[Federal Register Volume 62, Number 127 (Wednesday, July 2, 1997)]
[Proposed Rules]
[Pages 35718-35751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17011]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 950, 953, 955, 1000, 1003 and 1005
[Docket No. FR-4170-P-10]
RIN 2577-AB74
Implementation of the Native American Housing Assistance and
Self-Determination Act of 1996; Proposed Rule
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing; HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would 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. As required by section 106(b)(2) of NAHASDA, HUD has
developed this proposed rule with active tribal participation and using
the procedures of the Negotiated Rulemaking Act.
DATES: Comments on the proposed rule are due on or before August 18,
1997. Comments on the proposed information collection requirements are
due on or before September 2, 1997.
ADDRESSES: Interested persons are invited to submit written comments
regarding this proposed rule to the Rules Docket Clerk, Office of
General Counsel, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410. Comments
should refer to the above docket number and title. A copy of each
comment submitted will be available for public inspection and copying
between 7:30 a.m. and 5:30 p.m. weekdays at the above address.
Facsimile (FAX) comments will not be accepted.
[[Page 35719]]
For additional information concerning the information collection
requirements contained in this rule, please see the ``Findings and
Certifications'' section of this preamble. A copy of any comment
regarding the information collection requirements must be sent to:
Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and
Budget, New Executive Office Building, Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Dominic Nessi, Deputy Assistant
Secretary for Native American Programs, 1999 Broadway, Suite 3390,
Denver, CO 80202; telephone (303) 675-1600. Speech or hearing-impaired
individuals may access this number via TTY by calling the Federal
Information Relay Service at 1-800-877-8339. (With the exception of the
``800'' number, these telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Statutory Background
On October 26, 1996, President Clinton signed into law the Native
American Housing Assistance and Self-Determination Act of 1996 (Pub. L.
104-330) (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. Beginning on October 1, 1997, the first day of
Fiscal Year (FY) 1998, a single block grant program will replace
assistance previously authorized under:
1. The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.)
(1937 Act);
2. The Indian Housing Child Development Program under Section 519
of the Cranston-Gonzalez National Affordable Housing Act (12 U.S.C.
1701z-6 note);
3. The Youthbuild Program under subtitle D of title IV of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12899 et
seq.);
4. The Public Housing Youth Sports Program under section 520 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 11903a);
5. The HOME Investment Partnerships Program under title II of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12721 et
seq.); and
6. Housing assistance for the homeless under title IV of the
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11361 et seq.)
and the Innovative Homeless Demonstration Program under section 2(b) of
the HUD Demonstration Act of 1993 (42 U.S.C. 11301 note).
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.
Section 106 of NAHASDA sets out the general procedure for the
implementation of the new Indian housing block grant (IHBG) program.
The procedure described is a two-step process. First, section 106(a)
requires the publication of a notice in the Federal Register not later
than 90 days after enactment of NAHASDA. The purpose of the notice is
to establish any requirements necessary for the transition from the
provision of assistance for Indian tribes and Indian housing
authorities under the 1937 Act and other related provisions of law to
the provision of assistance in accordance with NAHASDA. Secondly,
section 106(b) requires that HUD issue final regulations implementing
NAHASDA no later than September 1, 1997. Section II of this preamble
discusses the transition requirements established by HUD. The remainder
of the preamble presents an overview of the development and contents of
the proposed regulations.
II. Transition Requirements
On January 27, 1997 (62 FR 3972), HUD published the transition
notice required by section 106(a) of NAHASDA. HUD subsequently amended
the January 27, 1997 notice to extend the Indian Housing Plan (IHP)
submission deadline to November 3, 1997 (62 FR 8258, February 24,
1997).
The January 27, 1997 notice focused on the information which must
be included in an Indian tribe's IHP and the treatment of activities
and funding under programs repealed by NAHASDA. Although section 106(b)
of NAHASDA requires that HUD issue final regulations by September 1,
1997, the ``old'' system of funding expires on the first day of FY 1998
(October 1, 1997). The submission of an IHP and a determination by HUD
that the IHP complies with NAHASDA is a prerequisite for funding under
NAHASDA. Accordingly, the January 27, 1997 notice established IHP
submission requirements in order to ensure that there is sufficient
time for Indian tribes to prepare their IHPs, and for HUD to review
them. Similarly, the January 27, 1997 notice provided guidance for the
treatment of activities and funding under programs repealed by NAHASDA
in order to permit Indian tribes to have the greatest time available
under the new law to consider and prepare for the transition from the
``old'' programs to the new IHBG program.
The deadline for submission of an IHP is November 3, 1997. Indian
tribes wishing to participate in the new IHBG program in FY 1998 should
familiarize themselves with the transition requirements established in
the Federal Register notices described above.
III. Negotiated Rulemaking
As described above, section 106(b) of NAHASDA requires that HUD
issue final implementing regulations no later than September 1, 1997.
Further, section 106(b)(2)(A) of NAHASDA provides that all regulations
required under NAHASDA be issued according to the negotiated rulemaking
procedure under subchapter III of chapter 5 of title 5, United States
Code. The rulemaking procedure referenced is the Negotiated Rulemaking
Act of 1990 (5 U.S.C. 561-570). Accordingly, the Secretary of HUD
established the Native American Housing Assistance & Self-Determination
Negotiated Rulemaking Committee (Committee) to negotiate and develop a
proposed rule implementing NAHASDA.
Prior to the establishment of the Committee, HUD held a series of
meetings with tribal representatives to discuss the regulatory
implementation of NAHASDA. These meetings were preliminary to the
formal negotiated rulemaking process required by NAHASDA. The
preliminary meetings provided a valuable exchange of ideas that
assisted in focusing the efforts of the Committee.
The Committee consists of 58 members. Forty-eight of these members
represent geographically diverse small, medium, and large Indian
tribes. There are ten HUD representatives on the Committee.
Additionally, three individuals from the Federal Mediation and
Conciliation Service served as facilitators. While the Committee is
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 and its approved charter. 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. Procedures recommended by
tribal leaders on the negotiated rulemaking process were also adopted
by the Committee. HUD committed to using, to the maximum extent
feasible consistent with its legal obligations, all consensus decisions
as
[[Page 35720]]
the basis for the proposed rule. The Committee further agreed that any
Committee member or his/her constituents could comment on this proposed
rule. The Committee will consider all comments in drafting the final
rule.
In order to complete the proposed regulations by the statutory
deadline, 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. The seven workgroups were: (1) Preamble, Policy and
Definitions; (2) IHP Preparation and Submission, Monitoring, Review and
Compliance; (3) Allocation Formula; (4) Affordable Housing Activities;
(5) Transition Requirements; (6) Alternative Financing; and (7)
Drafting Coordination.
The first meeting of the Committee was in February of 1997. At that
meeting the Committee established workgroups, a protocol for
deliberations and a meeting schedule. 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 the draft regulations produced by the
workgroups. Each of these meetings lasted between four and eight days.
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. All of the Committee sessions were announced in the
Federal Register and were open to the public.
IV. Summary of New 24 CFR Part 1000
The rule proposes to implement NAHASDA in a new 24 CFR part 1000.
Part 1000 would be divided into six subparts (A through F), each
describing the regulatory requirements for a different aspect of
NAHASDA. For the convenience of readers, part 1000 is in Question and
Answer format. Additionally, the rule will as much as practicable not
repeat statutory language but rather make reference to specific
provisions. A reader of the rule must therefore have the statute
available while reading the rule.
The full Committee reached consensus on the individual subparts of
this proposed rule. However, the Committee has yet to endorse an
integrated proposed rule. The full Committee asks for public comment on
the workgroup products, and suggestions regarding any modifications
necessary to produce an integrated rule. The full Committee will meet
to consider the public comments and to produce an integrated final
rule.
The following is a brief description of the contents of each
subpart:
Subpart A--General
Subpart A would contain the legal authority and scope of the
regulations. It would also set forth definitions for key terms used in
the balance of the regulations. Additionally, subpart A would cross-
reference to other applicable Federal laws and regulations. Although
HUD encourages readers to familiarize themselves with all of the
provisions of subpart A, it wishes to highlight the following sections
contained in this subpart:
Section 1000.8. Section 1000.8 provides that HUD may waive any non-
statutory provision of this rule in accordance with 24 CFR 5.110. This
section requires that any waivers be based upon a determination of good
cause. In making this determination, HUD may consider such factors as
undue hardship. Under section 106 of the Department of Housing and
Urban Development Reform Act of 1989 (42 U.S.C. 3545) waivers will be
in writing and published in the Federal Register.
Section 1000.10. Section 1000.10 sets forth the generally
applicable definitions used throughout 24 CFR part 1000. The Committee
has adopted without change many of the definitions set forth in section
4 of NAHASDA. Section 1000.10 proposes to define 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,'' ``Median income,'' ``Near-
elderly persons,'' ``Nonprofit,'' ``Recipient,'' Secretary,''
``State,'' and ``Tribally designated housing entity (TDHE)'' by cross-
referencing to section 4. Further, the term ``Affordable housing
activities'' is defined by cross-referencing to the list of eligible
activities set forth in section 202 of NAHASDA.
In the case of the definitions of ``Family'' and ``Indian area,''
the Committee determined that it was necessary to make minor clarifying
changes to the statutory definitions in section 4 of NAHASDA.
Specifically, the definition of ``Family'' has been revised to clarify
that the term includes, but is not limited to, the types of families
identified in the statutory definition. Similarly, the Committee has
added a sentence to the statutory definition of ``Indian area'' to
specify that ``[w]henever the term `jurisdiction' is used in NAHASDA it
shall mean `Indian area,' except where specific reference is made to
the jurisdiction of a court.''
Section 4 of NAHASDA required that the Committee develop additional
language expanding upon the statutory definitions of ``Income'' and
``Person with disabilities.'' In both cases, the Committee elected to
use the language of existing HUD definitions codified in title 24 of
the CFR.
Section 4 of NAHASDA defines ``Income'' to mean income from all
sources of each member of the household ``as determined in accordance
with criteria prescribed by'' HUD. The Committee chose to use the term
``annual income,'' rather than the term ``income.'' Further, the
Committee elected to adopt the income criteria set forth in HUD's
current Indian housing program regulations at 24 CFR part 950.
Accordingly, the definition of ``Annual income'' set forth in this
proposed rule is nearly identical to the existing definition of the
term at 24 CFR 950.102.
The statutory definition of ``Person with disabilities'' requires a
regulatory definition of the term ``physical, mental, or emotional
impairment.'' The Committee elected to model this definition on the
definition of ``physical or mental impairment'' set forth in HUD's
regulations implementing section 504 of the Rehabilitation Act of 1973,
as amended (29 U.S.C. 794) (24 CFR part 8). Although the definition of
``physical, mental, or emotional impairment'' contained in this
proposed rule makes several minor editorial changes to the definition
of ``physical or mental impairment'' at 24 CFR 8.3, these changes do
not alter the intent or meaning of the definition in part 8.
The definitions of ``Annual contributions contract (ACC)'' and
``Indian housing authority (IHA)'' set forth in this proposed rule are
also modelled on the existing definitions of these terms in 24 CFR part
950.
Section 1000.12. This section sets forth the nondiscrimination
requirements which are applicable to NAHASDA. Specifically,
Sec. 1000.12 provides that the following civil right authorities are
applicable to NAHASDA: (1) The requirements of the Age Discrimination
Act of 1975 (42 U.S.C.
[[Page 35721]]
6101-6107) and HUD's implementing regulations in 24 CFR part 146; (2)
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and HUD's
regulations at 24 CFR part 8; and (3) title II of the Civil Rights Act
of 1968 (25 U.S.C. 1301-1303), to the extent such title is applicable,
and other applicable Federal civil rights statutes. Additionally, this
section 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.) do not apply to actions by Indian tribes under section
201(b) of NAHASDA.
HUD has revised the regulatory language developed by the Committee
by adding the reference to title II of the Civil Rights Act of 1968.
This addition reflects the statutory language of section 102(c)(5)(A)
of NAHASDA, which requires that recipients include a certification of
compliance with title II in their IHP.
Section 1000.14. This section sets forth the relocation and real
property acquisition policies which are applicable to NAHASDA. Except
for minor editorial and formatting changes, Sec. 1000.14 is identical
to the corresponding provision in HUD's regulations for the Indian
Community Development Block Grant program (See 24 CFR 953.602).
Section 1000.16. This section describes the labor standards
applicable to NAHASDA. Section 1000.16 provides, in accordance with
section 104(b) of NAHASDA, that contracts and agreements for
assistance, sale or lease under NAHASDA must require prevailing wage
rates determined under the Davis-Bacon Act (40 U.S.C. 276a-276a-5) to
be paid to laborers and mechanics employed in the development of
affordable housing projects. HUD has added a sentence to the regulatory
language developed by the Committee to reflect an additional statutory
requirement. Specifically, Sec. 1000.16 now provides that section
104(b) also mandates that these contracts and agreements require that
prevailing wages determined 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 such projects.
Section 1000.20. Section 1000.20 provides that an Indian tribe is
not required to assume environmental review responsibilities. Rather,
this proposed rule states 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. HUD has added a sentence to the
regulatory language adopted by the Committee to clarify that a HUD
environmental review must be completed for any 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 to such activities with respect to the property.
HUD's resources may be such that it may be unable to undertake
environmental reviews if the Indian tribe chooses not to assume
environmental review responsibilities. HUD needs to examine its
resources and further consider this issue. In addition, HUD is
reviewing whether a conflict exists between the 60 day maximum period
permitted in section 103(a)(2) of NAHASDA for HUD to review the IHP
and, in cases where an Indian tribe declines to assume environmental
review responsibilities and an activity requires an Environmental
Impact Statement (EIS), the greater time required for finalizing EISs
prepared and circulated for review and comment in accordance with the
National Environmental Policy Act of 1969 prior to a Federal decision
being made (including a general minimum of 90 days between publication
of a notice of draft EIS and the agency decision). HUD is also
reviewing possible options for reconciling the conflict, if any.
Accordingly, HUD wishes to alert the public that it may not be legally
permissible both to provide for a choice and to give full effect to the
requirements of the National Environmental Policy Act of 1969 and
related statutes. In particular, if HUD determines that a statutory
conflict exists, one of the options for reconciling the conflicts may
result in HUD not being able to implement the policy of allowing an
Indian tribe the option of not assuming environmental review for
actions that are subject to the statutory 60 day approval period.
Further, conforming changes will need to be made at the final rule
stage to HUD's regulations at 24 CFR part 58 (Environmental Review
Procedures for Entities Assuming HUD Environmental Responsibilities) to
reflect the environmental review procedures established in new part
1000.
Section 1000.30. This section describes the conflict of interest
provisions applicable to 24 CFR part 1000. Paragraph (a) of
Sec. 1000.30 cross-references to certain requirements of 24 CFR part 85
(Administrative Requirements for Grants and Cooperative Agreements to
State, Local and Federally Recognized Indian Tribal Governments).
Specifically, Sec. 1000.30(a) as adopted by the Committee provided that
``[i]n the procurement of supplies, equipment, construction and
services by recipients and subrecipients, the conflict of interest
provisions of 24 CFR 85.36 or 24 CFR 85.42 (as applicable) shall
apply.'' HUD has added the phrase ``other property'' after the word
``equipment'' in Sec. 1000.30 to clarify that the conflict of interest
provisions in 24 CFR 85.36 and 24 CFR 85.42 apply to property as well
as services.
HUD welcomes public comment on additional ways it may strengthen
the conflict of interest provisions to ensure that affordable housing
activities are conducted effectively without fraud, waste, or
mismanagement. In particular, HUD invites comment on whether the
regulation should require persons who participate in the decision-
making process to recuse themselves from decisions that directly affect
the provision of assistance to themselves or their relatives. During
the public comment period, HUD also will be considering additional ways
to strengthen the conflict of interest provisions to ensure that
affordable housing activities are conducted effectively without fraud,
waste, or mismanagement. Additionally, HUD will be considering whether
the final rule should require persons who participate in the decision-
making process to recuse themselves from decisions that directly affect
the provision of assistance to themselves or their relatives.
Accordingly, the final rule may reflect stronger conflict of interest
provisions than are set forth in this proposed rule based on any public
comments received and HUD's further consideration of the subject
matter.
Section 1000.32. This section provides that HUD may make case-by-
case exceptions to the conflict of interest provisions set forth in
Sec. 1000.30(b). As originally adopted by the Committee, this section
would have permitted an Indian tribe or TDHE to grant exceptions. HUD
has revised the language adopted by the Committee to specify that only
HUD may allow an exception to the conflict of interest provisions. HUD
has determined that this change is necessary to ensure that exceptions
are granted fairly and without abuse. Further, the change conforms
Sec. 1000.32 to its counterpart provision in HUD's regulations
governing the Community Development Block Grant (CDBG) program (see 24
CFR 570.611(d)).
Section 1000.38. This section describes the flood insurance
[[Page 35722]]
requirements applicable to NAHASDA. Specifically, Sec. 1000.38 provides
that 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 certain specified conditions are met.
Subpart B--Affordable Housing Activities
Subpart B would contain the regulations necessary for the
implementation of title II of NAHASDA. Among the topics addressed by
subpart B would be eligible affordable housing activities, low-income
requirements, lease requirements and tenant selection. Although HUD
encourages readers to familiarize themselves with all of the provisions
of subpart B, it wishes to highlight the following sections contained
in this subpart:
Section 1000.104. This section lists the types of families which
are eligible for affordable housing activities under NAHASDA.
Paragraphs (b) and (c) of Sec. 1000.104 set forth the conditions under
which a non low-income Indian family or a non-Indian family may receive
housing assistance under NAHASDA. Such families are presumed to meet
the requirements of Sec. 1000.104 if they are currently residing in
housing assisted under the 1937 Act. HUD has added language to the
regulatory text adopted by the Committee which clarifies that the
presumption applies only if there is no evidence to the contrary.
Sections 1000.106 to 1000.116. Title II of NAHASDA requires HUD
approval of certain eligible affordable housing activities under
NAHASDA. Specifically, section 202(6) of NAHASDA permits recipients to
conduct housing activities under model programs that are designed to
carry out the purposes of NAHASDA and that are specifically approved by
HUD for such purposes. Further, section 201(b)(2) of NAHASDA permits a
recipient to provide certain assistance to non low-income Indian
families with HUD approval.
Sections 1000.106 to 1000.116 of this proposed rule concern HUD
approval of eligible affordable housing activities. These sections
refer to HUD approval of model activities and ``other housing
programs.'' This phrase does not appear in the statutory language of
NAHASDA. HUD interprets the phrase ``other housing programs'' to apply
solely to the provision of assistance to non low-income Indian families
under section 201(b)(2) of NAHASDA.
Section 1000.124. Section 1000.124 provides that a recipient may
charge a low-income rental tenant or homebuyer payments not to exceed
thirty percent of the adjusted income of the family. HUD interprets the
phrase ``homebuyer payments'' to be limited to lease-purchase payments,
such as those in the existing Mutual Help Homeownership Opportunity
Program (See 24 CFR part 950, subpart E).
HUD has made one modification to the regulatory language adopted by
the Committee. That regulation provided that the thirty-percent (30%)
requirement ``applies only to NAHASDA grant amounts.'' HUD has removed
this phrase from Sec. 1000.124 since the statutory limitation on the
amount of the rent and homebuyer payment is not limited to the grant
amounts.
Section 1000.134. Section 1000.134 establishes the conditions under
which a recipient (or an entity funded by the recipient) may demolish
or dispose of Indian housing units owned or operated pursuant to an
Annual Contribution Contract. Paragraph (c) of Sec. 1000.134 provides
that in any disposition sale of a housing unit, the recipient will use
a sale process designed to maximize the sale price. Further,
Sec. 1000.134(c) provides that ``[t]he 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 this
part.'' HUD revised this sentence to more closely track the statutory
language of section 104(a)(1)(B) of NAHASDA. As originally adopted by
the Committee, the sentence read: ``The sale proceeds from the
disposition of any housing unit are program income under NAHASDA and
must be used for appropriate purposes under NAHASDA.'' Section
104(a)(1)(B) requires that the recipient use any ``program income for
affordable housing activities in accordance with the provisions of this
Act.''
Section 1000.136. Section 1000.136 describes the insurance
requirements which apply to housing units assisted with NAHASDA grants.
Specifically, this section requires that a recipient 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. HUD has added a
sentence to the regulatory language adopted by the Committee which
clarifies that these requirements are in addition to the applicable
flood insurance requirements set forth in Sec. 1000.38.
Section 1000.142. Section 205 of NAHASDA sets forth the criteria
for affordable housing under NAHASDA. Among other criteria, section
205(a)(2) requires that affordable housing remain affordable ``for the
remaining useful life of the property (as determined by the
Secretary).'' Section 1000.142 of this proposed rule reflects the
statutory useful life requirement. The Committee developed the
following regulatory language for Sec. 1000.142: ``Each recipient shall
describe in its IHP the useful life of each assisted housing unit in
each of its developments.'' HUD has modified this language by inserting
the phrase ``for Secretarial determination'' after the word ``IHP.''
The addition of this phrase clarifies that through approval of the IHP,
the Secretary will determine the useful life of the affordable housing
as required by section 205.
Section 1000.148. Section 1000.148 describes the information which
must be contained in a notice of eviction or termination. The
regulatory language adopted by the Committee provided that ``[t]he
owner or manager will apply the law applicable to the jurisdiction.''
For purposes of clarity, HUD has revised Sec. 1000.148 to more closely
track the statutory requirements set forth in section 207(a)(5) of
NAHASDA. Section 1000.148 now requires that the owner or manager must
give adequate written notice of termination of the lease, in accordance
with the period of time required under State, tribal, or local law.
Further, Sec. 1000.148 provides that, notwithstanding any State,
tribal, or local law, the notice must inform the resident of the
opportunity, prior to any hearing or trial, to examine any relevant
documents, records, or regulations directly related to the eviction or
termination.
Section 1000.152. Section 1000.152 tracks the statutory language of
section 208(c) of NAHASDA. Section 208(c) concerns the recipient's use
of criminal conviction information on adult applicants and tenants.
Section 1000.152 provides that recipients shall use this information
solely for purposes of applicant screening, lease enforcement and
eviction actions. Further, Sec. 1000.152 provides that ``[t]he
information may be disclosed only to a person who has a job related
need for the information and who is an officer, employee, or authorized
representative of the recipient or the owner of housing assisted under
NAHASDA.'' HUD revised the regulatory language developed by the
Committee by
[[Page 35723]]
inserting the phrase ``or the owner'' after the word ``recipient.'' The
addition of this phrase conforms Sec. 1000.152 to section 208(c) of
NAHASDA, which authorizes the release of criminal conviction
information to an officer, employee, or authorized representative of an
owner.
Section 1000.156. This section sets forth the housing development
cost limits applicable to ensure modest housing construction under
NAHASDA. Section 1000.156 provides that, unless approved by HUD, the
total development cost (TDC) per unit will be no more than 100% of the
TDC. HUD has added a sentence to the regulatory language adopted by the
Committee to clarify that TDC shall include the costs of making a
project meet the accessibility requirements of 24 CFR part 8
(Nondiscrimination Based on Handicap in Federally Assisted Programs and
Activities of the Department of Housing and Urban Development) for new
construction and alterations of existing housing facilities.
Subpart C--Indian Housing Plan (IHP)
Subpart C would set forth the regulatory requirements concerning
the preparation, submission, and review of an Indian tribe's IHP.
Although HUD encourages readers to familiarize themselves with all of
the provisions of subpart C, it wishes to highlight the following
sections contained in this subpart:
Section 1000.214. This section provides that there are no separate
IHP requirements for small Indian tribes. The IHP requirements set
forth in subpart C are minimal. Further, HUD has general authority
under section 101 of NAHASDA to waive IHP requirements when an Indian
tribe cannot comply with IHP requirements due to circumstances beyond
its control. The waiver authority under section 101 provides
flexibility to address the needs of every Indian tribe, including small
Indian tribes. The original regulatory language for Sec. 1000.214
developed by the Committee referred to the Secretary's authority under
section 101 to waive IHP requirements for an ``Indian tribe or TDHE.''
HUD has revised Sec. 1000.214 to clarify that the section 101 waiver
provision applies only to Indian tribes.
Section 1000.216. Section 102(c)(5) of NAHASDA requires that a
recipient include certain certifications of compliance in its IHP.
Among other certifications, the recipient must certify that it will
comply with title II of the Civil Rights Act of 1968 in carrying out
NAHASDA, to the extent that title II is applicable, and other
applicable Federal statutes. Section 101(b)(2) of NAHASDA permits HUD
to waive these certification requirements if HUD determines that an
Indian tribe has not complied or cannot comply with the certification
requirements due to circumstances beyond the control of the Indian
tribe. Section 1000.216 cross-references to this statutory provision.
HUD has added a sentence to the regulatory text adopted by the
Committee which clarifies that although HUD may waive the certification
requirement, the recipient must still comply with the nondiscrimination
requirements listed in Sec. 1000.12.
Section 1000.226. Section 1000.226 of this proposed rule sets forth
a non-exclusive list of eligible administrative and planning expenses
under the IHBG program. HUD has made two revisions to the list
developed by the Committee. First, HUD has removed staff and overhead
costs directly related to carrying out affordable housing activities
from the list of eligible expenses. These costs do not constitute
administrative and planning expenses. Additionally, HUD has amended the
list by adding the expenses related to the collection of data necessary
to challenge the data used in the IHBG formula. This addition reflects
the language of Sec. 1000.320(a), which provides that the collection of
data for this purpose is an allowable cost for IHBG funds.
Section 101(h) of NAHASDA requires that HUD authorize, by
regulation, each recipient to use a percentage of its NAHASDA grant
amounts for administrative and planning expenses relating to carrying
out NAHASDA and activities assisted with such amounts. This proposed
rule, however, does not set forth such a percentage. HUD is considering
the appropriate percentage which it is statutorily required to
establish at the final rule stage.
Section 1000.228. Section 101(c) of NAHASDA prohibits HUD from
awarding NAHASDA grant funds to a recipient unless the governing body
of the locality within which any affordable housing to be assisted with
grant amounts will be situated has entered into a local cooperation
agreement with the recipient. Section 1000.228 of this proposed rule
provides that the requirement for a local cooperation agreement
``applies to assistance of rental and lease-purchase homeownership
units under the 1937 Act or NAHASDA which are owned by the Indian tribe
or TDHE.'' HUD has revised the regulatory language developed by the
Committee by using the word ``assistance'' rather than ``development.''
This change clarifies that section 101(c) covers all assistance, and
not just development.
HUD also notes that a cooperation agreement is not required in
those cases where the affordable housing will be located on an Indian
reservation and the Indian tribe is the recipient, since a tribal
government could not enter into an agreement with itself.
Section 1000.230. Section 101(d)(1) of NAHASDA requires that
affordable housing assisted with NAHASDA grant amounts be exempt from
all real or personal property taxes levied or imposed by any State,
tribe, city, county, or other political subdivision. Section 1000.230
of this proposed rule provides that the tax-exemption requirement
``applies only to assistance of rental and lease-purchase homeownership
units under the 1937 Act or NAHASDA which are owned by an Indian tribe
or TDHE.'' As is the case with Sec. 1000.228, HUD has revised
Sec. 1000.230 by substituting the word ``development'' with the word
``assistance.'' This revision clarifies that section 101(d)(1) applies
to all assistance of rental and lease-purchase homeownership units.
Subpart D--Allocation Formula
Subpart D would implement title III of NAHASDA. Specifically, it
would establish the components, definitions, and data sources used in
the NAHASDA block grant formula. The allocation formula is set forth in
an appendix to this proposed rule. Although the formula is currently
set forth in an appendix, it may be incorporated in the regulatory text
at the final rule stage.
Subpart E--Federal Guarantees for Financing of Tribal Housing
Activities
Subpart E would describe the regulatory requirements necessary for
the implementation of title VI of NAHASDA. This subpart would establish
the terms and conditions by which HUD will guarantee the obligations
issued by an Indian tribe or TDHE for the purposes of financing
affordable housing activities.
Subpart E does not contain a provision setting forth the
requirements for eligible lenders. HUD believes that the establishment
of lender eligibility requirements will help to ensure the stability
and integrity of the title VI loan guarantee program. HUD proposes the
use of the lender eligibility criteria used in the Indian loan
guarantee program authorized by section 184 of the Housing and
Community Development Act of 1992 (Pub. L. 102-550, approved October
28, 1992) (currently codified at 24 CFR part 955). The section 184
program has been highly successful in
[[Page 35724]]
providing access to sources of private financing to Indian families and
Indian housing authorities who otherwise could not acquire housing
financing because of the unique legal status of Indian trust land.
Accordingly, HUD believes the section 184 lender eligibility
requirements provide a good model for loan guarantees under title VI of
NAHASDA. HUD invites public comment on the proposed lender eligibility
criteria. The regulatory provision proposed by HUD would read as
follows:
Who Are Eligible Lenders Under This Subpart?
The loan shall be made only by a lender approved by and meeting
qualifications established in this subpart, except that loans
otherwise insured or guaranteed by any agency of the Federal
Government, 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 approved
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 Federal Government.
HUD encourages readers to familiarize themselves with all of the
provisions of subpart E; however, it wishes to highlight the following
section contained in this subpart:
Section 1000.408. This section sets forth the conditions which HUD
will prescribe when providing a guarantee for notes or other
obligations issued by an Indian tribe. The regulatory language
developed by the Committee would have authorized a repayment period in
excess of twenty years if the period was commercially reasonable or was
an industry standard. HUD has revised Sec. 1000.408 to provide that the
repayment period may not exceed twenty years. This change is based on
HUD's legal interpretation of section 601(c) of NAHASDA which provides
that HUD ``may not deny a guarantee under [title VI of NAHASDA] on the
basis of the proposed repayment period for the note or other obligation
unless the period is more than 20 years or the Secretary determines
that the period causes the guarantee to constitute an unacceptable
financial risk.'' HUD has determined that the statutory language of
section 601(c) prohibits a repayment period of greater than 20 years.
Subpart F--Recipient Monitoring, Oversight and Accountability
Subpart F would implement title IV of NAHASDA. Among other topics,
this subpart would address monitoring of compliance, performance
reports, HUD and tribal review, audits, and remedies for noncompliance.
Sections 1000.504 and 1000.524 of this subpart discuss performance
measures. The newness of the IHBG program makes it difficult to
establish detailed performance objectives. As the IHBG program evolves,
and greater programmatic experience is developed, it will be possible
to set forth the necessary performance measurements with greater
clarity and detail.
Although HUD encourages readers to familiarize themselves with all
of the provisions of subpart F, it wishes to highlight the following
sections contained in this subpart:
Section 1000.502. This section describes the monitoring
responsibilities of the recipient, the grant beneficiary and HUD under
NAHASDA. HUD has revised the language adopted by the Committee to
reference the periodic reviews required under the applicable
nondiscrimination requirements set forth in Sec. 1000.12 (See
Sec. 1000.502(c)).
Section 1000.508. This section provides that if the recipient's
monitoring activities identify programmatic concerns, it must take one
of several specified corrective actions. As originally adopted by the
Committee, this section listed the actions the recipient ``may'' take
to remedy identified concerns. HUD has strengthened this language to
specify that a recipient is required to take one of the listed remedial
actions.
Section 1000.510. This section sets forth the Indian tribe's
responsibility if the tribal monitoring identifies compliance concerns.
The language adopted by the Committee provided that ``[t]he Indian
tribe should ensure that appropriate corrective action is taken.'' HUD
has strengthened and clarified this provision by revising it to read:
``The Indian tribe's responsibility is to ensure that appropriate
corrective action is taken.''
Section 1000.526. This section lists the types of information HUD
may use in conducting a performance review of the recipient. HUD has
expanded the list adopted by the Committee to provide that HUD may also
consider ``any other relevant information'' (see Sec. 1000.526(i)).
Section 1000.528. This language in this section is closely modelled
on section 405(c) of NAHASDA. Specifically, Sec. 1000.528 provides that
HUD may make appropriate adjustments in the amount of the annual grants
under NAHASDA in accordance with the finding 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.
HUD added Sec. 1000.528 subsequent to the completion of the
negotiated rulemaking meetings. Accordingly, the Committee did not have
the opportunity to approve the language of Sec. 1000.528. HUD believes
the addition of this provision is necessary to provide Indian tribes
with a fuller picture of the review and audit authority provided to HUD
by NAHASDA. HUD emphasizes that the language of Sec. 1000.528 is nearly
identical to the language of section 405(c). Section 1000.528 does not
establish any requirements or procedures in addition to those
authorized under NAHASDA.
Section 1000.532. This section sets forth the hearing requirements
that will be used under NAHASDA. HUD has revised the language adopted
by the Committee to clarify that for hearings under section 504 of the
Rehabilitation Act of 1973 or the Age Discrimination Act of 1975, the
procedures in 24 CFR part 180 must be used.
Section 1000.538. This section describes the recipient audits
required under NAHASDA. Specifically, Sec. 1000.538 provides that a
recipient must comply with the requirements of the Single Audit Act
which requires annual audits of recipients that expend Federal funds
equal to or in excess of $300,000. The audit shall be made by an
independent auditor in accordance with generally accepted government
auditing standards covering financial and compliance audits.
V. Nonconsensus Provisions and Rationale
The Committee was unable to reach consensus on five issues. On four
of the issues, HUD and tribal representatives disagreed on proposed
regulatory language. These issues involve legal determinations which
must be made by HUD. In the case of the allocation formula, tribal
representatives could not reach consensus on the use of a performance
variable. The following
[[Page 35725]]
section of the preamble summarizes these issues and presents the
different positions. The summaries were drafted by proponents of the
position on the Drafting Coordination Workgroup.
1. Issue: Indian Preference for Procurement
Is one time HUD approval necessary for alternative Indian
Preference methods for procurement? The Committee drafted a proposed
regulatory provision on this issue which was not approved by the
Committee. The proposed provision is reproduced below.
Tribal Position: The tribes believe that a certification of
compliance with the requirements of section 7(b) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b) is
sufficient to satisfy the requirements for alternative Indian
Preference methods.
HUD's Position: HUD approval for alternative Indian Preference
methods is intended to ensure that the minimum procurement requirements
of 24 CFR 85.36 are met in the implementation of alternative methods of
providing Indian Preference.
The proposed regulatory provision which was not approved reads:
What Indian Preference Requirements Are Applicable?
(a) Applicability. HUD has determined that grants under this
part are subject to Section 7(b) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450b). 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 urban 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.
(c) Preference in administration of grant. 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.
(d) Preference in contracting. 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.
(1) Each recipient shall:
(i) Advertise for bids or proposals limited to qualified Indian
organizations and Indian-owned enterprises; or
(ii) Use a two-stage preference procedure, as follows:
(A) Stage 1. Invite or otherwise solicit Indian-owned economic
enterprises to submit a statement of intent to respond to a bid
announcement or request for proposals limited to Indian-owned firms.
(B) Stage 2. If responses are received from more than one Indian
enterprise found to be qualified, advertise for bids or proposals
limited to Indian organizations and Indian-owned economic
enterprises; or
(iii) Develop, subject to HUD one-time approval, the recipient's
own method of providing preference. An Indian preference policy
which was previously approved by HUD for a recipient under the
provisions of 24 CFR part 1003 will meet the requirements of this
section.
(2) If the recipient selects a method of providing preference
that results in fewer than two responsible qualified organizations
or enterprises submitting a statement of intent, a bid or a proposal
to perform the contract at a reasonable cost, then the recipient
shall:
(i) Re-advertise the contract, using any of the methods
described in paragraph (d)(1) of this section; or
(ii) Re-advertise the contract without limiting the
advertisement for bids or proposals to Indian organizations and
Indian-owned economic enterprises; or
(iii) If one approvable bid or proposal is received, request
Area ONAP review and approval of the proposed contract and related
procurement documents, in accordance with 24 CFR 85.36, in order to
award the contract to the single bidder or offeror.
(3) Procurements that are within the dollar limitations
established for small purchases under 24 CFR 85.36 need not follow
the formal bid or proposal procedures of paragraph (d) of this
section, since these procurements are governed by the small purchase
procedures of 24 CFR 85.36. However, a recipient's small purchase
procurement shall, to the greatest extent feasible, provide Indian
preference in the award of contracts.
(4) All preferences shall be publicly announced in the
advertisement and bidding or proposal solicitation documents and the
bidding and proposal documents.
(5) A recipient, at its discretion, may require information of
prospective contractors seeking to qualify as Indian organizations
or Indian-owned economic enterprises. Recipients may require
prospective contractors to include the following information before
submitting a bid or proposal, or at the time of submission:
(i) Evidence showing fully the extent of Indian ownership and
interest;
(ii) Evidence of structure, management and financing affecting
the Indian character of the enterprise, including major subcontracts
and purchase agreements; materials or equipment supply arrangements;
and management salary or profit-sharing arrangements; and evidence
showing the effect of these on the extent of Indian ownership and
interest; and
(iii) Evidence sufficient to demonstrate to the satisfaction of
the recipient that the prospective contractor has the technical,
administrative, and financial capability to perform contract work of
the size and type involved.
(6) The recipient shall incorporate the following clause
(referred to as the Section 7(b) clause) in each contract awarded in
connection with a project funded under this part:
(i) The work to be performed under this contract is on a project
subject to Section 7(b) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b) (Indian Act). Section 7(b)
requires that to the greatest extent feasible (A) preferences and
opportunities for training and employment shall be given to Indians
and (B) preferences in the award of contracts and subcontracts shall
be given to Indian organizations and Indian-owned economic
enterprises.
(ii) The parties to this contract shall comply with the
provisions of Section 7(b) of the Indian Act.
(iii) In connection with this contract, the contractor shall, to
the greatest extent feasible, give preference in the award of any
subcontracts to Indian organizations and Indian-owned economic
enterprises, and preferences and opportunities for training and
employment to Indians.
(iv) The contractor shall include this Section 7(b) clause in
every subcontract in connection with the project, 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.
(e) Complaint procedures. The following complaint procedures are
applicable to complaints arising out of any of the methods of
providing for Indian preference contained in this part, including
alternate methods enacted and approved in a manner described in this
section.
(1) Each complaint shall be in writing, signed, and filed with
the recipient.
(2) 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.
(3) Upon receipt of a complaint, the recipient shall promptly
stamp the date and time of receipt upon the complaint, and
immediately acknowledge its receipt.
(4) Within 20 calendar days of receipt of a complaint, the
recipient shall either meet, or communicate by mail or telephone,
with
[[Page 35726]]
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.
2. Issue: Interest Income
Can interest income earned on advances of grant funds be retained
by a recipient?
Tribal Position: For the following reasons, the tribal position is
that recipients can retain interest income earned on advances of
NAHASDA grant funds to be used for affordable housing activities:
(a) Under Public Law 93-638 self-determination contracts and self-
governance compacts, federal policy allows tribes to receive lump-sum
distributions for their programs and to keep any interest they earn on
such funds before expending the funds on their programs. The Congress
directed through NAHASDA that ``Federal assistance to meet these
responsibilities [federal housing responsibilities to Indians] 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 TDHEs under authorities
similar to those accorded Indian tribes in Public Law 93-638 (25 U.S.C.
450 et seq.)'' (NAHASDA section 2(7)--Congressional Findings). The
tribal representatives believe that this language authorizes HUD to
make NAHASDA grant amounts available to recipients in lump-sum
distributions and that recipients can then keep any interest earned on
this money before the recipient expends the money on eligible
affordable housing activities.
(b) The tribal representatives also believe that NAHASDA expressly
authorizes recipients to invest grant amounts and retain any interest.
NAHASDA states: ``A recipient may invest grant amounts for the purposes
of carrying out affordable housing activities in investment securities
and other obligations as approved by the Secretary'' (NAHASDA section
204(b)).
HUD's Position: HUD believes that the Congressional findings in
NAHASDA do not overcome the longstanding opinions of the Comptroller
General that recipients may not augment appropriation amounts by
earning interest on grant funds pending disbursement for a program
purpose and that interest earned on grant advances belongs to the
Federal Government. A more explicit statutory provision is needed which
authorizes the recipient to draw down grant funds in a lump sum and to
retain any interest earned.
HUD construes section 204(b) of NAHASDA consistent with the above
stated opinions of the Comptroller General. Accordingly, the statute
permits recipients to invest grant amounts for the purposes of carrying
out affordable housing activities, but this does not permit recipients
to invest grant funds solely for the purpose of earning interest to
augment the grant amount.
A workgroup of the Committee developed the following definition of
``Program Income'' but HUD could not agree on the underlined language:
(1) Program income is defined as any income that is realized
from the disbursements of grant amounts. 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 on loans
made with grant funds. Program income includes interest income
earned on grant funds prior to disbursement.
(2) Any program income over the amount of $250 per annum can be
retained by a recipient provided it is used for affordable housing
activities in accordance with section 202 of NAHASDA. Any program
income realized that is less than $250 per annum shall be excluded
from consideration as program income. Such funds may be retained but
are not classified and treated as program income.
(3) If program income is realized from an eligible activity
funded with both grant funds as well as other funds, i.e., 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 that are grant funds.
(4) Costs incident to the generation of program income shall be
deducted from gross income to determine program income.
3. Issue: Reducing Grant Amounts
Should HUD be allowed to reduce, adjust, or withdraw NAHASDA grant
funds without giving notice and a hearing to a recipient?
Tribal Position: Tribal representatives felt that before the
Secretary takes any actions to adjust, reduce, or withdraw grant
amounts the Secretary must comply with the due process requirements set
forth in section 401 of NAHASDA to give a recipient reasonable notice
and an opportunity for a hearing.
HUD's Position: Section 405(c) of NAHASDA expressly permits HUD to
adjust, reduce, or withdraw grant amounts in accordance with HUD's
review and audits of recipients. This authority is in addition to the
authority in section 401 to take actions based on the recipient's
substantial noncompliance with the requirements of NAHASDA.
4. Issue: Substantial Noncompliance
How is substantial noncompliance defined under NAHASDA section
401(a) before the Secretary may terminate, reduce, or limit the
availability of payments under NAHASDA or replace the TDHE?
Tribal Position: The tribal representatives proposed a definition
for substantial noncompliance, as follows:
For HUD to conclude that a recipient has failed to comply
substantially with any provision of NAHASDA, HUD must find:
(a) An act or omission or series of acts or omissions; or
(b) A pattern or practice or activities constituting willful
noncompliance with the requirements under NAHASDA; or
(c) Criminal activity; or
(d) Such other activity or activities--
by the recipient which place the housing program at sufficient risk
with the primary objectives of NAHASDA to warrant HUD taking the
remedial actions set forth under sections 401 and 402 of NAHASDA.
HUD's Position: HUD disagrees with the tribal representatives'
proposed definition for four reasons. First, the ``sufficient risk''
standard may prove to be essentially rudderless, leaving to HUD the
question of whether actions pose such a sufficient risk, without any
clear standard. Second, the standard is limited to such risk to the
primary objectives of the law, which term will not necessarily cover
``any provision'' of NAHASDA, as section 401 compels. Third, subjecting
any act or omission to the ``sufficient risk'' standard could have the
unintended effect of converting minor actions to ``substantial'' ones.
Fourth, the test ignores the statute's emphasis on past noncompliance.
This statutory provision, like many others in NAHASDA, is patterned
after the community development block grant (CDBG) legislation at title
I of the Housing and Community Development Act of 1974, as amended (42
U.S.C. 5301 et seq.). While little case law exists in this area, it is
apparent that the CDBG provision in question is one which has been
viewed with as much emphasis on its past nature as on substantiality
(See Kansas City v. HUD, 861 F.2d 739 (D.C.Cir. 1988)). The proposed
definition fails to take this aspect of the standard into account. HUD
welcomes public comment on what would be an appropriate standard for
this term or, for
[[Page 35727]]
that matter, whether the term should be defined in the regulation.
5. Issue: Performance Variable
Should a measure of performance be used as a variable within the
allocation formula for NAHASDA Block Grant funds? This issue was not
agreed to among tribal representatives.
Position Opposing the Use of a Performance Variable: Taking a stand
against the use of a performance variable in the allocation formula
does not mean taking a stand against quality performance; rather, it
means taking a stand against the use of an unnecessary and penal method
of evaluating how tribes serve their own people.
It is unnecessary because both the statute and the proposed
compliance regulations already address how to deal with poor
performance.
It is penal in that it disciplines a failing tribe, instead of
focusing on assisting that tribe.
NAHASDA requires the development of a formula for the allocation of
block grant funds based on need and maintenance of current housing
stock. It does not mandate or even suggest that such a formula address
an individual tribe's performance, presumably because NAHASDA itself
deals adequately with the issue by requiring annual performance
reports, providing for audits and monitoring, and specifying remedies
for non-compliance with NAHASDA (including failure to expend monies on
low-income activities).
The relief available to the Secretary allows him to make
adjustments in future grant amounts, to require the repayment of
misspent amounts, to seek civil remedies, and to appoint a replacement
TDHE, among other things. If these remedies are not the same as the
penalty imposed by the performance factor, then those who favor the
performance factor essentially are opting for an additional penalty. If
the remedies are the same, then by definition they are duplicative.
Those who favor a performance factor in the allocation formula
skirt the fact that failure to perform to standard would absolutely
result in the lowering of one tribe's subsequent allocations, thereby
resulting in the raising of the allocation of other tribes whose
performance was excellent. Such a position has merit at first blush,
but fails in the final analysis, for Indian tribes do not need to raise
themselves on the backs of their fallen brothers and sisters.
Technical assistance will be available to a tribe that performs
poorly, but that is the case with or without the use of a performance
variable, and the real trigger should come before failure, not in its
wake. Supporters of the performance factor argue that the penalty comes
only after the first full year of performance; they neglect to mention
that it can continue to come each year, year after year, with each new
application for a block grant. None of us has any experience with
NAHASDA or how it will affect the ability to provide quality housing
assistance in the first few years, especially for the smaller tribes
and newer TDHEs. To include a performance variable at this stage is
premature.
A performance variable in the allocation formula is neither
required nor contemplated by NAHASDA. Even without a performance
variable, all tribes will be required to develop performance objectives
and to describe how they intend to use their block grant funds. Even
without a performance factor, HUD will not continually provide funds to
a poorly performing tribe. With a performance factor many tribes will
unnecessarily perform their work under greater pressure and with less
of the support from their fellow tribes who will benefit from their
failure. The performance variable is unnecessary and insidious and
serves as just another way in which to divide tribes, just as it has
divided the rulemaking committee and resulted in nonconsensus.
Position in favor of the Performance Variable: Some Committee
members feel that in order for a tribe or TDHE to efficiently and
effectively meet the housing needs of its constituents its performance
should be quantified through tribally initiated performance objectives.
Towards this end, a system that will measure the performance of a tribe
or TDHE against objectives determined by each individual tribe was
developed by these members and presented to the Committee for
consideration. These members feel development of such objectives,
provided they respect and accommodate the diversity of tribal needs,
will not impose an undue burden on tribes or their TDHEs, but instead
will allow them to more effectively meet the needs of their
constituents. Development of such performance objectives will encourage
all recipients of NAHASDA funds to clearly describe objectives and
describe how they will use the limited resources made available by the
Congress in a timely and businesslike manner.
Crucial to the implementation of any performance objectives and
their codification in the formula allocation is a commitment to promote
and develop the technical and administrative capacity among all tribes
that administer affordable housing activities. The variable must
trigger the provision of technical assistance to those tribes or their
TDHEs that encounter difficulty meeting the objectives they set for
themselves. Towards this end, the variable is a proactive means for
tribes and their TDHEs that obligates the Secretary to promote and
develop greater technical and administrative capacity so that both
tribes and the Department are assured NAHASDA funds will be used to
provide affordable housing to deserving Native Americans.
The performance variable proposed for Committee consideration will
not measure performance against tribally set objectives until the end
of the year--as such it does not take effect until the second year of
NAHASDA. Throughout the year, tribes would have an opportunity to
update or change their objectives should events occur that are beyond
their control. The performance variable only reduces funding in the
following year to those tribes or TDHEs that fail to accomplish what
they said they would accomplish and then only if they fail to meet
several of their objectives set for the year.
While the temporary reduction in funds was construed by many
Committee members as a punitive measure, the proponents of the
performance variable feel it addresses a broader reality facing Indian
housing--continued provision of funds to a poorly performing entity is
not an efficient use of limited appropriations, poorly performing
recipients do not put as many people in housing as could otherwise be
done, and the current political climate will not continue to subsidize
poorly run programs that will not or do not use appropriated funds in a
timely manner for the purposes for which they were allocated.
Accordingly, members supporting the incorporation of the performance
variable in the allocation of NAHASDA funds feel it is imperative that
tribes be the driving force that initiate measures that assure the
maximum number of deserving Native Americans are provided a house to
call home and the technical and administrative capacities of all tribes
are increased to accomplish this objective. Rather than rely on the
Department or others to establish the criteria by which tribes will
perform, it is time for tribes to take the initiative and set their own
high standards--the performance variable and tribally determined
objectives as proposed take this important step.
[[Page 35728]]
VI. Items Highlighted for Comment
Public comment is invited on this proposed rule in its entirety,
including those issues highlighted in this preamble. The Committee
especially seeks comments on the following issues.
1. Local Cooperation Agreements and Tax Exemption Issues
Sections 101(c), (d), and (e) of NAHASDA, governing local co-
operation agreements, tax exemption, and user fees proved to be
problematic, and the statutory requirements were generally agreed to be
inappropriate and unreasonable in the context of a formula block grant
program. The Committee's tribal caucus approved and forwarded to the
Congress a technical amendment intended to deal with the problems.
However, in the event that the Congress does not act on this amendment,
potential recipients should be aware of the following issues:
(a) How to handle situations in which local governing bodies refuse
to enter into local cooperation agreements with recipients;
(b) How to handle payments where more than one local governing body
provides services;
(c) Should there be a limit on assistance to a unit or individual
below which the requirements of this section should not apply; and
(d) How to deal with local governing bodies that fail to comply
with their cooperation agreements. Should there be a certification by
the recipient each year that the local governing body has complied with
the certification agreement?
HUD is interpreting the statutory provisions for local cooperation
agreements, tax exemption, and user fees in the context of the long-
standing history of the requirements in the 1937 Act. Accordingly, the
applicability of these provisions is limited in the regulations to
rental housing (including homebuyer programs for lease-purchase of
homes) owned by the Indian tribe or TDHE.
2. Labor Standards of NAHASDA
NAHASDA requires prevailing wage rates determined under the Davis-
Bacon Act (40 U.S.C. 276a-276a-5) to be paid to laborers and mechanics
employed in the development of affordable housing projects. NAHASDA
also requires prevailing wages determined by HUD to be paid to
maintenance laborers and mechanics employed in the operation, and to
architects, technical engineers, draftsmen and technicians employed in
the development of such projects. Some Committee members felt that
applying prevailing wage standards to all development and maintenance
assisted in any way by NAHASDA is not practical or reasonable and that
some minimum exemption is needed. Placing these requirements on small
development and maintenance activities and certain types of projects
leveraged with other funds and with other owners would make many such
activities infeasible. Many committee members also felt that in
accordance with the Congressional findings of NAHASDA, Indian tribes
should have the right to apply their own wage standards or Tribal
Employment Rights Office (TERO) standards in an effort to encourage
tribal employment and that those should supersede Davis-Bacon and HUD
wage rates. Since Davis-Bacon and HUD rates are a statutory
requirement, the Congress must act to address or remove this provision.
3. Formula Used to Allocate NAHASDA Block Grant Funds
The Committee encourages comment on the following two issues--(a)
whether or not the definition of ``formula area'' accurately reflects
the geography that most tribes serve; and (b) how to develop a better
data source than the U.S. Census that is uniformly and consistently
collected throughout Indian areas for purposes of future formula
allocations.
Although not to be commented on in respect to the proposed rule,
tribes should be aware that their individual allocations under the
Needs component of the formula are based on two primary pieces of
information: (a) Geography--HUD will inform each tribe of the geography
being used for its ``formula area'' so that tribes may correct or
challenge the geographic definition for their area; and (b) data for
Native Americans living in the ``formula area''--the U.S. Census is
known to have made an undercount, each tribe should review the data for
its area (provided by HUD) to determine if it wishes to challenge the
Census data as allowed under the proposed rule.
4. Formula Set-Aside for Emergency and Disaster Relief
Some Committee members felt it was important that an emergency and
disaster relief fund be established with a portion of the Indian
Housing Block Grant funds. The initial proposal was that the fund be
capitalized at $10 million in its first year and that it be replenished
in future years such that it begins each year with a balance of $10
million. Other Committee members suggested that the fund should address
only disaster relief and that each Tribe or TDHE develop its own
reserves for emergency circumstances. The Committee is requesting
comments on (a) whether or not an emergency and/or disaster relief fund
should be developed and (b) if so, how it should be administered.
5. When May NAHASDA Block Grant Funds be Drawn-Down?
The Committee held informal discussions about whether NAHASDA grant
amounts will be drawn-down in lump-sum payments or whether they will be
drawn-down as the funds are due to be spent by a recipient. Tribal
leaders expressed the view that grant amounts should be distributed in
lump-sum up-front distributions so that recipients can invest the grant
amounts and earn and retain interest on the funds as tribes do in
Public Law 93-638 self-determination contracts and self-governance
compacts. Lump-sum distributions are also consistent with the
Congressional findings in NAHASDA. As set forth in section V.2. of this
preamble (nonconsensus issue regarding interest income), HUD has
determined that NAHASDA does not authorize the recipient to drawdown
grant funds in a lump sum.
6. Applicability of Section 3 of the Housing and Urban Development Act
of 1968 and the Lead Based Paint Requirements of 24 CFR Part 35
Tribal members expressed strong disagreement of the applicability
of these laws on the basis of their burdensome reporting requirements
or high compliance costs. Tribal members believed that compliance with
Indian preference requirements under NAHASDA and its regulations should
also be deemed as meeting the requirements of section 3 requiring a
preference for low and very low-income persons. HUD does not agree with
this tribal position. The Committee requested that HUD look at how the
section 3 and lead based paint requirements would be applied to the
IHBG program and whether NAHASDA's lead based paint requirements would
be the same as they are for the HOME program.
HUD's current regulations setting forth its section 3 requirements
(24 CFR part 135) and lead-based paint hazard requirements (24 CFR part
35) were published prior to the enactment of NAHASDA. HUD is currently
developing final rules revising 24 CFR parts 35 and 135. HUD will
address the impact of its section 3 and lead-based paint regulatory
requirements on Native American housing assistance, especially in light
of the changes made by
[[Page 35729]]
NAHASDA, in the development of the final rules.
7. The Applicability of 24 CFR Part 85--Uniform Administrative
Requirements for Grants
The Committee decided that some portions of 24 CFR part 85 may not
be applicable to the IHBG program. At the conclusion of the comment
period, the Committee will review the sections of part 85 and make a
determination as to which of the sections will apply. The public is
encouraged to submit comments on this issue to assist the Committee in
their determination.
8. Rents and Utilities
The Committee decided to give flexibility to recipients to
determine whether or not rent includes utilities. HUD believes this
implementation of NAHASDA is legally permissible, but notes that this
position is a departure from the long-standing HUD policy of including
utilities in rents.
VII. Reorganization of Existing Indian Housing Regulations
In addition to establishing a new 24 CFR part 1000, this rule
proposes to make several conforming amendments to HUD's existing Indian
housing regulations. For example, this proposed rule would remove 24
CFR part 950 from the Code of Federal Regulations. Part 950 sets forth
the regulatory requirements for the ``old'' system of funding which
expires on September 30, 1997. Accordingly, the removal of part 950 is
necessary to ensure that title 24 does not contain outdated
regulations.
This proposed rule would also 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 would consolidate HUD's Indian housing regulations in
the ``1000 series'' of title 24, and assist program participants by
presenting uniformity. In addition to the changes in designation, this
proposes to make amendments to the regulations currently set forth in
part 955. These revisions will reflect the amendments made by NAHASDA
to section 184 of the Housing and Community Development Act of 1992 (12
U.S.C. 1515z-13a).
As a result of these redesignations, several conforming amendments
must be made at the final rule stage to other HUD regulations that
cross-reference to 24 CFR parts 950, 953, and 955.
VIII. Justification for Reduced Comment Period
It is HUD's policy generally to afford the public not less than
sixty days for submission of comments on its notices of proposed
rulemaking (24 CFR 10.1). It was determined that it would not be
practicable to provide a public comment period greater than 45 calendar
days. As noted above, section 106(b)(1) of NAHASDA requires that HUD
issue final regulations implementing NAHASDA by September 1, 1997. In
developing a schedule for completing its work, the Committee has
attempted to strike a balance between the need for public input in the
regulatory implementation of NAHASDA, and the necessity of meeting the
statutory publication deadline. Given the number and complexity of
negotiated rulemaking issues, it was determined that it would not be
possible to issue proposed regulations before today. In order to permit
the publication of a final rule by September 1, 1997, and provide the
Committee with sufficient time to review and address public comments on
this proposed rule, HUD requests that comments be submitted by August
18, 1997. The Committee believes that this 45-day comment period will
provide interested persons with sufficient time to develop and submit
their comments.
The Committee recognizes the value and necessity of public comment
in the development of final regulations implementing NAHASDA and
welcomes comments on this proposed rule. All comments will be addressed
in the final rule. Further, the Committee has sought public input
throughout the negotiated rulemaking process. All Committee meetings
were announced in the Federal Register and were open to the public
without advance registration. Members of the public were also invited
to make statements during the negotiated rulemaking meetings and to
submit written statements for the Committee's consideration.
The Committee also notes that the negotiated rulemaking process
provided for the development of proposed regulations with the active
participation of Indian tribes. Forty-eight of the fifty-eight
Committee members were representatives of geographically diverse small,
medium, and large Indian tribes. These Committee members represented
tribal concerns and interests in the development of regulations
implementing NAHASDA and the proposals contained in this rule reflect
the consensus decisions of the Committee.
IX. Findings and Certifications
Paperwork Reduction Act of 1995
(a) The information collection requirements contained in this
proposed rule have been submitted to the Office of Management and
Budget (OMB) for review under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520). 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.
(b) Estimate of the total reporting and recordkeeping burden that
will result from the collection of information:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Est. avg.
Type of collection Proposed section of 24 CFR affected Number of Frequency of response time Annual burden
respondents response (hrs.) hrs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Real property acquisition requirements; 1000.14 (a)(1) and (a)(2).............. 400 1 24 9,600
information a recipient must provide an owner.
Advance written notice to residential tenants 1000.14(c)(2).......................... 400 1 .30 9,000
and homebuyers.
Maintenance of Uniform Relocation Act records.. 1000.14(f)(3).......................... 400 1 .15 60
Maintenance of conflict of interest records.... 1000.36................................ 400 1 .15 60
HUD approval for model activities and non- 1000.108 and 1000.118(b)............... 400 1 16 6,400
Indian families.
Income verification and document maintenance... 1000.128............................... 400 1 40 16,000
Notification to HUD of demolition/disposition.. 1000.134(b)............................ 400 1 6 2,400
Obtaining and maintenance of criminal 1000.154............................... 400 1 24 9,600
conviction information.
IHP submission requirements.................... 1000.212, 1000.142, 1000.222........... 400 1 120 42,000
[[Page 35730]]
Appeal of HUD determination regarding non- 1000.224............................... 400 1 16 6,400
compliance or IHP modification.
Certification and document maintenance for 1000.406............................... 400 1 1 400
title VI of NAHASDA.
Demonstration requirement for multiple 1000.410............................... 400 1 3 1,200
guarantees.
Demonstration requirement for financial 1000.412............................... 400 1 3 1,200
capacity.
Procedures and requirements for title VI loan 1000.420, 1000.422..................... 400 1 20 8,000
guarantee applications.
Amendment procedure for approved guarantees.... 1000.430............................... 400 1 1 400
Monitoring responsibility under NAHASDA........ 1000.502(a), 1000.512, 1000.538........ 400 1 30 12,000
Public comment on performance reports.......... 1000.518............................... 400 1 3 1,200
Program records maintenance.................... 1000.548............................... 400 1 1 400
Certification and document maintenance for lack 1005.105(f)............................ 400 1 1 400
of financial market access requirement in
section 184 loan guarantees.
Section 184 certification of compliance with 1005.112............................... 400 1 .15 42
tribal laws.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Burden, 126,762.
(c) In accordance with 5 CFR 1320.8(d)(1), the Department is
soliciting comments from members of the public and affected agencies
concerning the proposed collection of information to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond; including through the use of appropriate automated
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
(d) OMB is required to make a decision concerning the collection of
information contained in this proposed rule between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not effect the
deadline for the public to comment on the proposed rule. Comments on
the paperwork collection requirements contained in this rule must be
submitted to those persons indicated in the ADDRESSES section of this
preamble.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made 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). The Finding of No Significant Impact 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
[[Page 35731]]
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 proposed to be amended as
follows:
PART 950--[REMOVED]
1. Part 950 is removed.
PART 953 [REDESIGNATED]
2. Part 953 is redesignated as part 1003.
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 is the objective of the IHBG program?
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?
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 an 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 24 CFR part 85?
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?
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 activities 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 How will HUD determine whether to approve model housing
activities or other housing programs?
1000.112 How long does HUD have to review and act on a model
housing activity or other housing program proposal?
1000.114 What should HUD do before declining a model housing
activity or other housing program?
1000.116 What recourse does a recipient have if HUD disapproves a
model housing activity or other program?
1000.118 Under what conditions may non low-income Indian families
participate in the program?
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 any leverage funding, including any federal or state program
and still be considered an affordable housing activity?
1000.124 What is the maximum and minimum rent or homebuyer payment
a recipient can charge a low-income rental tenant or homebuyer?
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% 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 Indian housing units owned or operated
pursuant to an ACC?
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 before NAHASDA subject to
the useful life provisions of section 205(a)(2)?
1000.146 Is a homebuyer required to remain low-income throughout
the term of their participation in a housing program funded under
NAHASDA?
1000.148 What law will an owner or manager follow in providing
adequate written notice of eviction or termination of a lease?
1000.150 How many 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 What housing development cost limits are applicable to
ensure modest housing construction under NAHASDA?
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 a recipient
of the grant?
1000.206 How is a TDHE designated?
1000.208 Is submission of an IHP required?
1000.210 Who prepares and submits an IHP?
1000.212 What are the minimum requirements for the IHP?
1000.214 Are there separate IHP requirements for small Indian
tribes?
1000.216 Can the certification requirements of section 102(c)(5) of
NAHASDA be waived by HUD?
1000.218 If HUD changes its IHP format will Indian tribes be
involved?
1000.220 What is the process for HUD review of IHPs and IHP
amendments?
1000.222 Can an Indian tribe or TDHE amend its IHP?
1000.224 Can HUD's determination regarding the non-compliance of an
IHP or a modification to an IHP be appealed?
1000.226 What are eligible administrative and planning expenses?
1000.228 When is a local cooperation agreement required for
affordable housing activities?
[[Page 35732]]
1000.230 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 Who can make modifications to the IHBG formula?
1000.308 What are the components of the IHBG formula?
1000.310 How is the need component developed?
1000.312 What if a formula area is served by more than one Indian
tribe?
1000.314 What are data sources for the need variables?
1000.316 May Indian tribes, TDHEs, or HUD challenge the data from
the U.S. Decennial Census or provide an alternative source of data?
1000.318 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?
1000.320 How may an Indian tribe, TDHE, or HUD challenge data?
1000.322 How is the need component adjusted for local area costs?
1000.324 What is current assisted stock?
1000.326 What is formula current assisted stock?
1000.328 How is the Formula Current Assisted Stock (FCAS) Component
developed?
1000.330 How is the Section 8 criteria developed?
1000.332 How long will Section 8 units be counted for purposes of
the formula?
1000.334 How will the formula allocation be affected if an Indian
tribe or TDHE removes some or all of its Formula Current Assisted
Stock from inventory?
1000.336 Do units under Formula Current Assisted Stock ever expire
from inventory used for the formula?
1000.338 How are Formula Current Assisted Stock and Section 8
adjusted for local area costs?
1000.340 IHA financed units included in the determination of
Formula Current Assisted Stock?
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 constitutes tribal approval to issue notes or other
obligations under title VI of NAHASDA?
1000.406 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?
1000.408 What conditions shall HUD prescribe when providing a
guarantee for notes or other obligations issued by an Indian tribe?
1000.410 Can an issuer obtain a guarantee for more than one note or
other obligation at a time?
1000.412 How is an issuer's financial capacity demonstrated?
1000.414 What is a repayment contract in a form acceptable to HUD?
1000.416 Can grant funds be used to pay costs incurred when issuing
notes or other obligations?
1000.418 May grants made by HUD under section 603 of NAHASDA be
used to pay net interest costs incurred when issuing notes or other
obligations?
1000.420 What are the procedures for applying for loan guarantees
under title VI of NAHASDA?
1000.422 What are the application requirements for guarantee
assistance under title VI of NAHASDA?
1000.424 How does HUD review a guarantee application?
1000.426 For what reasons may HUD disapprove an application or
approve an application for an amount less than that requested?
1000.428 When will HUD issue notice to the applicant if the
application is approved at the requested or reduced amount?
1000.430 Can an amendment to an approved guarantee be made?
1000.432 How will HUD allocate the availability of loan guarantee
assistance?
1000.434 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 is the Indian tribe's responsibility if the 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?
1000.522 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 adjustments may HUD make in the amount of NAHASDA
annual grants under section 405 of NAHASDA?
1000.530 What are remedies available for substantial noncompliance?
1000.532 What hearing procedures will be used?
1000.534 When may HUD require replacement of a TDHE?
1000.536 When does failure to comply substantially cease?
1000.538 What audits are required?
1000.540 Who is the cognizant audit agency?
1000.542 Are audit costs an eligible program expense?
1000.544 Must a copy of the recipient's audit pursuant to the
Single Audit Act be submitted to HUD?
1000.546 If the TDHE is the recipient, does it have to submit a
copy of its audit to the Indian tribe?
1000.548 How long must the recipient maintain program records?
1000.550 Which agencies have right of access to the recipient's
records relating to activities carried out under NAHASDA?
1000.552 Does the Freedom of Information Act (FOIA) apply to
recipient records?
1000.554 Does the Federal Privacy Act apply to recipient records?
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.
This part supplements the statutory requirements set forth in NAHASDA.
Sec. 1000.2 What are the Guiding Principles in the implementation of
NAHASDA?
The Secretary shall use the following Congressional findings set
forth in section 2 of NAHASDA as the guiding principles in the
implementation of NAHASDA:
(a) The Federal government has a responsibility to promote the
general welfare of the Nation:
(1) By using Federal resources to aid families and individuals
seeking affordable homes in safe and healthy environments and, in
particular,
[[Page 35733]]
assisting responsible, deserving citizens who cannot provide fully for
themselves because of temporary circumstances or factors beyond their
control;
(2) By working to ensure a thriving national economy and a strong
private housing market; and
(3) 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.
(b) 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;
(c) 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.
(d) 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.
(e) 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.
(f) 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.
(g) 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
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.)
Sec. 1000.4 What is the objective of the IHBG program?
The primary objective of the IHBG program is the provision of
affordable, decent, safe and sanitary housing and a suitable living
environment, principally for Native American and Alaskan Native persons
of low-income.
Sec. 1000.6 What is the nature of the IHBG program?
The IHBG program is a formula grant program whereby eligible
recipients of funding receive an equitable share of periodic
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?
Provisions of this part may be waived in accordance with 24 CFR
5.110.
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,''
``Median income,'' ``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. Annual income is the anticipated total income from
all sources received by the family head and spouse (even if temporarily
absent) and by each additional member of the family, including all net
income derived from assets, for the 12-month period following the
effective date of the initial determination or reexamination of income,
exclusive of certain types of income as provided in paragraph (2) of
this definition.
(1) Annual income includes, but is not limited to:
(i) The full amount, before any payroll deductions, of wages and
salaries, overtime pay, commissions, fees, tips and bonuses, and other
compensation for personal services;
(ii) The net income from operation of a business or profession.
Expenditures for business expansion or amortization of capital
indebtedness shall not be used as deductions in determining net income.
An allowance for depreciation of assets used in a business or
profession may be deducted, based on straight line depreciation, as
provided in Internal Revenue Service regulations. Any withdrawal of
cash or assets from the operation of a business or profession will be
included in income, except to the extent the withdrawal is
reimbursement of cash or assets invested in the operation by the
family;
(iii) Interest, dividends, and other net income of any kind from
real or personal property. Expenditures for amortization of capital
indebtedness shall not be used as deductions in determining net income.
An allowance for depreciation is permitted only as authorized in
paragraph (1)(ii) of this definition. Any withdrawal of cash or assets
from an investment will be included in income, except to the extent the
withdrawal is reimbursement of cash or assets invested by the family.
Where the family has net family assets in excess of $5,000, annual
income shall include the greater of the actual income derived from all
net family assets or a percentage of the value of such assets based on
the current passbook savings rate as determined by HUD;
(iv) The full amount of periodic amounts received from social
security, annuities, insurance policies, retirement funds, pensions,
disability, or death benefits and other similar types of periodic
receipts, including a lump-sum amount or prospective monthly amounts
for the delayed start of a periodic amount (except as provided in
paragraph (2)(xiv) of this definition):
(v) Payments in lieu of earnings, such as unemployment and
disability compensation, worker's compensation, and severance pay
(except as provided in paragraph (2)(iii) of this definition);
(vi) Welfare assistance. If the welfare assistance payment includes
an amount specifically designated for shelter and utilities that is
subject to adjustment by the welfare assistance agency in
[[Page 35734]]
accordance with the actual cost of shelter and utilities, the amount of
welfare assistance income to be included as income shall consist of:
(A) The amount of the allowance or grant exclusive of the amount
specifically designated for shelter or utilities; plus
(B) The maximum amount that the welfare assistance agency could, in
fact, allow the family for shelter and utilities. If the family's
welfare assistance is ratably reduced from the standard of need by
applying a percentage, the amount calculated under paragraph (1)(vi)(B)
of this definition shall be the amount resulting from one application
of the percentage;
(vii) Periodic and determinable allowances, such as alimony and
child support payments, and regular contributions or gifts received
from persons not residing in the dwelling; and
(viii) All regular pay, special pay, and allowances of a member of
the Armed Forces (but see paragraph (2)(vii) of this definition).
(2) Annual income does not include the following:
(i) Income from employment of children (including foster children)
under the age of 18 years;
(ii) Payments received for the care of foster children or foster
adults (usually individuals with disabilities, unrelated to the tenant
family, who are unable to live alone):
(iii) Lump-sum additions to family assets, such as inheritances,
insurance payments (including payments under health and accident
insurance and worker's compensation), capital gains, and settlement for
personal or property losses (but see paragraph (1)(v) of this
definition);
(iv) Amounts received by the family that are specifically for, or
in reimbursement of, the cost of medical expenses for any family
member;
(v) Income of a live-in aide;
(vi) The full amount of student financial assistance paid directly
to the student or to the educational institution;
(vii) The special pay to a family member serving in the Armed
Forces who is exposed to hostile fire;
(viii)(A) Amounts received under training programs funded by HUD;
(B) Amounts received by a disabled person that are disregarded for
a limited time for purposes of Supplemental Security Income eligibility
and benefits because they are set aside for use under a Plan for
Achieving Self-Support (PASS);
(C) Amounts received by a participant in other publicly assisted
programs that are specifically for or in reimbursement of out-of-pocket
expenses incurred (special equipment, clothing, transportation, child
care, etc.) and that are made solely to allow participation in a
specific program;
(D) Amounts received under a student service stipend. A resident
service stipend is a modest amount (not to exceed $200 per month)
received by an Indian housing resident for performing a service for the
IHA, on a part-time basis, that enhances the quality of life in the
development. Such services may include, but are not limited to fire
patrol, hall monitoring, lawn maintenance and resident initiatives
coordination. No resident may receive more than one such stipend during
the same period of time.
(E) Incremental earnings and benefits resulting to any family
member from the participation in qualifying state or local employment
training programs (including training programs not affiliated with
local government) and training of a family member as resident
management staff. Amounts excluded by this provision must be received
under employment training programs with clearly defined goals and
objectives and are excluded only for the period during which the family
member participates in the employment training.
(ix) Temporary, nonrecurring, or sporadic income (including gifts);
(x) Earnings in excess of $480 for each full-time student 18 years
old or older (excluding the head of household and spouse);
(xi) Adoption assistance payments in excess of $480 per adopted
child;
(xii) The earnings and benefits to any family member resulting from
the participation in a program providing employment training and
supportive services in accordance with the Family Support Services Act
of 1988, section 22 of the 1937 Act, or any comparable Federal, state,
tribal, or local law during the exclusion period. For purposes of this
paragraph (2)(xii) of this definition, the following definitions apply:
(A) Comparable Federal, state, tribal, or local law means a program
providing employment training and supportive services that--
(1) Is authorized by Federal, state, tribal, or local law;
(2) Is funded by Federal, state, tribal, or local government;
(3) Is operated or administered by a public agency; and
(4) Has as its objective to assist participants in acquiring
employment skills.
(B) Exclusion period means the period during which the family
member participates in a program described in this definition, plus 18
months from the date the family member begins the first job acquired by
the family member after completion of such program that is not funded
by public housing assistance under the 1937 Act. If the resident is
terminated from employment with good cause, the exclusion period shall
end.
(C) Earnings and Benefits means the incremental earnings and
benefits resulting from a qualifying employment training program or
subsequent job;
(xiii) Deferred periodic amounts from supplemental security income
and social security benefits that are received in a lump sum amount or
in prospective monthly amounts;
(xiv) Amounts received by the family in the form of refunds or
rebates under state or local law for property taxes on the dwelling
unit;
(xv) Amounts paid by a state agency to a family with a
developmentally disabled family member living at home to offset the
cost of services and equipment needed to keep the developmentally
disabled family member at home; or
(xvi) Amounts specifically excluded by any other Federal statute
from consideration as income for purposes of determining eligibility or
benefits under a category of assistance programs that includes
assistance under the 1937 Act. A notice is published from time to time
in the Federal Register and distributed to recipients identifying the
benefits that qualify for this exclusion. Updates will be published and
distributed when necessary.
(3) If it is not feasible to anticipate a level of income over a
12-month period, the income anticipated for a shorter period may be
annualized subject to a redetermination at the end of the shorter
period.
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.
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 or
a TDHE is authorized by one or more
[[Page 35735]]
Indian tribes to provide assistance under NAHASDA for affordable
housing. 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.
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'' has the same meaning as an ``individual with
handicaps'' set forth at 24 CFR 8.3, which 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, emotional illness, drug addiction and alcoholism.
Total development cost. The sum of all HUD-approved costs for a
project including all undertakings necessary for administration,
planning, site acquisition, demolition, construction or equipment and
financing (including the payment of carrying charges), and for
otherwise carrying out the development of the project. The maximum
total development cost excludes off-site water and sewer facilities
development costs; costs normally paid for by other entities, but
included in the development cost budget for the project for contracting
or accounting convenience; and any donations received from public or
private sources.
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) Title II of the Civil Rights Act of 1968 (25 U.S.C. 1301-1303),
to the extent that such title is applicable, and other applicable
Federal civil rights statutes. Title II provides that no Indian tribe,
in exercising powers of self government, shall deny to any person
within its jurisdiction equal protection of its laws or deprive any
person of liberty or property without due process of law.
(d) In accordance with section 201(b)(5) of NAHASDA, 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.) 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
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
[[Page 35736]]
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 cited in this paragraph.
(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) As described in section 104(b) of NAHASDA, contracts and
agreements for assistance, sale or lease under NAHASDA must require
prevailing wage rates determined under the Davis-Bacon Act (40 U.S.C.
276a-276a-5) to be paid to laborers and mechanics employed in the
development of affordable housing projects. Section 104(b) also
mandates that these contracts and agreements require that prevailing
wages determined 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
such projects.
(b) 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.
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.
[[Page 35737]]
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 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 to
such 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.
Sec. 1000.22 Are the costs of the environmental review an eligible
cost?
Yes, costs of completing the environmental review are eligible
costs.
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?
Except as specified in this part, the uniform administrative
requirements for grants and cooperative agreements set forth in 24 CFR
part 85 are applicable to grants under this part. In the event that
there are conflicts between the requirements of part 85 and the
requirements of this part, the requirements of this part shall govern.
Sec. 1000.28 May a self-governance Indian tribe be exempted from the
applicability of 24 CFR part 85?
A self-governance Indian tribe may request that it be exempt from
24 CFR part 85 and instead follow its own laws, regulations,
administrative requirements, standards and systems. Upon receipt of
such written request, HUD shall conduct a timely review of the Indian
tribe's administrative requirements, standards and systems to determine
if they fulfill the fundamental purposes of 24 CFR part 85. If so, the
Indian tribe will be obligated to follow its own laws, regulations and
policies. If HUD determines that the Indian tribe must comply with part
85, the Indian tribe may ask for a redetermination from HUD.
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 or 24 CFR 84.42 (as
applicable) shall apply. In all cases not governed by 24 CFR 85.36 or
24 CFR 84.42, the provisions of this part 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 family ties.
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 administration or
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?
The following factors must be considered.
(a) 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. In evaluating the hardship which
would result to the person affected, HUD will consider if the person is
a member of a group or class of intended beneficiaries of the assisted
activities and if they would receive generally the same benefits as
would be provided to the group as a class.
(b) Whether the exception would provide a significant cost benefit
or essential expert knowledge to the program, activity, or project
which would otherwise not be available.
(c) Whether an opportunity was provided for open competitive
bidding or negotiations.
(d) Any other relevant considerations.
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
5 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. 4012a(a)).
[[Page 35738]]
Sec. 1000.40 Do lead-based paint poisoning prevention requirements
apply to affordable housing activities under NAHASDA?
Yes, the provisions of 24 CFR part 35 which provide lead-based
paint poisoning prevention requirements are applicable.
Sec. 1000.42 Are the requirements of section 3 of the Housing and
Urban Development Act of 1968 applicable?
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)). The purpose of Section 3 is to ensure that employment
and other economic opportunities generated by certain HUD financial
assistance for housing (including public and Indian housing) shall, to
the greatest extent feasible, and consistent with existing Federal,
state, and local laws and regulations, be directed to low-and very low-
income persons, particularly those who are recipients of government
assistance for housing, and to business concerns which provide economic
opportunities to low-and very low-income persons residing in the area
where the work is to be performed.
Sec. 1000.44 What prohibitions on the use of debarred, suspended or
ineligible contractors apply?
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, 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.
Subpart B--Affordable Housing Activities
Sec. 1000.101 What is affordable housing?
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. 1000.118. Non-low income Indian families
currently residing in housing assisted under the 1937 Act are presumed
to have met the requirements of this section, absent evidence to the
contrary.
(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. Non-
Indian families currently residing in housing assisted under the 1937
Act are presumed to have met the requirements of this section, absent
evidence to the contrary.
Sec. 1000.106 What activities under title II of NAHASDA require HUD
approval?
(a) Activities under NAHASDA sections 201(b)(2) (Housing for non-
low income Indian families) and 202(6) (Model activities), require HUD
approval.
(b) Activities under section 201(b)(3) of NAHASDA for non-Indian
families do not require HUD approval but only require 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 or other housing programs as defined in NAHASDA
sections 201(b)(2) and 202(6) for non low-income families. Proposals
may be submitted in the recipient's IHP one year plan or at any time by
amendment of the IHP, or by special request to HUD at any time.
Sec. 1000.110 How will HUD determine whether to approve model housing
activities or other housing programs?
HUD will review all proposals with the goal of approving the
program 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. 1000.112 How long does HUD have to review and act on a model
housing activity or other housing program proposal?
Whether submitted in the IHP one year plan or at any other time by
amendment, HUD will have sixty days after receiving the proposal to
notify the recipient that the proposal for model activities or other
housing programs is approved or disapproved. If no decision is made by
HUD within sixty days of receiving the proposal, the proposal is deemed
to have been approved by HUD.
Sec. 1000.114 What should HUD do before declining a model housing
activity or other housing program?
HUD shall consult with a recipient regarding the recipient's model
housing activity or other housing program before disapproval. 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. 1000.116 What recourse does a recipient have if HUD disapproves a
model housing activity or other program?
(a) Within thirty days of receiving HUD's denial of a model housing
activity or other program, the recipient may request reconsideration of
the denial, in writing. The request shall set forth justification for
the reconsideration.
(b) Within twenty-one 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 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 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. 1000.118 Under what conditions may non low-income Indian families
participate in the program?
(a) A recipient may provide the following types of assistance to
non low-income Indian families under the conditions specified in
paragraphs (b), (c) and (d) of this section:
[[Page 35739]]
(1) Homeownership activities under section 202(2) of NAHASDA;
(2) Model activities under section 202(6) of NAHASDA; and
(3) Loan guarantee activities under title VI of NAHASDA.
(b) A recipient must demonstrate to HUD that there is a need for
housing for each family which cannot reasonably be met without such
assistance. HUD shall make approvals consistent with the intent of
NAHASDA.
(c) A recipient may use up to ten percent of the recipient's annual
grant amount for families whose income falls within 80 to 100% of the
median income without HUD approval. HUD approval is required if a
recipient plans to use more than ten percent of its annual grant amount
for such assistance or to provide housing for families over 100% of
median income.
(d) The non low-income Indian family must pay back, at a minimum:
(1) The amount a low income family at 80% median income is paying
back for the assistance; plus
(2) The fair market value of the assistance multiplied by the
percentage by which the income of the non-low income Indian family
exceeds 80% of median income.
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 is the maximum and minimum rent or homebuyer
payment a recipient can charge a low-income rental tenant or homebuyer?
A recipient can charge a low-income rental tenant or homebuyer
payments not to exceed thirty percent (30%) 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.
Sec. 1000.126 May a recipient charge flat or income-adjusted rents?
Yes, providing rental or homebuyer payment of the low-income family
does not exceed thirty percent (30%) 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% 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% 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 Indian housing units owned or operated pursuant
to an ACC?
(a) A recipient (or entity funded by a recipient) may undertake a
planned demolition or disposal of Indian housing units owned or
operated pursuant to an ACC when:
(1) The recipient has performed a financial analysis demonstrating
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;
(2) The housing unit has been condemned by the government which has
authority over the unit;
(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) The recipient cannot take any action to demolish or dispose of
the property other than performing the analysis cited in paragraph (a)
of this section 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 recipient's 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, the recipient will
use a sale process designed to maximize the sale price. 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 this part.
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. These requirements are in
addition to applicable flood insurance requirements under Sec. 1000.38.
(b) The recipients shall not require insurance (other than flood
insurance where required under Sec. 1000.38) 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.
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.
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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 accord 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 for Secretarial
determination the useful life of each assisted housing unit in each of
its developments.
Sec. 1000.144 Are Mutual Help homes developed before NAHASDA subject
to the useful life provisions of section 205(a)(2)?
No.
Sec. 1000.146 Is a homebuyer 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.
Sec. 1000.148 What law will an owner or manager follow in providing
adequate written notice of eviction or termination of a lease?
Section 207(a) of NAHASDA requires that the owner or manager give
adequate written notice of termination of the lease, in accordance with
the period of time required under State, tribal, or local law.
Notwithstanding any State, tribal, or local law, the notice must inform
the resident of the opportunity, prior to any hearing or trial, to
examine any relevant documents, records, or regulations directly
related to the eviction or termination.
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 officer, employee, or authorized 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 or his designee and are only to be used for the
purposes stated in section 208 of NAHASDA and the regulations in this
part.
Sec. 1000.156 What housing development cost limits are applicable to
ensure modest housing construction under NAHASDA?
Unless approved by HUD, the total development cost (TDC) per unit
will be no more than 100% of the TDC. HUD will make every effort to
ensure that TDC accurately reflects the cost of construction. TDC shall
include the costs of making a project meet the accessibility
requirements of 24 CFR 8.22 and 24 CFR 8.23 for new construction and
alterations of existing housing facilities.
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
Indian tribes or their designated recipients who have submitted to HUD
for that fiscal year an IHP in accordance with Sec. 1000.212 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 tribes.
Sec. 1000.204 How does an Indian tribe designate itself as a 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 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.
Sec. 1000.210 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. 1000.212 What are the minimum requirements for the IHP?
The minimum IHP requirements are set forth in sections 102(b) and
102(c) of NAHASDA. Recipients are only required to provide IHPs that
contain these minimum elements in a form prescribed by HUD. 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. 1000.214100 Are there separate IHP requirements for small Indian
tribes?
No. HUD requirements for IHPs are minimal and HUD has general
authority under section 101(b)(2) of NAHASDA to waive the 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.
Sec. 1000.216 Can the certification requirements of section 102(c)(5)
of NAHASDA be waived by HUD?
Yes, HUD may waive these certification requirements as provided
[[Page 35741]]
in section 101(b)(2) of NAHASDA. Recipients granted such a waiver must
still comply with the nondiscrimination requirements set forth in
Sec. 1000.12.
Sec. 1000.218 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. 1000.220 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), (a)(2), 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 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. 1000.224.
(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 certifications 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. 1000.222 Can an Indian tribe or TDHE amend its IHP?
Yes. Section 103(c) of the NAHASDA specifically provides that a
recipient may submit modifications or revisions of their IHP to HUD for
review and determination of compliance. 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 will consider modifications to the IHP in accordance with
Sec. 1000.220. HUD will act on amended IHPs within 60 days.
Sec. 1000.224 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. 1000.226 What are eligible administrative and planning expenses?
Eligible administrative and planning expenses of the IHBG program
include, but are not limited to:
(a) Costs of overall program management;
(b) Coordination monitoring and evaluation;
(c) Preparation of the IHP;
(d) Preparation of the annual performance report; and
(e) Collection of data for purposes of challenging data used in the
IHBG formula (see Sec. 1000.320(a)).
Sec. 1000.228 When is a local cooperation agreement required for
affordable housing activities?
The requirement for a local cooperation agreement applies to
assistance of rental and lease-purchase homeownership units under the
1937 Act or NAHASDA which are owned by the Indian tribe or TDHE.
Sec. 1000.230 When does the requirement for exemption from taxation
apply to affordable housing activities?
The requirement for exemption from taxation applies only to
assistance of rental and lease-purchase homeownership units under the
1937 Act or NAHASDA 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 (excluding utilities
and expenses allowed under Sec. 950.715) computed in accordance with
Sec. 950.710 which is used to compute the amount of operating subsidy.
The ``AEL factor'' is the relative difference between a local area AEL
and the national weighted average for AEL.
Annual Income. For purposes of the IHBG formula, annual income is a
household's total income as defined by the U.S. Census Bureau.
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
[[Page 35742]]
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 nonmetropolitan county FMR areas. The ``FMR factor'' is the
relative difference between a local area FMR and the national weighted
average for FMR.
Formula area is the geographic area over which the Indian tribe
exercises jurisdiction or for which an Indian tribe or TDHE has an
executed local cooperation agreement. The term ``Formula area''
includes, but is not limited to:
(1) A reservation;
(2) Trust land;
(3) Alaska Native Village Statistical Area;
(4) Alaska Native Claims Settlement Act Corporation Service Area;
(5) Tribal Jurisdictional Statistical Area;
(6) Tribal Designated Statistical Area;
(7) Former Indian Reservation Areas in Oklahoma;
(8) Congressionally Mandated Service Area; and
(9) Department of the Interior Near-Reservation Service Area.
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.
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.
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. The formula may be modified:
(a) Upon development of a set of measurable and verifiable data
directly related to Native American 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; or
(b) If it is determined by HUD that subsidy is needed to operate
and maintain NAHASDA units.
Sec. 1000.306 Who can make modifications to the IHBG formula?
HUD can make modifications in accordance with Sec. 1000.304
provided that any changes proposed by HUD are published and made
available for public comment in accordance with applicable law before
their implementation.
Sec. 1000.308 What are the components of the IHBG formula?
The IHBG formula consists of three components:
(a) Need;
(b) Formula Current Assisted Housing Stock (CAS); and
(c) Section 8.
Sec. 1000.310 How is the need component developed?
The need component consists of seven criteria. They are:
(a) American Indian and Alaskan Native (AIAN) Households with
housing cost burden greater than 50% of annual income;
(b) AIAN Households which are overcrowded or without kitchen or
plumbing;
(c) Housing Shortage which is the number of AIAN households with an
annual income less than 80% of median income reduced by the combination
of current assisted stock and units developed under NAHASDA;
(d) AIAN households with annual income less than 30% of median
income;
(e) AIAN households with annual income between 30% and 50% of
median income;
(f) AIAN households with annual income between 50% and 80% of
median income;
(g) AIAN persons.
Sec. 1000.312 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.
(b) Tribal membership in the geographic area 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. 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 60 days
before formula allocation.
Sec. 1000.314 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. 1000.316 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 questions asked in a tribal survey are
consistent with those asked in the U.S. Decennial Census and responses
are gathered and presented in a method acceptable to HUD.
Sec. 1000.318 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 and projected allocation to be used for the formula not less than
120 days before an allocation.
Sec. 1000.320 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. 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 are collected in a manner acceptable to HUD,
should submit the data and proper documentation to HUD no later than 90
days prior to scheduled distribution of NAHASDA block grant funds. 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:
[[Page 35743]]
(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. 1000.116).
(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. 1000.322 How is the need component adjusted for local area costs?
The need component is adjusted by the TDC factor.
Sec. 1000.324 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 IHP.
Sec. 1000.326 What is formula current assisted stock?
Formula current assisted stock is current assisted stock as
described in Sec. 1000.324 plus housing units in the development
pipeline as of September 30, 1997 when they are owned or operated by
the Indian tribe or TDHE and are under management as indicated in the
IHP.
Sec. 1000.328 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 two
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; and
(2) 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. 1000.330 How is the Section 8 criteria developed?
The Section 8 criteria includes one variable: The number of Section
8 units under contract on September 30, 1997 where the Section 8
contract has expired or is due to expire in any subsequent Fiscal Year
(as shown in an Indian tribe's or TDHE's IHP) multiplied by the
national per unit average for Section 8 subsidy adjusted for inflation.
Sec. 1000.332 How long will Section 8 units be counted for purposes of
the formula?
Section 8 units shall continue as rental units and be included in
the formula as long as they continue to be operated as low income
rental units as included in the Indian tribe's or TDHE's IHP.
Sec. 1000.334 How will the formula allocation be affected if an Indian
tribe or TDHE removes some or all of its Formula Current Assisted Stock
from inventory?
The formula allocation will be reduced by the number of units
removed from the inventory. Such information shall be indicated through
the Annual Performance Report.
Sec. 1000.336 Do units under Formula Current Assisted Stock ever
expire from inventory used for the formula?
Yes. Mutual Help and Turnkey III units shall be removed from the
Formula Current Assisted Stock when the Indian tribe or TDHE 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
conveyance of each Mutual Help or Turnkey III unit occurs when a unit
becomes eligible for conveyance by the terms of the MHOA and further
provided that the Indian tribe or TDHE actively enforces strict
compliance by the homebuyer with the terms and conditions of the MHOA,
including the requirements for full and timely payment. Rental units
shall continue to be included for formula purposes as long as they
continue to be operated as low income rental units.
Sec. 1000.338 How are Formula Current Assisted Stock and Section 8
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 the TDC factor.
Sec. 1000.340 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.
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 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. 1000.406 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
[[Page 35744]]
tribe has attempted to obtain financing and can not do so in a timely
manner without a guarantee from the HUD. Written documentation shall be
maintained by the Indian tribe or TDHE to support the certification.
Sec. 1000.408 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, notes or other obligation guaranteed under title VI
of NAHASDA, including the security given for the note or obligation,
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 not exceed twenty years; and
(d) Lender and issuer/borrower must certify that they acknowledge
and agree to comply with all applicable tribal laws.
Sec. 1000.410 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 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. 1000.412 How is an issuer's financial capacity demonstrated?
An issuer must demonstrate its ability to meet its obligations and
to protect and maintain the viability of housing developed or operated
pursuant to the 1937 Act.
Sec. 1000.414 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 may be required by HUD at a later date.
Sec. 1000.416 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. 1000.418 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. 1000.420 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. 1000.422 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) The drug-free workplace certification required under 24 CFR
part 24.
(4) The certification regarding debarment and suspension required
under 24 CFR part 24.
(5) It possesses the legal authority to borrow or issue obligations
and to use the guaranteed funds in accordance with the requirements of
this subpart;
(6) 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.
(7) The borrower has complied with the regulations of section
602(a) of NAHASDA.
(8) The borrower will comply with the requirements governing
displacement, relocation, and real property acquisition described in
subpart A of this part.
(9) The borrower has complied and will comply with the other
provisions of NAHASDA, applicable regulations, and other applicable
laws.
Sec. 1000.424 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
[[Page 35745]]
NAHASDA and the implementing regulations in this part.
(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. 1000.426 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 length of the proposed repayment period;
(2) 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;
(3) Evidence that the borrower will not continue to receive grant
assistance under this part during the proposed repayment period;
(4) The borrower's ability to furnish adequate security pursuant to
section 602(a) of NAHASDA;
(5) 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.
Sec. 1000.428 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 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
conditions as HUD may specify in the commitment documents in a
particular case.
Sec. 1000.430 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. 1000.432 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 jurisdiction of that office.
(b) These allocated amounts shall remain exclusively available for
loan guarantee assistance for Indian tribes or TDHEs in the
jurisdiction of that office until committed by HUD for loan guarantees
or until the end of the third quarter of the fiscal year. During the
last quarter of the fiscal year, any residual loan guarantee commitment
amount in all Area ONAP allocations shall be made available to
guarantee loans for Indian tribes or TDHEs regardless of their
location.
(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. 1000.434 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 periodically reviewing and auditing the
recipient as set forth in Sec. 1000.520, 24 CFR 8.56, and 24 CFR
146.31.
(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.
[[Page 35746]]
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 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 is the Indian tribe's responsibility if the tribal
monitoring identifies compliance concerns?
The Indian tribe's responsibility is 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 in
a format acceptable by HUD. Annual performance reports shall contain:
(a) The information required by section 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
(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.
Sec. 1000.514 When must the annual performance report be submitted?
The annual performance report must be submitted within 45 days of
the end of the 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
fiscal 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) Whether the recipient has complied with the IHP of the grant
beneficiary; and
(c) Whether the performance reports of the recipient are accurate.
Sec. 1000.522 How will HUD give notice of on-site reviews?
Whenever an on-site review is to be conducted, HUD shall give
written notice to the Indian tribe and TDHE that a review will be
commenced. 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 the audit report have been
addressed within the prescribed time period.
(d) Accurate annual performance reports were submitted to HUD
within 45 days after the completion of the recipient's fiscal 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 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 drawdowns of grant funds;
(g) Records of comments and complaints by citizens and
organizations within the Indian area;
(h) Litigation; and
(i) Any other relevant information.
Sec. 1000.528 What adjustments may HUD make in the amount of NAHASDA
annual grants under section 405 of NAHASDA?
HUD may 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.
[[Page 35747]]
Sec. 1000.530 What are remedies 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
provision 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. 1000.534,
provide a replacement TDHE for the recipient.
(b) HUD may on 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 provision 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. 1000.532 What hearing procedures will be used?
(a) The hearing procedures in 24 CFR part 26 shall be used.
(b) For hearings under section 504 of the Rehabilitation Act of
1973 or the Age Discrimination Act of 1975, the procedures at 24 CFR
part 180 shall be used.
Sec. 1000.534 When may HUD require replacement of a TDHE?
(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 in paragraph (b) of this section,
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 has engaged in a pattern or practice of activities
that constitute substantial or willful noncompliance with the
requirements of NAHASDA.
Sec. 1000.536 When does failure to comply substantially cease?
HUD shall confirm the existence of certain conditions regarding the
recipient's compliance. Such conditions shall have been described in
HUD's finding of substantial noncompliance. A recipient may request HUD
to review its situation to determine if it is now in compliance.
Sec. 1000.538 What audits are required?
The recipient must comply with the requirements of the Single Audit
Act which requires annual audits of recipients that expend Federal
funds equal to or in excess of $300,000. The audit shall be made by an
independent auditor in accordance with generally accepted government
auditing standards covering financial and compliance audits.
Sec. 1000.540 Who is the cognizant audit agency?
For the purposes of the audit described in Sec. 1000.538, the
Department of the Interior is the cognizant agency.
Sec. 1000.542 Are audit costs an eligible program expense?
Yes, audit costs are an eligible administrative expense. For a
recipient not covered by the Single Audit Act, but yet chooses to have
an audit, the cost of such an audit would be an eligible program
expense. If the Indian tribe is the recipient then program funds can be
used to pay a prorated share of the tribal audit cost that is
attributable to NAHASDA funded activities.
Sec. 1000.544 Must a copy of the recipient's audit pursuant to the
Single Audit Act be submitted to HUD?
Yes. A copy of the latest recipient audit under the Single Audit
Act must be submitted with the annual performance report.
Sec. 1000.546 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. 1000.548 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 grantee which are
required to be maintained by the statute, regulation, or grant
agreement.
(b) Except as otherwise provided in this section, 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. 1000.550 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
and sub-recipients which are pertinent to the NAHASDA assistance, in
order to make audits, examination, excerpts, and transcripts.
(b) The right of access in this section lasts as long as the
records are maintained.
Sec. 1000.552 Does the Freedom of Information Act (FOIA) apply to
recipient records?
FOIA does not apply to recipient records.
Sec. 1000.554 Does the Federal Privacy Act apply to recipient records?
The Federal Privacy Act does not apply to recipient records.
PART 955--[REDESIGNATED]
4. Part 955 is redesignated as part 1005 and amended as set forth
below.
PART 1005--LOAN GUARANTEES FOR INDIAN HOUSING
5. 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).
6. Newly designated Section 1005.101 is revised to read as follows:
[[Page 35748]]
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 of 1996 (12 U.S.C. 1515z-13a), the
Department of Housing and Urban Development (the Department) has the
authority to guarantee loans for the construction, acquisition, or
rehabilitation of 1- to 4-family homes to be owned by Native Americans
on restricted Indian lands. This part provides requirements that are in
addition to those in section 184.
7. Newly designated Section 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 is also
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.''
* * * * *
8.-9. Newly designated Section 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 a borrower for which an Indian Housing Plan has been submitted
and approved under 24 CFR part 1000, and that is:
(1) An Indian who will occupy it 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, the borrower must provide written
certification that it lacks access to private financial markets.
Written documentation must be maintained to support the certification.
10.-11. Newly designated Section 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
f. Adding a new paragraph (b)(3), to read as follows:
Sec. 1005.107 What is eligible collateral?
(a) In general. 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) Trust land as collateral. If trust land or restricted Indian
land is used as collateral or security for the loan, the following
additional provisions apply:
* * * * *
(3) Liquidation. The mortgagee or HUD shall only pursue liquidation
after offering to transfer the account to an eligible tribal member,
the tribe, or the Indian housing authority 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].
12.-13. Newly designated Section 1005.109 is amended by revising
the section heading to read
``Sec. 1005.109 What is a guarantee fee?''
Sec. 1005.111 [Amended].
14.-15. Newly designated Section 1005.111 is amended by revising
the section heading to read
``Sec. 1005.111 What safety and quality standards apply?''
16. Newly designated Section 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.
17. Section 1005.113 is added to read as follows:
Sec. 1005.113 How does HUD enforce lender compliance with applicable
tribal laws?
As provided in Section 184, failure of the lender to comply with
applicable tribal law is considered to be a practice detrimental to the
interest of the borrower.
Dated: June 9, 1997.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Kevin Emanuel Marchman,
Acting Assistant Secretary for Public and Indian Housing.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix A to Part 1000--IHBG Formula Mechanics
This appendix shows the different components of the IHBG
formula. The following text explains how each component of the IHBG
formula works.
The proposed IHBG formula is calculated by initially determining
the amount a tribe receives for Formula Current Assisted Stock
(FCAS) and Section 8. FCAS funding is comprised of two components,
operating subsidy and modernization. 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 1. 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.
---------------------------------------------------------------------------
\1\ Note that the attachment shows this amount to be $2,440 for
Low Rent, $528 for Mutual Help, and $3,625 for Section 8. These
numbers may change slightly as the department gets better
information.
---------------------------------------------------------------------------
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.
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
[[Page 35749]]
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.
The construction adjustment factor planned to be used is Total
Development Cost (TDC) for the area divided by the weighted national
average for TDC (weighted on the unadjusted allocation for
modernization).
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. The Need component is then calculated by multiplying a
tribe's share of housing need by a local area cost adjustment factor
for construction (Total Development Cost).
The Need component of the IHBG formula is calculated using seven
factors weighted as shown on the attachment. The way this works is
as follows: 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, while 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, and so on. The attachment shows the
current national totals for each of the need variables. The national
total will change as tribes update information about their formula
area and data for individual areas are challenged.
After determining each Indian tribe's allocation under the IHBG
formula, their grants are compared to how much they 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. 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 down. The formula for that adjustment
is shown below. 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.
Tribal Grant = Formula Current Assisted Stock (FCAS) + NEED
FCAS = FCAS Subsidy + FCAS Modernization
FCAS Subsidy = [ { $2440 * (Low-rent units) } + { $528 *
(Homeowner Units) } + { $3625 * (S8 expired ``units'') } ] * FMRAEL/
1.15
CAS Modernization = [ $1974 * (Total Low-rent and homeowner
units) ] * TDC/$111649
NEED = (Appropriation--National Total FCAS) * Need Share * TDC/
$113462
Need Share =
{ .25 * (AIAN Households overcrowded and or without kitchen or
plumbing ) / 86831}+
{ .22 * (AIAN Households paying more than 50% of their income
for housing ) / 39842}+
{ .15 * (Housing Shortage 2) / 147268}+
---------------------------------------------------------------------------
\2\ AIAN Households less than 80 percent of median income--CAS
units--S8--NAHASDA units.
---------------------------------------------------------------------------
{ .13 * (AIAN Households less than 30% of Median Income ) /
87322}+
{ .07 * (AIAN Households with incomes between 30% and 50% of
Median Income ) / 58692}+
{ .07 * (AIAN Households with incomes between 50% and 80% of
Median Income ) / 68425}+
{ .11 * (AIAN Persons ) /1059041}.
ADJUSTED AS FOLLOWS:
30 tribes receive less than their FY 1996 funding for operating
subsidy and modernization.
The total amount they are less than the FY 1996 amount is
$5,941,550, 337 tribes receive funding greater than their FY 1996
funding for operating subsidy and modernization.
The total amount they are above the FY 1996 amount is
$234,663,723
The tribes receiving less than the FY 1996 amount are adjusted
to the FY 1996 amount. The tribes that received more than the FY
1996 amount (not including new tribes), have their funding amount
decreased in proportion to their share of the total funding among
tribes with more than the FY 1996 amount. The adjustment formula
looks as follows:
Grant for tribes with amount greater than FY 1996 amount =
(Grant prior to adjustment)--[ $5,941,550 * { (amount above FY
1996) / $234,663,723 } ]
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[FR Doc. 97-17011 Filed 7-1-97; 8:45 am]
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