4076 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

[Docket No. FR–4170–N–11]

RIN: 2577–AB74

Indian Housing Block Grant Program—

Revised Notice of Transition

Requirements

AGENCY: Office of the Assistant

Secretary for Public and Indian

Housing, HUD.

ACTION: Revised notice of transition

requirements.

SUMMARY: On January 27, 1997 (62 FR

3972), HUD published for public

comment a notice to implement that

part of section 106 of the Native

American Housing Assistance and SelfDetermination Act of 1996 (NAHASDA)

which requires HUD to establish the

requirements necessary to provide for

the transition from the provision of

assistance for Indian tribes and Indian

housing authorities under the United

States Housing Act of 1937 and other

related provisions of law to the

provision of assistance in accordance

with NAHASDA. The January 27, 1997

notice also provided notice of the

negotiated rulemaking process for the

development of regulations necessary to

implement NAHASDA, and requested

nominations for membership on the

negotiated rulemaking committee. This

notice addresses the public comments

received on the January 27, 1997

transition requirements, and provides

additional transition guidance and

requirements.

DATES: The revised transition

requirements are effective upon

publication.

IHP submission date: No earlier than

the publication date of the final

regulations implementing NAHASDA

and no later than July 1, 1998.

Effective date of NAHASDA section

701(c): November 3, 1998.

FOR FURTHER INFORMATION CONTACT:

Deborah Lalancette, National Office of

Native American Programs, Department

of Housing and Urban Development,

1999 Broadway, Suite 3390, Denver, CO;

telephone (303) 675–1600 (this is not a

toll-free number). Hearing or speechimpaired individuals may access this

number via TTY by calling the toll-free

Federal Information Relay Service at 1–

800–877–8339.

Indian tribes or tribally designated

housing entities with specific questions

relating to the preparation of Indian

Housing Plans as required by this notice

may call their Area Office of Native

American Programs for assistance in

resolving their questions. The telephone

numbers and addresses for these Offices

appear in Question 7 of this notice.

SUPPLEMENTARY INFORMATION:

I. Statutory Background

The Native American Housing

Assistance and Self-Determination Act

of 1996 (Pub. L. 104–330, approved

October 26,1996) (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.

Beginning on October 1, 1997, the first

day of the 1998 fiscal year (FY), a single

block grant program replaced assistance

previously authorized under:

1. The United States Housing Act of

1937 (1937 Act);

2. The Indian Housing Child

Development Program under Section

518 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 CranstonGonzalez 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

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

from 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. Further, section

106(b)(2)(A) of NAHASDA provides that

all regulations required under

NAHASDA be issued in accordance

with the procedures of the Negotiated

Rulemaking Act of 1990 (5 U.S.C. 561–

570). Accordingly, the Secretary of HUD

established the Native American

Housing Assistance & SelfDetermination Negotiated Rulemaking

Committee to negotiate and develop a

proposed rule implementing

NAHASDA. This proposed rule was

published on July 2, 1997 (62 FR

35718).

II. The January 27, 1997 Transition

Notice and the July 2, 1997 Proposed

Rule

On January 27, 1997 (62 FR 3972),

HUD published the transition notice

required by section 106(a) of

NAHASDA. As directed by section

106(a), the January 27, 1997 notice

requested public comment on the

transition requirements and invited

nominations for membership on the

negotiated rulemaking committee. The

January 27, 1997 notice described in

detail the transition requirements and

the establishment of the negotiated

rulemaking committee.

The public comment period on the

transition notice expired on February

27, 1997. Twelve comments were

submitted on the transition

requirements. Additionally, sixteen

nominations for negotiated rulemaking

committee membership were received.

In several cases, the public comments

raised issues more appropriately

addressed in the proposed rule

implementing NAHASDA, rather than

in the transition requirements.

Accordingly, the proposed rule

addresses many of the public comments

received on the January 27, 1997

transition notice.

Section III. of this notice presents a

summary of the significant issues raised

by the public commenters on the

January 27, 1997 transition

requirements and HUD’s responses to

these comments. Where appropriate,

readers are referred to the provisions of

the July 2, 1997 proposed rule that

address the issue raised by the

commenter.

The July 2, 1997 rule contains a

detailed description of the proposed

regulatory requirements and the

negotiated rulemaking process. The

public comment deadline on the

proposed rule was August 18, 1997. All

comments will be considered in the

development of the final rule.
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 4077

III. Discussion of Public Comments on

the January 27, 1997 Transition

Requirements

Indian Housing Plan Submission Date of

June 1, 1997 Is Not Reasonable

Comment. Eight of the commenters

objected to the June 1, 1997 IHP

submission deadline established by the

January 27, 1997 notice. The

commenters believed that this date

would not provide sufficient time for

relevant tribal input in the development

of the IHP. Specifically, it would not

have allowed housing authorities (HAs)

to adequately compile local and regional

data and develop a quality,

comprehensive housing plan.

Several of these commenters

suggested alternate IHP submission

dates. For example, five commenters

objected to the submission of an IHP

prior to the development of regulations

implementing NAHASDA. Three of the

commenters suggested that HUD extend

the IHP submission deadline to August

1, 1997. This date is based on section

103 of NAHASDA, which provides HUD

with a 60-day period to review an IHP

submitted by a tribe or its TDHE. Since

NAHASDA becomes effective on

October 1, 1997, this alternate August

date would provide HUD with a 60-day

review period prior to the statute’s

effective date.

Response. HUD has addressed the

concerns raised by these commenters.

On February 24, 1997 (62 FR 8258),

HUD published a notice in the Federal

Register extending the IHP submission

deadline to November 3, 1997. With the

publication of the proposed rule, many

commenters indicated that the deadline

did not provide sufficient time to

prepare an IHP. Also, it is not expected

the regulations implementing

NAHASDA will be effective by

November 3, 1997. Therefore, it is

unreasonable to expect a recipient to

submit a plan prior to publication date

of the program regulations.

Based on the above, this transition

notice is establishing new IHP

submission dates for Fiscal Year 1998

only. An IHP can be submitted no

earlier than the publication date of the

final regulations implementing

NAHASDA and no later than July 1,

1998. The July 1, 1998, date is necessary

in order to provide for a 60-day review

period by the Office of Native American

Program (ONAP) field staff and

reservation of funds prior to September

30, 1998. The final regulations will

establish IHP submission dates for all

future years.

October 1, 1997 Implementation Date is

Premature

Section 107 of NAHASDA states that

‘‘[e]xcept as otherwise expressly

provided in this Act, this

Act * * * shall take effect on October

1, 1997.’’ Four of the commenters

expressed concern about the short

statutory deadline for the

implementation of NAHASDA. The

commenters believe that additional time

is necessary for the successful

implementation of this new program.

One of these commenters suggested

that HUD use the waiver authority

granted in section 101(b)(2) of

NAHASDA to waive the requirement for

an IHP submission in FY 1998, in order

to permit HUD and affected Indian

tribes adequate time to develop

comprehensive final regulations

implementing NAHASDA. This

commenter also suggested that the

Negotiated Rulemaking Committee

develop interim regulations to put in

place for FY 1998 to guide tribes in the

administration of block grants during

this interim period, rather than racing to

complete regulations by October 1,

1997.

Response. The Negotiated Rulemaking

Committee has developed a work

schedule which it believes provides for

the effective implementation of

NAHASDA in a timely manner.

IHP Should Be Format Driven Rather

Than Forms Driven

Comment. One commenter urged that

HUD not implement the IHP

requirement by prescribing a series of

forms. The commenter believes that a

forms driven approach will stifle

innovation and increase administrative

burden. This commenter fears that

beneficial information might be omitted

from the IHP if the tribe or its TDHE is

unable to make it fit into a prescribed

HUD form. Further, each planning

innovation could potentially require an

updated or new form. Accordingly, the

commenter suggested that HUD

maximize the flexibility available to

tribes and their TDHEs by merely

requiring that the IHP follow a certain

format.

Response. The Negotiated Rulemaking

Committee has considered this

comment in the development of the

proposed regulations. Interested readers

should refer to the proposed

requirements of 24 CFR part 1000,

subpart C, which would govern IHP

submission requirements.

Cooperation Agreement Requirement

May Prevent the Receipt of Funding

Comment. The January 27, 1997

notice requires that the IHP include a

certification that the tribe or its TDHE

has entered into, or has begun

negotiations to enter into, a local

cooperation agreement with the

governing body of the locality within

which any affordable housing to be

assisted with grant amounts will be

situated (62 FR 3974). One commenter

expressed concern that this requirement

may prevent a tribe or its TDHE from

receiving funding in situations where,

through no fault of the housing entity or

the affected tribal members, such an

agreement cannot be negotiated before

grant funds are needed to maintain

existing housing. The commenter noted

that the cooperation agreement

requirement is set forth in NAHASDA

section 101(b). The commenter

supported amendments to NAHASDA

which would permit HUD to waive the

requirement for a cooperation

agreement.

Response. The Negotiated Rulemaking

Committee considered this public

comment in the development of the

proposed rule. Interested readers should

consult the preamble to the July 2, 1997

proposed rule, which discusses the

requirement for a local cooperation

agreement and highlights this issue for

public comment (See 62 FR 35728).

Concerns Regarding Tax Exemption and

Reimbursement Requirements

Comment. The January 27, 1997

notice requires that the cooperation

agreement discussed above provide that

the tribe or its TDHE is exempt from all

real or personal property taxes. The

tribe or TDHE, however, must

compensate the relevant political

subdivision for the costs of providing

governmental services (such as police

and fire protection). Alternatively, if the

tribe or its TDHE is not tax exempt, the

cooperation agreement must provide for

the reimbursement of the tribe or TDHE.

The reimbursement amount will be

equal to the difference between the tax

amount and the costs of providing

governmental services. (62 FR 3974.)

One commenter expressed

reservations about this requirement. The

commenter noted that a tribe or its

TDHE may initiate a program to provide

off-reservation housing within its area of

operation. In these cases, a city council

or board of supervisors may have to

approve a cooperation agreement. The

commenter wrote that under State law

the council or board may lack the

statutory authority to exempt a

particular housing unit from real or

personal property taxes imposed by

state statute. If the combination of those

taxes exceed the cost of providing

governmental services, the affected city

or county may be unable or unwilling to
4078 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

remit the difference in cash or tax

remission.

The commenter suggested that HUD

address this concern by keeping the

requirement for a cooperation agreement

separate from the tax exemption

requirement. The commenter wrote that

NAHASDA treats the local cooperation

agreement requirement and the tax

exemption requirement in separate

subsections (See NAHASDA sections

101(c) and (d).) The certification

required in the January 27, 1997 notice

folds these requirements together,

making the tax exemption requirements

the contents of the cooperation

agreements. The commenter noted that

a cooperation agreement could address

subjects other than tax exemptions and

a tribe could comply with the tax

exemption requirements without

necessarily having an agreement with a

local jurisdiction.

Response. The Negotiated Rulemaking

Committee considered this comment in

the development of the July 2, 1997

proposed rule. Interested readers should

consult the preamble to the proposed

rule, which discusses the tax exemption

requirement and requests additional

public comment on this issue (See 62

FR 35728).

Negotiated Rulemaking Committee

Should Develop Budget Scenarios

Comment. Section 102 of NAHASDA

requires that the IHP include an

operating budget. One commenter

questioned the ability of a tribe or its

TDHE to develop a budget prior to FY

1998 appropriations. This commenter

recommended that the Negotiated

Rulemaking Committee develop budget

information to assist tribes and their

TDHEs in the preparation of the IHPs.

The commenter noted that IHAs have an

advantage in estimating probable

allocation amounts based on historical

allocations and awards. However, some

tribes (especially those currently served

by an umbrella housing authority)

considering whether or not to submit an

IHP may have very little to work from.

Response. The Negotiated Rulemaking

Committee considered this issue in the

development of the proposed rule.

Interested readers should refer to the

July 2, 1997 proposed regulatory

requirements. Further, section 302(d) of

NAHASDA speaks to funding levels

under the Act.

Transition Notice Should Establish

Streamlined IHP Requirements for

Small Tribes and Small TDHEs

Comment. Section 102(f)(1) of

NAHASDA permits the Secretary to

‘‘waive any [IHP]

requirements * * * that the Secretary

determines are burdensome or

unnecessary for’’ small tribes and small

TDHEs. One commenter questioned

why the transition notice had not

established such streamlined IHP

requirements for these tribes and

housing entities.

Response. The Negotiated Rulemaking

Committee considered this comment in

the development of the proposed rule.

The proposed rule provides that there

are no separate IHP requirements for

small Indian tribes. The IHP

requirements set forth in proposed 24

CFR part 1000, 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.

Transition Requirements Should

Reference Statutory Review Criteria

Comment. Section 103 of NAHASDA

provides that the Secretary of HUD shall

conduct a limited review of each Indian

housing plan to ensure that the plan

complies with the NAHASDA

submission requirements for IHPs. One

commenter believes that the January 27,

1997 notice should have provided an

interpretation of the phrase ‘‘limited

review.’’ Section 103 of NAHASDA also

establishes a 60-day deadline for review

of an IHP. Further, this section requires

that the Secretary of HUD provide an

explanation to the tribe or TDHE if the

Secretary finds the IHP deficient. The

commenter believes these statutory

review requirements should also have

been referenced in the January 27, 1997

notice.

Response. The Negotiated Rulemaking

Committee considered this comment in

the development of the proposed rule.

Interested readers should refer to

proposed 24 CFR part 1000, subpart C,

which would govern IHP submission

procedures (including the process for

HUD review of IHPs and IHP

amendments).

Concerns Regarding TDHE Designation

Comment. Section 102 of NAHASDA

provides that an IHP may be submitted

by an Indian tribe or, if specifically

empowered by the recognized tribal

government, by the TDHE. The January

27, 1997 notice provided that if ‘‘a tribe

does not specifically authorize an entity

to act as its tribally designated housing

entity, the tribe’s * * * HA under the

United States Housing Act of 1937, if

there is one on the date of NAHASDA’s

enactment, is the tribe’s [default]

TDHE’’ (62 FR 3973).

One of the commenters believes that

this provision violates the principle of

tribal self-governance. First, the

provision would delegate to the HA the

authority to administer the block grant

even if the tribe has not taken any

affirmative step to designate the HA as

its TDHE. Secondly, the January 27,

1997 notice fails to specify the

timeframe in which a tribe would lose

the important right to designate the

TDHE. Further, the provision is unclear

as to whether the IHP developed by an

HA acting as the default TDHE must

still be reviewed and approved by the

tribe.

Response. HUD agrees with the

commenter that the transition

requirements must reflect the right of

tribal self-governance and the unique

relationship between the government of

the United States and the governments

of Indian tribes. This notice makes the

appropriate revisions to the January 27,

1997 transition notice. The notice

clarifies that NAHASDA section 102(d)

requires that a tribe identify its TDHE,

if any, in its IHP. Specifically, when an

IHP is submitted on behalf of a tribe by

its TDHE, the IHP must contain a

certification by the recognized tribal

government that either (1) the tribe has

had an opportunity to review the IHP

and has authorized its submission by

the TDHE, or (2) the tribe has delegated

to the TDHE the authority to submit an

IHP without prior review by the tribe.

This certification must be included in

the IHP, even in those cases where the

tribe’s HA under the United States

Housing Act of 1937 is serving as the

tribe’s default TDHE.

‘‘Broad Discretion’’ of Section 204 of

NAHASDA Should Be Referenced

Comment. Section 204(a) of NAHASDA

provides:

(a) Subject to * * * [program

requirements] and the Indian housing plan

for an Indian tribe, the recipient for that tribe

shall have—

(1) the discretion to use grant amounts for

affordable housing activities through equity

investments, interest-bearing loans or

advances, noninterest bearing loans or

advances, interest subsidies, leveraging of

private investments, or any other form of

assistance that the Secretary has determined

to be consistent with the purposes of this

Act; and

(2) the right to establish the terms of

assistance.

One commenter interprets section

204(a) very broadly and recommended

that the January 27, 1997 notice be

amended to reference the ample

discretion it believes this statutory

provision grants to a tribe or its TDHE.
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 4079

Specifically, the commenter requested

that HUD clarify that grant recipients

have the discretion to use grant amounts

for affordable housing activities using

the alternatives expressly set out in

NAHASDA (e.g., equity investments,

interest-bearing loans or advances, etc.).

The commenter believes that only in the

case of ‘‘any other form of assistance’’

not expressly enumerated in section 204

does NAHASDA authorize the Secretary

to determine whether the assistance is

consistent with the purposes of the Act.

Response. The Negotiated Rulemaking

Committee considered this comment in

the development of the July 2, 1997

proposed rule. Interested readers should

refer to proposed 24 CFR part 1000,

subpart B, which would govern eligible

affordable housing activities.

Exceptions to Low-Income Eligibility

Requirements Should Be Identified

Comment. Section 201 of NAHASDA

provides that, except under certain

specified circumstances, ‘‘eligible

housing activities under this Act shall

be limited to low-income Indian

families on Indian reservations and

other Indian areas.’’ One of the

commenters suggested that the January

27, 1997 notice should be amended to

identify the exceptions to this general

rule.

Response. The Negotiated Rulemaking

Committee considered this comment in

the development of the proposed

regulations. Interested readers are

referred to proposed 24 CFR part 1000,

subpart B, which would govern eligible

affordable housing activities (including

the provision of assistance to non lowincome families).

Grant Agreement Process Should Be

Identified

Comment. One commenter believes

that the January 27, 1997 notice does

not seem to anticipate or require the

development of a grant agreement with

the tribes. The commenter worried that

the notice did not provide sufficient

information regarding the grant

agreements and the block grant process.

For example, the IHP must contain goals

and objectives to be accomplished

during 1998. The commenter wondered

whether these activities would be

binding on the tribe through the grant

agreement. The commenter

recommended that HUD identify the

grant agreement document or the

process of developing the grant

agreement as early as possible.

Response. The Negotiated Rulemaking

Committee considered this comment in

the development of the proposed rule.

Interested readers should consult the

proposed regulatory requirements for

additional detail.

IV. Revised Effective Date for Section

701(c) of NAHASDA

Section 701(c) of NAHASDA

establishes a new requirement for the

Indian Housing Loan Guarantee

Program (also called the Section 184

Program) under section 184 of the

Housing and Community Development

Act of 1992 (12 U.S.C. 1515z–13a).

Specifically, section 701(c) provides

that Indian tribes wishing to participate

in the Section 184 program must submit

an IHP that provides for the use of

Section 184 loan guarantees.

In order to prevent any interruption in

the processing of Section 184 loan

guarantees, HUD must establish an

effective date for section 701(c) that

takes into account the timeframes for

submission and HUD review of IHPs.

The January 27, 1997 transition notice

established an effective date of October

1, 1997 for section 701(c), based on an

IHP submission deadline of June 1,

1997. As described above, HUD is

extending the IHP deadline date to no

earlier than the publication date of the

final regulations implementing

NAHASDA and no later than July 1,

1998. This notice conforms the effective

date for section 701(c) to the IHP

deadline extension. Specifically, this

notice amends the January 27, 1997

notice by establishing an effective date

of November 3, 1998 for purposes of

NAHASDA section 701(c).

V. Technical Correction to the January

27, 1997 Notice

The January 27, 1997 notice

incorrectly designated the paragraph

listing the certifications as paragraph (d)

of Question and Answer 3. The

paragraph should have been designated

as paragraph (e). This notice makes the

necessary correction.

VI. Additional Transition Requirements

The January 27, 1997 notice stated

that HUD may also issue a supplemental

notice with additional transition

guidance and requirements.

Accordingly, additional guidance and

requirements for the treatment of

housing, activities and funding under

programs repealed by NAHASDA are

included in this notice. For the

convenience of all parties involved with

NAHASDA, this notice presents the

requirements of the January 27, 1997

notice, amended as discussed in

sections IV. and V. of this notice, above,

and the additional transition

requirements in a single, consolidated

document. The additional requirements

follow the same Question and Answer

format established in the January 27,

1997 notice and begin with Question 10

in this notice. If there are any

inconsistencies between the

requirements in this notice and any

final rule issued under NAHASDA, the

requirements of the rule shall govern.

VII. Findings and Certifications

Paperwork Reduction Act Statement

The information collection

requirements contained in this notice

have been approved by the Office of

Management and Budget under the

Paperwork Reduction Act of 1995 and

assigned control number 2577–0218. 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.

Regulatory Planning and Review

This notice has been reviewed in

accordance with Executive Order 12866,

issued by the President on September

30, 1993 (58 FR 51735, October 4, 1993).

Any changes to the notice resulting from

this review are available for public

inspection between 7:30 a.m. and 5:30

p.m. weekdays in the Office of the Rules

Docket Clerk, Office of General Counsel,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410–

0500.

Executive Order 12612, Federalism

The General Counsel has determined,

as the Designated Official for HUD

under section 6(a) of Executive Order

12612, Federalism, that the policies

contained in this notice will not have

substantial direct effects on states or

their political subdivisions, or the

relationship between the federal

government and the states, or on the

distribution of power and

responsibilities among the various

levels of government. The notice only

establishes temporary transition

requirements for the initial participation

by Indian tribes in a new statutory

program

Environmental Review

A Finding of No Significant Impact

with respect to the environment was

made at the time of development of the

January 27, 1997 notice in accordance

with HUD regulations at 24 CFR Part 50,

which implement section 102(2)(C) of

the National Environmental Policy Act

of 1969. That Finding of No Significant

Impact remains applicable to this notice

and is available for public inspection

between 7:30 a.m. and 5:30 p.m.

weekdays in the Office of the Rules

Docket Clerk, Office of General Counsel,
4080 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410–

0500.

Transition Requirements for the Native

American Housing Block Grant

Program

Question 1. How is funding made

available under NAHASDA?

Answer 1. Under NAHASDA, funding

is made available for affordable housing

activities on an annual basis, and is

distributed each fiscal year according to

an allocation formula on behalf of

Indian tribes who submit an Indian

Housing Plan (IHP) that is reviewed and

approved by HUD. Unlike other

programs, NAHASDA funds are not

awarded on a competitive basis in

which applications are given scores and

are then funded in rank order so that

only the highest scoring applications are

funded. Every tribe, or entity designated

by a tribe, that submits an IHP which

complies with the necessary

requirements is awarded a block grant

which is a share of the available funds.

The size of the share is determined by

the allocation formula. The award is

called a block grant because the

recipient receives a single ‘‘block’’ of

funds that may be used for any eligible

affordable housing activities in

accordance with the tribe’s IHP.

Question 2. Who may submit an IHP

to apply for a block grant?

Answer 2. An IHP may be submitted

by an Indian tribe or, if specifically

empowered by the recognized tribal

government, by the tribally designated

housing entity for the tribe. A tribally

designated housing entity (TDHE) is an

entity other than the tribal government

which is authorized by the Indian tribe

to receive the block grant amounts and

provide assistance according to the

requirements of NAHASDA.

NAHASDA section 102(d) requires

that a tribe identify its TDHE, if any, in

its IHP. Specifically, when an IHP is

submitted on behalf of a tribe by its

TDHE, the IHP must contain a

certification by the recognized tribal

government that either: (1) the tribe has

had an opportunity to review the IHP

and has authorized its submission by

the TDHE; or (2) the tribe has delegated

to the TDHE the authority to submit an

IHP without prior review by the tribe.

This certification must be included in

the IHP, even in those cases where the

tribe’s HA under the United States

Housing Act of 1937 is serving as the

tribe’s default TDHE.

An IHP submitted by a TDHE may

cover more than one Indian tribe, but

only if the IHP contains the certification

described in the paragraph above from

each tribe covered by the IHP. This

option provides additional flexibility by

permitting several tribes to agree to have

their affordable housing activities

administered by a single TDHE for

reasons of greater economy or increased

efficiency, or for any other reason.

Question 3. What information must be

included in an IHP?

Answer 3. Each IHP shall be in a form

prescribed by HUD and every IHP

consists of two parts, a 5-year plan and

a 1-year plan, each of which is

discussed separately below. The

NAHASDA final rule may also contain

additional plan requirements.

The 5-year plan must contain the

following information for the 5-year

period beginning with the fiscal year

(FY) for which the plan is submitted (for

the first IHP submission under the

transition requirements of this notice,

the five fiscal years covered are 1998,

1999, 2000, 2001 and 2002):

(a) Mission Statement—A general

statement of the mission of the Indian

tribe to serve the housing needs of the

low-income families in the jurisdiction

of the Indian tribe during the 5-year

period.

(b) Goals and Objectives—A statement

of the goals and objectives of the Indian

tribe to enable the tribe to serve the

needs identified in the Mission

Statement during the 5-year period.

(c) Activities Plan—An overview of

the housing activities, including the

NAHASDA-eligible affordable housing

activities, planned during the 5-year

period with an analysis of the manner

in which the activities will enable the

tribe to meet its mission, goals, and

objectives.

The 1-year plan must contain the

following information relating to the

upcoming fiscal year (FY 1998 for

purposes of the first IHP submission

under the transition requirements of this

notice):

(a) Goals and Objectives—A statement

of the goals and objectives to be

accomplished during FY 1998,

including the NAHASDA-eligible

affordable housing activities.

(b) Statement of Needs—A statement

of the housing needs of the low-income

Indian families residing in the

jurisdiction of the Indian tribe and the

means by which such needs will be

addressed during FY 1998, including:

(1) A description of the estimated

housing needs and the need for

assistance for the low-income Indian

families in the jurisdiction, including a

description of the manner in which the

geographical distribution of assistance is

consistent with the geographical needs

and needs for various categories of

housing assistance; and

(2) A description of the estimated

housing needs for all Indian families in

the jurisdiction.

(c) Financial Resources—An

operating budget for the recipient that

includes:

(1) An identification and a description

of the financial resources reasonably

available to the recipient to carry out the

NAHASDA-eligible affordable housing

activities described in the IHP,

including an explanation of the manner

in which amounts made available will

leverage additional resources; and

(2) The uses to which such resources

will be committed, including eligible

affordable housing activities and

administrative expenses. (Section 101(h)

of NAHASDA requires HUD, by

regulation, to authorize each recipient to

use a percentage of any grant amounts

received for any reasonable

administrative and planning expenses of

the recipient relating to carrying out

NAHASDA and activities assisted with

such amounts, which may include costs

for salaries of individuals engaged in

administering and managing affordable

housing activities assisted with grant

amounts and expenses of preparing an

IHP. This regulation will be developed

by the negotiated rulemaking committee

who will be proposing to HUD the

percentage of grant amounts to be used

for planning and administrative

expenses.

(d) Affordable Housing Resources—A

statement of the affordable housing

resources currently available and to be

made available during FY 1998,

including:

(1) A description of the significant

characteristics of the housing market in

the tribe’s jurisdiction, including the

availability of housing from other public

sources, private market housing, and the

manner in which such characteristics

influence the decision of the recipient to

use grant amounts for rental assistance,

production of new units, acquisition of

existing units, or rehabilitation of units;

(2) A description of the structure,

coordination, and means of cooperation

between the recipient and any other

governmental entities in the

development, submission, or

implementation of housing plans,

including a description of the

involvement of private, public, and

nonprofit organizations and institutions,

and the use of loan guarantees under

section 184 of the Housing and

Community Development Act of 1992,

and other housing assistance provided

by the Federal Government for Indian

tribes, including loans, grants, and

mortgage insurance;

(3) A description of the manner in

which the plan will address the needs
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 4081

identified in the Statement of Needs in

the 1-year plan required by paragraph

(b), above;

(4) A description of the manner in

which the recipient will protect and

maintain the viability of housing owned

and operated by the recipient that was

developed under a contract between

HUD and an Indian housing authority

pursuant to the United States Housing

Act of 1937;

(5) A description of any existing and

anticipated homeownership programs

and rental programs to be carried out

during FY 1998, and the requirements

and assistance available under such

programs;

(6) A description of any existing and

anticipated housing rehabilitation

programs necessary to ensure the longterm viability of the housing to be

carried out during FY 1998, and the

requirements and assistance available

under such programs;

(7) A description of all other existing

or anticipated housing assistance

provided by the recipient during FY

1998, including transitional housing,

homeless housing, college housing,

supportive services housing, and the

requirements and assistance available

under such programs;

(8) A description of any housing to be

demolished or disposed of, and a

timetable for such demolition or

disposition;

(9) A description of the manner in

which the recipient will coordinate with

tribal and State welfare agencies to

ensure that residents of such housing

will be provided with access to

resources to assist in obtaining

employment and achieving selfsufficiency;

(10) A description of the requirements

established by the recipient to promote

the safety of residents of such housing,

facilitate the undertaking of crime

prevention measures, allow resident

input and involvement, including the

establishment of resident organizations,

and allow for the coordination of crime

prevention activities between the

recipient and tribal and local law

enforcement officials; and

(11) A description of the entity that

will carry out the activities under the

IHP, including the organizational

capacity and key personnel of the entity.

(e) Certifications of compliance—The

IHP must include the following

certifications:

(1) A certification that the recipient

will comply with title II of the Civil

Rights Act of 1968 in carrying out

activities funded by NAHASDA, to the

extent that such title is applicable, and

other applicable Federal statutes,

including Section 504 of the

Rehabilitation Act of 1973;

(2) A certification that the recipient

will maintain adequate insurance

coverage for housing units that are

owned and operated or assisted with

grant amounts;

(3) A certification that policies are in

effect and are available for review by

HUD and the public governing:

(i) The eligibility, admission, and

occupancy of families for housing

assisted with grant amounts;

(ii) Rents charged, including the

methods by which rents or homebuyer

payments are determined, for housing

assisted with grant amounts;

(iii) The management and

maintenance of housing assisted with

grant amounts provided under this Act;

(4) If an IHP is submitted on behalf of

a tribe by its tribally designated housing

entity (TDHE), the IHP must contain a

certification by the recognized tribal

government that either:

(i) The tribe has had an opportunity

to review the IHP and has authorized its

submission by the TDHE, or

(ii) The tribe has delegated to the

TDHE the authority to submit an IHP

without prior review by the tribe;

(5) If an IHP that covers more than

one Indian tribe is submitted by a

TDHE, each tribe covered by the IHP

must submit as part of the IHP the

certification described in paragraph (4),

immediately above;

(6) A certification that the governing

body of the locality within which any

affordable housing to be assisted with

the grant amounts will be situated has

entered into, or has begun negotiations,

which must be completed before any

award of NAHASDA funds can be made,

to enter into, a local cooperation

agreement with the recipient for the

tribe providing that:

(i) The affordable housing assisted

with grant amounts received by the

recipient (exclusive of any portions not

assisted with amounts provided under

NAHASDA) is exempt from all real and

personal property taxes levied or

imposed by any State, tribe, city,

county, or other political subdivision;

and

(ii) The recipient makes annual

payments of user fees to compensate

such governments for the costs of

providing governmental services,

including police and fire protection,

roads, water and sewerage systems,

utilities systems and related facilities, or

payments in lieu of taxes to such taxing

authority, in an amount equal to the

greater of $150 per dwelling unit or 10

percent of the difference between the

shelter rent and the utility cost, or such

lesser amount as:

(A) Is prescribed by State, tribal, or

local law;

(B) Is agreed to by the local governing

body in the local cooperation

agreement; or

(C) The recipient and the local

governing body agree in the local

cooperation agreement that such user

fees or payments in lieu of taxes shall

not be made; or

(iii) If the affordable housing assisted

with grant amounts received by the

recipient (exclusive of any portions not

assisted with amounts provided under

NAHASDA) is not exempt from all real

and personal property taxes levied or

imposed by any State, tribe, city,

county, or other political subdivision,

that the tribe, State, city, county, or

other political subdivision in which the

affordable housing development is

located contributes, in the form of cash

or tax remission, the amount by which

the taxes paid with respect to the

development exceed the amounts

prescribed in section (6)(ii) of the 1-year

plan requirements, above.

Question 4. What are the affordable

housing activities that are eligible for

funding under NAHASDA?

Answer 4. Affordable housing

activities are activities to develop or to

support affordable housing for rental or

homeownership, or to provide housing

services with respect to affordable

housing, for the benefit of low-income

Indian families on Indian reservations

and other Indian areas. In the case of a

low-income family residing in a

dwelling unit assisted with NAHASDA

grant amounts, affordable housing is

housing for which the monthly rent or

homebuyer payment (as applicable)

does not exceed 30 percent of the

family’s monthly adjusted income.

Eligible affordable housing activities are

described below in sections (a) through

(k) of this answer:

(a) Indian Housing Assistance—The

provision of modernization or operating

assistance for housing previously

developed or operated pursuant to a

contract between HUD and an Indian

housing authority.

(b) Development—The acquisition,

new construction, reconstruction, or

moderate or substantial rehabilitation of

affordable housing, which may include

real property acquisition, site

improvement, development of utilities

and utility services, conversion,

demolition, financing, administration

and planning, and other related

activities. Affordable housing includes

permanent housing for homeless

persons who are persons with

disabilities, transitional housing, and

single room occupancy housing.
4082 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

(c) Housing Services—The provision

of housing-related services for

affordable housing, such as housing

counseling in connection with rental or

homeownership assistance,

establishment and support of resident

organizations and resident management

corporations, energy auditing, activities

related to the provision of selfsufficiency and other services, and other

services related to assisting owners,

tenants, contractors, and other entities,

participating or seeking to participate in

other housing activities assisted with

grant amounts.

(d) Housing Management Services—

The provision of management services

for affordable housing, including

preparation of work specifications, loan

processing, inspections, tenant

selection, management of tenant-based

rental assistance, and management of

affordable housing projects.

(e) Crime Prevention and Safety

Activities—The provision of safety,

security, and law enforcement measures

and activities appropriate to protect

residents of affordable housing from

crime.

(f) Rental Assistance—The provision

of tenant-based rental assistance.

(g) Model Activities—Housing

activities under model programs that are

designed to carry out the purposes of

NAHASDA and are specifically

approved by HUD as appropriate for

such purpose.

(h) Administrative Expenses—A

percent of grant amounts, to be

determined in the final rule, may be

used for any reasonable administrative

and planning expenses of a recipient

relating to carrying out NAHASDA and

activities assisted with such amounts,

including costs for salaries of

individuals engaged in administering

and managing affordable housing

activities assisted with grant amounts

and the expenses of preparing an IHP.

Question 5. How may grant amounts

be used to carry out eligible activities?

Answer 5. In addition to being used to

directly pay for eligible activities, grant

amounts may be used for affordable

housing activities through equity

investments, interest-bearing loans or

advances, noninterest-bearing loans or

advances, interest subsidies, leveraging

of private investments, or any other

form of assistance that HUD determines

to be consistent with the purposes of

NAHASDA. This answer is provided

from section 204—‘‘Types of

Investments’’—of NAHASDA. Guidance

on the types of investments permissible

under section 204 of NAHASDA will be

provided in the final regulations.

Question 6. When must the IHP

required by these transition

requirements be submitted?

Answer 6. An IHP must be received by

HUD no earlier than the publication

date of the final regulations

implementing NAHASDA and no later

than July 1, 1998 in order to be

considered for FY 1998 funding.

Question 53, below, also addresses this

issue.

Question 7. Where must an IHP be

submitted?

Answer 7. All IHPs must be submitted

to the local Area Office of Native

American Programs as follows:

Tribes and IHAs located ONAP address

East of the Mississippi River (including all of

Minnesota) and Iowa.

Eastern/Woodlands Office of Native American Programs, 5P, Metcalfe Federal Building, 77

West Jackson Boulevard, Chicago, Illinois 60604–3507, (312) 353–1282 or (800) 735–3239,

TTY Numbers: 1–800–927–9275 or 312–886–3741.

Louisiana, Missouri, Kansas, Oklahoma, and

Texas except for Yseleta del Sur.

Southern Plains Office of Native American Programs, 6.IPI, 500 West Main Street, Suite 400,

Oklahoma City, Oklahoma 73012, (405) 553–7520, 553–7480.

Colorado, Montana, Nebraska, North Dakota,

South Dakota, Utah and Wyoming.

Northern Plains Office of Native American Programs, 8P, First Interstate Tower North, 633

17th Street, Denver, Colorado 80202–3607, (303) 672–5462, TTY Number: 303–844–6158.

Arizona, California, New Mexico, Nevada, and

Yseleta del Sur in Texas.

Southwest Office of Native American Programs, 9EPI, Two Arizona Center, 400 North Fifth

Street, Suite 1650, Phoenix, Arizona 85004–2361, (602) 379–4156, TTY Number: 602–379–

4461, or Albuquerque Division of Native American Programs, 9EPIQ, Albuquerque Plaza,

201 3rd Street, NW, Suite 1830, Albuquerque, New Mexico 87102–3368, (505) 766–1372,

TTY Number: None.

Idaho, Oregon, and Washington ......................... Northwest Office of Native American Programs, 10PI, 909 First Avenue, Suite 300, Seattle,

Washington 98104–1000, (206) 220–5270, TTY Number: (206) 220–5185.

Alaska ................................................................. Alaska Office of Native American Programs, 10.1PI, 949 East 36th Avenue, Suite 401, Anchorage, Alaska 99508–4399, (907) 271–4633, TTY Number: (907) 271–4328.

Question 8. May an IHA continue to

remain subject to the 1937 Act, and

convert to a PHA?

Answer 8. No, because the purpose

and result of NAHASDA is the

exclusion of IHAs from the definition of

a PHA as of September 30, 1997. After

September 30, 1997, there may be IHAs

that want to remain subject to the 1937

Act, but the consequence of NAHASDA

section 501 is to make it impossible,

after September 30, 1997, for an IHA to

be considered a PHA. Further, section

502(b) provides that any IHA housing

developed or operated under the 1937

Act must be considered and maintained

as affordable housing for purposes of

NAHASDA, and precludes the

continued application of title I of the

1937 Act to IHAs after September 30,

1997. Question 30, below, also

addresses this issue.

Question 9. What happens to grants

already made under the homeless,

Youthbuild and Indian HOME

programs?

Answer 9. These grants continue to be

governed by the statutes authorizing the

programs as those statutes read on

September 30, 1997 and by the grant

agreements. After completion of the

funded activities, the grants will be

closed out in accordance with their

program requirements and grant

agreements. Questions 37 and 38,

below, also address this issue.

General Impact on Housing and

Funding

Question 10. On October 1, 1997, the

Native American Housing Assistance

and Self-Determination Act of 1996

(NAHASDA) legislation becomes

effective. How does this impact the

provision of housing assistance to

Native Americans?

Answer 10. NAHASDA terminates

provision of housing assistance under

the United States Housing Act of 1937,

as amended, (1937 Act) and creates a

new program of grants made directly to

Indian tribes. The new Indian Housing

Block Grant (IHBG) is intended to

provide greater flexibility to tribes in

determining how to address their

housing needs for low-income

individuals within their jurisdiction.
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 4083

Tribes assume a responsibility to

maintain current housing stocks

developed under the 1937 Act.

Question 11. Does the change in

governing legislation affect who owns

housing developed or assets and funds

held by IHAs?

Answer 11. No. While IHA funds and

assets become subject to the

requirements of NAHASDA on October

1, 1997, the ownership of the housing

funds and assets are not affected. Grants

made to IHAs and the assets of IHAs

continue to belong to the IHA. IHAs that

are created by tribal ordinance are

subject to the authority of the tribe.

Tribes must review their existing

ordinances and other documents

affecting the organization and legal

commitments of the tribe and its IHA to

determine how to transfer funds and

assets of the IHA to the tribe or its

newly established tribally designated

housing entity (TDHE).

Effect on 1937 Act Housing

Question 12. What happens to public

housing units owned and operated by

IHAs?

Answer 12. All units owned by IHAs

become ineligible for assistance under

the 1937 Act as of October 1, 1997.

Public housing units owned and

operated by IHAs are considered Indian

housing units and become subject to

NAHASDA on October 1, 1997.

Question 13. What happens to

existing 1937 Act units if tribes in those

jurisdictions do not or cannot submit an

IHP?

Answer 13. NAHASDA does not

provide the statutory authority for HUD

to grant NAHASDA grant funds to an

IHA, tribe or to a default TDHE which

cannot obtain a tribal certification, if the

requisite IHP is not submitted by a tribe

or is determined to be out of compliance

by HUD. There may be circumstances

where this may happen, and in those

cases, other methods of tribal, federal or

private market support may have to be

sought to maintain and operate those

1937 Act units.

Question 14. Should the public

housing stock owned by IHAs be

reflected in the current assisted stock

element of the IHBG formula under

NAHASDA?

Answer 14. Yes.

Question 15. Will the housing units in

the current development pipeline be

allowed to increase the 1937 Act count

for NAHASDA formula purposes?

Answer 15. Yes. Upon completion of

housing units currently in the

development pipeline, HUD should be

notified to adjust the information

reflected in the formula for existing

1937 Act units operated by the IHA or

recipient. The notification should take

the same form as the current notification

for Date of Full Availability under the

Indian Housing program.

Question 16. What process would a

tribe or TDHE follow in order to admit

over-income families to a vacant unit

developed under the 1937 Act or for

new units developed under the 1937 Act

which will be counted as Current

Assisted Stock under the IHBG

Formula?

Answer 16. Since the 1937 Act no

longer applies to these units and the

NAHASDA final rule will only address

the procedures for admitting overincome families when using the

recipient’s annual grant amount, there is

a need to develop procedures for these

units.

For units to be developed after

September 30, 1997, with funds

provided under the 1937 Act, a

recipient may use up to 10% of its funds

available from 1937 Act programs to

admit families whose income fall within

80 to 100% of median income without

HUD approval. HUD approval is

required if a recipient plans to use more

than 10% of its 1937 Act funds for such

assistance or to provide housing for

families over 100% of median income.

For vacancies in homeownership

programs where the units were under

management as of September 30, 1997,

occupancy by families whose income

falls within 80 to 100% of median

income may not exceed 10% of the

dwelling units in the project or 5

dwelling units, whichever is greater,

without HUD approval. HUD approval

is required if a recipient plans to admit

more than this amount in a project or to

provide housing for families over 100%

of median income.

Question 17. Can an IHA or recipient

develop additional units with funds

provided through the 1937 Act and have

the extra units included in the IHBG

formula?

Answer 17. No. While developing the

maximum number of affordable housing

units is encouraged, housing units over

the number specified in the original

grant approval will not be included in

the total number of units developed

with 1937 Act funds.

Question 18. Can an IHA be a

NAHASDA sub-grantee of the tribe or

TDHE for the purpose of maintaining

housing developed under the 1937 Act?

Answer 18. Yes. Additionally, an IHA

could be a sub-grantee for the purpose

of developing and managing housing

with NAHASDA funds.

Effect on 1937 Act Funding

Question 19. Must an IHA (or its

successor entity) use grant funds

provided under the 1937 Act for the

original purpose after October 1, 1997?

Answer 19. No. Funds provided to an

IHA under the 1937 Act can be used for

any activity eligible under NAHASDA.

An IHA (or its successor entity) must

honor existing contracts the IHA has

entered into with others prior to

NAHASDA; however, an IHA may

reprogram the use of funds for eligible

activities subject to written notification

to HUD.

Question 20. Will Indian housing

authorities (IHA), tribes or tribally

designated housing entities (TDHE) be

eligible to apply for assistance under

any programs covered by the 1937 Act?

Answer 20. No. Section 501 of

NAHASDA repealed Title II of the 1937

Act and made Titles I and III

inapplicable to Indian housing after

September 30, 1997. Therefore, as of

October 1, 1997, IHAs and tribes are

ineligible for funding for the following

programs:

—New development

—Modernization (both the

Comprehensive Improvement

Assistance Program and the

Comprehensive Grant Program

including the disaster/emergency

reserve)

—Operating subsidy

—HOPE for Public and Indian Housing

Homeownership

—Indian Housing Childhood

Development

—Section 8

Question 21. Will any operating

subsidy be provided to IHAs after

October 1, 1997?

Answer 21. Yes. The Fiscal Year (FY)

1997 appropriation for operating

subsidy under Section 9 of the 1937 Act

covers IHAs fiscal years beginning

(FYB) January 1, 1997 and ending

December 31, 1997; FYB April 1, 1997

and ending March 31, 1998; FYB July 1,

1997 and ending June 30, 1998; and

FYB October 1, 1997 and ending

September 30, 1998. IHAs are eligible

for funds appropriated prior to FY 98,

and therefore, operating subsidy will be

provided for the time periods stated in

this paragraph.

After September 30, 1997, financial

assistance may not be provided under

the 1937 Act unless such assistance is

provided from amounts made available

for FY 97 and pursuant to a

commitment entered into before

September 30, 1997, therefore, all

operating budgets for these periods must

have been approved prior to September

30, 1997 in order to be eligible for

funding. Operating budget adjustments

or revisions after October 1, 1997,

cannot be processed.
4084 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

Question 22. If an IHA has

unobligated or unexpended funds in

any of the programs listed in Answer 19,

how are they handled?

Answer 22. Any unobligated/

unexpended funds which were

approved for new development,

modernization, operations or HOPE can

now be used for any eligible NAHASDA

activity. Section 8 contracts remain in

effect and the program is still governed

by the 1937 Act and the existing

contract provisions.

Question 23. What is the definition of

‘‘obligated’’ as it relates to the

development and modernization

programs?

Answer 23. Obligated means the

cumulative amount of modernization or

development commitments entered into

by the housing authority; i.e., contract

execution for contract labor, materials or

services; start and continuation of

physical work by force account labor;

and start and continuation of

administrative expenses. Contract

execution means execution of the

contract by both the housing authority

and the contractor. For force account

work, all funds for a group of

sequentially-related physical work items

are considered obligated when the first

work item is started, such as kitchen

cabinet replacement followed by

kitchen floor replacement, but only

where funds continue to be expended at

a reasonable rate. Where one force

account physical work item is started

and is not sequentially related to other

physical work items, such as site

improvements and kitchen remodeling,

then only the funds for the one physical

work item started are considered

obligated.

Question 24. Does an IHA need to

enter into a new grant agreement with

HUD covering the use of existing 1937

Act grant funds?

Answer 24. In most instances, the

requirement limiting use of grant funds

to eligible NAHASDA activities is selfimplementing and does not require a

new grant agreement between HUD and

the IHA. However, in instances where a

grant was never placed under annual

contributions contract or where a tribe

or other organization becomes the

successor entity to an IHA, a grant

agreement is required to obligate funds

to the IHA or to establish the tribe or

other organization as the successor

entity to access IHA funds held by HUD.

Question 25. What Federal

requirements apply after September 30,

1997 to funds provided under the 1937

Act?

Answer 25. Funds are subject to

applicable Federal requirements which

include but are not limited to:

• procurement requirements as listed

under 24 CFR part 85 or as specified in

the grantee’s HUD approved

procurement policy;

• environmental requirements as

listed under 24 CFR part 58;

• labor requirements of Sec. 104(b) of

NAHASDA;

• tenant or homebuyer selection

requirements contained in the grantee’s

HUD approved admissions policy or

which comply with Sections 203, 205

and 207(b) of NAHASDA;

• financial controls requirements

specified at 24 CFR Part 85.

Question 26. Do the Federal

requirements listed in Question 25

apply to IHAs if they are not designated

as a TDHE?

Answer 26. Yes.

Question 27. Are there any reporting

requirements after September 30, 1997

for grant funds provided under the 1937

Act?

Answer 27. Yes. When a recipient

includes funds provided to an IHA in its

IHP, reporting is included in the Annual

Report and fiscal audit requirements

under NAHASDA.

When funds provided to an IHA are

not included in a recipient’s IHP,

reporting requirements in effect on

September 30, 1997, continue to apply

until the close-out of the grant activity

or until the IHA notifies HUD and HUD

acknowledges that the grant funds have

been reprogrammed for eligible

activities which support the regular

operation of the IHA. This requirement

applies only to categorical grants

provided for specific purposes such as

development or modernization grants

and not to regular operating activities of

the IHA. Please note that the

modernization reporting requirements

have been simplified and guidance has

been provided to tribes, TDHEs, IHAs

and Area ONAPs.

Question 28. What audit requirements

apply to grants funded under the 1937

Act?

Answer 28. IHAs (or their successor

entities) are responsible for providing

HUD with audits of program activities

in accordance with OMB Circulars A–

128 and A–133 for any period prior to

October 1, 1997, the effective date of

NAHASDA. Notice PIH 97–30 (HA)

provides the compliance supplement for

annual audits of Indian housing

authorities. This requirement includes

any overdue audits. Additionally, any

grant not included by the recipient in its

IHP is subject to these audit

requirements for the grant activity until

all grant activities are completed and

the grant is closed.

Question 29. What process does an

IHA (or its successor entity) follow to

close grants originally funded with 1937

Act monies?

Answer 29. Where grant activities are

essentially completed and the IHA and

HUD are in the process of closing the

grant, the procedures for establishing

actual grant costs in effect as of

September 30, 1997, for the grant

program are to be followed. This

includes the requirement for audit

verification of expenditures and final

financial settlement between the IHA

and HUD. Upon completion of the final

financial settlement, HUD will adjust its

financial records to reflect the actual

cost of the grant.

Where grant activities are not

completed, final settlement procedures

are dependent upon whether the

NAHASDA recipient assumes control of

the grant funding. If the recipient does

not assume responsibility for funds

provided by the 1937 Act, procedures

for closing grants are the same as stated

in the above paragraph. Where the

NAHASDA recipient assumes control of

the grant funding, close-out procedures

established for NAHASDA grants are to

be followed even if a significant portion

of the grant activities are completed

prior to October 1, 1997.

Question 30. If an IHA wants to

remain subject to the 1937 Act after

October 1, 1997, can it be converted to

a PHA?

Answer 30. No. To be eligible for

Indian Housing under the 1937 Act,

tribal and state enabling legislation

allowed for the creation of housing

authorities for the express benefit of

Indians. IHAs that were created for the

benefit of Indians are ineligible for

funding under the 1937 Act after

October 1, 1997. They cannot choose to

be converted to PHAs.

Effect on ACCs

Question 31. Does the repeal of the

1937 Act terminate existing Annual

Contributions Contracts (ACCs)?

Answer 31. Section 502(b) of

NAHASDA states that Indian housing

developed pursuant to an ACC ‘‘shall

not be subject to any provision of [the

1937 Act] or any [ACC] or other

agreement pursuant to such Act.’’ Based

on this language, existing ACCs are

terminated with two exceptions (bond

financed projects and Section 8) which

are explained below in Questions 32

and 33.

Question 32. Can HUD continue

funding for bond-financed projects in

which the bonds were secured by ACCs?

Answer 32. Section 507 of NAHASDA

addresses bond-financed projects.

Annual contributions can be made by

HUD, consistent with Section 507, to

continue payments to trustees on behalf
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 4085

of holders of bonds issued, and

outstanding, in connection with the

development of Indian housing projects.

Section 8

Question 33. Are Section 8 ACCs

terminated?

Answer 33. No. Section 503 of

NAHASDA governs the provision of

Section 8 rental assistance for units for

which a contract was entered into before

October 1, 1997. This section states that

after September 30, 1997, financial

assistance for rental housing assistance

may not be provided to an IHA or

TDHE, unless such assistance is

provided pursuant to a contract for such

assistance before October 1, 1997. Any

such assistance shall be governed by the

provisions of the 1937 Act and the

provisions of such contract.

In other words, if an existing Section

8 contract does not expire until after

October 1, 1997, funding will continue

to be provided until the expiration date

of the contract. This may be as late as

fiscal year (FY) 2000. The program is to

be operated in accordance with the

existing ACC and HAP contract.

Question 34. What will happen to any

remaining Section 8 operating reserves

after the Section 8 contracts expire?

Answer 34. Section 8 operating

reserves will remain with the entity

administering the Section 8 program.

Once the contract expires, the reserves

shall be used for eligible activities under

NAHASDA.

Question 35. What will happen to any

remaining Section 8 program or project

reserves?

Answer 35. Section 8 program or

project reserves are those funds held by

HUD to fund monthly housing

assistance payments. When the contract

expires, any remaining funds will

remain with the Department.

Question 36. If a Tribe or TDHE

chooses not to continue a Section 8

program after the current contract

expires, is there a requirement to notify

program participants of its intent to

discontinue the program?

Answer 36. Yes, IHAs administering

Section 8 rental certificates and rental

voucher programs for which the ACC

term will expire after September 30,

1997, must immediately notify Section

8 participants (including families that

have exercised the portability

provisions of the Section 8 program and

have not been absorbed by the receiving

housing authority) that their Section 8

assistance will end upon expiration of

the ACC in accordance with the

Housing Assistance Payment (HAP)

contract, part B, Subpart 6, Paragraph iv.

Owners of Section 8 moderate

rehabilitation units must also be

notified that after September 30, 1997,

HAP contracts will not be renewed

upon the expiration of their current

HAP contracts. Owners should be

advised that they must provide written

notice of the impending HAP contract

expiration to each Section 8 family 180

days before the contract expires. A copy

of the written notice must also be sent

to the appropriate housing authority in

accordance with Section 8(c)(9) of the

1937 Act, as amended. See PIH Notice

97–50, ‘‘Expiration of Section 8 Annual

Contributions Contracts between the

Department of Housing and Urban

Development and Indian housing

authorities’’ dated September 19, 1997,

for further guidance.

Programs Under the Cranston-Gonzalez

National Affordable Housing Act or the

Stewart B. McKinney Homeless

Assistance Act

Question 37. Will IHAs or tribes be

eligible for programs funded under the

Cranston-Gonzalez National Affordable

Housing Act or the Stewart B. McKinney

Homeless Assistance Act?

Answer 37. No. As of October 1, 1997,

IHAs or tribes are no longer eligible for

the following programs:

—Youth Sports

—Youthbuild

—HOME (Although tribes or IHAs are

not eligible as direct grantees for

HOME funds, States may choose to

fund them if the needs of the tribes

are reflected in the State’s

Consolidated Plan.)

—Housing Assistance for the Homeless

which includes: Comprehensive

Homeless Assistance Plan; Emergency

Shelter Grants; Supportive Housing

Programs; Safe Havens for Homeless

Individuals Demonstration Program;

Shelter Plus Care; Rural Homeless

Housing Assistance; and Innovative

Homeless Demonstration.

Question 38. If an IHA or tribe has

unobligated or unexpended funds in

any of the programs listed in Question

37, how are they handled?

Answer 38. Youth Sports, Youthbuild,

HOME and the Housing Assistance for

the Homeless Programs continue to be

governed by the provisions of the

statutes in effect at the time of funding.

The program shall continue to be

operated under existing program

provisions. After completion of the

funded activities, the grants will be

closed out in accordance with their

program requirements and grant

agreements.

Question 39. What will happen to the

Drug Elimination Program?

Answer 39. Section 704 of NAHASDA

amends the Public and Assisted

Housing Drug Elimination Act of 1990

to exclude IHAs as eligible applicants.

However, TDHEs are now eligible

applicants. The language in NAHASDA

does not include tribes as eligible

applicants.

Other Programs and Funds

Question 40. Will tribes be eligible for

the Economic Development and

Supportive Services (EDSS) Program?

Answer 40. The EDSS program is

created by annual appropriations. The

appropriation language currently makes

IHAs and public housing agencies

eligible for this program. Continued

eligibility for IHAs will depend on

future appropriation language. The

language will need to be changed to

include tribes and TDHEs. For those

with existing EDSS grants, the program

should continue to be operated under

existing program provisions.

Question 41. Is the same true for the

Tenant Opportunity Program (TOP) as

for the EDSS Program under Question

40?

Answer 41. Yes.

Question 42. What happens to rental

and homeownership operating reserves,

mutual help equity accounts under the

Mutual Help Homeownership

Opportunity Program, earned home

payment accounts under the Turnkey III

programs and proceeds from the sale of

homeownership units?

Answer 42. These funds can now be

used for any eligible NAHASDA activity

subject to any conditions imposed by

the contract or agreement between the

IHA and the homebuyer.

Question 43. Do tenant leases and

homeownership agreements for the

Mutual Help and Turnkey III Programs

remain in effect?

Answer 43. Yes. For the rental

program, leases remain in effect until

the lease term expires. At that time, the

tribe, TDHE, or IHA operate the units

under the regulations governing

NAHASDA. For homeownership

programs, the agreements remain in

effect until the contract term expires or

modifications may be made to the

agreement if these changes are

acceptable to both parties. Modifications

to the agreement must be in accordance

with NAHASDA.

Question 44. What happens to tenant

accounts receivables?

Answer 44. Since the terms of the

rental leases and homeownership

agreements remain in effect, the tenant

accounts receivable are still due based

on current program requirements. New

policies regarding payment

requirements for units developed under

NAHASDA can be adopted by the tribe

or TDHE.
4086 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

Other Pre-NAHASDA Requirements

Question 45. What happens to the

current regulations governing the Indian

housing program, 24 CFR 950?

Answer 45. As of October 1, 1997, the

regulations are cancelled.

Question 46. What cash management

and investment policies and procedures

are in effect as of October 1, 1997?

Answer 46. Current procedures

outlined in PIH Notice 96–33 (HA),

extended by Notice 97–41 (HA) dated

July 21, 1997, titled ‘‘Required HA Cash

Management and Investment Policies

and Procedures’’ will continue to apply

until the effective date of the

NAHASDA final regulation.

Question 47. Are IHAs responsible for

resolving audit findings which were

issued pursuant to activities prior to

October 1, 1997?

Answer 47. Yes. Audit findings are

open until closed. Findings that are

based on operating policies or

procedures can be resolved between an

IHA (or its successor entity) and HUD

by identifying such findings and

agreeing that the correction of

deficiencies is no longer required by

statute or regulation. Findings that are

not based on operating policies or

procedures such as instances of fraud,

criminal activities or ineligible program

activities including repayment of any

outstanding amounts due the

Department, must be resolved between

the IHA (or its successor entity) and

HUD before the audit finding can be

closed.

Question 48. Will financial statements

be required when the IHA’s FY ends?

Answer 48. The requirement to submit

financial statements ended on

September 30, 1997.

Question 49. Will the tribe or TDHE be

required to submit the Multifamily

Tenant Characteristic Reports, HUD

50058, as of 10–1–97?

Answer 49. As of October 1, 1997, the

HUD 50058 does not need to be

submitted for the rental and

homeownership programs. The form is

still required for the Section 8 program

until the contract term expires.

Question 50. Will LOCCS access to

funds be changed for IHAs on October

1, 1997?

Answer 50. No. LOCCS access to

funds will be modified only if a

recipient assumes responsibility for a

grant. At that time, HUD must be

notified of the change in responsibility

so that access to the grant funds can be

provided to the recipient.

LOCCS provides for the disbursement

of funds by certain line items contained

in program budgets. Since budgets are

no longer required, the Area ONAP will

enter the entire grant amount under

account 1500 when they establish a

project in LOCCS. This will obviate the

need to provide budget information to

the Area ONAP. For grants already

established in LOCCS, the grantee can

request the Area ONAP to transfer funds

to line 1500 to enable access to the

funds. The request to transfer funds can

be in writing or by telephone.

Question 51. If an IHA is declared

‘‘high risk’’ under the provisions of 24

CFR 950.135, will this designation

continue as of October 1, 1997?

Answer 51. No. There is no basis or

authority for allowing the designation of

‘‘high risk’’ to continue because this

designation was based on failure to

comply with the 1937 Act,

implementing regulations or the ACC.

Regulations are being developed under

NAHASDA which will outline

corrective action under the new

program.

Question 52. Are cooperation

agreements transferable to a successor

agency without requiring any action on

the agreement by the local government

or the successor agency?

Answer 52. Cooperation agreements

may be transferable to a successor

agency by their terms. However, it is

also possible that the agreement is not

transferable in which case a new

agreement would have to be negotiated.

Generally, if the current IHA becomes

the TDHE, a new agreement is not

needed because the designation of the

IHA as a TDHE does not create a new

legal entity. However, an IHA’s

cooperation agreement does not

automatically become the Tribe’s.

New Program Under NAHASDA

Question 53. What is the IHP

submission deadline?

Answer 53. On January 27, 1997, a

transition notice was published in the

Federal Register which established the

original IHP deadline submission date

of June 1, 1997. Based on public

comment, this date was later amended

to extend the deadline to November 3,

1997. With the publication of the

proposed rule, many commenters

indicated that the deadline did not

provide sufficient time to prepare an

IHP. Therefore, it is unreasonable to

expect a recipient to submit a plan prior

to publication date of the program

regulations.

Based on the above, this transition

notice is establishing new IHP

submission dates for Fiscal Year 1998

only. An IHP can be submitted no

earlier than the publication date of the

final regulations implementing

NAHASDA and no later than July 1,

1998. The July 1, 1998, date is necessary

in order to provide for a 60-day review

period by Office of Native American

Program (ONAP) field staff and

reservation of funds prior to September

30, 1998. The final regulations will

establish IHP submission dates for all

future years.

Question 54. Will ONAP develop a

model IHP as an example or guide for

tribes or TDHEs? Is so, will it be

available in a diskette format?

Answer 54. A draft IHP format has

been developed and submitted to the

Office of Management and Budget

(OMB) for approval. This form was also

mailed to all tribes and IHAs in August

1997.

To assist with the submission of the

IHP, the Department is offering three

ways in which to submit the IHP. The

first is via the Internet. It is anticipated

that this will be the easiest method and

it will also provide you with on-line

resources such as reviewing plan status.

You may also develop your plan using

a diskette which contains a template of

the IHP in a Microsoft Word 6.0 format.

Once completed, this diskette is

submitted to the Area ONAP. The

diskette and internet instructions were

sent to all eligible recipients on July 24,

1997. Of course, a hard copy of the plan

will also be accepted for the first several

years of the program.

Question 55. Are costs incurred prior

to the receipt of a FY 1998 Indian

Housing Block Grant (IHBG) which are

related to the development and

preparation of an IHP (including the

challenge of data) eligible for

reimbursement from an IHBG?

Answer 55. Yes. Under the provisions

of paragraph 32 of OMB Circular A–87,

pre-award planning and administrative

costs incurred by a recipient which are

directly related to the development and

preparation of its IHP (including the

challenge of data) will be considered

eligible IHBG expenditures under the

following conditions:

(a) The costs would have been

allowable if they had been incurred after

the date of the award of the IHBG; and,

(b) The costs do not exceed more than

20% of the recipient’s anticipated FY

1998 IHBG (or such other amounts

approved in the IHP).

Question 56. Can an IHA which

currently represents more than one tribe

be designated by more than one tribe as

their TDHE?

Answer 56. Yes.

Question 57. If a TDHE represents

more than one tribe, do individual IHPs

need to be submitted?

Answer 57. If a TDHE has been

designated by more than one Indian
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 4087

tribe, the TDHE can submit a separate

IHP for each Indian tribe or it may

submit a single IHP that covers two or

more tribes. However, the IHP must

contain a separate certification in

accordance with Section 102(d) of

NAHASDA and the IHP Tables when

requested by such tribes.

Question 58. What happens if a tribe

had two IHAs as of September 30, 1996?

Answer 58. Tribes which had

established and were operating two

IHAs as of September 30, 1996, under

the 1937 Act shall be allowed to form

and operate two TDHEs under

NAHASDA. Nothing in this section

shall affect the allocation of funds

otherwise due to a tribe under the

formula.

Question 59. Who is considered as a

tribe in Alaska?

Answer 59. The definition of

Federally recognized tribe in

NAHASDA reads: ‘‘The term ‘federally

recognized tribe’ means any Indian

tribe, band, nation, or other organized

group or community of Indians,

including any Alaska Native village or

regional or village corporation as

defined in or established pursuant the

Alaska Native Claims Settlement Act,

that is recognized as eligible for the

special programs and services provided

by the United States to Indians because

of their status as Indians pursuant to the

Indian Self-Determination and

Education Assistance Act of 1975.’’

Authority: Section 106 of the Native

American Housing Assistance and SelfDetermination Act of 1996 (NAHASDA) (Pub.

L. 104–330, approved October 26, 1996).

Dated: January 15, 1998.

Kevin Emanuel Marchman,

Assistant Secretary for Public and Indian

Housing.

[FR Doc. 98–1939 Filed 1–26–98; 8:45 am]

BILLING CODE 4210–33–P