52166 Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 / Proposed Rules 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 1003 

[Docket No. FR–5115–P–01] 

RIN 2577–AC78 

Prohibition on Use of Indian 

Community Development Block Grant 

Assistance for Employment Relocation 

Activities 

AGENCY: Office of the Assistant 

Secretary for Public and Indian 

Housing, HUD. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend HUD’s regulations for the Indian 

Community Development Block Grant 

(ICDBG) program by prohibiting Indian 

tribes and Alaska Native villages from 

using ICDBG funds to facilitate the 

relocation of for-profit businesses from 

one labor market area to another, if the 

relocation is likely to result in 

significant job loss. The proposed rule 

would prohibit Indian tribes and Alaska 

Native villages from using ICDBG funds 

for ‘‘job pirating’’ activities that are 

likely to result in significant job loss. 

‘‘Job pirating,’’ in this context, refers to 

the use of ICDBG funds to lure or attract 

a business and its jobs from one 

community to another. To prevent the 

rule from having an effect in situations 

where the relocation of a business 

causes an insignificant loss of jobs, the 

proposed rule would provide that a loss 

of 25 or fewer jobs from an area, as a 

result of an ICDBG-funded economic 

development project, would not 

constitute a significant loss of jobs. 

DATES: Comment Due Date: November 7, 

2008. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed 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. Communications must refer to the 

above docket number and title. There 

are two methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel (OGC), Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Room 10276, 

Washington, DC 20410–0001. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

http://www.regulations.gov. HUD 

strongly encourages commenters to 

submit comments electronically. 

Electronic submission of comments 

allows the commenter maximum time to 

prepare and submit a comment, ensures 

timely receipt by HUD, and enables 

HUD to make them immediately 

available to the public. Comments 

submitted electronically through the 

http://www.regulations.gov Web site can 

be viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that Web site 

to submit comments electronically. 

Note: To receive consideration as public 

comments, comments must be submitted 

through one of the two methods specified 

above. Again, all submissions must refer to 

the docket number and title of the rule. No 

Facsimile Comments. Facsimile (FAX) 

comments are not acceptable. 

Public Inspection of Public 

Comments. All properly submitted 

comments and communications 

submitted to HUD will be available for 

public inspection and copying between 

8 a.m. and 5 p.m. eastern time 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, OGC, at (202) 708–3055 (this 

is not a toll-free number). Individuals 

with speech or hearing impairments 

may access this number via TTY by 

calling the Federal Information Relay 

Service at (800) 877–8339 (this is a tollfree 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, 1670 Broadway, 

23rd Floor, Denver, CO 80202, 

telephone number (301) 675–1600 (this 

is not a toll-free number). Hearing- or 

speech-impaired individuals may access 

this number through TTY by calling the 

Federal Information Relay Service tollfree number at (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Title I of the Housing and Community 

Development Act of 1974, as amended, 

(42 U.S.C. 5301–5320) (1974 HCD Act) 

establishes the statutory framework for 

the Community Development Block 

Grant (CDBG) program. Section 

106(a)(1) of the 1974 HCD Act 

authorizes grants to Indian tribes for the 

ICDBG program. HUD’s regulations 

implementing the ICDBG program are 

located at 24 CFR part 1003 (entitled 

‘‘Community Development Block Grants 

for Indian Tribes and Alaska Native 

Villages’’). The purpose of the ICDBG 

program is the development of viable 

Indian and Alaska Native communities, 

including the creation of decent 

housing, suitable living environments, 

and economic opportunities primarily 

for persons with low and moderate 

incomes. Grantees may use their ICDBG 

funds for activities authorized by 

section 105(a) of the 1974 HCD Act. 

Section 588 of the Quality Housing 

and Work Responsibility Act of 1998 

amended section 105 of the 1974 HCD 

Act (42 U.S.C. 5305). Specifically, 

section 588 added to section 105 a new 

subsection (h) entitled ‘‘Prohibition on 

Use of Assistance for Employment 

Relocation Activities.’’ This subsection 

prohibits the use of CDBG funds to 

facilitate the relocation of for-profit 

businesses from one labor market area to 

another, if the relocation is likely to 

result in significant job loss. Subsection 

(h) states: 

(h) Prohibition on Use of Assistance for 

Employment Relocation Activities— 

Notwithstanding any other provision of law, 

no amount from a grant under section 106 

made in fiscal year 1999 or any succeeding 

fiscal year may be used to assist directly in 

the relocation of any industrial or 

commercial plant, facility, or operation, from 

1 area to another area, if the relocation is 

likely to result in a significant loss of 

employment in the labor market area from 

which the relocation occurs. 

Applicants for ICDBG grants have 

been notified of this statutory 

requirement in annual Notices of 

Funding Availability. 

II. This Proposed Rule 

This proposed rule would implement 

subsection (h) of the 1974 HCD Act by 

revising HUD’s ICDBG program 

regulations in 24 CFR part 1003. The 

proposed rule would establish a new 

§ 1003.209 (entitled ‘‘Prohibition on Use 

of Assistance for Employment 

Relocation Activities’’), which would 

describe the ICDBG job-piracy 

provisions. This proposed rule would 

also amend § 1003.505 (entitled 

‘‘Records to be Maintained’’), to ensure 

that appropriate recordkeeping 

requirements are met. 

III. Significant Features of the Proposed 

Rule 

A. Direct assistance to for-profit 

businesses. Section 105(a)(17) of the 

1974 HCD Act authorizes ICDBG 

recipients to provide direct assistance to 

for-profit businesses for economic 

development activities. Additionally, 

section 105(a)(15) authorizes recipients 


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Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 / Proposed Rules 52167 

to provide ICDBG funds to Community 

Based Development Organizations 

(CBDOs) for economic development 

activities that increase economic 

opportunities, or that stimulate or retain 

businesses or permanent jobs. 

In accordance with the statutory 

language of section 105(h), the proposed 

rule would prohibit the provision of 

ICDBG assistance to for-profit 

businesses (including business 

expansions) under sections 105(a)(15) 

and 105(a)(17) of the 1974 HCD Act, if: 

(1) The funding will assist in the 

relocation of a plant, facility, or 

operation; and 

(2) If the relocation is likely to result 

in a significant loss of jobs in the area 

from which the relocation occurs. 

The proposed rule would not cover 

the business activities of nonprofit 

entities. HUD believes that the 

likelihood of ICDBG assistance to a notfor-profit business relocation is limited. 

B. Definition of ‘‘area.’’ The statutory 

language of section 105(h) prohibits the 

relocation of any industrial or 

commercial plant, facility, or operation, 

from ‘‘one area to another,’’ if the 

relocation is likely to result in 

significant job loss. HUD believes the 

relevant definition of labor market 

‘‘area’’ for a Native American economic 

development project is the ‘‘Identified 

Service Area’’ for the eligible applicant, 

as defined in 24 CFR 1003.4. 

C. Definition of ‘‘operation.’’ Section 

105(h) prohibits the use of ICDBG 

assistance with respect to the relocation 

of any industrial or commercial plant, 

facility, or ‘‘operation’’ from one 

Identified Service Area to another. This 

proposed rule would define the term 

‘‘operation’’ to include, but not be 

limited to, any equipment, position, 

employment opportunity, production 

capacity, or product line. 

D. Determining ‘‘significant loss of 

jobs.’’ Section 105(h) prohibits ICDBG 

assistance for business relocation 

activities that ‘‘will result in a 

significant loss of employment’’ in the 

Identified Service Area from which the 

relocation occurs. This proposed rule 

would require that an ICDBG grantee, in 

determining whether a significant job 

loss would occur, collect labor force 

statistics for the Identified Service Area 

where the business is located before the 

relocation occurs. The grantee also 

would be required to document the 

number of jobs that the business plans 

to relocate to the new Identified Service 

Area. 

In a large Identified Service Area, a 

job loss of one-tenth of one percent of 

the total labor market may constitute a 

large number of employees. Therefore, 

this proposed rule would provide that 

in all cases a loss of more than 500 jobs 

will be considered to constitute a 

significant job loss. To prevent the rule 

from having an effect in situations 

where the relocation of a business 

causes an insignificant loss of jobs, the 

proposed rule would provide that a loss 

of 25 or fewer jobs from an Identified 

Service Area, as a result of an ICDBGfunded economic development project, 

would not constitute a significant loss of 

jobs. 

In summary, a loss of 25 or fewer jobs 

as a result of a single activity will not 

constitute a significant job loss; any loss 

greater than 500 will continue to be 

counted as significant; and job losses 

between 25 and 500 must be less than 

0.1 percent of the Identified Service 

Area’s labor force to avoid being 

counted as significant. 

E. Activities and businesses exempt 

from the job piracy prohibition. Under 

the proposed rule, certain activities and 

businesses would be exempt from the 

job piracy prohibition. This proposed 

rule would not apply to relocation 

assistance required by the Uniform 

Relocation Assistance and Real Property 

Acquisition Policies Act of 1970 (42 

U.S.C. 4601-4655) (implemented at 24 

CFR part 42) (URA) and, with respect to 

the ICDBG regulations at 24 CFR 

1003.602, microenterprises and 

assistance to businesses that buy 

equipment and/or inventory in armslength transactions and move the 

equipment and/or inventory to another 

Identified Service Area. 

1. Uniform Relocation Act and related 

assistance. HUD proposes to exclude 

relocation assistance required to be 

provided to a business under the URA. 

Businesses that receive such assistance 

and are required to relocate generally 

are not voluntarily relocating. In 

addition, relocation assistance under 

section 105(a)(11), as implemented at 

§§ 1003.201(h) and 1003.602(b), (c), and 

(d), should be excluded for the same 

reasons. HUD does not believe that the 

anti-pirating provisions were intended 

to prevent businesses that are forced to 

relocate as a result of a government 

action covered by the URA from 

relocating to another Identified Service 

Area. 

2. Microenterprises. HUD considered 

whether microenterprises should be 

subject to the job pirating restrictions, 

but has determined that this type of 

business was not the intended target of 

the statutory prohibition. 

Microenterprises, generally, have five or 

fewer employees and typically do not 

seek resources to relocate jobs to other 

areas. 

3. ICDBG-assisted arms-length 

transactions. The exemption for 

businesses that buy equipment, 

inventory, or other physical assets in 

arms-length transactions is meant to 

protect assisted businesses that merely 

purchase equipment and inventory that 

are located in one Identified Service 

Area and move them to a new location. 

The job piracy prohibition targets 

businesses that move existing 

operations from one labor market area to 

another. 

This proposed rule would apply to 

ICDBG assistance to a business that: (a) 

Shuts down or downsizes a facility and 

sells the equipment in a non-armslength transaction (an example of a nonarms-length transaction is a firm selling 

equipment to a subsidiary); or (b) sells, 

in an arms-length transaction, an 

interest in an existing business, product 

line, customer base, or the entire stockin-trade and goodwill of an existing 

business. 

This proposed rule would not apply 

to assistance to a business that only 

purchases used equipment in an armslength transaction. HUD believes that 

the sale and purchase of equipment, 

inventories, or other business assets on 

the open market were not intended to be 

included under the business relocation 

provisions of section 105(h). 

F. Documentation requirements for 

ICDBG recipients and businesses. This 

proposed rule would require that, for 

each ICDBG-assisted business covered 

by this rule, the recipient’s ICDBG 

project file must document: Whether the 

business has a plant, facility, or 

operation in an area outside of the 

recipient’s Identified Service Area; and, 

if the business has one or more plants, 

facilities, or operations located in other 

areas, whether the business plans to 

relocate jobs from other locations to the 

site being assisted with ICDBG funds. 

Prior to a decision to provide ICDBG 

assistance to a business that has a plant, 

location, or facility in other areas, the 

recipient shall document whether the 

number of jobs relocated by the business 

at each of the locations that is losing 

jobs to the new facility would constitute 

a significant job loss, as defined in this 

rule. If the recipient decides to commit 

ICDBG assistance to a business, then it 

must require and obtain, as a condition 

for assistance, a certification from the 

assisted business that neither it, nor any 

of its subsidiaries, has plans to relocate 

jobs, at the time the agreement is signed, 

that would result in a significant job 

loss, as defined in this rule. The 

business must provide this certification 

to the recipient as a part of the 

agreement committing ICDBG assistance 

to the business. 


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52168 Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 / Proposed Rules 

IV. Tribal Consultation 

HUD’s policy is to consult with 

Indian tribes early in the rulemaking 

process on matters that have tribal 

implications. Accordingly, HUD sent 

letters to all eligible funding recipients 

under the ICDBG program informing 

them of the nature of the forthcoming 

rule and soliciting comments. The 

Department received one response to 

the consultation request, expressing full 

support for the proposed regulatory 

change. In addition, tribes have the 

opportunity to comment on this 

proposed rule, and HUD welcomes such 

comment. 

V. Findings and Certifications 

Paperwork Reduction Act 

The information collection 

requirements contained in this rule have 

been submitted to the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520). In accordance 

with the Paperwork Reduction Act, an 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information, unless the 

collection displays a currently valid 

OMB control number. 

The burden of the information 

collections in this proposed rule is 

estimated as follows: 

REPORTING AND RECORDKEEPING BURDEN

Section reference Number of parties 

Number of responses per 

respondent 

Estimated average time for 

requirement 

(in hours) 

Estimated annual burden 

(in hours) 

§ 1003.209 & § 1003.505 ................................ 15 plus ............................................................ 1 3 45 

In accordance with 5 CFR 

1320.8(d)(1), HUD is soliciting 

comments from members of the public 

and affected agencies concerning this 

collection of information to: 

(1) Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

(2) Evaluate the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information; 

(3) Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

(4) Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated collection 

techniques or other forms of information 

technology, e.g., permitting electronic 

submission of responses. 

Interested persons are invited to 

submit comments regarding the 

information collection requirements in 

this rule. Comments must refer to the 

proposal by name and docket number 

(FR–5115–P–01) and must be sent to: 

HUD Desk Officer, Office of 

Management and Budget, Room 

10235, New Executive Office 

Building, Washington, DC 20503, Fax 

number: (202) 395–6974; and 

Ms. Sherry Fobear-McCown, Office of 

Public and Indian Housing, U.S. 

Department of Housing and Urban 

Development, Room 4116, 451 

Seventh Street, SW., Washington, DC 

20410–5000. 

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. eastern 

time, 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. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

(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. There are no 

anti-competitive discriminatory aspects 

of the rule with regard to small entities 

and there are no unusual procedures 

that would need to be complied with by 

small entities. Accordingly, the 

undersigned certifies that this rule will 

not have a significant economic impact 

on a substantial number of small 

entities. Nevertheless, HUD is sensitive 

to the fact that the uniform application 

of requirements on entities of differing 

sizes often places a disproportionate 

burden on small businesses. Therefore, 

HUD specifically invites comments from 

all entities, including small entities, 

regarding less burdensome alternatives 

to this rule, that will meet HUD’s 

objectives as described in this preamble. 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule either imposes 

substantial direct compliance costs on 

state and local governments and is not 

required by statute, or the rule preempts 

state law, unless the agency meets the 

consultation and funding requirements 

of section 6 of the Order. This proposed 

rule does not have federalism 

implications and would not impose 

substantial direct compliance costs on 

state and local governments nor 

preempt state law within the meaning of 

the 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 the 

private sector. This proposed rule does 

not impose any federal mandates on any 

state, local, or tribal governments or the 

private sector within the meaning of the 

UMRA. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance (CFDA) number for the 

ICDBG program is 14.862. 

List of Subjects in 24 CFR Part 1003 

Alaska; Community development 

block grants; Grant programs—housing 

and community development; Grant 

programs—Indians; Indians; Reporting 

and recordkeeping requirements. 

Accordingly, for the reasons 

discussed in the preamble, HUD 

proposes to amend 24 CFR part 1003 to 

read as follows: 


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Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 / Proposed Rules 52169 

PART 1003—COMMUNITY 

DEVELOPMENT BLOCK GRANTS FOR 

INDIAN TRIBES AND ALASKA NATIVE 

VILLAGES 

1. The authority citation for part 1003 

continues to read as follows: 

Authority: 42 U.S.C. 3535(d) and 5301–

5320. 

2. Add § 1003.209 to read as follows: 

§ 1003.209 Prohibition on use of 

assistance for employment relocation 

activities. 

(a) Prohibition. ICDBG funds may not 

be used to directly assist a business, 

including a business expansion, in the 

relocation of a plant, facility, or 

operation from one Identified Service 

Area to another Identified Service Area, 

if the relocation is likely to result in a 

significant loss of jobs in the Identified 

Service Area from which the relocation 

occurs. 

(b) Definitions. The following 

definitions apply to this section: 

(1) Directly assist. Directly assist 

means the provision of ICDBG funds for 

activities pursuant to: 

(i) § 1003.203(b); or 

(ii) §§ 1003.201(a) through (d), 

1003.201(k), 1003.203(a), or § 1003.204 

when the grantee, subrecipient, or, in 

the case of an activity carried out 

pursuant to § 1003.204, a Community 

Based Development Organization 

(CBDO) enters into an agreement with a 

business to undertake one or more of 

these activities as a condition of the 

business relocating a facility, plant, or 

operation to the grantee’s Identified 

Service Area. Provision of public 

facilities and indirect assistance that 

will provide benefit to multiple 

businesses does not fall under the 

definition of ‘‘directly assist,’’ unless it 

includes the provision of infrastructure 

to aid a specific business that is the 

subject of an agreement with the 

specific assisted business. 

(2) Area. The relevant definition of 

‘‘area’’ for a Native American economic 

development project is the ‘‘Identified 

Service Area’’ for the eligible applicant, 

as defined in § 1003.4. 

(3) Operation. A business operation 

includes, but is not limited to, any 

equipment, employment opportunity, 

production capacity, or product line of 

the business. 

(4) Significant loss of jobs. (i) A loss 

of jobs is significant if the number of 

jobs to be lost in the Identified Service 

Area in which the affected business is 

currently located is equal to or greater 

than one-tenth of one percent of the 

total number of persons in the labor 

force of that area; or, in all cases, a loss 

of 500 or more jobs. Notwithstanding 

the aforementioned, a loss of 25 jobs or 

fewer does not constitute a significant 

loss of jobs. 

(ii) A job is considered to be lost due 

to the provision of ICDBG assistance if 

the job is relocated within 3 years of the 

provision of assistance to the business; 

or the time period within which jobs are 

to be created as specified by the 

agreement between the business and the 

recipient, if it is longer than 3 years. 

(c) Written agreement. Before directly 

assisting a business with ICDBG funds, 

the recipient, subrecipient, or a CBDO 

(in the case of an activity carried out 

pursuant to § 1003.204) shall sign a 

written agreement with the assisted 

business. The written agreement shall 

include: 

(1) Statement. A statement from the 

assisted business as to whether the 

assisted activity will result in the 

relocation of any industrial or 

commercial plant, facility, or operation 

from one Identified Service Area to 

another, and, if so, the number of jobs 

that will be relocated from each 

Identified Service Area; and 

(2) Required certification. If the 

assistance will not result in a relocation 

covered by this section, a certification 

from the assisted business that neither 

it, nor any of its subsidiaries, has plans 

to relocate jobs, at the time the 

agreement is signed, that would result 

in a significant job loss as defined in 

this rule. 

(d) Assistance not covered by this 

section. This section does not apply to: 

(1) Relocation assistance. Relocation 

assistance under § 1003.602(b), (c), or 

(d); 

(2) Microenterprises. Assistance to 

microenterprises as defined by section 

102(a)(22) of the Housing and 

Community Development Act of 1974; 

and 

(3) Arms-length transactions. 

Assistance to a business that purchases 

business equipment, inventory, or other 

physical assets in an arms-length 

transaction, including the assets of an 

existing business, provided that the 

purchase does not result in the 

relocation of the sellers’ business 

operation (including customer base or 

list, goodwill, product lines, or trade 

names) from one Identified Service Area 

to another Identified Service Area and 

does not produce a significant loss of 

jobs in the Identified Service Area from 

which the relocation occurs. 

3. Revise § 1003.505 to read as 

follows: 

§ 1003.505 Records to be maintained. 

Each grantee shall establish and 

maintain sufficient records to enable the 

Secretary to determine whether the 

grantee has met the requirements of this 

part. This includes establishing and 

maintaining records demonstrating that 

the recipient has made the 

determinations required as a condition 

of eligibility of certain activities, 

including as prescribed in § 1003.209. 

Dated: May 1, 2008. 

Paula O. Blunt, 

General Deputy Assistant Secretary for Public 

and Indian Housing. 

[FR Doc. E8–20785 Filed 9–5–08; 8:45 am] 

BILLING CODE 4210–67–P 


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