[Federal Register Volume 73, Number 174 (Monday, September 8, 2008)]
[Proposed Rules]
[Pages 52166-52169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20785]
[[Page 52165]]
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Part VI
Department of Housing and Urban Development
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24 CFR Part 1003
Prohibition on Use of Indian Community Development Block Grant
Assistance for Employment Relocation Activities; Proposed Rule
Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 /
Proposed Rules
[[Page 52166]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 1003
[Docket No. FR-5115-P-01]
RIN 2577-AC78
Prohibition on Use of Indian Community Development Block Grant
Assistance for Employment Relocation Activities
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend HUD's regulations for the
Indian Community Development Block Grant (ICDBG) program by prohibiting
Indian tribes and Alaska Native villages from using ICDBG funds to
facilitate the relocation of for-profit businesses from one labor
market area to another, if the relocation is likely to result in
significant job loss. The proposed rule would prohibit Indian tribes
and Alaska Native villages from using ICDBG funds for ``job pirating''
activities that are likely to result in significant job loss. ``Job
pirating,'' in this context, refers to the use of ICDBG funds to lure
or attract a business and its jobs from one community to another. To
prevent the rule from having an effect in situations where the
relocation of a business causes an insignificant loss of jobs, the
proposed rule would provide that a loss of 25 or fewer jobs from an
area, as a result of an ICDBG-funded economic development project,
would not constitute a significant loss of jobs.
DATES: Comment Due Date: November 7, 2008.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room 10276, Washington, DC 20410-0500. Communications must
refer to the above docket number and title. There are two methods for
submitting public comments. All submissions must refer to the above
docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel (OGC),
Department of Housing and Urban Development, 451 Seventh Street, SW.,
Room 10276, Washington, DC 20410-0001.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
http://www.regulations.gov Web site can be viewed by other commenters
and interested members of the public. Commenters should follow the
instructions provided on that Web site to submit comments
electronically.
Note: To receive consideration as public comments, comments must
be submitted through one of the two methods specified above. Again,
all submissions must refer to the docket number and title of the
rule. No Facsimile Comments. Facsimile (FAX) comments are not
acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. eastern time
weekdays at the above address. Due to security measures at the HUD
Headquarters building, an advance appointment to review the public
comments must be scheduled by calling the Regulations Division, OGC, at
(202) 708-3055 (this is not a toll-free number). Individuals with
speech or hearing impairments may access this number via TTY by calling
the Federal Information Relay Service at (800) 877-8339 (this is a
toll-free number). Copies of all comments submitted are available for
inspection and downloading at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Deborah Lalancette, Director, Office
of Grants Management, Office of Native American Programs, 1670
Broadway, 23rd Floor, Denver, CO 80202, telephone number (301) 675-1600
(this is not a toll-free number). Hearing- or speech-impaired
individuals may access this number through TTY by calling the Federal
Information Relay Service toll-free number at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Title I of the Housing and Community Development Act of 1974, as
amended, (42 U.S.C. 5301-5320) (1974 HCD Act) establishes the statutory
framework for the Community Development Block Grant (CDBG) program.
Section 106(a)(1) of the 1974 HCD Act authorizes grants to Indian
tribes for the ICDBG program. HUD's regulations implementing the ICDBG
program are located at 24 CFR part 1003 (entitled ``Community
Development Block Grants for Indian Tribes and Alaska Native
Villages''). The purpose of the ICDBG program is the development of
viable Indian and Alaska Native communities, including the creation of
decent housing, suitable living environments, and economic
opportunities primarily for persons with low and moderate incomes.
Grantees may use their ICDBG funds for activities authorized by section
105(a) of the 1974 HCD Act.
Section 588 of the Quality Housing and Work Responsibility Act of
1998 amended section 105 of the 1974 HCD Act (42 U.S.C. 5305).
Specifically, section 588 added to section 105 a new subsection (h)
entitled ``Prohibition on Use of Assistance for Employment Relocation
Activities.'' This subsection prohibits the use of CDBG funds to
facilitate the relocation of for-profit businesses from one labor
market area to another, if the relocation is likely to result in
significant job loss. Subsection (h) states:
(h) Prohibition on Use of Assistance for Employment Relocation
Activities--Notwithstanding any other provision of law, no amount
from a grant under section 106 made in fiscal year 1999 or any
succeeding fiscal year may be used to assist directly in the
relocation of any industrial or commercial plant, facility, or
operation, from 1 area to another area, if the relocation is likely
to result in a significant loss of employment in the labor market
area from which the relocation occurs.
Applicants for ICDBG grants have been notified of this statutory
requirement in annual Notices of Funding Availability.
II. This Proposed Rule
This proposed rule would implement subsection (h) of the 1974 HCD
Act by revising HUD's ICDBG program regulations in 24 CFR part 1003.
The proposed rule would establish a new Sec. 1003.209 (entitled
``Prohibition on Use of Assistance for Employment Relocation
Activities''), which would describe the ICDBG job-piracy provisions.
This proposed rule would also amend Sec. 1003.505 (entitled ``Records
to be Maintained''), to ensure that appropriate recordkeeping
requirements are met.
III. Significant Features of the Proposed Rule
A. Direct assistance to for-profit businesses. Section 105(a)(17)
of the 1974 HCD Act authorizes ICDBG recipients to provide direct
assistance to for-profit businesses for economic development
activities. Additionally, section 105(a)(15) authorizes recipients
[[Page 52167]]
to provide ICDBG funds to Community Based Development Organizations
(CBDOs) for economic development activities that increase economic
opportunities, or that stimulate or retain businesses or permanent
jobs.
In accordance with the statutory language of section 105(h), the
proposed rule would prohibit the provision of ICDBG assistance to for-
profit businesses (including business expansions) under sections
105(a)(15) and 105(a)(17) of the 1974 HCD Act, if:
(1) The funding will assist in the relocation of a plant, facility,
or operation; and
(2) If the relocation is likely to result in a significant loss of
jobs in the area from which the relocation occurs.
The proposed rule would not cover the business activities of
nonprofit entities. HUD believes that the likelihood of ICDBG
assistance to a not-for-profit business relocation is limited.
B. Definition of ``area.'' The statutory language of section 105(h)
prohibits the relocation of any industrial or commercial plant,
facility, or operation, from ``one area to another,'' if the relocation
is likely to result in significant job loss. HUD believes the relevant
definition of labor market ``area'' for a Native American economic
development project is the ``Identified Service Area'' for the eligible
applicant, as defined in 24 CFR 1003.4.
C. Definition of ``operation.'' Section 105(h) prohibits the use of
ICDBG assistance with respect to the relocation of any industrial or
commercial plant, facility, or ``operation'' from one Identified
Service Area to another. This proposed rule would define the term
``operation'' to include, but not be limited to, any equipment,
position, employment opportunity, production capacity, or product line.
D. Determining ``significant loss of jobs.'' Section 105(h)
prohibits ICDBG assistance for business relocation activities that
``will result in a significant loss of employment'' in the Identified
Service Area from which the relocation occurs. This proposed rule would
require that an ICDBG grantee, in determining whether a significant job
loss would occur, collect labor force statistics for the Identified
Service Area where the business is located before the relocation
occurs. The grantee also would be required to document the number of
jobs that the business plans to relocate to the new Identified Service
Area.
In a large Identified Service Area, a job loss of one-tenth of one
percent of the total labor market may constitute a large number of
employees. Therefore, this proposed rule would provide that in all
cases a loss of more than 500 jobs will be considered to constitute a
significant job loss. To prevent the rule from having an effect in
situations where the relocation of a business causes an insignificant
loss of jobs, the proposed rule would provide that a loss of 25 or
fewer jobs from an Identified Service Area, as a result of an ICDBG-
funded economic development project, would not constitute a significant
loss of jobs.
In summary, a loss of 25 or fewer jobs as a result of a single
activity will not constitute a significant job loss; any loss greater
than 500 will continue to be counted as significant; and job losses
between 25 and 500 must be less than 0.1 percent of the Identified
Service Area's labor force to avoid being counted as significant.
E. Activities and businesses exempt from the job piracy
prohibition. Under the proposed rule, certain activities and businesses
would be exempt from the job piracy prohibition. This proposed rule
would not apply to relocation assistance required by the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of
1970 (42 U.S.C. 4601-4655) (implemented at 24 CFR part 42) (URA) and,
with respect to the ICDBG regulations at 24 CFR 1003.602,
microenterprises and assistance to businesses that buy equipment and/or
inventory in arms-length transactions and move the equipment and/or
inventory to another Identified Service Area.
1. Uniform Relocation Act and related assistance. HUD proposes to
exclude relocation assistance required to be provided to a business
under the URA. Businesses that receive such assistance and are required
to relocate generally are not voluntarily relocating. In addition,
relocation assistance under section 105(a)(11), as implemented at
Sec. Sec. 1003.201(h) and 1003.602(b), (c), and (d), should be
excluded for the same reasons. HUD does not believe that the anti-
pirating provisions were intended to prevent businesses that are forced
to relocate as a result of a government action covered by the URA from
relocating to another Identified Service Area.
2. Microenterprises. HUD considered whether microenterprises should
be subject to the job pirating restrictions, but has determined that
this type of business was not the intended target of the statutory
prohibition. Microenterprises, generally, have five or fewer employees
and typically do not seek resources to relocate jobs to other areas.
3. ICDBG-assisted arms-length transactions. The exemption for
businesses that buy equipment, inventory, or other physical assets in
arms-length transactions is meant to protect assisted businesses that
merely purchase equipment and inventory that are located in one
Identified Service Area and move them to a new location. The job piracy
prohibition targets businesses that move existing operations from one
labor market area to another.
This proposed rule would apply to ICDBG assistance to a business
that: (a) Shuts down or downsizes a facility and sells the equipment in
a non-arms-length transaction (an example of a non-arms-length
transaction is a firm selling equipment to a subsidiary); or (b) sells,
in an arms-length transaction, an interest in an existing business,
product line, customer base, or the entire stock-in-trade and goodwill
of an existing business.
This proposed rule would not apply to assistance to a business that
only purchases used equipment in an arms-length transaction. HUD
believes that the sale and purchase of equipment, inventories, or other
business assets on the open market were not intended to be included
under the business relocation provisions of section 105(h).
F. Documentation requirements for ICDBG recipients and businesses.
This proposed rule would require that, for each ICDBG-assisted business
covered by this rule, the recipient's ICDBG project file must document:
Whether the business has a plant, facility, or operation in an area
outside of the recipient's Identified Service Area; and, if the
business has one or more plants, facilities, or operations located in
other areas, whether the business plans to relocate jobs from other
locations to the site being assisted with ICDBG funds. Prior to a
decision to provide ICDBG assistance to a business that has a plant,
location, or facility in other areas, the recipient shall document
whether the number of jobs relocated by the business at each of the
locations that is losing jobs to the new facility would constitute a
significant job loss, as defined in this rule. If the recipient decides
to commit ICDBG assistance to a business, then it must require and
obtain, as a condition for assistance, a certification from the
assisted business that neither it, nor any of its subsidiaries, has
plans to relocate jobs, at the time the agreement is signed, that would
result in a significant job loss, as defined in this rule. The business
must provide this certification to the recipient as a part of the
agreement committing ICDBG assistance to the business.
[[Page 52168]]
IV. Tribal Consultation
HUD's policy is to consult with Indian tribes early in the
rulemaking process on matters that have tribal implications.
Accordingly, HUD sent letters to all eligible funding recipients under
the ICDBG program informing them of the nature of the forthcoming rule
and soliciting comments. The Department received one response to the
consultation request, expressing full support for the proposed
regulatory change. In addition, tribes have the opportunity to comment
on this proposed rule, and HUD welcomes such comment.
V. Findings and Certifications
Paperwork Reduction Act
The information collection requirements contained in this rule have
been submitted to the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In accordance
with the Paperwork Reduction Act, an agency may not conduct or sponsor,
and a person is not required to respond to, a collection of
information, unless the collection displays a currently valid OMB
control number.
The burden of the information collections in this proposed rule is
estimated as follows:
Reporting and Recordkeeping Burden
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Estimated
Number of average time Estimated
Section reference Number of parties responses per for requirement annual burden
respondent (in hours) (in hours)
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Sec. 1003.209 & Sec. 1003.505... 15 plus................ 1 3 45
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In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments
from members of the public and affected agencies concerning this
collection of information to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
Interested persons are invited to submit comments regarding the
information collection requirements in this rule. Comments must refer
to the proposal by name and docket number (FR-5115-P-01) and must be
sent to:
HUD Desk Officer, Office of Management and Budget, Room 10235, New
Executive Office Building, Washington, DC 20503, Fax number: (202) 395-
6974; and
Ms. Sherry Fobear-McCown, Office of Public and Indian Housing, U.S.
Department of Housing and Urban Development, Room 4116, 451 Seventh
Street, SW., Washington, DC 20410-5000.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant
Impact is available for public inspection between the hours of 8 a.m.
and 5 p.m. eastern time, weekdays in the Regulations Division, Office
of General Counsel, Department of Housing and Urban Development, 451
Seventh Street, SW., Room 10276, Washington, DC 20410-0500.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
There are no anti-competitive discriminatory aspects of the rule with
regard to small entities and there are no unusual procedures that would
need to be complied with by small entities. Accordingly, the
undersigned certifies that this rule will not have a significant
economic impact on a substantial number of small entities.
Nevertheless, HUD is sensitive to the fact that the uniform application
of requirements on entities of differing sizes often places a
disproportionate burden on small businesses. Therefore, HUD
specifically invites comments from all entities, including small
entities, regarding less burdensome alternatives to this rule, that
will meet HUD's objectives as described in this preamble.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on state and local
governments and is not required by statute, or the rule preempts state
law, unless the agency meets the consultation and funding requirements
of section 6 of the Order. This proposed rule does not have federalism
implications and would not impose substantial direct compliance costs
on state and local governments nor preempt state law within the meaning
of the Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments and the private sector. This proposed rule does not
impose any federal mandates on any state, local, or tribal governments
or the private sector within the meaning of the UMRA.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance (CFDA) number for the
ICDBG program is 14.862.
List of Subjects in 24 CFR Part 1003
Alaska; Community development block grants; Grant programs--housing
and community development; Grant programs--Indians; Indians; Reporting
and recordkeeping requirements.
Accordingly, for the reasons discussed in the preamble, HUD
proposes to amend 24 CFR part 1003 to read as follows:
[[Page 52169]]
PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND
ALASKA NATIVE VILLAGES
1. The authority citation for part 1003 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 5301-5320.
2. Add Sec. 1003.209 to read as follows:
Sec. 1003.209 Prohibition on use of assistance for employment
relocation activities.
(a) Prohibition. ICDBG funds may not be used to directly assist a
business, including a business expansion, in the relocation of a plant,
facility, or operation from one Identified Service Area to another
Identified Service Area, if the relocation is likely to result in a
significant loss of jobs in the Identified Service Area from which the
relocation occurs.
(b) Definitions. The following definitions apply to this section:
(1) Directly assist. Directly assist means the provision of ICDBG
funds for activities pursuant to:
(i) Sec. 1003.203(b); or
(ii) Sec. Sec. 1003.201(a) through (d), 1003.201(k), 1003.203(a),
or Sec. 1003.204 when the grantee, subrecipient, or, in the case of an
activity carried out pursuant to Sec. 1003.204, a Community Based
Development Organization (CBDO) enters into an agreement with a
business to undertake one or more of these activities as a condition of
the business relocating a facility, plant, or operation to the
grantee's Identified Service Area. Provision of public facilities and
indirect assistance that will provide benefit to multiple businesses
does not fall under the definition of ``directly assist,'' unless it
includes the provision of infrastructure to aid a specific business
that is the subject of an agreement with the specific assisted
business.
(2) Area. The relevant definition of ``area'' for a Native American
economic development project is the ``Identified Service Area'' for the
eligible applicant, as defined in Sec. 1003.4.
(3) Operation. A business operation includes, but is not limited
to, any equipment, employment opportunity, production capacity, or
product line of the business.
(4) Significant loss of jobs. (i) A loss of jobs is significant if
the number of jobs to be lost in the Identified Service Area in which
the affected business is currently located is equal to or greater than
one-tenth of one percent of the total number of persons in the labor
force of that area; or, in all cases, a loss of 500 or more jobs.
Notwithstanding the aforementioned, a loss of 25 jobs or fewer does not
constitute a significant loss of jobs.
(ii) A job is considered to be lost due to the provision of ICDBG
assistance if the job is relocated within 3 years of the provision of
assistance to the business; or the time period within which jobs are to
be created as specified by the agreement between the business and the
recipient, if it is longer than 3 years.
(c) Written agreement. Before directly assisting a business with
ICDBG funds, the recipient, subrecipient, or a CBDO (in the case of an
activity carried out pursuant to Sec. 1003.204) shall sign a written
agreement with the assisted business. The written agreement shall
include:
(1) Statement. A statement from the assisted business as to whether
the assisted activity will result in the relocation of any industrial
or commercial plant, facility, or operation from one Identified Service
Area to another, and, if so, the number of jobs that will be relocated
from each Identified Service Area; and
(2) Required certification. If the assistance will not result in a
relocation covered by this section, a certification from the assisted
business that neither it, nor any of its subsidiaries, has plans to
relocate jobs, at the time the agreement is signed, that would result
in a significant job loss as defined in this rule.
(d) Assistance not covered by this section. This section does not
apply to:
(1) Relocation assistance. Relocation assistance under Sec.
1003.602(b), (c), or (d);
(2) Microenterprises. Assistance to microenterprises as defined by
section 102(a)(22) of the Housing and Community Development Act of
1974; and
(3) Arms-length transactions. Assistance to a business that
purchases business equipment, inventory, or other physical assets in an
arms-length transaction, including the assets of an existing business,
provided that the purchase does not result in the relocation of the
sellers' business operation (including customer base or list, goodwill,
product lines, or trade names) from one Identified Service Area to
another Identified Service Area and does not produce a significant loss
of jobs in the Identified Service Area from which the relocation
occurs.
3. Revise Sec. 1003.505 to read as follows:
Sec. 1003.505 Records to be maintained.
Each grantee shall establish and maintain sufficient records to
enable the Secretary to determine whether the grantee has met the
requirements of this part. This includes establishing and maintaining
records demonstrating that the recipient has made the determinations
required as a condition of eligibility of certain activities, including
as prescribed in Sec. 1003.209.
Dated: May 1, 2008.
Paula O. Blunt,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. E8-20785 Filed 9-5-08; 8:45 am]
BILLING CODE 4210-67-P