[Federal Register: April 20, 2007 (Volume 72, Number 76)]
[Rules and Regulations]
[Page 20017-20028]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ap07-12]
[[Page 20017]]
-----------------------------------------------------------------------
Part II
Department of Housing and Urban Development
-----------------------------------------------------------------------
24 CFR Part 1000
Native American Housing Assistance and Self-Determination Act
(NAHASDA); Revisions to the Indian Housing Block Grant Program Formula;
Final Rule
[[Page 20018]]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 1000
[Docket No. FR-4938-F-03]
RIN 2577-AC57
Native American Housing Assistance and Self-Determination Act
(NAHASDA); Revisions to the Indian Housing Block Grant Program Formula
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule makes several revisions to the regulations for
the Indian Housing Block Grant (IHBG) program allocation formula.
Through the IHBG program, HUD provides federal housing assistance to
Indian tribes in a manner that recognizes the right of Indian self-
determination and tribal self-government. This final rule follows
publication of a February 25, 2005, proposed rule and takes into
consideration the public comments received on the proposed rule. Other
than one conforming change, this final rule adopts the February 25,
2005, proposed rule without change. HUD negotiated the proposed rule
and final rule with active tribal participation and using the
procedures of the Negotiated Rulemaking Act of 1990.
DATES: Effective Date. May 21, 2007.
FOR FURTHER INFORMATION CONTACT: Rodger J. Boyd, Deputy Assistant
Secretary for Native American Programs, Office of Public and Indian
Housing, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room 4126, Washington, DC 20410-5000; telephone (202) 401-
7914 (this is not a toll-free number). Hearing-or speech-impaired
individuals may access this number via TTY by calling the toll-free
Federal Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
On February 25, 2005, HUD published a proposed rule (70 FR 9490) to
revise the regulations for the Indian Housing Block Grant (IHBG)
program allocation formula. The IHBG program is authorized by the
Native American Housing Assistance and Self-Determination Act of 1996
(25 U.S.C. 4101 et seq.) (NAHASDA), which changed the way that housing
assistance is provided to Native Americans. NAHASDA eliminated several
separate assistance programs and replaced them with a single block
grant program. NAHASDA and its implementing regulations at 24 CFR part
1000 recognize tribal self-determination and self-governance while
establishing reasonable standards of accountability. The part 1000
regulations were developed with active tribal participation using the
procedures of the Negotiated Rulemaking Act of 1990 (5 U.S.C. 561-570).
Under the IHBG program, HUD makes assistance available to eligible
Indian tribes for affordable housing activities. The amount of
assistance made available to each Indian tribe is determined in
accordance with the allocation formula that was developed as part of
the NAHASDA negotiated rulemaking process (IHBG Formula). A regulatory
description of the IHBG Formula is located in subpart D of 24 CFR part
1000 (Sec. Sec. 1000.301-1000.340).
The current IHBG Formula consists of two components: Need and
Formula Current Assisted Stock (FCAS). Generally, the amount of annual
funding for an Indian tribe is the sum of the Need component (subject
to a minimum funding amount authorized by Sec. 1000.328) and the FCAS
component. Based on the amount of funding appropriated annually for the
IHBG program, HUD calculates the annual grant for each Indian tribe and
provides this information to the Indian tribes. An Indian Housing Plan
(IHP) for the Indian tribe is then submitted to HUD. If the IHP is
found to be in compliance with statutory and regulatory requirements,
the grant is made.
Section 1000.306 of the IHBG program regulations provides that the
IHBG Formula shall be reviewed within 5 years after issuance.
Accordingly, HUD established the IHBG Formula Negotiated Rulemaking
Committee (Committee) for the purposes of reviewing the regulations at
24 CFR part 1000, subpart D, and negotiating recommendations for a
possible proposed rule modifying the IHBG Formula. The Committee
membership consisted of 24 elected officers of tribal governments (or
authorized designees of those tribal governments). The Committee
membership reflected a balanced representation of Indian tribes, both
geographically and based on size. In addition to the tribal members,
there were two HUD representatives on the Committee. The first meeting
of the Committee took place in April 2003 and the Committee continued
to meet thereafter on approximately a monthly basis. The Committee met
a total of seven times to negotiate the proposed rule, with the final
meeting being held in January 2004. All of the Committee sessions were
announced in the Federal Register and were open to the public, and
interested members of the public actively participated in the workgroup
sessions. The February 25, 2005, proposed rule reflected the consensus
decisions reached by the Committee during the negotiated rulemaking
process on the best way to address certain areas of the IHBG Formula
that the Committee determined required clarification, were outdated, or
were not operating as intended by the original Negotiated Rulemaking
Committee. The preamble to the February 25, 2005, proposed rule
provides additional details regarding the proposed regulatory changes
to the IHBG Formula, and the negotiated rulemaking process used to
develop the proposed changes.
II. This Final Rule; Conforming Change to the February 25, 2005,
Proposed Rule
This final rule follows publication of the February 25, 2005,
proposed rule and takes into consideration the public comments received
on the proposed rule. The public comment period on the proposed rule
closed on April 26, 2005. HUD received 49 public comments from Indian
tribes on the proposed rule. The Committee met on January 31 through
February 1, 2006, to review and consider responses to the public
comments. A drafting workgroup was charged with developing the preamble
to this final rule. The membership of the workgroup consisted of HUD
and tribal representatives. The 2-day meeting, which was open to the
public, was announced in the Federal Register through a notice
published on January 13, 2006 (71 FR 2176).
Conforming changes to appendices A and B were required based on the
regulatory changes adopted by the Committee in this final rule.
Therefore, these conforming changes to appendices A and B are adopted
in this final rule. No other changes are made to the appendices.
After careful consideration of the comments, the Committee reached
consensus on making a conforming typographical change to Sec.
1000.316(a)(2) and (a)(3). Other than these conforming changes (which
are discussed below in this preamble), the regulatory revisions that
were proposed in the February 25, 2005, proposed rule are unchanged in
this final rule.
III. Discussion of Public Comments on the February 25, 2005, Proposed
Rule
This section of the preamble presents a summary of the significant
issues raised by the public commenters on the February 25, 2005,
proposed rule and
[[Page 20019]]
the Committee's responses to these comments. For the convenience of
readers, the discussion of the public comments is organized into three
sections. The first section discusses the general comments that were
received on the proposed rule. The second section discusses the public
comments received on specific proposed regulatory changes contained in
the proposed rule. The third section discusses the public comments
received on non-consensus issues (i.e., those issues on which the
Committee could not reach agreement on proposed regulatory language).
A. General Comments
Comment. Twenty-eight commenters praised the IHBG Formula
negotiated rulemaking process and offered support that all revisions to
NAHASDA regulations be developed using negotiated rulemaking. Further,
these commenters requested that all public comments be considered by
the Committee in a face-to-face meeting before HUD develops the final
rule.
Response: The Committee appreciates the commenters' support for the
negotiated rulemaking process and for the Committee's efforts. As noted
above, this Committee met during January 31 through February 1, 2006,
to consider the public comments and develop this final rule.
B. Comments on Specific Proposed Regulatory Changes
Comment regarding the revised definition of Formula Area. The
February 25, 2005, rule proposed to revise the definition of the term
``Formula Area'' located in Sec. 1000.302. Many comments were received
on various aspects of this revised definition. For example, five
commenters objected to the inclusion of Oklahoma Tribal Statistical
Areas (OTSAs), as defined by the U.S. Census, in the list of acceptable
formula areas. The commenters wrote that the inclusion of OTSAs as
formula areas will ``shift funding from Reservation restricted trust
lands to Fee Simple State lands.'' Other commenters suggested that the
rule be revised to remove Tribal Designated Statistical Areas (TDSAs)
from the list of formula areas. These commenters recommended that the
final rule should instead use the listing of federally recognized
tribes published by the Department of Interior.
Response: The final rule has not been revised in response to these
comments. The Committee continues to believe that the proposed changes
to the definition of Formula Area help to clarify the current
definition and better address the different types of geographic areas
served by Indian tribes. In response to the comments objecting to the
inclusion of OTSAs, the Committee does not agree that the inclusion of
such areas will necessarily result in a shift in funding and notes that
the final rule continues to provide for challenges to the
``grandfathering'' of the current formula areas for such tribal areas
in Oklahoma. Additionally, geographic areas encompassed by OTSAs are
not new to the formula, but rather reflect a change in terminology used
by the Census Bureau. These geographic areas were previously referred
to as Tribal Jurisdictional Statistical Areas and have historically
been included in the IHBG formula. With regard to the commenters
recommending the use of the list of federally recognized tribes, some
federally recognized tribes do not have a reservation or trust land.
Additionally, five state recognized tribes have been grandfathered into
the IHBG program by statute. As noted above, the inclusion of TDSAs
simply provides Indian tribes with another Formula Area option that may
better reflect the geographic areas they serve.
Comments regarding the definition of Alaska Formula Area. Several
commenters raised concerns about the proposed definition of Alaska
Formula Area. Some of these commenters were concerned about the
procedures contained in the definition for crediting Alaska needs data.
One of these commenters wrote that NAHASDA does not authorize HUD to
grant IHBG funds to ``Alaska Native Villages,'' only to sovereign
Indian or Alaska Native tribes, and suggested that the definition be
revised accordingly. Some of the commenters raised concern about the
provision for expanding Alaska Formula Areas. Several of these
commenters objected to the perceived ``ability of any corporation to be
able to expand their service or formula areas.'' Another commenter,
however, requested that the final rule clarify the ability of Alaska
Indian tribes to expand their Formula Area.
Response: The rule has not been revised in response to these
comments. The regulatory provision regarding Alaska Formula Areas
addresses the unique circumstances of Indian tribes in Alaska, and is
consistent with the statutory requirements of NAHASDA. The language
regarding the crediting of formula data is identical to that found in
Sec. 1000.327 of the current regulations. The change proposed by the
February 25, 2005, rule was simply to transfer this language to the
definition of Formula Area for purposes of clarity. With regard to the
expansion of Alaska Formula Areas, the proposed and final rules make
clear that Alaska tribes may seek to expand their Formula Areas in the
same manner as any other Indian tribe. Alaska Native Villages have been
listed and are recognized as ``federally recognized Indian tribes'' by
the Secretary of Interior (70 FR 71194). Additionally, NAHASDA defines
Alaska Native Villages, regional corporations, and village corporations
as Indian tribes, expressly making them eligible for provisions under
the statute.
Comments on the population cap used to determine formula area.
Several commenters wrote in support of the continued use of the ``cap''
on the population data that will be attributed to an Indian tribe
within its Formula Area. In particular, the commenters supported the
clarification that for state-recognized tribes the population data and
formula allocation shall be limited to tribal enrollment figures
reflecting tribal enrollment criteria in effect in 1996. The commenters
wrote that the cap must be enforced to prohibit state recognized tribes
from being credited with any new members.
Response: The Committee agrees that the cap is necessary to
maintain fairness for all Indian tribes. As explained in the preamble
to the February 25, 2005, proposed rule, the provision regarding state-
recognized Indian tribes is statutorily based. The definition of state-
recognized tribe in section 4(12)(C)(ii) of NAHASDA requires that the
allocation for such a tribe shall be determined based on tribal
membership eligibility criteria in existence on the date of enactment
(October 26, 1996). The language of the proposed rule (and adopted by
this final rule) helps to ensure that state-recognized tribes will not
be credited for any new members who do not meet the 1996 enrollment
criteria. However, the rule does not prohibit a state-recognized Indian
tribe from being credited with new members who meet the enrollment
criteria in place in 1996 and it does not freeze a state-recognized
Indian tribe's population data or formula allocation at 1996 levels.
Comments regarding the expansion and redefinition of Formula Area.
The proposed rule described new procedures governing the expansion or
re-definition of an Indian tribe's Formula Area. One tribe objected to
reducing the new area to the ``smallest U.S. Census unit or units''
when there are other reasonable boundaries that can be followed, such
as municipal or tribal boundaries.
Response: The rule has not been revised in response to this
comment. The new requirements were carefully crafted by the Committee
to ensure that
[[Page 20020]]
an Indian tribe seeking to include additional geography within its
approved Formula Area has the authority to provide housing services
within the new geography and will serve the housing needs of Native
Americans within the expanded Formula Area. The provision noted by the
commenter is consistent with these goals because it limits expansion to
those U.S. Census units for which the tribe can verify that it has the
requisite legal authority and the ability to provide housing services.
Despite differing views on its limitations, the Committee decided to
base the limitation on U.S. Census data because such data is uniformly
collected and accessible to all Indian tribes and because no acceptable
alternative source has yet been developed and agreed upon.
Comments regarding the definition of Substantial Housing Services.
Among the required criteria for expanding its Formula Area, the Indian
tribe must demonstrate that it is providing ``substantial housing
services'' (as defined in the rule) within the new geographic area.
Several of the commenters objected to the requirement that the tribe
demonstrate affordable housing activities equal to at least 100 percent
of the increase in its IHBG Formula allocation or 51 percent of the
tribe's current formula allocation. The commenters wrote that this
requirement establishes an excessively high and difficult threshold for
expansion. Several commenters wrote that the definition would make it
especially difficult for small tribes in California and Nevada, whose
IHBG Formula allocation is based largely on the FCAS component needed
for maintaining current housing stock, to include locations outside
their existing Formula Areas even if they provide housing services to
their enrolled members in those areas.
Response: The rule has not been revised in response to these
comments. As noted above in this preamble, the new requirements
regarding the expansion of Formula Area were carefully crafted by the
Committee. The definition of substantial housing services intentionally
contains thresholds that are designed to ensure that an Indian tribe
seeking to include additional geography within its approved Formula
Area has the authority to provide housing services within the new
geography and will serve the housing needs of Native Americans within
the expanded Formula Area. However, the definition also contains the
necessary flexibility to help address geographic and other differences
among Indian tribes. Specifically, the rule permits Indian tribes to
satisfy the substantial housing services requirements in one of two
ways: to either provide 100 percent of the increase in its IHBG Formula
allocation or 51 percent of the tribe's current formula allocation if
certain other conditions are satisfied.
Comments regarding the use of U.S. Census data in overlapping
Formula Areas. Current regulations at Sec. 1000.326 specify how IHBG
funds will be allocated where the Formula Areas of one or more tribes
overlap. Among other factors, the allocation will be based upon the
Indian tribe's proportional share of the population in the geographic
area. Tribal membership in the geographic area (not including dually
enrolled tribal members) will be based on data that all Indian tribes
involved agree to use. The current regulation lists several suggested
data sources, including tribal enrollment lists, Indian Health Service
User Data, and Bureau of Indian Affairs data. This list is not
exclusive, and the data used for this purpose has sometimes included
U.S. Census data. For purposes of clarity, the proposed rule expanded
the list of suggested data sources to explicitly include data from the
U.S. Census. Five commenters objected to the use of Census data,
suggesting that HUD instead utilize official enrollment data from the
tribe.
Response: The change clarifies that the U.S. Census data is one of
several data sources that may be used to determine tribal population.
The Committee notes that the regulation does not require the use of
Census data and does not preclude the use of other data, including the
tribal enrollment figures recommended by the commenters. Accordingly,
the Committee determined that a change to the rule was not necessary.
Comments regarding the required use of the Formula Response Form
for reporting changes to FCAS. The February 25, 2005, rule proposed to
add a new Sec. 1000.315 and Sec. 1000.319, both clarifying policies
and procedures relating to the reporting of changes to FCAS. New Sec.
1000.315 clarifies that the Formula Response Form is the only mechanism
a recipient may use to report changes to the FCAS. New Sec. 1000.319
provides that if a recipient receives an overpayment of funds because
it failed to report changes on the Formula Response Form in a timely
manner, the recipient must repay the funds within 5 fiscal years.
Conversely, HUD has agreed to provide back funding for any undercount
of units that occurred and was reported or challenged prior to October
30, 2003. In their comments, 34 tribes offered support for these rule
changes. The commenters supported the change on over- and under-
counting of FCAS, as well as the formula response form change at Sec.
1000.319.
Response: The Committee appreciates the support of the comments.
The final rule adopts the provisions of proposed Sec. Sec. 1000.315
and 1000.319 without change.
Comments regarding the calculation of the operating subsidy
component of FCAS. For clarity, the February 25, 2005, rule proposed to
make a minor, non-substantive modification to Sec. 1000.316(a)(1). The
current language of the regulation provides that the first of the three
variables comprising the operating subsidy component of FCAS is ``the
number of low-rent FCAS units multiplied by the FY 1996 national per
unit subsidy (adjusted to full funding level) multiplied by an
adjustment factor for inflation.'' The proposed provision would
simplify this provision by establishing a separate definition of the
term ``national per unit subsidy'' in Sec. 1000.302, which contains
the definitions applicable to the IHBG program.
Twenty-eight commenters wrote in support of the change. However,
one of the commenters identified a typographical inconsistency between
Sec. 1000.316(a)(1) and paragraphs (a)(2) and (a)(3) of Sec.
1000.316. Specifically, the proposed rule inadvertently failed to
include the same changes to paragraphs (a)(2) and (a)(3) as were
proposed for paragraph (a)(1). The commenter requested that the final
rule correct this error. Two other commenters submitted comments
related to Sec. 1000.316, but that were outside the scope of the
proposed rule and therefore not appropriate for inclusion at this final
rule stage. Specifically, one commenter advocated the participation of
all Indian tribes in the Section 8 voucher program, while the other
commenter advocated for increased IHBG funding.
Response: The Committee appreciates the support expressed by the
commenters on the clarifying change. As noted above in this preamble,
the final rule makes the necessary correction to paragraphs (a)(2) and
(a)(3) of Sec. 1000.316.
Comments regarding the FCAS modernization allocation for small
Indian tribes. The February 25, 2005, rule proposed to implement a
statutory amendment to NAHASDA by making various conforming changes to
the IHBG regulations. Section 1003(g) of the Omnibus Indian Advancement
Act (Pub. L. 106-568, approved December 27, 2000) added a new
subsection
[[Page 20021]]
302(d)(1)(B) to NAHASDA regarding operating and modernization funding
for Indian tribes with Indian Housing Authorities (IHAs) that owned or
operated fewer than 250 units developed under the United States Housing
Act of 1937 (42 U.S.C. 1437 et seq.) (1937 Act). The proposed rule
contained conforming changes to Sec. 1000.316 and Sec. 1000.340 to
codify this statutory requirement.
Twenty-nine commenters offered support for the proposed regulatory
changes to accommodate the statutory amendment to NAHASDA regarding
operating and modernization funding for tribes that owned or operated
fewer than 250 units. Five commenters, although acknowledging that the
regulatory changes were statutorily based, wrote that the statutory
amendment is unfair to those tribes that did not receive the one-time
competitive modernization grant in 1997. One commenter requested
clarification regarding the effect of the regulatory change for Indian
tribes that had more than 250 units on October 1, 1997.
Response: The rule has not been revised in response to these
comments. As the commenters acknowledged, the regulatory change
conforms the IHBG regulations to the statutory language of section
302(d)(1)(B) of NAHASDA. In response to the commenter requesting
additional clarification, the statutory change does not affect the
calculation of operating and modernization funding for Indian tribes
that had more than 250 units on October 1, 1997.
Comments regarding small programs/minimum funding. The February 25,
2005, rule proposed numerous revisions to the minimum funding
provisions at Sec. 1000.328. Among other changes, the rule proposed to
remove the current provisions regarding the minimum IHBG Formula Need
allocation for an Indian tribe in its first year of participation in
the IHBG program. The rule also proposed to revise the minimum formula
allocation an Indian tribe will receive under the Need component of the
IHBG Formula after its first year of participation in the program. The
February 25, 2005, proposed rule also proposed new eligibility
requirements for minimum funding.
Thirty-four comments offered support for the revised minimum
funding provisions, and 28 of these commenters recommended that the
provisions be adopted without change. Five commenters wrote that the
minimum funding provisions will not provide small tribes with adequate
funds to meaningfully address their housing needs. These commenters
recommended that FCAS should not be considered in providing minimum
funding, as these funds go toward maintenance of existing housing and
do not address the unmet need for housing assistance. These commenters
also objected to the requirement that the Indian tribe demonstrate a
need for the minimum funding, writing that this requirement is
unnecessary and duplicative because each tribe's IHP already contains a
statement of needs.
Response: The rule has not been revised in response to these
comments. As noted in the preamble to the proposed rule, the minimum
funding provision provides for a minimum needs allocation of $50,000
based on current IHBG appropriations. The Committee continues to
believe that this provision is fair to all Indian tribes while helping
to ensure an adequate minimum level of funding for smaller tribes. With
regard to the eligibility requirements, the Committee concluded they
are necessary to ensure that the minimum funding provisions benefit
Indian tribes that would otherwise be unable to provide even minimal
housing services and that have a demonstrated need for such services.
The requirement is not duplicative because tribes will demonstrate the
presence of any households at or below 80 percent of median income only
in the IHP.
Comments regarding the adjustment of the Need variables using birth
and death rate data. Section 1000.330 describes the data sources used
for the Need component. The February 25, 2005, rule proposed to revise
this section to codify existing procedures by specifying that the data
for the Need variables shall be adjusted annually beginning the year
after the Need data is collected, using Indian Health Service
projections based upon birth and death rate data as provided by the
National Center for Health Statistics.
Twenty-eight commenters wrote in support of the consensus position
on birth and death rates. Five commenters wrote that, while death and
birth rates are a fair method to adjust the Need component, it should
be the responsibility of the tribes to report annual enrollment
certification instead of HUD.
Response: The birth and death rate provision has been adopted
without change. As noted, the regulatory change codifies an existing
procedure that both Indian tribes and HUD have determined works
effectively and fairly in adjusting the Formula Need component for
birth and death rates. Procedures at Sec. 1000.336 have also been
revised to include challenges of birth and death rate data used in
computing Indian Health Service projections.
Comments regarding data challenges and appeals of HUD formula
determinations. The September 25, 2005, rule proposed to clarify and
elaborate upon existing Sec. 1000.336, which describes the procedures
that an Indian tribe, tribally designated housing entities (TDHE), and
HUD may use to challenge data. Under the proposed rule, Sec. 1000.336
would continue to authorize data challenges, but also provide for
appeal of certain HUD formula determinations. Thirty-four commenters
wrote in support of the proposed rule provisions regarding data
challenges and appeals. However, five commenters objected to the use of
U.S. Census data to determine need.
Response: The consensus position as described in the proposed rule
remains unchanged in the final rule. The Committee appreciates the
support expressed by the majority of comments on this provision, and
believes that the new regulatory language will assist both tribes and
HUD by clarifying the policies and procedures for challenging data and
appealing formula determinations.
C. Comments Regarding Nonconsensus Items
Comments regarding formula median income. During negotiations, the
Committee considered removing the definition of ``formula median
income'' used in calculating the Need component of the IHBG Formula
and, in its place, using the definition of ``median income'' provided
under section 4 of NAHASDA. The Committee was unable to reach consensus
on this issue and therefore a regulatory change was not contained in
the February 25, 2005, proposed rule.
A majority of commenters requested that the Committee revisit the
issue. Twenty-nine commenters explained that there was not enough time
to properly address the issue during the negotiations. They wrote that
the use of two separate definitions of median income (one for the
formula and the other for use elsewhere in the IHBG regulations) was
confusing and contradictory to the intent of NAHASDA. The commenters
also wrote that the formula definition unfairly results in some Indian
tribes not receiving IHBG funding for low-income Indian families who
must be served by the tribe.
Response: No change has been made to the rule in response to these
comments. As noted above and discussed in detail in the preamble to the
proposed rule, the Committee could
[[Page 20022]]
not reach consensus on whether to revise the definition of formula
median income. Because decision-making during the negotiated rulemaking
process was based on consensus, the absence of consensus on formula
median income, even after full consideration of public comments,
precluded the Committee from adopting the changes proposed by the
commenters. Moreover, such a revision would not have been appropriate
at this final rule stage, as it would require additional notice and
public comment.
Comments regarding the Section 8 inflation factor. During
negotiations on the proposed rule, the Committee considered various
proposals to remove the inflation adjustment factor for Section 8 units
in calculating FCAS, but was unable to reach consensus on a regulatory
change. There were several comments received that made suggestions
outside the scope of the proposed rule. Specifically, five commenters
suggested that the regulations be revised to provide that as an
individual Section 8 voucher expires, the associated funding be placed
in a ``pot'' in the same way as other FCAS are conveyed. One commenter
raised an objection to the statutory language of section 502(a) of
NAHASDA, which, according to the commenter, effectively includes
Section 8 assistance to be treated as FCAS.
Response: The rule has not been revised in response to these
comments. This was an item on which the Committee was unable to reach
consensus. Further, the change recommended by the commenters could not
be made at this final rule stage without additional notice and comment
rulemaking. The comment objecting to section 502(a) of NAHASDA pertains
to statutory language that may be revised only through legislative
amendment.
Comments regarding substantial noncompliance. Section 1000.534 of
the IHBG program regulations describes those tribal actions that
constitute substantial noncompliance with IHBG program requirements. As
explained in Sec. 1000.538, HUD may take certain actions against an
Indian tribe that has failed to comply substantially with the IHBG
program requirements, but only after reasonable notice and opportunity
for a hearing conducted in accordance with 24 CFR part 24. The
Committee considered expanding the actions deemed to constitute
substantial noncompliance and, therefore, entitle the Indian tribe to a
formal hearing prior to any reduction or adjustment of its IHBG grant.
During negotiations, there were two objections to the proposed
expansion of substantial noncompliance and, therefore, consensus was
not reached on this proposal. Several commenters expressed concern on
the failure of the Committee to find consensus on the proposal to amend
Sec. Sec. 1000.534 and 1000.538.
Response: No change has been made to the rule in response to these
comments. As noted above, the Committee could not reach consensus on
whether to revise the regulatory provisions concerning substantial
noncompliance. Because the negotiated rulemaking process required
consensus and because consensus was not reached on this item, the
Committee did not adopt the changes recommended by the commenters.
Moreover, such revisions would not be appropriate at this final rule
stage because they would require additional notice and opportunity for
public comment.
Comments regarding the replacement of the Allowable Expense Level
(AEL). The IHBG Formula currently uses an adjustment factor known as
the Allowable Expense Level (AEL), which serves as a substitute
measurement of geographic and other differences in the monthly per-unit
operating costs incurred by an Indian tribe to operate Current Assisted
Stock. During negotiations, some members of the Committee expressed
dissatisfaction with the AEL, stating that it is not reflective of the
true costs of operating affordable housing units and that individual
AEL levels were often inaccurately calculated. Other Committee members,
however, felt that general use of the AEL is an acceptable method for
allocating IHBG operating funds among the Indian tribes but that
individual AEL determinations should be subject to challenge by
individual Indian tribes. The Committee was unable to reach consensus
on this issue and, therefore, a regulatory change was not contained in
the February 25, 2005, proposed rule. HUD agreed to a study of the use
of the AEL. This Indian housing cost study is currently underway.
Twenty-nine commenters submitted comments regarding possible changes to
the AEL, but were divided in their opinions. Some of the commenters
were concerned about the failure of the Committee to find consensus on
AEL and expressed support for changes through legislation or future
regulatory changes. Others supported the continued use of AEL as an
adjustment factor to account for the higher costs associated with
differing geographic locations.
Response: No change has been made to the rule in response to the
comments. As noted, the Committee was unable to reach consensus on a
proposed regulatory change and, therefore, did not adopt the
commenters' suggested change in this final rule. Accordingly, a
revision to the AEL would not be appropriate at this final rule stage,
since it would require additional notice and public comment.
Comments regarding the use of multi-race U.S. Census data. In
calculating the Need component, pursuant to Sec. 1000.330, HUD uses
U.S. Census population data. The 2000 U.S. Census reported for the
first time both those persons who identify themselves solely as
American Indian/Alaska Native (AIAN) and those who also identify with
another race. HUD made the determination to use the 2000 Census data.
HUD's current calculation of the Need component incorporates all
persons who identify as AIAN, without regard to whether they also
identify as another race. During the negotiations for the proposed
rule, proponents of using this data stated that the use of single-race
data does not reflect the best available information and would exclude
some persons who identified as multi-race and are eligible to be served
under NAHASDA. Other Committee members, however, expressed objections
to the use of this multi-race data, stating that the purpose of
NAHASDA, which is to assist Native Americans, would be better served by
limiting the population data to those persons designating themselves as
being solely AIAN. The Committee was unable to reach consensus on this
issue and, therefore, a regulatory change was not contained in the
February 25, 2005, proposed rule. Thirty-four commenters opposed the
use of multi-race Census data and urged the Committee to revisit this
issue. The tribes stated that the change to multi-race data has the
effect of drastically increasing some tribes' funding and decreasing
that of others. In particular, one commenter wrote that the use of
multi-race data would shift funding from traditional Native Villages to
more urban areas. Several commenters suggested a compromise position
providing for calculation of the Need component based on the average of
individuals designating themselves solely as AIAN and the number of
persons also designating themselves as belonging to other racial
categories. One commenter suggested that tribal enrollment criteria
should be used as the determining factor where eligibility is in
question. Four commenters wrote in support of the multi-race Census
data. One of these commenters stated that tribal members can be more
than one race provided they meet the criteria established by the tribe.
Two
[[Page 20023]]
commenters wrote that not using multi-race data would result in
undercounting of tribal membership. Another commenter offered general
support for the use of multi-race Census data in the IHBG allocation
formula.
Response: The rule has not been revised in response to these
comments. As discussed above, the Committee was unable to reach
consensus on the issue of multi-race data and, therefore, a regulatory
change at this final rule stage would be inappropriate without advance
notice and the opportunity for public comment. Further, Senate Report
109-109 accompanying the Fiscal Year 2006 HUD Appropriations Act (Pub.
L. 109-115; approved November 30, 2005) provides for HUD to reassess,
using notice and comment rulemaking procedures, its decision to use
multi-race data. Consistent with the language of the Senate Report, on
December 12, 2006, HUD published a notice in the Federal Register (71
FR 74748) that solicited public comment on the use of multi-race data
in the computation of the IHBG allocation formula.
IV. Findings and Certifications
Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866 (entitled ``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 an economically
significant action, as provided under section 3(f)(1) of the Order).
The docket file is available for public inspection in the Regulations
Division, Office of General Counsel, Department of Housing and Urban
Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410-
0500. Due to security measures at the HUD Headquarters building, please
schedule an advance appointment to review the docket file by calling
the Regulations Division at (202) 708-3055 (this is not a toll-free
number).
Paperwork Reduction Act
The information collection requirements contained in this proposed
rule have been approved by OMB under the Paperwork Reduction Act of
1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2577-0218.
In accordance with the Paperwork Reduction Act, an agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection displays a currently
valid OMB control number.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment was made at the proposed rule stage in accordance with HUD
regulations at 24 CFR part 50, which implement section 102(2)(C) of the
National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). That
FONSI remains applicable to this final rule and is available for public
inspection between the hours of 8 a.m. and 5 p.m. weekdays in the
Regulations Division, Office of General Counsel, Department of Housing
and Urban Development, 451 Seventh Street, SW., Room 10276, Washington,
DC 20410-0500. Due to security measures at the HUD Headquarters
building, please schedule an advance appointment to review the FONSI by
calling the Regulations Division at (202) 708-3055 (this is not a toll-
free number).
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally
requires an agency to conduct a regulatory flexibility analysis of any
rule subject to notice and comment rulemaking requirements, unless the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities. This rule would not
impose substantive new requirements on Indian tribes. Rather, the rule
addresses those areas of the IHBG Formula that HUD and Indian tribal
representatives determined require clarification, are outdated, or are
not operating as intended. Moreover, HUD negotiated the amendments
contained in this final rule with representatives of Indian tribes, and
the rule reflects the consensus decisions reached by HUD and its tribal
negotiating partners on the best way to address the required changes to
the IHBG Formula. The potential burden of the regulatory changes on
Indian tribes was considered and addressed as part of the negotiated
rulemaking process. Accordingly, the undersigned certifies that this
rule will not have a significant economic impact on a substantial
number of small entities.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2
U.S.C. 1531-1538) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments and on the private sector. This rule does not impose
any federal mandate on state, local, or tribal governments, or on the
private sector within the meaning of UMRA.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number for the IHBG
program is 14.867.
List of Subjects in 24 CFR Part 1000
Aged, Grant programs--housing and community development, Grant
programs--Indians, Individuals with disabilities, Low and moderate
income housing, Public housing, Reporting and recordkeeping
requirements.
0
Accordingly, for reasons discussed in the preamble, HUD amends 24 CFR
part 1000 as follows:
PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES
0
1. The authority citation for 24 CFR part 1000 continues to read as
follows:
Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).
0
2. In Sec. 1000.302, revise the definition of ``Formula Area'' and
add, in alphabetical order, definitions of the terms ``National Per
Unit Subsidy'' and ``Substantial Housing Services'' to read as follows:
Sec. 1000.302 What are the definitions applicable to the IHBG
formula?
* * * * *
Formula area. (1) Formula areas are:
(i) Reservations for federally recognized Indian tribes, as defined
by the U.S. Census;
(ii) Trust lands;
(iii) Department of the Interior Near-Reservation Service Areas;
(iv) Former Indian Reservation Areas in Oklahoma Indian Areas, as
defined by the U.S. Census as Oklahoma Tribal Statistical Areas
(OTSAs);
(v) Congressionally Mandated Service Areas;
(vi) State Tribal Areas as defined by the U.S. Census as State
Designated American Indian Statistical Areas (SDAISAs);
(vii) Tribal Designated Statistical Areas (TDSAs);
(viii) California Tribal Jurisdictional Areas established or
reestablished by federal court judgment; and
(ix) Alaska formula areas described in paragraph (4) of this
definition.
(2)(i) For a geographic area not identified in paragraph (1) of
this definition, and for expansion or re-definition of a geographic
area from the prior year, including those identified in paragraph (1)
of this definition, the Indian tribe must submit, on a form agreed to
by HUD, information about the geographic area it wishes to include in
[[Page 20024]]
its Formula Area, including proof that the Indian tribe, where
applicable, has agreed to provide housing services pursuant to a
Memorandum of Agreement (MOA) with the tribal and public governing
entity or entities of the area, or has attempted to establish such an
MOA; and either:
(A) Could exercise court jurisdiction; or
(B) Is providing substantial housing services and will continue to
expend or obligate funds for substantial housing services, as reflected
in the form agreed to by HUD for this purpose.
(ii) Upon receiving a request for recognition of a geographic area
not identified in paragraph (1) of this definition, HUD shall make a
preliminary determination. HUD shall notify all potentially affected
Indian tribes of the basis for its preliminary determination by
certified mail and provide the Indian tribes with the opportunity to
comment for a period of not less than 90 days. After consideration of
the comments, HUD shall announce its final determination through
Federal Register notice.
(iii) No Indian tribe may expand or redefine its Formula Area
without complying with the requirements of paragraphs (2)(i) and (ii)
of this definition, notwithstanding any changes recognized by the U.S.
Census Bureau.
(iv) The geographic area into which an Indian tribe may expand
under this paragraph (2) shall be the smallest U.S. Census unit or
units encompassing the physical location where substantial housing
services have been provided by the Indian tribe.
(3) Subject to a challenge by an Indian tribe with a Formula Area
described under paragraph (1)(iv) of this definition, any federally
recognized Indian tribe assigned Formula Area geography in Fiscal Year
2003 not identified in paragraphs (1) and (2) of this definition, shall
continue to be assigned such Formula Area in subsequent fiscal years,
provided that the Indian tribe continues to provide an appropriate
level of housing services within the Formula Area as monitored by HUD
using the definition of substantial housing services contained in this
section as a guideline but not as a requirement.
(4) Notwithstanding paragraphs (1), (2), and (3) of this
definition, Alaska needs data shall be credited as set forth in Sec.
1000.327 to the Alaska Native Village (ANV), the regional Indian tribe,
or to the regional corporation established pursuant to the Alaska
Native Claims Settlement Act (33 U.S.C. 1601 et seq.) (ANCSA). For
purposes of Sec. 1000.327 and this definition:
(i) The formula area of the ANV shall be the geographic area of the
village or that area delineated by the TDSA established for the ANV for
purposes of the 1990 U.S. Census or the Alaska Native Village
Statistical Area (ANVSA) established for the ANV. To the extent that
the area encompassed by such designation may substantially exceed the
actual geographic area of the village, such designation is subject to
challenge pursuant to Sec. 1000.336. If the ANVSA or the TDSA is
determined pursuant to such challenge to substantially exceed the
actual area of the village, then the geographic formula area of the ANV
for purposes of Sec. 1000.327 shall be such U.S. Census designation as
most closely approximates the actual geographic area of the village.
(ii) The geographic formula area of the regional corporation shall
be the area established for the corporation by the ANCSA.
(iii) An Indian tribe may seek to expand its Alaska formula area
within its ANCSA region pursuant to the procedures set out in paragraph
(2) of this definition. Formula Area added in this way shall be treated
as overlapping pursuant to Sec. 1000.326, unless the Indian tribe's
members in the expanded area are less than 50 percent of the AIAN
population. In cases where the Indian tribe is not treated as
overlapping, the Indian tribe shall be credited with population and
housing data only for its own tribal member residents within the new or
added area. All other population and housing data for the area shall
remain with the Indian tribe or tribes previously credited with such
data.
(5) In some cases the population data for an Indian tribe within
its Formula Area is greater than its tribal enrollment. In general, to
maintain fairness for all Indian tribes, the tribe's population data
will not be allowed to exceed twice an Indian tribe's enrolled
population. However, an Indian tribe subject to this cap may receive an
allocation based on more than twice its total enrollment if it can show
that it is providing housing assistance to substantially more non-
member Indians and Alaska Natives who are members of another federally
recognized Indian tribe than it is to members. For state-recognized
Indian tribes, the population data and formula allocation shall be
limited to their tribal enrollment figures as determined under
enrollment criteria in effect in 1996.
(6) In cases where an Indian tribe is seeking to receive an
allocation more than twice its total enrollment, the tribal enrollment
multiplier will be determined by the total number of Indians and Alaska
Natives to whom the Indian tribe is providing housing assistance (on
July 30 of the year before funding is sought) divided by the number of
members to whom the Indian tribe is providing housing assistance. For
example, an Indian tribe that provides housing to 300 Indians and
Alaska Natives, of which 100 are members, the Indian tribe would then
be able to receive an allocation for up to three times its tribal
enrollment if the Indian and Alaska Native population in the area is
three or more times the tribal enrollment.
* * * * *
National per unit subsidy is the Fiscal Year 1996 national per unit
subsidy (adjusted to full funding level) multiplied by an adjustment
factor for inflation.
* * * * *
Substantial housing services are:
(1) Affordable housing activities funded from any source provided
to AIAN households with incomes 80 percent of the median income as
defined in NAHASDA (25 U.S.C. 4103 (14)) or lower, equivalent to 100
percent or more of the increase in the IHBG formula allocation that the
Indian tribe would receive as a result of adding the proposed
geography; or
(2) Affordable housing activities funded with IHBG funds provided
to AIAN households with incomes 80 percent of the median income as
defined in NAHASDA (25 U.S.C. 4104(14)) or lower, equivalent to 51
percent or more of the Indian tribe's current total IHBG grant; and
either:
(i) Fifty-one percent or more of the Indian tribe's official
enrollment resides within the geographic area; or
(ii) The Indian tribe's official enrollment constitutes 51 percent
or more of the total AIAN persons within the geography.
(3) HUD shall require that the Indian tribe annually provide
written verification, on a form approved by HUD, that the affordable
housing activities it is providing meet the definition of substantial
housing services.
* * * * *
0
3. Revise Sec. 1000.306(b) to read as follows:
Sec. 1000.306 How can the IHBG Formula be modified?
* * * * *
(b) The IHBG Formula shall be reviewed not later than May 21, 2012
to determine if a subsidy is needed to operate and maintain NAHASDA
units or if any other changes are needed in respect to funding under
the Formula
[[Page 20025]]
Current Assisted Stock component of the formula.
* * * * *
0
4. Add Sec. 1000.315 to read as follows:
Sec. 1000.315 Is a recipient required to report changes to the
Formula Current Assisted Stock (FCAS) on the Formula Response Form?
(a) A recipient shall report changes to information related to the
IHBG formula on the Formula Response Form, including corrections to the
number of Formula Current Assisted Stock (FCAS), during the time period
required by HUD. This time period shall be not less than 60 days from
the date of the HUD letter transmitting the form to the recipient.
(b) The Formula Response Form is the only mechanism that a
recipient shall use to report changes to the number of FCAS.
0
5. In Sec. 1000.316, revise paragraphs (a)(1), (a)(2), and (a)(3) and
paragraph (b) to read as follows:
Sec. 1000.316 How is the Formula Current Assisted Stock (FCAS)
Component developed?
* * * * *
(a) * * *
(1) The number of low-rent FCAS units multiplied by the national
per unit subsidy;
(2) The number of Section 8 units whose contract has expired but
had been under contract on September 30, 1997, multiplied by the FY
1996 national per unit subsidy; and
(3) The number of Mutual Help and Turnkey III FCAS units multiplied
by the national per unit subsidy.
(b) Modernization allocation. (1) For Indian tribes with an Indian
Housing Authority that owned or operated 250 or more public housing
units on October 1, 1997, the modernization allocation equals the
number of Low Rent, Mutual Help, and Turnkey III FCAS units multiplied
by the national per-unit amount of allocation for FY 1996 modernization
multiplied by an adjustment factor for inflation.
(2) For Indian tribes with an Indian Housing Authority that owned
or operated fewer than 250 public housing units on October 1, 1997, the
modernization allocation equals the average amount of funds received
under the assistance program authorized by section 14 of the 1937 Act
(not including funds provided as emergency assistance) for FYs 1992
through 1997.
0
6. Add Sec. 1000.319 to read as follows:
Sec. 1000.319 What would happen if a recipient misreports or fails to
correct Formula Current Assisted Stock (FCAS) information on the
Formula Response Form?
(a) A recipient is responsible for verifying and reporting changes
to their Formula Current Assisted Stock (FCAS) on the Formula Response
Form to ensure that data used for the IHBG Formula are accurate (see
Sec. 1000.315). Reporting shall be completed in accordance with
requirements in this Subpart D and the Formula Response Form.
(b) If a recipient receives an overpayment of funds because it
failed to report such changes on the Formula Response Form in a timely
manner, the recipient shall be required to repay the funds within 5
fiscal years. HUD shall subsequently distribute the funds to all Indian
tribes in accordance with the next IHBG Formula allocation.
(c) A recipient will not be provided back funding for any units
that the recipient failed to report on the Formula Response Form in a
timely manner.
(d) HUD shall have 3 years from the date a Formula Response Form is
sent out to take action against any recipient that fails to correct or
make appropriate changes on that Formula Response Form. Review of FCAS
will be accomplished by HUD as a component of A-133 audits, routine
monitoring, FCAS target monitoring, or other reviews.
0
7. Revise Sec. 1000.326(b) to read as follows:
Sec. 1000.326 What if a formula area is served by more than one
Indian tribe?
* * * * *
(b) Tribal membership in the geographic area (not to include dually
enrolled tribal members) will be based on data that all Indian tribes
involved agree to use. Suggested data sources include tribal enrollment
lists, the U.S. Census, Indian Health Service User Data, and Bureau of
Indian Affairs data.
* * * * *
0
8. Revise Sec. 1000.328 to read as follows:
Sec. 1000.328 What is the minimum amount that an Indian tribe may
receive under the need component of the formula?
(a) Subject to the eligibility criteria described in paragraph (b)
of this section, the minimum allocation in any fiscal year to an Indian
tribe under the need component of the IHBG Formula shall equal 0.007826
percent of the available appropriations for that fiscal year after set
asides.
(b) To be eligible for the minimum allocation described in
paragraph (a) of this section, an Indian tribe must:
(1) Receive less than $200,000 under the FCAS component of the IHBG
Formula for the fiscal year; and
(2) Demonstrate the presence of any households at or below 80
percent of median income.
0
9. In Sec. 1000.330, revise the heading and designate the existing
text of paragraph (a) and add new paragraphs (b) and (c) to read as
follows:
Sec. 1000.330 What are the data sources for the need variables?
* * * * *
(b) The data for the need variables shall be adjusted annually
beginning the year after the need data is collected, using Indian
Health Service projections based upon birth and death rate data as
provided by the National Center for Health Statistics.
(c) Indian tribes may challenge the data described in paragraphs
(a) and (b) of this section pursuant to Sec. 1000.336.
0
10. Revise Sec. 1000.336 to read as follows:
Sec. 1000.336 How may an Indian tribe, TDHE, or HUD challenge data or
appeal HUD formula determinations?
(a) An Indian tribe, TDHE, or HUD may challenge data used in the
IHBG Formula and HUD formula determinations regarding:
(1) U.S. Census data;
(2) Tribal enrollment;
(3) Formula area;
(4) Formula Current Assisted Stock (FCAS);
(5) Total Development Cost (TDC);
(6) Fair Market Rents (FMRs); and
(7) Indian Health Service projections based upon birth and death
rate data provided by the National Center for Health Statistics.
(b) An Indian tribe or TDHE may not challenge data or HUD formula
determinations regarding Allowable Expense Level (AEL) and the
inflation factor.
(c) The challenge and the collection of data and the appeal of HUD
formula determinations is an allowable cost for IHBG funds.
(d) An Indian tribe or TDHE that seeks to appeal data or a HUD
formula determination, and has data in its possession that are
acceptable to HUD, may submit the data and proper documentation to HUD.
Data used to challenge data contained in the U.S. Census must meet the
requirements described in Sec. 1000.330(a). Further, in order for a
census challenge to be considered for the upcoming fiscal year
allocation, documentation must be submitted by March 30th.
[[Page 20026]]
(e) HUD shall respond to all challenges or appeals not later than
45 days after receipt and either approve or deny the validity of such
data or challenge to a HUD formula determination in writing, setting
forth the reasons for its decision. Pursuant to HUD's action, the
following shall apply:
(1) In the event HUD challenges the validity of the submitted data,
the Indian tribe or TDHE and HUD shall attempt in good faith to resolve
any discrepancies so that such data may be included in the formula
allocation.
(2) Should the Indian tribe or TDHE and HUD be unable to resolve
any discrepancy within 30 calendar days of receipt of HUD's denial, the
Indian tribe or TDHE may request reconsideration of HUD's denial in
writing. The request shall set forth justification for reconsideration.
(3) Within 20 calendar days of receiving the request, HUD shall
reconsider the Indian tribe or TDHE's submission and either affirm or
reverse its initial decision in writing, setting forth HUD's reasons
for the decision.
(4) Pursuant to resolution of the dispute:
(i) If the Indian tribe or TDHE prevails, an adjustment to the
Indian tribe's or TDHE's subsequent allocation for the subsequent year
shall be made retroactive to include only the disputed fiscal year(s);
or
(ii) If HUD prevails, it shall issue a written decision denying the
Indian tribe or TDHE's petition for reconsideration, which shall
constitute final agency action.
(f) In the event HUD questions that the data contained in the
formula does not accurately represent the Indian tribe's need, HUD
shall request the Indian tribe to submit supporting documentation to
justify the data and to provide a commitment to serve the population
indicated in the geographic area.
0
11. Revise Sec. 1000.340 to read as follows:
Sec. 1000.340 What if an Indian tribe is allocated less funding under
the IHBG Formula than it received in Fiscal Year (FY) 1996 for
operating subsidy and modernization?
(a) If an Indian tribe is allocated less funding under the
modernization allocation of the formula pursuant to Sec.
1000.316(b)(2) than the calculation of the number of Low Rent, Mutual
Help, and Turnkey III FCAS units multiplied by the national per-unit
amount of allocation for FY 1996 modernization multiplied by an
adjustment factor for inflation, the Indian tribe's modernization
allocation is calculated under Sec. 1000.316(b)(1). The remaining
grants are adjusted to keep the allocation within available
appropriations.
(b) If an Indian tribe is allocated less funding under the formula
than an IHA received on its behalf in FY 1996 for operating subsidy and
modernization, its grant is increased to the amount received in FY 1996
for operating subsidy and modernization. The remaining grants are
adjusted to keep the allocation within available appropriations.
0
12. Revise Appendices A and B to part 1000 to read as follows:
APPENDIX A TO PART 1000--INDIAN HOUSING BLOCK GRANT FORMULA MECHANICS
This appendix shows the different components of the IHBG
formula. The following text explains how each component of the IHBG
formula is calculated.
1. The Indian Housing Block Grant (IHBG) formula is calculated
by initially determining the amount a tribe receives for Formula
Current Assisted Stock (FCAS) (See Sec. Sec. 1000.310 and
1000.312). FCAS funding is comprised of two components, Operating
subsidy (Sec. 1000.316(a)) and Modernization (Sec. 1000.316(b)).
2. The operating subsidy component is calculated based on the
national per unit subsidy (Sec. 1000.302 National Per Unit Subsidy)
for operations for each of the following types of programs--Low
Rent, Homeownership (Mutual Help and Turnkey III), and Section 8. A
tribe's total count of units in each of the above categories is
multiplied by the relevant national per unit subsidy. That amount is
summed and multiplied by a local area cost adjustment factor for
management.
3. The local area cost adjustment factor for management is
called AELFMR. AELFMR is the greater of a tribe's Allowable Expense
Level (AEL) or Fair Market Rent (FMR) factor, where the AEL and FMR
factors are determined by dividing each tribe's AEL and FMR by their
respective national weighted average (weighted on the unadjusted
allocation under FCAS operating subsidy). The adjustment made to the
FCAS component of the IHBG formula is then the new AELFMR factor
divided by the national weighted average of the AELFMR (See Sec.
1000.320).
4. The Modernization component is determined using two methods
depending on the number of public housing units that a tribe's
housing authority operated prior to NAHASDA.
(a) For Indian tribes with an Indian housing authority (IHA)
that owned or operated 250 or more public housing units on October
1, 1997, the modernization allocation equals the number of Low Rent,
Mutual Help, and Turnkey III FCAS units multiplied by the national
per-unit amount of allocation for FY 1996 modernization multiplied
by an adjustment factor for inflation (See Sec. 1000.316(b)(1)).
(b) For Indian tribes with an IHA that owned or operated fewer
than 250 units on October 1, 1997, the modernization allocation
equals the average amount of funds received under the assistance
program authorized by section 14 of the 1937 Act (not including
funds provided as emergency assistance) for FYs 1992 through 1997
(See Sec. 1000.316(b)(2)).
(c) The modernization amount is then multiplied times a local
area cost adjustment factor for construction, the TDC. The
construction adjustment factor is the TDC for the area divided by
the weighted national average for TDC (weighted on the unadjusted
allocation for modernization (See Sec. 1000.320).
5. After determining the total amount allocated under FCAS for
each tribe, it is summed for every tribe. The national total amount
for FCAS is subtracted from the remaining available funds to
determine the total amount to be allocated under the Need component
of the IHBG formula.
6. The Need component of the IHBG formula is calculated using
seven factors using data from sources defined in Sec. 1000.330
weighted as set forth in Sec. 1000.324 as follows: 22 percent of
the allocated funds will be allocated by a tribe's share of the
total Native American households paying more than 50 percent of
their income for housing and living in the Indian tribe's formula
area, 25 percent of the funds allocated under Need will be allocated
by a tribe's share of the total Native American households
overcrowded and/or without kitchen or plumbing living in their
formula area, and so on. The current national totals for each of the
need variables will be distributed annually by HUD with the Formula
Response Form (See Sec. 1000.332). The national totals will change
as tribes update information about their formula area and data for
individual areas are challenged (See Sec. Sec. 1000.334 and
1000.336). The Need component is then calculated by multiplying a
tribe's share of housing need by a local area cost adjustment factor
for construction (the TDC) (See Sec. 1000.338).
7. Tribes that receive less than $200,000 under the FCAS
component of the IHBG formula and that can demonstrate the presence
of any households at or below 80 percent of median income are
guaranteed to receive no less than a specified minimum under the
Needs component of the formula. The specified minimum amount shall
equal .007826 percent of the available appropriations for that FY
after set asides. The increase in funding for the tribes receiving
the minimum need amount is funded by a reallocation from other
tribes whose needs allocation exceeds the minimum need amount. This
is necessary in order to keep the total allocation within the
appropriation level (See Sec. 1000.328).
8. A tribe's preliminary grant is calculated by summing the FCAS
and Need allocations. This amount is subject to two final
adjustments:
(a) If an Indian tribe with an IHA that owned or operated fewer
than 250 units on October 1, 1997, is allocated less funding under
the averaging method (Sec. 1000.316(b)(2)) than the calculation of
the number of Low Rent, Mutual Help, and Turnkey III FCAS multiplied
by the national
[[Page 20027]]
per-unit amount of allocation for FY 1996 modernization multiplied
by an adjustment factor for inflation, the Indian tribe's
modernization allocation is calculated under Sec. 1000.316(b)(1).
The grants of all other tribes are proportionately adjusted to keep
the allocation within available appropriations.
(b) Next, this preliminary grant is compared to how much a tribe
received in FY 1996 for operating subsidy and modernization. If a
tribe received more in FY 1996 for operating subsidy and
modernization than it does under the IHBG formula allocation, its
grant is adjusted up to the FY 1996 level (See Sec. 1000.340(b)).
Indian tribes receiving more under the IHBG formula than in FY 1996
``pay'' for the upward adjustment for the other tribes by having
their own grants adjusted downward. Because many more Indian tribes
have grant amounts above the FY 1996 level than those with grants
below the FY 1996 level, each tribe contributes very little,
relative to their total grant, to fund the adjustment.
Appendix B to Part 1000--IHBG Block Grant Formula Mechanisms
1. The Indian Housing Block Grant (IHBG) formula consists of two
components, the Formula Current Assisted Stock (FCAS) and Need.
Therefore, the formula allocation before adjusting for the statutory
requirement that a tribe's minimum grant will not be less than the
tribe's Fiscal Year (FY) 1996 Operating Subsidy and Modernization
funding, can be represented by:
unadjGRANT = FCAS + NEED.
2. NAHASDA requires that the FCAS be provided for before
allocating funds based on need. Therefore, FCAS must be calculated
first. FCAS consists of two components, Operating Subsidy (OPSUB)
and Modernization (MOD), such that:
FCAS = OPSUB + MOD.
3. OPSUB consists of three main parts: number of Low-Rent units;
number of Section 8 units; and number of Mutual Help and Turnkey III
units. Each of these main parts are adjusted by the national per
unit subsidy (Sec. 1000.302 National Per Unit Subsidy) and local
area costs as reflected by the greater of the AEL factor or FMR
factor. The AEL factor is defined in Sec. 1000.302 as the relative
difference between a local area Allowable Expense Level (AEL) and
the national weighted average for AEL (NAEL). The FMR factor is also
defined in Sec. 1000.302 as the relative difference between a local
area Fair Market Rent (FMR) and the national weighted average for
FMR.
OPSUB = [LR * LRSUB + (MH+TK) * HOSUB + S8 * S8SUB ] * AELFMR
Where:
LR = number of Low-Rent units.
LRSUB = national per unit subsidy for Low-Rent units ($2,440*INF).
MH+TK = number of Mutual Help and Turnkey III units.
HOSUB = national per unit subsidy for Homeownership units
($528*INF).
S8 = number of Section 8 units.
S8SUB = national per unit subsidy for Section 8 units =
($3,625*INF).
AELFMR = greater of AEL Factor or FMR Factor weighted by national
average of AEL Factor and FRM Factor.
AEL FACTOR = AEL/NAEL.
AEL = local Allowable Expense Level.
NAEL = national weighted average for AEL.
FMR FACTOR = FMR/NFMR.
FMR = local Fair Market Rent.
NFMR = national weighted average for FMR.
NAELFMR = national weighted average for greater of AEL Factor or FMR
factor.
Where:
INF = adjustment for inflation since 1995, as determined by the
Consumer Price Index for housing.
4. The modernization component, MOD, is calculated by two
different methods, depending on whether the tribe had an Indian
housing authority (IHA) that owned or operated more than 250 public
housing units on October 1, 1997.
a. MOD1996 is calculated for all tribes and considers the number
of Low-Rent, and Mutual Help and Turnkey III FCAS units. Each of
these is adjusted by the national per-unit modernization amount in
1996 adjusted for inflation.
MOD1996 = [LR + MH+TK] *MODPU *INF.
Where:
LR = number of Low-Rent units.
MH = number of Mutual Help units.
TK = number of Turnkey III units.
MODPU = national per-unit amount for modernization in 1996 ($1,974).
INF = adjustment for inflation since 1995, as determined by the
Consumer Price Index for housing.
b. MODAVG is calculated only for tribes that had an IHA that
owned or operated fewer than 250 public housing units on October 1,
1997, as the annual average amount they received for FYs 1992
through 1997 under the assistance program authorized by section 14
of the 1937 Act (not including emergency assistance).
MODAVG = Average (FY 1992 to FY 1997) amount received by Section 14
of the 1937 Act.
c. For Indian tribes with an IHA that owned or operated 250 or
more public housing units on October 1, 1997, the modernization
calculation is based on MOD1996, adjusted for local area costs:
MOD = MOD1996* TDC/NTDC.
Where:
TDC = Local Total Development Costs defined in Sec. 1000.302.
NTDC = weighted national average for TDC of tribes with CAS.
d. For Indian tribes with an IHA that owned or operated fewer
than 250 units on October 1, 1997, the modernization calculation is
based on MODAVG, adjusted for local area costs.
MOD = MODAVG* TDC/NTDC.
5. Now that calculation for FCAS is complete, funds available
for allocation using the Need component of the formula can be
determined:
NEED FUNDS = APPROPRIATION - NATCAS.
Where:
APPROPRIATION = dollars provided for distribution through the IHBG
formula.
NATCAS = National summation of FCAS allocation for all tribes.
6. Two iterations are necessary to compute the final Need
allocation. The first iteration consists of seven weighted criteria
that allocate need funds based on a tribe's population and housing
data. This allocation is then adjusted for local area cost
differences based on TDC relative to the national weighted average.
This can be represented by:
NEED1 = [(0.11 * PER / NPER) + (0.13 * HHLE30 / NHHLE30) + (0.07 *
HH30T50 / NHH30T50) + (0.07 * HH50T80 / NHH50T80) + (0.25 * OCRPR /
NOCRPR) + (0.22 * SCBTOT / NSCBTOT) + (0.15 * HOUSHOR / NHOUSHOR)] *
NEED FUNDS * (TDC/NATDC).
Where:
PER = American Indian and Alaskan Native (AIAN) persons.
NPER = national total of PER.
HHLE30 = AIAN households less than 30% of median income.
NHHLE30 = national total of HHLE30.
HH30T50 = AIAN households 30% to 50% of median income.
NHH30T50 = national total of HH30T50.
HH50T80 = AIAN households 50% to 80% of median income.
NHH50T80 = national total of HH50T80.
OCRPR = AIAN households crowded or without complete kitchen or
plumbing.
NOCRPR = national total of OCRPR.
SCBTOT = AIAN households paying more than 50% of their income for
housing.
NSCBTOT = national total SCBTOT.
HOUSHOR = AIAN households with an annual income less than or equal
to 80% of formula median income reduced by the combination of
current assisted stock and units developed under NAHASDA.
NHOUSHOR = national total of HOUSHOR.
TDC = Local Total Development Costs defined in Sec. 1000.302.
NATDC = weighted national average for TDC of tribes with need.
7. The second iteration in computing the Need allocation
consists of adjusting the Need allocation computed above to take
into account the minimum needs provision. Tribes that receive less
than $200,000 under the FCAS component of the IHBG formula and that
can demonstrate the presence of any households at or below 80
percent of median income are guaranteed to receive no less than a
specified minimum amount under the Needs component of the formula.
The specified minimum amount shall equal .007826 percent of the
available appropriations for that fiscal year after set asides.
MINFUNDING = APPROPRIATION* .00007826
If in the first Need computation, a qualified tribe is allocated
less than the minimum Needs funding level, its Need allocation will
go up. Other tribes whose Needs allocations are greater than the
minimum needs amount will have their allocations adjusted downward
to keep the total allocation within available funds:
[[Page 20028]]
If NEED1 < MINFUNDING and FCAS < $200,000 and (HHLE30 + HH30T50 +
HH50T80) > 0, then NEED 2 = MINFUNDING.
If NEED1 > = MINFUNDING, then NEED2 = NEED1 - {UNDERMIN$ * [(NEED1 -
MINFUNDING) / OVERMIN$]{time} .
Where:
MINFUNDING = minimum needs amount
UNDERMIN$ = for all tribes qualifying for an increase under the
minimum needs provision, sum of the differences between MINFUNDING
and NEED1.
OVERMIN$ = for all tribes with needs allocations larger than the
minimum needs amount, the sum of the difference between NEED1 and
MINFUNDING.
8. The next step is to compute a preliminary unadjusted grant
allocation (unadjGRANT) that will serve as the basis for further
adjustments called for in Sec. 1000.340.
unadjGRANT = FCAS + NEED, where both FCAS and NEED are calculated
above.
9. As required by Sec. 1000.340(a), if an Indian tribe with an
IHA that owned or operated fewer than 250 units on October 1, 1997,
is allocated less funding under the averaging method (Sec.
1000.316(b)(2)) than the calculation of the number of Low-Rent,
Mutual Help, and Turnkey III FCAS is multiplied by the national per-
unit amount of allocation for FY 1996 modernization multiplied by an
adjustment factor for inflation, then, the Indian tribe's
modernization allocation is calculated under Sec. 1000.316(b)(1).
The grants of all other tribes are proportionately adjusted to keep
the allocation within available appropriations.
If MODAVG < MOD1996,
then GRANT1 = unadjGRANT + (MOD1996*(TDC/NTDC)) - (MODAVG* (TDC/
NTDC)).
Otherwise,
GRANT1 = unadjGRANT - [UNDERMOD$ * (unadjGRANT / OVERMODGRANT$)]
Where:
UNDERMOD$ = for all tribes qualifying for an increase to
modernization, the sum of the differences between local cost
adjusted MOD1996 and local cost adjusted MODAVG.
OVERMODGRANT$ = for all tribes not qualifying for an increase to
modernization, the sum of their unadjusted grant amounts.
10. As called for in Sec. 1000.340(b), a final adjustment
occurs to ensure that no tribe is allocated less funding under the
formula than an IHA received on its behalf in FY 1996 for operating
subsidy and modernization. Indian tribes receiving more under the
IHBG formula than in FY 1996 ``pay'' for the upward adjustment for
the other tribes by having their grants adjusted downward, so long
as the adjustment does not reduce their grant below the minimum
funding amount.
Let TEST = GRANT1 - OPMOD96.
If TEST is less than 0, then GRANT2 = OPMOD96.
If TEST is greater than 0 and GRANT1 > MINFUNDING, then GRANT2 =
GRANT1 - [UNDER1996 * (TEST / OVER1996)].
Where:
OPMOD96 = funding received by tribe in FY 1996 for Operating Subsidy
and Modernization.
UNDER1996 = for all tribes with TEST less than 0, sum of the
absolute value of TEST.
OVER1996 = for all tribes with TEST greater than 0, sum of TEST.
GRANT2 is the approximate grant amount in any given year for any
given tribe.
Dated: April 12, 2007.
Paula O. Blunt,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. E7-7470 Filed 4-19-07; 8:45 am]
BILLING CODE 4210-67-P
