# Indian Housing Program: Proposed Amendments > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-17838 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** August 1, 1994 ## Text DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Assistant Secretary for Public and Indian Housing 24 CFR Parts 905 and 950 [Docket No. R-94-1742; FR-3646-P-01] RIN 2577-AB43 Indian Housing Program: Proposed Amendments AGENCY: Office of the Assistant Secretary for Public and Indian Housing, HUD. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: This proposed rule would add a new part 950 to HUD's regulations. New part 950 would contain the Indian Housing Consolidated regulations that are currently set forth in 24 CFR part 905. In addition to moving the Indian Housing Consolidated regulations from part 905 to part 950, the proposed rule would make a number of amendments to the Indian Housing Consolidated regulations to simplify program processes, reduce the number of regulatory requirements, and provide more flexibility to local Tribal and Indian housing authority officials in the administration of the Indian Housing program. DATES: Comments due date: September 30, 1994. ADDRESSES: Interested persons are invited to submit comments regarding this proposed rule to the Rules Docket Clerk, Office of the General Counsel, Room 10276, Department of Housing and Urban Development, 451 Seventh Street, S.W., Washington, D.C. 20410-0500. Communications should refer to the above docket number and title. Facsimile (FAX) comments are not acceptable. A copy of each communication submitted will be available for public inspection and copying between 7:30 a.m. to 5:30 p.m. weekdays at the above address. FOR FURTHER INFORMATION CONTACT: Dominic Nessi, Director, Office of Native American Programs, Public and Indian Housing, Room 4140, Department of Housing and Urban Development, 451 Seventh Street SW, Washington, DC 20410, telephone (202) 708-1015, or (202) 708-0850 (these are not toll-free numbers). Hearing- or speech-impaired persons may use the TDD number by contacting the Federal Information Relay Service on 1-800-877-TDDY (1-800-877-8339) (a toll-free number) or 202- 708-9300 (this is not a toll free number). SUPPLEMENTARY INFORMATION: I. Paperwork Burden This proposed rule does not add to the information collection requirements currently contained in 24 CFR part 905, and that already have been approved and assigned OMB control numbers under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520). These numbers are shown under the applicable sections. II. Background Title II of the United States Housing Act of 1937 (42 U.S.C. 1437aa) (``the Act''), as amended provides for the establishment of the Indian Housing program. The Indian Housing program includes the Rental program and the Mutual Help and Turnkey III Homeownership Opportunity Programs. A number of regulatory revisions have been made to the Indian Housing program in the past four years designed to provide IHAs with more administrative flexibility. Most recently, a final rule for ``Indian Housing: Revised Consolidated Program Regulations'' was published on June 24, 1992 (56 FR 28250) and became effective on October 3, 1992. This proposed rule published today continues that trend. The move from part 905 to part 950 will allow HUD's Office of Native American Programs to consolidate all Native American program regulations in consecutive CFR parts. HUD's Community Development Block Grant regulations that are applicable to Indian tribes and currently codified in 24 CFR part 571 will eventually be moved to 24 CFR part 951. III. Program Streamlining A. Administrative Actions and Pre-Publication Comments The primary goal in undertaking these revisions to the Indian Housing Program regulations is to provide greater discretion and responsibility to IHAs in carrying out their housing programs, thereby returning them to local control. Since September 1993, the six Native American Program Field Offices have been conducting an extensive consultation with IHAs and Tribal officials. A significant number of comments were submitted which constitute the basis for the revisions contained in this proposed rule. A consultation session to discuss these changes and to provide for additional input was held in Washington, DC, with the National American Indian Housing Council, eight regional IHA associations, as well as a number of representatives from other IHAs. Additional verbal comments were received from the Native American housing community at that time. Each regional Indian housing association received a full set of the comments submitted by other IHAs. Interested parties should contact their respective regional associations for a copy of these comments. Consistent with the principles of Executive Order 12866, HUD has reviewed the existing Indian Housing regulations, and has proposed modifications that are designed to make these regulations more effective, consistent, understandable and sensible. B. Proposed Amendments The following describes the amendments proposed to be made to the Indian Housing regulations. Unless otherwise indicated, the references to regulatory sections and subparts are to those in the existing regulations in 24 CFR part 905. Additionally, unless otherwise indicated, the section numbers in new part 950 will remain the same as currently set forth in part 905 (e.g., Sec. 905.105 will be renumbered Sec. 950.150). SUBPART A--GENERAL 905.105 Types of low income housing projects. The types of low income housing projects contained in this section has been removed in an effort to streamline the regulations. The definitions will be included in the Indian Housing Management Handbook. 905.115 Applicability of civil rights. The civil rights requirements contained in this section would be amended to include a reference to title II of the Americans with Disabilities Act (42 U.S.C. 12131). 905.126 Establishment of IHAs by Tribal ordinance. The model Tribal Ordinance contained in this section have been removed and will be placed in a handbook for reference. The revised language will state, ``The form of Tribal ordinance shall be determined by the Tribe and reviewed by the ONAP Administrator. The IHA must also demonstrate that it has the legal capacity to develop, own and operate a public housing project under the Act. A sample format will be provided by HUD.'' 905.135 Administrative capability. Verbal, as well as written comments, recommended that the system could be simplified to benefit both HUD and the IHAs. No specific written comments were given. Comments received during the Washington, D.C. consultation were mixed as to the need for change. Based on the discussions during the meeting, slight revisions have been made to the language in new Sec. 950.135(a) which could provide flexibility in the future regarding determinations of administrative capability. The appeal process contained in this section also has been revised based on HUD's recent reorganization. 905.140 Certification of housing managers. The certification of housing managers as a Federal requirement has been removed. HUD encourages the Indian housing community to continue the effort to professionalize the industry. Subpart B--Procurement General In the current regulation, subparts B and C of part 905 contain numerous references to approval by HUD for ``high risk'' IHAs. This proposed rule provides for the assumption that procurement and development processing will be completed by IHAs that are not designated ``high risk''. Procedures addressing processing for ``high risk'' IHAs are contained in Sec. 905.210. This modification has resulted in significant editing of subparts B and C but has no other impact on program requirements. Additionally, both subparts B and C have been reorganized to more closely follow processing steps. 905.160 Procurement standards. This section has been reworded to clarify that an IHA Board of Commissioners must assure that program requirements have been satisfied before execution of contracts. Previous wording required the Board to certify to compliance before a contract is executed. The proposed language allows compliance with this requirement if the IHA Board of Commissioners develops procurement policies in accordance with this subpart and 24 CFR part 85 and reviews compliance with these policies on a regular basis. The requirement for submission of a bidding package or a certification of compliance prior to the solicitation of bids/proposals is proposed to be removed. Such certification is to be submitted after award of contract (see new Sec. 950.260). 905.165 Indian preference requirements [Renumbered 950.175]. The Indian Preference (IP) part has been completely re-written and simplified. The re-written section closely follows the IP requirements included in the Indian CDBG regulations in 24 CFR part 571. It is anticipated that standardization of IP requirements between the Indian Housing, CDBG and HOME programs will provide improved flexibility to IHAs and tribes and will be simpler to understand and comply with for both grantees and contractors/suppliers. The proposed rule would remove HUD's involvement in the Indian Preference complaint process. Complaint resolution, including appeals and administrative hearings, is proposed to be contained at the IHA level. HUD will continue to monitor IHA compliance with Indian Preference requirements during periodic performance monitoring reviews. This proposal is made to expedite the complaint process and to vest full authority for compliance with Indian Preference with local officials. 905.175 Methods of procurement [Renumbered 950.165]. The ``X'' factor method has been removed and will be addressed in the program handbook. The section ``Methods of procurement'' was a continuation of the IP requirements of the program. With the simplification of IP (see new Sec. 950.160) this part has been modified to recite the provisions of 24 CFR 85.36(d). 905.180 Training and employment requirements [Renumbered 950.175]. This section would be relocated to the Indian Preference section (noted earlier in this preamble) and simplified to enable IHAs to develop programs which can more adequately reflect local conditions and needs. Subpart C--Development 905.210 Development priorities. The requirements for development priorities were removed from U.S. Housing Act of 1937, as amended, by the Housing and Community Development Act of 1992. Accordingly, the requirements currently contained in existing Sec. 905.210 are not contained in the proposed rule. 905.212 Authority for proceeding without HUD approval [Renumbered 950.210]. As part of the revisions to subparts B and C of part 905, to remove specific requirements for ``high risk'' IHA processing, this section had been modified to provide for HUD to require an IHA to obtain approval for additional processing steps where it is determined necessary. The section includes three circumstances where HUD may impose additional requirements on an IHA during the development period. 905.215 Production methods and requirements [Retitled ``Production methods'']. The explanations of the usual methods of development used by IHAs have been abbreviated in the proposed rule and a clarification has been made that an IHA can use whatever method of development it chooses so long as the method is not counter to the requirements of 24 CFR part 85. HUD believes that this revision expands the opportunities for IHAs to utilize new and innovative means of producing housing and may result in lower cost housing developed in shorter time periods. The listing of public advertisement requirements has been removed. These requirements are more fully covered in 24 CFR part 85 and the program handbooks. 905.220 Application procedures [Renumbered 950.225, and retitled ``Application'']. Timeframes for beginning review of applications; initial review and request for supplemental information steps; and other processing instructions have been removed from this section. Processing steps such as these are more appropriately covered in the program handbook and, if necessary, in the program NOFA. The term ``ranked'' in existing paragraph (c) of this section has been replaced with the correct term--``rated''. Projects are rated by program type but ranked together to arrive at an ordered list for funding determinations. The proposed rule clarifies that project funds cannot be used for expenses of another project except for comprehensive planning. This requirement is in the current regulations but is not clear. The limitation on planning funds of 3 percent of the program reservation has been removed. Experience has shown that an arbitrary percentage is impractical with the result being that many IHAs either requesting a waiver of the 3 percent limitation or delaying payment of incurred expenses. The proposed language specifies that IHAs must justify the level of funding for planning regardless of the amount requested. The word ``cluster'' has been removed from examples contained in the comprehensive housing plan section. The removal of this term clarifies that comprehensive planning is not limited to cluster or subdivision housing sites. 950.230 Project coordination [New section]. A new section has been added to address project coordination. The new section specifies that IHAs must plan for the development with the tribe, utility companies, and other state or Federal agencies and schedule completion of these activities. While IHAs have always participated in the coordination of project planning, HUD frequently took a leadership role in the past. With the removal of HUD from most aspects of planning coordination relative to all projects unless otherwise specified (Sec. 905.210), this section clarifies that the IHA is fully responsible for project coordination. The section also requires that a project coordination schedule be provided to HUD for monitoring purposes. 905.225 IHA development program [Renumbered 950.260]. A clarification was made to this section to specify that the Development Program is to be submitted in accordance with the project schedule. This was added to emphasize that the IHA is responsible for planning its project and implementing the plan. 905.230 Site selection criteria [Renumbered 950.235]. The requirements contained in this section have been significantly modified to reduced regulatory requirements. These changes include (1) simplifying this section to state that all utilities needed for the project will be committed before final site approval; (2) removing requirements for topography, subsurface conditions and natural hazards, flooding, and multi-unit and scattered sites (these items are either addressed under other requirements of this part (flooding) or are more appropriately addressed in the program handbook); and (3) changing maximum site size from one acre to a local determination based on needs of housing occupants. 905.235 Types of interest in land [Renumbered 950.240]. A clarification was made to this section, to be consistent with the statute, that all property included in the project must be exempt from state or local real and personal property tax. 905.240 Appraisals [Renumbered 950.245]. This section was simplified to require compliance with the Uniform Relocation and Assistance Act. The part of this section which attempted to instruct the IHA on how to perform an appraisal was removed. Additionally, clarification was provided that an appraisal is not required for any donated property that has a value of $1,500 or less, regardless of the source of the donation. The requirement for HUD approval of appraisals was removed. If a Field Office determines that a project should be processed under the ``assisted'' method, review of appraisals can be required. 905.245 Site approval [Renumbered 950.250]. This section has been restructured to clarify the site approval process. Revised provisions include (1) clarification that the IHA may submit a site approval certification with the development program in lieu of the supporting documents; (2) clarification of the method to be followed by the IHA in determining tentative site approval; and (3) clarification of the environmental clearance process and how it will be conducted jointly by HUD and the IHA; and, removal of the requirement that HUD inspect all sites. 905.250 Design criteria [Renumbered 950.255]. This section was modified to include (1) Model Energy Code requirements; (2) IHA Board of Commissioners designation of applicable codes in the absence of tribal adoption; (3) clarification that designs must be approved by local or tribal regulatory agencies and the BIA and/or IHS, where applicable. Additionally, the moderate housing design requirement was moved to this section. 905.255 Total development cost standard [Renumbered 950.220 and retitled ``Total development cost'']. HUD processing and procedure requirements were removed from this section. These requirements are more appropriately located in the program handbook or notices. Wording was added to clarify that tenant training includes homebuyers and tenants. This has been previously authorized under the program with tenant counseling discussed here, and a parallel authorization for homebuyers under subpart E of part 905. Provisions have been added to allow for the escrow of insurance premium funds to assist in closeout of development programs. Currently, a development program must be held open until all expenses have been incurred and paid. This change will allow for certain development programs to be closed in a shorter period. 905.260 Construction and inspections [Renumbered 950.265]. The submission requirements of plans, specifications, and other contract documents have been listed to clarify when the submissions must be made and what is to be included. Clarification also has been added that submissions are not due to be provided to HUD until after award of a contract by the IHA. A new subsection has been added clarifying that the IHA has the responsibility to coordinate construction inspections with other agencies. A new subsection, ``Construction completion and settlement,'' has been added to distinguish between the construction period and the closeout period of project development. Provisions from existing Sec. 905.260 that address completion and settlement will be addressed in this section. In addition the following has been modified to provide clarification and structure to the process: HUD's involvement in the final inspection process for standard method IHAs has been removed. Other agencies who may be required to attend the final inspection have been added to the participant list for the final inspection. This section also has been revised to clarify the procedures for contract settlement to include an interim and final certificate of completion, and to clarify that IHAs may make payment to contractors without prior HUD approval. Submittal requirements for completion documents to HUD have been included in this section. 905.265 Warranty inspections and enforcement [Renumbered 950.275]. This section was revised to clarify that two inspections are the minimum requirement during the warranty period; one within six months of the start of the warranty period and one prior to the expiration of the warranty. This is not a new requirement but the wording of this section was modified to remove possible confusion. 905.270 Correcting deficiencies [Renumbered 950.280]. This section was revised to clarify that modernization funds or IHA held funds may be used to correct design or construction deficiencies. This is not a new authority but serves to list in one place the potential funding sources to address design or construction deficiencies (DCDs). This section also was revised to clarify that HUD is under no obligation to fund correction of DCDs. Subpart D--Operation General Changes The subpart has been generally revised to provide for a clearer organization of information. Specific Changes 905.301 Admission policies. The ``broad range of incomes'' language in Sec. 950.301(a)(2)(ii) would include reference to the statutory change in section 501 of National Affordable Housing Act (NAHA) that now requires adherence to the requirement to attain a tenant mix with a broad range of incomes ``to the maximum extent feasible.'' Additionally, Sec. 950.301(a)(2)(iv) would include the increase from 10 percent to 30 percent of non-Federal preference holders eligible for admission to Indian housing programs as permitted under section 501 of the NAHA. 905.335 Rent and homebuyer payment collection policy. This section has been revised to include the phrase ``and homebuyer'' after the word ``rent'' to emphasize that collection payment policies apply to Mutual Help (MH). Subpart E--Mutual Help Homeownership Opportunity Program General Changes HUD recognized that changes were needed to the Indian program, such as Mutual Help (MH), to assure that services provided to the Tribes and the residents continue to be in their best interests. Accordingly, the changes made to this subpart were directed to make the MH program more efficient. 905.404 Program framework. In an effort to streamline the regulation, this section has been removed. As commenters indicated, the information outlined here is already located in subparts C and E of part 905. This does not eliminate the necessity for an ACC, MHO Agreement or Construction Contract, however. 905.407 Application. This section has been removed. (See new Sec. 950.225, Application, discussed earlier in this preamble.) 905.410 HUD review of application. This section has been removed. 905.416 Selection of MH homebuyers. The provisions of Sec. 905.301(a)(3)(vi) would be contained in Sec. 950.416(a)(3) and revised to reflect changes made in this subpart regarding the determination of purchase prices and the designation of a successor. Paragraph (a)(3) of new Sec. 950.416 provides that the IHA's admission policies for MH projects should be different from those for its rental or Turnkey III projects. The policies for the MH program should provide standards for determining a homebuyer's: --Ability to provide maintenance for the unit; -- Potential for maintaining at least the current income return-- successor to a unit at the time of an ``event.'' (``Event'' should also be defined by the IHA in its policy); and -- Initial purchase price and the purchase price for a subsequent homebuyer. Paragraph (e) of new Sec. 950.416 would be strengthened and clarified to address the comments received. The following language has been added to this section: ``Ownership or use of a decent, safe and sanitary residence other than the MH home at the time of occupancy or acquisition during occupancy would disqualify a family from the MH program.'' 905.419 MH Contribution. The requirement in existing Sec. 905.419(3) for HUD approval has been removed in the new Sec. 950.419(3). 905.425 Inspections, responsibility for items covered by warranty. The language in paragraph (a) of this section has been revised in new Sec. 950.425(a) to clarify that the homebuyer move-in inspection could be the final inspection with the contractor, IHA, and homebuyer or a separate inspection with the IHA and homebuyer. Paragraph (c) of existing Sec. 905.425 has been removed since it is contained in Sec. 950.428. 905.427 Homebuyer payments--post-1976 projects. This section has been revised to eliminate HUD approval of the amount of monthly payment for New MH program developments and HUD approval of the specific percentage the IHA will use to determine the monthly payment in Mutual Help. 905.431 Operating reserve. The language in this section that requires HUD approval of unanticipated costs has been removed. 950.432 Operating budget submission and approval [New section]. A new section has been added to this subpart to provide for the operating budget submission for Mutual Help. Subpart J does not apply to the Mutual Help program. Therefore, no guidance is given for IHAs submitting budgets for this program. 905.434 Operating subsidy. HUD is proposing a revision to the current method of determining subsidy for counseling and training. HUD proposes the use of a formula for providing subsidy to IHAs in these two areas, and seeks comment from the Indian housing community on the specific formula to be used. The formula approach will eliminate the need for IHAs to submit specific training and counseling budgets annually. Subject to appropriations, an additional category of subsidy eligibility is also being added. Funding of up to $25 per unit per year would be made available to an IHA with a duly elected resident organization for resident participation activities. Of this amount, $15 per unit per year shall fund resident participation activities of the resident organization. IHAs should refer to 905.965, Funding Resident Participation and 905.967, Eligible TOP Activities. 905.437 Homebuyer reserves and accounts. The Voluntary Equity Payments Account (VEPA) has been removed from this section since it was not necessary and seldom used. Substantial revision was made to the provision concerning reserves in this section. Several requests were made to revise the section on investment of equity funds to allow IHAs to utilize the homebuyer's monthly equity payments account (MEPA), provided that a portion is maintained as a reserve. It was suggested that a sufficient amount of funds should be maintained in a secured investment for use if homebuyers terminate the mutual help and occupancy agreement (MHOA) and equity funds are to be disbursed. HUD agrees with the comment but also believes that HUD local office approval should be a part of the process to insure that the IHA has administrative capability prior to using the equity funds. Proposed regulatory language is as follows: Notwithstanding other provisions of this subpart and subject to HUD Field Office approval, an IHA may use a portion of the homebuyers' equity accounts for low-income housing purposes provided that a reserve of homebuyers' MEPA is maintained. The reserve must be at a percentage established by the IHA and approved by the HUD Field Office. 905.440 Purchase of home. In paragraph (a) of this section, the reference to 24 CFR 203.43(h) was removed. In new Sec. 950.440(b), the details on determining the purchase price have been streamlined. The proposed language is as follows: ``(1) Initial purchase price. The initial purchase price of a home for a homebuyer shall be determined by the IHA.'' In paragraph (b)(2) of this section, the reference to the prevailing interest rate for VA guaranteed mortgage loans at the time the schedule is established was removed because VA no longer sets this amount. Paragraph (d) of this section concerning notice of eligibility for financing was removed. Section 905.443/950.443 already outlines the IHA homeownership financing guidelines. The need to notify families at the time of each reexamination is burdensome. In paragraph (e)(7) of this section, the last sentence regarding the relationship with the homebuyer has been removed. It is repeated in Sec. 950.443. In paragraph (e)(8) of this section, the following language has been added, ``Notwithstanding the above requirements, an IHA may complete emergency and statutorily or regulatorily required modernization work on a unit which is paid off but not conveyed, during the term of the repayment schedule.'' Paragraph (e)(9)(ii) has been revised to read, ``Upon repayment of the total delinquency, the IHA may, in accordance with Sec. 950.602(e)(2), complete non-emergency modernization work on a unit prior to conveyance.'' 905.443 IHA homeownership financing. The homeownership financing requirements have been streamlined. Additional guidance on IHA financing will be provided in a handbook. 905.449 Succession upon death or mental incapacity [Renamed ``Succession'']. Revisions to this section are as follows: In paragraph (a), language has been revised as follows, ``''Event'' means the death, mental incapacity, or other conditions as determined by the IHA, of all of the persons who have executed the MHO Agreement as homebuyers.'' In paragraph (b), language was added as follows: ``A homebuyer may designate a successor who, at the time of the ``event'' would assume the status of homebuyer, provided that the successor meets the conditions established by the IHA which shall include satisfying program eligibility requirements.'' The designation may be made at the time of execution of the MHO Agreement, and the homebuyer may change the designation at any later time by written notice to the IHA. Paragraph (c) was revised to read, ``Upon occurrence of an `event', the person designated as the successor shall succeed to the former homebuyer's rights and responsibilities under the MHO Agreement if the designated successor meets the criteria established by the IHA which shall include program eligibility requirements.'' Paragraphs (c)(i) through (iv) and (c)(2) of this section were removed. These paragraphs address current regulatory conditions applicable to HUD. Paragraph (d) was revised. The clause ``or if any of the conditions in paragraph (c) of this section are not met by the designated successor'' has been removed. 905.453 Counseling of homebuyers. Funding of counseling has been modified to eliminate the $500 maximum contained in the current regulation for development. Counseling cost will now be determined by the IHA with no minimum or maximum amount. The maximum amount will be a factor of the IHA's needs and the availability of funds within the development program. Additionally, all portions of this section with the exception of (1) the requirement to submit a counseling program to the HUD Field Office for approval, (2) the requirement for an annual report and (3) the termination process have been removed. The IHA will have the flexibility to design a program to meet their needs. Subpart F--Self-Help Development in the Mutual Help Homeownership Opportunity Program 905.463 Basic requirements [renumbered 950.475] Section 950.463(d) has been removed. A detailed discussion is already in the program handbook. Paragraph (d) of this section has been removed. Construction tasks are more appropriately included in the program handbook. Subpart G--Turnkey III Program The revisions to this subpart are designed to streamline the Turnkey III program regulations as appropriate to the present status of the program, which is limited to the management, operation, conversion and sale of the remaining unsold Turnkey III units only. Accordingly, language concerning development and initial occupancy of new projects was removed. At the present time, there are only about 30 IHAs with active Turnkey III programs, and the total inventory of Turnkey III homes still in management nationwide amounts to 1,749 units. It is anticipated that the remaining program inventory will be rapidly reduced, and the rest of the Turnkey III homes will be sold or converted to Mutual Help and the program completely closed out within the next few years. 905.501 Introduction. This section was streamlined to provide only essential elements of the Turnkey III program. A new paragraph (5), ``Program Overview,'' was added to provide a brief description of how the Turnkey III Program works. This paragraph is added for the orientation of the reader who wants basic information about the general nature of the program. 905.503 Conversions of Turnkey III units and transfer of occupants [Retitled ``Conversion of Turnkey III developments'']. The requirements of this section have been streamlined. The conversion procedures are now similar to those in Secs. 950.455 and 950.458 which cover conversions of rental and Mutual Help programs, and simplify the process and provide consistency from one program to another. 905.505 Selection of Turnkey III homebuyers [Retitled ``Eligibility and selection of Turnkey III homebuyers'']. This section was retitled to clarify basic provisions on homebuyer requirements. Paragraph (a) of this section was retitled ``Applications'' to clarify basic provisions on homebuyer requirements. The ``Turnkey III waiting list'' provisions have been eliminated from this section, and replaced with streamlined requirements in paragraph (b) titled ``Selection and notification of homebuyers.'' 905.507 Homebuyer Ownership Opportunity Agreements (HOOA). Paragraph (c) of this section, ``New agreements'', has been removed because the information is adequately covered in other sections of the regulation. 905.511 Homebuyers' association and homeowners' association [Retitled ``Homebuyers Association (HBA)'']. This section has been retitled to reflect that this section only addresses information on the HBA. Homeowners' associations are addressed in Sec. 950.512. Additionally, the requirements in paragraph (a) of this section have been streamlined. 950.512 Homeowners' association (HOA) [New section]. This section has been added to discuss HOAs. 905.513 Break-even amount and application of monthly payments. The requirements of this section have been streamlined and paragraph (d) has been revised to insert limits on EHPA/NRMR credits in circumstances specified. 905.515 Monthly operating expense. Paragraph (c) of this section titled ``Provision for common property maintenance'' has been removed. 905.517 Earned Home Payments Account (EHPA). Paragraphs (c)(1) (i), (ii), (iii) and (2) concerning exercise of option and required amount in EHPA have been removed for the purpose of expediting sale to subsequent homebuyers without their having to wait two years. 905.521 Operating reserve. Paragraph (b) of this section titled ``Nonroutine maintenance--common property (contribution to operating reserve)'' has been revised to remove all references to maximum operating reserve. Paragraph (c) of this section has been removed. 905.525 Achievement of Ownership [Retitled ``Purchase price and methods of purchase'']. Revisions have been made to this section regarding the terms of sale to original and subsequent homebuyers. Based on comments received, the procedures for determining the purchase price and the term of the purchase price schedule have been changed to agree with the Mutual Help program. A new subparagraph (c)(5) has been added to make clear that IHA financing is allowed, without the need for HUD approval, just like in the MH program (see Sec. 950.440, Purchase of Home). 905.527 Payment upon resale at profit. A new paragraph (c) titled ``Death of Homeowner'' has been added to respond to any questions concerning the death of the homebuyer before the end of the five-year period of the promissory note. Subpart I--Modernization The Comprehensive Grant Program (CGP) portion of this subpart has been revised in an effort to simplify and streamline the CGP process. The revised CGP regulation, which includes both the Indian housing and public housing CGP regulations, was published as a proposed rule on March 8, 1994 (59 FR 10876). The revisions were made in consultation with the housing authorities and interest groups which included representation from the National American Indian Housing Council (NAIHC). Additional changes to the proposed version of the CGP regulation are included in this proposed rule. Indian Housing Authorities (IHAs) are encouraged to provide any additional comments they may have on this program. Additionally, in this proposed part 950 rule, changes to the General Provisions and Comprehensive Improvement Assistance Program (CIAP) sections of subpart I are also proposed to be made. A recommendation to remove the CIAP requirement that states that each development for which work is proposed must be at least three years old from the end of the initial operating period has been adopted in the proposed revisions to the CIAP regulation. 905.602 Special requirements for TKIII and Mutual Help developments. The requirements for TKIII homebuyers to be charged for the cost of modernization work have been removed. This section also has been revised to allow IHAs to modernize Mutual Help units which are paid off but not conveyed. Changes have been made to allow IHAs to do work necessary to meet statutory or regulatory requirements in TKIII units which are paid off, so long as the work is completed prior to conveyance Comprehensive Improvement Assistance Program (CIAP) 905.618 Procedures for obtaining approval of a modernization program. The following requirements have been removed from this section: (1) that developments proposed for work must be at least three years old from the date of EIOP; (2) that the submission of a fiscal audit is an eligibility requirement; and (3) the use of a Declaration of Trust as a requirement for Mutual Help units. 905.624 Resident and homebuyer participation. This section consolidates homebuyer consultation requirements in one section by removing special consultation requirements for TKIII homebuyers where the cost of modernization work increased the amortization period of the home. 905.633 Special requirements for section 23 leased housing bond- financed development [Removed]. This section has been removed since there is no longer any Section 23 housing management by IHAs. 905.635 Initiation of modernization activities. The requirement for prior HUD approval of force account work has been removed from this section. Comprehensive Grant Program Revisions have been made to make the $75 million set-aside for emergencies and disasters available to CIAP housing authorities as well as CGP housing authorities. Also, changes were made to continue the rolling base concept of the Five-Year Action Plan. The regulations now allow for full interchangability of work items in any of the five years. The following provisions have been removed from the CGP requirements: 1. The annual Statement by making the level of detail for describing work items the same for each year of the Five-Year Plan; 2. The concept of ``major changes'' has been eliminated since IHAs would be able to move work items within any of the five years of the plan; however, amendments to the Annual Work Statement would be required where any work items are added which are not in the Five-Year Action Plan; 3. The optional two-year Annual Statement; 4. The presumptive estimate by providing only a final formula amount; 5. The requirement for an initial notice and specific notification of democratically elected presidents of resident organizations but public notice is required prior to the advance meeting and public hearing; 6. The specified three week time frame for holding the advance meeting before the public hearing; 7. The requirement for use of a Declaration of Trust for Mutual help units; 8. The Executive Summary as a separate document; and 9. The requirement for prior approval of force account work. The percentage limitation on management improvements from 10 to 20 percent has been increased for all IHAs. IHAs determined by the ONAP to be ``high performing'' would have no percentage limitation on management improvements. The revisions proposed allow IHAs to hold the advance meeting for residents and the public hearing earlier in the year by using the formula amount for the current year as the planning level for the coming year. 905.666 Eligible costs. The charge to TKIII homebuyers for the cost of health and safety work items has been removed from this section. Also removed from this section is the requirement for IHAs to keep records by unit of the substantial rehabilitation of TKIII units, and the requirement for IHAs to demonstrate that the proposed substantial rehabilitation of vacant or non-homebuyer occupied TKIII units will bring the units into full compliance with the homeownership objectives of subpart G. Additionally, the proposed rule removes the language requiring that to the ``maximum extent feasible'' IHAs should use their management improvement funds to train residents. Subpart J--Operating Subsidy 905.715 Computation of utilities expense level. Revisions have been made to this section to extend, for a period not to exceed an additional six (6) years, the existing arrangement under which an IHA may share equally with HUD any cost reductions due to the differences between projected and actual utility rates in the first year reductions occur. Similar changes were made in Sec. 905/950.730, discussed below. 950.720 Other costs. Revisions were made to paragraph (b)(2) of this section. The revisions include removing the need for a waiver before operating subsidy may be paid for certain units approved for nondwelling use to promote economic self-sufficiency and anti-drug activities. 905.730 Adjustments. The 60 day deadline in this section for requesting a revision of an IHA's Allowable Expense Level in 950.730(f)(3)) has been removed. 905.740 Operating reserves. The maximum operating reserve requirement has been removed from this section. IHAs will be required to maintain sufficient working capital for future nonroutine maintenance requirements, insurance premiums and unanticipated project requirements. 905.772 Operating subsidy eligibility for projects owned by IHAs in Alaska [Renumbered 950.774]. In the proposed rule, the provisions of this section are in Sec. 950.774. Additionally, the provisions of subpart N have been incorporated into subpart J to address Alaska's non PFS status and the need for them to comply with budget submission requirements. 950.772 Financial management systems, monitoring and reporting. In the existing regulations, these provisions are found in Sec. 905.950 of subpart N. In the proposed rule, these provisions are in Sec. 950.772 and apply to all programs. Subpart K--Energy Audits, Energy Conservation Measures and Utility Allowances General Changes In the majority of sections in this subpart, the examples of methodologies of performing energy audits have removed. These examples will be placed, more appropriately, in the Indian Housing Management Handbook. Descriptions of specific energy saving items, such as ceiling insulation and timers for hot water heaters, have been removed from this subpart and also will be addressed in the Handbook. 905.807 Energy conservation measures [Removed].This section will be moved in its entirety to the Handbook. 905.810 Order of funding. Paragraphs (b) and (c) of this section have been removed, and their provisions will be addressed in the Handbook. 905.815 Energy conservation equipment (renamed Energy conservation equipment and practices). The list of energy conservation equipment has been removed and will be placed in the Handbook. 905.822 Compliance schedule, and 905.848 Compliance schedule. Both sections have been revised to eliminate dates that have passed, and therefore are no longer applicable. 905.842 Benefit/cost analysis. The methodology for performing a benefit/cost analysis has been removed and will be addressed in the Handbook. 905.870 Standards for allowances for utilities. This section has been edited to remove duplicative language. Subpart L--Operation of Projects After Expiration of Initial ACC Term No comments were received on this subpart from IHAs and Tribal officials, and no changes are proposed. Therefore, this subpart is not being published for comment. Subpart M--Disposition or Demolition of Projects General Changes This subpart has been streamlined by removing sections and subsections that are more appropriate in a handbook (those regulatory provisions that merely provide examples). The removed provisions will be incorporated in the Indian Housing Management Handbook. Specific Changes 905.925 Relocation of displaced tenants [Removed]. This section was removed by a technical amendment and replaced by Sec. 950.117. 950.925 Resident organization opportunity to purchase [New section]. A new Sec. 950.925 which implements the new statutory requirements on this subject contained in the Federal Register of October 6, 1992 (57 FR 46074), has been added. 905.933 Use of Proceeds. Paragraph (a)(2) of this section titled ``Proceeds of a Disposition'' was revised to reflect the statutory requirement for application of a proportional ratio in scattered site housing when satisfying outstanding debt obligations of a project. 950.937 Reports and records [Removed]. This section was removed and the subject matter of this section will be addressed in the Handbook. Subpart O--Resident Participation and Opportunities General Changes The proposed rule on Resident Participation and Opportunities in Indian Housing, 24 CFR 905, subpart O, was published in the Federal Register on April 19, 1994 (59 FR 18666). Comments were due May 19, 1994. HUD anticipates publishing a final rule on subpart O that takes into consideration public comment in the summer of 1994. Because the proposed rule on subpart O was recently published, this proposed rule does not republish subpart O. Subpart P--Section 5(h) Homeownership Program HUD is currently preparing the final rule on section 5(h) for publication. The interim rule was published September 20, 1991 (56 FR 47866), made effective October 21, 1991, and is codified at 24 CFR part 906, and part 905, subpart P. The final rule makes the following changes: 1. It streamlines the rules for the Section 5(h) Program; 2. It allows more flexibility in the regulatory requirements of the Section 5(h) Program; and 3. It requires only what is statutory according to the United States Housing Act of 1937 and provides additional technical guidance will be provided in a forthcoming handbook. The major change to be made in the final rule is the clarification that the section 5(h) program applies to the Mutual Help and Turnkey III programs. No comments were received from the Native American community during the comment period of the interim rule, or during the recent consultation with IHAs and Tribal officials. Accordingly, subpart P is not republished in this proposed rule for further comment. Subpart R--Indian Housing Family Self-Sufficiency (FSS) Program HUD proposes to make very few changes to the regulation implementing the FSS program because the current regulation reflects the statutory provisions of section 23 of the U.S. Housing Act of 1937 (42 U.S.C. 1437u). However, the following minor changes have been made to streamline the policies and procedures applicable to the FSS program under HUD's Indian housing program. 905.3012 Program Coordinating Committee (PCC). In paragraph (b)(1) of this section, the heading ``Required Membership'' has been removed as the statutory provision does not contain language that directs IHAs to have a required membership. In this paragraph, the word ``must'' in the phrase ``The PCC must'' has been removed and the word ``may'' has been substituted. The U.S. Housing Act of 1937 does not require IHA representatives or residents of the IHA to be members of the PCC. Paragraph (b)(2) states that ``the PCC should . . .''. The ``should has been removed and word ``may'' substituted for the same reasons stated above. IV. Other Matters Finding of No Significant Impact A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is available for public inspection and copying during regular business hours (7:30 a.m. to 5:00 p.m. weekdays) in the Office of the Rules Docket Clerk, Room 10272, 451 Seventh Street, S.W., Washington, D.C. 20410. Regulatory Flexibility Act The Secretary, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this proposed rule before publication and by approving it certifies that this proposed rule does not have a significant economic impact on a substantial number of small entities. The proposed rule would make a number of amendments to the Indian Housing Consolidated regulations to simplify program processes, reduce the number of regulatory requirements, and to provide more flexibility to local Tribal and Indian housing authority officials in the administration of the Indian Housing program. Executive Order 12612, Federalism The General Counsel, as the Designated Official under section 6(a) of Executive Order 12612, Federalism, has determined that the policies contained in this proposed rule will not have substantial direct effects on states or their political subdivisions, or the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. As a result, the proposed rule is not subject to review under the order. Executive Order 12606, the Family The General Counsel, as the Designated Official under Executive Order 12606, The Family, has determined that this proposed rule does not have potential for significant impact on family formation, maintenance, and general well-being, and, thus, is not subject to review under the order. No significant change in existing HUD policies or programs will result from promulgation of this rule, as those policies and programs relate to family concerns. Regulatory Agenda This proposed rule was listed as sequence number 1681 in the Department's Semiannual Regulatory Agenda published on April 25, 1994 (59 FR 20424, 20468) in accordance with Executive Order 12866 and the Regulatory Flexibility Act. The Catalog of Domestic Assistance numbers for the programs affected by this proposed rule are 14.146, 14.147, 14.850, 14.851, 14.852, and 15.141. List of Subjects in 24 CFR Part 950 Aged, Grant programs--housing and community development, Grant programs--Indians, Disability, Homeownership, Indians, Low and moderate income housing, Public housing, Reporting and recordkeeping requirements. Accordingly, and under the authority of 42 U.S.C. 3535(d), title 24 of the Code of Federal Regulations would be amended by: 1. Redesignating part 905 as part 950; 2. Revising the table of contents for the newly designated part 950; 3. Revising subparts A--G, I, J, K, and M; 4. Reserving subpart Q; and 5. Adding a new subpart R, consisting of Secs. 950.3001 through 950.3030, as follows: PART 950--INDIAN HOUSING PROGRAMS Subpart A--General Sec. 950.101 Applicability and scope. 950.102 Definitions. 950.110 Assistance from Indian Health Service and Bureau of Indian Affairs. 950.115 Applicability of civil rights requirements. 950.117 Displacement, relocation, and acquisition. 950.120 Compliance with other Federal requirements. 950.125 Establishment of IHAs pursuant to State law. 950.126 Establishment of IHAs by Tribal ordinance. 950.130 IHA Commissioners who are tenants or homebuyers. 950.135 Administrative capability. Subpart B--Procurement 950.160 Procurement standards. 950.165 Methods of procurement. 950.170 Other requirements applicable to development contracts. 950.172 Wage rates. 950.175 Indian preference requirements. 950.190 Insurance. Subpart C--Development 950.200 Roles and responsibilities of Federal agencies. 950.205 Allocation. 950.210 Authority for proceeding without HUD approval. 950.215 Production methods. 950.220 Total development cost. 950.225 Application. 950.230 Project coordination. 950.235 Site selection criteria. 950.240 Types of interest in land. 950.245 Appraisals. 950.250 Site approval. 950.255 Design criteria. 950.260 IHA development program. 950.265 Construction and inspections. 950.270 Construction completion and settlement. 950.275 Warranty inspections and enforcement. 950.280 Correcting deficiencies. 950.285 Fiscal closeout. Subpart D--Operation 950.301 Admission policies. 950.305 Federal selection preferences. 950.310 [Reserved]. 950.315 Initial determination, verification, and reexamination of family income and composition. 950.320 Determination of rents and homebuyer payments. 950.325 Total tenant payment--Rental and Turnkey III programs. 950.335 Rent and homebuyer payment collection policy. 950.340 Grievance procedures and leases. 950.345 Maintenance and improvements. 950.346 Fire safety. 950.360 IHA employment practices. Subpart E--Mutual Help Homeownership Opportunity Program 950.401 Scope and applicability. 950.413 Special provisions for development of an MH project. 950.416 Selection of MH homebuyers. 950.419 MH contribution. 950.422 Commencement of occupancy. 950.425 Inspections, responsibility for items covered by warranty. 950.426 Homebuyer payments--pre-1976 projects. 950.427 Homebuyer payments--post-1976 projects. 950.428 Maintenance, utilities, and use of home. 950.431 Operating reserve. 950.432 Operating budget submission and approval. 950.434 Operating subsidy. 950.437 Homebuyer reserves and accounts. 950.440 Purchase of home. 950.443 IHA homeownership financing. 950.446 Termination of MHO agreement. 950.449 Succession. 950.452 Miscellaneous. 950.453 Counseling of homebuyers. 950.455 Conversion of rental projects. 950.458 Conversion of Mutual Help projects to Rental Program. Subpart F--Self-Help Development in the Mutual Help Homeownership Program 950.470 Purpose and applicability. 950.475 Basic requirements. 950.480 Self-Help agreement. 950.485 Application. 950.490 Development program. 950.495 Default of self-help agreement. Subpart G--Turnkey III Program 950.501 Introduction. 950.503 Conversion of Turnkey III developments. 950.505 Eligibility and selection of Turnkey III homebuyers. 950.507 Homebuyer Ownership Opportunity Agreements (HOOA). 950.509 Responsibilities of homebuyer. 950.511 Homebuyers' association (HBA). 950.512 Homeowners' association (HOA). 950.513 Breakeven amount and application of monthly payments. 950.515 Monthly operating expense. 950.517 Earned Home Payments Account (EHPA). 950.519 Nonroutine Maintenance Reserve (NRMR). 950.521 Operating reserve. 950.523 Operating subsidy. 950.525 Purchase price and methods of purchase. 950.527 Payment upon resale at profit. 950.529 Termination of Homebuyer Ownership Opportunity Agreement. Subpart H--Lead-Based Paint Poisoning Prevention 950.551 Purpose and applicability. 950.553 Testing and abatement applicable to development. 950.555 Testing and abatement applicable to modernization. 950.560 Notification. 950.565 Maintenance obligation; defective paint surfaces. 950.570 Procedures involving EBLs. 950.575 Compliance with Tribal, State and local laws. 950.580 Monitoring and enforcement. Subpart I--Modernization Program General Provisions 950.600 Purpose and applicability. 950.601 Allocation of funds under Section 14. 950.602 Special requirements for Turnkey III and Mutual Help developments. 950.603 Modernization and energy conservation standards. Comprehensive Improvement Assistance Program (for IHAs That Own or Operate Fewer Than 250 Indian Housing Units 950.609 Purpose. 950.615 Eligible costs. 950.618 Procedures for obtaining approval of a modernization program. 950.624 Resident and homebuyer participation. 950.635 Initiation of modernization activities. 950.639 Fund requisitions. 950.642 Contracting requirements. 950.645 On-site inspections. 950.648 Budget revisions. 950.651 Progress reports. 950.654 HUD review of IHA performance. 950.657 Fiscal closeout. Comprehensive Grant Program (for IHAs That Own or Operate 250 or More Indian Housing Units 950.660 Purpose. 950.666 Eligible costs. 950.667 Reserve for emergencies and disasters. 950.669 Allocation of assistance. 950.672 Comprehensive Plan (including Five-Year Action Plan). 950.675 HUD review and approval of Comprehensive Plan (including action plan). 950.678 Annual Submission of activities and expenditures. 950.681 Conduct of modernization activities. 950.684 IHA Performance and Evaluation Report. 950.687 HUD review of IHA performance. Subpart J--Operating Subsidy 950.701 Purpose and applicability. 950.705 Determination of amount of operating subsidy under PFS. 950.710 Computation of allowable expense level. 950.715 Computation of utilities expense level. 950.720 Other costs. 950.725 Projected operating income level. 950.730 Adjustments. 950.735 Transition funding for excessive high-cost IHAs. 950.740 Operating reserves. 950.745 Operating budget submission and approval. 950.750 Payment procedure for operating subsidy under PFS. 950.755 Payments of operating subsidy conditioned upon reexamination of income of families in occupancy. 950.760 Determining actual occupancy percentage. 950.770 Comprehensive Occupancy Plan requirements. 950.772 Financial management systems, monitoring and reporting. 950.774 Operating subsidy eligibility for projects owned by IHAs in Alaska. Subpart K--Energy Audits, Energy Conservation Measures and Utility Allowances 950.801 Purpose and applicability. Energy Audits and Energy Conservation Measures 950.805 Requirements for energy audits. 950.810 Order of funding. 950.812 Funding. 950.815 Energy conservation equipment and practices. 950.822 Compliance schedule. 950.825 Energy performance contracts. Individual Metering of Utilities 950.840 Individually metered utilities. 950.842 Benefit/cost analysis. 950.844 Funding. 950.845 Order of conversion. 950.846 Actions affecting residents. 950.849 Waivers for similar projects. 950.850 Reevaluations of mastermeter systems. Resident Utility Allowances 950.860 Applicability. 950.865 Establishment of utility allowances by IHAs. 950.867 Categories for establishment of allowances. 950.869 Period for which allowances are established. 950.870 Standards for allowances for utilities. 950.872 Surcharges for excess consumption of IHA-furnished utilities. 950.874 Review and revision of allowances. 950.876 Individual relief. Subpart L--Operation of Projects After Expiration of Initial ACC Term 950.901 Purpose and applicability. 950.903 Continuing eligibility for operating subsidy; ACC extension. 950.905 ACC extension in absence of current operating subsidy. 950.907 HUD approval of disposition or demolition. Subpart M--Disposition or Demolition of Projects 950.921 Purpose and applicability. 950.923 General requirements for HUD approval of disposition or demolition. 950.925 Resident organization opportunity to purchase. 950.927 Specific criteria for HUD approval of disposition requests. 950.928 Specific criteria for HUD approval of demolition requests. 950.931 IHA application for HUD approval. 950.933 Use of proceeds. 950.935 Replacement housing plan. Subpart N--Miscellaneous 950.950 Operating subsidy eligibility for projects owned by IHAs in Alaska. Subpart O--Resident Management and Participation 950.960 Purpose. 950.961 Applicablity and scope. 950.962 Definitions. 950.963 HUD's role in activities under this subpart. 950.964 Resident participation requirements. 950.965 Resident managment requirements. 950.966 Continued IHA responsibility to HUD. 950.967 Management specialist. 950.969 Modernization assistance. 950.970 Operating subsidy, preparation of operating budget, operating reserves and retention of excess revenues. 950.971 Waiver of HUD requirements. 950.972 Audit and administrative requirements. 950.973 Technical assistance. Subpart P--Section 5(h) Homeownership Program 950.1001 Purpose. 950.1002 Applicability. 950.1003 General authority for sale. 950.1004 Fundamental criteria for HUD approval. 950.1005 Resident consultation and involvement. 950.1006 Property that may be sold. 950.1007 Methods of sale and ownership. 950.1008 Purchase eligibility and selection. 950.1009 Counseling, training, and technical assistance. 950.1010 Nonpurchasing residents. 950.1011 Maintenance reserve. 950.1012 Purchase prices and financing. 950.1013 Protection against fraud and abuse. 950.1014 Limitation of resale profit. 950.1015 Use of sale proceeds. 950.1016 Replacement housing. 950.1017 Records, reports, and audits. 950.1018 Submission and review of homeownership plan. 950.1019 HUD approval and IHA-HUD implementing agreement. 950.1020 Content of homeownership plan. 950.1021 Supporting documentation. Subpart Q--[Reserved] Subpart R--Family Self Sufficiency 950.3001 Purpose, scope and applicability. 950.3002 Program objectives. 950.3003 Definitions. 950.3004 Basic requirements of the FSS program. 950.3011 Action Plan. 950.3012 Program Coordinating Committee (PCC). 950.3013 FSS family selection procedures. 950.3014 On-site facilities. 950.3020 Program implementation. 950.3021 Administrative fees. 950.3022 Contract of participation. 950.3024 Total tenant payment and increases in family income. 950.3025 FSS account. 950.3030 Reporting. Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437aa-1437ee and 3535(d). Subpart A--General Sec. 950.101 Applicability and scope. (a) General. (1) Under title II of the United States Housing Act of 1937, as added by the Indian Housing Act of 1988 (42 U.S.C. 1437aa, et seq.), the U.S. Department of Housing and Urban Development (HUD) provides financial and technical assistance to Indian Housing Authorities (IHAs), for the development and operation of low income housing projects in Indian areas. This part is applicable to such projects developed or operated by an IHA in an Indian area, as defined in Sec. 950.102. (2) If assistance under this part is not available to a low income family because the family desires housing in an area within which no IHA is authorized to provide housing, or if for any other reason a family desires housing assistance other than under this part, a family may seek housing assistance under other HUD programs: (See 24 CFR part 203, chapter VIII of this title, as well as the remainder of chapter IX of this title.) (b) Other HUD regulations and requirements. The provisions of this part are a complete statement of HUD regulations affecting the development and operation of low income housing by IHAs except as supplemented by parts in other chapters of this title, which are referenced in this part. Sec. 950.102 Definitions. ACC expiration date. The last day of the term during which a particular Indian housing project is subject to all or any of the provisions of the ACC. Act. The United States Housing Act of 1937 (42 U.S.C. 1437-1440). Action plan. A plan of the actions to be funded by an IHA over a period of five years (including an IHA's proposed allocation of its modernization funds to a reserve established under Sec. 950.666(a)(3)) to make the necessary physical and management improvements identified in the IHA's comprehensive plan under subpart I of this part. The plan shall be based upon HUD's and the IHA's best estimates of the funding reasonably expected to become available over the next five-year period. The action plan is updated annually to reflect a rolling five-year base. Adjusted income. Annual income less the following allowances, determined in accordance with HUD instructions: (1) $480 for each dependent; (2) $400 for any elderly family; (3) For any family that is not an elderly family but has a handicapped or disabled member other than the head of household or spouse, handicapped assistance expenses in excess of three percent of annual income, but this allowance may not exceed the employment income received by family members who are 18 years of age or older as a result of the assistance to the handicapped or disabled person; (4) For any elderly family-- (i) That has no handicapped assistance expenses (as defined in this section), an allowance for medical expenses (as defined in this section) equal to the amount by which the medical expenses exceed three percent of annual income; (ii) That has handicapped assistance expenses greater than or equal to three percent of annual income, an allowance for handicapped assistance expenses computed in accordance with paragraph (3) of this definition, plus an allowance for medical expenses that is equal to the family's medical expenses; (iii) That has handicapped assistance expenses that are less than three percent of annual income, an allowance for combined handicapped assistance expenses and medical expenses that is equal to the amount by which the sum of these expenses exceeds three percent of annual income; and (5) Child care expenses, as defined in this section; and (6) Excessive travel expenses, not to exceed $25 per family per week, for employment- or education-related travel. Administration charge. In Mutual Help projects, the amount budgeted per-unit per-month for operating expense, exclusive of the cost of HUD- approved expenditures for which operating subsidy is being provided in accordance with Sec. 950.434 (see Sec. 950.427(c)). Administrative capability assessment (ACA). An annual evaluation of the IHA's administrative capability to administer programs in compliance with the Act and all applicable HUD regulations, contracts, HUD handbooks, and other applicable requirements (see Sec. 950.135). Allowable expense level. In rental projects, the per-unit per-month dollar amount of expenses (excluding utilities, and expenses allowed under Sec. 950.720) computed in accordance with Sec. 950.710, which is used to compute the amount of operating subsidy. Allowable utilities consumption level (AUCL). In rental projects, the amount of utilities expected to be consumed per-unit per-month by the IHA during the requested budget year, which is equal to the average amount consumed per-unit per-month during the rolling base period. After the end of the requested budget year, the AUCL of the utility (ies) used for space heating will be adjusted by a change factor, which is defined in this section. Annual contributions contract (ACC). A contract under the Act between HUD and the IHA containing the terms and conditions under which HUD assists the IHA in providing decent, safe, and sanitary housing for low income families. The ACC must be in a form prescribed by HUD under which HUD agrees to provide assistance in the development, modernization and/or operation of a low income housing project under the Act, and the IHA agrees to develop, modernize and operate the project in compliance with all provisions of the ACC and the Act, and all HUD regulations and implementing requirements and procedures. Annual income. Annual income is the anticipated total income from all sources received by the family head and spouse (even if temporarily absent) and by each additional member of the family, including all net income derived from assets, for the 12-month period following the effective date of the initial determination or reexamination of income, exclusive of certain types of income as provided in paragraph (2) of this definition. (1) Annual income includes, but is not limited to: (i) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (ii) The net income from operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family; (iii) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (1)(ii) of this definition. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate as determined by HUD; (iv) The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts, including a lump-sum payment for the delayed start of a periodic payment; (v) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (but see paragraph (2) (iii) of this definition); (vi) Welfare assistance. If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: (A) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities, plus (B) The maximum amount that the welfare assistance agency could, in fact, allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under paragraph (1)(vi)(B) of this definition shall be the amount resulting from one application of the percentage; (vii) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling; and (viii) All regular pay, special pay and allowances of a member of the Armed Forces (but see paragraph (2)(vii) of this section). (2) Annual income does not include the following: (i) Income from employment of children (including foster children) under the age of 18 years; (ii) Payments received for the care of foster children; (iii) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (but see paragraph (1)(v) of this definition); (iv) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; (v) Income of a live-in aide; (vi) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the Government to a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation and miscellaneous personal expenses of the student. Any amount of such scholarship or payment to a veteran that is made available for subsistence is to be included in income; (vii) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire; (viii) (A) Amounts received under training programs funded by HUD; (B) Amounts received by a disabled person that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan for Achieving Self-Support (PASS); or (C) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of- pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (ix) Temporary, nonrecurring or sporadic income (including gifts); (x) For all initial determinations and reexaminations of income carried out on or after April 23, 1993, reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; or (xi) Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the United States Housing Act of 1937. A notice is published from time to time in the Federal Register and distributed to IHAs identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. (3) If it is not feasible to anticipate a level of income over a 12-month period, the income anticipated for a shorter period may be annualized subject to a redetermination at the end of the shorter period. (4) Any family receiving the reparation payments referred to in paragraph (2)(x) of this definition of Annual Income that has been requested to repay assistance under this part as a result of receipt of such payments shall not be required to make further repayments on or after April 23, 1993. Applicable surface. All intact and nonintact interior and exterior painted surfaces of a residential structure. Assisted dwelling unit. A dwelling unit assisted under the programs covered by this part 950. Base year. The IHA's fiscal year immediately preceding its first fiscal year under PFS. Base-year expense level. The expense level (excluding utilities, audits, and certain other items) for the year, computed as provided in Sec. 950.710(a) Benefit/cost analysis. For purposes of subpart K of this part, a direct comparison of the present worth of any savings generated by a given system during the expected useful life of the system or the estimated remaining life of the project, whichever is the shortest number of years, to the cost of the change. BIA. The Bureau of Indian Affairs in the Department of the Interior. Change factor. The ratio of the affected IHA fiscal year heating degree days (HDD) divided by the average annual HDD of the rolling base period. (Affected year HDD divided by rolling base period average HDD). Checkmeter. A device for measuring utility consumption of each individual dwelling unit where the utility service is supplied through a mastermeter system. The IHA pays the utility supplier on the basis of the mastermeter readings and uses the checkmeters to determine whether and to what extent utility consumption of each dwelling unit is in excess of the allowance for IHA-furnished utilities, established in accordance with subpart K of this part. Chewable surface. All chewable protruding painted surfaces up to five feet from the floor or ground, which are readily accessible to children under seven years of age, e.g., protruding corners, windowsills and frames, doors and frames, and other protruding woodwork. Chief executive officer (CEO). The CEO of a unit of general local government means the elected official or the legally designated official who has the primary responsibility for the conduct of that entity's governmental affairs. Examples of the CEO of a unit of general local government are: the elected mayor of a municipality; the elected county executive of a county; the chairperson of a county commission or board in a county that has no elected county executive; or the official designated pursuant to law by the governing body of a unit of general local government (e.g., Tribal administrator). The CEO for an Indian Tribe is the Tribal governing official. Child care expenses. Amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary to enable a family member to be gainfully employed or to further his or her education only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care, and, in the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of income received from such employment. Common property. The non-dwelling structures and equipment, common areas, community facilities, and in some cases certain component parts of dwelling structures, which are contained in the development. It also may include common property as defined in a cooperative form of ownership, as determined by the IHA. Comprehensive grant number. A grant number that is unique to each work statement (under subpart I of this part) covering the improvements to one or more existing Indian housing projects. Comprehensive Plan. A plan prepared by an IHA, and approved by HUD, under the Comprehensive Grant Program setting forth all of the physical and management improvement needs of the IHA and its Indian housing developments, indicating the relative urgency of needs, and which includes the IHA's action plan, cost estimates, and required local government and IHA certifications. The Comprehensive Plan may be revised, as necessary, but must be revised at least every sixth year. (See subpart I of this part.) Construction contract. The contract for construction in the case of the conventional method, or the contract of sale in the case of the Turnkey method. Cooperation agreement. An agreement between an IHA and a local governing (taxing) body that assures exemption from real and personal property taxes and provides for payments in lieu of taxes by the IHA; and that provides for cooperation with respect to the development and operation of low income housing owned by the IHA. Cost effective. As used in subpart K of this part, an energy conservation measure with a pay-back period of fifteen years or shorter shall be considered cost effective. Current budget year. The IHA fiscal year in which the IHA is operating. Defective lead-based paint surface. Paint on applicable surfaces having a lead content of greater than or equal to 1 mg/cm2, that is cracking, scaling, chipping, peeling or loose. Defective paint surface. Paint on applicable surfaces that is cracking, scaling, chipping, peeling or loose. Demolition. The razing in whole, or in part, of one or more permanent buildings of an Indian housing project. Dependent. A member of the family household (excluding foster children) other than the family head or spouse, who is under 18 years of age or is a disabled person or handicapped person, or is a full-time student. Deprogramming. Removal from the IHA's inventory under the ACC, pursuant to the IHA's formal request and HUD's approval, of a dwelling unit no longer used for dwelling purposes or a nondwelling structure or a unit used for nondwelling purposes that the IHA has determined will no longer be used for IHA purposes. Development. Any or all undertakings necessary for planning, land acquisition, demolition, construction, or equipment, in connection with a low income housing project. Disabled person. A person who is under a disability as defined in section 223 of the Social Security Act (42 U.S.C. 423), or who has a developmental disability as defined in section 102(7) of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001(7)). Displaced person. A person displaced by governmental action, or a person whose dwelling has been extensively damaged or destroyed as a result of a disaster declared or otherwise formally recognized under Federal disaster relief laws. Disposition. The conveyance or other transfer by the IHA, by sale or other transaction, of any interest in the real estate of an Indian housing project, excluding transfers of property described in Sec. 950.921(b)(1)(i) through (vii). Earned home payments account (EHPA). In the Turnkey III program (subpart G of this part), this account is established and maintained pursuant to Sec. 950.517 by the IHA based on a portion of the homebuyer's required monthly payment. The EHPA should equal the IHA's estimate of the monthly cost for routine maintenance of the home. Elderly family. A family whose head or spouse (or sole member) is an elderly, disabled, or handicapped person, as defined in this section. It may include two or more elderly, disabled or handicapped persons living together, or one or more of these persons living with one or more live-in aides, as defined in this section. Elderly person. A person who is at least 62 years of age. Elevated blood lead level or EBL. Excessive absorption of lead, that is, a confirmed concentration of lead in whole blood of 25 ug/dl (micrograms of lead per deciliter of whole blood) or greater. Emergency Modernization (CIAP). A type of modernization program for a development that is limited to physical work items of an emergency nature, posing an immediate threat to the health or safety of residents or related to fire safety, which must be corrected within one year of CIAP funding approval. Emergency work. Physical work items of an emergency nature, posing an immediate threat to the health or safety of residents, which must be completed within one year of funding. Under the Comprehensive Grant program, management improvements are not eligible as emergency work and, therefore, must be covered by the Comprehensive Plan (including the action plan), before the IHA may carry them out. See subpart I of this part. Energy audit. A process carried out in accordance with subpart K of this part, which identifies and specifies the energy and cost savings that are estimated to result from installing or accomplishing an energy conservation measure. Energy conservation measures (ECMs). Physical improvements or modifications that, if undertaken for a building or facility, or its equipment, are likely to reduce the cost of energy in an amount sufficient to recover the installation costs in a period no longer than the useful life of the measure. (See subpart K of this part.) Family. Family includes but is not limited to: (1) An elderly family or single person as defined in this part; (2) The remaining member of a tenant family; and (3) A displaced person. Family project. Any project assisted under section 9 of the Act (42 U.S.C. 1437g) that is not an elderly project. For this purpose, an elderly project is one that was designated for occupancy by the elderly at its inception (and has retained that character) or, although not so designated, for which the IHA gives preference in tenant selection (with HUD approval) for all units in the project to elderly families. A building within a mixed-use project that meets these qualifications shall, for purposes of this definition, be excluded from any family project, as shall zero bedroom units. Federally recognized tribe. Any Indian tribe, band, nation or other organized group or community, including any Alaska Native village or regional corporation or village as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. FFY. Federal Fiscal Year (starting with October 1, and ending with September 30, and designated by the calendar year in which it ends). Force account labor. Labor directly employed by the IHA on either a permanent or a temporary basis. Formula. The formula prescribed by HUD to be used in the Performance Funding System to estimate the cost of operating an average unit in an IHA's inventory. (See subpart J of this part.) Formula expense level. The per-unit per-month dollar amount of expenses (excluding utilities and audits) computed under the formula, in accordance with Sec. 950.710. Full-time student. A person who is carrying a subject load that is considered full-time for day students under the standards and practices of the educational institution attended. An educational institution includes a vocational school with a diploma or certificate program, as well as an institution offering a college degree. Handicapped assistance expenses. Reasonable expenses that are anticipated, during the period for which annual income is computed, for attendant care and auxiliary apparatus for a handicapped or disabled family member and that are necessary to enable a family member (including the handicapped or disabled member) to be employed, provided that the expenses are neither paid to a member of the family nor reimbursed by an outside source. Handicapped person. A person having a physical or mental impairment that: (1) Is expected to be of long-continued and indefinite duration; (2) Substantially impedes his or her ability to live independently; and (3) Is of such a nature that such ability could be improved by more suitable housing conditions. Hard costs. The physical improvement costs in development accounts 1450 through 1475 of the Low-Rent Housing Accounting Handbook, 7510.1, as revised, which include: Account 1450 Site Improvements; Account 1460 Dwelling Structures; Account 1465.1 Dwelling Equipment--Nonexpendable; Account 1470 Nondwelling Structures; and Account 1475 Nondwelling Equipment. Heating degree days (HDD). The annual arithmetic sum of the positive differences (those under 65 degrees) of the average of the lowest and highest daily outside temperature in degrees Fahrenheit, subtracted from 65 degrees Fahrenheit. High-risk. See 24 CFR 85.12 and Sec. 950.135. Home. A dwelling unit covered by a homebuyer agreement. Homebuyer. The member or members of a low income family who have executed a homebuyer agreement with the IHA and who have not yet achieved homeownership. Homebuyer agreement. A Mutual Help and Occupancy Agreement or a Turnkey III Homebuyer's Ownership Opportunity Agreement. Homebuyer Association. In the Turnkey III program this means an incorporated organization (as defined in Sec. 950.511) composed of all of the families who are entitled to occupancy pursuant to a Homebuyer Ownership Opportunity Agreement or who are homeowners. Homeowner. A former homebuyer who has achieved ownership of his or her home and acquired title to the home. HUD. The Department of Housing and Urban Development, including the Field Offices that have been delegated authority under the Act to perform functions pertaining to this part for the area in which the IHA is located. HUD Field Office. The HUD Offices in Chicago, Oklahoma City, Denver, Phoenix, Seattle, and Anchorage, which have been delegated authority to administer programs under the United States Housing Act of 1937 for the area in which the IHA is located. IHA homeownership financing. IHA financing for purchase of a home by an eligible homebuyer who gives the IHA a promissory note and mortgage for the balance of the purchase price. IHS. The Indian Health Service in the Department of Health and Human Services. Indian. Any person recognized as being an Indian or Alaska Native by an Indian Tribe, the Federal Government, or any State. Indian area. The area within which an Indian Housing Authority is authorized to provide low income housing. Indian Housing Authority (IHA). An entity that is authorized to engage in or assist in the development or operation of low income housing for Indians that is established either: (1) By exercise of the power of self-government of an Indian Tribe independent of State law; or (2) By operation of State law providing specifically for housing authorities for Indians, including regional housing authorities in the State of Alaska. Indian Tribe. Any Tribe, band, pueblo, group, community, or nation of Indians or Alaska Natives. Interdepartmental agreement. The agreement among HUD, the Department of Health and Human Services, the Department of Interior, and other appropriate agencies, concerning assistance to projects developed and operated under the Act. Latent defect. A design or construction deficiency that could not reasonably have been foreseen by the IHA or the Office of Indian Programs. Lead-based paint. A paint surface, whether or not defective, identified as having a lead content greater than or equal to 1.0 mg/ cm2, or .5 percent by weight. Live-in aide. A person who resides with an elderly, disabled, or handicapped person or persons and who: (1) Is determined by the IHA to be essential to the care and well- being of the person(s); (2) Is not obligated for support of the person(s); and (3) Would not be living in the unit except to provide necessary supportive services. (See definition of annual income for treatment of a live-in aide's income.) Local inflation factor. The weighted average percentage increase in local government wages and salaries for the area in which the IHA is located and non-wage expenses based upon the implicit price deflator for State and local government purchases of goods and services. This weighted average percentage will be supplied by HUD. HUD anticipates that it will update the local inflation factor each year. Low-income family. A family whose annual income does not exceed 80 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families. HUD may establish income limits higher or lower than 80 percent of the median income for an Indian area on the basis of its finding that such variations are necessary because of the prevailing levels of construction costs or unusually high or lower family incomes. Management capability. (1) An IHA has management capability if it is: (i) Not designated as High Risk under Sec. 950.135; or (ii) Designated as High Risk, but has a reasonable prospect of acquiring management capability which may include modernization-funded management improvements. (2) An IHA may be considered for funding of non-emergency physical improvements where it is making reasonable progress toward meeting the goals established in its management improvement plan under Sec. 950.135. Management improvement plan. A document developed by the IHA in accordance with Sec. 950.135 which specifies the actions to be taken, including timetables, to correct deficiencies identified as a result of a management assessment. Mastermeter system. A utility distribution system in which an IHA is supplied utility service by a utility supplier through a meter or meters and the IHA then distributes the utility to its tenants. Medical expenses. Those medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance. Meter loop. A device provided to accommodate future installation of a utility meter. (See subpart K of this part). Modernization capability. An IHA has modernization capability for CIAP if it is capable of effectively carrying out the proposed modernization improvements. Where an IHA does not have a funded modernization program in progress, HUD will determine whether the IHA has a reasonable prospect of acquiring modernization capability through hiring staff or contracting for assistance. (See Sec. 950.135.) Modernization funds. Funds derived from an allocation of budget authority for the purpose of funding physical and management improvements. Modernization program. An IHA's program for carrying out modernization, as set forth in the approved CIAP budget for modernization funds. (See subpart I (CIAP) of this part.) Modernization project. The improvement of one or more existing Indian housing developments under a new number designated for that modernization program (CIAP). For each modernization project, HUD and the IHA shall enter into an ACC amendment, requiring low-income use of the housing for not less than 20 years from the date of the ACC amendment (subject to sale of homeownership units in accordance with the terms of the ACC). Monthly adjusted income. One twelfth of adjusted income. Monthly Equity Payments Account (MEPA). A homebuyer account in the Mutual Help Homeownership Opportunity program credited with the amount by which each required monthly payment exceeds the administration charge. Monthly income. One twelfth of annual income. MH. Mutual Help. MH Construction Contract. A construction contract for an MH project, which shall be on a form prescribed by HUD. MH Contribution. Land, labor, cash, materials, or equipment--or a combination of these--contributed toward the development cost of a project in accordance with a homebuyer's MHO Agreement, credit for which is to be used toward purchase of a home. MH Program. The MH Homeownership Opportunity Program. MHO Agreement. A Mutual Help and Occupancy Agreement between an IHA and a homebuyer. Near elderly family. A family whose head or spouse (or sole member) is at least 50 years of age but below the age of 62 years. Net family assets. Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles are excluded, and, in the case of a family in which any member is actively engaged in a business or farming operation, the assets that are a part of the business or farming operation are excluded. In cases where a trust fund, such as individual Indian monies held by the BIA, has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. In determining net family assets, IHAs shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. Nonroutine maintenance. (1) For purposes of the Turnkey III Program (Nonroutine Maintenance Reserve), nonroutine maintenance refers to infrequent and costly items of maintenance and replacement, including dwelling equipment such as a range or refrigerator, or major components such as heating or plumbing systems or a roof. Specifically excluded are maintenance expenses attributable to homebuyer negligence or to defective materials or workmanship. (2) For purposes of the CIAP and Comprehensive Grant Modernization Programs under subpart I of this part and the applicability of wage rates, nonroutine maintenance refers to work items that ordinarily would be performed on a regular basis in the course of upkeep of a property, but have become substantial in scope because they have been put off, and that involve expenditures that would otherwise materially distort the level trend of maintenance expenses. Replacement of equipment and materials rendered unsatisfactory because of normal wear and tear by items of substantially the same kind does qualify, but reconstruction, substantial improvement in the quality or kind of original equipment and materials, or remodeling that alters the nature or type of housing units does not qualify. NRMR. The nonroutine maintenance reserve account in the Turnkey III Program established and maintained in accordance with Sec. 950.519. Operating budget. The IHA's operating budget (HUD form 52564) and all related documents, required by HUD to be submitted pursuant to the ACC. Operating subsidy. Annual contributions for IHA operations made by HUD under the authority of section 9 of the Act. (See subpart J of this part with respect to rental projects. See also Sec. 950.434 (Mutual Help Operating Subsidy) and Sec. 950.523 (Turnkey III Operating Subsidy).) Other income. Income to the IHA other than dwelling rental income and income from investments, except that, for purposes of determining operating subsidy eligibility, the following items are excluded: Grants and gifts for operations, other than for utility expenses, received from Federal, State, and local governments, individuals or private organizations; amounts charged to tenants for repairs for which the IHA incurs an offsetting expense; and legal fees in connection with eviction proceedings, when those fees are lawfully charged to tenants. Other Modernization (modernization other than emergency). A type of modernization program under the Comprehensive Improvement Assistance Program (CIAP) for a development that includes one or more physical work items, where HUD determines that the physical improvements are necessary and sufficient to extend substantially the useful life of the development, and/or one or more management work items (including planning costs), and/or testing, professional risk assessments, interim containment, and abatement of lead-based paint. Partnership process. A specific and ongoing process that is designed to ensure that residents, resident groups, and the IHA work in a cooperative and collaborative manner to develop, implement and monitor the CIAP or Comprehensive Grant Program. At a minimum, an IHA shall ensure that the partnership process incorporates full resident participation in each of the required program components. Pay-back period. The number of years required to accumulate net savings to equal the cost of an energy conservation measure. Performance funding system (PFS). The standards, policies and procedures established by HUD for determining the amount of operating subsidy an IHA is eligible to receive for its owned rental projects, based on the costs of operating a comparable well-managed project. Pilot. Payment in lieu of taxes. Includes all payments made by an IHA to the local governing body (or other taxing jurisdiction) for the provision of certain municipal services, including that portion of payments in lieu of taxes which is to be applied as a reimbursement of payments of offsite utilities. The amount charged is determined by the cooperation agreement which is generally defined as 10 percent of shelter rent. Shelter rent is defined as dwelling rentals less total utility expenses. Program reservation. A written notification by HUD to an IHA, which is not a legal obligation, but which expresses HUD's determination, subject to fulfillment by an IHA of all legal and administrative requirements within a stated time, that HUD will enter into a new or amended ACC covering the stated number of housing units, or such other number as is consistent with funding reserved by HUD for the project. Project. Housing developed, acquired, or assisted by an IHA under the Act, and the improvement of this housing. Project for elderly families. A rental project or portion of a rental project assisted under the U.S. Housing Act of 1937 that was designated for occupancy by the elderly at its inception (and that has retained that character) or, although not so designated, for which the IHA gives preference in tenant selection (with HUD approval) for all units in the project, or for a portion of the units in the project, to elderly families. Project units. All dwelling units of an IHA's projects. Projected operating income level. The per unit per month dollar amount of dwelling rental income plus nondwelling income, computed as provided in Sec. 950.725. Reasonable cost. Total unfunded hard cost needs for a development that do not exceed 90 percent of the computed total development cost limit for a new development with the same structure type and number and size of units in the market area. Requested budget year. The budget year (fiscal year) of an IHA following the current budget year. Resident groups. Democratically elected resident groups such as IHA-wide resident groups, area-wide resident groups, single development resident groups, or RMCs. Retail service. Purchase of utility service by IHA tenants directly from the utility supplier. Rolling base period. The 36-month period that ends 12 months before the beginning of the IHA requested budget year, which is used to determine the allowable utilities consumption level used to compute the utilities expense level. Single person. A person who lives alone or intends to live alone, and who does not qualify as: (1) An elderly family; (2) A displaced person (as defined in this section); or (3) The remaining member of a tenant family. Soft costs. The non-physical improvement costs, which exclude any costs in development accounts 1450 through 1475. State. Any of the several States of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, the territories and possessions of the United States, the Trust Territory of the Pacific Islands, and Indian Tribes. Subsequent homebuyer. Any homebuyer other than the homebuyer who first occupies a home pursuant to an MHO agreement. Substantial rehabilitation. A modernization program for a project that provides for all physical and management improvements needed to meet the modernization and energy conservation standards and to ensure long-term physical and social viability. Successor homebuyer. A person eligible to become a homebuyer who has been designated by a current homebuyer to succeed to an interest under a homeownership agreement in the event of the current homebuyer's death or mental incapacity. Surcharge. The amount charged by the IHA to a tenant, in addition to the Tenant Rent, for consumption of utilities in excess of the allowance for IHA-furnished utilities or for estimated consumption attributable to tenant-owned major appliances or to optional functions of IHA-furnished equipment. Surcharges calculated pursuant to subpart K, based on estimated consumption where checkmeters have not been installed, are referred to as ``scheduled surcharges.'' Tenant-purchased utilities. Utilities purchased by the tenant directly from a utility supplier. Tenant rent. The amount payable monthly by the family as rent to the IHA. Where all utilities (except telephone) and other essential housing services are supplied by the IHA, tenant rent equals total tenant payment. Where some or all utilities (except telephone) and other essential housing services are not supplied by the IHA and the cost thereof is not included in the amount paid as rent, tenant rent equals total tenant payment less the utility allowance. Total development cost. The sum of all HUD-approved costs for a project including all undertakings necessary for administration, planning, site acquisition, demolition, construction or equipment and financing (including the payment of carrying charges), and for otherwise carrying out the development of the project. The maximum total development cost excludes offsite water and sewer facilities development costs; costs normally paid for by other entities, but included in the development cost budget for the project for contracting or accounting convenience; and any donations received from public or private sources. Total tenant payment. The monthly amount calculated under subpart D of this part. Total tenant payment does not include any surcharge for excess utility consumption or other miscellaneous charges (see subpart K of this part). Unit approved for deprogramming. (1) A dwelling unit for which HUD has approved the IHA's formal request to remove the dwelling unit from the IHA's inventory and the Annual Contributions Contract but for which removal, i.e. deprogramming, has not yet been completed; or (2) A nondwelling structure or a dwelling unit used for nondwelling purposes which the IHA has determined will no longer be used for IHA purposes and which HUD has approved for removal from the IHA's inventory and Annual Contributions Contract. Unit months available. Project units multiplied by the number of months the project units are expected to be available for occupancy during a given IHA fiscal year. Except as provided in the following sentence, for purposes of this part, a unit is considered available for occupancy from the date on which the end of the initial operating period for the project is established until the time it is approved by HUD for deprogramming and is vacated or approved for nondwelling use. On or after July 1, 1991, a unit is not considered available for occupancy in any IHA Requested Budget Year if the unit is located in a vacant building in a project that HUD has determined is nonviable. Utilities. For purposes of determining utility allowances, utilities include electricity, gas, heating fuel, water, sewerage service, septic tank pumping/maintenance, sewer system hookup charges (after development), and trash and garbage collection. Telephone service is not included as a utility. For purposes of IHA accounting, PFS and non-PFS, trash and garbage collection and maintenance and repair of any systems are considered maintenance expenses and not utility expenses. Utilities expense level. The per-unit per-month dollar amount of utilities expense used in calculation of operating subsidy, as provided in Sec. 950.715. Utility allowance. An allowance for IHA-furnished utilities represents the maximum consumption units (e.g., kilowatt hours of electricity), that may be used by a dwelling unit without a surcharge against the tenant for excess consumption. An allowance for tenant- purchased utilities is a fixed dollar amount that is deducted from the total tenant payment otherwise chargeable to a tenant who has retail service, whether the charges are more or less than the amounts of the allowance. (See Secs. 950.865 and 950.870.) Utility reimbursement. The amount, if any, by which the utility allowance for tenant-purchased utilities for the unit, if applicable, exceeds the family's total tenant payment. Very low-income family. A low-income family whose annual income does not exceed 50 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families. HUD may establish income limits higher or lower than 50 percent of the median income for an Indian area on the basis of its finding that such variations are necessary because of unusually high or low family incomes. Welfare assistance. Welfare or other payments to families or individuals, based on need, that are made under programs funded, separately or jointly, by Federal, State or local governments. Work item. Any separately identifiable unit of work constituting a part of a modernization program. Sec. 950.110 Assistance from Indian Health Service and Bureau of Indian Affairs. Because HUD assistance under this part is not limited to IHAs of federally recognized Tribes, provisions in this part relating to assistance from BIA or IHS, or to required approvals, actions or determinations by these agencies in connection with such assistance, are applicable only to projects undertaken by IHAs of federally recognized Tribes or by regional housing authorities created by Alaska state law. These projects shall be developed promptly and operated in accordance with the provisions of this part and the Interdepartmental Agreement. Sec. 950.115 Applicability of civil rights requirements. (a) Indian Civil Rights Act. (1) The Indian Civil Rights Act (title II of the Civil Rights Act of 1968, 25 U.S.C. 1301-1303) provides, among other things, that ``no Indian tribe in exercising powers of self-government shall . . . deny to any person within its jurisdiction the equal protection of its laws or deprive any person of liberty or property without due process of law.'' The Indian Civil Rights Act (ICRA) applies to any tribe, band, or other group of Indians subject to the jurisdiction of the United States in the exercise of recognized powers of self-government. The ICRA is applicable in all cases where an IHA has been established by exercise of Tribal powers of self- government. (2) In the case of IHAs established pursuant to State law, determinations by HUD of the applicability of the ICRA on a case-by- case basis may consider such factors as the existence of recognized powers of self-government; the scope and jurisdiction of such powers; and the applicability of such powers to the area of operation of a particular IHA. Generally, determinations by HUD of the existence of recognized powers of self-government and the jurisdiction of such powers will be made in consultation with the Department of Interior- Bureau of Indian Affairs, and may consider applicable legislation, treaties and judicial decisions. The area of operation of an IHA may be determined by the jurisdiction of the governing body creating the IHA, any limitations within the enabling legislation, and judicial decisions. (3) Projects of IHAs subject to the ICRA shall be developed and operated in compliance with its provisions and all HUD regulations and handbooks thereunder. (b) Nonapplicability of Title VI, the Fair Housing Act, and title II of the Americans with Disabilities Act. Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), which prohibits discrimination on the basis of race, color or national origin in federally assisted programs, the Fair Housing Act (42 U.S.C. 3601-3619), which prohibits discrimination based on race, color, religion, sex or national origin in the sale or rental of housing, and title II of the Americans with Disabilities Act (42 U.S.C. 12131) do not apply to IHAs established by exercise of a Tribe's powers of self-government. HUD regulations implementing Title VI and the Fair Housing Act (24 CFR parts 1 and 100) and 49 CFR part 24 which implements title II of the Americans with Disabilities Act shall not be applicable to development or operation of projects by such IHAs. Any determination by HUD of the applicability of Title VI, the Fair Housing Act and title II of the Americans with Disabilities Act on a case-by-case basis shall consider the applicability of the Indian Civil Rights Act under paragraph (a) of this section. Actions taken by an IHA to implement the statutory admission restriction in favor of Indian families in the MH program, as set forth in Sec. 950.416, shall not be considered a violation of any provision of either Title VI, the Fair Housing Act, or title II of the Americans with Disabilities Act. (c) Indian Housing Act of 1988--Mutual Help program admissions. For provisions generally limiting admission to the Mutual Help Homeownership Opportunity program to Indians and requiring findings of need for admission of non-Indians, see Sec. 950.416. (d) Disability. (1) Under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, HUD is required to assure that no otherwise-qualified disabled person is excluded from participation, denied benefits, or discriminated against under any program or activity receiving Federal financial assistance, solely by reason of his or her disability. IHAs must comply with implementing instructions in 24 CFR part 8. (2) The IHA shall comply with the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157), and HUD implementing regulations (24 CFR part 40). (e) Minority Business Enterprise Development and Women's Business Enterprise Policy. Executive Orders 12432 (3 CFR, 1983 Comp., p. 198) and 12138 (3 CFR, 1979 Comp. p. 39), respectively, apply to Indian Housing Authorities. Sec. 950.117 Displacement, relocation, and acquisition. (a) Minimizing displacement. Consistent with the other goals and objectives of this part, IHAs shall assure that they have taken all reasonable steps to minimize the displacement of persons (families, individuals, businesses, nonprofit organizations, and farms) as a result of a project assisted under this part. (b) Temporary relocation. Residents who will not be required to move permanently, but who must relocate temporarily (e.g., to permit rehabilitation), shall be provided: (1) Reimbursement for all reasonable out-of-pocket expenses incurred in connection with the temporary relocation, including the cost of moving to and from the temporary housing and any increase in monthly rent/utility costs. (2) Appropriate advisory services, including reasonable advance written notice of: (i) The date and approximate duration of the temporary relocation; (ii) The location of the suitable, decent, safe and sanitary housing to be made available for the temporary period; (iii) The terms and conditions under which the resident may lease and occupy a suitable, decent, safe, and sanitary dwelling in the development following its completion; and (iv) The provisions of paragraph (b)(1) of this section. (c) Relocation assistance for displaced persons. (1) A ``displaced person'' (defined in paragraph (g) of this section) must be provided relocation assistance at the levels described in, and in accordance with the requirements of, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C. 4601-4655) and implementing regulations at 49 CFR part 24. (2) A comparable Indian housing unit, project-based Section 8 housing or a privately-owned dwelling made affordable by a Section 8 Rental Certificate or Rental Voucher, may qualify as a comparable replacement dwelling for a person displaced from an Indian housing unit. (d) Real property acquisition requirements. The acquisition of real property for a development is subject to the URA and the requirements described in 49 CFR part 24, subpart B, whether the acquiring entity is organized under State law or Tribal law. (e) Appeals. A person who disagrees with the IHA'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 IHA. A lower- income person who is dissatisfied with the IHA's determination on his or her appeal may submit a written request for review of that determination to the HUD Field Office. (f) Responsibility of IHA. (1) The IHA shall certify (i.e., provide assurance of compliance, as required by 49 CFR part 24) that it will comply with the URA, the regulations at 49 CFR part 24, and the requirements of this section, and shall ensure such compliance notwithstanding any third party's contractual obligation to the IHA to comply with those provisions. (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 also may be paid from funds available from other sources. (3) The IHA shall maintain records in sufficient detail to demonstrate compliance with the requirements of this section. (g) Definition of displaced person. (1) For purposes of this section, the term ``displaced person'' means a person (family, individual, business, nonprofit organization, or farm) that moves from real property, or moves personal property from real property, permanently, as a direct result of acquisition, rehabilitation, demolition, or conversion of a unit to homeownership (Mutual Help Homeownership Opportunity (MH) Program) for a project assisted under this part or as a direct result of disposition in accordance with subpart M of this part. This includes any permanent, involuntary move for an assisted project including any permanent move from the development that is made: (i) After notice to the person by the IHA or property owner to move permanently from the property, if the move occurs on or after: (A) For the comprehensive improvement assistance program (CIAP) and the comprehensive grant program (CGP) under subpart I of this part, 45 calendar days from before: (1) The IHA issues the invitation for bids for the project, or (2) The start of force account work, whichever is applicable; or (B) For the disposition or demolition of Indian housing under subpart M of this part, the date of HUD approval of the IHA's proposal; or (C) For other projects subject to this section, the date HUD approves the site for the project; or, if HUD site approval is not required, the date the IHA approves the site for the project; (ii) Before the date described in paragraph (g)(1)(i) of this section, if the IHA or HUD determines that the displacement resulted directly from acquisition, rehabilitation, demolition, or conversion for the assisted project; or (iii) By a resident of a dwelling unit, if any one of the following three situations occurs: (A) The resident moves after the ``initiation of negotiations'' and the move occurs before the resident is provided written notice offering him or her the opportunity to lease and occupy a suitable, decent, safe, and sanitary dwelling in the same development, under reasonable terms and conditions, upon its completion. Such reasonable terms and conditions include a monthly rent and estimated average monthly utility costs that do not exceed the amount determined in accordance with Sec. 950.325; or (B) The resident is required to relocate temporarily, does not return to the development, and either: (1) The resident is not offered payment for all reasonable out-of- pocket expenses incurred in connection with the temporary relocation, or (2) Other conditions of the temporary relocation are not reasonable; or (C) The resident is required to move to another dwelling unit in the same development but is not offered reimbursement for all reasonable out-of-pocket expenses incurred in connection with the move, or other conditions of the move are not reasonable. (2) Notwithstanding the provisions of paragraph (g)(1) of this section, a person does not qualify as a ``displaced person'' (and is not eligible for relocation assistance under the URA or this section), if: (i) The person has been evicted for serious or repeated violation of the terms and conditions of the lease or occupancy agreement, violation of applicable Federal, State, tribal, or local law, or other good cause, and HUD determines that the eviction was not undertaken for the purpose of evading the obligation to provide relocation assistance; (ii) The person moved into the property after the date described in paragraph (g)(1)(i) of this section and, before 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 he or she will not qualify as a ``displaced person'' (or for assistance under this section) as a result of the project: (iii) The person is ineligible under 49 CFR 24.2(g)(2); or (iv) HUD determines that the person was not displaced as a direct result of acquisition, rehabilitation, demolition, or conversion for the project. (3) The IHA may, at any time, ask HUD to determine whether a displacement is or would be covered by this section. (h) Definition of initiation of negotiations. For purposes of determining the formula for computing the replacement housing assistance to be provided to a resident, the term ``initiation of negotiations'' means the following action: (1) For the comprehensive improvement assistance program (CIAP) or comprehensive grant program (CGP) under subpart I of this part, 45 calendar days before: (i) The IHA's issuance of the invitation for bids for the project; or (ii) The start of force account work, whichever is applicable; (2) For an IHA purchase through an arm's-length transaction as described in 49 CFR 24.101(a)(1), the seller's acceptance of the IHA's written offer to purchase the property; (3) For an IHA purchase that does not qualify as an arm's-length transaction, the delivery of the initial written purchase offer from the IHA to the Owner of the property. However, if the IHA issues a notice of intent to acquire the property, and a person moves after that notice, but before the initial written purchase offer, the ``initiation of negotiations'' is the actual move of the person from the property; (4) For disposition or demolition of Indian housing under subpart M of this part, HUD approval of the IHA's proposal; or (5) For other programs under this part 950, the notice to the occupant that he or she must move permanently, or, if there is no notice, the person's actual move from the property. (Approved by the Office of Management and Budget under control number 2506-0121) Sec. 950.120 Compliance with [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-17838. Public record. Not legal advice.