[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Rules and Regulations]
[Pages 27124-27126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12842]


      

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Part III





Department of Housing and Urban Development





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24 CFR Part 5, Et al.



Admission Preferences, Public Housing Development, and Public Housing 
Modernization Regulations: Technical Amendments; Final Rule

  Federal Register / Vol. 62, No. 95 / Friday, May 16, 1997 / Rules and 
Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 941, 950, and 968

[Docket No. FR-4166-F-01]
RIN 2501-AC38


Admission Preferences, Public Housing Development, and Public 
Housing Modernization Regulations: Technical Amendments

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule: technical amendment.

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SUMMARY: This final rule makes technical amendments to several of HUD's 
regulations that affect its assisted housing programs. These amendments 
make the following changes: revise language in a rule governing 
admission preferences in the assisted housing programs to make it more 
general, to cover all the Section 8 Housing Assistance Payments 
programs it was intended to cover, as evidenced by the Section 8 
regulations that cross-reference the preferences rule; restore language 
regarding ``total development cost'' that was removed from regulations 
covering the public housing development program when an interim rule 
expired on May 29, 1995; restore language stating review criteria for 
performance under modernization standards; and conform the requirements 
for paid-off and conveyed Turnkey III units in public housing to those 
in the Indian housing program. These changes rectify problems that 
occurred inadvertently in previous rulemakings.

EFFECTIVE DATE: June 16, 1997.

FOR FURTHER INFORMATION CONTACT: For the public housing program, 
contact Bill Flood, Director, Office of Capital Improvements, Office of 
Public Housing Investments, Department of Housing and Urban 
Development, 451 Seventh Street, S.W., Washington, D.C. 20410, 
telephone (voice): (202) 708-1640, ext. 4185. (This is not a toll-free 
number.) For hearing-and speech-impaired persons, this number may be 
accessed via text telephone by dialing the Federal Information Relay 
Service at 1-800-877-8339.
    For the Section 8 programs, contact Gerald J. Benoit, Director, 
Operations Division, Office of Public and Assisted Housing Operations, 
Department of Housing and Urban Development, 451 Seventh Street, S.W., 
Washington, D.C. 20410, telephone (voice): (202) 708-0477, ext. 4069. 
(This is not a toll-free number.) For hearing-and speech-impaired 
persons, this number may be accessed via text telephone by dialing the 
Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 29, 1993, an interim rule was published (58 FR 62522), 
which revised the definition of ``Total development cost'' found in the 
public housing development regulations (24 CFR part 941) and the Indian 
housing regulations (located then at 24 CFR part 905, now at part 950). 
That rule also revised other sections of those regulations specifying 
how the total development cost concept was used to limit the maximum 
approvable cost for a project. That rule contained an expiration date 
of May 29, 1995.
    Having lost track of the existence of that expiration date for 
these provisions and, having further revised the sections in the 
meantime, the Department failed to realize that the definitions and 
other affected sections might return to their pre-1993 status. In the 
case of the public housing development regulations, the definition of 
``Total development cost'' was omitted when title 24 of the Code of 
Federal Regulations was published, in accordance with the expiration 
date. In the case of the Indian housing regulations, the definition 
remains.
    A second prior rulemaking that occasioned the need for this rule is 
the final rule published on March 6, 1996 (61 FR 9040), consolidating 
the provisions governing admissions preferences into a single part, 24 
CFR part 5, subpart E. Although the terms of the 1997 appropriations 
for HUD continue the suspension of application of the Federal 
preferences to HUD programs through September 30, 1997, the Department 
feels it necessary to correct the rule that will apply on October 1, 
1997, absent additional Congressional action on this subject.
    The consolidated preferences rule states, at 24 CFR 5.410(d)(1)(i), 
that its provision concerning consideration of matching the 
characteristics of the unit with the characteristics of the applicant 
family applies to ``developments administered under the Section 8 New 
Construction and Substantial Rehabilitation programs and the public 
housing program''. The Section 8 program regulations, on the other 
hand, provide (at 24 CFR 882.514(a)(1) and 882.514(b), 886.132 and 
886.337) that the preferences provisions of 24 CFR part 5 apply to the 
Section 8 Moderate Rehabilitation and Section 8 HUD-Held and HUD-Owned 
projects. The intent of the consolidation was to apply the provision 
(Sec. 5.410(d)(1)(i)) that requires matching characteristics of a unit 
with characteristics of applicants (including accessibility features 
and such needs), along with other preferences provisions, to all 
Section 8 programs where the responsible entity is selecting a family 
for a particular unit. This technical amendment corrects this oversight 
in the listing of covered Section 8 programs by changing the above-
quoted language to, ``developments administered under the Section 8 
programs and * * * public housing''.
    A third rulemaking that occasioned the need for this rule is a 
final rule published on October 18, 1996 (61 FR 54492) that 
consolidated provisions dealing with income and rent applicable to 
several assisted housing programs from 24 CFR parts 813 and 913 into 
one subpart of 24 CFR part 5. It preserved language in the new 
Sec. 5.617(b)(3) referring to the purposes of this ``part,'' when it 
should have modified the language to fit the new context of its 
placement in a ``subpart.'' An old typographical error in that same 
section was preserved from the former location, and is being corrected 
in this amendment.
    A fourth rulemaking that is a foundation for this rule is a final 
rule published on March 5, 1996. That rule streamlined the 
modernization provisions of the Indian housing and public housing 
programs. However, in one respect it used different language, 
inadvertently. This rule conforms the language of the public housing 
rule (Sec. 968.102(b)) to the language of the Indian housing rule with 
respect to the treatment of paid-off Turnkey III units. (See 
Sec. 950.602(b) at 61 FR 8721.) It also conforms the language of the 
public housing rule to the language of the Indian housing rule with 
respect to increased value of a homeownership unit caused by its 
substantial rehabilitation by adding the word ``not'' to paragraph 
Sec. 968.112(d)(3)(ii) before the phrase, ``by an automatic increase in 
its selling price.'' (See Secs. 950.608(d)(3)(ii) and 968.112(d)(3)(ii) 
at 61 FR 8724 and 8739, respectively).
    In addition, it has come to the Department's attention that 
performance standards were omitted from both the Indian housing and 
public housing rules in that rulemaking. This rule corrects that 
omission by adding new provisions Secs. 950.660(a)(3) and 
968.335(a)(3), which describe what HUD means by ``reasonable progress'' 
in implementing the HA's modernization plan.

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II. Findings and Certifications

A. Justification for Final Rule

    The Department generally publishes a rule for public comment before 
issuing a rule for effect, in accordance with its regulations on 
rulemaking in 24 CFR part 10. However, part 10 provides that prior 
public procedure will be omitted if HUD determines that it is 
``impracticable, unnecessary, or contrary to the public interest'' (24 
CFR 10.1).
    This final rule merely makes technical amendments to existing rules 
to restore language removed inadvertently, and to correct language to 
remove an apparent inconsistency between program regulations and a 
consolidated rule. Implementation of the rule's provisions is needed as 
soon as possible to correct existing rules in effect. Therefore, the 
Department has determined that good cause exists to omit prior public 
procedure for this final rule because such delay would be contrary to 
the public interest and unnecessary.

B. Impact on the Environment

    This rule does not in itself have an environmental impact. This 
rule merely makes technical changes to existing rules to restore 
provisions removed inadvertently; to correct language to provide 
consistency between program regulations, consistent with their original 
intent; and to correct editorial errors. It does not alter the 
environmental effect of the regulations. At the time of development of 
the original program regulations whose language is restored or 
corrected by this rule, Findings of No Significant Impact with respect 
to the environment were made in accordance with HUD regulations in 24 
CFR part 50 and section 102(2)(C) of the National Environmental Policy 
Act of 1969 (42 U.S.C. 4332). The findings remain applicable to this 
rule and are available for public inspection between 7:30 a.m. and 5:30 
p.m. weekdays in the office of the Rules Docket Clerk, Room 10276, 451 
Seventh Street, SW, Washington, DC 20410.

C. Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this rule 
does not have significant impact 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 only makes minor technical changes 
to existing rules.

D. 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 will not have a significant 
impact on a substantial number of small entities. This rule makes only 
technical amendments to clarify existing regulations.

E. Unfunded Mandates Reform Act

    The Secretary has reviewed this rule before publication and by 
approving it certifies, in accordance with the Unfunded Mandates Reform 
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal 
mandate that will result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year.

Catalog

    The Catalog of Federal Domestic Assistance number for the programs 
affected by this rule is 14.850.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Grant programs--low and moderate 
income housing, Indians, Individuals with disabilities, 
Intergovernmental relations, Loan programs--housing and community 
development, Low and moderate income housing, Mortgage insurance, 
Penalties, Pets, Public housing, Rent subsidies, Reporting and 
recordkeeping requirements, Social Security, Unemployment compensation, 
Wages.

24 CFR Part 941

    Grant programs--housing and community development, Loan programs--
housing and community development, Public housing.

24 CFR Part 950

    Aged, Grant programs--housing and community development, Grant 
programs--Indians, Individuals with disabilities, Low and moderate 
income housing, Public housing, Reporting and recordkeeping 
requirements.

24 CFR Part 968

    Grant programs--housing and community development, Indians, Loan 
programs--housing and community development, Public housing, Reporting 
and recordkeeping requirements.

    Accordingly, parts 5, 941, 950, and 968 of title 24 of the Code of 
Federal Regulations are amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

    1. The authority citation for part 5 continues to read as follows:

    Authority: 12 U.S.C. 101r-1; 42 U.S.C. 1436a, 3535(d), 3543, and 
3544.

    2. In Sec. 5.410, paragraph (d)(1)(i), the first sentence is 
revised to read as follows:


Sec. 5.410  Selection preferences.

* * * * *
    (d) * * *
    (1) * * *
    (i) Characteristics of the unit. For developments administered 
under the Section 8 programs and for public housing, the responsible 
entity may, in selecting a family for a particular unit, match other 
characteristics of the applicant family with the type of unit 
available, e.g., number of bedrooms. * * *
* * * * *
    3. In Sec. 5.617, paragraph (b)(3) is revised to read as follows:


Sec. 5.617  Reexamination and verification.

* * * * *
    (b) * * *
    (3) The use or disclosure of information obtained from a family or 
from another source pursuant to this release and consent shall be 
limited to purposes directly connected with administration of this 
subpart or applying for assistance.
* * * * *

PART 941--PUBLIC HOUSING DEVELOPMENT

    4. The authority citation for part 941 continues to read as 
follows:

    Authority: 42 U.S.C. 1437b, 1437c, 1437g and 3535(d).

    5. Section 941.103 is amended by adding a definition of ``Total 
development cost'' in alphabetical order at the end of the definitions, 
to read as follows:


Sec. 941.103  Definitions.

* * * * *
    Total development cost (TDC). The sum of all HUD-approved costs for 
planning (including proposal preparation), administration, site 
acquisition, relocation, demolition, construction and equipment, 
interest and carrying charges, on-site streets and utilities, non-
dwelling facilities, a

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contingency allowance, insurance premiums, off-site facilities, any 
initial operating deficit, and other costs necessary to develop the 
project. The total development cost in the proposal, when reviewed and 
approved by HUD, becomes the maximum total development cost stated in 
the ACC. Upon completion of the project, the actual development cost is 
determined, and this becomes the maximum total development cost of the 
project for purposes of the ACC. The maximum total development cost 
excludes costs funded from donations.

PART 950--INDIAN HOUSING PROGRAMS

    6. The authority citation for part 950 is revised to read as 
follows:

    Authority: 25 U.S.C. 450e(b), 42 U.S.C. 1437aa-1437ee, and 
3535(d).

    7. In Sec. 950.660, paragraph (a)(3) is revised to read as follows:


Sec. 950.660  HUD review of IHA performance.

    (a) * * *
    (3) Reasonable progress. HUD shall determine whether the IHA has 
satisfied, or has made reasonable progress towards satisfying, the 
following performance standards:
    (i) Conformity with its comprehensive plan, including its annual 
statement and latest HUD-approved five-year action plan, and other 
statutory and regulatory requirements;
    (ii) Continuing capacity to carry out its comprehensive plan in a 
timely manner and expend the annual grant funds; and
    (iii) Reasonable progress toward bringing all of its developments 
to the modernization and energy conservation standards and toward 
implementing the work specified in the annual statement or five-year 
action plan designed to address management deficiencies.
* * * * *

PART 968--PUBLIC HOUSING MODERNIZATION

    8. The authority citation for part 968 continues to read as 
follows:

    Authority: 42 U.S.C. 1437d, 1437l, and 3535(d).

    9. In Sec. 968.102, paragraph (b) is revised to read as follows:


Sec. 968.102  Special requirements for Turnkey III developments.

* * * * *
    (b) Eligibility of paid-off and conveyed units for assistance.--(1) 
Paid-off units. A Turnkey III unit that is paid off but has not been 
conveyed at the time the CIAP application or CGP Annual Submission is 
submitted, is eligible for any physical improvement under 
Sec. 968.112(d).
    (2) Conveyed units. Where modernization work has been approved 
before conveyance, the PHA may complete the work even if title to the 
unit is subsequently conveyed before the work is completed. However, 
once conveyed, the unit is not eligible for additional or future 
assistance. A PHA shall not use funds provided under this part for the 
purpose of modernizing units if the modernization work was not approved 
before conveyance of title.
* * * * *


Sec. 968.112  [Amended]

    10. Section 968.112 is amended by adding to the last sentence of 
paragraph (d)(3)(ii) the word ``not'' before the phrase ``by an 
automatic increase in its selling price.''
    11. In Sec. 968.335, paragraph (a)(3) is revised to read as 
follows:


Sec. 968.335  HUD review of PHA performance.

    (a) * * *
    (3) Reasonable progress. HUD shall determine whether the PHA has 
satisfied, or has made reasonable progress towards satisfying, the 
following performance standards:
    (i) Conformity with its comprehensive plan, including its annual 
statement and latest HUD-approved five-year action plan, and other 
statutory and regulatory requirements;
    (ii) Continuing capacity to carry out its comprehensive plan in a 
timely manner and expend the annual grant funds; and
    (iii) Reasonable progress toward bringing all of its developments 
to the modernization and energy conservation standards and toward 
implementing the work specified in the annual statement or five-year 
action plan designed to address management deficiencies.
* * * * *
    Dated: May 7, 1997.
Andrew Cuomo,
Secretary.
[FR Doc. 97-12842 Filed 5-15-97; 8:45 am]
BILLING CODE 4210-32-P