[Federal Register Volume 63, Number 48 (Thursday, March 12, 1998)]
[Rules and Regulations]
[Pages 12334-12374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6283]
[[Page 12333]]
_______________________________________________________________________
Part VI
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 950, 953, 955, 1000, 1003, and 1005
Implementation of the Native American Housing Assistance and Self-
Determination Act of 1996; Final Rule
Federal Register / Vol. 63, No. 48 / Thursday, March 12, 1998 / Rules
and Regulations
[[Page 12334]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 950, 953, 955, 1000, 1003, and 1005
[Docket No. FR-4170-F-16]
RIN 2577-AB74
Implementation of the Native American Housing Assistance and
Self-Determination Act of 1996; Final Rule
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
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SUMMARY: On July 2, 1997, HUD published a rule proposing to implement
the Native American Housing Assistance and Self-Determination Act of
1996 (NAHASDA). NAHASDA reorganizes the system of Federal housing
assistance to Native Americans by eliminating several separate programs
of assistance and replacing them with a single block grant program. In
addition to simplifying the process of providing housing assistance,
the purpose of NAHASDA is to provide Federal assistance for Indian
tribes in a manner that recognizes the right of Indian self-
determination and tribal self-governance. This rule makes final the
policies and procedures set forth in the July 2, 1997 proposed rule,
and takes into consideration the public comments received on the
proposed rule. As required by section 106(b)(2) of NAHASDA, HUD
developed the proposed and final rules with active tribal participation
and using the procedures of the Negotiated Rulemaking Act.
EFFECTIVE DATE: April 13, 1998.
FOR FURTHER INFORMATION CONTACT: Jacqueline Johnson, Deputy Assistant
Secretary for Native American Programs, Department of Housing and Urban
Development, 451 Seventh Street, SW, Room 4100, Washington, DC 20410;
telephone (202) 708-0950 (this is not a toll-free number). Speech or
hearing-impaired individuals may access this number via TTY by calling
the toll-free Federal Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. The July 2, 1997 Proposed Rule
On July 2, 1997 (62 FR 35718), HUD published for public comment a
rule proposing to implement the Native American Housing Assistance and
Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA).
NAHASDA streamlines the process of providing housing assistance to
Native Americans. Specifically, it eliminates several separate programs
of assistance and replaces them with a single block grant program. In
addition to simplifying the process of providing housing assistance,
the purpose of NAHASDA is to provide Federal assistance for Indian
tribes in a manner that recognizes the right of Indian self-
determination and tribal self-governance.
The July 2, 1997 rule proposed to implement NAHASDA in a new 24 CFR
part 1000. Part 1000 is divided into six subparts (A through F), each
describing the regulatory requirements for a different aspect of
NAHASDA. The Committee elected to present new part 1000 in a ``Question
and Answer'' format. Additionally, the rule as much as practicable did
not repeat statutory language. A reader was therefore required to have
the statute available while reading the rule.
The July 2, 1997 rule also proposed to make several conforming
amendments to HUD's existing Indian housing regulations. For example,
the rule proposed to remove 24 CFR part 950 from the Code of Federal
Regulations. Part 950, which sets forth the regulatory requirements for
the ``old'' system of funding, was made obsolete by NAHASDA.
The rule also proposed to redesignate 24 CFR part 953 (Community
Development Block Grants for Indian tribes and Alaskan Native Villages)
and 24 CFR part 955 (Loan Guarantees for Indian Housing) as 24 CFR
parts 1003 and 1005, respectively. These redesignations were designed
to consolidate HUD's Indian housing regulations in the ``1000 series''
of title 24, and assist program participants by presenting uniformity.
Finally, the July 2, 1997 rule proposed amendments to the
regulations currently set forth in part 955. These revisions were
designed to reflect the amendments made by NAHASDA to section 184 of
the Housing and Community Development Act of 1992 (12 U.S.C. 1715z-
13a).
The July 2, 1997 proposed rule provided a detailed description of
the amendments to title 24 of the CFR.
II. Negotiated Rulemaking.
Section 106(b)(2)(A) of NAHASDA provides that all regulations
required under NAHASDA be issued according to the negotiated rulemaking
procedure under subchapter II of chapter 5 of title 5, United States
Code. The rulemaking procedure referenced is the Negotiated Rulemaking
Act of 1990. Accordingly, the Secretary of HUD established the Native
American Housing Assistance and Self-Determination Negotiated
Rulemaking Committee (Committee) to negotiate and develop a proposed
rule implementing NAHASDA.
The Committee consisted of 58 members. Forty-eight of these members
represented geographically diverse small, medium, and large Indian
tribes. There were ten HUD representatives on the Committee.
Additionally, three individuals from the Federal Mediation and
Conciliation Service served as facilitators. While the Committee was
much larger than usually chartered under the Negotiated Rulemaking Act,
its larger size was justified due to the diversity of tribal interests,
as well as the number and complexity of the issues involved.
Tribal leaders recommended and the Committee agreed to operate
based on consensus rulemaking. The protocols adopted by the Committee
define ``consensus'' as general agreement demonstrated by the absence
of expressed disagreement by a Committee member in regards to a
particular issue. HUD committed to using, to the maximum extent
feasible consistent with its legal obligations, all consensus decisions
as the basis for the proposed rule.
The Committee divided itself into six workgroups. Each workgroup
was charged with analyzing specified provisions of the statute and
drafting any regulations it believed were necessary for implementing
those provisions. The draft regulations developed by the workgroups
were then brought before the full Committee for review, amendment, and
approval. A seventh workgroup was assigned the task of reviewing the
approved regulations for format, style, and consistent use of
terminology.
During February, March, and April 1997 the Committee met four
times. The meetings were divided between workgroup sessions at which
regulatory language was developed and full Committee sessions to
discuss draft regulations produced by the workgroups. Tribal leaders
were encouraged to attend the meetings and participate in the
rulemaking process.
It was the Committee's policy to provide for public participation
in the rulemaking process. All of the Committee sessions were announced
in the Federal Register and were open to the public.
After the Negotiated Rulemaking Committee delivered a proposed
rule, the Department placed the rule in clearance in accordance with
its customary procedures for the finalization of proposed rules. As a
result, numerous changes were suggested by offices within HUD which
[[Page 12335]]
had not been part of the negotiated rulemaking process. The Department
did not send up a ``red flag'' or adjust its customary process,
notwithstanding the fact that the proposed rule was the product of a
negotiated rulemaking process. As a result, changes were made to the
negotiated rule and were not communicated to the Negotiated Rulemaking
Committee for comment prior to publication.
After discussing conflicting views of the propriety of the
Department's actions, the Committee determined (with HUD agreement)
that the Department's changes would be given consideration in a manner
similar to public comments. As with public comments, the Department's
changes were accepted by the Committee where they contributed to the
clarity or legal accuracy of the rule, or where they more effectively
implemented NAHASDA.
The Department regrets any misunderstanding its actions may have
caused.
III. Discussion of Public Comments on the July 2, 1997 Proposed
Rule
The public comment period on the July 2, 1997 proposed rule expired
on August 18, 1997. The rule was of significant interest to Indian
country, as demonstrated by the 134 public comments submitted on the
regulations. These comments offered detailed and helpful suggestions on
the implementation of NAHASDA. The Committee met during August,
September, and October 1997 to consider the public comments and develop
this final rule. This section of the preamble presents a summary of the
significant issues raised by the public commenters on the July 2, 1997
proposed rule, and the Committee's responses to these comments. For the
convenience of readers, the discussion of the public comments is
organized by subpart and regulatory section.
Subpart A--General
Subpart A contains the legal authority and scope of the
regulations. It also sets forth definitions for key terms used in the
balance of the regulations. Subpart A also cross-references to other
applicable Federal laws and regulations. Additionally, subpart A
describes the conflict of interest provisions which are applicable
under the new Indian housing block grant program.
Section 1000.1. Section 1000.1 describes the applicability and
scope of 24 CFR part 1000. The Committee has made a clarifying
amendment to this provision. Specifically, a sentence has been added to
explain that to the extent practicable the regulations do not repeat
statutory language.
Section 1000.2. Several commenters believe that the final rule
should restate the trust responsibility of the United States to Indian
tribes. One of the commenters recommended language regarding trust
responsibility for inclusion in the final rule. The Committee has
adopted the language suggested by this commenter and added a new
undesignated paragraph at the end of Sec. 1000.2.
Section 1000.4. Several commenters believe that this section did
not accurately reflect the objectives of NAHASDA. The Committee has
addressed this concern by specifically reiterating the language of
NAHASDA section 201(a) which sets forth the primary objective of
NAHASDA.
Section 1000.6. Several commenters objected to the unilateral
change made by HUD to this section. Specifically, the language
originally adopted by the Committee provided that the new Indian
Housing Block Grant (IHBG) program is a ``formula driven'' program. HUD
revised this to read ``formula grant program.'' The Committee has
adopted the suggestion made by these commenters to use the original
regulatory language. The Committee believes this language more
accurately reflects the nature of the IHBG program.
Section 1000.8. Several commenters believe that this section, which
merely cross-referenced to HUD's general regulatory waiver provision at
24 CFR 5.110, was unclear. The Committee has corrected this by revising
the section to reiterate the language of Sec. 5.110.
Another commenter recommended that HUD should be required to
respond to waiver requests within 30 days of receipt or the waiver
should be automatically approved. The authority to grant regulatory
waivers rests solely with the Secretary. The default approval procedure
suggested by the commenter would contradict this principle.
Accordingly, the comment has not been adopted.
Section 1000.10. A number of comments were received which suggested
changes to definitions contained in the proposed rule. The Committee
reviewed each of the comments and determined as follows:
1. Adjusted income. Several comments suggested excluding child
support from annual income. The definition of adjusted income is
specified in the statute. The statutory definition allows the Indian
tribe to include in its Indian Housing Plan (IHP) other amounts they
decide to exclude from annual income. Accordingly, no revision was made
to the proposed rule.
2. Annual income. A number of suggestions were received to remove
from the definition of annual income specific items such as per capita
payments, lease payments, education stipends, etc. The definition in
the proposed rule is modeled on the obsolete 1937 Act definition which
was repealed by NAHASDA. In response to these comments, the Committee
has revised the definition of ``annual income'' to provide Indian
tribes with greater flexibility in determining what is annual income.
The revised definition is modeled on the definition of annual income in
the HOME program (24 CFR part 92) and provides three distinct
definitions of annual income from which a recipient may choose.
3. Homebuyer payment. The Committee has added a new definition of
``homebuyer payment.'' As explained in the preamble to the proposed
rule (62 FR 35722), the term ``homebuyer payment'' is limited to lease-
purchase payments, such as those in the Mutual Help Homeownership
Opportunity Program. The addition of this new definition will clarify
the meaning of the phrase for readers of the regulations.
4. Indian area. The proposed rule provided the broadest possible
definition of ``Indian area'' to allow Indian tribes or Tribally
Designated Housing Entities (TDHEs) to operate. The Committee has
chosen not to make substantive revisions to this definition. However,
in response to several comments, it has clarified the definition.
5. Indian tribe. One commenter suggested that only Federally
recognized Indian tribes be recognized in Alaska. The definition of
eligible recipients is statutory; therefore, no change was made to the
definition.
6. Median Income. The Committee has amended the definition of
median income. The proposed rule merely cross-referenced to the
statutory definition. The amendment clarifies the definition for
purposes of eligibility under a recipient's program.
7. Person with disabilities. HUD made several changes to language
adopted by the Committee at the proposed rule stage designed to clarify
that this definition was based on HUD's definition of ``physical, or
mental impairment'' at 24 CFR 8.3. The regulations at 24 CFR part 8
implement section 504 of the Rehabilitation Act of 1973 (29 U.S.C.
794). The Committee reviewed the HUD changes and determined they were
unnecessary. Accordingly, this final rule reflects the original
Committee language.
8. Total development cost. Several comments suggested
clarifications and
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modifications to this definition. Total development cost is a term used
only for purposes of the formula. Therefore, the term is being defined
under subpart D and is being removed from this section.
Section 1000.12. This section describes the nondiscrimination
requirements that are applicable to the Indian Housing Block Grant
(IHBG) program. In response to several public comments, the Committee
has made several clarifying revisions to Sec. 1000.12. The section now
clarifies that the Indian Civil Rights Act applies to Federally
recognized Indian tribes exercising powers of self-government. Further,
Sec. 1000.12(b) now clearly provides that 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 ICRA. However, the title VI and title VIII requirements
do not apply to actions by Indian tribes under section 201(b) of
NAHASDA.
Section 1000.14. Several commenters objected to the relocation and
property disposition requirements set forth in this section. The
commenters wrote that these requirements were burdensome and redundant.
Several commenters suggested that Sec. 1000.14 simply cross-reference
to the Department of Transportation regulations at 49 CFR part 24. The
Department of Transportation is the lead agency in the implementation
of the Uniform Relocation Act. The Committee has reviewed Sec. 1000.14
and determined that it provides clear and concise guidance to
recipients. Accordingly, no changes have been made.
Section 1000.16. A number of comments were received which expressed
concern with the application of Davis-Bacon Act requirements to
NAHASDA. The payment of Davis-Bacon wage rates to laborers and
mechanics in the development of affordable housing under NAHASDA is a
statutory requirement under section 104(b) of NAHASDA and cannot be
removed by regulation.
Other commenters suggested that the regulations limit the
applicability of Davis-Bacon to projects larger than 12 units. This
suggestion was not adopted by the Committee for lack of statutory
authority.
A number of commenters suggested that the labor standards section
was not sufficiently clear. The Committee has replaced the language in
the proposed rule, including those provisions modified by HUD without
the consent of the Committee, with a more explicit discussion of labor
standards including the applicability of Davis-Bacon wage rates, HUD
determined wage rates, the Contract Work Hours and Safety Standards
Act, and miscellaneous related laws and issuances.
Section 1000.18. One commenter questioned whether HUD or the
recipient will have to conduct an Environmental Assessment (EA) before
HUD's compliance determination for an IHP. The commenter recommended
that the final rule clarify this issue. Section 1000.18 has been
revised to provide that an environmental review does not have to be
completed prior to HUD's compliance determination for an IHP.
One commenter noted that 24 CFR parts 50 and 58 do not refer to the
Archaeological Resources Protection Act and Native American Graves
Protection and Repatriation Act. The commenter believed these statutes
should be addressed in the final rule. The Committee has not adopted
this suggestion. Parts 50 and 58 list only statutes that apply to
Federal projects specifically. The statutes referenced by the commenter
have a broader scope.
Section 1000.20. Forty-seven comments were received on this
section. These comments deal with HUD's environmental review
responsibilities addressing the payment of review costs; the timely
completion of reviews; and the eligibility, under NAHASDA, for NEPA
training.
This section has been modified by the Committee to provide greater
flexibility in addressing environmental review requirements. In
addition to requesting HUD to complete reviews or the Indian tribe
completing reviews, the Indian tribe can now choose to provide HUD with
necessary information for HUD to complete the environmental reviews.
Also, a sentence has been added which clearly notifies recipients that
environmental reviews must be completed before affordable housing
activities affecting the environment can begin.
Additionally, HUD raised an issue in the preamble of the proposed
rule concerning the timing of environmental reviews as it relates to
approval of the IHP. HUD has reviewed the IHP approval process and has
determined that the approval of the IHP does not have an impact on the
completion of the environmental reviews.
Section 1000.22. One commenter suggested that the final rule state
whether additional funds will be available to the Indian tribes to meet
the environmental review requirements. The rule states in Sec. 1000.22
that environmental review costs are eligible costs. Another commenter
wrote that Indian tribes should be reimbursed for all related expenses
to the extent they assume environmental review responsibilities. The
Committee has not revised Sec. 1000.22 in response to these comments.
There will be no additional funds available to Indian tribes for the
review.
Section 1000.26. Several commenters objected to the applicability
of 24 CFR part 85 to recipients under NAHASDA. These commenters
believed that making part 85 applicable violated the self-governance
principles of NAHASDA. Part 85 establishes uniform administrative
requirements for grants and cooperative agreements to State, local, and
Federally recognized tribal governments. The Committee determined that
the consensus language of Sec. 1000.26 should not be changed.
Several commenters recommended that the final rule specify which
administrative provisions are applicable to NAHASDA. The Committee has
adopted this comment. Accordingly, Sec. 1000.26 has been revised to
list the administrative requirements which apply to NAHASDA.
Section 1000.28. Several commenters believed the Committee should
provide a definition of ``self governance tribe.'' The Committee has
added a sentence to this section which provides that for purposes of
Sec. 1000.28, a self-governance Indian tribe is an Indian tribe that
participates in self governance activities as authorized under Public
Law 93-638 (25 U.S.C. 450 et seq.).
Other commenters wrote that making the part 85 requirements
applicable to self-governance Indian tribes violated the principles of
tribal self-determination. The Committee agrees with these comments.
Accordingly, the provision has been revised to provide that a self-
governance Indian tribe may certify that its administrative
requirements and standards meet or exceed the comparable requirements
set forth in Sec. 1000.26.
Section 1000.30 through 34. Several commenters objected to the
inclusion of specific conflict of interest provisions in the proposed
rule. The commenters believe that recipients should make their own
determination regarding conflict of interest based on local conditions
or the fact that other programs administered by the recipient may have
conflict of interest requirements that are not entirely consistent with
the proposed requirements. The Committee has not revised Sec. 1000.30
based on these comments. The Committee determined that the final rule
should set forth specific conflict of interest provisions to guide
recipients.
Other commenters objected to the unilateral changes made by HUD
subsequent to Committee approval. The
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Committee reviewed the language modifications made by HUD and
determined the language is clearer than the original language.
Accordingly, the change has been incorporated.
In response to a number of public comments, the Committee has
clarified the meaning of the term ``family ties'' used in this section.
Section 1000.30 has been revised to make clear that this term applies
to immediate family ties, which are determined by the Indian tribe or
TDHE in its operating policies.
The Committee has also removed the reference to 24 CFR part 84,
Grants and Agreements with Institutions of Higher Education, Hospitals,
and Other Non-Profit Organizations, from this section based upon its
determination that the common rule requirements of part 85,
Administrative Requirements for Grants and Cooperative Agreements to
State, Local and Federally Recognized Indian Tribal Governments, apply
to recipients. The part 85 requirements apply to governmental entities
and therefore are more appropriate for recipients of NAHASDA
assistance.
Additionally, the Committee has added a new Sec. 1000.30(c) which
excludes from the conflict of interest provisions those individuals who
would otherwise be eligible for program benefits. Additional language
clarifications were also made to sections 1000.32 and 1000.34.
Section 1000.36. Proposed Sec. 1000.36 would have required a
recipient to retain records regarding exceptions made to the conflict
of interest provisions for a period of at least 5 years. Section
1000.548 of the proposed rule, renumbered as Sec. 1000.552 in the final
rule, requires that recipients maintain all other IHBG program records
for a period of three years. One commenter suggested that the final
rule establish a uniform time period for the retention of program
records. The commenter further suggested that the three-year time
period set forth in Sec. 1000.548 of the proposed rule, now
Sec. 1000.552, be adopted. The Committee agrees and has revised
Sec. 1000.36 accordingly.
Section 1000.38. Several commenters objected to HUD's changes to
the original Committee language. These commenters believe that the
revisions made by HUD establish onerous flood insurance requirements.
Other comments expressed concern with the workability of flood
insurance requirements and suggested adding exclusions such as for
inability to obtain coverage or for costs below $5000, or exemptions
from the requirements due to lack of available land outside marginal
floodplain areas. Another commenter stated that flood insurance
requirements should be limited to acquisition and construction
projects.
The Committee has decided to retain the revisions made by HUD to
Sec. 1000.38. HUD's changes added a citation to the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4001-4128) (FDPA). In addition, the
changes clarified that flood insurance requirements apply under the
FDPA to financial assistance for ``acquisition and construction
purposes'', rather than to all affordable housing activities under
NAHASDA. There is no authority to administratively adopt the exemptions
suggested. Section 102(c)(2) of the FDPA contains an exclusion from the
flood insurance purchase requirement for loans that have an original
outstanding balance of $5000 or less and a repayment term of one year
or less.
One commenter suggested that the following language from the FDPA
should be added to the end of paragraph 1000.38(b): ``Provided, that if
the financial assistance provided is in the form of a loan or an
insurance or guaranty of a loan, the amount of flood insurance required
need not exceed the outstanding principal balance of the loan and need
not be required beyond the term of the loan.'' The Committee has made
the recommended change with minor revisions.
Section 1000.40. A number of comments were received questioning the
applicability of lead-based paint poisoning prevention requirements to
NAHASDA, the complexity and cost of complying with program regulations
which applied to housing developed under the 1937 Act, and the limited
information provided under the proposed rule as to the lead-based paint
poison prevention requirements. In order to streamline the lead-based
paint poisoning requirements applicable to NAHASDA and to provide
guidance to recipients on protection against lead poisoning from
applied paint, the Committee has replaced the limited language in the
proposed rule with more extensive, grant activity based language
utilizing HUD's experience in the HOME program.
Section 1000.42. Several commenters objected to the applicability
of HUD's regulations at 24 CFR part 135, Economic Opportunities for
Low-and Very Low-Income Persons, which implement section 3 of the
Housing and Urban Development Act of 1968. The commenters believe that
independent Section 3 regulations should be developed for the IHBG
program. The Committee has determined that the development of
independent Section 3 regulations would be extremely time-consuming.
Further, the part 135 regulations provide an existing set of useful and
comprehensive requirements for implementing the Section 3 requirements.
Accordingly, the Committee has decided to retain the reference to 24
CFR part 135.
The Committee has made two changes to Sec. 1000.42. First, the
lengthy sentence explaining the purpose of section 3 has been removed
and has been replaced with a more concise statement of purpose. This
sentence merely repeated the language already found in 24 CFR 135.1.
Second, a new Sec. 1000.42(b) has been added which clarifies that the
section 3 requirements apply only to those Section 3 covered projects
or activities for which the amount of assistance exceeds $200,000.
Sections 1000.44 and 1000.46. Similar public comments were received
on these two sections. Section 1000.44 provides that the prohibitions
in 24 CFR part 24 on the use of debarred, suspended, or ineligible
contractors apply to the IHBG program. Section 1000.46 provides that
requirements of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et
seq.) and HUD's implementing regulations in 24 CFR part 24 apply to the
IHBG program.
Several commenters recommended that Indian tribes be allowed to
develop their own debarment and drug-free workplace procedures. The
Committee reviewed the requirements set forth in 24 CFR part 24, and
determined that they should continue to be referenced in the
regulations. The Committee did make one clarifying change to
Secs. 1000.44 and 1000.46. Specifically, the sections have been revised
to clarify that the part 24 requirements apply, in addition to any
tribal debarment and drug-free workplace requirements.
Sections 1000.48 through 1000.54. One commenter recommended that
the rule be amended to state that an Indian tribe or TDHE may provide
preferences in the employment, training, procurement and services to
members of the Federally recognized Indian tribes. The reason Indian
preference was not addressed in the proposed rule is because it was a
non-consensus item as indicated in the preamble to the proposed rule.
The Committee has added four sections which address the applicability
of Indian preference, requirements for the provision of Indian
preference in program administration and procurement, and methods for
addressing complaints.
Sections 1000.56, 1000.58, and 1000.60. Numerous comments were
received on the issue of the method of NAHASDA payments, identified as
a nonconsensus issue in the proposed
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rule. After full consideration, HUD and the tribal members of the
Committee have agreed to add new Secs. 1000.56, 1000.58, and 1000.60,
which track the statutory language of section 204(b) of NAHASDA.
Section 204(b) authorizes a recipient to invest grant amounts for the
purposes of carrying out affordable housing activities in investment
securities and other obligations as approved by the Secretary.
The new regulatory provisions provide for a ``phase-in'' of the
recipient's ability to drawdown NAHASDA funds for investment purposes.
Specifically, new Sec. 1000.58(f) provides that a recipient may invest
its IHBG annual grant in an amount equal to the annual formula grant
less any formula grant amounts allocated for the operating subsidy
element of the Formula Current Assisted Housing Stock (FCAS) component
of the formula multiplied by the following percentages, as appropriate:
50% in Fiscal Years 1998 and 1999; 75% in Fiscal Year 2000; and 100% in
Fiscal Year 2001 and thereafter. Investments under these provisions may
be for a period no longer than two years.
Section 1000.62. NAHASDA grant amounts will often generate interest
funds from investment and program funds from tribal housing activities.
The question of whether recipients could keep interest funds was a
nonconsensus issue in the proposed rule. Many commenters and tribal
committee members strongly supported the right of the recipients to
keep all interest income earned on grant amounts. The Committee agrees
and has drafted a new Sec. 1000.62 to the final rule.
Tribal representatives and HUD agree that Sec. 1000.62 provides
that all program income must be used for affordable housing activities,
but Indian tribes argue that program income is not subject to the
requirements applicable to NAHASDA grant amounts. HUD disagrees, and
interprets Sec. 1000.62 to mean that the use of program income is
subject to the same requirements as grant amounts and intends to
implement Sec. 1000.62 accordingly. This would have the effect of
requiring program income to be subject to other statutory requirements
such as environmental review requirements and maximum rent requirements
applicable to grant amounts.
The Committee recognizes the importance of the need for developing
guidance for accounting for program income grant amounts generated by
the combined use of NAHASDA grant amounts and other funds. This
guidance will be jointly developed by HUD and tribal representatives
appointed by the Committee co-chairs. Every attempt will be made to
develop and issue this guidance as expeditiously as possible.
Subpart B--Affordable Housing Activities
Subpart B contains the regulations necessary for the implementation
of title II of NAHASDA. Among the topics addressed by subpart B are
eligible affordable housing activities, low-income requirements, lease
requirements and tenant selection.
Section 1000.104. Several commenters objected to the language,
``absent evidence to the contrary'', added at the end of each sentence.
This language was stricken. This section was intended to clarify that
NAHASDA and these regulations do not affect the eligibility of
homebuyers and tenants assisted under the 1937 Act. The regulations
were revised to reflect this intent. The original language was unclear
regarding whether current families residing in housing units were
automatically eligible for all NAHASDA activities or only for continued
occupancy. One commenter commented that all Indians residing in Indian
Country should be eligible for housing assistance. All Indians are
eligible for assistance under specified activities under NAHASDA.
However, the regulations are written to reflect the intent of Congress
to provide assistance primarily for low income Indian families and to
establish eligibility requirements for non low-income Indian families.
NAHASDA does not impose requirements on continuing income eligibility
after a participant enters a housing program.
Section 1000.106. One comment was received on the different
standards applied to non low-income Indian families and non-Indian
families. The regulations reflect the statutory requirements in NAHASDA
and the Congressional intent to provide housing primarily for low
income Indian families, while recognizing an Indian tribe's need to
house other persons who are essential to the well-being of Indian
families.
Section 1000.108. The Committee agreed with comments to remove the
phrase ``other housing activities'' from this section and Sec. 1000.112
to clarify that these regulations are addressing the assistance to non
low-income Indian families and model housing activities.
Section 1000.110. For purposes of clarity, Sec. 1000.118 has been
redesignated as Sec. 1000.110 and moved to immediately follow
Sec. 1000.108. Former Secs. 1000.108 through 116 were renumbered to
conform to this change.
NAHASDA requires a family to be low income at the time of purchase
of a home. This caused problems for families buying homes pursuant to a
lease purchase agreement. To solve the problem, the section was revised
by adding a new paragraph (a) to make families who are not low income
at the time of purchase of a home, eligible under the non low-income
requirements. In addition, this section was revised to allow recipients
to provide housing to non low-income Indian families who have been
determined by the recipient to be essential to the well-being of the
Indian families in the area, without requiring a higher repayment than
low income Indian families.
Numerous comments were received that the formula for providing
assistance to non low-income Indian families was difficult to
understand. The formula was simplified. Comments were received that the
amount a non low-income family must pay for the assistance should not
be more than the fair market value of the assistance. Comments were
received that the regulations gave HUD too much discretion. The
regulations were revised to give more discretion to recipients,
including the authority to limit payments to Fair Market Value.
Section 1000.112. One commenter believed that these regulations
give too much discretion to HUD in evaluating model housing activities.
The Committee disagreed with the comment because the regulations
provide that HUD will review the proposals with the goal of approving
the activities.
Section 1000.114. One commenter asked that the regulations state
how notice is to be given. The regulations were changed to clarify that
notice by HUD will be given in writing. One commenter commented that
HUD should be given 90 days rather than 60 to approve or disapprove a
proposal. The Committee believes that sixty days is sufficient time for
HUD to approve or disapprove a proposal. This time period is consistent
with the time period for approving an IHP.
Section 1000.116. A commenter requested that this section establish
a time frame. The time frame is specified in Sec. 1000.114. Other
commenters asked whether the time period is affected by the
consultation requirement. The time period within which HUD must respond
is not affected by the requirement to consult with a recipient
regarding its proposal.
Section 1000.118. Commenters asked whether the days specified in
this section were calendar or business days and suggested that the
number of days be consistent in each step of the appeal
[[Page 12339]]
process. The number of days specified in paragraphs (b), (c) and (d) of
this section were changed to 20 calendar days. Paragraph (a) of this
section was clarified to read ``30 calendar days.'' The appeal process
is consistent with other administrative appeal processes.
Section 1000.122. Several commenters stated the answer to the
question should be ``yes.'' The final rule clarifies that while NAHASDA
does not prohibit the use of grant funds as matching funds, other
programs may or may not have restrictions on what may be used as
matching funds.
Section 1000.124. Many comments were received that the 30 percent
maximum rent or homebuyer payment would impose a hardship in areas
where the administrative fee alone exceeds 30 percent of a family's
income. The 30 percent requirement is statutory and cannot be changed
by the regulations. Many comments were also received on the impact of
these regulations on current Mutual Help participants and Section 8
participants. These regulations do not apply to current participants of
a lease purchase agreement, including Mutual Help or Homeownership
participants under the 1937 Act or Section 8 participants. Their
contracts are not affected by NAHASDA. A definition of ``homebuyer
payment'' has been added to the list of defined terms in subpart A,
which only refers to payments made under a lease purchase agreement for
the purchase of a home. This clarifies that Sec. 1000.124 applies only
to rental payments and homebuyer payments made under a lease purchase
agreement.
A commenter requested clarification on how adjusted income is
determined. Guidance on adjusted income is provided in the definitions
section. The section was revised to clarify that these regulations
apply only to units assisted with NAHASDA grant amounts. A sentence was
also added to address minimum rents.
Section 1000.126. Several commenters objected to the 30 percent
limitation on rent or homebuyer payments. The 30 percent requirement is
statutory.
Section 1000.132. Many commenters supported this section.
Section 1000.134. One commenter suggested that all HUD requirements
for demolition or disposition be provided under this part. This section
sets forth all requirements for demolition or disposition. Comments
were received asking for more flexibility in disposing of units
especially where units were sold to low-income Indian families. This
section was revised to reflect this concern. The change allows a
recipient to dispose of a home to a low-income Indian family without
maximizing the sale price, so long as the disposition is consistent
with a recipient's IHP.
Section 1000.138. Several commenters asked that the regulations
exempt from the procurement requirements insurance purchased from
Amerind. Language was added to the regulations to provide an exemption
for nonprofit insurance entities which are owned and controlled by
recipients and which have been approved by HUD.
Section 1000.142. Many comments were received regarding the
necessity of HUD determining ``useful life'' and the criteria used to
make such determination. The statute requires HUD to make
determinations of what is ``useful life.'' The regulations clarify this
while ensuring that the determination will be made in accordance with
the local conditions of the Indian area.
Section 1000.146. Many commenters expressed concern about the
requirement that homebuyers be income eligible at the time of purchase.
This is a statutory requirement. However, Sec. 1000.110 was revised to
allow families buying a home under a lease purchase agreement and who
are no longer low-income at the time of purchase to be eligible as a
non low-income family. This section has been revised to cross reference
to Sec. 1000.110.
Section 1000.148. This section of the proposed rule was removed
because it was attempting to clarify the statutory language in section
207(a)(3) of NAHASDA concerning what law is applicable regarding the
period of time required in giving notice. The answer confused rather
than clarified that the law applicable to notice timing requirements is
the applicable State, tribal or local law. The issue of applicable law
can best be resolved in the recipient's lease.
Section 1000.150. One commenter asked whether HUD would pay the
costs of obtaining the criminal conviction information. Another asked
if it was a requirement to obtain the criminal conviction information.
The costs of obtaining criminal conviction information is an eligible
cost of NAHASDA. A recipient is not required to obtain such
information. One commenter asked what could be done if such agencies
refuse to comply with the request. HUD cannot force other agencies to
comply, but the Indian tribe may seek a legal recourse.
Section 1000.154. One commenter suggested that persons other than
those specified in NAHASDA section 208(c) be authorized to receive
criminal conviction information. The Committee believes this is
inconsistent with NAHASDA.
Section 1000.156. Many comments were received on this section. Many
commented on the various elements included in the total development
cost. One commenter asked whether donations counted towards total
development cost. One commenter objected to any limits. The section was
revised to clearly establish a limit on the amount of IHBG funds that
can be used on the dwelling construction and equipment of a unit, and
to clarify that other costs of development were eligible NAHASDA costs
but not subject to the limit.
The costs of making a unit handicapped accessible is a part of the
dwelling construction cost. The limit was placed in these regulations
in recognition of the few cases of abuse in past Indian housing
programs and was developed to prevent abuses in the new IHBG program.
Subpart C--Indian Housing Plan (IHP)
Subpart C sets forth the regulatory requirements concerning the
preparation, submission, and review of an Indian tribe's IHP. (Note:
The numbers of several sections in this subpart have been amended due
to the addition of new sections. For example, Sec. 1000.210 of the
proposed rule is numbered as Sec. 1000.218 of this final rule.)
Section 1000.201. One commenter requested that language be added to
the beginning of the sentence to indicate ``At the beginning of every
fiscal year HUD will distribute funds .'' The language ``At the
beginning'' was not incorporated because the allocation of the formula
is subject to appropriations and allocation at the beginning of the
Fiscal Year cannot be guaranteed . Also, distribution of the grant is
based on submission and approval of an IHP which may not take place at
the beginning of the FY.
Another commenter suggested that funds should be allowed to be
carried forward from one fiscal year to another. Based on NAHASDA, a
recipient has more than one year to expend each annual grant based on
goals and objectives in the IHP. As a performance measure,
Sec. 1000.524 provides that within 2 years of grant award, 90 percent
of the funds must be obligated by the recipient. Another commenter
asked what would happen to an Indian tribe's or TDHE's allocation under
NAHASDA if an IHP was not submitted by November 3, 1997 deadline. A new
provision has been added to address this question.
[[Page 12340]]
Section 1000.202. One commenter requested that eligible recipients
should include TDHEs which existed and received funding as a Public
Housing Agency (PHA) or Indian Housing Authority (IHA) under the 1937
Act. The Committee believes the language in Sec. 1000.202 is clear as
to who is an eligible recipient and the specific recipients are more
fully defined in Sec. 1000.206. Also, a new section (Sec. 1000.208) has
been added which addresses the commenter's concern regarding an Indian
tribe which had two IHAs established prior to September 30, 1996.
However, under NAHASDA, PHAs are not default TDHEs unless otherwise
recognized as IHAs under these regulations.
Section 1000.204. One commenter asked if the Indian tribe is
obligated to notify an existing TDHE for its jurisdiction within a
certain time period, if the Indian tribe designates itself as the grant
recipient. First, if the Indian tribe designates itself as the
recipient, there is no TDHE. Also, there is no requirement in NAHASDA
which requires any notification to an existing entity which may own or
manage units developed under the 1937 Act. The same commenter asked
whether the TDHE is required to submit an IHP for its existing housing
stock if the Indian tribe is also submitting an IHP within the same
jurisdiction. If an Indian tribe designates itself as a recipient,
there is no TDHE and the Indian tribe must provide for existing housing
stock in its IHP. One commenter raised several concerns regarding the
administration of NAHASDA regarding conflicts of interest,
mismanagement, fraud, and abuse. The regulations as a whole were
written to address these concerns.
Section 1000.206. Several commenters requested clarification on how
TDHEs in Alaska are designated. TDHEs in Alaska are designated in the
same manner as any other TDHE. Several commenters also stated that a
default TDHE should be able to submit an IHP and obtain funding without
obtaining Tribal certification. Section 102(d) of NAHASDA requires
Tribal certification for each IHP including a default TDHE. However,
the Committee has added Sec. 1000.210 to address the commenters'
concern regarding what would happen to 1937 Act units if an Indian
tribe did not submit an IHP or if a default TDHE could not obtain
tribal certification.
Section 1000.208 of the proposed rule. This section was formerly
designated as Sec. 1000.208, but has been redesignated as Sec. 1000.212
due to the addition/redesignation of other regulatory text. One
commenter questioned the need for a detailed five-year plan; another
requested that the five-year plan be submitted at the end of the first
year of funding; and another requested deleting the requirement for the
one-year plan. These requirements are statutory; however, the Committee
believes the submission requirements are reasonable. Several commenters
have requested an extension of the IHP submission deadline and
clarification on what happens if the deadline date is not met. Section
100.214 (formerly designated as Sec. 1000.209) has been amended to
address the commenters concerns regarding the IHP submission deadline
date. Also, Sec. 1000.216 has been added to clarify what happens if the
deadline date is not met.
Section 1000.211 of the proposed rule. This section was formerly
designated as Sec. 1000.210, but has been redesignated as Sec. 1000.218
due to the addition/redesignation of other regulatory text. One
commenter asked what plan requirements were necessary for a consortium
of Indian tribes. The Committee agrees that this comment needs to be
addressed and language has been added to Sec. 1000.212 to address this
concern. Two commenters stated that the reference in the proposed rule
was incorrect. The rule has not been revised, because it reflects the
proper statutory reference.
Section 1000.212 of the proposed rule. This section was formerly
designated as Sec. 1000.212, but has been redesignated as Sec. 1000.220
due to the addition/redesignation of other regulatory text. A commenter
requested that additional language be added to this section to
encourage Indian tribes to assess the ability of the existing
infrastructure to support additional housing. In response, the
Committee believes that the current language that Indian tribes are
encouraged to perform comprehensive housing needs assessments is
adequate.
Section 1000.214 of the proposed rule. This section was formerly
designated as Sec. 1000.214, but has been redesignated as Sec. 1000.222
due to the addition/redesignation of other regulatory text. Two
commenters requested that waiver authority be given to a TDHE. The
Committee agrees and adopted the comment by adding a new Sec. 1000.224.
Comments were received in support of the definition of ``small Indian
tribe'' and also agreeing that ``small Indian tribe'' should not be
defined. No changes have been made to the regulations because the
Committee believes that the IHP requirements are reasonable and the
deadline date has been extended to allow small Indian tribes additional
time to complete the plan.
Section 1000.216 of the proposed rule. This section was formerly
designated as Sec. 1000.216, but has been redesignated as Sec. 1000.226
due to the addition/redesignation of other regulatory text. Two
commenters requested that the HUD changes made to this section be
deleted. One stated that Title II of the Civil Rights Act would create
problems for Indian tribes. The Title II referred to in Sec. 1000.12 is
the Indian Civil Rights Act. However, because the nondiscrimination
requirements, as well as other Federal requirements outlined in these
regulations apply whether or not the recipient certifies that it will
comply, the language inserted in Sec. 1000.226 is not needed and has
been removed.
Section 1000.218 of the proposed rule. This section was formerly
designated as Sec. 1000.218, but has been redesignated as Sec. 1000.228
due to the addition/redesignation of other regulatory text. One
commenter stated that the word ``will'' should be changed to ``shall''
and the word ``substantial'' should be removed. The word ``will'' and
``shall'' have the same meaning in these regulations. Also, the
Committee has agreed that NAHASDA gives HUD the authority to develop
the IHP format and minor changes may be needed to address comments.
Accordingly, no changes have been made to this section.
Section 1000.220 of the proposed rule. This section was formerly
designated as Sec. 1000.220, but has been redesignated as Sec. 1000.230
due to the addition/redesignation of other regulatory text. One
commenter stated that HUD should be given a limit of 60 days to
respond. This requirement is statutory and is outlined in
Sec. 1000.230(b). Another commenter stated that a recipient should be
required to agree to reasonable time frames for which to provide
required certifications. The certifications are a requirement of the
IHP submission and are statutory. An IHP cannot be determined to be in
compliance without the certifications based on section 102(c)(5) of
NAHASDA unless waived under Sec. 1000.226.
A commenter stated that HUD approval should be required only for
substantial modifications to the IHP. The Committee agrees with this
comment and has added appropriate language to Sec. 1000.232. A
commenter stated that the limited HUD review of the IHP should be
clearly defined. This limited review is outlined in section 103(c) of
NAHASDA and the Committee determined that it was not necessary to
repeat these statutory requirements. Another commenter asked when a HUD
review would not be
[[Page 12341]]
necessary.NAHASDA mandates an IHP review by HUD.
Two commenters addressed the waiver provision in Sec. 1000.230. One
requested that the words ``requested and approved'' be added in
paragraph (d). The Committee agrees and has added the language. The
second stated that the waiver could not impose conditions which the
recipient could not comply with due to conditions beyond the
recipient's control. The Committee does not believe this language is
necessary since the waiver indicates that HUD has determined the
recipient cannot meet certain plan requirements.
Another commenter requested a new section to address partial
approval of an IHP. HUD can only make a grant if it is determined that
the plan meets the requirements of section 102 of NAHASDA. Therefore,
this additional language has not been included in the regulations.
However, HUD may approve an IHP pending approval of a model activity or
assistance to non low-income Indian families.
Section 1000.222 of the proposed rule. This section was formerly
designated as Sec. 1000.222, but has been redesignated as Sec. 1000.232
due to the addition/redesignation of other regulatory text. Several
commenters addressed the requirement for modifications of the IHP
including the 60-day timeframe for review. The Committee has addressed
these comments by providing language in the regulations which limits
when HUD's review and determination of compliance is necessary and
provides the flexibility requested.
Section 1000.224 of the proposed rule. This section was formerly
designated as Sec. 1000.224, but has been redesignated as Sec. 1000.234
due to the addition/redesignation of other regulatory text. One
commenter recommended defining applicable judicial review available
following final agency action. No change to the regulations is required
because an agency's action may be challenged under the Administrative
Procedure Act. Another commenter requested that a question be added on
the requirements of the form HUD 50058. It is not necessary to address
this in final regulations, however, the requirements as of October 1,
1997 will be covered in the transition notice published in the Federal
Register.
Section 1000.226 of the proposed rule. This section was formerly
designated as Sec. 1000.226, but has been redesignated as Sec. 1000.236
due to the addition/redesignation of other regulatory text. Several
comments were received on this section. Some commenters requested a
percentage should be set for administration and planning; others felt
that the recipient should set the percentage. Several commenters asked
that indirect costs be included as an eligible expense. There were also
several questions related to reimbursement for reasonable planning
costs associated with developing the IHP. NAHASDA states that the
Secretary shall, by regulation, authorize each recipient to use a
percentage of any grant amounts for administrative and planning
expense. Section 1000.238 has been added which establishes a percentage
which can be used for these costs and clarifies the eligibility of
indirect costs. This percentage can be exceeded with HUD review and
approval. The Committee has also made changes to Sec. 1000.236 which
are intended to further clarify what are considered administrative and
planning costs.
Section 1000.228 of the proposed rule. This section was formerly
designated as Sec. 1000.228, but has been redesignated as Sec. 1000.240
due to the addition/redesignation of other regulatory text. There were
many comments received on this section. The Committee has clarified
when a local cooperation agreement is needed. A statutory amendment
would be required to address any of the other comments.
Section 1000.230 of the proposed rule. This section was formerly
designated as Sec. 1000.230, but has been redesignated as Sec. 1000.242
due to the addition/redesignation of other regulatory text. There were
many comments received on this section. The Committee has clarified
when the tax exemption requirement applies. A statutory amendment would
be required to address any of the other comments.
Subpart D--Allocation Formula
Subpart D implements title II of NAHASDA. Specifically, it
establishes the formula for allocating amounts available for a fiscal
year for block grants under NAHASDA.
Section 1000.301. One commenter felt that the following sentence
should be added to Sec. 1000.301: ``Native Regional Housing Authorities
in Alaska shall be the recipients of grants awarded under section
202(1) of NAHASDA for the maintenance and operation of current assisted
stock.'' This cannot be done by regulation; it is a statutory
requirement that Indian tribes be funded directly. The Committee agreed
to adopt the clarifying changes made by HUD to this section at the
proposed rule stage.
Section 1000.302. Several commenters wrote that the references to
24 CFR part 950 should be removed from the definition of ``Allowable
Expense Level (AEL) factor.'' As the commenters noted, the part 950
regulations are made obsolete by this final rule. The Committee agreed
and revised the definition to reflect the removal of 24 CFR part 950.
Four commenters felt there was no reference provided for how
AELFMR, AEL, FMR factor, local area cost adjustment factor for
construction, and TDC are computed or what office is responsible for
determining these rates or how they can be challenged. Except for AEL
and TDC, the Committee felt the definitions are complete as written in
the rule. The definition for AEL has been changed in the rule to
improve its clarity. AEL was calculated by ONAP and will not be
calculated again, there is a method to challenge FMR and the
requirements are available from HUD. The definition of TDC has been
added to the rule.
Six commenters were concerned with separate definitions of annual
income for formula purposes than in the rest of the rule. The
definition of annual income is different for purposes of the formula
because the formula uses data collected by Census while the annual
income for the remainder of the rule relates to income data collected
from families by the Indian tribe or TDHE (and is statutory). For
clarity, the definition has been changed to ``Formula Annual Income''
and the census definition is included.
Numerous comments were received on the definition for formula area.
Several commenters proposed alternative definitions. Some commenters
felt the rule should clearly state that a local cooperation agreement
is not required where an Indian tribe or TDHE is providing housing
services. Several commenters believed that other service areas
designated by an Indian tribe as historical areas of operation or areas
of service described in the Indian tribe's ordinance should be included
in the definition of formula area. Three commenters felt that Tribal
Jurisdictional Statistical Area and Tribal Designated Statistical Area
should be defined or removed from the definition.
In response to comments, new language was added which maintains the
integrity of the formula by both allowing Indian tribes that provide
housing assistance off tribal lands to include a larger geographic
area. The regulations still constrain the area and the population
counted for an Indian tribe so that it would be fair and equitable for
all Indian tribes.
The Committee added a definition of ``Formula Response Form'' to
reflect the changes made elsewhere in the rule. The proposed rule would
have required data for the formula to be included in
[[Page 12342]]
the IHP. However, because the data is needed before the IHP submission
date, the Committee decided to require formula data to be submitted on
a separate form.
One commenter felt the definition of ``Section 8 unit'' should be
clarified. Some Section 8 assistance is not tied to a unit; rather, it
is tenant-based assistance. The commenter believed this definition
lumps all Section 8 under the definition and is confusing. The
Committee considered the comment, and believes the definition is clear.
Sections 1000.304 and 1000.306. Several commenters believed that
proposed Sec. 1000.304(a) puts the burden on Indian tribes to develop
measurable and verifiable data. The commenters felt this should be
HUD's responsibility. The Committee believes that proposed
Sec. 1000.304 adequately meets the concerns of the commenters. However,
the section may have been unclear to commenters so it has been split
into two sections (Secs. 1000.304 and 1000.306). An additional
reference to reviewing the factors in Formula Current Assisted stock is
added in reference to comments received on funding for Section 8 noted
later.
One commenter recommended that the final rule require the use of
more reliable data as soon as possible, and not establish a five year
waiting period. The Committee believes the method currently proposed
satisfies this concern as efforts to improve data must be begun
immediately in order to complete the effort within five years.
Section 1000.308. A commenter believed the formula should be
modified by a committee in the same fashion as the formula was
developed. Section 1000.306 allows public participation in revision of
the formula. While the tribal Committee members encourage HUD to
convene a tribal group to negotiate modifications, the rule was not
changed to require this.
Section 1000.310. Two commenters stated that the word ``formula''
added by HUD makes no sense. One commenter felt the proposed
Secs. 1000.308 and 1000.310 didn't seem to work together. The commenter
also believed there is inconsistency among the proposed Secs. 1000.308,
1000.324, 1000.326, and 1000.328 which need clarification. The word
``formula'' is included to maintain consistency in the rule. In
response to the confusion over the relationship of Formula Current
Assisted Stock to Section 8, they were combined under the single
heading of Formula Current Assisted Stock. Furthermore, to provide
greater clarity, the order of presentation was changed so that Formula
Current Assisted Stock is listed before Need because this is the manner
in which the formula is actually calculated. As a result of this change
the sections on FCAS are moved ahead of the sections on Need and are
renumbered accordingly.
Section 1000.312. Four comments were received relating to who
should receive funding under Current Assisted Stock in cases where the
ownership of the Current Assisted Stock remains separate from the
Indian tribe. One commenter suggested that a new Sec. 1000.346 be
added, responding to the issue of whether IHAs or TDHEs are entitled to
continued financial assistance for rental public housing projects.
NAHASDA requires that the funding for Current Assisted Stock be
provided to the Indian tribe where the Current Assisted Stock is
located. Because of this statutory requirement, the Committee could not
make the changes requested by the commenters, however language in
Sec. 1000.327 does address this concern as it relates to the
overlapping areas unique to Alaska due to the Alaska Native Settlement
Claims Act (ANSCA).
Section 1000.314. Two commenters felt the explanation on how the
formula addresses units developed under the 1937 Act and in the
development pipeline on October 1, 1997 was unclear. The Committee
agreed and has reworded Secs. 1000.314 through 1000.320 to improve
clarity. The major change was to combine Section 8 into the ``formula
current assisted stock'' component of the formula. As noted earlier
under definitions, changes to IHP submission dates required the
creation of a Formula Response Form.
Two commenters felt that units developed under NAHASDA should be
included in the funding formula. One of the commenters felt that by not
providing such a subsidy creates an incentive not to add either rental
or homeownership units because the formula will not take into account
the maintenance costs of these units. NAHASDA allows for great
flexibility in developing housing stock. At this time the Committee is
not able to determine the level of need for NAHASDA stock subsidy. This
will be re-evaluated within the required 5-year time frame as noted in
Sec. 1000.306.
Two commenters stated that the development of housing units for
homeownership under a model distinct from the existing Mutual Help
program requires a larger initial subsidy investment to reduce the
mortgage burden for the homeowner. However, the formula, because it
fails to account for this greater expense, fails to count non-mutual
help homeownership units, or include sufficient development funds. This
encourages the use of the mutual help model instead of the mortgage
model, which discourages the leveraging of private funds for mortgages
and goes against NAHASDA. The Committee felt no changes were necessary.
Under self-determination Indian tribes have responsibility to develop
affordable housing activities within their available resources.
Section 1000.316. One commenter wrote that proposed Sec. 1000.330
is confusing. The commenter questioned how Section 8 contracts that
have expired or are due to expire in any subsequent year can be
meaningful to a number derived as of September 30, 1997. The Committee
agrees that the section is confusing and has incorporated it into
Sec. 1000.316 and reworded it for clarity.
One commenter wrote that Section 8 units should be multiplied by
the national per unit average for low-rent units and not the Section 8
unit average since they are administered as low income rental units.
The Committee disagrees. In developing the base funding for
homeownership, Low-Rent, and Section 8 of the Formula Current Assisted
Stock, the Committee sought to develop the base funding for each which
reflects the actual operating cost of each.
One commenter wrote that Section 8 participants should continue to
have flexibility to pay more than 30 percent of income in order to
compete for units on the private rental market. Statutorily, recipients
are not allowed to charge low-income families receiving subsidy under
NAHASDA more than 30 percent of the family's adjusted income for
affordable housing.
Four comments received were opposed to funding expired Section 8
contracts under NAHASDA. Opinions were expressed that NAHASDA does not
have enough appropriation to fund the Section 8 and that the Section 8
administered by IHAs has a large number of non-Indians. Two commenters
specified support for funding Section 8 under the formula.
Once a Section 8 contract administered by an IHA expires it cannot
be renewed under the 1937 Act. To maintain this assistance for the
households currently served by the Indian tribes, the Committee felt it
was important to provide assistance under NAHASDA. Nonetheless, the
Committee understands the concerns about the limited assistance
available for Indian housing and has made note in this section and
Sec. 1000.306 that in five years subsidy for Section 8 should be
reconsidered as a component of the formula.
[[Page 12343]]
Section 1000.317. Many comments were received from IHAs in Alaska
concerning funds to maintain and operate 1937 Act units owned by the
IHAs. In response to these comments, a new section has been added which
states that formula funds for 1937 Act units owned by Regional Native
Housing Authorities in Alaska will be allocated to the regional tribe.
Section 1000.318. One commenter wrote that even if units are
conveyed over to a homeowner, the units should still count as Current
Assisted Stock if the units are part of the five-year Comp Grant plan
because there is a continuing obligation on the part of the Indian
tribe's housing program to provide the assistance which has been
promised. However, a conveyed unit, because it has become a private
home, does not qualify as Current Assisted Stock. However, conveyed
units for which Comprehensive Grant funding has been obligated in prior
years may be modernized as scheduled.
One commenter stated that block grant amounts should be fixed based
on units in management and should only be reduced as units leave
management. The grant will not be increased when units are added to
management after October 1, 1997. This gives the IHA no incentive to
convey units out of management nor does it provide for costs of
management of rental units added by the grant. The Committee considered
this concern and has added language that requires conveyance of the
units as soon as practicable as they are paid off under existing
homeownership contracts.
One commenter noted that TDHEs should not be required to repay
grant amounts for housing inventories reduced within the FY. The next
grant year should be based on inventory at that date. The Committee
agrees and has clarified this provision.
Two commenters suggested that the last sentence in the proposed
Sec. 1000.336 have the following added: ``...by the Tribe or TDHE.''
The Committee has incorporated this change and also added ``or IHA'' to
take into account situations where the IHA, not designated as the TDHE,
continues to own the units.
Section 1000.324. The Committee agreed to adopt the clarifying
change made by HUD to this section. One commenter noted that the
``without kitchen or plumbing'' variable is not an accurate measure of
substandard housing because some Indian tribes building housing in
remote location or extreme environmental conditions build new homes
without kitchen or plumbing. After careful consideration of many
issues, including the concern of the commenter, the Committee felt that
it was important to include some indicator of substandard housing.
Currently, the only indicator of substandard housing collected in a
uniform manner for all Indian tribes related to substandard housing is
``without kitchen or plumbing.'' Accordingly, no change has been made
to the rule.
One commenter expressed that ``Without kitchen or plumbing'' should
include heating. While the Committee considered this issue, it was not
felt that the available data would adequately address the concern and
thus the change to the variable could not be accommodated.
Two commenters noted that because most reservations are poverty
areas and the majority of housing consists of HUD built homes and 30
percent is the maximum amount charged, the housing cost burden
component appears to mainly reflect urban need. The commenter felt the
need components should measure criteria which are proportionally
consistent across the country and not include regional or special group
needs. Because housing need is different throughout the country, each
of the variables in the formula has some regional bias, including the
housing cost burden variable referenced in the comment. However, it is
the Committee's position that the combination of all of the variables
in the formula most fairly allocates funds toward housing need in all
regions of the country.
Two commenters felt there should be two need components. One as
AIAN households which are overcrowded and the second as AIAN Households
without kitchen or plumbing. Separating the two variables was
considered. However, they were combined because they are highly
correlated; places with overcrowding tend to also have households
without complete kitchen or plumbing. The Committee combined the two
variables in order to reflect both overcrowding and some components of
substandard housing.
One commenter felt the need component should include non-Indians
presently living in current assisted stock. IHAs provide housing for
both Indians and non-Indians alike. The Committee recognizes that
households with a divorced non-Indian with Indian children are not
counted by the household variables, nor are other non-Indians that an
Indian tribe may choose to serve. However, the needs side of the
formula is intended to target toward Native American housing need.
After receiving the funds based on Native American housing need, the
Indian tribe may choose who they wish to serve. The current assisted
stock component of the formula funds per unit regardless of the race of
the resident.
One commenter noted that the formula does not adequately take into
consideration the disparity between communities that currently have
adequate infrastructure and those that do not. Among tribal communities
in the same geographic region, the per-unit cost of infrastructure
development typically varies much more than the per-unit cost for the
houses alone. Tribal communities located in places that require capital
investment infrastructure, such as very deep wells or long pipelines,
will be severely disadvantaged under the current formula. The Committee
sought out infrastructure data to be used in the formula. However,
after discussions with Indian Health Service staff, it was determined
that at this time the data were not appropriate for this formula.
However, this will be one factor to be considered during the review of
the formula over the next five years.
Several commenters recommended that the formula points and methods
to weight these components agreed to by the Committee should be added
to the regulations. The Committee agreed and has included the weights
in the proposed rule.
Section 1000.326. Several comments submitted regarding
``overlapping service areas'', when more than one Indian tribe defines
the same formula area. One commenter indicated that in Alaska there are
tribal boundaries and a number of projects that border two or more
Indian tribes. Furthermore, Alaska Native Land Claims Corporations
overlap many Indian tribes. One commenter feared that without a quick
HUD determination regarding overlapping formula area, Indian tribes
might be placed in the situation of having to do political ``battle''
with one another to determine their fair share. The Committee agrees
with the comments and have revised Sec. 1000.326 to address overlap
disputes between state and Federal Indian tribes as well as
Sec. 1000.327 to address the allocation of data for the unique
overlapping areas in Alaska.
In addition, one comment was received relating to dual tribal
membership and a change was made in the rule to reflect that concern.
The other concern related to HUD's timing for dealing with issues
related to overlapping areas and a change was made to put in a date
specific when overlapping issues will be addressed.
[[Page 12344]]
One commenter indicated that the IHS is interested in working with
HUD and other agencies on developing better data sources regarding the
number and conditions of AIAN homes. Over the next 5 years HUD and the
Indian tribes intend to improve the data available on Native American
Housing need. IHS participation in this process is greatly appreciated.
Furthermore, IHS assistance with current data that might be used for
addressing problems related to overlapping service areas will be
extremely helpful.
Section 1000.328. Twenty-four of the comments suggested that the
needs component of the formula should provide a minimum level of
funding, thirteen of the commenters suggesting a base allocation of
$150,000.
After giving this issue serious consideration, the Committee agreed
that if an Indian tribe receives less than $50,000 under the needs side
of the formula in the first year it applies for funding, its need
component is set to $50,000 with a downward adjustment for all other
Indian tribes to cover this cost. In subsequent years up to the year
2002, an Indian tribe receiving less than $25,000 under need has their
grant adjusted up to $25,000.
The Committee determined this minimum grant amount was allowable
under NAHASDA under ``other objectively measurable conditions as the
Secretary and Indian tribes may specify.''
Section 1000.330. One commenter felt it would be more equitable to
allocate a standard across-the board housing allowance for every
registered Native American who is a member of a recognized Indian
tribe. A housing allowance for every registered Native American is
contrary to the intent of the Act. NAHASDA requires that the block
grants be targeted to the need of the Indian tribes and the Indian
areas of the Indian tribes for assistance for affordable housing
activities (Sec. 302(b)).
Two commenters felt that U.S. Census data do not reflect the
housing need in Indian country. One commenter recommended the use of
tribal waiting lists for housing and that those waiting lists be
audited to ensure accuracy. In developing the proposed rule, issues of
Census data quality and potential use of waiting list were discussed
and carefully considered. Although recognizing the limitations of
Census data, it is currently the only data available that is collected
in a uniform manner that can be confirmed and verified for all Indian
tribes on income and housing need. Section 1000.306 notes that a new
set of measurable and verifiable data on Native American housing need
will be developed not later than 5 years from the date of issuance of
these regulations. Waiting lists tend to reflect local need rather than
national need that is comparative across Indian tribes.
Section 1000.332. Three commenters felt this section (designated in
the proposed rule as Sec. 1000.318) should provide the procedural
requirements for securing HUD approval, including automatic approval if
HUD fails to act within a specified time. The Committee believes the
details provided in Sec. 1000.336 are adequate. However, the Committee
felt commenters were confused by the order of the questions and answers
presented in proposed Secs. 1000.316 and 1000.318. Accordingly, the
final rule reverses the order of these two sections.
Fourteen comments were received discussing HUD's provision of
notice regarding formula data. Several commenters recommended that the
data should be provided to Indian tribes/TDHEs immediately for review.
Commenters also suggested that HUD be required to provide notice of
data and projected allocation not less than 120 days before the end of
HUD's fiscal year. Other commenters recommended that HUD should be
required to provide notice of data and projected allocation not less
than 120 days before the date IHPs are required to be submitted.
The section was changed by adding a specific date (August 1 of each
year) by which HUD will provide each Indian tribe with the data and a
preliminary allocation based on an estimated appropriation for the next
fiscal year. For consistency, all other deadlines in the formula
component of the rule were made date specific.
Section 1000.334. Several related comments were made reflecting
what information could be used for challenge. One commenter stated that
many States, counties, cities, universities and other educational
institutions have better data than the U.S. Census. The commenters
asked why more systems need to be created if they are in place at the
regional or local level. One commenter wrote that if the TDHE is
providing accurate, verifiable information to be used in the formula,
HUD should not be able to disallow that information. Two commenters
wrote that challenge data could be certified by the Indian tribe and
the BIA, as the BIA already uses tribal enrollment numbers for some
contract funding.
The data used for the formula must be uniformly and consistently
collected for all Indian tribes. Local data sources do not necessarily
provide this. However, the Committee revised the rule to allow HUD
greater discretion to accept data.
Section 1000.336. Five commenters requested more detail on ``a
method acceptable to HUD'' for challenge. A more detailed explanation
of ``a method acceptable to HUD'' for challenge will be included in the
information packet sent out with the data to be used in the formula.
Nonetheless, the Committee agreed that the section needed to be
clarified in respect to submission of challenge material and the rule
was changed accordingly.
Section 1000.338 of the proposed rule. This section was formerly
designated as Sec. 1000.338 but has been redesignated as Sec. 1000.325
for purposes of clarity and better organization of the regulatory text.
One commenter wrote that this section on adjusting for local area costs
is unclear to someone unfamiliar with the existing program. An
explanation of this section is included in the appendix which explains
how the formula works. In addition, TDC is defined in Sec. 1000.302.
Section 1000.340. Because many small IHAs did not receive
modernization funding in FY 1996, two commenters felt the formula
should be based on a three to five year average of operating subsidy
and modernization received by the IHA. However, the current use of FY
1996 modernization is a statutory requirement that cannot be changed by
regulation. Nonetheless, the comments reminded the Committee that an
explanation of how this statutory requirement is incorporated into the
formula was mistakenly not included in the proposed rule. Accordingly,
new Sec. 1000.342 has been added.
Section 1000.342. The proposed rule specifically requested comment
on the issue of whether or not there should be an emergency and
disaster relief set-aside as part of the block grant allocation.
Seventeen commenters opposed a set-aside. Several commenters wrote
that funds should not be taken off the top of the block grant. These
commenters believed this would serve to punish everyone for the
disasters impacting the few. Other commenters suggested that an Indian
tribe should address disaster relief by setting aside its own reserves
for such circumstances. One commenter noted that a fund should not be
established because insurance requirements protect TDHE property and
FEMA is available for natural disasters. Another commenter opposed a
set aside due to the lack of accepted definitions for ``emergency'' and
``disaster.'' One of the comments suggested individual insurance
coverage
[[Page 12345]]
should be required to be sufficient to cover disaster situations at 100
percent.
Thirty-three commenters were in favor of a disaster and/or
emergency set aside. Many of these commenters recommended that the fund
not exceed $10 million. Several commenters suggested that Indian tribes
applying for this funding should be required to show that no other
relief is available from other sources. One commenter supported the
emergency fund, but recommended that Indian tribes should also have the
option of establishing an emergency fund with a portion of their grant
funds. After considering all of the comments, the Committee determined
that a set aside would be difficult to implement and inadvisable. The
Committee recommends that recipients consider the establishment of an
insurance pool.
Performance Variable. The July 2, 1997 proposed rule solicited
comments on the use of a performance variable in the formula
allocation. Numerous comments were received.
Many commenters supported the inclusion of a performance variable
in the allocation formula. These commenters believed a performance
variable was necessary to establish a connection between performance
and the amount of funding an Indian tribe receives. Further, the
commenters believed that the inclusion of a performance variable would
encourage proper fiscal management by Indian tribes. One commenter
recommended that the performance objectives be established by the
Indian tribes and be tribally driven.
Many commenters were opposed to the performance variable. These
commenters believe that a performance variable is unnecessary and would
only serve to divide Indian tribes. These commenters believed that the
inclusion of a performance variable would lead to the high-performing
recipients getting rewarded at the expense of low-performing
recipients, which are in most need of assistance. One commenter writing
against the proposal believes the inclusion of a performance variable
would allow HUD subjectivity in funding decisions.
The Committee believes that performance is an important issue.
However, the Committee determined that the inclusion of a performance
variable in the formula would be inappropriate. Rather, the Committee
has addressed performance measures in subpart F of these regulations,
which deals with compliance issues and adjustments to funding.
General comments on the allocation formula. Several commenters
submitted comments that did not refer to a specific section of subpart
D, but rather concerned the allocation formula generally.
One commenter suggested the allocation formula be published as part
of the final rule. The Committee agrees and the formula is published as
part of the appendix to this final rule.
Another commenter suggested splitting allocations by region or size
of Indian tribe on a bi-annual or tri-annual basis. This suggestion was
considered and not adopted by the Committee for reasons of fairness and
equity.
One commenter questioned whether special consideration would be
given to the high costs of construction and maintenance in Alaska. The
Committee provided for different regional costs to be accounted for in
the formula.
Another commenter recommended that $15 million of the total amount
of funds under the Need component be reserved annually for development
of off-site sanitation facilities (water, sewer, and solid waste
facilities) and allocated to Indian tribes based on a separate
methodology. The Committee considered but did not adopt this proposal
due to the impracticality of administering such a fund.
Subpart E--Federal Guarantees for Financing of Tribal Housing
Activities
Subpart E describes the regulatory requirements necessary for the
implementation of title VI of NAHASDA. This subpart establishes the
terms and conditions by which HUD will guarantee the obligations issued
by an Indian tribe or Tribally Designated Housing Entity for the
purposes of financing eligible affordable housing activities. (Note:
The numbers of several sections in this subpart have been amended due
to the addition of new sections. For example, Sec. 1000.406 of the
proposed rule is numbered as Sec. 1000.408 of this final rule.)
Section 1000.402. Several commenters suggested that State
recognized Indian tribes should not be eligible for participation in
Title VI. Two of these commenters added that if any State recognized
Indian tribes were permitted to participate that their funding should
come from a separate appropriation. The regulations were not changed
because the statute allows for participation by State Indian tribes
that meet the definition in section 4(12)(c) of NAHASDA.
Section 1000.404. This section of the final rule contains new
language. Section 1000.404 of the proposed rule has been redesignated
as Sec. 1000.406 in the final rule. The preamble to the proposed rule
sought input on whether a definition of lender should be added in the
final rule. Some commenters agreed that the language should be added
while others stated that no regulatory language should be added. It was
the decision of the Committee that a lender definition was advisable.
It was further agreed to utilize the language found in HUD's
regulations for the Section 184 Loan Guarantee Program (currently
located in 24 CFR part 955, but redesignated by this final rule as 24
CFR part 1005) to provide consistency in the two loan guarantee
programs. Further, it was agreed that the additional language added to
the definition of lender in part 1005 was appropriate for Title VI as
well (see discussion of changes to part 1005 below). These agreements
are implemented in the revised Sec. 1000.404 of the final rule.
Section 1000.406 of the proposed rule. Section 1000.406 of the
proposed rule has been redesignated as Sec. 1000.408 in the final rule.
One commenter suggested that HUD require only a certification and not
volumes of paperwork. The Committee agreed with the comment but made no
change to the proposed rule as the language as published was
sufficiently broad and did not require excessive paperwork. An
additional commenter stated that the financing terms of a non-
guaranteed loan should not exceed the financing terms of a guaranteed
loan to avoid penalizing financially responsible Indian tribes. The
Committee concurred and reworded the rule to conform with statutory
language regarding the timely execution of program plans.
Section 1000.408 of the proposed rule. Section 1000.408 of the
proposed rule has been redesignated as Sec. 1000.410 in the final rule.
Numerous comments were received stating that the term of the Title VI
loan should be longer than 20 years. The commenters noted that the
proposed rule language provided no flexibility and was
counterproductive to establishing creative financing mechanisms. One
commenter requesting the longer loan term suggested that each
application stand on its own merits. The Committee agreed with this
suggestion and amended the language in the final rule. Additionally,
the language in paragraph (a) was amended to correct wording which
erroneously provided that security pledged with the note or other
obligation could have been sold if the note was sold.
Section 1000.412 of the proposed rule. Section 1000.412 of the
proposed rule has been redesignated as Sec. 1000.414 in the final rule.
While no comments were received, this section was divided into separate
paragraphs to clearly show the
[[Page 12346]]
reader that NAHASDA contains two, distinctive requirements.
Section 1000.414 of the proposed rule. Section 1000.414 of the
proposed rule has been redesignated as Sec. 1000.416 in the final rule.
Several commenters requested a change in wording from ``may'' to
``will'' which they believed responded to concerns from Indian tribes
and was more grammatically correct. The Committee concurred and amended
the language as noted.
Section 1000.418 of the proposed rule. Section 1000.418 of the
proposed rule has been redesignated as Sec. 1000.420 in the final rule.
Two comments requested a change in the proposed rule by adding ``should
not'' instead of the proposed wording of simply ``not.'' The Committee
did not concur with this change as the statute limits the net interest
costs to 30 percent and does not provide for the flexibility the
commenter is seeking.
Section 1000.422 of the proposed rule. Section 1000.422 of the
proposed rule has been redesignated as Sec. 1000.424 in the final rule.
Several comments were received requesting the removal of the
certification on the drug-free workplace and relocation requirements
and the rewording of the certifications in general to be clearer to the
reader. The Committee concurred with these recommendations and further
streamlined the listing of required certifications. Several commenters
requested that ``regulation'' be changed to ``requirements'' since the
reference is to a statutory requirement, as opposed to a regulatory
requirement. The Committee accepted this change.
Section 1000.428 of the proposed rule. Section 1000.428 of the
proposed rule has been redesignated as Sec. 1000.430 in the final rule.
Several commenters suggested that the word ``reasonable'' be added to
the conditions under which HUD may list conditions in the issuance of a
guarantee certificate. The Committee concurred and made this change in
paragraph (c) of this section. A comment was received requesting that a
45 day limit be placed on HUD to provide its request for information.
The Committee agreed that a review period should be established and
retained the 30 day review period.
Section 1000.432 of the proposed rule. Section 1000.432 of the
proposed rule has been redesignated as Sec. 1000.434 in the final rule.
Two comments requested that the allocation process for title VI
applicants be based only on seeking loan guarantee assistance. The
Committee did not recommend any changes based on this comment as the
Title VI applications will be received by the Department throughout the
year and not at one time. Therefore, it is impossible for the
Department to accurately predict the number of loans and the amount of
those loans when applying the formula.
Two comments requested that the date when applications could be
submitted for the unused funds be changed from the fourth quarter to
the third quarter. The Committee agreed with these comments and the
language was amended. Additionally, language was added to make clear to
the reader that an application previously denied under the regional
allocation method would need to be resubmitted at the beginning of the
third quarter to be made eligible for unused funds.
Two comments stated that the allocation method should be based on
need. The Committee did not adopt this recommendation as there is no
statutory basis for such a requirement. The Committee believes that the
language in the proposed rule provided a fair distribution of available
funds. During the third quarter, an adjustment will be made for regions
with higher participation or lower participation in Title VI.
Section 1000.434 of the proposed rule. Section 1000.434 of the
proposed rule has been redesignated as Sec. 1000.436 in the final rule.
A comment was received which supported the monitoring of Title VI funds
by HUD. The Committee agreed with this comment but determined that such
monitoring was fully provided for in the proposed rule language.
Therefore, no change was necessary. A comment was also received which
recommended that this provision be deleted from the rule. The Committee
did not concur on this provision as it would contradict the statute.
Subpart F--Recipient Monitoring, Oversight and Accountability
Subpart F implements title IV of NAHASDA. Among other topics, this
subpart addresses monitoring of compliance, performance reports, HUD
and tribal review, audits, and remedies for noncompliance. (Note: The
numbers of several sections in this subpart have been amended due to
the addition of new sections. For example, Sec. 1000.528 of the
proposed rule is numbered as Sec. 1000.532 of this final rule.)
General comment. One commenter suggested that HUD elevate its
capabilities to insure that it can effectively monitor NAHASDA
activities. No regulatory changes were proposed.
Section 1000.501. One commenter was in favor of this provision.
Section 1000.502. HUD had added the word ``periodically'' in
describing the HUD review process which otherwise was cross-referenced
to section Sec. 100.520. This prompted several negative comments.
Section 1000.520 states that HUD will ``at least annually'' review each
recipient's performance. Therefore, the word ``periodically'' has been
removed.
HUD also added citations to 24 CFR 8.56 and 24 CFR 146.31. Several
commenters objected to this addition. These referenced regulations are
not applicable to these reviews and NAHASDA regulations, so they have
been deleted.
In paragraph (c) one commenter expressed concern about adding the
word ``auditing'' to HUD's review practices since HUD is unlikely to
conduct financial audits of recipients. Therefore, the word
``auditing'' has been deleted.
One commenter challenged HUD's monitoring and suggested further
regulating how Indian tribes and HUD should carry out their monitoring
responsibilities. NAHASDA mandates that HUD monitor activities and the
Committee believes that it is prudent for both HUD and Indian tribes to
monitor recipients. The Committee additionally believes that Indian
tribes and HUD should generally not be further restricted in their
monitoring activities.
Several commenters wanted further detail on monitoring activities.
However, the Committee believes the regulations as currently stated are
adequate and appropriate.
Section 1000.508. A number of commenters objected to the
regulations mandating that recipients take certain specified actions if
they identified programmatic concerns. The regulations have been
changed to state that some corrective action must be taken, but is not
limited to the remedies outlined.
A comment argued that HUD has an obligation to provide technical
assistance. This comment was considered but no language was adopted.
Section 1000.510. Similar to some comments regarding Sec. 1000.508,
commenters were concerned about the language added by HUD concerning
``responsibility'' and how this might be interpreted or what
consequences it might have. However, the Committee agreed to retain the
language.
Section 1000.512. At the suggestion of several commenters,
paragraph (c) has been changed to cross-reference to Sec. 1000.524.
Section 1000.514. Contrary to the suggestions of several
commenters, the Committee does not believe that it is necessary to
address the particulars of audit submissions in this section. Many
[[Page 12347]]
comments were received suggesting that Indian tribes need more time to
submit performance reports. Therefore, the proposed period of 45 days
has been changed to 60 days. Also, based on one comment, ``program
year'' has now been changed to ``recipient's program year.''
Section 1000.516. As with the change made to Sec. 1000.514, the
term ``program year'' has been changed to read ``recipient's program
year.''
One commenter inquired about staggering IHP deadlines to allow them
to fit different fiscal years. The submission period for IHPs has been
changed to permit IHP submission anytime prior to July 1 of the Federal
Fiscal Year for which funds are appropriated (See Sec. 1000.214).
Coordination of plan submission with individual fiscal years has been
left to the discretion of the individual recipients.
Section 1000.521. At the suggestion of several commenters, this new
question and answer has been added giving HUD 60 days to issue a report
on a recipient's performance.
Section 1000.522. Many comments were received regarding the notice
for on-site reviews. In response, the regulations have been changed to
require a 30-day written notice in most cases. One commenter suggested
that in emergency situations where a notice is not required, that the
term ``emergency'' be defined. However, the Committee believes that
such a definition would be too cumbersome. One commenter proposed that
the recipient and HUD be required to mutually agree on whether an on-
site review should be done. The Committee does not agree with this
proposal because it might conflict with the rights and duties that HUD
has under NAHASDA.
The Committee encourages HUD to be sensitive to the right of Indian
tribes to participate in exit reviews. Though no specific action is
promulgated, HUD should incorporate such rights in its review
procedures.
Section 1000.524. As addressed in the discussion of previous
sections, paragraph (d) is changed to read ``recipient's program
year.''
At the suggestion of several commenters, the amount of time that a
recipient has to submit an annual performance report has been changed
from 45 days to 60 days.
One commenter wanted to expressly address treatment of obligated
funds and to define them as expended funds. However, the Committee
feels this is not an appropriate definition and that explanatory
language is not necessary.
One commenter felt that ``substantial'' compliance with regulations
and statutes should be required in paragraph (f). The Committee agrees
with this commenter and has changed the regulations accordingly.
One commenter suggested that HUD review be done biannually.
However, this conflicts with the statutory requirement that HUD review
recipients annually.
Section 1000.526. Many commenters objected to HUD adding paragraph
(i) to the list of information which it may consider in reviewing a
recipient's performance. It was agreed that this section be revised to
apply only to ``reliable'' information relating to performance
measurements.
One commenter asked whether paragraph (h) is an inappropriate
waiver of attorney-client privilege. The Committee does not interpret
this as a waiver because the section merely allows HUD to take into
account matters that may be in litigation.
Section 1000.530. This section of the final rule contains new
language. Section 1000.530 of the proposed rule has been redesignated
as Sec. 1000.538 in the final rule. A number of comments were received
which stated that the proposed regulations did not provide a recipient
a period of time to cure a performance problem before the Department
initiates remedies available to it under either Sec. 1000.528 of the
proposed rule, redesignated as Sec. 1000.532 in the final rule,
(adjustments to future grants) or Sec. 1000.530 of the proposed rule,
redesignated as Sec. 1000.538 in the final rule, (adjustments to
current grant based on substantial noncompliance). The final rule adds
new language at Sec. 1000.530 which, depending upon the severity of the
performance problem, provides a number of corrective and remedial
measures which the recipient may take to cure the performance problem.
At least one or more of the corrective and remedial actions must be
taken by the Department before the Department pursues the remedies
available to it under Secs. 1000.532 or 1000.538 of the final rule.
Such corrective or remedial measures are designed to (1) prevent
continuance of the problem, (2) mitigate any adverse effects, and (3)
prevent recurrence of the problem. The corrective and remedial actions
are phrased as requests and recommendations to recipients.
Section 1000.528 of the proposed rule. Section 1000.528 of the
proposed rule has been redesignated as Sec. 1000.532 in the final rule.
The July 2, 1997 proposed rule identified the reduction of grant
amounts under section 405(c) of NAHASDA without affording notice and an
opportunity for a hearing to be a nonconsensus issue. The tribal
position in the proposed rule was that prior to the Department taking
action under section 405(c) to adjust, reduce or withdraw future grant
awards, the Department must provide notice and an opportunity for a
hearing which would be available to the recipient under section 401(a)
of NAHASDA (relating to substantial noncompliance issues involving the
current year grant). The Department took the position in the proposed
rule that section 405(c) permits the Department to adjust, reduce,
withdraw, or take other appropriate actions based on the Department's
review and audit of the recipient without providing prior notice and an
opportunity for hearing.
Section 1000.528 of the proposed rule was drafted by the Department
to implement section 405(c). The section, as drafted, did not provide
notice and an opportunity for hearing.
Extensive comments were received which unanimously supported the
tribal position that the Department afford notice and an opportunity
for hearing prior to the Department taking the section 405(c) remedies
against the future year grant. The final rule states HUD will (1)
provide notice and an informal meeting to resolve program deficiencies
prior to taking the section 405(c) remedies and following the future
grant adjustment, reduction, withdrawal, or other action, and (2)
provide the recipient with a hearing identical to that afforded
recipients under section 401(a) of NAHASDA. The funds adjusted,
reduced, or withdrawn shall not be reallocated until 15 days after this
hearing has been held and a final decision rendered.
Several comments stated that the statutory language in section
405(c) regarding ``appropriate adjustments'' to future grants is vague
and provides little or no guidance to either the Department or
recipients. They recommended that some explanation be provided as to
the standard that applies when HUD makes a determination to adjust a
future grant. Paragraph (c) provides such a standard and mandates that
the Department make adjustments in the recipient's future grant
appropriate to the deficiency when the recipient has not complied
significantly with a major activity of its IHP. If a reduction is made,
a recipient may request a hearing identical to that provided for
reductions under section 401(a) of NAHASDA.
Other comments were received that were directed at reducing the
share of grant funds to recipients who failed to meet their own IHP
goals and objectives. The solution to this situation recommended by
these commenters was
[[Page 12348]]
to provide a performance variable in the funding allocation formula.
Also received were comments specific to the issue of whether annual
funding would continue for programs with identified management and
performance shortfalls and whether, as proposed, the regulations would
implement a system that could increase the existing project development
pipeline. However, many comments were received that opposed adding
performance variables to the formula to reduce funding to non-
performing programs.
The response to these varied comments is the insertion of paragraph
(c)--a mandatory program sanction which HUD must take. The sanctions
only occur if a recipient fails to comply significantly with a major
activity of its IHP and the deficiencies that caused the failure were
not beyond the control of the recipient.
Since each participant prepares its own IHP and conducts monitoring
and oversight activities to assure the IHP will be accomplished, the
Committee believes that the actions taken by HUD in the new paragraph
(c) are necessary to provide a ``means of last resort'' when the
recipient fails in a way that wastes or mismanages NAHASDA funding.
Further, the Committee intends that inclusion of paragraph (c)
underscores HUD's responsibility to assure that funds are allocated to
programs that address the goals and objectives set forth in their
housing plans, thereby playing an active role in assuring the program's
success.
Section 1000.530 of the proposed rule. Section 1000.530 of the
proposed rule has been redesignated as Sec. 1000.538 in the final rule.
A number of commenters submitted questions regarding the definition of
``substantial noncompliance.'' Several comments were received
concerning providing a review and allowing an opportunity to cure a
case of substantial noncompliance. In whole or in part, these concerns
have been addressed in changes and additions made under Secs. 1000.530,
1000.532, 1000.534, and 1000.536 of the final rule. One commenter
endorsed the language as published.
Section 1000.532 of the proposed rule. Section 1000.532 of the
proposed rule has been redesignated as Sec. 1000.540 in the final rule.
Numerous comments were received regarding hearing procedures to be
followed. The reference to 24 CFR part 26 has been left intact.
However, the references to the Rehabilitation Act and the Age
Discrimination Act (which were added by HUD) have been removed since
these laws are not applicable in the context of this section.
Section 1000.534 of the proposed rule. Section 1000.534 of the
proposed rule has been redesignated as Sec. 1000.542 in the final rule.
Commenters in Alaska were concerned about how this section might apply
to them and the unique circumstances when an Indian tribe might refuse
to both certify a TDHE and submit an IHP covering certain existing
units. This issue has been addressed in Sec. 1000.210.
Several commenters were concerned with the structure and language
of paragraph (b). The Committee has not revised the language, because
the current language reflects the statute.
One commenter expressed concern that this section is inconsistent
with the principles of self-determination, although the commenter
acknowledges that the section is required by the statute. Because it is
mandated by NAHASDA, no change was made to the regulations.
Section 1000.534 of the final rule. This section of the final rule
contains new language. Section 1000.534 of the proposed rule has been
redesignated as Sec. 1000.542 in the final rule. The proposed rule
identified as a nonconsensus issue the question of a definition of the
term ``substantial noncompliance'' contained in section 401 of NAHASDA.
The Indian tribes proposed a definition for this term which is the
basis for terminating, reducing, or limiting payments under NAHASDA.
HUD disagreed with inclusion of the definition, but welcomed public
comment on whether the term should be defined and how. There were many
public comments on this matter and all urged inclusion of a definition.
The final rule adds a definition at Sec. 1000.534 that indicates both
the substantiality and noncompliance aspects of the definition.
Section 1000.536 of the proposed rule. This question was added to
the proposed rule by HUD and the proposed rule language has been
completely removed. One commenter's challenge to this question made the
Committee realize that this provision is not needed. Tribal conditions
and performance are evaluated each year by HUD upon the submission of
an IHP. At that time, HUD shall make a new determination as to whether
the recipient is in substantial compliance. Therefore, HUD is required
to follow this process instead of determining that a particular
instance of substantial noncompliance has ceased.
Section 1000.536 of the final rule. This section of the final rule
contains new language. The language of Sec. 1000.536 of the proposed
rule has been removed from the final rule. This new question and answer
provides that NAHASDA grant funds withheld from a recipient and not
returned as a result of the hearing will be distributed by HUD in
accordance with the next NAHASDA formula allocation.
Section 1000.538 of the proposed rule. Section 1000.538 of the
proposed rule has been redesignated as Sec. 1000.544 in the final rule.
Several comments were received on this section. The regulations have
been changed to better explain this requirement. (Also, see changes to
Secs. 1000.546 and 1000.548 of the final rule, which were
Secs. 1000.542 and 1000.544 of the proposed rule.)
Section 1000.540. The proposed rule language for this entire
section has been removed because OMB Circular A-133 establishes new
procedures for cognizant agencies and auditing oversight. Section
1000.532 of the proposed rule has been redesignated as Sec. 1000.540 in
the final rule.
Section 1000.552 of the proposed rule. Section 1000.552 of the
proposed rule has been redesignated as Sec. 1000.556 in the final rule.
Several comments were received asking for clarification on this
section. Language has been added to explain that there may be other
laws or policies which are applicable.
Section 1000.554 of the proposed rule. Section 1000.554 of the
proposed rule has been redesignated as Sec. 1000.558 in the final rule.
Several comments were received asking for clarification on this
section. Language has been added to explain that there may be other
laws or policies which are applicable.
Amendments to 24 CFR Part 1005--Section 184 Loan Guarantee Program
Regulations
Section 1005.103. A comment was received which recommended a
clarifying rewording of the definition for ``Holder.'' The Committee
agreed and revised the wording of the section accordingly.
Section 1005.104. One commenter provided several comments on the
eligibility of lenders for the 184 program. While these comments were
directed to the requirements of other Federal agencies, the rule was
amended to expand the eligibility of lenders.
Section 1005.105. The Committee agreed to reword the provisions of
paragraph (b) for further clarity and compliance with NAHASDA.
Many comments were received regarding paragraph (f) of this
section. One commenter noted the adverse affect on HMDA data if loan
applicants must go through a denial process. A comment discussed the
shortage of housing in
[[Page 12349]]
rural Alaska and noted that a requirement for a written documentation
would present a disadvantage to buyers under this program. Questions
were also raised about the type and amount of documentation required.
Several commenters requested removal of the ``lack of access to private
financial markets'' language. Several commenters noted that the
proposed language would discourage access to private markets which was
inconsistent with the objective of NAHASDA. One commenter proposed that
this provision be delayed until a later time so that market comparables
could be established.
The Committee considered all comments and determined that the
language regarding ``lack of access'' could not be removed as it is
contained in NAHASDA. The Committee agrees with the comments that the
provision, as drafted, could be detrimental to the program and Indian
country and therefore the rule was revised. The new requirement
provides for a certification from the borrower that they lack access to
private financial markets. Written documentation is no longer required
to support this certification.
Section 1005.107. Several commenters believed that NAHASDA intended
that the TDHE servicing the Indian tribe be eligible under the
liquidation provision. The Committee agreed with this comment and added
the language.
III. Findings and Certifications
Paperwork Reduction Act
The information collection requirements contained in this rule have
been approved by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction Act of 1995 (42 U.S.C. 3501-
3530), and assigned OMB control number 2577-0218. 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 valid
control number.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
was made at the proposed rule stage in accordance with HUD regulations
at 24 CFR part 50, implementing section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332). That Finding of No
Significant Impact remains applicable to this final rule and is
available for public inspection during business hours in the Office of
the Rules Docket Clerk, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410-0500.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule have no federalism implications, and that the
policies are not subject to review under the Order.
Executive Order 13045, Protection of Children From Environmental Health
Risks and Safety Risks
This rule will not pose an environmental health risk or safety risk
on children.
Unfunded Mandates Reform Act
The Secretary has reviewed this rule before publication and by
approving it certifies, in accordance with the Unfunded Mandates Reform
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal
mandate that will result in the expenditure by state, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year.
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. OMB determined
that this rule is a ``significant regulatory action,'' as defined in
section 3(f) of the Order (although not economically significant, as
provided in section 3(f)(1) of the Order). Any changes made to the
final rule subsequent to its submission to OMB are identified in the
docket file, which is available for public inspection in the office of
the Department's Rules Docket Clerk, Room 10276, 451 Seventh Street,
SW, Washington, DC 20410-0500.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing
certifies that this rule would not have a significant economic impact
on a substantial number of small entities.
List of Subjects
24 CFR Part 950
Aged, Grant programs--housing and community development, Grant
programs--Indians, Indians, Individuals with disabilities, Low and
moderate income housing, Public housing, Reporting and recordkeeping
requirements.
24 CFR Part 953
Alaska, Community development block grants, Grant programs--housing
and community development, Indians, Reporting and recordkeeping
requirements.
24 CFR Part 955
Indians, Loan programs--Indians, Reporting and recordkeeping
requirements.
24 CFR Part 1000
Aged, Community development block grants, Grant programs--housing
and community development, Grant programs--Indians, Indians,
Individuals with disabilities, Low and moderate income housing, Public
housing, Reporting and recordkeeping requirements.
24 CFR Part 1003
Alaska, Community development block grants, Grant programs--housing
and community development, Indians, Reporting and recordkeeping
requirements.
24 CFR Part 1005
Indians, Loan programs--Indians, Reporting and recordkeeping
requirements.
Accordingly, for the reasons described above, in title 24 of the
Code of Federal Regulations, Chapter IX is amended as follows:
PART 950--[REMOVED]
1. Part 950 is removed.
PART 953--[REDESIGNATED]
2. Part 953 is redesignated as part 1003.
2a. Part 955 is redesignated as part 1005.
3. Part 1000 is added to read as follows:
PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES
Subpart A--General
Sec.
1000.1 What is the applicability and scope of these regulations?
1000.2 What are the guiding principles in the implementation of
NAHASDA?
1000.4 What are the objectives of NAHASDA?
1000.6 What is the nature of the IHBG program?
1000.8 May provisions of these regulations be waived?
1000.10 What definitions apply in these regulations?
1000.12 What nondiscrimination requirements are applicable?
1000.14 What relocation and real property acquisition policies are
applicable?
[[Page 12350]]
1000.16 What labor standards are applicable?
1000.18 What environmental review requirements apply?
1000.20 Is an Indian tribe required to assume environmental review
responsibilities?
1000.22 Are the costs of the environmental review an eligible cost?
1000.24 If an Indian tribe assumes environmental review
responsibility, how will HUD assist the Indian tribe in performing
the environmental review?
1000.26 What are the administrative requirements under NAHASDA?
1000.28 May a self-governance Indian tribe be exempted from the
applicability of Sec. 1000.26?
1000.30 What prohibitions regarding conflict of interest are
applicable?
1000.32 May exceptions be made to the conflict of interest
provisions?
1000.34 What factors must be considered in making an exception to
the conflict of interest provisions?
1000.36 How long must a recipient retain records regarding
exceptions made to the conflict of interest provisions?
1000.38 What flood insurance requirements are applicable?
1000.40 Do lead-based paint poisoning prevention requirements apply
to affordable housing activities under NAHASDA?
1000.42 Are the requirements of section 3 of the Housing and Urban
Development Act of 1968 applicable?
1000.44 What prohibitions on the use of debarred, suspended or
ineligible contractors apply?
1000.46 Do drug-free workplace requirements apply?
1000.48 Are Indian preference requirements applicable to IHBG
activities?
1000.50 What Indian preference requirements apply to IHBG
administration activities?
1000.52 What Indian preference requirements apply to IHBG
procurement?
1000.54 What procedures apply to complaints arising out of any of
the methods of providing for Indian preference?
1000.56 How are NAHASDA funds paid by HUD to recipients?
1000.58 Are there limitations on the investment of IHBG funds?
1000.60 Can HUD prevent improper expenditure of funds already
disbursed to a recipient?
1000.62 What is considered program income and what restrictions are
there on its use?
Subpart B--Affordable Housing Activities
1000.101 What is affordable housing?
1000.102 What are eligible affordable housing activities?
1000.104 What families are eligible for affordable housing
activities?
1000.106 What families receiving assistance under title II of
NAHASDA require HUD approval?
1000.108 How is HUD approval obtained by a recipient for housing
for non low-income Indian families and model activities?
1000.110 Under what conditions may non low-income Indian families
participate in the program?
1000.112 How will HUD determine whether to approve model housing
activities?
1000.114 How long does HUD have to review and act on a proposal to
provide assistance to non low-income Indian families or a model
housing activity?
1000.116 What should HUD do before declining a proposal to provide
assistance to non low-income Indian families or a model housing
activity?
1000.118 What recourse does a recipient have if HUD disapproves a
proposal to provide assistance to non low-income Indian families or
a model housing activity?
1000.120 May a recipient use Indian preference or tribal preference
in selecting families for housing assistance?
1000.122 May NAHASDA grant funds be used as matching funds to
obtain and leverage funding, including any Federal or state program
and still be considered an affordable housing activity?
1000.124 What maximum and minimum rent or homebuyer payment can a
recipient charge a low-income rental tenant or homebuyer residing in
housing units assisted with NAHASDA grant amounts?
1000.126 May a recipient charge flat or income-adjusted rents?
1000.128 Is income verification required for assistance under
NAHASDA?
1000.130 May a recipient charge a non low-income family rents or
homebuyer payments which are more than 30 percent of the family's
adjusted income?
1000.132 Are utilities considered a part of rent or homebuyer
payments?
1000.134 When may a recipient (or entity funded by a recipient)
demolish or dispose of current assisted stock?
1000.136 What insurance requirements apply to housing units
assisted with NAHASDA grants?
1000.138 What constitutes adequate insurance?
1000.140 May a recipient use grant funds to purchase insurance for
privately owned housing to protect NAHASDA grant amounts spent on
that housing?
1000.142 What is 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?
1000.144 Are Mutual Help homes developed under the 1937 Act subject
to the useful life provisions of section 205(a)(2)?
1000.146 Are homebuyers required to remain low-income throughout
the term of their participation in a housing program funded under
NAHASDA?
1000.150 How may Indian tribes and TDHEs receive criminal
conviction information on adult applicants or tenants?
1000.152 How is the recipient to use criminal conviction
information?
1000.154 How is the recipient to keep criminal conviction
information confidential?
1000.156 Is there a per unit limit on the amount of IHBG funds that
may be used for dwelling construction and dwelling equipment?
Subpart C--Indian Housing Plan (IHP)
1000.201 How are funds made available under NAHASDA?
1000.202 Who are eligible recipients?
1000.204 How does an Indian tribe designate itself as recipient of
the grant?
1000.206 How is a TDHE designated?
1000.208 What happens if an Indian tribe had two IHAs as of
September 30, 1996?
1000.210 What happens to existing 1937 Act units in those
jurisdictions for which Indian tribes do not or cannot submit an
IHP?
1000.212 Is submission of an IHP required?
1000.214 What is the deadline for submission of an IHP?
1000.216 What happens if the recipient does not submit the IHP to
the Area ONAP by July 1?
1000.218 Who prepares an submits an IHP?
1000.220 What are the minimum requirements for the IHP?
1000.222 Are there separate IHP requirements for small Indian
tribes and small TDHEs?
1000.224 Can any part of the IHP be waived?
1000.226 Can the certification requirements of section 102(c)(5) of
NAHASDA be waived by HUD?
1000.228 If HUD changes its IHP format will Indian tribes be
involved?
1000.230 What is the process for HUD review of IHPs and IHP
amendments?
1000.232 Can an Indian tribe or TDHE amend its IHP?
1000.234 Can HUD's determination regarding the non-compliance of an
IHP or a modification to an IHP be appealed?
1000.236 What are eligible administrative and planning expenses?
1000.238 What percentage of the IHBG funds can be used for
administrative and planning expenses?
1000.240 When is a local cooperation agreement required for
affordable housing activities?
1000.242 When does the requirement for exemption from taxation
apply to affordable housing activities?
Subpart D--Allocation Formula
1000.301 What is the purpose of the IHBG formula?
1000.302 What are the definitions applicable for the IHBG formula?
1000.304 May the IHBG formula be modified?
1000.306 How can the IHBG formula be modified?
1000.308 Who can make modifications to the IHBG formula?
1000.310 What are the components of the IHBG formula?
1000.312 What is current assisted stock?
[[Page 12351]]
1000.314 What is formula current assisted stock?
1000.316 How is the Formula Current Assisted Stock (FCAS) Component
developed?
1000.317 Who is the recipient for funds for current assisted stock
which is owned by state-created Regional Native Housing Authorities
in Alaska?
1000.318 When do units under Formula Current Assisted Stock cease
to be counted or expire from the inventory used for the formula?
1000.320 How is Formula Current Assisted Stock adjusted for local
area costs?
1000.322 Are IHA financed units included in the determination of
Formula Current Assisted Stock?
1000.324 How is the need component developed?
1000.325 How is the need component adjusted for local area costs?
1000.326 What if a formula area is served by more than one Indian
tribe?
1000.327 What is the order of preference for allocating the IHBG
formula needs data for Indian tribes in Alaska not located on
reservations due to the unique circumstances in Alaska?
1000.328 What is the minimum amount an Indian tribe can receive
under the need component of the formula?
1000.330 What are data sources for the need variables?
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?
1000.334 May Indian tribes, TDHEs, or HUD challenge the data from
the U.S. Decennial Census or provide an alternative source of data?
1000.336 How may an Indian tribe, TDHE, or HUD challenge data?
1000.340 What if an Indian tribe is allocated less funding under
the block grant formula than it received in Fiscal Year 1996 for
operating subsidy and modernization?
Subpart E--Federal Guarantees for Financing of Tribal Housing
Activities
1000.401 What terms are used throughout this subpart?
1000.402 Are State recognized Indian tribes eligible for guarantees
under title VI of NAHASDA?
1000.404 What lenders are eligible for participation?
1000.406 What constitutes tribal approval to issue notes or other
obligations under title VI of NAHASDA?
1000.408 How does an Indian tribe or TDHE show that it has made
efforts to obtain financing without a guarantee and cannot complete
such financing in a timely manner?
1000.410 What conditions shall HUD prescribe when providing a
guarantee for notes or other obligations issued by an Indian tribe?
1000.412 Can an issuer obtain a guarantee for more than one note or
other obligation at a time?
1000.414 How is an issuer's financial capacity demonstrated?
1000.416 What is a repayment contract in a form acceptable to HUD?
1000.418 Can grant funds be used to pay costs incurred when issuing
notes or other obligations?
1000.420 May grants made by HUD under section 603 of NAHASDA be
used to pay net interest costs incurred when issuing notes or other
obligations?
1000.422 What are the procedures for applying for loan guarantees
under title VI of NAHASDA?
1000.424 What are the application requirements for guarantee
assistance under title VI of NAHASDA?
1000.426 How does HUD review a guarantee application?
1000.428 For what reasons may HUD disapprove an application or
approve an application for an amount less than that requested?
1000.430 When will HUD issue notice to the applicant if the
application is approved at the requested or reduced amount?
1000.432 Can an amendment to an approved guarantee be made?
1000.434 How will HUD allocate the availability of loan guarantee
assistance?
1000.436 How will HUD monitor the use of funds guaranteed under
this subpart?
Subpart F--Recipient Monitoring, Oversight and Accountability
1000.501 Who is involved in monitoring activities under NAHASDA?
1000.502 What are the monitoring responsibilities of the recipient,
the grant beneficiary and HUD under NAHASDA?
1000.504 What are the recipient performance objectives?
1000.506 If the TDHE is the recipient, must it submit its
monitoring evaluation/results to the Indian tribe?
1000.508 If the recipient monitoring identifies programmatic
concerns, what happens?
1000.510 What happens if tribal monitoring identifies compliance
concerns?
1000.512 Are performance reports required?
1000.514 When must the annual performance report be submitted?
1000.516 What reporting period is covered by the annual performance
report?
1000.518 When must a recipient obtain public comment on its annual
performance report?
1000.520 What are the purposes of HUD review?
1000.521 After the receipt of the recipient's performance report,
how long does HUD have to make recommendations under section 404(c)
of NAHASDA?
1000.522 How will HUD give notice of on-site reviews?
1000.524 What are HUD's performance measures for the review?
1000.526 What information will HUD use for its review?
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?
1000.530 What corrective and remedial actions will HUD request or
recommend to address performance problems prior to taking action
under Secs. 1000.532 or 1000.538?
1000.532 What are the adjustments HUD makes to a recipient's future
year's grant amount under section 405 of NAHASDA?
1000.534 What constitutes substantial noncompliance?
1000.536 What happens to NAHASDA grant funds adjusted, reduced,
withdrawn, or terminated under Sec. 1000.532 or Sec. 1000.538?
1000.538 What remedies are available for substantial noncompliance?
1000.540 What hearing procedures will be used under NAHASDA?
1000.542 When may HUD require replacement of a recipient?
1000.544 What audits are required?
1000.546 Are audit costs eligible program or administrative
expenses?
1000.548 Must a copy of the recipient's audit pursuant to the
Single Audit Act relating to NAHASDA activities be submitted to HUD?
1000.550 If the TDHE is the recipient, does it have to submit a
copy of its audit to the Indian tribe?
1000.552 How long must the recipient maintain program records?
1000.554 Which agencies have right of access to the recipient's
records relating to activities carried out under NAHASDA?
1000.556 Does the Freedom of Information Act (FOIA) apply to
recipient records?
1000.558 Does the Federal Privacy Act apply to recipient records?
Appendix A to Part 1000--Indian Housing Block Grant Formula
Mechanics
Appendix B to Part 1000--IHBG Block Grant Formula Mechanisms
Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).
Subpart A--General
Sec. 1000.1 What is the applicability and scope of these regulations?
Under the Native American Housing Assistance and Self-Determination
Act of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) the Department of
Housing and Urban Development (HUD) provides grants, loan guarantees,
and technical assistance to Indian tribes and Alaska Native villages
for the development and operation of low-income housing in Indian
areas. The policies and procedures described in this part apply to
grants to eligible recipients under the Indian Housing Block Grant
(IHBG) program for Indian tribes and Alaska Native villages. This part
also applies to loan guarantee assistance under title VI of NAHASDA.
The regulations in this part supplement the statutory requirements set
forth in NAHASDA. This part, as much as
[[Page 12352]]
practicable, does not repeat statutory language.
Sec. 1000.2 What are the guiding principles in the implementation of
NAHASDA?
(a) The Secretary shall use the following Congressional findings
set forth in section 2 of NAHASDA as the guiding principles in the
implementation of NAHASDA:
(1) The Federal government has a responsibility to promote the
general welfare of the Nation:
(i) By using Federal resources to aid families and individuals
seeking affordable homes in safe and healthy environments and, in
particular, assisting responsible, deserving citizens who cannot
provide fully for themselves because of temporary circumstances or
factors beyond their control;
(ii) By working to ensure a thriving national economy and a strong
private housing market; and
(iii) By developing effective partnerships among the Federal
government, state, tribal, and local governments, and private entities
that allow government to accept responsibility for fostering the
development of a healthy marketplace and allow families to prosper
without government involvement in their day-to-day activities.
(2) There exists a unique relationship between the Government of
the United States and the governments of Indian tribes and a unique
Federal responsibility to Indian people.
(3) The Constitution of the United States invests the Congress with
plenary power over the field of Indian affairs, and through treaties,
statutes, and historical relations with Indian tribes, the United
States has undertaken a unique trust responsibility to protect and
support Indian tribes and Indian people.
(4) The Congress, through treaties, statutes, and the general
course of dealing with Indian tribes, has assumed a trust
responsibility for the protection and preservation of Indian tribes and
for working with Indian tribes and their members to improve their
housing conditions and socioeconomic status so that they are able to
take greater responsibility for their own economic condition.
(5) Providing affordable homes in safe and healthy environments is
an essential element in the special role of the United States in
helping Indian tribes and their members to improve their housing
conditions and socioeconomic status.
(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 should 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 should 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.).
(b) Nothing in this section shall be construed as releasing the
United States government from any responsibility arising under its
trust responsibilities towards Indians or any treaty or treaties with
an Indian tribe or nation.
Sec. 1000.4 What are the objectives of NAHASDA?
The primary objectives of NAHASDA are:
(a) To assist and promote affordable housing activities to develop,
maintain and operate affordable housing in safe and healthy
environments on Indian reservations and in other Indian areas for
occupancy by low-income Indian families;
(b) To ensure better access to private mortgage markets for Indian
tribes and their members and to promote self-sufficiency of Indian
tribes and their members;
(c) To coordinate activities to provide housing for Indian tribes
and their members and to promote self-sufficiency of Indian tribes and
their members;
(d) To plan for and integrate infrastructure resources for Indian
tribes with housing development for Indian tribes; and
(e) To promote the development of private capital markets in Indian
country and to allow such markets to operate and grow, thereby
benefiting Indian communities.
Sec. 1000.6 What is the nature of the IHBG program?
The IHBG program is formula driven whereby eligible recipients of
funding receive an equitable share of appropriations made by the
Congress, based upon formula components specified under subpart D of
this part. IHBG recipients must have the administrative capacity to
undertake the affordable housing activities proposed, including the
systems of internal control necessary to administer these activities
effectively without fraud, waste, or mismanagement.
Sec. 1000.8 May provisions of these regulations be waived?
Yes. Upon determination of good cause, the Secretary may, subject
to statutory limitations, waive any provision of this part and delegate
this authority in accordance with section 106 of the Department of
Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)).
Sec. 1000.10 What definitions apply in these regulations?
Except as noted in a particular subpart, the following definitions
apply in this part:
(a) The terms ``Adjusted income,'' ``Affordable housing,'' ``Drug-
related criminal activity,'' ``Elderly families and near-elderly
families,'' ``Elderly person,'' ``Grant beneficiary,'' ``Indian,''
``Indian housing plan (IHP),'' ``Indian tribe,'' ``Low-income family,''
``Near-elderly persons,'' ``Nonprofit,'' ``Recipient,'' Secretary,''
``State,'' and ``Tribally designated housing entity (TDHE)'' are
defined in section 4 of NAHASDA.
(b) In addition to the definitions set forth in paragraph (a) of
this section, the following definitions apply to this part:
Affordable housing activities are those activities identified in
section 202 of NAHASDA.
Annual Contributions Contract (ACC) means a contract under the 1937
Act between HUD and an IHA containing the terms and conditions under
which HUD assists the IHA in providing decent, safe, and sanitary
housing for low-income families.
Annual income has one of the following meanings, as determined by
the Indian tribe:
(1) ``Annual income'' as defined for HUD's Section 8 programs in 24
CFR part 5, subpart F (except when determining the income of a
homebuyer for an owner-occupied rehabilitation project, the value of
the homeowner's principal residence may be excluded from the
calculation of Net Family assets); or
(2) Annual income as reported under the Census long-form for the
most recent available decennial Census. This definition includes:
(i) Wages, salaries, tips, commissions, etc.;
(ii) Self-employment income;
(iii) Farm self-employment income;
(iv) Interest, dividends, net rental income, or income from estates
or trusts;
(v) Social security or railroad retirement;
[[Page 12353]]
(vi) Supplemental Security Income, Aid to Families with Dependent
Children, or other public assistance or public welfare programs;
(vii) Retirement, survivor, or disability pensions; and
(viii) Any other sources of income received regularly, including
Veterans' (VA) payments, unemployment compensation, and alimony; or
(3) Adjusted gross income as defined for purposes of reporting
under Internal Revenue Service (IRS) Form 1040 series for individual
Federal annual income tax purposes.
Assistant Secretary means the Assistant Secretary for Public and
Indian Housing.
Department or HUD means the Department of Housing and Urban
Development.
Family includes, but is not limited to, a family with or without
children, an elderly family, a near-elderly family, a disabled family,
a single person, as determined by the Indian tribe.
Homebuyer payment means the payment of a family purchasing a home
pursuant to a lease purchase agreement.
Homeless family means a family who is without safe, sanitary and
affordable housing even though it may have temporary shelter provided
by the community, or a family who is homeless as determined by the
Indian tribe.
IHBG means Indian Housing Block Grant.
Income means annual income as defined in this subpart.
Indian Area means the area within which an Indian tribe operates
affordable housing programs or the area in which a TDHE is authorized
by one or more Indian tribes to operate 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.
Indian Housing Authority (IHA) means an entity that:
(1) Is authorized to engage or assist in the development or
operation of low-income housing for Indians under the 1937 Act; and
(2) Is established:
(i) By exercise of the power of self government of an Indian tribe
independent of state law; or
(ii) By operation of state law providing specifically for housing
authorities for Indians, including regional housing authorities in the
State of Alaska.
Median income for an Indian area is the greater of:
(1) The median income for the counties, previous counties, or their
equivalent in which the Indian area is located; or
(2) The median income for the United States.
NAHASDA means the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4101 et seq.).
1937 Act means the United States Housing Act of 1937 (42 U.S.C.
1437 et seq.).
Office of Native American Programs (ONAP) means the office of HUD
which has been delegated authority to administer programs under this
part. An ``Area ONAP'' is an ONAP field office.
Person with Disabilities means a person who --
(1) Has a disability as defined in section 223 of the Social
Security Act;
(2) Has a developmental disability as defined in section 102 of the
Developmental Disabilities Assistance and Bill of Rights Act;
(3) Has a physical, mental, or emotional impairment which-
(i) Is expected to be of long-continued and indefinite duration;
(ii) Substantially impedes his or her ability to live
independently; and
(iii) Is of such a nature that such ability could be improved by
more suitable housing conditions.
(4) The term ``person with disabilities'' includes persons who have
the disease of acquired immunodeficiency syndrome or any condition
arising from the etiologic agent for acquired immunodeficiency
syndrome.
(5) Notwithstanding any other provision of law, no individual shall
be considered a person with disabilities, for purposes of eligibility
for housing assisted under this part, solely on the basis of any drug
or alcohol dependence. The Secretary shall consult with Indian tribes
and appropriate Federal agencies to implement this paragraph.
(6) For purposes of this definition, the term ``physical, mental or
emotional impairment'' includes, but is not limited to:
(i) Any physiological disorder or condition, cosmetic
disfigurement, or anatomical loss affecting one or more of the
following body systems: Neurological, musculoskeletal, special sense
organs, respiratory, including speech organs; cardiovascular;
reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and
endocrine; or
(ii) Any mental or psychological condition, such as mental
retardation, organic brain syndrome, emotional or mental illness, and
specific learning disabilities.
(iii) The term ``physical, mental, or emotional impairment''
includes, but is not limited to, such diseases and conditions as
orthopedic, visual, speech, and hearing impairments, cerebral palsy,
autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart
disease, diabetes, Human Immunodeficiency Virus infection, mental
retardation, and emotional illness.
Sec. 1000.12 What nondiscrimination requirements are applicable?
(a) The requirements of the Age Discrimination Act of 1975 (42
U.S.C. 6101-6107) and HUD's implementing regulations in 24 CFR part
146.
(b) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)
and HUD's regulations at 24 CFR part 8 apply.
(c) The Indian Civil Rights Act (Title II of the Civil Rights Act
of 1968; 25 U.S.C. 1301-1303), applies to Federally recognized Indian
tribes that exercise powers of self-government.
(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. However, the Title VI and Title VIII requirements do not apply to
actions by Indian tribes under section 201(b) of NAHASDA.
Sec. 1000.14 What relocation and real property acquisition policies
are applicable?
The following relocation and real property acquisition policies are
applicable to programs developed or operated under NAHASDA:
(a) Real Property acquisition requirements. The acquisition of real
property for an assisted activity is subject to 49 CFR part 24, subpart
B. Whenever the recipient does not have the authority to acquire the
real property through condemnation, it shall:
(1) Before discussing the purchase price, inform the owner:
(i) Of the amount it believes to be the fair market value of the
property. Such amount shall be based upon one or more appraisals
prepared by a qualified appraiser. However, this provision does not
prevent the recipient from accepting a donation or purchasing the real
property at less than its fair market value.
(ii) That it will be unable to acquire the property if negotiations
fail to result in an amicable agreement.
(2) Request HUD approval of the proposed acquisition price before
executing a firm commitment to purchase the property if the proposed
acquisition payment exceeds the fair market value. The recipient shall
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include with its request a copy of the appraisal(s) and a justification
for the proposed acquisition payment. HUD will promptly review the
proposal and inform the recipient of its approval or disapproval.
(b) Minimize displacement. Consistent with the other goals and
objectives of this part, recipients shall assure that they have taken
all reasonable steps to minimize the displacement of persons
(households, businesses, nonprofit organizations, and farms) as a
result of a project assisted under this part.
(c) Temporary relocation. The following policies cover residential
tenants and homebuyers who will not be required to move permanently but
who must relocate temporarily for the project. Such residential tenants
and homebuyers shall be provided:
(1) Reimbursement for all reasonable out-of-pocket expenses
incurred in connection with the temporary relocation, including the
cost of moving to and from the temporarily occupied housing and any
increase in monthly housing costs (e.g., rent/utility costs).
(2) Appropriate advisory services, including reasonable advance
written notice of:
(i) The date and approximate duration of the temporary relocation;
(ii) The location of the suitable, decent, safe and sanitary
dwelling to be made available for the temporary period;
(iii) The terms and conditions under which the tenant may occupy a
suitable, decent, safe, and sanitary dwelling in the building/complex
following completion of the repairs; and
(iv) The provisions of paragraph (c)(1) of this section.
(d) Relocation assistance for displaced persons. A displaced person
(defined in paragraph (g) of this section) must be provided relocation
assistance at the levels described in, and in accordance with the
requirements of, the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C. 4601-
4655) and implementing regulations at 49 CFR part 24.
(e) Appeals to the recipient. A person who disagrees with the
recipient's determination concerning whether the person qualifies as a
``displaced person,'' or the amount of relocation assistance for which
the person is eligible, may file a written appeal of that determination
with the recipient.
(f) Responsibility of recipient. (1) The recipient shall certify
that it will comply with the URA, the regulations at 49 CFR part 24,
and the requirements of this section. The recipient shall ensure such
compliance notwithstanding any third party's contractual obligation to
the recipient to comply with the provisions in this section.
(2) The cost of required relocation assistance is an eligible
project cost in the same manner and to the same extent as other project
costs. However, such assistance may also be paid for with funds
available to the recipient from any other source.
(3) The recipient shall maintain records in sufficient detail to
demonstrate compliance with this section.
(g) Definition of displaced person. (1) For purposes of this
section, the term ``displaced person'' means any person (household,
business, nonprofit organization, or farm) that moves from real
property, or moves his or her personal property from real property,
permanently, as a direct result of rehabilitation, demolition, or
acquisition for a project assisted under this part. The term
``displaced person'' includes, but is not limited to:
(i) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the submission to HUD of an IHP that
is later approved.
(ii) Any person, including a person who moves before the date
described in paragraph (g)(1)(i) of this section, that the recipient
determines was displaced as a direct result of acquisition,
rehabilitation, or demolition for the assisted project.
(iii) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the execution of the agreement
between the recipient and HUD, if the move occurs before the tenant is
provided written notice offering him or her the opportunity to lease
and occupy a suitable, decent, safe and sanitary dwelling in the same
building/complex, under reasonable terms and conditions, upon
completion of the project. Such reasonable terms and conditions include
a monthly rent and estimated average monthly utility costs that do not
exceed the greater of:
(A) The tenant-occupant's monthly rent and estimated average
monthly utility costs before the agreement; or
(B) 30 percent of gross household income.
(iv) A tenant-occupant of a dwelling who is required to relocate
temporarily, but does not return to the building/complex, if either:
(A) The tenant-occupant is not offered payment for all reasonable
out-of-pocket expenses incurred in connection with the temporary
relocation, including the cost of moving to and from the temporarily
occupied unit, any increased housing costs and incidental expenses; or
(B) Other conditions of the temporary relocation are not
reasonable.
(v) A tenant-occupant of a dwelling who moves from the building/
complex after he or she has been required to move to another dwelling
unit in the same building/complex in order to carry out the project, if
either:
(A) The tenant-occupant is not offered reimbursement for all
reasonable out-of-pocket expenses incurred in connection with the move;
or
(B) Other conditions of the move are not reasonable.
(2) Notwithstanding the provisions of paragraph (g)(1) of this
section, a person does not qualify as a ``displaced person'' (and is
not eligible for relocation assistance under the URA or this section),
if:
(i) The person moved into the property after the submission of the
IHP to HUD, but, before signing a lease or commencing occupancy, was
provided written notice of the project, its possible impact on the
person (e.g., the person may be displaced, temporarily relocated or
suffer a rent increase) and the fact that the person would not qualify
as a ``displaced person'' or for any assistance provided under this
section as a result of the project.
(ii) The person is ineligible under 49 CFR 24.2(g)(2).
(iii) The recipient determines the person is not displaced as a
direct result of acquisition, rehabilitation, or demolition for an
assisted project. To exclude a person on this basis, HUD must concur in
that determination.
(3) A recipient may at any time ask HUD to determine whether a
specific displacement is or would be covered under this section.
(h) Definition of initiation of negotiations. For purposes of
determining the formula for computing the replacement housing
assistance to be provided to a person displaced as a direct result of
rehabilitation or demolition of the real property, the term
``initiation of negotiations'' means the execution of the agreement
covering the rehabilitation or demolition (See 49 CFR part 24).
Sec. 1000.16 What labor standards are applicable?
(a) Davis-Bacon wage rates. (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. 276a-276a-5) to be paid
to
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laborers and mechanics employed in the development of affordable
housing.
(2) When NAHASDA assistance is only used to assist homebuyers to
acquire single family housing, the Davis-Bacon wage rates apply to the
construction of the housing if there is a written agreement with the
owner or developer of the housing that NAHASDA assistance will be used
to assist homebuyers to buy the housing.
(3) Prime contracts not in excess of $2000 are exempt from Davis-
Bacon wage rates.
(b) HUD-determined wage rates. Section 104(b) also mandates that
contracts and agreements for assistance, sale or lease under NAHASDA
require that prevailing wages determined or adopted (subsequent to a
determination under applicable state, tribal or local law) by HUD shall
be paid to maintenance laborers and mechanics employed in the
operation, and to architects, technical engineers, draftsmen and
technicians 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. 327).
(d) Volunteers. The requirements in 24 CFR part 70 concerning
exemptions for the use of volunteers on projects subject to Davis-Bacon
and HUD-determined wage rates are applicable.
(e) Other laws and issuances. Recipients, contractors,
subcontractors, and other participants must comply with regulations
issued under the labor standards provisions cited in this section,
other applicable Federal laws and regulations pertaining to labor
standards, and HUD Handbook 1344.1 (Federal Labor Standards Compliance
in Housing and Community Development Programs).
Sec. 1000.18 What environmental review requirements apply?
The environmental effects of each activity carried out with
assistance under this part must be evaluated in accordance with the
provisions of the National Environmental Policy Act of 1969 (NEPA) (42
U.S.C. 4321) and the related authorities listed in HUD's implementing
regulations at 24 CFR parts 50 and 58. An environmental review does not
have to be completed prior to HUD approval of an IHP.
Sec. 1000.20 Is an Indian tribe required to assume environmental
review responsibilities?
(a) No. It is an option an Indian tribe may choose. If an Indian
tribe declines to assume the environmental review responsibilities, HUD
will perform the environmental review in accordance with 24 CFR part
50. The timing of HUD undertaking the environmental review will be
subject to the availability of resources. A HUD environmental review
must be completed for any NAHASDA assisted activities not excluded from
review under 24 CFR 50.19(b) before a recipient may acquire,
rehabilitate, convert, lease, repair or construct property, or commit
HUD or local funds used in conjunction with such NAHASDA assisted
activities with respect to the property.
(b) If an Indian tribe assumes environmental review
responsibilities:
(1) Its certifying officer must certify that he/she is authorized
and consents on behalf of the Indian tribe and such officer to accept
the jurisdiction of the Federal courts for the purpose of enforcement
of the responsibilities of the certifying officer as set forth in
section 105(c) of NAHASDA; and
(2) The Indian tribe must follow the requirements of 24 CFR part
58.
(3) No funds may be committed to a grant activity or project before
the completion of the environmental review and approval of the request
for release of funds and related certification required by sections
105(b) and 105(c) of NAHASDA, except as authorized by 24 CFR part 58
such as for the costs of environmental reviews and other planning and
administrative expenses.
(c) Where an environmental assessment (EA) is appropriate under 24
CFR part 50, instead of an Indian tribe assuming environmental review
responsibilities under paragraph (b) of this section or HUD preparing
the EA itself under paragraph (a) of this section, an Indian tribe or
TDHE may prepare an EA for HUD review. In addition to complying with
the requirements of 40 CFR 1506.5(a), HUD shall make its own evaluation
of the environmental issues and take responsibility for the scope and
content of the EA in accordance with 40 CFR 1506.5(b).
Sec. 1000.22 Are the costs of the environmental review an eligible
cost?
Yes, costs of completing the environmental review are eligible.
Sec. 1000.24 If an Indian tribe assumes environmental review
responsibility, how will HUD assist the Indian tribe in performing the
environmental review?
As set forth in section 105(a)(2)(B) of NAHASDA and 24 CFR 58.77,
HUD will provide for monitoring of environmental reviews and will also
facilitate training for the performance for such reviews by Indian
tribes.
Sec. 1000.26 What are the administrative requirements under NAHASDA?
(a) Except as addressed in Sec. 1000.28, recipients shall comply
with the requirements and standards of OMB Circular No. A-87,
``Principles for Determining Costs Applicable to Grants and Contracts
with State, Local and Federally recognized Indian Tribal Governments,''
and with the following sections of 24 CFR part 85 ``Uniform
Administrative Requirements for Grants and Cooperative Agreements to
State and Local Governments.'' For purposes of this part, ``grantee''
as defined in 24 CFR part 85 has the same meaning as ``recipient.''
(1) Section 85.3, ``Definitions.''
(2) Section 85.6, ``Exceptions.''
(3) Section 85.12, ``Special grant or subgrant conditions for `high
risk' grantees.''
(4) Section 85.20, ``Standards for financial management systems,''
except paragraph (a).
(5) Section 85.21, ``Payment.''
(6) Section 85.22, ``Allowable costs.''
(7) Section 85.26, ``Non-federal audits.''
(8) Section 85.32, ``Equipment,'' except in all cases in which the
equipment is sold, the proceeds shall be program income.
(9) Section 85.33, ``Supplies.''
(10) Section 85.35, ``Subawards to debarred and suspended
parties.''
(11) Section 85.36, ``Procurement,'' except paragraph (a). 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:
(i) 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;
(ii) 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
(iii) 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.
(12) Section 85.37, ``Subgrants.''
(13) Section 85.40, ``Monitoring and reporting program
performance,'' except paragraphs (b) through (d) and paragraph (f).
[[Page 12356]]
(14) Section 85.41, ``Financial reporting,'' except paragraphs (a),
(b), and (e).
(15) Section 85.44, ``Termination for convenience.''
(16) Section 85.51 ``Later disallowances and adjustments.''
(17) Section 85.52, ``Collection of amounts due.''
(b)(1) With respect to the applicability of cost principles, all
items of cost listed in Attachment B of OMB Circular A-87 which require
prior Federal agency approval are allowable without the prior approval
of HUD to the extent that they comply with the general policies and
principles stated in Attachment A of this circular and are otherwise
eligible under this part, except for the following:
(i) Depreciation methods for fixed assets shall not be changed
without specific approval of HUD or, if charged through a cost
allocation plan, the Federal cognizant agency.
(ii) Fines and penalties are unallowable costs to the IHBG program.
(2) In addition, no person providing consultant services in an
employer-employee type of relationship shall receive more than a
reasonable rate of compensation for personal services paid with IHBG
funds. In no event, however, shall such compensation exceed the
equivalent of the daily rate paid for Level IV of the Executive
Schedule.
Sec. 1000.28 May a self-governance Indian tribe be exempted from the
applicability of Sec. 1000.26?
Yes. A self-governance Indian tribe shall certify that its
administrative requirements, standards and systems meet or exceed the
comparable requirements of Sec. 1000.26. For purposes of this section,
a self-governance Indian tribe is an Indian tribe that participates in
tribal self-governance as authorized under Public Law 93-638, as
amended (25 U.S.C. 450 et seq.).
Sec. 1000.30 What prohibitions regarding conflict of interest are
applicable?
(a) Applicability. In the procurement of supplies, equipment, other
property, construction and services by recipients and subrecipients,
the conflict of interest provisions of 24 CFR 85.36 shall apply. In all
cases not governed by 24 CFR 85.36, the following provisions of this
section shall apply.
(b) Conflicts prohibited. No person who participates in the
decision-making process or who gains inside information with regard to
NAHASDA assisted activities may obtain a personal or financial interest
or benefit from such activities, except for the use of NAHASDA funds to
pay salaries or other related administrative costs. Such persons
include anyone with an interest in any contract, subcontract or
agreement or proceeds thereunder, either for themselves or others with
whom they have business or immediate family ties. Immediate family ties
are determined by the Indian tribe or TDHE in its operating policies.
(c) The conflict of interest provision does not apply in instances
where a person who might otherwise be included under the conflict
provision is low-income and is selected for assistance in accordance
with the recipient's written policies for eligibility, admission and
occupancy of families for housing assistance with IHBG funds, provided
that there is no conflict of interest under applicable tribal or state
law. The recipient must make a public disclosure of the nature of
assistance to be provided and the specific basis for the selection of
the person. The recipient shall provide the appropriate Area ONAP with
a copy of the disclosure before the assistance is provided to the
person.
Sec. 1000.32 May exceptions be made to the conflict of interest
provisions?
(a) Yes. HUD may make exceptions to the conflict of interest
provisions set forth in Sec. 1000.30(b) on a case-by-case basis when it
determines that such an exception would further the primary objective
of NAHASDA and the effective and efficient implementation of the
recipient's program, activity, or project.
(b) A public disclosure of the conflict must be made and a
determination that the exception would not violate tribal laws on
conflict of interest (or any applicable state laws) must also be made.
Sec. 1000.34 What factors must be considered in making an exception to
the conflict of interest provisions?
In determining whether or not to make an exception to the conflict
of interest provisions, HUD must consider whether undue hardship will
result, either to the recipient or to the person affected, when weighed
against the public interest served by avoiding the prohibited conflict.
Sec. 1000.36 How long must a recipient retain records regarding
exceptions made to the conflict of interest provisions?
A recipient must maintain all such records for a period of at least
3 years after an exception is made.
Sec. 1000.38 What flood insurance requirements are applicable?
Under the Flood Disaster Protection Act of 1973, as amended (42
U.S.C. 4001-4128), a recipient may not permit the use of Federal
financial assistance for acquisition and construction purposes
(including rehabilitation) in an area identified by the Federal
Emergency Management Agency (FEMA) as having special flood hazards,
unless the following conditions are met:
(a) The community in which the area is situated is participating in
the National Flood Insurance Program in accord with section 202(a) of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4106(a)), or less
than a year has passed since FEMA notification regarding such flood
hazards. For this purpose, the ``community'' is the governmental
entity, such as an Indian tribe or authorized tribal organization, an
Alaska Native village, or authorized Native organization, or a
municipality or county, that has authority to adopt and enforce flood
plain management regulations for the area; and
(b) Where the community is participating in the National Flood
Insurance Program, flood insurance on the building is obtained in
compliance with section 102(a) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012(a)); provided, that if the financial assistance is
in the form of a loan or an insurance or guaranty of a loan, the amount
of flood insurance required need not exceed the outstanding principal
balance of the loan and need not be required beyond the term of the
loan.
Sec. 1000.40 Do lead-based paint poisoning prevention requirements
apply to affordable housing activities under NAHASDA?
Yes, lead-based paint requirements apply to housing activities
assisted under NAHASDA. The applicable requirements for NAHASDA are:
(a) Purpose and applicability. (1) The purpose of this section is
to implement section 302 of the Lead-Based Paint Poisoning Prevention
Act (42 U.S.C. 4822) by establishing procedures to eliminate as far as
practicable the hazards of lead-based paint poisoning for rental and
homeownership units owned or operated by a recipient. This section is
issued under 24 CFR 35.24(b)(4). The requirements of subpart C of 24
CFR part 35 do not apply to the housing covered under this section.
Other provisions of part 35 apply, including subpart H, Disclosure of
Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or
Lease of Residential Property.
(2) The requirements of this section do not apply to housing built
after 1977, 0-bedroom units, units that are certified by a qualified
inspector to be free of lead-based paint, or units designated
exclusively for the elderly or the handicapped unless a child of less
than
[[Page 12357]]
six years of age resides or is expected to reside in the unit.
(3) Further information on identifying and reducing lead-based
paint hazards can be found in the HUD publication, ``Guidelines for the
Evaluation and Control of Lead-Based Paint Hazards in Housing.''
(b) Definitions.
Chewable surface. Protruding painted surfaces that are readily
accessible to children under six years of age; for example, protruding
corners, window sills and frames, doors and frames, and other
protruding woodwork. Hard metal surfaces are not considered chewable
surfaces.
Component. An element of a residential structure identified by type
and location, such as a bedroom wall, an exterior window sill, a
baseboard in a living room, a kitchen floor, an interior window sill in
a bathroom, a porch floor, stair treads in a common stairwell, or an
exterior wall.
Defective paint surface. A surface on which the paint is cracking,
scaling, chipping, peeling, or loose.
Elevated blood lead level (EBL). Excessive absorption of lead.
Excessive absorption is a confirmed concentration of lead in whole
blood of 20 g/dl (micrograms of lead per deciliter) or more
for a single test or of 15-19 g/dl in two consecutive tests 3-
4 months apart.
HEPA means a high efficiency particle accumulator as used in lead
abatement vacuum cleaners.
Lead-based paint. A paint surface, whether or not defective,
identified as having a lead content greater than or equal to 1
milligram per centimeter squared (mg/cm2), or 0.5 percent by
weight or 5000 parts per million by weight (PPM).
(c) Requirements for pre-1978 units. (1) If a dwelling unit was
constructed before 1978, it must be visually inspected for defective
paint surfaces. If defective paint surfaces are found, such surfaces
must be treated in accordance with this section.
(2) Defective paint surfaces that are found in a report by a
qualified lead-based paint inspector not to be lead-based paint, as
defined in this section, may be exempted from treatment. For purposes
of this section, a qualified lead-based paint inspector is a lead-based
paint inspector certified, licensed or regulated by a State or Tribal
government, the U.S. Environmental Protection Agency, a local health or
housing agency, or an organization recognized by HUD.
(3) Treatment of defective paint surfaces required under this
section must be completed within 30 calendar days of the visual
evaluation. When weather conditions prevent treatment of the defective
paint conditions on exterior surfaces within the 30 day period,
treatment as required by this section may be delayed for a reasonable
time.
(4) The requirements in this paragraph apply to:
(i) All painted interior surfaces within the unit (including
ceilings but excluding furniture that is not built in or attached to
the property);
(ii) The entrance and hallway providing ingress or egress to a unit
in a multi-unit building, and other common areas that are readily
accessible to children less than six years of age; and
(iii) Exterior surfaces that are readily accessible to children
under six years of age (including walls, stairs, decks, porches,
railings, windows and doors, and outbuildings such as garages and sheds
that are readily accessible to children of less than six years of age).
(d) Additional requirements for pre-1978 units with children under
six with an EBL. (1) In addition to the requirements of this section,
for a dwelling unit constructed before 1978 that is occupied by a
family with a child under the age of six years with an identified EBL
condition, chewable surfaces must be tested for lead-based paint.
Testing is not required if previous testing of chewable surfaces is
negative for lead-based paint or if the chewable surfaces have already
been treated.
(2) Testing must be conducted by a qualified lead-based paint
inspector, as explained in paragraph (c)(2) of this section. Lead
content must be tested by using an X-ray fluorescence analyzer (XRF) or
by laboratory analysis of paint samples. Where lead-based paint on
chewable surfaces is identified, treatment of the paint surface in
accordance with this section is required, and treatment shall be
completed within 30 days of the paint testing report.
(3) The requirements of paragraph (d) in this section apply to
chewable surfaces:
(i) Within the unit;
(ii) The entrance and hallway providing access to a unit in a
multi-unit building; and
(iii) Exterior surfaces (including walls, stairs, decks, porches,
railings, windows and doors, and outbuildings such as garages and sheds
that are accessible to children of less than six years of age).
(e) Treatment of chewable surfaces without testing. The recipient
may, at its discretion, waive the testing requirement and require the
owner to treat all interior and exterior chewable surfaces in
accordance with the methods set out in this section.
(f) Treatment methods and requirements. Treatment of defective
paint surfaces and chewable surfaces must consist of covering or
removal of the paint in accordance with the following requirements:
(1) Surfaces must be covered with durable materials with joints and
edges sealed and caulked as needed to prevent the escape of lead
contaminated dust. The following are acceptable methods of treatment:
(i) Removal by wet scraping, wet sanding, chemical stripping on or
off site;
(ii) Replacing painted components;
(iii) Scraping with infra-red or coil type heat gun with
temperatures below 1100 degrees;
(iv) HEPA vacuum sanding;
(v) HEPA vacuum needle gun;
(vi) Contained hydroblasting or high pressure wash with HEPA
vacuum; and
(vii) Abrasive sandblasting with HEPA vacuum.
(2) Prohibited methods of removal are: open flame burning or
torching; machine sanding or grinding without a HEPA exhaust;
uncontained hydroblasting or high pressure wash; and dry scraping
except around electrical outlets or except when treating defective
paint spots no more than two square feet in any one interior room or
space (hallway, pantry, etc.) or totaling no more than 20 square feet
on exterior surfaces.
(3) During exterior treatment soil and playground equipment must be
protected from contamination.
(4) All treatment procedures must be concluded with a thorough
cleaning of all surfaces in the room or area of treatment to remove
fine dust particles. Cleanup must be accomplished by wet washing
surfaces with a lead solubilizing detergent such as trisodium phosphate
or an equivalent solution. Dust clearance testing by a qualified
inspector may be done at the discretion of the recipient to ensure that
the unit has been cleaned adequately.
(5) Waste and debris must be disposed of in accordance with all
applicable Federal, tribal, state and local laws.
(g) Tenant protection. The owner must take appropriate action to
protect residents and their belongings from hazards associated with
treatment procedures. Residents must not enter spaces undergoing
treatment until cleanup is completed. Personal belongings that are in
work areas must be relocated or otherwise protected from contamination.
[[Page 12358]]
Sec. 1000.42 Are the requirements of section 3 of the Housing and
Urban Development Act of 1968 applicable?
(a) General. Yes. Recipients shall comply with section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and HUD's
implementing regulations in 24 CFR part 135, to the maximum extent
feasible and consistent with, but not in derogation of, compliance with
section 7(b) of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450e(b)). Section 3 provides job training, employment,
and contracting opportunities for low-income individuals.
(b) Threshold requirement. The requirements of section 3 apply only
to those section 3 covered projects or activities for which the amount
of assistance exceeds $200,000.
Sec. 1000.44 What prohibitions on the use of debarred, suspended or
ineligible contractors apply?
In addition to any tribal requirements, the prohibitions in 24 CFR
part 24 on the use of debarred, suspended or ineligible contractors
apply.
Sec. 1000.46 Do drug-free workplace requirements apply?
Yes. In addition to any tribal requirements, the Drug-Free
Workplace Act of 1988 (41 U.S.C. 701 et seq.) and HUD's implementing
regulations in 24 CFR part 24 apply.
Sec. 1000.48 Are Indian preference requirements applicable to IHBG
activities?
(a) Applicability. Grants under this part are subject to section
7(b) of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450e(b). 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:
(1) Preference and opportunities for training and employment shall
be given to Indians, and
(2) 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).
(b) Definitions.
(1) 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.
(2) 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.
Sec. 1000.50 What Indian preference requirements apply to IHBG
administration activities?
To the greatest extent feasible, preference and opportunities for
training and employment in connection with the administration of grants
awarded under this part shall be given to Indians.
Sec. 1000.52 What Indian preference requirements apply to IHBG
procurement?
To the greatest extent feasible, recipients shall give preference
in the award of contracts for projects funded under this part to Indian
organizations and Indian-owned economic enterprises.
(a) Each recipient shall:
(1) Certify to HUD that the polices 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
(2) Advertise for bids or proposals limited to qualified Indian
organizations and Indian-owned enterprises; or
(3) Use a two-stage preference procedure, as follows:
(i) 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.
(ii) 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.
(b) 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:
(1) Re-advertise the contract, using any of the methods described
in paragraph (a) of this section; or
(2) Re-advertise the contract without limiting the advertisement
for bids or proposals to Indian organizations and Indian-owned economic
enterprises; or
(3) 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 to
award the contract to the single bidder or offeror.
(c) 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.
(d) All preferences shall be publicly announced in the
advertisement and bidding or proposal solicitation documents and the
bidding and proposal documents.
(e) 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:
(1) Evidence showing fully the extent of Indian ownership and
interest;
(2) Evidence of structure, management and financing affecting the
Indian character of the enterprise, including major subcontracts and
purchase agreements; materials or equipment supply arrangements; and
management salary or profit-sharing arrangements; and evidence showing
the effect of these on the extent of Indian ownership and interest; and
(3) 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.
(f) 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:
[[Page 12359]]
(1) 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:
(i) Preferences and opportunities for training and employment shall
be given to Indians; and
(ii) Preferences in the award of contracts and subcontracts shall
be given to Indian organizations and Indian-owned economic enterprises.
(2) The parties to this contract shall comply with the provisions
of section 7(b) of the Indian Act.
(3) 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.
(4) The contractor shall include this section 7(b) clause in every
subcontract 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.
Sec. 1000.54 What procedures apply to complaints arising out of any of
the methods of providing for Indian preference?
The following procedures are applicable to complaints arising out
of any of the methods of providing for Indian preference contained in
this part, including alternate methods. Tribal policies that meet or
exceed the requirements of this section shall apply.
(a) Each complaint shall be in writing, signed, and filed with the
recipient.
(b) A complaint must be filed with the recipient no later than 20
calendar days from the date of the action (or omission) upon which the
complaint is based.
(c) Upon receipt of a complaint, the recipient shall promptly stamp
the date and time of receipt upon the complaint, and immediately
acknowledge its receipt.
(d) Within 20 calendar days of receipt of a complaint, the
recipient shall either meet, or communicate by mail or telephone, with
the complainant in an effort to resolve the matter. The recipient shall
make a determination on a complaint and notify the complainant, in
writing, within 30 calendar days of the submittal of the complaint to
the recipient. The decision of the recipient shall constitute final
administrative action on the complaint.
Sec. 1000.56 How are NAHASDA funds paid by HUD to recipients?
(a) Each year funds shall be paid directly to a recipient in a
manner that recognizes the right of Indian self-determination and
tribal self-governance and the trust responsibility of the Federal
government to Indian tribes consistent with NAHASDA.
(b) Payments shall be made as expeditiously as practicable.
Sec. 1000.58 Are there limitations on the investment of IHBG funds?
(a) A recipient may invest IHBG funds for the purposes of carrying
out affordable housing activities in investment securities and other
obligations as provided in this section.
(b) The recipient may invest IHBG funds so long as it demonstrates
to HUD:
(1) That there are no unresolved significant and material audit
findings or exceptions in the most recent annual audit completed under
the Single Audit Act or in an independent financial audit prepared in
accordance with generally accepted auditing principles; and
(2) That it is a self-governance Indian tribe or that it has the
administrative capacity and controls to responsibly manage the
investment. For purposes of this section, a self-governance Indian
tribe is an Indian tribe that participates in tribal self-governance as
authorized under Public Law 93-638, as amended (25 U.S.C. 450 et seq.).
(c) Recipients shall invest IHBG funds only in:
(1) Obligations of the United States; obligations issued by
Government sponsored agencies; securities that are guaranteed or
insured by the United States; mutual (or other) funds registered with
the Securities and Exchange Commission and which invest only in
obligations of the United States or securities that are guaranteed or
insured by the United States; or
(2) Accounts that are insured by an agency or instrumentality of
the United States or fully collateralized to ensure protection of the
funds, even in the event of bank failure.
(d) IHBG funds shall be held in one or more accounts separate from
other funds of the recipient. Each of these accounts shall be subject
to an agreement in a form prescribed by HUD sufficient to implement the
regulations in this part and permit HUD to exercise its rights under
Sec. 1000.60.
(e) Expenditure of funds for affordable housing activities under
section 204(a) of NAHASDA shall not be considered investment.
(f) A recipient may invest its IHBG annual grant in an amount equal
to the annual formula grant amount less any formula grant amounts
allocated for the operating subsidy element of the Formula Current
Assisted Housing Stock (FCAS) component of the formula (see
Secs. 1000.316(a) and 1000.320) multiplied by the following
percentages, as appropriate:
(1) 50% in Fiscal Years 1998 and 1999;
(2) 75% in Fiscal Year 2000; and
(3) 100% in Fiscal Years 2001 and thereafter.
(g) Investments under this section may be for a period no longer
than two years.
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. 1000.538 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.
Sec. 1000.62 What is considered program income and what restrictions
are there on its use?
(a) Program income is defined as any income that is realized from
the disbursement of grant amounts. Program income does not include any
amounts generated from the operation of 1937 Act units unless the units
are assisted with grant amounts and the income is attributable to such
assistance. Program income includes income from fees for services
performed from the use of real or rental of real or personal property
acquired with grant funds, from the sale of commodities or items
developed, acquired, etc. with grant funds, and from payments of
principal and interest earned on grant funds prior to disbursement.
(b) Any program income can be retained by a recipient provided it
is used for affordable housing activities in accordance with section
202 of NAHASDA. 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.
(c) If program income is realized from an eligible activity funded
with both grant funds as well as other funds (i.e.,
[[Page 12360]]
funds that are not grant funds), then the amount of program income
realized will be based on a percentage calculation that represents the
proportional share of funds provided for the activity generating the
program income.
(d) Costs incident to the generation of program income shall be
deducted from gross income to determine program income.
Subpart B--Affordable Housing Activities
Sec. 1000.101 What is affordable housing?
Eligible affordable housing is defined in section 4(2) of NAHASDA
and is described in title II of NAHASDA.
Sec. 1000.102 What are eligible affordable housing activities?
Eligible affordable housing activities are those described in
section 202 of NAHASDA.
Sec. 1000.104 What families are eligible for affordable housing
activities?
The following families are eligible for affordable housing
activities:
(a) Low income Indian families on a reservation or Indian area.
(b) A non-low income Indian family may receive housing assistance
in accordance with Sec. 1000.110, except that non low-income Indian
families residing in housing assisted under the 1937 Act do not have to
meet the requirements of Sec. 1000.110 for continued occupancy.
(c) A non-Indian family may receive housing assistance on a
reservation or Indian area if the non-Indian 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, except
that non-Indian families residing in housing assisted under the 1937
Act do not have to meet these requirements for continued occupancy.
Sec. 1000.106 What families receiving assistance under title II of
NAHASDA require HUD approval?
(a) Housing assistance for non low-income Indian families requires
HUD approval only as required in Secs. 1000.108 and 1000.110.
(b) Assistance under section 201(b)(3) of NAHASDA for non-Indian
families 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
the non-Indian family's housing needs cannot be reasonably met without
such assistance.
Sec. 1000.108 How is HUD approval obtained by a recipient for housing
for non low-income Indian 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 Indian families in accordance with
section 201(b)(2) of NAHASDA. Assistance to non low-income Indian
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 Indian families.
Sec. 1000.110 Under what conditions may non low-income Indian families
participate in the program?
(a) A family who is purchasing housing under a lease purchase
agreement and who was low income at the time the lease was signed is
eligible without further conditions.
(b) A recipient may provide the following types of assistance to
non low-income Indian families under the conditions specified in
paragraphs (c), (d) and (e) of this section:
(1) Homeownership activities under section 202(2) of NAHASDA, which
may include assistance in conjunction with loan guarantees under the
Section 184 program (see 24 CFR part 1005);
(2) Model activities under section 202(6) of NAHASDA; and
(3) Loan guarantee activities under title VI of NAHASDA.
(c) A recipient must determine and document that there is a need
for housing for each family which cannot reasonably be met without such
assistance.
(d) A recipient may use up to 10 percent of its annual grant amount
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 its annual grant amount for such
assistance or to provide housing for families with income over 100
percent of median income.
(e) Non low-income Indian families cannot receive the same benefits
provided low-income Indian families. The amount of assistance non low-
income Indian 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 Indian 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 Indian 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).
(f) The requirements set forth in paragraph (e) of this section do
not apply to non low-income Indian families which the recipient has
determined to be essential to the well-being of the Indian families
residing in the housing area.
Sec. 1000.112 How will HUD determine whether to approve model housing
activities?
HUD will review all proposals with the goal of approving the
activities and encouraging the flexibility, discretion, and self-
determination granted to Indian tribes under NAHASDA to formulate and
operate innovative housing programs that meet the intent of NAHASDA.
Sec. 1000.114 How long does HUD have to review and act on a proposal
to provide assistance to non low-income Indian families or a model
housing activity?
Whether submitted in the IHP or at any other time, HUD will have
sixty calendar days after receiving the proposal to notify the
recipient in writing that the proposal to provide assistance to non
low-income Indian families or for model activities is approved or
disapproved. If no decision is made by HUD within sixty calendar days
of receiving the proposal, the proposal is deemed to have been approved
by HUD.
Sec. 1000.116 What should HUD do before declining a proposal to
provide assistance to non low-income Indian families or a model housing
activity ?
HUD shall consult with a recipient regarding the recipient's
proposal to provide assistance to non low-income Indian families or a
model housing activity. To the extent 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.
Sec. 1000.118 What recourse does a recipient have if HUD disapproves a
proposal to provide assistance to non low-income Indian families or a
model housing activity?
(a) Within thirty calendar days of receiving HUD's denial of a
proposal to
[[Page 12361]]
provide assistance to non low-income Indian 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.
(b) Within twenty calendar days of receiving the request, HUD shall
reconsider the recipient's request and either affirm or reverse its
initial decision in writing, setting forth its reasons for the
decision. If the decision was made by the Assistant Secretary, the
decision will constitute final agency action. If the decision was made
at a lower level, then paragraphs (c) and (d) of this section will
apply.
(c) The recipient may appeal any denial of reconsideration by
filing an appeal with the Assistant Secretary within twenty calendar
days of receiving the denial. The appeal shall set forth the reasons
why the recipient does not agree with HUD's decision and set forth
justification for the reconsideration.
(d) Within twenty calendar days of receipt of the appeal, the
Assistant Secretary shall review the recipient's appeal and act on the
appeal, setting forth the reasons for the decision.
Sec. 1000.120 May a recipient use Indian preference or tribal
preference in selecting families for housing assistance?
Yes. The IHP may set out a preference for the provision of housing
assistance to Indian families who are members of the Indian tribe or to
other Indian families if the recipient has adopted the preference in
its admissions policy. The recipient shall ensure that housing
activities funded under NAHASDA are subject to the preference.
Sec. 1000.122 May NAHASDA grant funds be used as matching funds to
obtain and leverage funding, including any Federal or state program and
still be considered an affordable housing activity?
There is no prohibition in NAHASDA against using grant funds as
matching funds.
Sec. 1000.124 What maximum and minimum rent or homebuyer payment can a
recipient charge a low-income rental tenant or homebuyer residing in
housing units assisted with NAHASDA grant amounts?
A recipient can charge a low-income rental tenant or homebuyer rent
or homebuyer payments not to exceed 30 percent of the adjusted income
of the family. The recipient may also decide to compute its rental and
homebuyer payments on any lesser percentage of adjusted income of the
family. This requirement applies only to units assisted with NAHASDA
grant amounts. NAHASDA does not set minimum rents or homebuyer
payments; however, a recipient may do so.
Sec. 1000.126 May a recipient charge flat or income-adjusted rents?
Yes, providing the rental or homebuyer payment of the low-income
family does not exceed 30 percent of the family's adjusted income.
Sec. 1000.128 Is income verification required for assistance under
NAHASDA?
(a) Yes, the recipient must verify that the family is income
eligible based on anticipated annual income. The family is required to
provide documentation to verify this determination. The recipient is
required to maintain the documentation on which the determination of
eligibility is based.
(b) The recipient may require a family to periodically verify its
income in order to determine housing payments or continued occupancy
consistent with locally adopted policies. When income verification is
required, the family must provide documentation which verifies its
income, and this documentation must be retained by the recipient.
Sec. 1000.130 May a recipient charge a non low-income family rents or
homebuyer payments which are more than 30 percent of the family's
adjusted income?
Yes. A recipient may charge a non low-income family rents or
homebuyer payments which are more than 30 percent of the family's
adjusted income.
Sec. 1000.132 Are utilities considered a part of rent or homebuyer
payments?
Utilities may be considered a part of rent or homebuyer payments if
a recipient decides to define rent or homebuyer payments to include
utilities in its written policies on rents and homebuyer payments
required by section 203(a)(1) of NAHASDA. A recipient may define rents
and homebuyer payments to exclude utilities.
Sec. 1000.134 When may a recipient (or entity funded by a recipient)
demolish or dispose of current assisted stock?
(a) A recipient (or entity funded by a recipient) may undertake a
planned demolition or disposal of current assisted stock owned by the
recipient or an entity funded by the recipient when:
(1) A financial analysis demonstrates that it is more cost-
effective or housing program-effective for the recipient to demolish or
dispose of the unit than to continue to operate or own it; or
(2) The housing unit has been condemned by the government which has
authority over the unit; or
(3) The housing unit is an imminent threat to the health and safety
of housing residents; or
(4) Continued habitation of a housing unit is inadvisable due to
cultural or historical considerations.
(b) No action to demolish or dispose of the property other than
performing the analysis cited in paragraph (a) of this section can be
taken until HUD has been notified in writing of the recipient's intent
to demolish or dispose of the housing units consistent with section
102(c)(4)(H) of NAHASDA. The written notification must set out the
analysis used to arrive at the decision to demolish or dispose of the
property and may be set out in a recipient's IHP or in a separate
submission to HUD.
(c) In any disposition sale of a housing unit, a sale process
designed to maximize the sale price will be used. However, where the
sale is to a low-income Indian family, the home may be disposed of
without maximizing the sale price so long as such price is consistent
with a recipient's IHP. The sale proceeds from the disposition of any
housing unit are program income under NAHASDA and must be used in
accordance with the requirements of NAHASDA and these regulations.
Sec. 1000.136 What insurance requirements apply to housing units
assisted with NAHASDA grants?
(a) The recipient shall provide adequate insurance either by
purchasing insurance or by indemnification against casualty loss by
providing insurance in adequate amounts to indemnify the recipient
against loss from fire, weather, and liability claims for all housing
units owned or operated by the recipient.
(b) The recipients shall not require insurance on units assisted by
grants to families for privately owned housing if there is no risk of
loss or exposure to the recipient or if the assistance is in an amount
less than $5000, but will require insurance when repayment of all or
part of the assistance is part of the assistance agreement.
(c) The recipient shall require contractors and subcontractors to
either provide insurance covering their activities or negotiate
adequate indemnification coverage to be provided by the recipient in
the contract.
(d) These requirements are in addition to applicable flood
insurance requirements under Sec. 1000.38.
Sec. 1000.138 What constitutes adequate insurance?
Insurance is adequate if it is a purchased insurance policy from an
insurance provider or a plan of self-insurance in an amount that will
protect the financial stability of the recipient's IHBG program.
Recipients may purchase the required insurance without regard to
[[Page 12362]]
competitive selection procedures from nonprofit insurance entities
which are owned and controlled by recipients and which have been
approved by HUD.
Sec. 1000.140 May a recipient use grant funds to purchase insurance
for privately owned housing to protect NAHASDA grant amounts spent on
that housing?
Yes. All purchases of insurance must be in accordance with
Secs. 1000.136 and 1000.138.
Sec. 1000.142 What is 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?
Each recipient shall describe in its IHP its determination of the
useful life of each assisted housing unit in each of 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.
Sec. 1000.144 Are Mutual Help homes developed under the 1937 Act
subject to the useful life provisions of section 205(a)(2)?
No.
Sec. 1000.146 Are homebuyers required to remain low-income throughout
the term of their participation in a housing program funded under
NAHASDA?
No. The low-income eligibility requirement applies only at the time
of purchase. However, families purchasing housing under a lease
purchase agreement who are not low-income at the time of purchase are
eligible under Sec. 1000.110.
Sec. 1000.150 How may Indian tribes and TDHEs receive criminal
conviction information on adult applicants or tenants?
(a) As required by section 208 of NAHASDA, the National Crime
Information Center, police departments, and other law enforcement
agencies shall provide criminal conviction information to Indian tribes
and TDHEs upon request. Information regarding juveniles shall only be
released to the extent such release is authorized by the law of the
applicable state, Indian tribe or locality.
(b) For purposes of this section, the term ``tenants'' includes
homebuyers who are purchasing a home pursuant to a lease purchase
agreement.
Sec. 1000.152 How is the recipient to use criminal conviction
information?
The recipient shall use the criminal conviction information
described in Sec. 1000.150 only for applicant screening, lease
enforcement and eviction actions. The information 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.
Sec. 1000.154 How is the recipient to keep criminal conviction
information confidential?
(a) The recipient will keep all the criminal conviction record
information it receives from the official law enforcement agencies
listed in Sec. 1000.150 in files separate from all other housing
records.
(b) These criminal conviction records will be kept under lock and
key and be under the custody and control of the recipient's housing
executive director/lead official and/or his designee for such records.
(c) These criminal conviction records may only be accessed with the
written permission of the Indian tribe's or TDHE's housing executive
director/lead official and/or his designee and are only to be used for
the purposes stated in section 208 of NAHASDA and these regulations.
Sec. 1000.156 Is there a per unit limit on the amount of IHBG funds
that may be used for dwelling construction and dwelling equipment?
(a) Yes. The per unit amount of IHBG funds that may be used for
dwelling construction and dwelling equipment cannot exceed the limit
established by HUD except as allowed in the definition below. Other
costs associated with developing a project, including all undertakings
necessary for administration, planning, site acquisition, water and
sewer, demolition, and financing may be eligible NAHASDA costs but are
not subject to this limit.
(b) Dwelling construction and equipment (DC&E) costs include all
construction costs of an individual dwelling within five feet of the
foundation. Excluded from the DC&E are any administrative, planning,
financing, site acquisition, site development more than five feet from
the foundation, and utility development or connection costs. HUD will
publish and update on a regular basis DC&E amounts for appropriate
geographic areas.
(c) DC&E amounts will be based on a moderately designed house or
multi-family structure and will be determined by averaging the current
construction costs, as listed in not less than two nationally
recognized residential construction cost indices, for publicly bid
construction of a good and sound quality. If a recipient determines
that published DC&E amounts are not representative of construction
costs in its area, it may request a re-evaluation of DC&E amounts and
provide HUD with relevant information for this re-evaluation.
Subpart C--Indian Housing Plan (IHP)
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 that fiscal year an IHP in
accordance with Sec. 1000.220 to carry out affordable housing
activities.
Sec. 1000.202 Who are eligible recipients?
Eligible recipients are Indian tribes, or TDHEs when authorized by
one or more Indian tribes.
Sec. 1000.204 How does an Indian tribe designate itself as recipient
of the grant?
(a) By resolution of the Indian tribe; or
(b) When such authority has been delegated by an Indian tribe's
governing body to a tribal committee(s), by resolution or other written
form used by such committee(s) to memorialize the decisions of that
body, if applicable.
Sec. 1000.206 How is a TDHE designated?
(a)(1) By resolution of the Indian tribe or Indian tribes to be
served; or
(2) When such authority has been delegated by an Indian tribe's
governing body to a tribal committee(s), by resolution or other written
form used by such committee(s) to memorialize the decisions of that
body, if applicable.
(b) In the absence of a designation by the Indian tribe, the
default designation as provided in section 4(21) of NAHASDA shall
apply.
Sec. 1000.208 What happens if an Indian tribe had two IHAs as of
September 30, 1996?
Indian tribes which had established and were operating two IHAs as
of September 30, 1996, under the 1937 Act shall be allowed to form and
operate two TDHEs under NAHASDA. Nothing in this section shall affect
the allocation of funds otherwise due to an Indian tribe under the
formula.
Sec. 1000.210 What happens to existing 1937 Act units in those
jurisdictions for which Indian tribes do not or cannot submit an IHP?
NAHASDA does not provide the statutory authority for HUD to grant
NAHASDA grant funds to an Indian housing authority, Indian tribe or to
a default TDHE which cannot obtain a tribal certification, if the
requisite IHP is not submitted by an Indian tribe or is determined to
be out of compliance by
[[Page 12363]]
HUD. There may be circumstances where this may happen, and in those
cases, other methods of tribal, Federal, or private market support may
have to be sought to maintain and operate those 1937 Act units.
Sec. 1000.212 Is submission of an IHP required?
Yes. An Indian tribe or, with the consent of its Indian tribe(s),
the TDHE, must submit an IHP to HUD to receive funding under NAHASDA,
except as provided in section 101(b)(2) of NAHASDA. If a TDHE has been
designated by more than one Indian tribe, the TDHE can submit a
separate IHP for each Indian tribe or it may submit a single IHP based
on the requirements of Sec. 1000.220 with the approval of the Indian
tribes.
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 July 1. Grant funds cannot be provided until the plan is
submitted and determined to be in compliance with section 102 of
NAHASDA and funds are available.
Sec. 1000.216 What happens if the recipient does not submit the IHP to
the Area ONAP by July 1?
If the IHP is not initially sent by July 1, the recipient will not
be eligible for IHBG funds for that fiscal year. Any funds not
obligated because an IHP was not received before the deadline has
passed shall be distributed by formula in the following year.
Sec. 1000.218 Who prepares and submits an IHP?
An Indian tribe, or with the authorization of a Indian tribe, in
accordance with section 102(d) of NAHASDA a TDHE may prepare and submit
a plan to HUD.
Sec. 1000.220 What are the minimum requirements for the IHP?
The minimum IHP requirements are set forth in sections 102(b) and
102(c) of NAHASDA. In addition, Secs. 1000.56, 1000.108, 1000.120,
1000.134, 1000.142, 1000.238, 1000.328, and 1000.504 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 minimum 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.
Sec. 1000.222 Are there separate IHP requirements for small Indian
tribes and small TDHEs?
No. HUD requirements for IHPs are reasonable.
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 circumstances beyond its control. 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).
Sec. 1000.226 Can the certification requirements of section 102(c)(5)
of NAHASDA be waived by HUD?
Yes. HUD may waive these certification requirements as provided in
section 101(b)(2) of NAHASDA.
Sec. 1000.228 If HUD changes its IHP format will Indian tribes be
involved?
Yes. HUD will first consult with Indian tribes before making any
substantial changes to HUD's IHP format.
Sec. 1000.230 What is the process for HUD review of IHPs and IHP
amendments?
HUD will conduct the IHP review in the following manner:
(a) HUD will conduct a limited review of the IHP to ensure that its
contents:
(1) Comply with the requirements of section 102 of NAHASDA which
outlines the IHP submission requirements;
(2) Are consistent with information and data available to HUD;
(3) Are not prohibited by or inconsistent with any provision of
NAHASDA or other applicable law; and
(4) Include the appropriate certifications.
(b) If the IHP complies with the provisions of paragraphs (a)(1),
(a)(2), and (a)(3) of this section, HUD will notify the recipient of
IHP compliance within 60 days after receiving the IHP. If HUD fails to
notify the recipient, the IHP shall be considered to be in compliance
with the requirements of section 102 of NAHASDA and the IHP is
approved.
(c) If the submitted IHP does not comply with the provisions of
paragraphs (a)(1), and (a)(3) of this section, HUD will notify the
recipient of the determination of non-compliance. HUD will provide this
notice no later than 60 days after receiving the IHP. This notice will
set forth:
(1) The reasons for noncompliance;
(2) The modifications necessary for the IHP to meet the submission
requirements; and
(3) The date by which the revised IHP must be submitted.
(d) If the recipient does not submit a revised IHP by the date
indicated in the notice provided under paragraph (c) of this section,
the IHP will be determined by HUD to be in non-compliance unless a
waiver is requested and approved under section 101(b)(2) of NAHASDA. If
the IHP is determined by HUD to be in non-compliance and no waiver is
granted, the recipient may appeal this determination following the
appeal process in Sec. 1000.234.
(e)(1) If the IHP does not contain the certifications identified in
paragraph (a)(4) of this section, the recipient will be notified within
60 days of submission of the IHP that the plan is incomplete. The
notification will include a date by which the certification must be
submitted.
(2) If the recipient has not complied or cannot comply with the
certification requirements due to circumstances beyond the control of
the Indian tribe(s), within the timeframe established, the recipient
can request a waiver in accordance with section 101(b)(2) of NAHASDA.
If the waiver is approved, the recipient is eligible to receive its
grant in accordance with any conditions of the waiver.
Sec. 1000.232 Can an Indian tribe or TDHE amend its IHP?
Yes. Section 103(c) of NAHASDA specifically provides that a
recipient may submit modifications or revisions of its IHP to HUD.
Unless the initial IHP certification provided by an Indian tribe
allowed for the submission of IHP amendments without further tribal
certifications, a tribal certification must accompany submission of IHP
amendments by a TDHE to HUD. HUD's review of an amendment and
determination of compliance will be limited to modifications of an IHP
which adds new activities or involve a decrease in the amount of funds
provided to protect and maintain the viability of housing assisted
under the 1937 Act. HUD will consider these modifications to the IHP in
accordance
[[Page 12364]]
with Sec. 1000.230. HUD will act on amended IHPs within 30 days.
Sec. 1000.234 Can HUD's determination regarding the non-compliance of
an IHP or a modification to an IHP be appealed?
(a) Yes. Within 30 days of receiving HUD's disapproval of an IHP or
of a modification to an IHP, the recipient may submit a written request
for reconsideration of the determination. The request shall include the
justification for the reconsideration.
(b) Within 21 days of receiving the request, HUD shall reconsider
its initial determination and provide the recipient with written notice
of its decision to affirm, modify, or reverse its initial
determination. This notice will also contain the reasons for HUD's
decision.
(c) The recipient may appeal any denial of reconsideration by
filing an appeal with the Assistant Secretary within 21 days of
receiving the denial. The appeal shall set forth the reasons why the
recipient does not agree with HUD's decision and include justification
for the reconsideration.
(d) Within 21 days of receipt of the appeal, the Assistant
Secretary shall review the recipient's appeal and act on the appeal.
The Assistant Secretary will provide written notice to the recipient
setting forth the reasons for the decision. The Assistant Secretary's
decision constitutes final agency action.
Sec. 1000.236 What are eligible administrative and planning expenses?
(a) Eligible administrative and planning expenses of the IHBG
program include, but are not limited to:
(1) Costs of overall program and/or administrative management;
(2) Coordination monitoring and evaluation;
(3) Preparation of the IHP including data collection and transition
costs;
(4) Preparation of the annual performance report; and
(5) Challenge to and collection of data for purposes of challenging
the formula.
(b) Staff and overhead costs directly related to carrying out
affordable housing activities can be determined to be eligible costs of
the affordable housing activity or considered administration or
planning at the discretion of the recipient.
Sec. 1000.238 What percentage of the IHBG funds can be used for
administrative and planning expenses?
The recipient can use up to 20 percent of its annual grant amount
for administration and planning. The recipient shall identify the
percentage of grant funds which will be used in the IHP. HUD approval
is required if a higher percentage is requested by the recipient. 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.
Sec. 1000.240 When is a local cooperation agreement required for
affordable housing activities?
The requirement for a local cooperation agreement applies only to
rental and lease-purchase homeownership units assisted with IHBG funds
which are owned by the Indian tribe or TDHE.
Sec. 1000.242 When does the requirement for exemption from taxation
apply to affordable housing activities?
The requirement for exemption from taxation applies only to rental
and lease-purchase homeownership units assisted with IHBG funds which
are owned by the Indian tribe or TDHE.
Subpart D--Allocation Formula
Sec. 1000.301 What is the purpose of the IHBG formula?
The IHBG formula is used to allocate equitably and fairly funds
made available through NAHASDA among eligible Indian tribes. A TDHE may
be a recipient on behalf of an Indian tribe.
Sec. 1000.302 What are the definitions applicable for the IHBG
formula?
Allowable Expense Level (AEL) factor. In rental projects, AEL is
the per-unit per-month dollar amount of expenses which was used to
compute the amount of operating subsidy used prior to October 1, 1997
for the Low Rent units developed under the 1937 Act. The ``AEL factor''
is the relative difference between a local area AEL and the national
weighted average for AEL.
Date of Full Availability (DOFA) means the last day of the month in
which substantially all the units in a housing development are
available for occupancy.
Fair Market Rent (FMR) factors are gross rent estimates; they
include shelter rent plus the cost of all utilities, except telephones.
HUD estimates FMRs on an annual basis for 354 metropolitan FMR areas
and 2,355 non-metropolitan county FMR areas. The ``FMR factor'' is the
relative difference between a local area FMR and the national weighted
average for FMR.
Formula Annual Income. For purposes of the IHBG formula, annual
income is a household's total income as currently defined by the U.S.
Census Bureau.
Formula area. (1) Formula area is the geographic area over which an
Indian tribe could exercise court jurisdiction or is providing
substantial housing services and, where applicable, the Indian tribe or
TDHE has agreed to provide housing services pursuant to a Memorandum of
Agreement with the governing entity or entities (including Indian
tribes) of the area, including but not limited to:
(i) A reservation;
(ii) Trust land;
(iii) Alaska Native Village Statistical Area;
(iv) Alaska Native Claims Settlement Act Corporation Service Area;
(v) Department of the Interior Near-Reservation Service Area;
(vi) Former Indian Reservation Areas in Oklahoma as defined by the
Census as Tribal Jurisdictional Statistical Area;
(vii) Congressionally Mandated Service Area; and
(viii) State legislatively defined Tribal Areas as defined by the
Census as Tribal Designated Statistical Areas.
(2) For additional areas beyond those identified in the above list
of eight, the Indian tribe must submit on the Formula Response Form the
area that it wishes to include in its Formula Area and what previous
and planned investment it has made in the area. HUD will review this
submission and determine whether or not to include this area. HUD will
make its judgment using as its guide whether this addition is fair and
equitable for all Indian tribes in the formula.
(3) In some cases the population data for an Indian tribe within
its formula area is greater than its tribal enrollment. In general, for
those cases to maintain fairness for all Indian tribes, the population
data will not be allowed to exceed twice an Indian tribe's enrolled
population. However, an Indian tribe subject to this cap may receive an
allocation based on more than twice its total enrollment if it can show
that it is providing housing assistance to substantially more non-
member Indians and Alaska Natives who are members of another Federally
recognized Indian tribe than it is to members.
(4) In cases where an Indian tribe is seeking to receive an
allocation more than twice its total enrollment, the tribal enrollment
multiplier will be determined by the total number of Indians and Alaska
Natives the Indian tribe is providing housing assistance (on July 30 of
the year before funding is sought) divided by the number of members the
Indian tribe is providing housing assistance. For example, an
[[Page 12365]]
Indian tribe which provides housing to 300 Indians and Alaska Natives,
of which 100 are members, would then be able to receive an allocation
for up to three times its tribal enrollment if the Indian and Alaska
Native population in the area is three or more times the tribal
enrollment.
Formula Median Income. For purposes of the formula median income is
determined in accordance with section 567 of the Housing and Community
Development Act of 1987 (42 U.S.C. 1437a note).
Formula Response Form is the form recipients use to report changes
to their Formula Current Assisted stock, formula area, and other
formula related information before each year's formula allocation.
Indian Housing Authority (IHA) financed means a homeownership
program where title rests with the homebuyer and a security interest
rests with the IHA.
Mutual Help Occupancy Agreement (MHOA) means a lease with option to
purchase contract between an IHA and a homebuyer under the 1937 Act.
Overcrowded means households with more than 1.01 persons per room
as defined by the U.S. Decennial Census.
Section 8 means the making of housing assistance payments to
eligible families leasing existing housing pursuant to the provisions
of the 1937 Act.
Section 8 unit means the contract annualized housing assistance
payments (certificates, vouchers, and project based) under the Section
8 program.
Total Development Cost (TDC) is the sum of all costs for a project
including all undertakings necessary for administration, planning, site
acquisition, demolition, construction or equipment and financing
(including payment of carrying charges) and for otherwise carrying out
the development of the project, excluding off site water and sewer.
Total Development Cost amounts will be based on a moderately designed
house and will be determined by averaging the current construction
costs as listed in not less than two nationally recognized residential
construction cost indices.
Without kitchen or plumbing means, as defined by the U.S. Decennial
Census, an occupied house without one or more of the following items:
(1) Hot and cold piped water;
(2) A flush toilet;
(3) A bathtub or shower;
(4) A sink with piped water;
(5) A range or cookstove; or
(6) A refrigerator.
Sec. 1000.304 May the IHBG formula be modified?
Yes, as long as any modification does not conflict with the
requirements of NAHASDA.
Sec. 1000.306 How can the IHBG formula be modified?
(a) The IHBG formula can be modified upon development of a set of
measurable and verifiable data directly related to Indian and Alaska
Native housing need. Any data set developed shall be compiled with the
consultation and involvement of Indian tribes and examined and/or
implemented not later than 5 years from the date of issuance of these
regulations and periodically thereafter.
(b) Furthermore, the IHBG formula shall be reviewed within five
years to determine if subsidy is needed to operate and maintain NAHASDA
units or any other changes are needed in respect to funding under the
Formula Current Assisted Stock component of the formula.
(c) During the five year review of housing stock for formula
purposes, the Section 8 units shall be reduced by the same percentage
as the current assisted rental stock has diminished since September 30,
1999.
Sec. 1000.308 Who can make modifications to the IHBG formula?
HUD can make modifications in accordance with Sec. 1000.304 and
Sec. 1000.306 provided that any changes proposed by HUD are published
and made available for public comment in accordance with applicable law
before their implementation.
Sec. 1000.310 What are the components of the IHBG formula?
The IHBG formula consists of two components:
(a) Formula Current Assisted Housing Stock (FCAS); and
(b) Need.
Sec. 1000.312 What is current assisted stock?
Current assisted stock consists of housing units owned or operated
pursuant to an ACC. This includes all low rent, Mutual Help, and
Turnkey III housing units under management as of September 30, 1997, as
indicated in the Formula Response Form.
Sec. 1000.314 What is formula current assisted stock?
Formula current assisted stock is current assisted stock as
described in Sec. 1000.312 plus 1937 Act units in the development
pipeline when they become owned or operated by the recipient and are
under management as indicated in the Formula Response Form. Formula
current assisted stock also includes Section 8 units when their current
contract expires and the Indian tribe continues to manage the
assistance in a manner similar to the Section 8 program, as reported on
the Formula Response Form.
Sec. 1000.316 How is the Formula Current Assisted Stock (FCAS)
Component developed?
The Formula Current Assisted Stock component consists of two
elements. They are:
(a) Operating subsidy. The operating subsidy consists of three
variables which are:
(1) The number of low-rent FCAS units multiplied by the FY 1996
national per unit subsidy (adjusted to full funding level) multiplied
by an adjustment factor for inflation;
(2) The number of Section 8 units whose contract has expired but
had been under contract on September 30, 1997, multiplied by the FY
1996 national per unit subsidy adjusted for inflation; and
(3) The number of Mutual Help and Turnkey III FCAS units multiplied
by the FY 1996 national per unit subsidy (adjusted to full funding
level) multiplied by an adjustment factor for inflation.
(b) Modernization allocation. Modernization allocation consists of
the number of Low Rent, Mutual Help, and Turnkey III FCAS units
multiplied by the national per unit amount of allocation for FY 1996
modernization multiplied by an adjustment factor for inflation.
Sec. 1000.317 Who is the recipient for funds for current assisted
stock which is owned by state-created Regional Native Housing
Authorities in Alaska?
If housing units developed under the 1937 Act are owned by a state-
created Regional Native Housing Authority in Alaska, and are not
located on an Indian reservation, then the recipient for funds
allocated for the current assisted stock portion of NAHASDA funds for
the units is the regional Indian tribe.
Sec. 1000.318 When do units under Formula Current Assisted Stock cease
to be counted or expire from the inventory used for the formula?
(a) Mutual Help and Turnkey III units shall no longer be considered
Formula Current Assisted Stock when the Indian tribe, TDHE, or IHA no
longer has the legal right to own, operate, or maintain the unit,
whether such right is lost by conveyance, demolition, or otherwise,
provided that:
(1) Conveyance of each Mutual Help or Turnkey III unit occurs as
soon as
[[Page 12366]]
practicable after a unit becomes eligible for conveyance by the terms
of the MHOA; and
(2) The Indian tribe, TDHE, or IHA actively enforce strict
compliance by the homebuyer with the terms and conditions of the MHOA,
including the requirements for full and timely payment.
(b) Rental units shall continue to be included for formula purposes
as long as they continue to be operated as low income rental units by
the Indian tribe, TDHE, or IHA.
(c) Expired contract Section 8 units shall continue as rental units
and be included in the formula as long as they are operated as low
income rental units as included in the Indian tribe's or TDHE's Formula
Response Form.
Sec. 1000.320 How is Formula Current Assisted Stock adjusted for local
area costs?
There are two adjustment factors that are used to adjust the
allocation of funds for the Current Assisted Stock portion of the
formula. They are:
(a) Operating Subsidy as adjusted by the greater of the AEL factor
or FMR factor (AELFMR); and
(b) Modernization as adjusted by TDC.
Sec. 1000.322 Are IHA financed units included in the determination of
Formula Current Assisted Stock?
No. If these units are not owned or operated at the time (September
30, 1997) pursuant to an ACC then they are not included in the
determination of Formula Current Assisted Stock.
Sec. 1000.324 How is the need component developed?
After determining the FCAS allocation, remaining funds are
allocated by need component. The need component consists of seven
criteria. They are:
(a) American Indian and Alaskan Native (AIAN) Households with
housing cost burden greater than 50 percent of formula annual income
weighted at 22 percent;
(b) AIAN Households which are overcrowded or without kitchen or
plumbing weighted at 25 percent;
(c) Housing Shortage which is the number of AIAN households with an
annual income less than or equal to 80 percent of formula median income
reduced by the combination of current assisted stock and units
developed under NAHASDA weighted at 15 percent;
(d) AIAN households with annual income less than or equal to 30
percent of formula median income weighted at 13 percent;
(e) AIAN households with annual income between 30 percent and 50
percent of formula median income weighted at 7 percent;
(f) AIAN households with annual income between 50 percent and 80
percent of formula median income weighted at 7 percent;
(g) AIAN persons weighted at 11 percent.
Sec. 1000.325 How is the need component adjusted for local area costs?
The need component is adjusted by the TDC.
Sec. 1000.326 What if a formula area is served by more than one Indian
tribe?
(a) If an Indian tribe's formula area overlaps with the formula
area of one or more other Indian tribes, the funds allocated to that
Indian tribe for the geographic area in which the formula areas overlap
will be divided based on:
(1) The Indian tribe's proportional share of the population in the
overlapping geographic area; and
(2) The Indian tribe's commitment to serve that proportional share
of the population in such geographic area.
(3) In cases where a State recognized Indian tribe's formula area
overlaps with a Federally recognized Indian tribe, the Federally
recognized Indian tribe receives the allocation for the overlapping
area.
(b) Tribal membership in the geographic area (not to include dually
enrolled tribal members) will be based on data that all Indian tribes
involved agree to use. Suggested data sources include tribal enrollment
lists, Indian Health Service User Data, and Bureau of Indian Affairs
data.
(c) If the Indian tribes involved cannot agree on what data source
to use, HUD will make the decision on what data will be used to divide
the funds between the Indian tribes by August 1.
Sec. 1000.327 What is the order of preference for allocating the IHBG
formula needs data for Indian tribes in Alaska not located on
reservations due to the unique circumstances in Alaska?
(a) Data in areas without reservations. The data on population and
housing within an Alaska Native Village is credited to the Alaska
Native Village. Accordingly, the village corporation for the Alaska
Native Village has no needs data and no formula allocation. The data on
population and housing outside the Alaska Native Village is credited to
the regional Indian tribe, and if there is no regional Indian tribe,
the data will be credited to the regional corporation.
(b) Deadline for notification on whether an IHP will be submitted.
By September 15 of each year, each Indian tribe in Alaska not located
on a reservation, including each Alaska Native village, regional Indian
tribe, and regional corporation, or its TDHE must notify HUD in writing
whether it or its TDHE intends to submit an IHP. If an Alaska Native
village notifies HUD that it does not intend either to submit an IHP or
to designate a TDHE to do so, or if HUD receives no response from the
Alaska Native village or its TDHE, the formula data which would have
been credited to the Alaska Native village will be credited to the
regional Indian tribe, or if there is no regional Indian tribe, to the
regional corporation.
Sec. 1000.328 What is the minimum amount an Indian tribe can receive
under the need component of the formula?
In the first year of NAHASDA participation, an Indian tribe whose
allocation is less than $50,000 under the need component of the formula
shall have its need component of the grant adjusted to $50,000. An
Indian tribe's IHP shall contain a certification of the need for the
$50,000 funding. In subsequent years, but not to extend beyond Federal
Fiscal Year 2002, an Indian tribe whose allocation is less than $25,000
under the need component of the formula shall have its need component
of the grant adjusted to $25,000. The need for Sec. 1000.328 will be
reviewed in accordance with Sec. 1000.306.
Sec. 1000.330 What are data sources for the need variables?
The sources of data for the need variables shall be data available
that is collected in a uniform manner that can be confirmed and
verified for all AIAN households and persons living in an identified
area. Initially, the data used are U.S. Decennial Census data.
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
August 1.
Sec. 1000.334 May Indian tribes, TDHEs, or HUD challenge the data from
the U.S. Decennial Census or provide an alternative source of data?
Yes. Provided that the data are gathered, evaluated, and presented
in a manner acceptable to HUD and that the standards for acceptability
are consistently applied throughout the Country.
[[Page 12367]]
Sec. 1000.336 How may an Indian tribe, TDHE, or HUD challenge data?
(a) An Indian tribe, TDHE, or HUD may challenge data used in the
IHBG formula. The challenge and collection of data for this purpose is
an allowable cost for IHBG funds.
(b) An Indian tribe or TDHE that has data in its possession that it
contends are more accurate than data contained in the U.S. Decennial
Census, and the data were collected in a manner acceptable to HUD, may
submit the data and proper documentation to HUD. Beginning with the
Fiscal Year 1999 allocation, in order for the challenge to be
considered for the upcoming Fiscal Year allocation, documentation must
be submitted by June 15. HUD shall respond to such data submittal not
later than 45 days after receipt of the data and either approve or
challenge the validity of such data. Pursuant to HUD's action, the
following shall apply:
(1) In the event HUD challenges the validity of the submitted data,
the Indian tribe or TDHE and HUD shall attempt in good faith to resolve
any discrepancies so that such data may be included in formula
allocation. Should the Indian tribe or TDHE and HUD be unable to
resolve any discrepancy by the date of formula allocation, the dispute
shall be carried forward to the next funding year and resolved in
accordance with the dispute resolution procedures set forth in this
part for model housing activities (Sec. 1000.118).
(2) Pursuant to resolution of the dispute:
(i) If the Indian tribe or TDHE prevails, an adjustment to the
Indian tribe's or TDHE's subsequent allocation for the subsequent year
shall be made retroactive to include only the disputed Fiscal Year(s);
or
(ii) If HUD prevails, no further action shall be required.
(c) In the event HUD questions that the data contained in the
formula does not accurately represent the Indian tribe's need, HUD
shall request the Indian tribe to submit supporting documentation to
justify the data and provide a commitment to serve the population
indicated in the geographic area.
Sec. 1000.340 What if an Indian tribe is allocated less funding under
the block grant formula than it received in Fiscal Year 1996 for
operating subsidy and modernization?
If an Indian tribe is allocated less funding under the formula than
an IHA received on its behalf in Fiscal Year 1996 for operating subsidy
and modernization, its grant is increased to the amount received in
Fiscal Year 1996 for operating subsidy and modernization. The remaining
grants are adjusted to keep the allocation within available
appropriations.
Subpart E--Federal Guarantees for Financing of Tribal Housing
Activities
Sec. 1000.401 What terms are used throughout this subpart?
As used throughout title VI of NAHASDA and in this subpart:
Applicant means the entity that requests a HUD guarantee under the
provisions of this subpart.
Borrower means an Indian tribe or TDHE that receives funds in the
form of a loan with the obligation to repay in full, with interest, and
has executed notes or other obligations that evidence that transaction.
Issuer means an Indian tribe or TDHE that issues or executes notes
or other obligations. An issuer can also be a borrower.
Sec. 1000.402 Are State recognized Indian tribes eligible for
guarantees under title VI of NAHASDA?
Those State recognized Indian tribes that meet the definition set
forth in section 4(12)(C) of NAHASDA are eligible for guarantees under
title VI of NAHASDA.
Sec. 1000.404 What lenders are eligible for participation?
Eligible lenders are those approved under and meeting the
qualifications established in this subpart, except that loans otherwise
insured or guaranteed by an agency of the United States, or made by an
organization of Indians from amounts borrowed from the United States,
shall not be eligible for guarantee under this part. The following
lenders are deemed to be eligible under this subpart:
(a) Any mortgagee approved by HUD for participation in the single
family mortgage insurance program under title II of the National
Housing Act;
(b) Any lender whose housing loans under chapter 37 of title 38,
United States Code, are automatically guaranteed pursuant to section
1802(d) of such title;
(c) Any lender approved by the Department of Agriculture to make
guaranteed loans for single family housing under the Housing Act of
1949;
(d) Any other lender that is supervised, approved, regulated, or
insured by any agency of the United States; and
(e) Any other lender approved by the Secretary.
Sec. 1000.406 What constitutes tribal approval to issue notes or other
obligations under title VI of NAHASDA?
Tribal approval is evidenced by a written tribal resolution that
authorizes the issuance of notes or obligations by the Indian tribe or
a TDHE on behalf of the Indian tribe.
Sec. 1000.408 How does an Indian tribe or TDHE show that it has made
efforts to obtain financing without a guarantee and cannot complete
such financing in a timely manner?
The Indian tribe or TDHE shall submit a certification that states
that the Indian tribe has attempted to obtain financing and cannot
complete such financing consistent with the timely execution of the
program plans without such guarantee. Written documentation shall be
maintained by the Indian tribe or TDHE to support the certification.
Sec. 1000.410 What conditions shall HUD prescribe when providing a
guarantee for notes or other obligations issued by an Indian tribe?
HUD shall provide that:
(a) Any loan, note or other obligation guaranteed under title VI of
NAHASDA may be sold or assigned by the lender to any financial
institution that is subject to examination and supervision by an agency
of the Federal government, any State, or the District of Columbia
without destroying or otherwise negatively affecting the guarantee; and
(b) Indian tribes and housing entities are encouraged to explore
creative financing mechanisms and in so doing shall not be limited in
obtaining a guarantee. These creative financing mechanisms include but
are not limited to:
(1) Borrowing from private or public sources or partnerships;
(2) Issuing tax exempt and taxable bonds where permitted; and
(3) Establishing consortiums or trusts for borrowing or lending, or
for pooling loans.
(c) The repayment period may exceed twenty years and the length of
the repayment period cannot be the sole basis for HUD disapproval; and
(d) Lender and issuer/borrower must certify that they acknowledge
and agree to comply with all applicable tribal laws.
Sec. 1000.412 Can an issuer obtain a guarantee for more than one note
or other obligation at a time?
Yes. To obtain multiple guarantees, the issuer shall demonstrate
that:
(a) The issuer will not exceed a total for all notes or other
obligations in an amount equal to five times its grant amount,
excluding any amount no
[[Page 12368]]
longer owed on existing notes or other obligations; and
(b) Issuance of additional notes or other obligations is within the
financial capacity of the issuer.
Sec. 1000.414 How is an issuer's financial capacity demonstrated?
An issuer must demonstrate its financial capacity to:
(a) Meet its obligations; and
(b) Protect and maintain the viability of housing developed or
operated pursuant to the 1937 Act.
Sec. 1000.416 What is a repayment contract in a form acceptable to
HUD?
(a) The Secretary's signature on a contract shall signify HUD's
acceptance of the form, terms and conditions of the contract.
(b) In loans under title VI of NAHASDA, involving a contract
between an issuer and a lender other than HUD, HUD's approval of the
loan documents and guarantee of the loan shall be deemed to be HUD's
acceptance of the sufficiency of the security furnished. No other
security can or will be required by HUD at a later date.
Sec. 1000.418 Can grant funds be used to pay costs incurred when
issuing notes or other obligations?
Yes. Other costs that can be paid using grant funds include but are
not limited to the costs of servicing and trust administration, and
other costs associated with financing of debt obligations.
Sec. 1000.420 May grants made by HUD under section 603 of NAHASDA be
used to pay net interest costs incurred when issuing notes or other
obligations?
Yes. Other costs that can be paid using grant funds include but are
not limited to the costs of servicing and trust administration, and
other costs associated with financing of debt obligations, not to
exceed 30 percent of the net interest cost.
Sec. 1000.422 What are the procedures for applying for loan guarantees
under title VI of NAHASDA?
(a) The borrower applies to the lender for a loan using a guarantee
application form prescribed by HUD.
(b) The lender provides the loan application to HUD to determine if
funds are available for the guarantee. HUD will reserve these funds for
a period of 90 days if the funds are available and the applicant is
otherwise eligible under this subpart. HUD may extend this reservation
period for an extra 90 days if additional documentation is necessary.
(c) The borrower and lender negotiate the terms and conditions of
the loan in consultation with HUD.
(d) The borrower and lender execute documents.
(e) The lender formally applies for the guarantee.
(f) HUD reviews and provides a written decision on the guarantee.
Sec. 1000.424 What are the application requirements for guarantee
assistance under title VI of NAHASDA?
The application for a guarantee must include the following:
(a) An identification of each of the activities to be carried out
with the guaranteed funds and a description of how each activity
qualifies as an affordable housing activity as defined in section 202
of NAHASDA.
(b) A schedule for the repayment of the notes or other obligations
to be guaranteed that identifies the sources of repayment, together
with a statement identifying the entity that will act as the borrower.
(c) A copy of the executed loan documents, if applicable,
including, but not limited to, any contract or agreement between the
borrower and the lender.
(d) Certifications by the borrower that:
(1) The borrower possesses the legal authority to pledge and that
it will, if approved, make the pledge of grants required by section
602(a)(2) of NAHASDA.
(2) The borrower has made efforts to obtain financing for the
activities described in the application without use of the guarantee;
the borrower will maintain documentation of such efforts for the term
of the guarantee; and the borrower cannot complete such financing
consistent with the timely execution of the program plans without such
guarantee.
(3) It possesses the legal authority to borrow or issue obligations
and to use the guaranteed funds in accordance with the requirements of
this subpart.
(4) Its governing body has duly adopted or passed as an official
act a resolution, motion, or similar official action that:
(i) Identifies the official representative of the borrower, and
directs and authorizes that person to provide such additional
information as may be required; and
(ii) Authorizes such official representative to issue the
obligation or to execute the loan or other documents, as applicable.
(5) The borrower has complied with section 602(a) of NAHASDA.
(6) The borrower will comply with the requirements described in
subpart A of this part and other applicable laws.
Sec. 1000.426 How does HUD review a guarantee application?
The procedure for review of a guarantee application includes the
following steps:
(a) HUD will review the application for compliance with title VI of
NAHASDA and these implementing regulations.
(b) HUD will accept the certifications submitted with the
application. HUD may, however, consider relevant information that
challenges the certifications and require additional information or
assurances from the applicant as warranted by such information.
Sec. 1000.428 For what reasons may HUD disapprove an application or
approve an application for an amount less than that requested?
HUD may disapprove an application or approve a lesser amount for
any of the following reasons:
(a) HUD determines that the guarantee constitutes an unacceptable
risk. Factors that will be considered in assessing financial risk shall
include, but not be limited to, the following:
(1) The ratio of the expected annual debt service requirements to
the expected available annual grant amount, taking into consideration
the obligations of the borrower under the provisions of section 203(b)
of NAHASDA;
(2) Evidence that the borrower will not continue to receive grant
assistance under this part during the proposed repayment period;
(3) The borrower's inability to furnish adequate security pursuant
to section 602(a) of NAHASDA; and
(4) The amount of program income the proposed activities are
reasonably estimated to contribute toward repayment of the guaranteed
loan or other obligations.
(b) The loan or other obligation for which the guarantee is
requested exceeds any of the limitations specified in sections 601(d)
or section 605(d) of NAHASDA.
(c) Funds are not available in the amount requested.
(d) Evidence that the performance of the borrower under this part
has been determined to be unacceptable pursuant to the requirements of
subpart F of this part, and that the borrower has failed to take
reasonable steps to correct performance.
(e) The activities to be undertaken are not eligible under section
202 of NAHASDA.
(f) The loan or other obligation documents for which a guarantee is
requested do not meet the requirements of this subpart.
[[Page 12369]]
Sec. 1000.430 When will HUD issue notice to the applicant if the
application is approved at the requested or reduced amount?
(a) HUD shall make every effort to approve a guarantee within 30
days of receipt of a completed application including executed documents
and, if unable to do so, will notify the applicant within the 30 day
timeframe of the need for additional time and/or if additional
information is required.
(b) HUD shall notify the applicant in writing that the guarantee
has either been approved, reduced, or disapproved. If the request is
reduced or disapproved, the applicant will be informed of the specific
reasons for reduction or disapproval.
(c) HUD shall issue a certificate to guarantee the debt obligation
of the issuer subject to compliance with NAHASDA including but not
limited to sections 105, 601(a), and 602(c) of NAHASDA, and such other
reasonable conditions as HUD may specify in the commitment documents in
a particular case.
Sec. 1000.432 Can an amendment to an approved guarantee be made?
(a) Yes. An amendment to an approved guarantee can occur if an
applicant wishes to allow a borrower/issuer to carry out an activity
not described in the loan or other obligation documents, or
substantially to change the purpose, scope, location, or beneficiaries
of an activity.
(b) Any changes to an approved guarantee must be approved by HUD.
Sec. 1000.434 How will HUD allocate the availability of loan guarantee
assistance?
(a) Each fiscal year HUD may allocate a percentage of the total
available loan guarantee assistance to each Area ONAP equal to the
percentage of the total NAHASDA grant funds allocated to the Indian
tribes in the geographic area of operation of that office.
(b) These allocated amounts shall remain exclusively available for
loan guarantee assistance for Indian tribes or TDHEs in the area of
operation of that office until committed by HUD for loan guarantees or
until the end of the second quarter of the fiscal year. At the
beginning of the third quarter of the fiscal year, any residual loan
guarantee commitment amount shall be made available to guarantee loans
for Indian tribes or TDHEs regardless of their location. Applications
for residual loan guarantee money must be submitted on or after April
1.
(c) In approving applications for loan guarantee assistance, HUD
shall seek to maximize the availability of such assistance to all
interested Indian tribes or TDHEs. HUD may limit the proportional share
approved to any one Indian tribe or TDHE to its proportional share of
the block grant allocation based upon the annual plan submitted by the
Indian tribe or TDHE indicating intent to participate in the loan
guarantee allocation process.
Sec. 1000.436 How will HUD monitor the use of funds guaranteed under
this subpart?
HUD will monitor the use of funds guaranteed under this subpart as
set forth in section 403 of NAHASDA, and the lender is responsible for
monitoring performance with the documents.
Subpart F--Recipient Monitoring, Oversight and Accountability
Sec. 1000.501 Who is involved in monitoring activities under NAHASDA?
The recipient, the grant beneficiary and HUD are involved in
monitoring activities under NAHASDA.
Sec. 1000.502 What are the monitoring responsibilities of the
recipient, the grant beneficiary and HUD under NAHASDA?
(a) The recipient is responsible for monitoring grant activities,
ensuring compliance with applicable Federal requirements and monitoring
performance goals under the IHP. The recipient is responsible for
preparing at least annually: a compliance assessment in accordance with
section 403(b) of NAHASDA; a performance report covering the assessment
of program progress and goal attainment under the IHP; and an audit in
accordance with the Single Audit Act, as applicable. The recipient's
monitoring should also include an evaluation of the recipient's
performance in accordance with performance objectives and measures. At
the request of a recipient, other Indian tribes and/or TDHEs may
provide assistance to aid the recipient in meeting its performance
goals or compliance requirements under NAHASDA.
(b) Where the recipient is a TDHE, the grant beneficiary (Indian
tribe) is responsible for monitoring programmatic and compliance
requirements of the IHP and NAHASDA by requiring the TDHE to prepare
periodic progress reports including the annual compliance assessment,
performance and audit reports.
(c) HUD is responsible for reviewing the recipient as set forth in
Sec. 1000.520.
(d) HUD monitoring will consist of on-site as well as off-site
review of records, reports and audits. To the extent funding is
available, HUD or its designee will provide technical assistance and
training, or funds to the recipient to obtain technical assistance and
training. In the absence of funds, HUD shall make best efforts to
provide technical assistance and training.
Sec. 1000.504 What are the recipient performance objectives?
Performance objectives are developed by each recipient. Performance
objectives are criteria by which the recipient will monitor and
evaluate its performance. For example, if in the IHP the recipient
indicates it will build new houses, the performance objective may be
the completion of the homes within a certain time period and within a
certain budgeted amount.
Sec. 1000.506 If the TDHE is the recipient, must it submit its
monitoring evaluation/results to the Indian tribe?
Yes. The Indian tribe as the grant beneficiary must receive a copy
of the monitoring evaluation/results so that it can fully carry out its
oversight responsibilities under NAHASDA.
Sec. 1000.508 If the recipient monitoring identifies programmatic
concerns, what happens?
If the recipient's monitoring activities identify areas of
concerns, the recipient will take corrective actions which may include
but are not limited to one or more of the following actions:
(a) Depending upon the nature of the concern, the recipient may
obtain additional training or technical assistance from HUD, other
Indian tribes or TDHEs, or other entities.
(b) The recipient may develop and/or revise policies, or ensure
that existing policies are better enforced.
(c) The recipient may take appropriate administrative action to
remedy the situation.
(d) The recipient may refer the concern to an auditor or to HUD for
additional corrective action.
Sec. 1000.510 What happens if tribal monitoring identifies compliance
concerns?
The Indian tribe shall have the responsibility to ensure that
appropriate corrective action is taken.
Sec. 1000.512 Are performance reports required?
Yes. An annual report shall be submitted by the recipient to HUD
and the Indian tribe being served in a format acceptable by HUD. Annual
performance reports shall contain:
(a) The information required by sections 403(b) and 404(b) of
NAHASDA;
(b) Brief information on the following:
(1) A comparison of actual accomplishments to the objectives
established for the period;
(2) The reasons for slippage if established objectives were not
met; and
[[Page 12370]]
(3) Analysis and explanation of cost overruns or high unit costs;
and
(c) Any information regarding the recipient's performance in
accordance with HUD's performance measures, as set forth in section
Sec. 1000.524.
Sec. 1000.514 When must the annual performance report be submitted?
The annual performance report must be submitted within 60 days of
the end of the recipient's program year. If a justified request is
submitted by the recipient, the Area ONAP may extend the due date for
submission of the performance report.
Sec. 1000.516 What reporting period is covered by the annual
performance report?
For the first year of NAHASDA, the period to be covered by the
annual performance report will be October 1, 1997 through September 30,
1998. Subsequent reporting periods will coincide with the recipient's
program year.
Sec. 1000.518 When must a recipient obtain public comment on its
annual performance report?
The recipient must make its report publicly available to tribal
members, non-Indians served under NAHASDA, and other citizens in the
Indian area, in sufficient time to permit comment before submission of
the report to HUD. The recipient determines the manner and times for
making the report available.
The recipient shall include a summary of any comments received by
the grant beneficiary or recipient from tribal members, non-Indians
served under NAHASDA, and other citizens in the Indian area.
Sec. 1000.520 What are the purposes of HUD review?
At least annually, HUD will review each recipient's performance to
determine whether the recipient:
(a) Has carried out its eligible activities in a timely manner, has
carried out its eligible activities and certifications in accordance
with the requirements and the primary objective of NAHASDA and with
other applicable laws and has a continuing capacity to carry out those
activities in a timely manner;
(b) Has complied with the IHP of the grant beneficiary; and
(c) Whether the performance reports of the recipient are accurate.
Sec. 1000.521 After the receipt of the recipient's performance report,
how long does HUD have to make recommendations under section 404(c) of
NAHASDA?
60 days.
Sec. 1000.522 How will HUD give notice of on-site reviews?
HUD shall generally provide a 30 day written notice of an impending
on-site review to the Indian tribe and TDHE. Prior written notice will
not be required in emergency situations. All notices shall state the
general nature of the review.
Sec. 1000.524 What are HUD's performance measures for the review?
HUD has the authority to develop performance measures which the
recipient must meet as a condition for compliance under NAHASDA. The
performance measures are:
(a) Within 2 years of grant award under NAHASDA, no less than 90
percent of the grant must be obligated.
(b) The recipient has complied with the required certifications in
its IHP and all policies and the IHP have been made available to the
public.
(c) Fiscal audits have been conducted on a timely basis and in
accordance with the requirements of the Single Audit Act, as
applicable. Any deficiencies identified in audit reports have been
addressed within the prescribed time period.
(d) Accurate annual performance reports were submitted to HUD
within 60 days after the completion of the recipient's program year.
(e) The recipient has met the IHP goals and objectives in the 1-
year plan and demonstrated progress on the 5-year plan goals and
objectives.
(f) The recipient has substantially complied with the requirements
of 24 CFR part 1000 and all other applicable Federal statutes and
regulations.
Sec. 1000.526 What information will HUD use for its review?
In reviewing each recipient's performance, HUD may consider the
following:
(a) The approved IHP and any amendments thereto;
(b) Reports prepared by the recipient;
(c) Records maintained by the recipient;
(d) Results of HUD's monitoring of the recipient's performance,
including on-site evaluation of the quality of the work performed;
(e) Audit reports;
(f) Records of drawdown(s) of grant funds;
(g) Records of comments and complaints by citizens and
organizations within the Indian area;
(h) Litigation; and
(i) Any other reliable relevant information which relates to the
performance measures under Sec. 1000.524.
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 thirty (30) days of the completion of HUD's review. The
recipient will have at least thirty (30) days to review and comment on
the draft report as well as provide any additional information relating
to the draft report. HUD shall consider the comments and any additional
information provided by the recipient. HUD may also revise the 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 thirty (30) days after receipt of the recipient's
comments and additional information.
Sec. 1000.530 What corrective and remedial actions will HUD request or
recommend to address performance problems prior to taking action under
Secs. 1000.532 or 1000.538?
(a) The following actions are designed, first, to prevent the
continuance of the performance problem(s); second, to mitigate any
adverse effects or consequences of the performance problem(s); and
third, to prevent a recurrence of the same or similar performance
problem. The following actions, at least one of which must be taken
prior to a sanction under paragraph (b), may be taken by HUD singly or
in combination, as appropriate for the circumstances:
(1) Issue a letter of warning advising the recipient of the
performance problem(s), describing the corrective actions that HUD
believes should be taken, establishing a completion date for corrective
actions, and notifying the recipient that more serious actions may be
taken if the performance problem(s) is not corrected or is repeated;
(2) Request the recipient to submit progress schedules for
completing activities or complying with the requirements of this part;
(3) Recommend that the recipient suspend, discontinue, or not incur
costs for the affected activity;
(4) Recommend that the recipient redirect funds from affected
activities to other eligible activities;
(5) Recommend that the recipient reimburse the recipient's program
account in the amount improperly expended; and
(6) Recommend that the recipient obtain appropriate technical
assistance using existing grant funds or other
[[Page 12371]]
available resources to overcome the performance problem(s).
(b) Failure of a recipient to address performance problems
specified in paragraph (a) above may result in the imposition of
sanctions as prescribed in Sec. 1000.532 (providing for adjustment,
reduction, or withdrawal of future grant funds, or other appropriate
actions), or Sec. 1000.538 (providing for termination, reduction, or
limited availability of payments, or replacement of the TDHE).
Sec. 1000.532 What are the adjustments HUD makes to a recipient's
future year's grant amount under section 405 of NAHASDA?
(a) HUD may, subject to the procedures in paragraph (b) below, make
appropriate adjustments in the amount of the annual grants under
NAHASDA in accordance with the findings of HUD pursuant to reviews and
audits under section 405 of NAHASDA. HUD may adjust, reduce, or
withdraw grant amounts, or take other action as appropriate in
accordance with the reviews and audits, except 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.
(b) Before undertaking any action in accordance with paragraphs (a)
and (c) of this section, HUD will notify the recipient in writing of
the actions it intends to take and provide the recipient an opportunity
for an informal meeting to resolve the deficiency. In the event the
deficiency is not resolved, HUD may take any of the actions available
under paragraphs (a) and (c) of this section. However, the recipient
may request, within 30 days of notice of the action, a hearing 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 held and HUD has rendered a final decision.
(c) Absent circumstances beyond the recipient's control, when a
recipient is not complying significantly with a major activity of its
IHP, HUD shall make appropriate adjustment, reduction, or withdrawal of
some or all of the recipient's subsequent year grant in accordance with
this section.
Sec. 1000.534 What constitutes substantial noncompliance?
HUD will review the circumstances of each noncompliance with
NAHASDA and the regulations on a case-by-case basis to determine if the
noncompliance is substantial. This review is a two step process. First,
there must be a noncompliance with NAHASDA or these regulations.
Second, the noncompliance must be substantial. A noncompliance is
substantial if:
(a) The noncompliance has a material effect on the recipient
meeting its major goals and objectives as described in its Indian
Housing Plan;
(b) The noncompliance represents a material pattern or practice of
activities constituting willful noncompliance with a particular
provision of NAHASDA or the regulations, even if a single instance of
noncompliance would not be substantial;
(c) The noncompliance involves the obligation or expenditure of a
material amount of the NAHASDA funds budgeted by the recipient for a
material activity; or
(d) The noncompliance places the housing program at substantial
risk of fraud, waste or abuse.
Sec. 1000.536 What happens to NAHASDA grant funds adjusted, reduced,
withdrawn, or terminated under Sec. 1000.532 or Sec. 1000.538?
Such NAHASDA grant funds shall be distributed by HUD in accordance
with the next NAHASDA formula allocation.
Sec. 1000.538 What remedies are available for substantial
noncompliance?
(a) If HUD finds after reasonable notice and opportunity for
hearing that a recipient has failed to comply substantially with any
provisions of NAHASDA, HUD shall:
(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;
(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) HUD may, upon due notice, suspend payments at any time after
the issuance of the opportunity for hearing pending such hearing and
final decision, to the extent HUD determines such action necessary to
preclude the further expenditure of funds for activities affected by
such failure to comply.
(c) If HUD determines that the failure to comply substantially with
the provisions of NAHASDA is not a pattern or practice of activities
constituting willful noncompliance, and is a result of the limited
capability or capacity of the recipient, HUD may 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.
(d) In lieu of, or in addition to, any action described in this
section, if HUD has reason to believe that the recipient has failed to
comply substantially with any provisions of NAHASDA, HUD may refer the
matter to the Attorney General of the United States, with a
recommendation that appropriate civil action be instituted.
Sec. 1000.540 What hearing procedures will be used under NAHASDA?
The hearing procedures in 24 CFR part 26 shall be used.
Sec. 1000.542 When may HUD require replacement of a recipient?
(a) In accordance with section 402 of NAHASDA, as a condition of
HUD making a grant on behalf of an Indian tribe, the Indian tribe shall
agree that, notwithstanding any other provisions of law, HUD may, only
in the circumstances discussed below, require that a replacement TDHE
serve as the recipient for the Indian tribe.
(b) HUD may require a replacement TDHE for an Indian tribe only
upon a determination by HUD on the record after opportunity for hearing
that the recipient for the Indian tribe has engaged in a pattern or
practice of activities that constitute substantial or willful
noncompliance with the requirements of NAHASDA.
Sec. 1000.544 What audits are required?
The recipient must comply with the requirements of the Single Audit
Act and 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 U.S. Office of Management and Budget, which is currently set at
$300,000.
Sec. 1000.546 Are audit costs eligible program or administrative
expenses?
Yes, audit costs are an eligible program or administrative expense.
If the Indian tribe is the recipient then program funds can be used to
pay a prorated share of the tribal audit or financial review cost that
is attributable to NAHASDA funded activities. For a recipient not
covered by the Single Audit Act, but which chooses to obtain a periodic
financial review, the cost of such a review would be an eligible
program expense.
[[Page 12372]]
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 with the Annual
Performance Report.
Sec. 1000.550 If the TDHE is the recipient, does it have to submit a
copy of its audit to the Indian tribe?
Yes. The Indian tribe as the grant beneficiary must receive a copy
of the audit report so that it can fully carry out its oversight
responsibilities with NAHASDA.
Sec. 1000.552 How long must the recipient maintain program records?
(a) This section applies to all financial and programmatic records,
supporting documents, and statistical records of the recipient which
are required to be maintained by the statute, regulation, or grant
agreement.
(b) Except as otherwise provided herein, records must be retained
for three years from the date the recipient submits to HUD the annual
performance report that covers the last expenditure of grant funds
under a particular grant.
(c) If any litigation, claim, negotiation, audit or other action
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the
action and resolution of all issues which arise from it, or until the
end of the regular 3-year period, whichever is later.
Sec. 1000.554 Which agencies have right of access to the recipient's
records relating to activities carried out under NAHASDA?
(a) HUD and the Comptroller General of the United States, and any
of their authorized representatives, shall have the right of access to
any pertinent books, documents, papers, or other records of recipients
which are pertinent to NAHASDA assistance, in order to make audits,
examinations, excerpts, and transcripts.
(b) The right of access in this section lasts as long as the
records are maintained.
Sec. 1000.556 Does the Freedom of Information Act (FOIA) apply to
recipient records?
FOIA does not apply to recipient records. However, there may be
other applicable State and tribal access laws or recipient policies
which may apply.
Sec. 1000.558 Does the Federal Privacy Act apply to recipient records?
The Federal Privacy Act does not apply to recipient records.
However, there may be other applicable State and tribal access laws or
recipient policies which may apply.
PART 1005--LOAN GUARANTEES FOR INDIAN HOUSING
4. The authority citation for newly designated 24 CFR part 1005
continues to read as follows:
Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 1715z-13a and
3535(d).
5. Newly designated Sec. 1005.101 is revised to read as follows:
Sec. 1005.101 What is the applicability and scope of these
regulations?
Under the provisions of section 184 of the Housing and Community
Development Act of 1992, as amended by the Native American Housing
Assistance and Self-Determination Act of 1996 (12 U.S.C. 1515z-13a),
the Department of Housing and Urban Development (the Department or HUD)
has the authority to guarantee loans for the construction, acquisition,
or rehabilitation of 1- to 4-family homes that are standard housing
located on trust land or land located in an Indian or Alaska Native
area, and for which an Indian Housing Plan has been submitted and
approved under 24 CFR part 1000. This part provides requirements that
are in addition to those in section 184.
6. Newly designated Sec. 1005.103 is amended by revising the
section heading and by adding the definitions of the terms ``Holder''
and ``Mortgagee'' in alphabetical order, to read as follows:
Sec. 1005.103 What definitions are applicable to this program?
* * * * *
Holder means the holder of the guarantee certificate and in this
program is variously referred to as the lender holder, the holder of
the certificate, the holder of the guarantee, and the mortgagee.
* * * * *
Mortgagee means the same as ``Holder.''
* * * * *
7. A new Sec. 1005.104 is added to read as follows:
Sec. 1005.104 What lenders are eligible for participation?
Eligible lenders are those approved under and meeting the
qualifications established in this subpart, except that loans otherwise
insured or guaranteed by an agency of the United States, or made by an
organization of Indians from amounts borrowed from the United States,
shall not be eligible for guarantee under this part. The following
lenders are deemed to be eligible under this part:
(a) Any mortgagee approved by HUD for participation in the single
family mortgage insurance program under title II of the National
Housing Act;
(b) Any lender whose housing loans under chapter 37 of title 38,
United States Code are automatically guaranteed pursuant to section
1802(d) of such title;
(c) Any lender approved by the Department of Agriculture to make
guaranteed loans for single family housing under the Housing Act of
1949;
(d) Any other lender that is supervised, approved, regulated, or
insured by any agency of the United States; or
(e) Any other lender approved by the Secretary.
8. Newly designated Sec. 1005.105 is amended by:
a. Revising the section heading;
b. Revising paragraphs (b) and (d)(3); and
c. Adding a new paragraph (f), to read as follows:
Sec. 1005.105 What are eligible loans?
* * * * *
(b) Eligible borrowers. A loan guarantee under section 184 may be
made to:
(1) An Indian family who will occupy the home as a principal
residence and who is otherwise qualified under section 184;
(2) An Indian Housing Authority or Tribally Designated Housing
Entity; or
(3) An Indian tribe.
* * * * *
(d) * * *
(3) The principal amount of the mortgage is held by the mortgagee
in an interest bearing account, trust, or escrow for the benefit of the
mortgagor, pending advancement to the mortgagor's creditors as provided
in the loan agreement; and
* * * * *
(f) Lack of access to private financial markets. In order to be
eligible for a loan guarantee if the property is not on trust or
restricted lands, the borrower must certify that the borrower lacks
access to private financial markets. Borrower certification is the only
certification required by HUD.
9. Newly designated Sec. 1005.107 is amended by:
a. Revising the section heading;
b. Revising paragraph (a) introductory text;
c. Revising paragraph (a)(2);
d. Revising paragraph (b) introductory text;
e. Redesignating paragraphs (b)(3) and (b)(4) as paragraphs (b)(4)
and (b)(5), respectively; and
[[Page 12373]]
f. Adding a new paragraph (b)(3), to read as follows:
Sec. 1005.107 What is eligible collateral?
(a) A loan guaranteed under section 184 may be secured by any
collateral authorized under and not prohibited by Federal, state, or
tribal law and determined by the lender and approved by the Department
to be sufficient to cover the amount of the loan, and may include, but
is not limited to, the following:
* * * * *
(2) A first and/or second mortgage on property other than trust
land;
* * * * *
(b) If trust land or restricted Indian land is used as collateral
or security for the loan, the following additional provisions apply:
* * * * *
(3) The mortgagee or HUD shall only pursue liquidation after
offering to transfer the account to an eligible tribal member, the
Indian tribe, or the Indian housing authority servicing the Indian
tribe or the TDHE servicing the Indian tribe. The mortgagee or HUD
shall not sell, transfer, or otherwise dispose of or alienate the
property except to one of these three entities.
* * * * *
Sec. 1005.109 [Amended].
10. Newly designated Sec. 1005.109 is amended by revising the
section heading to read ``Sec. 1005.109 What is a guarantee fee?''
Sec. 1005.111 [Amended].
11. Newly designated Sec. 1005.111 is amended by revising the
section heading to read ``Sec. 1005.111 What safety and quality
standards apply?''
12. Newly designated Sec. 1005.112 is added to read as follows:
Sec. 1005.112 How do eligible lenders and eligible borrowers
demonstrate compliance with applicable tribal laws?
The lender/borrower will certify that they acknowledge and agree to
comply with all applicable tribal laws. An Indian tribe with
jurisdiction over the dwelling unit does not have to be notified of
individual section 184 loans unless required by applicable tribal law.
13. Section 1005.113 is added to read as follows:
Sec. 1005.113 How does HUD enforce lender compliance with applicable
tribal laws?
Failure of the lender to comply with applicable tribal law is
considered to be a practice detrimental to the interest of the borrower
and may be subject to enforcement action(s) under section 184(g) of the
statute.
Appendix A TO PART 1000--Indian Housing Block Grant Formula Mechanics
This appendix shows the different components of the IHBG
formula. The following text explains how each component of the IHBG
formula works.
1. The Indian Housing Block Grant (IHBG) formula is calculated
by initially determining the amount a tribe receives for Formula
Current Assisted Stock (FCAS) (See Secs. 1000.310 and 1000.312. FCAS
funding is comprised of two components, operating subsidy
(Sec. 1000.316(a)) and modernization (Sec. 1000.316(b)). The
operating subsidy component is calculated based on the national per
unit subsidy provided in FY 1996 (adjusted to a 100 percent funding
level) for each of the following types of programs--Low Rent,
Homeownership (Mutual Help and Turnkey III), and Section 8. A
tribe's total units in each of the above categories is multiplied
times the relevant national per unit subsidy amount. That amount is
summed and multiplied times a local area cost adjustment factor for
management.
2. The local area cost adjustment factor for management is
called AELFMR. AELFMR is the greater of a tribe's Allowable Expense
Level (AEL) or Fair Market Rent (FMR) factor, where the AEL and FMR
factors are determined by dividing each tribe's AEL and FMR by their
respective national weighted average (weighted on the unadjusted
allocation under FCAS operating subsidy). The adjustment made to the
FCAS component of the IHBG formula is then the new AELFMR factor
divided by the national weighted average of the AELFMR (See
Sec. 1000.320).
3. The modernization component of FCAS is based on the national
per unit modernization funding provided in FY 1996 to Indian Housing
Authorities (IHAs). The per unit amount is determined by dividing
the modernization funds by the total Low Rent, Mutual Help, and
Turnkey III units operated by IHAs in 1996. A tribe's total Low
Rent, Mutual Help, and Turnkey III units are multiplied times the
per unit modernization amount. That amount is then multiplied times
a local area cost adjustment factor for construction (e.g. the Total
Development Cost) (See Sec. 1000.320).
4. The construction adjustment factor is Total Development Cost
(TDC) for the area divided by the weighted national average for TDC
(weighted on the unadjusted allocation for modernization) (See
Sec. 1000.320).
5. After determining the total amount allocated under FCAS for
each tribe, it is summed for every tribe. The national total amount
for FCAS is subtracted from the Fiscal Year appropriation to
determine the total amount to be allocated under the Need component
of the IHBG formula.
6. The Need component of the IHBG formula is calculated using
seven factors weighted as set forth in Sec. 1000.324 as follows: 22
percent of the allocated funds will be allocated by a tribe's share
of the total Native American households paying more than 50 percent
of their income for housing living in the Indian tribe's formula
area, 25 percent of the funds allocated under Need will be allocated
by a tribe's share of the total Native American households
overcrowded and or without kitchen or plumbing living in their
formula area, and so on. The current national totals for each of the
need variables will be distributed annually by HUD with the Formula
Response Form (See Sec. 1000.332). The national totals will change
as tribes update information about their formula area and data for
individual areas are challenged (See Secs. 1000.334 and 1000.336).
The Need component is then calculated by multiplying a tribe's share
of housing need by a local area cost adjustment factor for
construction (the Total Development Cost) (See Sec. 1000.338).
7. No tribe in its first year of funding will receive less than
$50,000 under the Need component of the formula. In subsequent
allocations to a tribe, it will receive no less than $25,000 under
the Need component of the formula. This increase in funding for the
tribes receiving the minimum Need allocation is funded by a
reallocation from all tribes receiving more than $50,000 under their
Need component. This is necessary in order to keep the total
allocation within the appropriation level. Such minimum Need
allocations will only continue through FY 2002 (See Sec. 1000.328).
8. A tribe's total grant is calculated by summing the FCAS and
Need allocations. This preliminary grant is compared to how much a
tribe received in FY 1996 for operating subsidy and modernization.
If a tribe received more in FY 1996 for operating subsidy and
modernization than they do under the IHBG formula, their grant is
adjusted up to the FY 1996 level (See Sec. 1000.340). Indian tribes
receiving more under the IHBG formula than in FY 1996 ``pay'' for
the upward adjustment for the other tribes by having their grants
adjusted downward. Because many more Indian tribes have grant
amounts above the FY 1996 level than those with grants below the FY
1996 level, each tribe contributes very little relative to their
total grant to fund the adjustment.
Appendix B to Part 1000--IHBG Block Grant Formula Mechanisms
1. The Indian Housing Block Grant Formula consists of two
components, the Formula Current Assisted Stock (FCAS) and Need.
Therefore, the formula allocation before adjusting for the statutory
requirement that a tribe's minimum grant will not be less than the
tribe's FY 1996 Operating Subsidy and Modernization funding, can be
represented by:
unadjGRANT = FCAS + NEED.
2. NAHASDA requires the current assisted stock be provided for
before allocating funds based on need. Therefore, FCAS must be
calculated first. FCAS consists to two components, Operating Subsidy
(OPSUB) and Modernization (MOD) such that:
FCAS = OPSUB + MOD.
3. OPSUB consists of three main parts: Number of Low-Rent units;
Number of Section 8 units; and Number of Mutual Help and Turnkey III
units. Each of these main parts are adjusted by the FY 1996 national
per unit subsidy, an inflation factor, and local area costs as
reflected by the greater of the AEL factor or FMR factor. The AEL
factor
[[Page 12374]]
as defined in Sec. 1000.302 as the difference between a local area
Allowable Expense Level (AEL) and the national weighted average for
AEL. The FMR factor is also defined in Sec. 1000.302 as the
difference between a local area Fair Market Rent (FMR) and the
national weighted average for FMR. So, expanding OPSUB gives:
OPSUB = [LR * LRSUB + (MH+TK) * HOSUB + S8 * S8SUB] * INF * AELFMR
Where:
LR = number of Low-Rent units.
LRSUB = FY 1996 national per unit average subsidy for Low-Rent units
= $2,440.
MH+TK = number of Mutual Help and Turnkey III units.
HOSUB = FY 1996 national per unit average subsidy for Homeownership
units = $528.
S8 = number of Section 8 units.
S8SUB = FY 1996 national per unit average subsidy for Section 8
units = $3,625.
INF = inflation adjustment determined by the Consumer Price Index
for housing.
AELFMR = greater of AEL Factor or FMR Factor weighted by national
average of AEL Factor and FRM Factor.
AEL FACTOR = AEL/NAAEL.
AEL = local Allowable Expense Level.
NAAEL = national weighted average for AEL.
FMR FACTOR = FMR/NAFMR.
FMR = local Fair Market Rent.
NAFMR = national weighted average for FMR.
NAAELFMR = national weighted average for greater of AEL Factor or
FMR factor.
For estimating FY 1998 allocations:
NAAEL = 240.224.
NAFMR = 459.437.
NAAELFMR = 1.144.
4. MOD considers only the number of Low-Rent, and Mutual Help
and Turnkey III units. Each of these are adjusted by the FY 1996
national per unit subsidy for modernization, an inflation factor and
the local Total Development Costs relative to the weighted national
average for TDC. So, expanding MOD gives us:
MOD = [LR + (MH+TK)] * SUB * INF * TDC/NATDC.
Where:
LR = number of Low-Rent units.
MH+TK = number of Mutual Help and Turnkey III units.
SUB = FY 1996 national per unit average subsidy for modernization.
INF = inflation adjustment determined by the Consumer Price Index
for housing.
TDC = Local Total Development Costs defined in Sec. 1000.302.
NATDC = weighted national average for TDC.
For estimating FY 1998 allocations:
SUB = $1,974.
NATDC = $103,828.
5. Now that calculation for FCAS is complete, we can determine
how many funds will be available to allocate over the NEED component
of the formula by calculating:
NEED FUNDS = APPROPRIATION--NATCAS.
Where:
APPROPRIATION = dollars provided by Congress for distribution by the
IHBG formula.
NATCAS = summation of CAS allocations for all tribes.
For estimating FY 1998 allocations:
APPROPRIATION = $590 million.
NATCAS = $236,147,110.
6. Two iterations are necessary to compute the final Need
allocation. The first iteration consists of seven weighted criteria
that allocate need funds based on a tribe's population and housing
data. This allocation is then adjusted for local area cost
differences based on TDC relative to the national weighted average.
This can be represented by:
NEED1 = [(0.11 * PER / NPER) + (0.13 * HHLE30 / NHHLE30)
+ (0.07 * HH30T50 / NHH30T50) + (0.07 * HH50T80 / NHH50T80)
+ (0.25 * OCRPR / NOCRPR) + (0.22 * SCBTOT / NSCBTOT)
+ (0.15 * HOUSHOR / NHOUSHOR)] * NEED FUNDS * (TDC/NATDC).
Where:
PER = American Indian and Alaskan Native (AIAN) persons.
NPER = national total of PER.
HHLE30 = AIAN households less than 30% of median income.
NHHLE30 = national total of HHLE30.
HH30T50 = AIAN households 30% to 50% of median income.
NHH30T50 = national total of HH30T50.
HH50T80 = AIAN households 50% to 80% of median income.
NHH50TO80 = national total of HH50T80.
OCRPR = AIAN households crowded or without complete kitchen or
plumbing.
NOCRPR = national total of OCRPR.
SCBTOT = AIAN households paying more than 50% of their income for
housing.
NSCBTOT = national total SCBTOT.
HOUSHOR = AIAN households with an annual income less than or equal
to 80% of formula median income reduced by the combination of
current assisted stock and units developed under NAHASDA.
NHOUSHOR = national total of HOUSHOR.
TDC = Local Total Development Costs defined in Sec. 1000.302.
NATDC = weighted national average for TDC.
For estimating FY 1998 allocations:
NPER = 953,254.
NHHLE30 = 78,496.
NHH30T50 = 52,514.
NHH50T80 = 59,793.
NOCPR = 80,581.
NSCBTOT = 34,080.
NHOUSHOR = 23,840.
NEEDFUNDS = $353,852,890.
NATDC = $104,956.
7. The second iteration in computing Need allocation consists of
adjusting the Need allocation computed above to take into account
the $50,000 baseline funding for the first year only and then
$25,000 per year for each year thereafter through FY 2002. So, if in
the first Need computation you have less than the minimum Needs
funding level, your Need allocation will go up. But, if you have
more than the minimum Needs funding level, your Need allocation will
go down to adjust for the other Need allocations going up. We can
represent this by:
If NEED1 is less than MINFUNDING, then NEED = MINFUNDING.
If NEED1 is greater than or equal to MINFUNDING, then NEED = NEED1--
{UNDERMIN$ * [(NEED1--MINFUNDING) / OVERMIN$]}.
Where:
MINFUNDING = minimum needs funding level.
UNDERMIN$ = for all tribes with NEED1 less than MINFUNDING, sum of
the differences between MINFUNDING and NEED1.
OVERMIN$ = for all tribes with NEED1 greater than or equal to
MINFUNDING, sum of the difference between NEED1 and MINFUNDING.
For estimating FY 1998 allocations:
MINFUNDING = $50,000.
UNDERMIN$ = $4,919,224.
OVERMIN$ = $335,022,114.
8. Now we have computed values for FCAS and NEED. This final
step in computing the grant allocation is to adjust the sum of FCAS
and NEED to reflect the statutory requirement that a tribe's minimum
grant will not be less than that tribe's FY 1996 Operating Subsidy
and Modernization funding. So, before adjusting for the minimum
grant compute:
unadjGRANT = FCAS + NEED
where both FCAS and NEED are calculated above.
9. Now, apply test to determine if the GRANT (unadjusted for FY
1996) levels is greater than or equal to FY 1996 Operating Subsidy
and Modernization funding.
Let TEST = unadjGRANT--OPMOD96 .
If TEST is less than 0, then GRANT = OPMOD96.
If TEST is greater than or equal to 0, then GRANT = unadjGRANT--
[UNDER1996 * (TEST / OVER1996)].
Where:
OPMOD96 = funding received by tribe in FY 1996 for Operating Subsidy
and Modernization
UNDER1996 = for all tribes with TEST less than 0, sum of the
absolute value of TEST.
OVER1996 = for all tribes with TEST greater than or equal to 0, sum
of TEST.
For estimating FY 1998 allocations:
UNDER1996 = $5,378,558.
OVER1996 = $326,095,837.
GRANT is the approximate grant amount in any given year for any
given tribe.
Dated: March 6, 1998.
Kevin Emanuel Marchman,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 98-6283 Filed 3-11-98; 8:45 am]
BILLING CODE 4210-33-P
