plan for Disaster Recovery provided that the assisted activities are designed to ensure that CDBG funds will be invested only to the extent of reasonably anticipated need. Also in conjunction with the Road Home rental program, the grantee may provide assistance to establish an initial operating reserve account for a project receiving other Road Home assistance. 6. *National objective documentation for certain economic development activities.* 24 CFR 570.483(b)(4)(i) is waived to allow the grantee to establish low- and moderate-income jobs benefit by documenting for each person employed the name of the business, type of job, and the annual wages or salary of the job. HUD will consider the person income-qualified if the annual wages or salary of the job is at or under the HUD-established income limit for a one-person family. 7. *Eligibility of certain activities to support homeless prevention and rapid rehousing programs.* 42 U.S.C. 5305(a) is waived to the extent necessary to make eligible rental assistance and utility payments paid for up to two years on behalf of homeless and at-risk households when such assistance or payments are part of a homeless prevention or rapid rehousing program. Eligible assistance in these programs may also include rental and utility deposits and back payments for housing when the State determines that such payments are necessary to help prevent a family from being homeless. 8. *Public benefit standards for economic development activities.* For economic development activities designed to create or retain jobs or businesses (including but not limited to BRIDGE, Short term, Long term, infrastructure projects), the public benefit standards at 42 U.S.C. 5305(e)(3) and 24 CFR 570.482(f)(1), (2), (3), (4)(i), (5), and

(6)are waived, except that the grantee shall report and maintain documentation on the creation and retention of

(a)total jobs,

(b)number of jobs within certain salary ranges,

(c)average amount of assistance provided per job by activity or program, and

(c)types of jobs. Paragraph

(g)of 24 CFR 570.482 is also waived to the extent its provisions are related to public benefit. 9. *Voluntary acquisition under the Piggyback program.* The requirements at 49 CFR 24.101(b)(2)(i)-(ii) are waived to the extent that they apply to an existing option for the arm's length voluntary purchase carried out by a person that does not have the power of eminent domain, in connection with the purchase of property for the projects listed below, so long as the initial option pre-dates December 22, 2006. LHFA project ID Project name Parish Est. total units 0708FA37 The Meadows Calcasieu 180 0708FA43 Renoir Acres Estates II Calcasieu 60 0708FA44 Monet Acres Estates II Calcasieu 60 0708FA48 Sulphur Retirement Community Calcasieu 60 0708FA52 Grand Lake Elderly Cameron 30 0708FA01 Timberlane Apartments Jefferson 164 0708FA22 Beechgrove Homes Jefferson 100 0708FA28 Wellswood Manor Jefferson 84 08FA49 Oak Villa Jefferson 80 0708FA30 Lafitte Redevelopment Orleans 568 0708FA26 St Bernard I Orleans 465 0708FA24 BW Cooper I Orleans 410 0708FA25 CJ Peete III Orleans 410 0708FA42 Rivergarden CSII Orleans 310 0708FA57 Canterbury House Apts-New Orleans East Orleans 276 0708FA47 The Marquis Apartments Orleans 250 0708FA08 The Villas at Lake Forest Orleans 230 0708FA11 The Crescent Club Orleans 226 0708FA41 Walnut Square Apartments Orleans 209 0708FA13 200 Carondelet Orleans 190 0708FA10 The Preserve Orleans 183 0708FA38 Crescent Garden Homes Orleans 143 0708FA36 Levey Gardens Orleans 100 0708FA40 Nine 27 Orleans 76 0708FA09 Jefferson Davis Apartments Orleans 72 0708FA61 Indiana Homes Orleans 60 0708FA64 Orleans Place Orleans 60 0708FA27 Classic Construction of New Orleans Venture II Orleans 56 0708FA29 Constance Lofts Orleans 47 0708FA23 Delta Oaks Homes Orleans 40 0708FA63 Old Morrison Homes Orleans 38 0708FA07 Lakeside Apartments St. Tammany 250 0708FA06 Tiffany Apartments Vermilion 250 Totals 5737 10. *Information collection approval note.* HUD has approval for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) under OMB control number 2506-0165, which expires August 31, 2007. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a person required to respond to, a collection of information unless the collection displays a valid control number. Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this Notice are as follows: 14.219; 14.228. Finding of No Significant Impact A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-0500. Dated: February 27, 2007. Pamela H. Patenaude, Assistant Secretary for Community Planning and Development. [FR Doc. E7-3830 Filed 3-5-07; 8:45 am] BILLING CODE 4210-67-P 72 43 Tuesday, March 6, 2007 Notices Part IV Department of Housing and Urban Development Additional Waivers Granted to and Alternative Requirements for the State of Mississippi Under Public Laws 109-148 and 109-234; Notice DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT [Docket No. FR-5089-N-04] Additional Waivers Granted to and Alternative Requirements for the State of Mississippi Under Public Laws 109-148 and 109-234 AGENCY: Office of the Secretary, HUD. ACTION: Notice of waivers and alternative requirements. SUMMARY: As described in the Supplementary Information section of this Notice, HUD is authorized by statute to waive statutory and regulatory requirements and specify alternative requirements for this purpose, upon the request of the state grantees. This Notice describes the additional waivers for the disaster recovery grants made to the State of Mississippi under the subject appropriations acts. DATES: *Effective Date:* March 12, 2007. FOR FURTHER INFORMATION CONTACT: Clifford Taffet, Acting Director, Disaster Recovery and Special Issues Division, Office of Block Grant Assistance, Department of Housing and Urban Development, Room 7286, 451 Seventh Street, SW., Washington, DC 20410, telephone number

(202)708-2684. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at

(800)877-8339. FAX inquiries may be sent to Mr. Taffet at

(CDBG)program was in the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 (Pub. L. 109-148, approved December 30, 2005) which appropriated $11.5 billion for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the covered disasters. The second 2006 supplemental appropriation was in Chapter 9 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (Pub. L. 109-234, approved June 15, 2006) which appropriated $5.2 billion in Community Development Block Grant funds also for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the covered disasters. The 2006 Acts each authorize the Secretary to waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or use by the recipient of these funds and guarantees, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, upon a request by the State and a finding by the Secretary that such a waiver would not be inconsistent with the overall purpose of the statute. The following additional waivers and alternative requirements for funds provided under either or both 2006 Acts are in response to requests from the State of Mississippi. (A waiver or alternative requirement will apply to assistance provided under either Act unless otherwise specified in this Notice.) The Secretary finds that the following waivers and alternative requirements, as described below, are not inconsistent with the overall purpose of Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq.) (the 1974 Act), or the Cranston-Gonzalez National Affordable Housing Act, as amended (42 U.S.C. 12721 et seq.). Under the requirements of the Department of Housing and Urban Development Act, as amended (42 U.S.C. 3535(q)), regulatory waivers must be published in the **Federal Register** . Except as described in this and other notices applicable to these grants, statutory and regulatory provisions governing the Community Development Block Grant program for states, including those at 24 CFR part 570, shall apply to the use of these funds. In accordance with the appropriations acts cited above, HUD will reconsider every waiver in this Notice on the two-year anniversary of the day this Notice is published. Waiver Justification In general, waivers already granted to the State of Mississippi and alternative requirements already specified for CDBG disaster recovery grant funds provided under Public Law 109-148 and Public Law 109-234 apply. The notices in which these prior waivers and alternative requirements applicable to Mississippi appear are 71 FR 7666, published February 13, 2006; 71 FR 34457, published June 14, 2006; 71 FR 62372, published October 24, 2006, and 71 FR 63337, published October 30, 2006. The provisions of this Notice do not apply to funds provided under the annual CDBG program. The provisions provide additional flexibility in program design and implementation for the disaster recovery grants. *Housing incentives to resettle in Mississippi.* The state may offer disaster recovery or mitigation housing incentives to promote housing development or resettlement in particular geographic areas. The Department is waiving the 1974 Act and associated regulations to the extent necessary to make this use of grant funds eligible. *Eligibility—buildings for the general conduct of government.* The State requested an eligibility waiver to allow it to fund buildings for the general conduct of government under the economic development programs in its Action Plan. The requested change will allow the State to assist construction, reconstruction, or rehabilitation of such buildings when the assistance meets the criteria in the Action Plan. HUD considered the state's request and agrees that it is consistent with the overall purposes of the 1974 Act for the state to be allowed to use the grant funds under this notice to fund critical projects involving repair of buildings for the general conduct of government that the state has selected in accordance with the method described in its Action Plan for Disaster Recovery and that the state has determined have substantial value in promoting disaster recovery. *Public benefit for certain economic development activities.* For its economic development programs, the state has requested a waiver of the public benefit standards for its economic development activities. The public benefit provisions set standards for individual economic development activities (such as a single loan to a business) and for economic development activities in the annual aggregate. Currently, public benefit standards limit the amount of CDBG assistance per job retained or created, or the amount of CDBG assistance per low- and moderate-income person to which goods or services are provided by the activity. Essentially, the public benefit standards are a proxy for all the other possible public benefits provided by an assisted activity. These dollar thresholds were set more than a decade ago and under disaster recovery conditions (which often require a larger investment to achieve a given result), can be too low and thus impede recovery by limiting the amount of assistance the grantee may provide to a critical activity. The State has made public in its Action Plan the disaster recovery needs each activity is addressing and the public benefits expected. After consideration, this Notice waives the public benefit standards for the cited activities, except that the State shall report and maintain documentation on the creation and retention of

(a)total jobs,

(b)number of jobs within certain salary ranges,

(c)the average amount of assistance per job and activity or program, and

(d)the types of jobs. As a conforming change for the same activities or programs, HUD is also waiving paragraph

(g)of 24 CFR 570.482 to the extent its provisions are related to public benefit. *Overall benefit to low- and moderate-income persons.* The State of Mississippi has asked the Secretary to waive the requirement that at least 50 percent of the CDBG funds received by the state under the grant made under Public Law 109-148 be for activities that benefit persons of low and moderate income (see 71 FR 7666, published February 13, 2006, for the waiver granted under Public Law 109-148 to the original 70 percent requirement, and 71 FR 34457 and 71 FR 62372 for additional waivers specific to Mississippi). With this Notice, HUD is not replacing the October 24 waiver and alternative requirements but adding to them. (Substantial amendments to the State's program after the date of this notice may trigger further updates.) In considering the waiver request, HUD applied the logic and principles used in the October 24 waiver to the economic development activities under the State's Economic Development program, approved December 19, 2006. HUD also considered that the State has, to some extent, followed the Department's recommendation that it make a reasonable effort to address the recovery needs of its low- and moderate-income residents. The State designed its economic development grants and loans selection criteria to consider benefit to persons of low and moderate income. Further, it has funded Phase II of the homeowner assistance program and reconstruction of public housing, both designed to primarily or entirely benefit income eligible persons. However, the State has not yet published Action Plan amendments describing the uses of all grant funds. HUD considered the data and the state's justification for its request. Considering that the State has not yet budgeted all of its grant funds in the Action Plan, it has a large amount of unbudgeted funds, it will be reallocating previously budgeted funds, and a substantial number of low- and moderate-income persons were impacted by the disaster, HUD decided that it still does not have enough information to conclude that the State has compelling need for a waiver of overall benefit for the entire grant at this time. Based on the compelling need presented for the activities already included in the Action Plan for Disaster Recovery for the grant made under Pub. L. 109-148, HUD is modifying the waiver granted in the October 24 Notice to grant the state a waiver of the requirement that at least 50 percent of the supplemental CDBG grant funds provided under Pub. L. 109-148 primarily benefit persons of low and moderate income, to the extent necessary to permit Mississippi to carry out the activities contained in its Action Plan amendment dated December 15, 2006, provided that the State must give reasonable priority for the balance of its funds to activities that will primarily benefit persons of low and moderate income. HUD expects the grantee to maintain low- and moderate-income benefit documentation for each activity providing such benefit. This waiver of overall benefit does not cover activities added or modified under a substantial amendment to the activities mentioned in the Action Plan submission listed above. Previously, the State agreed to examine other housing needs and to pursue other sources of funding to provide assistance for other compelling housing needs, such as for homeless and special needs populations, for low-income renters, and for uninsured low-income homeowners. HUD notes that Phase II addresses some of these needs. The Department expects the State to continue these efforts. Applicable Rules, Statutes, Waivers, and Alternative Requirements 1. *General note.* Except as described in this Notice, the statutory, regulatory, and notice provisions that shall apply to the use of these funds are: a. Those governing the funds appropriated under Public Law 109-148 and already published in the **Federal Register** , including those in Notices 71 FR 7666, published February 13, 2006; 71 FR 34457, published June 14, 2006; 71 FR 62372, published October 24, 2006; and 71 FR 63337, published October 30, 2006. b. Those governing the Community Development Block Grant program for states, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570. 2. *Eligibility—buildings for the general conduct of government.* 42 U.S.C. 5305(a) is waived to the extent necessary to allow the state to use the grant funds under this notice to assist construction, reconstruction, or rehabilitation of buildings for the general conduct of government that the State has selected in accordance with the method described in its Action Plan for Disaster Recovery and that the State has determined have substantial value in promoting disaster recovery. 3. *Eligibility—incentives to resettle in Mississippi.* 42 U.S.C. 5305(a) is waived to the extent necessary to make eligible incentives to resettle in Mississippi in accordance with the state's approved Action Plan and published program design. 4. *Public benefit standards for economic development activities.* For economic development activities designed to create or retain jobs or businesses, the public benefit standards at 42 U.S.C. 5305(e)(3) and 24 CFR 570.482(f)(1), (2), (3), (4)(i), (5), and

(6)are waived, except that the grantee shall report and maintain documentation on the creation and retention of

(a)total jobs,

(b)number of jobs within certain salary ranges,

(c)average amount of assistance provided per job by activity or program, and

(d)types of jobs. Paragraph

(g)of 24 CFR 570.482 is also waived to the extent its provisions are related to public benefit. 5. *Overall benefit.* 42 U.S.C. 5301(c) and 5304(b)(3), and 24 CFR 570.484 and 24 CFR 91.325(b)(4)(ii) with respect to the overall benefit requirement are waived to the extent necessary to permit Mississippi to carry out the activities contained in its March 31, June 28, and July 12, 2006, Action Plan submissions, and its submission dated December 15, 2006, provided that: a. The State must give reasonable priority for the balance of its funds to activities which will primarily benefit persons of low and moderate income; and b. The State will maintain documentation of the low- and moderate-income benefit attributable to each assisted activity, if feasible, and report on such benefit to HUD as part of the regular quarterly reports. 6. *Information collection approval note.* HUD has approval for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) under OMB control number 2506-0165, which expires August 31, 2007. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a person required to respond to, a collection of information unless the collection displays a valid control number. Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this Notice are as follows: 14.219; 14.228. Finding of No Significant Impact A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-0500. Dated: February 27, 2007. Pamela H. Patenaude, Assistant Secretary for Community Planning and Development. [FR Doc. E7-3831 Filed 3-5-07; 8:45 am] BILLING CODE 4210-67-P 72 43 Tuesday, March 6, 2007 Presidential Documents Part V The President Proclamation 8111—To Implement the Dominican Republic-Central America-United States Free Trade Agreement With Respect to the Dominican Republic and for Other Purposes Title 3— The President Proclamation 8111 of February 28, 2007 To Implement the Dominican Republic-Central America-United States Free Trade Agreement With Respect to the Dominican Republic and for Other Purposes By the President of the United States of America A Proclamation 1. On August 5, 2004, the United States entered into the Dominican Republic-Central America-United States Free Trade Agreement (the “Agreement”) with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua (the “Agreement countries”). The Agreement was approved by the Congress in section 101(a) of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (the “Act”) (Public Law 109-53, 119 Stat. 462) (19 U.S.C. 4011 note). 2. Section 201 of the Act authorizes the President to proclaim such modifications or continuation of any duty, such continuation of duty-free or excise treatment, or such additional duties, as the President determines to be necessary or appropriate to carry out or apply Article 3.3 and Annex 3.3 (including the schedule of United States duty reductions with respect to originating goods) of the Agreement. 3. Consistent with section 201(a)(2) of the Act, each Agreement country is to be removed from the enumeration of designated beneficiary developing countries eligible for the benefits of the Generalized System of Preferences

(GSP)on the date the Agreement enters into force with respect to that country. 4. Consistent with section 201(a)(3) of the Act, each Agreement country is to be removed from the enumeration of designated beneficiary countries under the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2701 *et seq* .) on the date the Agreement enters into force with respect to that country, subject to the exceptions set out in section 201(a)(3)(B) of the Act. 5. Consistent with section 213(b)(5)(D) of the CBERA, as amended by the United States-Caribbean Basin Trade Partnership Act (CBTPA) (Public Law 106-200), each Agreement country is to be removed from the enumeration of designated CBTPA beneficiary countries on the date the Agreement enters into force with respect to that country. 6. Section 1634(c)(2) of the Pension Protection Act of 2006 (Public Law 109-280) (29 U.S.C. 1001 note) authorizes the President to proclaim a reduction in the overall limit in the tariff preference level for Nicaragua provided in Annex 3.28 of the Agreement if the President determines that Nicaragua has failed to comply with a commitment under an agreement between the United States and Nicaragua with regard to the administration of such tariff preference level. 7. Presidential Proclamation 6641 of December 15, 1993, implemented the North American Free Trade Agreement (NAFTA) with respect to the United States and, pursuant to the North American Free Trade Agreement Implementation Act (Public Law 103-182) (the “NAFTA Implementation Act”), incorporated in the Harmonized Tariff Schedule of the United States

(HTS)the tariff modifications and rules of origin necessary or appropriate to carry out the NAFTA. 8. Section 202 of the NAFTA Implementation Act (19 U.S.C. 3332) provides rules for determining whether goods imported into the United States originate in the territory of a NAFTA party and thus are eligible for the tariff and other treatment contemplated under the NAFTA. Section 202(q) of the NAFTA Implementation Act (19 U.S.C. 3332(q)) authorizes the President to proclaim, as a part of the HTS, the rules of origin set out in the NAFTA and to proclaim modifications to such previously proclaimed rules of origin, subject to the consultation and layover requirements of section 103(a) of the NAFTA Implementation Act (19 U.S.C. 3313(a)). 9. The United States and Mexico have agreed to modify certain NAFTA rules of origin. It is therefore necessary to modify the NAFTA rules of origin set out in Proclamation 6641. 10. Executive Order 11651 of March 3, 1972, as amended, established the Committee for the Implementation of Textile Agreements (CITA), consisting of representatives of the Departments of State, the Treasury, Commerce, and Labor, and the Office of the United States Trade Representative, with the representative of the Department of Commerce as Chairman, to supervise the implementation of textile trade agreements. Consistent with 3 U.S.C. 301, when carrying out functions vested in the President by statute and assigned by the President to CITA, the officials collectively exercising those functions are all to be officers required to be appointed by the President with the advice and consent of the Senate. 11. Section 604 of the Trade Act of 1974 (the “1974 Act”) (19 U.S.C. 2483), as amended, authorizes the President to embody in the HTS the substance of relevant provisions of that Act, or other acts affecting import treatment, and of actions taken thereunder. NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, acting under the authority vested in me by the Constitution and the laws of the United States of America, including but not limited to section 201 of the Act, section 1634(c)(2) of the Pension Protection Act of 2006, section 202 of the NAFTA Implementation Act, section 301 of title 3, United States Code, and section 604 of the 1974 Act, and the Act having taken effect pursuant to section 107(a), do proclaim that:

(1)In order to provide generally for the preferential tariff treatment being accorded under the Agreement to the Dominican Republic, to provide certain other treatment to originating goods for the purposes of the Agreement, to provide tariff-rate quotas with respect to certain goods, to reflect the removal of the Dominican Republic from the enumeration of designated beneficiary developing countries for purposes of the GSP, to reflect the removal of the Dominican Republic from the enumeration of designated beneficiary countries for purposes of the CBERA and the CBTPA, and to make technical and conforming changes in the general notes to the HTS, the HTS is modified as set forth in Annexes I and II of Publication 3901 of the United States International Trade Commission, entitled Modifications to the Harmonized Tariff Schedule of the United States to Implement the Dominican Republic-Central America-United States Free Trade Agreement With Respect to the Dominican Republic (Publication 3901), which is incorporated by reference into this proclamation.

(2)The CITA is authorized to exercise the function of the President under section 1634(c)(2) of the Pension Protection Act of 2006 of determining whether Nicaragua has failed to comply with a commitment under an agreement between the United States and Nicaragua with regard to the administration of the tariff preference level for Nicaragua provided in Annex 3.28 of the Agreement and, on making such a determination, to reduce the overall limit in the tariff preference level for Nicaragua provided in Annex 3.28 of the Agreement.

(3)In order to modify the rules of origin under the NAFTA, general note 12 to the HTS is modified as set forth in the Annex to this proclamation. (4)(a) The amendments to the HTS made by paragraph

(1)of this proclamation shall be effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after the relevant dates indicated in Annex I or II of Publication 3901.

(b)The amendments to the HTS made by paragraph

(3)of this proclamation shall enter into effect on the date that the United States Trade Representative announces in the **Federal Register** that Mexico has completed its applicable domestic procedures to give effect to corresponding modifications to be applied to goods of the United States and shall, at that time, be effective with respect to goods of Mexico entered, or withdrawn from warehouse for consumption, on or after the date indicated in the Annex to this proclamation.

(c)Except as provided in paragraphs (4)(a) and

(b)of this proclamation, this proclamation shall be effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after March 1, 2007.

(5)Any provisions of previous proclamations and Executive Orders that are inconsistent with the actions taken in this proclamation are superseded to the extent of such inconsistency. IN WITNESS WHEREOF, I have hereunto set my hand this twenty-eighth day of February, in the year of our Lord two thousand seven, and of the Independence of the United States of America the two hundred and thirty-first. GWBOLD.EPS Billing code 3195-01-P ED06MR07.000 [FR Doc. 07-1068 Filed 3-5-07; 8:45 am]

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U.S. Code