[Federal Register Volume 60, Number 173 (Thursday, September 7, 1995)]
[Notices]
[Pages 46746-46748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22237]




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Part IV





Department of Housing and Urban Development





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Grants and Cooperative Agreements, Availability, Etc.: Rescissions Act 
Impact on Public and Indian Housing; Notice

  Federal Register / Vol. 60, No. 173 / Thursday, September 7, 1995 / 
Notices  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket Nos. FR-3769-N-02; FR-3774-N-03; FR 3832-N-02; FR-3841-N-04; 
FR-3867-N-02; and FR-3871-N-02]


Impact of Rescissions Act on Availability of Funding for Fiscal 
Year 1995: Public Housing Development; Traditional Indian Housing 
Development; Demolition and Disposition; Public and Indian Housing 
Modernization Program; and Family Investment Centers

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

ACTION: Notice of Impact of Rescissions Act on Availability of Funding 
for Fiscal Year (FY) 1995 for public housing development, the 
Traditional Indian Housing Development Program, public housing 
demolition and disposition, the public and Indian housing modernization 
program, and Family Investment Centers.

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SUMMARY: The FY 1995 Rescissions Act affects the public and Indian 
housing programs described below by rescinding funds and amending the 
U.S. Housing Act of 1937. This notice advises the public of the 
rescissions and their impact on Notices of Funding Availability (NOFAs) 
that have been issued. This notice also advises the public of changes 
to regulation requirements and program policies, implementing some, but 
not all, of the provisions of the Rescissions Act that amend the 1937 
Act for FY 1995.

DATES: This notice does not revise or extend any application deadlines, 
except with regard to demolition/disposition applications requesting 
replacement housing, as described in section I of this notice, under 
the heading SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT:
For public housing programs, contact: William Minning, Director of 
Policy and Evaluation Division, Room 4236. Telephone (202) 708-0713, or 
(202) 708-0850 (TDD).
    For Indian housing programs, contact: Bruce Knott, Native American 
Programs Housing and Community Development Division, Room P8204. 
Telephone (202) 755-0068, or (202) 708-0850 (TDD).
    The address for both individuals is: Office of Public and Indian 
Housing, Department of Housing and Urban Development, 451 7th Street, 
SW., Washington, DC 20410. The telephone numbers listed are not toll-
free.

SUPPLEMENTARY INFORMATION: 

I. Public Housing Development

    On June 16, 1995 (60 FR 31842), HUD published a NOFA that announced 
the availability of $600,278,866 for public housing development, of 
which $598,000,000 was derived from the FY 1995 appropriation and the 
remainder from carryover funds.
    In the Emergency Supplemental Appropriations for Additional 
Disaster Assistance, for Anti-terrorism Initiatives, for Assistance in 
the Recovery from the Tragedy that Occurred at Oklahoma City, and 
Rescissions Act, 1995 (Pub. L. 104-19, approved July 27, 1995) (the 
Rescissions Act), Congress rescinded $620,600,000 of public housing 
development funds. The rescissions amount will be taken from FY 1995 
funds, carryover funds, and recaptures.
    The Rescissions Act provides that:

    [O]f the total rescinded under this heading, [Annual 
Contributions for Assisted Housing,] $700,600,000 shall be from 
amounts earmarked for development or acquisition costs of public 
housing (including $80,000,000 of funds for public housing for 
Indian families), except that such rescission shall not apply to 
funds for priority replacement housing for units demolished or 
disposed of (including units to be disposed of pursuant to a 
homeownership program under section 5(h) or title III of the United 
States Housing Act of 1937, as amended (hereinafter referred to as 
``the Act'')) from the existing public housing inventory, as 
determined by the Secretary, or to funds related to litigation 
settlements or court orders, and the Secretary shall not be required 
to make any remaining funds available pursuant to section 
213(d)(1)(A) of the Housing and Community Development Act of 1974 
and notwithstanding any other provision of law, the Secretary may 
recapture unobligated funds for development or acquisition costs of 
public housing (including public housing for Indians) irrespective 
of the length of time funds have been reserved or of any time 
extension previously granted by the Secretary. * * *

    Under the June 16, 1995 NOFA (60 FR 31842), applications were 
limited to the following funding categories:
    (1) Replacements for demolition/disposition subject to section 18 
of the United States Housing Act of 1937;
    (2) Replacements for homeownership transfers under the HOPE I 
Program, and homeownership sales under section 5(h) of the U.S. Housing 
Act of 1937;
    (3) Headquarters Reserve: Unforeseen housing needs resulting from 
natural and other disasters; housing needs resulting from emergencies, 
as certified by the Secretary, other than such disasters; housing needs 
resulting from the settlement of litigation; and housing in support of 
desegregation efforts; and
    (4) ``Other'' applications.
    Under the Rescissions Act, funds for priority replacement housing 
(including unforeseen housing needs resulting from natural and other 
disasters) and funds related to litigation settlements or court orders 
are not rescinded. Therefore, these are the only categories of 
Headquarters Reserve that can be funded. To the extent that HUD funds 
FY 1995 public housing development activities of this nature, however, 
the magnitude of the rescission dictates that HUD recapture unobligated 
prior year public housing funds (i.e., funds that have not been placed 
under an Annual Contributions Contract (ACC)), as described further 
below.
    Because of the enactment of the Rescissions Act, HUD is now able to 
address only the first three categories of funding in the June 16, 1995 
NOFA. To pay for the congressionally mandated FY 1995 funding actions 
under the first three NOFA categories, HUD will recapture prior year 
unobligated funds from funding awards not within congressionally 
protected categories.
    The one-for-one replacement requirement of section 18 of the U.S. 
Housing Act of 1937 (the 1937 Act) was eliminated by the Rescissions 
Act for all public housing (but not Indian housing) demolition or 
disposition applications approved on or prior to September 30, 1995, 
including all previous section 18 approvals. Therefore, public housing 
(but not Indian housing) authorities are no longer required to provide 
replacement units for such demolition or disposition, nor is HUD 
obligated to make commitments to provide funding to meet that 
requirement. However, in keeping with the congressional directive that 
priority replacement housing funds are not rescinded, HUD intends to 
review FY 1995 replacement public housing applications and to consider 
funding those applications it views as best meeting the priorities 
stated in the NOFA.

Application Requirements

    All provisions of the FY 1995 NOFA for public housing development, 
published on June 16, 1995, still apply except the references to 
category 4, ``Other'' applications. There will not be a ``fair share'' 
distribution of funds in FY 1995. HUD plans to destroy all category 4 
``Other'' applications submitted in response to the FY 1995 NOFA. Any 
public housing authorities (PHAs) interested in having their unfunded 
applications returned should contact the Office of Public Housing in 
the local HUD office.
    The June 16, 1995 NOFA also provided that category 1 or 2 

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    applications would not be funded unless the underlying demolition of 
disposition application was submitted by the time funding selections 
are made (60 FR 31845). The NOFA further provided that HUD may make a 
funding award if the underlying application had not yet been approved, 
if all aspects of the underlying application other than compliance with 
Section 412 of the Cranston-Gonzalez National Affordable Housing Act of 
1990, as amended, were approvable by August 1, 1995 (See 60 FR 31845, 
section III.C.1, column 1.)
    The last two sentences of section III.C.1. of the June 16, 1995 
NOFA no longer apply and are replaced by the following three sentences:

    For those housing authorities that intend to submit an 
application for replacement housing under this NOFA, the underlying 
demolition or disposition application must be submitted by September 
15, 1995, and must additionally be approvable by that date. The 
Department may make a funding award if the underlying application 
has not yet been approved, if all aspects of the underlying 
application other than compliance with section 412 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, as amended, are 
approvable by that date. The Department reserves the right to extend 
to an individual housing authority that submits a demolition or 
disposition application by the extended deadline the ability to 
augment its application submission for items that the HUD staff 
finds are not complete after an initial review for approvability and 
that can be completed within the time specified by HUD.
II. Traditional Indian Housing Development Program

    On January 20, 1995 (60 FR 4330), HUD published the NOFA for the 
Traditional Indian Housing Development Program for Fiscal Year 1995. 
The NOFA announced that up to $282,000,000 was available for new Indian 
Housing units. Of that amount, $20,000,000 was retained until July 1, 
1995 for replacement of approved demolition/disposition units. The NOFA 
also included a table reflecting the percentage of total funds being 
made available to each of the Field Offices of Native American Programs 
(FONAPs) (60 FR 4331).
    HUD has completed its funding decisions under this NOFA. With the 
exception of $1,819,131, all funds have been reserved under grants to 
Indian Housing Authorities.
    As referenced under the Public Housing Development section of this 
notice, Congress rescinded $80,000,000 of funds for public housing for 
Indian families, which reduces the maximum authorized budget authority 
for FY 1995 to $202,000,000. Since HUD completed funding decisions 
prior to the enactment of the Rescissions Act, HUD must reduce awards 
made to Indian housing authorities by $78,180,869 (the amount of the 
rescission less unreserved funds).
    HUD intends, as practical, to assign an amount to be rescinded to 
each FONAP based upon the original assignment of Indian Housing 
Development funds. Each FONAP, in consultation with representatives of 
client groups, will identify sources of unobligated funds equal to that 
FONAPs share of the rescission. If an individual FONAP has insufficient 
unobligated funds, any remaining funds required to meet the rescission 
requirements will be prorated to each remaining FONAP.

III. Demolition or Disposition of Public Housing

    On January 18, 1995, HUD published in the Federal Register (60 FR 
3706) a final rule for demolition or disposition of public housing 
projects. The final rule implemented section 121 of the Housing and 
Community Development Act of 1987, which amended section 18 of the 1937 
Act, governing approvals of demolition and disposition of public and 
Indian housing. Section 121 provided that developments or portions of 
developments may not be demolished or disposed of unless the housing 
agency (HA) has developed a plan for the provision of a replacement 
unit for each unit involved. The Rescissions Act eliminates the 
requirement for one-for-one replacement of dwelling units in the case 
of any application for demolition or disposition of public housing (but 
not Indian housing) approved on or before September 30, 1995.
    In accordance with section 1002 of the Rescissions Act, HAs that 
have applications for demolition, disposition, or conversion to 
homeownership of public housing dwelling units approved on or before 
September 30, 1995, including all previous approvals, are no longer 
required to provide one-for-one housing replacement, and HUD is not 
obligated to commit the funds necessary to carry out the replacement 
housing plan. The Rescissions Act provides that no application for 
replacement housing submitted by a public housing agency to implement a 
final order of a court issued, or a settlement approved by a court, 
before enactment of the Rescissions Act, shall be affected.

Review of Pending and New Demolition/Disposition Applications

    HUD's review of all pending applications (those currently in 
Processing Centers or in Headquarters) and all new applications 
approved on or before September 30, 1995, will require compliance with 
all provisions of 24 CFR part 970, except that HUD will not require 
compliance with 24 CFR 970.11, Replacement Housing Plans. HAs 
submitting new demolition or disposition applications should be aware 
that if their applications are approved on or before September 30, 
1995, replacement housing is not required.
    However, as directed by Congress and stated in the public housing 
development section of this notice (section I, above), HUD will review 
and consider for funding FY 1995 applications for use of public housing 
development funds as priority replacement housing. As HUD will describe 
in another notice to be published soon in the Federal Register, certain 
Section 8 funds will also be made available for replacement of public 
housing units that are to be demolished or disposed of.
    HAs with pending applications for demolition or disposition are 
encouraged to inform the residents, the related resident organizations, 
and the units of local government that approved the replacement housing 
plans of the changes brought about by the Rescissions Act.

Approved Demolition/Disposition Applications With Reserved Funding

    For those HAs whose demolition or disposition applications were 
previously approved by HUD on or before September 30, 1995, for which 
there are public housing development funds or Section 8 15-year or 5-
year certificates reserved (i.e., the replacement housing plan is 
either fully or partially funded), the HA must use the funds that have 
been reserved, and are not recaptured, in accordance with all 
applicable requirements, even though the replacement housing 
requirement is no longer applicable.

Other Provisions

    Other provisions of the Rescissions Act may be addressed in future 
Federal Register notices.

IV. Public and Indian Housing Modernization

    The Rescissions Act rescinds $815 million previously appropriated 
for FY 1995 modernization under Section 14 of the 1937 Act. The $815 
million rescission will be achieved by the following:

Eliminating Choice in Management set-aside.............     $100,000,000
Reducing Lead-Based Paint Risk Assessment set-aside....        4,203,655

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Reducing Reserve for Emergencies and Natural Disasters.       40,000,000
Reducing Comprehensive Improvement Assistance Program                   
 (CIAP) funds..........................................       70,398,701
Reducing Comprehensive Grant Program (CGP) funds.......      600,397,644
                                                        ----------------
    Total..............................................      815,000,000
                                                                        



    Set-asides for Section 6(j) technical assistance to HAs, the Tenant 
Opportunity Program, inspection and technical assistance, and lead-
based paint indemnification will not be affected by the rescission.

Expanded Use of Modernization

    The Rescissions Act amends section 14 of the 1937 Act by adding a 
new subsection (q) that expands the eligible activities that may be 
funded with modernization assistance (CGP or CIAP). An HA may use 
modernization assistance for any eligible activity related to public 
and Indian housing that is currently authorized by the 1937 Act or 
applicable appropriations Acts for an HA. For example, new eligible 
items include:
     Development of additional units or replacement housing;
     Modernization activities related to the public or Indian 
housing portion of housing developments held in partnership, or 
cooperation with nonpublic housing entities (this would include 
development of replacement housing and receipt of operating subsidy); 
and
     Other activities related to public and Indian housing, 
including activities eligible under the Urban Revitalization 
Demonstration (Hope VI).
    However, the Rescissions Act does not authorize use of 
modernization assistance for public and Indian housing operating 
assistance.
    If the HA wishes to undertake any of these previously ineligible 
activities, the HA shall revise its Physical Needs Assessment or 
Management Needs Assessment, as well as the Annual Statement or Five-
Year Action Plan, and shall conduct another public hearing and obtain 
another Local Government Statement. If the revised Annual Statement 
includes any of these previously ineligible activities, the HA is 
required to submit another Board Resolution, approving the revised 
Annual Statement.
    The Rescissions Act also states that modernization funds must be 
used principally for physical improvements or replacement housing and 
for associated management improvements, except as otherwise approved by 
the Secretary.

Comprehensive Grant Program (CGP)

    The effect of the Rescissions Act is to reduce by 19 percent the 
amount of CGP funds available in FY 1995, from $3,153,244,533 to 
$2,552,846,889. The Rescissions Act directs HUD ``to take actions 
necessary to assure that such rescission is distributed among public 
housing authorities, as if such rescission occurred prior to the 
commencement of the fiscal year.'' To comply with the Rescissions Act 
and to ensure that each CGP agency receives its proportionate 
reduction, HUD has rerun the CGP formula using the revised 
appropriation. HUD sent each CGP agency a letter on August 9, 1995, 
informing it of the revised formula amount and operating procedures to 
implement the rescission.

Comprehensive Improvement Assistance Program (CIAP)

    On March 17, 1995 (60 FR 14538), HUD published a NOFA announcing 
the availability of $369,715,143 for the Comprehensive Improvement 
Assistance Program. The effect of the Rescissions Act is to reduce by 
19 percent the amount of CIAP funds available in FY 1995, down to 
$299,316,442. The fund assignment to each HUD Field Office will be 
reduced accordingly. Since FY 1995 CIAP funding decisions were not 
final at the time the Rescissions Act was signed, no adjustments to FY 
1995 CIAP grants are necessary. FY 1995 CIAP emergency applications 
that are already approved are not affected by the rescission.

V. Public and Indian Housing Family Investment Centers

    HUD published a NOFA for up to $60,000,000 for Public and Indian 
Housing Family Investment Centers (FICs) on February 15, 1995 (60 FR 
8900). HUD also published NOFAs for the following set-asides from FIC 
funds: $3,500,000 for the Family Investment Centers After-School 
Program, March 14, 1995 (60 FR 13850); $10,000,000 for a Youth 
Development Initiative, May 30, 1995 (60 FR 28304); and $1,000,000 for 
the HOPE in Youth Pilot Demonstration, July 20, 1995 (60 FR 37552).
    The Rescissions Act provides that $66,000,000 shall be rescinded 
from amounts earmarked for family investment centers. However, 
$5,209,500 has already been awarded and placed under contract either to 
correct errors in HUD's processing of the FY 1994 family investment 
center competition or as part of an after school demonstration program. 
HUD concluded upon review that two applicants were not funded during 
the FY 1994 family investment center competition due to an error. HUD 
funded these two applicants for a total of $1,709,500. In addition HUD 
funded four grantees for a total of $3,500,000 as part of an after 
school demonstration program. These funds cannot be recaptured because 
they are under contract.
    HID will not award additional grants in FY 1995 under the Family 
Investment Centers program.

    Dated: August 30, 1995.
Michael B. Janis,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 95-22237 Filed 9-1-95; 4:04 pm]
BILLING CODE 4210-33-M