                                                                                   FILED
                                                                       United States Court of Appeals
                                                                               Tenth Circuit
                         UNITED STATES COURT OF APPEALS
                                                                           February 19, 2010
                                      TENTH CIRCUIT
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court

FORT PECK HOUSING AUTHORITY,

        Plaintiff – Appellee/Cross-                    No. 06-1425 & 06-1447
        Appellant,                                            (D. Colo.)
                                                      (D.C. No. 05-CV-18-RPM)
v.

UNITED STATES DEPARTMENT OF
HOUSING AND URBAN
DEVELOPMENT; ALPHONSO
JACKSON, Secretary of Housing and
Urban Development; MICHAEL LIU,
Assistant Secretary for Public and Indian
Housing,

        Defendants – Appellants/Cross-
        Appellees.

------------------------------

OGLALA SIOUX (LAKOTA) HOUSING;
SICANGU WICOTI AWANYAKAPI
CORPORATION; TURTLE MOUNTAIN
HOUSING AUTHORITY; LOWER
BRULE HOUSING AUTHORITY,

        Movants.



                                 ORDER AND JUDGMENT*


        *
         This order and judgment is an unpublished decision, not binding precedent. 10th
Cir. R. 32.1(A). Citation to unpublished decisions is not prohibited. Fed. R. App. 32.1.
It is appropriate as it relates to law of the case, issue preclusion and claim preclusion.
Unpublished decisions may also be cited for their persuasive value. 10th Cir. R. 32.1(A).
Citation to an order and judgment must be accompanied by an appropriate parenthetical
notation B (unpublished). Id.
Before LUCERO, ANDERSON, and O’BRIEN, Circuit Judges.


       This case involves the Native American Housing Assistance and Self-

Determination Act of 1996 (NAHASDA), 25 U.S.C. §§ 4101-4243.1 In that act Congress

directed the Department of Housing and Urban Development (HUD) to enter into a

collaborative process with interested Native American tribes and their designated housing

entities (Tribal Housing Entities) to adopt regulations providing for an annual, equitable

distribution of available funds for low-income housing assistance. A regulation

promulgated in 1998 disqualified funding for housing units which were no longer owned

or operated by a Tribal Housing Entity. 24 C.F.R. § 1000.318. In subsequent years HUD

mistakenly overpaid Fort Peck Housing Authority (Fort Peck) for dwelling units it no

longer owned or operated. After discovering its oversight HUD demanded a refund. Fort

Peck partially repaid HUD, but then sued, alleging the “owned or operated” regulation

was invalid. The district court agreed but determined Fort Peck was not entitled to a

return of all monies it had already refunded. HUD appealed from the court’s invalidation

of its regulation and Fort Peck cross-appealed from the denial of return of its repayments.

We reverse the invalidation of HUD’s regulation, dismiss Fort Peck’s cross-appeal, and

remand.




       1
        Congress has since amended NAHASDA, including the statutory provisions at
issue here. See Native American Housing Assistance and Self-Determination
Reauthorization Act of 2008, Pub. L. No. 110-411, 122 Stat. 4319 (2008). This Order
and Judgment only considers the 2002 version of NAHASDA.

                                               -2-
                                         I.

A.    Relevant Statutory and Regulatory History

      Prior to 1997,2 financial assistance for low-income housing programs arose

through a number of separate programs under the Housing Act of 1937. See

Implementation of the Native American Housing Assistance and Self-Determination Act

of 1996, Proposed Rule, 62 Fed. Reg. 35,718, 35,719 (July 2, 1997). Some programs

helped Indian families afford low-income rental options and others allowed families to

purchase housing through lease-to-own or lease-purchase agreements. This financial

assistance was awarded according to the terms of individual Annual Contribution

Contracts (ACCs) between the government and individual Indian tribes or Tribal Housing

Entities. See 24 C.F.R. § 1000.10(b) (defining “Annual Contributions Contract”). Each

ACC was awarded a certain amount of funding for the Tribal Housing Entity to cover the

costs of specific public-housing projects. 42 U.S.C. § 1437c(a)(2) (1996) (explaining the

operation of ACCs). That changed.

      Congress enacted NAHASDA in an attempt to consolidate low-income housing

assistance for Indian tribes and simplify the distribution of funds. NAHASDA

terminated the housing assistance programs established under the Housing Act of 1937

and created a new system.3 This new method of distributing funds sought to “[recognize]


      2
        NAHASDA’s effective date was October 1, 1997. P.L. 104-330, Tit. I, § 107,
110 Stat. 4030 (1996).
      3
        HUD identified programs terminated by NAHASDA in the “Statutory
Background” section of its proposed rule. See Implementation of the Native American
Housing Assistance and Self-Determination Act of 1996, Proposed Rule, 62 Fed. Reg.
35,718, 35,719 (July 2, 1997).
                                              -3-
the right of Indian self-determination and tribal self-governance by making such

assistance available directly to the Indian tribes or tribally designated entities . . .” 25

U.S.C. § 4101(7). This new system required the distribution of appropriated funds

through annual block grants to individual housing entities for the purpose of carrying out

affordable housing activities. 25 U.S.C. § 4111.

       Congress directed HUD to establish an allocation formula for this new system to

reflect the need of the Indian tribes in the distribution of appropriated funds through

block grants. 25 U.S.C. § 4152(a).4 It specifically described the intended structure of the

formula:

       The formula shall be based on factors that reflect the need of the Indian
       tribes and the Indian areas of the tribes for assistance for affordable housing
       activities, including the following factors:

       (1) The number of low-income housing dwelling units owned or operated at
       the time pursuant to a contract between an Indian housing authority for the
       tribe and the Secretary.

       (2) The extent of poverty and economic distress and the number of Indian
       families within Indian areas of the tribe.

       (3) Other objectively measurable conditions as the Secretary and the Indian
       tribes may specify.

25 U.S.C. § 4152(b).5

       4
      The full text of the statute is reproduced as Appendix A to this Order and
Judgment.
       5
        In addition to the factors specified in § 4152(b)(1)-(3), Congress required
consideration of two other factors:

       In establishing the formula, the Secretary shall consider --

       (1) the relative administrative capacities and other challenges faced by the
       recipient, including, but not limited to geographic distribution within the
       Indian area and technical capacity; and
                                                 -4-
       Congress also required the regulations be crafted through a negotiated rulemaking

process that involved interested Indian tribes. 25 U.S.C. § 4116. The negotiated

rulemaking committee included fifty-eight members. Forty-eight of these members

represented “geographically diverse small, medium and large Indian tribes.” 62 Fed. Reg.

35,719. This committee was larger “than usually chartered under the Negotiated

Rulemaking Act” because of “the diversity of tribal interests, as well as the number and

complexity of the issues involved.” Id. It operated solely by consensus and HUD agreed

to use all of the committee consensus decisions, to the extent allowable under the law, as

the basis for the proposed rulemaking. Id. at 35,719-20. The committee crafted a

number of factors for the block grant formula, including the factor at issue in this appeal,

which HUD considered when it adopted the final regulations.

       The block-grant formula was included in the final regulations and codified at 24

C.F.R. §§ 1000.304–1000.340. It included two separately calculated components: 1)

“Formula Current Assisted Housing Stock” units (current units);6 and 2) “Need.”7 24



       (2) the extent to which terminations of assistance under subchapter V of
       this chapter will affect funding available to State recognized tribes.

25 U.S.C. § 4152(c). Subsection (c)(1) is addressed in the regulations at 24 C.F.R. §
1000.538 which allows HUD to provide technical assistance if the Housing Entity’s
inability to comply with NAHASDA provisions is not due to willful noncompliance.
Subsection (c)(2) references the termination of the housing assistance provided under the
Housing Act of 1937 and is addressed at 24 C.F.R. § 1000.312 where HUD includes the
1937 programs in the definition of current units. HUD addressed these factors within its
regulations. Neither party raised the section in their briefs, so we do not consider them
further.
        6
          Formula Current Assisted Stock is defined by regulation to include all dwelling
units owned or operated by an entity as of September 30, 1997, and limited other units.
24 C.F.R. § 1000.314. This definition was the starting point in determining current units.
Subsequent regulations, including § 1000.318, identified when Formula Current Assisted
                                                -5-
C.F.R. § 1000.310. In accordance with the formula, to determine the amount of funding

a Tribal Housing Entity would receive in a particular fiscal year, HUD first calculated the

number of current units owned or operated by each Tribal Housing Entity and earmarked

funds from the total appropriation to fund them.8 The current need portion for each

Tribal Housing Entity was then established by applying preset weighted criteria to the

remaining amount of appropriated funds. Because the funds earmarked for the current

unit portion of the formula directly reduced the amount of funding available for current

need disbursement, the current units component was of primary importance to Tribal

Housing Entities. A larger number of current units funded in a particular fiscal year

decreased the funds available for the current needs of all Tribal Housing Entities.

       The current units calculation for an individual Tribal Housing Entity began with

the number of dwelling units owned or operated by that entity at the time of

NAHASDA’s enactment. Id. Over the years, some rent-to-own units became eligible to

be transferred from a Tribal Housing Entity’s inventory or be otherwise disposed of due

to the terms of a contract between the Tribal Housing Entity and the unit’s occupant. For


Stock became ineligible for purposes of the block grant formula.
       7
         The criteria for determining need, each weighted differently, include: (1)
American Indian and Alaskan Native (AIAN) households with housing cost burden
greater than 50% of “formula area income;” (2) AIAN households that are overcrowded
or without kitchen or plumbing; (3) AIAN housing shortage; (4) AIAN households with
income less than or equal to 30% of “formula median income;” (5) AIAN households
with income between 30% and 50% of “formula median income;” (6) AIAN households
with income between 50% and 80% of “formula median income;” and (7) AIAN persons.
24 C.F.R. § 1000.324.
       8
      See Appendix A to Part 1000 – Indian Housing block grant Formula Mechanics
HUD, Nos. 5-6; see also 25 U.S.C. § 1000.324.

                                               -6-
instance, a lease-to-own agreement between a Tribal Housing Entity and a low-income

family may terminate in a given year and title to the residence would be transferred

accordingly. Reflecting this reduction, HUD included a downward adjustment in the

current units calculation. This adjustment was equal to the number of dwelling units a

tribe “no longer has the legal right to own, operate, or maintain . . . whether such right is

lost by conveyance, demolition, or otherwise.” 24 C.F.R. § 1000.318(a). Units are to be

removed from a Tribal Housing Entity’s inventory “as soon as practicable after the unit

becomes eligible for conveyance.” 24 C.F.R. § 1000.318(a)(1). In determining the

number of these disqualified units, HUD relied on information provided by the individual

Tribal Housing Entities on annual “Formula Response Forms.” 24 C.F.R. § 1000.312.

B.     Relevant Factual History

       HUD’s Inspector General conducted a nation-wide audit in 2002. This included

seventeen on-site visits to Tribal Housing Entities across the nation. At five of the Tribal

Housing Entities, it evaluated the accuracy of the current units reported on the Formula

Response Forms. The audit revealed some Tribal Housing Entities owned or operated

fewer dwelling units than they had reported on their Formula Response Forms and were

receiving funds for dwelling units they no longer owned or operated. Those findings

prompted a nation-wide audit, which showed Fort Peck, and other Housing Entities not

relevant to this appeal, had made the same reporting mistake in fiscal years 1997-2003.

HUD demanded a refund of these alleged overpayments.

       Fort Peck initially refunded a portion of the alleged overpayments but later refused

to continue repayment and instead contested the validity of 24 C.F.R. § 1000.318. It

                                                -7-
argued NAHASDA’s plain language required HUD to continue funding at the 1997 level

in the current units portion of the formula. In support of this argument, it stressed

Congress’s language that the formula “shall be based on . . . [t]he number of low-income

housing dwelling units owned or operated at the time,” meaning all dwelling units owned

or operated in 1997 under 25 U.S.C. § 4181(a). (Appellant’s Supp. Appx. at 61.) It

asserted HUD’s disqualification of units under 24 C.F.R. § 1000.318 violated Congress’s

expressed intent in § 4152(b)(1). Fort Peck asserted the monies it had refunded to HUD

must be returned.

       HUD maintained Congress’s intent in NAHASDA was to fund all tribal housing

projects according to their relative need. It reasoned that a Tribal Housing Entity’s need

is reduced when dwelling units pass from its control or ownership. See 24 C.F.R. §

1000.318 (dwelling units cease to qualify as a current unit when a Tribal Housing Entity

“no longer has the legal right to own, operate, or maintain the unit”); see also 63 Fed.

Reg. 12,334, 12,343 (Mar. 12, 1998).9 It explained the regulation followed Congress’s

express direction and intent because the reduction set forth in § 1000.318 was created

through a negotiated rulemaking process and was an objectively measurable condition.

       After exhausting the agency appeal process, Fort Peck brought suit in federal court

challenging HUD’s final determination. In relevant part, it claimed: (1) § 1000.318 was

contrary to the statutory language in NAHASDA and HUD’s conclusions to the contrary


       9
         One public comment to the proposed rule suggested conveyed units should
qualify as current units if the unit is a part of a “five-year Comp Grant plan.” HUD
rejected this suggestion stating “a conveyed unit, because it has become a private home,
does not qualify as [a current unit].” 63 Fed. Reg. at 12,343.

                                                -8-
should be overturned; (2) HUD had no authority to seek further refund for overpayment;

and (3) the district court should order HUD to return all payments already made.

       The district court concluded HUD unlawfully deprived Fort Peck of block-grant

funding by improperly removing conveyed properties from the formula. Fort Peck

Housing Auth. v. United States Dept. of Housing & Urban Dev., 435 F. Supp. 2d 1125,

1132 (D. Colo. 2006). It determined the plain language of § 4152(b)(1) created a

minimum or “floor” of dwelling units to be funded and § 1000.318 violated this

requirement. Id. In support of this conclusion, the court stressed that 25 U.S.C. §

4181(a) requires any housing formerly funded under the programs established by the

1937 Housing Act “shall, for the following fiscal year and each fiscal year thereafter, be

considered a dwelling unit under § 4152(b).” Id. at 1133. The district court concluded

“[t]he statute leaves no room for the formula to include some, but not all of the number of

[1997 units]” because Congress limited agency discretion when it required HUD “shall”

use the “definitive” number of 1997 units. Id. at 1132.

       It further reasoned that even if the statute was ambiguous, deference must be given

to Fort Peck’s reasonable interpretation of the statute because statutes are to be construed

liberally to benefit Indian tribes. Id. at 1134. It determined that Fort Peck’s

interpretation is consistent with NAHASDA’s purposes and encouraged the building of

new homeownership units which would otherwise not be funded. Id. The court

considered HUD’s regulation to be fundamentally unfair to Housing Entities with large

numbers of homeownership units who “suffer decreases in their share of the annual

apportionment” as units are conveyed while “tribes with a large percentage of rental units

                                                -9-
receive a greater share each year.”10 Id. at 1133. Finally, the district court concluded

Fort Peck’s position furthered NAHASDA’s goals of self-governance and self-

determination by eliminating many bureaucratic burdens and removing HUD’s

paternalistic oversight of whether units should be conveyed or participants evicted. Id. at

1134-35.

       For these reasons the district court invalidated 24 C.F.R. § 1000.318 and ordered

HUD “take such administrative action as necessary to implement [its] ruling.” Id. at

1136. In response to a Rule 59(e) motion by Fort Peck11 requesting return of the partial

refund of alleged overpayments, the court refused to order such return because these

funds had already been distributed to other Housing Entities, making the issue moot.

Fort Peck Housing Auth. v. United Stated Dept. of Housing & Urban Dev., No. 05-CV-

00018, 2006 WL 2192043 at *1 (D. Colo. Aug. 1, 2006). Instead, it ordered HUD to

“take whatever action may be appropriate within its regulatory authority to adjust for its

errors in computing [Fort Peck’s] entitlement . . . .” Id. at *2.




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

       11
          Both parties filed motions under Fed. R. Civ. P. 59(e) to alter or amend the
original judgment. HUD requested clarification of the scope of the district court’s
judgment and requested guidance as to whether administrative actions against other
Tribal Housing Entities were included. The court modified its judgment to limit its
holding to administrative action involving Fort Peck. Neither party appealed from this
decision.

                                                - 10 -
                                           II.

       We exercise jurisdiction under the Administrative Procedures Act (APA) and

consider whether the HUD’s action was “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with the law.” 5 U.S.C. § 706(2)(A). Our review is de novo

for agency action under the Administrative Procedure Act. Defenders of Wildlife v.

United States Envtl. Protection Agency, 415 F.3d 1121, 1126 (10th Cir. 2005). We afford

the district court’s decision no particular deference. See Santa Fe Energy Prods. Co. v.

McCutcheon, 90 F.3d 409, 413 (10th Cir. 1996).

       “An agency’s rulemaking power is not the power to make law, it is only the power

to adopt regulations to carry into effect the will of Congress as expressed by the statute.”

Sundance Assocs., Inc. v. Reno, 139 F.3d 804, 808 (10th Cir. 1998) (quotation omitted).

Statutory interpretation begins with the words Congress has chosen. The inquiry ends if

that language is clear. We merely enforce the statute’s plain meaning. Robinson v. Shell

Oil Co., 519 U.S. 337, 340 (1997). But if an ambiguity confuses the statute’s meaning,

or irrational results arise from the statute’s literal wording, we apply additional

interpretive tools to ascertain and give effect to Congress’s intent. See, e.g., Exxon Mobil

Corp. v. Allapattah Servs. Inc., 545 U.S. 546, 568 (2005) (“Extrinsic materials have a

role in statutory interpretation only to the extent they shed a reliable light on the enacting

Legislature’s understanding of otherwise ambiguous terms.”); Carter v. United States,

530 U.S. 255, 267 (2000) (“[T]he title of a statute is of use only when it sheds light on

some ambiguous word or phrase in the statute itself.”) (quotations and alterations

omitted). Such tools include consideration of the statute’s history and purpose as well as

                                                 - 11 -
statutory canons of construction. “If a court, employing traditional tools of statutory

construction, ascertains that Congress had an intention on the precise question at issue,

that intention is the law and must be given effect.” Chevron, U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 843 n.9 (1984).

A.     Statutory Interpretation

       The parties agree NAHASDA required HUD to create and implement the block-

grant formula. They also agree Congress set forth criteria to act as the formula’s basis

and allowed HUD to identify other criteria. This authorizing language was plain and

required the formula be based on factors which reflect “the need of the Indian tribes . . .

for assistance for affordable housing activities.” 25 U.S.C. § 4152(b). The parties

disagree about the amount of discretion Congress gave HUD regarding the formula’s

creation. The words of Congress are our best guide. Those words explicitly list two

factors – the number of 1997 dwelling units and the extent of current need – and a third

factor allowing further identification of “[o]ther objectively measurable conditions as the

Secretary and the Indian tribes may specify.” 25 U.S.C. §§ 4152(b)(1)-(3).

       “It is a fundamental canon of statutory construction that the words of a statute

must be read in their context and with a view to their place in the overall statutory

scheme.”12 Nat’l Assoc. of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 666


       12
          The importance of context has been aptly illustrated by the Supreme Court, “the
scope of what seems a precise technical chess instruction, such as ‘you must place the
queen next to the king,’ varies with context, depending, for example, upon whether the
instructor is telling a beginner how to set up the board or telling an advanced player how
to checkmate an opponent.” Zuni Pub. Sch. Dist. No. 89 v. Dep’t of Educ., 550 U.S. 81,
127 S. Ct. 1534, 1546 (2007).

                                               - 12 -
(2007) (internal citation and quotations omitted). Here, NAHASDA requires the formula

be “based on” three factors. As used within § 4152(b) where Congress explicitly allowed

for further definition of factors by HUD, the phrase “based on” is not synonymous with

“equal to.” See Sierra Club v. EPA, 356 F.3d 296, 306 (D.C. Cir. 2004) (the term “based

on” is ambiguous and does not require the agency’s findings rest solely upon a particular

model); McDaniel v. Chevron Corp., 203 F.3d 1099, 1111 (9th Cir. 2000) (“based on”

may be reasonably interpreted as indicating a “starting point” or “foundation”). Applying

the ordinary definition of “based on” means the factors form the basis, beginning, or

starting point, of the formula. See United States ex rel. Siller v. Becton Dickinson & Co.,

21 F.3d 1339, 1348 (4th Cir. 1994) (“To ‘base upon’ means to ‘use as a basis for.’”

(citing Webster’s Third New Int’l Dictionary 180 (1986))).13

       Congress amended § 4181 of NAHASDA in 2000. This amendment required

“[a]ny housing that is the subject of a contract for tenant-based assistance between the

Secretary and an Indian housing authority that is terminated under this section shall, for

the following year and each fiscal year thereafter, be considered a dwelling unit under

section 4152(b)(1).” 25 U.S.C. § 4181(a). Fort Peck asserts this amendment supports the

district court’s conclusion that the downward adjustment in 24 C.F.R. § 1000.318

violated NAHASDA’s purpose of requiring the 1997 units act as the basis for the block

grant formula. 435 F. Supp. 2d at 1133-34. This is incorrect. The amendment did not

require the funding of these dwelling units in perpetuity, nor did it require any other


       13
         Even if Congress’s use of the term “based on” creates some ambiguity, the term
does not render NAHASDA’s purpose or intent ambiguous.

                                               - 13 -
alteration of how HUD had interpreted the statute in its regulatory program. It only

required the terminated housing be considered a dwelling unit under § 4152(b)(1) and

included as part of the block grant formula’s basis -- no more. It did not remove or

amend the other two factors of § 4152(b) which also formed the basis for the block grant

formula, nor did it limit HUD’s discretion to include other objectively measurable

conditions in the formula according to § 4152(b)(3). Because HUD included all

terminated housing in § 4152(b)(1), it satisfied the requirement of § 4181(a).

       HUD incorporated the units required by § 4152(b)(1) when it used all of the 1997

dwelling units as the starting point for the allocation formula. However, this number was

but one factor required to meet the statute’s overarching mandate that the formula “reflect

the need of the Indian tribes and the Indian areas of the tribes for assistance for affordable

housing activities.” 25 U.S.C. § 4152(b). HUD’s adjustment from the number required

by § 4152(b)(1) and § 4181 is of no concern because the adjustment was accomplished

through “other objectively measurable conditions” that reflected the need of the Indian

tribes in accordance with § 4152(b)(3). Congress’s explicit direction allowed for this

result. It required the funding be tied to the need of the tribes and granted the negotiated

rulemaking committee the authority to craft criteria for inclusion in the formula. HUD

determined the funding of units no longer owned or operated by a Tribal Housing Entity

decreased the amount of remaining funds available to fund the current need of all tribal

programs. Thus, it incorporated a corresponding reduction in the current units portion of

the formula funding and effectively increased the amount of funding available for the

current need portion of the formula. Interpreting § 4152(b)(1) to prohibit a reduction in

                                               - 14 -
the number of current units corresponding to a measurable reduction in responsibility by

the Tribal Housing Entity for those units is inconsistent with the statute’s plain language

and is contrary to Congress’s unambiguous intent that the funding formula relate to the

needs of all tribal Housing Entities. See 25 U.S.C. § 4152.

       While we appreciate the district court’s concern with the decreased allocation to

entities that chose home-ownership over rental programs, its literal reading of the

statutory language conflicts with the plain language of the statute viewed as a whole. The

district court was without the benefit of our recent holding in United Keetoowah Band of

Cherokee Indians v. Department of Housing and Urban Development, 567 F.3d 1235,

1241 (10th Cir. 2009). Therein, we considered whether HUD’s regulation imposing a

jurisdictional-based factor for funding eligibility was contrary to its authority under the

statute. Holding in the affirmative, we stated § 4152(b) “explicitly and unambiguously

mandates that the factors in HUD’s allocation formula reflect -- in other words, have

some connection or nexus with -- the needs of Indian tribes and Indian areas of the tribes.

The language does not permit any other reading.” Id. The same reasoning applies

equally here. An interpretation of the formula requirement in NAHASDA that requires a

perpetual funding “floor” does not reflect Congress’s unambiguous intent that the

formula be related to the need of all tribal Housing Entities. Where Congress has

expressed its intent, we are bound to give effect to that intent. Osborne v. Babbitt, 61

F.3d 810, 812 (10th Cir. 1995).

B.     Agency Rulemaking

       Having determined the plain language of the statute did not set a funding floor

                                               - 15 -
based upon the 1997 units, we consider whether the regulation comported with the

statutory requirement that the formula relate to the need of the Housing Entities.

Congress authorized broad agency authority when it delegated responsibility for creation

of the block-grant formula to HUD. 25 U.S.C. § 4152(a). This broad authority, however,

was limited by the requirement the formula have a “nexus with” the needs related to

assistance for affordable housing activities. United Keetoowah, 567 F.3d at 1241; see

also 25 U.S.C. § 4152(b).

       We review agency rulemaking with great deference when a challenged decision

involves matters within the agency’s area of expertise. Utah Envtl. Congress v.

Bosworth, 443 F.3d 732, 739 (10th Cir. 2006). Here, the disbursement of funds for low-

income housing assistance for Indian tribes was certainly within HUD’s expertise: its

institutional experiences in implementing the Housing Act of 1937, including the low-

income housing programs for Indian tribes which NAHASDA replaced, justify our

deference here. Congress not only identified specific factors to serve as the formula’s

basis but also required cooperation with tribal representatives in finalizing the formula.

See 25 U.S.C. § 4116. This required participation supplemented HUD’s institutional

knowledge and expertise.14



       14
         The district court stated this participation of tribal representatives was “of no
relevance.” Ft. Peck, 435 F. Supp. 2d at 1134. It is true a rule developed through
negotiated rulemaking shall not be “accorded any greater deference by a court than a rule
which is the product of other rulemaking procedures.” 5 U.S.C. § 570. However, this
does not mean we ignore the forty-eight members of the negotiated rulemaking
committee who represented a number of Indian tribes. These representatives had first-
hand knowledge of factors helpful in identifying tribal need. We do not grant any greater
deference to this regulation because tribal representatives were involved. We do
                                                - 16 -
       HUD’s regulation complied with the mandate set forth in NAHASDA and clearly

included the entire (b)(1) factor as the starting point. See 24 C.F.R. §§ 1000.316(a)(1)-

(3) (including all of the 1997 units). From this initial number, the formula offset the 1997

units by a definitive number of units as of a definitive date. 24 C.F.R. §§ 1000.316–

1000.318. This number reflected the factors explicitly required by §§ 4152(b)(1)-(3). A

reduction equal to the number of dwelling units no longer owned or operated by a Tribal

Housing Entity recognized the ongoing and evolving needs of Tribal Housing Entities.

NAHASDA clearly required interplay between all three factors in the determination of a

Tribal Housing Entity’s need, including those HUD identified in the rulemaking process.

Section 1000.318’s downward adjustment was an example of this interplay. It was not

arbitrary or capricious.

       Finally, Fort Peck asserts even if the regulations are reasonable, we must

nonetheless reject them and defer to its interpretation of NAHASDA because “statutes

are to be construed liberally in favor of Indians, with ambiguous provisions interpreted to

their benefit.” Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985). Because

NAHASDA was unambiguous and the final regulations were properly promulgated

within NAHASDA’s mandate, we need not address this issue except to note the canon

cited does not allow a court to rob Peter to pay Paul no matter how well intentioned Paul

may be. The statute was not ambiguous and HUD’s regulation dispersed block-grant

funding in such a way as to meet the current needs of all tribes.



recognize the import of their participation and insight just as we recognize the value of
public comments when we consider traditional rulemaking procedures.

                                               - 17 -
      We DENY the motion for leave to file a brief as amicus curiae submitted by other

Housing Entities as untimely, REVERSE the district court’s invalidation of 24 C.F.R. §

1000.318, REMAND for action consistent with this Order and Judgment, and DISMISS

Fort Peck’s cross-appeal.15

                                        Entered by the Court:


                                        Terrence L. O’Brien
                                        United States Circuit Judge




      15
         Because HUD’s actions did not violate Congress’s mandate, the issues raised in
Fort Peck’s cross-appeal are moot.

                                            - 18 -
                                        APPENDIX A
                                      25 U.S.C.A. § 4152
                                           PAGE 1


Effective: December 27, 2000

United States Code Annotated Currentness
Title 25. Indians
     Chapter 43. Native American Housing Assistance and Self-Determination (Refs &
Annos)
     Subchapter III. Compliance, Audits, and, Report
   § 4152. Allocation formula

(a) Establishment

The Secretary shall, by regulations issued not later than the expiration of the 12-month
period beginning on October 26, 1996, in the manner provided under section 4116 of this
title, establish a formula to provide for allocating amounts available for a fiscal year for
block grants under this chapter among Indian tribes in accordance with the requirements
of this section.

(b) Factors for determination of need

The formula shall be based on factors that reflect the need of the Indian tribes and the
Indian areas of the tribes for assistance for affordable housing activities, including the
following factors:

(1) The number of low-income housing dwelling units owned or operated at the time
pursuant to a contract between an Indian housing authority for the tribe and the Secretary.

(2) The extent of poverty and economic distress and the number of Indian families within
Indian areas of the tribe.

(3) Other objectively measurable conditions as the Secretary and the Indian tribes may
specify.

(c) Other factors for consideration

In establishing the formula, the Secretary shall consider--

(1) the relative administrative capacities and other challenges faced by the recipient,
including, but not limited to geographic distribution within the Indian area and technical
capacity; and
                                      APPENDIX A
                                    25 U.S.C.A. § 4152
                                         PAGE 2


(2) the extent to which terminations of assistance under subchapter V of this chapter will
affect funding available to State recognized tribes.

(d) Funding for public housing operation and modernization

(1) Full funding

(A) In general

Except with respect to an Indian tribe described in subparagraph (B), the formula shall
provide that, if, in any fiscal year, the total amount made available for assistance under
this chapter is equal to or greater than the total amount made available for fiscal year
1996 for assistance for the operation and modernization of public housing developed or
operated pursuant to a contract between the Secretary and an Indian housing authority
pursuant to the United States Housing Act of 1937 [42 U.S.C.A. § 1437 et seq.], the
amount provided for such fiscal year for each Indian tribe for which such operating or
modernization assistance was provided for fiscal year 1996 shall not be less than the total
amount of such operating and modernization assistance provided for fiscal year 1996 for
such tribe.

(B) Certain Indian tribes

With respect to fiscal year 2001 and each fiscal year thereafter, for any Indian tribe with
an Indian housing authority that owns or operates fewer than 250 public housing units,
the formula shall provide that if the amount provided for a fiscal year in which the total
amount made available for assistance under this chapter is equal to or greater than the
amount made available for fiscal year 1996 for assistance for the operation and
modernization of the public housing referred to in subparagraph (A), then the amount
provided to that Indian tribe as modernization assistance shall be equal to the average
annual amount of funds provided to the Indian tribe (other than funds provided as
emergency assistance) under the assistance program under section 14 of the United States
Housing Act of 1937 (42 U.S.C. 1437l) for the period beginning with fiscal year 1992
and ending with fiscal year 1997.

(2) Partial funding

The formula shall provide that, if, in any fiscal year, the total amount made available for
assistance under this chapter is less than the total amount made available for fiscal year
1996 for assistance for the operation and modernization of public housing developed or
                                     APPENDIX A
                                   25 U.S.C.A. § 4152
                                        PAGE 3

operated pursuant to a contract between the Secretary and an Indian housing authority
pursuant to the United States Housing Act of 1937 [42 U.S.C.A. § 1437 et seq.], the
amount provided for such fiscal year for each Indian tribe for which such operating or
modernization assistance was provided for fiscal year 1996 shall not be less than the
amount that bears the same ratio to the total amount available for assistance under this
chapter for such fiscal year that the amount of operating and modernization assistance
provided for the tribe for fiscal year 1996 bears to the total amount made available for
fiscal year 1996 for assistance for the operation and modernization of such public
housing.

(e) Effective date

This section shall take effect on October 26, 1996.

CREDIT(S)

(Pub.L. 104-330, Title III, § 302, Oct. 26, 1996, 110 Stat. 4036; Pub.L. 106-568, Title X,
§ 1003(g), Dec. 27, 2000, 114 Stat. 2928; Pub.L. 106-569, Title V, § 503(f), Dec. 27,
2000, 114 Stat. 2964.)

HISTORICAL AND STATUTORY NOTES

References in Text

This chapter, referred to in subsecs. (a) and (d), was in the original “this Act”, meaning
the Native American Housing Assistance and Self-Determination Act of 1996, Pub.L.
104-330, Oct. 26, 1996, 110 Stat. 4016, as amended, which is classified principally to this
chapter. For complete classification of this Act to the Code, see Short Title note set out
under section 4101 of this title and Tables.

Subchapter V of this chapter, referred to in subsec. (c)(2), was in the original “title V”,
meaning Title V of Pub.L. 104-330, Oct. 26, 1996, 110 Stat. 4041, as amended, which is
classified principally to subchapter V of this chapter; see Tables for complete
classification.

The United States Housing Act of 1937, referred to in subsec. (d)(1)(A), is Act Sept. 1,
1937, c. 896, as revised generally by Pub.L. 93-383, Title II, § 201(a), Aug. 22, 1974, 88
Stat. 653, which is classified principally to chapter 8 (section 1437 et seq.) of Title 42.
For complete classification of this Act to the Code, see Short Title note set out under
section 1437 of Title 42 and Tables.
                                     APPENDIX A
                                   25 U.S.C.A. § 4152
                                        PAGE 4


“Section 14 of the United States Housing Act of 1937 (42 U.S.C. 1437l)”, referred to in
subsec. (d)(1)(B), was repealed by Pub.L. 105-276, Title V, § 522(a), Oct. 21, 1998, 112
Stat. 2564.

Codifications

Pub.L. 106-569 amended this section without any reference to prior identical amendment
by Pub.L. 106-568. See 2000 Amendments notes under this section.

Amendments

2000 Amendments. Subsec. (d)(1)(A). Pub.L. 106-569, § 503(f)(1), designated existing
provisions as subpar. (A), added a heading thereto, and as so designated, substituted
“Except with respect to an Indian tribe described in subparagraph (B), the formula” for
“The formula”.

Pub.L. 106-568, § 1003(g)(1), designated existing provisions as subpar. (A), added a
heading thereto, and as so designated, substituted “Except with respect to an Indian tribe
described in subparagraph (B), the formula” for “The formula”. See Codifications note
set out under this section.

Subsec. (d)(1)(B). Pub.L. 106-569, § 503(f)(2), added subpar. (B).

Pub.L. 106-569, § 1003(g)(2), added subpar. (B). See Codifications note set out under
this section.

LIBRARY REFERENCES

American Digest System

Indians  9.
Key Number System Topic No.209.

25 U.S.C.A. § 4152, 25 USCA § 4152

Current through P.L. 110-316 (excluding P.L. 110-234, 110-246, 110-289, 110-314, and
110-315) approved 8-14-08

Copr. (C) 2008 Thomson Reuters/West. No Claim to Orig. U.S. Govt. Works
