[Federal Register Volume 64, Number 203 (Thursday, October 21, 1999)]
[Proposed Rules]
[Pages 56890-56892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27303]
[[Page 56889]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 964
Direct Funding of Public Housing Resident Management Corporations;
Proposed Rule
Federal Register / Vol. 64, No. 203 / Thursday, October 21, 1999 /
Proposed Rules
[[Page 56890]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 964
[Docket No. FR-4501-P-01]
RIN 2577-AC12
Direct Funding of Public Housing Resident Management Corporations
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule revises HUD's regulations regarding
resident participation and resident opportunities in public housing.
Specifically, the rule would make conforming amendments to the HUD
regulations to reflect recent statutory changes made by the Quality
Housing and Work Responsibility Act of 1998. The proposed rule provides
that a resident management corporation (RMC) may receive capital and
operating funds from HUD if the RMC has primary management
responsibility for the public housing project and HUD determines that
the RMC has the capacity to effectively discharge such responsibility.
DATES: Comments Due Date: December 20, 1999.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of 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) comments
are not acceptable. A copy of each communication submitted 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: Paula Blunt, Director, Customer
Services and Amenities Division, Department of Housing and Urban
Development, Office of Public and Indian Housing, 451 Seventh Street,
SW, Room 4228, Washington, DC 20410; telephone (202) 619-8201 (this is
not a toll-free telephone number). Persons with hearing or speech
disabilities may access this number via TTY by calling the free Federal
Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Section 20 of the United States Housing Act of 1937 (42 U.S.C. 1437
et seq.) (the ``1937 Act'') encourages resident management of public
housing projects as a means of improving existing living conditions in
public housing. HUD has implemented section 20 of the 1937 Act in its
regulations at 24 CFR part 964 (captioned ``Tenant Participation and
Tenant Opportunities in Public Housing''). Under section 20, and 24 CFR
part 964, an RMC must be a nonprofit corporation organized under the
laws of the State in which the public housing project is located, and
the tenants of the project must be the sole voting members of the RMC.
An eligible RMC enters into a management contract with the public
housing agency (PHA) establishing the respective management rights and
responsibilities of the RMC and the PHA. The contract must be
consistent with the requirements of the 1937 Act and may provide for
the RMC to perform any or all of the management functions for which the
PHA is responsible to HUD. The management contract is treated as a
contracting out of services and is subject to any provision of a
collective bargaining agreement regarding the contracting out of
services to which the PHA is subject. To assist and encourage resident
management of public housing, HUD is developing a sample management
contract for use by RMCs and PHAs. Once completed, the sample contract
will be included as part of a broader HUD notice, which will also
discuss other issues related to public housing management.
The performance of the RMC is subject to periodic review by the PHA
to ensure that the RMC complies with all applicable requirements and
standards of performance.
II. Public Housing Reform
On October 21, 1998, President Clinton signed into law HUD's fiscal
year 1999 Appropriations Act, which includes the Quality Housing and
Work Responsibility Act of 1998 (Pub. L. 105-276; 112 Stat. 2461, 2522)
(the ``Public Housing Reform Act'' or ``Act''). The Public Housing
Reform Act constitutes a substantial overhaul of HUD's public housing
and Section 8 assistance programs. The changes made by the Public
Housing Reform Act are directed at revitalizing and improving HUD's
public housing and Section 8 tenant-based programs. These changes are
also designed to provide for more resident involvement, and to increase
resident participation and awareness in creating and maintaining a
positive living environment.
III. This Proposed Rule
This proposed rule would amend 24 CFR part 964 to reflect recent
statutory changes made to section 20 of the 1937 Act by section 532 of
the Public Housing Reform Act. Section 532 of the Public Housing Reform
Act provides for the direct provision of capital and operating
assistance to an RMC if: (1) The RMC petitions HUD for the release of
the funds; (2) the management contract between the RMC and the PHA
provides for the RMC to assume the primary management responsibilities
of the PHA; and (3) HUD determines that the RMC has the capability to
effectively discharge such responsibilities. In all other cases,
operating and capital funding will be provided to the RMC by the PHA.
The proposed rule provides that HUD will consider this third
requirement to be satisfied if the RMC is designated at least a
``standard performer'' under the Public Housing Assessment System
(PHAS) (see 24 CFR part 902); and the RMC is not in violation of any
financial, accounting, procurement, civil rights, fair housing, or
other program requirements that HUD determines call into question the
capability of the RMC to effectively discharge its responsibilities
under the contract.
The standard that HUD will use to determine RMC eligibility for
direct assistance does not impose any new requirements on RMCs. The
proposed rule reflects existing performance measures and program
requirements that RMCs must already comply with. For example, RMCs are
already subject to the PHAS performance measures described in 24 CFR
part 902. Further, RMCs are currently required to comply with all
applicable program, civil rights, and financial requirements as a
condition of assistance under HUD's public housing programs. HUD
believes that the use of existing measures will allow HUD to accurately
determine RMC management capability, while minimizing the burdens
imposed on RMCs.
The Annual Contributions Contract between HUD and the PHA will
provide for the direct allocation of operating and capital assistance
to RMCs that meet the requirements described above. Any direct capital
or operating assistance provided to the RMC must be used for purposes
of operating the public housing developments of the PHA and for
performing other eligible activities with respect to public housing. If
HUD provides direct funding to an RMC, the PHA is not responsible for
the actions of the RMC.
[[Page 56891]]
In addition to implementing section 532 of the Public Housing
Reform Act, this proposed rule would also make one clarifying change to
24 CFR part 964. Specifically, this rule would revise Sec. 964.225
(entitled ``Resident management requirements'') to clarify that an RMC
must be in compliance with any local licensing requirement, or other
local requirement, governing the qualifications or operations of a
property manager.
IV. Other Changes Made by the Public Housing Reform Act to Public
Housing Resident Requirements
In addition to the changes described above, the Public Housing
Reform Act makes various other amendments to the statutory requirements
regarding resident participation and resident opportunities in public
housing. For example, the Public Housing Reform Act requires the
participation of residents on the governing board of a PHA (section 505
of the Act) and provides for grant funding of services for public
housing residents (section 538 of the Act).
The resident board membership requirements established by section
505 of the Act are being implemented through a separate proposed
rulemaking published on June 23, 1999 (64 FR 33644). The June 23, 1999
proposed rule would create a new subpart E to 24 CFR part 964
describing these requirements. The other changes made by the Public
Housing Reform Act affecting the part 964 requirements will be the
subject of a separate proposed rulemaking. HUD is committed to the
development of this proposed rule with the active participation of
public housing residents (see Section V of this preamble below).
V. HUD's Ongoing Efforts To Promote Effective Resident
Participation
To further promote effective resident participation in public
housing, HUD is taking various steps to promote resident involvement in
creating and maintaining a positive living environment. As discussed
above, HUD is developing a proposed rule that will implement the
resident related amendments made by the Public Housing Reform Act. HUD
is committed to developing this proposed rule with the active
participation of public housing residents. HUD will solicit resident
input through the scheduling of public forums, solicitations for
written comments, and/or other appropriate means.
HUD's goal in undertaking this rulemaking is to develop a set of
easy-to-understand regulations that reflect the meaningful
contributions of public housing residents. Accordingly, the proposed
rule will not only implement statutory amendments made by the Public
Housing Reform Act, but will also streamline and reorganize 24 CFR part
964 to simplify and improve the clarity of HUD's resident participation
requirements.
HUD is taking several other steps to increase resident
participation in public housing. For example, HUD will conduct training
for resident organizations and PHAs on the new Public Housing Reform
Act. HUD will also clarify in the PHA Plan regulation that reasonable
resources for the Resident Advisory Boards must provide reasonable
means for them to become informed on programs covered by the PHA Plan,
to communicate in writing and by telephone with assisted families and
hold meetings with those families, and to access information regarding
covered programs on the internet, taking into account the size and
resources of the PHA.
VI. Findings and Certifications
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4223). The Finding of No Significant Impact is
available for public inspection between the hours of 7:30 a.m. and 5:30
p.m. weekdays in the Office of the Rules Docket Clerk, Office of
General Counsel, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC.
Regulatory Flexibility Act
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 reasons
for HUD's determination are as follows:
(1) A Substantial Number of Small Entities Will Not be Affected.
The proposed rule is exclusively concerned with public housing agencies
that contract with RMCs for the management and operation of specific
public housing projects. Specifically, the rule would make various
conforming amendments to 24 CFR part 964 (captioned ``Tenant
Participation and Tenant Opportunities in Public Housing'') to reflect
recent statutory changes made by the Public Housing Reform Act. Under
the definition of ``Small governmental jurisdiction'' in section 601(5)
of the RFA, the provisions of the RFA are applicable only to those few
public housing agencies that are part of a political jurisdiction with
a population of under 50,000 persons. The number of entities
potentially affected by this rule is therefore not substantial.
(2) No Significant Economic Impact. The Public Housing Reform Act
improves and simplifies the way in which PHAs and RMCs are funded.
Specifically, section 519 of the Public Housing Reform replaces funding
under the existing Performance Funding System (PFS) with formula
funding under the new Operating Fund and the Capital Improvement
Assistance Program (CIAP) and the Comprehensive Grant Program with
formula allocations under the new Capital Fund. The implementation of
section 519 is beyond the scope of this proposed rule, and is the
subject of separate negotiated rulemakings that HUD is currently
undertaking. Accordingly, the economic impact of this proposed rule
will not be significant, and it will not affect a substantial number of
small entities.
Notwithstanding HUD's determination that this rule will not have a
significant economic effect on a substantial number of small entities,
HUD specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in this preamble.
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 would not impose, within the
meaning of the UMRA, any Federal mandates on any State, local, or
tribal governments or on the private sector.
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. This proposed rule would
revise 24 CFR part 964 to reflect recent statutory changes made to
section 20 of the 1937 Act by section 532 of the Public Housing Act.
The proposed rule would also make several clarifying and technical
changes to the part 964. No
[[Page 56892]]
programmatic or policy change will result from this rule that will
affect the relationship between the Federal government and State and
local governments.
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.
Accordingly, for the reasons described 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 part 964 is revised to read as
follows:
Authority: 42 U.S.C. 1437d, 1437g, 1437r, 3535(d).
2. Amend Sec. 964.225 as follows:
a. Redesignate paragraphs (h), (i), (j), and (k) as paragraphs (i),
(j), (k), and (l), respectively;
b. Add new paragraph (h); and
c. Revise newly designated paragraph (j).
The addition and revision to Sec. 964.225 read as follows:
Sec. 964.225 Resident management requirements.
* * * * *
(h) Direct provision of operating and capital assistance to RMC.--
(1) Direct provision of assistance to RMC. The ACC shall provide for
the direct provision of operating and capital assistance by HUD to an
RMC if:
(i) The RMC petitions HUD for the release of funds;
(ii) The contract provides for the RMC to assume the primary
management responsibilities of the PHA;
(iii) The RMC has been designated as at least a ``standard
performer'' under the Public Housing Assessment System (PHAS) (see 24
CFR part 902); and
(iv) The RMC is not in violation of any financial, accounting,
procurement, civil rights, fair housing or other program requirements
that HUD determines call into question the capability of the RMC to
effectively discharge its responsibilities under the contract.
(2) Use of assistance. Any direct capital or operating assistance
provided to the RMC must be used for purposes of performing eligible
activities with respect to public housing as may be provided under the
contract.
(3) Responsibilities of PHA. If HUD provides direct funding to a
RMC under paragraph (h)(1) of this section, the PHA is not responsible
for the actions of the RMC.
* * * * *
(j) Bonding, insurance, and licensing. (1) Bonding and insurance.--
Before assuming any management responsibility under its contract, the
RMC must provide fidelity bonding and insurance, or equivalent
protection that is adequate (as determined by HUD and the PHA) to
protect HUD and the PHA against loss, theft, embezzlement, or
fraudulent acts on the part of the RMC or its employees.
(2) Licensing and other local requirements. An RMC must be in
compliance with any local licensing, or other local requirement,
governing the qualifications or operations of a property manager.
* * * * *
Dated: October 13, 1999.
Deborah Vincent,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-27303 Filed 10-20-99; 8:45 am]
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