[Federal Register Volume 88, Number 2 (Wednesday, January 4, 2023)]
[Proposed Rules]
[Pages 328-337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28020]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 1006

[Docket No. FR-6273-P-01]
RIN 2577-AD13


Implementing Rental Housing Assistance for the Native Hawaiian 
Housing Block Grant Program

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

ACTION: Proposed rule.

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SUMMARY: Through this notice of proposed rulemaking, the Department of 
Housing and Urban Development (HUD) is proposing to amend its 
regulations covering rental housing assistance for the Native Hawaiian 
Housing Block Grant (NHHBG) program, consistent with the Native 
American Housing Assistance and Self-Determination Act of 1996 
(NAHASDA). HUD proposes to clarify and improve consistency with 
NAHASDA's statutory requirements and HUD's Indian Housing Block Grant 
program regulations. This proposed rule would also help make affordable 
housing opportunities, in the form of NHHBG-assisted rental housing, 
more available to eligible Native Hawaiian families.

DATES: Comment Due Date: March 6, 2023.

ADDRESSES: 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, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
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 
www.regulations.gov website can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that 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 
proposed rule.

    No Facsimile Comments. Facsimile (fax) comments are not acceptable.
    Public Inspection of Public Comments. HUD will make all properly 
submitted comments and communications available for public inspection 
and copying between 8 a.m. and 5 p.m. weekdays at the above address. 
Due to security measures at the HUD Headquarters building, you must 
schedule an appointment in advance to review the public comments by 
calling the Regulations Division at 202-708-3055 (this is not a toll-
free number). HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as individuals 
with speech and communication disabilities. To learn more about how to 
make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Copies of all 
comments submitted are available for inspection and downloading at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Claudine Allen, Lead Native Hawaiian 
Program Specialist, Office of Native American Programs, HUD Honolulu 
Field Office, 1003 Bishop Street, Suite 2100, Honolulu, HI 96813; 
telephone number 808-457-4674 (this is not a toll-free number). HUD 
welcomes and is prepared to receive calls from individuals who are deaf 
or hard of hearing, as well as individuals with speech and 
communication disabilities. To learn more about how to make an 
accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

    The Hawaiian Homelands Homeownership Act of 2000 (HHH Act) was 
enacted as both title II of the Omnibus Indian Advancement Act (Pub. L. 
106-568, 114 Stat. 2868, approved December 27, 2000) and subtitle B of 
title V of the American Homeownership and Economic Opportunity Act of 
2000 (Pub. L. 106-569, 114 Stat. 2944, approved December 27, 2000). 
Section 513 of the HHH Act, Public Law 106-569, amended the Native 
American Housing Assistance and Self-Determination Act of 1996 (25 
U.S.C. 4101 et seq.) (NAHASDA) by adding to it a new ``Title VIII--
Housing Assistance for Native Hawaiians''. Title VIII established the 
Native Hawaiian

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Housing Block Grant (NHHBG) program to provide block grant assistance 
for affordable housing for eligible Native Hawaiians,\1\ and section 
810 provides statutory authority for NHHBG rental housing assistance.
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    \1\ Section 513 of the HHH Act adds sections 801 through 824, 
which authorize this NHHBG program, as title VIII of NAHASDA. 
Although NAHASDA may be referenced throughout this proposed rule, 
NHHBG serves Native Hawaiians specifically.
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    In accordance with title VIII of NAHASDA, the NHHBG program must 
primarily benefit low-income Native Hawaiian families who are eligible 
to reside on the Hawaiian Home Lands. Native Hawaiian families eligible 
to reside on the Hawaiian Home Lands experience more significant 
housing challenges compared to Native Hawaiian households overall, 
including other Hawaii residents and Native Hawaiians already residing 
on the Hawaiian Home Lands.
    On June 13, 2002, HUD published an interim rule (``interim rule'') 
adding a new 24 CFR part 1006 to implement the block grant assistance 
program for Native Hawaiians. 67 FR 40773. HUD modeled the NHHBG 
regulations after the Indian Housing Block Grant (IHBG) regulations 
implemented at 24 CFR part 1000 because the NHHBG and IHBG programs are 
authorized under the same statute and have overlapping requirements 
that apply to both programs.\2\
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    \2\ 67 FR 40773; see Native American Housing Assistance and 
Self-Determination Act of 1996 [hereinafter NAHASDA] sections 810-
811, 25 U.S.C. 4229-30. There are also differences between the 
statutory authorities governing the IHBG and NHHBG programs. In 
2008, the Native American Housing Assistance and Self-Determination 
Reauthorization Act of 2008 (Pub. L. 110-411) (NAHASDA 
Reauthorization Act), made several changes to, inter alia, statutory 
requirements governing HUD's IHBG program, and implemented statutory 
changes to NAHASDA made by several laws enacted between 1998 and 
2005. See 77 FR 71513. The NAHASDA Reauthorization Act did not amend 
statutory provisions governing block grant assistance for Native 
Hawaiians. See Native American Housing Assistance and Self-
Determination Reauthorization Act of 2008, Public Law 110-411, 122 
Stat. 4319-35.
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    The interim rule established program requirements pertaining to 
homeownership and rental assistance authorized under section 810 of 
title VIII of NAHASDA.\3\ The new 24 CFR part 1006 as implemented by 
the interim rule closely followed the statute with some differences for 
clarification. Part 1006 established requirements such as: 
applicability, definitions, and waivers; what the Department of 
Hawaiian Home Lands (DHHL) must include in its housing plan that it 
must submit to HUD for each Federal fiscal year grant; eligible program 
activities, including development, housing services, housing management 
services, crime prevention and safety activities and model activities; 
requirements related to income eligibility and compliance with 
applicable Federal laws; and reporting, performance reviews, and how to 
address and remedy noncompliance. HUD has not comprehensively reviewed 
or amended 24 CFR part 1006 since this interim rulemaking.
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    \3\ NAHASDA section 810(a), 25 U.S.C. 4229(a).
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    Prior to fiscal year 2020, the DHHL, the sole recipient of the 
NHHBG, used NHHBG funds primarily for homeownership housing assistance. 
In 2019, Hawaii's governor approved administrative rules allowing the 
DHHL to expand residential lease offerings to include rental 
housing.\4\ HUD received feedback from the DHHL about the DHHL's rental 
housing projects currently in development. HUD then reviewed its 
regulations and determined they do not adequately explain how NHHBG 
funds may be used for rental assistance and could be revised to provide 
additional details to better support a fully successful rental housing 
program administered by the DHHL. This review has prompted HUD's 
proposal to amend NHHBG program regulations in this notice of proposed 
rulemaking.
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    \4\ Dep't of Haw. Home Lands, Adoption of Chapter 10-7 Hawaii 
Administrative Rules (2019), https://dhhl.hawaii.gov/wp-content/uploads/2020/02/HAR-Ch-10-7_Eff-Aug-17-2019-1.pdf.
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    Two of HUD's proposals require further background discussion. 
First, NAHASDA requires HUD to establish certain program requirements 
for both IHBG and NHHBG. On July 26, 2007, HUD amended the IHBG 
regulations at 24 CFR part 1000 to reflect these requirements. 72 FR 
41211. Pursuant to authority in section 404(c) of NAHASDA, HUD revised 
Sec.  1000.514 to require IHBG recipients to submit Annual Performance 
Reports within 90 days, instead of 60 days, of the end of their program 
year. HUD did not make a corresponding change to the NHHBG provision in 
Sec.  1006.410, Performance reports.
    Second, HUD has identified one provision, Sec.  1006.101, Housing 
plan requirements, where HUD has flexibility to implement regulatory 
requirements different than those in the IHBG framework due to 
differences in underlying statutory language for the NHHBG and IHBG 
programs. Under section 803 of NAHASDA, 25 U.S.C. 4223, the DHHL must 
submit a housing plan ``each fiscal year;'' and no deadline is 
specified. Section 1006.101 currently requires submission of a housing 
plan ``for each Federal Fiscal Year grant.'' The Native American 
Housing Assistance and Self-Determination Reauthorization Act of 2008 
(Pub. L. 110-411) (NAHASDA Reauthorization Act) amended, inter alia, 
statutory requirements for submission of housing plans under the IHBG 
program; the amended statute requires submission no later than 75 days 
before the beginning of a program year.\5\ However, the NAHASDA 
Reauthorization Act did not amend statutory provisions governing the 
NHHBG program.\6\ Accordingly, HUD published a final rule in the 
Federal Register on December 3, 2012, 77 FR 71513, that revised IHBG 
program regulations at 24 CFR part 1000 to conform to new statutory 
requirements, including 24 CFR 1000.214 governing the deadline for 
submission of Indian housing plans under the IHBG program. HUD did not 
amend any NHHBG regulations in that final rule.
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    \5\ NAHASDA Reauthorization Act section 102 (amending section 
102 of NAHASDA, 25 U.S.C. 4112).
    \6\ See generally NAHASDA Reauthorization Act of 2008, Public 
Law 110-411, 122 Stat. 4319-35.
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II. This Proposed Rule

    Given the need to clarify the rental assistance provisions in HUD's 
current NHHBG regulations and because HUD has not comprehensively 
reviewed or amended 24 CFR part 1006 in over 20 years, HUD is proposing 
to amend its regulations to clarify how the funding recipient may use 
NHHBG program funds for rental housing assistance, as authorized by 
title VIII of NAHASDA. These changes should relieve burden on the 
funding recipient in implementing rental assistance, directly help low-
income Native Hawaiian families who need rental assistance, and clarify 
the tools available for HUD to monitor and enforce program 
requirements. This proposed rule would help make affordable housing 
opportunities, in the form of NHHBG-assisted rental housing, more 
available to Native Hawaiian families who are not ready for or do not 
desire homeownership housing, and who otherwise may be experiencing 
overcrowded conditions, lack of affordability, and/or homelessness.
    HUD is proposing in this rulemaking to amend 24 CFR part 1006 to 
ensure compliance with the NHHBG program's statutory requirements; 
promote consistency between NHHBG and IHBG program regulations where 
the programs' statutory requirements overlap or where inconsistencies 
exist between the NHHBG and IHBG regulatory frameworks; and add details 
that would improve the NHHBG

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regulatory framework governing rental assistance.

Section 1006.10, Definitions

    HUD is proposing to add definitions in Sec.  1006.10 for each of 
the reasons identified in the most immediately preceding paragraph.
    HUD is proposing to add a definition for ``Annual income'' that 
matches the definition in Sec.  1000.10. This term is currently used in 
part 1006 but does not have a specific definition. The proposed 
definition would allow for discretion by the Department of Hawaiian 
Home Lands to use the Section 8 programs definition in 24 CFR part 5, 
the definition of income as used by the U.S. Census Bureau, or adjusted 
gross income as defined for purposes of reporting under Internal 
Revenue Service (IRS) Form 1040 series for individual Federal annual 
income tax purposes.
    HUD is proposing to add definitions for ``Homeless family'' and 
``Person with a Disability''. These terms are currently used in part 
1006 but do not have specific definitions. HUD's proposed definition 
for ``Person with a Disability'' is consistent with the definition of 
person with a disability in HUD's regulations for section 504 of the 
Rehabilitation Act of 1973 in 24 CFR 8.3, as amended by the Americans 
with Disabilities Act (ADA) Amendments Act of 2008, see 42 U.S.C. 
12102(3)(B). The provisions and rules of construction in 28 CFR 35.108 
are necessary when applying the definition of ``Person with a 
Disability'' in this proposed rule.
    HUD is proposing to add a definition for ``Income'' that clarifies 
this term has the meaning provided in the definition of ``Income'' in 
section 4(9) of NAHASDA. The statute defines ``Income'' as income from 
all sources of each member of the household, as determined according to 
criteria determined by HUD, and provides for three categories of 
amounts that may not be considered income: amounts not actually 
received by the family, certain amounts received under the Social 
Security Act, and amounts received for certain disability compensation 
or as dependency and indemnity compensation received by veterans or 
their surviving family members.
    HUD is proposing to add a definition for ``NAHASDA'' that provides 
the full title, Native American Housing Assistance and Self-
Determination Act of 1996, and United States Code citation, 25 U.S.C. 
4101 et seq.
    HUD is proposing to add a definition for ``Project-based rental 
assistance'' since HUD is proposing to add project-based rental 
assistance requirements in new Sec.  1006.227, Tenant-based or project-
based rental assistance. The definition would provide that project-
based rental assistance means rental assistance provided through a 
contract with the owner of an existing structure, where the owner 
agrees to lease the subsidized units to program participants. The 
definition would also provide that program participants would not 
retain rental assistance if they move from the project.

Section 1006.101, Housing Plan Requirements

    In this proposed rule, HUD is proposing to amend Sec.  1006.101 by 
revising the introductory text of Sec.  1006.101 to clarify that the 
DHHL must submit a housing plan before the start of its fiscal year. 
This is consistent with NHHBG statutory requirements and provides a 
clear deadline.
    HUD is also proposing to amend Sec.  1006.101 by making technical 
revisions to the introductory text to clarify that the housing plan has 
two components, a five-year plan and a one-year plan. HUD also proposes 
clarifying amendments to paragraphs (c) and (d). HUD is proposing to 
revise paragraph (c)(1) to clarify that the five-year plan may be 
changed as necessary to update it after its initial submission, but the 
information for the one-year plan must be submitted annually. HUD 
proposes revising paragraph (c)(2) to clarify that complete plans must 
include a new five-year plan. Paragraph (d) currently requires that, 
before undertaking new activities not addressed in a current one-year 
housing plan, the DHHL must submit to HUD for review any amendment to 
the plan. HUD proposes to revise this paragraph to clarify that the 
current one-year plan must have been reviewed by HUD and determined to 
comply with section 803 of NAHASDA.

Section 1006.201, Eligible Affordable Housing Activities

    HUD is proposing to amend Sec.  1006.201 by adding language that 
clarifies that eligible affordable housing activities may include those 
conducted in accordance with subpart D of part 1006 and that develop, 
operate, maintain, or support housing for rental or homeownership, or 
provide services with respect to affordable housing through the 
activities described in subpart C of part 1006. This added language 
improves consistency between Sec.  1006.201 and statutory language.\7\
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    \7\ 25 U.S.C. 4229(a).
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Section 1006.210, Housing Services

    HUD is proposing to amend Sec.  1006.210 by removing existing 
paragraph (g) and redesignating existing paragraph (h) as new paragraph 
(g). HUD proposes to move the existing language in Sec.  1006.210(g) to 
a new section, Sec.  1006.227, Tenant-based or project-based rental 
assistance, paragraph (a)--HUD is adding new Sec.  1006.227 that 
provides that NHHBG funds may be used for the provision of tenant-based 
(and project-based) rental assistance, and that provides further 
details about how funds may be used for such purposes. Existing Sec.  
1006.210(g) speaks to these details, so HUD proposes moving this 
language to the new section to eliminate redundancy and to efficiently 
organize HUD's regulations on the use of funds for tenant-based rental 
assistance.

Section 1006.227, Tenant-Based or Project-Based Rental Assistance

    HUD is proposing to add Sec.  1006.227 that describes in detail how 
NHHBG funds may be used for tenant-based rental assistance and project-
based rental assistance. HUD proposes to model this new section off 
Sec.  1000.103 to maintain consistency between IHBG and NHHBG 
regulations. However, HUD proposes slightly different language from 
Sec.  1000.103 to conform to NHHBG statutory requirements. Paragraph 
(a) of Sec.  1006.227 would explicitly authorize use of NHHBG funds for 
tenant-based rental assistance, which may include security deposits and 
first month's rent, and project-based rental assistance. Paragraph 
(a)(1) of this section would clarify that rental assistance must comply 
with the requirements of part 1006 and be provided to eligible 
families. In paragraph (a)(2), HUD proposes to incorporate statutory 
flexibility providing that DHHL ``may'' use NHHBG funds for rental 
assistance for eligible Native Hawaiian families ``both on and off the 
Hawaiian Home Lands,'' \8\ when appropriations acts enacted by Congress 
authorize such use by the DHHL.
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    \8\ Public Law 115-141; Public Law 116-6; Public Law 116-94; 
Public Law 116-260; Public Law 117-103 (emphasis added).
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Section 1006.301, Eligible Families

    HUD is proposing to amend Sec.  1006.301 by adding new paragraphs 
(b)(3) and (b)(3)(i) through (iii) to implement limitations on uses of 
NHHBG assistance for non-low-income families pursuant to section 
809(a)(2)(B)(ii) of NAHASDA. HUD proposes to implement a 10-percent 
limitation on the use, if any, of the

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amount specified in a housing plan for families whose income is 81 to 
100 percent of the median income; specify when the recipient, the DHHL, 
must seek HUD's approval; and set out related requirements. New 
paragraph (b)(3)(iii) would state that the limitations in the preceding 
paragraphs (b)(3)(i) and (ii) do not apply to other families who are 
non-low income that the DHHL has determined to be essential under Sec.  
1006.301(c).
    HUD is proposing to further amend Sec.  1006.301 by revising 
paragraph (b)(2) to add a sentence at the end of the paragraph 
clarifying that the DHHL must obtain HUD approval by submitting 
proposals in its housing plan, by amendment of the housing plan, or by 
special request to HUD at any time, where the DHHL would provide 
homeownership assistance to Native Hawaiian families who are not low-
income under Sec.  1006.301(b)(1). This revision would improve 
consistency with the IHBG program regulation at Sec.  1000.108.
    HUD is also proposing to amend Sec.  1006.301 by revising language 
in paragraph (b)(1) to clarify that the DHHL may provide homeownership 
assistance in conjunction with loan guarantee activities. Section 
1006.301(b)(1) currently states the DHHL may provide homeownership 
assistance through loan guarantee activities, but such assistance is 
not provided through loan guarantee activities alone.
    Finally, HUD proposes to revise paragraph (b)(2) to make technical 
changes, such as the addition of a cross reference, that conform to 
HUD's proposed addition of new paragraph (b)(3) and subordinate 
paragraphs (b)(3)(i) through (iii).

Section 1006.305, Low-Income Requirement and Income Targeting

    HUD is proposing to amend Sec.  1006.305 by revising existing 
paragraph (a) and existing paragraphs (a)(1) and (2) and adding new 
paragraphs (a)(3) through (5). HUD proposes these changes to reflect 
the typical timeline for families entering programs offered by the 
DHHL, the typical timeline for constructing housing, and the 
possibility of fluctuating incomes over time.
    HUD's proposed revision to paragraph (a) would provide that housing 
qualifies as affordable housing for purposes of NAHASDA and part 1006 
provided that the family occupying the housing unit is low-income at 
the times described in paragraphs (a)(1) through (5).
    HUD proposes removing language in paragraph (a)(1) referring to 
occupancy by a low-income family to avoid redundancy with new language 
proposed in paragraph (a).
    HUD proposes removing the last clause of paragraph (a)(2), ``or is 
an owner-occupied unit in which the family is low-income at the time it 
receives NHHBG assistance'' and adding it as a new paragraph (a)(3). 
HUD also proposes to add a sentence to the end of paragraph (a)(2) 
providing that when the DHHL enters into a loan contract with the 
family for assistance to purchase or construct a homeownership unit, 
the time of purchase means the time that loan contract is executed.
    HUD proposes adding paragraphs (a)(3) through (5) to further 
clarify when housing qualifies as affordable housing: under paragraph 
(a)(3), in the case of owner-occupied housing units, at the time the 
family receives NHHBG assistance; under paragraph (a)(4), in the case 
of a lease-purchase agreement for existing housing or for housing to be 
constructed, at the time the lease-purchase agreement is signed; and 
under paragraph (a)(5), in the case of emergency assistance to prevent 
homelessness or foreclosure, at the time the family receives NHHBG 
assistance.

Section 1006.306, Income Verification for Receipt of NHHBG Assistance

    HUD is proposing to add Sec.  1006.306 to incorporate for the NHHBG 
program requirements for initial determination of income eligibility 
and periodic reverification. These requirements are already implemented 
for the IHBG program in Sec.  1000.128, and HUD's proposed addition of 
these requirements in Sec.  1006.306 would ensure compliance with 
NAHASDA and improve consistency between IHBG and NHHBG program 
regulations.

Section 1006.307, Non-Low-Income Families

    HUD is proposing to add Sec.  1006.307 to clarify that a family 
that was low-income at the times described in Sec.  1006.305 but 
subsequently becomes a non-low-income family may continue to 
participate in the program in accordance with the DHHL's admission and 
occupancy policies. HUD proposes to model this new section off the IHBG 
program regulation in Sec.  1000.110(a) to improve consistency between 
NHHBG and IHBG program regulations. Section 1006.307 would exempt these 
families from the limitations HUD proposes to add at Sec.  
1006.301(b)(3)(i), and would permit the DHHL to apply the additional 
requirements HUD proposes to add in Sec.  1006.301(b)(3)(ii) based on 
the DHHL's policies.

Section 1006.310, Rent and Lease-Purchase Limitations

    HUD is proposing to amend Sec.  1006.310 by adding details about 
maximum and minimum rents limitations, flat or income-adjusted rent, 
and utilities, to maintain consistency with IHBG program regulations at 
Sec. Sec.  1000.124 and 1000.126. HUD proposes to move the last 
sentence in Sec.  1006.310(a), which states the maximum monthly rent 
for a low-income family may not exceed 30 percent of the family's 
monthly adjusted income, to new paragraph (a)(1). New paragraph (a)(1) 
would further provide that the DHHL may compute payments based on any 
lesser percentage of the family's adjusted income, and while the Act 
does not set minimum tenant rent or homebuyer payments, the DHHL may do 
so. HUD proposes to add paragraph (a)(2) about flat or income-adjusted 
rent. Paragraph (a)(2) would provide that flat rent means the tenant's 
rent payment is set at a specific dollar amount or specific percent of 
market rent, income-adjusted rent means the tenant's rent payment 
varies based on the tenant's income (i.e., 30% of monthly adjusted 
income), and the DHHL may charge flat or income-adjusted rents, 
provided the rental or homebuyer payment of the low-income family does 
not exceed 30 percent of the family's adjusted income. New paragraph 
(a)(3) would permit the DHHL to include utilities as part of rent or 
homebuyer payments if the DHHL has defined rent or homebuyer payments 
as such in its written policies.

Section 1006.375, Other Federal Requirements

    HUD is proposing to amend Sec.  1006.375 by removing paragraph (c), 
Displacement and relocation, and redesignating existing paragraphs (d) 
and (e) as paragraphs (c) and (d). HUD is proposing to add paragraph 
(c)'s language and requirements with minor technical changes to new 
Sec.  1006.377. HUD is further proposing to amend Sec.  1006.375 by 
adding new paragraph (e), Section 3, to clarify that requirements under 
section 3 of the Housing and Urban Development Act of 1968 and 24 CFR 
part 75 apply to the NHHBG program; and by adding new paragraph (f), 
Debarment and suspension, to clarify that the nonprocurement debarment 
and suspension requirements at 2 CFR part 2424 apply to the NHHBG 
program.

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Section 1006.377, Other Federal Requirements: Displacement, Relocation, 
and Acquisition

    HUD is proposing to add Sec.  1006.377 which would contain only the 
existing displacement and relocation requirements in current Sec.  
1006.375(c) with minor technical changes to cross references. HUD 
proposes this change for structural reorganization and readability. 
Existing Sec.  1006.375(c) is lengthy and includes definitions relevant 
only to displacement and relocation requirements. Additionally, HUD is 
proposing to amend new Sec.  1006.377(c) by adding sentences at the end 
of paragraph (c) that describe civil rights requirements included in 24 
CFR 576.408(c)(1): that a displaced person must be advised of his or 
her rights under the Fair Housing Act (42 U.S.C. 3601 et seq.); 
minority persons shall be given reasonable opportunities to relocate to 
comparable and suitable decent, safe, and sanitary replacement 
dwellings, not located in an area of minority concentration, that are 
within their financial means; and, for a displaced person with a 
disability, a unit will not be considered a comparable replacement 
dwelling under the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970, as amended (URA) unless it is free of 
any barriers which would preclude reasonable ingress, egress, or use of 
the dwelling by such displaced person in accordance with 49 CFR 
24.2(a)(8)(vii) and the unit meets the requirements of section 504 of 
the Rehabilitation Act (29 U.S.C. 794).

Section 1006.410, Performance Reports

    HUD is proposing to amend Sec.  1006.410 by revising paragraph 
(a)(2) to require the DHHL to submit a performance report within 90 
days, instead of 60 days, of the end of the DHHL's fiscal year. HUD is 
also proposing to add a new paragraph (a)(3) that states the DHHL may 
request an extension and that HUD will provide a new date for 
submission if HUD grants the extension. Both changes would improve 
consistency between the IHBG requirements at Sec.  1000.514 and the 
NHHBG requirements.

Technical Changes for Compliance With NAHASDA and Consistency With IHBG

    HUD is proposing to make minor technical revisions to several 
provisions to conform to statutory requirements and increase 
consistency with IHBG regulations. These provisions and revisions are:
     In Sec.  1006.205, HUD is proposing to add language to 
paragraph (a)(9) so that it conforms to language in section 202 of 
NAHASDA and is more consistent with Sec.  1000.102.
     In Sec.  1006.215, HUD is proposing to add paragraph (f) 
so it conforms to language in section 202 of NAHASDA and is more 
consistent with Sec.  1000.102.
     In Sec.  1006.235, HUD is proposing to revise the title to 
read Types of investments and forms of assistance, to maintain 
consistency with section 812 of NAHASDA.
     In Sec.  1006.340, HUD is proposing to revise the cross 
reference at the end of paragraph (a) to cite to statutory 
requirements, ``Section 812(b) of NAHASDA'', instead of regulatory 
requirements, ``Sec.  1006.235''.
     In Sec. Sec.  1006.230, 1006.350, 1006.410, and 1006.420, 
HUD is also proposing minor technical amendments.

III. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the Order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned.'' Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. HUD is proposing changes to NHHBG program 
requirements and regulations, such as clarifying that NHHBG funds can 
be used for certain affordable housing activities including project-
based rental assistance, permitting rental assistance to be provided 
off the Hawaiian Home Lands when Congress authorizes such use through 
appropriations acts, and adding or changing requirements for low-income 
and non-low-income families. However, there is no significant impact 
because DHHL is the sole recipient of NHHBG funds. This proposed rule 
was not subject to OMB review. This proposed rule is not a 
``significant regulatory action'' as defined in section 3(f) of 
Executive Order 12866, and is not an economically significant 
regulatory action.

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. 
This rulemaking proposes to amend HUD regulations to implement rental 
housing assistance for the NHHBG program, consistent with title VIII of 
NAHASDA. These amendments impose no significant economic impact on a 
substantial number of small entities, and there is only a singular 
recipient of funding. Therefore, the undersigned certifies that this 
proposed rule will not have a significant impact on a substantial 
number of small entities.

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.

Environmental Review

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations in 24 CFR part 50 that 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant Impact is 
available for public inspection between the hours of 8 a.m. and 5 p.m. 
weekdays in the Regulations Division, Office of General Counsel, Room 
10276, Department of Housing and Urban Development, 451 Seventh Street 
SW, Washington, DC 20410-0500. The FONSI is also available through the 
Federal eRulemaking Portal at https://www.regulations.gov.

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

[[Page 333]]

substantial direct compliance costs on state and local governments nor 
preempt state law within the meaning of the Order.

List of Subjects

24 CFR Part 1006

    Community development block grants; Grant programs--housing and 
community development; Grant programs--Indians; Hawaiian natives; Low 
and moderate income housing; Reporting and recordkeeping requirements.

    For the reasons described in the preamble, the Department of 
Housing and Urban Development proposes to amend 24 CFR part 1006, as 
set forth below:

PART 1006--NATIVE HAWAIIAN HOUSING BLOCK GRANT PROGRAM

0
1. Revise the authority citation for part 1006 to read as follows:

    Authority: 12 U.S.C. 1701x, 1701x-1; 25 U.S.C. 4221 et seq.; 42 
U.S.C. 3535(d), Pub. L. 115-141, Pub. L. 116-6, Pub. L. 116-94, Pub. 
L. 116-260, Pub. L. 117-103.

0
2. In Sec.  1006.10, add in alphabetical order the definitions for 
``Annual income,'' ``Homeless family,'' ``Income,'' ``NAHASDA,'' 
``Person with a Disability,'' and ``Project-based rental assistance,'' 
to read as follows:


Sec.  1006.10  Definitions.

* * * * *
    Annual income has one or more of the following meanings, as 
determined by the Department of Hawaiian Home Lands:
    (1) ``Annual income'' as defined for HUD's Section 8 programs in 24 
CFR part 5, subpart F (except when determining the income of a 
homebuyer for an owner-occupied rehabilitation project, the value of 
the homeowner's principal residence may be excluded from the 
calculation of net family assets); or
    (2) The definition of income as used by the U.S. Census Bureau. 
This definition includes:
    (i) Wages, salaries, tips, commissions, etc.;
    (ii) Self-employment income;
    (iii) Farm self-employment income;
    (iv) Interest, dividends, net rental income, or income from estates 
or trusts;
    (v) Social security or railroad retirement;
    (vi) Supplemental Security Income, Aid to Families with Dependent 
Children, or other public assistance or public welfare programs;
    (vii) Retirement, survivor, or disability pensions; and
    (viii) Any other sources of income received regularly, including 
Veterans' (VA) payments, unemployment compensation, and alimony; or
    (3) Adjusted gross income as defined for purposes of reporting 
under Internal Revenue Service (IRS) Form 1040 series for individual 
Federal annual income tax purposes.
* * * * *
    Homeless family means a family who is without safe, sanitary and 
affordable housing even though it may have temporary shelter provided 
by the community, or a family who is homeless as determined by the 
DHHL.
* * * * *
    Income means the term ``income'' as defined in section 4(9) of 
NAHASDA.
* * * * *
    NAHASDA means the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4101 et seq.).
* * * * *
    Person with a Disability means a person who, as further explained 
in 28 CFR 35.108--
    (1) Has a physical or mental impairment which substantially limits 
one or more major
    life activities;
    (2) Has a record of having such an impairment;
    (3) Is regarded as having such an impairment;
    (4) Has a disability as defined in section 223 of the Social 
Security Act; or
    (5) Has a developmental disability as defined in section 102 of the 
Developmental Disabilities Assistance and Bill of Rights Act.
    (6) For the purposes of this definition, the term ``Physical or 
mental impairment'' means:
    (i) Any physiological disorder or condition, cosmetic 
disfigurement, or anatomical loss affecting one or more body systems, 
such as: neurological, musculoskeletal, special sense organs, 
respiratory (including speech organs), cardiovascular, reproductive, 
digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, 
and endocrine; or
    (ii) Any mental or psychological disorder such as intellectual 
disability, organic brain syndrome, emotional or mental illness, and 
specific learning disability.
    (7) For the purposes of this definition, the term ``physical or 
mental impairment'' includes, but is not limited to contagious and 
noncontagious diseases and conditions such as the following: 
orthopedic, visual, speech, and hearing impairments, and cerebral 
palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart 
disease, diabetes, intellectual disability, emotional illness, dyslexia 
and other specific learning disabilities, Attention Deficit 
Hyperactivity Disorder, Human Immunodeficiency Virus infection (whether 
symptomatic or asymptomatic), tuberculosis, drug addiction, and 
alcoholism.
    (8) For the purposes of this definition, the term ``major life 
activities'' includes, but is not limited to:
    (i) Caring for oneself, performing manual tasks, seeing, hearing, 
eating, sleeping, walking, standing, sitting, reaching, lifting, 
bending, speaking, breathing, learning, reading, concentrating, 
thinking, writing, communicating, interacting with others, and working; 
and
    (ii) The operation of a major bodily function, such as the 
functions of the immune system, special sense organs and skin, normal 
cell growth, and digestive, genitourinary, bowel, bladder, 
neurological, brain, respiratory, circulatory, cardiovascular, 
endocrine, hemic, lymphatic, musculoskeletal, and reproductive systems. 
The operation of a major bodily function includes the operation of an 
individual organ within a body system.
* * * * *
    Project-based rental assistance means rental assistance provided 
through a contract with the owner of an existing structure, where the 
owner agrees to lease the subsidized units to program participants. 
Program participants will not retain the rental assistance if they move 
from the project.
* * * * *
0
3. In Sec.  1006.101, revise the introductory text paragraph and 
paragraphs (c) and (d) to read as follows.


Sec.  1006.101  Housing plans requirements.

    The DHHL must submit a housing plan each year prior to the start of 
its fiscal year. The housing plan has two components, a five-year plan 
and a one-year plan, as follows:
* * * * *
    (c) Updates to plan--(1) In general. Subject to paragraph (c)(2) of 
this section, after the housing plan has been submitted for a fiscal 
year, the DHHL may comply with the provisions of this section for any 
succeeding fiscal year with respect to information included for the 5-
year period under paragraph (a) of this section by submitting only such 
information regarding such changes as may be necessary to update the 5-
year period of the plan previously submitted. Information for the 1-
year period under paragraph (b) of this section must be submitted each 
fiscal year.

[[Page 334]]

    (2) Complete plans. The DHHL shall submit a complete plan that 
includes a new five-year plan under this section not later than 4 years 
after submitting an initial plan, and not less frequently than every 4 
years thereafter.
    (d) Amendments to plan. The DHHL must submit any amendment to the 
one-year housing plan for HUD review before undertaking any new 
activities that are not addressed in the current plan that was reviewed 
by HUD and found to be in compliance with section 803 of NAHASDA and 
this part. The amendment must include a description of the new activity 
and a revised budget reflecting the changes. HUD will review the 
revised plan and will notify DHHL within 30 days whether the amendment 
complies with applicable requirements.
0
4. Revise Sec.  1006.201 to read as follows:


Sec.  1006.201  Eligible affordable housing activities.

    Eligible affordable housing activities are development, housing 
services, housing management services, crime prevention and safety 
activities, and model activities. Affordable housing activities under 
this part are activities conducted in accordance with subpart D of this 
part to develop, operate, maintain, or support housing for rental or 
homeownership; or provide services with respect to affordable housing 
through the activities described in this subpart. NHHBG funds may only 
be used for eligible activities that are consistent with the DHHL's 
housing plan.
0
5. In Sec.  1006.205, revise paragraph (a)(9) to read as follows:


Sec.  1006.205  Development.

    (a) * * *
    (9) The development and rehabilitation of utilities, necessary 
infrastructure, and utility services;
* * * * *


Sec.  1006.210  [Amended]

0
6. In Sec.  1006.210, remove paragraph (g) and redesignate paragraph 
(h) as paragraph (g).
0
7. In Sec.  1006.215, revise paragraph (e), redesignate paragraph (f) 
as paragraph (g), and add new paragraph (f) to read as follow:


Sec.  1006.215  Housing management services.

* * * * *
    (e) Management of tenant-based rental assistance;
    (f) The costs of operation and maintenance of units developed with 
NHHBG funds; and
* * * * *
0
8. Add Sec.  1006.227 to read as follows:


Sec.  1006.227  Tenant-based or project-based rental assistance.

    (a) NHHBG funds may be used for the provision of tenant-based 
rental assistance, which may include security deposits and first 
month's rent, and project-based rental assistance.
    (1) Rental assistance must comply with the requirements of this 
part and be provided to eligible families.
    (2) Rental assistance may be provided to eligible families both on 
and off the Hawaiian Home Lands provided such use is consistent with 
the applicable appropriations acts governing the use of the NHHBG 
funds.
    (b) [Reserved].


Sec.  1006.230  [Amended]

0
9. In Sec.  1006.230, paragraph (d), remove the citation ``2 CFR part 
200, subpart E.'' and add in its place the citation ``2 CFR part 200, 
subpart E.'', and in paragraph (f), remove the text ``Sec. Sec.  
1006.370 and 1006.375 of this part'' and add in its place the text 
``Sec. Sec.  1006.370, 1006.375, and 1006.377''.


Sec.  1006.235  [Amended]

0
10. In Sec.  1006.235, revise the section heading to read ``Sec.  
1006.235 Types of investments and forms of assistance.''.
0
11. Revise Sec.  1006.301 to read as follows:


Sec.  1006.301  Eligible families.

    (a) General. Assistance for eligible housing activities under the 
Act and this part is limited to low-income Native Hawaiian families who 
are eligible to reside on the Hawaiian Home Lands, except as provided 
under paragraphs (b) and (c) of this section.
    (b) Exception to low-income requirement--(1) Other Native Hawaiian 
families. The DHHL may provide assistance for homeownership activities, 
which may include assistance in conjunction with loan guarantee 
activities to Native Hawaiian families who are not low-income families, 
as approved by HUD, to address a need for housing for those families 
that cannot be reasonably met without that assistance. DHHL must 
determine and document the need for housing for each family that cannot 
reasonably be met without such assistance.
    (2) HUD approval. HUD approval is required, except as provided in 
paragraph (b)(3)(i) of this section, if the DHHL plans to use grant 
amounts provided under the Act for assistance in accordance with 
paragraph (b)(1) of this section. HUD approval shall be obtained by 
DHHL submitting proposals in its housing plan, by amendment of the 
housing plan, or by special request to HUD at any time.
    (3) Limitations. (i) DHHL may use up to 10 percent of the amount 
planned in its Housing Plan for its fiscal year for families whose 
income is 81 to 100 percent of the median income without HUD approval. 
HUD approval is required if DHHL plans to use more than 10 percent of 
the amount planned for its fiscal year for such assistance or to 
provide housing for families with income over 100 percent of median 
income.
    (ii) Non-low-income families cannot receive the same benefits 
provided low-income Native Hawaiian families. The amount of assistance 
non-low-income families may receive will be determined by DHHL as 
established in its written policies.
    (iii) The requirements set forth in paragraphs (b)(3)(i) and (ii) 
of this section do not apply to other families who are non-low income 
that DHHL has determined to be essential under Sec.  1006.301(c).
    (c) Other families. The DHHL may provide housing or NHHBG 
assistance to a family that is not low-income and is not a Native 
Hawaiian family without HUD approval if the DHHL documents that:
    (1) The presence of the family in the housing involved is essential 
to the well-being of Native Hawaiian families; and
    (2) The need for housing for the family cannot be reasonably met 
without the assistance.
    (d) Written policies. The DHHL must develop, follow, and have 
available for review by HUD written policies governing the eligibility, 
admission, and occupancy of families for housing assisted with NHHBG 
funds and governing the selection of families receiving other 
assistance under the Act and this part.
0
12. In Sec.  1006.305, revise paragraphs (a) and (b) to read as 
follows:


Sec.  1006.305  Low-income requirement and income targeting.

    (a) In general. Housing qualifies as affordable housing for 
purposes of the Act and this part, provided that the family occupying 
the unit is low-income at the following times:
    (1) In the case of rental housing, at the time of the family's 
initial occupancy of such unit;
    (2) In the case of housing for homeownership, at the time of 
purchase. When DHHL enters into a loan contract with the family for 
NHHBG assistance to purchase or construct a homeownership unit, the 
time of purchase means the time that loan contract is executed;

[[Page 335]]

    (3) In the case of owner-occupied housing units, at the time the 
family receives NHHBG assistance;
    (4) In the case of a lease-purchase agreement for existing housing 
or for housing to be constructed, at the time the lease-purchase 
agreement is signed; and
    (5) In the case of emergency assistance to prevent homelessness or 
foreclosure, at the time the family receives NHHBG assistance.
    (b) Affordability requirements. NHHBG-assisted rental and 
homeownership units must meet the affordability requirements for the 
remaining useful life of the property, as determined by HUD, or such 
other period as HUD determines in accordance with section 813(a)(2)(B) 
of the Act.
* * * * *
0
13. Add Sec.  1006.306 to read as follows:


Sec.  1006.306  Income verification for receipt of NHHBG assistance.

    (a) Initial determination of eligibility. DHHL must verify that the 
family is income eligible based on anticipated annual income. The 
family is required to provide documentation to verify this 
determination. DHHL is required to maintain the documentation on which 
the determination of eligibility is based.
    (b) Periodic verification. DHHL may require a family to 
periodically verify its income in order to determine housing payments 
or continued occupancy consistent with DHHL's written policies. When 
income verification is required, the family must provide documentation 
which verifies its income, and this documentation must be retained by 
DHHL.
0
14. Add Sec.  1006.307 to read as follows:


Sec.  1006.307  Non-low-income families.

    (a) A family that was low-income at the times described in Sec.  
1006.305 but subsequently becomes a non-low-income family may continue 
to participate in the program in accordance with DHHL's admission and 
occupancy policies. The 10 percent limitation in Sec.  
1006.301(b)(3)(i) in this part shall not apply to such families. Such 
families may be made subject to the additional requirements in Sec.  
1006.301(b)(3)(ii) of this part based on those policies.
    (b) [Reserved]
0
15. Revise Sec.  1006.310 to read as follows:


Sec.  1006.310  Rent and lease-purchase limitations.

    (a) Rents. The DHHL must develop and follow written policies 
governing rents for rental housing units assisted with NHHBG funds, 
including methods by which rents are determined.
    (1) Maximum and minimum rent. The maximum monthly tenant rent 
payment for a low-income family may not exceed 30 percent of the 
family's monthly adjusted income. DHHL may also decide to compute 
rental or homebuyer payments on any lesser percentage of the adjusted 
income of the family. The Act does not set minimum rent or homebuyer 
payments; however, DHHL may do so.
    (2) Flat or income-adjusted rent. Flat rent means the tenant's rent 
payment is set at a specific dollar amount or specific percent of 
market rent. Income-adjusted rent means the tenant's rent payment 
varies based on the tenant's income (i.e., 30% of monthly adjusted 
income). DHHL may charge flat or income-adjusted rents, provided the 
rental or homebuyer payment of the low-income family does not exceed 30 
percent of the family's adjusted income.
    (3) Utilities. Utilities may be considered a part of rent or 
homebuyer payments if DHHL decides to define rent or homebuyer payments 
to include utilities in its written policies on rents and homebuyer 
payments required by section 811(a)(1) of NAHASDA. DHHL may define 
rents and homebuyer payments to exclude utilities.
    (b) Lease-purchase. If DHHL assists low-income families to become 
homeowners of rental housing through a long-term lease (i.e., 10 or 
more years) with an option to purchase the housing, DHHL must develop 
and follow written policies governing lease-purchase payments (i.e., 
homebuyer payments) for rental housing units assisted with NHHBG funds, 
including methods by which payments are determined. The maximum monthly 
payment for a low-income family may not exceed 30 percent of the 
family's monthly adjusted income.
    (c) Exception for certain homeownership payments. Homeownership 
payments for families who are not low-income, as permitted under Sec.  
1006.301(b), are not subject to the requirement that homebuyer payments 
may not exceed 30 percent of the monthly adjusted income of that 
family.
    (d) Applicability. Low-income families who receive homeownership 
assistance other than lease-purchase assistance are not subject to the 
limitations in paragraphs (a) and (b) of this section.


Sec.  1006.340  [Amended]

0
16. In Sec.  1006.340, paragraph (a), remove the citation ``Sec.  
1006.235'' and add in its place the citation ``section 812(b) of 
NAHASDA''.


Sec.  1006.350  [Amended]

0
17. In Sec.  1006.350, paragraph (a), remove the word 
``decisionmaking'' and add in its place the word ``decision-making''.
0
18. Revise Sec.  1006.375 to read as follows:


Sec.  1006.375  Other Federal requirements.

    (a) Lead-based paint. The following subparts of HUD's lead-based 
paint regulations at part 35 of this title, which implement the Lead-
Based Paint Poisoning Prevention Act (42 U.S.C. 4822-4846) and the 
Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 
4851-4856), apply to the use of assistance under this part:
    (1) Subpart A, ``Disclosure of Known Lead-Based Paint Hazards Upon 
Sale or Lease of Residential Property'';
    (2) Subpart B, ``General Lead-Based Paint Requirements and 
Definitions for All Programs'';
    (3) Subpart H, ``Project-Based Rental Assistance'';
    (4) Subpart J, ``Rehabilitation'';
    (5) Subpart K, ``Acquisition, Leasing, Support Services, or 
Operation'';
    (6) Subpart M, ``Tenant-Based Rental Assistance''; and
    (7) Subpart R, ``Methods and Standards for Lead-Based Paint Hazard 
Evaluation and Hazard Reduction Activities''.
    (b) Drug-free workplace. The Drug-Free Workplace Act of 1988 (41 
U.S.C. 701, et seq.) and HUD's implementing regulations in 2 CFR part 
2429 apply to the use of assistance under this part.
    (c) Audits. The DHHL must comply with the requirements of the 
Single Audit Act and 2 CFR part 200, subpart F, with the audit report 
providing a schedule of expenditures for each grant. A copy of each 
audit must be submitted to the Federal Audit Clearinghouse.
    (d) Housing counseling. Housing counseling, as defined in Sec.  
5.100, that is funded with or provided in connection with NHHBG funds 
must be carried out in accordance with 24 CFR 5.111.
    (e) Section 3. Requirements under section 3 of the Housing and 
Urban Development Act of 1968 and 24 CFR part 75 apply.
    (f) Debarment and suspension. The Nonprocurement debarment and 
suspension requirements at 2 CFR part 2424 are applicable.
0
19. Add Sec.  1006.377 to read as follows:


Sec.  1006.377  Other Federal requirements: Displacement, relocation, 
and acquisition.

    The following relocation and real property acquisition policies are 
applicable to programs developed or operated under the Act and this 
part:
    (a) Real property acquisition requirements. The acquisition of real

[[Page 336]]

property for an assisted activity is subject to the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970, as 
amended (URA) and the requirements of 49 CFR part 24, subpart B.
    (b) Minimize displacement. Consistent with the other goals and 
objectives of the Act and this part, the DHHL shall assure that it has 
taken all reasonable steps to minimize the displacement of persons 
(households, businesses, nonprofit organizations, and farms) as a 
result of a project assisted under the Act and this part.
    (c) Relocation assistance for displaced persons. A displaced person 
(defined in paragraph (f) of this section) must be provided relocation 
assistance at the levels described in, and in accordance with the URA 
requirements of 49 CFR part 24. A displaced person must be advised of 
his or her rights under the Fair Housing Act (42 U.S.C. 3601 et seq.). 
Whenever possible, minority persons shall be given reasonable 
opportunities to relocate to comparable and suitable decent, safe, and 
sanitary replacement dwellings, not located in an area of minority 
concentration, that are within their financial means. For a displaced 
person with a disability, a unit is not a comparable replacement 
dwelling under the URA unless it is free of any barriers which would 
preclude reasonable ingress, egress, or use of the dwelling by such 
displaced person in accordance with 49 CFR 24.2(a)(8)(vii) and the unit 
meets the requirements of section 504 of the Rehabilitation Act (29 
U.S.C. 794).
    (d) Appeals to the DHHL. A person who disagrees with the DHHL's 
determination concerning whether the person qualifies as a ``displaced 
person,'' or the amount of relocation assistance for which the person 
is eligible, may file a written appeal of that determination with the 
DHHL in accordance with URA requirements of 49 CFR 24.10.
    (e) Responsibility of DHHL. (1) The DHHL shall certify that it will 
comply with the URA requirements of 49 CFR part 24, and the 
requirements of this section. The DHHL shall ensure such compliance 
notwithstanding any third party's contractual obligation to the DHHL to 
comply with the provisions in this section.
    (2) The cost of required relocation assistance is an eligible 
project cost in the same manner and to the same extent as other project 
costs. However, such assistance may also be paid for with funds 
available to the DHHL from any other source.
    (3) The DHHL shall maintain records in sufficient detail to 
demonstrate compliance with this section.
    (f) Definition of displaced person. (1) For purposes of this 
section, the term ``displaced person'' means any person (household, 
business, nonprofit organization, or farm) that moves from real 
property, or moves his or her personal property from real property, 
permanently, as a direct result of rehabilitation, demolition, or 
acquisition for a project assisted under the Act. The term ``displaced 
person'' includes, but is not limited to:
    (i) A tenant-occupant of a dwelling unit who moves from the 
building/complex permanently after the submission to HUD of a housing 
plan that is later approved;
    (ii) Any person, including a person who moves before the date the 
housing plan is submitted to HUD, that the DHHL determines was 
displaced as a direct result of acquisition, rehabilitation, or 
demolition for the assisted project;
    (iii) A tenant-occupant of a dwelling unit who moves from the 
building/complex permanently after execution of the agreement between 
the DHHL and HUD, if the move occurs before the tenant is provided 
written notice offering him or her the opportunity to lease and occupy 
a suitable, decent, safe and sanitary dwelling in the same building/
complex, under reasonable terms and conditions, upon completion of the 
project. Such reasonable terms and conditions include a monthly rent 
and estimated average monthly utility costs that do not exceed the 
greater of:
    (A) The tenant-occupant's monthly rent and estimated average 
monthly utility costs before the agreement; or
    (B) 30 percent of gross household income.
    (iv) A tenant-occupant of a dwelling who is required to relocate 
temporarily, but does not return to the building/complex, if either:
    (A) The tenant-occupant is not offered payment for all reasonable 
out-of-pocket expenses incurred in connection with the temporary 
relocation, including the cost of moving to and from the temporarily 
occupied unit, any increased housing costs and incidental expenses; or
    (B) Other conditions of the temporary relocation are not 
reasonable.
    (v) A tenant-occupant of a dwelling who moves from the building/
complex after he or she has been required to move to another dwelling 
unit in the same building/complex in order to carry out the project, if 
either:
    (A) The tenant-occupant is not offered reimbursement for all 
reasonable out-of-pocket expenses incurred in connection with the move; 
or
    (B) Other conditions of the move are not reasonable.
    (2) Notwithstanding the provisions of this section for the 
definition of ``Displaced Person,'' a person does not qualify as a 
``displaced person'' (and is not eligible for relocation assistance 
under the URA or this section), if:
    (i) The person moved into the property after the submission of the 
housing plan to HUD, but before signing a lease or commencing 
occupancy, was provided written notice of the project, its possible 
impact on the person (e.g., the person may be displaced, temporarily 
relocated or suffer a rent increase) and the fact that the person would 
not qualify as a ``displaced person'' or for any assistance provided 
under this section as a result of the project;
    (ii) The person is ineligible under 49 CFR 24.2(a)(9)(ii); or
    (iii) The DHHL determines the person is not displaced as a direct 
result of acquisition, rehabilitation, or demolition for an assisted 
project. To exclude a person on this basis, HUD must concur in that 
determination.
    (3) The DHHL may at any time ask HUD to determine whether a 
specific displacement is or would be covered under this section.
    (g) Definition of initiation of negotiations. For purposes of 
determining the formula for computing the replacement housing 
assistance to be provided to a person displaced from a dwelling as a 
direct result of acquisition, rehabilitation, or demolition of the real 
property, the term ``initiation of negotiations'' means the execution 
of the written agreement covering the acquisition, rehabilitation, or 
demolition (See 49 CFR 24.2(a)(15)).
0
20. In Sec.  1006.410, revise paragraph (a)(2), add paragraph (a)(3), 
and revise paragraph (c)(1) to read as follows:


Sec.  1006.410  Performance reports.

    (a) * * *
    (2) Submit a report in a form acceptable to HUD, within 90 days of 
the end of the DHHL's fiscal year, to HUD describing the conclusions of 
the review.
    (3) DHHL may submit a written request for an extension of the 
deadline. HUD will establish a new date for submission if the extension 
is granted.
* * * * *
    (c) * * *
    (1) Comments by Native Hawaiians. In preparing a report under this 
section, the DHHL shall make the report publicly available to Native 
Hawaiians who are eligible to reside on the

[[Page 337]]

Hawaiian Home Lands and give a sufficient amount of time to permit them 
to comment on that report, in such manner and at such time as the DHHL 
may determine, before it is submitted to HUD.
* * * * *


Sec.  1006.420  [Amended]

0
21. In Sec.  1006.420, paragraph (c), add the paragraph heading 
``Failure to maintain records.'' before the words ``The DHHL's failure 
to maintain records''.

Dominique Blom,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 2022-28020 Filed 1-3-23; 8:45 am]
BILLING CODE 4210-67-P