[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]
[Proposed Rules]
[Pages 71474-71490]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29642]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 1000
[Docket No. FR-5275-P-11]
RIN 2577-AC80
Native American Housing Assistance and Self-Determination
Reauthorization Act of 2008: Amendments to Program Regulations
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would make several revisions to the
regulations governing the Indian Housing Block Grant (IHBG) Program and
the Title VI Loan Guarantee Program. HUD negotiated the proposed rule
with active Tribal participation under the procedures of the Negotiated
Rulemaking Act of 1990, pursuant to the Native American Housing
Assistance and Self-Determination Reauthorization Act of 2008. The
proposed regulatory changes would implement statutory amendments and
reflect the consensus decisions reached by HUD and the Tribal
representatives.
DATES: Comment Due Date: January 17, 2012.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 7th Street
SW., Room 10276, Washington, DC 20410-0500. Communications must refer
to the above docket number and title. There are two methods for
submitting public comments. All submissions must refer to the above
docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
http://www.regulations.gov Web site can be viewed by other commenters
and interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments
must be submitted through one of the two methods specified above.
Again, all submissions must refer to the docket number and title of
the rule. No Facsimile Comments. Facsimile (FAX) comments are not
acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at (202) 708-3055 (this
is not a toll-free number). Individuals with speech or hearing
impairments may access this number via TTY by calling the toll-free
Federal Relay Service at (800) 877-8339. Copies of all comments
submitted are available for inspection and downloading at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Rodger J. Boyd, Deputy Assistant
Secretary for Native American Programs, Office of Public and Indian
Housing, Department of Housing and Urban Development, 451 7th Street
SW., Room 4126, Washington, DC 20410; telephone number (202) 401-7914
(this is not a toll-free number). Hearing- or speech-impaired
individuals may access this number via TTY by calling the toll-free
Federal Relay Service at 1-(800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
The Native American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) changed the way that housing
assistance is provided to Native Americans. NAHASDA eliminated several
separate assistance programs and replaced them with a single block
grant program, known as the Indian Housing Block Grant (IHBG) Program.
In addition, Title VI of NAHASDA authorizes Federal guarantees for the
financing of certain Tribal activities (under the Title VI Loan
Guarantee Program). The regulations governing the IHBG and Title VI
Loan Guarantee programs are located in part 1000 of HUD's regulations
in title 24 of the Code of Federal Regulations. In accordance with
section 106 of NAHASDA, HUD developed the regulations with active
Tribal participation under the procedures of the Negotiated Rulemaking
Act of 1990 (5 U.S.C. 561-570).
The Native American Housing Assistance and Self-Determination
Reauthorization Act of 2008 (Pub. L. 110-411, approved October 14,
2008) (NAHASDA Reauthorization Act) reauthorizes NAHASDA through
September 30, 2013, and makes a number of amendments to the statutory
requirements governing the IHBG and Title VI Loan Guarantee programs.
The NAHASDA Reauthorization Act amends section 106 of NAHASDA by
providing that HUD shall initiate a negotiated rulemaking in order to
implement
[[Page 71475]]
aspects of the 2008 Reauthorization Act that require rulemaking. On
January 5, 2010, at 75 FR 423, HUD published a Federal Register notice
announcing the final list of members of the Native American Housing
Assistance and Self-Determination Negotiated Rulemaking Committee (the
NAHASDA Rulemaking Committee, or the Committee).
The NAHASDA Rulemaking Committee convened for one, 2-day meeting
and five, 3-day meetings in Scottsdale, Arizona; Westminster, Colorado;
Seattle, Washington; and St. Paul, Minnesota, from March to August
2010. Under the terms of the charter approved by the Committee, the
negotiations were to focus on implementation of NAHASDA, as amended,
except that subpart D of 24 CFR part 1000, which governs the NAHASDA
allocation formula, was generally to be excluded from the negotiations.
(The committee nonetheless agreed by consensus to make minor revisions
to regulations in subpart D in order to address issues that primarily
involved provisions under subpart C.) HUD also agreed to consider
issues that did not directly arise from statutory amendments, if time
permitted.
II. This Proposed Rule
This proposed rule would amend HUD's regulations by implementing
statutory amendments to NAHASDA. The proposed rule would make changes
to the regulations under subpart A of 24 CFR part 1000 regarding the
guiding principles of NAHASDA, definitions, labor standards,
environmental review procedures, procurement, Tribal and Indian
preference, and program income. Proposed changes to subpart B of 24 CFR
part 1000 address eligible families, useful life of properties, and
criminal conviction records. Proposed changes to subpart C of 24 CFR
part 1000 would address the Tribal program year, Indian Housing Plan
(IHP) requirements, administrative and planning expenses, reserve
accounts, local cooperation agreements, and exemption from taxation.
Proposed changes to subpart D of part 24 would address certain formula
information that must be included in the IHP and Annual Performance
Report (APR), as well as the date by which HUD must provide data used
for the formula and projected allocation to a Tribe or Tribally
Designated Housing Entity (TDHE). Proposed changes to subpart E of 24
CFR part 1000 would address financing guarantees. Finally, proposed
changes to subpart F of 24 CFR part 1000 would address HUD monitoring,
APRs, APR review, HUD performance measures, recipient comments on HUD
reports, remedial actions in the event of substantial noncompliance,
audits, submission of audit reports, and records retention.
Following is a section-by-section description of provisions that
HUD proposes under this rule:
Subpart A
Section 1000.2, Guiding Principles
Section 1000.2 would be revised to conform it to the provision of
amended NAHASDA section 2, that the Federal government ``shall'' work
to provide housing assistance and to assist development of private
finance mechanisms, and that Federal assistance ``shall'' be provided
in a manner that recognizes Indian self-determination and self-
governance. Prior to the NAHASDA Reauthorization Act, these provisions
stated that the Federal government and Federal assistance ``should''
comply with the stated principles.
Section 1000.9, Negotiated Rulemaking
Section 1000.9 would establish provisions that apply to the
negotiated rulemaking process that is used under NAHASDA. Paragraph (a)
would require HUD to appoint representatives of the Federal government
and representatives of diverse Tribes and program recipients. Paragraph
(b) would codify the requirement of NAHASDA section 106(b)(2)(C) for
HUD to initiate negotiated rulemaking within 90 days after enactment of
any act reauthorizing NAHASDA, as well as any act that significantly
amends NAHASDA. Paragraph (c) would provide that negotiated rulemaking
committees may establish workgroups to develop proposals. Paragraph (d)
would provide that the committee submits recommended rules to HUD and
that once HUD determines what rules it will propose, it will publish
notice of the proposal in the Federal Register. Finally, it would
provide that the committee and HUD will review public comments before
HUD makes a determination on the provisions of the final rule.
Section 1000.10, Definitions
Section 1000.10(b) would add a new definition of ``housing related
activities,'' which is used in proposed Sec. 1000.64 with respect to
permissible use requirements for program income. The proposed
definition would be modeled, in significant part, on the new statutory
definition of ``housing related community development.'' Section
1000.10(b) would codify in regulations the new statutory definition of
``housing related community development,'' which are those activities
that may be financed with notes and other obligations guaranteed by HUD
pursuant to section 601 of NAHASDA. It would revise the existing
definition of ``Indian Area'' to conform to the amended definition in
NAHASDA. It would also add a new definition of ``outcomes,'' which is
used in NAHASDA section 102(b) to describe information required to be
in the IHP, and which would be used in Sec. 1000.512 to describe items
required to be included in IHPs and performance reports. Section
1000.10(b) would also add a new definition of ``Tribal program year,''
which is used in Sec. Sec. 1000.110, 1000.201, 1000.214, and 1000.216
to specify the basis on which grants are provided and the date by which
IHPs must be submitted to HUD. The definition would provide that
``Tribal program year'' means the fiscal year of the recipient.
Section 1000.12, Nondiscrimination Requirements
Section 1000.12(d) would be revised to conform to amended NAHASDA
section 201(b)(6), which exempts Federally recognized Tribes and their
TDHEs from Title VI of the Civil Rights Act of 1964 and the Fair
Housing Act in carrying out activities under NAHASDA. It would also
provide that state-recognized Tribes may provide preference to Tribal
members and other Indian families pursuant to NAHASDA section 201(b),
and in employment and contracting pursuant to NAHASDA section 101(k).
Section 1000.16, Labor Standards
Section 1000.16 would be revised to add a paragraph (e) based on
NAHASDA section 104(b)(3), which addresses the applicability of Tribal
laws that require payment of not less than prevailing wages to certain
workers. The statute provides that if a contract or agreement for
assistance, sale, or lease pursuant to NAHASDA is covered by such a
Tribal law or laws, then the contract or agreement is not required to
contain a provision requiring payment of prevailing wages in accordance
with section 104(b)(1). The current paragraph (e) of 1000.16 would be
redesignated as paragraph (f). In addition, the citation to the Davis-
Bacon Act in paragraph (a) would be revised to reflect current
codification of the provision referenced in amended section 104(b)(1)
of NAHASDA, and the citation to the Contract Work Hours and Safety
Standards Act in paragraph (c) would be
[[Page 71476]]
updated to reflect the current codification of the referenced
provision.
The Committee draft included a provision that addressed
construction and development contracts that are entered into by a
recipient. The language sought to clarify that such construction and
development contracts, if entered into pursuant to a HUD contract or
agreement for assistance, sale, or lease under NAHASDA, are not
required to contain the prevailing wage provision referenced in NAHASDA
section 104(b)(1) if the contracts are subject to Tribal laws that
require payment of not less than prevailing wages. Upon further review,
HUD determined that revision of the draft rule provision was needed in
order to reconcile the intent of the Committee with language as used in
the statute, but the Committee did not take up the draft provision
again. Although this proposed rule does not include the described
provision, HUD agrees that such construction and development contracts
are not required to include the provision referenced in NAHASDA section
104(b)(1) under the described circumstances. HUD notes that in addition
to construction and development contracts, contracts for the operation
(including maintenance) of NAHASDA-assisted affordable housing are not
required to include the provision under the described circumstances,
and work performed directly by Tribal or TDHE employees on NAHASDA-
assisted housing is also not subject to the provisions in section
104(b)(1) in those circumstances. HUD specifically solicits public
comment on whether inclusion of a provision clarifying these exclusions
would be necessary or beneficial in the final rule.
Section 1000.21, Waiver of Environmental Review Procedures
A new Sec. 1000.21 would be added to conform to NAHASDA section
105(d), which establishes the circumstances under which HUD may waive
certain procedural requirements for the submission of certifications
related to environmental reviews performed by Tribes. Following the
amendment enacting section 105(d) of NAHASDA, HUD established, through
the issuance of program Notice CPD-04-08, procedures \1\ for requesting
a waiver of the statutory environmental review requirements. It is
HUD's policy to follow the procedures in Notice CPD-04-08 when
processing environmental review waivers.
---------------------------------------------------------------------------
\1\ The following is a brief summary of these procedures. When a
procedural or nonsubstantive violation of NEPA by a Tribe has been
identified, the grantee has the opportunity to request a waiver. The
waiver request must be in writing and include all available and
relevant information necessary for HUD to complete an environmental
review under 24 CFR part 50. HUD conducts a site visit and prepares
and signs the environmental assessment. The waiver request, executed
environmental assessment, and all supporting documentation are
provided to the Headquarters Office of Native American Programs
(ONAP) for review. If the waiver request is acceptable, the Deputy
Assistant Secretary for Native American Programs forwards it to the
Environmental Review Division of the Office of Community Planning
and Development (CPD). CPD has NEPA oversight authority for HUD.
After appropriate review and consideration, if the waiver package is
found to comply with section 105(d) of NAHASDA, it is then approved
by the Assistant Secretary for Public and Indian Housing and the
Assistant Secretary for CPD, and the grantee is notified that the
waiver is approved.
---------------------------------------------------------------------------
Section 1000.26, Procurement
Section 1000.26 would incorporate two statutory provisions related
to procurement. The exemption in NAHASDA section 203(g) of procurements
of less than $5,000 from competitive requirements would be incorporated
in Sec. 1000.26(a)(11)(iii), and the provision in section 101(j) that
recipients may use Federal supply sources made available by the General
Services Administration would be incorporated in Sec.
1000.26(a)(11)(iv). The existing regulatory provision with respect to
bonding requirements in procurement would be redesignated as Sec.
1000.26(a)(11)(ii).
Section 1000.42, Section 3 of the Housing and Urban Development Act of
1968
Section 1000.42 would address section 3 of the Housing and Urban
Development Act of 1968, which requires certain HUD recipients (e.g.,
recipients of more than $200,000 in HUD housing and community
development assistance for a covered project) to provide economic
opportunities to low- and very low-income residents. New paragraph (c)
would clarify that recipients meet the section 3 requirements when they
comply with employment and contract preference laws adopted by their
Tribe in accordance with section 101(k) of NAHASDA. Paragraph (d) would
provide that for purposes of section 3, NAHASDA funding is subject to
the requirements applicable to the category of programs entitled
``Other Programs'' that provide housing and community development
assistance. The proposed provision would serve to clarify that NAHASDA
recipients do not fall under the alternative category of recipients
under section 3, which is for public and Indian housing agencies that
award contracts in connection with assistance for development,
modernization of units, and the operation of programs and projects
under the 1937 Act. NAHASDA recipients do not receive assistance under
the 1937 Act.
Sections 1000.48, 1000.50, and 1000.52, Tribal and Indian Preference
Sections 1000.48, 1000.50, and 1000.52 would be revised to
implement section 101(k) of NAHASDA, which provides that the employment
and contract preference laws of a Tribe that receives the benefit of a
grant (or portion of a grant) apply to the administration of the grant
(or portion of a grant), notwithstanding any other provision of law.
Sections 1000.48, 1000.50, and 1000.52 would clarify that a
recipient is required to apply Tribal preference in employment and
contracting, if a Tribe has enacted Tribal preference laws, and that
only to the extent that such Tribal preference laws have not been
enacted, a recipient must instead apply Indian preference, as required
under section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e(b)).
In addition, Sec. Sec. 1000.48(c) and 1000.52(d) would clarify
that the exemption in NAHASDA section 203(g) for procurements of less
than $5,000 from competitive rules and procedures serves to exempt such
procurements from Indian preference requirements under section 7(b) of
the Indian Self-Determination and Education Assistance Act.
Sections 1000.26, 1000.62, and 1000.64, Program Income
The NAHASDA Reauthorization Act amended NAHASDA section
104(a)(1)(B) to change one of the conditions for a recipient to be able
to retain program income. The amendment removed the requirement for a
recipient to agree to use the program income for ``affordable housing
activities'' in accordance with NAHASDA, and replaced it with a
requirement for the recipient to agree to use the program income for
``housing related activities'' in accordance with NAHASDA. Accordingly,
a new Sec. 1000.64 would address the permissible uses of program
income and clarify that the requirement for program income to be used
for ``housing related activities'' is the only applicable Federal
requirement. (As discussed above, ``housing related activities'' would
be defined in Sec. 1000.10(b).) This clarification is consistent with
HUD's treatment of proceeds of sale as outlined in the notice titled
``IHBG Program: Notice of Revision to Transition Requirements--Proceeds
of Sales of Former 1937 Act
[[Page 71477]]
Homeownership Units,'' published in the Federal Register on April 1,
1999 (64 FR 15778). In addition, the provision in Sec. 1000.62(b) that
reflects the former statutory provision regarding ``affordable housing
activities'' would be removed, so that Sec. 1000.62 would address only
what constitutes program income, rather than its permissible uses. The
heading of Sec. 1000.62 would be revised accordingly. Finally,
consistent with the amendments to NAHASDA section 104(a)(2) regarding
expenditure of program income, Sec. 1000.26(a)(5) would be revised to
provide that a recipient may draw down or expend IHBG funds before
expending program income.
Section 1000.58, Investment of IHBG Funds
Paragraph (f) of Sec. 1000.58 would be revised to remove the
current restriction on investing IHBG funds that have been allocated
for the operating subsidy element of the Formula Current Assisted
Housing Stock (FCAS) component of the IHBG formula. Paragraph (g) would
be revised to increase the permissible period of investments from 2 to
5 years. These changes would provide recipients greater flexibility in
their financial management of IHBG funds pending their expenditure on
IHBG activities.
Subpart B
Sections 1000.104, 1000.106, 1000.108, 1000.110, 114, 116, and 118,
Eligible Families
The NAHASDA Reauthorization Act amended NAHASDA section 201(b)(3),
which provides that, notwithstanding the general requirement for
assistance to be provided to low-income Indian families, recipients may
provide housing to other families whose presence is essential to the
well-being of Indian families. The amendment removed the provision that
the exception is for ``non-Indian'' essential families. Accordingly,
corresponding regulatory references to ``non-Indian'' essential
families would be removed throughout Sec. Sec. 1000.104, 1000.106,
1000.108, 1000.110, 1000.114, 1000.116, and 1000.118.
Section 1000.110(a) would clarify that a family that is low income
at the times specified in redesignated Sec. 1000.147, but which
subsequently becomes non low-income due to an increase in income, may
continue to participate in the program in accordance with the
recipient's admission and occupancy policies. The provision would
clarify that NAHASDA does not prohibit the recipient from continuing to
serve such families, but that the policy determination is to be made by
the recipient. Amounts of assistance expended on such families would
not be counted toward the 10 percent limit (or a higher limit approved
by HUD) under Sec. 1000.110(c). Such families, as well as a family
member or household member who takes ownership of a homeownership unit
under Sec. 1000.146, would not be subject to the requirements of
redesignated Sec. 1000.110(b), but would be subject to the limitations
on benefits that non low-income families may receive under Sec.
1000.110(d) only to the extent provided in the recipient's admission
and occupancy policies.
Section 1000.110(b), which enumerates three activities that may
serve non low-income families, would be removed to conform to the
amendment that removed these enumerated activities in NAHASDA section
201(b)(2). The NAHASDA amendment added a blanket provision that any
affordable housing activities may be provided to non low-income
families to the extent that HUD approves the activities due to a need
that cannot be reasonably met without the assistance. Prior to the
statutory amendment, non low-income families could receive only
homeownership assistance under section 202(2), model activities under
section 202(6), or loan assistance activities under Title VI of
NAHASDA.
In addition, redesignated Sec. 1000.110(c) would be revised to
provide that a recipient may, without HUD approval, use up to 10
percent of the amount it plans to spend in a Tribal program year,
rather than 10 percent of the amount of its annual grant, for families
whose income falls within 80 to 100 percent of median income. (Use of
amounts in excess of 10 percent would still require HUD approval.) This
change would be consistent with HUD's practice of no longer requiring
recipients to track expenditures against particular annual grants.
Instead, activities and expenditures would be tracked to the grantee's
fiscal year on a rolling year-to-year basis.
Redesignated Sec. 1000.110(e) would clarify that amounts of
assistance expended on essential families would not be counted toward
the 10 percent limit (or a higher limit approved by HUD) under Sec.
1000.110(c). It would retain the existing provision that essential
families are not subject to the limitations on benefits that non low-
income families may receive under Sec. 1000.110(d).
Finally, Sec. 1000.104(d) would incorporate the provision in
NAHASDA section 201(b) that housing assistance may be provided to a law
enforcement officer whose presence the recipient determines will deter
crime.
Sections 1000.141, 1000.142, 1000.143, 1000.144, 1000.145, and
1000.146, Useful Life
Proposed Sec. 1000.146 would incorporate the provision of NAHASDA
section 205(c), which provides that a family or household member who
subsequently takes ownership of a homeownership unit is not subject to
the binding commitment requiring that a dwelling unit must remain
affordable for the useful life of the property. Proposed Sec. 1000.146
would clarify, however, that if such a family or household member then
transfers the property to a third party, such a third party is subject
to the requirement that the unit remain affordable for its useful life.
Section 1000.141 would codify the definition of ``useful life.''
The question in the heading of Sec. 1000.142 was revised slightly to
clarify ``how a recipient determines useful life'' rather than ``what
is the useful life.'' The response was also revised slightly to respond
to the revised question. Proposed Sec. Sec. 1000.143 and 1000.144
would clarify that a recipient implements the useful life requirement
by placing a binding commitment that is satisfactory to HUD on the
assisted property, and that to be satisfactory to HUD, the binding
commitment must be a written use restriction agreement that is placed
on the property and that has a duration equal to the property's useful
life. Existing Sec. Sec. 1000.144 and 1000.146 would be redesignated
as Sec. Sec. 1000.145 and 1000.147 for organizational clarity.
Redesignated Sec. 1000.147 (formerly Sec. 1000.146) would be
revised to codify the provision in section 205(a) of NAHASDA that
states when a family must be low-income to participate in a housing
program under NAHASDA.
Sections 1000.150 and 1000.152, Criminal Conviction Records
The heading of Sec. 1000.150 would be revised to conform to the
NAHASDA Reauthorization Act amendment to NAHASDA section 208(a) that
permits Tribes and TDHEs to access criminal conviction records of
applicants for employment.
Section 1000.152 would be revised to specify how criminal
conviction records may be used with respect to applicants for
employment, by referencing permitted purposes under section 208 of
NAHASDA.
[[Page 71478]]
Subpart C
Section 1000.201, Tribal Program Year
Section 1000.201 would be revised to conform to the amended
provision of NAHASDA section 102(a) that IHPs are submitted for a
Tribal program year, rather than for the Federal government's fiscal
year.
Sections 1000.214, 1000.216, 1000.220, and 1000.230, Indian Housing
Plan and Annual Performance Report Requirements
Sections 1000.214 and 1000.216 would be revised to conform to the
amended provision of NAHASDA section 102(a) that an IHP must be
submitted to HUD 75 days before the beginning of a Tribal program year.
The existing regulatory provision requires submission of the IHP by
July 1. Section 1000.220 would be revised by removing the statement
that IHP requirements are contained in section 102(c) of NAHASDA. The
referenced statutory provisions were removed under the NAHASDA
Reauthorization Act. Section 1000.220 would be further revised to state
that it enumerates the ``requirements,'' rather than the ``minimum
requirements,'' for items to be included in the IHP. It would add Sec.
1000.302 to the list of cross-referenced regulatory sections that
include items required to be in the IHP, as further discussed below. It
would also remove Sec. 1000.504 from the list, in accordance with the
proposed removal of that section. Section 1000.230 would clarify that
an IHP may use either the HUD estimated grant amount or the grant
amount from the most recent compliant IHP.
Sections 1000.224, 1000.225, and 1000.227, Waivers of Indian Housing
Plan Requirements
Section 1000.224 would be revised in accordance with the amendment
to section 101(b)(2) of NAHASDA. The revision would clarify that a
waiver of IHP submission requirements is available when noncompliance
is due to exigent circumstances beyond the control of the Indian Tribe.
It would also provide that HUD may not withhold the requested waiver
unreasonably. Section 1000.225 would provide that a request for a
waiver must be submitted not more than 90 days beyond the submission
due date. Section 1000.227 would require HUD to decide upon the waiver
request and notify the recipient of its decision within 45 days of
receiving the request.
Sections 1000.236 and 1000.238, Administrative and Planning Expenses
Section 1000.236(a) would be revised to provide that eligible
administrative and planning expenses include expenses associated with
the expenditure of non-IHBG funds on affordable housing activities, to
the extent that the source of the non-IHBG funds limits expenditure of
its funds on such expenses. The provision is intended to encourage
recipients to leverage IHBG funds with funds obtained from other
sources and recognizes that some sources permit little or none of their
funds to be expended on administrative and planning activities. Section
1000.236(b) would be revised to conform to amended NAHASDA section
101(h)'s provision that eligible uses include comprehensive housing and
community development planning activities. Section 1000.238 would be
revised to provide a two-tiered limit on the amount of IHBG funds that
may be used on administrative and planning expenses. (The existing
regulation imposes a limit equal to 20 percent of the annual grant
amount.) Under the revision, recipients receiving in excess of $500,000
would be permitted to use up to 20 percent of either their annual
expenditures of grant funds or of their annual grant amount, whichever
is greater, on such expenses. Recipients receiving $500,000 or less
would be permitted to use up to 30 percent of either their annual
expenditures or of their annual grant amount, whichever is greater, on
such expenses. A recipient that is receiving grant funds on behalf of
one or more grant beneficiaries would apply these rules to the amounts
provided for the benefit of those grant beneficiaries, to determine the
amount it may use for administrative and planning expenses. It would
also provide that a recipient combining grant funds with other funding
may request HUD approval to use a higher percentage and may justify the
request based on its total expenditure of funds from all sources for
that year.
Section 1000.239, Reserve Accounts
New Sec. 1000.239 would incorporate the provisions of NAHASDA
section 202(9), which adds to the list of eligible activities the
establishment of a reserve account for the purpose of accumulating
funds for administrative and planning activities related to affordable
housing activities. The proposed regulation would clarify that the
amounts may be invested in accordance with existing regulatory
provisions in Sec. 1000.58(c), and would provide that a recipient may
have more than one such account, provided that the total amount of
reserves in all accounts does not exceed the maximum amount established
in NAHASDA. The proposed regulation would also incorporate NAHASDA's
formula for calculating the maximum amount. Finally, it would clarify
that interest earned on reserves is not program income and is not
included in calculating the maximum amount of reserves.
Sections 1000.244 and 1000.246, Local Cooperation Agreements and
Exemption From Taxation
Two new sections would implement NAHASDA sections 101(c) and (d).
Section 1000.244 would provide the procedure for requesting a waiver of
the requirements for a local cooperation agreement and tax-exempt
status of dwelling units. Requests would have to be submitted to the
Area ONAP and would be required to demonstrate that the recipient had
made a good-faith effort to comply. Section 1000.246 would require HUD
to make a determination on and respond to a request for a waiver within
30 days of receipt, or to provide a reason for any delay and a timeline
within which a determination would be made. It would also require HUD
to notify the recipient as to whether the waiver is granted or denied.
A granted waiver would remain effective until revoked. If a waiver
request is denied, IHBG funds would not be permitted to be spent on
housing units, and any amounts expended prior to the denial would have
to be reimbursed.
Subpart D
Section 1000.302, IHBG Formula Definitions
Paragraph (2)(i)(B) of the definition of ``Formula area'' in Sec.
1000.302 would be revised to provide that the forms on which a Tribe
reports on substantial housing services are the IHP and APR. In the
same section, the definition of ``Substantial housing services'' would
provide that the required written verification that a Tribe must
provide annually is to be included in the IHP and APR.
Section 1000.328, Certification of Households at or Below 80 Percent
of Median Income
Section 1000.328 would be revised to provide that for a Tribe
receiving minimum funding, it must certify in its IHP, rather than
demonstrate, the presence of households at or below 80 percent of
median family income.
[[Page 71479]]
Section 1000.332, Schedule for HUD To Provide Formula Data and
Projected Allocations
Section 1000.332 would revise the date by which HUD is required to
provide a Tribe or TDHE with the data used to determine its formula
allocation. The existing regulation requires provision of the data by
August 1, and under this proposed rule would be revised to June 1. The
change is necessary in order to ensure timely provision of the
information to a Tribe or TDHE with a program year that begins on
October 1.
Subpart E
Sections 1000.408 and 1000.410, Financing Guarantees
Section 1000.408, which sets forth the manner in which a Tribe or
TDHE was required to show that it had made efforts to obtain financing,
prior to requesting financing guarantees from HUD, would be removed.
The removal conforms to the NAHASDA Reauthorization Act's removal of
this requirement, which was previously found in section 601(b) of
NAHASDA, as a condition for obtaining guarantees from HUD. A new
paragraph (e) would be added to Sec. 1000.410 to conform to NAHASDA
section 602(d), which requires guarantees made under Title VI to
guarantee repayment of 95 percent of the unpaid principal and interest
due on guaranteed obligations.
Sections 1000.424 and 1000.428, Financing Guarantees for Housing
Related Community Development
Section 1000.424 would be revised to provide that an application
for financing guarantees under Title VI of NAHASDA may identify
housing-related community development activities, as well as affordable
housing activities for which the guarantees are sought. Section
1000.428 would be revised to provide that an application may be
disapproved if proposed activities are not within the definitions of
these eligible activities. The proposed changes conform to the amended
NAHASDA section 601(a)'s provision that housing-related community
development is a permissible use for the proceeds of financing
guaranteed by HUD under Title VI of NAHASDA.
Subpart F
Section 1000.503, HUD Monitoring
New Sec. 1000.503 would clarify the appropriate frequency and
level of monitoring of recipients. Paragraph (a) would codify the
standard risk assessment factors that HUD uses to determine the
frequency and priority for monitoring a particular recipient, and would
provide that HUD may establish other factors, consistent with HUD's
Tribal Consultation Policy. In accordance with the policy, HUD would
provide written notification and an opportunity for comment when
establishing such other factors. The provisions would not apply to
monitoring or compliance reviews concerning regulatory requirements
that arise independently of NAHASDA, such as those concerning
nondiscrimination and accessibility for persons with disabilities. Any
new factors would be issued by program guidance.
Paragraph (b) would provide the level of monitoring that HUD would
apply once a recipient has been selected for monitoring. Monitoring
would typically cover the current and prior 2 Tribal program years, and
it would include inspection of no more than the greater of 10 dwelling
units or 10 percent of all dwelling units, and review of no more than
the greater of 10 client files or 10 percent of client files. HUD would
undertake additional sampling and review if this initial sampling
indicated noncompliance. Paragraph (c) would provide that, subject to
the limitation on time that recipients are required to retain records
under Sec. 1000.552, HUD would be permitted to undertake additional
sampling and review, notwithstanding these sampling limits, whenever
HUD has credible information suggesting noncompliance. HUD would share
the information with the recipient, as appropriate. Finally, paragraph
(e) would provide that a recipient may request to enter into a self-
monitoring agreement with HUD, under which HUD would monitor only the
recipient in accordance with the agreement, absent reasonable evidence
of fraud, a pattern of noncompliance, or significant unlawful
expenditure of IHBG funds.
Section 1000.512, Annual Performance Reports
Paragraphs (b)(1) and (b)(2) of Sec. 1000.512 would be revised by
replacing the term ``objectives'' with ``planned activities,''
consistent with the amendment to section 102(b)(2) of NAHASDA. Section
1000.512 would also be revised to list additional items required to be
included in APRs. Paragraph (d) would require inclusion of annual
performance data, including jobs supported with IHBG funds, and outputs
and outcomes by eligible activity. Paragraph (e) would cross-reference
items that may be required to be included in the APR under Sec. Sec.
1000.302 and 1000.544, as further discussed in this preamble.
Section 1000.520, Annual Performance Report Review
Section 1000.520 would be revised to clarify that HUD's review of
an APR takes place upon submission and that there is only one such
review.
Sections 1000.504 and 1000.524, HUD's Performance Measures
Section 1000.524 would be revised by removing the requirement that
90 percent of grant funds must be obligated within 2 years of the grant
award. The revision would conform to NAHASDA section 203(f)(1)'s
provision that HUD may not require commitment of funds earlier than
provided for in the IHP. In addition, section 1000.524(e) would be
revised to remove reference to a 5-year plan and its contents, which
were eliminated from NAHASDA section 102 by the NAHASDA Reauthorization
Act. Section 1000.504, which describes performance objectives, would
also be removed, because of the elimination of the 5-year plan and
because performance objectives are no longer required to be included in
the one-year plan.
Section 1000.528, Recipient Comments on HUD Reports
Section 1000.528 would be revised to increase from 30 days to 60
days the time from HUD's completion of its review that HUD will have to
issue its draft report. The section would also be revised to increase
from 30 days to 60 days the time that a recipient and Indian Tribe will
have to review the draft report from HUD. It would also provide for an
additional 30-day review period, available upon notification to HUD, as
well as the possibility of additional extensions as mutually agreed to
by HUD and the recipient.
Sections 1000.532 and 1000.538, Remedial Actions in the Event of
Substantial Noncompliance
Section 1000.538, which addresses remedies that are available to
HUD in the event of substantial noncompliance, would be removed, and
provisions addressing remedies for substantial noncompliance would be
provided in a revised and expanded Sec. 1000.532. The existing
provision at Sec. 1000.532(c), which addresses a recipient's
significant noncompliance with a major activity of its IHP, would be
removed. A new paragraph (a) would include a broad provision addressing
remedies HUD may take if HUD finds, after reasonable notice and
opportunity to be heard, that a recipient has failed to comply
substantially with any provision of NAHASDA or the implementing
regulations in 24 CFR part 1000. The
[[Page 71480]]
provision would cover significant noncompliance with a major activity
of a recipient's IHP, which is specifically addressed in the existing
provision at Sec. 1000.532(c), and corresponds to the existing
provision at Sec. 1000.538(a).
Paragraph (b) of Sec. 1000.532 would provide the procedures that
HUD would follow for providing notice and the opportunity to be heard,
prior to taking any action under paragraph (a). The procedures would
include notification in writing of the action it intends to take and
the opportunity for an informal meeting with HUD to resolve the
deficiency. Prior to taking any remedial action under paragraph (a),
HUD would provide the opportunity no less than 30 days prior to taking
the action, in accordance with the procedures at 24 CFR part 26.
Amounts would not be reallocated until 15 days after the hearing has
been conducted and HUD has rendered a final decision.
Paragraph (c) of Sec. 1000.532 would incorporate NAHASDA section
401(a)(4)'s expedited procedures for HUD's limitation of the
availability of funds, when HUD determines that the substantial
noncompliance of a recipient is resulting, and would continue to
result, in a continuing expenditure of funds that is not authorized by
law. The procedures would allow HUD to limit the availability of such
funds, provided that it gives notice of the action and then provides a
hearing within 60 days.
Paragraph (d) of Sec. 1000.532 would correspond to the provision
in existing Sec. 1000.538(c), which provides that HUD may provide
technical assistance to a recipient if HUD determines that the failure
to comply substantially is not willful and is a result of limited
capacity or capability. The provision in paragraph (d) would clarify
that HUD shall provide the technical assistance if, upon HUD's
determination, the recipient requests the technical assistance. It
would also incorporate NAHASDA section 401(b)'s requirement that a
recipient must enter into a performance agreement with HUD as a
condition of receiving the technical assistance.
Paragraph (e) of Sec. 1000.532 would include the substance of the
provision in paragraph (d) of existing Sec. 1000.538, which provides
that HUD may refer matters involving substantial noncompliance to the
Attorney General, with a recommendation for taking civil action.
Finally, cross-references to remove Sec. 1000.538 found in Sec.
1000.60, Sec. 1000.530, and Sec. 1000.536 would be revised to refer
to Sec. 1000.532.
Section 1000.534, Substantial Noncompliance
The reference to ``goals and objectives'' in Sec. 1000.534(a)
would be changed to ``planned activities'' in a recipient's IHP. The
change would conform to the amendment to NAHASDA section 102(b)(2),
which describes information required to be included in the IHP.
Section 1000.544, Audits
Technical changes would be made to Sec. 1000.544 by adding
statutory citations for NAHASDA and the Single Audit Act, and by
removing the dollar amount that is the threshold for the annual audit
requirement. In place of the dollar amount, Sec. 1000.544 would
reference the section of OMB Circular A-133 that establishes the
threshold, which may change from time to time. If applicable, a
certification that the recipient has not expended Federal funds in
excess of the audit threshold that is set by OMB would be required to
be included in the recipient's APR.
Section 1000.548, Submission of Audit Reports
Section 1000.548 would be revised to require the recipient to
submit a copy of its audit report to the appropriate HUD ONAP Area
Office at the time the recipient submits the audit report to the
Federal Audit Clearinghouse.
Section 1000.552, Records Retention
Section 1000.552(b) would be revised to provide that records must
be retained for 3 years from the end of the Tribal program year in
which funds are expended. The provision would be consistent with HUD's
practice of no longer requiring recipients to track expenditures
against particular annual grants.
III. Other Statutory Amendments Addressed
The NAHASDA Reauthorization Act added two demonstration programs.
Subtitle B of Title II of NAHASDA provides for Self Determined Housing
Activities for Tribal Communities and section 606 created the
demonstration program for guaranteed loans to finance Tribal community
and economic development activities. The Committee agreed that HUD
would implement both programs by PIH notice. The full Committee both
reviewed and commented on the draft PIH notices before they were
published.
IV. Nonconsensus Items
The following section of the preamble summarizes issues that the
Committee discussed but on which it did not reach consensus. Summaries
of positions taken on nonconsensus items were drafted by the proponents
of the positions.
Hearing Requirements for FCAS Overcounts
The NAHASDA Reauthorization Act added a new section 401(a)(2) to
provide that ``[t]he failure of a recipient to comply with section
302(b)(1) (regarding the counting of FCAS units) * * * shall not, in
itself, be considered to be substantial noncompliance for the purposes
of this title.'' HUD and Tribal Committee members disagreed on the
meaning of this paragraph. HUD construes this paragraph to mean that
FCAS overcounts do not constitute substantial noncompliance under
section 401(a)(1) of NAHASDA so as to require HUD to afford recipients
an opportunity for a hearing prior to adjusting grant amounts. The
Tribal Committee members construed this paragraph as, at least,
requiring such a hearing where the amount in controversy was of
sufficient magnitude. A proposal to define this paragraph in the manner
proposed by the Tribal Committee members failed to achieve consensus,
the two HUD committee members being the dissenting votes. As a result,
the Committee did not propose any rule interpreting section 401(a)(2)
of NAHASDA.
Recapturing Expenditures on Affordable Housing Activities
In 2000, Congress, in Public Law 106-568, removed a portion of
then-section 405(c) of NAHASDA that had provided that ``grant amounts
already expended on affordable housing activities may not be recaptured
or deducted from future assistance provided on behalf of an Indian
Tribe.'' However, a regulation containing that same restriction remains
at 24 CFR 1000.532(a). Since enactment of this 2000 statutory change,
HUD's position has been that this statutory change removed the
statutory basis for the corollary regulation, and required the
regulation's repeal. The Tribal Committee members believed that HUD
still has discretion under NAHASDA to retain the regulatory
restriction, despite the removal from the statute of language requiring
this restriction. The Committee was unable to achieve consensus on the
inclusion of the disputed regulatory language in the new, consolidated
Sec. 1000.532, the two HUD Committee members being opposed to its
inclusion. As a result, the subject provision is not included in the
revision of Sec. 1000.532 in this proposed rule.
[[Page 71481]]
Time Limitations on Noncompliance Claims
The majority of the workgroup that examined limitations on
noncompliance claims had proposed that administrative enforcement
actions be barred if not commenced within 3 years of the alleged
noncompliance, and recommended that this limitation be placed in the
new, consolidated Sec. 532 of the regulations. HUD and some other
Committee members did not support the adoption of a ``statute of
limitations'' on enforcement actions. HUD's position was that the
Committee had already adopted a regulation limiting the scope and
frequency of monitoring, including a records retention schedule that
essentially functions as a limitation similar to a statute of
limitations. The proposal to add a statute of limitations to the new,
consolidated Sec. 532 did not achieve consensus.
Line of Credit Control System (LOCCS) edits
The Tribes proposed language for a new Sec. 1000.532(a) that did
not have the consensus from HUD participants in the workgroup, because
the language had been drafted specifically to prohibit HUD from
continuing to use the process known as a ``LOCCS [Line of Credit
Control System] edit,'' through which HUD can put a hold on a Tribe's/
TDHE's ability to continue to draw down their IHBG funds through LOCCS
unless and until the Tribe/TDHE submits certain required documentation.
The Tribes and HUD disagree as to whether a ``LOCCS edit'' is a
``limitation on the availability of payments to programs, projects, or
activities not affected by a failure to comply,'' as described under
section 401(a)(1) of NAHASDA, which requires that HUD must provide
notice and opportunity for a hearing before terminating, reducing, or
limiting the availability of payments. HUD's interpretation, provided
in a memorandum from HUD's Office of General Counsel (OGC), is that the
LOCCS edit does not conflict with the statutory language because the
funds remain ``available,'' and can be accessed by the Tribe/TDHE as
soon as they submit the documentation required by HUD. Further, while a
LOCCS edit will remain in place if the basis for the edit is
``documented concerns on the part of ONAP regarding the use of grant
funds,'' a recipient will be able to continue to draw down grant funds
despite the edit even though the concerns remain unresolved, subject to
the submission of appropriate supporting documentation. The memo also
described the LOCCS edit as a permissible form of ``pre-drawdown
monitoring,'' through which HUD can determine--ahead of drawdown--
whether a Tribe/TDHE is going to use the funds for a permissible
purpose and according to legal requirements. HUD described the LOCCS
edit not as a limitation on availability of payments, but as a change
in the method of payment requiring certain documentation before
payments are released. HUD reviewed the relevant case law on other HUD
programs with similar governing statutory language and found that all
cases were clearly distinguishable because they involved HUD action
that amounted to either outright termination of grants, or refusal to
enter into grant agreements to obligate funds.
The Tribes responded that the HUD memorandum did not provide a
legal basis for the practice of a LOCCS edit, for the following
reasons: (1) The LOCCS edit process set out in the HUD memo (and in PIH
Notice 2009-49) is a limit on the availability of payments because it
is a means by which HUD can and does impose certain specific conditions
prior to the release of funds, which meets the dictionary definition of
the statutory language; (2) even if the IHBG funds were to remain
``available'' (per HUD's reasoning), the LOCCS edit places an
impermissible ``limit'' on that availability; (3) HUD's ``pre-drawdown
monitoring'' justification is invalid because the monitoring process
ends with the notice and hearing opportunity for substantial
noncompliance, and a ``pre-drawdown monitoring'' that limits access to
funding would circumvent the entirety of the monitoring process; (4)
the cases cited by HUD OGC in the memo undermined HUD's position
because those cases indicated the courts' rejection of prior, similar
efforts by HUD to avoid the kind of due process requirements set out in
NAHASDA 401(a)(1) (in similar provisions of other HUD statutes) through
``hyper-technical'' reasoning and on the impermissible assertion of the
need for agency ``flexibility.''
The Tribes then put forward the language that they had proposed
previously for a new Sec. 1000.532(a) that would in effect prohibit
HUD from using the LOCCS edit. The HUD representatives on the committee
did not agree to the proposal.
Content of Annual Performance Reports
HUD held eight Tribal consultation meetings throughout the country
from January through May 2005 to solicit comments and recommendations
on the existing IHP and APR. A Tribal workgroup consisting of 12 Tribal
representatives selected by the Regional Housing Associations worked
with HUD staff to incorporate the suggestions gathered at the Tribal
consultations into a revised form. The recommendations from the Tribal
workgroup formed the basis for the majority of statutory revisions to
the IHP and APR. In addition, the Tribal workgroup agreed to include
more detailed data collection in the APR in order to better document
the positive effects of the IHBG program. Proposals were developed to
regulate the data collection in the APR to more fully prescribe the
content required under NAHASDA section 404(b), consistent with the
recommendations of the Tribal workgroup. The two HUD Committee members
advocated for the full data collection recommended by the Tribal
workgroup; however, some Tribal Committee members disagreed with most
of the data collection items as being too burdensome. As a result, the
Committee reached consensus only on the collection of jobs data, units
completed or assisted, families assisted, and outcomes by eligible
activity under new Sec. 1000.512(d). The Committee did not reach
consensus on collecting housing unit cost information, a finite list of
specific outcomes by eligible activity, or reduction in criminal
activity data.
Indian Housing Plan and Annual Performance Report Formats
Tribal representatives supported proposed revisions to permit HUD
to accept alternative IHP and APR formats developed by each Tribe, as a
means to enhance the congressional finding and guiding principle of
NAHASDA implementation of providing assistance in a manner similar to
that accorded in Public Law 93-638. HUD committee members objected.
V. Findings and Certifications
Executive Order 12866, Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866, Regulatory Planning and Review. This rule was
determined to be a ``significant regulatory action,'' as defined in
section 3(f) of the Order (although not an economically significant
regulatory action under the Order). The docket file is available for
public inspection in the Regulations Division, Office of General
Counsel, 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 public comments must be scheduled by calling
[[Page 71482]]
the Regulations Division at (202) 402-3055 (this is not a toll-free
number). Individuals with speech or hearing impairments may access this
number via TTY by calling the Federal Relay Service at (800) 877-8339.
Paperwork Reduction Act
The information collection requirements contained in this rule have
been approved by OMB in accordance with the Paperwork Reduction Act of
1995 (44 U.S.C. 3501-3520) and assigned OMB Control Number 2577-0218.
In accordance with the Paperwork Reduction Act, an agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information, unless the collection displays a currently
valid OMB control number.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis for any rule that is subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
The requirements of this proposed rule apply to Indian Tribal
governments and their Tribal housing authorities. Tribal governments
and their Tribal housing authorities are not covered by the definition
of ``small entities'' under the RFA. Accordingly, the undersigned
certifies that this rule will not have a significant impact on a
substantial number of small entities.
Notwithstanding HUD's view that this rule will not have a
significant effect on a substantial number of small entities, HUD
specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in this preamble.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits, to the
extent practicable and permitted by law, an agency from promulgating a
regulation that has federalism implications and either imposes
substantial direct compliance costs on state and local governments and
is not required by statute, or preempts state law, unless the relevant
requirements of section 6 of the Executive Order are met. This rule
does not have federalism implications and does not impose substantial
direct compliance costs on state and local governments or preempt state
law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for Federal agencies to
assess the effects of their regulatory actions on state, local, and
Tribal governments, and on the private sector. This rule will not
impose any Federal mandate on any state, local, or Tribal government,
or on the private sector, within the meaning of UMRA.
Environmental Review
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 Finding of
No Significant Impact is available for public inspection between the
hours of 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. Due to security
measures at the HUD Headquarters building, please schedule an
appointment to review the FONSI by calling the Regulations Division at
(202) 708-3055 (this is not a toll-free number). Individuals with
speech or hearing impairments may access this number via TTY by calling
the Federal Relay Service at (800) 877-8339.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance Number (CFDA) for Indian
Housing Block Grants is 14.867, and the CFDA for Title VI Federal
Guarantees for Financing Tribal Housing Activities is 14.869.
List of Subjects in 24 CFR Part 1000
Aged, Community development block grants, Grant programs--housing
and community development, Grant programs--Indians, Indians,
Individuals with disabilities, Public housing, Reporting and
recordkeeping requirements.
Accordingly, for the reasons described in the preamble, HUD
proposes to amend 24 CFR part 1000 as follows:
PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES
1. The authority citation for 24 CFR part 1000 continues to read as
follows:
Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).
2. Revise Sec. 1000.2(a)(6) and (a)(7) to read as follows:
Sec. 1000.2 What are the guiding principles in the implementation of
NAHASDA?
(a) * * *
(6) The need for affordable homes in safe and healthy environments
on Indian reservations, in Indian communities, and in Native Alaskan
villages is acute and the Federal government shall work not only to
provide housing assistance, but also, to the extent practicable, to
assist in the development of private housing finance mechanisms on
Indian lands to achieve the goals of economic self-sufficiency and
self-determination for Indian Tribes and their members.
(7) Federal assistance to meet these responsibilities shall be
provided in a manner that recognizes the right of Indian self-
determination and Tribal self-governance by making such assistance
available directly to the Indian Tribes or Tribally designated entities
under authorities similar to those accorded Indian Tribes in Public Law
93-638 (25 U.S.C. 450 et seq.).
* * * * *
3. Add Sec. 1000.9, to read as follows:
Sec. 1000.9 How is negotiated rulemaking conducted when promulgating
NAHASDA regulations?
The negotiated rulemaking procedures and requirements set out in
section 106(b) of NAHASDA shall be conducted as follows:
(a) Committee membership. In forming a negotiated rulemaking
committee, HUD shall appoint as committee members representatives of
the Federal government and representatives of diverse Tribes and
program recipients.
(b) Initiation of rulemaking. HUD shall initiate a negotiated
rulemaking not later than 90 days after the enactment of any act to
reauthorize or significantly amend NAHASDA.
(c) Work groups. Negotiated rulemaking committees may form
workgroups made up of committee members and other interested parties to
meet during committee sessions and between sessions to develop specific
rulemaking proposals for committee consideration.
(d) Further review. Negotiated rulemaking committees shall provide
recommended rules to HUD. Once rules are proposed by HUD, they shall be
published for comment in the Federal Register. Any comments will be
further reviewed by the committee and HUD before HUD determines if the
rule or rules will be adopted.
4. In Sec. 1000.10(b), revise the definition of ``Indian area''
and add, in alphabetical order, the definitions for the terms ``Housing
related activities,''
[[Page 71483]]
``Housing related community development,'' ``Outcomes,'' and ``Tribal
program year,'' to read as follows:
Sec. 1000.10 What definitions apply in these regulations?
* * * * *
(b) * * *
Housing related activities, for purposes of program income, means
any facility, community building, infrastructure, business, program, or
activity, including any community development or economic development
activity, that:
(1) Is determined by the recipient to be beneficial to the
provision of housing in an Indian area, and that:
(2) Would meet at least one of the following conditions:
(i) Would help an Indian Tribe or its Tribally designated housing
entity to reduce the cost of construction of Indian housing;
(ii) Would make housing more affordable, energy efficient,
accessible, or practicable in an Indian area; or
(iii) Would otherwise advance the purposes of NAHASDA.
* * * * *
Housing related community development:
(1) Means any facility, community building, business, activity, or
infrastructure that:
(i) Is owned by an Indian Tribe or a Tribally designated housing
entity;
(ii) Is necessary to the provision of housing in an Indian area;
and
(iii)(A) Would help an Indian Tribe or Tribally designated housing
entity reduce the cost of construction of Indian housing;
(B) Would make housing more affordable, energy efficient,
accessible, or practicable in an Indian area; or
(C) Would otherwise advance the purposes of NAHASDA.
(2) Does not include any activity conducted by any Indian Tribe
under the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)
* * * * *
Indian Area means the area within which an Indian Tribe operates
affordable housing programs or the area in which a TDHE, as authorized
by one or more Indian Tribes, operates affordable housing programs.
Whenever the term ``jurisdiction'' is used in NAHASDA, it shall mean
``Indian Area,'' except where specific reference is made to the
jurisdiction of a court.
* * * * *
Outcomes are the intended results or consequences important to
program beneficiaries, the IHBG recipient, and the Tribe generally from
carrying out the housing or housing-related activity as determined by
the Tribe (and/or its TDHE).
* * * * *
Tribal program year means the fiscal year of the IHBG recipient.
* * * * *
5. In Sec. 1000.12, revise paragraph (d), to read as follows:
Sec. 1000.12 What nondiscrimination requirements are applicable?
* * * * *
(d) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and
Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.)
apply to Indian Tribes that are not covered by the Indian Civil Rights
Act. The Title VI and Title VIII requirements do not apply to actions
under NAHASDA by Federally recognized Indian Tribes and their TDHEs.
State-recognized Indian Tribes and their TDHEs may provide preference
for Tribal members and other Indian families pursuant to NAHASDA
sections 201(b) and 101(k) (relating to Tribal preference in employment
and contracting).
6. In Sec. 1000.16, revise paragraphs (a)(1) and (c), redesignate
paragraph (e) as paragraph (f), and add new paragraph (e), to read as
follows:
Sec. 1000.16 What labor standards are applicable?
(a) * * *
(1) As described in section 104(b) of NAHASDA, contracts and
agreements for assistance, sale, or lease under NAHASDA must require
prevailing wage rates determined by the Secretary of Labor under the
Davis-Bacon Act (40 U.S.C. 3141-44, 3146, and 3147) to be paid to
laborers and mechanics employed in the development of affordable
housing.
* * * * *
(c) Contract Work Hours and Safety Standards Act. Contracts in
excess of $100,000 to which Davis-Bacon or HUD-determined wage rates
apply are subject by law to the overtime provisions of the Contract
Work Hours and Safety Standards Act (40 U.S.C. 3701).
* * * * *
(e) Paragraphs (a) through (d) of this section shall not apply to
any contract or agreement for assistance, sale, or lease pursuant to
NAHASDA, if such contract or agreement is otherwise covered by one or
more laws or regulations adopted by an Indian Tribe that requires the
payment of not less than prevailing wages, as determined by the Indian
Tribe.
* * * * *
7. Add Sec. 1000.21, to read as follows:
Sec. 1000.21 Under what circumstances are waivers of the
environmental review procedures available to Tribes?
A Tribe or recipient may request that the Secretary waive the
requirements under section 105 of NAHASDA. The Secretary may grant the
waiver if the Secretary determines that a failure on the part of a
recipient to comply with provisions of this section:
(a) Will not frustrate the goals of the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.) or any other provision of
law that furthers the goals of that Act;
(b) Does not threaten the health or safety of the community
involved by posing an immediate or long-term hazard to residents of
that community;
(c) Is a result of inadvertent error, including an incorrect or
incomplete certification provided under section 105(c)(1) of NAHASDA;
and
(d) May be corrected through the sole action of the recipient.
8. In Sec. 1000.26, revise paragraphs (a)(5) and (a)(11) to read
as follows:
Sec. 1000.26 What are the administrative requirements under NAHASDA?
(a) * * *
(5) Section 85.21, ``Payment,'' except that HUD shall not require a
recipient to expend retained program income before drawing down or
expending IHBG funds.
* * * * *
(11)(i) General. Section 85.36 of this title, ``Procurement,''
except paragraph (a), subject to paragraphs (a)(11)(ii) and
(a)(11)(iii) of this section.
(ii) Bonding requirements. There may be circumstances under which
the bonding requirements of Sec. 85.36(h) are inconsistent with other
responsibilities and obligations of the recipient. In such
circumstances, acceptable methods to provide performance and payment
assurance may include:
(A) Deposit with the recipient of a cash escrow of not less than 20
percent of the total contract price, subject to reduction during the
warranty period, commensurate with potential risk;
(B) Letter of credit for 25 percent of the total contract price,
unconditionally payable upon demand of the recipient, subject to
reduction during any warranty period commensurate with potential risk;
or
(C) Letter of credit for 10 percent of the total contract price
unconditionally payable upon demand of the recipient, subject to
reduction during any warranty period commensurate with potential risk,
and compliance with the procedures for monitoring of disbursements by
the contractor.
[[Page 71484]]
(iii) De minimis procurement. A recipient shall not be required to
comply with Sec. 85.36 of this title with respect to any procurement,
using a grant provided under NAHASDA, of goods and services with a
value of less than $5,000.
(iv) Utilizing Federal supply sources in procurement. In accordance
with Section 101(j) of NAHASDA, recipients may use Federal supply
sources made available by the General Services Administration pursuant
to 40 U.S.C. 501.
* * * * *
9. In Sec. 1000.42, add paragraphs (c) and (d), to read as
follows:
Sec. 1000.42 Are the requirements of section 3 of the Housing and
Urban Development Act of 1968 applicable?
* * * * *
(c) Tribal preference. Recipients meet the section 3 requirements
when they comply with employment and contract preference laws adopted
by their Tribe in accordance with section 101(k) of NAHASDA.
(d) Applicability. For purposes of section 3, NAHASDA funding is
subject to the requirements applicable to the category of programs
entitled ``Other Programs'' that provide housing and community
development assistance (12 U.S.C. 1701u(c)(2), (d)(2)).
10. Revise Sec. 1000.48, to read as follows:
Sec. 1000.48 Are Indian or Tribal preference requirements applicable
to IHBG activities?
Grants under this part are subject to Indian preference under
section 7(b) of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450e(b)) or, if applicable under section 101(k) of
NAHASDA, Tribal preference in employment and contracting.
(a)(1) Section 7(b) provides that any contract, subcontract, grant,
or subgrant pursuant to an act authorizing grants to Indian
organizations or for the benefit of Indians shall require that, to the
greatest extent feasible:
(i) Preference and opportunities for training and employment shall
be given to Indians; and
(ii) Preference in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises as
defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C.
1452).
(2) The following definitions apply:
(i) The Indian Self-Determination and Education Assistance Act
defines ``Indian'' to mean a person who is a member of an Indian Tribe
and defines ``Indian Tribe'' to mean any Indian Tribe, band, nation, or
other organized group or community including any Alaska Native village
or regional or village corporation as defined or established pursuant
to the Alaska Native Claims Settlement Act, which is recognized as
eligible for the special programs and services provided by the United
States to Indians because of their status as Indians.
(ii) In section 3 of the Indian Financing Act of 1974, ``economic
enterprise'' is defined as any Indian-owned commercial, industrial, or
business activity established or organized for the purpose of profit,
except that Indian ownership must constitute not less than 51 percent
of the enterprise. This act defines ``Indian organization'' to mean the
governing body of any Indian Tribe or entity established or recognized
by such governing body.
(b) If Tribal employment and contract preference laws have not been
adopted by the Indian Tribe, section 7(b) Indian preference provisions
shall apply.
(c) Exception for de minimis procurements. A recipient shall not be
required to apply Indian preference requirements under Section 7(b) of
the Indian Self-Determination and Education Assistance Act with respect
to any procurement, using a grant provided under NAHASDA, of goods and
services with a value less than $5,000.
11. Revise Sec. 1000.50, to read as follows:
Sec. 1000.50 What Tribal or Indian preference requirements apply to
IHBG administration activities?
(a) In accordance with Section 101(k) of NAHASDA, a recipient shall
apply the Tribal employment and contract preference laws (including
regulations and Tribal ordinances) adopted by the Indian Tribe that
receives a benefit from funds granted to the recipient under NAHASDA.
(b) In the absence of Tribal employment and contract preference
laws, a recipient must, to the greatest extent feasible, give
preference and opportunities for training and employment in connection
with the administration of grants awarded under this part to Indians in
accordance with section 7(b) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450e(b)).
12. Revise Sec. 1000.52, to read as follows:
Sec. 1000.52 What Tribal or Indian preference requirements apply to
IHBG procurement?
(a) In accordance with Section 101(k) of NAHASDA, a recipient shall
apply the Tribal employment and contract preference laws (including
regulations and Tribal ordinances) adopted by the Indian Tribe that
receives a benefit from funds granted to the recipient under NAHASDA.
(b) In the absence of Tribal employment and contract preference
laws, a recipient must, to the greatest extent feasible, give
preference in the award of contracts for projects funded under this
part to Indian organizations and Indian-owned economic enterprises in
accordance with Section 7(b) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450e(b)).
(c) The following provisions apply to the application of Indian
preference under paragraph (b) of this section:
(1) In applying Indian preference, each recipient shall:
(i) Certify to HUD that the policies and procedures adopted by the
recipient will provide preference in procurement activities consistent
with the requirements of section 7(b) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450e(b)) (An Indian preference
policy which was previously approved by HUD for a recipient will meet
the requirements of this section); or
(ii) Advertise for bids or proposals limited to qualified Indian
organizations and Indian-owned enterprises; or
(iii) Use a two-stage preference procedure, as follows:
(A) Stage 1. Invite or otherwise solicit Indian-owned economic
enterprises to submit a statement of intent to respond to a bid
announcement or request for proposals limited to Indian-owned firms.
(B) Stage 2. If responses are received from more than one Indian
enterprise found to be qualified, advertise for bids or proposals
limited to Indian organizations and Indian-owned economic enterprises.
(2) If the recipient selects a method of providing preference that
results in fewer than two responsible qualified organizations or
enterprises submitting a statement of intent, a bid, or a proposal to
perform the contract at a reasonable cost, then the recipient shall:
(i) Re-advertise the contract, using any of the methods described
in paragraph (a) of this section; or
(ii) Re-advertise the contract without limiting the advertisement
for bids or proposals to Indian organizations and Indian-owned economic
enterprises; or
(iii) If one approvable bid or proposal is received, request Area
ONAP review and approval of the proposed contract and related
procurement documents, in accordance with 24 CFR 85.36, in order
[[Page 71485]]
to award the contract to the single bidder or offeror.
(3) Procurements that are within the dollar limitations established
for small purchases under 24 CFR 85.36 need not follow the formal bid
or proposal procedures of paragraph (a) of this section, since these
procurements are governed by the small purchase procedures of 24 CFR
85.36. However, a recipient's small purchase procurement shall, to the
greatest extent feasible, provide Indian preference in the award of
contracts.
(4) All preferences shall be publicly announced in the
advertisement and bidding or proposal solicitation documents and the
bidding and proposal documents.
(5) A recipient, at its discretion, may require information of
prospective contractors seeking to qualify as Indian organizations or
Indian-owned economic enterprises. Recipients may require prospective
contractors to provide the following information before submitting a
bid or proposal, or at the time of submission:
(i) Evidence showing fully the extent of Indian ownership and
interest;
(ii) Evidence of structure, management, and financing affecting the
Indian character of the enterprise, including major subcontracts and
purchase agreements; materials or equipment supply arrangements;
management salary or profit-sharing arrangements; and evidence showing
the effect of these on the extent of Indian ownership and interest; and
(iii) Evidence sufficient to demonstrate to the satisfaction of the
recipient that the prospective contractor has the technical,
administrative, and financial capability to perform contract work of
the size and type involved.
(6) The recipient shall incorporate the following clause (referred
to as the section 7(b) clause) in each contract awarded in connection
with a project funded under this part:
(i) The work to be performed under this contract is on a project
subject to section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e(b)) (the Indian Act). Section 7(b)
requires that, to the greatest extent feasible:
(A) Preferences and opportunities for training and employment shall
be given to Indians; and
(B) Preferences in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises.
(ii) The parties to this contract shall comply with the provisions
of section 7(b) of the Indian Act.
(iii) In connection with this contract, the contractor shall, to
the greatest extent feasible, give preference in the award of any
subcontracts to Indian organizations and Indian-owned economic
enterprises, and preferences and opportunities for training and
employment to Indians.
(iv) The contractor shall include this section 7(b) clause in every
subcontract in connection with the project; shall require
subcontractors at each level to include this section 7(b) clause in
every subcontract they execute in connection with the project; and
shall, at the direction of the recipient, take appropriate action
pursuant to the subcontract upon a finding by the recipient or HUD that
the subcontractor has violated the section 7(b) clause of the Indian
Act.
(d) A recipient shall not be required to apply Indian preference
requirements under Section 7(b) of the Indian Self-Determination and
Education Assistance Act with respect to any procurement, using a grant
provided under NAHASDA, of goods and services with a value less than
$5,000.
13. In Sec. 1000.58, revise paragraphs (f) and (g) to read as
follows:
Sec. 1000.58 Are there limitations on the investment of IHBG funds?
* * * * *
(f) A recipient may invest its IHBG annual grant in an amount equal
to the annual formula grant amount.
(g) Investments under this section may be for a period no longer
than 5 years.
14. Revise Sec. 1000.60, to read as follows:
Sec. 1000.60 Can HUD prevent improper expenditure of funds already
disbursed to a recipient?
Yes. In accordance with the standards and remedies contained in
Sec. 1000.532 relating to substantial noncompliance, HUD will use its
powers under a depository agreement and take such other actions as may
be legally necessary to suspend funds disbursed to the recipient until
the substantial noncompliance has been remedied. In taking this action,
HUD shall comply with all appropriate procedures, appeals, and hearing
rights prescribed elsewhere in this part.
15. In Sec. 1000.62, revise the heading and paragraph (b), to read
as follows:
Sec. 1000.62 What is considered program income?
* * * * *
(b) If the amount of income received in a single year by a
recipient and all its subrecipients, which would otherwise be
considered program income, does not exceed $25,000, such funds may be
retained but will not be considered to be or treated as program income.
* * * * *
16. Add Sec. 1000.64, to read as follows:
Sec. 1000.64 What are the permissible uses of program income?
Program income may be used for any housing or housing related
activity and is not subject to other Federal requirements.
17. In Sec. 1000.104, revise paragraphs (b) and (c), and add
paragraph (d), to read as follows:
Sec. 1000.104 What families are eligible for affordable housing
activities?
* * * * *
(b) A non low-income family may receive housing assistance in
accordance with Sec. 1000.110.
(c) A family may receive housing assistance on a reservation or
Indian area if the family's housing needs cannot be reasonably met
without such assistance and the recipient determines that the presence
of that family on the reservation or Indian area is essential to the
well-being of Indian families.
(d) A recipient may provide housing or housing assistance provided
through affordable housing activities assisted with grant amounts under
NAHASDA for a law enforcement officer on an Indian reservation or other
Indian area, if:
(1) The officer:
(i) Is employed on a full-time basis by the Federal government or a
state, county, or other unit of local government, or lawfully
recognized Tribal government; and
(ii) In implementing such full-time employment, is sworn to uphold,
and make arrests for, violations of Federal, state, county, or Tribal
law; and
(2) The recipient determines that the presence of the law
enforcement officer on the Indian reservation or other Indian area may
deter crime.
18. Revise Sec. 1000.106, to read as follows:
Sec. 1000.106 What families receiving assistance under title II of
NAHASDA require HUD approval?
(a) Housing assistance for non low-income families requires HUD
approval only as required in Sec. Sec. 1000.108 and 1000.110.
(b) Assistance for essential families under section 201(b)(3) of
NAHASDA does not require HUD approval but only requires that the
recipient determine that the presence of that family on the reservation
or Indian area is essential to the well-being of Indian families and
that the family's housing needs cannot
[[Page 71486]]
be reasonably met without such assistance.
19. Revise Sec. 1000.108, to read as follows:
Sec. 1000.108 How is HUD approval obtained by a recipient for housing
for non low-income families and model activities?
Recipients are required to submit proposals to operate model
housing activities as defined in section 202(6) of NAHASDA and to
provide assistance to non low-income families in accordance with
section 201(b)(2) of NAHASDA. Assistance to non low-income families
must be in accordance with Sec. 1000.110. Proposals may be submitted
in the recipient's IHP or at any time by amendment of the IHP, or by
special request to HUD at any time. HUD may approve the remainder of an
IHP, notwithstanding disapproval of a model activity or assistance to
non low-income families.
20. Revise Sec. 1000.110, to read as follows:
Sec. 1000.110 Under what conditions may non low-income Indian
families participate in the program?
(a) A family that was low-income at the times described in Sec.
1000.147 but subsequently becomes a non low-income family due to an
increase in income may continue to participate in the program in
accordance with the recipient's admission and occupancy policies. The
10 percent limitation in paragraph (c) of this section shall not apply
to such families. Such families may be made subject to the additional
requirements in paragraph (d) of this section based on those policies.
This includes a family member or household member who takes ownership
of a homeownership unit under Sec. 1000.146.
(b) A recipient must determine and document that there is a need
for housing for each family that cannot reasonably be met without such
assistance.
(c) A recipient may use up to 10 percent of the amount planned for
the Tribal program year for families whose income falls within 80 to
100 percent of the median income without HUD approval. HUD approval is
required if a recipient plans to use more than 10 percent of the amount
planned for the Tribal program year for such assistance or to provide
housing for families with income over 100 percent of median income.
(d) Non low-income families cannot receive the same benefits
provided low-income Indian families. The amount of assistance non low-
income families may receive will be determined as follows:
(1) The rent (including homebuyer payments under a lease purchase
agreement) to be paid by a non low-income family cannot be less than:
(Income of non low-income family/Income of family at 80 percent of
median income) x (Rental payment of family at 80 percent of median
income), but need not exceed the fair market rent or value of the unit.
(2) Other assistance, including down payment assistance, to non
low-income families, cannot exceed: (Income of family at 80 percent of
median income/Income of non low-income family) x (Present value of the
assistance provided to family at 80 percent of median income).
(e) The requirements set forth in paragraphs (c) and (d) of this
section do not apply to non low-income families which the recipient has
determined to be essential under Sec. 1000.106(b).
21. Revise Sec. 1000.114, to read as follows:
Sec. 1000.114 How long does HUD have to review and act on a proposal
to provide assistance to non low-income families or a model housing
activity?
Whether submitted in the IHP or at any other time, HUD will have 60
calendar days after receiving the proposal to notify the recipient in
writing that the proposal to provide assistance to non low-income
families or for model activities is approved or disapproved. If no
decision is made by HUD within 60 calendar days of receiving the
proposal, the proposal is deemed to have been approved by HUD.
22. Revise Sec. 1000.116, to read as follows:
Sec. 1000.116 What should HUD do before declining a proposal to
provide assistance to non low-income families or a model housing
activity?
HUD shall consult with a recipient regarding the recipient's
proposal to provide assistance to non low-income families or a model
housing activity. To the extent that resources are available, HUD shall
provide technical assistance to the recipient in amending and modifying
the proposal, if necessary. In case of a denial, HUD shall give the
specific reasons for the denial.
23. In Sec. 1000.118, revise the heading and paragraph (a), to
read as follows:
Sec. 1000.118 What recourse does a recipient have if HUD disapproves
a proposal to provide assistance to non low-income families or a model
housing activity?
(a) Within 30 calendar days of receiving HUD's denial of a proposal
to provide assistance to non low-income families or a model housing
activity, the recipient may request reconsideration of the denial in
writing. The request shall set forth justification for the
reconsideration.
* * * * *
24. Add Sec. 1000.141, to read as follows:
Sec. 1000.141 What is ``useful life'' and how is it related to
affordability?
Useful life is the time period during which an assisted property
must remain affordable, as defined in section 205(a) of NAHASDA.
25. Revise Sec. 1000.142, to read as follows:
Sec. 1000.142 How does a recipient determine the ``useful life''
during which low-income rental housing and low-income homebuyer housing
must remain affordable as required in sections 205(a)(2) and 209 of
NAHASDA?
To the extent required in the IHP, each recipient shall describe
its determination of the useful life of the assisted housing units in
its developments in accordance with the local conditions of the Indian
area of the recipient. By approving the plan, HUD determines the useful
life in accordance with section 205(a)(2) of NAHASDA and for purposes
of section 209.
26. Add Sec. 1000.143, to read as follows:
Sec. 1000.143 How does a recipient implement its useful life
requirements?
A recipient implements its useful life requirements by placing a
binding commitment, satisfactory to HUD, on the assisted property.
Sec. Sec. 1000.144 and 1000.146 [Redesignated]
27. Redesignate Sec. 1000.144 and Sec. 1000.146 as Sec. 1000.145
and Sec. 1000.147, respectively.
28. Add Sec. 1000.144, to read as follows:
Sec. 1000.144 What are binding commitments satisfactory to HUD?
A binding commitment satisfactory to HUD is a written use
restriction agreement, developed by the recipient, and placed on an
assisted property for the period of its useful life.
29. Add Sec. 1000.146, to read as follows:
Sec. 1000.146 Are binding commitments for the remaining useful life
of property applicable to a family member or household member who
subsequently takes ownership of a homeownership unit?
No. The transfer of a homeownership unit to a family member or
household member is not subject to a binding commitment for the
remaining useful life of the property. Any subsequent transfer by the
family member or household member to a third party (not a family member
or household member)
[[Page 71487]]
is subject to any remaining useful life under a binding commitment.
30. Revise redesignated Sec. 1000.147, to read as follows:
Sec. 1000.147 When does housing qualify as affordable housing under
NAHASDA?
(a) Housing qualifies as affordable housing, provided that the
family occupying the unit is low-income at the following times:
(1) In the case of rental housing, at the time of the family's
initial occupancy of such unit;
(2) In the case of a contract to purchase existing housing, at the
time of purchase;
(3) In the case of a lease-purchase agreement for existing housing
or for housing to be constructed, at the time the agreement is signed;
and
(4) In the case of a contract to purchase housing to be
constructed, at the time the contract is signed.
(b) Families that are not low-income as described in this section
may be eligible under Sec. 1000.104 or Sec. 1000.110.
31. In Sec. 1000.150, revise the heading to read as follows:
Sec. 1000.150 How may Indian Tribes and TDHEs receive criminal
conviction information on applicants for employment and on adult
applicants for housing assistance, or tenants?
32. Revise Sec. 1000.152 to read as follows:
Sec. 1000.152 How is the recipient to use criminal conviction
information?
(a) With regard to adult tenants and applicants for housing
assistance, the recipient shall use the criminal conviction information
described in Sec. 1000.150 only for applicant screening, lease
enforcement, and eviction actions.
(b) With regard to applicants for employment, the recipient shall
use the criminal conviction information described in Sec. 1000.150 for
the purposes set out in section 208 of NAHASDA.
(c) The criminal conviction information described in Sec. 1000.150
may be disclosed only to any person who has a job-related need for the
information and who is an authorized officer, employee, or
representative of the recipient or the owner of housing assisted under
NAHASDA.
33. Revise Sec. 1000.201, to read as follows:
Sec. 1000.201 How are funds made available under NAHASDA?
Every fiscal year HUD will make grants under the IHBG program to
recipients who have submitted to HUD for a Tribal program year an IHP
in accordance with Sec. 1000.220 to carry out affordable housing
activities.
34. Revise Sec. 1000.214, to read as follows:
Sec. 1000.214 What is the deadline for submission of an IHP?
IHPs must be initially sent by the recipient to the Area ONAP no
later than 75 days before the beginning of a Tribal program year. Grant
funds cannot be provided until the plan due under this section is
determined to be in compliance with section 102 of NAHASDA and funds
are available.
35. Revise Sec. 1000.216, to read as follows:
Sec. 1000.216 What happens if the recipient does not submit the IHP
to the Area ONAP by not later than 75 days before the beginning of the
Tribal program year?
If the IHP is not initially sent by at least 75 days before the
beginning of the Tribal program year, the recipient will not be
eligible for IHBG funds for that fiscal year. Any funds not obligated
because an IHP was not received before this deadline has passed shall
be distributed by formula in the following year.
36. Revise Sec. 1000.220, to read as follows:
Sec. 1000.220 What are the requirements for the IHP?
The IHP requirements are set forth in section 102(b) of NAHASDA. In
addition, Sec. Sec. 1000.56, 1000.108, 1000.120, 1000.134, 1000.142,
1000.238, 1000.302, and 1000.328, require or permit additional items to
be set forth in the IHP for HUD determinations required by those
sections. Recipients are only required to provide IHPs that contain
these elements in a form prescribed by HUD. If a TDHE is submitting a
single IHP that covers two or more Indian Tribes, the IHP must contain
a separate certification in accordance with section 102(d) of NAHASDA
and IHP Tables for each Indian Tribe when requested by such Indian
Tribes. However, Indian Tribes are encouraged to perform comprehensive
housing needs assessments and develop comprehensive IHPs and not limit
their planning process to only those housing efforts funded by NAHASDA.
An IHP should be locally driven.
37. Revise Sec. 1000.224, to read as follows:
Sec. 1000.224 Can any part of the IHP be waived?
Yes. HUD has general authority under section 101(b)(2) of NAHASDA
to waive any IHP requirements when an Indian Tribe cannot comply with
IHP requirements due to exigent circumstances beyond its control, for a
period of not more than 90 days. The waiver authority under section
101(b)(2) of NAHASDA provides flexibility to address the needs of every
Indian Tribe, including small Indian Tribes. The waiver may be
requested by the Indian Tribe or its TDHE (if such authority is
delegated by the Indian Tribe), and such waiver shall not be
unreasonably withheld.
38. Add Sec. 1000.225, to read as follows:
Sec. 1000.225 When may a waiver of the IHP submission deadline be
requested?
A recipient may request a waiver for a period of not more than 90
days beyond the IHP submission due date.
39. Add Sec. 1000.227, to read as follows:
Sec. 1000.227 What shall HUD do upon receipt of a IHP submission
deadline waiver request?
The waiver shall be decided upon by HUD within 45 days of receipt
of the waiver request. HUD shall notify the recipient in writing within
45 days of receipt of the waiver request whether the request is
approved or denied.
40. In Sec. 1000.230, revise paragraph (a)(1), to read as follows:
Sec. 1000.230 What is the process for HUD review of IHPs and IHP
amendments?
* * * * *
(a) * * *
(1) Comply with the requirements of section 102 of NAHASDA, which
outlines the IHP submission requirements; however, the recipient may
use either the HUD-estimated IHBG amount or the IHBG amount from their
most recent compliant IHP;
* * * * *
41. In Sec. 1000.236, revise paragraphs (a)(4), (a)(5), and (b),
and add paragraph (a)(6), to read as follows:
Sec. 1000.236 What are eligible administrative and planning expenses?
(a) * * *
(4) Preparation of the annual performance report;
(5) Challenge to and collection of data for purposes of challenging
the formula; and
(6) Administrative and planning expenses associated with
expenditure of non-IHBG funds on affordable housing activities if the
source of the non-IHBG funds limits expenditure of its funds on such
administrative expenses.
(b) Staff and overhead costs directly related to carrying out
affordable housing activities or comprehensive and community
development planning activities can be determined to be eligible costs
of the affordable housing activity or considered administration or
[[Page 71488]]
planning at the discretion of the recipient.
42. Revise Sec. 1000.238, to read as follows:
Sec. 1000.238 What percentage of the IHBG funds can be used for
administrative and planning expenses?
Recipients receiving in excess of $500,000 may use up to 20 percent
of their annual expenditures of grant funds or may use up to 20 percent
of their annual grant amount, whichever is greater. Recipients
receiving $500,000 or less may use up to 30 percent of their annual
expenditures of grant funds or up to 30 percent of their annual grant
amount, whichever is greater. When a recipient is receiving grant funds
on behalf of one or more grant beneficiaries, the recipient may use up
to 30 percent of the annual expenditure of grant funds or up to 30
percent of their annual grant amount, whichever is greater, of each
grant beneficiary whose allocation is $500,000 or less, and up to 20
percent of the annual expenditure of grant funds or up to 20 percent of
their annual grant amount, whichever is greater, of each grant
beneficiary whose allocation is greater than $500,000. HUD approval is
required if a higher percentage is requested by the recipient.
Recipients combining grant funds with other funding may request HUD
approval to use a higher percentage based on its total expenditure of
funds from all sources for that year. When HUD approval is required,
HUD must take into consideration any cost of preparing the IHP,
challenges to and collection of data, the recipient's grant amount,
approved cost allocation plans, and any other relevant information with
special consideration given to the circumstances of recipients
receiving minimal funding.
43. Add Sec. 1000.239, to read as follows:
Sec. 1000.239 May a recipient establish and maintain reserve accounts
for administration and planning?
Yes. In addition to the amounts established for planning and
administrative expenses under Sec. Sec. 1000.236 and 1000.238, a
recipient may establish and maintain separate reserve accounts only for
the purpose of accumulating amounts for administration and planning
relating to affordable housing activities. These amounts may be
invested in accordance with Sec. 1000.58(c). Interest earned on
reserves is not program income and shall not be included in calculating
the maximum amount of reserves. The maximum amount of reserves, whether
in one or more accounts, that a recipient may have available at any one
time is calculated as follows:
(a) Determine the 5-year average of administration and planning
amounts, not including reserve amounts, expended in a Tribal program
year.
(b) Establish \1/4\ of that amount for the total eligible reserve.
44. Add Sec. 1000.244, to read as follows:
Sec. 1000.244 If the recipient has made a good-faith effort to
negotiate a cooperation agreement and tax-exempt status but has been
unsuccessful through no fault of its own, may the Secretary waive the
requirement for a cooperation agreement and a tax exemption?
Yes. Recipients must submit a written request for waiver to the
recipient's Area ONAP. The request must detail a good-faith effort by
the recipient, identify the housing units involved, and include all
pertinent background information about the housing units. The recipient
must further demonstrate that it has pursued and exhausted all
reasonable channels available to it to reach an agreement to obtain
tax-exempt status, and that failure to obtain the required agreement
and tax-exempt status has been through no fault of its own. The Area
ONAP will forward the request, its recommendation, comments, and any
additional relevant documentation to the Deputy Assistant Secretary for
Native American Programs for processing to the Assistant Secretary.
45. Add Sec. 1000.246, to read as follows:
Sec. 1000.246 How must HUD respond to a request for waiver of the
requirement for a cooperation agreement and a tax exemption?
(a) HUD shall make a determination to such request for a waiver
within 30 days of receipt or provide a reason to the requestor for the
delay, identify all additional documentation necessary, and provide a
timeline within which a determination will be made.
(b) If the waiver is granted, HUD shall notify the recipient of the
waiver in writing and inform the recipient of any special condition or
deadlines with which it must comply. Such waiver shall remain effective
until revoked by the Secretary.
(c) If the waiver is denied, HUD shall notify the recipient of the
denial and the reason for denial in writing. If the request is denied,
IHBG funds may not be spent on the housing units. If IHBG funds have
been spent on the housing units prior to the denial, the recipient must
reimburse the grant for all IHBG funds expended.
46. In Sec. 1000.302, revise paragraph (2)(i)(B) of the definition
of ``Formula area'' and paragraph (3) of the definition of
``Substantial housing services,'' to read as follows:
Sec. 1000.302 What are the definitions applicable for the IHBG
formula?
* * * * *
Formula area. * * *
(2)(i) * * *
(B) Is providing substantial housing services and will continue to
expend or obligate funds for substantial housing services, as reflected
in its Indian Housing Plan and Annual Performance Report for this
purpose.
* * * * *
Substantial housing services are:
* * *
(3) HUD shall require that the Indian Tribe annually provide
written verification, in its Indian Housing Plan and Annual Performance
Report, that the affordable housing activities it is providing meet the
definition of substantial housing services.
* * * * *
47. In Sec. 1000.328, revise paragraph (b)(2), to read as follows:
Sec. 1000.328 What is the minimum amount that an Indian Tribe may
receive under the need component of the formula?
* * * * *
(b) * * *
(2) Certify in its Indian Housing Plan the presence of any
households at or below 80 percent of median income.
48. Revise Sec. 1000.332, to read as follows:
Sec. 1000.332 Will data used by HUD to determine an Indian Tribe's or
TDHE's formula allocation be provided to the Indian Tribe or TDHE
before the allocation?
Yes. HUD shall provide notice to the Indian Tribe or TDHE of the
data to be used for the formula and projected allocation amount by June
1.
Sec. 1000.408 [Removed]
49. Remove Sec. 1000.408.
50. In Sec. 1000.410, revise paragraphs (c) and (d), and add
paragraph (e) to read as follows:
Sec. 1000.410 What conditions shall HUD prescribe when providing a
guarantee for notes or other obligations issued by an Indian Tribe?
* * * * *
(c) The repayment period may exceed 20 years, and the length of the
repayment period cannot be the sole basis for HUD disapproval;
(d) Lender and issuer/borrower must certify that they acknowledge
and agree to comply with all applicable Tribal laws; and
(e) A guarantee made under Title VI of NAHASDA shall guarantee
[[Page 71489]]
repayment of 95 percent of the unpaid principal and interest due on the
notes or other obligations guaranteed.
51. In Sec. 1000.424, revise paragraph (a), remove paragraph
(d)(2), and redesignate paragraphs (d)(3) and (d)(4) as paragraphs
(d)(2) and (d)(3), respectively, to read as follows:
Sec. 1000.424 What are the application requirements for guarantee
assistance under title VI of NAHASDA?
* * * * *
(a) An identification of each of the activities to be carried out
with the guaranteed funds and a description of how each activity
qualifies:
(1) As an affordable housing activity as defined in section 202 of
NAHASDA; or
(2) As a housing related community development activity under
section 601(a) of NAHASDA.
* * * * *
52. In Sec. 1000.428, revise paragraphs (b) and (e) to read as
follows:
Sec. 1000.428 For what reasons may HUD disapprove an application or
approve an application for an amount less than that requested?
* * * * *
(b) The loan or other obligation for which the guarantee is
requested exceeds any of the limitations specified in sections 601(c)
or section 605(d) of NAHASDA.
* * * * *
(e) The activities to be undertaken are not eligible under either:
(1) Section 202 of NAHASDA; or
(2) Section 601(a) of NAHASDA.
* * * * *
53. Add Sec. 1000.503, to read as follows:
Sec. 1000.503 What is an appropriate extent of HUD monitoring?
(a) Subject to any conflicting or supplementary requirement of
specific legislation, and upon the effective date of this regulation,
the frequency of HUD monitoring of a particular recipient will be
determined by application of the HUD standard risk assessment factors,
provided that when a recipient requests to be monitored, HUD shall
conduct such monitoring as soon as practicable. The HUD standard risk
assessment factors may be but are not limited to the following:
(1) Annual grant amount;
(2) Disbursed amounts--all open grants;
(3) Months since last on-site monitoring;
(4) Delinquent audits;
(5) Open audit findings;
(6) Conclusions of auditor;
(7) Open monitoring findings;
(8) Delinquent Annual Performance Reports or Annual Status and
Evaluation Reports;
(9) Status of Corrective Action Plan (CAP) or Performance Agreement
(PA);
(10) Recipient Self-Monitoring;
(11) Inspection of 1937 Act units;
(12) Preservation of 1937 Act units; and
(13) Any other additional factors that may be determined by HUD,
consistent with HUD's Tribal Consultation Policy, by which HUD will
send written notification and provide a comment period. Such additional
factors shall be provided by program guidance.
(b) Provided that if monitoring indicates noncompliance, HUD may
undertake additional sampling and review to determine the extent of
such noncompliance, the level of HUD monitoring of a recipient once
that recipient has been selected for HUD monitoring is as follows:
(1) Review recipient program compliance for the current program
year and the 2 prior program years;
(2) On-site inspection of no more than 10 dwelling units or 10
percent of total dwelling units, whichever is greater;
(3) Review of no more than 10 client files or 10 percent of client
files, whichever is greater.
(c) Notwithstanding paragraph (b) of this section, HUD may at any
time undertake additional sampling and review of prior program years,
subject to the records retention limitations of Sec. 1000.552, if HUD
has credible information suggesting noncompliance. HUD will share this
information with the recipient as appropriate.
(d) A recipient may request ONAP to enter into self-monitoring
mutual agreements or other self-monitoring arrangements with
recipients. ONAP will monitor the recipient only in accordance with
such agreement or arrangement, unless ONAP finds reasonable evidence of
fraud, a pattern of noncompliance, or the significant unlawful
expenditure of IHBG funds.
Sec. 1000.504 [Removed]
54. Remove Sec. 1000.504.
55. In Sec. 1000.512, revise paragraphs (b) and (c), and add
paragraphs (d) and (e), to read as follows:
Sec. 1000.512 Are performance reports required?
* * * * *
(b) Brief information on the following:
(1) A comparison of actual accomplishments to the planned
activities established for the period;
(2) The reasons for slippage if established planned activities were
not met; and
(3) Analysis and explanation of cost overruns or high unit costs;
(c) Any information regarding the recipient's performance in
accordance with HUD's performance measures, as set forth in section
Sec. 1000.524; and
(d) Annual performance data to reflect the accomplishments of the
recipient to include, as specified in the IHP:
(1) Permanent and temporary jobs supported with IHBG funds;
(2) Outputs by eligible activity, including:
(i) Units completed or assisted, and
(ii) Families assisted; and
(3) Outcomes by eligible activity.
(e) As applicable, items required under Sec. Sec. 1000.302 and
1000.544.
56. In Sec. 1000.520, revise the heading, introductory text, and
paragraph (c), to read as follows:
Sec. 1000.520 What are the purposes of HUD's review of the Annual
Performance Report?
HUD will review each recipient's Annual Performance Report when
submitted to determine whether the recipient:
* * * * *
(c) Whether the Annual Performance Report of the recipient is
accurate.
57. In Sec. 1000.524, remove paragraph (a), redesignate paragraphs
(b) through (f) as paragraphs (a) through (e), and revise redesignated
paragraph (d), to read as follows:
Sec. 1000.524 What are HUD's performance measures for the review?
* * * * *
(d) The recipient has met the IHP--planned activities in the one-
year plan.
* * * * *
58. Revise Sec. 1000.528, to read as follows:
Sec. 1000.528 What are the procedures for the recipient to comment on
the result of HUD's review when HUD issues a report under section
405(b) of NAHASDA?
HUD will issue a draft report to the recipient and Indian Tribe
within 60 days of the completion of HUD's review. The recipient will
have at least 60 days to review and comment on the draft report, as
well as provide any additional information relating to the draft
report. Upon written notification to HUD, the recipient may exercise
the right to take an additional 30 days to complete its review and
comment to the draft report. Additional extensions of time for the
recipient to complete review and comment may be mutually agreed upon in
writing by HUD and the recipient. HUD shall consider the comments and
any additional information provided by the recipient. HUD may also
revise the
[[Page 71490]]
draft report based on the comments and any additional information
provided by the recipient. HUD shall make the recipient's comments and
a final report readily available to the recipient, grant beneficiary,
and the public not later than 30 days after receipt of the recipient's
comments and additional information.
59. In Sec. 1000.530, revise the heading and paragraph (b), to
read as follows:
Sec. 1000.530 What corrective and remedial actions will HUD request
or recommend to address performance problems prior to taking action
under Sec. 1000.532?
* * * * *
(b) Failure of a recipient to address performance problems
specified in paragraph (a) of this section may result in the imposition
of sanctions as prescribed in Sec. 1000.532.
60. Revise Sec. 1000.532, to read as follows:
Sec. 1000.532 What are the remedial actions that HUD may take in the
event of recipient's substantial noncompliance?
(a) If HUD finds after reasonable notice and opportunity for
hearing that a recipient has failed to comply substantially with any
provision of NAHASDA or these regulations, HUD shall carry out any of
the following actions with respect to the recipient's current or future
grants, as appropriate:
(1) Terminate payments under NAHASDA to the recipient;
(2) Reduce payments under NAHASDA to the recipient by an amount
equal to the amount of such payments that were not expended in
accordance with NAHASDA or these regulations;
(3) Limit the availability of payments under NAHASDA to programs,
projects, or activities not affected by the failure to comply; or
(4) In the case of noncompliance described in Sec. 1000.542,
provide a replacement TDHE for the recipient.
(b) Before undertaking any action in accordance with paragraph (a)
of this section, HUD will notify the recipient in writing of the action
it intends to take and provide the recipient an opportunity for an
informal meeting to resolve the deficiency. Before taking any action
under paragraph (a) of this section, HUD shall provide the recipient
with the opportunity for a hearing no less than 30 days prior to taking
the proposed action. The hearing shall be held in accordance with Sec.
1000.540. The amount in question shall not be reallocated under the
provisions of Sec. 1000.536, until 15 days after the hearing has been
conducted and HUD has rendered a final decision.
(c) Notwithstanding paragraphs (a) and (b) of this section, if HUD
makes a determination that the failure of a recipient to comply
substantially with any material provision of NAHASDA or these
regulations is resulting, and would continue to result, in a continuing
expenditure of funds provided under NAHASDA in a manner that is not
authorized by law, HUD may, in accordance with section 401(a)(4) of
NAHASDA, take action under paragraph (a)(3) of this section prior to
conducting a hearing under paragraph (b) of this section. HUD shall
provide notice to the recipient at the time that HUD takes that action
and conducts a hearing, in accordance with section 401(a)(4)(B) of
NAHASDA, within 60 days of such notice.
(d) Notwithstanding paragraph (a) of this section, if HUD
determines that the failure to comply substantially with the provisions
of NAHASDA or these regulations is not a pattern or practice of
activities constituting willful noncompliance, and is a result of the
limited capability or capacity of the recipient, if the recipient
requests HUD shall provide technical assistance for the recipient
(directly or indirectly) that is designed to increase the capability or
capacity of the recipient to administer assistance under NAHASDA in
compliance with the requirements under NAHASDA. A recipient's
eligibility for technical assistance under this subsection is
contingent on the recipient's execution of, and compliance with, a
performance agreement pursuant to Section 401(b) of NAHASDA.
(e) In lieu of, or in addition to, any action described in this
section, if the Secretary has reason to believe that the recipient has
failed to comply substantially with any provisions of NAHASDA or these
regulations, HUD may refer the matter to the Attorney General of the
United States, with a recommendation that appropriate civil action be
instituted.
61. In Sec. 1000.534, revise paragraph (a) to read as follows:
Sec. 1000.534 What constitutes substantial noncompliance?
* * * * *
(a) The noncompliance has a material effect on the recipient
meeting its planned activities as described in its Indian Housing Plan;
* * * * *
62. In Sec. 1000.536, revise the heading to read as follows:
Sec. 1000.536 What happens to NAHASDA grant funds adjusted, reduced,
withdrawn, or terminated under Sec. 1000.532?
* * * * *
Sec. 1000.538 [Removed]
63. Remove Sec. 1000.538.
64. Revise Sec. 1000.544 to read as follows:
Sec. 1000.544 What audits are required?
Pursuant to NAHASDA Section 405(a), the recipient must comply with
the requirements of the Single Audit Act (chapter 75 of title 31,
United States Code), including OMB Circular A-133, which require annual
audits of recipients that expend Federal funds equal to or in excess of
an amount specified by the Office of Management and Budget (OMB), as
set out in OMB Circular A-133, subpart B, section 200. If applicable, a
certification that the recipient has not expended Federal funds in
excess of the audit threshold that is set by OMB shall be included in
the recipient's Annual Performance Report.
65. Revise Sec. 1000.548, as follows:
Sec. 1000.548 Must a copy of the recipient's audit pursuant to the
Single Audit Act relating to NAHASDA activities be submitted to HUD?
Yes. A copy of the latest recipient audit under the Single Audit
Act relating to NAHASDA activities must be submitted to the appropriate
HUD ONAP area office at the same time it is submitted to the Federal
Audit Clearinghouse pursuant to OMB Circular A-133.
66. Revise Sec. 1000.552 paragraph (b), to read as follows:
Sec. 1000.552 How long must the recipient maintain program records?
* * * * *
(b) Except as otherwise provided herein, records must be retained
for 3 years from the end of the Tribal program year during which the
funds were expended.
* * * * *
Dated: October 4, 2011.
Sandra B. Henriquez,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 2011-29642 Filed 11-17-11; 8:45 am]
BILLING CODE 4210-67-P