Implementation of the Native American Housing Assistance and Self-Determination Act of 1996; Proposed Rule

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 950, 953, 955, 1000, 1003 and 1005

[Docket No. FR-4170-P-10]

RIN 2577-AB74

Implementation of the Native American Housing Assistance and

Self-Determination Act of 1996; Proposed Rule

AGENCY: Office of the Assistant Secretary for Public and Indian

Housing; HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement the Native American Housing

Assistance and Self-Determination Act of 1996 (NAHASDA). NAHASDA

reorganizes the system of Federal housing assistance to Native

Americans by eliminating several separate programs of assistance and

replacing them with a single block grant program. In addition to

simplifying the process of providing housing assistance, the purpose of

NAHASDA is to provide Federal assistance for Indian tribes in a manner

that recognizes the right of Indian self-determination and tribal self-

governance. As required by section 106(b)(2) of NAHASDA, HUD has

developed this proposed rule with active tribal participation and using

the procedures of the Negotiated Rulemaking Act.

DATES: Comments on the proposed rule are due on or before August 18,

1997. Comments on the proposed information collection requirements are

due on or before September 2, 1997.

ADDRESSES: Interested persons are invited to submit written comments

regarding this proposed rule to the Rules Docket Clerk, Office of

General Counsel, Room 10276, Department of Housing and Urban

Development, 451 Seventh Street, SW, Washington, DC 20410. Comments

should refer to the above docket number and title. A copy of each

comment submitted will be available for public inspection and copying

between 7:30 a.m. and 5:30 p.m. weekdays at the above address.

Facsimile (FAX) comments will not be accepted.

[[Page 35719]]

For additional information concerning the information collection

requirements contained in this rule, please see the ``Findings and

Certifications'' section of this preamble. A copy of any comment

regarding the information collection requirements must be sent to:

Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and

Budget, New Executive Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Dominic Nessi, Deputy Assistant

Secretary for Native American Programs, 1999 Broadway, Suite 3390,

Denver, CO 80202; telephone (303) 675-1600. Speech or hearing-impaired

individuals may access this number via TTY by calling the Federal

Information Relay Service at 1-800-877-8339. (With the exception of the

``800'' number, these telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Statutory Background

On October 26, 1996, President Clinton signed into law the Native

American Housing Assistance and Self-Determination Act of 1996 (Pub. L.

104-330) (NAHASDA). NAHASDA streamlines the process of providing

housing assistance to Native Americans. Specifically, it eliminates

several separate programs of assistance and replaces them with a single

block grant program. Beginning on October 1, 1997, the first day of

Fiscal Year (FY) 1998, a single block grant program will replace

assistance previously authorized under:

1. The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.)

(1937 Act);

2. The Indian Housing Child Development Program under Section 519

of the Cranston-Gonzalez National Affordable Housing Act (12 U.S.C.

1701z-6 note);

3. The Youthbuild Program under subtitle D of title IV of the

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12899 et

seq.);

4. The Public Housing Youth Sports Program under section 520 of the

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 11903a);

5. The HOME Investment Partnerships Program under title II of the

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12721 et

seq.); and

6. Housing assistance for the homeless under title IV of the

Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11361 et seq.)

and the Innovative Homeless Demonstration Program under section 2(b) of

the HUD Demonstration Act of 1993 (42 U.S.C. 11301 note).

In addition to simplifying the process of providing housing

assistance, the purpose of NAHASDA is to provide Federal assistance for

Indian tribes in a manner that recognizes the right of Indian self-

determination and tribal self-governance.

Section 106 of NAHASDA sets out the general procedure for the

implementation of the new Indian housing block grant (IHBG) program.

The procedure described is a two-step process. First, section 106(a)

requires the publication of a notice in the Federal Register not later

than 90 days after enactment of NAHASDA. The purpose of the notice is

to establish any requirements necessary for the transition from the

provision of assistance for Indian tribes and Indian housing

authorities under the 1937 Act and other related provisions of law to

the provision of assistance in accordance with NAHASDA. Secondly,

section 106(b) requires that HUD issue final regulations implementing

NAHASDA no later than September 1, 1997. Section II of this preamble

discusses the transition requirements established by HUD. The remainder

of the preamble presents an overview of the development and contents of

the proposed regulations.

II. Transition Requirements

On January 27, 1997 (62 FR 3972), HUD published the transition

notice required by section 106(a) of NAHASDA. HUD subsequently amended

the January 27, 1997 notice to extend the Indian Housing Plan (IHP)

submission deadline to November 3, 1997 (62 FR 8258, February 24,

1997).

The January 27, 1997 notice focused on the information which must

be included in an Indian tribe's IHP and the treatment of activities

and funding under programs repealed by NAHASDA. Although section 106(b)

of NAHASDA requires that HUD issue final regulations by September 1,

1997, the ``old'' system of funding expires on the first day of FY 1998

(October 1, 1997). The submission of an IHP and a determination by HUD

that the IHP complies with NAHASDA is a prerequisite for funding under

NAHASDA. Accordingly, the January 27, 1997 notice established IHP

submission requirements in order to ensure that there is sufficient

time for Indian tribes to prepare their IHPs, and for HUD to review

them. Similarly, the January 27, 1997 notice provided guidance for the

treatment of activities and funding under programs repealed by NAHASDA

in order to permit Indian tribes to have the greatest time available

under the new law to consider and prepare for the transition from the

``old'' programs to the new IHBG program.

The deadline for submission of an IHP is November 3, 1997. Indian

tribes wishing to participate in the new IHBG program in FY 1998 should

familiarize themselves with the transition requirements established in

the Federal Register notices described above.

III. Negotiated Rulemaking

As described above, section 106(b) of NAHASDA requires that HUD

issue final implementing regulations no later than September 1, 1997.

Further, section 106(b)(2)(A) of NAHASDA provides that all regulations

required under NAHASDA be issued according to the negotiated rulemaking

procedure under subchapter III of chapter 5 of title 5, United States

Code. The rulemaking procedure referenced is the Negotiated Rulemaking

Act of 1990 (5 U.S.C. 561-570). Accordingly, the Secretary of HUD

established the Native American Housing Assistance & Self-Determination

Negotiated Rulemaking Committee (Committee) to negotiate and develop a

proposed rule implementing NAHASDA.

Prior to the establishment of the Committee, HUD held a series of

meetings with tribal representatives to discuss the regulatory

implementation of NAHASDA. These meetings were preliminary to the

formal negotiated rulemaking process required by NAHASDA. The

preliminary meetings provided a valuable exchange of ideas that

assisted in focusing the efforts of the Committee.

The Committee consists of 58 members. Forty-eight of these members

represent geographically diverse small, medium, and large Indian

tribes. There are ten HUD representatives on the Committee.

Additionally, three individuals from the Federal Mediation and

Conciliation Service served as facilitators. While the Committee is

much larger than usually chartered under the Negotiated Rulemaking Act,

its larger size was justified due to the diversity of tribal interests,

as well as the number and complexity of the issues involved.

Tribal leaders recommended and the Committee agreed to operate

based on consensus rulemaking and its approved charter. The protocols

adopted by the Committee define ``consensus'' as general agreement

demonstrated by the absence of expressed disagreement by a Committee

member in regards to a particular issue. Procedures recommended by

tribal leaders on the negotiated rulemaking process were also adopted

by the Committee. HUD committed to using, to the maximum extent

feasible consistent with its legal obligations, all consensus decisions

as

[[Page 35720]]

the basis for the proposed rule. The Committee further agreed that any

Committee member or his/her constituents could comment on this proposed

rule. The Committee will consider all comments in drafting the final

rule.

In order to complete the proposed regulations by the statutory

deadline, the Committee divided itself into six workgroups. Each

workgroup was charged with analyzing specified provisions of the

statute and drafting any regulations it believed were necessary for

implementing those provisions. The draft regulations developed by the

workgroups were then brought before the full Committee for review,

amendment, and approval. A seventh workgroup was assigned the task of

reviewing the approved regulations for format, style, and consistent

use of terminology. The seven workgroups were: (1) Preamble, Policy and

Definitions; (2) IHP Preparation and Submission, Monitoring, Review and

Compliance; (3) Allocation Formula; (4) Affordable Housing Activities;

(5) Transition Requirements; (6) Alternative Financing; and (7)

Drafting Coordination.

The first meeting of the Committee was in February of 1997. At that

meeting the Committee established workgroups, a protocol for

deliberations and a meeting schedule. During February, March and April

1997 the Committee met four times. The meetings were divided between

workgroup sessions at which regulatory language was developed and full

Committee sessions to discuss the draft regulations produced by the

workgroups. Each of these meetings lasted between four and eight days.

Tribal leaders were encouraged to attend the meetings and participate

in the rulemaking process.

It was the Committee's policy to provide for public participation

in the rulemaking. All of the Committee sessions were announced in the

Federal Register and were open to the public.

IV. Summary of New 24 CFR Part 1000

The rule proposes to implement NAHASDA in a new 24 CFR part 1000.

Part 1000 would be divided into six subparts (A through F), each

describing the regulatory requirements for a different aspect of

NAHASDA. For the convenience of readers, part 1000 is in Question and

Answer format. Additionally, the rule will as much as practicable not

repeat statutory language but rather make reference to specific

provisions. A reader of the rule must therefore have the statute

available while reading the rule.

The full Committee reached consensus on the individual subparts of

this proposed rule. However, the Committee has yet to endorse an

integrated proposed rule. The full Committee asks for public comment on

the workgroup products, and suggestions regarding any modifications

necessary to produce an integrated rule. The full Committee will meet

to consider the public comments and to produce an integrated final

rule.

The following is a brief description of the contents of each

subpart:

Subpart A--General

Subpart A would contain the legal authority and scope of the

regulations. It would also set forth definitions for key terms used in

the balance of the regulations. Additionally, subpart A would cross-

reference to other applicable Federal laws and regulations. Although

HUD encourages readers to familiarize themselves with all of the

provisions of subpart A, it wishes to highlight the following sections

contained in this subpart:

Section 1000.8. Section 1000.8 provides that HUD may waive any non-

statutory provision of this rule in accordance with 24 CFR 5.110. This

section requires that any waivers be based upon a determination of good

cause. In making this determination, HUD may consider such factors as

undue hardship. Under section 106 of the Department of Housing and

Urban Development Reform Act of 1989 (42 U.S.C. 3545) waivers will be

in writing and published in the Federal Register.

Section 1000.10. Section 1000.10 sets forth the generally

applicable definitions used throughout 24 CFR part 1000. The Committee

has adopted without change many of the definitions set forth in section

4 of NAHASDA. Section 1000.10 proposes to define the terms ``Adjusted

income,'' ``Affordable housing,'' ``Drug-related criminal activity,''

``Elderly families and near-elderly families,'' ``Elderly person,''

``Grant beneficiary,'' ``Indian,'' ``Indian housing plan (IHP),''

``Indian tribe,'' ``Low-income family,'' ``Median income,'' ``Near-

elderly persons,'' ``Nonprofit,'' ``Recipient,'' Secretary,''

``State,'' and ``Tribally designated housing entity (TDHE)'' by cross-

referencing to section 4. Further, the term ``Affordable housing

activities'' is defined by cross-referencing to the list of eligible

activities set forth in section 202 of NAHASDA.

In the case of the definitions of ``Family'' and ``Indian area,''

the Committee determined that it was necessary to make minor clarifying

changes to the statutory definitions in section 4 of NAHASDA.

Specifically, the definition of ``Family'' has been revised to clarify

that the term includes, but is not limited to, the types of families

identified in the statutory definition. Similarly, the Committee has

added a sentence to the statutory definition of ``Indian area'' to

specify that ``[w]henever the term `jurisdiction' is used in NAHASDA it

shall mean `Indian area,' except where specific reference is made to

the jurisdiction of a court.''

Section 4 of NAHASDA required that the Committee develop additional

language expanding upon the statutory definitions of ``Income'' and

``Person with disabilities.'' In both cases, the Committee elected to

use the language of existing HUD definitions codified in title 24 of

the CFR.

Section 4 of NAHASDA defines ``Income'' to mean income from all

sources of each member of the household ``as determined in accordance

with criteria prescribed by'' HUD. The Committee chose to use the term

``annual income,'' rather than the term ``income.'' Further, the

Committee elected to adopt the income criteria set forth in HUD's

current Indian housing program regulations at 24 CFR part 950.

Accordingly, the definition of ``Annual income'' set forth in this

proposed rule is nearly identical to the existing definition of the

term at 24 CFR 950.102.

The statutory definition of ``Person with disabilities'' requires a

regulatory definition of the term ``physical, mental, or emotional

impairment.'' The Committee elected to model this definition on the

definition of ``physical or mental impairment'' set forth in HUD's

regulations implementing section 504 of the Rehabilitation Act of 1973,

as amended (29 U.S.C. 794) (24 CFR part 8). Although the definition of

``physical, mental, or emotional impairment'' contained in this

proposed rule makes several minor editorial changes to the definition

of ``physical or mental impairment'' at 24 CFR 8.3, these changes do

not alter the intent or meaning of the definition in part 8.

The definitions of ``Annual contributions contract (ACC)'' and

``Indian housing authority (IHA)'' set forth in this proposed rule are

also modelled on the existing definitions of these terms in 24 CFR part

950.

Section 1000.12. This section sets forth the nondiscrimination

requirements which are applicable to NAHASDA. Specifically,

Sec. 1000.12 provides that the following civil right authorities are

applicable to NAHASDA: (1) The requirements of the Age Discrimination

Act of 1975 (42 U.S.C.

[[Page 35721]]

6101-6107) and HUD's implementing regulations in 24 CFR part 146; (2)

section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and HUD's

regulations at 24 CFR part 8; and (3) title II of the Civil Rights Act

of 1968 (25 U.S.C. 1301-1303), to the extent such title is applicable,

and other applicable Federal civil rights statutes. Additionally, this

section provides that title VI of the Civil Rights Act of 1964 (42

U.S.C. 2000d) and title VIII of the Civil Rights Act of 1968 (42 U.S.C.

3601 et seq.) do not apply to actions by Indian tribes under section

201(b) of NAHASDA.

HUD has revised the regulatory language developed by the Committee

by adding the reference to title II of the Civil Rights Act of 1968.

This addition reflects the statutory language of section 102(c)(5)(A)

of NAHASDA, which requires that recipients include a certification of

compliance with title II in their IHP.

Section 1000.14. This section sets forth the relocation and real

property acquisition policies which are applicable to NAHASDA. Except

for minor editorial and formatting changes, Sec. 1000.14 is identical

to the corresponding provision in HUD's regulations for the Indian

Community Development Block Grant program (See 24 CFR 953.602).

Section 1000.16. This section describes the labor standards

applicable to NAHASDA. Section 1000.16 provides, in accordance with

section 104(b) of NAHASDA, that contracts and agreements for

assistance, sale or lease under NAHASDA must require prevailing wage

rates determined under the Davis-Bacon Act (40 U.S.C. 276a-276a-5) to

be paid to laborers and mechanics employed in the development of

affordable housing projects. HUD has added a sentence to the regulatory

language developed by the Committee to reflect an additional statutory

requirement. Specifically, Sec. 1000.16 now provides that section

104(b) also mandates that these contracts and agreements require that

prevailing wages determined by HUD shall be paid to maintenance

laborers and mechanics employed in the operation, and to architects,

technical engineers, draftsmen and technicians employed in the

development, of such projects.

Section 1000.20. Section 1000.20 provides that an Indian tribe is

not required to assume environmental review responsibilities. Rather,

this proposed rule states it is an option an Indian tribe may choose.

If an Indian tribe declines to assume the environmental review

responsibilities, HUD will perform the environmental review in

accordance with 24 CFR part 50. HUD has added a sentence to the

regulatory language adopted by the Committee to clarify that a HUD

environmental review must be completed for any activities not excluded

from review under 24 CFR 50.19(b) before a recipient may acquire,

rehabilitate, convert, lease, repair or construct property, or commit

HUD or local funds to such activities with respect to the property.

HUD's resources may be such that it may be unable to undertake

environmental reviews if the Indian tribe chooses not to assume

environmental review responsibilities. HUD needs to examine its

resources and further consider this issue. In addition, HUD is

reviewing whether a conflict exists between the 60 day maximum period

permitted in section 103(a)(2) of NAHASDA for HUD to review the IHP

and, in cases where an Indian tribe declines to assume environmental

review responsibilities and an activity requires an Environmental

Impact Statement (EIS), the greater time required for finalizing EISs

prepared and circulated for review and comment in accordance with the

National Environmental Policy Act of 1969 prior to a Federal decision

being made (including a general minimum of 90 days between publication

of a notice of draft EIS and the agency decision). HUD is also

reviewing possible options for reconciling the conflict, if any.

Accordingly, HUD wishes to alert the public that it may not be legally

permissible both to provide for a choice and to give full effect to the

requirements of the National Environmental Policy Act of 1969 and

related statutes. In particular, if HUD determines that a statutory

conflict exists, one of the options for reconciling the conflicts may

result in HUD not being able to implement the policy of allowing an

Indian tribe the option of not assuming environmental review for

actions that are subject to the statutory 60 day approval period.

Further, conforming changes will need to be made at the final rule

stage to HUD's regulations at 24 CFR part 58 (Environmental Review

Procedures for Entities Assuming HUD Environmental Responsibilities) to

reflect the environmental review procedures established in new part

1000.

Section 1000.30. This section describes the conflict of interest

provisions applicable to 24 CFR part 1000. Paragraph (a) of

Sec. 1000.30 cross-references to certain requirements of 24 CFR part 85

(Administrative Requirements for Grants and Cooperative Agreements to

State, Local and Federally Recognized Indian Tribal Governments).

Specifically, Sec. 1000.30(a) as adopted by the Committee provided that

``[i]n the procurement of supplies, equipment, construction and

services by recipients and subrecipients, the conflict of interest

provisions of 24 CFR 85.36 or 24 CFR 85.42 (as applicable) shall

apply.'' HUD has added the phrase ``other property'' after the word

``equipment'' in Sec. 1000.30 to clarify that the conflict of interest

provisions in 24 CFR 85.36 and 24 CFR 85.42 apply to property as well

as services.

HUD welcomes public comment on additional ways it may strengthen

the conflict of interest provisions to ensure that affordable housing

activities are conducted effectively without fraud, waste, or

mismanagement. In particular, HUD invites comment on whether the

regulation should require persons who participate in the decision-

making process to recuse themselves from decisions that directly affect

the provision of assistance to themselves or their relatives. During

the public comment period, HUD also will be considering additional ways

to strengthen the conflict of interest provisions to ensure that

affordable housing activities are conducted effectively without fraud,

waste, or mismanagement. Additionally, HUD will be considering whether

the final rule should require persons who participate in the decision-

making process to recuse themselves from decisions that directly affect

the provision of assistance to themselves or their relatives.

Accordingly, the final rule may reflect stronger conflict of interest

provisions than are set forth in this proposed rule based on any public

comments received and HUD's further consideration of the subject

matter.

Section 1000.32. This section provides that HUD may make case-by-

case exceptions to the conflict of interest provisions set forth in

Sec. 1000.30(b). As originally adopted by the Committee, this section

would have permitted an Indian tribe or TDHE to grant exceptions. HUD

has revised the language adopted by the Committee to specify that only

HUD may allow an exception to the conflict of interest provisions. HUD

has determined that this change is necessary to ensure that exceptions

are granted fairly and without abuse. Further, the change conforms

Sec. 1000.32 to its counterpart provision in HUD's regulations

governing the Community Development Block Grant (CDBG) program (see 24

CFR 570.611(d)).

Section 1000.38. This section describes the flood insurance

[[Page 35722]]

requirements applicable to NAHASDA. Specifically, Sec. 1000.38 provides

that under the Flood Disaster Protection Act of 1973, as amended (42

U.S.C. 4001-4128), a recipient may not permit the use of Federal

financial assistance for acquisition and construction purposes

(including rehabilitation) in an area identified by the Federal

Emergency Management Agency (FEMA) as having special flood hazards

unless certain specified conditions are met.

Subpart B--Affordable Housing Activities

Subpart B would contain the regulations necessary for the

implementation of title II of NAHASDA. Among the topics addressed by

subpart B would be eligible affordable housing activities, low-income

requirements, lease requirements and tenant selection. Although HUD

encourages readers to familiarize themselves with all of the provisions

of subpart B, it wishes to highlight the following sections contained

in this subpart:

Section 1000.104. This section lists the types of families which

are eligible for affordable housing activities under NAHASDA.

Paragraphs (b) and (c) of Sec. 1000.104 set forth the conditions under

which a non low-income Indian family or a non-Indian family may receive

housing assistance under NAHASDA. Such families are presumed to meet

the requirements of Sec. 1000.104 if they are currently residing in

housing assisted under the 1937 Act. HUD has added language to the

regulatory text adopted by the Committee which clarifies that the

presumption applies only if there is no evidence to the contrary.

Sections 1000.106 to 1000.116. Title II of NAHASDA requires HUD

approval of certain eligible affordable housing activities under

NAHASDA. Specifically, section 202(6) of NAHASDA permits recipients to

conduct housing activities under model programs that are designed to

carry out the purposes of NAHASDA and that are specifically approved by

HUD for such purposes. Further, section 201(b)(2) of NAHASDA permits a

recipient to provide certain assistance to non low-income Indian

families with HUD approval.

Sections 1000.106 to 1000.116 of this proposed rule concern HUD

approval of eligible affordable housing activities. These sections

refer to HUD approval of model activities and ``other housing

programs.'' This phrase does not appear in the statutory language of

NAHASDA. HUD interprets the phrase ``other housing programs'' to apply

solely to the provision of assistance to non low-income Indian families

under section 201(b)(2) of NAHASDA.

Section 1000.124. Section 1000.124 provides that a recipient may

charge a low-income rental tenant or homebuyer payments not to exceed

thirty percent of the adjusted income of the family. HUD interprets the

phrase ``homebuyer payments'' to be limited to lease-purchase payments,

such as those in the existing Mutual Help Homeownership Opportunity

Program (See 24 CFR part 950, subpart E).

HUD has made one modification to the regulatory language adopted by

the Committee. That regulation provided that the thirty-percent (30%)

requirement ``applies only to NAHASDA grant amounts.'' HUD has removed

this phrase from Sec. 1000.124 since the statutory limitation on the

amount of the rent and homebuyer payment is not limited to the grant

amounts.

Section 1000.134. Section 1000.134 establishes the conditions under

which a recipient (or an entity funded by the recipient) may demolish

or dispose of Indian housing units owned or operated pursuant to an

Annual Contribution Contract. Paragraph (c) of Sec. 1000.134 provides

that in any disposition sale of a housing unit, the recipient will use

a sale process designed to maximize the sale price. Further,

Sec. 1000.134(c) provides that ``[t]he sale proceeds from the

disposition of any housing unit are program income under NAHASDA and

must be used in accordance with the requirements of NAHASDA and this

part.'' HUD revised this sentence to more closely track the statutory

language of section 104(a)(1)(B) of NAHASDA. As originally adopted by

the Committee, the sentence read: ``The sale proceeds from the

disposition of any housing unit are program income under NAHASDA and

must be used for appropriate purposes under NAHASDA.'' Section

104(a)(1)(B) requires that the recipient use any ``program income for

affordable housing activities in accordance with the provisions of this

Act.''

Section 1000.136. Section 1000.136 describes the insurance

requirements which apply to housing units assisted with NAHASDA grants.

Specifically, this section requires that a recipient provide adequate

insurance either by purchasing insurance or by indemnification against

casualty loss by providing insurance in adequate amounts to indemnify

the recipient against loss from fire, weather, and liability claims for

all housing units owned or operated by the recipient. HUD has added a

sentence to the regulatory language adopted by the Committee which

clarifies that these requirements are in addition to the applicable

flood insurance requirements set forth in Sec. 1000.38.

Section 1000.142. Section 205 of NAHASDA sets forth the criteria

for affordable housing under NAHASDA. Among other criteria, section

205(a)(2) requires that affordable housing remain affordable ``for the

remaining useful life of the property (as determined by the

Secretary).'' Section 1000.142 of this proposed rule reflects the

statutory useful life requirement. The Committee developed the

following regulatory language for Sec. 1000.142: ``Each recipient shall

describe in its IHP the useful life of each assisted housing unit in

each of its developments.'' HUD has modified this language by inserting

the phrase ``for Secretarial determination'' after the word ``IHP.''

The addition of this phrase clarifies that through approval of the IHP,

the Secretary will determine the useful life of the affordable housing

as required by section 205.

Section 1000.148. Section 1000.148 describes the information which

must be contained in a notice of eviction or termination. The

regulatory language adopted by the Committee provided that ``[t]he

owner or manager will apply the law applicable to the jurisdiction.''

For purposes of clarity, HUD has revised Sec. 1000.148 to more closely

track the statutory requirements set forth in section 207(a)(5) of

NAHASDA. Section 1000.148 now requires that the owner or manager must

give adequate written notice of termination of the lease, in accordance

with the period of time required under State, tribal, or local law.

Further, Sec. 1000.148 provides that, notwithstanding any State,

tribal, or local law, the notice must inform the resident of the

opportunity, prior to any hearing or trial, to examine any relevant

documents, records, or regulations directly related to the eviction or

termination.

Section 1000.152. Section 1000.152 tracks the statutory language of

section 208(c) of NAHASDA. Section 208(c) concerns the recipient's use

of criminal conviction information on adult applicants and tenants.

Section 1000.152 provides that recipients shall use this information

solely for purposes of applicant screening, lease enforcement and

eviction actions. Further, Sec. 1000.152 provides that ``[t]he

information may be disclosed only to a person who has a job related

need for the information and who is an officer, employee, or authorized

representative of the recipient or the owner of housing assisted under

NAHASDA.'' HUD revised the regulatory language developed by the

Committee by

[[Page 35723]]

inserting the phrase ``or the owner'' after the word ``recipient.'' The

addition of this phrase conforms Sec. 1000.152 to section 208(c) of

NAHASDA, which authorizes the release of criminal conviction

information to an officer, employee, or authorized representative of an

owner.

Section 1000.156. This section sets forth the housing development

cost limits applicable to ensure modest housing construction under

NAHASDA. Section 1000.156 provides that, unless approved by HUD, the

total development cost (TDC) per unit will be no more than 100% of the

TDC. HUD has added a sentence to the regulatory language adopted by the

Committee to clarify that TDC shall include the costs of making a

project meet the accessibility requirements of 24 CFR part 8

(Nondiscrimination Based on Handicap in Federally Assisted Programs and

Activities of the Department of Housing and Urban Development) for new

construction and alterations of existing housing facilities.

Subpart C--Indian Housing Plan (IHP)

Subpart C would set forth the regulatory requirements concerning

the preparation, submission, and review of an Indian tribe's IHP.

Although HUD encourages readers to familiarize themselves with all of

the provisions of subpart C, it wishes to highlight the following

sections contained in this subpart:

Section 1000.214. This section provides that there are no separate

IHP requirements for small Indian tribes. The IHP requirements set

forth in subpart C are minimal. Further, HUD has general authority

under section 101 of NAHASDA to waive IHP requirements when an Indian

tribe cannot comply with IHP requirements due to circumstances beyond

its control. The waiver authority under section 101 provides

flexibility to address the needs of every Indian tribe, including small

Indian tribes. The original regulatory language for Sec. 1000.214

developed by the Committee referred to the Secretary's authority under

section 101 to waive IHP requirements for an ``Indian tribe or TDHE.''

HUD has revised Sec. 1000.214 to clarify that the section 101 waiver

provision applies only to Indian tribes.

Section 1000.216. Section 102(c)(5) of NAHASDA requires that a

recipient include certain certifications of compliance in its IHP.

Among other certifications, the recipient must certify that it will

comply with title II of the Civil Rights Act of 1968 in carrying out

NAHASDA, to the extent that title II is applicable, and other

applicable Federal statutes. Section 101(b)(2) of NAHASDA permits HUD

to waive these certification requirements if HUD determines that an

Indian tribe has not complied or cannot comply with the certification

requirements due to circumstances beyond the control of the Indian

tribe. Section 1000.216 cross-references to this statutory provision.

HUD has added a sentence to the regulatory text adopted by the

Committee which clarifies that although HUD may waive the certification

requirement, the recipient must still comply with the nondiscrimination

requirements listed in Sec. 1000.12.

Section 1000.226. Section 1000.226 of this proposed rule sets forth

a non-exclusive list of eligible administrative and planning expenses

under the IHBG program. HUD has made two revisions to the list

developed by the Committee. First, HUD has removed staff and overhead

costs directly related to carrying out affordable housing activities

from the list of eligible expenses. These costs do not constitute

administrative and planning expenses. Additionally, HUD has amended the

list by adding the expenses related to the collection of data necessary

to challenge the data used in the IHBG formula. This addition reflects

the language of Sec. 1000.320(a), which provides that the collection of

data for this purpose is an allowable cost for IHBG funds.

Section 101(h) of NAHASDA requires that HUD authorize, by

regulation, each recipient to use a percentage of its NAHASDA grant

amounts for administrative and planning expenses relating to carrying

out NAHASDA and activities assisted with such amounts. This proposed

rule, however, does not set forth such a percentage. HUD is considering

the appropriate percentage which it is statutorily required to

establish at the final rule stage.

Section 1000.228. Section 101(c) of NAHASDA prohibits HUD from

awarding NAHASDA grant funds to a recipient unless the governing body

of the locality within which any affordable housing to be assisted with

grant amounts will be situated has entered into a local cooperation

agreement with the recipient. Section 1000.228 of this proposed rule

provides that the requirement for a local cooperation agreement

``applies to assistance of rental and lease-purchase homeownership

units under the 1937 Act or NAHASDA which are owned by the Indian tribe

or TDHE.'' HUD has revised the regulatory language developed by the

Committee by using the word ``assistance'' rather than ``development.''

This change clarifies that section 101(c) covers all assistance, and

not just development.

HUD also notes that a cooperation agreement is not required in

those cases where the affordable housing will be located on an Indian

reservation and the Indian tribe is the recipient, since a tribal

government could not enter into an agreement with itself.

Section 1000.230. Section 101(d)(1) of NAHASDA requires that

affordable housing assisted with NAHASDA grant amounts be exempt from

all real or personal property taxes levied or imposed by any State,

tribe, city, county, or other political subdivision. Section 1000.230

of this proposed rule provides that the tax-exemption requirement

``applies only to assistance of rental and lease-purchase homeownership

units under the 1937 Act or NAHASDA which are owned by an Indian tribe

or TDHE.'' As is the case with Sec. 1000.228, HUD has revised

Sec. 1000.230 by substituting the word ``development'' with the word

``assistance.'' This revision clarifies that section 101(d)(1) applies

to all assistance of rental and lease-purchase homeownership units.

Subpart D--Allocation Formula

Subpart D would implement title III of NAHASDA. Specifically, it

would establish the components, definitions, and data sources used in

the NAHASDA block grant formula. The allocation formula is set forth in

an appendix to this proposed rule. Although the formula is currently

set forth in an appendix, it may be incorporated in the regulatory text

at the final rule stage.

Subpart E--Federal Guarantees for Financing of Tribal Housing

Activities

Subpart E would describe the regulatory requirements necessary for

the implementation of title VI of NAHASDA. This subpart would establish

the terms and conditions by which HUD will guarantee the obligations

issued by an Indian tribe or TDHE for the purposes of financing

affordable housing activities.

Subpart E does not contain a provision setting forth the

requirements for eligible lenders. HUD believes that the establishment

of lender eligibility requirements will help to ensure the stability

and integrity of the title VI loan guarantee program. HUD proposes the

use of the lender eligibility criteria used in the Indian loan

guarantee program authorized by section 184 of the Housing and

Community Development Act of 1992 (Pub. L. 102-550, approved October

28, 1992) (currently codified at 24 CFR part 955). The section 184

program has been highly successful in

[[Page 35724]]

providing access to sources of private financing to Indian families and

Indian housing authorities who otherwise could not acquire housing

financing because of the unique legal status of Indian trust land.

Accordingly, HUD believes the section 184 lender eligibility

requirements provide a good model for loan guarantees under title VI of

NAHASDA. HUD invites public comment on the proposed lender eligibility

criteria. The regulatory provision proposed by HUD would read as

follows:

Who Are Eligible Lenders Under This Subpart?

The loan shall be made only by a lender approved by and meeting

qualifications established in this subpart, except that loans

otherwise insured or guaranteed by any agency of the Federal

Government, or made by an organization of Indians from amounts

borrowed from the United States shall not be eligible for guarantee

under this part. The following lenders are deemed to be approved

under this part:

(a) Any mortgagee approved by HUD for participation in the

single family mortgage insurance program under title II of the

National Housing Act.

(b) Any lender whose housing loans under chapter 37 of title 38,

United States Code are automatically guaranteed pursuant to section

1802(d) of such title.

(c) Any lender approved by the Department of Agriculture to make

guaranteed loans for single family housing under the Housing Act of

1949.

(d) Any other lender that is supervised, approved, regulated, or

insured by any agency of the Federal Government.

HUD encourages readers to familiarize themselves with all of the

provisions of subpart E; however, it wishes to highlight the following

section contained in this subpart:

Section 1000.408. This section sets forth the conditions which HUD

will prescribe when providing a guarantee for notes or other

obligations issued by an Indian tribe. The regulatory language

developed by the Committee would have authorized a repayment period in

excess of twenty years if the period was commercially reasonable or was

an industry standard. HUD has revised Sec. 1000.408 to provide that the

repayment period may not exceed twenty years. This change is based on

HUD's legal interpretation of section 601(c) of NAHASDA which provides

that HUD ``may not deny a guarantee under [title VI of NAHASDA] on the

basis of the proposed repayment period for the note or other obligation

unless the period is more than 20 years or the Secretary determines

that the period causes the guarantee to constitute an unacceptable

financial risk.'' HUD has determined that the statutory language of

section 601(c) prohibits a repayment period of greater than 20 years.

Subpart F--Recipient Monitoring, Oversight and Accountability

Subpart F would implement title IV of NAHASDA. Among other topics,

this subpart would address monitoring of compliance, performance

reports, HUD and tribal review, audits, and remedies for noncompliance.

Sections 1000.504 and 1000.524 of this subpart discuss performance

measures. The newness of the IHBG program makes it difficult to

establish detailed performance objectives. As the IHBG program evolves,

and greater programmatic experience is developed, it will be possible

to set forth the necessary performance measurements with greater

clarity and detail.

Although HUD encourages readers to familiarize themselves with all

of the provisions of subpart F, it wishes to highlight the following

sections contained in this subpart:

Section 1000.502. This section describes the monitoring

responsibilities of the recipient, the grant beneficiary and HUD under

NAHASDA. HUD has revised the language adopted by the Committee to

reference the periodic reviews required under the applicable

nondiscrimination requirements set forth in Sec. 1000.12 (See

Sec. 1000.502(c)).

Section 1000.508. This section provides that if the recipient's

monitoring activities identify programmatic concerns, it must take one

of several specified corrective actions. As originally adopted by the

Committee, this section listed the actions the recipient ``may'' take

to remedy identified concerns. HUD has strengthened this language to

specify that a recipient is required to take one of the listed remedial

actions.

Section 1000.510. This section sets forth the Indian tribe's

responsibility if the tribal monitoring identifies compliance concerns.

The language adopted by the Committee provided that ``[t]he Indian

tribe should ensure that appropriate corrective action is taken.'' HUD

has strengthened and clarified this provision by revising it to read:

``The Indian tribe's responsibility is to ensure that appropriate

corrective action is taken.''

Section 1000.526. This section lists the types of information HUD

may use in conducting a performance review of the recipient. HUD has

expanded the list adopted by the Committee to provide that HUD may also

consider ``any other relevant information'' (see Sec. 1000.526(i)).

Section 1000.528. This language in this section is closely modelled

on section 405(c) of NAHASDA. Specifically, Sec. 1000.528 provides that

HUD may make appropriate adjustments in the amount of the annual grants

under NAHASDA in accordance with the finding of HUD pursuant to reviews

and audits under section 405 of NAHASDA. HUD may adjust, reduce, or

withdraw grant amounts, or take other action as appropriate in

accordance with the reviews and audits, except that grant amounts

already expended on affordable housing activities may not be recaptured

or deducted from future assistance provided on behalf of an Indian

tribe.

HUD added Sec. 1000.528 subsequent to the completion of the

negotiated rulemaking meetings. Accordingly, the Committee did not have

the opportunity to approve the language of Sec. 1000.528. HUD believes

the addition of this provision is necessary to provide Indian tribes

with a fuller picture of the review and audit authority provided to HUD

by NAHASDA. HUD emphasizes that the language of Sec. 1000.528 is nearly

identical to the language of section 405(c). Section 1000.528 does not

establish any requirements or procedures in addition to those

authorized under NAHASDA.

Section 1000.532. This section sets forth the hearing requirements

that will be used under NAHASDA. HUD has revised the language adopted

by the Committee to clarify that for hearings under section 504 of the

Rehabilitation Act of 1973 or the Age Discrimination Act of 1975, the

procedures in 24 CFR part 180 must be used.

Section 1000.538. This section describes the recipient audits

required under NAHASDA. Specifically, Sec. 1000.538 provides that a

recipient must comply with the requirements of the Single Audit Act

which requires annual audits of recipients that expend Federal funds

equal to or in excess of $300,000. The audit shall be made by an

independent auditor in accordance with generally accepted government

auditing standards covering financial and compliance audits.

V. Nonconsensus Provisions and Rationale

The Committee was unable to reach consensus on five issues. On four

of the issues, HUD and tribal representatives disagreed on proposed

regulatory language. These issues involve legal determinations which

must be made by HUD. In the case of the allocation formula, tribal

representatives could not reach consensus on the use of a performance

variable. The following

[[Page 35725]]

section of the preamble summarizes these issues and presents the

different positions. The summaries were drafted by proponents of the

position on the Drafting Coordination Workgroup.

1. Issue: Indian Preference for Procurement

Is one time HUD approval necessary for alternative Indian

Preference methods for procurement? The Committee drafted a proposed

regulatory provision on this issue which was not approved by the

Committee. The proposed provision is reproduced below.

Tribal Position: The tribes believe that a certification of

compliance with the requirements of section 7(b) of the Indian Self-

Determination and Education Assistance Act (25 U.S.C. 450b) is

sufficient to satisfy the requirements for alternative Indian

Preference methods.

HUD's Position: HUD approval for alternative Indian Preference

methods is intended to ensure that the minimum procurement requirements

of 24 CFR 85.36 are met in the implementation of alternative methods of

providing Indian Preference.

The proposed regulatory provision which was not approved reads:

What Indian Preference Requirements Are Applicable?

(a) Applicability. HUD has determined that grants under this

part are subject to Section 7(b) of the Indian Self-Determination

and Education Assistance Act (25 U.S.C. 450b). Section 7(b) provides

that any contract, subcontract, grant or subgrant pursuant to an act

authorizing grants to Indian organizations or for the benefit of

Indians shall require that, to the greatest extent feasible:

(1) Preference and opportunities for training and employment

shall be given to Indians, and

(2) Preference in the award of contracts and subcontracts shall

be given to Indian organizations and Indian-owned economic

enterprises as defined in section 3 of the Indian Financing Act of

1974 (25 U.S.C. 1452).

(b) Definitions.

(1) The Indian Self-Determination and Education Assistance Act

defines ``Indian'' to mean a person who is a member of an Indian

tribe and defines ``Indian tribe'' to mean any Indian tribe, band,

nation, or other organized group or community including any Alaska

Native village or regional or village urban corporation as defined

or established pursuant to the Alaska Native Claims Settlement Act,

which is recognized as eligible for the special programs and

services provided by the United States to Indians because of their

status as Indians.

(2) In section 3 of the Indian Financing Act of 1974 ``economic

enterprise'' is defined as any Indian--owned commercial, industrial,

or business activity established or organized for the purpose of

profit, except that Indian ownership must constitute not less than

51 percent of the enterprise. This act defines ``Indian

organization'' to mean the governing body of any Indian tribe or

entity established or recognized by such governing body.

(c) Preference in administration of grant. To the greatest

extent feasible, preference and opportunities for training and

employment in connection with the administration of grants awarded

under this part shall be given to Indians.

(d) Preference in contracting. To the greatest extent feasible,

recipients shall give preference in the award of contracts for

projects funded under this part to Indian organizations and Indian-

owned economic enterprises.

(1) Each recipient shall:

(i) Advertise for bids or proposals limited to qualified Indian

organizations and Indian-owned enterprises; or

(ii) Use a two-stage preference procedure, as follows:

(A) Stage 1. Invite or otherwise solicit Indian-owned economic

enterprises to submit a statement of intent to respond to a bid

announcement or request for proposals limited to Indian-owned firms.

(B) Stage 2. If responses are received from more than one Indian

enterprise found to be qualified, advertise for bids or proposals

limited to Indian organizations and Indian-owned economic

enterprises; or

(iii) Develop, subject to HUD one-time approval, the recipient's

own method of providing preference. An Indian preference policy

which was previously approved by HUD for a recipient under the

provisions of 24 CFR part 1003 will meet the requirements of this

section.

(2) If the recipient selects a method of providing preference

that results in fewer than two responsible qualified organizations

or enterprises submitting a statement of intent, a bid or a proposal

to perform the contract at a reasonable cost, then the recipient

shall:

(i) Re-advertise the contract, using any of the methods

described in paragraph (d)(1) of this section; or

(ii) Re-advertise the contract without limiting the

advertisement for bids or proposals to Indian organizations and

Indian-owned economic enterprises; or

(iii) If one approvable bid or proposal is received, request

Area ONAP review and approval of the proposed contract and related

procurement documents, in accordance with 24 CFR 85.36, in order to

award the contract to the single bidder or offeror.

(3) Procurements that are within the dollar limitations

established for small purchases under 24 CFR 85.36 need not follow

the formal bid or proposal procedures of paragraph (d) of this

section, since these procurements are governed by the small purchase

procedures of 24 CFR 85.36. However, a recipient's small purchase

procurement shall, to the greatest extent feasible, provide Indian

preference in the award of contracts.

(4) All preferences shall be publicly announced in the

advertisement and bidding or proposal solicitation documents and the

bidding and proposal documents.

(5) A recipient, at its discretion, may require information of

prospective contractors seeking to qualify as Indian organizations

or Indian-owned economic enterprises. Recipients may require

prospective contractors to include the following information before

submitting a bid or proposal, or at the time of submission:

(i) Evidence showing fully the extent of Indian ownership and

interest;

(ii) Evidence of structure, management and financing affecting

the Indian character of the enterprise, including major subcontracts

and purchase agreements; materials or equipment supply arrangements;

and management salary or profit-sharing arrangements; and evidence

showing the effect of these on the extent of Indian ownership and

interest; and

(iii) Evidence sufficient to demonstrate to the satisfaction of

the recipient that the prospective contractor has the technical,

administrative, and financial capability to perform contract work of

the size and type involved.

(6) The recipient shall incorporate the following clause

(referred to as the Section 7(b) clause) in each contract awarded in

connection with a project funded under this part:

(i) The work to be performed under this contract is on a project

subject to Section 7(b) of the Indian Self-Determination and

Education Assistance Act (25 U.S.C. 450b) (Indian Act). Section 7(b)

requires that to the greatest extent feasible (A) preferences and

opportunities for training and employment shall be given to Indians

and (B) preferences in the award of contracts and subcontracts shall

be given to Indian organizations and Indian-owned economic

enterprises.

(ii) The parties to this contract shall comply with the

provisions of Section 7(b) of the Indian Act.

(iii) In connection with this contract, the contractor shall, to

the greatest extent feasible, give preference in the award of any

subcontracts to Indian organizations and Indian-owned economic

enterprises, and preferences and opportunities for training and

employment to Indians.

(iv) The contractor shall include this Section 7(b) clause in

every subcontract in connection with the project, and shall, at the

direction of the recipient, take appropriate action pursuant to the

subcontract upon a finding by the recipient or HUD that the

subcontractor has violated the Section 7(b) clause of the Indian

Act.

(e) Complaint procedures. The following complaint procedures are

applicable to complaints arising out of any of the methods of

providing for Indian preference contained in this part, including

alternate methods enacted and approved in a manner described in this

section.

(1) Each complaint shall be in writing, signed, and filed with

the recipient.

(2) A complaint must be filed with the recipient no later than

20 calendar days from the date of the action (or omission) upon

which the complaint is based.

(3) Upon receipt of a complaint, the recipient shall promptly

stamp the date and time of receipt upon the complaint, and

immediately acknowledge its receipt.

(4) Within 20 calendar days of receipt of a complaint, the

recipient shall either meet, or communicate by mail or telephone,

with

[[Page 35726]]

the complainant in an effort to resolve the matter. The recipient

shall make a determination on a complaint and notify the

complainant, in writing, within 30 calendar days of the submittal of

the complaint to the recipient. The decision of the recipient shall

constitute final administrative action on the complaint.

2. Issue: Interest Income

Can interest income earned on advances of grant funds be retained

by a recipient?

Tribal Position: For the following reasons, the tribal position is

that recipients can retain interest income earned on advances of

NAHASDA grant funds to be used for affordable housing activities:

(a) Under Public Law 93-638 self-determination contracts and self-

governance compacts, federal policy allows tribes to receive lump-sum

distributions for their programs and to keep any interest they earn on

such funds before expending the funds on their programs. The Congress

directed through NAHASDA that ``Federal assistance to meet these

responsibilities [federal housing responsibilities to Indians] should

be provided in a manner that recognizes the right of Indian self-

determination and tribal self-governance by making such assistance

available directly to the Indian tribes or TDHEs under authorities

similar to those accorded Indian tribes in Public Law 93-638 (25 U.S.C.

450 et seq.)'' (NAHASDA section 2(7)--Congressional Findings). The

tribal representatives believe that this language authorizes HUD to

make NAHASDA grant amounts available to recipients in lump-sum

distributions and that recipients can then keep any interest earned on

this money before the recipient expends the money on eligible

affordable housing activities.

(b) The tribal representatives also believe that NAHASDA expressly

authorizes recipients to invest grant amounts and retain any interest.

NAHASDA states: ``A recipient may invest grant amounts for the purposes

of carrying out affordable housing activities in investment securities

and other obligations as approved by the Secretary'' (NAHASDA section

204(b)).

HUD's Position: HUD believes that the Congressional findings in

NAHASDA do not overcome the longstanding opinions of the Comptroller

General that recipients may not augment appropriation amounts by

earning interest on grant funds pending disbursement for a program

purpose and that interest earned on grant advances belongs to the

Federal Government. A more explicit statutory provision is needed which

authorizes the recipient to draw down grant funds in a lump sum and to

retain any interest earned.

HUD construes section 204(b) of NAHASDA consistent with the above

stated opinions of the Comptroller General. Accordingly, the statute

permits recipients to invest grant amounts for the purposes of carrying

out affordable housing activities, but this does not permit recipients

to invest grant funds solely for the purpose of earning interest to

augment the grant amount.

A workgroup of the Committee developed the following definition of

``Program Income'' but HUD could not agree on the underlined language:

(1) Program income is defined as any income that is realized

from the disbursements of grant amounts. Program income includes

income from fees for services performed from the use of real or

rental of real or personal property acquired with grant funds, from

the sale of commodities or items developed, acquired, etc. with

grant funds, and from payments of principal and interest on loans

made with grant funds. Program income includes interest income

earned on grant funds prior to disbursement.

(2) Any program income over the amount of $250 per annum can be

retained by a recipient provided it is used for affordable housing

activities in accordance with section 202 of NAHASDA. Any program

income realized that is less than $250 per annum shall be excluded

from consideration as program income. Such funds may be retained but

are not classified and treated as program income.

(3) If program income is realized from an eligible activity

funded with both grant funds as well as other funds, i.e., funds

that are not grant funds, then the amount of program income realized

will be based on a percentage calculation that represents the

proportional share of funds provided for the activity generating the

program income that are grant funds.

(4) Costs incident to the generation of program income shall be

deducted from gross income to determine program income.

3. Issue: Reducing Grant Amounts

Should HUD be allowed to reduce, adjust, or withdraw NAHASDA grant

funds without giving notice and a hearing to a recipient?

Tribal Position: Tribal representatives felt that before the

Secretary takes any actions to adjust, reduce, or withdraw grant

amounts the Secretary must comply with the due process requirements set

forth in section 401 of NAHASDA to give a recipient reasonable notice

and an opportunity for a hearing.

HUD's Position: Section 405(c) of NAHASDA expressly permits HUD to

adjust, reduce, or withdraw grant amounts in accordance with HUD's

review and audits of recipients. This authority is in addition to the

authority in section 401 to take actions based on the recipient's

substantial noncompliance with the requirements of NAHASDA.

4. Issue: Substantial Noncompliance

How is substantial noncompliance defined under NAHASDA section

401(a) before the Secretary may terminate, reduce, or limit the

availability of payments under NAHASDA or replace the TDHE?

Tribal Position: The tribal representatives proposed a definition

for substantial noncompliance, as follows:

For HUD to conclude that a recipient has failed to comply

substantially with any provision of NAHASDA, HUD must find:

(a) An act or omission or series of acts or omissions; or

(b) A pattern or practice or activities constituting willful

noncompliance with the requirements under NAHASDA; or

(c) Criminal activity; or

(d) Such other activity or activities--

by the recipient which place the housing program at sufficient risk

with the primary objectives of NAHASDA to warrant HUD taking the

remedial actions set forth under sections 401 and 402 of NAHASDA.

HUD's Position: HUD disagrees with the tribal representatives'

proposed definition for four reasons. First, the ``sufficient risk''

standard may prove to be essentially rudderless, leaving to HUD the

question of whether actions pose such a sufficient risk, without any

clear standard. Second, the standard is limited to such risk to the

primary objectives of the law, which term will not necessarily cover

``any provision'' of NAHASDA, as section 401 compels. Third, subjecting

any act or omission to the ``sufficient risk'' standard could have the

unintended effect of converting minor actions to ``substantial'' ones.

Fourth, the test ignores the statute's emphasis on past noncompliance.

This statutory provision, like many others in NAHASDA, is patterned

after the community development block grant (CDBG) legislation at title

I of the Housing and Community Development Act of 1974, as amended (42

U.S.C. 5301 et seq.). While little case law exists in this area, it is

apparent that the CDBG provision in question is one which has been

viewed with as much emphasis on its past nature as on substantiality

(See Kansas City v. HUD, 861 F.2d 739 (D.C.Cir. 1988)). The proposed

definition fails to take this aspect of the standard into account. HUD

welcomes public comment on what would be an appropriate standard for

this term or, for

[[Page 35727]]

that matter, whether the term should be defined in the regulation.

5. Issue: Performance Variable

Should a measure of performance be used as a variable within the

allocation formula for NAHASDA Block Grant funds? This issue was not

agreed to among tribal representatives.

Position Opposing the Use of a Performance Variable: Taking a stand

against the use of a performance variable in the allocation formula

does not mean taking a stand against quality performance; rather, it

means taking a stand against the use of an unnecessary and penal method

of evaluating how tribes serve their own people.

It is unnecessary because both the statute and the proposed

compliance regulations already address how to deal with poor

performance.

It is penal in that it disciplines a failing tribe, instead of

focusing on assisting that tribe.

NAHASDA requires the development of a formula for the allocation of

block grant funds based on need and maintenance of current housing

stock. It does not mandate or even suggest that such a formula address

an individual tribe's performance, presumably because NAHASDA itself

deals adequately with the issue by requiring annual performance

reports, providing for audits and monitoring, and specifying remedies

for non-compliance with NAHASDA (including failure to expend monies on

low-income activities).

The relief available to the Secretary allows him to make

adjustments in future grant amounts, to require the repayment of

misspent amounts, to seek civil remedies, and to appoint a replacement

TDHE, among other things. If these remedies are not the same as the

penalty imposed by the performance factor, then those who favor the

performance factor essentially are opting for an additional penalty. If

the remedies are the same, then by definition they are duplicative.

Those who favor a performance factor in the allocation formula

skirt the fact that failure to perform to standard would absolutely

result in the lowering of one tribe's subsequent allocations, thereby

resulting in the raising of the allocation of other tribes whose

performance was excellent. Such a position has merit at first blush,

but fails in the final analysis, for Indian tribes do not need to raise

themselves on the backs of their fallen brothers and sisters.

Technical assistance will be available to a tribe that performs

poorly, but that is the case with or without the use of a performance

variable, and the real trigger should come before failure, not in its

wake. Supporters of the performance factor argue that the penalty comes

only after the first full year of performance; they neglect to mention

that it can continue to come each year, year after year, with each new

application for a block grant. None of us has any experience with

NAHASDA or how it will affect the ability to provide quality housing

assistance in the first few years, especially for the smaller tribes

and newer TDHEs. To include a performance variable at this stage is

premature.

A performance variable in the allocation formula is neither

required nor contemplated by NAHASDA. Even without a performance

variable, all tribes will be required to develop performance objectives

and to describe how they intend to use their block grant funds. Even

without a performance factor, HUD will not continually provide funds to

a poorly performing tribe. With a performance factor many tribes will

unnecessarily perform their work under greater pressure and with less

of the support from their fellow tribes who will benefit from their

failure. The performance variable is unnecessary and insidious and

serves as just another way in which to divide tribes, just as it has

divided the rulemaking committee and resulted in nonconsensus.

Position in favor of the Performance Variable: Some Committee

members feel that in order for a tribe or TDHE to efficiently and

effectively meet the housing needs of its constituents its performance

should be quantified through tribally initiated performance objectives.

Towards this end, a system that will measure the performance of a tribe

or TDHE against objectives determined by each individual tribe was

developed by these members and presented to the Committee for

consideration. These members feel development of such objectives,

provided they respect and accommodate the diversity of tribal needs,

will not impose an undue burden on tribes or their TDHEs, but instead

will allow them to more effectively meet the needs of their

constituents. Development of such performance objectives will encourage

all recipients of NAHASDA funds to clearly describe objectives and

describe how they will use the limited resources made available by the

Congress in a timely and businesslike manner.

Crucial to the implementation of any performance objectives and

their codification in the formula allocation is a commitment to promote

and develop the technical and administrative capacity among all tribes

that administer affordable housing activities. The variable must

trigger the provision of technical assistance to those tribes or their

TDHEs that encounter difficulty meeting the objectives they set for

themselves. Towards this end, the variable is a proactive means for

tribes and their TDHEs that obligates the Secretary to promote and

develop greater technical and administrative capacity so that both

tribes and the Department are assured NAHASDA funds will be used to

provide affordable housing to deserving Native Americans.

The performance variable proposed for Committee consideration will

not measure performance against tribally set objectives until the end

of the year--as such it does not take effect until the second year of

NAHASDA. Throughout the year, tribes would have an opportunity to

update or change their objectives should events occur that are beyond

their control. The performance variable only reduces funding in the

following year to those tribes or TDHEs that fail to accomplish what

they said they would accomplish and then only if they fail to meet

several of their objectives set for the year.

While the temporary reduction in funds was construed by many

Committee members as a punitive measure, the proponents of the

performance variable feel it addresses a broader reality facing Indian

housing--continued provision of funds to a poorly performing entity is

not an efficient use of limited appropriations, poorly performing

recipients do not put as many people in housing as could otherwise be

done, and the current political climate will not continue to subsidize

poorly run programs that will not or do not use appropriated funds in a

timely manner for the purposes for which they were allocated.

Accordingly, members supporting the incorporation of the performance

variable in the allocation of NAHASDA funds feel it is imperative that

tribes be the driving force that initiate measures that assure the

maximum number of deserving Native Americans are provided a house to

call home and the technical and administrative capacities of all tribes

are increased to accomplish this objective. Rather than rely on the

Department or others to establish the criteria by which tribes will

perform, it is time for tribes to take the initiative and set their own

high standards--the performance variable and tribally determined

objectives as proposed take this important step.

[[Page 35728]]

VI. Items Highlighted for Comment

Public comment is invited on this proposed rule in its entirety,

including those issues highlighted in this preamble. The Committee

especially seeks comments on the following issues.

1. Local Cooperation Agreements and Tax Exemption Issues

Sections 101(c), (d), and (e) of NAHASDA, governing local co-

operation agreements, tax exemption, and user fees proved to be

problematic, and the statutory requirements were generally agreed to be

inappropriate and unreasonable in the context of a formula block grant

program. The Committee's tribal caucus approved and forwarded to the

Congress a technical amendment intended to deal with the problems.

However, in the event that the Congress does not act on this amendment,

potential recipients should be aware of the following issues:

(a) How to handle situations in which local governing bodies refuse

to enter into local cooperation agreements with recipients;

(b) How to handle payments where more than one local governing body

provides services;

(c) Should there be a limit on assistance to a unit or individual

below which the requirements of this section should not apply; and

(d) How to deal with local governing bodies that fail to comply

with their cooperation agreements. Should there be a certification by

the recipient each year that the local governing body has complied with

the certification agreement?

HUD is interpreting the statutory provisions for local cooperation

agreements, tax exemption, and user fees in the context of the long-

standing history of the requirements in the 1937 Act. Accordingly, the

applicability of these provisions is limited in the regulations to

rental housing (including homebuyer programs for lease-purchase of

homes) owned by the Indian tribe or TDHE.

2. Labor Standards of NAHASDA

NAHASDA requires prevailing wage rates determined under the Davis-

Bacon Act (40 U.S.C. 276a-276a-5) to be paid to laborers and mechanics

employed in the development of affordable housing projects. NAHASDA

also requires prevailing wages determined by HUD to be paid to

maintenance laborers and mechanics employed in the operation, and to

architects, technical engineers, draftsmen and technicians employed in

the development of such projects. Some Committee members felt that

applying prevailing wage standards to all development and maintenance

assisted in any way by NAHASDA is not practical or reasonable and that

some minimum exemption is needed. Placing these requirements on small

development and maintenance activities and certain types of projects

leveraged with other funds and with other owners would make many such

activities infeasible. Many committee members also felt that in

accordance with the Congressional findings of NAHASDA, Indian tribes

should have the right to apply their own wage standards or Tribal

Employment Rights Office (TERO) standards in an effort to encourage

tribal employment and that those should supersede Davis-Bacon and HUD

wage rates. Since Davis-Bacon and HUD rates are a statutory

requirement, the Congress must act to address or remove this provision.

3. Formula Used to Allocate NAHASDA Block Grant Funds

The Committee encourages comment on the following two issues--(a)

whether or not the definition of ``formula area'' accurately reflects

the geography that most tribes serve; and (b) how to develop a better

data source than the U.S. Census that is uniformly and consistently

collected throughout Indian areas for purposes of future formula

allocations.

Although not to be commented on in respect to the proposed rule,

tribes should be aware that their individual allocations under the

Needs component of the formula are based on two primary pieces of

information: (a) Geography--HUD will inform each tribe of the geography

being used for its ``formula area'' so that tribes may correct or

challenge the geographic definition for their area; and (b) data for

Native Americans living in the ``formula area''--the U.S. Census is

known to have made an undercount, each tribe should review the data for

its area (provided by HUD) to determine if it wishes to challenge the

Census data as allowed under the proposed rule.

4. Formula Set-Aside for Emergency and Disaster Relief

Some Committee members felt it was important that an emergency and

disaster relief fund be established with a portion of the Indian

Housing Block Grant funds. The initial proposal was that the fund be

capitalized at $10 million in its first year and that it be replenished

in future years such that it begins each year with a balance of $10

million. Other Committee members suggested that the fund should address

only disaster relief and that each Tribe or TDHE develop its own

reserves for emergency circumstances. The Committee is requesting

comments on (a) whether or not an emergency and/or disaster relief fund

should be developed and (b) if so, how it should be administered.

5. When May NAHASDA Block Grant Funds be Drawn-Down?

The Committee held informal discussions about whether NAHASDA grant

amounts will be drawn-down in lump-sum payments or whether they will be

drawn-down as the funds are due to be spent by a recipient. Tribal

leaders expressed the view that grant amounts should be distributed in

lump-sum up-front distributions so that recipients can invest the grant

amounts and earn and retain interest on the funds as tribes do in

Public Law 93-638 self-determination contracts and self-governance

compacts. Lump-sum distributions are also consistent with the

Congressional findings in NAHASDA. As set forth in section V.2. of this

preamble (nonconsensus issue regarding interest income), HUD has

determined that NAHASDA does not authorize the recipient to drawdown

grant funds in a lump sum.

6. Applicability of Section 3 of the Housing and Urban Development Act

of 1968 and the Lead Based Paint Requirements of 24 CFR Part 35

Tribal members expressed strong disagreement of the applicability

of these laws on the basis of their burdensome reporting requirements

or high compliance costs. Tribal members believed that compliance with

Indian preference requirements under NAHASDA and its regulations should

also be deemed as meeting the requirements of section 3 requiring a

preference for low and very low-income persons. HUD does not agree with

this tribal position. The Committee requested that HUD look at how the

section 3 and lead based paint requirements would be applied to the

IHBG program and whether NAHASDA's lead based paint requirements would

be the same as they are for the HOME program.

HUD's current regulations setting forth its section 3 requirements

(24 CFR part 135) and lead-based paint hazard requirements (24 CFR part

35) were published prior to the enactment of NAHASDA. HUD is currently

developing final rules revising 24 CFR parts 35 and 135. HUD will

address the impact of its section 3 and lead-based paint regulatory

requirements on Native American housing assistance, especially in light

of the changes made by

[[Page 35729]]

NAHASDA, in the development of the final rules.

7. The Applicability of 24 CFR Part 85--Uniform Administrative

Requirements for Grants

The Committee decided that some portions of 24 CFR part 85 may not

be applicable to the IHBG program. At the conclusion of the comment

period, the Committee will review the sections of part 85 and make a

determination as to which of the sections will apply. The public is

encouraged to submit comments on this issue to assist the Committee in

their determination.

8. Rents and Utilities

The Committee decided to give flexibility to recipients to

determine whether or not rent includes utilities. HUD believes this

implementation of NAHASDA is legally permissible, but notes that this

position is a departure from the long-standing HUD policy of including

utilities in rents.

VII. Reorganization of Existing Indian Housing Regulations

In addition to establishing a new 24 CFR part 1000, this rule

proposes to make several conforming amendments to HUD's existing Indian

housing regulations. For example, this proposed rule would remove 24

CFR part 950 from the Code of Federal Regulations. Part 950 sets forth

the regulatory requirements for the ``old'' system of funding which

expires on September 30, 1997. Accordingly, the removal of part 950 is

necessary to ensure that title 24 does not contain outdated

regulations.

This proposed rule would also redesignate 24 CFR part 953

(Community Development Block Grants for Indian Tribes and Alaskan

Native Villages) and 24 CFR part 955 (Loan Guarantees for Indian

Housing) as 24 CFR parts 1003 and 1005, respectively. These

redesignations would consolidate HUD's Indian housing regulations in

the ``1000 series'' of title 24, and assist program participants by

presenting uniformity. In addition to the changes in designation, this

proposes to make amendments to the regulations currently set forth in

part 955. These revisions will reflect the amendments made by NAHASDA

to section 184 of the Housing and Community Development Act of 1992 (12

U.S.C. 1515z-13a).

As a result of these redesignations, several conforming amendments

must be made at the final rule stage to other HUD regulations that

cross-reference to 24 CFR parts 950, 953, and 955.

VIII. Justification for Reduced Comment Period

It is HUD's policy generally to afford the public not less than

sixty days for submission of comments on its notices of proposed

rulemaking (24 CFR 10.1). It was determined that it would not be

practicable to provide a public comment period greater than 45 calendar

days. As noted above, section 106(b)(1) of NAHASDA requires that HUD

issue final regulations implementing NAHASDA by September 1, 1997. In

developing a schedule for completing its work, the Committee has

attempted to strike a balance between the need for public input in the

regulatory implementation of NAHASDA, and the necessity of meeting the

statutory publication deadline. Given the number and complexity of

negotiated rulemaking issues, it was determined that it would not be

possible to issue proposed regulations before today. In order to permit

the publication of a final rule by September 1, 1997, and provide the

Committee with sufficient time to review and address public comments on

this proposed rule, HUD requests that comments be submitted by August

18, 1997. The Committee believes that this 45-day comment period will

provide interested persons with sufficient time to develop and submit

their comments.

The Committee recognizes the value and necessity of public comment

in the development of final regulations implementing NAHASDA and

welcomes comments on this proposed rule. All comments will be addressed

in the final rule. Further, the Committee has sought public input

throughout the negotiated rulemaking process. All Committee meetings

were announced in the Federal Register and were open to the public

without advance registration. Members of the public were also invited

to make statements during the negotiated rulemaking meetings and to

submit written statements for the Committee's consideration.

The Committee also notes that the negotiated rulemaking process

provided for the development of proposed regulations with the active

participation of Indian tribes. Forty-eight of the fifty-eight

Committee members were representatives of geographically diverse small,

medium, and large Indian tribes. These Committee members represented

tribal concerns and interests in the development of regulations

implementing NAHASDA and the proposals contained in this rule reflect

the consensus decisions of the Committee.

IX. Findings and Certifications

Paperwork Reduction Act of 1995

(a) The information collection requirements contained in this

proposed rule have been submitted to the Office of Management and

Budget (OMB) for review under the Paperwork Reduction Act of 1995 (44

U.S.C. 3501-3520). An agency may not conduct or sponsor, and a person

is not required to respond to, a collection of information unless the

collection displays a valid control number.

(b) Estimate of the total reporting and recordkeeping burden that

will result from the collection of information:

--------------------------------------------------------------------------------------------------------------------------------------------------------

Est. avg.

Type of collection Proposed section of 24 CFR affected Number of Frequency of response time Annual burden

respondents response (hrs.) hrs.

--------------------------------------------------------------------------------------------------------------------------------------------------------

Real property acquisition requirements; 1000.14 (a)(1) and (a)(2).............. 400 1 24 9,600

information a recipient must provide an owner.

Advance written notice to residential tenants 1000.14(c)(2).......................... 400 1 .30 9,000

and homebuyers.

Maintenance of Uniform Relocation Act records.. 1000.14(f)(3).......................... 400 1 .15 60

Maintenance of conflict of interest records.... 1000.36................................ 400 1 .15 60

HUD approval for model activities and non- 1000.108 and 1000.118(b)............... 400 1 16 6,400

Indian families.

Income verification and document maintenance... 1000.128............................... 400 1 40 16,000

Notification to HUD of demolition/disposition.. 1000.134(b)............................ 400 1 6 2,400

Obtaining and maintenance of criminal 1000.154............................... 400 1 24 9,600

conviction information.

IHP submission requirements.................... 1000.212, 1000.142, 1000.222........... 400 1 120 42,000

[[Page 35730]]

Appeal of HUD determination regarding non- 1000.224............................... 400 1 16 6,400

compliance or IHP modification.

Certification and document maintenance for 1000.406............................... 400 1 1 400

title VI of NAHASDA.

Demonstration requirement for multiple 1000.410............................... 400 1 3 1,200

guarantees.

Demonstration requirement for financial 1000.412............................... 400 1 3 1,200

capacity.

Procedures and requirements for title VI loan 1000.420, 1000.422..................... 400 1 20 8,000

guarantee applications.

Amendment procedure for approved guarantees.... 1000.430............................... 400 1 1 400

Monitoring responsibility under NAHASDA........ 1000.502(a), 1000.512, 1000.538........ 400 1 30 12,000

Public comment on performance reports.......... 1000.518............................... 400 1 3 1,200

Program records maintenance.................... 1000.548............................... 400 1 1 400

Certification and document maintenance for lack 1005.105(f)............................ 400 1 1 400

of financial market access requirement in

section 184 loan guarantees.

Section 184 certification of compliance with 1005.112............................... 400 1 .15 42

tribal laws.

--------------------------------------------------------------------------------------------------------------------------------------------------------

Total Burden, 126,762.

(c) In accordance with 5 CFR 1320.8(d)(1), the Department is

soliciting comments from members of the public and affected agencies

concerning the proposed collection of information to:

(1) Evaluate whether the proposed collection of information is

necessary for the proper performance of the functions of the agency,

including whether the information will have practical utility;

(2) Evaluate the accuracy of the agency's estimate of the burden of

the proposed collection of information;

(3) Enhance the quality, utility, and clarity of the information to

be collected; and

(4) Minimize the burden of the collection of information on those

who are to respond; including through the use of appropriate automated

collection techniques or other forms of information technology, e.g.,

permitting electronic submission of responses.

(d) OMB is required to make a decision concerning the collection of

information contained in this proposed rule between 30 and 60 days

after publication of this document in the Federal Register. Therefore,

a comment to OMB is best assured of having its full effect if OMB

receives it within 30 days of publication. This does not effect the

deadline for the public to comment on the proposed rule. Comments on

the paperwork collection requirements contained in this rule must be

submitted to those persons indicated in the ADDRESSES section of this

preamble.

Environmental Impact

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50,

implementing section 102(2)(C) of the National Environmental Policy Act

of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is

available for public inspection during business hours in the Office of

the Rules Docket Clerk, Room 10276, Department of Housing and Urban

Development, 451 Seventh Street, SW, Washington, DC 20410-0500.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

contained in this rule have no federalism implications, and that the

policies are not subject to review under the Order.

Executive Order 13045, Protection of Children from Environmental Health

Risks and Safety Risks

This rule will not pose an environmental health risk or safety risk

on children.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule before publication and by

approving it certifies, in accordance with the Unfunded Mandates Reform

Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal

mandate that will result in the expenditure by state, local, and tribal

governments, in the aggregate, or by the private sector, of $100

million or more in any one year.

Executive Order 12866, Regulatory Planning and Review

The Office of Management and Budget (OMB) reviewed this rule under

Executive Order 12866, Regulatory Planning and Review. OMB determined

that this rule is a ``significant regulatory action,'' as defined in

section 3(f) of the Order (although not economically significant, as

provided in section 3(f)(1) of the Order). Any changes made to the

final rule subsequent to its submission to OMB are identified in the

docket file, which is available for public inspection in the office of

the Department's Rules Docket Clerk, Room 10276, 451 Seventh Street,

SW, Washington, DC 20410-0500.

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)) has reviewed and approved this rule, and in so doing

certifies that this rule would not have a significant economic impact

on a substantial number of small entities.

List of Subjects

24 CFR Part 950

Aged, Grant programs--housing and community development, Grant

programs--Indians, Indians, Individuals with disabilities, Low and

moderate income housing, Public housing, Reporting and recordkeeping

requirements.

24 CFR Part 953

Alaska, Community development block grants, Grant programs--housing

and community development, Indians, Reporting and recordkeeping

requirements.

24 CFR Part 955

Indians, Loan programs--Indians, Reporting and recordkeeping

requirements.

24 CFR Part 1000

Aged, Community development block grants, Grant programs--housing

and community development, Grant

[[Page 35731]]

programs--Indians, Indians, Individuals with disabilities, Low and

moderate income housing, Public housing, Reporting and recordkeeping

requirements.

24 CFR Part 1003

Alaska, Community development block grants, Grant programs--housing

and community development, Indians, Reporting and recordkeeping

requirements.

24 CFR Part 1005

Indians, Loan programs--Indians, Reporting and recordkeeping

requirements.

Accordingly, for the reasons described above, in title 24 of the

Code of Federal Regulations, Chapter IX is proposed to be amended as

follows:

PART 950--[REMOVED]

1. Part 950 is removed.

PART 953 [REDESIGNATED]

2. Part 953 is redesignated as part 1003.

3. Part 1000 is added to read as follows:

PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES

Subpart A--General

Sec.

1000.1 What is the applicability and scope of these regulations?

1000.2 What are the Guiding Principles in the implementation of

NAHASDA?

1000.4 What is the objective of the IHBG program?

1000.6 What is the nature of the IHBG program?

1000.8 May provisions of these regulations be waived?

1000.10 What definitions apply in these regulations?

1000.12 What nondiscrimination requirements are applicable?

1000.14 What relocation and real property acquisition policies are

applicable?

1000.16 What labor standards are applicable?

1000.18 What environmental review requirements apply?

1000.20 Is an Indian tribe required to assume environmental review

responsibilities?

1000.22 Are the costs of an environmental review an eligible cost?

1000.24 If an Indian tribe assumes environmental review

responsibility, how will HUD assist the Indian tribe in performing

the environmental review?

1000.26 What are the administrative requirements under NAHASDA?

1000.28 May a self-governance Indian tribe be exempted from the

applicability of 24 CFR part 85?

1000.30 What prohibitions regarding conflict of interest are

applicable?

1000.32 May exceptions be made to the conflict of interest

provisions?

1000.34 What factors must be considered in making an exception to

the conflict of interest provisions?

1000.36 How long must a recipient retain records regarding

exceptions made to the conflict of interest provisions?

1000.38 What flood insurance requirements are applicable?

1000.40 Do lead-based paint poisoning prevention requirements apply

to affordable housing activities under NAHASDA?

1000.42 Are the requirements of section 3 of the Housing and Urban

Development Act of 1968 applicable?

1000.44 What prohibitions on the use of debarred, suspended or

ineligible contractors apply?

1000.46 Do drug-free workplace requirements apply?

Subpart B--Affordable Housing Activities

1000.101 What is affordable housing?

1000.102 What are eligible affordable housing activities?

1000.104 What families are eligible for affordable housing

activities?

1000.106 What activities under title II of NAHASDA require HUD

approval?

1000.108 How is HUD approval obtained by a recipient for housing

for non low-income Indian families and model activities?

1000.110 How will HUD determine whether to approve model housing

activities or other housing programs?

1000.112 How long does HUD have to review and act on a model

housing activity or other housing program proposal?

1000.114 What should HUD do before declining a model housing

activity or other housing program?

1000.116 What recourse does a recipient have if HUD disapproves a

model housing activity or other program?

1000.118 Under what conditions may non low-income Indian families

participate in the program?

1000.120 May a recipient use Indian preference or tribal preference

in selecting families for housing assistance?

1000.122 May NAHASDA grant funds be used as matching funds to

obtain any leverage funding, including any federal or state program

and still be considered an affordable housing activity?

1000.124 What is the maximum and minimum rent or homebuyer payment

a recipient can charge a low-income rental tenant or homebuyer?

1000.126 May a recipient charge flat or income-adjusted rents?

1000.128 Is income verification required for assistance under

NAHASDA?

1000.130 May a recipient charge a non low-income family rents or

homebuyer payments which are more than 30% of the family's adjusted

income?

1000.132 Are utilities considered a part of rent or homebuyer

payments?

1000.134 When may a recipient (or entity funded by a recipient)

demolish or dispose of Indian housing units owned or operated

pursuant to an ACC?

1000.136 What insurance requirements apply to housing units

assisted with NAHASDA grants?

1000.138 What constitutes adequate insurance?

1000.140 May a recipient use grant funds to purchase insurance for

privately owned housing to protect NAHASDA grant amounts spent on

that housing?

1000.142 What is the ``useful life'' during which low-income rental

housing and low-income homebuyer housing must remain affordable as

required in sections 205(a)(2) and 209 of NAHASDA?

1000.144 Are Mutual Help homes developed before NAHASDA subject to

the useful life provisions of section 205(a)(2)?

1000.146 Is a homebuyer required to remain low-income throughout

the term of their participation in a housing program funded under

NAHASDA?

1000.148 What law will an owner or manager follow in providing

adequate written notice of eviction or termination of a lease?

1000.150 How many Indian tribes and TDHEs receive criminal

conviction information on adult applicants or tenants?

1000.152 How is the recipient to use criminal conviction

information?

1000.154 How is the recipient to keep criminal conviction

information confidential?

1000.156 What housing development cost limits are applicable to

ensure modest housing construction under NAHASDA?

Subpart C--Indian Housing Plan (IHP)

1000.201 How are funds made available under NAHASDA?

1000.202 Who are eligible recipients?

1000.204 How does an Indian tribe designate itself as a recipient

of the grant?

1000.206 How is a TDHE designated?

1000.208 Is submission of an IHP required?

1000.210 Who prepares and submits an IHP?

1000.212 What are the minimum requirements for the IHP?

1000.214 Are there separate IHP requirements for small Indian

tribes?

1000.216 Can the certification requirements of section 102(c)(5) of

NAHASDA be waived by HUD?

1000.218 If HUD changes its IHP format will Indian tribes be

involved?

1000.220 What is the process for HUD review of IHPs and IHP

amendments?

1000.222 Can an Indian tribe or TDHE amend its IHP?

1000.224 Can HUD's determination regarding the non-compliance of an

IHP or a modification to an IHP be appealed?

1000.226 What are eligible administrative and planning expenses?

1000.228 When is a local cooperation agreement required for

affordable housing activities?

[[Page 35732]]

1000.230 When does the requirement for exemption from taxation

apply to affordable housing activities?

Subpart D--Allocation Formula

1000.301 What is the purpose of the IHBG formula?

1000.302 What are the definitions applicable for the IHBG formula?

1000.304 May the IHBG formula be modified?

1000.306 Who can make modifications to the IHBG formula?

1000.308 What are the components of the IHBG formula?

1000.310 How is the need component developed?

1000.312 What if a formula area is served by more than one Indian

tribe?

1000.314 What are data sources for the need variables?

1000.316 May Indian tribes, TDHEs, or HUD challenge the data from

the U.S. Decennial Census or provide an alternative source of data?

1000.318 Will data used by HUD to determine an Indian tribe's or

TDHE's formula allocation be provided to the Indian tribe or TDHE

before the allocation?

1000.320 How may an Indian tribe, TDHE, or HUD challenge data?

1000.322 How is the need component adjusted for local area costs?

1000.324 What is current assisted stock?

1000.326 What is formula current assisted stock?

1000.328 How is the Formula Current Assisted Stock (FCAS) Component

developed?

1000.330 How is the Section 8 criteria developed?

1000.332 How long will Section 8 units be counted for purposes of

the formula?

1000.334 How will the formula allocation be affected if an Indian

tribe or TDHE removes some or all of its Formula Current Assisted

Stock from inventory?

1000.336 Do units under Formula Current Assisted Stock ever expire

from inventory used for the formula?

1000.338 How are Formula Current Assisted Stock and Section 8

adjusted for local area costs?

1000.340 IHA financed units included in the determination of

Formula Current Assisted Stock?

Subpart E--Federal Guarantees for Financing of Tribal Housing

Activities

1000.401 What terms are used throughout this subpart?

1000.402 Are state recognized Indian tribes eligible for guarantees

under title VI of NAHASDA?

1000.404 What constitutes tribal approval to issue notes or other

obligations under title VI of NAHASDA?

1000.406 How does an Indian tribe or TDHE show that it has made

efforts to obtain financing without a guarantee and cannot complete

such financing in a timely manner?

1000.408 What conditions shall HUD prescribe when providing a

guarantee for notes or other obligations issued by an Indian tribe?

1000.410 Can an issuer obtain a guarantee for more than one note or

other obligation at a time?

1000.412 How is an issuer's financial capacity demonstrated?

1000.414 What is a repayment contract in a form acceptable to HUD?

1000.416 Can grant funds be used to pay costs incurred when issuing

notes or other obligations?

1000.418 May grants made by HUD under section 603 of NAHASDA be

used to pay net interest costs incurred when issuing notes or other

obligations?

1000.420 What are the procedures for applying for loan guarantees

under title VI of NAHASDA?

1000.422 What are the application requirements for guarantee

assistance under title VI of NAHASDA?

1000.424 How does HUD review a guarantee application?

1000.426 For what reasons may HUD disapprove an application or

approve an application for an amount less than that requested?

1000.428 When will HUD issue notice to the applicant if the

application is approved at the requested or reduced amount?

1000.430 Can an amendment to an approved guarantee be made?

1000.432 How will HUD allocate the availability of loan guarantee

assistance?

1000.434 How will HUD monitor the use of funds guaranteed under

this subpart?

Subpart F--Recipient Monitoring, Oversight and Accountability

1000.501 Who is involved in monitoring activities under NAHASDA?

1000.502 What are the monitoring responsibilities of the recipient,

the grant beneficiary and HUD under NAHASDA?

1000.504 What are the recipient performance objectives?

1000.506 If the TDHE is the recipient, must it submit its

monitoring evaluation/results to the Indian tribe?

1000.508 If the recipient monitoring identifies programmatic

concerns, what happens?

1000.510 What is the Indian tribe's responsibility if the tribal

monitoring identifies compliance concerns?

1000.512 Are performance reports required?

1000.514 When must the annual performance report be submitted?

1000.516 What reporting period is covered by the annual performance

report?

1000.518 When must a recipient obtain public comment on its annual

performance report?

1000.520 What are the purposes of HUD review?

1000.522 How will HUD give notice of on-site reviews?

1000.524 What are HUD's performance measures for the review?

1000.526 What information will HUD use for its review?

1000.528 What adjustments may HUD make in the amount of NAHASDA

annual grants under section 405 of NAHASDA?

1000.530 What are remedies available for substantial noncompliance?

1000.532 What hearing procedures will be used?

1000.534 When may HUD require replacement of a TDHE?

1000.536 When does failure to comply substantially cease?

1000.538 What audits are required?

1000.540 Who is the cognizant audit agency?

1000.542 Are audit costs an eligible program expense?

1000.544 Must a copy of the recipient's audit pursuant to the

Single Audit Act be submitted to HUD?

1000.546 If the TDHE is the recipient, does it have to submit a

copy of its audit to the Indian tribe?

1000.548 How long must the recipient maintain program records?

1000.550 Which agencies have right of access to the recipient's

records relating to activities carried out under NAHASDA?

1000.552 Does the Freedom of Information Act (FOIA) apply to

recipient records?

1000.554 Does the Federal Privacy Act apply to recipient records?

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

Subpart A--General

Sec. 1000.1 What is the applicability and scope of these regulations?

Under the Native American Housing Assistance and Self-Determination

Act of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) the Department of

Housing and Urban Development (HUD) provides grants, loan guarantees,

and technical assistance to Indian tribes and Alaska Native villages

for the development and operation of low-income housing in Indian

areas. The policies and procedures described in this part apply to

grants to eligible recipients under the Indian Housing Block Grant

(IHBG) program for Indian tribes and Alaska Native villages. This part

also applies to loan guarantee assistance under title VI of NAHASDA.

This part supplements the statutory requirements set forth in NAHASDA.

Sec. 1000.2 What are the Guiding Principles in the implementation of

NAHASDA?

The Secretary shall use the following Congressional findings set

forth in section 2 of NAHASDA as the guiding principles in the

implementation of NAHASDA:

(a) The Federal government has a responsibility to promote the

general welfare of the Nation:

(1) By using Federal resources to aid families and individuals

seeking affordable homes in safe and healthy environments and, in

particular,

[[Page 35733]]

assisting responsible, deserving citizens who cannot provide fully for

themselves because of temporary circumstances or factors beyond their

control;

(2) By working to ensure a thriving national economy and a strong

private housing market; and

(3) By developing effective partnerships among the Federal

government, state, tribal, and local governments, and private entities

that allow government to accept responsibility for fostering the

development of a healthy marketplace and allow families to prosper

without government involvement in their day-to-day activities.

(b) There exists a unique relationship between the Government of

the United States and the governments of Indian tribes and a unique

Federal responsibility to Indian people;

(c) The Constitution of the United States invests the Congress with

plenary power over the field of Indian affairs, and through treaties,

statutes, and historical relations with Indian tribes, the United

States has undertaken a unique trust responsibility to protect and

support Indian tribes and Indian people.

(d) The Congress, through treaties, statutes, and the general

course of dealing with Indian tribes, has assumed a trust

responsibility for the protection and preservation of Indian tribes and

for working with Indian tribes and their members to improve their

housing conditions and socioeconomic status so that they are able to

take greater responsibility for their own economic condition.

(e) Providing affordable homes in safe and healthy environments is

an essential element in the special role of the United States in

helping Indian tribes and their members to improve their housing

conditions and socioeconomic status.

(f) The need for affordable homes in safe and healthy environments

on Indian reservations, in Indian communities, and in Native Alaskan

villages is acute and the Federal government should work not only to

provide housing assistance, but also, to the extent practicable, to

assist in the development of private housing finance mechanisms on

Indian lands to achieve the goals of economic self-sufficiency and

self-determination for Indian tribes and their members.

(g) Federal assistance to meet these responsibilities should be

provided in a manner that recognizes the right of Indian self-

determination and tribal self-governance by making such assistance

directly to the Indian tribes or tribally designated entities under

authorities similar to those accorded Indian tribes in Public Law 93-

638 (25 U.S.C. 450 et seq.)

Sec. 1000.4 What is the objective of the IHBG program?

The primary objective of the IHBG program is the provision of

affordable, decent, safe and sanitary housing and a suitable living

environment, principally for Native American and Alaskan Native persons

of low-income.

Sec. 1000.6 What is the nature of the IHBG program?

The IHBG program is a formula grant program whereby eligible

recipients of funding receive an equitable share of periodic

appropriations made by the Congress, based upon formula components

specified under subpart D of this part. IHBG recipients must have the

administrative capacity to undertake the affordable housing activities

proposed, including the systems of internal control necessary to

administer these activities effectively without fraud, waste, or

mismanagement.

Sec. 1000.8 May provisions of these regulations be waived?

Provisions of this part may be waived in accordance with 24 CFR

5.110.

Sec. 1000.10 What definitions apply in these regulations?

Except as noted in a particular subpart, the following definitions

apply in this part:

(a) The terms ``Adjusted income,'' ``Affordable housing,'' ``Drug-

related criminal activity,'' ``Elderly families and near-elderly

families,'' ``Elderly person,'' ``Grant beneficiary,'' ``Indian,''

``Indian housing plan (IHP),'' ``Indian tribe,'' ``Low-income family,''

``Median income,'' ``Near-elderly persons,'' ``Nonprofit,''

``Recipient,'' Secretary,'' ``State,'' and ``Tribally designated

housing entity (TDHE)'' are defined in section 4 of NAHASDA.

(b) In addition to the definitions set forth in paragraph (a) of

this section, the following definitions apply to this part:

Affordable Housing Activities are those activities identified in

section 202 of NAHASDA.

Annual Contributions Contract (ACC) means a contract under the 1937

Act between HUD and an IHA containing the terms and conditions under

which HUD assists the IHA in providing decent, safe, and sanitary

housing for low-income families.

Annual income. Annual income is the anticipated total income from

all sources received by the family head and spouse (even if temporarily

absent) and by each additional member of the family, including all net

income derived from assets, for the 12-month period following the

effective date of the initial determination or reexamination of income,

exclusive of certain types of income as provided in paragraph (2) of

this definition.

(1) Annual income includes, but is not limited to:

(i) The full amount, before any payroll deductions, of wages and

salaries, overtime pay, commissions, fees, tips and bonuses, and other

compensation for personal services;

(ii) The net income from operation of a business or profession.

Expenditures for business expansion or amortization of capital

indebtedness shall not be used as deductions in determining net income.

An allowance for depreciation of assets used in a business or

profession may be deducted, based on straight line depreciation, as

provided in Internal Revenue Service regulations. Any withdrawal of

cash or assets from the operation of a business or profession will be

included in income, except to the extent the withdrawal is

reimbursement of cash or assets invested in the operation by the

family;

(iii) Interest, dividends, and other net income of any kind from

real or personal property. Expenditures for amortization of capital

indebtedness shall not be used as deductions in determining net income.

An allowance for depreciation is permitted only as authorized in

paragraph (1)(ii) of this definition. Any withdrawal of cash or assets

from an investment will be included in income, except to the extent the

withdrawal is reimbursement of cash or assets invested by the family.

Where the family has net family assets in excess of $5,000, annual

income shall include the greater of the actual income derived from all

net family assets or a percentage of the value of such assets based on

the current passbook savings rate as determined by HUD;

(iv) The full amount of periodic amounts received from social

security, annuities, insurance policies, retirement funds, pensions,

disability, or death benefits and other similar types of periodic

receipts, including a lump-sum amount or prospective monthly amounts

for the delayed start of a periodic amount (except as provided in

paragraph (2)(xiv) of this definition):

(v) Payments in lieu of earnings, such as unemployment and

disability compensation, worker's compensation, and severance pay

(except as provided in paragraph (2)(iii) of this definition);

(vi) Welfare assistance. If the welfare assistance payment includes

an amount specifically designated for shelter and utilities that is

subject to adjustment by the welfare assistance agency in

[[Page 35734]]

accordance with the actual cost of shelter and utilities, the amount of

welfare assistance income to be included as income shall consist of:

(A) The amount of the allowance or grant exclusive of the amount

specifically designated for shelter or utilities; plus

(B) The maximum amount that the welfare assistance agency could, in

fact, allow the family for shelter and utilities. If the family's

welfare assistance is ratably reduced from the standard of need by

applying a percentage, the amount calculated under paragraph (1)(vi)(B)

of this definition shall be the amount resulting from one application

of the percentage;

(vii) Periodic and determinable allowances, such as alimony and

child support payments, and regular contributions or gifts received

from persons not residing in the dwelling; and

(viii) All regular pay, special pay, and allowances of a member of

the Armed Forces (but see paragraph (2)(vii) of this definition).

(2) Annual income does not include the following:

(i) Income from employment of children (including foster children)

under the age of 18 years;

(ii) Payments received for the care of foster children or foster

adults (usually individuals with disabilities, unrelated to the tenant

family, who are unable to live alone):

(iii) Lump-sum additions to family assets, such as inheritances,

insurance payments (including payments under health and accident

insurance and worker's compensation), capital gains, and settlement for

personal or property losses (but see paragraph (1)(v) of this

definition);

(iv) Amounts received by the family that are specifically for, or

in reimbursement of, the cost of medical expenses for any family

member;

(v) Income of a live-in aide;

(vi) The full amount of student financial assistance paid directly

to the student or to the educational institution;

(vii) The special pay to a family member serving in the Armed

Forces who is exposed to hostile fire;

(viii)(A) Amounts received under training programs funded by HUD;

(B) Amounts received by a disabled person that are disregarded for

a limited time for purposes of Supplemental Security Income eligibility

and benefits because they are set aside for use under a Plan for

Achieving Self-Support (PASS);

(C) Amounts received by a participant in other publicly assisted

programs that are specifically for or in reimbursement of out-of-pocket

expenses incurred (special equipment, clothing, transportation, child

care, etc.) and that are made solely to allow participation in a

specific program;

(D) Amounts received under a student service stipend. A resident

service stipend is a modest amount (not to exceed $200 per month)

received by an Indian housing resident for performing a service for the

IHA, on a part-time basis, that enhances the quality of life in the

development. Such services may include, but are not limited to fire

patrol, hall monitoring, lawn maintenance and resident initiatives

coordination. No resident may receive more than one such stipend during

the same period of time.

(E) Incremental earnings and benefits resulting to any family

member from the participation in qualifying state or local employment

training programs (including training programs not affiliated with

local government) and training of a family member as resident

management staff. Amounts excluded by this provision must be received

under employment training programs with clearly defined goals and

objectives and are excluded only for the period during which the family

member participates in the employment training.

(ix) Temporary, nonrecurring, or sporadic income (including gifts);

(x) Earnings in excess of $480 for each full-time student 18 years

old or older (excluding the head of household and spouse);

(xi) Adoption assistance payments in excess of $480 per adopted

child;

(xii) The earnings and benefits to any family member resulting from

the participation in a program providing employment training and

supportive services in accordance with the Family Support Services Act

of 1988, section 22 of the 1937 Act, or any comparable Federal, state,

tribal, or local law during the exclusion period. For purposes of this

paragraph (2)(xii) of this definition, the following definitions apply:

(A) Comparable Federal, state, tribal, or local law means a program

providing employment training and supportive services that--

(1) Is authorized by Federal, state, tribal, or local law;

(2) Is funded by Federal, state, tribal, or local government;

(3) Is operated or administered by a public agency; and

(4) Has as its objective to assist participants in acquiring

employment skills.

(B) Exclusion period means the period during which the family

member participates in a program described in this definition, plus 18

months from the date the family member begins the first job acquired by

the family member after completion of such program that is not funded

by public housing assistance under the 1937 Act. If the resident is

terminated from employment with good cause, the exclusion period shall

end.

(C) Earnings and Benefits means the incremental earnings and

benefits resulting from a qualifying employment training program or

subsequent job;

(xiii) Deferred periodic amounts from supplemental security income

and social security benefits that are received in a lump sum amount or

in prospective monthly amounts;

(xiv) Amounts received by the family in the form of refunds or

rebates under state or local law for property taxes on the dwelling

unit;

(xv) Amounts paid by a state agency to a family with a

developmentally disabled family member living at home to offset the

cost of services and equipment needed to keep the developmentally

disabled family member at home; or

(xvi) Amounts specifically excluded by any other Federal statute

from consideration as income for purposes of determining eligibility or

benefits under a category of assistance programs that includes

assistance under the 1937 Act. A notice is published from time to time

in the Federal Register and distributed to recipients identifying the

benefits that qualify for this exclusion. Updates will be published and

distributed when necessary.

(3) If it is not feasible to anticipate a level of income over a

12-month period, the income anticipated for a shorter period may be

annualized subject to a redetermination at the end of the shorter

period.

Assistant Secretary means the Assistant Secretary for Public and

Indian Housing.

Department or HUD means the Department of Housing and Urban

Development.

Family includes, but is not limited to, a family with or without

children, an elderly family, a near-elderly family, a disabled family,

a single person, as determined by the Indian tribe.

Homeless family means a family who is without safe, sanitary and

affordable housing even though it may have temporary shelter provided

by the community, or a family who is homeless as determined by the

Indian tribe.

IHBG means Indian Housing Block Grant.

Income means annual income as defined in this subpart.

Indian Area means the area within which an Indian tribe operates or

a TDHE is authorized by one or more

[[Page 35735]]

Indian tribes to provide assistance under NAHASDA for affordable

housing. Whenever the term ``jurisdiction'' is used in NAHASDA it shall

mean ``Indian Area'' except where specific reference is made to the

jurisdiction of a court.

Indian Housing Authority (IHA) means an entity that:

(1) Is authorized to engage or assist in the development or

operation of low-income housing for Indians under the 1937 Act; and

(2) Is established:

(i) By exercise of the power of self-government of an Indian tribe

independent of state law; or

(ii) By operation of state law providing specifically for housing

authorities for Indians, including regional housing authorities in the

State of Alaska.

NAHASDA means the Native American Housing Assistance and Self-

Determination Act of 1996 (25 U.S.C. 4101 et seq.).

1937 Act means the United States Housing Act of 1937 (42 U.S.C.

1437 et seq.)

Office of Native American Programs (ONAP) means the office of HUD

which has been delegated authority to administer programs under this

part. An ``Area ONAP'' is an ONAP field office.

Person with Disabilities means a person who--

(1) Has a disability as defined in section 223 of the Social

Security Act;

(2) Has a developmental disability as defined in section 102 of the

Developmental Disabilities Assistance and Bill of Rights Act;

(3) Has a physical, mental, or emotional impairment which--

(i) Is expected to be of long-continued and indefinite duration;

(ii) Substantially impedes his or her ability to live

independently; and

(iii) Is of such a nature that such ability could be improved by

more suitable housing conditions.

(4) The term ``person with disabilities'' includes persons who have

the disease of acquired immunodeficiency syndrome or any condition

arising from the etiologic agent for acquired immunodeficiency

syndrome.

(5) Notwithstanding any other provision of law, no individual shall

be considered a person with disabilities, for purposes of eligibility

for housing assisted under this part, solely on the basis of any drug

or alcohol dependence. The Secretary shall consult with Indian tribes

and appropriate Federal agencies to implement this paragraph.

(6) For purposes of this definition, the term ``physical, mental or

emotional impairment'' has the same meaning as an ``individual with

handicaps'' set forth at 24 CFR 8.3, which includes, but is not limited

to:

(i) Any physiological disorder or condition, cosmetic

disfigurement, or anatomical loss affecting one or more of the

following body systems: Neurological, musculoskeletal, special sense

organs, respiratory, including speech organs; cardiovascular;

reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and

endocrine; or

(ii) Any mental or psychological condition, such as mental

retardation, organic brain syndrome, emotional or mental illness, and

specific learning disabilities.

(iii) The term ``physical, mental, or emotional impairment''

includes, but is not limited to, such diseases and conditions as

orthopedic, visual, speech, and hearing impairments, cerebral palsy,

autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart

disease, diabetes, Human Immunodeficiency Virus infection, mental

retardation, emotional illness, drug addiction and alcoholism.

Total development cost. The sum of all HUD-approved costs for a

project including all undertakings necessary for administration,

planning, site acquisition, demolition, construction or equipment and

financing (including the payment of carrying charges), and for

otherwise carrying out the development of the project. The maximum

total development cost excludes off-site water and sewer facilities

development costs; costs normally paid for by other entities, but

included in the development cost budget for the project for contracting

or accounting convenience; and any donations received from public or

private sources.

Sec. 1000.12 What nondiscrimination requirements are applicable?

(a) The requirements of the Age Discrimination Act of 1975 (42

U.S.C. 6101-6107) and HUD's implementing regulations in 24 CFR part

146.

(b) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)

and HUD's regulations at 24 CFR part 8 apply.

(c) Title II of the Civil Rights Act of 1968 (25 U.S.C. 1301-1303),

to the extent that such title is applicable, and other applicable

Federal civil rights statutes. Title II provides that no Indian tribe,

in exercising powers of self government, shall deny to any person

within its jurisdiction equal protection of its laws or deprive any

person of liberty or property without due process of law.

(d) In accordance with section 201(b)(5) of NAHASDA, title VI of

the Civil Rights Act of 1964 (42 U.S.C. 2000d) and title VIII of the

Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.) do not apply to

actions by Indian tribes under section 201(b) of NAHASDA.

Sec. 1000.14 What relocation and real property acquisition policies

are applicable?

The following relocation and real property acquisition policies are

applicable to programs developed or operated under NAHASDA:

(a) Real Property acquisition requirements. The acquisition of real

property for an assisted activity is subject to 49 CFR part 24, subpart

B. Whenever the recipient does not have the authority to acquire the

real property through condemnation, it shall:

(1) Before discussing the purchase price, inform the owner:

(i) Of the amount it believes to be the fair market value of the

property. Such amount shall be based upon one or more appraisals

prepared by a qualified appraiser. However, this provision does not

prevent the recipient from accepting a donation or purchasing the real

property at less than its fair market value.

(ii) That it will be unable to acquire the property if negotiations

fail to result in an amicable agreement.

(2) Request HUD approval of the proposed acquisition price before

executing a firm commitment to purchase the property if the proposed

acquisition payment exceeds the fair market value. The recipient shall

include with its request a copy of the appraisal(s) and a justification

for the proposed acquisition payment. HUD will promptly review the

proposal and inform the recipient of its approval or disapproval.

(b) Minimize displacement. Consistent with the other goals and

objectives of this part, recipients shall assure that they have taken

all reasonable steps to minimize the displacement of persons

(households, businesses, nonprofit organizations, and farms) as a

result of a project assisted under this part.

(c) Temporary relocation. The following policies cover residential

tenants and homebuyers who will not be required to move permanently but

who must relocate temporarily for the project. Such residential tenants

and homebuyers shall be provided:

(1) Reimbursement for all reasonable out-of-pocket expenses

incurred in connection with the temporary relocation, including the

cost of moving to and from the temporarily occupied

[[Page 35736]]

housing and any increase in monthly housing costs (e.g., rent/utility

costs).

(2) Appropriate advisory services, including reasonable advance

written notice of:

(i) The date and approximate duration of the temporary relocation;

(ii) The location of the suitable, decent, safe and sanitary

dwelling to be made available for the temporary period;

(iii) The terms and conditions under which the tenant may occupy a

suitable, decent, safe, and sanitary dwelling in the building/complex

following completion of the repairs; and

(iv) The provisions of paragraph (c)(1) of this section.

(d) Relocation assistance for displaced persons. A displaced person

(defined in paragraph (g) of this section) must be provided relocation

assistance at the levels described in, and in accordance with the

requirements of, the Uniform Relocation Assistance and Real Property

Acquisition Policies Act of 1970, as amended (URA)(42 U.S.C. 4601-4655)

and implementing regulations at 49 CFR part 24.

(e) Appeals to the recipient. A person who disagrees with the

recipient's determination concerning whether the person qualifies as a

``displaced person,'' or the amount of relocation assistance for which

the person is eligible, may file a written appeal of that determination

with the recipient.

(f) Responsibility of recipient. (1) The recipient shall certify

that it will comply with the URA, the regulations at 49 CFR part 24,

and the requirements of this section. The recipient shall ensure such

compliance notwithstanding any third party's contractual obligation to

the recipient to comply with the provisions cited in this paragraph.

(2) The cost of required relocation assistance is an eligible

project cost in the same manner and to the same extent as other project

costs. However, such assistance may also be paid for with funds

available to the recipient from any other source.

(3) The recipient shall maintain records in sufficient detail to

demonstrate compliance with this section.

(g) Definition of displaced person. (1) For purposes of this

section, the term ``displaced person'' means any person (household,

business, nonprofit organization, or farm) that moves from real

property, or moves his or her personal property from real property,

permanently, as a direct result of rehabilitation, demolition, or

acquisition for a project assisted under this part. The term

``displaced person'' includes, but is not limited to:

(i) A tenant-occupant of a dwelling unit who moves from the

building/complex permanently after the submission to HUD of an IHP that

is later approved.

(ii) Any person, including a person who moves before the date

described in paragraph (g)(1)(i) of this section, that the recipient

determines was displaced as a direct result of acquisition,

rehabilitation, or demolition for the assisted project.

(iii) A tenant-occupant of a dwelling unit who moves from the

building/complex, permanently, after the execution of the agreement

between the recipient and HUD, if the move occurs before the tenant is

provided written notice offering him or her the opportunity to lease

and occupy a suitable, decent, safe and sanitary dwelling in the same

building/complex, under reasonable terms and conditions, upon

completion of the project. Such reasonable terms and conditions include

a monthly rent and estimated average monthly utility costs that do not

exceed the greater of:

(A) The tenant-occupant's monthly rent and estimated average

monthly utility costs before the agreement; or

(B) 30 percent of gross household income.

(iv) A tenant-occupant of a dwelling who is required to relocate

temporarily, but does not return to the building/complex, if either:

(A) The tenant-occupant is not offered payment for all reasonable

out-of-pocket expenses incurred in connection with the temporary

relocation, including the cost of moving to and from the temporarily

occupied unit, any increased housing costs and incidental expenses; or

(B) Other conditions of the temporary relocation are not

reasonable.

(v) A tenant-occupant of a dwelling who moves from the building/

complex after he or she has been required to move to another dwelling

unit in the same building/complex in order to carry out the project, if

either:

(A) The tenant-occupant is not offered reimbursement for all

reasonable out-of-pocket expenses incurred in connection with the move;

or

(B) Other conditions of the move are not reasonable.

(2) Notwithstanding the provisions of paragraph (g)(1) of this

section, a person does not qualify as a ``displaced person'' (and is

not eligible for relocation assistance under the URA or this section),

if:

(i) The person moved into the property after the submission of the

IHP to HUD, but, before signing a lease or commencing occupancy, was

provided written notice of the project, its possible impact on the

person (e.g., the person may be displaced, temporarily relocated or

suffer a rent increase) and the fact that the person would not qualify

as a ``displaced person'' or for any assistance provided under this

section as a result of the project.

(ii) The person is ineligible under 49 CFR 24.2(g)(2).

(iii) The recipient determines the person is not displaced as a

direct result of acquisition, rehabilitation, or demolition for an

assisted project. To exclude a person on this basis, HUD must concur in

that determination.

(3) A recipient may at any time ask HUD to determine whether a

specific displacement is or would be covered under this section.

(h) Definition of initiation of negotiations. For purposes of

determining the formula for computing the replacement housing

assistance to be provided to a person displaced as a direct result of

rehabilitation or demolition of the real property, the term

``initiation of negotiations'' means the execution of the agreement

covering the rehabilitation or demolition (See 49 CFR part 24).

Sec. 1000.16 What labor standards are applicable?

(a) As described in section 104(b) of NAHASDA, contracts and

agreements for assistance, sale or lease under NAHASDA must require

prevailing wage rates determined under the Davis-Bacon Act (40 U.S.C.

276a-276a-5) to be paid to laborers and mechanics employed in the

development of affordable housing projects. Section 104(b) also

mandates that these contracts and agreements require that prevailing

wages determined by HUD shall be paid to maintenance laborers and

mechanics employed in the operation, and to architects, technical

engineers, draftsmen and technicians employed in the development, of

such projects.

(b) The requirements in 24 CFR part 70 concerning exemptions for

the use of volunteers on projects subject to Davis-Bacon and HUD-

determined wage rates are applicable.

Sec. 1000.18 What environmental review requirements apply?

The environmental effects of each activity carried out with

assistance under this part must be evaluated in accordance with the

provisions of the National Environmental Policy Act of 1969 (NEPA) (42

U.S.C. 4321) and the related authorities listed in HUD's implementing

regulations at 24 CFR parts 50 and 58.

[[Page 35737]]

Sec. 1000.20 Is an Indian tribe required to assume environmental

review responsibilities?

(a) No. It is an option an Indian tribe may choose. If an Indian

tribe declines to assume the environmental review responsibilities, HUD

will perform the environmental review in accordance with 24 CFR part

50. The timing of HUD undertaking the environmental review will be

subject to the availability of resources. A HUD environmental review

must be completed for any activities not excluded from review under 24

CFR 50.19(b) before a recipient may acquire, rehabilitate, convert,

lease, repair or construct property, or commit HUD or local funds to

such activities with respect to the property.

(b) If an Indian tribe assumes environmental review

responsibilities:

(1) Its certifying officer must certify that he/she is authorized

and consents on behalf of the Indian tribe and such officer to accept

the jurisdiction of the Federal courts for the purpose of enforcement

of the responsibilities of the certifying officer as set forth in

section 105(c) of NAHASDA; and

(2) The Indian tribe must follow the requirements of 24 CFR part

58.

(3) No funds may be committed to a grant activity or project before

the completion of the environmental review and approval of the request

for release of funds and related certification required by sections

105(b) and 105(c) of NAHASDA, except as authorized by 24 CFR part 58.

Sec. 1000.22 Are the costs of the environmental review an eligible

cost?

Yes, costs of completing the environmental review are eligible

costs.

Sec. 1000.24 If an Indian tribe assumes environmental review

responsibility, how will HUD assist the Indian tribe in performing the

environmental review?

As set forth in section 105(a)(2)(B) of NAHASDA and 24 CFR 58.77,

HUD will provide for monitoring of environmental reviews and will also

facilitate training for the performance for such reviews by Indian

tribes.

Sec. 1000.26 What are the administrative requirements under NAHASDA?

Except as specified in this part, the uniform administrative

requirements for grants and cooperative agreements set forth in 24 CFR

part 85 are applicable to grants under this part. In the event that

there are conflicts between the requirements of part 85 and the

requirements of this part, the requirements of this part shall govern.

Sec. 1000.28 May a self-governance Indian tribe be exempted from the

applicability of 24 CFR part 85?

A self-governance Indian tribe may request that it be exempt from

24 CFR part 85 and instead follow its own laws, regulations,

administrative requirements, standards and systems. Upon receipt of

such written request, HUD shall conduct a timely review of the Indian

tribe's administrative requirements, standards and systems to determine

if they fulfill the fundamental purposes of 24 CFR part 85. If so, the

Indian tribe will be obligated to follow its own laws, regulations and

policies. If HUD determines that the Indian tribe must comply with part

85, the Indian tribe may ask for a redetermination from HUD.

Sec. 1000.30 What prohibitions regarding conflict of interest are

applicable?

(a) Applicability. In the procurement of supplies, equipment, other

property, construction and services by recipients and subrecipients,

the conflict of interest provisions of 24 CFR 85.36 or 24 CFR 84.42 (as

applicable) shall apply. In all cases not governed by 24 CFR 85.36 or

24 CFR 84.42, the provisions of this part shall apply.

(b) Conflicts Prohibited. No person who participates in the

decision-making process or who gains inside information with regard to

NAHASDA assisted activities may obtain a personal or financial interest

or benefit from such activities, except for the use of NAHASDA funds to

pay salaries or other related administrative costs. Such persons

include anyone with an interest in any contract, subcontract or

agreement or proceeds thereunder, either for themselves or others with

whom they have business or family ties.

Sec. 1000.32 May exceptions be made to the conflict of interest

provisions?

(a) Yes. HUD may make exceptions to the conflict of interest

provisions set forth in Sec. 1000.30(b) on a case-by-case basis when it

determines that such an exception would further the primary objective

of NAHASDA and the effective and efficient administration or

implementation of the recipient's program, activity, or project.

(b) A public disclosure of the conflict must be made and a

determination that the exception would not violate tribal laws on

conflict of interest (or any applicable state laws) must also be made.

Sec. 1000.34 What factors must be considered in making an exception to

the conflict of interest provisions?

The following factors must be considered.

(a) Whether undue hardship will result, either to the recipient or

to the person affected, when weighed against the public interest served

by avoiding the prohibited conflict. In evaluating the hardship which

would result to the person affected, HUD will consider if the person is

a member of a group or class of intended beneficiaries of the assisted

activities and if they would receive generally the same benefits as

would be provided to the group as a class.

(b) Whether the exception would provide a significant cost benefit

or essential expert knowledge to the program, activity, or project

which would otherwise not be available.

(c) Whether an opportunity was provided for open competitive

bidding or negotiations.

(d) Any other relevant considerations.

Sec. 1000.36 How long must a recipient retain records regarding

exceptions made to the conflict of interest provisions?

A recipient must maintain all such records for a period of at least

5 years after an exception is made.

Sec. 1000.38 What flood insurance requirements are applicable?

Under the Flood Disaster Protection Act of 1973, as amended (42

U.S.C. 4001-4128), a recipient may not permit the use of Federal

financial assistance for acquisition and construction purposes

(including rehabilitation) in an area identified by the Federal

Emergency Management Agency (FEMA) as having special flood hazards,

unless the following conditions are met:

(a) The community in which the area is situated is participating in

the National Flood Insurance Program in accord with section 202(a) of

the Flood Disaster Protection Act of 1973 (42 U.S.C. 4106(a)), or less

than a year has passed since FEMA notification regarding such flood

hazards. For this purpose, the ``community'' is the governmental

entity, such as an Indian tribe or authorized tribal organization, an

Alaska Native village, or authorized Native organization, or a

municipality or county, that has authority to adopt and enforce flood

plain management regulations for the area; and

(b) Where the community is participating in the National Flood

Insurance Program, flood insurance on the building is obtained in

compliance with section 102(a) of the Flood Disaster Protection Act of

1973 (42 U.S.C. 4012a(a)).

[[Page 35738]]

Sec. 1000.40 Do lead-based paint poisoning prevention requirements

apply to affordable housing activities under NAHASDA?

Yes, the provisions of 24 CFR part 35 which provide lead-based

paint poisoning prevention requirements are applicable.

Sec. 1000.42 Are the requirements of section 3 of the Housing and

Urban Development Act of 1968 applicable?

Yes. Recipients shall comply with section 3 of the Housing and

Urban Development Act of 1968 (12 U.S.C. 1701u) and HUD's implementing

regulations in 24 CFR part 135, to the maximum extent feasible and

consistent with, but not in derogation of, compliance with section 7(b)

of the Indian Self-Determination and Education Assistance Act (25

U.S.C. 450e(b)). The purpose of Section 3 is to ensure that employment

and other economic opportunities generated by certain HUD financial

assistance for housing (including public and Indian housing) shall, to

the greatest extent feasible, and consistent with existing Federal,

state, and local laws and regulations, be directed to low-and very low-

income persons, particularly those who are recipients of government

assistance for housing, and to business concerns which provide economic

opportunities to low-and very low-income persons residing in the area

where the work is to be performed.

Sec. 1000.44 What prohibitions on the use of debarred, suspended or

ineligible contractors apply?

The prohibitions in 24 CFR part 24 on the use of debarred,

suspended or ineligible contractors apply.

Sec. 1000.46 Do drug-free workplace requirements apply?

Yes, the Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.)

and HUD's implementing regulations in 24 CFR part 24 apply.

Subpart B--Affordable Housing Activities

Sec. 1000.101 What is affordable housing?

Affordable housing is defined in section 4(2) of NAHASDA and is

described in title II of NAHASDA.

Sec. 1000.102 What are eligible affordable housing activities?

Eligible affordable housing activities are those described in

section 202 of NAHASDA.

Sec. 1000.104 What families are eligible for affordable housing

activities?

The following families are eligible for affordable housing

activities:

(a) Low income Indian families on a reservation or Indian area.

(b) A non-low income Indian family may receive housing assistance

in accordance with Sec. 1000.118. Non-low income Indian families

currently residing in housing assisted under the 1937 Act are presumed

to have met the requirements of this section, absent evidence to the

contrary.

(c) A non-Indian family may receive housing assistance on a

reservation or Indian area if the non-Indian family's housing needs

cannot be reasonably met without such assistance and the recipient

determines that the presence of that family on the reservation or

Indian area is essential to the well-being of Indian families. Non-

Indian families currently residing in housing assisted under the 1937

Act are presumed to have met the requirements of this section, absent

evidence to the contrary.

Sec. 1000.106 What activities under title II of NAHASDA require HUD

approval?

(a) Activities under NAHASDA sections 201(b)(2) (Housing for non-

low income Indian families) and 202(6) (Model activities), require HUD

approval.

(b) Activities under section 201(b)(3) of NAHASDA for non-Indian

families do not require HUD approval but only require that the

recipient determine that the presence of that family on the reservation

or Indian area is essential to the well-being of Indian families and

the non-Indian family's housing needs cannot be reasonably met without

such assistance.

Sec. 1000.108 How is HUD approval obtained by a recipient for housing

for non low-income Indian families and model activities?

Recipients are required to submit proposals to operate model

housing activities or other housing programs as defined in NAHASDA

sections 201(b)(2) and 202(6) for non low-income families. Proposals

may be submitted in the recipient's IHP one year plan or at any time by

amendment of the IHP, or by special request to HUD at any time.

Sec. 1000.110 How will HUD determine whether to approve model housing

activities or other housing programs?

HUD will review all proposals with the goal of approving the

program and encouraging the flexibility, discretion, and self-

determination granted to Indian tribes under NAHASDA to formulate and

operate innovative housing programs that meet the intent of NAHASDA.

Sec. 1000.112 How long does HUD have to review and act on a model

housing activity or other housing program proposal?

Whether submitted in the IHP one year plan or at any other time by

amendment, HUD will have sixty days after receiving the proposal to

notify the recipient that the proposal for model activities or other

housing programs is approved or disapproved. If no decision is made by

HUD within sixty days of receiving the proposal, the proposal is deemed

to have been approved by HUD.

Sec. 1000.114 What should HUD do before declining a model housing

activity or other housing program?

HUD shall consult with a recipient regarding the recipient's model

housing activity or other housing program before disapproval. To the

extent resources are available, HUD shall provide technical assistance

to the recipient in amending and modifying the proposal if necessary.

In case of a denial, HUD shall give the specific reasons for the

denial.

Sec. 1000.116 What recourse does a recipient have if HUD disapproves a

model housing activity or other program?

(a) Within thirty days of receiving HUD's denial of a model housing

activity or other program, the recipient may request reconsideration of

the denial, in writing. The request shall set forth justification for

the reconsideration.

(b) Within twenty-one days of receiving the request, HUD shall

reconsider the recipient's request and either affirm or reverse its

initial decision in writing, setting forth its reasons for the

decision. If the decision was made by the Assistant Secretary, the

decision will constitute final agency action. If the decision was made

at a lower level, then paragraphs (c) and (d) of this section will

apply.

(c) The recipient may appeal any denial of reconsideration by

filing an appeal with the Assistant Secretary within twenty days of

receiving the denial. The appeal shall set forth the reasons why the

recipient does not agree with HUD's decision and set forth

justification for the reconsideration.

(d) Within twenty days of receipt of the appeal, the Assistant

Secretary shall review the recipient's appeal and act on the appeal,

setting forth the reasons for the decision.

Sec. 1000.118 Under what conditions may non low-income Indian families

participate in the program?

(a) A recipient may provide the following types of assistance to

non low-income Indian families under the conditions specified in

paragraphs (b), (c) and (d) of this section:

[[Page 35739]]

(1) Homeownership activities under section 202(2) of NAHASDA;

(2) Model activities under section 202(6) of NAHASDA; and

(3) Loan guarantee activities under title VI of NAHASDA.

(b) A recipient must demonstrate to HUD that there is a need for

housing for each family which cannot reasonably be met without such

assistance. HUD shall make approvals consistent with the intent of

NAHASDA.

(c) A recipient may use up to ten percent of the recipient's annual

grant amount for families whose income falls within 80 to 100% of the

median income without HUD approval. HUD approval is required if a

recipient plans to use more than ten percent of its annual grant amount

for such assistance or to provide housing for families over 100% of

median income.

(d) The non low-income Indian family must pay back, at a minimum:

(1) The amount a low income family at 80% median income is paying

back for the assistance; plus

(2) The fair market value of the assistance multiplied by the

percentage by which the income of the non-low income Indian family

exceeds 80% of median income.

Sec. 1000.120 May a recipient use Indian preference or tribal

preference in selecting families for housing assistance?

Yes. The IHP may set out a preference for the provision of housing

assistance to Indian families who are members of the Indian tribe or to

other Indian families if the recipient has adopted the preference in

its admissions policy. The recipient shall ensure that housing

activities funded under NAHASDA are subject to the preference.

Sec. 1000.122 May NAHASDA grant funds be used as matching funds to

obtain and leverage funding, including any federal or state program and

still be considered an affordable housing activity?

There is no prohibition in NAHASDA against using grant funds as

matching funds.

Sec. 1000.124 What is the maximum and minimum rent or homebuyer

payment a recipient can charge a low-income rental tenant or homebuyer?

A recipient can charge a low-income rental tenant or homebuyer

payments not to exceed thirty percent (30%) of the adjusted income of

the family. The recipient may also decide to compute its rental and

homebuyer payments on any lesser percentage of adjusted income of the

family.

Sec. 1000.126 May a recipient charge flat or income-adjusted rents?

Yes, providing rental or homebuyer payment of the low-income family

does not exceed thirty percent (30%) of the family's adjusted income.

Sec. 1000.128 Is income verification required for assistance under

NAHASDA?

(a) Yes, the recipient must verify that the family is income

eligible based on anticipated annual income. The family is required to

provide documentation to verify this determination. The recipient is

required to maintain the documentation on which the determination of

eligibility is based.

(b) The recipient may require a family to periodically verify its

income in order to determine housing payments or continued occupancy

consistent with locally adopted policies. When income verification is

required, the family must provide documentation which verifies its

income, and this documentation must be retained by the recipient.

Sec. 1000.130 May a recipient charge a non low-income family rents or

homebuyer payments which are more than 30% of the family's adjusted

income?

Yes. A recipient may charge a non low-income family rents or

homebuyer payments which are more than 30% of the family's adjusted

income.

Sec. 1000.132 Are utilities considered a part of rent or homebuyer

payments?

Utilities may be considered a part of rent or homebuyer payments if

a recipient decides to define rent or homebuyer payments to include

utilities in its written policies on rents and homebuyer payments

required by section 203(a)(1) of NAHASDA. A recipient may define rents

and homebuyer payments to exclude utilities.

Sec. 1000.134 When may a recipient (or entity funded by a recipient)

demolish or dispose of Indian housing units owned or operated pursuant

to an ACC?

(a) A recipient (or entity funded by a recipient) may undertake a

planned demolition or disposal of Indian housing units owned or

operated pursuant to an ACC when:

(1) The recipient has performed a financial analysis demonstrating

that it is more cost-effective or housing program-effective for the

recipient to demolish or dispose of the unit than to continue to

operate or own it;

(2) The housing unit has been condemned by the government which has

authority over the unit;

(3) The housing unit is an imminent threat to the health and safety

of housing residents; or

(4) Continued habitation of a housing unit is inadvisable due to

cultural or historical considerations.

(b) The recipient cannot take any action to demolish or dispose of

the property other than performing the analysis cited in paragraph (a)

of this section until HUD has been notified in writing of the

recipient's intent to demolish or dispose of the housing units

consistent with section 102(c)(4)(H) of NAHASDA. The written

notification must set out the recipient's analysis used to arrive at

the decision to demolish or dispose of the property and may be set out

in a recipient's IHP or in a separate submission to HUD.

(c) In any disposition sale of a housing unit, the recipient will

use a sale process designed to maximize the sale price. The sale

proceeds from the disposition of any housing unit are program income

under NAHASDA and must be used in accordance with the requirements of

NAHASDA and this part.

Sec. 1000.136 What insurance requirements apply to housing units

assisted with NAHASDA grants?

(a) The recipient shall provide adequate insurance either by

purchasing insurance or by indemnification against casualty loss by

providing insurance in adequate amounts to indemnify the recipient

against loss from fire, weather, and liability claims for all housing

units owned or operated by the recipient. These requirements are in

addition to applicable flood insurance requirements under Sec. 1000.38.

(b) The recipients shall not require insurance (other than flood

insurance where required under Sec. 1000.38) on units assisted by

grants to families for privately owned housing if there is no risk of

loss or exposure to the recipient or if the assistance is in an amount

less than $5000, but will require insurance when repayment of all or

part of the assistance is part of the assistance agreement.

(c) The recipient shall require contractors and subcontractors to

either provide insurance covering their activities or negotiate

adequate indemnification coverage to be provided by the recipient in

the contract.

Sec. 1000.138 What constitutes adequate insurance?

Insurance is adequate if it is a purchased insurance policy from an

insurance provider or a plan of self-insurance in an amount that will

protect the financial stability of the recipient's IHBG program.

[[Page 35740]]

Sec. 1000.140 May a recipient use grant funds to purchase insurance

for privately owned housing to protect NAHASDA grant amounts spent on

that housing?

Yes. All purchases of insurance must be in accord with

Secs. 1000.136 and 1000.138.

Sec. 1000.142 What is the ``useful life'' during which low-income

rental housing and low-income homebuyer housing must remain affordable

as required in sections 205(a)(2) and 209 of NAHASDA?

Each recipient shall describe in its IHP for Secretarial

determination the useful life of each assisted housing unit in each of

its developments.

Sec. 1000.144 Are Mutual Help homes developed before NAHASDA subject

to the useful life provisions of section 205(a)(2)?

No.

Sec. 1000.146 Is a homebuyer required to remain low-income throughout

the term of their participation in a housing program funded under

NAHASDA?

No. The low income eligibility requirement applies only at the time

of purchase.

Sec. 1000.148 What law will an owner or manager follow in providing

adequate written notice of eviction or termination of a lease?

Section 207(a) of NAHASDA requires that the owner or manager give

adequate written notice of termination of the lease, in accordance with

the period of time required under State, tribal, or local law.

Notwithstanding any State, tribal, or local law, the notice must inform

the resident of the opportunity, prior to any hearing or trial, to

examine any relevant documents, records, or regulations directly

related to the eviction or termination.

Sec. 1000.150 How may Indian tribes and TDHEs receive criminal

conviction information on adult applicants or tenants?

(a) As required by section 208 of NAHASDA, the National Crime

Information Center, police departments, and other law enforcement

agencies shall provide criminal conviction information to Indian tribes

and TDHEs upon request. Information regarding juveniles shall only be

released to the extent such release is authorized by the law of the

applicable state, Indian tribe or locality.

(b) For purposes of this section, the term ``tenants'' includes

homebuyers who are purchasing a home pursuant to a lease-purchase

agreement.

Sec. 1000.152 How is the recipient to use criminal conviction

information?

The recipient shall use the criminal conviction information

described in Sec. 1000.150 only for applicant screening, lease

enforcement and eviction actions. The information may be disclosed only

to any person who has a job related need for the information and who is

an officer, employee, or authorized representative of the recipient or

the owner of housing assisted under NAHASDA.

Sec. 1000.154 How is the recipient to keep criminal conviction

information confidential?

(a) The recipient will keep all the criminal conviction record

information it receives from the official law enforcement agencies

listed in Sec. 1000.150 in files separate from all other housing

records.

(b) These criminal conviction records will be kept under lock and

key and be under the custody and control of the recipient's housing

executive director/lead official and/or his designee for such records.

(c) These criminal conviction records may only be accessed with the

written permission of the Indian tribe's or TDHE's housing executive

director/lead official or his designee and are only to be used for the

purposes stated in section 208 of NAHASDA and the regulations in this

part.

Sec. 1000.156 What housing development cost limits are applicable to

ensure modest housing construction under NAHASDA?

Unless approved by HUD, the total development cost (TDC) per unit

will be no more than 100% of the TDC. HUD will make every effort to

ensure that TDC accurately reflects the cost of construction. TDC shall

include the costs of making a project meet the accessibility

requirements of 24 CFR 8.22 and 24 CFR 8.23 for new construction and

alterations of existing housing facilities.

Subpart C--Indian Housing Plan (IHP)

Sec. 1000.201 How are funds made available under NAHASDA?

Every fiscal year HUD will make grants under the IHBG program to

Indian tribes or their designated recipients who have submitted to HUD

for that fiscal year an IHP in accordance with Sec. 1000.212 to carry

out affordable housing activities.

Sec. 1000.202 Who are eligible recipients?

Eligible recipients are Indian tribes, or TDHEs when authorized by

one or more tribes.

Sec. 1000.204 How does an Indian tribe designate itself as a recipient

of the grant?

(a) By resolution of the Indian tribe; or

(b) When such authority has been delegated by an Indian tribe's

governing body to a tribal committee(s), by resolution or other written

form used by such committee(s) to memorialize the decisions of that

body, if applicable.

Sec. 1000.206 How is a TDHE designated?

(a)(1) By resolution of the Indian tribe or Indian tribes to be

served; or

(2) When such authority has been delegated by an Indian tribe's

governing body to a tribal committee(s), by resolution or other written

form used by such committee(s) to memorialize the decisions of that

body, if applicable.

(b) In the absence of a designation by the Indian tribe, the

default designation as provided in section 4(21) of NAHASDA shall

apply.

Sec. 1000.208 Is submission of an IHP required?

Yes. An Indian tribe or, with the consent of its Indian tribe(s),

the TDHE, must submit an IHP to HUD to recei

This text is long and has been trimmed here. Open the source document for the complete record.