Federal Disaster Recovery Funding:

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1 Federal Disaster Recvery Funding: Minimizing Radblcks t Maximize Resurces CONSUMER CONFIDENCE SK COLLABORATION BUSINESS RETENTION TRENDS CAPITAL PLANNING GLOBAL RAPID RESPONSE RESTORATION COLLABORATION LEADERSHIP ENTREPRENEURSH PARTNERSHIPS GREEN MANAGEMENT WORKFORCE WEALTH RESOURCES STAKEHOLDERS UNEMPLOYMENT DIVERSIFICATION REGIONALISM FORESIGHT BRANDING LEVERAGE CREATIVITY STRATEGIC VISION GROWTH TALENT REDEVELOPMENT JOBS SITE SELECTION PRIVATE SECTOR ECONOMIC TRANSFORMATION COMMUNITY POLICY INNOVATION ENCY MARKETING MITIGATION COMMUNICATION SUSTAINABILITY BUSINESS CONTINUITY PARTNERSHIPS PRIVATE SECTOR COMMERCIALIZATION PR REDEVELOPMENT INNOVATION JOBS CRI IEDC Research Reprt // June 2013

2 Internatinal Ecnmic Develpment Cuncil (IEDC) develpment prfessin with 4,300+ members and a netwrk f 25,000+ ecnmic develpment prfessinals and allies. Frm public t private, rural t urban, and lcal t internatinal, experience. Thrugh a range f services that include cnferences, training curses, webinars, publicatins, research and technical assistance effrts, IEDC strives t prvide cutting-edge expertise t the ecnmic develpment cmmunity and its stakehlders. Primary Authrs Editrs Carrie Mulcaire, Directr, Federal Grants and Technical Assistance Brian Overingtn, Senir Assciate, Ecnmic Develpment Tye Libby, Special Prjects and Research Assciate Swati Ghsh, Directr, Research and Technical Assistance Elizabeth Thrstensen, Vice President, Knwledge Management and Ecnmic Develpment Practice Acknwledgements This research prject was accmplished thrugh the U.S. Ecnmic Develpment Administratin (EDA)'s Ecnmic Adjustment Assistance Prject N The statements, findings, cnclusins, recmmendatins, and ther data in this reprt are slely thse f IEDC and d nt necessarily reflect the views f the U.S. Ecnmic Develpment Administratin. This reprt is part f a larger cmpendium f research and technical assistance prduced by IEDC and funded by the afrementined U.S. Ecnmic Develpment Administratin (EDA) grant, which fcuses n lng-term ecnmic recvery f disaster-impacted Gulf Cast cmmunities in sutheast Texas and Luisiana. IEDC greatly appreciates input and assistance received frm its members and stakehlders wh participated in research and interviews fr this reprt, and wuld like t acknwledge thse wh cntributed greatly t the cntent f this reprt. Cpyright 2012 Internatinal Ecnmic Develpment Cuncil 2

3 Table f Cntents Sectin I Intrductin... 7 Overview... 8 Federal Apprach t Recvery... 9 Presidential Disaster Declaratin... 9 Natinal Disaster Recvery Framewrk... 9 Federal Agencies and Prgrams fr Ecnmic Recvery U.S. Department f Husing and Urban Develpment U.S. Ecnmic Develpment Administratin U.S. Small Business Administratin U.S. Emplyment and Training Administratin U.S. Department f Agriculture Rural Develpment U.S. Treasury Department Overview f Federal Requirements Definitins f Federal Requirements Definitins f Waivers Issues Impacting Federal Supprt fr Ecnmic Recvery Lack f Knwledge f Federal Prgrams Different Reprting Requirements fr Grant Cmpliance Interpreting Requirements between Levels f Gvernment Funding Match Requirements: Asking T Much frm Impacted Cmmunities? Timeliness in Interpreting Federal Requirements Sectin II General Guidelines fr Requesting Waivers Making a Case t Justify a Waiver Knw Federal Agency Objectives Review Previus Waivers Present Unique Cmmunity Recvery Needs in Waiver Requests Cmmunicate with Federal and State Officials Early and Often Establish a Lcal Ecnmic Recvery Team Identify Lead Organizatins Engage State Agency Recvery Leaders Cmmunicate Frequently with State and Federal Agencies Fllwing thrugh with Agency Officials Persevering Dcument All Cmmunicatin and Waiver Apprvals Pushing thrugh Majr Regulatry Barriers Preparatins fr the Next Disaster Sectin III Guidelines fr Waiving Requirements by Federal Agency U.S. Department f Husing and Urban Develpment CDBG-DR Overview Requirements That Cannt Be Waived DR Prgram Identify and Cmmunicate with Agencies Authrized t Request Waivers Learn Abut Requirements and Waivers Needed in a Cmmunity Demnstrate Need fr Waivers and Hw Requirements Negatively Impact a Cmmunity 40 Retain Experienced Legal Persnnel t Review Regulatins

4 Overview f Disaster Recvery Assistance Requirements That Cannt Be Waived Allwable Waivers f EDA Disaster Assistance Requirements Wrking Effectively with EDA n Federal Requirements U.S. Small Business Administratin Overview f SBA Disaster Lans Requirements That Cannt Be Waived Allwable Waivers f SBA Disaster Lan Requirements Waiver-Related Recmmendatins fr SBA Disaster Lans Overview f Natinal Emergency Grants (NEGs) fr Disaster State Actin Is Necessary t Extend Six Mnth Limitatin U.S. Department f Agriculture Rural Develpment Allwable Waivers f USDA Rural Develpment Requirements Cnclusin

5 Executive Summary The increased frequency and magnitude f majr disasters in the U.S. in recent years has caused the federal gvernment t be mre invlved in disaster recvery assistance. In 2011 and 2012, the U.S. experienced 25 majr natural disasters, each accunting fr at least a billin dllars in damage. Eleven f these billin-dllar disasters caused a cmbined $110 billin in damage in 2012, making it the secnd cstliest year after 2005 (Hurricane Katrina). Even the mst resilient lcal cmmunities and states struck by these disasters require massive amunts f federal gvernment assistance fr their recvery effrts. This reprt is intended t help guide lcal and state ecnmic recvery stakehlders including ecnmic develpment rganizatins, lcal and state gvernment agencies, chambers f cmmerce, ecnmic develpment districts and ther recvery fficials arund sme f the radblcks t using federal funds fr ecnmic recvery purpses. The reprt shares hw federal requirements can smetime hinder the recvery prcess and prvides insights abut the prcess f requesting waivers f these requirements. Many f the recmmendatins are based n input frm ecnmic recvery practitiners and federal fficials interviewed fr this research. Lcal cmmunities can use this infrmatin t help maximize the speed and efficiency f their ecnmic recvery effrts after a disaster. This reprt is divided in three sectins. The first sectin intrduces the subject and prvides an verview f the federal apprach t recvery, including presidentiallydeclared disasters and the Natinal Disaster Recvery Framewrk (NDRF). It als utlines sme f the federal prgrams assciated with ecnmic recvery and highlights majr challenges t meeting federal requirements. Disaster-impacted cmmunities that are familiar with the mst cmmn barriers t meeting federal requirements will be in a better psitin t cnfrnt challenges alng the rad t recvery. The secnd sectin prvides general guidelines fr states and disaster-impacted cmmunities fr requesting waivers f funding requirements frm federal gvernment agencies. These include: Identifying a lead rganizatin at the lcal level fr representing the ecnmic recvery interests f an impacted cmmunity; Cmmunicating early and ften with federal fficials abut federal requirements; Reviewing successful waivers f ther disaster-impacted states; Presenting unique recvery needs alngside ther cmpelling infrmatin t justify waiver requests; and Prmting frequent engagement between impacted cmmunities and the state agencies that serve as crdinatrs f disaster recvery activities. The final sectin prvides infrmatin n waivers assciated with the majr federal agencies that fund pst-disaster ecnmic recvery effrts. This includes the U.S. Department f Husing and Urban Develpment (HUD), the U.S. Ecnmic Develpment Administratin (EDA), the U.S. Small Business Administratin (SBA), the U.S. Department f Agriculture (USDA). 5

6 It als highlights the mst cmmnly requested waivers by federal agency and prvides agency specific recmmendatins fr justifying waiver requests. Readers f this reprt shuld nte that its cntent shuld be seen as a snapsht, and that federal pst-disaster funding prgrams and plicies evlve. IEDC encurages readers t peridically check disaster-preparedness-and-recvery/ cntent and recmmendatins and fr additinal resurces t help navigate federal funding prcesses and requirements fr ecnmic recvery effrts. 6

7 Sectin I Intrductin 7

8 Overview When majr disasters strike, cmmunities are seldm prepared t deal with the cmplex challenges assciated with the ecnmic recvery prcess that fllws. Catastrphes ften require massive capital infusins and assistance beynd what an individual cmmunity r state can prvide. Part f the disaster recvery prcess will almst certainly invlve the federal gvernment and its surces f financial assistance. Yet, many ecnmic develpment rganizatins (EDOs) are nt well-versed in the prcess f btaining and maximizing federal funding assistance until they are cnfrnted with having t request these funds fr the first time. This reprt is intended t infrm disaster-impacted cmmunities and their EDOs abut issues that arise with the use f federal funds fr ecnmic recvery, hw federal requirements can smetimes hinder the ecnmic recvery prcess, and t share insights n the prcess fr requesting waivers f federal requirements that pse significant barriers fr lcal cmmunities. Fr the purpses f this reprt, ecnmic recvery is defined as the recvery effrts f lcal businesses and the lcal ecnmy, and des nt cver the immediate respnse effrts fcused n life-saving and prperty-saving activities. 1 Cmmunities face many cmplex challenges when trying t meet statutry and regulatry requirements f federal funds fr disaster recvery. Amng the mst significant are labr and wage requirements, lcal r state matching funds, envirnmental reviews, incme level requirements, and the requirement that individuals, businesses, and ther entities d nt receive duplicative assistance frm different federal agencies (i.e. duplicatin f benefits). Sme federal requirements can be waived, but federal agencies require an ften lengthy justificatin prcess in which applicants must prvide detailed and frmally dcumented explanatins fr why exceptins t these requirements shuld be made. Based n myriad interviews with lcal ecnmic recvery practitiners, federal prgram fficers, state fficials, and cngressinal staff, this reprt highlights reasns that federal requirement waivers are smetimes necessary and prvides insight n hw disaster-impacted cmmunities can mve frward thrugh a waiver request prcess. While this reprt ffers guidance fr navigating the smetimes challenging prcess f requesting waivers, it is nt intended t ffer an exhaustive review f all federal prgrams that fund disaster recvery assistance. 1 While sme cmmunities may include husing as part f their ecnmic recvery effrts and husing is a critical cmpnent f cmmunity rebuilding after a disaster, this reprt des nt cver the tpic f husing assistance. 8

9 Federal Apprach t Recvery Presidential Disaster Declaratin This reprt fcuses exclusively n presidentially-declared disasters. Presidentiallydeclared disaster areas are regins r states fr which the President f the United States has issued a majr disaster declaratin that authrizes the federal gvernment t prvide pst-disaster assistance. The declaratin begins with the submissin f a written request fr federal assistance by a state gvernr t the president. 2 The advantage f a presidential declaratin is that it creates an pprtunity fr cmmunities t access a substantial amunt f federal assistance prgrams, resurces, and funding t accelerate respnse and recvery initiatives. The Natinal Respnse Framewrk (NRF) and the Natinal Disaster Recvery Framewr the federal framewrk fr disaster respnse and disaster recvery, including making existing federal pst-disaster functins wrk mre effectively tgether. Where the NRF is largely cncerned with shrt-term respnse, the NDRF cvers lng-term recvery effrts, including the vast majrity f ecnmic recvery functins. Disasterimpacted cmmunities shuld develp a brad understanding f the NDRF, as it helps t infrm state and lcal fficials abut the federal recvery prcess and prgrams that may be available t impacted cmmunities. The fllwing sectin highlights the purpse and resurces f the NDRF. Natinal Disaster Recvery Framewrk The Natinal Disaster Recvery Framewrk (NDRF) prvides guidance n hw federal gvernment agencies crdinate disaster recvery assistance with ne anther and with state, tribal, and lcal gvernments with the gal f assisting disaster-impacted cmmunities with recvery effrts. The NDRF recgnizes that lcal, state, and tribal gvernments bear the chief respnsibility fr cmmunity recvery effrts, but that federal resurces are necessary t supplement the lcal recvery needs. rvide a cmprehensive rganizing structure fr disaster recvery that all levels f gvernment can fllw. The nngvernmental partners t align resurces and wrk tgether t supprt recvery 3 cre principles that are reflected in six recvery supprt functins (RSFs) (Primary crdinating agencies are in parentheses). 2 3 This prcess is set frth in the Rbert T. Staffrd Disaster Relief and Emergency Act, 42 U.S.C (Staffrd Act) Natinal Disaster Recvery Framewrk - Frequently Asked Questins. Federal Emergency Management Agency (FEMA) website. Available at June 10,

10 1. Cmmunity Planning and Capacity Building (Federal Emergency Management Agency (FEMA)) 2. Ecnmic 3. Health and Scial Services (Department f Health and Human Services (HHS)) 4. Husing (Department f Husing and Urban Develpment (HUD)) 5. Infrastructure Systems (United States Army Crps f Engineers (CORPS)) 6. Natural and Cultural Resurces (Department f the Interir (DOI)) (EDA)) In additin t pst-disaster recvery, the NDRF als seeks t establish leadership rles, respnsibilities, crdinatin, and guide recvery planning between all levels f gvernment befre a disaster ccurs. The majrity f federal agencies are legally bligated t initially crdinate with a then determine which state agency will manage disaster recvery funds fr specific (CDBG-DR)). 10

11 Federal Agencies and Prgrams fr Ecnmic Recvery The fllwing sectin prvides a list f cmmnly used federal funding surces fr pst-disaster ecnmic recvery. While this list is nt exhaustive, it highlights many f the mst imprtant federal agencies and prgrams respnsible fr prviding federal ecnmic recvery resurces. Ecnmic develpment prfessinals are encuraged t use the infrmatin in this sectin as a starting pint n which t build a mre cmprehensive knwledge base abut federal ecnmic recvery funding mechanisms. U.S. Department f Husing Cmmunity Develpment Blck Grants fr Disaster Recvery Develpment (CPD) administers the Grant fr Disaster Recvery (CDBG-DR) prgram. This prgram has served as the majr surce f recvery funds fr mst presidentially-declared disasters ver the past 25 years. In additin t helping supplement ther federal disaster recvery funding resurces such as the (SBA) Disaster Lan prgram, CDBG- - impacted areas and prvide cmmunities with vital seed funding t begin the recvery prcess. 4 CDBG-DR funds can nly be used fr - relief, lng-term recvery, and the restratin f infrastructure, husing, and Federal Recvery Assistance U.S. Department f Husing and Urban Develpment Cmmunity Develpment Blck Grants fr Disaster Recvery U.S. Small Business Administratin Disaster Recvery Lans Hme/Persnal Prperty Lan Business Physical Disaster Lan Ecnmic Injury Disaster Lan U.S. Ecnmic Develpment Administratin Strategic Planning and Technical Assistance Infrastructure Design and Develpment Capital fr Alternative Financing U.S. Emplyment and Training Administratin Natinal Emergency Grants (NEGs) Disaster U.S. Department f Agriculture Rural Develpment Rural Business Enterprise Grants Rural Business Opprtunity Grants Intermediary Relending Prgram Rural Ecnmic Develpment Lans and Grants Cmmunity Facilities Lans and Grants Water and Waste Direct Lans Business and Industry Guaranteed Lan Prgram Bimass Crp Assistance Prgram Birefinery Assistance Prgram Bienergy Prgram fr Advanced Bifuels Rural Energy fr America Prgram Bimass Research and Develpment Initiative 4 CDBG Disaster Recvery Assistance. U.S. Department f Husing and Urban Develpment (HUD) website. Accessed at: 11

12 5 It is wrth nting that there is n set frmula r prcess fr dcumenting hw a prject is related the afrementined criteria. A grantee in discussins with a federal prgram fficer has sme discretin in determining what type f dcumentatin is sufficient. When submitting an applicatin, grantees must als demnstrate that a prject r prgram (1) addresses a disaster-related impact fr a cunty in a presidentially-declared disaster area; (2) is a legitimate CDBG-eligible 6 and mderate incme (LMI); (2) aiding the preventin r eliminatin f slums r blight; r (3) meeting ther urgent cmmunity develpment needs due t an immediate threat f cmmunity health and welfare. 7 In interviews with ecnmic develpment prfessinals that have used CDBG-DR grants after a disaster, the mst frequently cited cncerns are difficulties with meeting ne f the three natinal bjectives, particularly the LMI requirement, and the significant amunt f cmpliance paperwrk that the prgram requires. U.S. Department f Cmmer Ecnmic Develpment Administratin develpment assistance t lcal gvernments fr lng-term cmmunity ecnmic 8 EDA ffers this assistance directly t impacted cmmunities in the frm f grants fr strategic planning, infrastructure, capital fr alternative financing (i.e. revlving lan funds), ecnmic develpment and redevelpment prjects, and funding fr disaster recvery crdinatrs. EDA reginal ffices wrk directly with lcal cmmunities thrugh an established netwrk f ecnmic develpment districts (EDDs). The full list f eligible EDA grant recipients includes: (1) states and plitical subdivisins f states (i.e., twns and cunties); (2) public r private nnprfit assciatins; (3) ecnmic develpment districts (r reginal planning agencies); (4) institutins f higher educatin; (5) tribal gvernments; and (6) applicants lcated in, r applying n behalf f, a cunty that received a majr disaster declaratin. While EDA is a smaller surce f disaster recvery funding cmpared t prgrams like -DR, IEDC interviewees nted that EDA grants were mre flexible surces f ecnmic recvery funding because f the cmparatively mre limited amunt f federal requirements and ease f grant cmpliance Ibid. Guide t Natinal Objectives and Eligible Activities fr State CDBG Prgrams. U.S. Department f Husing and Urban Develpment Website. e Disaster Recvery. U.S. Ecnmic Develpment Administratin website. Accessed at: 12

13 U.S. Small Business Admin The U.S. Small Business Administratin (SBA) ffers disaster recvery assistance in the frm f Disaster Lans fr businesses and mst private nnprfit rganizatins. These lans are ffered t disaster-impacted businesses f all sizes fr repairing r replacing real estate, persnal prperty, equipment, and business assets damaged in a disaster. SBA Disaster Lans prvide lw-interest, lng-term lans fr physical and ecnmic damage caused by a presidentially-declared disaster thrugh the SBA Office f Disaster Assistance. fr disaster-impacted businesses. These lans help businesses with regular and necessary financial bligatins that they cannt t meet because f disaster impacts. disaster recvery perid and are available fr businesses and business wners wh cannt cver the full csts f their wn recvery withut financial assistance frm gvernment surces. 9 and Training (NEGs) fr Disaster that assist dislcated wrkers, and the cmmunities in which they live and wrk, 10 The NEG prgram funds ne f fur eligible layff events: (1) a single cmpany layff f 50 r mre wrkers; (2) multiple cmpany layffs, where 50 r mre wrkers frm each cmpany are dislcated; (3) industry-wide layffs; r (4) layffs affecting an entire cmmunity (Cmmunity Impact), where there are multiple small dislcatins (50 wrkers r less frm each cmpany). 11 The Disaster NEG prgram prvides funding specifically fr the creatin f temprary emplyment t assist directly with disaster cleanup activities fr the first six mnths frm the date the grant is awarded. A state can include a cmpnent fr emplymentrelated services in its fully dcumented plan r mdificatin request. Disaster NEGs are nly available t state gvernments and require that FEMA has declared a disaster area eligible fr public assistance. U.S. Department f A Rural Develpment Disaster Assistance USDA Rural Develpment ffers federal funding resurces fr pst-disaster cmmunity ecnmic recvery purpses that fall within three categries f business prgrams: (1) revlving lan funds and technical assistance; (2) cmmercial lending; and (3) energy prvide financing and technical assistance fr setting up revlving lan fund prgrams, wrking capital lans, real estate, financing prgrams, ecnmic develpment planning, business develpment, real estate feasibility analyses, cnstructin, capital imprvement, and machinery r equipment purchases. USDA Rural Develpment als As determined by SBA. Emplyment and Training Administratin. Accessed at: Ibid. 13

14 prvides guaranteed lans generating r maintaining emplyment. US fcus n renewable energy, energy efficiency, bimass, birefinery, and bienergy prjects. U.S. Cmmunity Develpment Financial Institutins (CDFI) Fund The purpse f the U.S. Treasury Depart int Cmmunity Develpment Financial Institutins (CDFIs), which serve lwerincme cmmunities that lack sufficient access t affrdable financial services. The CDFI Fund ffers tw funding ptins t CDFIs: Technical Assistance awards and Financial Assistance awards. 12 These financial institutins wrk tward the fllwing bjectives: 13 Prmting ecnmic develpment, jb creatin, and develp businesses and cmmercial real estate; Prmting hme wnership and affrdable husing develpment; and Prviding financial services fr cmmunity develpment (e.g., financial literacy prgrams, alternatives t predatry lending, and basic banking services). After a disaster, CDFIs can ffer crucial alternative financing and technical assistance t lcal small businesses. CDFIs have becme increasingly imprtant cntributrs t the ecnmic recvery prcess, as their financial terms generally ffer greater flexibility t suit small business needs. Fllwing Hurricane Sandy, lcal CDFIs were disaster-impacted businesses. This alternative financing surce was critical fr quickly getting funds t small businesses while these businesses waited fr traditinal surces f disaster financing such as insurance settlements Ibid. 14 CDFIs and Hurricane Sandy A Key Partner in Disaster Recvery Effrts January 31, Accessed at: 14

15 Overview f Federal Requirements Federal requirements ensure the financial integrity f public tax dllars. Under nrmal, nn-disaster cnditins, these requirements set perfrmance and cmpliance standards fr state and lcal recipients f federal funds. Yet, these requirements d nt ften reflect the realities f pst-disaster envirnments. Disasters can strike with little r n warning, and damages t cmmunities and states can ttal billins f dllars. Disasters ften frce lcal cmmunities and states t face dramatic scial, humanitarian, and ecnmic cnsequences in an extremely shrt perid f time, and ty t recver frm catastrphic damages. Speed majr disaster. Accrding t industry experts, apprximately 25 t 40 percent f impacted small businesses never repen r are likely t clse within tw years f an event. Every day a business remains clsed spells lst revenue fr bth the individual business and the cmmunity. Mrever, businesses ften depend n lcal suppliers and custmer bases that are als likely t have been impacted. It is vital that cmmunity ecnmy recvery effrts mve quickly and with full crdinatin amng cmmunity lcal, state and federal recvery fficials. As partners in the disaster recvery prcess, the federal gvernment has put frth great effrt t streamline and accelerate the ecnmic recvery prcess fr cmmunities and states. Certain federal requirements can, hwever, impede r halt recvery assistance effrts and slw recvery prcesses fr mnths r years. In interviews with IEDC, ne state-level disaster recvery fficial characterized many f fficial urged ther disaster-impacted cmmunities t carefully scrutinize the regulatins f federal recvery prgrams and cnsider requesting waivers f any and Fllwing a disaster, funding delays carry huge pprtunity csts, as lcal businesses that cannt quickly access vital funds ften face grim survival prspects. In this cntext, the value f waivers is clear. Lcal cmmunities that are able t temprarily repeal certain federal funding requirements can accelerate the prcess f getting necessary funds t the businesses and rganizatins that desperately need them. Definitins f Federal Requirements T better understand what federal requirements may r may nt be waived, it is imprtant t nte the distinctin between statutry requirements and regulatry requirements. Federal requirements are created when the U.S Cngress enacts legislatin that defines federal statutes that gvern U.S. gvernment agencies and assciated prgrams. These statutes are then cdified in what is knwn as the U.S. Cde. These statutry requirements are cnsidered fficial federal law and can nly be changed r waived by subsequent acts f Cngress. After Cngress creates federal statutes, federal agencies then interpret these statutes t develp specific agency regulatins and rules fr their funding prgrams. These resulting regulatins are published in the Cde f Federal Regulatins (CFR) and can -disaster) regulatins under which federal 15

16 agencies perate prgrams and disburse federal funds. Federal agencies generally have brader discretin t mdify r waive these regulatry requirements. By cmparisn, after a disaster strikes and the U.S. President has issued a federal disaster declaratin, Cngress can then authrize supplemental disaster-related legislatin that adjusts the requirements f a federal (e supplemental legislatin specifies alternative requirements fr these prgrams and effectively creates a disaster recvery versin f a -DR). A significant amunt f disaster assistance funding cmes thrugh these emergency supplemental apprpriatins, which are mre funding apprpriatins g beynd the regular agency budgets authrized in annual apprpriatin bills and may als be subject t additinal federal requirements. Definitins f Waivers strict regulatry cmpliance upn a finding f gd cause, subject t statutry limitatins and waiver nt t certain federal regulatins cdified in the Cde f Federal Regulatins (CFR). 15 A federal agency may chse t waive a regulatry requirement but in mst cases an alternative requirement will be specified. Fr example, under nrmal circumstances EDA may require cmmunities t prvide a 50 Cmmnly Requested Waivers U.S. Dept. f Husing and Urban Develpment CDBG Actin Plan Requirement Annual Perfrmance Review Reprting Requirement Citizen Participatin Requirement Expanded Distributin and Direct Actin Cnsistency with Cnslidated Plan Requirement Overall Benefit t Lw-t-Mderate (LMI) Persns General Administratin Limitatin/Cap Use f Sub-Recipients Prgram Incme Requirements Eligibility Husing Related Buildings fr General Cnduct f Gvernment Jb Relcatin/Anti-Pirating Requirements Standard Certificatins Requirements Applicatin Requirements fr Allcatins Under Supplemental Apprpriatins Act U.S. Ecnmic Develpment Administratin Matching Share Requirements and Investment Rates Cmprehensive Ecnmic Develpment Strategy (CEDS) Requirement EDA Prcedures in Disaster Areas U.S. Small Business Administratin Timeline Requirement fr SBA Lan Increase Maximum Amunt Requirement fr Physical Disaster and Ecnmic Injury Business Lans Federal Debt Cllectin Requirement U.S. Emplyment and Training Administratin 6-mnth Limit n Emplyment fr Disaster NEG Participants U.S. Department f Agriculture Rural Develpment Rural Area Definitin Requirement Limitatin n Grant Amunts Matching Funds Requirement fr Cmmunity Facilities Prgram Requirements fr Renewable Energy Systems/Energy Efficiency Imprvements Requirements fr Value-Added Prducer Grants 15 U.S. Department f Husing and Urban Develpment Office f Public and Indian Husing. Prcessing Requests fr Regulatry Waivers. Available at: 16

17 percent lcal funding match t receive an EDA grant award. Hwever, EDA may waive this requirement and nly impse a 20 percent funding match requirement. It is imprtant t nte that sme federal agencies may nt explicitly refer t remving waive requirements, prgram fficers at these agencies may repeal a particular requirement withut necessarily explaining t a grantee it has been fficially waived. It shuld als be nted that sme federal agency headquarters and reginal ffices may have mre flexible interpretatins f sme statutry and regulatry requirements listed in federal legislatin. 17

18 Issues Impacting Federal Supprt fr Ecnmic Recvery Different cmmunities face many cmmn challenges using federal funding fr ecnmic recvery purpses. Based n interviews with lcal- and state-level recvery practitiners, sme f the mst frequently cited challenges that hinder swift and efficient use f federal funding include: Lack f knwledge abut federal prgrams fr disaster recvery Different perfrmance, cmpliance and reprting requirements f varius federal agencies and prgrams Variatin and ambiguity f statutry and regulatry requirement interpretatins acrss lcal, state, and federal fficials Onerus requirements such as federal funding matches Timeliness in clarifying and interpreting federal requirements, which can substantially delay disbursement f funds Lack f Knwledge f Federal Prgrams One f the mst bvius challenges fr cmmunities seeking t btain federal waivers is a sheer lack f knwledge abut the varius federal prgrams available. It is critical t build an understanding f the varius federal disaster recvery prgrams ideally befre a disaster strikes s that cmmunities are better prepared t navigate the applicatin and waiver request prcess. Eligibility requirements can vary widely acrss different federal prgrams and can be cnfusing fr cmmunities withut prir experience. Different Reprting Requirements fr Grant Cmpliance Requirements can vary significantly acrss different federal agencies and funding prgrams. Different federal agency requirements are impsed t encurage grantees t achieve specific bjectives and prgram utcmes. Fr example, interpretatins f envirnmental requirements fr HUD-funded prjects can vary significantly frm the envirnmental requirements that the U.S. Army Crp f Engineers impses n the same pst-disaster redevelpment prject. In interviews with IEDC, an fficial invlved in the ecnmic recvery effrts f the state f Mississippi referenced an example f a HUD envirnmental regulatin that disallws any HUD-funded prject t be within a mile f any abve-grund explsive r flammable strage tanks f 100 gallns r mre. The issue became a significant barrier t addressing the urgent need fr rental prperty cnstructin and recnstructin, as the area in which HUD-funded disaster recvery prjects were t take place was ppulated with prpane tanks used fr residential hme and water heating. 18

19 Interpreting Requirements between Levels f Gvernment While this paper fcuses n federal requirements, it is imprtant t understand that each state als has legal requirements that gvern and impact the ecnmic recvery prcess. The federal gvernment generally takes these state requirements int accunt by nting in varius federal legislatin that all actins related t federal disaster and ecnmic recvery funds must cmply with state laws as well. Yet, federal legislatin and state legislatin may nt always align. One example mentined by recvery ff cmparatively mre restrictive definitin and interpretatin f husing regulatins than federal requirements. This led t cnfusin and delays in administering federal funding fr husing-related recvery effrts in the state. Funding Match Requirements: Asking T Much frm Impacted Cmmunities? Disaster fficials ften nte the challenge that impacted cmmunities encunter when trying t meet federal matching requirements fr disaster recvery prjects. On ne hand, many federal funding prgrams require that all ther financial resurces be exhausted prir t awarding federal funds. On the ther hand, ther federal disaster recvery funding prgrams require a disaster-impacted cmmunity t generate a -share requirement). Disaster recvery practitiners nted in interviews that lcal disaster-impacted cmmunities are ften cash-strapped after suffering a disaster and have extremely limited capacities t generate funding fr a match-share requirement. They expressed sme degree f exasperatin that disaster-impacted cmmunities are asked t simultaneusly meet tw cmpeting requirements (i.e. exhaust all funding while generating match-share funds) in rder t access critical surces f federal funding. Timeliness in Interpreting Federal Requirements Anther cmmn cncern amng experienced cmmunity disaster recvery prfessinals is the speed with which federal disaster recvery funding prgrams are able t disburse funding t disaster-impacted cmmunities. There are many factrs that affect the timeliness f disbursing federal disaster recvery funding, mst f which are beynd the scpe f this reprt. Hwever, it is sufficient t say that the mre prepared a disaster-impacted cmmunity is with regard t understanding the prcess f applying fr waivers f funding requirements, the mre likely the chances that federal disaster recvery funds will be disbursed mre quickly. 19

20 Sectin II General Guidelines fr Requesting Waivers 20

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