[Federal Register Volume 64, Number 83 (Friday, April 30, 1999)]
[Proposed Rules]
[Pages 23484-23486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10464]



[[Page 23483]]

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Part V





Department of Housing and Urban Development





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24 CFR Part 968



Comprehensive Improvement Assistance Program; Proposed Rule

  Federal Register / Vol. 64, No. 83 / Friday, April 30, 1999 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 968

[Docket No. FR-4462-P-01]
RIN 2577-AB97


Comprehensive Improvement Assistance Program

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the regulations for the 
Comprehensive Improvement Assistance Program (CIAP) to permit the non-
competitive distribution of CIAP funds to all eligible public housing 
authorities (PHAs) based on two equally-weighted factors: a PHA's share 
of the total number of units eligible for CIAP; and a PHA's share of 
the total number of bedrooms in units eligible for CIAP (with studio 
units counted as one-bedroom units). The purpose of this amendment is 
to provide small PHAs the opportunity of a transition period to become 
familiar with a non-competitive, capital funding process in 
anticipation of formula funding in Federal Fiscal Year (FFY) 2000 under 
new statutory authority.

DATES: Comments due date: June 1, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
regarding this proposed rule to the Rules Docket Clerk, Office of 
General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410. Comments 
should refer to the above docket number and title. A copy of each 
comment submitted will be available for public inspection and copying 
between 7:30 a.m. and 5:30 p.m. weekdays at the above address. 
Facsimile (FAX) comments will not be accepted.

FOR FURTHER INFORMATION CONTACT: William J. Flood, Director, Office of 
Capital Improvements, Department of Housing and Urban Development, 451 
Seventh Street, SW, Room 4134, Washington, D.C. 20410. Telephone (202) 
708-1640. (This is not a toll free number.) Persons with hearing or 
speech impediments may access this number via TTY by calling the 
Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    The Comprehensive Improvement Assistance Program (CIAP) is 
authorized under section 14 of the United States Housing Act of 1937 
(1937 Act). CIAP provides modernization funds to public housing 
authorities (PHAs) that own or operate less than 250 units of public 
housing, to enable them to improve the physical condition and upgrade 
the management and operations of existing public housing developments 
to assure their continued availability for low-income families. In FFY 
1999, a total of $2.895 billion is available for Modernization Programs 
(CIAP and Comprehensive Grant Program (CGP)), of which approximately 
$364 million will be available to CIAP PHAs. Modernization funds are 
allocated between CIAP and CGP PHAs based on the relative shares of 
backlog needs (weighted at 50%) and accrual needs (weighted at 50%), as 
determined by field inspections conducted for the HUD-funded Abt 
Associates study of modernization needs. This allocation results in 
CIAP PHAs receiving approximately 12.5% and CGP PHAs receiving 
approximately 87.5% of the total funds available. In previous years, an 
allocation of CIAP funds has been made for each Field Office based, in 
part, on the relative shares of backlog and accrual needs for CIAP 
PHAs. After the assignment of funds to Field Offices, CIAP funds were 
then distributed to PHAs pursuant to a competitive process, under which 
applications submitted to HUD were rated and ranked. Awards were then 
made in rank order to the extent that funds were available. Under this 
system of distribution, not every PHA that submitted an acceptable 
application was funded.
    In lieu of the former distribution method, HUD proposes to continue 
to use the formula allocation for CIAP described in 24 CFR 968.103 (but 
not to assign CIAP funds to Field Offices and then distribute the CIAP 
funds to PHAs by a competitive method) and to amend the CIAP 
regulations to permit the distribution of funds after formula 
allocation to all eligible PHAs on a non-competitive basis. Section 519 
of the Quality Housing and Work Responsibility Act of 1998 (Pub.L. 105-
276, 112 Stat. 2461, approved October 21, 1998) (QHWRA), authorizes a 
new system of funding capital improvement needs for all PHAs, large and 
small, on a formula basis beginning in FFY 2000. The final year of CIAP 
funding will be FFY 1999. HUD will be working with housing industry and 
resident groups, and representatives of small, medium and large PHAs to 
develop, using the negotiated rulemaking process, an entirely new 
formula for capital funds distribution for all PHAs. Rather than have 
PHAs that own or operate less than 250 units continue to plan for and 
obtain capital funding on a competitive basis that will soon no longer 
be available, HUD wishes to provide these small PHAs the opportunity of 
a transition period in which funding is made available under a process 
that is closer to the formula-based capital program that will apply to 
all PHAs beginning in FFY 2000.
    This rule would amend 24 CFR 968.210 to remove the provisions that 
require competitive funding and to add a provision that permits funding 
distributions on the basis described below. To initiate the 
distribution process, HUD will notify PHAs of their estimated dollar 
amount and the time frame for submission of the CIAP application and 
other pertinent information. Every eligible PHA (owning or operating 
less than 250 units) that responds to the notice would then receive a 
distribution based on two equally-weighted factors: (1) A PHA's share 
of the total number of units eligible for CIAP; and (2) a PHA's share 
of the total number of bedrooms in units eligible for CIAP (with studio 
units counted as one-bedroom units). HUD currently estimates that for a 
given PHA, each unit would receive between $1250 and $2250 per unit of 
CIAP funding under this proposed system, and that for most PHAs, the 
per unit funding will be between $1600 and $2000 per unit.
    This proposed rule would also provide for the preferences under 
section 14(h) of the 1937 Act. Under section 14(h), preferences are 
given to small PHAs for projects having conditions which threaten the 
health or safety of the tenants (emergency modernization preference) or 
having a significant number of vacant, substandard units (vacancy 
preference), and that also have demonstrated modernization capability.
    Under the competitive system of distributing CIAP funds, emergency 
modernization was funded as Group 1 during the competition or during 
the course of the year from the emergency reserve under 24 CFR 968.104. 
For the vacancy preference, HUD provided for extra points in the CIAP 
NOFAs to PHAs that demonstrated the high priority needs and 
modernization capability required for the vacancy preference.
    The emergency modernization preference will be satisfied by 
processing all emergency modernization under existing procedures in 24 
CFR 968.104. In addition, HUD will set-aside

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from the CIAP distribution approximately $6.1 million for the East 
Texas housing authorities (those with less than 250 public housing 
units) involved in the Young v. Cuomo civil rights case, to meet the 
requirements of the settlement agreement, which is subject to judicial 
oversight.
    Because CIAP funds would not be distributed competitively under 
this rule, the vacancy preference cannot be implemented by providing 
extra points. This rule applies the vacancy preference by providing an 
additional increment of funding to PHAs that have modernization 
capability and demonstrate that at least 25% of their units are vacant, 
substandard units (where vacancies are not due to insufficient demand). 
A PHA has modernization capability if it has previously received CIAP 
funding and meets the requirements of Modernization capability as 
defined at Sec. 968.205. PHAs must apply for the vacancy preference 
incremental assistance as part of the CIAP application (to be provided 
by HUD under the notification required by 24 CFR 968.210(a)).
    As an additional matter, this rule would make a technical 
correction to Sec. 968.110(a), replacing a citation to ``section 503 of 
the Rehabilitation Act of 1973'' with ``section 504 of the 
Rehabilitation Act of 1973''.

II. Findings and Certifications

Justification for Shortened Comment Period

    It is the general practice of the Department to provide a 60-day 
public comment period on all proposed rules. However, in order to 
provide a sufficient transition period for small PHAs to become 
familiar with working under a new statutory system of funding capital 
improvement needs on a formula basis rather than a competitive basis, 
the Department is shortening its usual 60-day public comment period to 
30 days.

Paperwork Reduction Act Statement

    The information collection requirements of the Comprehensive 
Improvement Assistance Program have been approved by the Office of 
Management and Budget under OMB Approval No. 2577-0044. An agency may 
not conduct or sponsor, and a person is not required to respond to, a 
collection of information unless the collection displays a valid 
control number.

Environmental Impact

    In accordance with 40 CFR 1508.4 of the regulations of the Council 
on Environmental Quality and 24 CFR 50.19(c)(2) of the HUD regulations, 
this rule amends an existing document, the regulations at 24 CFR part 
968, which as a whole would not fall within an exclusion, but the 
amendment by itself would do so. Therefore, the actions proposed in 
this document are determined not to have the potential of having a 
significant impact on the quality of the human environment and further 
review under the National Environmental Policy Act is not necessary. A 
Finding of No Significant Impact (FONSI) is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. This proposed rule does not impose 
any Federal mandates on any State, local, or tribal governments or the 
private sector within the meaning of Unfunded Mandates Reform Act of 
1995.

Executive Order 12866

    The Office of Management and Budget (OMB) reviewed this proposed 
rule under executive Order 12866, Regulatory Planning and Review. OMB 
determined that this proposed rule is a ``significant regulatory 
action,'' as defined in section 3(f) of the Order (although not 
economically significant, as provided in section 3(f)(1) of the Order). 
Any changes made to the proposed rule subsequent to its submission to 
OMB are 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 Street, SW, Washington, DC 20410-0500.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) (the RFA), has reviewed and approved this proposed rule 
and in so doing certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The rule 
would only modify the funding process for the final year of the CIAP to 
provide small PHAs with a transition period to become familiar with a 
non-competitive capital funding process. Small businesses are 
specifically invited, however, to comment on whether this rule will 
significantly affect them, and persons are invited to submit comments 
according to the instructions in the DATES and COMMENTS sections in the 
preamble of this proposed rule.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official for HUD under 
section 6(a) of Executive Order 12612, Federalism, has determined that 
this rule will not have federalism implications concerning the division 
of local, State, and Federal responsibilities. The rule would only 
modify the funding process for the final year of the CIAP to provide 
small PHAs with a transition period to become familiar with a non-
competitive capital funding process.

Catalog of Domestic Assistance Numbers

    The Catalog of Domestic Assistance numbers for the Comprehensive 
Improvement Assistance Program is 14.852.

List of Subjects in 24 CFR Part 968

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

    Accordingly, 24 CFR part 968 is amended, as follows:

PART 968--PUBLIC HOUSING MODERNIZATION

    1. The authority citation for 24 CFR part 968 continues to read as 
follows:

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

    2. In Sec. 963.110, paragraph (a) is revised to read as follows:


Sec. 968.110  Other program requirements.

* * * * *
    (a) Nondiscrimination and equal opportunity. The PHA shall comply 
with Title II of the Americans with Disabilities Act and 28 CFR part 
35; section 504 of the Rehabilitation Act of 1973 and 41 CFR chapter 
60-471; and the Architectural Barriers Act of 1968 (42 U.S.C. 4151-
4157) and 24 CFR part 40.
* * * * *
    3. Section 968.210 is revised to read as follows:


Sec. 968.210  Procedures for obtaining approval of a modernization 
program.

    (a) HUD notification. After modernization funds for a particular 
FFY become available, HUD will notify PHAs of the time frame for 
submission of the CIAP application and other pertinent information.
    (b) Distribution of funding. HUD will distribute the available 
funding under this subpart to every eligible PHA that

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responds to the notice issued pursuant to paragraph (a) of this section 
based on two equally-weighted factors: A PHA's share of the total 
number of units eligible for CIAP; and a PHA's share of the total 
number of bedrooms in units eligible for CIAP (with studio units 
counted as one-bedroom units). HUD will also provide a vacancy 
preference, consisting of an additional increment of funding, to PHAs 
that have modernization capability and demonstrate that at least 25% of 
their units are vacant, substandard units (where vacancies are not due 
to insufficient demand). A PHA has modernization capability if it has 
previously received CIAP funding and meets the requirements of 
Modernization capability as defined at Sec. 968.205.
    (c) ACC amendment. HUD and the PHA shall enter into an ACC 
amendment in order for the PHA to draw down modernization funds. The 
ACC amendment shall require low-income use of the housing for not less 
than 20 years from the date of the ACC amendment (subject to sale of 
homeownership units in accordance with the terms of the ACC). The PHA 
Executive Director, where authorized by the Board of Commissioners and 
permitted by State law, may sign the ACC amendment on behalf of the 
PHA. HUD has the authority to condition an ACC amendment (e.g., to 
require a PHA to hire a modernization coordinator or contract 
administrator to administer its modernization program).
    (d) Declaration of trust. As HUD may require, the PHA shall execute 
and file for record a Declaration of Trust, as provided under the ACC, 
to protect the rights and interests of HUD throughout the 20-year 
period during which the PHA is obligated to operate its developments in 
accordance with the ACC, the Act, and HUD regulations and requirements.

    Dated: March 25, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-10464 Filed 4-29-99; 8:45 am]
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