Implementing Rental Housing Assistance for the Native Hawaiian Housing Block Grant Program, 9757-9764 [2024-02447]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 89, Number 29 (Monday, February 12, 2024)]
[Rules and Regulations]
[Pages 9757-9764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02447]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 1006

[Docket No. FR-6273-F-02]
RIN 2577-AD13


Implementing Rental Housing Assistance for the Native Hawaiian 
Housing Block Grant Program

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

ACTION: Final rule.

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SUMMARY: This rule amends HUD's regulations covering rental housing 
assistance for the Native Hawaiian Housing Block Grant (NHHBG) program, 
consistent with the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA). The amendments clarify and improve 
consistency with NAHASDA's statutory requirements and HUD's Indian 
Housing Block Grant (IHBG) program regulations. This rule would also 
help to make affordable housing opportunities, in the form of NHHBG-
assisted rental housing, more available to eligible Native Hawaiian 
families.

DATES: Effective March 13, 2024.

FOR FURTHER INFORMATION CONTACT: Claudine Allen, Lead Native Hawaiian 
Program Specialist, Office of Native American Programs, HUD Honolulu 
Field Office, 1003 Bishop Street, Suite 2100, Honolulu, HI 96813; 
telephone number 808-457-4674 (this is not a toll-free number). HUD 
welcomes and is prepared to receive calls from individuals who are deaf 
or hard of hearing, as well as from individuals with speech and 
communication disabilities. To learn more about how to make an 
accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

Statutory Authority for the Native Hawaiian Housing Block Grant program

    Section 513 of the Hawaiian Homelands Homeownership Act of 2000 
(HHH Act),\1\ Public Law 106-569, amended the Native American Housing 
Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.) 
(NAHASDA) by adding to it a new ``Title VIII--Housing Assistance for 
Native Hawaiians.'' Title VIII of NAHASDA established the Native 
Hawaiian Housing Block Grant (NHHBG) program to provide block grant 
assistance for affordable housing for eligible Native Hawaiians, 
including rental assistance.\2\
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    \1\ The HHH Act was enacted as both Title II of the Omnibus 
Indian Advancement Act (Pub. L. 106-568, 114 Stat. 2868, approved 
December 27, 2000) and Subtitle B of Title V of the American 
Homeownership and Economic Opportunity Act of 2000 (Pub. L. 106-569, 
114 Stat. 2944, approved December 27, 2000).
    \2\ Section 513 of the HHH Act adds sections 801 through 824 of 
NAHASDA's Title VIII, which authorize this NHHBG program. 25 U.S.C. 
4221 et seq. Although NAHASDA may be referenced throughout this 
rule, NHHBG serves Native Hawaiians specifically.
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    The NHHBG program must primarily benefit low-income Native Hawaiian 
families who are eligible to reside on the Hawaiian Home Lands. 25 
U.S.C. 4222(a); 25 U.S.C. 4228(a)(2)(A). These families experience more 
significant housing challenges compared to Native Hawaiian households 
overall, including other Hawaii residents and Native Hawaiians already 
residing on the Hawaiian Home Lands.

Interim Rule

    On June 13, 2002, HUD published an interim rule (``interim rule'') 
adding new regulations at 24 CFR part 1006 to implement the NHHBG 
program. 67 FR 40773. HUD modeled the NHHBG regulations after the 
Indian Housing Block Grant (IHBG) regulations implemented at 24 CFR 
part 1000 because NAHASDA authorizes and applies overlapping 
requirements to both programs.\3\
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    \3\ 67 FR 40773; see Native American Housing Assistance and 
Self-Determination Act of 1996 [hereinafter NAHASDA] sections 810-
811, 25 U.S.C. 4229-30. There are also differences between the 
statutory authorities governing the IHBG and NHHBG programs. In 
2008, the Native American Housing Assistance and Self-Determination 
Reauthorization Act of 2008 (Pub. L. 110-411) (NAHASDA 
Reauthorization Act), made several changes to, inter alia, statutory 
requirements governing HUD's IHBG program, and implemented statutory 
changes to NAHASDA made by several laws enacted between 1998 and 
2005. See 77 FR 71513. The NAHASDA Reauthorization Act did not amend 
statutory provisions governing block grant assistance for Native 
Hawaiians. See Native American Housing Assistance and Self-
Determination Reauthorization Act of 2008, Public Law 110-411, 122 
Stat. 4319-35.

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[[Page 9758]]

    The interim rule established program requirements pertaining to 
homeownership and rental assistance authorized under section 810 of 
Title VIII of NAHASDA.\4\ The new 24 CFR part 1006 as implemented by 
the interim rule closely followed the statute with some differences for 
clarification.
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    \4\ NAHASDA section 810(a), 25 U.S.C. 4229(a).
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Need To Amend NHHBG Regulations

    HUD has not comprehensively reviewed or amended 24 CFR part 1006 
since the interim rulemaking. Since then, Congress has amended 
statutory requirements, which HUD has implemented for the IHBG program 
through rulemaking, but not the NHHBG program.
    Additionally, current NHHBG regulations do not adequately explain 
how NHHBG's sole funding recipient, the Department of Hawaiian Home 
Lands (DHHL), may use funds for rental assistance. Prior to fiscal year 
2020, the DHHL used NHHBG funds primarily for homeownership housing 
assistance. In 2019, Hawaii changed administrative rules to allow the 
DHHL to expand residential lease offerings to include rental 
housing.\5\ HUD received feedback from the DHHL about the DHHL's rental 
housing projects currently in development. HUD then reviewed its 
regulations and determined that additional regulatory details would be 
necessary to support a fully successful rental housing program 
administered by the DHHL.
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    \5\ Dep't of Haw. Home Lands, Adoption of Chapter 10-7 Hawaii 
Administrative Rules (2019), https://dhhl.hawaii.gov/wp-content/uploads/2020/02/HAR-Ch-10-7_Eff-Aug-17-2019-1.pdf.
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II. The Proposed Rule

    On January 4, 2023, HUD published a proposed rule in the Federal 
Register (88 FR 328) to amend the NHHBG program regulations at 24 CFR 
part 1006 to provide necessary updates to NHHBG regulations and clarify 
how the DHHL may use NHHBG program funds for rental housing assistance, 
as authorized by Title VIII of NAHASDA.
    HUD's broad goals in proposing these changes were to decrease 
DHHL's burden in implementing rental assistance, improve low-income 
Native Hawaiian families' access to rental assistance, and clarify 
HUD's program requirement monitoring and enforcement tools. More 
specifically, the amendments to 24 CFR part 1006 were designed to 
achieve three outcomes: ensure compliance with the NHHBG program's 
statutory requirements; promote consistency between NHHBG and IHBG 
program regulations where the programs' statutory requirements overlap; 
and clarify the NHHBG regulatory rental assistance framework.
    The preamble to the proposed rule at 88 FR 328 includes a thorough 
explanation and justification of amendments and new sections.

III. This Final Rule

    This final rule adopts the proposed rule, published at 88 FR 328 
(Jan. 4, 2023), with the following revisions, based on public comments.
    First, HUD is striking the proposed definition of ``Homeless 
Family'' at Sec.  1006.10 to allow DHHL to retain flexibility with 
respect to its approach to homeless families; and changing the 
definition of ``project-based rental assistance'' to add that project-
based rental assistance may consist of rental assistance provided 
through an agreement for use of a DHHL property to account for 
situations where DHHL owns the building but contracts with an agency to 
manage the property as a facility where units are rented out.
    Second, HUD is revising Sec.  1006.215(f) to allow NHHBG funds to 
be used for management services not just for units developed with NHHBG 
funds, but for all units occupied by NHHBG eligible families, to 
account for the fact that some units occupied by NHHBG eligible 
families are not developed with NHHBG funds.
    This rule also makes non-substantive changes to the definition of 
``Person with a disability'' for clarity.
    The public comments section further explains these revisions to the 
proposed rule.

IV. Public Comments

    The public comment period for the proposed rule closed on March 6, 
2023. HUD received three distinct comments on the proposed rule. This 
section presents the significant issues, questions, and suggestions 
submitted by public commenters, and HUD's responses to these issues, 
questions, and suggestions. The following sections summarize the 
comments received on the proposed rule and HUD's responses.

General Support

    Commenters supported the proposed rule. Some commenters stated that 
they generally support the proposed rule and a commenter specifically 
supported HUD's proposed additions and revisions to 24 CFR part 1006 
but suggested some changes to the proposed regulatory text.
    One commenter stated that they support the effort, through this 
rulemaking, to reduce the burden on the recipient of NHHBG funds. This 
commenter stated that the proposed rule would increase availability of 
assisted rental housing through tenant-based rental assistance and 
offer Native Hawaiians more choice to reside in communities of their 
choosing. This commenter also noted that HUD's proposals allow 
qualifying families to enter into private tenancy agreements, and this 
would mean rental assistance would cover the initial deposit for 
eligible families.
    HUD Response: HUD appreciates the participation and feedback of the 
public during the proposed rule's availability for comment.

Sec.  1006.10 Definitions

    For the proposed definition of ``Homeless family'' in Sec.  
1006.10, one commenter noted that ``safe, sanitary and affordable 
housing'' is not defined, questioned the meaning of these terms, and 
recommended that HUD consider referencing the definition of 
``homeless'' in other HUD regulations, such as 24 CFR 578.3.
    For the proposed definition of ``Project-based rental assistance'' 
in Sec.  1006.10, the commenter recommended clarifying the definition 
by adding ``an agreement for the use of a DHHL property'' as an 
alternative to a contract with the owner, such that the first sentence 
of the definition would read: ``Project-based rental assistance means 
rental assistance provided through an agreement for use of a DHHL 
property or contract with the owner of an existing structure, where the 
owner agrees to lease the subsidized units to program participants.'' 
The commenter reasoned that where DHHL owns the building but contracts 
with an agency to manage the property as a facility where units are 
rented out, an agreement may be required.
    HUD Response: HUD appreciates the comment requesting clarification 
of ``safe, sanitary, and affordable housing'' within the proposed 
definition of ``Homeless family.'' The proposed definition was intended 
to codify existing policy and align the NHHBG regulations with the 
regulations for the IHBG program, not to introduce new requirements 
that may conflict with current practice. Because the proposed rule does 
not have any requirements related to the ``Homeless family'' 
definition, HUD has determined a definition for ``Homeless family'' is 
not necessary, will strike the proposed

[[Page 9759]]

definition, and declines to adopt or reference the definition of 
``homeless'' that appears at 24 CFR 578.3. This will allow DHHL to 
retain flexibility with respect to its approach to homeless families, 
without applying a definition that may prove limiting or incompatible 
with the unique nature of the NHHBG program. HUD appreciates the 
comment about the definition of ``Project-based rental assistance'' 
(PBRA) and acknowledges the suggested edit as it supports the different 
scenarios that could arise with project based rental assistance in the 
NHHBG program. HUD accepts the suggested edit to the definition of PBRA 
and has updated the regulatory text accordingly.

Sec.  1006.215 Housing Management Services

    One commenter supported the proposed addition of costs of the 
operation and maintenance of units developed with NHHBG funds to Sec.  
1006.215 but recommended that the language ``units developed with NHHBG 
funds'' be replaced with ``units occupied by NHHBG eligible families'' 
because other funds received by DHHL (for example, from the state of 
Hawaii) may be used to construct units receiving NHHBG funds for 
operation and maintenance. The language at paragraph (f) would then 
read: ``The costs of operation and maintenance of units occupied by 
NHHBG eligible families.''
    HUD Response: HUD supports allowing DHHL the ability to expand 
making affordable housing available to as many families as possible. 
HUD agrees with the commenter's suggested edit and has updated the 
regulatory text accordingly.

Sec.  1006.301 Eligible Families

    For the income eligibility criteria proposed in Sec.  
1006.301(b)(3), one commenter expressed concern with using median 
income for eligibility criteria in the state of Hawaii because wealthy 
families' income can distort the median income of the population. Due 
to these distortions, this commenter is concerned that permitting DHHL 
to use 10 percent of its planned Housing Plan for families whose income 
is 81 to 100 percent of the median income will inaccurately represent 
income within the state.
    HUD Response: Median income is the standard used in HUD programs to 
determine eligibility for assistance. HUD annually calculates median 
family income using Fair Market Rents to determine very low-income, 
low-income, and extremely low-income limits for programs across HUD, 
including the Section 8 program. Further, the proposed language aligns 
with the IHBG program, which publishes yearly income limits under 
NAHASDA based on median family income. Using median family income 
provides consistent interpretation of NAHASDA income limits within HUD 
and allows DHHL to use a small portion of funds to serve over-income 
families if it chooses to do so. It is not practicable or equitable for 
the NHHBG program to deviate from other HUD programs when determining 
income limits. As such, HUD will keep the proposed regulatory language.

Sec.  1006.307 Non-Low-Income Families

    A commenter said that improved income situations should not 
disqualify families currently receiving assistance from receiving 
further assistance.
    HUD Response: HUD appreciates the commenter's response. The 
proposed language allows families whose income circumstances improve to 
continue to participate in the program in accordance with DHHL's 
admission and occupancy policies. This is a long-standing policy that 
is being codified and is consistent with the IHBG program.

Sec.  1006.375 Other Federal Requirements: Housing Counseling

    A commenter recommended changing HUD's proposed Sec.  1006.375(d) 
by removing ``or provided in connection with,'' so that the paragraph 
reads: ``Housing counseling, as defined in Sec.  5.100, that is funded 
with NHHBG funds must be carried out in accordance with 24 CFR 5.111.'' 
The commenter reasoned that limiting the federal requirements to 
housing counseling funded with NHHBG funds gives DHHL greater 
flexibility for the significant funding from the State.
    HUD Response: HUD appreciates the commenter's suggestion, but HUD 
declines to accept it. The housing counseling requirements at 24 CFR 
part 5 are standard requirements applicable to all HUD programs unless 
inconsistent with the authorizing statute for that program. HUD's 
position is to maintain consistency in providing housing counseling via 
HUD-certified housing counselors across HUD programs. The commenter's 
suggested modification to 24 CFR 1006.375 conflicts with 24 CFR 
5.111(a), which requires housing counseling from a HUD certified 
housing counselor when provided under, or in connection with, any 
program administered by HUD. Accordingly, any housing counseling 
provided in connection with NHHBG assistance must be provided by a HUD-
certified housing counselor to comply with 24 CFR 5.111 and to maintain 
consistency with other HUD programs where housing counseling is 
involved.

Sec.  1006.377 Other Federal Requirements: Displacement, Relocation, 
and Acquisition

    In HUD's proposed Sec.  1006.377(c), outlining relocation 
assistance requirements for displaced persons, a commenter asked HUD to 
remove the requirement that wherever possible, minority persons shall 
be given reasonable opportunities to relocate to dwellings ``not 
located in an area of minority concentration, that are within their 
financial means'' (leaving the requirement that relocation be to 
``comparable and suitable decent, safe, and sanitary replacement 
dwellings''). This commenter reasoned that the specified relocation 
requirements may be difficult to attain depending on the island and 
area where units may be found within a family's means.
    HUD Response: HUD has considered the comment but declines to make 
the proposed change. The language the commenter highlights is directly 
from the Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970 (URA) regulation at 49 CFR 24.205(c)(2)(ii)(D) and 
is not subject to changes under this rulemaking. HUD recognizes it may 
not always be feasible to relocate displaced individuals to areas not 
of a minority concentration. However, given that 49 CFR 
24.205(c)(2)(ii)(D) already provides flexibility for when it is not 
possible to relocate individuals to areas not of a minority 
concentration, HUD does not agree that additional flexibility or 
removal of the requirement when feasible is necessary.

V. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563 and 14094

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned.'' Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory

[[Page 9760]]

approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. Executive Order 14094 entitled ``Modernizing 
Regulatory Review'' amends section 3(f) of Executive Order 12866 
(Regulatory Planning and Review), among other things.
    HUD's revisions to NHHBG program requirements and regulations would 
clarify that NHHBG funds can be used for certain affordable housing 
activities including project-based rental assistance, permit rental 
assistance to be provided off the Hawaiian Home Lands when Congress 
authorizes such use through appropriations acts, and add or change 
certain requirements for low-income and non-low-income families. 
However, there is no significant impact because DHHL is the sole 
recipient of NHHBG funds. This rule was not subject to OMB review. This 
rule is not a ``significant regulatory action'' as defined in Section 
3(f) of Executive Order 12866 and is not an economically significant 
regulatory action.

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 of any rule 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. 
This rule will amend HUD regulations to implement rental housing 
assistance for the NHHBG program, consistent with title VIII of 
NAHASDA. These amendments impose no significant economic impact on a 
substantial number of small entities, and there is only a singular 
recipient of funding. Therefore, the undersigned certifies that this 
final rule will not have a significant impact on a substantial number 
of small entities.

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 the private sector. This rule does not impose 
any federal mandates on any state, local, or tribal governments or the 
private sector within the meaning of the UMRA.

Environmental Review

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations in 24 CFR 
part 50 that implement section 102(2)(C) of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI 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, Room 10276, 
Department of Housing and Urban Development, 451 Seventh Street SW, 
Washington, DC 20410-0500. The FONSI is also available through the 
Federal eRulemaking Portal at https://www.regulations.gov.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Order. This rule does not have federalism 
implications and would not impose substantial direct compliance costs 
on state and local governments nor preempt state law within the meaning 
of the Order.

List of Subjects in 24 CFR Part 1006

    Community development block grants; Grant programs--housing and 
community development; Grant programs--Indians; Hawaiian Natives; Low- 
and moderate-income housing; Reporting and recordkeeping requirements.

    For the reasons described in the preamble, the Department of 
Housing and Urban Development amends 24 CFR part 1006, as set forth 
below:

PART 1006--NATIVE HAWAIIAN HOUSING BLOCK GRANT PROGRAM

0
1. The authority citation for part 1006 is revised to read as follows:

    Authority: 12 U.S.C. 1701x, 1701x-1; 25 U.S.C. 4221 et seq.; 42 
U.S.C. 3535(d), Pub. L. 115-141, Pub. L. 116-6, Pub. L. 116-94, Pub. 
L. 116-260, Pub. L. 117-103, Pub. L. 117-328.


0
2. In Sec.  1006.10, add alphabetically definitions for ``Annual 
income'', ``Income'', ``NAHASDA'', ``Person with a disability'', and 
``Project-based rental assistance'' to read as follows:


Sec.  1006.10   Definitions.

* * * * *
    Annual income has one or more of the following meanings, as 
determined by the Department of Hawaiian Home Lands:
    (1) ``Annual income'' as defined for HUD's Section 8 programs in 24 
CFR part 5, subpart F (except when determining the income of a 
homebuyer for an owner-occupied rehabilitation project, the value of 
the homeowner's principal residence may be excluded from the 
calculation of net family assets); or
    (2) The definition of income as used by the U.S. Census Bureau. 
This definition includes:
    (i) Wages, salaries, tips, commissions, etc.;
    (ii) Self-employment income;
    (iii) Farm self-employment income;
    (iv) Interest, dividends, net rental income, or income from estates 
or trusts;
    (v) Social security or railroad retirement;
    (vi) Supplemental Security Income, Aid to Families with Dependent 
Children, or other public assistance or public welfare programs;
    (vii) Retirement, survivor, or disability pensions; and
    (viii) Any other sources of income received regularly, including 
Veterans' (VA) payments, unemployment compensation, and alimony; or
    (3) Adjusted gross income as defined for purposes of reporting 
under Internal Revenue Service (IRS) Form 1040 series for individual 
Federal annual income tax purposes.
* * * * *
    Income means the term ``income'' as defined in Section 4(9) of 
NAHASDA.
* * * * *
    NAHASDA means the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4101 et seq.).
* * * * *
    Person with a disability, as further explained in 28 CFR 35.108, is 
defined as follows:
    (1) Definition of person with a disability. ``Person with a 
disability'' means a person who:
    (i) Has a physical or mental impairment which substantially limits 
one or more major life activities;
    (ii) Has a record of having such an impairment;
    (iii) Is regarded as having such an impairment;
    (iv) Has a disability as defined in section 223 of the Social 
Security Act; or
    (v) Has a developmental disability as defined in section 102 of the 
Developmental Disabilities Assistance and Bill of Rights Act.
    (2) Definition of physical or mental impairment. For the purposes 
of this definition, the term ``physical or mental impairment'' means:
    (i) Any physiological disorder or condition, cosmetic 
disfigurement, or anatomical loss affecting one or more

[[Page 9761]]

body systems, such as: neurological, musculoskeletal, special sense 
organs, respiratory (including speech organs), cardiovascular, 
reproductive, digestive, genitourinary, immune, circulatory, hemic, 
lymphatic, skin, and endocrine; or
    (ii) Any mental or psychological disorder such as intellectual 
disability, organic brain syndrome, emotional or mental illness, and 
specific learning disability.
    (3) Nonexhaustive list of physical and mental impairments. For the 
purposes of this definition, the term ``physical or mental impairment'' 
includes, but is not limited to, contagious and noncontagious diseases 
and conditions such as the following: orthopedic, visual, speech, and 
hearing impairments, and cerebral palsy, epilepsy, muscular dystrophy, 
multiple sclerosis, cancer, heart disease, diabetes, intellectual 
disability, emotional illness, dyslexia and other specific learning 
disabilities, Attention Deficit Hyperactivity Disorder, Human 
Immunodeficiency Virus infection (whether symptomatic or asymptomatic), 
tuberculosis, drug addiction, and alcoholism.
    (4) Nonexhaustive list of major life activities. For the purposes 
of this definition, the term ``major life activities'' includes, but is 
not limited to:
    (i) Caring for oneself, performing manual tasks, seeing, hearing, 
eating, sleeping, walking, standing, sitting, reaching, lifting, 
bending, speaking, breathing, learning, reading, concentrating, 
thinking, writing, communicating, interacting with others, and working; 
and
    (ii) The operation of a major bodily function, such as the 
functions of the immune system, special sense organs and skin, normal 
cell growth, and digestive, genitourinary, bowel, bladder, 
neurological, brain, respiratory, circulatory, cardiovascular, 
endocrine, hemic, lymphatic, musculoskeletal, and reproductive systems. 
The operation of a major bodily function includes the operation of an 
individual organ within a body system.
* * * * *
    Project-based rental assistance means rental assistance provided 
through an agreement for use of a DHHL property or a contract with the 
owner of an existing structure, where the owner agrees to lease the 
subsidized units to program participants. Program participants will not 
retain the rental assistance if they move from the project.
* * * * *

0
3. In Sec.  1006.101, revise the introductory text and paragraphs (c) 
and (d) to read as follows:


Sec.  1006.101  Housing plans requirements.

    The DHHL must submit a housing plan each year prior to the start of 
its fiscal year. The housing plan has two components, a five-year plan 
and a one-year plan, as follows:
* * * * *
    (c) Updates to plan--(1) In general. Subject to paragraph (c)(2) of 
this section, after the housing plan has been submitted for a fiscal 
year, the DHHL may comply with the provisions of this section for any 
succeeding fiscal year with respect to information included for the 5-
year period under paragraph (a) of this section by submitting only such 
information regarding such changes as may be necessary to update the 5-
year period of the plan previously submitted. Information for the 1-
year period under paragraph (b) of this section must be submitted each 
fiscal year.
    (2) Complete plans. The DHHL shall submit a complete plan that 
includes a new five-year plan under this section not later than 4 years 
after submitting an initial plan, and not less frequently than every 4 
years thereafter.
    (d) Amendments to plan. The DHHL must submit any amendment to the 
one-year housing plan for HUD review before undertaking any new 
activities that are not addressed in the current plan that was reviewed 
by HUD and found to be in compliance with section 803 of NAHASDA and 
this part. The amendment must include a description of the new activity 
and a revised budget reflecting the changes. HUD will review the 
revised plan and will notify DHHL within 30 days whether the amendment 
complies with applicable requirements.

0
4. Revise Sec.  1006.201 to read as follows:


Sec.  1006.201  Eligible affordable housing activities.

    Eligible affordable housing activities are development, housing 
services, housing management services, crime prevention and safety 
activities, and model activities. Affordable housing activities under 
this part are activities conducted in accordance with subpart D of this 
part to develop, operate, maintain, or support housing for rental or 
homeownership; or provide services with respect to affordable housing 
through the activities described in this subpart. NHHBG funds may only 
be used for eligible activities that are consistent with the DHHL's 
housing plan.

0
5. In Sec.  1006.205, revise paragraph (a)(9) to read as follows:


Sec.  1006.205  Development.

    (a) * * *
    (9) The development and rehabilitation of utilities, necessary 
infrastructure, and utility services;
* * * * *


Sec.  1006.210  [Amended]

0
6. In Sec.  1006.210, remove paragraph (g) and redesignate paragraph 
(h) as paragraph (g).

0
7. In Sec.  1006.215:
0
a. Revise paragraph (e);
0
b. Redesignate paragraph (f) as paragraph (g); and
0
c. Add new paragraph (f).
    The revision and addition read as follows:


Sec.  1006.215  Housing management services.

* * * * *
    (e) Management of tenant-based rental assistance;
    (f) The costs of operation and maintenance of units occupied by 
NHHBG eligible families; and
* * * * *

0
8. Add Sec.  1006.227 to read as follows:


Sec.  1006.227  Tenant-based or project-based rental assistance.

    NHHBG funds may be used for the provision of tenant-based rental 
assistance, which may include security deposits and first month's rent, 
and project-based rental assistance.
    (a) Rental assistance must comply with the requirements of this 
part and be provided to eligible families.
    (b) Rental assistance may be provided to eligible families both on 
and off the Hawaiian Home Lands provided such use is consistent with 
the applicable appropriations acts governing the use of the NHHBG 
funds.


Sec.  1006.230  [Amended]

0
9. In Sec.  1006.230, in paragraph (f), remove the citation 
``Sec. Sec.  1006.370 and 1006.375'' and add in its place the citation 
``Sec. Sec.  1006.370, 1006.375, and 1006.377''.

0
10. In Sec.  1006.235, revise the section heading to read as follows:


Sec.  1006.235  Types of investments and forms of assistance.

* * * * *

0
11. Revise Sec.  1006.301 to read as follows:


Sec.  1006.301  Eligible families.

    (a) General. Assistance for eligible housing activities under the 
Act and this part is limited to low-income Native Hawaiian families who 
are eligible to reside on the Hawaiian Home Lands, except as provided 
under paragraphs (b) and (c) of this section.

[[Page 9762]]

    (b) Exception to low-income requirement--(1) Other Native Hawaiian 
families. The DHHL may provide assistance for homeownership activities, 
which may include assistance in conjunction with loan guarantee 
activities to Native Hawaiian families who are not low-income families, 
as approved by HUD, to address a need for housing for those families 
that cannot be reasonably met without that assistance. DHHL must 
determine and document the need for housing for each family that cannot 
reasonably be met without such assistance.
    (2) HUD approval. HUD approval is required, except as provided in 
paragraph (b)(3)(i) of this section, if the DHHL plans to use grant 
amounts provided under the Act for assistance in accordance with 
paragraph (b)(1) of this section. HUD approval shall be obtained by 
DHHL submitting proposals in its housing plan, by amendment of the 
housing plan, or by special request to HUD at any time.
    (3) Limitations. (i) DHHL may use up to 10 percent of the amount 
planned in its Housing Plan for its fiscal year for families whose 
income is 81 to 100 percent of the median income without HUD approval. 
HUD approval is required if DHHL plans to use more than 10 percent of 
the amount planned for its fiscal year for such assistance or to 
provide housing for families with income over 100 percent of median 
income.
    (ii) Non-low-income families cannot receive the same benefits 
provided low-income Native Hawaiian families. The amount of assistance 
non-low-income families may receive will be determined by DHHL as 
established in its written policies.
    (iii) The requirements set forth in paragraphs 3(i) and (ii) of 
this section do not apply to other families who are non-low income that 
DHHL has determined to be essential under paragraph (c) of this 
section.
    (c) Other families. The DHHL may provide housing or NHHBG 
assistance to a family that is not low-income and is not a Native 
Hawaiian family without HUD approval if the DHHL documents that:
    (1) The presence of the family in the housing involved is essential 
to the well-being of Native Hawaiian families; and
    (2) The need for housing for the family cannot be reasonably met 
without the assistance.
    (d) Written policies. The DHHL must develop, follow, and have 
available for review by HUD written policies governing the eligibility, 
admission, and occupancy of families for housing assisted with NHHBG 
funds and governing the selection of families receiving other 
assistance under the Act and this part.

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12. In Sec.  1006.305, revise paragraphs (a) and (b) to read as 
follows:


Sec.  1006.305  Low-income requirement and income targeting.

    (a) In general. Housing qualifies as affordable housing for 
purposes of the Act and this part, provided that the family occupying 
the unit is low-income at the following times:
    (1) In the case of rental housing, at the time of the family's 
initial occupancy of such unit;
    (2) In the case of housing for homeownership, at the time of 
purchase. When DHHL enters into a loan contract with the family for 
NHHBG assistance to purchase or construct a homeownership unit, the 
time of purchase means the time that loan contract is executed;
    (3) In the case of owner-occupied housing units, at the time the 
family receives NHHBG assistance;
    (4) In the case of a lease-purchase agreement for existing housing 
or for housing to be constructed, at the time the lease-purchase 
agreement is signed; and
    (5) In the case of emergency assistance to prevent homelessness or 
foreclosure, at the time the family receives NHHBG assistance.
    (b) Affordability requirements. NHHBG-assisted rental and 
homeownership units must meet the affordability requirements for the 
remaining useful life of the property, as determined by HUD, or such 
other period as HUD determines in accordance with section 813(a)(2)(B) 
of the Act.
* * * * *

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13. Add Sec.  1006.306 to read as follows:


Sec.  1006.306  Income verification for receipt of NHHBG assistance.

    (a) Initial determination of eligibility. DHHL must verify that the 
family is income eligible based on anticipated annual income. The 
family is required to provide documentation to verify this 
determination. DHHL is required to maintain the documentation on which 
the determination of eligibility is based.
    (b) Periodic verification. DHHL may require a family to 
periodically verify its income in order to determine housing payments 
or continued occupancy consistent with DHHL's written policies. When 
income verification is required, the family must provide documentation 
which verifies its income, and this documentation must be retained by 
DHHL.

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14. Add Sec.  1006.307 to read as follows:


Sec.  1006.307  Non-low-income families.

    A family that was low-income at the times described in Sec.  
1006.305 but subsequently becomes a non-low-income family may continue 
to participate in the program in accordance with DHHL's admission and 
occupancy policies. The 10 percent limitation in Sec.  
1006.301(b)(3)(i) in this part shall not apply to such families. Such 
families may be made subject to the additional requirements in Sec.  
1006.301(b)(3)(ii) of this part based on those policies.

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15. Revise Sec.  1006.310 to read as follows:


Sec.  1006.310  Rent and lease-purchase limitations.

    (a) Rents. The DHHL must develop and follow written policies 
governing rents for rental housing units assisted with NHHBG funds, 
including methods by which rents are determined.
    (1) Maximum and minimum rent. The maximum monthly tenant rent 
payment for a low-income family may not exceed 30 percent of the 
family's monthly adjusted income. DHHL may also decide to compute 
rental or homebuyer payments on any lesser percentage of the adjusted 
income of the family. The Act does not set minimum rent or homebuyer 
payments; however, DHHL may do so.
    (2) Flat or income-adjusted rent. Flat rent means the tenant's rent 
payment is set at a specific dollar amount or specific percent of 
market rent. Income-adjusted rent means the tenant's rent payment 
varies based on the tenant's income (i.e., 30 percent of monthly 
adjusted income). DHHL may charge flat or income-adjusted rents, 
provided the rental or homebuyer payment of the low-income family does 
not exceed 30 percent of the family's adjusted income.
    (3) Utilities. Utilities may be considered a part of rent or 
homebuyer payments if DHHL decides to define rent or homebuyer payments 
to include utilities in its written policies on rents and homebuyer 
payments required by section 811(a)(1) of NAHASDA. DHHL may define 
rents and homebuyer payments to exclude utilities.
    (b) Lease-purchase. If DHHL assists low-income families to become 
homeowners of rental housing through a long-term lease (i.e., 10 or 
more years) with an option to purchase the housing, DHHL must develop 
and follow written policies governing lease-purchase payments (i.e., 
homebuyer payments) for rental housing units assisted with NHHBG funds, 
including methods by which payments are determined. The maximum monthly 
payment for a low-

[[Page 9763]]

income family may not exceed 30 percent of the family's monthly 
adjusted income.
    (c) Exception for certain homeownership payments. Homeownership 
payments for families who are not low-income, as permitted under Sec.  
1006.301(b), are not subject to the requirement that homebuyer payments 
may not exceed 30 percent of the monthly adjusted income of that 
family.
    (d) Applicability. Low-income families who receive homeownership 
assistance other than lease-purchase assistance are not subject to the 
limitations in paragraphs (a) and (b) of this section.


Sec.  1006.340   [Amended]

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16. In Sec.  1006.340, in paragraph (a), remove the citation ``Sec.  
1006.235'' and add in its place the citation ``section 812(b) of the 
Act''.


Sec.  1006.350   [Amended]

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17. In Sec.  1006.350, in paragraph (a), remove the word 
``decisionmaking'' and add in its place the word ``decision-making''.

0
18. Revise Sec.  1006.375 to read as follows:


Sec.  1006.375  Other Federal requirements.

    (a) Lead-based paint. The following subparts of HUD's lead-based 
paint regulations at 24 CFR part 35, which implement the Lead-Based 
Paint Poisoning Prevention Act (42 U.S.C. 4822-4846) and the 
Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 
4851-4856), apply to the use of assistance under this part:
    (1) Subpart A (Sec. Sec.  35.80 through 35.98) for disclosures of 
known lead-based paint hazards upon sale or lease of residential 
property;
    (2) Subpart B (Sec. Sec.  35.100 through 35.175) for general lead-
based paint requirements and definitions;
    (3) Subpart H (Sec. Sec.  35.700 through 35.830) for project-based 
rental assistance;
    (4) Subpart J (Sec. Sec.  35.900 through 35.940) for 
rehabilitation;
    (5) Subpart K (Sec. Sec.  35.1000 through 35.1020) for acquisition, 
leasing, support services, or operation;
    (6) Subpart M (Sec. Sec.  35.1200 through 35.1225) for tenant-based 
rental assistance; and
    (7) Subpart R (Sec. Sec.  35.1300 through 35.1355) for methods and 
standards for lead-based paint hazard evaluation and Reduction 
activities.
    (b) Drug-free workplace. The Drug-Free Workplace Act of 1988 (41 
U.S.C. 701, et seq.) and HUD's implementing regulations in 2 CFR part 
2429 apply to the use of assistance under this part.
    (c) Audits. The DHHL must comply with the requirements of the 
Single Audit Act and 2 CFR part 200, subpart F, with the audit report 
providing a schedule of expenditures for each grant. A copy of each 
audit must be submitted to the Federal Audit Clearinghouse.
    (d) Housing counseling. Housing counseling, as defined in Sec.  
5.100, that is funded with or provided in connection with NHHBG funds 
must be carried out in accordance with 24 CFR 5.111.
    (e) Section 3. Requirements under Section 3 of the Housing and 
Urban Development Act of 1968 and 24 CFR part 75 apply.
    (f) Debarment and suspension. The nonprocurement, debarment, and 
suspension requirements at 2 CFR part 2424 are applicable.

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19. Add Sec.  1006.377 to subpart D to read as follows:


Sec.  1006.377  Other Federal requirements: Displacement, Relocation, 
and Acquisition.

    The following relocation and real property acquisition policies are 
applicable to programs developed or operated under the Act and this 
part:
    (a) Real property acquisition requirements. The acquisition of real 
property for an assisted activity is subject to the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970, as 
amended (42 U.S.C. 4601 et seq.) (URA) and the requirements of 49 CFR 
part 24, subpart B.
    (b) Minimize displacement. Consistent with the other goals and 
objectives of the Act and this part, the DHHL shall assure that it has 
taken all reasonable steps to minimize the displacement of persons 
(households, businesses, nonprofit organizations, and farms) as a 
result of a project assisted under the Act and this part.
    (c) Relocation assistance for displaced persons. A displaced person 
(defined in paragraph (f) of this section) must be provided relocation 
assistance at the levels described in, and in accordance with the URA 
and the requirements of 49 CFR part 24. A displaced person must be 
advised of his or her rights under the Fair Housing Act (42 U.S.C. 3601 
et seq.). Whenever possible, minority persons shall be given reasonable 
opportunities to relocate to comparable and suitable decent, safe, and 
sanitary replacement dwellings, not located in an area of minority 
concentration, that are within their financial means. For a displaced 
person with a disability, a unit is not a comparable replacement 
dwelling under the URA unless it is free of any barriers which would 
preclude reasonable ingress, egress, or use of the dwelling by such a 
displaced person in accordance with the definition of ``Decent, safe, 
and sanitary dwelling'' at 49 CFR 24.2. Furthermore, the unit must also 
meet the requirements of section 504 of the Rehabilitation Act (29 
U.S.C. 794) as implemented by HUD's regulations at 24 CFR part 8, 
subpart C.
    (d) Appeals to the DHHL. A person who disagrees with the DHHL'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 
DHHL in accordance with URA requirements of 49 CFR 24.10.
    (e) Responsibility of DHHL. (1) The DHHL shall certify that it will 
comply with the URA requirements of 49 CFR part 24, and the 
requirements of this section. The DHHL shall ensure such compliance 
notwithstanding any third party's contractual obligation to the DHHL to 
comply with the provisions in this section.
    (2) The cost of required relocation assistance is an eligible 
project cost in the same manner and to the same extent as other project 
costs. However, such assistance may also be paid for with funds 
available to the DHHL from any other source.
    (3) DHHL must provide proper and timely distribution of notices to 
residents in accordance with the URA regulations. This includes the 
General Information Notice (GIN), the Notice of Relocation Eligibility, 
the Notice to Owner, and the 90-Day Notice. All notices must be sent in 
accordance with 49 CFR 24.203 and 24.102. Notices of Relocation 
Eligibility are typically triggered by the Initiation of Negotiation 
(ION).
    (4) The DHHL shall maintain records in sufficient detail to 
demonstrate compliance with this section.
    (f) 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 the Act. 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 a housing 
plan that is later approved;

[[Page 9764]]

    (ii) Any person, including a person who moves before the date the 
housing plan is submitted to HUD, that the DHHL 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 execution of the agreement between 
the DHHL 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) Thirty 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:
    (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;
    (B) The tenant-occupant is required to temporarily relocate for 
more than one year; or
    (C) 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 this section for the 
definition of ``Displaced Person,'' 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 
housing plan 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 meets the definition of ``persons not displaced'' 
as defined in 49 CFR 24.2; or
    (iii) The DHHL 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 in accordance with 49 CFR 24.2.
    (3) The DHHL may at any time ask HUD to determine whether a 
specific displacement is or would be covered under this section.
    (g) Definition of initiation of negotiations. For purposes of 
determining the formula for computing the replacement housing 
assistance to be provided to a person displaced from a dwelling as a 
direct result of acquisition, rehabilitation, or demolition of the real 
property, the term Initiation of Negotiations (ION) date means the 
execution of the written agreement covering the acquisition, 
rehabilitation, or demolition (See 49 CFR 24.2).

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20. In Sec.  1006.410, revise paragraph (a)(2), add paragraph (a)(3), 
and revise paragraph (c)(1) to read as follows:


Sec.  1006.410  Performance reports.

    (a) * * *
    (2) Submit a report in a form acceptable to HUD, within 90 days of 
the end of the DHHL's fiscal year, describing the conclusions of the 
review.
    (3) DHHL may submit a written request for an extension of the 
deadline. HUD will establish a new date for submission if the extension 
is granted.
* * * * *
    (c) * * *
    (1) Comments by Native Hawaiians. In preparing a report under this 
section, the DHHL shall make the report publicly available to Native 
Hawaiians who are eligible to reside on the Hawaiian Home Lands and 
give a sufficient amount of time to permit them to comment on that 
report, in such manner and at such time as the DHHL may determine, 
before it is submitted to HUD.
* * * * *

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21. In Sec.  1006.420, add a heading to paragraph (c) to read as 
follows:


Sec.  1006.420  Review of DHHL's performance.

* * * * *
    (c) Failure to maintain records. * * *

Adrianne Todman,
Deputy Secretary for U.S. Department of Housing and Urban Development.
[FR Doc. 2024-02447 Filed 2-9-24; 8:45 am]
BILLING CODE 4210-67-P