[Federal Register Volume 89, Number 250 (Tuesday, December 31, 2024)]
[Proposed Rules]
[Pages 107072-107099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30260]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 4, 5, 75, 92, 93, 200, 570, 574, 576, 578, 700, 880,
881, 883, 884, 886, 905, 964, 965, 970, 990, 1000, 1003, 1005,
1006, and 1007
[Docket No. FR-6266-P-01]
RIN 2501-AE01
HUD's Implementation of OMB's Guidance for Federal Financial
Assistance
AGENCY: Office of General Counsel, HUD.
ACTION: Proposed rule.
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SUMMARY: The U.S. Department of Housing and Urban Development (HUD) is
proposing to amend its regulations on Federal financial assistance to
conform with 2020 and 2024 changes to Office of Management and Budget
(OMB) guidance governing Federal financial assistance (previously
called grants and agreements). The proposed amendments would implement
the guidance and update cross-references to OMB provisions that have
been renumbered or reorganized. HUD is also proposing changes to
improve some grant management and administrative program regulations
based on HUD's experience implementing OMB's
[[Page 107073]]
regulations and guidance in existing entitlement, discretionary, and
other programs involving grant management and administration. Finally,
HUD is proposing changes to its Title VI, Section 108, Section 184, and
Section 184A loan guarantee program regulations to address OMB's
changes for loan guarantee programs regarding System for Award
Management (SAM.gov) registration and to clarify that the Section 184
and Section 184A programs are subject to audit requirements in OMB's
regulations and final guidance. All these changes will improve HUD's
processes for awarding Federal financial assistance and align HUD's
regulations with governmentwide efforts to adopt consistent and
standardized terms and data elements, implement data- and risk-based
frameworks, reduce Federal agency and recipient burdens, promote
consistent interpretations of OMB's regulations and guidance, and
improve and maximize agencies' ability to assess performance of
recipients.
DATES: Comment Due Date: March 3, 2025.
ADDRESSES: There are two methods for submitting public comments. All
submissions must refer to the above docket number and title.
1. Electronic Submission of Comments. Comments may be submitted
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 comments immediately available
to the public. Comments submitted electronically through
www.regulations.gov can be viewed by other commenters and interested
members of the public. Commenters should follow the instructions
provided on that website to submit comments electronically.
2. 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.
Note: To receive consideration as a public comment, comments must
be submitted through one of the two methods specified above.
Public Inspection of Public Comments. HUD will make all properly
submitted comments and communications available for public inspection
and copying during regular business hours 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 or
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.
In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed
rule may be found at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Office of General
Counsel, Office of Legislation and Regulations, Department of Housing
and Urban Development, 451 7th Street SW, Washington, DC 20410-8000;
telephone number 202-708-1793 (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 or 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 1
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\1\ Through OMB's 2024 round of revisions to its regulations and
final guidance, OMB has indicated its preference for the use of the
terms ``Federal financial assistance,'' ``recipient,'' and
``subrecipient'' over other terms. 89 FR 30046. This preamble
sometimes uses the term ``Federal financial assistance,'' which is
now used throughout OMB's regulations and guidance, in place of
``grant'' or ``Federal award,'' but this preamble also uses
``grant'' or ``Federal award'' where appropriate for a given
program, when discussing prior rounds of OMB revisions (which used
``grant'' or ``Federal award''), when discussing updated OMB
provisions that use ``grant'' or ``Federal award,'' or when used as
part of a quote. Also in this preamble, HUD uses ``recipient'' and
``subrecipient'' interchangeably with ``grantee'' and
``subgrantee,'' respectively, as those terms are defined in OMB's
regulations and guidance. See 2 CFR 200.1.
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OMB's 2013 Uniform Guidance and HUD's Implementation
On December 26, 2013, the Office of Management and Budget (OMB)
issued the Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform Guidance), parts of
which are codified in 2 CFR part 200. This Uniform Guidance ``set
standard requirements for financial management of Federal awards across
the entire [F]ederal government.'' \2\ OMB promulgated the Uniform
Guidance to (1) streamline guidance in making Federal awards to ease
administrative burden and (2) strengthen financial oversight over
Federal funds to reduce risks of fraud, waste, and abuse.\3\
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\2\ 78 FR 78590, 78590 (Dec. 26, 2013).
\3\ 78 FR 78590, 78950; see also 85 FR 3766 (Jan. 22, 2020)
(providing additional explanation of OMB's 2013 final guidance).
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The requirements at 2 CFR part 200 derive from previously issued
policies: Executive Order (E.O.) 13520 titled Reducing Improper
Payments and Eliminating Waste in Federal Programs \4\ and a related
Presidential Memorandum on Administrative Flexibility, Lower Costs, and
Better Results for State, Local, and Tribal Governments.\5\ The E.O.
required agencies to improve accountability by ``intensifying efforts
to eliminate payment error, waste, fraud, and abuse'' in Federal
programs.\6\ The Presidential Memorandum directed OMB to ``review and
where appropriate revise guidance concerning cost principles, burden
minimizations, and audits for State, local, and tribal governments in
order to eliminate, to the extent permitted by law, unnecessary, unduly
burdensome, duplicative, or low-priority recordkeeping requirements and
effectively tie such requirements to achievement of outcomes.'' \7\
OMB's 2013 Uniform Guidance added a new 2 CFR part 200 based on work
done by the Federal and non-Federal financial assistance community in
response to these directives.\8\
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\4\ 74 FR 62201 (Nov. 25, 2009).
\5\ Admin. of Barack Obama, 2011, Presidential Memorandum on
Administrative Flexibility, Lower Costs, and Better Results for
State, Local, and Tribal Governments (2011) [hereinafter
Presidential Memo 2011], https://www.gpo.gov/fdsys/pkg/DCPD-201100123/pdf/DCPD-201100123.pdf.
\6\ 74 FR 62201, 62201.
\7\ Presidential Memo 2011, at 2.
\8\ 78 FR 78590, 78591.
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In a joint interim final rule published December 19, 2014, and
titled ``Federal Awarding Agency Regulatory Implementation of Office of
Management and Budget's Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (UAR)'', all
Federal award-making departments and agencies, including HUD,
implemented OMB's 2013 Uniform Guidance.\9\ HUD adopted and codified
the Uniform Guidance as requirements for Federal awards at 2 CFR part
2400 and, amended 24 CFR parts 84 and 85 by
[[Page 107074]]
removing substantive provisions implementing OMB circulars issued prior
to OMB's Uniform Guidance in 2013.\10\ Implementation of the Uniform
Guidance became effective on December 26, 2014.\11\ Shortly after, HUD
published a notice that provided guidance to internal and external
stakeholders on HUD's transition to the new UAR provisions.\12\ On
December 7, 2015, HUD published a final rule (HUD's 2015 rulemaking) to
conform title 24 of the CFR to OMB's 2013 Uniform Guidance by removing
references in title 24, including in HUD program regulations, to 24 CFR
parts 84 and 85 and replacing them with corresponding references to 2
CFR part 200 in HUD program regulations.\13\ These changes took effect
January 6, 2016.\14\
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\9\ 79 FR 75871 (Dec. 19, 2014).
\10\ 79 FR 75871, 76078; 80 FR 75931, 75931-32 (Dec. 7, 2015).
\11\ 79 FR 75871, 75871.
\12\ U.S. Dep't of Hous. & Urban Dev., Notice SD-2015-01:
Transition to 2 CFR part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards, Final
Guidance, (2015), https://www.hudexchange.info/resource/4444/notice-sd201501-transition-to-2-cfr-part-200-uniform-administrative-requirements-cost-principles-and-audit-requirements-for-Federal-awards-final-guidance/.
\13\ 80 FR 75931, 75931-32.
\14\ 80 FR 75931, 75931.
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OMB's 2013 Uniform Guidance and the 2014 UAR apply to the
recipients (and, as provided, subrecipients) of Federal financial
assistance from HUD, whether such assistance is provided in the form of
grants or cooperative agreements, with such recipients and
subrecipients.\15\
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\15\ OMB has used terms such as ``non-Federal entities'' in the
past to collectively refer to recipients and subrecipients. E.g., 85
FR 49506. However, under OMB's 2024 changes, OMB is replacing the
term ``non-Federal entity'' with ``recipients,'' ``subrecipients,''
or both. See 89 FR 30046, 30047. HUD is adopting this terminology
for this preamble and in HUD's regulations in title 24 of the Code
of Federal Regulations.
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OMB's 2020 Updated Uniform Guidance: Summary of Changes
OMB reviews its Uniform Guidance periodically per 2 CFR 200.109. On
August 13, 2020, OMB published final guidance titled ``Guidance for
Grants and Agreements'', 85 FR 49506 (OMB's 2020 final guidance), which
amended 2 CFR parts 25, 170, 183, and 200.\16\ (Although OMB amended 2
CFR parts 25, 170, and 183, the changes made to these provisions do not
require modifications to HUD's regulations at this time and thus are
not the subject of this rulemaking.) OMB's 2020 final guidance, among
other things, added new sections, such as the new 2 CFR 200.322,
Domestic preferences for procurements; changed section numbers for
several existing sections of 2 CFR part 200; revised and reorganized
definitions; shifted requirements away from monitoring compliance to
creating a ``risk-based, data-driven framework that balances compliance
with demonstrating successful results''; implemented statutory
requirements; and clarified areas to improve consistent
interpretation.\17\ For ease of reference, this preamble uses ``OMB's
2020 changes'' or ``2020 changes'' when referring to changes made by
OMB's 2020 final guidance.
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\16\ As explained in section II of this proposed rule, while OMB
amended 2 CFR parts 25, 170, and 183, in its 2020 final guidance,
the changes made to these parts do not require modifications to
HUD's regulations at this time.
\17\ 85 FR 49506, 49506.
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According to OMB's 2020 final guidance, the revisions were intended
to support four strategies identified by the Results-Oriented
Accountability for Grants Cross Agency Priority Goal Executive Steering
Committee in the President's Management Agenda on March 20, 2018. Those
strategies are to (1) operationalize the grants management standards,
(2) establish a robust marketplace of modern solutions, (3) manage
risk, and (4) achieve program goals and objectives. To further these
strategies, OMB modified 2 CFR part 200, among other parts, to require
Federal agencies to adopt standard data elements for the information
recipients are required to report (in support of strategies 1 and 2),
as well as to strengthen governmentwide approaches to performance and
risk (in support of strategies 3 and 4).\18\ OMB issued a reference
document instructing agencies on the new revisions prior to the
effective date of August 13, 2020.\19\ This document stated that OMB's
clarifying changes also meant to address areas of misinterpretation and
reduce burdens on recipients by improving consistency in interpretation
of the guidance.\20\ For more information on the 2020 changes to 2 CFR
part 200 and the previously mentioned strategies, see OMB's final
guidance, 85 FR 49506, and OMB's reference document.\21\
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\18\ 85 FR 49506, 49506.
\19\ Office of Mgmt. & Budget, Reference Document for Federal
Register Document Number: 2020-17468 (2020), https://www.trumpadministration.archives.performance.gov/CAP/20200812-2-CFR-Revision-Redline_Final.pdf.
\20\ Id. at 46-53.
\21\ https://www.trumpadministration.archives.performance.gov/CAP/20200812-2-CFR-Revision-Redline_Final.pdf.
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Relevant to this proposed rulemaking are the following changes made
by OMB's 2020 final guidance to 2 CFR part 200:
OMB revised 2 CFR 200.318(a) and 200.319(a) to add
language clarifying that those sections' (and other sections')
requirements apply to procurement ``for the acquisition of property or
services required under a Federal award.'' In Sec. 200.318(a), the
last phrase was revised to read, ``under a Federal award or subaward.''
OMB also reorganized 2 CFR 200.319 and separated paragraph (a) into two
paragraphs (a) and (b). Therefore, where HUD's 2 CFR part 200 cross
references refer to 2 CFR 200.319(a)(5), they should refer to paragraph
(b)(5) under OMB's 2020 changes.
OMB added a new section 2 CFR 200.322, Domestic
preferences for procurements, to align with prior administration policy
and E.O. 13788, Buy American and Hire American (April 18, 2017), and
E.O. 13858, Strengthening Buy-American Preferences for Infrastructure
Projects (January 31, 2019). Under OMB's 2020 changes, this provision
stated non-Federal entities (and others subject to the requirement), as
appropriate and to the extent permitted by law, should, to the greatest
extent practicable under a Federal award, provide a preference for the
purchase, acquisition, or use of goods, products, or materials produced
in the United States (including but not limited to iron, aluminum,
steel, cement, and other manufactured products). E.O. 14005, Ensuring
the Future Is Made in All of America by All of America's Workers
(January 25, 2021), revoked E.O. 13788 and E.O. 13858. OMB made changes
to 2 CFR 200.322 through OMB's 2024 final rule and notification of
final guidance, 89 FR 30046. These changes are discussed in more detail
later in this preamble.
At 2 CFR 200.340, Termination, OMB made changes to ensure
that Federal awarding agencies could terminate a grant in whole or in
part, to the greatest extent authorized by law, when the grant no
longer effectuates the program goals or Federal awarding agency
priorities. However, OMB also made changes focused on the need for
agencies to communicate clearly to recipients, such as those changes at
2 CFR 200.211(c)(1)(v), which requires that recipients be clearly and
unambiguously informed of the termination provisions at 2 CFR 200.340.
OMB made further changes to 2 CFR 200.340 through OMB's 2024 final rule
and notification of final guidance, 89 FR 30046. These changes are
discussed in more detail later in this preamble.
OMB revised 2 CFR 200.344, Closeout, ``to support timely
closeout of awards, improve the accuracy of final
[[Page 107075]]
closeout reporting, and reduce recipient burden.'' \22\ At Sec.
200.344(a), OMB revised language to extend the deadline for report
submission by recipients, established a deadline for subrecipients to
submit reports to pass-through entities, and made changes such as
changing ``non-Federal entity'' to ``recipient'' and adding ``or an
earlier date as agreed upon by the pass-through entity and
subrecipient.'' OMB made further changes to 2 CFR 200.344 through OMB's
2024 final rule and notification of final guidance, 89 FR 30046. These
changes are discussed in more detail later in this preamble.
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\22\ Id. at 32.
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OMB added a new paragraph (h) to 2 CFR 200.403, Factors
affecting allowability of costs. Section 200.403 lists general criteria
for costs to be allowed under Federal awards. New paragraph (h) states
that costs must be incurred during the approved budget period, and it
authorizes Federal awarding agencies to waive prior written approvals
for carrying forward unobligated balances to later budget periods per
Sec. 200.308(e)(3). OMB made further changes to 2 CFR 200.403 through
OMB's 2024 final rule and notification of final guidance, 89 FR 30046.
These changes are discussed in more detail later in this preamble.
OMB revised 2 CFR 200.414(f) to change the requirement
permitting use of the 10 percent de minimis rate election for
recovering indirect costs. Previously, a non-Federal entity was
permitted to use the 10 percent de minimis option only if it had never
received a negotiated indirect cost rate. The new rule permits use of
the de minimis rate of 10 percent if the non-Federal entity does not
have a current negotiated rate. OMB clarified that no documentation is
required to justify the 10 percent de minimis indirect cost rate. OMB
made further changes to 2 CFR 200.414(f) through OMB's 2024 final rule
and notification of final guidance, 89 FR 30046. These changes are
discussed in more detail later in this preamble.
OMB revised 2 CFR 200.465, Rental costs of real property
and equipment, by redesignating paragraph (c)(5) as paragraph (d),
revising the text of paragraph (d), and adding a new paragraph (e).
Revisions to paragraph (d) replace the reference to ``leases which are
required to be treated as capital leases'' (in accordance with
generally accepted accounting principles, GAAP) with ``leases which are
required to be accounted for as a financed purchase under [Governmental
Accounting Standards Board (GASB)] standards or a finance lease under
[Financial Accounting Standards Board (FASB)] standards[.]'' New
paragraph (e) provides for general allowability of rental or lease
payments under lease contracts where the non-Federal entity must
recognize an intangible right-to-use lease asset (per GASB) or right of
use operating lease asset (per FASB) for purposes of financial
reporting in accordance with generally accepted accounting principles.
OMB made further changes to 2 CFR 200.465 through OMB's 2024 final rule
and notification of final guidance, 89 FR 30046. These changes are
discussed in more detail later in this preamble.
OMB revised 2 CFR 200.515, Audit reporting, to better
align the regulation with the Federal Audit Clearinghouse's audit form
and collections on financial statements. Section 200.515 requires
auditors to determine and provide an opinion on whether an auditee's
financial statements ``are presented fairly in all material respects.''
Section 200.515 permits use of GAAP to make such determinations. OMB
revised Sec. 200.515 to permit use of a special purpose framework,
such as cash, modified cash, or regulatory as required by State law, in
addition to GAAP. OMB made further changes to 2 CFR 200.515 through
OMB's 2024 final rule and notification of final guidance, 89 FR 30046.
These changes are discussed in more detail later in this preamble.
OMB's 2024 Final Rulemaking and Notification of Final Guidance for
Federal Financial Assistance
On October 5, 2023, OMB published another proposed rule to revise
OMB's guidance and its regulations in title 2 of the Code of Federal
Regulations, including, among other parts, part 200. 88 FR 69390
(October 2023 proposed rule). OMB's proposed rule sought to further
streamline, clarify, and update the guidance, including raising certain
thresholds, where permissible under law, in recognition of inflation
over time. The proposals were based on four objectives: (1)
incorporating statutory requirements and administration priorities
related to Federal financial assistance; (2) reducing agency and
recipient burden; (3) clarifying sections that recipients or agencies
have interpreted in different ways; and (4) rewriting applicable
sections in plain language, improving flow, and addressing inconsistent
use of terms.
OMB partially based its proposed changes on Federal agency input
from ongoing engagement with Federal agencies and the broader Federal
financial assistance community, and from Federal agency comments and
public comments on a previously issued Request for Information (RFI)
that OMB published on February 9, 2023. 88 FR 8480. The RFI announced
that OMB would be proposing revisions to chapters I and II of subtitle
A of title 2 of the Code of Federal Regulations, which includes 2 CFR
part 200 among other parts, and requested public comment on 2 CFR and
several specific questions. OMB also published a proposed rule on the
same date proposing to revise OMB Guidance for Grants and Agreements
and soliciting public comment on the rule's proposals. 88 FR 8374
(OMB's 2023 proposed rule).\23\ OMB proposed to create a new part 184
in 2 CFR chapter I and revise 2 CFR 200.322 to support implementation
of the Build America, Buy America Act provisions of the Infrastructure
Investment and Jobs Act (IIJA) \24\ and to clarify existing
requirements.\25\
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\23\ The public comment period for this proposed rule ended on
March 13, 2023.
\24\ The Build America, Buy America Act (``BABA'' or ``the
Act'') was enacted on November 15, 2021, as part of the
Infrastructure Investment and Jobs Act (``IIJA'') (Pub. L. 117-58).
\25\ Under the proposed rule, the new part 184 would address the
Buy America Preference for all awards with infrastructure
expenditures set forth in section 70914 of the Act, generally align
with OMB guidance M-22-11, provide definitions for the purposes of 2
CFR part 184 and a common framework for applying Buy America
Preferences to Federal Financial Assistance, include guidance for
determining the cost of manufactured products and use the definition
of ``cost of components'' in the Federal Acquisition Regulation
(FAR) (48 CFR 25.003) that is used for Federal procurement, and
include OMB's proposed standards for ``all manufacturing processes''
for the manufacture of construction materials. OMB's rule also
proposed to modify 2 CFR 200.322 to direct Federal agencies to the
new part in chapter I (2 CFR part 184) for guidance on all awards
that include infrastructure projects.
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After consideration of further public and Federal agency comments
on the October 2023 proposed rule, OMB published a final rule on April
22, 2024, to finalize changes to guidance and OMB regulations in title
2 of the CFR, 89 FR 30046 (OMB's 2024 final rule), parts 1, 25, 170,
175, 180, 182, 183, 184, and 200.\26\ OMB finalized these changes for
purposes related to the four objectives stated in the October 2023
proposed rule, and to improve Federal financial assistance management,
transparency, and oversight through more accessible and comprehensible
guidance. OMB largely retained the overall structure and part, subpart,
and section number organization from prior
[[Page 107076]]
iterations of its guidance and regulations. OMB made many plain
language revisions to simplify text, reduce technical verbiage, and
increase consistency and brevity, but largely did not change the
substantive content of the guidance and regulations. The changes from
OMB's 2024 final rule became effective October 1, 2024.\27\
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\26\ As explained in section II. of this proposed rule, while
OMB amended 2 CFR parts 1, 170, 175, 180, 182, 183, and 184 in its
2024 final guidance, the changes made to these parts do not require
modifications to HUD's regulations at this time. Some provisions in
2 CFR part 25 are relevant to this rulemaking, as explained later in
this preamble.
\27\ This rulemaking is part of HUD's effort to implement OMB's
changes for HUD regulations and programs. ``Consistent with 2 CFR
200.106 and applicable law, Federal agencies must take appropriate
steps to ensure the 2024 Revisions are effective for all Federal
awards issued on or after October 1, 2024.'' OMB Memorandum M-24-11,
https://www.whitehouse.gov/wp-content/uploads/2024/04/M-24-11-Revisions-to-2-CFR.pdf.
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Relevant to this proposed rulemaking are the following changes made
by OMB's 2024 final guidance to 2 CFR part 25:
OMB amended 2 CFR 25.105, Applicability, which now
provides in paragraph (a) that 2 CFR part 25 applies to all applicants
for and recipients of Federal financial assistance as defined in 2 CFR
25.400 unless exempted by Federal statute or 2 CFR 25.110. Under
revised paragraph (b), subrecipients must obtain a unique entity
identifier (UEI) by registering with the System for Award Management
(SAM.gov) and acquiring a UEI through that website, as discussed below,
in accordance with 2 CFR part 25, subpart C. OMB also clarified in a
new paragraph (d) that recipients of the guarantee from the Federal
agency, including for-profit lenders participating in loan guarantee
programs, are required to register in SAM.gov. These lenders are also
required to complete entity validations and acquire a UEI. Finally, a
Federal agency may require non-individual beneficiary borrowers,
including small businesses or corporations, to obtain a UEI or register
in SAM.gov. There is no change to the underlying requirements, but OMB
has clarified that applicability extends to lenders participating in
loan guarantee programs.
OMB revised 2 CFR 25.200, Requirements for notice of
funding opportunities, regulations, and application instructions, to
reorganize, provide clarity, and make plain language changes, but did
not make substantive changes.\28\
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\28\ 89 FR 30052.
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OMB revised 2 CFR 25.205, Effect of noncompliance with a
requirement to obtain a UEI or register in SAM.gov, to make plain
language revisions and provide minor clarifications, including that the
requirement to have an active UEI does not apply to amendments to
terminate or close a Federal award.
OMB revised 2 CFR 25.300, Requirement for recipients to
ensure subrecipients have a unique entity identifier, to make plain
language changes, but did not make substantive changes.
OMB amended the definition of Federal financial assistance
in 2 CFR 25.400, Definitions, by adding ``loan guarantee'' as a form of
assistance that constitutes Federal financial assistance. Read together
with revised 2 CFR 25.105, OMB's changes clarify that 2 CFR part 25
applies to loan guarantee assistance.
OMB amended Appendix A to 2 CFR part 25, Award Term, to
make plain language revisions and minor clarifying edits, but did not
make substantive changes. Appendix A to 2 CFR part 25 requires, among
other things, that recipients to maintain current and active
registration in SAM.gov until the recipient submits all final reports
required under a Federal award or receives final payment, whichever is
later; that recipients notify potential subrecipients that no entity
may receive a subaward until the entity has provided its UEI to the
recipient; and that recipients must not make subawards to an entity
unless the entity has provided its UEI to the recipient.
Relevant to this proposed rulemaking are the following changes made
by OMB's 2024 final guidance to 2 CFR part 200:
OMB revised the definition of Cost sharing in 2 CFR 200.1
by removing ``or matching'' from the previously defined term ``Cost
sharing or matching''. Instead, OMB has clarified that cost sharing
includes matching, meaning the required levels of cost share that must
be provided by entities such as recipients, subrecipients, and third
parties. The definition continues to cross-reference 2 CFR 200.306,
Cost sharing.
OMB revised the definition of Modified Total Direct Cost
(MTDC), in 2 CFR 200.1, by changing the two dollar amounts of $25,000
in the definition to $50,000. The MTDC definition now provides that
MTDC includes up to the first $50,000 of each subaward, and that MTDC
excludes the portion of each subaward in excess of $50,000.
OMB revised the definition of Federal financial assistance
in 2 CFR 200.1 by replacing ``non-Federal entities'' and with
``recipients or subrecipients'' throughout. The revised definition now
specifies that 2 CFR part 200 provisions, including, under paragraph
(2) of the definition of Federal financial assistance, 2 CFR 200.203
and subpart F of 2 CFR part 200, apply to loan guarantee program
assistance that goes to or is administered by recipients and
subrecipients. Under the previously existing definition of ``Non-
Federal entity'' under 2 CFR 200.1, for-profit entities were not
included.
OMB made several revisions to 2 CFR 200.101,
Applicability. Of relevance to this rulemaking's proposed changes to
HUD regulations in 24 CFR parts 5, 1005, and 1007: OMB removed the
table 1 for paragraph (b), and reorganized and clarified text
describing the applicability of 2 CFR part 200 subparts and provisions
for different types of Federal financial assistance, including loan
guarantee program assistance. The items under revised paragraph (b)(5),
including agreements for loan guarantees, are subject to 2 CFR part
200, subpart F, Audit Requirements only when awarded to a non-Federal
entity as defined in 2 CFR 200.1.\29\
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\29\ Non-Federal entity under 2 CFR 200.1 ``means a State, local
government, Indian Tribe, Institution of Higher Education (IHE), or
nonprofit organization that carries out a Federal award as a
recipient or subrecipient.''
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Under 2 CFR 200.208, Specific conditions, paragraph (d),
before OMB's 2024 changes, if a Federal awarding agency or pass-through
entity was imposing additional requirements through specific
conditions, they were required to notify the applicant or non-Federal
entity without specification as to when this notice must be provided.
Under revised paragraph (d), the Federal agency or pass-through entity
must notify the recipient or subrecipient prior to imposing specific
conditions. Notification must include the nature of and reason for the
specific conditions, the action needed to remove them, the time allowed
for completing such actions, and the method for requesting the Federal
agency or pass-through entity to reconsider imposing a specific
condition. 2 CFR 200.208(d)(1) through (5).
OMB reorganized and revised 2 CFR 200.307. The previous
paragraph (e), concerning use of program income, has been moved to new
paragraph (b)(2). Additionally, OMB simplified language by revising all
paragraphs in Sec. 200.307(b), but the substantive requirements did
not change. For purposes of cross-reference updates in this rulemaking,
HUD notes that preexisting paragraph (e)(2) is now in paragraph (b)(2).
OMB revised 2 CFR 200.317 by, among other things, adding
``Indian Tribes'' where States are mentioned in the regulation. This
means that, if applicable, Indian Tribes receiving HUD Federal
financial assistance must use their own procurement policies and
procedures when conducting procurement transactions under a
[[Page 107077]]
Federal award. If these policies and procedures do not exist, then a
Tribe must follow the procurement standards in 2 CFR 200.318 through
200.327. Applicability does not extend to Tribally Designated Housing
Entities under OMB's revisions.
OMB revised 2 CFR 200.318 by, among other things, removing
the term ``non-Federal entity'' and replacing it with ``recipient or
subrecipient''. Paragraph (c) of this section concerns conflicts of
interest, including organizational conflicts of interest, and is of
relevance to this rulemaking. (Paragraph (c) was not changed
substantively other than the addition of a ``board member with a real
or apparent conflict of interest'' to the list of persons who may not
participate in the selection, award, or administration of a contract
supported by the Federal award.)
After its 2020 changes to 2 CFR 200.319, OMB further
reorganized and revised this section in its 2024 round of changes. Of
relevance to this rulemaking is the requirement under what was, prior
to OMB's 2020 and 2024 changes, paragraph (a)(5): To ensure objective
contractor performance and eliminate unfair competitive advantage,
contractors that develop or draft specifications, requirements,
statements of work, or invitations for bids or requests for proposals
must be excluded from competing for such procurements. One situation
``considered to be'' restrictive of competition is organizational
conflicts of interest; this example was, prior to OMB's 2020 and 2024
changes, provided in Sec. 200.319(a)(5). These requirements are now
found in paragraph (b), which speaks to the exclusions for procurement
competition, and (c)(5), which contains the organizational conflicts of
interest example. Therefore, where HUD's regulations cross reference 2
CFR 200.319(a)(5), they should now cross reference 2 CFR 200.319(b) and
(c)(5) following OMB's 2020 and 2024 changes.
OMB revised 2 CFR 200.321, Contracting with small
businesses, minority businesses, women's business enterprises, veteran-
owned businesses, and labor surplus area firms, such that this section
(as of October 1, 2024) no longer requires but instead recommends
actions to ensure consideration of minority, women, and veteran-owned
businesses and labor surplus area firms. OMB added qualifying language,
``When possible,'' to the beginning of paragraph (a), changed the
language of requirement ``must'' in paragraph (a) to discretionary
language ``should'' to state that a recipient or subrecipient ``should
ensure'' that such businesses and firms are considered, and replaced
the term ``Affirmative steps must include'' with ``Such consideration
means''. OMB also added the category of ``veteran-owned business'' to
this section for the first time. Finally, OMB made several changes for
simplification of language and clarification.
In 2 CFR 200.322, OMB added a new paragraph (c) stating
that Federal agencies providing Federal financial assistance for
infrastructure projects must implement the Buy America preferences set
forth in 2 CFR part 184. While HUD is not proposing that any of its
regulations specifically cross-reference 2 CFR part 184, where HUD's
regulations do require applicability or compliance with 2 CFR 200.322
and/or 2 CFR part 200, subpart D (which contains 2 CFR 200.322), this
also necessarily includes 2 CFR part 184 where Federal financial
assistance is provided for infrastructure projects.
OMB revised 2 CFR 200.331 by, among other things,
clarifying in paragraph (b) that a contract is for the purpose of
obtaining goods and services for the recipient's or subrecipient's
(previously ``the non-Federal entity's own'') use and creates a
procurement relationship with a contractor.
OMB revised 2 CFR 200.403(h) to add language clarifying
that administrative closeout costs may be incurred until the due date
of the final report(s) and, if incurred, these costs must be liquidated
prior to the due date of the final report(s) and charged to the final
budget period of the award unless otherwise specified by the Federal
agency. OMB also made minor edits to the existing language of paragraph
(h) for plain language and clarification.
Through its 2024 final guidance, OMB amended 2 CFR
200.414(f) by:
[cir] Providing that recipients and subrecipients that do not have
a current negotiated indirect cost rate may elect to charge a de
minimis rate;
[cir] Removing the exception for non-Federal entities described in
2 CFR part 200 appendix VII, paragraph D.1.b;
[cir] Increasing the amount of the de minimis indirect cost rate
from 10 to 15 percent of MTDC, and expressly authorizing the recipient
or subrecipient to determine the appropriate rate up to this limit;
[cir] Specifying that Federal agencies and pass-through entities
cannot require recipients and subrecipients to use a de minimis rate
lower than the negotiated indirect cost rate or the rate chosen
pursuant to Sec. 200.414, unless required by Federal statute or
regulation;
[cir] Prohibiting application of the de minimis rate to cost
reimbursement contracts issued directly by the Federal government in
accordance with the Federal Acquisition Regulation (FAR);
[cir] Specifying that recipients and subrecipients are not required
to use the de minimis rate;
[cir] Clarifying that if a recipient or subrecipient elects to use
the de minimis rate or a lower rate, or if it is required to use a
lower rate by Federal statute or regulation, it must use the de minimis
rate for all Federal awards until the recipient or subrecipient choose
to receive a negotiated rate; and
[cir] Removing language that permitted a non-Federal entity to
apply to negotiate a rate at any time.
OMB retained (but moved, within Sec. 200.414(f)) language stating
that the de minimis rate does not require documentation to justify its
use and may be used indefinitely.
OMB revised 2 CFR 200.445(b) by removing the phrase
``regardless of whether reported as taxable income to the employees''
in the provision stating that housing costs, housing allowances, and
personal living expenses for the recipient's or subrecipient's
employees are only allowable as direct costs and must be approved in
advance by the Federal agency.
OMB revised 2 CFR 200.472 by, among other things, adding a
new paragraph (b) that states that administrative costs related to
closeout activities of a Federal award are allowable and the recipient
or subrecipient may charge the Federal award during the closeout for
the necessary administrative costs of that Federal award. Section
200.472(b) provides examples including salaries of personnel preparing
final reports, publication and printing costs, costs associated with
the disposition of equipment and property, and related indirect costs.
The provision also repeats requirements stated in 2 CFR 200.403(h): The
administrative costs may be incurred until the due date of the final
report(s) and, if incurred, the costs must be liquidated prior to the
due date of the final report(s) and charged to the final budget period
of the award unless otherwise specified by the Federal agency.
II. This Proposed Rule
This proposed rule is necessary to incorporate into HUD's
regulations and bring into effect the updated Uniform Guidance issued
by OMB in 2020 (OMB's 2020 final guidance),\30\ and
[[Page 107078]]
OMB's Guidance for Federal Financial Assistance issued in 2024 (OMB's
2024 final guidance).\31\ Implementation of this guidance will reduce
administrative burden and decrease risk of waste, fraud, and abuse for
HUD's management of Federal financial assistance. Because HUD
previously implemented OMB's guidance into HUD's Federal financial
assistance management regulations throughout title 24 of the CFR, OMB's
2020 and 2024 amendments require that HUD review those regulations and
incorporate changes made in 2 CFR part 200 and, as applicable, the
other parts in title 2 of the CFR amended by OMB. During this process
HUD has also identified instances where technical corrections to HUD
regulations are necessary. Although OMB also amended 2 CFR parts 25,
170, and 183 in OMB's 2020 final guidance, and OMB amended 2 CFR parts
1, 25, 170, 175, 180, 182, 183, and 184 in OMB's 2024 final guidance,
the changes being made to these provisions do not require modifications
to HUD's regulations at this time, with the exception of changes to 2
CFR part 25 made through OMB's 2024 final guidance, which is explained
in more detail elsewhere in this preamble.
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\30\ 85 FR 49506 (Aug. 13, 2020). Some of OMB's changes and the
updated Uniform Guidance are already in effect based on language in
a Federal award or through another implementation method.
\31\ 89 FR 30046 (April 22, 2024). OMB's changes go into effect
October 1, 2024.
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Specifically, through this proposed rule HUD is proposing to make
technical changes to 2 CFR part 200 cross-references to conform HUD's
regulations with revisions made by OMB. OMB also made substantive
changes to certain 2 CFR part 200 provisions that HUD previously
implemented in its regulations, and HUD is proposing conforming changes
to implement new or changed requirements in relevant 2 CFR part 200
provisions. HUD is also proposing to amend its regulations based on its
experience implementing 2 CFR part 200 to improve clarity and
consistency in HUD regulations that cross-reference 2 CFR part 200 or
specific subparts or provisions. HUD's proposed changes are explained
in more detail below. This includes proposed changes to HUD's Housing
Trust Fund (HTF) program regulations to establish program-specific
procedures and better align programmatic and administrative
requirements for HTF grant closeout. Additionally, HTF program
regulations are modeled off of HUD's HOME Investment Partnership
program regulations, so HUD is proposing some changes in this
rulemaking that would align HTF regulations with changes related to 2
CFR part 200 proposed in HUD's recent proposed rule for the HOME
program.\32\ Finally, because some of OMB's 2024 changes affect loan
guarantee programs, and because HUD has yet to codify in regulation
some requirements that have applied to loan guarantee programs even
before OMB's 2020 changes, HUD is proposing to amend its Section 184
and 184A program regulations (24 CFR parts 1005 and 1007, respectively)
to implement the relevant requirements. HUD is seeking public comment
on its proposed changes.
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\32\ 89 FR 46618.
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Conforming Technical Changes Based on OMB's 2020 and 2024 Updates to
Uniform Guidance
Cross Reference Updates
Through this proposed rulemaking, HUD is proposing to make
technical changes to 2 CFR part 200 cross-references to conform HUD's
regulations with revisions made by OMB in its two rounds of changes,
2020 and 2024. For example, through its 2020 final guidance, OMB
removed all 2 CFR part 200 sections containing specific definitions,
sections 2 CFR 200.2 through 200.99, and added all the definitions in
those sections into a general ``Definitions'' section, 2 CFR 200.1.
Therefore, in its regulations at title 24, HUD proposes replacing any
cross-references to sections 2 CFR 200.2 through 200.99 (which no
longer exist) with a cross-reference to 2 CFR 200.1. For example, HUD
proposes to revise 24 CFR 4.9(a)(iii) by removing the cross-reference
``2 CFR 200.80,'' which previously contained the definition of
``program income,'' and adding in its place a cross-reference to 2 CFR
200.1, which now contains the definition for ``program income.''
Through its 2020 and 2024 final guidance, OMB revised and
reorganized some sections, such as 2 CFR 200.319. This created new
paragraph and regulatory text organization and some new paragraph
designations within these 2 CFR provisions. Therefore, through this
rulemaking, HUD is proposing to update cross-references in HUD's
existing regulations, such as 24 CFR 700.175(b) and 1003.606(a)(1),
which cross-reference 2 CFR 200.319(a)(5), to reference the new,
correct paragraph(s). In this example, the cross-reference to 2 CFR
200.319(a)(5) would be updated to 2 CFR 200.319(b) and (c)(5), since
the information previously contained in 2 CFR 200.319(a)(5) is now
split into several paragraphs with new paragraph designations because
of changes from both OMB's 2020 and 2024 final guidance.
HUD is also proposing updates to cross-references to point to more
specific 2 CFR part 200 subparts or provisions. For example, 24 CFR
75.31 provides for recordkeeping requirements and states that
documentation must be maintained for a time period in accordance with
applicable program regulations or, in the absence of such regulations,
``in accordance with 2 CFR part 200.'' For clarity, HUD proposes to
replace the cross-reference in 24 CFR 75.31(c) to 2 CFR part 200 with a
reference to 2 CFR 200.334, which specifies a three-year requirement
and exceptions to this requirement. In addition, HUD proposes changes
to cross-reference more specific 2 CFR part 200 subparts or provisions
in Sec. 75.33(a), to cross-reference 2 CFR 200.334; and Sec.
570.509(b)(3), to cross-reference 2 CFR part 200, subpart F.
Finally, some of HUD's regulations, 24 CFR 570.502(a) for example,
cross reference 2 CFR provisions by only section number (not CFR title
number 2) and then by section title: in Sec. 570.502(a)(1), ``Section
200.305 `Payment' ''. This could refer to Sec. 200.305 in any title of
the CFR. HUD is proposing to clarify that the cross-references are to
title 2 provisions by revising these cross-references to read, e.g.,
``2 CFR 200.305.'' OMB's 2024 changes also changed the section titles
of some of these 2 CFR part 200 provisions. For example, 2 CFR 200.306,
which 24 CFR 570.502(a)(2) cross-references as ``Section 200.306 `Cost
sharing or matching,' '' is no longer ``Cost sharing or matching'' but
``Cost sharing''. HUD is proposing to remove the section titles from
the 2 CFR part 200 cross-references in its regulations to remove the
need to update HUD's regulations to account for any future change in
section titles of 2 CFR part 200 provisions. HUD is therefore proposing
for 24 CFR 570.502(a)(1) to simply cross-reference ``2 CFR 200.305,''
and, for paragraph (a)(2), ``2 CFR 200.306,'' and so on. HUD is
proposing these technical changes in 24 CFR 570.502(a), 1000.26(a), and
1003.501(a).
Section 570.489 Program Administrative Requirements
Through OMB's 2020 changes to 2 CFR part 200, OMB removed section 2
CFR 200.88, which contained the definition of ``simplified acquisition
threshold'' (SAT), and moved the SAT definition into the new
definitions section 2 CFR 200.1. OMB also revised the definition of
``simplified acquisition threshold'' to cross-reference 2 CFR 200.320
and clarify that the SAT ``for
[[Page 107079]]
procurement activities administered under Federal awards'' is set by
the Federal Acquisition Regulation at 48 CFR subpart 2.1.\33\ In Sec.
570.489(j), HUD is proposing to remove the language ``the threshold for
small purchase procurement (2 CFR 200.88),'' and replace it with ``the
simplified acquisition threshold (2 CFR 200.1) set by the FAR at 48 CFR
part 2, subpart 2.1.'' This will incorporate OMB's renumbering of 2 CFR
part 200 definitions and make HUD's regulatory language consistent with
the language in the SAT definition in 2 CFR 200.1.
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\33\ On July 2, 2020, the Department of Defense, the General
Services Administration (GSA), and the National Aeronautics and
Space Administration (NASA) finalized changes to the Federal
Acquisition Regulation at 48 CFR part 2, subpart 2.1, in a final
rule titled ``Federal Acquisition Regulation; Federal Acquisition
Circular 2020-07; Introduction.'' 85 FR 40060; see also FAR Case
2018-004, titled ``Federal Acquisition Regulation: Increased Micro-
Purchase and Simplified Acquisition Thresholds,'' at 85 FR 40064.
That final rule, among other things, increased the general
simplified acquisition threshold amount from $150,000 to $250,000.
These changes are not directly relevant to HUD's reasoning for
proposing changes to 24 CFR 570.489(j), but are worth noting.
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Conforming Substantive Changes Based on OMB's 2020 and 2024 Updates to
Uniform Guidance
Some of OMB's changes to the Uniform Guidance add new requirements
or changes to existing requirements. HUD has reviewed these substantive
changes and seeks to implement OMB's permissive requirement for
consideration of small, minority, veteran-owned, and women's business
enterprises and labor surplus area firms in 2 CFR 200.321; OMB's
indirect cost requirements in section 2 CFR 200.414(f); and OMB's audit
reporting requirements in 2 CFR 200.515. The relevant substantive
changes to OMB's Uniform Guidance and HUD's corresponding proposed
changes are outlined in this section. HUD is proposing to make these
changes to align its program regulations with OMB's regulations and
2020 and 2024 final rules and final guidance. Doing so will help HUD
regulations and programs to achieve or better achieve the objectives
outlined in the preambles of OMB's rulemakings: align with statutory
requirements and administration priorities, reduce agency and recipient
burden, and strengthen Federal agency approaches to performance and
risk.
Application, Registration, and Submission Requirements: Sec. Sec.
5.1001 Through 5.1005
Following OMB's 2024 changes to 2 CFR 25.105, 2 CFR part 25 applies
to applicants for and recipients of Federal financial assistance as
defined in 2 CFR 25.400 unless a Federal statute or 2 CFR 25.110
provides for an exemption. OMB's changes to the definition of Federal
financial assistance in 2 CFR 25.400 clarify that loan guarantees
constitute Federal financial assistance for purposes of 2 CFR part 25.
The changes to 2 CFR 25.105 and 25.400 together mean that 2 CFR part 25
applies to loan guarantee assistance. HUD is proposing conforming
changes to 24 CFR 5.1001 that would incorporate OMB's new applicability
language and include loan guarantees as a form of Federal financial
assistance subject to the requirements of HUD regulations that
implement 2 CFR part 25: 24 CFR 5.1001 through 5.1005 (24 CFR part 5,
subpart K).
HUD regulations at Sec. Sec. 5.1003 and 5.1004 implement OMB's
preexisting provisions in title 2 of the Code of Federal Regulations
related to use of a unique entity identifier and the System of Award
Management (SAM), 2 CFR 25.200 and 25.205. HUD implemented these OMB
provisions as part of its prior 2 CFR rulemaking effort to implement
OMB's 2013 uniform guidance, and HUD's regulations currently only
expressly incorporate these requirements for applicants of Federal
financial assistance, not recipients and subrecipients.\34\ HUD is
proposing conforming changes to 24 CFR 5.1003 and 5.1004 to align them
with the revised OMB provisions and to clarify that certain
requirements extend to applicants, in Sec. 5.1003, and also to
recipients and subrecipients, in Sec. 5.1004. HUD is proposing
conforming changes to Sec. 5.1003 to incorporate the revised language
in OMB's revised 2 CFR 25.200 and 25.205. HUD is also proposing to
maintain some of the structure and language in current 24 CFR 5.1003
related to consortium arrangements. HUD is similarly proposing
conforming changes to 24 CFR 5.1004 to align it with revised 2 CFR
25.200, 25.205, 25.300, and appendix A to 2 CFR part 25. HUD is
proposing to incorporate 2 CFR 25.205(d) in Sec. 5.1004(c) to clarify
UEI and SAM.gov requirements for recipients of loan guarantee
assistance.\35\
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\34\ 80 FR 75931.
\35\ HUD's proposed 24 CFR 5.1004(b) incorporates provisions in
2 CFR part 25, Appendix A, Award Term.
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Section 5.1005 of title 24 of the CFR currently incorporates HUD's
requirements for electronic submission of applications for HUD
assistance.\36\ These requirements apply only for applications
submitted in response to any application that HUD has placed on the
www.grants.gov website. This website, grants.gov, is only applicable
for awards made via competition, and not all HUD programs use
grants.gov for electronic submission of applications. Additionally, in
response to public comment, OMB stated in its 2024 final rulemaking
that it would not implement a single, centralized application system or
related provisions.\37\ HUD is therefore proposing to remove the
existing requirements in 24 CFR 5.1005.
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\36\ See 70 FR 77292. HUD's requirements originate from goals
set by the President in the President's Management Agenda for Fiscal
Year 2002, which furthered the objectives of the Federal Financial
Assistance Management Improvement Act of 1999 and the Government
Paperwork Elimination Act. 69 FR 68218. The Federal Financial
Assistance Management Improvement Act of 1999, which required
Federal agencies to streamline and simplify the application,
administrative, and reporting procedures for Federal financial
assistance programs, ceased to be effective on Nov. 20, 2007.
\37\ 89 FR 30072.
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OMB's regulations at 2 CFR 25.220(a), as revised through OMB's 2024
changes, require all awards of Federal financial assistance to include
the award term in appendix A to 2 CFR part 25. This was a preexisting
requirement; OMB's 2024 changes did not alter its substance, but this
requirement has only been included indirectly via cross-reference in
HUD's regulations up to this point.\38\ HUD is therefore proposing a
new Sec. 5.1005 that would provide that every agreement for Federal
financial assistance executed by HUD with a recipient on or after
October 1, 2024, is subject to the Award Term in appendix A to 2 CFR
part 25.
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\38\ See existing 24 CFR 5.1004, ``Applicants for HUD financial
assistance that are subject to this subpart are required to register
with the System of Award Management (SAM) and have an active
registration in SAM in accordance with 2 CFR part 25, appendix A in
order for HUD to obligate funds and for an awardee to receive an
award of funds from HUD.''
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Section 92.508 Recordkeeping
Through OMB's 2024 changes, OMB revised 2 CFR 200.321 by removing
the requirement that non-Federal entities ``must take all necessary
affirmative steps to assure'' use of minority businesses, women's
business enterprises, and labor surplus area firms, and replacing it
with a statement that ``[w]hen possible, the recipient or subrecipient
should ensure'' (emphasis added) consideration of small businesses,
minority businesses, women's business enterprises, veteran-owned
businesses, and labor surplus area firms, for contracting purposes.
Affirmative steps to ensure use of these entities is no longer a
requirement, and, instead, consideration of these entities
[[Page 107080]]
is now an option that OMB regulations encourage ``when possible''.
Additionally, the list of entities has expanded and now includes small
businesses and veteran-owned businesses. Through this rulemaking, HUD
is proposing to add a new paragraph (a)(7)(ii)(C) to 24 CFR 92.508 to
require participating jurisdictions to establish and maintain records
of any efforts to consider small businesses, minority businesses,
women's business enterprises, veteran-owned businesses, and labor
surplus area firms, as described in 2 CFR 200.321. HUD's current
recordkeeping requirements in this section only address HOME statutory
requirements; HUD is proposing this change to clarify that the
recordkeeping requirements include records for groups mentioned within
2 CFR part 200 even if not mentioned within the HOME statute.
Indirect Costs: Sec. Sec. 570.206, 576.109, and 578.63
Through its 2020 final guidance, OMB amended 2 CFR 200.414(f) to
expand use of the de minimis indirect cost rate of 10 percent of
modified total direct costs (MTDC), defined in 2 CFR 200.1. Under OMB's
2020 changes, Sec. 200.414(f) stated that any non-Federal entity that
does not have a current negotiated indirect cost rate, except for a
non-Federal entity described in paragraph D.1.b of appendix VII to 2
CFR part 200,\39\ may elect to charge the de minimis rate.
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\39\ Under OMB's 2020 changes, these non-Federal entities
described in appendix VII in paragraph D.1.b. were defined as a
State or local governmental department or agency unit that receives
more than $35 million in direct Federal funding or is specifically
requested to submit an indirect cost rate proposal by the cognizant
agency for indirect costs. State or local governments receiving more
than $35 million in direct Federal funding were required to submit
an indirect cost rate proposal to its cognizant agency for indirect
costs.
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Through its 2024 final guidance, OMB further amended 2 CFR
200.414(f) by, among other things, increasing the amount of the de
minimis indirect cost rate from 10 to up to 15 percent of MTDC, and as
otherwise described previously in the ``OMB's 2024 Final Rulemaking and
Notification of Final Guidance for Federal Financial Assistance''
section in the ``Background'' section of this preamble.
HUD's regulation at 24 CFR 578.63(b) currently states that indirect
costs may be allocated to eligible activities ``consistent with an
indirect cost rate proposal developed in accordance with 2 CFR part
200, subpart E,'' (emphasis added). This does not contemplate use of
the de minimis rate, which is included under 2 CFR part 200, subpart E,
but is not considered an indirect cost rate proposal. Other HUD
regulations state that direct costs may be allocated to eligible
activities ``consistent with 2 CFR part 200, subpart E,'' without
reference to an indirect cost rate proposal.\40\ Therefore, HUD
proposes to revise language in Sec. 578.63(b) to state that indirect
costs may be allocated consistent with 2 CFR part 200, subpart E, and
remove reference to an ``indirect cost rate proposal.'' This will end
confusion over the permissible use of a de minimis rate as contemplated
by 2 CFR 200.414 and improve consistency with other HUD regulations.
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\40\ See, e.g., 24 CFR 576.109(b).
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Under the regulations for several of HUD's Community Planning and
Development (CPD) programs, the programs' administrative cost caps do
not limit costs directly related to carrying out eligible activities,
because HUD considers those costs part of the activity delivery costs.
For example, where rental assistance is the eligible activity, the
costs of writing out and mailing the rental assistance checks to each
property owner are costs of providing rental assistance and therefore
chargeable under the ``rental assistance'' activity. Because some of
these ``activity delivery costs'' may be classified as indirect costs
under 2 CFR part 200, some of CPD's program rules (24 CFR parts 576 and
578) include provisions to clarify the conditions under which indirect
costs can be charged to eligible activities. These conditions are to
ensure (1) the applicable indirect cost rate and direct cost base allow
for activity-level allocation of indirect costs, and (2) the sum of
direct and indirect costs charged to a specific activity category or to
administrative costs is within with the program's cost caps.
However, when reviewing OMB's changes to the part 200 definitions
and the de minimis indirect cost rate requirements, HUD determined that
a further condition is needed where indirect costs are determined using
modified total direct cost (MTDC). Specifically, because part 200
defines MTDC at 2 CFR 200.1 to include ``up to the first $50,000 of
each subaward (regardless of the period of performance of the subawards
under the award),'' and the portion of indirect costs determined based
on that specific amount can only be considered program administration
costs, HUD proposes to amend 24 CFR 576.109(b) and 578.63(b) to make
sure that the portion of indirect costs can only be charged as program
administration costs, when indirect costs are allocated and charged at
the activity level.
In addition, HUD invites public comments on whether similar
conditions should be added to other CPD program regulations that
distinguish activity delivery costs from program administration costs
for purposes of determining compliance with applicable cost caps (e.g.,
parts 92, 93, 570, and 574).
Section 574.500 Responsibility for Grant Administration
Through its 2024 changes, OMB amended 2 CFR 200.342 to require
Federal agencies to, upon initiating a remedy for noncompliance
including disallowed costs, a corrective action plan, or termination,
provide a recipient an opportunity to object and provide information
challenging the action. Through this rulemaking, HUD is proposing
conforming amendments to its Housing Opportunities for Persons With
AIDS (HOPWA) program enforcement regulation at 24 CFR 574.500(c) to
directly incorporate the language and procedure laid out in OMB's
revised regulations. HUD is not proposing any changes to the first
sentence of existing paragraph (c). HUD's proposed language replacing
the second sentence would provide that, upon initiating a remedy for
noncompliance (for example, disallowed costs, a corrective action plan,
or termination), HUD will provide the grantee with an opportunity for
informal consultation, in which the grantee may object and provide
information challenging the action.
Section 574.540 Deobligation of Funds
As explained earlier in this preamble, OMB revised 2 CFR 200.403(h)
to allow administrative costs to be incurred until the due date of the
final report(s) for that Federal award. This allows Federal financial
assistance funds to be used for such costs after the period of
performance. For consistency with this revised requirement, HUD is
proposing to revise 24 CFR 574.540. Rather than provide that HUD may
deobligate any amount of grant funds that have not been expended within
a three-year period from the date of the signing of the grant
agreement, which is the language in HUD's existing regulation, revised
Sec. 574.540 would provide that the period of performance for the
grant will be 36 months after the date that HUD executes the grant
agreement with the recipient, unless the grant agreement provides for a
longer period. The proposed change would retain the default three-year
period of performance and HUD's discretion to amend grant
[[Page 107081]]
agreements to provide for a longer period of performance without
needing to waive the regulation. HUD is also proposing to clarify that
``the requirements of this regulation'' in Sec. 574.540 means 24 CFR
part 574, and to reorganize the sentences in this section. HUD is not
proposing any other changes to existing requirements in Sec. 574.540.
Section 576.200 Submission Requirements and Grant Approval
Section 576.200(a) of the Emergency Solutions Grants (ESG) program
regulation currently includes the following statement with respect to
the specific award conditions provision in 2 CFR 200.207, ``As provided
under 2 CFR 200.207, HUD may impose special conditions or restrictions
on a grant, if the recipient is determined to be high risk.'' HUD is
proposing to revise this statement to accommodate the changes OMB made
to the criteria for imposing specific conditions as well as to reflect
OMB's renumbering of the specific conditions provision in part 200 from
2 CFR 200.207 to 2 CFR 200.208. The proposed revision would state that
HUD may include specific conditions in the grant agreement for a State,
urban county, or metropolitan city as provided by 2 CFR 200.208.
Section 576.201 Matching Requirement
Section 576.201(b) of title 24 of the CFR provides the requirements
for contributions to be recognized as match for HUD's ESG program.
Through this rulemaking, HUD is seeking to provide its prior
approval of ESG grant recipients to use unrecovered indirect costs as
match for the ESG grant, as permitted by 2 CFR 200.306(c). As revised
by OMB's 2020 and 2024 changes, 2 CFR 200.306(c) provides that
unrecovered indirect costs may be included as part of cost sharing
(which includes matching, per OMB's 2024 changes to the definition of
``cost sharing'' in 2 CFR 200.1 \41\) with prior approval of the
Federal agency or pass-through entity. Section 200.306(c) of title 2 of
the CFR defines ``unrecovered indirect cost'' to mean the difference
between the amount charged to the Federal award and the amount which
could have been charged to the Federal award under the recipient's or
subrecipient's approved indirect cost rate. Accordingly, HUD is
proposing to add a new paragraph (d) in 24 CFR 576.201 that would
permit matching contributions to include unrecovered indirect costs as
described in 2 CFR 200.306(c). This provision would clarify that
unrecovered indirect costs may be used to satisfy the ESG matching
requirements.
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\41\ OMB's 2024 changes removed the use of the term ``match''
throughout 2 CFR part 200 provisions, and ``cost sharing'' as
defined by 2 CFR 200.1 now includes matching, which refers to
required levels of cost share that must be provided. HUD is
retaining the use of the word ``matching'' throughout ESG program
regulations in 24 CFR part 576, as this is more accurate and
consistent with the ESG program statute. See 42 U.S.C. 11375.
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HUD is also proposing to remove the existing paragraphs (d) through
(f) in Sec. 576.201. In HUD's 2015 final rule, HUD revised Sec.
576.201 by revising paragraphs (a) through (c) as part of HUD's efforts
to update, substitute, or correct cross-references and make other
conforming changes to implement OMB's 2013 Uniform Guidance. 80 FR
75932. HUD's amendatory instruction number 86 stated, ``Revise Sec.
576.201(a), (b), and (c) to read as follows,'' 80 FR 75939, and it
should have stated ``Revise Sec. 576.201 to read as follows,'' to
remove paragraphs (d) through (f). Paragraph (d)(1) refers to OMB
circulars A-87 and A-122 and former parts of 2 CFR, which were
superseded by 2 CFR part 200. See 78 FR 7283. Paragraphs (d)(2) and (e)
contradict the application of 2 CFR 200.306 in Sec. 576.201(b) and
(c), as amended by HUD's 2015 final rule. Paragraph (f) was made
redundant by another amendment (number 89) of HUD's 2015 final rule. 80
FR75939. HUD is therefore proposing in this rulemaking to correct this
inadvertent error by removing the obsolete, redundant, and
contradictory paragraphs (d) through (f) from Sec. 576.201.
Section 576.203 Obligation, Expenditure, and Payment Requirements
OMB's 2024 changes to 2 CFR 200.403(h) and 200.472(b) permit
administrative costs associated with closeout activities to be charged
to the Federal award during closeout, and such costs may be incurred
until the due date of the final report(s). HUD is proposing to revise
Sec. 576.203(b) to provide for an exception for funds used for
administrative closeout costs as provided by 2 CFR 200.403(h) within
the sentence stating that the recipient's grant must be expended for
eligible activity costs within 24 months after the date HUD signs the
grant agreement with the recipient. HUD is also proposing minor
technical edits to the language in this sentence for clarity and plain
language, but otherwise is not proposing further changes to this
paragraph and section.
Section 964.230 Audit and Administrative Requirements, and Sec.
965.205, Qualified PHA-Owned Insurance Entity
Through its 2020 final guidance, OMB amended 2 CFR 200.515 to
permit auditors to review and make determinations regarding auditees'
financial statements in accordance with a special purpose framework,
such as cash, modified cash, or regulatory as required by State law, in
addition to generally accepted accounting principles (GAAP). OMB's 2024
final guidance made technical revisions to 2 CFR 200.515, but did not
alter the underlying substantive requirements. HUD's regulation at 24
CFR 964.230(b) currently provides that resident management corporations
managing a development(s) must be audited annually by a licensed
certified public accountant, designated by the corporation, in
accordance with generally accepted auditing standards. HUD's regulation
at 24 CFR 965.205(d)(1) similarly provides that certain nonprofit
insurance entities must prepare and submit (to HUD) audits and
actuarial reviews, and that the annual financial statement must be
audited by an independent auditor in accordance with generally accepted
auditing standards. HUD is proposing to revise Sec. 964.230(a)(2) and
(b) and Sec. 965.205(d)(1) to add language that permits auditing in
accordance with a special purpose framework as described in 2 CFR
200.515, in addition to generally accepted auditing standards. This
proposed change would conform HUD's regulations to OMB's change to 2
CFR 200.515.
Section 1006.370 Uniform Administrative, Requirements, Cost Principles,
and Audit Requirements for Federal Awards
HUD's regulation at 24 CFR 1006.370(b)(1)(iii) directly
incorporates the language from 2 CFR 200.445(b). OMB revised 2 CFR
200.445(b) through OMB's 2024 final rule by removing the phrase
``regardless of whether reported as taxable income to the employees''
because OMB, upon further review, found this to be an unnecessary
clarification. For consistency with OMB's changes, HUD is proposing to
remove this phrase from the language in Sec. 1006.370(b)(1)(iii). It
is sufficient to state that housing costs, housing allowances, and
personal living expenses are only allowable as direct costs and must be
approved by HUD.
[[Page 107082]]
Conforming Technical Changes Based on HUD's Experience Implementing 2
CFR Part 200
HUD proposes technical, conforming amendments to its regulations
based on its experience implementing 2 CFR part 200 in programs
involving Federal financial assistance management and administration.
These technical, conforming changes would improve clarity in some of
HUD's regulations that cross-reference 2 CFR part 200 or specific
subparts or provisions.
Section 5.1006 Certifications and Assurances
In HUD's existing regulations, e.g., 24 CFR 1.5(a)(1), there are
existing requirements that applicable contracts and applications for
Federal financial assistance must include certifications and assurances
of compliance with various cross-cutting Federal requirements,
including relevant civil rights obligations and requirements, as a
condition for approval and extension of any Federal financial
assistance. See also 24 CFR 3.115, 8.50, and 146.25. Currently, these
assurances requirements are only contained in those respective cross-
cutting subject regulations and not in HUD's general program
requirement regulations. HUD is therefore proposing to add a new
section 24 CFR 5.1006 that would, in one place, state that every
agreement for Federal financial assistance that HUD executes on or
after October 1, 2024, with a recipient, including recipients provided
an exemption to the requirements of 2 CFR 25.110, must contain or be
accompanied by the appropriate assurances and certifications.
HUD developed its own Assurances and Certifications form, HUD-424B,
to tailor assurances and certifications to HUD programs and to
consolidate the SF-424B and SF-424D. The new Sec. 5.1006 would state
that HUD has specified the form HUD-424B be used for purposes of
meeting requirements in relevant regulations, 24 CFR 1.5, 3.115, 8.50,
and 146.25. New Sec. 5.1006 would also provide that HUD \42\ may
require specific civil rights assurances be provided consistent with
those authorities, in which case HUD will specify the form on which
such assurances must be made.
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\42\ In HUD's proposed regulatory text, HUD uses the term
``Responsible Civil Rights Official.'' This means the Assistant
Secretary for Fair Housing and Equal Opportunity (FHEO). See 76 FR
73984 and https://www.hud.gov/sites/dfiles/FHEO/documents/2021_Sep_Amended_Consolidated_Delegation_Authority%20_FHEO.pdf.
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Conflicts of Interest: Sec. Sec. 92.356, 93.353, 570.611, 574.625,
576.404, 578.95, 1000.30, 1003.606, 1006.360
Several of HUD's existing conflict of interest regulations require
technical revisions to include a more complete scope of applicable
conflict of interest provisions in 2 CFR part 200 and to reflect which
2 CFR part 200 conflict of interest requirements have traditionally
applied, or should apply, in practice for procurement by recipients and
subrecipients of HUD Federal financial assistance.
Section 200.317 of 2 CFR requires States and, now under OMB's 2024
changes, Indian Tribes, to apply the conflict of interest requirements
that are required under their State or Tribe procurement policies when
conducting procurement transactions under a Federal award. If a State
or Tribe does not have its own procurement policies, then it must
follow the procurement standards in 2 CFR 200.318 through 200.327.
Additionally, under 2 CFR 200.317, non-State and non-Tribe recipients
and subrecipients, including subrecipients of a State or Indian Tribe,
must follow the procurement standards in 2 CFR 200.318 through 200.327.
Two sections within this range of 2 CFR provisions, 2 CFR 200.318
and 200.319, contain applicable conflict of interest provisions.
Section 200.318 of 2 CFR, paragraph (c), includes the requirement for
recipients and subrecipients to maintain written standards covering
conflicts of interest and actions of employees participating in
contract selection, award, and administration; a prohibition on the
participation of individuals with conflicts of interest in the
selection, award, and administration of a contract supported by a
Federal award; a definition of conflict of interest; and other
requirements. Section 200.319 of 2 CFR describes the requirements for
competition for non-State/non-Tribe recipients, subrecipients, and
States that have chosen to adopt the 2 CFR 200.317 through 200.327
requirements or similar procurement policies. Paragraph (b) of Sec.
200.319 prohibits certain conflicts, and paragraph (c)(5) provides that
organizational conflicts of interest are an example of a situation that
may restrict competition in procurement.\43\
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\43\ Paragraphs (b) and (c)(5) were previously organized under
paragraph (a) and (a)(5) of Sec. 200.319 until OMB's 2020 and 2024
rounds of changes.
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Through this rulemaking, HUD is seeking to provide greater clarity
about where in 2 CFR part 200 any applicable conflict of interest
provisions are located and to provide recipients and subrecipients with
accurate notice about 2 CFR part 200 conflict of interest requirements
that apply to their procurement actions. HUD is proposing to revise
some of its conflict of interest regulations to more accurately cite
the relevant conflict of interest provisions in 2 CFR part 200, and to
standardize language across various HUD program regulations.
Specifically, HUD is proposing changes in 24 CFR 92.356(a),
93.353(a), 570.611(a)(1), 574.625(a), 576.404(a) and (b), 578.95(a),
1000.30(a), 1003.606(a), and 1006.360. HUD is proposing to update
cross-references to refer to 2 CFR 200.317 through 200.319, with
language stating that recipients and subrecipients must comply with the
``applicable'' conflict of interest requirements in these three
sections. HUD is proposing to use the section numbers, e.g., 2 CFR
200.317 through 200.319, and not specific paragraphs within these
sections, e.g., 2 CFR 200.319(b)(5) and (c), to accommodate any further
reorganization by OMB of the paragraphs in these sections. HUD is also
proposing to make the lead-in language for these regulations \44\
consistently begin with, ``When procuring goods and services in
accordance with 2 CFR part 200, . . . .'' This change will reduce
confusion by eliminating needless differences in the wording of
different program regulations' references to the conflict of interest
requirements 2 CFR part 200 applies to procurement of goods and
services under a Federal award. Sections 24 CFR 92.356(a), 93.353(a),
570.611(a)(2), 574.625(a), 576.404(b), 1000.30(a), and 1003.606(a)
would also state, ``[i]n all other situations, the provisions of this
section apply,'' or similar language. These proposed changes would
provide, consistently across certain HUD program regulations, that
recipients and subrecipients must follow one set of requirements (i.e.,
the applicable conflict of interest requirements under 2 CFR 200.317
through 200.319) when procuring goods and services under a Federal
award and must follow another set of requirements (i.e., the additional
requirements spelled out in the conflict of interest section of the
program regulations) in all other situations.
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\44\ Including all the sections and paragraphs listed in the
first sentence of this preamble paragraph except 24 CFR 576.404(a).
---------------------------------------------------------------------------
HUD is also proposing minor technical changes in some of the
conflict of interest provisions. HUD is proposing, in Sec. 574.625(a),
(b), (c), and (d) to include program-specific terminology by changing
``recipient'' to ``grantee'' and ``subrecipient'' to
[[Page 107083]]
``project sponsor.'' In Sec. 578.95(b), HUD is proposing changes to
add the phrase ``or collaborative applicant'' after ``No Continuum of
Care'' and before ``board member.'' The Department is revising Sec.
578.95(b) to include collaborative applicants because collaborative
applicants and Continuum of Care board members are statutorily
prohibited from participating in or influencing discussions or
decisions concerning the award of a grant or other financial benefits
to the organization that the member represents. HUD is also proposing
to add a sentence to the end of Sec. 578.95(c) that would prohibit
recipients and subrecipients from having organizational conflicts of
interests and require these entities to maintain standards of conduct
covering organizational conflicts of interest described in 2 CFR
200.318. The Department is revising Sec. 578.95(c) to clarify that
under the CoC program recipients and subrecipients are prohibited from
having organizational conflicts of interest, consistent with applicable
2 CFR part 200 requirements.
Section 92.505 Applicability of Uniform Administrative Requirements
In a proposed rule published May 29, 2024, titled ``HOME Investment
Partnerships Program: Program Updates and Streamlining,'' 89 FR 46618
(``HUD's proposed HOME rule''), HUD proposed amendments to 24 CFR
92.505 to revise the applicability of 2 CFR part 200 to participating
jurisdictions, State recipients, and subrecipients receiving HOME
funds, to exclude 2 CFR 200.328 and 200.344. For more information on
why HUD proposed to exclude these provisions from applicability to HOME
program assistance, see HUD's proposed HOME rule.\45\
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\45\ 89 FR 46618, 46652.
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HUD is, through this rulemaking, not changing the proposal to
exclude applicability of 2 CFR 200.328 and 200.344. HUD is additionally
proposing to exclude applicability of 2 CFR 200.329(c) because 2 CFR
200.329(c) requires reporting on a different cycle than is required
under the HOME program regulations and HUD is seeking to provide a more
flexible reporting than the annual reporting of non-construction
performance requirements in that regulation.
Income From Equipment Sales: Sec. Sec. 570.502, 1000.26, 1003.501
Several sections in title 24 of the CFR state that 2 CFR 200.313,
Equipment, applies except that when the equipment is sold, the proceeds
shall be considered and treated as program income. For the Entitlement
Community Development Block Grant program, see Sec. 570.502(a)(6); for
Native American housing activities, see Sec. 1000.26(a)(8); and for
the Community Development Block Grant program for Indian tribes and
Alaska native villages, see Sec. 1003.501(a)(6). These sections do not
account for other sections in title 24 of the CFR that state that
income received by a recipient and its subrecipients in a single year
that, in total, is less than $25,000 does not constitute program
income. For the Entitlement Community Development Block Grant program,
see Sec. 570.500(a)(4)(i); for Native American housing activities, see
Sec. 1000.62(b); and for the Community Development Block Grant program
for Indian tribes and Alaska native villages, see Sec. 1003.503(b)(4).
HUD proposes to revise Sec. Sec. 570.502(a)(6), 1000.26(a)(8), and
1003.501(a)(6), to provide for a $25,000 de minimis exception. In other
words, proceeds from equipment sales shall not be considered and
treated as program income if the total income, including income from
equipment sales, of a recipient and its subrecipients totals less than
$25,000. HUD also proposes to revise Sec. 570.502(a)(6) by
reorganizing the two sentences in existing paragraph (a)(6) into two
paragraphs (a)(6)(i) and (ii) for clarity.
Recordkeeping: Sec. Sec. 574.530 and 576.500
HUD's consolidated plan regulations require access to records
related to a jurisdiction's records related to the consolidated plan
and use of assistance under the applicable programs during the
preceding five years. See 24 CFR 91.105(h) and 91.115(g). Section
574.530 in title 24 of the CFR currently provides for a four-year
record retention period. Following OMB's changes to 2 CFR part 200, 2
CFR 200.334 now states that the recipient and subrecipient must retain
all Federal award records for three years from the date of final
financial report submission. To resolve these discrepancies, HUD is
proposing to reorganize and revise 24 CFR 574.530, regarding
recordkeeping for HUD's HOPWA program. New proposed paragraph (a)(1)
would provide that, for formula grants, grantees ensure that all grant
records are maintained for the longer of five years or the applicable
record retention period provided in 2 CFR 200.334. Paragraph (a)(2)
would provide that for all other grants, grantees must ensure that all
grant records are maintained for the applicable record retention period
provided in 2 CFR 200.334. Paragraph (a)(3) would require grantees to
ensure maintenance of all records for real property subject to minimum
use requirements are maintained for at least three years after final
disposition. This language would account both for HUD's consolidated
plan access to records requirements and OMB's requirements in 2 CFR
200.334, including for recipients and subrecipients to retain all
Federal award records from three years from the date of submission of
their final financial report. (This has been a longstanding
requirement; OMB did not substantively revise 2 CFR 200.334 in its 2020
and 2024 changes.)
Existing paragraphs (a) through (c) of Sec. 574.530, which
describe the types of data and information that grantees must maintain
in records, would not be substantively changed. HUD is only proposing
to reorganize these paragraphs into a new (b)(1) through (3).
HUD is also proposing changes to Sec. 576.500 to bring the
recordkeeping requirements for HUD's ESG program into greater alignment
with 2 CFR part 200, where the recordkeeping requirements in 2 CFR part
200 would not undermine HUD's implementation of the statutory
requirements for ESG program. For example, 2 CFR part 200 requires
records to be kept for longer periods to account for certain
circumstances or special purposes, and it is possible to satisfy both
the minimum period 2 CFR part 200 would require the records to be
retained and the minimum period HUD currently requires the records to
be retained to implement the statutory requirements for ESG. So, HUD is
proposing to revise the introductory text for Sec. 576.500(y) to state
that all records related to a recipient's grant must be kept for the
longer of 5 years, the minimum period described in Sec. 576.500(y)(1)
through (3), or the minimum period provided by 2 CFR part 200 (2 CFR
200.334) for the specific situation or record. Likewise, HUD is
proposing to change the language in Sec. 576.500(y)(1) through (3)
from ``records must be retained for 5 years'' to ``records must be kept
for at least 5 years.'' In addition, HUD proposes to update a cross-
reference to 2 CFR 200.336, to 2 CFR 200.337, in Sec. 576.500(z) to
account for OMB's changes to 2 CFR part 200 section numbers. Finally,
HUD is also proposing to remove the sentence, ``Copies made by
microfilming, photocopying, or similar methods may be substituted for
their original records,'' because it is no longer necessary or useful,
considering what 2 CFR 200.336 provides on methods for collection,
transmission, and storage of information.
[[Page 107084]]
Section 574.605 Applicability of Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards
Section 574.605 currently states that 2 CFR part 200 provisions
apply to Housing Opportunities for Persons With AIDS (HOPWA) grants,
but it does not specify any exceptions. As a practical matter, 2 CFR
part 200 provisions do not apply to HOPWA grants without exception.
Section 200.101(d) of title 2 of the CFR contemplates this and states
that where Federal statutes or regulations conflict with 2 CFR part 200
provisions, Federal statutes or regulations govern. Therefore, HUD is
revising Sec. 574.605 to clarify this point and add language that
states 2 CFR part 200 provisions apply except where they are
inconsistent with relevant HOPWA statutes--the AIDS Housing Opportunity
Act and title I of the Cranston-Gonzalez National Affordable Housing
Act--or implementing regulations in 24 CFR part 574 or 91. This also
improves consistency with other HUD regulations for other programs,
which specify that the relevant Federal statutes and regulations govern
where 2 CFR part 200 provisions conflict with those statutes and
regulations,\46\ and with 2 CFR part 200 provisions that speak to the
precedence of Federal statutes over 2 CFR part 200 provisions.\47\
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\46\ See, e.g., 24 CFR 578.99(e).
\47\ E.g., 2 CFR 200.100(a)(1), 200.102(b), 200.106.
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Section 970.1 Purpose
Section 970.1 of title 24 of the CFR currently provides that the
regulations in 2 CFR part 200 are not applicable to 24 CFR part 970,
HUD's regulations for the Public Housing Program--Demolition or
Disposition of Public Housing Projects. However, the Office of Public
and Indian Housing (PIH) Notice 2016-20 \48\ provides that, as an
alternative to disposition of public housing property under section 18
of the United States Housing Act of 1937 and 24 CFR part 970, with PIH
Special Application Center approval, public housing authorities (PHAs)
are permitted to retain public housing property in accordance with 2
CFR 200.311. This rulemaking provides the 2 CFR part 200 disposition
instructions for PHAs' retention of certain public housing real
property. Therefore, in this rulemaking, HUD is proposing to revise the
last sentence of Sec. 970.1 to state that the regulations in 2 CFR
part 200 are not applicable except where the PHA requests to retain the
public housing property, in which case 2 CFR 200.311(d)(1) applies; and
where the PHA disposes of equipment or supplies, in which case 2 CFR
200.313 and 200.314 apply.
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\48\ https://www.hud.gov/sites/dfiles/PIH/documents/PIH-2016-20.pdf.
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Applicability of Administrative Requirements: Sec. Sec. 1000.26 and
1003.501
Through this rulemaking, HUD is proposing to add a new paragraph
(a)(1) to Sec. 1000.26 to clarify that the definition for ``Indian
Tribe'' in section 104 of NAHASDA (25 U.S.C. 4103) will apply instead
of the definition of ``Indian Tribe'' in 2 CFR 200.1. As provided in 2
CFR 200.1, definitions in Federal statutes or regulations that apply to
specific programs take precedence over the definitions in 2 CFR 200.1.
HUD is proposing such a change with the definition of ``Indian Tribe''
to ensure the use of the broader definition under NAHASDA. HUD is
proposing a similar change to Sec. 1003.501, by adding a new paragraph
(a)(1), to ensure the broader definition of ``Indian tribe'' under the
Housing and Community Development Act of 1974 is used when applying
part 200 to the Indian Community Development Block Grant program.
HUD's Indian Housing Block Grant (IHBG) program regulation at 24
CFR 1000.26(a)(10) currently excepts 2 CFR 200.317 from the
requirements of 2 CFR part 200 that recipients of IHBG assistance must
comply with. Through its 2024 changes, OMB revised 2 CFR 200.317 and
made the provision applicable to Indian tribes as well as States. Under
OMB's 2024 changes, applicability of 2 CFR 200.317 does not extend to
Tribally Designated Housing Entities, which are also eligible to be
direct recipients of IHBG funds. To align HUD's IHBG program
regulations with OMB's change, HUD is proposing to revise existing
Sec. 1000.26(a)(10) (which this rule proposes to renumber as paragraph
(a)(11) due to the proposed addition of a new Sec. 1000.26(a)(1)) to
state that 2 CFR 200.317 does apply to Indian tribes, as that term is
defined under NAHASDA, but does not apply to TDHEs receiving grants on
an Indian tribe's behalf. Additionally, to align OMB's changes to
200.317 with NAHASDA, HUD is proposing new paragraphs (a)(11)(i) and
(ii) in Sec. 1000.26 to clarify that statutory requirements under
NAHASDA limiting competitive procurements when the value of goods and
services is less than $5,000 and authorization for the use of Federal
supply sources in procurement apply to the procurements by tribes under
2 CFR 200.317.
Paragraph (a)(11) of Sec. 1000.26 currently applies 2 CFR 200.318
through 200.327 as modified by that paragraph (a)(11). HUD is proposing
to renumber this paragraph as (a)(12) (due to the proposed addition of
a new Sec. 1000.26(a)(1)) and, as discussed later in this
preamble,\49\ to add a new paragraph (a)(12)(i) that would state that 2
CFR 200.318 through 200.327 apply when a Tribe does not have their own
policies and procedures for procurement with non-Federal funds or when
a TDHE does not follow the policies and procedures for procurement with
non-Federal funds of the Tribe they serve.
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\49\ See part III. Questions for Public Comment, question 2, in
this proposed rule's preamble.
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Existing paragraph (a)(11)(i), which would become paragraph
(a)(12)(ii) through this proposed rule, provides that a recipient is
not required to comply with 2 CFR 200.318 through 200.326 (2 CFR
200.326 is now 2 CFR 200.327 after OMB's 2020 changes) with respect to
procurements, using grants under NAHASDA, of goods and services with a
value of less than $5,000. HUD is proposing to add language that would
except application of 2 CFR 200.318 through 200.327 for such
procurements of an ``other higher amount as may be established in
NAHASDA,'' in addition to those valued under $5,000. This change would
accommodate any future increases to the amount in NAHASDA's statutory
de minimis procurement exemption.\50\
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\50\ 25 U.S.C. 4133(g).
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Income From Sales of Supplies: Sec. Sec. 1000.26, 1003.501
Several sections in title 24 of the CFR state that 2 CFR 200.314,
Supplies, applies except that when the supplies are sold, the proceeds
shall be considered and treated as program income. For Native American
housing activities, see existing Sec. 1000.26(a)(9); for the Community
Development Block Grant program for Indian tribes and Alaska native
villages, see existing Sec. 1003.501(a)(7). These sections do not
account for other sections in title 24 of the CFR that state that
income received by a recipient and its subrecipients in a single year
that, in total, is less than $25,000 does not constitute program
income. For Native American housing activities, see Sec. 1000.62(b);
and for the Community Development Block Grant program for Indian tribes
and Alaska native villages, see Sec. 1003.503(b)(4). For consistency,
HUD is proposing to revise Sec. 1000.26(a)(9), which would be
designated paragraph (a)(10) under this proposed rule, and Sec.
1003.501(a)(7), which would be designated paragraph (a)(8) under this
proposed rule, to provide for a $25,000 de minimis
[[Page 107085]]
exception, as in existing Sec. Sec. 1000.62(b) and 1003.503(b)(4).
Section 1006.370 Uniform Administrative, Requirements, Cost Principles,
and Audit Requirements for Federal Awards
To correct a drafting error in HUD's 2015 rulemaking,\51\ and to
make Sec. 1006.370(b)(2) more consistent with other HUD program
regulations regarding compensation for consultant services, for
example, 24 CFR 570.200(d)(1), HUD is proposing to amend Sec.
1006.370(b)(2) to add the phrase ``more than a reasonable rate of
compensation for personal services paid with NHHBG'' after the word
``receive'' and before the word ``funds.'' This amendment would mean
that Sec. 1006.370(b)(2) requires that no person providing consultant
services in an employer-employee type of relationship shall receive
more than a reasonable rate of compensation for personal services paid
with NHHBG funds.
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\51\ Id.
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HUD is also proposing to update an outdated aspect of NHHBG program
regulations. HUD's NHHBG program regulations are modeled off its IHBG
program regulations. HUD is proposing to add a new paragraph (c) to
Sec. 1006.370 that would provide that 2 CFR 200.305 applies except HUD
must not require the sole recipient of NHHBG assistance, the Department
of Hawaiian Home Lands (DHHL), to expend retained program income before
drawing down or expending NHHBG funds. This proposed change would align
NHHBG program regulations with the corresponding Indian Housing Block
Grant regulation, existing 24 CFR 1000.26(a)(3),\52\ which permits
Tribes and TDHEs to spend grant funds before spending down all their
program income. To enable this change to take effect, HUD is proposing
to remove Sec. 1006.340(b)(3), which provides that, as part of DHHL's
authority to retain program income, DHHL must disburse program income
before disbursing additional NHHBG funds in accordance with 2 CFR
200.305. HUD is also proposing to add language to existing Sec.
1006.370(a) that would provide that DHHL and its subrecipients
receiving NHHBG funds must comply with the requirements and standards
in 2 CFR part 200 ``except as otherwise provided by this section,'' to
clarify that paragraphs (b) and (c) of Sec. 1006.370 provide for
exceptions to 2 CFR part 200 requirements.
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\52\ Under this proposed rule, Sec. 1000.26(a)(3) would become
Sec. 1000.26(a)(4).
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Substantive Changes Based on HUD's Experience Implementing 2 CFR Part
200 and the Housing Trust Fund (HTF) Program
Describing Period of Performance in the HTF Program, Closeout of HTF
Grant Awards: Sec. Sec. 93.400 and 93.409
HUD is proposing HTF closeout regulations at Sec. 93.409 to
establish program-specific procedures and better align programmatic and
administrative requirements for grant closeout. HUD's existing
regulation at Sec. 93.405 applies the 2 CFR part 200 closeout
requirements at 2 CFR 200.344, which are very specific as to the timing
of closeouts and reporting by grantees after the end of the grant's
period of performance, as set forth in the grant agreement. Rather than
adopt the specific requirements of 2 CFR 200.344 for the HTF program,
HUD is instead proposing program-specific closeout requirements at
Sec. 93.409 to provide HTF grantees greater flexibility to request
additional time, if needed, to meet certain program requirements, such
as meeting project completion requirements. (As discussed elsewhere in
this preamble, HUD is also proposing in Sec. 93.405 to add 2 CFR
200.344 as one of the 2 CFR part 200 provisions that would not apply to
grantees and subgrantees receiving HTF funds.)
HUD recognizes that there are many things that could disrupt an HTF
grantee's intended timeline for activity completion. To complete all
program activities, including, but not limited to, satisfying reporting
requirements, grantees are permitted to request an extension of one
year beyond the nine-year period of performance, as identified in the
grant agreement, for good cause.
The proposed rule at Sec. 93.409(a) would include elements from
the current closeout process for HTF grants. The proposed rule at Sec.
93.409(a) describes the closeout process, and states that HUD will
close out a grant after the period of performance has ended. A grantee
must complete all the required activities and closeout actions for the
grant, as required by HUD. Otherwise, proposed Sec. 93.409(a)(1)
states that HUD will close out the grant based on the information
available, including individual grants or multiple grants.
Proposed Sec. 93.409(a)(2) explains that to prepare for closeout,
before the budget period of the grant ends, the grantee must review all
the eligible activities under the grant and reconcile in accordance
with proposed Sec. 93.409(a)(2)(i) and (ii). Proposed Sec.
93.409(a)(2)(i) requires that for all eligible costs incurred under the
grant and not yet drawn down, the grantee must draw the funds down in a
timely manner. Proposed Sec. 93.40(a)(2)(ii) states that the grantee
must promptly refund to the proper accounts any previously disbursed
balances of unobligated case paid in advance. These refunds must be
completed before the reports in the proposed Sec. 93.409(b).
Additionally, unlike other programs, since the HTF funds are not
appropriated and are not required to be returned to the U.S. Treasury,
proposed Sec. 93.409(a)(3) requires HUD to reallocate the grant funds
in accordance with the regulation at Sec. 93.54.
In Sec. 93.409(a)(4)(i), HUD is proposing a nine-year period of
performance for the HTF program, with the ability to extend the period
of performance by a year. Given that HUD is proposing this period of
performance in 24 CFR 93.409(a)(4)(i) in this rulemaking and that
period of performance is not consistent with the current expenditure
deadline in Sec. 93.400(d)(2), HUD is proposing to revise the
expenditure deadline to avoid misalignment of program requirements and
grantee responsibilities. HUD is also proposing that Sec. 93.400(d)(2)
be revised to state that HUD will reduce or recapture HTF grants that
remain unexpended after the date of expiration of the grant's period of
performance, as described in 24 CFR 93.409(a)(4). Due to the HTF
program's unique source of funding, which is through an allocation of a
set-aside of funds earned by the Federal Home Loan Mortgage Corporation
and the Federal National Mortgage Association,\53\ HUD is not required
to cancel HTF grants under 31 U.S.C. 1552(a) after a certain time
period, and instead is reallocating any recaptured funds to HTF
grantees in accordance with Sec. 93.54. The revisions to Sec. Sec.
93.409 and 93.400(d)(2) would enable consistent application of
recapture and reallocation requirements including better defining the
HTF grantee's period of performance and closeout responsibilities.
These changes will avoid burdensome and misaligned expenditure, budget
period, and period of performance requirements and will prevent
inconsistent application of reporting and closeout requirements. These
proposed regulatory revisions would better enable HTF grantees to
administer the HTF program in their jurisdictions.
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\53\ See sections 1337 and 1338 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C.
4567 and 4568), the statutes establishing the HTF program and its
funding mechanism.
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Proposed Sec. 93.409(a)(4)(ii) would also establish that HUD may
report an HTF
[[Page 107086]]
grantee's material failure to comply with the terms and conditions of
the Federal award or closeout requirements in SAM.gov and pursue other
enforcement actions in 2 CFR 200.339. Under proposed Sec.
93.409(a)(5), a grantee may request, and HUD may provide, an extension
of the performance period or closeout deadlines for good cause. Even if
HUD approves an extension pursuant to the proposed Sec. 93.409, an HTF
grantee must still expend its funds by the end of the grant's budget
period. If the grantee fails to expend all its funds by the end of the
grant's budget period, HUD shall recapture and reallocate the grant
funds. Further, the proposed rule would clarify that certain
requirements survive grant closeout. While this is not a change from
the current requirements, HUD is taking the opportunity to clarify that
closeout of a HTF grant does not relieve a grantee from project
oversight in accordance with 24 CFR part 93 for as long as specified in
the requirements applicable to the assisted project and grantee.
Proposed Sec. 93.409(b) specifies the actions that must be taken
for closeout of a grant, including:
submitting a Federal Financial Report;
demonstrating that the grantee has fulfilled all
programmatic and administrative requirements for the project within the
period of performance;
entering all data into the computerized disbursement and
information system, demonstrating that all HTF units were occupied by
eligible occupants (including inputting correct beneficiary data)
within one year of the end of the period of performance;
resolving all finding associated with the grant;
carrying out all responsibilities under the grant
agreement and applicable laws; and
completing a closeout certification that
[cir] identifies the grant being closed out,
[cir] any funds being returned to HUD,
[cir] certifies compliance with recordkeeping requirements,
monitoring and enforcement of HUD requirements,
[cir] certifies compliance with program income,
[cir] states that all actions required under 2 CFR 2003.44 for both
the grantee and subgrantee have been taken,
[cir] explains any other provisions appropriate to special
circumstances of the grant closeout,
[cir] acknowledges future monitoring, and
[cir] certifies that unless otherwise provided the Consolidated
Plan for the grantee remains in effect until expiration of the program
year covered by the most recent Consolidated Plan.
Proposed paragraph Sec. 93.409(c) explains that regardless of
closeout of the grant, the rights and requirements under 2 CFR 200.345
remain in effect. These include the ability for HUD to disallow costs
based on future audits, the requirement that the grantee comply with
Sec. 93.407 and Sec. 93.408, record retention policies in 2 CFR
200.345, monitoring and enforcement of all requirements in 24 CFR part
93 that apply to the grant for the period of affordability specified in
the written agreement with the owner, compliance with program income
requirements in Sec. 93.403, compliance with the requirement that the
grantee return any funds due as a result of later refunds, corrections
or other transactions, and compliance with audit requirements.
Section 93.405 Applicability of Uniform Administrative Requirements,
Cost Principles, and Audits
HUD's existing regulation at Sec. 93.405 applies 2 CFR part 200 to
grantees and subgrantees receiving HTF funds, except for certain
provisions. In this rulemaking, HUD is proposing to add five provisions
to the list of exceptions: 2 CFR 200.308, 200.312, 200.328, 200.335,
and 200.344 (except as provided in Sec. 93.409). HUD is proposing some
of these exceptions because, among other reasons, doing so would align
the HTF program regulations with the proposed HOME program regulations
in HUD's recent proposed rule for the HOME program.\54\ The specific
reasoning for each provision is as follows:
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\54\ 89 FR 46618.
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HUD is proposing to except application of 2 CFR 200.308
because its requirements are inconsistent with HTF program rules
governing downpayment assistance and application of those requirements
would prove unduly burdensome given the current reporting requirements
in 24 CFR 93.407 and 93.408.
HUD is proposing to except application of 2 CFR 200.312
because Federally owned and exempt real property are not features of
the HTF program. Additionally, HUD is proposing this exception to align
with HOME program regulations at 24 CFR 92.205; the HOME and HTF
programs treat acquired real property similarly, and HTF's approach is
modeled after the HOME program's approach.
HUD is proposing to except application of 2 CFR 200.328 to
align HTF program requirements and regulations with those of the HOME
program. Both programs have the same Integrated Disbursement and
Information System (IDIS) financial reporting requirements, and those
requirements do not align with the annual or quarterly cycle described
in 2 CFR 200.328. Instead, the HOME and HTF financial reporting
requirements are performed as needed and pursuant to programmatic or
regulatory milestones, such as project completion.
HUD is proposing to except application of 2 CFR 200.335 to
align HOME and HTF program requirements and because the 2 CFR provision
conflicts with existing recordkeeping requirements in 24 CFR part 93.
As explained earlier in this preamble, the requirements at
2 CFR 200.344 are very specific as to the timing of closeouts and
reporting by grantees after the end of the grant's period of
performance, as set forth in the grant agreement. HUD is proposing to
except application of 2 CFR 200.344 for the HTF program and, in lieu,
apply program-specific requirements under this rule's proposed
revisions to 24 CFR 93.400 and 93.409, to provide grantees more
flexibility and time, where needed, to meet program requirements such
as project completion requirements, and to align HTF regulations with
HOME program regulations.
As explained elsewhere in this preamble, HUD is proposing to except
application of 2 CFR 200.329(c) in the HOME program regulations. For
the HTF program, Sec. 93.405 already excludes application of this
provision, which was previously numbered 2 CFR 200.328(b) before OMB's
2020 and 2024 changes. As under the HOME program, 2 CFR 200.329(c)'s
reporting requirements conflict with those for the HTF program
regulations and HUD is seeking to provide a more flexible reporting
than the annual reporting of non-construction performance requirements
under 2 CFR 200.329(c). Therefore, HUD is proposing to continue to
exclude application of 2 CFR 200.329(c)'s requirements for the HTF
program, and to update the cross-reference consistent with OMB's
changes.
Changes to HUD's Title VI, Section 108, Section 184, and 184A Loan
Guarantee Program Regulations
SAM.gov Registration and Acquiring a UEI Under 2 CFR 25.105: Sec. Sec.
570.707, 1000.438, 1005.219(b), and 1007.50(e)
As explained earlier in this preamble, through its 2024 final
guidance, OMB revised 2 CFR 25.105 by clarifying that for-profit
lenders participating in loan
[[Page 107087]]
guarantee programs are required to register with SAM.gov and acquire a
UEI. The revised provisions applying the UEI requirements and
registration in the System of Award Management (SAM) in 2 CFR part 25
apply to lenders and holders of notes guaranteed under various HUD
programs, including the Title VI,\55\ Section 184, and Section 184A
Loan Guarantee Programs. Through this rulemaking, HUD is proposing
conforming amendments to its Community Development Block Grant program
regulations (24 CFR part 570), Native American Housing Activities
regulations (24 CFR part 1000), Loan Guarantee for Indian Housing
program regulations (24 CFR part 1005) and Loan Guarantee for Native
Hawaiian Housing program regulations (24 CFR part 1007), to add
language specifying that certain entities, such as holders and lenders,
must complete entity validations and acquire a UEI in SAM.gov per 2 CFR
25.105. HUD is proposing to add a new paragraph (d) in 24 CFR 570.707,
add a new Sec. 1000.438 in 24 CFR part 1000, add a new paragraph (b)
to 24 CFR 1005.219, and add a new paragraph (e) to 24 CFR 1007.50 to
clarify which entities must complete entity validations and acquire a
UEI in SAM.gov per 2 CFR 25.105.
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\55\ Title VI in this NPRM refers to the Title VI of NAHASDA and
not Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d-1 et
seq.; 24 CFR part 1.
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For the Community Development Block Program and Sec. 570.707,
applying the UEI and SAM registration requirements to lenders and
holders of notes under the Section 108 Loan Guarantee program would
conflict with the statutory provisions of section 108(r)(4) of the
Housing and Community Development Act of 1974 (42 U.S.C. 5308(r)(4))
\56\ because it would impair the Secretary's ability to issue freely
marketable securities through issuance of a public offering. Requiring
each holder of a Note issued through a public offering to obtain a UEI
and register in SAM before purchasing a security on the open market
would limit the eligible pool of investors for the security and
negatively affect pricing. This would be expressly against the
statutory intent for the Section 108 Loan Guarantee program.
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\56\ 42 U.S.C. 5308(r)(4) states:
(4) Effect of laws
No State or local law, and no Federal law, shall preclude or
limit the exercise by the Secretary of--
(A) the power to contract with respect to public offerings and
other sales of notes, trust certificates, and other obligations
guaranteed under this section upon such terms and conditions as the
Secretary deems appropriate;
(B) the right to enforce any such contract by any means deemed
appropriate by the Secretary; and
(C) any ownership rights of the Secretary, as applicable, in
notes, certificates, or other obligations guaranteed under this
section, or constituting the trust or pool against which trust
certificates, or other obligations guaranteed under this section,
are offered.
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Moreover, HUD has determined that the beneficiary of a loan
guaranteed under section 108 is properly the public entity or State
that applies for the loan and not the interim lender or the holder of
the Note after a public offering. Section 108 of the Housing and
Community Development Act (42 U.S.C. 5308), and the program regulations
at 24 CFR part 570, subpart M, were written to require that the public
entity or State apply for the loan and contract directly with the
Secretary to provide necessary security to enable the Secretary to
guarantee the Loan. This has also been how the Department has treated
the obligation to obtain a UEI and register in SAM. Only the borrower
of a loan guaranteed under section 108 must obtain a UEI and register
in SAM.
Therefore, HUD is proposing to add a new paragraph (d) to Sec.
570.707 that would require public entities and States to complete
entity validations and acquire a UEI in SAM.gov in accordance with 2
CFR 25.105 in order to apply for and obtain a loan guaranteed under 24
CFR part 570, subpart M. The lender or holder of a note guaranteed
under that subpart would not be subject to this requirement, and HUD's
proposed regulation states this directly.
Compliance With Audit Requirements Under 2 CFR Part 200, Subpart F:
Sec. Sec. 1005.219(c) and 1007.50(f)
Prior to OMB's 2020 and 2024 changes, 2 CFR part 200, subpart F,
applied to ``[A]greements for loans, loans guarantees, interest
subsidies, and insurance and other forms of Federal Financial
Assistance as defined by the Single Audit Act Amendment of 1996.'' \57\
Under the Single Audit Act, Federal financial assistance is defined to
mean assistance that ``non-Federal entities receive or administer in
the form of . . . loan guarantees . . .,'' 31 U.S.C. 7501(a)(5), and
non-Federal entity is defined to include States, local governments, or
nonprofit organizations. 31 U.S.C. 7501(a)(13). OMB's 2020 and 2024
changes do not substantively alter this applicability. OMB's 2024
changes at 2 CFR 200.101(b)(5) provide that 2 CFR part 200, subpart F,
applies to agreements for loan guarantees only when awarded to a non-
Federal entity. Non-Federal entity as defined by 2 CFR 200.1 includes
more entity types than does the Single Audit Act, and means a State,
local government, Indian Tribe, Institution of Higher Education, or
nonprofit organization that carries out a Federal award as a recipient
or subrecipient.
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\57\ See 2 CFR 200.101(b) and table 1 to paragraph (b), https://www.trumpadministration.archives.performance.gov/CAP/20200812-2-CFR-Revision-Redline_Final.pdf.
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Prior to this rulemaking, HUD's Section 184 and 184A program
regulations did not specify that these programs must comply with the
audit requirements under 2 CFR part 200, subpart F, despite the
applicability of subpart F to these programs. HUD is seeking to clarify
in its Section 184 and 184A program regulations that lenders and
holders of loan guarantees that are States, local governments, Tribes
(for section 184 program only), or nonprofit organizations, must comply
with the audit requirements of 2 CFR part 200, subpart F but that this
requirement does not extend to for-profit entities. HUD is proposing,
in this rulemaking, to add new Sec. Sec. 1005.219(c) and 1007.50(f)
with language to this effect.
As explained earlier in this preamble, OMB revised the definition
of Federal financial assistance in 2 CFR 200.1. The change from ``non-
Federal entities'' to ``recipients and subrecipients,'' means that for-
profit entities are now included for purposes of the definition of
Federal financial assistance. With this definition alone, OMB's changes
would mean that the 2 CFR part 200 provisions listed in paragraphs (2)
and (3) of the Federal financial assistance definition, 2 CFR 200.203
and subpart F, and 2 CFR 200.216, respectively, apply to Section 184
and 184A loan guarantee program assistance received or administered by
for-profit entities. However, after review of 2 CFR 200.203; \58\ 2 CFR
200.101(b)(5) and the preamble of OMB's 2024 final rule and final
guidance, for 2 CFR part 200, subpart F; \59\ and 2 CFR
200.101(b)(3)(ii) and section 889 of the John S. McCain National
Defense Authorization Act for Fiscal Year 2019, for 2 CFR 200.216; \60\
HUD has
[[Page 107088]]
concluded that OMB's changes in the definition of Federal financial
assistance do not result in any substantive changes for for-profit
entities. Therefore, for-profit entities are not included in the
regulatory text proposed in 24 CFR 1005.219(c) and 1007.50(f).
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\58\ As 2 CFR 200.203 requires HUD to ensure Federal programs
are listed under the Federal Assistance Listings, and HUD already
complies with this provision for HUD's Section 184 and 184A loan
guarantee programs, the change in entities covered for purposes of 2
CFR 200.203 does not result in any actual change for these programs.
\59\ 2 CFR 200.101(b)(5) provides, ``(5) Subpart F (Audit
Requirements) only applies to the following items when awarded to a
non-Federal entity: . . . (iii) Agreements for loans, loan
guarantees, interest subsidies, and insurance; . . . .'' The Single
Audit Act as codified may be found at 31 U.S.C. chapter 75. OMB's
2024 final rule and final guidance may be found at 89 FR 30046.
\60\ 2 CFR 200.101(b)(3)(ii) provides, ``(ii) Section 200.216
(Prohibition on certain telecommunications and video surveillance
equipment or services) applies to loans and grants (see Pub. L. 115-
232, Div. A, Title VIII, Sec. 889, as amended).'' The John S.
McCain National Defense Authorization Act for Fiscal Year 2019 may
be found at Public Law 115-232.
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Cross-Reference Updates
Because the changes described above add new paragraphs (b) and (c)
to 24 CFR 1005.219, and there are already existing paragraphs (b) and
(c) in that section, HUD is proposing to redesignate existing
paragraphs (b) through (e) as paragraphs (d) through (g) in Sec.
1005.219. Additionally, this change requires updates to cross-
references to existing paragraphs in Sec. 1005.219 made throughout 24
CFR part 1005. In Sec. Sec. 1005.217(b)(7), 1005.739(h), and
1005.803(a), HUD is proposing to update the cross-references as
follows, respectively:
In Sec. 1005.217(b)(7), update the cross-reference
1005.219(d)(3) to 1005.219(f)(3);
In Sec. 1005.739(h), update the cross-reference
1005.219(d)(2) to 1005.219(f)(2); and
In Sec. 1005.803(a), update the cross-reference
1005.219(d)(2) to 1005.219(f)(2).
III. Questions for Public Comment
HUD welcomes comments on all aspects of this proposed rule. In
addition, HUD specifically requests public comments on the following:
1. Section 200.300 of title 2 of the CFR requires that agencies or
pass-through entities manage and administer Federal awards in a manner
to ensure compliance with applicable Federal nondiscrimination and
environmental protection provisions. OMB also added paragraphs
clarifying that sex discrimination encompasses sexual orientation and
gender identity. Are these provisions, along with HUD regulations, such
as those in 24 CFR part 5, sufficiently clear to make recipients aware
of their civil rights and environmental protection obligations? What
additional provisions, if any, should HUD add to program and cross-
cutting regulations that would help ensure that Federal awards are
administered in compliance with Federal nondiscrimination and
environmental protection requirements?
2. HUD has requested an exception from OMB under 2 CFR 200.102 that
would authorize HUD to treat Tribally Designated Housing Entities
(TDHEs) and Tribal organizations like Indian Tribes for purposes of 2
CFR part 200 procurement requirements in the Indian Housing Block Grant
and Indian Community Development Block Grant programs. HUD is seeking
this exception to conform with 2 CFR 200.313, which now states,
``Indian Tribes must use, manage, and dispose of equipment acquired
under a Federal award in accordance with tribal laws and procedures,''
and 2 CFR 200.317, which now requires that Indian Tribes, like States,
must follow the same policies and procedures that Tribes use for
procurements with non-Federal funds. The structure of HUD's Indian
Housing Block Grant (IHBG) and the Indian Community Development Block
Grant (ICDBG) programs treats Tribally Designated Housing Entities
(TDHEs) and Tribal Organizations as instrumentalities of the Tribe. HUD
has proposed regulatory text in this proposed rule that would account
for the requested exception, at proposed 24 CFR 1000.26(a)(9),
(a)(11)(i), and (a)(12)(i),\61\ and 1003.501(a)(7) and (a)(9).\62\ The
proposed changes for proposed Sec. Sec. 1000.26(a)(9) and (a)(11)(i)
and 1003.501(a)(7) and (9) would provide that the 2 CFR provision,
either 2 CFR 200.313 or 200.317, applies except as modified by HUD's
regulations. HUD's proposed regulations would permit a TDHE or Tribal
Organization to follow the Tribal laws, policies, and procedures of the
Indian Tribe they serve, instead of 2 CFR part 200 requirements.
Proposed 24 CFR 1000.26(a)(12)(i) would require 2 CFR 200.318 through
200.327 to apply when a Tribe does not have their own policies and
procedures for procurement with non-Federal funds or when a TDHE does
not follow the policies and procedures for procurement with non-Federal
funds of the Tribe they serve. HUD is seeking public comment on these
proposals pending OMB's approval of the requested exception.
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\61\ HUD is proposing changes to capture the exception by
revising Sec. 1000.26(a)(9), (11), and (12) in this proposed rule,
which are currently designated as paragraphs (a)(8), (10), and (11)
in HUD's existing regulations.
\62\ HUD is proposing changes to capture the exception by
revising existing paragraph (a)(6) in Sec. 1003.501, which would
become designated paragraph (a)(7) under this proposed rule, and by
adding a new paragraph (a)(9) to that section.
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IV. Findings and Certifications
Regulatory Review--Executive Orders 12866, 13563, and 14094
Pursuant to Executive Order 12866 (Regulatory Planning and Review),
a determination must be made whether a regulatory action is
significant, and therefore, subject to review by 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, where relevant, feasible, and consistent with regulatory
objectives, and to the extent permitted by law, agencies to identify
and consider regulatory approaches that reduce burdens and maintain
flexibility and freedom of choice for the public. Executive Order
14094, entitled ``Modernizing Regulatory Review'' (hereinafter referred
to as the ``Modernizing E.O.''), amends section 3(f) of Executive Order
12866 (Regulatory Planning and Review), among other things. This
proposed rule was determined to not be a significant regulatory action
under section 3(f) of Executive Order 12866, Regulatory Planning and
Review.
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 rule proposes to amend HUD regulations to make necessary technical
updates to cross-references to sections of 2 CFR part 200 and other
conforming changes that align HUD's regulations with revisions made by
OMB to 2 CFR parts 25 and 200. This rule also proposes to amend HUD
regulations based on HUD's experience implementing 2 CFR part 200 to
improve clarity and consistency in HUD regulations that cross-reference
2 CFR part 200 or specific subparts or provisions; to establish
program-specific procedures for the Housing Trust Fund (HTF) program
and better align programmatic and administrative requirements for HTF
grant closeout; to align HTF regulations with changes related to 2 CFR
part 200 proposed in HUD's recent proposed rule for the HOME program;
\63\ to update HUD's Title VI, Section 108, Section 184, and Section
184A loan guarantee program regulations to address OMB's changes for
loan guarantee programs regarding System for Award Management (SAM.gov)
registration; and to update
[[Page 107089]]
HUD's Section 184 and 184A loan guarantee programs to explicitly state
requirements that apply to these programs both prior to and because of
OMB's recent changes. These amendments impose no significant economic
impact on a substantial number of small entities. Therefore, the
undersigned certifies that this rulemaking will not have a significant
impact on a substantial number of small entities.
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\63\ 89 FR 46618.
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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
This proposed rule does not direct, provide for assistance or loan
and mortgage insurance for, or otherwise govern, or regulate, real
property acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this
proposed rule is categorically excluded from environmental review under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Order. This proposed rule does not have federalism
implications and would not impose substantial direct compliance costs
on State and local governments nor preempt State law within the meaning
of the Order.
List of Subjects
24 CFR Part 4
Administrative practice and procedure, Government employees, Grant
programs--housing and community development, Investigations, Loan
programs--housing and community development, Penalties, Reporting and
recordkeeping requirements.
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs--housing and community
development, Individuals with disabilities, Intergovernmental
relations, Loan programs--housing and community development, Low and
moderate income housing, Mortgage insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Social Security, Unemployment compensation, Wages.
24 CFR Part 75
Administrative practice and procedure, Community development,
Government contracts, Grant programs--housing and community
development, Housing, Loan programs--housing and community development,
Reporting and recordkeeping requirements, Small businesses.
24 CFR Part 92
Administrative practice and procedure, Low and moderate income
housing, Manufactured homes, Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 93
Administrative practice and procedure, Grant programs--housing and
community development, Low and moderate income housing, Manufactured
homes, Rent subsidies, Reporting and recordkeeping requirements.
24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Housing standards, Lead poisoning, Loan
programs--housing and community development, Mortgage insurance,
Organization and functions (Government agencies), Penalties, Reporting
and recordkeeping requirements, Social Security, Unemployment
compensation, Wages.
24 CFR Part 570
Administrative practice and procedure, American Samoa, Community
development block grants; Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Loan programs--
housing and community development, Low and moderate income housing,
Northern Mariana Islands, Pacific Islands Trust Territory, Puerto Rico,
Reporting and recordkeeping requirements, Student aid, Virgin Islands.
24 CFR Part 574
Community facilities, Grant programs--housing and community
development, Grant programs--social programs, HIV/AIDS, Low and
moderate income housing, Reporting and recordkeeping requirements.
24 CFR Part 576
Community facilities, Grant programs--housing and community
development, Grant programs--social programs, Homeless, Reporting and
recordkeeping requirements.
24 CFR Part 578
Community development, Community facilities, Grant programs--
housing and community development, Grant programs--social programs,
Homeless, Reporting and recordkeeping requirements.
24 CFR Part 700
Aged, Grant programs--housing and community development, Grant
programs--Indians, Indians, Individuals with disabilities, Low and
moderate income housing, Public housing, Reporting and recordkeeping
requirements.
24 CFR Parts 880, 881, and 883
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 884
Accounting, Administrative practice and procedure, Grant programs--
housing and community development, Home improvement, Housing, Low and
moderate income housing, Public assistance programs, Public housing,
Rent subsidies, Reporting and recordkeeping requirements, Rural areas,
Utilities.
24 CFR Part 886
Grant programs--housing and community development, Lead poisoning,
Rent subsidies, Reporting and recordkeeping requirements.
24 CFR Parts 905 and 964
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
24 CFR Part 965
Government procurement, Grant programs--housing and community
development, Lead poisoning, Loan
[[Page 107090]]
programs--housing and community development, Public housing, Reporting
and recordkeeping requirements, Utilities.
24 CFR Part 970
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
24 CFR Part 990
Accounting, Grant programs--housing and community development,
Public housing, Reporting and recordkeeping requirements.
24 CFR Part 1000
Aged, Community development block grants, Grant programs--housing
and community development, Grant programs--Indians, Indians,
Individuals with disabilities, Public housing, Reporting and
recordkeeping requirements.
24 CFR Part 1003
Alaska, Community development block grants, Grant programs--housing
and community development, Grant programs--Indians, Indians, Reporting
and recordkeeping requirements.
24 CFR Part 1005
Indians, Loan programs--Indians, Reporting and recordkeeping
requirements.
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.
24 CFR Part 1007
Hawaiian Natives, Loan programs--housing and community development,
Loan programs--Indians, Reporting and recordkeeping requirements.
For the reasons described in the preamble, and under the authority
of 42 U.S.C. 3535(d), the Department of Housing and Urban Development
proposes to amend 24 CFR parts 4, 5, 75, 92, 93, 200, 570, 574, 576,
578, 700, 880, 881, 883, 884, 886, 905, 964, 965, 970, 990, 1000, 1003,
1005, 1006, and 1007, as set forth below:
PART 4--HUD REFORM ACT
0
1. The authority citation for part 4 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 3537a, 3545.
Sec. 4.9 [Amended]
0
2. In Sec. 4.9(a)(1)(iii), remove ``2 CFR 200.80'' and add in its
place ``2 CFR 200.1''.
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
0
3. The authority citation for part 5 continues to read as follows:
Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f,
1437n, 3535(d); 42 U.S.C. 2000bb et seq.; 34 U.S.C. 12471 et seq.;
Sec. 327, Pub. L. 109-115, 119 Stat. 2396; E.O. 13279, 67 FR 77141,
3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010
Comp., p. 273; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517.
Sec. 5.801 [Amended]
0
4. In Sec. 5.801(a)(1):
0
a. Remove ``5, 9, or 14'' and add in its place ``5 or 9''; and
0
b. Remove ``(42 U.S.C. 1437c, 1437g, and 1437l)'' and add in its place
``(42 U.S.C. 1437c, 1437g)''.
0
5. Revise Sec. 5.1001 to read as follows:
Sec. 5.1001 Applicability.
This subpart applies to all applicants for and recipients of
Federal financial assistance provided under HUD programs, unless a
Federal statute or an exception under 2 CFR part 25 provides otherwise.
See 2 CFR 25.400 for the definitions that apply to ``Federal financial
assistance'' and other terms in this subpart.
0
6. Revise Sec. 5.1003 to read as follows:
Sec. 5.1003 System for Award Management (SAM) and Unique entity
identifier (UEI) requirements for applicants.
(a) General requirement. Each applicant for Federal financial
assistance must:
(1) Be registered in SAM.gov before submitting an application;
(2) Maintain a current and active registration in SAM.gov at all
times during which it has an active Federal award as a recipient or an
application under consideration by a Federal awarding agency. The
applicant must review and update its information in SAM.gov annually
from the date of initial registration or later updates to ensure the
information is current, accurate, and complete. If applicable, this
includes identifying the applicant's immediate and highest-level owner
and subsidiaries, as well as providing information on all predecessors
that have received a Federal award or contract within the last 3 years;
and
(3) Include its UEI in each application it submits to HUD,
including applications for renewal of a Federal award.
(b) Special cases. (1) Applicants or groups of applicants under a
consortium arrangement:
(i) If one organization is submitting the application for Federal
assistance as the lead applicant on behalf of the other applicants,
that organization must comply with the requirements in paragraph (a) of
this section.
(ii) If each organization is submitting a separate application as
part of a group of applications, then each organization must comply
with the requirements in paragraph (a) of this section.
(2) If an organization is submitting an application as a sponsor or
on behalf of other applicants, and the other entities will be receiving
funds directly from HUD, then each entity that would receive funds
directly from HUD must comply with the requirements in paragraphs
(a)(1) and (2) of this section, and the application submitted to HUD
must include the UEI of each of those entities.
(3) If an organization is managing funds for a group of
organizations and will be drawing down funds directly from HUD, that
organization must comply with the requirements in paragraph (a) of this
section.
(c) Issuing or amending a Federal award. Unless an entity is exempt
under 2 CFR 25.110, HUD may not issue a Federal award or amend an
existing Federal award to provide additional Federal funds if the
entity is not in compliance with the requirements of this part.
(d) Awarding another applicant. When HUD is ready to make a Federal
award, if the intended recipient has not complied with the requirements
to obtain a UEI and maintain an active registration in SAM.gov with
current information, HUD may make a Federal award to another applicant.
0
7. Revise Sec. 5.1004 to read as follows:
Sec. 5.1004 System for Award Management (SAM) and Unique entity
identifier (UEI) requirements for recipients and other entities.
(a) Each recipient of Federal financial assistance must maintain a
current and active registration in SAM.gov at all times during which it
has an active Federal award as a recipient or an application under
consideration by a Federal awarding agency. The recipient must review
and update its information in SAM.gov annually from the date of initial
registration or later updates to ensure the information is current,
accurate, and complete. If applicable, this includes identifying the
recipient's immediate and highest-level owner and subsidiaries, as well
as providing information on all predecessors that
[[Page 107091]]
have received a Federal award or contract within the last 3 years.
(b) Each recipient of Federal financial assistance must notify any
potential subrecipients that the recipient cannot make a subaward to a
subrecipient that has not obtained a UEI and provided it to the
recipient. Subrecipients are not required to complete full registration
in SAM.gov to obtain a UEI.
(c) For purposes of loan guarantees and other guaranteed programs,
recipients of the guarantee from the Federal agency (for example,
lenders of guaranteed loans) are required to complete entity
validations and acquire a UEI. In addition, HUD may require non-
individual beneficiary borrowers (for example, small businesses or
corporations) to obtain a UEI or register in SAM.gov.
0
8. Revise Sec. 5.1005 to read as follows:
Sec. 5.1005 Incorporation of required Award Term.
Every agreement for Federal financial assistance that HUD executes
with a recipient on or after October 1, 2024, is subject to the Award
Term in appendix A to 2 CFR part 25.
0
9. Add Sec. 5.1006 to read as follows:
Sec. 5.1006 Certifications and assurances.
Every agreement for Federal financial assistance that HUD executes
with a recipient on or after October 1, 2024, must contain or be
accompanied by the appropriate assurances and certifications (e.g.,
HUD-424B). This applies to recipients provided an exemption to the
requirements of 2 CFR 25.110. The Responsible Civil Rights Official has
specified the form HUD-424B for use for purposes of meeting the
requirements of Sec. Sec. 1.5, 3.115, 8.50, and 146.25 of this title,
as applicable. The Responsible Civil Rights Official may require
specific civil rights assurances to be furnished consistent with those
authorities and will specify the form on which such assurances must be
made.
PART 75--ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME
PERSONS
0
10. The authority citation for part 75 continues to read as follows:
Authority: 12 U.S.C. 1701u; 42 U.S.C. 3535(d).
Sec. 75.5 [Amended]
0
11. In Sec. 75.5, remove ``2 CFR 200.93'' wherever it appears and add
in its place ``2 CFR 200.1''.
Sec. 75.31 [Amended]
0
12. In Sec. 75.31(c), remove ``2 CFR part 200'' and add in its place
``2 CFR 200.334''.
Sec. 75.33 [Amended]
0
13. In Sec. 75.33(a), remove ``2 CFR part 200'' and add in its place
``2 CFR 200.334''.
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
0
14. The authority citation for part 92 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 12701-12839, 12 U.S.C. 1701x.
Sec. 92.220 [Amended]
0
15. In Sec. 92.220(a)(1)(ii), remove ``2 CFR 200.80'' and add in its
place ``2 CFR 200.1''.
0
16. In Sec. 92.356, revise paragraph (a) to read as follows:
Sec. 92.356 Conflict of interest.
(a) Applicability. When procuring goods and services in accordance
with 2 CFR part 200, the participating jurisdiction, State recipient,
or subrecipient must comply with the applicable conflict of interest
requirements in 2 CFR 200.317 through 200.319. In all other situations,
the provisions of this section apply.
* * * * *
Sec. 92.502 [Amended]
0
17. In Sec. 92.502(c)(2), remove ``2 CFR 200.305(b)(9)'' and add in
its place ``2 CFR 200.305(b)(12)''.
Sec. 92.504 [Amended]
0
18. In Sec. 92.504:
0
a. In paragraph (c)(1)(x):
0
i. Remove ``2 CFR 200.338'' and add in its place ``2 CFR 200.339''; and
0
ii. Remove ``2 CFR 200.339'' and add in its place ``2 CFR 200.340'';
and
0
b. In paragraph (c)(2)(ix):
0
i. Remove ``2 CFR 200.338'' and add in its place ``2 CFR 200.339''; and
0
ii. Remove ``2 CFR 200.339'' and add in its place ``2 CFR 200.340''.
0
19. Revise Sec. 92.505 to read as follows:
Sec. 92.505 Applicability of uniform administrative requirements.
The requirements of 2 CFR part 200 apply to participating
jurisdictions, State recipients, and subrecipients receiving HOME
funds, except for the following provisions: Sec. Sec. 200.306 through
200.308 (not applicable to participating jurisdictions), 200.311
(except as provided in Sec. 92.257), 200.312, 200.328, 200.329(c),
200.330, 200.334, 200.335, and 200.344. The provisions of 2 CFR 200.305
apply as modified by Sec. 92.502(c). If there is a conflict between
definitions in 2 CFR part 200 and this part, the definitions in this
part govern.
0
20. In Sec. 92.508, add paragraph (a)(7)(ii)(C) to read as follows:
Sec. 92.508 Recordkeeping.
(a) * * *
(7) * * *
(ii) * * *
(C) Records of any efforts to consider small businesses, minority
businesses, women's business enterprises, veteran-owned businesses, and
labor surplus area firms, as described in 2 CFR 200.321.
* * * * *
Sec. 92.551 [Amended]
0
21. In Sec. 92.551:
0
a. In paragraph (c)(2):
0
i. Remove ``2 CFR 200.207'' and add in its place ``2 CFR 200.208''; and
0
ii. Remove ``2 CFR 200.338'' and add in its place ``2 CFR 200.339''.
PART 93--HOUSING TRUST FUND
0
22. The authority citation for part 93 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 12 U.S.C. 4568.
0
23. In Sec. 93.353, revise paragraph (a) to read as follows:
Sec. 93.353 Conflict of interest.
(a) Applicability of procurement standards. When procuring goods
and services in accordance with 2 CFR part 200, the grantee or
subgrantee must comply with the applicable conflict of interest
requirements in 2 CFR 200.317 through 200.319. In all other situations,
the provisions of this section apply.
* * * * *
0
24. In Sec. 93.400, revise paragraph (d)(2) to read as follows:
Sec. 93.400 Housing Trust Fund (HTF) accounts.
* * * * *
(d) * * *
(2) Any fiscal year grant funds in the HTF Treasury account that
are not expended after the date of expiration of the grant's period of
performance, as described in Sec. 93.409(a)(3);
* * * * *
Sec. 93.404 [Amended]
0
25. In Sec. 93.404:
0
a. In paragraph (c)(1)(v), remove ``2 CFR 200.331'' and add in its
place ``2 CFR 200.332''; and
0
b. In paragraph (c)(1)(xi):
0
i. Remove ``2 CFR 200.338'' and add in its place ``2 CFR 200.339''; and
0
ii. Remove ``2 CFR 200.339'' and add in its place ``2 CFR 200.340''.
0
26. Revise Sec. 93.405 to read as follows:
Sec. 93.405 Applicability of uniform administrative requirements,
cost principles, and audits.
The requirements of 2 CFR part 200 apply to the grantees and
subgrantees
[[Page 107092]]
receiving HTF funds, except for the following provisions: Sec. Sec.
200.307, 200.308, 200.311, 200.312, 200.328, 200.329(c), 200.330,
200.334, 200.335, and 200.344 (except as provided in Sec. 93.409). If
there is a conflict between the definitions in 2 CFR part 200 and this
part, the definitions in this part govern.
Sec. 93.407 [Amended]
0
27. In Sec. 93.407:
0
a. In paragraph (a)(2)(ii):
0
i. Remove ``2 CFR 200.333'' and add in its place ``2 CFR 200.334''; and
0
ii. Remove ``200.337'' and add in its place ``200.338''; and
0
b. In paragraph (a)(3)(iv), remove ``2 CFR part 200,'' and add in its
place ``2 CFR 200.302''.
0
28. Add Sec. 93.409 to read as follows:
Sec. 93.409 Closeout.
This section specifies the procedure and actions that must be
completed by a HTF grantees and HUD to close out a grant. The
requirements of 2 CFR 200.344 apply to closeouts, except to the extent
that such requirements conflict with the following:
(a) Closeout process. (1) HUD will close out a grant after the
period of performance has ended. A grantee must complete all required
activities and closeout actions for the grant, as required by HUD. If
the grantee fails to complete the requirements in accordance with this
section, HUD may close out the Federal award with the information
available. HUD may closeout individual grants or multiple grants
simultaneously.
(2) To prepare for closeout, before the end of the budget period of
the grant, the grantee must review all eligible activities under the
grant and reconcile its accounts as follows:
(i) For any eligible costs incurred under the grant and not yet
drawn down from the U.S. Treasury account, the grantee must draw down
those funds in a timely manner.
(ii) The grantee must promptly refund to the proper accounts any
previously disbursed balances of unobligated cash paid in advance. All
such refunds must be completed prior to submission of the information
and reports required in paragraph (b) of this section.
(3) After the end of the grant budget period, no additional
eligible activities may be undertaken by the grantee using the grant
funds and no additional eligible costs incurred after the budget period
may be submitted by the grantee. Unused funds remaining on the grant
will be returned to HUD. The grantee must promptly refund any unused
grant funds not authorized to be retained, consistent with HUD's
instructions. HUD shall reallocate the grant funds by formula in
accordance with Sec. 93.54.
(4) HUD will initiate closeout actions in the computerized
disbursement and information system when the grantee has met the
requirements established in paragraph (b) of this section.
(i) If the grantee does not submit and enter all required data,
information, and reports or complete the actions described in paragraph
(b) of this section, HUD will proceed to close out the grant with the
information available within one year of the period of performance end
date. Each grant shall have a 9-year period of performance beginning
after the date of HUD's execution of the HTF grant agreement. The date
of HUD's execution of the HTF grant agreement is also the point of
obligation for the HTF grant.
(ii) HUD may report the grantee's material failure to comply with
the terms and conditions of the Federal award or requirements in this
section in SAM.gov. HUD may also pursue other enforcement actions in 2
CFR 200.339.
(5) A grantee may request, and HUD may provide an extension of the
period of performance or closeout deadlines provided good cause is
demonstrated.
(b) Actions required for closeout. A grantee must complete the
following actions for closeout of the grant:
(1) Submit a complete and final Federal Financial Report for the
grant to HUD within 120 days of the end date of the period of
performance, as indicated in the grant agreement;
(2) Demonstrate that it has fulfilled all programmatic and
administrative requirements for the project (i.e., property
inspections, obtaining certificates of occupancy, etc.) within the
period of performance in accordance with 2 CFR 200.344(a);
(3) Enter all data for activities in the computerized disbursement
and information system established by HUD, within one year from the end
of the period of performance as required by the grant agreement;
(4) Demonstrate that all HTF-assisted units are occupied by
eligible occupants by entering accurate beneficiary data in the
computerized disbursement and information system established by HUD,
within one year from the end of the period of performance, as required
by the grant agreement;
(5) Comply with the requirements in 2 CFR 200.313(e) for the
disposition of any equipment acquired under one or more HTF grants,
that is no longer needed for the HTF program, or for other activities
previously supported by a Federal agency;
(6) Resolve and close all HTF monitoring findings for the grant (if
applicable);
(7) Resolve and close all OIG audit findings for the grant (if
applicable);
(8) Resolve and close all Single Audit findings for the grant (if
applicable);
(9) Carry out all other responsibilities under the grant agreement
and applicable laws and regulations satisfactorily; and
(10) Complete a closeout certification prepared by HUD. The
certification shall identify the grant being closed out and include
provisions with respect to the following:
(i) Identification of any unused grant funds that were returned to
HUD;
(ii) Compliance with the recordkeeping requirements in Sec.
93.407, including maintaining program, project, financial, program
administration, records concerning other Federal requirements, and such
other records as necessary to carry out responsibilities for the grant
by the grantee and its subgrantees;
(iii) Monitoring and enforcement of the requirements for all HTF-
assisted units set forth in this part for the period specified in the
HTF written agreement with the property owner;
(iv) Compliance with use of program income, recaptured funds, and
repayments in accordance with Sec. 92.403. If the grantee is not a
grantee when it receives funds, the funds may be retained and used for
other affordable housing purposes;
(v) All actions required in 2 CFR 200.344 applicable to the grant
have been taken by the grantee;
(vi) All actions required in 2 CFR 200.344 applicable to the
grantee's subgrantees have been taken;
(vii) Other provisions appropriate to any special circumstances of
the grant closeout, in modification of or in addition to the
obligations in paragraphs (c)(1) and (2) of this section;
(viii) Acknowledge future monitoring by HUD, including that
findings of noncompliance may be taken into account by HUD as
unsatisfactory performance of the grantee and in any risk-based
assessment of a future grant award under this part; and
(ix) Unless otherwise provided in a closeout certification, the
Consolidated Plan will remain in effect after closeout until the
expiration of the program year covered by the most recent Consolidated
Plan.
(c) Post closeout adjustments and continuing responsibilities. The
closeout of a grant does not affect any of the obligations required
under this part and under 2 CFR 200.345, including:
[[Page 107093]]
(1) The right of HUD to disallow costs and recover funds on the
basis of a later audit or other review. HUD must make any cost
disallowance determination and notify the grantee within the record
retention period;
(2) Compliance with the requirements in Sec. 93.407;
(3) Compliance with the requirements in Sec. 93.408;
(4) Records retention as required in 2 CFR 200.345, as applicable;
(5) Monitoring and enforcement of the requirements for all HTF-
assisted units set forth in this part for the period of affordability
specified in the HTF written agreement with the property owner;
(6) Compliance with use of program income, recaptured funds, and
repayments in accordance with Sec. 93.403. If the grantee is not a
grantee when it receives funds, the funds may be retained and used for
other affordable housing purposes;
(7) Compliance with the requirement in 2 CFR 200.345(a)(2) that the
grantee return any funds due as a result of a later refund,
corrections, or other transactions including final indirect cost rate
adjustments; and
(8) Compliance with the audit requirements at 2 CFR part 200,
subpart F.
Sec. 93.452 [Amended]
0
29. In Sec. 93.452:
0
a. In paragraph (c)(2):
0
i. Remove ``2 CFR 200.207'' and add in its place ``2 CFR 200.208''; and
0
ii. Remove ``200.338'' and add in its place ``200.339''.
PART 200--INTRODUCTION TO FHA PROGRAMS
0
30. The authority citation for part 200 continues to read as follows:
Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).
0
31. Revise Sec. 200.11 to read as follows:
Sec. 200.11 Audit requirements for State and local governments as
mortgagees.
Requirements set forth in 2 CFR part 200, subpart F, apply to State
and local governments (as defined at 2 CFR 200.1) that receive mortgage
insurance as mortgagees.
PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS
0
32. The authority citation for part 570 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 3535(d) and
5301-5320.
0
33. In Sec. 570.206, revise paragraph (e) to read as follows:
Sec. 570.206 Program administrative costs.
* * * * *
(e) Indirect costs. The amount of indirect costs determined by
applying the indirect cost rate to the portion of modified total direct
costs (as defined at 2 CFR 200.1) that represents up to $50,000 of each
subaward may only be charged to the grant as a program administrative
cost.
* * * * *
Sec. 570.485 [Amended]
0
34. In Sec. 570.485(d), remove ``2 CFR 200.207'' and add in its place
``2 CFR 200.208''.
Sec. 570.489 [Amended]
0
35. In Sec. 570.489:
0
a. In paragraph (g), remove ``2 CFR 200.330'' and add in its place ``2
CFR 200.331;
0
b. Revise paragraph (j) introductory text;
0
c. In paragraph (m):
0
i. Remove ``2 CFR 200.330'' and add in its place ``2 CFR 200.331''; and
0
ii. Remove ``200.332'' and add in its place ``200.333''; and
0
d. In paragraph (o), remove ``2 CFR 200.343'' and add in its place ``2
CFR 200.344''.
The revision reads as follows:
Sec. 570.489 Program administrative requirements.
* * * * *
(j) Change of use of real property. The standards described in this
section apply to real property within the unit of general local
government's control (including activities undertaken by subrecipients)
that was acquired or improved in whole or in part using CDBG funds in
excess of the simplified acquisition threshold (2 CFR 200.1) set by the
FAR at 48 CFR part 2, subpart 2.1. These standards shall apply from the
date CDBG funds are first spent for the property until 5 years after
closeout of the unit of general local government's grant.
* * * * *
0
36. In Sec. 570.502, revise paragraph (a) to read as follows:
Sec. 570.502 Applicability of uniform administrative requirements.
(a) Grantees and subrecipients shall comply with 2 CFR part 200,
``Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards'', except that:
(1) 2 CFR 200.305 is modified for lump sum drawdown for financing
of property rehabilitation activities, in accordance with Sec.
570.513.
(2) 2 CFR 200.306 does not apply.
(3) 2 CFR 200.307 does not apply. Program income is governed by
Sec. 570.504.
(4) 2 CFR 200.308 does not apply.
(5) 2 CFR 200.311 does not apply, except as provided in Sec.
570.200(j). Real property is governed by Sec. 570.505.
(6)(i) 2 CFR 200.313 applies, except that in all cases in which the
equipment is sold, the proceeds shall be considered and treated as
program income unless Sec. 570.500(a)(4)(i) provides otherwise.
(ii) Equipment not needed by the subrecipient for CDBG activities
shall be transferred to the recipient for the CDBG program or shall be
retained after compensating the recipient.
(7) 2 CFR 200.334 applies except that:
(i) For recipients:
(A) The period shall be 4 years from the date of execution of the
closeout agreement for a grant, as further described in this part;
(B) Records for individual activities subject to the reversion of
assets provisions at Sec. 570.503(b)(7) or the change of use
provisions at Sec. 570.505 must be maintained for 3 years after those
provisions no longer apply to the activity;
(C) Records for individual activities for which there are
outstanding loan balances, other receivables, or contingent liabilities
must be retained for 3 years after the receivables or liabilities have
been satisfied.
(ii) For subrecipients:
(A) The retention period for individual CDBG activities shall be
the longer of 3 years after the expiration or termination of the
subrecipient agreement under Sec. 570.503, or 3 years after the
submission of the annual performance and evaluation report, as
prescribed in Sec. 91.520 of this title, in which the specific
activity is reported on for the final time;
(B) Records for individual activities subject to the reversion of
assets provisions at Sec. 570.503(b)(7) or change of use provisions at
Sec. 570.505 must be maintained for as long as those provisions
continue to apply to the activity; and
(C) Records for individual activities for which there are
outstanding loan balances, other receivables, or contingent liabilities
must be retained until such receivables or liabilities have been
satisfied.
(8) 2 CFR 200.344 applies to closeout of subrecipients.
* * * * *
Sec. 570.508 [Amended]
0
37. In Sec. 570.508, remove ``2 CFR 200.337'' and add in its place ``2
CFR 200.338''.
[[Page 107094]]
Sec. 570.509 [Amended]
0
38. In Sec. 570.509:
0
a. In paragraph (b)(3), remove ``2 CFR part 200'' and add in its place
``2 CFR part 200, subpart F'';
0
b. In paragraph (e), remove ``2 CFR 200.339'' and add in its place ``2
CFR 200.340''; and
0
c. In paragraph (f), remove ``2 CFR 200.342)'' and add in its place ``2
CFR 200.343''.
0
39. In Sec. 570.611, revise paragraph (a) to read as follows:
Sec. 570.611 Conflict of interest.
(a) Applicability. (1) When procuring goods and services in
accordance with 2 CFR part 200, the recipient or subrecipient must
comply with the applicable conflict of interest requirements in 2 CFR
200.317 through 200.319.
(2) In all cases where the provisions of 2 CFR 200.317 through
200.319 do not apply, the provisions of this section shall apply. Such
cases include the acquisition and disposition of real property and the
provision of assistance by the recipient or by its subrecipients to
individuals, businesses, and other private entities under eligible
activities that authorize such assistance (e.g., rehabilitation,
preservation, and other improvements of private properties or
facilities pursuant to Sec. 570.202; or grants, loans, and other
assistance to businesses, individuals, and other private entities
pursuant to Sec. 570.203, 570.204, 570.455, or 570.703(i)).
0
40. In Sec. 570.707, add paragraph (d) to read as follows:
Sec. 570.707 Applicability of rules and regulations.
* * * * *
(d) Registration in SAM.gov. Public entities and States must
complete entity validations and acquire a unique entity identifier
(UEI) in SAM.gov in accordance with 2 CFR 25.105 in order to apply for
and obtain a loan guaranteed under this subpart. The lender or holder
of a note guaranteed under this subpart is not required to complete
entity validations and acquire a UEI in SAM.gov in accordance with 2
CFR 25.105 in order to obtain the benefit of the loan guarantee.
PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS
0
41. The authority citation for part 574 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 3535(d) and
5301-5320.
0
42. In Sec. 574.500, revise paragraph (c) to read as follows:
Sec. 574.500 Responsibility for grant administration.
* * * * *
(c) Enforcement. HUD will enforce the obligations in the grant
agreement in accordance with the provisions of 2 CFR part 200, subpart
D. Upon initiating a remedy for noncompliance (for example, disallowed
costs, a corrective action plan, or termination), HUD will provide the
grantee with an opportunity for informal consultation, in which the
grantee may object and provide information challenging the action.
0
43. Revise Sec. 574.530 to read as follows:
Sec. 574.530 Recordkeeping.
(a)(1) For formula grants, each grantee must ensure that all grant
records are maintained for the longer of five years or the applicable
record retention period provided in 2 CFR part 200 (2 CFR 200.334).
(2) For all other grants, grantees must ensure that all grant
records are maintained for the applicable record retention period
provided in 2 CFR part 200 (2 CFR 200.334).
(3) For all grants, grantees must ensure that all records for real
property subject to minimum use requirements are maintained for at
least three years after final disposition.
(b) Grantees must maintain the following:
(1) Current and accurate data on the race and ethnicity of program
participants.
(2) Documentation of the actions the grantee has taken to
affirmatively further fair housing, pursuant to Sec. Sec. 5.151 and
5.152 of this title.
(3) Data on emergency transfers requested under Sec. 5.2005(e) of
this title, pertaining to victims of domestic violence, dating
violence, sexual assault, or stalking, including data on the outcomes
of such requests.
0
44. Revise Sec. 574.540 to read as follows:
Sec. 574.540 Deobligation of funds.
The period of performance for the grant will be 36 months after the
date that HUD executes the grant agreement with the recipient, unless
the grant agreement provides for a longer period. HUD may deobligate
all or a portion of the amounts approved for eligible activities if the
amounts are not expended in a timely manner, or the proposed activity
for which funding was approved is not in accordance with the approved
application or action plan and requirements of this part. The grant
agreement may set forth other circumstances under which funds may be
deobligated or sanctions imposed.
0
45. Revise Sec. 574.605 to read as follows:
Sec. 574.605 Applicability of uniform administrative requirements,
cost principles, and audit requirements for Federal awards.
The requirements of 2 CFR part 200, ``Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards,'' apply, except where inconsistent with the AIDS Housing
Opportunity Act, title I of the Cranston-Gonzalez National Affordable
Housing Act, or the implementing regulations in this part or part 91 of
this title.
0
46. Revise Sec. 574.625 to read as follows:
Sec. 574.625 Conflict of interest.
(a) Applicable requirements. When procuring goods and services in
accordance with 2 CFR part 200, the grantee or project sponsor must
comply with the applicable conflict of interest requirements under 2
CFR 200.317 through 200.319. In all other situations, the prohibition
in paragraph (b) of this section applies.
(b) Conflicts prohibited. No person who is an employee, agent,
consultant, officer, or elected or appointed official of the grantee or
project sponsor and who exercises or has exercised any functions or
responsibilities with respect to assisted activities, or who is in a
position to participate in a decision making process or gain inside
information with regard to such activities, may obtain a financial
interest or benefit from the activity, or have an interest in any
contract, subcontract, or agreement with respect thereto, or the
proceeds thereunder, either for himself or herself or for those with
whom he or she has family or business ties, during his or her tenure or
for one year thereafter.
(c) Exceptions: Threshold requirements. Upon the written request of
the grantee, HUD may grant an exception to the prohibition in paragraph
(b) of this section when it determines that the exception will serve to
further the purposes of the HOPWA program and the effective and
efficient administration of the grantee's program or project. An
exception may be considered only after the grantee has provided the
following:
(1) A disclosure of the nature of the conflict, accompanied by an
assurance that there has been public disclosure of the conflict and a
description of how the public disclosure was made; and
(2) An opinion of the grantee's attorney that the interest for
which the exception is sought would not violate State or local law.
[[Page 107095]]
(d) Factors to be considered for exceptions. In determining whether
to grant a requested exception after the grantee has satisfactorily met
the requirements of paragraph (c) of this section, HUD will consider
the cumulative effect of the following factors, where applicable:
(1) Whether the exception would provide a significant cost benefit
or an essential degree of expertise to the program or project that
would otherwise not be available;
(2) Whether the person affected is a member of a group or class of
eligible persons and the exception will permit such person to receive
generally the same interests or benefits as are being made available or
provided to the group or class;
(3) Whether the affected person has withdrawn from his or her
functions or responsibilities, or the decision making process with
respect to the specific assisted activity in question;
(4) Whether the interest or benefit was present before the affected
person was in a position as described in paragraph (b) of this section;
(5) Whether undue hardship will result to the grantee, the project
sponsor, or the person affected when weighed against the public
interest served by avoiding the prohibited conflict; and
(6) Any other relevant considerations.
PART 576--EMERGENCY SOLUTIONS GRANTS PROGRAM
0
47. The authority citation for part 576 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 11371 et seq.,
42 U.S.C. 3535(d).
Sec. 576.2 [Amended]
0
50. In Sec. 576.2, remove ``2 CFR 200.80'' wherever it appears and add
in its place ``2 CFR 200.1''.
0
51. In Sec. 576.109, revise paragraphs (b) and (c) to read as follows:
Sec. 576.109 Indirect Costs.
* * * * *
(b) Allocation to eligible activities under Sec. Sec. 576.101
through 576.107. Indirect costs may be allocated to an eligible
activity under Sec. Sec. 576.101 through 576.107, provided that:
(1) The applicable indirect cost methodology and requirements under
2 CFR part 200, subpart E, would allow for allocation of indirect costs
to a specific activity by applying the indirect cost rate to only the
allowable direct costs of that activity that are included within the
applicable direct cost base; and
(2) The sum of direct costs and indirect costs charged for street
outreach and emergency shelter activities would not exceed the
expenditure limit in Sec. 576.100(b).
(c) Allocation to administrative costs under Sec. 576.108.
Indirect costs that cannot be allocated to an eligible activity under
Sec. Sec. 576.101 through 576.107, but can otherwise be allocated to
the ESG grant under 2 CFR part 200, subpart E, may be charged to the
grant as administrative costs under Sec. 576.108, provided the sum of
direct and indirect costs charged as administrative costs does not
exceed the expenditure limit in Sec. Sec. 576.100(c) and 576.108(a).
Costs that may only be charged in this manner include any amount of
indirect costs that is determined by applying the indirect cost rate to
``up to the first $50,000 of each subaward'' as provided by the MTDC
definition in 2 CFR 200.1, where indirect costs are determined by
applying the indirect cost rate to MTDC.
0
52. In Sec. 576.200, revise paragraph (a) to read as follows:
Sec. 576.200 Submission requirements and grant approval.
(a) Application submission and approval. In addition to meeting the
requirements in part 5, subpart K of this title, each State, urban
county, or metropolitan city must submit and obtain HUD approval of a
consolidated plan in accordance with the requirements in part 91 of
this title, and each territory must submit and obtain HUD approval of a
consolidated plan in accordance with the requirements that apply to
local governments under part 91 of this title. HUD may include specific
conditions in the grant agreement for a State, urban county, or
metropolitan city as provided by 2 CFR 200.208.
* * * * *
0
53. In Sec. 576.201, revise paragraph (d) and remove paragraphs (e)
and (f) to read as follows:
Sec. 576.201 Matching requirement.
* * * * *
(d) Matching contributions may include unrecovered indirect costs
as described in 2 CFR 200.306(c).
0
54. In Sec. 576.203, revise the second sentence of paragraph (b) to
read as follows:
Sec. 576.203 Obligation, expenditure, and payment requirements.
* * * * *
(b) * * * The recipient's entire grant must be expended for
eligible costs within 24 months after the date HUD signs the grant
agreement with the recipient (``period of performance''), except for
funds used for administrative closeout costs as provided by 2 CFR
200.403(h). * * *
* * * * *
0
55. In Sec. 576.404, revise the last sentence of paragraph (a) and the
introductory text for paragraph (b) to read as follows:
Sec. 576.404 Conflicts of interest.
(a) * * * Recipients and subrecipients must also comply with the
applicable organizational conflicts of interest requirements under 2
CFR 200.317 through 200.319.
(b) Individual conflicts of interest. When procuring goods and
services in accordance with 2 CFR part 200, the recipient or
subrecipient must comply with the applicable conflict of interest
requirements under 2 CFR 200.317 and 200.318. For all other
transactions and activities, the following provisions apply:
* * * * *
0
56. In Sec. 576.500, revise paragraphs (y) and (z)(1) to read as
follows:
Sec. 576.500 Recordkeeping and reporting requirements.
* * * * *
(y) Period of record retention. All records related to the
recipient's ESG grant must be kept for the longer of 5 years, the
minimum period described in paragraphs (y)(1) through (3) of this
section, or the minimum period that 2 CFR part 200 (2 CFR 200.334)
provides for specific situations or records.
(1) Documentation of each program participant's qualification as a
family or individual at risk of homelessness or as a homeless family or
individual and other program participant records must be kept for at
least 5 years after the expenditure of all funds from the grant under
which the program participant was served;
(2) Where ESG funds are used for the renovation of an emergency
shelter involves costs charged to the ESG grant that exceed 75 percent
of the value of the building before renovation, records must be kept
for at least 10 years after the date that ESG funds are first obligated
for the renovation; and
(3) Where ESG funds are used to convert a building into an
emergency shelter and the costs charged to the ESG grant for the
conversion exceed 75 percent of the value of the building after
conversion, records must be kept for at least 10 years after the date
that ESG funds are first obligated for the conversion.
(z) * * *
(1) Federal Government rights. Notwithstanding the confidentiality
procedures established under paragraph (x) of this section, the
recipient and its
[[Page 107096]]
subrecipients must comply with the requirements for access to records
in 2 CFR 200.337.
* * * * *
PART 578--CONTINUUM OF CARE
0
57. The authority citation for part 578 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 11381 et seq.,
42 U.S.C. 3535(d).
0
58. In Sec. 578.63:
0
a. Revise paragraph (b);
0
b. Redesignate paragraph (c) as paragraph (d); and
0
c. Add a new paragraph (c).
The revision and addition read as follows:
Sec. 578.63 Indirect costs.
* * * * *
(b) Allocation to eligible activities under Sec. Sec. 578.39
through 578.57 and 578.61. Indirect costs may be allocated to an
eligible activity under Sec. Sec. 578.39 through 578.57 and 578.61,
provided that:
(1) The applicable indirect cost methodology and requirements under
2 CFR part 200, subpart E, would allow for allocation of indirect costs
to a specific activity by applying the indirect cost rate to only the
allowable direct costs of that activity that are included within the
applicable direct cost base; and
(2) The sum of direct costs and indirect costs charged for eligible
activities under Sec. Sec. 578.39 and 578.41 would not exceed the
expenditure limits in Sec. Sec. 578.39(a) and 578.41(a) respectively.
(c) Allocation to administrative costs under Sec. 578.59. Indirect
costs that cannot be allocated to an eligible activity under paragraph
(b) of this section, but can otherwise be allocated to the CoC program
grant under 2 CFR part 200, subpart E, may be charged to the grant as
administrative costs under Sec. 578.59, provided the sum of direct and
indirect costs charged as administrative costs does not exceed the
applicable expenditure limit in Sec. 578.59. Costs that may only be
charged in this manner include any amount of indirect costs that is
determined by applying the indirect cost rate to ``up to the first
$50,000 of each subaward'' as provided by the MTDC definition in 2 CFR
200.1, where indirect costs are determined by applying the indirect
cost rate to MTDC.
* * * * *
0
59. In Sec. 578.95:
0
a. Revise paragraphs (a) and (b); and
0
b. Add a sentence to the end of paragraph (c).
The revision and addition read as follows:
Sec. 578.95 Conflicts of interest.
(a) Procurement. When procuring goods and services in accordance
with 2 CFR part 200, the recipient or subrecipient must comply with the
applicable conflict of interest requirements in 2 CFR 200.317 through
200.319.
(b) Continuum of Care board members. No Continuum of Care or
collaborative applicant board member may participate in or influence
discussions or resulting decisions concerning the award of a grant or
other financial benefits to the organization that the member
represents.
(c) * * * No recipient or subrecipient may have an organizational
conflict of interest. Recipients and subrecipients must also maintain
standards of conduct covering organizational conflicts of interest
described in 2 CFR 200.318.
PART 700--CONGREGATE HOUSING SERVICES PROGRAM
0
60. The authority citation for part 700 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 8011.
Sec. 700.175 [Amended]
0
61. In Sec. 700.175(b), remove ``and 200.319(a)(5)'' and add in its
place ``and 200.319(b) and (c)(5).''
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
0
62. The authority citation for part 880 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
Sec. 880.211 [Amended]
0
63. In Sec. 880.211, remove ``2 CFR 200.69'' and add in its place ``2
CFR 200.1''.
PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
SUBSTANTIAL REHABILITATION
0
64. The authority citation for part 881 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
Sec. 881.211 [Amended]
0
65. In Sec. 881.211(a), remove ``2 CFR 200.69'' and add in its place
``2 CFR 200.1''.
PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE
HOUSING AGENCIES
0
66. The authority citation for part 883 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Sec. 883.313 [Amended]
0
67. In Sec. 883.313, remove ``2 CFR 200.69'' and add in its place ``2
CFR 200.1''.
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
0
68. The authority citation for part 884 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Sec. 884.124 [Amended]
0
69. In Sec. 884.124, remove ``2 CFR 200.69'' and add in its place ``2
CFR 200.1''.
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
0
70. The authority citation for part 886 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Sec. 886.131 [Amended]
0
71. In Sec. 886.131, remove ``2 CFR 200.69'' and add in its place ``2
CFR 200.1''.
Sec. 886.336 [Amended]
0
72. In Sec. 886.336, remove ``2 CFR 200.69'' and add in its place ``2
CFR 200.1''.
PART 905--THE PUBLIC HOUSING CAPITAL FUND PROGRAM
0
73. The authority citation for part 905 continues to read as follows:
Authority: 42 U.S.C. 1437g, 42 U.S.C. 1437z-2, 42 U.S.C. 1437z-
7 and 3535(d).
0
74. In Sec. 905.322 revise the first sentence in paragraphs (a) and
(b)(1)(i) and (ii) to read as follows:
Sec. 905.322 Fiscal closeout.
(a) General. Each Capital Fund grant and/or development project is
subject to fiscal closeout in accordance with 2 CFR 200.344. * * *
(b) * * *
(1) * * *
(i) Actual Development Cost Certificate (ADCC) is to be submitted
according with 2 CFR 200.344. * * *
(ii) Actual Modernization Cost Certificate (AMCC) for each grant,
is to be submitted according with 2 CFR 200.344, but no earlier than
the obligation end date. * * *
* * * * *
[[Page 107097]]
PART 964--TENANT PARTICIPATION AND TENANT OPPORTUNITIES IN PUBLIC
HOUSING
0
75. The authority citation for part 964 continues to read as follows:
Authority: 42 U.S.C. 1437d, 1437g, 1437r, 3535(d).
Sec. 964.230 [Amended]
0
76. In Sec. 964.230:
0
a. In paragraph (a)(2), add ``or a special purpose framework as
approved by HUD'' after ``generally accepted government audit
standards''; and
0
b. In paragraph (b), add ``or a special purpose framework as approved
by HUD'' after ``generally accepted government audit standards''.
PART 965--PHA-OWNED OR LEASED PROJECTS--GENERAL PROVISIONS
0
77. The authority citation for part 965 continues to read as follows:
Authority: 42 U.S.C. 1437, 1437a, 1437d, 1437g, and 3535(d).
Subpart H is also issued under 42 U.S.C. 4821-4846.
Sec. 965.205 [Amended]
0
78. In Sec. 965.205(d)(1), add ``or a special purpose framework as
approved by HUD'' after ``generally accepted accounting principles''
wherever it appears.
Sec. 965.308 [Amended]
0
79. In Sec. 965.308:
0
a. In paragraph (a)(1), remove ``2 CFR 200.320(d)'' wherever it appears
and add in its place ``2 CFR 200.320(b)(2)''; and
0
b. In paragraph (a)(2), remove ``2 CFR 200.320(f)'' and add in its
place ``2 CFR 200.320(c)''.
PART 970--PUBLIC HOUSING PROGRAM--DEMOLITION OR DISPOSITION OF
PUBLIC HOUSING PROJECTS
0
80. The authority citation for part 970 continues to read as follows:
Authority: 42 U.S.C. 1437p and 3535(d).
0
81. In Sec. 970.1, revise the last sentence to read as follows:
Sec. 970.1 Purpose.
* * * The regulations in 2 CFR part 200 are not applicable to this
part except: if the PHA requests to retain the public housing property,
in which case, 2 CFR 200.311(d)(1) applies; and if the PHA disposes of
equipment or supplies, 2 CFR 200.313 and 200.314 apply.
PART 990--THE PUBLIC HOUSING OPERATING FUND PROGRAM
0
82. The authority citation for part 990 continues to read as follows:
Authority: 42 U.S.C. 1437g; 42 U.S.C. 3535(d).
Sec. 990.280 [Amended]
0
83. In Sec. 990.280(b)(2), remove ``2 CFR part 200it'' and add in its
place ``2 CFR part 200), it''.
PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES
0
84. The authority citation for part 1000 continues to read as follows:
Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).
0
85. In Sec. 1000.26:
0
a. Revise paragraph (a); and
0
b. Add a heading to paragraph (b).
The revision and addition read as follows:
Sec. 1000.26 What are the administrative requirements under NAHASDA?
(a) Uniform Administrative Requirements. Except as addressed in
Sec. 1000.28, recipients shall comply with the requirements and
standards of 2 CFR part 200, ``Uniform Administrative Requirements,
Cost Principles, And Audit Requirements for Federal Awards'', except
for the following sections:
(1) 2 CFR 200.1 applies, except that, in lieu of the definition for
Indian Tribe, the definition for Indian Tribe in section 104 of NAHASDA
(25 U.S.C. 4103) will apply.
(2) 2 CFR 200.113 applies, except that, in lieu of the remedies
described in 2 CFR 200.339, HUD shall be authorized to seek remedies
under subpart F of this part.
(3) 2 CFR 200.302(a).
(4) 2 CFR 200.305 applies, except that HUD shall not require a
recipient to expend retained program income before drawing down or
expending IHBG funds.
(5) 2 CFR 200.306.
(6) 2 CFR 200.307.
(7) 2 CFR 200.308.
(8) 2 CFR 200.311, except as provided in Sec. 5.109 of this title.
(9) 2 CFR 200.313 applies except that a TDHE may follow the Tribal
laws and procedures contemplated in 2 CFR 200.313(b) of the Indian
Tribe they serve.
(10) 2 CFR 200.314 applies, except in all cases in which the
supplies are sold, the proceeds shall be program income.
(11) 2 CFR 200.317 applies except as modified in this paragraph
(a)(11):
(i) Procurement policies and procedures. A TDHE may follow the same
policies and procedures on procurement used by the Indian tribe they
serve.
(ii) De minimis procurement. Regardless of the Tribe's policies and
procedures for procurement, procurements using a grant provided under
NAHASDA cannot be subject to competitive procurement requirements when
the value of the goods and services is less than $5,000, or such other
higher amount as may be established in NAHASDA.
(iii) Utilizing Federal supply sources in procurement. In
accordance with section 101(j) of NAHASDA, recipients may use Federal
supply sources made available by the General Services Administration
pursuant to 40 U.S.C. 501.
(12) 2 CFR 200.318 through 200.327 apply, as modified in this
paragraph (a)(12):
(i) General. These provisions apply when a Tribe does not have
their own policies and procedures for procurement with non-Federal
funds or when a TDHE does not follow the policies and procedures for
procurement with non-Federal funds of the Tribe they serve.
(ii) De minimis procurement. A recipient shall not be required to
comply with 2 CFR 200.318 through 200.327 with respect to any
procurement, using a grant provided under NAHASDA, of goods and
services with a value of less than $5,000, or such other higher amount
as may be established in NAHASDA.
(iii) Utilizing Federal supply sources in procurement. In
accordance with section 101(j) of NAHASDA, recipients may use Federal
supply sources made available by the General Services Administration
pursuant to 40 U.S.C. 501.
(13) 2 CFR 200.326 applies. There may be circumstances under which
the bonding requirements of 2 CFR 200.326 are inconsistent with other
responsibilities and obligations of the recipient. In such
circumstances, acceptable methods to provide performance and payment
assurance may include:
(i) Deposit with the recipient of a cash escrow of not less than 20
percent of the total contract price, subject to reduction during the
warranty period, commensurate with potential risk;
(ii) Letter of credit for 25 percent of the total contract price,
unconditionally payable upon demand of the recipient, subject to
reduction during any warranty period commensurate with potential risk;
or
(iii) Letter of credit for 10 percent of the total contract price,
unconditionally payable upon demand of the recipient, subject to
reduction during any warranty period commensurate with potential risk,
and compliance with the
[[Page 107098]]
procedures for monitoring of disbursements by the contractor.
(14) 2 CFR 200.329(c) through (e) and (g), ``Monitoring and
reporting program performance.''
(15) 2 CFR 200.334.
(16) 2 CFR 200.339.
(17) 2 CFR 200.344.
(b) Cost principles.
* * * * *
0
86. In Sec. 1000.30, revise paragraph (a) to read as follows:
Sec. 1000.30 What prohibitions regarding conflict of interest are
applicable?
(a) Applicability. When procuring goods and services in accordance
with 2 CFR part 200, the recipient or subrecipient must comply with the
applicable conflict of interest requirements in 2 CFR 200.317 through
200. 319. In all other situations, the provisions of this section
apply.
* * * * *
Sec. 1000.52 [Amended]
0
87. In Sec. 1000.52(c)(2)(iii), remove ``through 200.326'' and add in
its place ``through 200.327''.
0
88. Add Sec. 1000.438 to read as follows:
Sec. 1000.438 Are Title VI lenders and holders of Title VI guarantee
certificates required to register for the System for Award Management
(SAM) and obtain a Unique entity identifier (UEI)?
Yes. All Title VI lenders and holders of Title VI guarantee
certificates must complete entity validations and acquire a unique
entity identifier (UEI) in SAM.gov per 2 CFR 25.105.
PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND
ALASKA NATIVE VILLAGES
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89. The authority citation for part 1003 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 5301 et seq.
Sec. 1003.4 [Amended]
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90. In Sec. 1003.4, in the definition for ``Subrecipient'', remove
``through 200.326'' and add in its place ``through 200.327''.
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91. In Sec. 1003.501, revise paragraphs (a) and (b)(1)(iii) to read as
follows:
Sec. 1003.501 Applicability of uniform administrative requirements
and cost principles.
(a) Uniform Administrative Requirements. Grantees and subrecipients
shall comply with the requirements and standards of 2 CFR part 200,
except for the following sections:
(1) 2 CFR 200.1 applies, except that, in lieu of the definition for
Indian Tribe, the definition for Indian tribe in section 102 of the
Housing and Community Development Act of 1974 (42 U.S.C. 5302) will
apply, and in lieu of the definition for Subrecipient, the definition
for Subrecipient at Sec. 1003.4 will apply.
(2) 2 CFR 200.302(a).
(3) 2 CFR 200.306.
(4) 2 CFR 200.307 applies as modified by Sec. 1003.503.
(5) 2 CFR 200.308.
(6) 2 CFR 200.311 except as provided in Sec. 1003.600.
(7) 2 CFR 200.313 applies, except that Tribal Organizations may
follow the Tribal laws and procedures used by the Indian tribe it
serves. In all cases in which the equipment is sold, the proceeds shall
be program income in accordance with Sec. 1003.503.
(8) 2 CFR 200.314 applies, except in all cases in which the
supplies are sold, the proceeds shall be program income in accordance
with Sec. 1003.503.
(9) 2 CFR 200.317 applies, except that Tribal Organization may
follow the same policies and procedures on procurement used by the
Indian tribe it serves.
(10) 2 CFR 200.326 applies. However, there may be circumstances
under which the bonding requirements of 2 CFR 200.326 are inconsistent
with other responsibilities and obligations of the grantee. In such
circumstances, acceptable methods to provide performance and payment
assurance may include:
(i) Deposit with the grantee of a cash escrow of not less than 20
percent of the total contract price, subject to reduction during the
warranty period, commensurate with potential risk; or
(ii) Letter of credit for 25 percent of the total contract price,
unconditionally payable upon demand of the grantee, subject to
reduction during the warranty period commensurate with potential risk.
(11) 2 CFR 200.329(c) through (e) and (g).
(12) 2 CFR 200.334 applies. However, the retention period
referenced in 2 CFR 200.334 pertaining to individual ICDBG activities
starts from the date of the submission of the final status and
evaluation report as prescribed in Sec. 1003.506(a) in which the
specific activity is reported.
(13) 2 CFR 200.344.
(b) * * *
(1) * * *
(iii) Costs of housing (e.g., depreciation, maintenance, utilities,
furnishings, rent), housing allowances, and personal living expenses
(goods or services for personal use, 2 CFR 200.445) require prior HUD
approval.
* * * * *
Sec. 1003.503 [Amended]
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92. In Sec. 1003.503(b)(7), remove ``2 CFR 200.307(e)(2)'' and add in
its place ``2 CFR 200.307(b)(2)''.
Sec. 1003.507 [Amended]
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93. In Sec. 1003.507, remove ``2 CFR 200.337'' and add in its place
``2 CFR 200.338''.
Sec. 1003.508 [Amended]
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94. In Sec. 1003.508:
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a. In paragraph (d), remove ``2 CFR 200.339'' and add in its place ``2
CFR 200.340''; and
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b. In paragraph (e), remove ``2 CFR 200.342'' and add in its place ``2
CFR 200.343''.
Sec. 1003.510 [Amended]
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95. In Sec. 1003.510(d)(3), remove ``of 2 CFR 200.320.'' and add in
its place ``of 2 CFR 200.320.''.
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96. In Sec. 1003.606, revise paragraph (a) to read as follows:
Sec. 1003.606 Conflict of interest.
(a) Applicability. When procuring goods and services in accordance
with 2 CFR part 200, the grantee or subrecipient must comply with the
applicable conflict of interest requirements in 2 CFR 200.317 through
200.319. In all other situations, the provisions of this section apply.
* * * * *
PART 1005--LOAN GUARANTEES FOR INDIAN HOUSING
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97. The authority citation for part 1005 continues to read as follows:
Authority: 12 U.S.C. 1715z-13a; 15 U.S.C. 1639c; 42 U.S.C.
3535(d).
Sec. 1005.217 [Amended]
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98. In Sec. 1005.217(b)(7), remove ``1005.219(d)(3)'' and add in its
place ``1005.219(f)(3)''.
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99. In Sec. 1005.219:
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a. Redesignate paragraphs (b) through (e) as paragraphs (d) through
(g); and
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b. Add new paragraphs (b) and (c).
The additions read as follows:
Sec. 1005.219 Other requirements.
* * * * *
(b) Registration in SAM.gov. All Holders and Direct Guarantee
Lenders must complete entity validations and acquire a UEI in SAM.gov
per 2 CFR 25.105.
(c) Compliance with 2 CFR part 200, subpart F. All Holders and
Direct Guarantee Lenders that are States, local governments, Tribes, or
nonprofit
[[Page 107099]]
organizations must comply with the audit requirements of 2 CFR part
200, subpart F.
* * * * *
Sec. 1005.739 [Amended]
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100. In Sec. 1005.739(h), remove ``1005.219(d)(2)'' and add in its
place ``1005.219(f)(2)''.
Sec. 1005.803 [Amended]
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101. In Sec. 1005.803(a), remove ``1005.219(d)(2)'' and add in its
place ``1005.219(f)(2)''.
PART 1006--NATIVE HAWAIIAN HOUSING BLOCK GRANT PROGRAM
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102. The authority citation for part 1006 continues 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, Pub. L. 117-328.
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103. In Sec. 1006.340, revise paragraph (b) to read as follows:
Sec. 1006.340 Treatment of program income.
* * * * *
(b) Authority to retain. The DHHL may retain any program income
that is realized from any NHHBG funds if:
(1) That income was realized after the initial disbursement of the
NHHBG funds received by the DHHL; and
(2) The DHHL agrees to use the program income for affordable
housing activities in accordance with the provisions of the Act and
this part.
* * * * *
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104. Revise Sec. 1006.360 to read as follows:
Sec. 1006.360 Conflict of interest.
When procuring goods and services in accordance with 2 CFR part
200, DHHL and its contractors must comply with the applicable conflict
of interest requirements in 2 CFR 200.317 through 200.319.
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105. In Sec. 1006.370:
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a. Revise paragraph (a);
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b. Add a heading to paragraph (b);
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c. Revise paragraphs (b)(1)(iii) and (b)(2); and
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d. Add paragraph (c).
The revisions and additions read as follows:
Sec. 1006.370 Uniform administrative, requirements, cost principles,
and audit requirements for Federal awards.
(a) Uniform Administrative Requirements. The DHHL and subrecipients
receiving NHHBG funds shall comply with the requirements and standards
of 2 CFR part 200, ``Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards'' except as
otherwise provided by this section.
(b) Cost principles.
(1) * * *
(iii) Costs of housing (e.g., depreciation, maintenance, utilities,
furnishings, rent), housing allowances, and personal living expenses
(goods or services for personal use, 2 CFR 200.445).
* * * * *
(2) In addition, no person providing consultant services in an
employer-employee type of relationship shall receive more than a
reasonable rate of compensation for personal services paid with NHHBG
funds. In no event, however, shall such compensation exceed the
equivalent of the daily rate paid for Level IV of the Executive
Schedule. The Executive Pay Schedule can be obtained by visiting
https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages.
(c) Section 200.305 applies, except that HUD shall not require DHHL
to expend retained program income before drawing down or expending
NHHBG funds.
Sec. 1006.420 [Amended]
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106. In Sec. 1006.420(b)(3), remove ``2 CFR 200.333'' and add in its
place ``2 CFR 200.334''.
PART 1007--SECTION 184A LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING
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107. The authority citation for part 1007 continues to read as follows:
Authority: 12 U.S.C. 1715z-13b; 15 U.S.C. 1639c; 42 U.S.C.
3535(d).
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108. In Sec. 1007.50, add paragraphs (e) and (f) to read as follows:
Sec. 1007.50 Certificate of guarantee.
* * * * *
(e) Registration in SAM.gov. All lenders and subsequent holders of
the loan guarantee must complete entity validations and acquire a UEI
in SAM.gov per 2 CFR 25.105.
(f) Compliance with 2 CFR part 200, subpart F. All lenders and
subsequent holders of the loan guarantee that are States, local
governments, or nonprofit organizations must comply with the audit
requirements of 2 CFR part 200, subpart F.
Damon Y. Smith,
General Counsel.
[FR Doc. 2024-30260 Filed 12-30-24; 8:45 am]
BILLING CODE 4210-67-P