[Federal Register Volume 59, Number 69 (Monday, April 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8543]


[[Page Unknown]]

[Federal Register: April 11, 1994]


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Part X





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Secretary



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24 CFR Parts 50 and 574




Housing Opportunities for Persons With AIDS; Final Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 50 and 574

[Docket No. R-94-1606; FR-3178-F-03]
RIN 2501-AB41

 
Housing Opportunities for Persons With AIDS

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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

SUMMARY: This final rule is being issued for the Housing Opportunities 
for Persons With AIDS (HOPWA) Program. The program provides States and 
localities with resources and incentives to devise long-term 
comprehensive strategies for meeting the housing needs of persons with 
acquired immunodeficiency syndrome (AIDS) or related diseases and their 
families. The program authorizes entitlement grants and competitively 
awarded grants for housing assistance and services. This final rule 
includes changes made in response to public comments.

EFFECTIVE DATE: May 11, 1994.

FOR FURTHER INFORMATION CONTACT: Barbara Richards, Acting Director, 
Office of Special Needs Assistance Programs, (202) 708-4300 (voice); 
(202) 708-2565 (TDD); Department of Housing and Urban Development, 451 
Seventh Street SW., Washington, DC 20410-7000. (Telephone numbers are 
not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Information Collections

    The information collection requirements for the HOPWA program have 
been approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1980 and were assigned OMB control number 
2506-0133.

II. Introduction

A. Background

    The Housing Opportunities for Persons With AIDS (HOPWA) Program was 
authorized by the AIDS Housing Opportunity Act (42 U.S.C. 12901) 
(hereafter ``AHOA''). An interim rule was published in the Federal 
Register on July 20, 1992 (57 FR 32106), estab- lishing regulations for 
the implementation of this new program at 24 CFR part 574.
    The Department received 12 public comments on the initial interim 
rule. Then Section 606 of the Housing and Community Development Act of 
1992, 106 Stat. 3806 (hereafter ``the Act'') made revisions to the 
HOPWA program and directed the Department to publish interim and final 
rules to implement those revisions. A second interim rule was published 
in the Federal Register on December 28, 1992 (57 FR 61736). It 
contained responses to comments on the first Interim Rule and revisions 
from the Act.
    In publishing a second interim rule, the Department announced a 
comment due date of February 26, 1993. Thirty-one public comments were 
received. The comments were submitted by persons representing nonprofit 
organizations, local coalitions of AIDS organizations, professional 
organizations, State and local governments, and the Bureau of Health 
Resources Development of the U.S. Department of Health and Human 
Services.
    A number of these comments were highly supportive of those 
provisions of the interim rule that allow flexibility in the selection 
of activities. In one view, this flexibility ``makes it an especially 
valuable resource, allowing local jurisdictions to tailor programs to 
their specific circumstances and needs.'' Commenters also noted the 
Department's commitment to implement this program in a ``non-
bureaucratic'' manner. Commenters supported the inclusion of 
administrative costs, the allowance for HUD approval of formula 
applications received before the due date, the provision exempting 
project sponsor selection from procurement requirements, and the 
removal of the applicability of housing quality standards to short-term 
rent, mortgage, and utility payments.
    Other public comments recommended revisions to the interim rule. 
These are addressed in this preamble along with several technical 
corrections which have been identified through the Department's 
experience in administering this program.

B. Public Comments, Technical Corrections, and HUD Responses

1. Families Defined--4 Comments
    Commenters requested clarification of the term ``family'' because 
family members can benefit from any of the eligible activities at 
Sec. 574.300(b), except for health services, as provided at 
Sec. 574.300(b)(7). Commenters recommended that the definition include 
``the spouse, life partner, or significant other person living with the 
person with AIDS,'' and that the incomes of any such persons be 
included under the household's income for determining resident rent 
payments. Other commenters recommended that family be considered ``any 
group of people who have chosen to live together'' but that the term 
would not apply to residents assembled for the purposes of shared 
housing.
    Response. The Department has added a definition of family at 
Sec. 574.3 of the final rule. The definition provides that a family 
includes members of a household who are related or who are determined 
to be important to the care and well-being of the member with AIDS or 
related diseases. It further provides that the surviving member or 
members of a family who were living in an assisted unit with that 
person at the time of death will continue to receive housing assistance 
and supportive services. The Department has established requirements 
for the termination of assistance to surviving family members at 
Sec. 574.310(e)(1), including the provision for a reasonable grace 
period for continued eligibility--not to exceed one year from the death 
of the family member with AIDS.
    Assistance to the family of a person with AIDS or related diseases 
is authorized by section 606(c)(3) of the Act. Under the final rule, 
which includes family under the definition of ``eligible person,'' 
housing assistance and supportive services can be provided for a family 
member residing with a low-income person with AIDS or related diseases, 
except for health services as provided at Sec. 574.300(b)(7).
    This definition is similar to that portion of the Department's 
Shelter Plus Care (S+C) Program definition of person with disabilities, 
found at 24 CFR 582.5, which ``includes two or more persons with 
disabilities living together, one or more such person living with 
another person who is determined to be important to their care or well-
being, and the surviving member or members of any [such] household.''
2. Non-substantial Rehabilitation--1 Comment
    A commenter noted that the term ``moderate rehabilitation'' was 
used in one location while the term ``non-substantial rehabilitation'' 
was used elsewhere in the interim rule. The commenter recommended using 
only ``non-substantial rehabilitation'' to provide for internal 
consistency.
    Response. The Department agrees that one term should be used 
throughout and has replaced ``moderate rehabilitation'' with ``non-
substantial rehabilitation'' in this rule at Sec. 574.3.
3. For-Profit Involvement--4 Comments
    Commenters recommended that for-profit developers not be excluded 
from serving as project sponsors. Recommendations included their 
serving directly as project sponsors or working in partnership with 
non-profits eligible to undertake activities. Commenters felt that a 
prohibition on for-profits unnecessarily restricts collaborative 
projects between AIDS services providers and housing development 
corporations.
    Response. No change has been made. The statute does not authorize 
for-profit organizations to serve as project sponsors. Eligible 
activities are carried out by the grantee itself, through any of its 
administrative agencies, or by contract with a project sponsor that is 
either a nonprofit organization or a government housing agency.
    However, as noted in the preamble to the second interim rule, at 
II(B)(6), grantees and project sponsors may contract for services. For-
profit entities could provide those contracted services.
4. Non-profit Organizations Definition--2 Comments
    Commenters were concerned that the definition of nonprofit 
organization at Sec. 574.3 in paragraph (4), which requires an 
organization to have ``among its purposes significant activities 
related to providing services or housing to persons with AIDS or 
related diseases,'' could prevent experienced nonprofit housing 
organizations, who lack such purposes, from participating in an AIDS 
housing project.
    Response. The definition has been retained. The definition conforms 
with the statutory definition under section 606(c)(3) of the Act. An 
organization wishing to participate in HOPWA could establish this 
purpose, for instance, by amending its by-laws to state that the 
organization has an AIDS housing or services mission.
    Additionally, as noted in the preceding response, other nonprofit 
organizations which do not serve as project sponsors and for-profit 
organizations may provide contracted services.
5. State Applicants--10 Comments
    Under State eligibility for formula grants, commenters noted that a 
State could qualify in one year but become ineligible for a grant in 
the following year. Commenters noted that once 1,500 cases of AIDS 
occur in a metropolitan area, that area will qualify. Because the 
number of cases reported outside qualifying Eligible Metropolitan 
Statistical Areas (EMSAs) is used to determine the State's eligibility, 
a State's remaining cumulative number of cases of AIDS could drop below 
the threshold 1,500 cases. In this case, the State would no longer be 
eligible to receive a formula allocation.
    Commenters recommended that, once qualified, a State should 
continue to receive funds in future program allocations. A concern was 
expressed that the State, as a Ryan White Title II recipient, is best 
able to coordinate HOPWA-funded activities with its programs through 
community-based organizations and the State's loss of eligibility as a 
HOPWA formula grantee would interfere with this coordination.
    One commenter noted that when a State loses its eligibility, 
persons residing in non-formula metropolitan areas and rural areas are 
deprived of assistance because of where they reside. The commenter 
recommended that HOPWA funds be awarded on morbidity in non-
metropolitan areas and States or that States receive funding to respond 
to needs in smaller cities and rural areas.
    Response. No change was made. The regulations at Sec. 574.130 
conform with the formula-based allocation specified in the statute. 
Section 854(c) of AHOA stipulates that any State with more that 1,500 
cases of AIDS, ``outside of metropolitan statistical areas'' qualifies 
for a formula allocation. Jurisdictions not qualifying for formula 
grants are eligible to apply for competitively awarded funds under 
Sec. 574.200.
6. High Cost Allocations--1 Comment
     The commenter requested that the funding level for the program be 
increased, that allocations reflect the demographics of the epidemic, 
and that additional funds be allocated to high-cost areas.
    Response. Section 854(c) of AHOA does not authorize additional 
allocation factors, such as supplemental funds for high-cost areas. The 
formula, however, does provide for demographic factors in allocating 
funds to those areas with the largest reported number of cases and 
incidence of AIDS.
7. County Governments--7 Comments
     Commenters raised concerns with the provision at Sec. 574.100 of 
the second Interim Rule that requires the most populous city that has 
an approved comprehensive housing affordability strategy serve as the 
grantee for an EMSA. Commenters noted that under the initial Interim 
Rule, the EMSA applicant designation process resulted in the 
designation of a number of county governments to serve as the applicant 
for the fiscal year 1992 formula grants. Commenters recommended a 
return to the designation process of the initial interim rule or allow 
for designating another Community Development Block Grant (CDBG) 
entitlement community to serve as the applicant by the mutual agreement 
with the EMSA community. The Health Resources and Services 
Administration, HHS, recommended that HUD review its ability to 
continue funding those entities receiving HOPWA grants as this could 
help ensure coordination with the community-based HIV services funded 
through the Ryan White CARE Act.
    Response. No change was made. The rule conforms with a specific 
statutory requirement at section 606(d)(2) of the Act to allocate 
formula awards to the most populous city in each EMSA.
8. Clarification of Coordination--4 Comments
    Commenters recommended a clearer delineation of the organizations 
that should be consulted in a grantee's application planning process.
    Response. The Department agrees and the application requirements at 
Sec. 574.160(c)(5) have been revised accordingly. The similar provision 
for a competitive grant application was also revised at 
Sec. 574.240(c)(6).
9. Limitation on Supportive Services--1 Comment
    A commenter expressed concern that a number of eligible activities, 
such as supportive services, short-term rent, mortgage and utility 
payments, and operating costs, dilute the effectiveness of the program 
in addressing long-term strategies and in providing needed housing 
assistance. The commenter recommended that the rule limit the use of 
funds for supportive services and short-term supported housing.
    Response. The rule has not been changed. The statute describes a 
broad range of eligible activities and states that its purpose is to 
provide States and localities with resources and incentives to devise 
long-term comprehensive strategies for meeting the housing needs of 
persons with AIDS and their families at Sec. 574.1. The choice of which 
HOPWA-assisted activities address the needs of eligible persons is a 
determination that should be made by States and localities.
10. Personal Assistance as a Supportive Service--1 Comment
    A commenter recommended that the supportive services activities at 
Sec. 574.300(b)(7) also include personal assistance, i.e., assistance 
with personal care and activities of daily living, so that such 
assistance could enable an individual to avoid institutionalization. In 
addition, the commenter indicated that including personal assistance as 
an eligible supportive service is needed if the provision for intensive 
services, at Sec. 574.310(a), is strictly interpreted as services that 
are delivered away from the person's residence.
    Response. The Department believes that the term ``day care and 
intensive care when required'' could have been interpreted to include 
``personal assistance.'' However, this final rule does include personal 
assistance as an eligible activity at Sec. 574.300(b)(7), to avoid 
confusion. Further, the rule does not prevent intensive care from being 
delivered at a person's residence at Sec. 574.310(a).
11. Technical Assistance--4 Comments
    Commenters requested that the authorization for technical 
assistance for community residences be broadened to apply to other 
eligible activities, especially acquisition and rehabilitation of other 
types of facilities.
    Response. The rule has not been changed. Section 861(c)(1)(C) of 
AHOA provides the only authorization for technical assistance in the 
Act, and it only authorizes technical assistance for establishing and 
operating a community residence. The rule at Sec. 574.300(b)(9) 
implements this eligible activity, as authorized.
12. Administrative Expenses--15 Comments
    Commenters expressed concern with the seven percent limitation on 
administrative expenses of project sponsors at Sec. 574.300(b)(10). 
Under that section, administrative costs include the costs of staff 
necessary to carry out eligible activities. Commenters stated that this 
provision hinders their activities and reduces program flexibility.
    Response. The Department has modified the language of the final 
rule for this section with respect to allowable administrative costs of 
project sponsors and added a definition of administrative costs at 
Sec. 574.3. The 1992 statutory amendment for the first time authorized 
the allowance of administrative costs on a program-wide basis. The 
purpose was clearly not to diminish the eligibility of any costs 
eligible before the amendment, but to provide for the cost to grantees 
and project sponsors, subject to the seven and three percent caps, of 
operating the program.
    Consistent with this purpose, the subject heading of section 
606(f)(2) of the Act authorizing these types of costs, and the overall 
language of the subsection, the Department believes that the 
inclusionary reference to staff costs with respect to project sponsors 
is to be construed not as words of limitation on previously eligible 
costs, but as an expansion of that authority. The final rule therefore 
authorizes a project sponsor to expend up to 7 percent of the amount 
received from a grantee for administrative costs (as that term is 
defined in Sec. 574.3), including such administrative costs incurred by 
its staff in carrying out eligible activities. This new authority is 
not intended to diminish the allowance of costs for the activities 
listed in Sec. 574.300 previously eligible, whether such activities are 
carried out by staff of the project sponsor or otherwise.
13. Voluntary Nondenominational Prayer--3 Comments
    Commenters objected to the allowance for voluntary 
nondenominational prayer at Sec. 574.300(c)(1)(i)(C). They stated that 
there is no truly inclusive ``nondenominational'' prayer and that the 
principles of separation of church and state and non-discrimination 
based on religious belief are at issue. They recommended that this 
allowance be removed, that the provisions be rewritten similar to the 
Community Development Block Grant (CDBG) program, or that it be amended 
to refer to board meetings at which HOPWA-funded client services are 
not provided.
    Response. The exception which allows for voluntary prayer before 
meetings has been deleted. The remaining prohibitions in the final rule 
are the same as those used for the CDBG program at 24 CFR 
570.200(j)(3)(iii).
14. Payments for Supportive Services--1 Comment
    One commenter asked if payments for health costs must be made by 
the beneficiary's primary health provider under an existing insurance 
policy, prepaid health plan, or other existing compensation before 
HOPWA funds may be used for such costs.
    Response. The final rule newly establishes an order of payments for 
health costs at Sec. 574.310(a). The rule provides that, before 
expending HOPWA funds for health related items and services, the 
grantee must seek payment for these items or services under State 
compensation programs, insurance policies, any Federal or State health 
benefits program, or a prepaid health service plan.
    This provision is similar to that used for Ryan White CARE Act 
program (42 U.S.C. 300ff-15) in providing HIV-related services. The 
Department supports the coordination of these related programs in 
addressing health care needs of persons with AIDS or related diseases 
and in addressing their housing needs. This new HOPWA provision will 
ensure that HOPWA funds are used for health costs only in the absence 
of payments that are made or can reasonably be expected to be made, for 
an item or service under any State compensation program, an insurance 
policy, any Federal or State health benefits program, or a plan that 
provides health services on a prepaid basis.
15. Housing Quality Standards--2 Comments
    Commenters favored a provision of the second interim rule that 
clarified that Housing Quality Standards (HQS) at Sec. 574.310(b) are 
not applicable to short-term rent, mortgage, and utility payments. 
Commenters requested that HUD specify that this provision exempting the 
grants from HQS applies to fiscal year 1992 grants.
    Response. The 1992 HOPWA grant agreements provide for the 
applicability of the program's statute and regulations as they may be 
amended from time to time. Thus, the second interim rule did apply to 
the fiscal year 1992 grants, and this final rule--with the exemption 
for short-term rent, mortgage and utility payments--will also apply to 
them. No change in the rule is needed to produce this result.
16. Resident Rent Payments
    HUD is making a technical correction at Sec. 574.310(d) to clarify 
that resident rent payments are not required for short-term supported 
housing. Since the purpose of this activity is to address emergency and 
temporary needs to prevent homelessness by providing short-term rent, 
mortgage, and utility payments, a requirement for resident rent 
payments is inconsistent with the nature of this activity.
    Such payments continue to be required for persons receiving 
project- or tenant-based rental assistance, at Sec. 574.300(b)(5), and 
for persons residing in any rental housing assisted under this program, 
including single-room occupancy (SRO) dwellings, community residences, 
and other housing facilities.
    The Department's technical correction on short-term supported 
housing is based on its review of section 858 of AHOA which authorizes 
that activity. Section 858 differs from sections 859, 860, and 861, 
which authorize the other eligible housing activities, as it does not 
require such payments or require that the assistance be provided in the 
manner provided for under Section 8, which includes a resident rent 
payment.
17. Community Residence Service Agreement--3 Comments
    Commenters supported a correction made by the Department in the 
second Interim Rule regarding a requirement for a written services 
agreement for community residences, at Sec. 574.340(b). However, the 
commenters viewed subsections (b) (1) and (2) as inconsistent if both 
are required.
    Response. The Rule has been changed to clarify the components of 
the grantee's certification of a written services agreement that is 
required by section 861(d)(1) of AHOA. The Department disagrees that 
the two sections were inconsistent under the second Interim Rule. 
However, in reviewing the requirements of the written services 
agreement, the Department finds that a clearer statement of the three 
required components will improve understanding and use of these 
components. The Final Rule requires the grantee to obtain and keep on 
file:
    (1) Either a certification that the grantee is carrying out the 
required supportive services itself, or a certification that it has a 
written services agreement with a project sponsor or contracted service 
provider to provide the services at a community residence; and
    (2) Either a certification that the grantee has sufficient funds 
for these services, or a certification that it has on file an analysis 
of the needed service level, a statement of which entity will provide 
the services, and a statement of how the services will be funded; and
    (3) Either a certification that the grantee is eligible to provide 
the services, or a certification that the project sponsor or service 
provider is qualified to provide the services.
18. Approval of Local Government--3 Comments
    Commenters requested the removal of the requirement at 
Sec. 574.420(b) for local government approval of project sponsors that 
carry out activities in that locality under a State grant. The 
commenters indicated that this was a potential roadblock in the State's 
program which invites a local government to violate the spirit of the 
Fair Housing Amendments Act of 1988 by trying to block the development 
of housing for persons with AIDS.
    Response. The rule implements a requirement of section 606(d)(2) of 
the Act for local approval and, therefore, cannot be changed. This 
provision does not affect the grantee's responsibility to comply with 
the Fair Housing Amendments Act and the Department will continue to 
ensure that that Act is not violated.
19. Timely Expenditures--5 Comments
    Commenters expressed concern with the provision allowing HUD to 
deobligate unexpended funds after three years at Sec. 574.540. 
Commenter recommendations include:
    (a) In the absence of a statutory limit, the three year period be 
eliminated, especially for projects with significant construction costs 
and considering that some other HUD programs use longer expenditure 
periods.
    (b) Since some activities will take longer than 3 years to 
accomplish, HUD should grant waivers in cases where the sponsor is 
acting in a timely and responsible manner.
    (c) Since some activities will be more lengthy due to complex 
financing structures or community opposition, allow streamlined HUD 
Regional Office approval of waivers to extend the period in cases of 
good faith effort.
    Response. The rule has not been changed. The Department does not 
agree with the comments that construction or rehabilitation of 
facilities should be expected to exceed the three year period for the 
use of funds under Sec. 574.540. Timely use of these funds is an 
important element in addressing the urgent needs that are not being met 
by available public and private sources as established by section 
854(d)(5) of AHOA. The Department intends to fully implement this 
provision.
20. Program Years--1 Comment
    A commenter requested that the program year, which runs from the 
signing date of a grant agreement, be made more flexible for the 
purposes of reporting on activities at Sec. 574.520. The commenter 
recommended that allowing grantees discretion in selecting the start 
date could improve their program coordination with other programs and 
reduce administrative burdens in reporting.
    Response. The rule has not been changed because the Department 
allows flexibility for setting the dates of program years under both 
types of HOPWA grants. Grantees for formula awards establish their 
program year by initiating the expenditure of funds following the 
signing of a grant agreement. A formula grantee may shorten or lengthen 
a program year by advance written notice to their HUD Field Office. 
Grantees for competitive grants may set the operating start date for 
their program on a date up to four months following the date of the 
signing of a grant agreement. Both types of grantees will describe the 
use of these funds annually in performance reports as required by 
Sec. 574.520 under their respective program year dates.
21. Conflict of Interest--4 Comments
    In the context of requirements for cooperation with local 
governments at Sec. 574.160(c)(5), commenters recommended that the rule 
clarify the roles of local governments, provider agencies, and the Ryan 
White Committee in light of the conflict of interest provision at 
Sec. 574.625.
    Response. Although the related application requirements were 
revised, as noted above in item 8, further changes have not been made 
in the conflict of interest provision. The relationships of the 
entities described will vary for each grant based on that grantee's 
program design. Conflict of interest questions in these situations are 
governed by Sec. 574.625 of the final rule. These procedures determine 
the conflict of interest for persons involved in an assisted activity. 
Procedures are also provided for granting exceptions which involve 
public disclosure of the conflict and nonviolation of State or local 
law.
22. Minor Technical Corrections
    The Department has made four minor technical corrections in the 
final rule. First, there is extensive discussion of the term ``eligible 
person'' in Secs. 574.140 and 574.220, as well as a definition of the 
term in Sec. 574.3. The definition at Sec. 574.3 has been expanded to 
include the special eligibility provisions applicable for receipt of 
housing information services and for outreach and educational 
activities. Sections 574.140 and 574.220 are removed, since they are 
redundant now that the definition of eligible person has been moved to 
the definitions section.
    Second, the phrase ``rent, mortgage, or utility payments'' in 
Sec. 574.330 (in the first paragraph and in paragraphs (a)(1) and (d)) 
has been replaced with the phrase ``rent, mortgage, and utility 
payments'', to provide consistency with the term used in the list of 
eligible activities in Sec. 574.300(b)(6).
    Third, at Sec. 574.655, the Department is clarifying that the 
Davis-Bacon Act (prevailing wage rate requirements) does not generally 
apply to this program.
    Fourth, the termination of assistance provision at Sec. 574.310(e) 
was clarified to provide participants with the opportunity to confront 
opposing witnesses and to be represented by counsel under these 
procedures.
23. Environmental Provisions
    The first interim rule published to establish this program 
contained revisions to 24 CFR part 50 to reflect the Department's 
determination that the decision point in the program to which 
environmental review responsibility would attach was when specific 
properties are identified for use under the grant (not before award of 
the grant). As noted in the second interim rule for this program, at 57 
FR 61739, there were no public comments received concerning the 
revisions to part 50. Therefore, this rule adopts as final the changes 
made in the first interim rule published on July 20, 1992 (57 FR 32110- 
32111): the addition of Secs. 50.3(i), 50.17(i), and 50.19 (as revised 
at 58 41337, August 3, 1993), and the revision to Sec. 50.20(o).
24. Removal of Publication Requirement For Entitlement Grants
    The Department has decided that publishing an annual announcement 
of allocations to those jurisdictions that qualify for formula 
allocations is a needless expense, since direct notification of the 
jurisdictions is more efficient and provides them with all the 
materials necessary to apply for funding. Therefore, references to 
publication of an announcement of allocations has been removed from 
Secs. 574.2(a), 574.100, and 574.160(b).

III. Findings and Certifications

A. 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. The finding of no significant impact is available for 
public inspection between 7:30 a.m. to 5:30 p.m. weekdays in the Office 
of the Rules Docket Clerk at the above address.

B. Regulatory Review

    This rule was reviewed by the Office of Management and Budget under 
the Executive Order on Regulatory Planning and Review (E.O. 12866) 
issued by the President on September 30, 1993. Any changes made to the 
rule as a result of that review are clearly identified in the docket 
file, which is available for public inspection in the office of the 
Department's Rules Docket Clerk, room 10276, 451 Seventh St., SW, 
Washington, DC.

C. Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this rule before publication and by 
approving it certifies that this rule does not have a significant 
economic impact on a substantial number of small entities, because 
jurisdictions that are statutorily eligible to receive formula 
allocations are limited to States and metropolitan statistical areas 
with a relatively large cumulative number of cases of persons with 
AIDS.

D. Semiannual Agenda of Rules

    This rule was listed as sequence number 1476 under the Office of 
the Secretary in the Department's Semiannual Agenda of Regulations, 
published on October 25, 1993 (58 FR 56402, 56417) in accordance with 
Executive Order 12866 and the Regulatory Flexibility Act.

E. Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule will not have substantial direct effects on 
States or their political subdivisions, or the relationship between the 
federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government. As a result, 
the Rule is not subject to review under the Order. The rule authorizes 
entitlement grants to a limited number of States and metropolitan areas 
and authorizes competitively awarded grants under a limited statutory 
allocation for housing assistance and services for the Housing 
Opportunities for Persons with AIDS program, but the grants are 
administered locally.

F. Impact on the Family

    The General Counsel, as the Designated Official for Executive Order 
12606, the Family, has determined that this rule, to the extent the 
funds provided under it are directed to families, has the potential for 
a beneficial impact on family formation, maintenance and general well-
being. The program provides housing assistance and services for 
individuals with acquired immunodeficiency syndrome or related diseases 
and their families and defines the term eligible person to include the 
family of a person with AIDS or related diseases. Such assistance will 
help enable those families with a participating member who has AIDS to 
live in decent, safe, and sanitary housing and receive the supportive 
services necessary to assist a person with AIDS to live independently. 
Since the impact on the family is beneficial, no further review is 
considered necessary.

H. Public Reporting Burden

    The information collection requirements contained in this rule have 
been submitted to the Office of Management and Budget under the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520). The Department 
has determined that the following provisions contain information 
collection requirements:

                                Table 1.--Tabulation of Annual Reporting Burden                                 
----------------------------------------------------------------------------------------------------------------
                                                               Number of                                        
    Description of        Provision of interim    Number of    responses      Total      Hours per              
information collection            rule           respondents      per         annual      response   Total hours
                                                               respondent   responses                           
----------------------------------------------------------------------------------------------------------------
Applications to HUD:                                                                                            
    --State             Sec. 574.160...........           17            1           17         20.0          340
     entitlements.                                                                                              
    --Local unit for    Sec. 574.160...........           33            1           33         20.0          660
     EMSA.                                                                                                      
    --Competitive       Sec. 574.240...........          100            1          100         44.0        4,400
     awards.                                                                                                    
Annual report to HUD..  Sec. 574.520...........          117            1          117         65.0        7,605
Waiver requests to HUD  Sec. 574.4, Sec.                   4            1            4          4.0           16
                         574.310(c), Sec.                                                                       
                         574.330(b).                                                                            
Amendments submitted..  Sec. 574.180, Sec.                40            1           40          4.0          160
                         574.260.                                                                               
Uniform Relocation Act  Sec. 574.630...........            5            1            5          2.0           10
    appeals process.                                                                                            
Environmental review    Sec. 574.510...........           75            1           75          4.0         300 
      recordkeeping.                                                                                            
                                                ----------------------------------------------------------------
      Total burden....  .......................  ...........  ...........  ...........  ...........      13,491 
----------------------------------------------------------------------------------------------------------------

I. Catalog

    The Catalog of Federal Domestic Assistance program number for the 
Housing Opportunities for Persons with AIDS program is 14.241.

List of Subjects

24 CFR Part 50

    Environmental protection, Environmental assessments, Environmental 
impact statements, Environmental policies and review procedures.

24 CFR Part 574

    AIDS, Community facilities, Disabled, Emergency shelter, Grant 
programs-health programs, Grant programs-housing and community 
development, Grant programs-social programs, Homeless, Housing, Low and 
moderate income housing, Nonprofit organizations, Rent subsidies, 
Reporting and recordkeeping requirements, Technical assistance.
    Accordingly, parts 50 and 574 of title 24 of the Code of Federal 
Regulations are amended, as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

    1. The authority citation for part 50 is revised to read as 
follows:

    Authority: 42 U.S.C. 3535(d), 4332; and Executive Order 11991, 
42 FR 26967 (May 24, 1977).

    2. This rule adopts without change as final the amendments made to 
Secs. 50.3(i) and 50.17, as they were published in the interim rule on 
July 20, 1992 (57 FR 32110).
    3. Sections 50.19 and 50.20 are adopted as final as they were 
published on July 20, 1992 (57 FR 32110), as amended on August 3, 1993 
(57 FR 41337).

PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS

    4. The authority citation for part 574 continues to read as 
follows:

    Authority: 42 U.S.C. 12901-12912.

    5. Part 574, as published on December 28, 1992 (57 FR 61736), is 
adopted as final with the following amendments:
    a. In Sec. 574.2, the second sentence of paragraph (a) is revised 
to read as follows:


Sec. 574.2  Overview.

    (a) * * * The amount of funds available for competitive grants will 
be specified in a Notice of Funding Availability (NOFA), published in 
the Federal Register; and the amount of funds available for formula 
allocations will be specified in a written notice to the entities 
eligible for such allocations. * * *
* * * * *
    b. In Sec. 574.3, the definition of ``moderate rehabilitation'' is 
removed; new definitions of ``administrative costs'', ``family'', and 
``non-substantial rehabilitation'' are added; and the definition of 
``eligible person'' is revised; to read as follows:


Sec. 574.3  Definitions.

* * * * *
    Administrative costs mean costs for general management, oversight, 
coordination, evaluation, and reporting on eligible activities. Such 
costs do not include costs directly related to carrying out eligible 
activities, since those costs are eligible as part of the activity 
delivery costs of such activities.
* * * * *
    Eligible person means a person with acquired immunodeficiency 
syndrome or related diseases who is a low-income individual, as defined 
in this section, and the person's family. A person with AIDS or related 
diseases or a family member regardless of income is eligible to receive 
housing information services, as described in Sec. 574.300(b)(1). Any 
person living in proximity to a community residence is eligible to 
participate in that residence's community outreach and educational 
activities regarding AIDS or related diseases, as provided in 
Sec. 574.300(b)(9).
* * * * *
    Family means a household composed of two or more related persons. 
The term family also includes one or more eligible persons living with 
another person or persons who are determined to be important to their 
care or well being, and the surviving member or members of any family 
described in this definition who were living in a unit assisted under 
the HOPWA program with the person with AIDS at the time of his or her 
death.
* * * * *
    Non-substantial rehabilitation means rehabilitation that involves 
costs that are less than or equal to 75 percent of the value of the 
building after rehabilitation.
* * * * *


Sec. 574.100  [Amended]

    c. In Sec. 574.100, paragraph (b) is removed, and the paragraph 
designation ``(a)'' for the remaining paragraph is removed.


Sec. 574.140  [Removed]

    d. Section 574.140 is removed.
    e. In Sec. 574.160, paragraphs (b) and (c)(5) are revised, to read 
as follows:


Sec. 574.160  Application requirements.

* * * * *
    (b) Application requirements. To receive a grant, a State or city 
applicant for an EMA applying for a formula grant award on the basis of 
an allocation under Sec. 574.130 must submit an application that meets 
the requirements of paragraph (c) of this section, and the application 
must be submitted within the time period established by HUD. HUD will 
send each qualifying city and eligible State a written notice, which 
shall include:
    (1) A statement of the amount of the allocation for which the city 
or State is eligible to apply;
    (2) The application package, which provides specific application 
requirements and guidance;
    (3) Designation of the time and the place for submitting a 
completed application; and
    (4) If applicable, the identity of the EMA or the area of the State 
for which the city or State is invited to apply.
    (c) * * *
    (5) (i) For State and city applicants, a description of efforts 
that have been or will be taken to coordinate proposed activities with:
    (A) State and local government agencies responsible for providing 
State or locally funded assistance and services to persons with AIDS or 
related diseases; and
    (B) Government agencies and nonprofit organizations that are 
administering the Ryan White Comprehensive AIDS Resources Emergency Act 
of 1990 (42 U.S.C. 300) and other related Federal programs.
    (ii) In addition, for city applicants, a description of efforts 
that have been or will be taken to coordinate proposed activities with 
other units of general local government located within the eligible 
metropolitan statistical area:
    (A) To address needs within that area; and
    (B) To consult with and involve in the application's proposed 
activities, the area community-based nonprofit organizations which are 
experienced in caring for persons with AIDS and the area organizations 
which represent persons with AIDS;
* * * * *


Sec. 574.220  [Removed]

    f. Section 574.220 is removed.
    g. Section 574.240 is amended by revising paragraph (c)(6), to read 
as follows:


Sec. 574.240  Application requirements.

* * * * *
    (c) * * *
    (6) (i) A description of efforts that have been or will be taken to 
coordinate proposed activities with:
    (A) State and local government agencies responsible for providing 
State or locally funded assistance and services to persons with AIDS or 
related diseases; and
    (B) Government agencies and nonprofit organizations that are 
administering the Ryan White Comprehensive AIDS Resources Emergency Act 
of 1990 (42 U.S.C. 300) and other related Federal programs.
    (ii) In addition, a description of efforts that have been or will 
be taken to consult with and involve in the application's proposed 
activities, community-based nonprofit organizations which are 
experienced in caring for persons with AIDS and organizations which 
represent persons with AIDS;
* * * * *
    h. In Sec. 574.300, paragraph (a) is amended by removing the word 
``hopelessness'' and adding in its place the word ``homelessness''; 
paragraph (c)(1)(i)(C) is amended by removing the words ``(which term 
does not include voluntary nondenominational prayer before meetings)''; 
and paragraphs (b)(7) and (b)(10)(ii) are revised to read as follows:


Sec. 574.300  Eligible activities.

* * * * *
    (b) Activities. * * *
    (7) Supportive services including, but not limited to, health, 
mental health, assessment, permanent housing placement, drug and 
alcohol abuse treatment and counseling, day care, personal assistance, 
nutritional services, intensive care when required, and assistance in 
gaining access to local, State, and Federal government benefits and 
services, except that health services may only be provided to 
individuals with acquired immunodeficiency syndrome or related diseases 
and not to family members of these individuals;
* * * * *
    (10) Administrative expenses:
* * * * *
    (ii) Each project sponsor receiving amounts from grants made under 
this program may use not more than 7 percent of the amounts received 
for administrative costs.
* * * * *
    i. Section 574.310 is amended by retitling paragraph (a) and 
redesignating it as ``(a)(1) General.''; by adding a new paragraph 
(a)(2); by adding the phrase ``Except for persons in short-term 
supported housing,'' at the beginning of the first sentence of 
paragraph (d) introductory text; and by revising paragraph (e), to read 
as follows:


Sec. 574.310  General standards for eligible housing activities.

* * * * *
    (a) * * *
    (2) Payments. The grantee shall ensure that grant funds will not be 
used to make payments for health services for any item or service to 
the extent that payment has been made, or can reasonably be expected to 
be made, with respect to that item or service:
    (i) Under any State compensation program, under an insurance 
policy, or under any Federal or State health benefits program; or
    (ii) By an entity that provides health services on a prepaid basis.
* * * * *
    (e) Termination of assistance.
    (1) Surviving family members. With respect to the surviving member 
or members of a family who were living in a unit assisted under the 
HOPWA program with the person with AIDS at the time of his or her 
death, housing assistance and supportive services under the HOPWA 
program shall continue for a grace period following the death of the 
person with AIDS. The grantee or project sponsor shall establish a 
reasonable grace period for continued participation by a surviving 
family member, but that period may not exceed one year from the death 
of the family member with AIDS. The grantee or project sponsor shall 
notify the family of the duration of their grace period and may assist 
the family with information on other available housing programs and 
with moving expenses.
    (2) Violation of requirements. (i) Basis. Assistance to 
participants who reside in housing programs assisted under this part 
may be terminated if the participant violates program requirements or 
conditions of occupancy. Grantees must ensure that supportive services 
are provided, so that a participant's assistance is terminated only in 
the most severe cases.
    (ii) Procedure. In terminating assistance to any program 
participant for violation of requirements, grantees must provide a 
formal process that recognizes the rights of individuals receiving 
assistance to due process of law. This process at minimum, must consist 
of:
    (A) Serving the participant with a written notice containing a 
clear statement of the reasons for termination;
    (B) Permitting the participant to have a review of the decision, in 
which the participant is given the opportunity to confront opposing 
witnesses, present written objections, and be represented by their own 
counsel, before a person other than the person (or a subordinate of 
that person) who made or approved the termination decision; and
    (C) Providing prompt written notification of the final decision to 
the participant.


Sec. 574.330  [Amended]

    j. In the undesignated first paragraph of Sec. 574.330 and in 
paragraphs (a)(1) and (d) of that section, the phrase ``rent, mortgage, 
or utilities payments'' is removed and the phrase ``rent, mortgage, and 
utilities payments'' is added in its place.
    k. Paragraph (b) of Sec. 574.340 is revised to read as follows:


Sec. 574.340  Additional standards for community residences.

* * * * *
    (b) If grant funds are used to provide a community residence, 
except for planning and other expenses preliminary to construction or 
other physical improvement for a community residence, the grantee must, 
prior to the expenditure of such funds, obtain and keep on file the 
following certifications:
    (1) A services agreement. (i) A certification that the grantee will 
itself provide services as required by Sec. 574.310(a) to eligible 
persons assisted by the community residence; or
    (ii) A certification that the grantee has entered into a written 
agreement with a project sponsor or contracted service provider to 
provide services as required by Sec. 574.310(a) to eligible persons 
assisted by the community residence;
    (2) The adequacy of funding. (i) A certification that the grantee 
has acquired sufficient funding for these services; or
    (ii) A certification that the grantee has on file an analysis of 
the service level needed for each community residence, a statement of 
which grantee agency, project sponsor, or service provider will provide 
the needed services, and a statement of how the services will be 
funded; and
    (3) Capability. (i) A certification that the grantee is qualified 
to provide the services; or
    (ii) A certification that the project sponsor or the service 
provider is qualified to provide the services.
    1. A new Sec. 574.655 is added, to read as follows:


Sec. 574.655  Wage rates.

    The provisions of the Davis-Bacon Act (40 U.S.C. 276a-276a-5) do 
not apply to this program, except where funds received under this part 
are combined with funds from other Federal programs that are subject to 
the Act.

    Dated: April 1, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-8543 Filed 4-8-94; 8:45 am]
BILLING CODE 4210-32-P