UNITED STATES CO URT OF APPEALS TENTH CIRCUIT

FORT PECK HOUSING AUTHORITY, Plaintiff – Appellee/Cross- Appellant,

v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; ALPHONSO JACKSON, Secretary of Housing and Urban Development; MICHAEL LIU, Assistant Secretary for Public and Indian Housing, Defendants – Appellants/Cross- Appellees.

------------------------------ OGLALA SIOUX (LAK OTA) HOUSING; SICANGU WICOTI AWANYAKAPI CORPORATION; TURTLE MOUNTAIN HOUSING AUTHORITY; LOWER BRULE HOUSING AUTHORITY,
Movants. No. 06-1425 & 06-1447 (D. Colo.) (D.C. No. 05-CV-18-RPM)

ORDER AND JUDGMENT *

* This order and judgment is an unpublis hed decision, not binding precedent. 10th Cir. R. 32.1(A). Citation to unpublished decisions is not prohibited. Fed. R. App. 32.1. It is appropriate as it relates to law of th e case, issue preclusion and claim preclusion. Unpublished decisions may also be cited for their persuasive value. 10th Cir. R. 32.1(A). Citation to an order and judgment must be accompanied by an appropriate parenthetical notation

B (unpublished). Id

. FILED United States Court of Appeals Tenth Circuit February 19, 2010
Elisabeth A. Shumaker Clerk of Court- 2 - Before LUCERO , ANDERSON , and O’BRIEN , Circuit Judges.

This case involves the Native Amer ican Housing Assistance and SelfDetermination Act of 1996 (N AHASDA), 25 U.S.C. §§ 4101-4243

. 1 In that act Congress directed the Department of Housing and Urban Development (HUD) to enter into a collaborative process with interested Native American trib es and their designated housing entities (Tribal Housing Entities) to adopt regu lations providing for an annual, equitable distribution of available funds for low-in come housing assist ance. A regulation promulgated in 1998 disqualified funding for housing units which we re no longer owned or operated by a Tribal Housing Entity. 24 C. F.R. § 1000.318. In subsequent years HUD mistakenly overpaid Fort Peck Housing Au thority (Fort Peck) for dwelling units it no longer owned or operated. After discovering its oversight HUD demanded a refund. Fort Peck partially repaid HUD, but then sued, alleging the “owned or operated” regulation was invalid. The district court agreed but determined Fort Peck was not entitled to a return of all monies it had already refunded . HUD appealed from the court’s invalidation of its regulation and Fort Peck cross-appealed from the denial of return of its repayments. We reverse the invalidation of HUD’s regulati on, dismiss Fort Peck’s cross-appeal, and remand.

1 Congress has since amended NAHASDA, in cluding the statutory provisions at issue here. See Native American Housing Assi stance and Self-Determination Reauthorization Act of 2008, Pub. L. No. 110-411, 122 Stat. 4319 (2008). This Order and Judgment only considers the 2002 version of NAHASDA.- 3 - I. A. Relevant Statutory and Regulatory History Prior to 1997, 2 financial assistance for low-income housing programs arose through a number of separate progr ams under the Housing Act of 1937. See Implementation of the Native American Hous ing Assistance and Self-Determination Act of 1996, Proposed Rule, 62 Fed. Reg. 35,7 18, 35,719 (July 2, 1997). Some programs helped Indian families afford low-income rental options and others allo wed families to purchase housing through lease- to-own or lease-purchase ag reements. This financial assistance was awarded accordin g to the terms of individual Annual Contribution Contracts (ACCs) between the government and in dividual Indian tribes or Tribal Housing Entities. See 24 C.F.R. § 1000.10(b) (defining “Annu al Contributions Contract”). Each ACC was awarded a certain amount of funding for the Tribal Housing Entity to cover the costs of specific public-housing projects. 42 U.S.C. § 1437c(a)(2) (1996) (explaining the operation of ACCs). That changed. Congress enacted NAHASDA in an attemp t to consolidate low-income housing assistance for Indian tribes and simplif y the distribution of funds. NAHASDA terminated the housing assistance programs established under the Housing Act of 1937 and created a new system. 3 This new method of distributi ng funds sought to “[recognize]

2 NAHASDA’s effective date was October 1, 1997. P.L. 104-330, Tit. I, § 107, 110 Stat. 4030 (1996).

3 HUD identified programs terminat ed by NAHASDA in the “Statutory Background” section of its proposed rule. See Implementation of the Native American Housing Assistance and Self-Determination Ac t of 1996, Proposed Rule, 62 Fed. Reg. 35,718, 35,719 (J uly 2, 1997).- 4 - the right of Indian self-determination a nd tribal self-governance by making such assistance available directly to the Indian tribes or triba lly designated entities . . .” 25 U.S.C. § 4101(7). This new system requi red the distribution of appropriated funds through annual bloc k grants to individual housing entitie s for the purpose of carrying out affordable housing activities. 25 U.S.C. § 4111. Congress directed HUD to establish an a llocation formula for this new system to reflect the need of the Indian tribes in the distribution of appropriated funds through block grants. 25 U.S.C. § 4152(a). 4 It specifically described the intended structure of the formula: The formula shall be based on factors that reflect the need of the Indian tribes and the Indian areas of the trib es for assistance for affordable housing activities, including th e following factors: (1) The number of low-income housing dwelling units owned or operated at the time pursuant to a contract between an Indian housing authority for the tribe and the Secretary. (2) The extent of poverty and econom ic distress and the number of Indian families within Indian areas of the tribe. (3) Other objectively meas urable conditions as the Secretary and the Indian tribes may specify. 25 U.S.C. § 4152(b). 5

4 The full text of the statute is reprod uced as Appendix A to this Order and Judgment.

5 In addition to the factors specified in § 4152(b)(1)-(3), Congress required consideration of two other factors: In establishing the formula, th e Secretary shall consider -- (1) the relative administrative capac ities and other challenges faced by the recipient, including, bu t not limited to geographi c distribution within the Indian area and technical capacity; and- 5 - Congress also required the regulations be crafted through a negotiated rulemaking process that involved interested Indian tr ibes. 25 U.S.C. § 41 16. The negotiated rulemaking committee included fifty-eight members. Forty-eight of these members represented “geographically dive rse small, medium and large I ndian tribes.” 62 Fed. Reg. 35,719. This committee was larger “tha n usually chartered under the Negotiated Rulemaking Act” because of “the diversity of tribal interests, as well as the number and complexity of the issues involved.” Id. It operated solely by consensus and HUD agreed to use all of the committee cons ensus decisions, to the extent allowable under the law, as the basis for the prop osed rulemaking. Id. at 35,719-20. Th e committee crafted a number of factors for the block grant formula, including the factor at issue in this appeal, which HUD considered when it adop ted the final regulations. The block-grant formula was included in th e final regulations and codified at 24 C.F.R. §§ 1000.304–10 00.340. It included two separately calculated components: 1) “Formula Current Assisted Housi ng Stock” units (current units); 6 and 2) “Need.” 7 24

(2) the extent to which terminations of assistance under subchapter V of this chapter will affect funding available to State recognized tribes. 25 U.S.C. § 4152(c). Subsection (c)(1) is a ddressed in the regulations at 24 C.F.R. § 1000.538 which allows HUD to provide tech nical assistance if th e Housing Entity’s inability to comply with NAHASDA provisions is not due to willful noncompliance. Subsection (c)(2) references the termination of the housing assistance provided under the Housing Act of 1937 and is addressed at 24 C.F.R. § 1000.312 where HUD includes the 1937 programs in the definition of current un its. HUD addressed these factors within its regulations. Neither party raised the section in their briefs, so we do not consider them further. 6 Formula Current Assisted Stock is defi ned by regulation to include all dwelling units owned or operated by an entity as of September 30, 1997, and limited other units. 24 C.F.R. § 1000.314. This de finition was the starting point in determining current units. Subsequent regulations, includi ng § 1000.318, identified when Formula Current Assisted- 6 - C.F.R. § 1000.310. In accordan ce with the formula, to determine the amount of funding a Tribal Housing Entity would receive in a pa rticular fiscal year, HUD first calculated the number of current units owned or operated by each Tribal Housing Entity and earmarked funds from the total appr opriation to fund them. 8 The current need portion for each Tribal Housing Entity was then established by applying pres et weighted criteria to the remaining amount of appropria ted funds. Because the funds earmarked for the current unit portion of the formula directly reduced the amount of funding available for current need disbursement, the current units compone nt was of primary importance to Tribal Housing Entities. A larger number of current units funded in a particular fiscal year decreased the funds available for the current needs of all Tribal Housing Entities. The current units calculation for an indi vidual Tribal Housin g Entity began with the number of dwelling units owned or op erated by that entity at the time of
NAHASDA’s enactment. Id. Over the years, some rent-t o-own units became eligible to be transferred from a Tribal Housing Entity’s inventory or be otherw ise disposed of due to the terms of a contract between the Tribal Housing Entity and the unit’s occupant. For
Stock became ineligible for purpose s of the block grant formula.

7 The criteria for determining need, each weighted differently, include: (1) American Indian and Alaskan Native (AIAN) households with housing cost burden greater than 50% of “formula area income;” (2) AIAN households that are overcrowded or without kitchen or plumbing; (3) AIAN housing shortage; (4) AIAN households with income less than or equal to 30% of “formula median income;” (5) AIAN households with income between 30% and 50% of “formu la median income;” (6) AIAN households with income between 50% and 80% of “formula median income;” and (7) AIAN persons. 24 C.F.R. § 1000.324.

8 See Appendix A to Part 1000 – Indian Ho using block grant Formula Mechanics HUD, Nos. 5-6; see also 25 U.S.C. § 1000.324.- 7 - instance, a lease-to-own agr eement between a Tribal Hous ing Entity and a low-income family may terminate in a gi ven year and title to the resi dence would be transferred accordingly. Reflecting this reduction, H UD included a downward adjustment in the current units calculation. This adjustment was equal to the number of dwelling units a tribe “no longer has the legal right to own, oper ate, or maintain . . . whether such right is lost by conveyance, demolition, or otherwise.” 24 C.F.R. § 1000.318(a). Units are to be removed from a Tribal Housin g Entity’s inventory “as soon as practicable after the unit becomes eligible fo r conveyance.” 24 C.F.R. § 10 00.318(a)(1). In determining the number of these disqualified units, HUD relied on informati on provided by the individual Tribal Housing Entities on annual “Formula Re sponse Forms.” 24 C. F.R. § 1000.312.
B. Relevant Factual History HUD’s Inspector General conducted a natio n-wide audit in 2002. This included seventeen on-site visits to Tribal Housing Enti ties across the nation. At five of the Tribal Housing Entities, it evaluated the accuracy of the current units reported on the Formula Response Forms. The audit revealed some Tribal Housin g Entities owned or operated fewer dwelling units than they had reported on their Formula Response Forms and were receiving funds for dwelling units they no lo nger owned or operate d. Those findings prompted a nation-wide audit, which showed Fort Peck, and othe r Housing Entities not relevant to this appeal, had made the same reporting mistake in fiscal years 1997-2003. HUD demanded a refund of th ese alleged overpayments. Fort Peck initially refunded a portion of th e alleged overpayments but later refused to continue repayment and inst ead contested the validity of 24 C.F.R. § 1000.318. It- 8 - argued NAHASDA’s plain language required HUD to continue funding at the 1997 level in the current units portion of the formula. In support of this argument, it stressed Congress’s language that the formula “shall be based on . . . [t]he number of low-income housing dwelling units owned or operated at the time,” meaning all dwelling units owned or operated in 1997 under 25 U.S.C. § 4181(a). (Appellant’s Supp. Appx. at 61.) It asserted HUD’s disqualification of units unde r 24 C.F.R. § 1000.318 violated Congress’s expressed intent in § 4152(b)(1 ). Fort Peck asserted the m onies it had refunded to HUD must be returned. HUD maintained Congress’s intent in NA HASDA was to fund all tribal housing projects according to their relativ e need. It reasoned that a Tr ibal Housing En tity’s need is reduced when dwelling units pass from its control or ownership. See 24 C.F.R. § 1000.318 (dwelling units cease to qualify as a current unit when a Tribal Housing Entity “no longer has the legal right to ow n, operate, or maintain the unit”); see also 63 Fed. Reg. 12,334, 12,343 (Mar. 12, 1998). 9 It explained the regulation followed Congress’s express direction and intent because the redu ction set forth in § 1000.318 was created through a negotiated rulemaking process and wa s an objectively measurable condition. After exhausting the agency appeal process, Fort Peck brought suit in federal court challenging HUD’s final determination. In re levant part, it claimed: (1) § 1000.318 was contrary to the statutory language in NAHA SDA and HUD’s conclusions to the contrary

9 One public comment to the proposed rule suggested conveyed units should qualify as current units if the unit is a part of a “five-year Comp Grant plan.” HUD rejected this suggestion stating “a conveyed unit, because it has become a private home, does not qualify as [a current unit ].” 63 Fed. Reg. at 12,343.- 9 - should be overtu rned; (2) HUD had no authority to seek further refund for overpayment; and (3) the district court should order HU D to return all payments already made. The district court conclude d HUD unlawfully deprived Fo rt Peck of block-grant funding by improperly removing convey ed properties from the formula. Fort Peck Housing Auth. v. United States Dept. of Housing & Urban Dev. , 435 F. Supp. 2d 1125, 1132 (D. Colo. 2006). It de termined the plain language of § 4152(b)(1) created a minimum or “floor” of dwelling units to be funded and § 1000.318 violated this requirement. Id. In support of this conclusion, the court stressed that 25 U.S.C. § 4181(a) requires any housing formerly fund ed under the programs established by the 1937 Housing Act “shall, for the following fiscal year and each fiscal year thereafter, be considered a dwelling unit under § 4152(b).” Id. at 1133. The district court concluded “[t]he statute leaves no room for the formula to include some, but not all of the number of [1997 units]” because Congress limited agency discreti on when it required HUD “shall” use the “definitive” numb er of 1997 units. Id. at 1132. It further reasoned that even if the stat ute was ambiguous, deference must be given to Fort Peck’s reasonable interpretation of the statute because statutes are to be construed liberally to benefit Indian tribes. Id. at 1134. It determined that Fort Peck’s interpretation is consistent with NAHASDA’ s purposes and encouraged the building of new homeownership units which wo uld otherwise not be funded. Id. The court considered HUD’s regulation to be fundamen tally unfair to Housing Entities with large numbers of homeownership units who “suffe r decreases in their share of the annual apportionment” as units are conveyed while “tri bes with a large percentage of rental units- 10 - receive a greater share each year.” 10 Id. at 1133. Finally, the district court concluded Fort Peck’s position furthe red NAHASDA’s goals of se lf-governance and selfdetermination by eliminating many bu reaucratic burdens and removing HUD’s paternalistic oversight of whether units shoul d be conveyed or par ticipants evicted. Id. at 1134-35. For these reasons the district court inva lidated 24 C.F.R. § 1000.318 and ordered HUD “take such administrative action as necessary to implement [its] ruling.” Id. at 1136. In response to a Ru le 59(e) motion by Fort Peck 11 requesting return of the partial refund of alleged overpayments, the court re fused to order such return because these funds had already been distributed to othe r Housing Entities, making the issue moot. Fort Peck Housing Auth. v. United St ated Dept. of Housing & Urban Dev. , No. 05-CV00018, 2006 WL 2192043 at *1 (D. Colo . Aug. 1, 2006). Instead, it ordered HUD to “take whatever action may be appropriate within its regulatory author ity to adjust for its errors in computing [Fort P eck’s] entitlement . . . .” Id. at *2.

10 HUD’s regulations allowed inclusion of certain dwelling units that Tribal Housing Entities had plans to purchase or cons truct in 1997 in its initial computation of current units. The regulations do not allow fo r inclusion of other un its which have been built or purchased by a Tribal Housing Entity since that time. 24 C.F.R. § 1000.312.

11 Both parties filed motions under Fed. R. Civ. P. 59(e) to alter or amend the original judgment. HUD requested clarificat ion of the scope of the district court’s judgment and requested guidance as to wh ether administrative actions against other Tribal Housing Entities were included. The court modified its judgment to limit its holding to administrative action involving Fo rt Peck. Neither part y appealed from this decision.- 11 - II. We exercise jurisdiction under the Ad ministrative Procedures Act (APA) and consider whether the HUD’s acti on was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” 5 U.S.C. § 706(2)(A). Our review is de novo for agency action under the Administrative Procedure Act. Defenders of Wildlife v. United States Envtl. Protection Agency , 415 F.3d 1121, 1126 (10t h Cir. 2005). We afford the district court’s decision no particular deference. See Santa Fe Energy Prods. Co. v. McCutcheon , 90 F.3d 409, 413 (10th Cir. 1996). “An agency’s rulemaking power is not the power to make law, it is only the power to adopt regulations to carry in to effect the will of Congress as expressed by the statute.” Sundance Assocs., Inc. v. Reno , 139 F.3d 804, 80 8 (10th Cir. 1998) (quotation omitted). Statutory interpretation begins with the words Congress has c hosen. The inquiry ends if that language is clear. We merely enforce the statute’s plain meaning. Robinson v. Shell Oil Co. , 519 U.S. 337, 340 (1997). But if an ambiguity confuses the statute’s meaning, or irrational results arise from the statut e’s literal wording, we apply additional interpretive tools to ascertain and gi ve effect to Congress’s intent. See, e.g. , Exxon Mobil Corp. v. Allapattah Servs. Inc. , 545 U.S. 546, 568 (2005) (“ Extrinsic materials have a role in statutory interpretation only to the extent they shed a reliable light on the enacting Legislature’s understanding of ot herwise ambiguous terms.”); Carter v. United States , 530 U.S. 255, 267 (2000) (“[T]he title of a st atute is of use only when it sheds light on some ambiguous word or phrase in the st atute itself.”) (quotations and alterations omitted). Such tools include co nsideration of the statute’s hi story and purpose as well as- 12 - statutory canons of construction. “If a c ourt, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law an d must be given effect.” Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 843 n.9 (1984).
A. Statutory Interpretation The parties agree NAHASDA required HUD to create and implement the blockgrant formula. They also ag ree Congress set forth criteria to act as the formula’s basis and allowed HUD to identify ot her criteria. This authoriz ing language was plain and required the formula be based on factors which re flect “the need of the Indian tribes . . . for assistance for affordable housing activities.” 25 U.S.C. § 4152(b). The parties disagree about the amount of discretion Congress gave HUD regarding the formula’s creation. The words of Congress are our be st guide. Those word s explicitly list two factors – the number of 1997 dwelling units and the extent of current need – and a third factor allowing further identif ication of “[o]ther objectivel y measurable conditions as the Secretary and the Indian tribes may sp ecify.” 25 U.S.C. §§ 4152(b)(1)-(3). “It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a vi ew to their place in the overall statutory scheme.” 12 Nat’l Assoc. of Home Buil ders v. Defenders of Wildlife , 551 U.S. 644, 666

12 The importance of context has been ap tly illustrated by the Supreme Court, “the scope of what seems a precise technical chess instruction, such as ‘you must place the queen next to the king,’ varies with context, depending, for exampl e, upon whether the instructor is telling a beginner how to set up the board or telling an advanced player how to checkmate an opponent.” Zuni Pub. Sch. Dist. No. 89 v. Dep’t of Educ. , 550 U.S. 81, 127 S. Ct. 1534, 1546 (2007).- 13 - (2007) (internal citation and quotations omitted). Here, NAHASDA requires the formula be “based on” three factors. As used with in § 4152(b) where Cong ress explicitly allowed for further definition of factors by HUD, the phrase “based on” is not synonymous with “equal to.” See Sierra Club v. EPA , 356 F.3d 296, 306 (D.C. Ci r. 2004) (the term “based on” is ambiguous and does not require the agency ’s findings rest solely upon a particular model); McDaniel v. Chevron Corp. , 203 F.3d 1099, 1111 (9th Cir. 2000) (“based on” may be reasonably interpreted as indicating a “s tarting point” or “foundation”). Applying the ordinary definition of “based on” means the factors form the basis, beginning, or starting point, of the formula. See United States ex rel. Sille r v. Becton Dickinson & Co. , 21 F.3d 1339, 1348 (4th Cir. 1994) (“To ‘base upon’ means to ‘use as a basis for.’” (citing Webster’s Third New In t’l Dictionary 180 (1986))). 13 Congress amended § 4181 of NAHASDA in 2000. This amendment required “[a]ny housing that is the subject of a contra ct for tenant-based assistance between the Secretary and an Indian housing authority that is terminated under this section shall, for the following year and each fis cal year thereafter, be cons idered a dwelling unit under section 4152(b)(1).” 25 U.S.C. § 4181(a). Fort Peck assert s this amendment supports the district court’s conclusion that the downwa rd adjustment in 24 C.F.R. § 1000.318 violated NAHASDA’s purpose of requiring the 1997 units act as the basis for the block grant formula. 435 F. Supp. 2d at 1133-34. This is incorrect. The amendment did not require the funding of these dwelling units in perpetuity, nor did it require any other

13 Even if Congress’s use of the term “bas ed on” creates some ambiguity, the term does not render NAHASDA’s purpose or intent ambiguous.- 14 - alteration of how HUD had interpreted the st atute in its regulatory program. It only required the terminated housing be consider ed a dwelling unit under § 4152(b)(1) and included as part of the block grant formula’ s basis -- no more. It did not remove or amend the other two factors of § 4152(b) whic h also formed the basis for the block grant formula, nor did it limit HUD’s discretion to include other objectively measurable conditions in the formula according to § 4152(b)(3). Because HUD included all terminated housing in § 41 52(b)(1), it satisfied the requ irement of § 4181(a). HUD incorporated the units re quired by § 4152(b)(1) wh en it used all of the 1997 dwelling units as the starting point for the al location formula. However, this number was but one factor required to meet the statute’s overarching mandate that the formula “reflect the need of the Indian tribes and the Indian ar eas of the tribes for a ssistance for affordable housing activities.” 25 U.S.C. § 4152(b). HUD’s adjustment from the number required by § 4152(b)(1) and § 4181 is of no concer n because the adjustment was accomplished through “other objectively meas urable conditions” that reflect ed the need of the Indian tribes in accordance with § 4152(b)(3). Congress’s explicit direction allowed for this result. It required the funding be tied to the need of the tribes and granted the negotiated rulemaking committee the author ity to craft criteria for inclusion in the formula. HUD determined the funding of un its no longer owned or operat ed by a Tribal Housing Entity decreased the amount of remaining funds availa ble to fund the current need of all tribal programs. Thus, it incorporat ed a corresponding reduction in the current units portion of the formula funding and effectively increased the amount of funding available for the current need portion of the formula. Interp reting § 4152(b)(1) to prohibit a reduction in- 15 - the number of current units co rresponding to a measurable reduction in responsibility by the Tribal Housing Entity for th ose units is inconsistent with the statute’s plain language and is contrary to Congress’s unambiguous inte nt that the funding fo rmula relate to the needs of all tribal Housing Entities. See 25 U.S.C. § 4152. While we appreciate the district court’s concern with the decreased allocation to entities that chose home-owner ship over rental programs, its literal reading of the statutory language conflicts with the plain lan guage of the statute viewed as a whole. The district court was without the be nefit of our recent holding in United Keetoowah Band of Cherokee Indians v. Department of Housing and Ur ban Development , 567 F.3d 1235, 1241 (10th Cir. 2009). Therein, we consid ered whether HUD’s regulation imposing a jurisdictional-based factor for funding eligibility was contrary to its authority under the statute. Holding in the affirmative, we stated § 4152(b) “explic itly and unambiguously mandates that the factors in HUD’s allocation formula reflect -- in other words, have some connection or nexus with -- the needs of I ndian tribes and Indian areas of the tribes. The language does not permit any other reading.” Id. The same reasoning applies equally here. An interpretation of the form ula requirement in NAHASDA that requires a perpetual funding “floor” does not reflec t Congress’s unambiguous intent that the formula be related to the need of all tr ibal Housing Entities. Where Congress has expressed its intent, we are bound to give effect to that intent. Osborne v. Babbitt , 61 F.3d 810, 812 (10th Cir. 1995).
B. Agency Rulemaking Having determined the plain language of the statute did not set a funding floor- 16 - based upon the 1997 units, we consider wh ether the regulation comported with the statutory requirement that the formula rela te to the need of the Housing Entities. Congress authorized broad agen cy authority when it delega ted responsibility for creation of the block-grant formula to HUD. 25 U.S.C. § 4152(a). This broad authority, however, was limited by the requirement the formula have a “nexus with” the needs related to assistance for affordab le housing activities. United Keetoowah , 567 F.3d at 1241; see also 25 U.S.C. § 4152(b). We review agency rulemaking with great deference when a challenged decision involves matters within the ag ency’s area of expertise. Utah Envtl. Congress v. Bosworth , 443 F.3d 732, 739 (10th Cir. 2006). He re, the disbursement of funds for lowincome housing assistance for Indian tribes was certainly within HUD’s expertise: its institutional experiences in implementing th e Housing Act of 1937, including the lowincome housing programs for Indian trib es which NAHASDA replaced, justify our deference here. Congress not only identified sp ecific factors to serve as the formula’s basis but also required coopera tion with tribal representative s in finalizing the formula.
See 25 U.S.C. § 4116. This required pa rticipation supplemented HUD’s institutional knowledge and expertise. 14

14 The district court stated this particip ation of tribal representatives was “of no relevance.” Ft. Peck , 435 F. Supp. 2d at 1134. It is true a rule developed through negotiated rulemaking shall not be “accorded any greater deference by a court than a rule which is the product of other rulemaking proc edures.” 5 U.S.C. § 570. However, this does not mean we ignore the forty-eigh t members of the negotiated rulemaking committee who represented a numbe r of Indian tribes. Thes e representatives had firsthand knowledge of factors helpful in identifyi ng tribal need. We do not grant any greater deference to this regulation because tribal representatives were involved. We do- 17 - HUD’s regulation complied with the mand ate set forth in NAHASDA and clearly included the entire (b)(1) factor as the starting point. See 24 C.F.R. §§ 1000.316(a)(1)- (3) (including all of the 1997 units). From this initial numbe r, the formula offset the 1997 units by a definitive number of units as of a definitive date. 24 C.F.R. §§ 1000.316– 1000.318. This number refl ected the factors explicitly re quired by §§ 4152(b)(1)-(3). A reduction equal to the number of dwelling un its no longer owned or operated by a Tribal Housing Entity recognized the ongoing and evolving needs of Tribal Housing Entities. NAHASDA clearly required interplay between a ll three factors in the determination of a Tribal Housing Entity’s need, including those HUD identified in the rulemaking process. Section 1000.318’s downward adjustment was an example of this interplay. It was not arbitrary or capricious. Finally, Fort Peck asserts even if th e regulations are reasonable, we must nonetheless reject them and defer to its interpretation of NAHA SDA because “statutes are to be construed liberally in favor of Indi ans, with ambiguous prov isions interpreted to their benefit.” Montana v. Blackfeet Tribe , 471 U.S. 759, 76 6 (1985). Because NAHASDA was unambiguous and the final re gulations were properly promulgated within NAHASDA’s mandate, we need not address this issue except to note the canon cited does not allow a court to rob Peter to pay Paul no matter how well intentioned Paul may be. The statute was not ambiguous an d HUD’s regulation dispersed block-grant funding in such a way as to meet the current needs of all tribes.

recognize the import of their participation and insight just as we recognize the value of public comments when we consider traditional rulemaking procedures.- 18 - We DENY the motion for leave to file a brief as amicus curiae submitted by other Housing Entities as untimely, REVERSE the district court’s invalidation of 24 C.F.R. § 1000.318, REMAND for action consistent with this Order and Judgment, and DISMISS Fort Peck’s cross-appeal. 15 Entered by the Court:

Terrence L. O’Brien United States Circuit Judge

15 Because HUD’s actions did not violate Congr ess’s mandate, the issues raised in Fort Peck’s cross-appeal are moot.APPENDIX A 25 U.S.C.A. § 4152 PAGE 1

Effective: December 27, 2000 United States Code Annotated Currentness Title 25. Indians Chapter 43 . Native American Housing Assistance and Self-Determination (Refs & Annos) Subchapter III . Compliance, Audits, and, Report § 4152. Allocation formula (a) Establishment The Secretary shall, by regulati ons issued not later than the expiration of the 12-month period beginning on October 26, 1 996, in the manner provided under section 4116 of this title, establish a formula to provide for alloca ting amounts available for a fiscal year for block grants under this chapter among Indian tribes in ac cordance with th e requirements of this section. (b) Factors for determination of need The formula shall be based on factors that refl ect the need of the In dian tribes and the Indian areas of the tribes fo r assistance for afford able housing activities, including the following factors: (1) The number of low-income housing dwe lling units owned or operated at the time pursuant to a contract between an Indian housing authority fo r the tribe and the Secretary. (2) The extent of poverty and economic distre ss and the number of Indian families within Indian areas of the tribe. (3) Other objectively measurable conditions as the Secretary and the Indian tribes may specify. (c) Other factors for consideration In establishing the formula, the Secretary shall consider-- (1) the relative administrativ e capacities and other challe nges faced by the recipient, including, but not limited to ge ographic distribution within the Indian area and technical capacity; andAPPENDIX A 25 U.S.C.A. § 4152 PAGE 2

(2) the extent to which terminations of assist ance under subchapter V of this chapter will affect funding available to State recognized tribes. (d) Funding for public housin g operation and modernization (1) Full funding (A) In general Except with respect to an I ndian tribe described in subparagraph (B), the formula shall provide that, if, in any fiscal year, the total amount made available for assistance under this chapter is equal to or greater than th e total amount made available for fiscal year 1996 for assistance for the operation and mode rnization of public housing developed or operated pursuant to a contract between the Secretary and an Indian housing authority pursuant to the United States Housing Act of 1937 [ 42 U.S.C.A. § 1437 et seq. ], the amount provided for such fiscal year for each Indian tribe for which such operating or modernization assistance was provided for fiscal year 1996 shall not be less than the total amount of such operating and m odernization assistance provided for fiscal year 1996 for such tribe. (B) Certain Indian tribes With respect to fiscal year 2001 and each fiscal year th ereafter, for any Indian tribe with an Indian housing authority that owns or operates fewer than 250 public housing units, the formula shall provide that if the amount pr ovided for a fiscal year in which the total amount made available for assistance under this chapter is equal to or greater than the amount made available for fiscal year 1 996 for assistance for the operation and modernization of the public housing referre d to in subparagraph (A), then the amount provided to that Indian trib e as modernization assistance shall be equal to the average annual amount of funds provided to the Indi an tribe (other than funds provided as emergency assistance) under the assistance pr ogram under section 14 of the United States Housing Act of 1937 ( 42 U.S.C. 1437 l ) for the period beginning with fiscal year 1992 and ending with fiscal year 1997. (2) Partial funding The formula shall provide that, if, in any fiscal year, the to tal amount made available for assistance under this chapter is less than the total amount made available for fiscal year 1996 for assistance for the operation and mode rnization of public housing developed orAPPENDIX A 25 U.S.C.A. § 4152 PAGE 3 operated pursuant to a contract between the Secretary and an Indian housing authority pursuant to the United States Housing Act of 1937 [ 42 U.S.C.A. § 1437 et seq. ], the amount provided for such fiscal year for each Indian tribe for which such operating or modernization assistance was provided for fi scal year 1996 shall not be less than the amount that bears the same ratio to the tota l amount available for assistance under this chapter for such fiscal year that the amount of operating and modernization assistance provided for the tribe for fiscal year 1996 bears to the total amount made available for fiscal year 1996 for assist ance for the operation and mode rnization of such public housing. (e) Effective date This section shall take effect on October 26, 1996. CREDIT(S) ( Pub.L. 104-330, Title III, § 302 , Oct. 26, 1996, 110 Stat. 4036; Pub.L. 106-568, Title X, § 1003(g) , Dec. 27, 2000, 114 Stat. 2928; Pub.L. 106-569, Title V, § 503(f) , Dec. 27, 2000, 114 Stat. 2964.)
HISTORICAL AND STATUTORY NOTES References in Text This chapter, referred to in subsecs. (a) and (d), was in the original “this Act”, meaning the Native American Housing Assistance a nd Self-Determination Act of 1996, Pub.L. 104-330, Oct. 26, 1996, 110 Stat. 4016, as ame nded, which is classified principally to this chapter. For complete classifica tion of this Act to the Code, see Short Title note set out under section 4101 of this title and Tables. Subchapter V of this chapter, referred to in subsec. (c)(2), was in the original “title V”, meaning Title V of Pub.L. 104-330, Oct. 26, 1996, 110 Stat. 4041, as amended, which is classified principally to subchapter V of this chapter; see Tables for complete classification. The United States Housing Act of 1937, referred to in subsec. (d)(1)(A), is Act Sept. 1, 1937, c. 896, as revised gene rally by Pub.L. 93-383, Title II, § 201(a), Aug. 22, 1974, 88 Stat. 653, which is classified principally to chapter 8 (section 1437 et seq. ) of Title 42. For complete classification of this Act to the Code, see Short Title note set out under section 1437 of Title 42 and Tables.APPENDIX A 25 U.S.C.A. § 4152 PAGE 4

“Section 14 of the United States Housing Act of 1937 ( 42 U.S.C. 1437 l )”, referred to in subsec. (d)(1)(B), was repealed by Pub.L. 105-276, Title V, § 522(a), Oct. 21, 1998, 112 Stat. 2564. Codifications Pub.L. 106-569 amended this section without any reference to prior identical amendment by Pub.L. 106-568. See 2000 Amendments notes under this section. Amendments 2000 Amendments. Subsec. (d)(1)(A). Pub.L. 106-569, § 503(f)(1), designated existing provisions as subpar. (A), added a headin g thereto, and as so designated, substituted “Except with respect to an Indian tribe described in su bparagraph (B), the formula” for “The formula”. Pub.L. 106-568, § 1003(g)(1) , designated existing provisions as subpar. (A), added a heading thereto, and as so de signated, substituted “Except with respect to an Indian tribe described in subparagraph (B), the formula” for “The formula”. Se e Codifications note set out under this section. Subsec. (d)(1)(B). Pub.L. 106-569, § 503(f)(2), added subpar. (B). Pub.L. 106-569, § 1003(g)(2) , added subpar. (B). See Codifications note set out under this section.
LIBRARY REFERENCES American Digest System Indians 9. Key Number System Topic No. 209

. 25 U.S.C.A. § 4152 , 25 USCA § 4152 Current through P.L. 110-316 (excluding P.L. 110-234, 110- 246, 110-289, 110-314, and 110-315) approved 8-14-08 Copr. (C) 2008 Thomson Re uters/West. No Claim to Orig. U.S. Govt. Works