[Federal Register Volume 74, Number 8 (Tuesday, January 13, 2009)]
[Rules and Regulations]
[Pages 1868-1869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-378]



[[Page 1867]]

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Part V





Department of Housing and Urban Development





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24 CFR Part 1003



Prohibition on Use of Indian Community Development Block Grant 
Assistance for Employment Relocation Activities; Final Rule

  Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Rules 
and Regulations  

[[Page 1868]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 1003

[Docket No. FR-5115-F-02]
RIN 2577-AC78


Prohibition on Use of Indian Community Development Block Grant 
Assistance for Employment Relocation Activities; Final Rule

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Final rule.

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SUMMARY: This rule amends 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. 
More specifically, the rule prohibits 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 only an insignificant loss of jobs, the rule provides 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. This rule follows a September 8, 2008, proposed rule, for 
which no public comments were received. This rule adopts the proposed 
rule without change.

DATES: Effective Date: February 12, 2009.

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 303-675-1600 
(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 toll-free 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. The September 8, 2008, Proposed Rule

    On September 8, 2008, at 73 FR 52166, HUD published a rule that 
proposed to implement subsection (h) of the 1974 HCD Act by revising 
HUD's ICDBG program regulations in 24 CFR part 1003. The rule proposed 
to establish a new Sec.  1003.209 (entitled ``Prohibition on Use of 
Assistance for Employment Relocation Activities''), which would 
describe the ICDBG job-piracy provisions. The September 8, 2008, rule 
also proposed to amend Sec.  1003.505 (entitled ``Records to be 
Maintained''), to ensure that appropriate recordkeeping requirements 
are met. The preamble to the September 8, 2008, proposed rule provides 
at 73 FR 52166 through 52168, a more detailed discussion of the 
specific regulatory amendments proposed to be made to 24 CFR part 1003.
    The September 8, 2008, proposed rule provided a 60-day public 
comment period. HUD received no public comments by the date of the 
close of the public comment period on November 7, 2008.

III. This Final Rule

    At this final rule stage, HUD adopts the proposed rule without 
change.

IV. 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) for review 
and approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520), and assigned OMB control number 2577-0191.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made at the proposed rule stage in accordance with HUD regulations 
at 24 CFR part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of 
No Significant Impact remains applicable to this final rule and is 
available for public inspection between the hours of 8 a.m. and 5 p.m. 
eastern time on weekdays in the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th 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.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from

[[Page 1869]]

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 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 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.


0
Accordingly, for the reasons discussed in the preamble, HUD amends 24 
CFR part 1003 to read as follows:

PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND 
ALASKA NATIVE VILLAGES

0
1. The authority citation for part 1003 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 5301-5320.


0
2. Add Sec.  1003.209 to read as follows:


Sec.  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) Sec.  1003.203(b); or
    (ii) Sec. Sec.  1003.201(a)-(d), 1003.201(k), 1003.203(a), or Sec.  
1003.204 when the grantee, subrecipient, or, in the case of an activity 
carried out pursuant to Sec.  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 Sec.  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, 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 Sec.  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 Sec.  
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.
0
3. Revise Sec.  1003.505 to read as follows:


Sec.  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 Sec.  1003.209.

    Dated: January 5, 2009.
Paula O. Blunt,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. E9-378 Filed 1-12-09; 8:45 am]
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