[Federal Register Volume 64, Number 120 (Wednesday, June 23, 1999)]
[Proposed Rules]
[Pages 33644-33647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15736]



[[Page 33643]]

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Part V





Department of Housing and Urban Development





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24 CFR Part 964



Public Housing Agency Organization; Required Resident Membership on 
Board of Directors or Similar Governing Body; Proposed Rule

  Federal Register / Vol. 64, No. 120 / Wednesday, June 23, 1999 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 964

[Docket No. FR-4502-P-01]
RIN 2577-AC13


Public Housing Agency Organization; Required Resident Membership 
on Board of Directors or Similar Governing Body

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement section 2(b) of the United 
States Housing Act of 1937, which was added by section 505 of the 
Quality Housing and Work Responsibility Act of 1998 (the Public Housing 
Reform Act of 1998). Section 2(b) requires, with certain exceptions, 
that the membership of the board of directors or similar governing body 
of a public housing agency must contain not less than one member who is 
directly assisted by the public housing agency.

DATES: Comments Due Date: August 23, 1999.

ADDRESSES: Submit your comments about this proposed rule to the Office 
of the General Counsel, Rules Docket Clerk, Room 10276, U.S. Department 
of Housing and Urban Development, 451 Seventh Street, SW, Washington, 
DC 20410-0500. Your comments should refer the above docket number and 
title. We do not accept facsimile (FAX) comments. A copy of each 
comment submitted will be available for public inspection and copying 
during regular business hours (7:30 a.m. to 5:30 p.m.) at the above 
address.

FOR FURTHER INFORMATION CONTACT: Rod Solomon, Deputy Assistant 
Secretary for Policy, Programs, and Legislative Initiatives, Room 4116, 
U.S. Department of Housing and Urban Development, 451 Seventh Street, 
SW, Washington, DC, 20410-5000; telephone (202) 708-0713 (this is not a 
toll-free number) or Paula Blunt, Associate Deputy Assistant Secretary 
for Community Relations and Involvement, Room 4226, U.S. Department of 
Housing and Urban Development, 451 Seventh Street, SW, Washington, DC, 
20410-5000; telephone (202) 619-8201 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access these numbers via 
TTY by calling the toll-free Federal Information Relay Service at (800) 
877-8339.

SUPPLEMENTARY INFORMATION:

I. Background Information

a. Public Housing Reform

    Section 505 of the Quality Housing and Work Responsibility Act of 
1998 (Public Law 105-276, 112 Stat. 2461)(the Public Housing Reform Act 
of 1998) amended section 2 of the United States Housing Act of 1937 (42 
U.S.C. 1437)(the 1937 Act). New section 2(b)(1) of the 1937 Act 
requires, except in certain cases, that:

the membership of the board of directors or similar governing body 
of each public housing agency shall contain not less than 1 member--
(A) who is directly assisted by the public housing agency; and (B) 
who may, if provided for in the public housing agency plan, be 
elected by the residents directly assisted by the public housing 
agency.

    New section 2(b)(2) of the 1937 Act establishes two exceptions to 
the resident board member requirement. First, public housing agencies 
that are located in a State that requires the members of a board of 
directors or similar governing body of a public housing agency to be 
salaried and to serve on a full-time basis are excepted from the 
resident board member requirement. Second, public housing agencies with 
less than 300 units are excepted from the resident board member 
requirement if they meet two conditions:
    (1) The public housing agency must provide reasonable notice to the 
resident advisory board of the opportunity for residents to serve on 
the agency's board of directors or similar governing body; and
    (2) The public housing agency must wait a reasonable time after the 
resident advisory board has received this notice.
    If the public housing agency has not been notified within this 
reasonable time that any resident intends to participate on the board 
of directors, then the public housing agency is excepted from the 
resident board member requirement.
    Section 2(b) also makes clear that no person may be prohibited from 
serving on the board of directors or similar governing body of the 
public housing agency because that person is a public housing resident 
or is assisted under section 8 of the 1937 Act (42 U.S.C. 
1437f)(section 8).

b. This Proposed Rule

    This proposed rule would implement section 2(b) of the 1937 Act in 
a new subpart E (captioned ``Resident board members'') in 24 CFR part 
964 (captioned ``Tenant Participation and Tenant Opportunities in 
Public Housing''). In addition, this proposed rule would also revise 
Sec. 964.3 (captioned ``Applicability and scope'') to clarify that 
while part 964 generally applies only to public housing residents, new 
subpart E would apply to both public housing residents and persons 
assisted under section 8.
    The proposed rule would implement the requirements of section 2(b) 
discussed above. In addition, the proposed rule would clarify a number 
of issues raised by section 2(b) as follows:
    (1) Exception for public housing agencies not governed by board. 
Public housing agencies that are not governed by a board of directors 
or similar governing body would be excepted.
    (2) Resident is full member. A resident board member would be a 
full member of the board of directors or similar governing body. The 
board would not be able to exclude a resident board member from 
participating in any matter before the board on the grounds that the 
resident board member's lease with the public housing agency either 
results or may result in a conflict of interest, unless the matter is 
clearly applicable to the resident board member only in a personal 
capacity.
    (3) Initial implementation of requirement. A board of directors or 
similar governing body would be required to comply with the following 
deadlines, unless the membership of the board already contains at least 
one resident board member. If the board consists of appointed board 
members, the first seat on the board that becomes open on or after 
October 1, 1999, would have to be filled by an eligible resident. If 
the board consists of elected board members, the chief executive 
officer of the unit of general local government whose jurisdiction 
coincides most directly with the jurisdiction of the public housing 
agency would have to create at least one additional seat on the board, 
by December 31, 1999, and would have to fill that seat with an eligible 
resident. In the case of multi-jurisdictional public housing agencies, 
the chief executive officers of each unit of general local government 
that comprises the jurisdiction of the public housing agency would be 
jointly responsible for creating and filling any additional seats. For 
the purposes of this rule, the term ``elected board member'' means:
    (1) A board member who is elected directly to the board; or
    (2) An elected official who serves on the board as a result of 
being elected to another office (i.e. county commissioner, city council 
member, etc.).
    (4) Filling open seats. When the term of a resident board member 
expires or a seat occupied by, or intended for, a

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resident board member otherwise becomes open, the open seat would have 
to be filled with an eligible resident, unless the membership of the 
board would continue to have at least one resident board member after 
the seat becomes open. If the loss of a resident board member would 
leave the membership of the board with no resident board member, the 
open seat would have to be filled with an eligible resident and would 
have to be filled according to the following procedures.
    If the public housing agency plan does not provide for an elected 
resident board member, the board's normal appointing authority would 
have to appoint an eligible resident to fill the open seat. If there 
are no eligible residents who wish to serve on the board at the time 
the seat becomes open, the board would have to continue to make 
reasonable efforts to identify an eligible resident, until an eligible 
resident is appointed to board.
    If the public housing agency plan provides for an elected resident 
board member, the board would have to initiate an election process. If 
there are no eligible residents who wish to stand for election to the 
board at the time the seat becomes open, the board would have to cancel 
the election and initiate a new election process when the board 
identifies an eligible resident who wishes to stand for election. The 
board would have to continue to make reasonable efforts to identify an 
eligible resident until an eligible resident is elected to the board.

II. Findings and Certifications

Environmental Impact

    This proposed rule does not direct, provide for assistance or loan 
and mortgage insurance for, or otherwise govern or regulate, real 
property acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Therefore, under HUD's regulations at 24 CFR 
50.19(c)(1), this rule is categorically excluded from environmental 
review under the National Environmental Policy Act of 1969 (42 U.S.C. 
4321).

Regulatory Flexibility Act

    The Secretary has reviewed this proposed rule before publication 
and by approving it certifies, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities. The proposed rule implements section 505 of the Public 
Housing Reform Act of 1998 (42 U.S.C. 1437), which requires with 
certain exceptions, that the board of directors or similar governing 
body of a public housing agency contain not less than one member who is 
directly assisted by the public housing agency. Section 505 and this 
proposed rule provide flexibility for smaller public housing agencies 
through an exception for public housing agencies that have less than 
300 public housing units. Consequently, HUD does not believe that this 
proposed rule would have a significant economic impact on a substantial 
number of small entities.
    While HUD has determined that this rule would not have a 
significant economic impact on a substantial number of small entities, 
we welcome any comments regarding alternatives to this rule that would 
meet HUD's objectives, a described in this preamble, and would be less 
burdensome to small entities.

Unfunded Mandates Reform Act

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

Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612 (captioned ``Federalism''), has determined 
that the policies contained in this proposed rule would have federalism 
implications. Specifically, the requirement that the membership of the 
board of directors or similar governing body of a public housing agency 
must contain not less than one member who is directly assisted by the 
public housing agency would have direct effects on any state or local 
laws that govern the organization of public housing agencies. HUD has 
prepared and submitted to the Office of Management and Budget a 
Federalism Assessment that addresses the federalism implications raised 
by this proposed rule.

Regulatory Planning and Review

    The Office of Management and Budget has reviewed this rule under 
Executive Order 12866 (captioned ``Regulatory Planning and Review'') 
and determined that this rule is a ``significant regulatory action'' as 
defined in section 3(f) of the Order (although not an economically 
significant regulatory action under the Order). Any changes made to 
this rule as a result of that review are identified in the docket file, 
which is available for public inspection during regular business hours 
(7:30 a.m. to 5:30 p.m.) at the Office of the General Counsel, Rules 
Docket Clerk, Room 10276, U.S. Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410-0500.

List of Subjects in 24 CFR Part 964

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

    For the reasons discussed in the preamble, HUD proposes to amend 24 
CFR part 964 as follows:

PART 964--TENANT PARTICIPATION AND TENANT OPPORTUNITIES IN PUBLIC 
HOUSING

    1. The authority citation for 24 CFR part 964 is revised to read as 
follows:

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

    2. Revise Sec. 964.3 as follows:
    a. Revise paragraph (a) to read as follows;
    b. Redesignate paragraph (e) as paragraph (f); and
    c. Add new paragraph (e) to read as follows.


Sec. 964.3  Applicability and scope.

    (a) The policies and procedures contained in this part apply to any 
HA that has a Public Housing Annual Contributions Contract (ACC) with 
HUD. This part, except for subpart E, does not apply to PHAs with 
housing assistance payments contracts with HUD under section 8 of the 
U.S. Housing Act of 1937.
* * * * *
    (e) Subpart E of this part implements section 2(b) of the United 
States Housing Act of 1937 (42 U.S.C. 1437), which provides for 
resident membership on the board of directors or similar governing body 
of a public housing agency. Subpart E applies to any public housing 
agency that has a public housing annual contributions contract with HUD 
or a housing assistance payments contract with HUD under section 8 of 
the United States Housing Act of 1937 (42 U.S.C. 1437f).
* * * * *
    2. Add subpart E to read as follows:

Subpart E--Resident Board Members

Sec.
964.400  Purpose.
964.405  Applicability.

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964.410  Additional definitions.
964.415  Resident board members.
964.420  Resident board member may be elected.
964.425  Exceptions.
964.430  Nondiscrimination.
964.435  Initial implementation of resident board member 
requirement.
964.440  Filling an open board member seat.

Subpart E--Resident Board Members


Sec. 964.400  Purpose.

    The purpose of this subpart is to implement section 2(b) of the 
United States Housing Act of 1937 (42 U.S.C. 1437).


Sec. 964.405  Applicability.

    This subpart applies to any public housing agency that has a public 
housing annual contributions contract with HUD or a housing assistance 
payments contract with HUD under section 8 of the United States Housing 
Act of 1937 (42 U.S.C. 1437f).


Sec. 964.410  Additional definitions.

    The following additional definitions apply to this subpart only:
    (a) Directly assisted. Directly assisted means a public housing 
resident or a participant in the tenant-based section 8 program.
    (b) Governing board. Governing board means the board of directors 
or similar governing body of a public housing agency.
    (c) Resident board member. A resident board member is a member of 
the governing board who is directly assisted by that public housing 
agency.
    (d) Related unit of general local government. A related unit of 
general local government is the unit of State or local government whose 
jurisdiction coincides most directly with the jurisdiction of the 
public housing agency, or in the case of a multi-jurisdictional public 
housing agency, a unit of State or local government whose jurisdiction 
comprises the jurisdiction of the public housing agency.
    (e) Elected board member. An elected board member is either a 
member of the governing board who is elected directly to the governing 
board or who serves on the board as a result of being elected to 
another office.
    (f) Eligible resident. An eligible resident is a resident who is 
directly assisted by a public housing agency and is eighteen years of 
age or older.


Sec. 964.415  Resident board members.

    Except as provided in Sec. 964.425, the membership of the governing 
board of each public housing agency must contain not less than one 
resident board member.


Sec. 964.420  Resident board member may be elected.

    Residents directly assisted by a public housing agency may elect a 
resident board member if provided for in the public housing agency 
plan.


Sec. 964.425  Exceptions.

    The requirements of this subpart do not apply to any public housing 
agency that:
    (a) Is located in a State that requires the members of a governing 
board to be salaried and to serve on a full-time basis;
    (b) Is not governed by a governing board; or
    (c) Has less than 300 public housing units provided that the public 
housing agency has:
    (1) Provided reasonable notice to the resident advisory board of 
the opportunity for residents to serve on the governing board;
    (2) Not been notified of the intention of any resident to 
participate on the governing board within a reasonable time of the 
resident advisory board receiving the notice described in paragraph 
(c)(1) of this section; and
    (3) Repeated the requirements of paragraphs (c)(1) and (c)(2) of 
this section at least once every year.


Sec. 964.430  Nondiscrimination.

    (a) Membership status. A resident board member is a full member of 
the governing board.
    (b) Residence status. A governing board may not prohibit any person 
from serving on the governing board because that person is a resident 
of a public housing project or is assisted under section 8 of the 
United States Housing Act of 1937 (42 U.S.C. 1437f).
    (c) Conflict of Interest. A governing board may not exclude any 
resident board member from participating in any matter before the 
governing board on the grounds that the resident board member's lease 
with the public housing agency either results or may result in a 
conflict of interest, unless the matter is clearly applicable to the 
resident board member only in a personal capacity.


Sec. 964.435  Initial implementation of resident board member 
requirement.

    Unless the membership of its governing board already contains not 
less than one resident board member, a public housing agency must 
comply with the following deadlines, as applicable:
    (a) If the governing board consists of appointed board members. If 
the governing board consists of appointed board members, the first seat 
on the governing board that becomes open on or after October 1, 1999, 
must be filled by an eligible resident according to the requirements of 
Sec. 964.440.
    (b) If the governing board consists of elected board members. If 
the governing board consists of elected board members, the chief 
executive officer of the related unit of general local government must 
create at least one additional seat on the governing board, by December 
31, 1999, and must fill that seat with an eligible resident according 
to the requirements Sec. 964.440. In the case of multi-jurisdictional 
public housing agencies, the chief executive officers of each related 
unit of general local government are jointly responsible for creating 
and filling any additional seats.


Sec. 964.440  Filling an open board member seat.

    When the term of a resident board member expires or when a seat 
occupied by, or intended for, a resident board member otherwise becomes 
open, the open seat must be filled with an eligible resident, unless 
the membership of the governing board would continue to contain not 
less than one resident board member if the open seat were not filled 
with an eligible resident. An open seat that does not meet this 
requirement must be filled with an eligible resident according to the 
following procedures, as applicable:
    (a) If the public housing agency plan does not provide for an 
elected resident board member. If the public housing agency plan does 
not provide for an elected resident board member, the governing board's 
normal appointing authority must appoint an eligible resident to fill 
the open seat. If there are no eligible residents who wish to serve on 
the governing board at the time the seat becomes open, the governing 
board must continue to make reasonable efforts to identify an eligible 
resident who wishes to serve on the governing board, until an eligible 
resident is appointed to the governing board.
    (b) If the public housing agency plan provides for an elected 
resident board member. If the public housing agency plan provides for 
an elected resident board member, the governing board must initiate an 
election process. If there are no eligible residents who wish to stand 
for election to the governing board at the time the seat becomes open, 
the governing board must cancel the election and initiate a new 
election process when the governing board identifies an eligible 
resident who wishes to stand for election to the governing board. The 
governing board must continue to make reasonable efforts to identify an 
eligible resident

[[Page 33647]]

who wishes to stand for election to the governing board until an 
eligible resident is elected to the governing board.

    Dated: June 15, 1999.
Deborah Vincent,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-15736 Filed 6-22-99; 8:45 am]
BILLING CODE 4210-33-P