[Federal Register Volume 64, Number 53 (Friday, March 19, 1999)]
[Proposed Rules]
[Pages 13533-13535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6720]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Chapter IX

[Docket No. FR-4423-N-01]


Capital Fund Rule; Notice of Intent to Establish a Negotiated 
Rulemaking Committee and Notice of First Meeting

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

ACTION: Notice of intent to establish a Negotiated Rulemaking Advisory 
Committee and notice of first meeting.

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SUMMARY: HUD is establishing a Negotiated Rulemaking Advisory Committee 
under the Federal Advisory Committee Act. The establishment of the 
committee is required by the Quality Housing and Work Opportunity Act 
of 1998, which requires issuance of regulations under the Negotiated 
Rulemaking Act of 1990. The purpose of the Committee is to discuss and 
negotiate a proposed rule that would change the current method of 
determining the allocation of capital funds to public housing agencies 
(PHAs). The Committee will consist of representatives with a definable 
stake in the outcome of a proposed rule. In accordance with 5 U.S.C. 
564 (section 564 of the Negotiated Rulemaking Act of 1990), this 
document: advises the public of the establishment of the committee; 
provides the public with information regarding the committee; solicits 
public comment on the proposed membership of the committee; explains 
how persons may be nominated for membership on the committee; and 
solicits public comment on specific agenda items to be considered by 
the committee.

DATES: Comment due date: April 19, 1999. HUD's tentative plan is to 
hold the first meeting of the committee on

[[Page 13534]]

April 28-29, 1999. Additional committee meetings are tentatively 
scheduled for May 11-12 and May 25-26, 1999.

ADDRESSES: The tentative location for the first committee meeting is 
the U.S. Department of Housing and Urban Development, 451 Seventh St., 
SW, Washington, DC 20410.
    Interested persons are invited to submit comments regarding the 
Committee and its proposed members to the Regulations Division, Office 
of General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410-0500. 
Comments or any other communications submitted should refer to the 
above docket number and title. Facsimile (FAX) comments are not 
acceptable. The docket will be available for public inspection and 
copying between 7:30 a.m. and 5:30 p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: William Flood, Director, Office of 
Capital Improvements, Public and Indian Housing, Room 4134, Department 
of Housing and Urban Development, 431 Seventh Street, SW, Washington, 
DC 20410-0500; telephone (202) 708-1640 ext. 4185 (this telephone 
numbers is not toll-free). 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.

SUPPLEMENTARY INFORMATION:

I. Background

    HUD currently uses a formula approach called the Comprehensive 
Grant Program (CGP) to distribute capital funds to large public housing 
agencies (PHAs) (i.e. PHAs with 250 units or more) and a competitive 
program called the Comprehensive Improvement Assistance Program (CIAP) 
for small PHAs (i.e., PHAs with less than 250 units). A regulatory 
description of the CGP and CIAP can be found at 24 CFR part 968. 
Generally, the amount of capital funding received by a PHA is based on 
the number of units, type of units, condition of its units, cost of 
construction in the area and prior funding. While the amount can vary, 
it is the only source of capital funding that most PHAs receive to make 
major capital investments in its public housing stock. For example, in 
1998, HUD distributed over $2.1 billion in capital funds for CGP and 
$307 million for CIAP to PHAs for 830 PHAs and over 900 PHAs 
respectively.
    On October 21, 1998, the Congress enacted the Quality Housing and 
Work Responsibility Act of 1998 (Pub.L. 105-276, 112 Stat. 2461) (the 
``Public Housing Reform Act''). The Public Housing Reform Act makes 
extensive changes to HUD's public and assisted housing programs. These 
changes include the establishment of a Capital Fund for the purpose of 
making assistance available to PHAs for capital and management 
activities of public housing under Section 9(d) of the U.S. Housing Act 
of 1937, as amended. The assistance to be made available from that fund 
is to be determined using a formula developed through negotiated rule-
making procedures. The effective date of the formula (the beginning 
date of the fiscal year for which PHAs will determine their capital 
eligibility using the new formula) is October 1, 1999. Accordingly, HUD 
hopes to publish a final rule that will take effect by October 1, 1999 
to implement these statutory changes.

II. Regulatory Negotiation

    Negotiated rulemaking, or ``neg-reg,'' is a relatively new process 
for HUD. The basic concept of neg-reg is to have the agency that is 
considering drafting a rule bring together representatives of affected 
interests for face-to-face negotiations that are open to the public. 
The give-and-take of the negotiation process is expected to foster 
constructive, creative and acceptable solutions to difficult problems.
    In anticipation of possible Congressional action, HUD entered into 
an interagency agreement in June 1998 with the Federal Mediation and 
Conciliation Service (FMCS) for convening and facilitation services 
associated with a negotiated rulemaking regarding a possible capital 
and operating fund proposed rule. FMCS met with HUD in November 1998 to 
discuss the use of its services for the capital fund. The meeting 
reached the conclusion that it was feasible to assemble the committee, 
and HUD would propose a list of individual PHAs and organizations that 
represented a wide range of interests willing and able to work within a 
consensus framework on a new Capital Fund formula.

III. Committee Membership

    HUD has independent of the FMCS consulted with the industry groups, 
its field staff and chosen 26 persons to be named to represent various 
organizations that would be affected by the capital fund rule. Three 
national PHA associations--the Council of Large Public Housing 
Authorities (CLPHA), the National Association of Housing and 
Redevelopment Officials (NAHRO), and the Public Housing Authority 
Directors Association (PHADA) suggested executive directors of PHAs for 
committee membership that would reflect a balance among PHAs in terms 
of size and number of developments and units. The national associations 
also indicated a willingness to serve on the committee, as did the 
National Organization of African Americans in Housing (NOAAH). In 
addition, HUD consulted with groups concerned with issues relating to 
residents of public housing and identified four resident 
representatives to serve on the committee. Further, HUD has identified 
three committee participants from groups which have had less direct 
involvement in public housing programs in the past, but which can 
provide other valuable perspectives on the issues to be considered by 
the committee.
    After reviewing the recommendations of the staff and industry 
groups, HUD has tentatively identified the following list of possible 
interests and parties.

 Housing Agencies
    1. Philadelphia Housing Authority
    2. Chicago Housing Authority
    3. Dallas Housing Authority
    4. Puerto Rico Housing Authority
    5. Seattle Housing Authority
    6. New York City Housing Authority
    7. Dayton Housing Authority
    8. Greensboro Housing Authority
    9. Jersey City Housing Authority
    10. San Diego Housing Authority
    11. Sanford (ME) Housing Authority
    12. Macon (GA) Housing Authority
    13. San Benito (TX) Housing Authority
    14. Sturgis (SD) Housing Authority
 Tenant Organizations
    1. New York City Public Housing Residents Alliance, Brooklyn, NY
    2. Guinotte Manor Tenant Association, Kansas City, MO
    3. Hillside Family Resource Center, Milwaukee, WI
    4. Mount Pleasant Estates Tenant Association, Newark, NJ
 National PHA Associations
    1. Public Housing Authority Directors Association (PHADA)
    2. National Association of Housing and Redevelopment Officials 
(NAHRO)
    3. Council of Large Public Housing Authorities (CLPHA)
    4. National Organization of African Americans in Housing (NOAAH)
 Other Groups
    1. National Housing Conference
    2. Conference of Mayors
    3. Fannie Mae
    4. National Low Income Housing Coalition
 Federal Government
    1. U.S. Department of Housing and

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Urban Development

    We invite you to give us comments and suggestions on this tentative 
list of committee members. We do not believe that each potentially 
affected organization or individual must necessarily have its own 
representative. However, we must be satisfied that the group as a whole 
reflects a proper balance and mix of interests. Accordingly, the 
composition of the final membership list may be different from this 
tentative membership list. Negotiation sessions will be open to members 
of the public, so individuals and organizations that are not members of 
the committee may attend all sessions and communicate informally with 
members of the committee. HUD may also invite a group of technical 
advisors to participate in Committee deliberations. This group may 
consist of non-profit and for-profit developers and other individuals 
who have had experience in mixed-finance development, the HOPE VI 
program, or other relevant experience.

IV. Requests for Representation

    If you are interested in serving as a member of the committee or in 
nominating another person to serve as a member of the committee, you 
must submit a written nomination to HUD at the address listed in the 
ADDRESSES section of this document. Your nomination for membership on 
the committee must include:
    (1) The name of your nominee and a description of the interests the 
nominee would represent;
    (2) Evidence that your nominee is authorized to represent parties 
with the interests the nominee would represent;
    (3) A written commitment that the nominee will actively participate 
in good faith in the development of the rule; and
    (4) The reasons that the parties listed in this document do not 
adequately represent your interests.
    HUD will determine, in consultation with the FMCS conveners, 
whether a proposed member should be included in the makeup of the 
committee. HUD will make that decision based on whether a proposed 
member would be significantly affected by the proposed rule and whether 
the interest of the proposed member could be represented adequately by 
other members.

V. Substantive Issues for Negotiation

    The subject and scope of the proposed rule to be considered is the 
development of a capital fund formula for the purpose of determining 
the amount of assistance provided to PHAs for capital and management 
activities of public housing, which shall include a mechanism to reward 
performance. The issues considered by the negotiated rulemaking 
committee in the development of the formula will include determining 
the factors and weighting of those factors to be used in determining 
the formula allocation for each PHA (including those factors listed in 
Section 519 of the Public Housing Reform Act. HUD invites suggestions 
on specific agenda items to be considered by the negotiated rulemaking 
committee.

VI. Tentative Schedule

    At this time, HUD's tentative plan is to hold the first meeting of 
the committee on April 28-29, 1999. On both days, the meeting is 
expected to run for the full day, starting at approximately 10:00 a.m. 
until completion. The tentative location for the first meeting is the 
U.S. Department of Housing and Urban Development, 451 Seventh St., SW, 
Washington, DC 20410. The purpose of the meeting will be to orient 
members to the neg-reg process, to establish a basic set of 
understandings and ground rules (protocols) regarding the process that 
will be followed in seeking a consensus, and to begin to address the 
issues. This meeting will be open to the public.
    Decisions with respect to future meetings will be made at the first 
meeting and from time to time thereafter. Additional committee meetings 
are tentatively scheduled for May 11-12 and May 25-26, 1999. Notices of 
future meetings will be published in the Federal Register.

VII. Final Notice Regarding Committee Establishment

    After reviewing any comments on this Notice and any requests for 
representation, HUD will issue a final notice. That notice will 
announce the final composition of the Negotiated Rulemaking Advisory 
Committee and the firm date, time, and place of the initial meeting.

    Dated: March 12, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
Deborah Vincent,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-6720 Filed 3-18-99; 8:45 am]
BILLING CODE 4423-01-P