[Federal Register Volume 64, Number 32 (Thursday, February 18, 1999)]
[Proposed Rules]
[Pages 8210-8212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4004]



[[Page 8209]]

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Part V





Department of Housing and Urban Development





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24 CFR Part 761



Public Housing Drug Elimination Program Formula Allocation; Proposed 
Rule

  Federal Register / Vol. 64, No. 32 / Thursday, February 18, 1999 / 
Proposed Rules  

[[Page 8210]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 761

[Docket No. FR-4451-A-01]
RIN 2577-AB95


Public Housing Drug Elimination Program Formula Allocation; 
Advance Notice of Proposed Rulemaking

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

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: This document announces HUD's intention to develop, through 
proposed rulemaking, a formula allocation funding for HUD's Public and 
Indian Housing Drug Elimination Program. HUD believes that formula 
funding, as opposed to competitive funding, provides a more timely, 
predictable and equitable allocation of funds. HUD solicits comments in 
advance of this rulemaking on a method, components of a method, or 
methods that would result in reliable and equitable funding to public 
housing agencies with drug elimination programs and ensure that this 
funding is allocated to agencies meeting certain performance standards.

DATES: Comment Due Date: March 22, 1999.

ADDRESSES: Interested persons are invited to submit comments to the 
Rules Docket Clerk, Office of the General Counsel, Room 10276, 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410-0500. Communications should refer to the above 
docket number and title. Facsimile (FAX) responses are not acceptable. 
A copy of each response will be available for public inspection and 
copying during regular business hours (7:30 a.m. to 5:30 p.m. Eastern 
Time at the above address).

FOR FURTHER INFORMATION CONTACT: Sonia Burgos, Director, Office of 
Crime Prevention and Security, Office of Public and Indian Housing, 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410; telephone (202) 708-1197 (this is not a toll-free 
number). Hearing or speech-impaired individuals may access this number 
via TTY by calling the toll-free Federal Information Relay Service at 
1-800-877-8339.

SUPPLEMENTAL INFORMATION:

Background

    Section 586 of the Quality Housing and Work Responsibility Act of 
1998 (Pub.L. 105-276, 112 Stat. 2461, approved October 21, 1998) 
(QHWRA) makes certain amendments to the Public and Assisted Housing 
Drug Elimination Act of 1990, and these amendments include some 
important changes to HUD's Public Housing Drug Elimination Program 
(PHDEP). The amendments to the PHDEP include authorizing the Secretary 
to make renewable grants. Specifically, section 586(e)(6) provides for 
a new section (b) to be added to section 5125 of the Anti-Drug Abuse 
Act of 1988 (42 U.S.C. 11904). This new language provides as follows:

    An eligible applicant that is a public housing agency may apply 
for a 1-year grant under this chapter that, subject to the 
availability of appropriated amounts, shall be renewed annually for 
a period of not more than 4 additional years, except that such 
renewal shall be contingent upon the Secretary finding, upon an 
annual or more frequent review, that the grantee agency is 
performing under the terms of the grant and applicable laws, in a 
satisfactory manner and meets such other requirements as the 
Secretary may prescribe. The Secretary may adjust the amount of any 
grant received or renewed under this paragraph to take into account 
increases or decreases in amounts appropriated for these purposes or 
such other factors as the Secretary determines appropriate.

    Section 586 also provides that the Secretary of HUD may not provide 
drug elimination assistance to an applicant that is a public housing 
agency unless the agency will use the grants to continue or expand drug 
elimination activities, as in effect before October 1, 1998. The 
Secretary of HUD is to provide preference in funding to these public 
housing agencies, but this preference does not preclude selection by 
the Secretary of other meritorious public housing agencies that need 
funding to address urgent or serious crime problems.
    Section 586 further provides that the Secretary of HUD shall, by 
regulation, issued after notice and opportunity for public comment, 
issue criteria for establishing a class of public housing agencies that 
have urgent or serious crime problems.
    In Senate colloquy before passage of QHWRA, Senator Mack noted that 
the amendments made to the Public and Assisted Housing Drug Elimination 
Act of 1990 represent a significant improvement in the program. The 
Senator stated:

    The amendments will provide renewable grants for agencies that 
meet performance standards established by HUD. In addition, housing 
authorities with urgent or serious crime needs are protected and 
will be assured an equitable amount of funding.
    * * * [T]he intent of these provisions is to provide more 
certain funding for agencies with clear needs for funds and to 
assure that both current funding recipients and other agencies with 
more urgent or serious crime problems are appropriately assisted by 
the program. The provisions will also reduce the administrative 
costs of the current application process which entails a substantial 
paperwork burden for agencies and HUD. Under the terms of the 
amendments, HUD can establish a fixed funding mechanism in which the 
relative needs of housing authorities are addressed with a greater 
amount of certainty. (Congressional Record of October 8, 1998, 
S.11842)

    Based upon the language of the statute and the Senate colloquy, HUD 
believes that the intent of Congress can best be carried out by a 
formula distribution of funds that covers both housing authorities with 
renewable grants and those with urgent or serious crime-related needs. 
The proposed formula however would not be applicable to statutory set-
asides that specify other funding methods.

This Advance Notice of Proposed Rulemaking

    The proposed rule that HUD intends to issue will both establish the 
performance criteria required by section 586 of the QHWRA and provide 
the method of need-based formula funding. Therefore HUD solicits 
comments on the following issues and proposals pertaining to the 
methods of the need based formula in advance of issuance of the 
proposed rule. HUD recognizes that issues of performance will have a 
major effect on a formula system, and it is developing issues and 
positions for which it will seek comment in a proposed rule that 
combines both technical formula issues and performance issues in one 
funding system. HUD's preferences for the options provided are noted 
below. The location on the internet of results of a formula based on 
HUD's stated preferences is also noted below.

A. How To Determine ``Renewable Agencies''--Options for Consideration

    Option A.1. Subject to ongoing performance reviews, include all 
housing agencies as renewable agencies that successfully competed for 
funding in FY 1998.
    Option A.2. Subject to ongoing performance reviews and additional 
capacity requirements, include all housing agencies that successfully 
competed for funding in at least one of the following years: FY 1996, 
FY 1997 or FY 1998.
    HUD Preference. HUD prefers Option 2. HUD believes that an agency 
that

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successfully competed for funding between FY 1996 and FY 1998 and that 
meets performance standards has recently shown both need and capacity.

B. How To Determine New Renewable Agencies with Urgent Needs--Options 
for Consideration

    Option B.1. Subject to ongoing performance reviews and subject to 
additional capacity requirements, include in a formula distribution a 
smaller number of housing agencies that have not been recently funded 
and that meet an established threshold of need of PHDEP funding.
    Option B.2. Subject to ongoing performance reviews and subject to 
additional capacity requirements, include a smaller number of housing 
agencies that have not been recently funded and that make a case in a 
competition for a serious and urgent need for PHDEP funding.
    HUD Preference. HUD prefers Option 1. HUD believes that a formula 
distribution method will be more timely and predictable than the 
competition provided in Option 2. (Since almost all large housing 
agencies would qualify as renewable agencies under Option A.2, housing 
agencies that would qualify as the new renewable agencies under the 
method of Option B.1 are generally small housing agencies.)

C. How To Determine Funding for Renewable Agencies With Urgent Need--
Issues for Consideration

    Option C.1. A subset of renewable agencies with urgent needs may be 
funded by creating a standardized threshold, based on the distribution 
of all housing agencies on a criterion such as the index of the rate of 
violent crimes of the community multiplied by the average number of 
bedrooms per unit of the housing agency. For the minority of housing 
agencies lacking community-wide violent crime data, impute data based 
on the average values of comparable communities with data where 
comparable communities have a certain size in the State or region (and, 
if data are available, some other characteristics). Agencies exceeding 
the threshold would receive additional formula funding. In broad terms, 
agencies under the threshold of need will receive no funding under this 
factor and agencies just above the threshold will receive modest 
funding under this factor and agencies well above the threshold will 
receive very high funding under this factor.
    Option C.2. Allow all renewable agencies to be funded under the 
``urgent need'' factor through an index of the rate of violent crimes 
of the community multiplied by the average number of bedrooms per unit 
of the housing agency, and then allow the factor to target more funds 
to housing agencies with relatively urgent needs. By contrast to Option 
C.1., agencies under the threshold of need in Option C.2. will receive 
some funding under this factor and agencies just above the threshold 
will receive moderate funding under this factor and agencies well above 
the threshold will receive high funding under this factor (but not as 
much relative to what they would receive under Option C.1.).
    HUD Preference. HUD prefers Option C.1. The subset of urgent need 
agencies follows closely the intention of the statute. At the same 
time, HUD prefers that the factor for this subset be subsumed into a 
funding system that covers all renewable agencies (please see the 
discussion in Option D.2 below.)

D. Funding Renewable Agencies versus Urgent Need Agencies--Issues for 
Consideration

    Option D.1. Have two pools of funds based on the relative share of 
needs of the two categories of agencies (renewable agencies and urgent 
need agencies) and fund them by different criteria.
    Option D.2. Have a combined funding system that has different 
factors (weighted up to 100 percent) that applies to the universe of 
agencies to be funded and that also reflects their relative needs.
    HUD Preference. HUD prefers Option D.2. This option is the easiest 
to understand and the easiest to compute. In this option, the weights 
and funding impacts of the different factors are explicit.

E. Standard Factors for Funding Agencies--Options for Consideration

    Standard factors that may be included in a formula for PHDEP 
funding are:
    Option E.1. A minimum floor of $25,000 per year.
    Option.E.2. The share of funding (or average share) provided to the 
housing agency during Fiscal Years 1996, 1997 and 1998.
    Option E.3. The housing agency's share of units.
    Option E.4. The housing agency's share of units multiplied by an 
index of the average number of bedrooms per unit.
    Option E.5. The housing agency's share of units multiplied by the 
positive difference, if any, between the housing agency's score and the 
unit-weighted median score of all housing agencies on the following 
index: the rate of violent crimes of the community multiplied by the 
average number of bedrooms per unit of the housing agency. The rate of 
violent crimes is capped at twice the median of the unit weighted 
scores across all housing agencies. To better understand how this 
calculation works, please see HUD's posting of a format statement of 
its method with a printout of data and estimated formula amounts at 
HUD's website at http://www.hud.gov/pih/legis/titlev.html.
    Option E.6. The housing agency's share of units multiplied by both 
the rate of the violent crimes of its community and by the average 
number of bedrooms per unit of the housing agency. The rate of violent 
crimes is capped at twice the median of the unit weighted scores across 
all housing agencies.
    HUD Preference. To address the statutory goal of predictable and 
equitable funding, HUD prefers a formula system that includes the 
factors of Options E.1, 3, 4 and 5. For a weighted formula system, HUD 
prefers that the factor in Option E.3 be weighted .25; that the factor 
in Option E.4 be weighted .50, and that the factor in Option E.5 be 
weighted .25. HUD also prefers a minimum floor of $25,000. All of HUD's 
preferences expressed in this notice are illustrated by the format 
statement with a printout of the data and estimated formula amounts 
that was referred to earlier and that is posted at HUD's website at 
http://www.hud.gov/pih/legis/titlev.html.

F. Impact of a Housing Agency's Performance on Funding--Issues for 
Consideration

    Option F.1. Housing agencies that do not meet performance criteria 
will have their funds for a given year returned to other housing 
agencies--either to the pool of funds for renewable agencies or to the 
pool of fund for urgent need agencies or to a combined pool.
    Option F.2. Housing agencies with excessive funds that are unspent 
or unobligated, for reasons within their control, will have their funds 
for a given year reduced in proportion to the extent of unspent or 
unobligated funds.
    HUD Preference. HUD has no preference at this time.

Solicitation of Comments

    HUD is requesting interested housing agencies and other interested 
members of the public to submit public comments on the options and 
issues for consideration of formula funding for PHDEP presented in this 
notice, including applicable performance criteria. HUD also welcomes 
additional options and issues that housing agencies or other members of 
the public believe

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that HUD should consider in developing a formula funding method. 
Further, HUD welcomes any formula methods that housing agencies or 
other interested members of the public have devised and for which they 
request HUD's consideration. Public comments received in response to 
this notice will be considered in the development of HUD's proposed 
rule on formula funding for PHDEP.

Executive Order 12866

    The Office of Management and Budget (OMB) has reviewed this 
advanced notice of proposed rulemaking (ANPR) under Executive Order 
12866, Regulatory Planning and Review, issued by the President on 
September 30, 1993. Any changes made in this ANPR subsequent to its 
submission to OMB are identified in the docket file, which is available 
for public inspection during regular business hours in the Office of 
the Rules Docket Clerk, Office of the General Counsel, Room 10276, U.S. 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410.

    Dated: February 9, 1999.
Deborah Vincent,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-4004 Filed 2-17-99; 8:45 am]
BILLING CODE 4210-33-P