[Federal Register Volume 64, Number 120 (Wednesday, June 23, 1999)]
[Rules and Regulations]
[Pages 33636-33637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15737]



[[Page 33635]]

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Part III





Department of Housing and Urban Development





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24 CFR Part 968



Comprehensive Improvement Assistance Program; Final Rule

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

[[Page 33636]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 968

[Docket No. FR-4462-F-02]
RIN 2577-AB97


Comprehensive Improvement Assistance Program

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

ACTION: Final rule.

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SUMMARY: This rule amends 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: Effective date: July 23, 1999.

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, DC 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.
    On April 30, 1999 (64 FR 23484), HUD published and requested 
comment on a proposed rule to amend the CIAP regulations to permit the 
distribution of funds, after the formula allocation described in 24 CFR 
968.103, to all eligible PHAs on a non-competitive basis.

II. Response to Public Comments

    HUD received a total of 18 public comments on the April 30, 1999 
proposed rule, 15 from PHAs and three from industry associations. The 
comments were almost entirely positive and in support of the proposed 
rule stating, for example, that the rule would allow PHAs to plan 
improvements each year based on funding they know they will receive 
rather than hope they will receive as in the past.
    A few comments suggested changes to the proposal, primarily to the 
formula factors. Suggested as alternative or additional factors to use 
in the formula were: age of units; management performance; prior 
unfunded CIAP applications; geographic location; availability of other 
government funding; market competition with other federal rent 
subsidized units; need, generally; and counting each studio unit as a 
half-bedroom, rather than a one-bedroom, unit. HUD acknowledges that 
many more or different factors could be considered, but for purposes of 
the FFY 1999 distribution, the final year of CIAP funding which this 
rule addresses, basically agrees with the comment that commended HUD 
for not complicating the formula with a multitude of other factors and 
stated: ``Basing the formula only on the number of units and the 
bedroom distribution appears simple and straightforward.'' Section 519 
of the Quality Housing and Work Responsibility Act of 1998 (Pub. L. 
105-276, 112 Stat. 2461, approved October 21, 1998) (the ``Public 
Housing Reform Act''), authorizes a new system of funding capital 
improvement needs for all PHAs, large and small, on a formula basis 
beginning in FFY 2000.
    Other comments focused on the vacancy preference provided in the 
proposed rule. One comment explicitly supported the retention of 
preferences for emergency modernization and vacancy reduction. Another 
comment stated that a vacancy factor of 25% is too high for a small 
PHA, and the presence of such a high rate suggests severe physical 
conditions, poor management, or design or area factors that would not 
be overcome with minor amounts of CIAP funding. HUD presently considers 
this factor an appropriate threshold as the determinant of an emergency 
that merits additional funding, but will monitor the requests for and 
use of emergency funds for future reconsideration.
    In consideration of the strong positive response to the proposed 
rule, HUD is adopting it as final without change.

Findings and Certifications

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 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 rule under 
Executive Order 12866, Regulatory Planning and Review. OMB determined 
that this 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 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

[[Page 33637]]

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 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.

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

24 CFR Part 968

    Grant programs--housing and community development, Indians, Loan 
programs--housing and community development, Public housing, Reporting 
and recordkeeping requirements.
    Accordingly, for the reasons stated in the preamble, part 968 of 
title 24 of the Code of Federal Regulations 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. 968.110, 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 part 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 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: June 15, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-15737 Filed 6-22-99; 8:45 am]
BILLING CODE 4210-33-P