[Federal Register Volume 66, Number 11 (Wednesday, January 17, 2001)]
[Rules and Regulations]
[Pages 4578-4581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1206]
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Part XI
Department of Housing and Urban Development
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24 CFR Part 1003
Revision to the Application Process for Community Development Block
Grants for Indian Tribes and Alaska Native Villages; Final Rule
Federal Register / Vol. 66 , No. 11 / Wednesday, January 17, 2001 /
Rules and Regulations
[[Page 4578]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 1003
[Docket No. FR-4612-F-02]
RIN 2577-AC22
Revision to the Application Process for Community Development
Block Grants for Indian Tribes and Alaska Native Villages
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
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SUMMARY: This final rule amends HUD's regulations for Community
Development Block Grants for Indian Tribes and Alaska Native Villages
(the ``ICDBG'' program). These amendments will permit the incorporation
of the ICDBG grant application and selection procedures into HUD's
SuperNOFA process. The SuperNOFA approach, in which the great majority
of HUD's competitive funds are announced in one document, is designed
to simplify the application process, bring consistency and uniformity
to the application and selection process, and accelerate the
availability of funding. In addition to the SuperNOFA-related
amendments, this final rule amends the ICDBG program regulations to
remove certain obsolete regulatory provisions and to clarify program
requirements. This final rule follows publication of a November 2000
proposed rule and takes into consideration the public comments received
on the proposed rule. After careful review of all of the public
comments, HUD has decided to adopt the proposed regulatory amendments
without change.
DATES: Effective Date: February 16, 2001.
FOR FURTHER INFORMATION CONTACT: Jacqueline Kruszek, Office of Grants
Management, Office of Native American Programs, Department of Housing
and Urban Development, Suite 3390, 1999 Broadway, Denver, CO 80202;
telephone 1-800-561-5913 (this is a toll-free number). Hearing or
speech-impaired persons may access this telephone number via TTY by
calling the Federal Information Relay Service at 1-800-877-8339. Ms.
Kruszek may also be contacted via e-mail at:
Jacqueline_A._Kruszek@hud.gov.
SUPPLEMENTARY INFORMATION:
I. Background--The November 6, 2000, Proposed Rule
The Community Development Block Grants program for Indian Tribes
and Alaska Native Villages (the ``ICDBG'' program) provides eligible
grantees with direct grants for use in developing viable Indian and
Alaskan Native communities, including decent housing, a suitable living
environment, and economic opportunities, primarily for low- and
moderate-income persons. On November 6, 2000 (65 FR 66592), HUD
published a proposed rule to amend the ICDBG program regulations at 24
CFR part 1003. The principal reason for the proposed changes was to
allow the integration of the ICDBG program application process into
HUD's Super Notice of Funding Availability (SuperNOFA) approach. HUD,
through letter dated July 12, 2000, provided Indian tribes and Alaska
Native Villages with the opportunity to comment on the substance of the
proposed regulatory changes during the development of the November 6,
2000 proposed rule. HUD received 7 comments on the proposed revisions,
all in support of the regulatory changes and the incorporation of the
ICDBG program requirements in the SuperNOFA process.
The SuperNOFA process, in which the great majority of HUD's
competitive funds are announced in one document, is designed to
simplify the application process, bring consistency and uniformity to
the application and selection process, and accelerate the availability
of funding. Unlike those HUD programs included in the SuperNOFA, the
application process for funding under the ICDBG program has been
implemented through separate stand-alone NOFAs. This was based, in
part, on a determination that the considerations for grant award were
substantially different for the ICDBG program when compared with those
included in the SuperNOFA. Based upon closer review, HUD has determined
that the SuperNOFA process, especially as it has evolved in the last
two years, affords the degree of flexibility necessary to address
important distinctions in funding considerations (such as project
specific thresholds), while at the same time providing a framework
within which application simplification procedures may be implemented.
Certain regulatory changes, however, are required in order to permit
the incorporation of the ICDBG program in the SuperNOFA process.
Accordingly, HUD issued the November 6, 2000 proposed rule to revise
the ICDBG program regulations application selection and rating
procedures.
In addition to the SuperNOFA-related amendments, HUD took the
opportunity provided by the November 6, 2000 proposed rule to make
several streamlining and clarifying amendments to 24 CFR part 1003.
These proposed amendments were non-substantive, but proposed to remove
obsolete regulatory language and clarify existing program requirements.
In addition, these proposed changes were designed to provide additional
flexibility to address eligible activities under the ICDBG program.
The preamble to the November 6, 2000 proposed rule provides
additional details regarding the proposed amendments to the ICDBG
programs regulations at 24 CFR part 1003.
II. This Final Rule; Discussion of the Public Comments Received on
the November 6, 2000, Proposed Rule
This final rule makes effective the policies and procedures
contained in the November 6, 2000 proposed rule and takes into
consideration the public comments received on the proposed rule. The
public comment period on the proposed rule closed on December 6, 2000.
By close of business on that date, HUD had received 9 public comments
on the proposed regulatory amendments, all from Indian tribes. After
careful review of all the public comments, HUD has decided to adopt the
proposed regulatory amendments without change. This section of the
preamble presents a summary of the significant issues raised by the
public commenters, and HUD's responses to the comments.
A. Comments Regarding National Rating of ICDBG Applications
Comment: Final rule should provide that Area ONAPs will continue to
rate ICDBG applications. The November 6, 2000, rule proposed to remove
the requirement that applications be rated by each Area Office of
Native American Programs (ONAP). The public commenters objected to this
proposed change. The commenters wrote that each Area ONAP has the
advantage of being intimately familiar with local tribes and local
conditions that may affect ICDBG project costs (such as weather
patterns, the availability of construction materials, and the local
labor market). Several of the commenters also disagreed that a national
rating panel would help to expedite the funding process, and wrote they
were unaware of any funding delays necessitating the proposed change.
For these reasons, the commenters believe that national ratings would
be less accurate and fair than those performed by the Area ONAPs.
HUD response. HUD is sensitive to the concerns expressed by these
public
[[Page 4579]]
commenters, and assures them that a national review panel will not be
used during the Fiscal Year (FY) 2001 ICDBG funding round. Applications
for FY 2001 ICDBG funding will continue to be rated by the Area ONAPs.
HUD continues to believe that the use of a national rating panel may
assist in expediting the ICDBG funding approval process, and wishes to
have the regulatory flexibility to consider such an option for future
ICDBG funding rounds. The final rule provides HUD with this
flexibility, but also continues to permit the rating of ICDBG
applications by the Area ONAPs. HUD agrees with the commenters that
there are several issues that need to be addressed before
implementation of a national review panel. HUD will work with its
tribal partners to address these issues of concern before establishing
a national ICDBG review panel. HUD also wishes to note that, even if a
national rating panel is established, ICDBG fund allocation and
competition for these funds would continue to be made for and limited
to each Area ONAP jurisdiction.
B. Comments Regarding Tribal Consultation/Comment Period
Comment: The reduced 30-day comment period was insufficient. Two
commenters did not agree that the need to incorporate the ICDBG program
in the FY 2001 SuperNOFA process justified reducing the customary 60-
day public comment period for proposed rules to 30-days. One of the
commenters wrote that delaying this incorporation would provide Indian
tribes (and particularly small tribes) with the necessary time to
become better acquainted with the SuperNOFA process.
HUD response. HUD agrees that public comment is essential to the
success of the rulemaking process. In general, it is HUD's policy to
provide the public with at least 60 days to submit comments on its
proposed rules. However, HUD continues to believe that good cause
existed to provide a reduced 30-day comment period for the November 6,
2000, proposed rule. The 30-day public comment period was necessary to
ensure the inclusion of the ICDBG funding process in the FY 2001
SuperNOFA. Incorporation in the SuperNOFA will greatly benefit ICDBG
program applicants. Among other benefits, the SuperNOFA's promotion of
coordination and comprehensive planning will provide potential ICDBG
grantees with greater flexibility in meeting local housing and
community development needs, and will allow for the delivery of a
wider, more integrated array of services. Provision of the customary
60-day public comment period had the potential to delay the rulemaking
process and might have jeopardized the incorporation of the ICDBG
program in the FY 2001 SuperNOFA process.
Further, HUD, through letter dated July 12, 2000, provided Indian
tribes and Alaska Native Villages with the opportunity to comment on
the substance of the proposed regulatory changes during the development
of the proposed rule. HUD received 7 comments on the proposed
revisions, all in support of the regulatory changes and the
incorporation of the ICDBG program requirements in the SuperNOFA
process. Accordingly, the reduced 30-day comment period did not unduly
restrict the ability of ICDBG program participants to express their
views on the proposed rule, since they had already been afforded an
opportunity to comment on the regulatory changes.
Comment: HUD failed to consult with Indian Tribes prior to issuing
the proposed rule. Several commenters objected to the perceived lack of
tribal consultation in the development of the proposed rule. The
commenters wrote that HUD was required to consult with Indian tribes
before issuing these proposed amendments, in accordance with Executive
Order 13084 regarding consultation and coordination with Indian tribes
(published in the Federal Register on May 19, 1998 (63 FR 27655)). Two
of the commenters however, acknowledged that the proposed incorporation
of the ICDBG program in the SuperNOFA process ``has been known and
discussed among the tribes for a period of time.''
HUD response. As noted above, HUD consulted with Indian tribes and
Alaska Native Villages during the development of the proposed
regulatory amendments. HUD received 7 comments on the proposed
revisions, all in support of the regulatory changes and the
incorporation of the ICDBG program requirements in the SuperNOFA
process. HUD is committed to continue its consultation efforts with
Indian tribes and Alaska Native Villages in the implementation of these
regulatory changes to the ICDBG program. For example, HUD will work
with its tribal partners to address issues of concern before
implementing a national ICDBG review panel. HUD has also scheduled a
series of meetings with Indian tribes during the week of January 8,
2000 to solicit additional input on the implementation of, and possible
future changes to, these regulatory amendments to the ICDBG program.
Further, and in accordance with the requirements of Executive Order
13084, HUD has also been working closely with Indian tribes in the
development of its tribal consultation policy. The purpose of the
consultation policy will be to enhance communication and coordination
between HUD and federally recognized Indian tribes, and to outline
guiding principles and procedures under which all HUD employees are to
operate with regard to federally recognized Indian or Alaska Native
tribes.
C. Other Comments
Comment: How will HUD determine the ``reasonableness'' of project
costs? The November 6, 2000 rule proposed to revise 24 CFR 1003.100(b),
which identifies the factors that an Area ONAP may take into account in
approving a grant amount less than the requested amount. Specifically,
HUD proposed to revise Sec. 1003.100(b)(2) to clarify that the Area
ONAP may consider the reasonableness of the project costs in making
this determination. One commenter requested clarification on how HUD
will determine whether proposed project costs are reasonable.
HUD response. The requirement that project costs be reasonable is
not a new requirement, but is one of the threshold requirements for
community appropriateness currently located at Sec. 1003.301. As in
previous years, information regarding how HUD will determine the
reasonableness of project costs will be provided in the application kit
for the FY 2001 ICDBG NOFA.
Comment: Clarification is needed regarding outstanding obligations
threshold requirement. The November 6, 2000 rule proposed to continue
to provide that an applicant that has an outstanding ICDBG obligation
to HUD that is in arrears, or has not agreed to a repayment schedule,
will be disqualified from the ICDBG competition (see proposed
Sec. 1003.301(a)). One commenter requested clarification of this
provision. Specifically, the commenter asked whether this provision
refers ``only to an outstanding financial payment due to HUD.'' The
commenter was concerned that this provision could be interpreted to
include any prior grants that are simply behind schedule or past the
desired two year time frame for completion. The commenter wrote that
``[m]any obstacles in the construction industry are unpredictable,
beyond the control of the grantee, and are the result of completely
reasonable dynamics specific to the industry, with compelling
justification.''
HUD response. The regulatory language in question was not revised
by the November 6, 2000, proposed rule.
[[Page 4580]]
Rather, the quoted language is an existing requirement currently
located at Sec. 1000.301(a)(3)(iii). The language was repeated in the
proposed rule solely for purposes of clarity and to place other
proposed regulatory changes in context. This requirement has been
consistently interpreted by HUD to refer only to outstanding financial
debts or payments due to HUD as a result of ineligible costs or
repayments.
Comment: Clarification is needed regarding the SuperNOFA rating
factors. Current Sec. 1003.303 (entitled ``Project rating'')
establishes three separate rating categories: housing, community
facilities, and economic development. Further, Sec. 1003.303
establishes specific rating criteria for these categories (although
some categories share similar criteria). The requirements for separate
rating categories and related criteria based on the type of project are
inconsistent with SuperNOFA requirements and procedures. Therefore, the
November 6, 2000 rule proposed to amend Sec. 1003.303 to provide for
the use of the five uniform rating factors used in the SuperNOFA--
Capacity, Need/Extent of the Problem, Soundness of Approach, Leveraging
of Resources, and Comprehensiveness and Coordination. One of the
commenters requested clarification on how HUD would measure need and
the soundness of approach.
HUD response. Many of the criteria addressed by the SuperNOFA
rating factors (such as need/extent of the problem, and soundness of
approach) are currently addressed under the existing ICDBG rating
factors, and will therefore be familiar to most ICDBG applicants.
Additional details regarding the new rating factors will be provided in
the ICDBG component of the SuperNOFA and the accompanying application
kit.
III. Findings and Certifications
Environmental Impact
In accordance with 24 CFR 50.19(c)(2) of the Department's
regulations, the amendments made by this final rule do not direct,
provide for assistance or loan and mortgage insurance for, or otherwise
govern or regulate, real property acquisition, disposition, leasing,
rehabilitation, alteration, demolition, or new construction, or
establish, revise, or provide for standards for construction or
construction materials, manufactured housing, or occupancy. Therefore,
this final rule is categorically excluded from the requirements of the
National Environmental Policy Act (42 U.S.C. 4321 et seq.).
Regulatory Flexibility Act
The Secretary has reviewed this final rule before publication, and
by approving it certifies, in accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), that this final rule will not have a
significant economic impact on a substantial number of small entities.
To the extent that the final rule has an impact on small Indian tribes
and Alaskan Native Villages, it will be to reduce burden and expedite
the ICDBG funding process. As described more fully in the preamble, the
amendments made by this final rule will permit the incorporation of the
ICDBG program application and selection procedures into HUD's highly
successful SuperNOFA process. The inclusion of the ICDBG program in the
SuperNOFA will simplify the ICDBG application process, conform the
ICDBG application and selection procedures with those of other HUD
competitive grant programs, and accelerate the availability of funding.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This final 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.
Consultation with Indian Tribal Governments
In accordance with Executive Order 13084, Consultation and
Coordination With Indian Tribal Governments, issued on May 14, 1998,
HUD has consulted with representatives of tribal governments concerning
the subject of this rule. HUD, through letter dated July 12, 2000,
provided Indian tribes and Alaska Native Villages the opportunity to
comment on the substance of the proposed regulatory changes during the
development of the November 6, 2000 proposed rule. HUD received 7
comments on the proposed revisions, all in support of the regulatory
changes and the incorporation of the ICDBG program requirements in the
SuperNOFA process. The comments received by HUD indicate that the
regulatory changes are not controversial, and are supported by most
Indian tribes and Alaska Native Villages. Additionally, the November 6,
2000, proposed rule provided Indian tribes with an additional
opportunity to comment on the proposed regulatory changes. HUD has
fully considered the public comments received on the proposed rule in
the development of this final rule. HUD has also scheduled a series of
meetings with Indian tribes during the week of January 8, 2000 to
discuss implementation of, and possible future changes to, these
regulatory amendments to the ICDBG program.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) 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 final rule does not impose
any Federal mandates on any State, local, or tribal governments, or on
the private sector, within the meaning of the Unfunded Mandates Reform
Act of 1995.
Catalog of Federal Domestic Assistance Numbers
The Catalog of Federal Domestic Assistance Number for the Community
Development Block Grant Program for Indian Tribes and Alaska Native
Villages is 14.862.
List of Subjects in 24 CFR Part 1003
Alaska, Community development block grants, Grant programs--housing
and community development, Indians, Reporting and recordkeeping
requirements.
Accordingly, for the reasons described in the preamble, HUD amends
24 CFR part 1003 as follows:
PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND
ALASKA NATIVE VILLAGES
1. The authority citation for 24 CFR part 1003 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 5301 et seq.
2. Revise 1003.100(b)(2) to read as follows:
Sec. 1003.100 General.
* * * * *
(b) * * *
(2) Individual grant amounts. An Area ONAP may approve a grant
amount less than the amount requested. In doing so, the Area ONAP may
take into account the size of the applicant, the level of demand, the
scale of the activity proposed relative to need and
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operational capacity, the number of persons to be served, the amount of
funds required to achieve project objectives, the reasonableness of the
project costs, and the administrative capacity of the applicant to
complete the activities in a timely manner.
3. Revise Sec. 1003.301 to read as follows:
Sec. 1003.301 Selection process.
(a) Threshold requirement. An applicant that has an outstanding
ICDBG obligation to HUD that is in arrears, or one that has not agreed
to a repayment schedule, will be disqualified from the competition.
(b) Application rating. NOFAs will define and establish weights for
the selection criteria, will specify the maximum points available, and
will describe how point awards will be made.
4. Revise Sec. 1003.303 to read as follows:
Sec. 1003.303 Project rating.
Each project included in an application that meets the threshold
requirements shall be competitively rated within each Area ONAP's
jurisdiction under the five following rating factors. Additional
details regarding the rating factors will be provided in the periodic
NOFAs.
(a) Capacity. This factor will address the applicant's
organizational resources necessary to successfully implement the
proposed activities in a timely manner.
(b) Need/Extent of the problem. This factor will address the extent
to which there is a need for the proposed project to address a
documented problem among the intended beneficiaries.
(c) Soundness of Approach. This factor will address the quality and
cost effectiveness of the proposed project, the commitment to sustain
the proposed activities, and the degree to which the proposed project
provides other benefits to community members.
(d) Leveraging of resources. This factor will address the level of
tribal resources and resources from other entities that are used in
conjunction with ICDBG funds to support the proposed project. HUD will
evaluate the level of non-ICDBG resources based on the percentage of
non-ICDBG resources provided relative to project costs.
(e) Comprehensiveness and coordination. This factor will address
the extent to which the applicant's proposed activities are consistent
with the strategic plans or policy goals of the community and further
on-going priorities and activities of the community.
Dated: January 9, 2001.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 01-1206 Filed 1-16-01; 8:45 am]
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