Native American Housing Assistance and Self-Determination Reauthorization Act of 2008: Amendments to Program Regulations, 71474-71490 [2011-29642]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]
[Proposed Rules]
[Pages 71474-71490]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29642]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 1000

[Docket No. FR-5275-P-11]
RIN 2577-AC80


Native American Housing Assistance and Self-Determination 
Reauthorization Act of 2008: Amendments to Program Regulations

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would make several revisions to the 
regulations governing the Indian Housing Block Grant (IHBG) Program and 
the Title VI Loan Guarantee Program. HUD negotiated the proposed rule 
with active Tribal participation under the procedures of the Negotiated 
Rulemaking Act of 1990, pursuant to the Native American Housing 
Assistance and Self-Determination Reauthorization Act of 2008. The 
proposed regulatory changes would implement statutory amendments and 
reflect the consensus decisions reached by HUD and the Tribal 
representatives.

DATES: Comment Due Date: January 17, 2012.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410-0500. Communications must refer 
to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
https://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically. Electronic submission of comments 
allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt by HUD, and enables HUD to make them immediately 
available to the public. Comments submitted electronically through the 
https://www.regulations.gov Web site can be viewed by other commenters 
and interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note:  To receive consideration as public comments, comments 
must be submitted through one of the two methods specified above. 
Again, all submissions must refer to the docket number and title of 
the rule. No Facsimile Comments. Facsimile (FAX) comments are not 
acceptable.

    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at (202) 708-3055 (this 
is not a toll-free number). Individuals with speech or hearing 
impairments may access this number via TTY by calling the toll-free 
Federal Relay Service at (800) 877-8339. Copies of all comments 
submitted are available for inspection and downloading at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Rodger J. Boyd, Deputy Assistant 
Secretary for Native American Programs, Office of Public and Indian 
Housing, Department of Housing and Urban Development, 451 7th Street 
SW., Room 4126, Washington, DC 20410; telephone number (202) 401-7914 
(this is not a toll-free number). Hearing- or speech-impaired 
individuals may access this number via TTY by calling the toll-free 
Federal Relay Service at 1-(800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    The Native American Housing Assistance and Self-Determination Act 
of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) changed the way that housing 
assistance is provided to Native Americans. NAHASDA eliminated several 
separate assistance programs and replaced them with a single block 
grant program, known as the Indian Housing Block Grant (IHBG) Program. 
In addition, Title VI of NAHASDA authorizes Federal guarantees for the 
financing of certain Tribal activities (under the Title VI Loan 
Guarantee Program). The regulations governing the IHBG and Title VI 
Loan Guarantee programs are located in part 1000 of HUD's regulations 
in title 24 of the Code of Federal Regulations. In accordance with 
section 106 of NAHASDA, HUD developed the regulations with active 
Tribal participation under the procedures of the Negotiated Rulemaking 
Act of 1990 (5 U.S.C. 561-570).
    The Native American Housing Assistance and Self-Determination 
Reauthorization Act of 2008 (Pub. L. 110-411, approved October 14, 
2008) (NAHASDA Reauthorization Act) reauthorizes NAHASDA through 
September 30, 2013, and makes a number of amendments to the statutory 
requirements governing the IHBG and Title VI Loan Guarantee programs. 
The NAHASDA Reauthorization Act amends section 106 of NAHASDA by 
providing that HUD shall initiate a negotiated rulemaking in order to 
implement

[[Page 71475]]

aspects of the 2008 Reauthorization Act that require rulemaking. On 
January 5, 2010, at 75 FR 423, HUD published a Federal Register notice 
announcing the final list of members of the Native American Housing 
Assistance and Self-Determination Negotiated Rulemaking Committee (the 
NAHASDA Rulemaking Committee, or the Committee).
    The NAHASDA Rulemaking Committee convened for one, 2-day meeting 
and five, 3-day meetings in Scottsdale, Arizona; Westminster, Colorado; 
Seattle, Washington; and St. Paul, Minnesota, from March to August 
2010. Under the terms of the charter approved by the Committee, the 
negotiations were to focus on implementation of NAHASDA, as amended, 
except that subpart D of 24 CFR part 1000, which governs the NAHASDA 
allocation formula, was generally to be excluded from the negotiations. 
(The committee nonetheless agreed by consensus to make minor revisions 
to regulations in subpart D in order to address issues that primarily 
involved provisions under subpart C.) HUD also agreed to consider 
issues that did not directly arise from statutory amendments, if time 
permitted.

II. This Proposed Rule

    This proposed rule would amend HUD's regulations by implementing 
statutory amendments to NAHASDA. The proposed rule would make changes 
to the regulations under subpart A of 24 CFR part 1000 regarding the 
guiding principles of NAHASDA, definitions, labor standards, 
environmental review procedures, procurement, Tribal and Indian 
preference, and program income. Proposed changes to subpart B of 24 CFR 
part 1000 address eligible families, useful life of properties, and 
criminal conviction records. Proposed changes to subpart C of 24 CFR 
part 1000 would address the Tribal program year, Indian Housing Plan 
(IHP) requirements, administrative and planning expenses, reserve 
accounts, local cooperation agreements, and exemption from taxation. 
Proposed changes to subpart D of part 24 would address certain formula 
information that must be included in the IHP and Annual Performance 
Report (APR), as well as the date by which HUD must provide data used 
for the formula and projected allocation to a Tribe or Tribally 
Designated Housing Entity (TDHE). Proposed changes to subpart E of 24 
CFR part 1000 would address financing guarantees. Finally, proposed 
changes to subpart F of 24 CFR part 1000 would address HUD monitoring, 
APRs, APR review, HUD performance measures, recipient comments on HUD 
reports, remedial actions in the event of substantial noncompliance, 
audits, submission of audit reports, and records retention.
    Following is a section-by-section description of provisions that 
HUD proposes under this rule:

Subpart A

Section 1000.2, Guiding Principles
    Section 1000.2 would be revised to conform it to the provision of 
amended NAHASDA section 2, that the Federal government ``shall'' work 
to provide housing assistance and to assist development of private 
finance mechanisms, and that Federal assistance ``shall'' be provided 
in a manner that recognizes Indian self-determination and self-
governance. Prior to the NAHASDA Reauthorization Act, these provisions 
stated that the Federal government and Federal assistance ``should'' 
comply with the stated principles.
 Section 1000.9, Negotiated Rulemaking
    Section 1000.9 would establish provisions that apply to the 
negotiated rulemaking process that is used under NAHASDA. Paragraph (a) 
would require HUD to appoint representatives of the Federal government 
and representatives of diverse Tribes and program recipients. Paragraph 
(b) would codify the requirement of NAHASDA section 106(b)(2)(C) for 
HUD to initiate negotiated rulemaking within 90 days after enactment of 
any act reauthorizing NAHASDA, as well as any act that significantly 
amends NAHASDA. Paragraph (c) would provide that negotiated rulemaking 
committees may establish workgroups to develop proposals. Paragraph (d) 
would provide that the committee submits recommended rules to HUD and 
that once HUD determines what rules it will propose, it will publish 
notice of the proposal in the Federal Register. Finally, it would 
provide that the committee and HUD will review public comments before 
HUD makes a determination on the provisions of the final rule.
 Section 1000.10, Definitions
    Section 1000.10(b) would add a new definition of ``housing related 
activities,'' which is used in proposed Sec.  1000.64 with respect to 
permissible use requirements for program income. The proposed 
definition would be modeled, in significant part, on the new statutory 
definition of ``housing related community development.'' Section 
1000.10(b) would codify in regulations the new statutory definition of 
``housing related community development,'' which are those activities 
that may be financed with notes and other obligations guaranteed by HUD 
pursuant to section 601 of NAHASDA. It would revise the existing 
definition of ``Indian Area'' to conform to the amended definition in 
NAHASDA. It would also add a new definition of ``outcomes,'' which is 
used in NAHASDA section 102(b) to describe information required to be 
in the IHP, and which would be used in Sec.  1000.512 to describe items 
required to be included in IHPs and performance reports. Section 
1000.10(b) would also add a new definition of ``Tribal program year,'' 
which is used in Sec. Sec.  1000.110, 1000.201, 1000.214, and 1000.216 
to specify the basis on which grants are provided and the date by which 
IHPs must be submitted to HUD. The definition would provide that 
``Tribal program year'' means the fiscal year of the recipient.
Section 1000.12, Nondiscrimination Requirements
    Section 1000.12(d) would be revised to conform to amended NAHASDA 
section 201(b)(6), which exempts Federally recognized Tribes and their 
TDHEs from Title VI of the Civil Rights Act of 1964 and the Fair 
Housing Act in carrying out activities under NAHASDA. It would also 
provide that state-recognized Tribes may provide preference to Tribal 
members and other Indian families pursuant to NAHASDA section 201(b), 
and in employment and contracting pursuant to NAHASDA section 101(k).
Section 1000.16, Labor Standards
    Section 1000.16 would be revised to add a paragraph (e) based on 
NAHASDA section 104(b)(3), which addresses the applicability of Tribal 
laws that require payment of not less than prevailing wages to certain 
workers. The statute provides that if a contract or agreement for 
assistance, sale, or lease pursuant to NAHASDA is covered by such a 
Tribal law or laws, then the contract or agreement is not required to 
contain a provision requiring payment of prevailing wages in accordance 
with section 104(b)(1). The current paragraph (e) of 1000.16 would be 
redesignated as paragraph (f). In addition, the citation to the Davis-
Bacon Act in paragraph (a) would be revised to reflect current 
codification of the provision referenced in amended section 104(b)(1) 
of NAHASDA, and the citation to the Contract Work Hours and Safety 
Standards Act in paragraph (c) would be

[[Page 71476]]

updated to reflect the current codification of the referenced 
provision.
    The Committee draft included a provision that addressed 
construction and development contracts that are entered into by a 
recipient. The language sought to clarify that such construction and 
development contracts, if entered into pursuant to a HUD contract or 
agreement for assistance, sale, or lease under NAHASDA, are not 
required to contain the prevailing wage provision referenced in NAHASDA 
section 104(b)(1) if the contracts are subject to Tribal laws that 
require payment of not less than prevailing wages. Upon further review, 
HUD determined that revision of the draft rule provision was needed in 
order to reconcile the intent of the Committee with language as used in 
the statute, but the Committee did not take up the draft provision 
again. Although this proposed rule does not include the described 
provision, HUD agrees that such construction and development contracts 
are not required to include the provision referenced in NAHASDA section 
104(b)(1) under the described circumstances. HUD notes that in addition 
to construction and development contracts, contracts for the operation 
(including maintenance) of NAHASDA-assisted affordable housing are not 
required to include the provision under the described circumstances, 
and work performed directly by Tribal or TDHE employees on NAHASDA-
assisted housing is also not subject to the provisions in section 
104(b)(1) in those circumstances. HUD specifically solicits public 
comment on whether inclusion of a provision clarifying these exclusions 
would be necessary or beneficial in the final rule.
Section 1000.21, Waiver of Environmental Review Procedures
    A new Sec.  1000.21 would be added to conform to NAHASDA section 
105(d), which establishes the circumstances under which HUD may waive 
certain procedural requirements for the submission of certifications 
related to environmental reviews performed by Tribes. Following the 
amendment enacting section 105(d) of NAHASDA, HUD established, through 
the issuance of program Notice CPD-04-08, procedures \1\ for requesting 
a waiver of the statutory environmental review requirements. It is 
HUD's policy to follow the procedures in Notice CPD-04-08 when 
processing environmental review waivers.
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    \1\ The following is a brief summary of these procedures. When a 
procedural or nonsubstantive violation of NEPA by a Tribe has been 
identified, the grantee has the opportunity to request a waiver. The 
waiver request must be in writing and include all available and 
relevant information necessary for HUD to complete an environmental 
review under 24 CFR part 50. HUD conducts a site visit and prepares 
and signs the environmental assessment. The waiver request, executed 
environmental assessment, and all supporting documentation are 
provided to the Headquarters Office of Native American Programs 
(ONAP) for review. If the waiver request is acceptable, the Deputy 
Assistant Secretary for Native American Programs forwards it to the 
Environmental Review Division of the Office of Community Planning 
and Development (CPD). CPD has NEPA oversight authority for HUD. 
After appropriate review and consideration, if the waiver package is 
found to comply with section 105(d) of NAHASDA, it is then approved 
by the Assistant Secretary for Public and Indian Housing and the 
Assistant Secretary for CPD, and the grantee is notified that the 
waiver is approved.
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 Section 1000.26, Procurement
    Section 1000.26 would incorporate two statutory provisions related 
to procurement. The exemption in NAHASDA section 203(g) of procurements 
of less than $5,000 from competitive requirements would be incorporated 
in Sec.  1000.26(a)(11)(iii), and the provision in section 101(j) that 
recipients may use Federal supply sources made available by the General 
Services Administration would be incorporated in Sec.  
1000.26(a)(11)(iv). The existing regulatory provision with respect to 
bonding requirements in procurement would be redesignated as Sec.  
1000.26(a)(11)(ii).
 Section 1000.42, Section 3 of the Housing and Urban Development Act of 
1968
    Section 1000.42 would address section 3 of the Housing and Urban 
Development Act of 1968, which requires certain HUD recipients (e.g., 
recipients of more than $200,000 in HUD housing and community 
development assistance for a covered project) to provide economic 
opportunities to low- and very low-income residents. New paragraph (c) 
would clarify that recipients meet the section 3 requirements when they 
comply with employment and contract preference laws adopted by their 
Tribe in accordance with section 101(k) of NAHASDA. Paragraph (d) would 
provide that for purposes of section 3, NAHASDA funding is subject to 
the requirements applicable to the category of programs entitled 
``Other Programs'' that provide housing and community development 
assistance. The proposed provision would serve to clarify that NAHASDA 
recipients do not fall under the alternative category of recipients 
under section 3, which is for public and Indian housing agencies that 
award contracts in connection with assistance for development, 
modernization of units, and the operation of programs and projects 
under the 1937 Act. NAHASDA recipients do not receive assistance under 
the 1937 Act.
 Sections 1000.48, 1000.50, and 1000.52, Tribal and Indian Preference
    Sections 1000.48, 1000.50, and 1000.52 would be revised to 
implement section 101(k) of NAHASDA, which provides that the employment 
and contract preference laws of a Tribe that receives the benefit of a 
grant (or portion of a grant) apply to the administration of the grant 
(or portion of a grant), notwithstanding any other provision of law.
    Sections 1000.48, 1000.50, and 1000.52 would clarify that a 
recipient is required to apply Tribal preference in employment and 
contracting, if a Tribe has enacted Tribal preference laws, and that 
only to the extent that such Tribal preference laws have not been 
enacted, a recipient must instead apply Indian preference, as required 
under section 7(b) of the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450e(b)).
    In addition, Sec. Sec.  1000.48(c) and 1000.52(d) would clarify 
that the exemption in NAHASDA section 203(g) for procurements of less 
than $5,000 from competitive rules and procedures serves to exempt such 
procurements from Indian preference requirements under section 7(b) of 
the Indian Self-Determination and Education Assistance Act.
 Sections 1000.26, 1000.62, and 1000.64, Program Income
    The NAHASDA Reauthorization Act amended NAHASDA section 
104(a)(1)(B) to change one of the conditions for a recipient to be able 
to retain program income. The amendment removed the requirement for a 
recipient to agree to use the program income for ``affordable housing 
activities'' in accordance with NAHASDA, and replaced it with a 
requirement for the recipient to agree to use the program income for 
``housing related activities'' in accordance with NAHASDA. Accordingly, 
a new Sec.  1000.64 would address the permissible uses of program 
income and clarify that the requirement for program income to be used 
for ``housing related activities'' is the only applicable Federal 
requirement. (As discussed above, ``housing related activities'' would 
be defined in Sec.  1000.10(b).) This clarification is consistent with 
HUD's treatment of proceeds of sale as outlined in the notice titled 
``IHBG Program: Notice of Revision to Transition Requirements--Proceeds 
of Sales of Former 1937 Act

[[Page 71477]]

Homeownership Units,'' published in the Federal Register on April 1, 
1999 (64 FR 15778). In addition, the provision in Sec.  1000.62(b) that 
reflects the former statutory provision regarding ``affordable housing 
activities'' would be removed, so that Sec.  1000.62 would address only 
what constitutes program income, rather than its permissible uses. The 
heading of Sec.  1000.62 would be revised accordingly. Finally, 
consistent with the amendments to NAHASDA section 104(a)(2) regarding 
expenditure of program income, Sec.  1000.26(a)(5) would be revised to 
provide that a recipient may draw down or expend IHBG funds before 
expending program income.
 Section 1000.58, Investment of IHBG Funds
    Paragraph (f) of Sec.  1000.58 would be revised to remove the 
current restriction on investing IHBG funds that have been allocated 
for the operating subsidy element of the Formula Current Assisted 
Housing Stock (FCAS) component of the IHBG formula. Paragraph (g) would 
be revised to increase the permissible period of investments from 2 to 
5 years. These changes would provide recipients greater flexibility in 
their financial management of IHBG funds pending their expenditure on 
IHBG activities.

Subpart B

 Sections 1000.104, 1000.106, 1000.108, 1000.110, 114, 116, and 118, 
Eligible Families
    The NAHASDA Reauthorization Act amended NAHASDA section 201(b)(3), 
which provides that, notwithstanding the general requirement for 
assistance to be provided to low-income Indian families, recipients may 
provide housing to other families whose presence is essential to the 
well-being of Indian families. The amendment removed the provision that 
the exception is for ``non-Indian'' essential families. Accordingly, 
corresponding regulatory references to ``non-Indian'' essential 
families would be removed throughout Sec. Sec.  1000.104, 1000.106, 
1000.108, 1000.110, 1000.114, 1000.116, and 1000.118.
    Section 1000.110(a) would clarify that a family that is low income 
at the times specified in redesignated Sec.  1000.147, but which 
subsequently becomes non low-income due to an increase in income, may 
continue to participate in the program in accordance with the 
recipient's admission and occupancy policies. The provision would 
clarify that NAHASDA does not prohibit the recipient from continuing to 
serve such families, but that the policy determination is to be made by 
the recipient. Amounts of assistance expended on such families would 
not be counted toward the 10 percent limit (or a higher limit approved 
by HUD) under Sec.  1000.110(c). Such families, as well as a family 
member or household member who takes ownership of a homeownership unit 
under Sec.  1000.146, would not be subject to the requirements of 
redesignated Sec.  1000.110(b), but would be subject to the limitations 
on benefits that non low-income families may receive under Sec.  
1000.110(d) only to the extent provided in the recipient's admission 
and occupancy policies.
    Section 1000.110(b), which enumerates three activities that may 
serve non low-income families, would be removed to conform to the 
amendment that removed these enumerated activities in NAHASDA section 
201(b)(2). The NAHASDA amendment added a blanket provision that any 
affordable housing activities may be provided to non low-income 
families to the extent that HUD approves the activities due to a need 
that cannot be reasonably met without the assistance. Prior to the 
statutory amendment, non low-income families could receive only 
homeownership assistance under section 202(2), model activities under 
section 202(6), or loan assistance activities under Title VI of 
NAHASDA.
    In addition, redesignated Sec.  1000.110(c) would be revised to 
provide that a recipient may, without HUD approval, use up to 10 
percent of the amount it plans to spend in a Tribal program year, 
rather than 10 percent of the amount of its annual grant, for families 
whose income falls within 80 to 100 percent of median income. (Use of 
amounts in excess of 10 percent would still require HUD approval.) This 
change would be consistent with HUD's practice of no longer requiring 
recipients to track expenditures against particular annual grants. 
Instead, activities and expenditures would be tracked to the grantee's 
fiscal year on a rolling year-to-year basis.
    Redesignated Sec.  1000.110(e) would clarify that amounts of 
assistance expended on essential families would not be counted toward 
the 10 percent limit (or a higher limit approved by HUD) under Sec.  
1000.110(c). It would retain the existing provision that essential 
families are not subject to the limitations on benefits that non low-
income families may receive under Sec.  1000.110(d).
    Finally, Sec.  1000.104(d) would incorporate the provision in 
NAHASDA section 201(b) that housing assistance may be provided to a law 
enforcement officer whose presence the recipient determines will deter 
crime.
 Sections 1000.141, 1000.142, 1000.143, 1000.144, 1000.145, and 
1000.146, Useful Life
    Proposed Sec.  1000.146 would incorporate the provision of NAHASDA 
section 205(c), which provides that a family or household member who 
subsequently takes ownership of a homeownership unit is not subject to 
the binding commitment requiring that a dwelling unit must remain 
affordable for the useful life of the property. Proposed Sec.  1000.146 
would clarify, however, that if such a family or household member then 
transfers the property to a third party, such a third party is subject 
to the requirement that the unit remain affordable for its useful life.
    Section 1000.141 would codify the definition of ``useful life.'' 
The question in the heading of Sec.  1000.142 was revised slightly to 
clarify ``how a recipient determines useful life'' rather than ``what 
is the useful life.'' The response was also revised slightly to respond 
to the revised question. Proposed Sec. Sec.  1000.143 and 1000.144 
would clarify that a recipient implements the useful life requirement 
by placing a binding commitment that is satisfactory to HUD on the 
assisted property, and that to be satisfactory to HUD, the binding 
commitment must be a written use restriction agreement that is placed 
on the property and that has a duration equal to the property's useful 
life. Existing Sec. Sec.  1000.144 and 1000.146 would be redesignated 
as Sec. Sec.  1000.145 and 1000.147 for organizational clarity.
    Redesignated Sec.  1000.147 (formerly Sec.  1000.146) would be 
revised to codify the provision in section 205(a) of NAHASDA that 
states when a family must be low-income to participate in a housing 
program under NAHASDA.
 Sections 1000.150 and 1000.152, Criminal Conviction Records
    The heading of Sec.  1000.150 would be revised to conform to the 
NAHASDA Reauthorization Act amendment to NAHASDA section 208(a) that 
permits Tribes and TDHEs to access criminal conviction records of 
applicants for employment.
    Section 1000.152 would be revised to specify how criminal 
conviction records may be used with respect to applicants for 
employment, by referencing permitted purposes under section 208 of 
NAHASDA.

[[Page 71478]]

Subpart C

 Section 1000.201, Tribal Program Year
    Section 1000.201 would be revised to conform to the amended 
provision of NAHASDA section 102(a) that IHPs are submitted for a 
Tribal program year, rather than for the Federal government's fiscal 
year.
 Sections 1000.214, 1000.216, 1000.220, and 1000.230, Indian Housing 
Plan and Annual Performance Report Requirements
    Sections 1000.214 and 1000.216 would be revised to conform to the 
amended provision of NAHASDA section 102(a) that an IHP must be 
submitted to HUD 75 days before the beginning of a Tribal program year. 
The existing regulatory provision requires submission of the IHP by 
July 1. Section 1000.220 would be revised by removing the statement 
that IHP requirements are contained in section 102(c) of NAHASDA. The 
referenced statutory provisions were removed under the NAHASDA 
Reauthorization Act. Section 1000.220 would be further revised to state 
that it enumerates the ``requirements,'' rather than the ``minimum 
requirements,'' for items to be included in the IHP. It would add Sec.  
1000.302 to the list of cross-referenced regulatory sections that 
include items required to be in the IHP, as further discussed below. It 
would also remove Sec.  1000.504 from the list, in accordance with the 
proposed removal of that section. Section 1000.230 would clarify that 
an IHP may use either the HUD estimated grant amount or the grant 
amount from the most recent compliant IHP.
 Sections 1000.224, 1000.225, and 1000.227, Waivers of Indian Housing 
Plan Requirements
    Section 1000.224 would be revised in accordance with the amendment 
to section 101(b)(2) of NAHASDA. The revision would clarify that a 
waiver of IHP submission requirements is available when noncompliance 
is due to exigent circumstances beyond the control of the Indian Tribe. 
It would also provide that HUD may not withhold the requested waiver 
unreasonably. Section 1000.225 would provide that a request for a 
waiver must be submitted not more than 90 days beyond the submission 
due date. Section 1000.227 would require HUD to decide upon the waiver 
request and notify the recipient of its decision within 45 days of 
receiving the request.
 Sections 1000.236 and 1000.238, Administrative and Planning Expenses
    Section 1000.236(a) would be revised to provide that eligible 
administrative and planning expenses include expenses associated with 
the expenditure of non-IHBG funds on affordable housing activities, to 
the extent that the source of the non-IHBG funds limits expenditure of 
its funds on such expenses. The provision is intended to encourage 
recipients to leverage IHBG funds with funds obtained from other 
sources and recognizes that some sources permit little or none of their 
funds to be expended on administrative and planning activities. Section 
1000.236(b) would be revised to conform to amended NAHASDA section 
101(h)'s provision that eligible uses include comprehensive housing and 
community development planning activities. Section 1000.238 would be 
revised to provide a two-tiered limit on the amount of IHBG funds that 
may be used on administrative and planning expenses. (The existing 
regulation imposes a limit equal to 20 percent of the annual grant 
amount.) Under the revision, recipients receiving in excess of $500,000 
would be permitted to use up to 20 percent of either their annual 
expenditures of grant funds or of their annual grant amount, whichever 
is greater, on such expenses. Recipients receiving $500,000 or less 
would be permitted to use up to 30 percent of either their annual 
expenditures or of their annual grant amount, whichever is greater, on 
such expenses. A recipient that is receiving grant funds on behalf of 
one or more grant beneficiaries would apply these rules to the amounts 
provided for the benefit of those grant beneficiaries, to determine the 
amount it may use for administrative and planning expenses. It would 
also provide that a recipient combining grant funds with other funding 
may request HUD approval to use a higher percentage and may justify the 
request based on its total expenditure of funds from all sources for 
that year.
 Section 1000.239, Reserve Accounts
    New Sec.  1000.239 would incorporate the provisions of NAHASDA 
section 202(9), which adds to the list of eligible activities the 
establishment of a reserve account for the purpose of accumulating 
funds for administrative and planning activities related to affordable 
housing activities. The proposed regulation would clarify that the 
amounts may be invested in accordance with existing regulatory 
provisions in Sec.  1000.58(c), and would provide that a recipient may 
have more than one such account, provided that the total amount of 
reserves in all accounts does not exceed the maximum amount established 
in NAHASDA. The proposed regulation would also incorporate NAHASDA's 
formula for calculating the maximum amount. Finally, it would clarify 
that interest earned on reserves is not program income and is not 
included in calculating the maximum amount of reserves.
 Sections 1000.244 and 1000.246, Local Cooperation Agreements and 
Exemption From Taxation
    Two new sections would implement NAHASDA sections 101(c) and (d). 
Section 1000.244 would provide the procedure for requesting a waiver of 
the requirements for a local cooperation agreement and tax-exempt 
status of dwelling units. Requests would have to be submitted to the 
Area ONAP and would be required to demonstrate that the recipient had 
made a good-faith effort to comply. Section 1000.246 would require HUD 
to make a determination on and respond to a request for a waiver within 
30 days of receipt, or to provide a reason for any delay and a timeline 
within which a determination would be made. It would also require HUD 
to notify the recipient as to whether the waiver is granted or denied. 
A granted waiver would remain effective until revoked. If a waiver 
request is denied, IHBG funds would not be permitted to be spent on 
housing units, and any amounts expended prior to the denial would have 
to be reimbursed.

Subpart D

 Section 1000.302, IHBG Formula Definitions
    Paragraph (2)(i)(B) of the definition of ``Formula area'' in Sec.  
1000.302 would be revised to provide that the forms on which a Tribe 
reports on substantial housing services are the IHP and APR. In the 
same section, the definition of ``Substantial housing services'' would 
provide that the required written verification that a Tribe must 
provide annually is to be included in the IHP and APR.
 Section 1000.328, Certification of Households at or Below 80 Percent 
of Median Income
    Section 1000.328 would be revised to provide that for a Tribe 
receiving minimum funding, it must certify in its IHP, rather than 
demonstrate, the presence of households at or below 80 percent of 
median family income.

[[Page 71479]]

 Section 1000.332, Schedule for HUD To Provide Formula Data and 
Projected Allocations
    Section 1000.332 would revise the date by which HUD is required to 
provide a Tribe or TDHE with the data used to determine its formula 
allocation. The existing regulation requires provision of the data by 
August 1, and under this proposed rule would be revised to June 1. The 
change is necessary in order to ensure timely provision of the 
information to a Tribe or TDHE with a program year that begins on 
October 1.

Subpart E

 Sections 1000.408 and 1000.410, Financing Guarantees
    Section 1000.408, which sets forth the manner in which a Tribe or 
TDHE was required to show that it had made efforts to obtain financing, 
prior to requesting financing guarantees from HUD, would be removed. 
The removal conforms to the NAHASDA Reauthorization Act's removal of 
this requirement, which was previously found in section 601(b) of 
NAHASDA, as a condition for obtaining guarantees from HUD. A new 
paragraph (e) would be added to Sec.  1000.410 to conform to NAHASDA 
section 602(d), which requires guarantees made under Title VI to 
guarantee repayment of 95 percent of the unpaid principal and interest 
due on guaranteed obligations.
 Sections 1000.424 and 1000.428, Financing Guarantees for Housing 
Related Community Development
    Section 1000.424 would be revised to provide that an application 
for financing guarantees under Title VI of NAHASDA may identify 
housing-related community development activities, as well as affordable 
housing activities for which the guarantees are sought. Section 
1000.428 would be revised to provide that an application may be 
disapproved if proposed activities are not within the definitions of 
these eligible activities. The proposed changes conform to the amended 
NAHASDA section 601(a)'s provision that housing-related community 
development is a permissible use for the proceeds of financing 
guaranteed by HUD under Title VI of NAHASDA.

Subpart F

 Section 1000.503, HUD Monitoring
    New Sec.  1000.503 would clarify the appropriate frequency and 
level of monitoring of recipients. Paragraph (a) would codify the 
standard risk assessment factors that HUD uses to determine the 
frequency and priority for monitoring a particular recipient, and would 
provide that HUD may establish other factors, consistent with HUD's 
Tribal Consultation Policy. In accordance with the policy, HUD would 
provide written notification and an opportunity for comment when 
establishing such other factors. The provisions would not apply to 
monitoring or compliance reviews concerning regulatory requirements 
that arise independently of NAHASDA, such as those concerning 
nondiscrimination and accessibility for persons with disabilities. Any 
new factors would be issued by program guidance.
    Paragraph (b) would provide the level of monitoring that HUD would 
apply once a recipient has been selected for monitoring. Monitoring 
would typically cover the current and prior 2 Tribal program years, and 
it would include inspection of no more than the greater of 10 dwelling 
units or 10 percent of all dwelling units, and review of no more than 
the greater of 10 client files or 10 percent of client files. HUD would 
undertake additional sampling and review if this initial sampling 
indicated noncompliance. Paragraph (c) would provide that, subject to 
the limitation on time that recipients are required to retain records 
under Sec.  1000.552, HUD would be permitted to undertake additional 
sampling and review, notwithstanding these sampling limits, whenever 
HUD has credible information suggesting noncompliance. HUD would share 
the information with the recipient, as appropriate. Finally, paragraph 
(e) would provide that a recipient may request to enter into a self-
monitoring agreement with HUD, under which HUD would monitor only the 
recipient in accordance with the agreement, absent reasonable evidence 
of fraud, a pattern of noncompliance, or significant unlawful 
expenditure of IHBG funds.
 Section 1000.512, Annual Performance Reports
    Paragraphs (b)(1) and (b)(2) of Sec.  1000.512 would be revised by 
replacing the term ``objectives'' with ``planned activities,'' 
consistent with the amendment to section 102(b)(2) of NAHASDA. Section 
1000.512 would also be revised to list additional items required to be 
included in APRs. Paragraph (d) would require inclusion of annual 
performance data, including jobs supported with IHBG funds, and outputs 
and outcomes by eligible activity. Paragraph (e) would cross-reference 
items that may be required to be included in the APR under Sec. Sec.  
1000.302 and 1000.544, as further discussed in this preamble.
 Section 1000.520, Annual Performance Report Review
    Section 1000.520 would be revised to clarify that HUD's review of 
an APR takes place upon submission and that there is only one such 
review.
 Sections 1000.504 and 1000.524, HUD's Performance Measures
    Section 1000.524 would be revised by removing the requirement that 
90 percent of grant funds must be obligated within 2 years of the grant 
award. The revision would conform to NAHASDA section 203(f)(1)'s 
provision that HUD may not require commitment of funds earlier than 
provided for in the IHP. In addition, section 1000.524(e) would be 
revised to remove reference to a 5-year plan and its contents, which 
were eliminated from NAHASDA section 102 by the NAHASDA Reauthorization 
Act. Section 1000.504, which describes performance objectives, would 
also be removed, because of the elimination of the 5-year plan and 
because performance objectives are no longer required to be included in 
the one-year plan.
 Section 1000.528, Recipient Comments on HUD Reports
    Section 1000.528 would be revised to increase from 30 days to 60 
days the time from HUD's completion of its review that HUD will have to 
issue its draft report. The section would also be revised to increase 
from 30 days to 60 days the time that a recipient and Indian Tribe will 
have to review the draft report from HUD. It would also provide for an 
additional 30-day review period, available upon notification to HUD, as 
well as the possibility of additional extensions as mutually agreed to 
by HUD and the recipient.
 Sections 1000.532 and 1000.538, Remedial Actions in the Event of 
Substantial Noncompliance
    Section 1000.538, which addresses remedies that are available to 
HUD in the event of substantial noncompliance, would be removed, and 
provisions addressing remedies for substantial noncompliance would be 
provided in a revised and expanded Sec.  1000.532. The existing 
provision at Sec.  1000.532(c), which addresses a recipient's 
significant noncompliance with a major activity of its IHP, would be 
removed. A new paragraph (a) would include a broad provision addressing 
remedies HUD may take if HUD finds, after reasonable notice and 
opportunity to be heard, that a recipient has failed to comply 
substantially with any provision of NAHASDA or the implementing 
regulations in 24 CFR part 1000. The

[[Page 71480]]

provision would cover significant noncompliance with a major activity 
of a recipient's IHP, which is specifically addressed in the existing 
provision at Sec.  1000.532(c), and corresponds to the existing 
provision at Sec.  1000.538(a).
    Paragraph (b) of Sec.  1000.532 would provide the procedures that 
HUD would follow for providing notice and the opportunity to be heard, 
prior to taking any action under paragraph (a). The procedures would 
include notification in writing of the action it intends to take and 
the opportunity for an informal meeting with HUD to resolve the 
deficiency. Prior to taking any remedial action under paragraph (a), 
HUD would provide the opportunity no less than 30 days prior to taking 
the action, in accordance with the procedures at 24 CFR part 26. 
Amounts would not be reallocated until 15 days after the hearing has 
been conducted and HUD has rendered a final decision.
    Paragraph (c) of Sec.  1000.532 would incorporate NAHASDA section 
401(a)(4)'s expedited procedures for HUD's limitation of the 
availability of funds, when HUD determines that the substantial 
noncompliance of a recipient is resulting, and would continue to 
result, in a continuing expenditure of funds that is not authorized by 
law. The procedures would allow HUD to limit the availability of such 
funds, provided that it gives notice of the action and then provides a 
hearing within 60 days.
    Paragraph (d) of Sec.  1000.532 would correspond to the provision 
in existing Sec.  1000.538(c), which provides that HUD may provide 
technical assistance to a recipient if HUD determines that the failure 
to comply substantially is not willful and is a result of limited 
capacity or capability. The provision in paragraph (d) would clarify 
that HUD shall provide the technical assistance if, upon HUD's 
determination, the recipient requests the technical assistance. It 
would also incorporate NAHASDA section 401(b)'s requirement that a 
recipient must enter into a performance agreement with HUD as a 
condition of receiving the technical assistance.
    Paragraph (e) of Sec.  1000.532 would include the substance of the 
provision in paragraph (d) of existing Sec.  1000.538, which provides 
that HUD may refer matters involving substantial noncompliance to the 
Attorney General, with a recommendation for taking civil action.
    Finally, cross-references to remove Sec.  1000.538 found in Sec.  
1000.60, Sec.  1000.530, and Sec.  1000.536 would be revised to refer 
to Sec.  1000.532.
 Section 1000.534, Substantial Noncompliance
    The reference to ``goals and objectives'' in Sec.  1000.534(a) 
would be changed to ``planned activities'' in a recipient's IHP. The 
change would conform to the amendment to NAHASDA section 102(b)(2), 
which describes information required to be included in the IHP.
 Section 1000.544, Audits
    Technical changes would be made to Sec.  1000.544 by adding 
statutory citations for NAHASDA and the Single Audit Act, and by 
removing the dollar amount that is the threshold for the annual audit 
requirement. In place of the dollar amount, Sec.  1000.544 would 
reference the section of OMB Circular A-133 that establishes the 
threshold, which may change from time to time. If applicable, a 
certification that the recipient has not expended Federal funds in 
excess of the audit threshold that is set by OMB would be required to 
be included in the recipient's APR.
 Section 1000.548, Submission of Audit Reports
    Section 1000.548 would be revised to require the recipient to 
submit a copy of its audit report to the appropriate HUD ONAP Area 
Office at the time the recipient submits the audit report to the 
Federal Audit Clearinghouse.
 Section 1000.552, Records Retention
    Section 1000.552(b) would be revised to provide that records must 
be retained for 3 years from the end of the Tribal program year in 
which funds are expended. The provision would be consistent with HUD's 
practice of no longer requiring recipients to track expenditures 
against particular annual grants.

III. Other Statutory Amendments Addressed

    The NAHASDA Reauthorization Act added two demonstration programs. 
Subtitle B of Title II of NAHASDA provides for Self Determined Housing 
Activities for Tribal Communities and section 606 created the 
demonstration program for guaranteed loans to finance Tribal community 
and economic development activities. The Committee agreed that HUD 
would implement both programs by PIH notice. The full Committee both 
reviewed and commented on the draft PIH notices before they were 
published.

IV. Nonconsensus Items

    The following section of the preamble summarizes issues that the 
Committee discussed but on which it did not reach consensus. Summaries 
of positions taken on nonconsensus items were drafted by the proponents 
of the positions.

Hearing Requirements for FCAS Overcounts

    The NAHASDA Reauthorization Act added a new section 401(a)(2) to 
provide that ``[t]he failure of a recipient to comply with section 
302(b)(1) (regarding the counting of FCAS units) * * * shall not, in 
itself, be considered to be substantial noncompliance for the purposes 
of this title.'' HUD and Tribal Committee members disagreed on the 
meaning of this paragraph. HUD construes this paragraph to mean that 
FCAS overcounts do not constitute substantial noncompliance under 
section 401(a)(1) of NAHASDA so as to require HUD to afford recipients 
an opportunity for a hearing prior to adjusting grant amounts. The 
Tribal Committee members construed this paragraph as, at least, 
requiring such a hearing where the amount in controversy was of 
sufficient magnitude. A proposal to define this paragraph in the manner 
proposed by the Tribal Committee members failed to achieve consensus, 
the two HUD committee members being the dissenting votes. As a result, 
the Committee did not propose any rule interpreting section 401(a)(2) 
of NAHASDA.

Recapturing Expenditures on Affordable Housing Activities

    In 2000, Congress, in Public Law 106-568, removed a portion of 
then-section 405(c) of NAHASDA that had provided that ``grant amounts 
already expended on affordable housing activities may not be recaptured 
or deducted from future assistance provided on behalf of an Indian 
Tribe.'' However, a regulation containing that same restriction remains 
at 24 CFR 1000.532(a). Since enactment of this 2000 statutory change, 
HUD's position has been that this statutory change removed the 
statutory basis for the corollary regulation, and required the 
regulation's repeal. The Tribal Committee members believed that HUD 
still has discretion under NAHASDA to retain the regulatory 
restriction, despite the removal from the statute of language requiring 
this restriction. The Committee was unable to achieve consensus on the 
inclusion of the disputed regulatory language in the new, consolidated 
Sec.  1000.532, the two HUD Committee members being opposed to its 
inclusion. As a result, the subject provision is not included in the 
revision of Sec.  1000.532 in this proposed rule.

[[Page 71481]]

Time Limitations on Noncompliance Claims

    The majority of the workgroup that examined limitations on 
noncompliance claims had proposed that administrative enforcement 
actions be barred if not commenced within 3 years of the alleged 
noncompliance, and recommended that this limitation be placed in the 
new, consolidated Sec.  532 of the regulations. HUD and some other 
Committee members did not support the adoption of a ``statute of 
limitations'' on enforcement actions. HUD's position was that the 
Committee had already adopted a regulation limiting the scope and 
frequency of monitoring, including a records retention schedule that 
essentially functions as a limitation similar to a statute of 
limitations. The proposal to add a statute of limitations to the new, 
consolidated Sec.  532 did not achieve consensus.

Line of Credit Control System (LOCCS) edits

    The Tribes proposed language for a new Sec.  1000.532(a) that did 
not have the consensus from HUD participants in the workgroup, because 
the language had been drafted specifically to prohibit HUD from 
continuing to use the process known as a ``LOCCS [Line of Credit 
Control System] edit,'' through which HUD can put a hold on a Tribe's/
TDHE's ability to continue to draw down their IHBG funds through LOCCS 
unless and until the Tribe/TDHE submits certain required documentation. 
The Tribes and HUD disagree as to whether a ``LOCCS edit'' is a 
``limitation on the availability of payments to programs, projects, or 
activities not affected by a failure to comply,'' as described under 
section 401(a)(1) of NAHASDA, which requires that HUD must provide 
notice and opportunity for a hearing before terminating, reducing, or 
limiting the availability of payments. HUD's interpretation, provided 
in a memorandum from HUD's Office of General Counsel (OGC), is that the 
LOCCS edit does not conflict with the statutory language because the 
funds remain ``available,'' and can be accessed by the Tribe/TDHE as 
soon as they submit the documentation required by HUD. Further, while a 
LOCCS edit will remain in place if the basis for the edit is 
``documented concerns on the part of ONAP regarding the use of grant 
funds,'' a recipient will be able to continue to draw down grant funds 
despite the edit even though the concerns remain unresolved, subject to 
the submission of appropriate supporting documentation. The memo also 
described the LOCCS edit as a permissible form of ``pre-drawdown 
monitoring,'' through which HUD can determine--ahead of drawdown--
whether a Tribe/TDHE is going to use the funds for a permissible 
purpose and according to legal requirements. HUD described the LOCCS 
edit not as a limitation on availability of payments, but as a change 
in the method of payment requiring certain documentation before 
payments are released. HUD reviewed the relevant case law on other HUD 
programs with similar governing statutory language and found that all 
cases were clearly distinguishable because they involved HUD action 
that amounted to either outright termination of grants, or refusal to 
enter into grant agreements to obligate funds.
    The Tribes responded that the HUD memorandum did not provide a 
legal basis for the practice of a LOCCS edit, for the following 
reasons: (1) The LOCCS edit process set out in the HUD memo (and in PIH 
Notice 2009-49) is a limit on the availability of payments because it 
is a means by which HUD can and does impose certain specific conditions 
prior to the release of funds, which meets the dictionary definition of 
the statutory language; (2) even if the IHBG funds were to remain 
``available'' (per HUD's reasoning), the LOCCS edit places an 
impermissible ``limit'' on that availability; (3) HUD's ``pre-drawdown 
monitoring'' justification is invalid because the monitoring process 
ends with the notice and hearing opportunity for substantial 
noncompliance, and a ``pre-drawdown monitoring'' that limits access to 
funding would circumvent the entirety of the monitoring process; (4) 
the cases cited by HUD OGC in the memo undermined HUD's position 
because those cases indicated the courts' rejection of prior, similar 
efforts by HUD to avoid the kind of due process requirements set out in 
NAHASDA 401(a)(1) (in similar provisions of other HUD statutes) through 
``hyper-technical'' reasoning and on the impermissible assertion of the 
need for agency ``flexibility.''
    The Tribes then put forward the language that they had proposed 
previously for a new Sec.  1000.532(a) that would in effect prohibit 
HUD from using the LOCCS edit. The HUD representatives on the committee 
did not agree to the proposal.

Content of Annual Performance Reports

    HUD held eight Tribal consultation meetings throughout the country 
from January through May 2005 to solicit comments and recommendations 
on the existing IHP and APR. A Tribal workgroup consisting of 12 Tribal 
representatives selected by the Regional Housing Associations worked 
with HUD staff to incorporate the suggestions gathered at the Tribal 
consultations into a revised form. The recommendations from the Tribal 
workgroup formed the basis for the majority of statutory revisions to 
the IHP and APR. In addition, the Tribal workgroup agreed to include 
more detailed data collection in the APR in order to better document 
the positive effects of the IHBG program. Proposals were developed to 
regulate the data collection in the APR to more fully prescribe the 
content required under NAHASDA section 404(b), consistent with the 
recommendations of the Tribal workgroup. The two HUD Committee members 
advocated for the full data collection recommended by the Tribal 
workgroup; however, some Tribal Committee members disagreed with most 
of the data collection items as being too burdensome. As a result, the 
Committee reached consensus only on the collection of jobs data, units 
completed or assisted, families assisted, and outcomes by eligible 
activity under new Sec.  1000.512(d). The Committee did not reach 
consensus on collecting housing unit cost information, a finite list of 
specific outcomes by eligible activity, or reduction in criminal 
activity data.

Indian Housing Plan and Annual Performance Report Formats

    Tribal representatives supported proposed revisions to permit HUD 
to accept alternative IHP and APR formats developed by each Tribe, as a 
means to enhance the congressional finding and guiding principle of 
NAHASDA implementation of providing assistance in a manner similar to 
that accorded in Public Law 93-638. HUD committee members objected.

V. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, Regulatory Planning and Review. This rule was 
determined to be a ``significant regulatory action,'' as defined in 
section 3(f) of the Order (although not an economically significant 
regulatory action under the Order). The docket file is available for 
public inspection in the Regulations Division, Office of General 
Counsel, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due 
to security measures at the HUD Headquarters building, an advance 
appointment to review the public comments must be scheduled by calling

[[Page 71482]]

the Regulations Division at (202) 402-3055 (this is not a toll-free 
number). Individuals with speech or hearing impairments may access this 
number via TTY by calling the Federal Relay Service at (800) 877-8339.

Paperwork Reduction Act

    The information collection requirements contained in this rule have 
been approved by OMB in accordance with the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520) and assigned OMB Control Number 2577-0218. 
In accordance with the Paperwork Reduction Act, an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information, unless the collection displays a currently 
valid OMB control number.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis for any rule that is subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
The requirements of this proposed rule apply to Indian Tribal 
governments and their Tribal housing authorities. Tribal governments 
and their Tribal housing authorities are not covered by the definition 
of ``small entities'' under the RFA. Accordingly, the undersigned 
certifies that this rule will not have a significant impact on a 
substantial number of small entities.
    Notwithstanding HUD's view that this rule will not have a 
significant effect on a substantial number of small entities, HUD 
specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the Executive Order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for Federal agencies to 
assess the effects of their regulatory actions on state, local, and 
Tribal governments, and on the private sector. This rule will not 
impose any Federal mandate on any state, local, or Tribal government, 
or on the private sector, within the meaning of UMRA.

Environmental Review

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of 
No Significant Impact is available for public inspection between the 
hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office 
of General Counsel, Department of Housing and Urban Development, 451 
7th Street SW., Room 10276, Washington, DC 20410. Due to security 
measures at the HUD Headquarters building, please schedule an 
appointment to review the FONSI by calling the Regulations Division at 
(202) 708-3055 (this is not a toll-free number). Individuals with 
speech or hearing impairments may access this number via TTY by calling 
the Federal Relay Service at (800) 877-8339.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance Number (CFDA) for Indian 
Housing Block Grants is 14.867, and the CFDA for Title VI Federal 
Guarantees for Financing Tribal Housing Activities is 14.869.

List of Subjects in 24 CFR Part 1000

    Aged, Community development block grants, Grant programs--housing 
and community development, Grant programs--Indians, Indians, 
Individuals with disabilities, Public housing, Reporting and 
recordkeeping requirements.

    Accordingly, for the reasons described in the preamble, HUD 
proposes to amend 24 CFR part 1000 as follows:

PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES

    1. The authority citation for 24 CFR part 1000 continues to read as 
follows:

    Authority:  25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).

    2. Revise Sec.  1000.2(a)(6) and (a)(7) to read as follows:


Sec.  1000.2  What are the guiding principles in the implementation of 
NAHASDA?

    (a) * * *
    (6) The need for affordable homes in safe and healthy environments 
on Indian reservations, in Indian communities, and in Native Alaskan 
villages is acute and the Federal government shall work not only to 
provide housing assistance, but also, to the extent practicable, to 
assist in the development of private housing finance mechanisms on 
Indian lands to achieve the goals of economic self-sufficiency and 
self-determination for Indian Tribes and their members.
    (7) Federal assistance to meet these responsibilities shall be 
provided in a manner that recognizes the right of Indian self-
determination and Tribal self-governance by making such assistance 
available directly to the Indian Tribes or Tribally designated entities 
under authorities similar to those accorded Indian Tribes in Public Law 
93-638 (25 U.S.C. 450 et seq.).
* * * * *
    3. Add Sec.  1000.9, to read as follows:


Sec.  1000.9  How is negotiated rulemaking conducted when promulgating 
NAHASDA regulations?

    The negotiated rulemaking procedures and requirements set out in 
section 106(b) of NAHASDA shall be conducted as follows:
    (a) Committee membership. In forming a negotiated rulemaking 
committee, HUD shall appoint as committee members representatives of 
the Federal government and representatives of diverse Tribes and 
program recipients.
    (b) Initiation of rulemaking. HUD shall initiate a negotiated 
rulemaking not later than 90 days after the enactment of any act to 
reauthorize or significantly amend NAHASDA.
    (c) Work groups. Negotiated rulemaking committees may form 
workgroups made up of committee members and other interested parties to 
meet during committee sessions and between sessions to develop specific 
rulemaking proposals for committee consideration.
    (d) Further review. Negotiated rulemaking committees shall provide 
recommended rules to HUD. Once rules are proposed by HUD, they shall be 
published for comment in the Federal Register. Any comments will be 
further reviewed by the committee and HUD before HUD determines if the 
rule or rules will be adopted.
    4. In Sec.  1000.10(b), revise the definition of ``Indian area'' 
and add, in alphabetical order, the definitions for the terms ``Housing 
related activities,''

[[Page 71483]]

``Housing related community development,'' ``Outcomes,'' and ``Tribal 
program year,'' to read as follows:


Sec.  1000.10  What definitions apply in these regulations?

* * * * *
    (b) * * *
    Housing related activities, for purposes of program income, means 
any facility, community building, infrastructure, business, program, or 
activity, including any community development or economic development 
activity, that:
    (1) Is determined by the recipient to be beneficial to the 
provision of housing in an Indian area, and that:
    (2) Would meet at least one of the following conditions:
    (i) Would help an Indian Tribe or its Tribally designated housing 
entity to reduce the cost of construction of Indian housing;
    (ii) Would make housing more affordable, energy efficient, 
accessible, or practicable in an Indian area; or
    (iii) Would otherwise advance the purposes of NAHASDA.
* * * * *
    Housing related community development:
    (1) Means any facility, community building, business, activity, or 
infrastructure that:
    (i) Is owned by an Indian Tribe or a Tribally designated housing 
entity;
    (ii) Is necessary to the provision of housing in an Indian area; 
and
    (iii)(A) Would help an Indian Tribe or Tribally designated housing 
entity reduce the cost of construction of Indian housing;
    (B) Would make housing more affordable, energy efficient, 
accessible, or practicable in an Indian area; or
    (C) Would otherwise advance the purposes of NAHASDA.
    (2) Does not include any activity conducted by any Indian Tribe 
under the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)
* * * * *
    Indian Area means the area within which an Indian Tribe operates 
affordable housing programs or the area in which a TDHE, as authorized 
by one or more Indian Tribes, operates affordable housing programs. 
Whenever the term ``jurisdiction'' is used in NAHASDA, it shall mean 
``Indian Area,'' except where specific reference is made to the 
jurisdiction of a court.
* * * * *
    Outcomes are the intended results o