[Federal Register: June 8, 2007 (Volume 72, Number 110)]
[Proposed Rules]
[Page 31943-31945]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08jn07-25]
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Part III
Department of Housing and Urban Development
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24 CFR Part 1000
Use of Indian Housing Block Grant Funds for Rental Assistance in Low-
Income Housing Tax Credit Projects; Proposed Rule
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 1000
[Docket No. FR-4999-P-01]
RIN 2577-AC61
Use of Indian Housing Block Grant Funds for Rental Assistance in
Low-Income Housing Tax Credit Projects
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend the Indian Housing Block Grant
(IHBG) program regulations to specify the conditions under which IHBG
funds may be used for project-based or tenant-based rental assistance.
The proposed rule clarifies that such rental assistance may be provided
in a manner consistent with assistance provided under section 8 of the
United States Housing Act of 1937 on behalf of a tenant receiving
assistance under the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA).
DATES: Comment Due Date: August 7, 2007.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule to the Regulations Division, Office of General Counsel,
Department of Housing and Urban Development, 451 Seventh Street, SW.,
Room 10276, Washington, DC 20410-0500. Interested persons also may
submit comments electronically through the Federal eRulemaking Portal
at http://www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically so that HUD can make them immediately available
to the public. Commenters should follow the instructions provided on
that site to submit comments electronically. Facsimile (FAX) comments
are not acceptable. In all cases, communications must refer to the
docket number and title. All comments and communications submitted to
HUD will be available for public inspection and copying between 8 a.m.
and 5 p.m. weekdays at the above address. Due to security measures at
the HUD Headquarters building, an advance appointment to review the
public comments must be scheduled by calling the Regulations Division
at (202) 708-3055 (this is not a toll-free number). Copies of all
comments submitted are available for inspection and downloading at
http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Deborah Lalancette, Director, Office
of Grants Management, Office of Native American Programs, United States
Department of Housing and Urban Development, 1670 Broadway, 23rd Floor,
Denver, CO 80202-4801; telephone (303) 675-1625 (this is not a toll-
free number). Persons with hearing or speech impairments may access
this number through TTY by calling the toll-free Federal Information
Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
The Native American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) changed the way that housing
assistance is provided to Native Americans. NAHASDA eliminated several
separate assistance programs and replaced them with a single block
grant program, known as the Indian Housing Block Grant (IHBG) program.
NAHASDA and its implementing regulations recognize tribal self-
determination and self-governance while establishing reasonable
standards of accountability. The regulations governing the IHBG program
are located in part 1000 of HUD's regulations in title 24 of the Code
of Federal Regulations.
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 using an
allocation formula, developed with the active participation of Indian
tribes and using negotiated rulemaking procedures. The IHBG allocation
formula is based on factors that reflect the need of Indian tribes for
affordable housing activities. 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 each 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. An Indian
tribe (or its tribally designated housing entity (TDHE)) may use its
IHBG funds for a wide range of affordable housing activities, including
the provision of project-based or tenant-based rental assistance for
eligible families.
II. Low-Income Housing Tax Credits
In 1986, Congress amended the Internal Revenue Code to create the
Low Income Housing Tax Credit (LIHTC) (see 26 U.S.C. 42), a tax
incentive to promote the development of affordable rental housing.
These tax credits encourage investment in affordable housing by
providing developers a source of equity investment--an ownership
interest in the housing project--in exchange for an agreement to limit
rents to a level that would be affordable to low-income households.
State housing agencies competitively allocate the credits to private
developers who acquire, construct, or rehabilitate affordable rental
housing.
Eligible projects receive Federal income tax credits over a 10-year
period using a formula that, in part, takes into account certain
eligible costs called ``eligible basis.'' Generally, Federal grants
used with respect to a building or for its operation thereof result in
a dollar-for-dollar decrease in eligible basis. However, the Internal
Revenue Service (IRS) has recognized that certain types of Federal
rental assistance payments are not Federal grants that require a
reduction in a building's eligible basis. They include payments made
pursuant to section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f) (Section 8) and comparable programs or methods of rental
assistance designated by the Secretary of the Treasury by publication
in the Federal Register or in the Internal Revenue Bulletin. (See the
IRS regulations at 26 CFR 1.42-16(b).) Section 8 is the statutory
authority for HUD's principal rental assistance programs--the tenant-
based Housing Choice Voucher program (with implementing regulations at
24 CFR part 982) and the Project-Based Voucher program (with
implementing regulations at 24 CFR part 983).
HUD rental assistance programs (such as the project-based voucher
program) address the requirements that apply when such program rental
assistance is provided to tenants residing in LIHTC projects. However,
the IHBG program regulations are silent with regard to the use of IHBG
rental assistance in these projects. HUD has received requests from
several Indian tribes and TDHEs that are IHBG recipients and wish to
use their IHBG funds for LIHTC projects. Specifically, these requests
came from eight IHBG recipients as well as one Native American housing
association representing 32 Indian tribes, all requesting that HUD
address the inability to use IHBG grants in LIHTC projects without
penalty (i.e., without the amount of the grant coming out of a
building's eligible basis). This proposed rule would address these
tribal requests.
[[Page 31945]]
III. This Proposed Rule
The proposed rule would add a new Sec. 1000.103 to specify the
conditions under which IHBG funds may be used for tenant-based or
project-based rental assistance. Proposed Sec. 1000.103 would clarify
that IHBG funds may be used for project-based or tenant-based rental
assistance. Further, the proposed rule clarifies that IHBG funds may be
used for project-based or tenant-based rental assistance that is
administered in a manner consistent with Section 8. IHBG funds used for
project-based or tenant-based rental assistance must comply with the
requirements of NAHASDA and 24 CFR part 1000. Only the Secretary of the
Treasury may make a determination that project-based or tenant-based
rental assistance complies with IRS regulations at 26 CFR 1.42-16(b)
and, therefore, will not reduce the building's eligible basis. This
proposed rule is necessary in order to begin the process of requesting
IRS approval for the combination of IHBG funds with LIHTCs. This
proposed rule, when promulgated in final form, will allow for such
determination to be made. This proposed rule would not limit the range
of eligible activities that an Indian tribe or TDHE may undertake. It
merely will clarify one permissible use of IHBG funds.
IV. Findings and Certifications
Executive Order 12866, 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 economically
significant, as provided in section 3(f)(1) of the Order). Any changes
made to the rule subsequent to its submission to OMB are identified in
the docket file, which 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 appointment to review the docket file by
calling the Regulations Divisions at (202) 708-3055 (this is not a
toll-free number). Persons with hearing or speech impairments may
access this number through TTY by calling the toll-free Federal
Information Relay Service at (800) 877-8339.
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
clarify that IHBG funds may be used for project-based or tenant-based
rental assistance that is provided in a manner consistent with
assistance provided under section 8 of the United States Housing Act of
1937 on behalf of a tenant receiving assistance under NAHASDA. This
rule would not impose new requirements on IHBG program participants.
Accordingly, the undersigned certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
Notwithstanding HUD's determination that this rule will not have a
significant economic impact on a substantial number of small entities,
HUD specifically invites comments regarding less burdensome
alternatives to this rule that will meet HUD's objectives as described
in 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,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant
Impact is available for public inspection between the hours of 8 a.m.
and 5 p.m. weekdays in the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room 10276, Washington, DC 20410-0500. Due to security
measures at the HUD Headquarters building, please schedule an
appointment to review the rule docket file by calling the Regulations
Division at (202) 708-3055 (this is not a toll-free number).
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits, to the
extent practicable and permitted by law, an agency from promulgating a
regulation that has federalism implications and either imposes
substantial direct compliance costs on state and local governments and
is not required by statute, or preempts state law, unless the relevant
requirements of section 6 of the Executive Order are met. This rule
does not have federalism implications and does not impose substantial
direct compliance costs on state and local governments or preempt state
law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for Federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments, and on the private sector. This rule would not
impose any Federal mandate on any State, local, or tribal government,
or on the private sector, within the meaning of UMRA.
Catalog of Federal Domestic Assistance.
The Catalog of Federal Domestic Assistance number applicable to the
program affected by this rule is 14.862.
List of Subjects in 24 CFR Part 1000
Aged, community development block grants, Grant programs--housing
and community development, Grant programs--Indians, Indians,
Individuals with disabilities, Public housing, Reporting and
recordkeeping requirements.
For the reasons described in the preamble, HUD proposes to amend 24
CFR part 1000 to read as follows:
PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES
1. The authority citation for part 1000 continues to read as
follows:
Authority: 25 U.S.C. 1401 et seq. and 42 U.S.C. 3535(d).
2. Add Sec. 1000.103 to read as follows:
Sec. 1000.103 How may IHBG funds be used for tenant-based or project-
based rental assistance?
(a) IHBG funds may be used for project-based or tenant-based rental
assistance.
(b) IHBG funds may be used for project-based or tenant-based rental
assistance that is provided in a manner consistent with section 8 of
the United States Housing Act of 1937 (42 U.S.C. 1437f).
(c) IHBG funds used for project-based or tenant-based rental
assistance must comply with the requirements of NAHASDA and this part.
Dated: May 3, 2007.
Orlando J. Cabrera,
Assistant Secretary for Public and Indian Housing.
[FR Doc. E7-11054 Filed 6-7-07; 8:45 am]
BILLING CODE 4210-67-P
