[Federal Register Volume 64, Number 245 (Wednesday, December 22, 1999)]
[Notices]
[Pages 71799-71813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33106]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4434-N-05]


Quality Housing and Work Responsibility Act of 1998; Status of 
Implementation; Guidance

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

ACTION: Notice.

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SUMMARY: On October 21, 1998, President Clinton signed into law the 
Quality Housing and Work Responsibility Act of 1998 (the ``Public 
Housing Reform Act''). This statute embodies many of the reforms of the 
HUD 2020 Management Reform Plan that are directed at revitalizing and 
improving HUD's public housing and Section 8 assistance programs. This 
notice updates the public on HUD's overall implementation of the Public 
Housing Reform Act and identifies where existing implementation 
guidance may be found, with respect to the provisions regarding public 
housing and tenant-based assistance. This notice also provides further 
implementation guidance on those provisions of the Public Housing 
Reform Act that are effective on October 1, 1999 or on October 21, 
1999.

FOR FURTHER INFORMATION CONTACT: For further information regarding 
public housing and the Section 8 certificate, voucher and moderate 
rehabilitation programs contact Stephen I. Holmquist, Office of Policy, 
Program and Legislative Initiatives, Office of Public and Indian 
Housing, Department of Housing and Urban Development, 451 Seventh 
Street, SW, Room 4116, Washington, DC, 20410; telephone (202) 708-0713 
(this is not a toll-free number).
    Persons with hearing or speech impairments may access that number 
via TTY by calling the Federal Information Relay Service at (800) 877-
8339. Program specialists for more specific HUD program areas are 
listed on the HUD web page at http://hudweb.hud.gov/offices.html.

SUPPLEMENTARY INFORMATION:

I. Introduction

    On October 21, 1998, President Clinton signed into law the Quality 
Housing and Work Responsibility Act of 1998 (Public Law 105-276, 112 
Stat. 2461) (the ``Public Housing Reform Act'') as part of the fiscal 
year 1999 HUD appropriations act. The Public Housing Reform Act makes 
extensive amendments to the United States Housing Act of 1937 (the 
``1937 Act''), which generally governs HUD's public housing and tenant-
based Section 8 housing assistance programs. Certain provisions of the 
Public Housing Reform Act became effective immediately on enactment 
(October 21, 1998). Most provisions, however, became effective on 
October 1, 1999, although some provisions become effective on October 
21, 1999 (one year from enactment) or on other specified dates.
    On February 18, 1999 (64 FR 8192), HUD published a Notice of 
Initial Guidance on the Public Housing Reform Act to advise the public 
of those provisions that were effective immediately and of action that 
may or should be taken at that point. The Notice also provided guidance 
on certain other provisions in the fiscal year 1999 HUD appropriations 
act that affect the public housing and Section 8 programs. Since 
publication of the February 18, 1999 notice, HUD has published numerous 
other notices and proposed, interim, and final rules to implement the 
Public Housing Reform Act.
    This notice updates the public on HUD's overall implementation of 
the Public Housing Reform Act and identifies where existing 
implementation guidance may be found, with respect to the provisions 
regarding public housing and tenant-based assistance. The notice also 
provides further implementation guidance on those provisions of the 
Public Housing Reform Act that became effective on October 1, 1999, or 
on October 21, 1999.
    Some of the Public Housing Reform Act provisions do not require HUD 
rulemaking, while others are the subject of rulemaking that is still in 
progress. For rulemaking that is still in progress, this notice 
provides guidance that Public Housing Agencies (PHAs) should follow 
until HUD completes rulemaking. Unless provided otherwise in this 
Notice published today, PHAs that follow HUD's guidance will not be

[[Page 71800]]

penalized for any changes made later in the rulemaking process. If 
changes are made later in the rulemaking process, HUD will provide 
adequate time for PHAs to adjust their policies accordingly.

II. Summary of Rulemakings Undertaken Under the Public Housing 
Reform Act

    In addition to the Notice of Initial Guidance, published on 
February 18, 1999, and an update to that Notice, published on April 30, 
1999 (64 FR 23344), the following rulemaking has occurred under the 
Public Housing Reform Act. (The reference to public comments received 
on the rules refer to written comments received on the rules by the 
public comment deadline. The number of comments does not include the 
comments raised at the public forums held on the Public Housing Agency 
Plan rule and the Section 8 Certificate and Voucher Merger rule. 
Additionally, the number does not include late comments. Although 
comments were received late on several rules, HUD made every effort to 
look at all comments and consider all issues raised.)

Final Rules

    1. Public Housing Agency Plans. The final rule was published on 
October 21, 1999 (64 FR 56844). HUD received 52 public comments on the 
interim rule published on February 18, 1999 (64 FR 8170); in addition, 
public forums were held in Atlanta, GA, Omaha, NE, Syracuse, NY, and 
Washington, DC.
    2. Statutory Merger of the Section 8 Certificate and Voucher 
Programs (Housing Choice Voucher Program). The final rule was published 
on October 21, 1999 (64 FR 56894). An amendment to the final rule was 
published on November 3, 1999 (64 FR 59620). HUD received 93 public 
comments on the interim rule published on May 14, 1999 (64 FR 26632); 
in addition, public forums were held in Omaha, NE; Syracuse, NY; and 
Washington, DC.
    3. Renewals of Section 8 Tenant-Based Assistance Contracts. The 
final rule for Renewals of Section 8 Tenant-Based Assistance Contracts, 
developed through negotiated rulemaking, was published on October 21, 
1999 (64 FR 56882). (The preamble to the October 21, 1999 final rule 
includes a discussion of the negotiated rulemaking process, lists the 
committee members, and provides the twelve dates of the negotiated 
rulemaking committee meetings.) The notice for calendar year 1999 
renewals was published on February 18, 1999 (64 FR 8188). This notice 
followed a direct notice issued by HUD's Office of Public and Indian 
Housing on December 31, 1998, in accordance with the statute.
    4. Revised Restrictions on Assistance to Noncitizens. The final 
rule was published on May 12, 1999 (64 FR 25726). HUD received 22 
public comments on the interim rule published on November 29, 1996 (61 
FR 60535).
    5. Comprehensive Improvement Assistance Program (CIAP). The final 
rule was published on June 23, 1999 (64 FR 33636). This allowed HUD to 
distribute the funds by formula in fiscal year 1999, one year before 
the statute required the distribution of funds by formula. HUD received 
18 public comments on the proposed rule published on April 30, 1999 (64 
FR 23484). The final rule covers funding distribution for fiscal year 
1999.
    6. Public Housing Drug Elimination Program (PHDEP) Formula 
Allocation. The final rule was published on September 14, 1999 (64 FR 
49900). This allowed HUD to distribute the funds by formula in fiscal 
year 1999, one year before the statute required distribution of funds 
by formula. HUD received 26 public comments on the proposed rule 
published on May 12, 1999 (64 FR 25736). HUD received 60 public 
comments on the Advance Notice of Proposed Rulemaking published on 
February 18, 1999 (64 FR 8210).
    7. Required Resident on the PHA Board of Commissioners or Similar 
Governing Body. The final rule was published on October 21, 1999 (64 FR 
56870). HUD received 71 public comments on the proposed rule published 
on June 23, 1999 (64 FR 33644).

Proposed Rules (Final Rule Not Yet Published)

    1. Changes to Admissions, Rents and Occupancy Requirements in the 
Public Housing and Section 8 Programs. The proposed rule was published 
on April 30, 1999. HUD received 113 public comments on the proposed 
rule.
    2. Section 8 Homeownership Vouchers. The proposed rule was 
published on April 30, 1999 (64 FR 23488). HUD received 93 public 
comments on this proposed rule.
    3. Amendments to the Public Housing Assessment System (PHAS). The 
proposed rule was published on June 22, 1999 (64 FR 33348). HUD 
received 29 public comments on the proposed rule. On October 21, 1999 
(64 FR 56676), HUD published a notice advising that HUD would provide 
transition assistance to the PHAS for PHAs with fiscal years ending 
September 30, 1999, or December 31, 1999. For these PHAs, no PHAS score 
would be issued for fiscal years ending September 30, 1999, and 
December 31, 1999. Instead these PHAs would receive an assessment 
solely on the basis of their management operations in accordance with 
subpart D of the PHAS regulation (24 CFR part 902). PHAs with fiscal 
years ending after December 31, 1999, would be issued PHAS scores.
    4. Pet Ownership in Public Housing. The proposed rule was published 
on June 23, 1999 (64 FR 33640). HUD received 3,777 public comments on 
the proposed rule. In addition to comments received by the public 
comment deadline, HUD continued to receive public comments on this rule 
several weeks after the deadline. These post-deadline comments numbered 
approximately 3,000.
    5. One Strike Screening and Eviction for Drug Abuse and Other 
Criminal Activity. The proposed rule was published on July 23, 1999 (64 
FR 40262). HUD received 29 public comments on the proposed rule.
    6. Required Conversion of Developments from Public Housing Stock. 
The proposed rule was published on July 23, 1999 (64 FR 40232). HUD 
received 5 public comments on the proposed rule.
    7. Voluntary Conversion of Developments from Public Housing Stock. 
The proposed rule was published on July 23, 1999 (64 FR 40240). HUD 
received 6 public comments on the proposed rule.
    8. Allocation of Funds Under the Capital Fund. The proposed rule 
was developed through negotiated rulemaking and published on September 
14, 1999 (64 FR 49924). (The preamble to the September 14, 1999 
proposed rule includes a discussion of the negotiated rulemaking 
process, lists the committee members, and provides the sixteen dates of 
the negotiated rulemaking committee meetings.) HUD received 10 public 
comments on the proposed rule.
    9. Consortia of Public Housing Agencies and Joint Ventures. The 
proposed rule was published on September 14, 1999 (64 FR 49940). The 
public comment period for this rule closed on November 15, 1999. HUD 
received 6 public comments on the proposed rule.
    10. Public Housing Homeownership Program. The proposed rule was 
published on September 14, 1999 (64 FR 49932). The public comment 
period for this rule closed on November 15, 1999. HUD received 12 
public comments on the proposed rule.
    11. Direct Funding of Resident Management Corporations. The 
proposed rule was published on October

[[Page 71801]]

21, 1999 (64 FR 56890). The proposed rule provides for a 60-day public 
comment period.

Proposed Rules Under Development

    The following proposed rules are under development and have not yet 
been published:
    1. Public Housing Capital Fund. This rule will establish regulatory 
provisions concerning the Public Housing Capital Fund other than the 
formula.
    2. Public Housing Mixed Finance. This rule will implement section 
539 of the Public Housing Reform Act, as further discussed below.
    3. Public Housing Demolition/Disposition. This rule will implement 
more fully section 531 of the Public Housing Reform Act, as further 
discussed below.
    4. Allocation of Funds Under the Public Housing Operating Fund. 
This is a proposed rule to be developed using negotiated rulemaking 
procedures.
    In addition to these proposed rules, HUD also expects to publish a 
proposed rule on tenant participation in public housing, which will 
amend the existing tenant participation regulations in 24 CFR part 964, 
and may determine that other rulemakings related to the Public Housing 
Reform Act are desirable.

III. Summary Chart of Status and Guidance

    The following chart summarizes the HUD guidance issued to date on 
each section of the Public Housing Reform Act covered by this Notice. 
The chart should be read in conjunction with the narrative which 
follows in the next section.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Implemented by
                                     February 18, 1999--
         Statutory section            Notice of Initial        Proposed rule           Interim rule           Final rule         Additional information
                                           Guidance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 503(c)  Technical                                                                                                         Report containing
 Recommendations.                                                                                                               proposals for technical
                                                                                                                                and conforming
                                                                                                                                legislative changes was
                                                                                                                                submitted to the
                                                                                                                                Congress on July 23,
                                                                                                                                1999.
Sec. 503(d)  List of Obsolete                                                                                                  The required Federal
 Documents.                                                                                                                     Register notice was
                                                                                                                                published on October 1,
                                                                                                                                1999 (64 FR 53400).
Sec. 505  Declaration of Policy                            June 23, 1999 (64 FR                          October 21, 1999 (64  Rulemaking implemented
 and Public Housing Agency                                  33644).                                       FR 56870).            the statutory
 Organization.                                                                                                                  requirement that the
                                                                                                                                governing board of each
                                                                                                                                PHA, with certain
                                                                                                                                exceptions, contain at
                                                                                                                                least one member who is
                                                                                                                                directly assisted by the
                                                                                                                                PHA.
Sec. 506  Definitions.............                                                                                             Statutory changes were
                                                                                                                                incorporated in HUD
                                                                                                                                rulemakings implementing
                                                                                                                                the Public Housing
                                                                                                                                Reform Act, as
                                                                                                                                appropriate.
Sec. 507  Minimum Rent............  Yes..................  Part of Admissions                            In development.       Section 507 was effective
                                                            and Occupancy                                                       upon enactment.
                                                            proposed rule
                                                            published on April
                                                            30, 1999 (64 FR
                                                            23459).
Sec. 508  Determination of                                 Part of Admissions                            In development.       Partial implementation
 Adjusted Income and Median Income.                         and Occupancy                                                       was required by August
                                                            rulemaking.                                                         6, 1999 Notice of
                                                                                                                                Guidance on Public
                                                                                                                                Housing Rent Policies
                                                                                                                                (64 FR 42956).
Sec. 509  Family Self-Sufficiency   Yes..................  Part of Admissions                            In development......
 Program.                                                   and Occupancy
                                                            rulemaking.
Sec. 510  Prohibition on Use of                                                                                                Self-implementing; no
 Funds.                                                                                                                         rulemaking required.
Sec. 511  Public Housing Agency                                                   February 18, 1999 (64  October 21, 1999 (64  Additional guidance
 Plans.                                                                            FR 8170).              FR 56844).            provided in PIH Notices
                                                                                                                                99-33 and 99-51. HUD
                                                                                                                                expects to provide
                                                                                                                                further information and
                                                                                                                                direction.
Sec. 512  Community Service and     Yes, as to changes to  Part of Admissions                            In development......
 Family Self-Sufficiency             welfare-related        and Occupancy
 Requirements.                       programs               rulemaking.
                                     requirements (see
                                     amended subsection
                                     12(d) of the 1937
                                     Act).

[[Page 71802]]

 
Sec. 513  Income Targeting for      Yes..................  Part of Admissions     Part of PHA Plan       Admissions and
 Public Housing and Tenant-Based                            and Occupancy          rulemaking, with       Occupancy final
 Section 8 Assistance.                                      rulemaking.            regard to              rule in development.
                                                                                   deconcentration (see
                                                                                   section 511).
                                                                                  Part of Section 8      Part of PHA Plan
                                                                                   Merger Interim rule    rulemaking, with
                                                                                   with regard to         regard to
                                                                                   Section 8 vouchers.    deconcentration
                                                                                   The interim rule was   (see section 511).
                                                                                   published on May 14,
                                                                                   1999 (64 FR 26632)
                                                                                   (see section 545).
                                                                                                         Final Section 8
                                                                                                          Merger rule
                                                                                                          published on
                                                                                                          October 21, 1999
                                                                                                          (64 FR 56894) (see
                                                                                                          section 545).
Sec. 514  Repeal of Federal         Yes..................  Part of Admissions     Part of Section 8      Admissions and
 preferences.                                               and Occupancy          Merger rulemaking      Occupancy final
                                                            rulemaking (for        (for Section 8         rule in
                                                            public housing and     tenant-based           development.
                                                            Section 8 project      vouchers) (See
                                                            based assistance).     section 545).
                                                                                                         Part of Section 8
                                                                                                          Merger rulemaking
                                                                                                          (See section 545).
Sec. 515  Joint Ventures and                               September 14, 1999                            In development.       See specific additional
 Consortia of PHAs.                                         (64 FR 49940).                                                      guidance below.
Sec. 516  Public Housing Agency                                                                                                Rulemaking in
 Mortgages and Security Interests.                                                                                              development. See
                                                                                                                                specific additional
                                                                                                                                guidance below.
Sec. 517  Mental Health Action                                                                                                 Development of action
 Plan.                                                                                                                          plan and compliance with
                                                                                                                                other statutory
                                                                                                                                requirements has begun.
Sec. 518(b)  Local Notification...                                                                                             No rulemaking necessary,
                                                                                                                                but additional
                                                                                                                                elaboration may be
                                                                                                                                provided in Capital Fund
                                                                                                                                program (non formula)
                                                                                                                                rulemaking (see section
                                                                                                                                519).
Sec. 519:
 
1. Capital Fund formula                                    September 14, 1999                            In development.       See specific additional
                                                            (64 FR 49924).                                                      guidance below.
    2. Capital Fund program (non-                          In development.                                                     See specific additional
     formula).                                                                                                                  guidance below.
Sec. 519  Operating Fund..........  Yes (transition        Negotiated proposed                                                 See specific additional
                                     provisions).           rule in development.                                                guidance below.
Sec. 519  Other Provisions........  Yes..................                                                                      See specific additional
                                                                                                                                guidance below.
Sec. 520  Total Development Cost..                         In development.......                                               Guidance also provided in
                                                                                                                                PIH Notice 99-17.
Sec. 521  Sanctions for Improper                                                                                               HUD will cross-reference
 Use of Amounts.                                                                                                                this sanction authority
                                                                                                                                in its program
                                                                                                                                regulations, as
                                                                                                                                appropriate.

[[Page 71803]]

 
Sec. 522  Repeal of Modernization                                                                                              Guidance provided in the
 Fund.                                                                                                                          March 23, 1999 HUD-CPD
                                                                                                                                memorandum on the
                                                                                                                                ``Impacts of the 1999
                                                                                                                                Appropriations Act on
                                                                                                                                HOME and SHOP'', and the
                                                                                                                                March 25, 1999
                                                                                                                                clarifying memorandum on
                                                                                                                                the same subject. See
                                                                                                                                specific additional
                                                                                                                                guidance below.
Sec. 523  Family Choice of Rental   Discussed but not      Part of Admissions                            In development.       Implementation required
 Payment.                            implemented.           and Occupancy                                                       by the August 6, 1999
                                                            rulemaking.                                                         Notice of Guidance on
                                                                                                                                Public Housing Rent
                                                                                                                                Policies.
Sec. 524  Occupancy by Police       Yes..................  Part of Admissions                            In development.       .........................
 Officers and Over-Income Families.                         and Occupancy
                                                            rulemaking.
Sec. 525  Site-Based Waiting Lists                                                Part of PHA Plan       Part of PHA Plan      .........................
                                                                                   rulemaking (see        rulemaking (see
                                                                                   section 511).          section 511).
Sec. 526  Pet Ownership...........                         June 23, 1999 (64 FR                          In development.       .........................
                                                            33640).
Sec. 529  Contract Provisions.....                                                                                             No rulemaking required;
                                                                                                                                to be implemented
                                                                                                                                through amendments to
                                                                                                                                Annual Contributions
                                                                                                                                Contracts (ACCs).
Sec. 530  Housing Quality           Yes..................                                                                      No rulemaking required;
 Requirements.                                                                                                                  to be implemented
                                                                                                                                through ACC amendments.
Sec. 531  Demolition and            Yes..................  In development.        Part of PHA Plan       Part of the PHA Plan  Additional guidance
 Disposition of Public Housing.                                                    rulemaking (see        rulemaking (see       provided in PIH Notice
                                                                                   section 511).          section 511).         99-19.
Sec. 532  Resident Councils and                            October 21, 1999 (64                          Final rule for        .........................
 Resident Management Corporations.                          FR 56890) (provides                           October 21, 1999
                                                            for the direct                                proposed rule in
                                                            funding of RMCs);                             development.
                                                            more comprehensive
                                                            proposed rule in
                                                            development.
Sec. 533  Voluntary Conversion of                          July 23, 1999 (64 FR                          In development.       See specific additional
 Public Housing to Vouchers.                                40240).                                                             guidance below.
Sec. 534  Transfer of Management                                                                                               No rulemaking necessary
 of Certain Housing.                                                                                                            or anticipated. See
                                                                                                                                specific additional
                                                                                                                                guidance below.
Sec. 535  Demolition, Site                                                                                                     Substantially implemented
 Revitalization, Replacement                                                                                                    by the FY 1999 notice of
 Housing, and Tenant-Based                                                                                                      Funding Availability
 Assistance Grants for Projects                                                                                                 (NOFA) for the HOPE VI
 (HOPE VI).                                                                                                                     program; published on
                                                                                                                                February 26, 1999 (64 FR
                                                                                                                                9618). HUD may undertake
                                                                                                                                rulemaking in FY 2000.
Sec. 536  Public Housing                                   September 14, 1999                            In development.       .........................
 Homeownership.                                             (64 FR 49932).
Sec. 537  Required Conversion of                           July 23, 1999 (64 FR                          In development.       .........................
 Public Housing to Vouchers.                                40232).

[[Page 71804]]

 
Sec. 538  Linking Services to                                                                                                  Implemented through FY
 Public Housing Residents.                                                                                                      1999 NOFA on the
                                                                                                                                Resident Opportunities
                                                                                                                                and Self-Sufficiency
                                                                                                                                (ROSS) program;
                                                                                                                                published on August 10,
                                                                                                                                1999 (64 FR 43530). HUD
                                                                                                                                may undertake rulemaking
                                                                                                                                in FY 2000.
Sec. 539  Mixed-Finance Public                             In development.                                                     .........................
 Housing.
Sec. 545  Merger of Certificate                                                   May 14, 1999 (64 FR    October 21, 1999 (64  .........................
 and Voucher Programs.                                                             26632).                FR 56894). An
                                                                                                          amendment to the
                                                                                                          final rule was
                                                                                                          published on
                                                                                                          November 3, 1999
                                                                                                          (64 FR 59620).
Sec. 546  Public Housing Agencies.                                                Part of Section 8      Part of Section 8     .........................
                                                                                   merger rulemaking      merger rulemaking
                                                                                   (see section 545).     (see section 545).
Sec. 547  Administrative Fees.....   Yes.................                                                                      Initial guidance will be
                                                                                                                                supplemented by annual
                                                                                                                                notices.
Sec. 548  Law Enforcement and       Yes..................  Part of Admissions                            In development.       .........................
 Security Personnel in Assisted                             and Occupancy
 Housing.                                                   rulemaking.
Sec. 549  Advance Notice to         Yes..................                         Part of Section 8      Part of Section 8     Additional guidance
 Tenants of Expiration,                                                            merger rulemaking      merger rulemaking     provided in PIH Notice
 Termination, or Owner Nonrenewal                                                  (see section 545)..    (see section 545).    98-64.
 of Assistance Contracts.
Sec. 550  Technical and Conforming                                                                                             No rulemaking necessary
 Amendments.                                                                                                                    or anticipated.
Sec. 551  Funding and Allocation..  Yes.                                                                                       .........................
Sec. 553  Portability.............                                                Part of Section 8      Part of Section 8     .........................
                                                                                   merger rulemaking      merger rulemaking
                                                                                   (see section 545).     (see section 545).
Sec. 554  Leasing to Voucher        Yes..................                         Part of Section 8      Part of Section 8     .........................
 Holders.                                                                          merger rulemaking      merger rulemaking
                                                                                   (see section 545).     (see section 545).
Sec. 555  Homeownership Option....                         April 30, 1999 (64 FR                         In development.       .........................
                                                            23488).
Sec. 556  Renewals................                                                                       Negotiated final      Consistent with statutory
                                                                                                          rule published on     requirement, the October
                                                                                                          October 21, 1999      21, 1999 final rule was
                                                                                                          (64 FR 56894).        preceded by an
                                                                                                                                implementing PIH Notice
                                                                                                                                (98-65). For the
                                                                                                                                convenience of the
                                                                                                                                public, the PIH notice
                                                                                                                                was also published in
                                                                                                                                the Federal Register on
                                                                                                                                February 18, 1999 (64 FR
                                                                                                                                8188).
Sec. 557  Manufactured Housing                                                                                                 Implemented by letter to
 Demonstration Program.                                                                                                         the participating
                                                                                                                                housing authorities.
Sec. 559  Rulemaking and                                                          Part of Section 8      Part of Section 8     .........................
 Implementation.                                                                   merger rulemaking      merger rulemaking
                                                                                   (see section 545).     (see section 545).
Sec. 561  Home Rule Flexible Grant  Yes.
 Demonstration.

[[Page 71805]]

 
Sec. 563  Performance Evaluation                                                                                               HUD has entered into the
 Study.                                                                                                                         statutorily required
                                                                                                                                contract, with the
                                                                                                                                National Academy of
                                                                                                                                Public Administration
                                                                                                                                (NAPA), and the study is
                                                                                                                                proceeding.
Sec. 564  Public Housing                                   June 22, 1999 (64 FR                          In development.       Partial implementation
 Management Assessment Program.                             33348).                                                             (regarding independent
                                                                                                                                assessment of small
                                                                                                                                troubled PHAs) provided
                                                                                                                                in the April 30, 1999
                                                                                                                                Initial Implementation
                                                                                                                                Guidance Update Notice
                                                                                                                                (64 FR 23344). Further
                                                                                                                                details were also
                                                                                                                                provided in a Federal
                                                                                                                                Register notice
                                                                                                                                published on October 21,
                                                                                                                                1999 (64 FR 33348).
Sec. 565  Expansion of Powers for   Yes..................  Part of the PHAS                              In development......
 Dealing with Public Housing                                rulemaking (see
 Agencies in Substantial Default.                           section 564).
Sec. 566  Audits..................                                                                                             To be implemented through
                                                                                                                                ACC amendment.
Sec. 567  Advisory Council for                                                                                                 No rulemaking is
 Housing Authority of New Orleans.                                                                                              necessary or
                                                                                                                                anticipated.
Sec. 568  Troubled PHAs and                                                                                                    Effective on October 1,
 Consolidated Plans.                                                                                                            1999. Will be
                                                                                                                                implemented through
                                                                                                                                rulemaking on
                                                                                                                                Consolidated Plans.
Sec. 575  Provisions Applicable     Yes (the provision     The remaining                                 In development......
 Only to Public Housing and          regarding obtaining    provisions are part
 Section 8 Assistance.               information from       of the ``One
                                     drug abuse treatment   Strike'' rulemaking
                                     facilities).           (64 FR 40262, July
                                                            23, 1999).
Sec. 576  Screening of Applicants                          Part of the ``One                             In development......
 for Federally Assisted Housing.                            Strike'' rulemaking.
Sec. 577  Termination of Tenancy                           Part of the ``One                             In development......
 and Assistance.                                            Strike'' rulemaking.
Sec. 578  Ineligibility of                                 Part of the ``One                             In development......
 Dangerous Sex Offenders for                                Strike'' rulemaking.
 Public Housing.
Sec. 579  Definitions.............                                                                                             These definitions are
                                                                                                                                applicable to the
                                                                                                                                requirements described
                                                                                                                                in sections 575-578.
Sec. 581  Annual Report...........                                                                                             The first annual report
                                                                                                                                was submitted to the
                                                                                                                                Congress in accordance
                                                                                                                                with the required
                                                                                                                                schedule.
Sec. 582  Repeals.................                                                                                             Effective on October 1,
                                                                                                                                1999. No rulemaking is
                                                                                                                                necessary or
                                                                                                                                anticipated.
Sec. 583  Consolidated Plans......                                                                                             Effective October 1,
                                                                                                                                1999. Will be
                                                                                                                                implemented through
                                                                                                                                rulemaking on
                                                                                                                                Consolidated Plans.
Sec. 584  Use of American Products  Yes.

[[Page 71806]]

 
Sec. 585  GAO Study on Housing                                                                                                 The study required by
 Assistance Programs.                                                                                                           this section is under
                                                                                                                                way.
Sec. 586  Drug Elimination Program                         May 12, 1999 (64 FR                           September 14, 1999    Proposed rule was
                                                            25736).                                       (64 FR 49900).        preceded by Advance
                                                                                                                                Notice of Proposed
                                                                                                                                Rulemaking published on
                                                                                                                                February 18, 1999 (64 FR
                                                                                                                                8210).
Sec. 587  Report on Drug                                                                                                       Report was submitted to
 Elimination Contracts.                                                                                                         Congress as required.
Sec. 589  Notice on Treatment of                                                                                               Required Federal Register
 Occupancy Standards.                                                                                                           notice published on
                                                                                                                                December 18, 1998 (63 FR
                                                                                                                                70256). No further
                                                                                                                                regulation is necessary.
Sec. 592  Use of Assisted Housing                                                                        May 12, 1999 (64 FR
 by Aliens.                                                                                               25726).
Sec. 595  Native American Housing                                                                                              Implemented by notice. No
 Assistance.                                                                                                                    rulemaking is necessary
                                                                                                                                or anticipated.
Sec. 596  Community Development                                                                                                No rulemaking is
 Block Grant Public Services Cap.                                                                                               necessary or
                                                                                                                                anticipated.
Sec. 597  Moderate Rehabilitation   Yes..................                                                                      Additional guidance
 Terms for Contract Renewals.                                                                                                   provided in PIH Notice
                                                                                                                                98-62. No rulemaking is
                                                                                                                                necessary or
                                                                                                                                anticipated.
Sec. 599  Tenant participation....                         June 17, 1999 (64 FR                          In development.
                                                            32782).
Sec. 599H  Miscellaneous..........                                                                                             No rulemaking is
                                                                                                                                necessary or
                                                                                                                                anticipated.
--------------------------------------------------------------------------------------------------------------------------------------------------------

IV. Section-by-Section Narrative of Status of Public Housing Reform 
Act Implementation and Guidance

    The following narrative clarifies and elaborates upon the 
information provided in the preceding chart, and is organized by 
section number from the Public Housing Reform Act. Several statutory 
sections of the Public Housing Reform Act were effective upon 
enactment. HUD's February 18, 1999 Notice of Initial Guidance provided 
notification of those sections of the Public Housing Reform Act that 
were immediately effective and HUD provided guidance concerning the 
action, if any, that was required to be taken. Therefore, reference in 
this narrative to a statutory section being ``implemented by the 
February 18, 1999 Notice of Initial Guidance'' is a reference to the 
notification and guidance provided in this February 18, 1999 notice. 
Also, dates on which rules were published, and which were listed in 
Section II of this notice, are not always restated below.
    Section 503(c)--Technical Recommendations. Section 503(c) requires 
HUD to submit to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Banking and Financial Services of 
the House of Representatives recommended technical and conforming 
legislative changes necessary to carry out the Public Housing Reform 
Act. HUD submitted its recommendations to the appropriate committees on 
July 23, 1999. One of the important recommended sections, regarding 
income eligibility adjustment, was enacted in the HUD/VA Independent 
Appropriations Act for Fiscal Year 2000 (Pub.L. 106-74, approved 
October 20, 1999).
    Section 503(d)--List of Obsolete Documents. Section 503(d) requires 
HUD to publish in the Federal Register, by October 1, 1999, a list of 
all rules, regulations, and orders (including all handbooks, notices, 
and related requirements) pertaining to public housing or Section 8 
tenant-based programs issued or promulgated under the 1937 Act before 
enactment of the Public Housing Reform Act that are or will be obsolete 
because of the enactment of the Public Housing Reform Act or are 
otherwise obsolete. The required list was published in the Federal 
Register on October 1, 1999 (64 FR 53400).
    Section 505--Declaration of Policy and Public Housing Agency 
Organization. Section 505 of the Public Housing Reform Act, which 
became effective October 1, 1999, amends section 2(b) of the 1937 Act 
to require that the membership of the board of directors or similar 
governing body of each PHA, with certain exceptions, contain not less 
than one member who is directly assisted by the PHA. The resident board 
member may, if provided in the PHA plan, be elected by the residents 
directly assisted by the PHA. The final rule implementing section 505 
of the Public Housing Reform Act was published on October 21, 1999.
    Section 506--Definitions. Section 506 of the Public Housing Reform 
Act became effective October 1, 1999, and amends section 3(b) of the 
1937 Act to modify definitions relating to the terms ``public 
housing,'' ``single persons,'' and ``person with disabilities'' (the 
latter definition is also included in the ``One Strike'' proposed 
rule). This section also adds definitions of the terms ``drug-

[[Page 71807]]

related criminal activity,'' ``mixed-finance project,'' ``public 
housing agency plan,'' ``Capital Fund,'' and ``Operating Fund.'' 
Conforming amendments have been and will be made to applicable HUD 
regulations to reflect the statutory revisions to these terms.
    Section 507--Minimum Rent. Section 507 of the Public Housing Reform 
Act became effective October 21, 1998, and was implemented by the 
February 18, 1999 Notice of Initial Guidance, which provided guidance 
on how PHAs should comply until publication of the Admissions and 
Occupancy final rule. Publication of this rule is expected within the 
next several weeks.
    Section 508--Determination of Adjusted Income and Median Income. 
Section 508 of the Public Housing Reform Act amends section 3(b)(5) of 
the 1937 Act to provide the manner in which adjusted income and median 
income will be determined, and provides certain mandatory exclusions. 
This section was effective beginning on October 1, 1999 (except that 
the provision relating to income limits in Rockland County, New York 
was effective October 21, 1998). In anticipation of the final rule on 
Admissions and Occupancy, HUD published a Notice of Guidance on Public 
Housing Rent Policies in the Federal Register on August 6, 1999 (64 FR 
42956), which made clear that the choice of rent and mandatory 
disregard of increased earned income provisions were to be implemented 
by PHAs on October 1, 1999. As the August 6, 1999 notice stated, any 
PHAs which followed that guidance will not be penalized for any changes 
made by HUD at the final rule stage.
    Section 509--Family Self-Sufficiency Program. Section 509 of the 
Public Housing Reform Act amends section 23 of the 1937 Act, regarding 
the Family Self-Sufficiency program, and was effective beginning on 
October 21, 1998. This section was implemented by the February 18, 1999 
Notice of Initial Guidance and will be elaborated on in the Admissions 
and Occupancy final rule.
    Section 510--Prohibition on Use of Funds. Section 510 of the Public 
Housing Reform Act is effective beginning on October 1, 1999. Section 
510 amends section 5 of the 1937 Act by adding a new subsection (l) 
that provides as follows:

    None of the funds made available to the Department of Housing 
and Urban Development to carry out [the Public Housing Reform Act], 
which are obligated to State or local governments, public housing 
agencies, housing finance agencies, or other public or quasi-public 
housing agencies, shall be used to indemnify contractors or 
subcontractors of the government or agency against costs associated 
with judgments of infringement of intellectual property rights.

    No rulemaking is necessary to implement this section.
    Section 511--Public Housing Agency Plan. Section 511 of the Public 
Housing Reform Act adds a new section 5A to the 1937 Act that requires 
each PHA, beginning with Federal Fiscal Year 2000 funds, to submit a 
PHA Plan consisting of a 5-Year Plan and an Annual Plan. Section 511 
was implemented by the interim rule published on February 18, 1999. On 
July 30, 1999, HUD issued Notice PIH 99-33, which provides the 
electronic template for PHA Plan submissions. HUD published the final 
rule on the PHA Plan on October 21, 1999. On November 24, 1999 (64 FR 
66106), HUD published a Federal Register notice announcing optional 
extensions for first PHA Plan due dates for PHAs with fiscal years 
beginning on January 1, 2000 and April 1, 2000. On December 14, 1999, 
HUD issued PIH Notice 99-51, which supplements the initial electronic 
template. HUD expects to provide further information and direction.
    Section 512--Community Service and Family Self-Sufficiency 
Requirements. The portion of section 512 which prevents reductions in 
assisted housing rents where a family has had its welfare benefits 
reduced for fraud or failure to comply with self-sufficiency 
requirements was implemented in the February 18, 1999 Notice of Initial 
Guidance and will be elaborated on in the Admissions and Occupancy 
final rule. Those documents also implemented the requirement that PHAs 
use best efforts to enter into cooperation agreements with local 
agencies, both to target services which will help housing assistance 
recipients become self-sufficient and to provide information needed to 
administer the new rent and community service provisions.
    The remainder of section 512 became effective beginning on October 
1, 1999. Section 512 amends section 12 of the 1937 Act by adding a new 
subsection (c) that imposes a requirement on adult public housing 
residents, with important exceptions, to participate for at least 8 
hours per month in a community service or economic self-sufficiency 
program. In some cases, PHAs must not renew a resident's 12-month lease 
for failure to satisfy this requirement. Each PHA must include in its 
PHA Plan a detailed description of the manner in which the agency 
intends to implement and administer the community service requirement.
    Although section 12(c) was effective beginning on October 1, 1999, 
PHAs must have sufficient time to develop community service programs 
and include detailed descriptions in their PHA Plan as the law 
requires. Accordingly, PHAs that are required to submit their PHA Plans 
for the fiscal years commencing January 1, 2000 or April 1, 2000 are 
not required to include community service programs in those Plans. 
HUD's final rule on Admissions and Occupancy will assist PHAs with 
their planning of the community service programs.
    Section 513--Income Targeting for Public Housing and Tenant-Based 
Section 8 Assistance. Section 513 of the Public Housing Reform Act, 
which was effective beginning on October 21, 1998, amends section 16 of 
the 1937 Act to establish, among other things, public housing 
deconcentration and income mixing requirements and income targeting 
requirements for public housing and tenant-based Section 8 assistance, 
including annual requirements for admitting families with incomes below 
30% of area median income. The deconcentration and income mixing 
requirements were initially implemented by the February 18, 1999 Notice 
of Initial Guidance and the PHA Plan interim rule, and are included in 
the PHA Plan final rule (for which further direction will be provided 
as indicated above).
    The income targeting requirements were implemented by the February 
18, 1999 Notice of Initial Guidance and are contained in the final rule 
on the statutory merger of the Section 8 certificate and voucher 
programs (for Section 8 tenant-based assistance), and will be contained 
in the Admissions and Occupancy final rule (for public housing as well 
as section 8 project-based assistance).
    Section 514--Repeal of Federal Preferences. Section 514 of the 
Public Housing Reform Act was effective as of October 21, 1998, and was 
initially implemented by the February 18, 1999 Notice of Initial 
Guidance. Final guidance is now provided in the final rule implementing 
the statutory merger of the Section 8 Certificate and Voucher programs 
(for Section 8 tenant-based assistance) and will be provided in the 
Admissions and Occupancy final rule (for public housing as well as 
section 8 project-based assistance).
    Section 515--Joint Ventures and Consortia of PHAs. Section 515 of 
the Public Housing Reform Act creates a new section 13 of the 1937 Act, 
and was effective beginning on October 1, 1999. New section 13(a) 
authorizes PHAs to administer any or all of their housing

[[Page 71808]]

programs through a consortium of PHAs. New section 13(b) authorizes 
PHAs to use subsidiaries, joint ventures, partnerships or other 
business arrangements to administer their housing programs or to 
provide supportive or social services. As noted earlier in this notice, 
a proposed rule implementing section 515 was published on September 14, 
1999 (64 FR 49940).
    In the September 14, 1999 proposed rule, HUD noted that before 
enactment of section 13, some PHAs had established cooperative 
arrangements for carrying out some of their responsibilities. A 
principal difference between such arrangements and consortia as 
authorized under new section 13, is that under section 13 funding may 
be directed to a representative of the consortium on behalf of several 
PHAs instead of being paid to the PHAs separately. Another major 
difference is that under a section 13 consortium, a joint PHA plan is 
submitted on behalf of participating PHAs. Enactment of section 13, 
however, does not restrict the ability of PHAs to continue to establish 
cooperative arrangements under which they receive funding separately 
and submit separate PHA plans.
    HUD also noted that with respect to joint ventures, partnerships, 
affiliates, subsidiaries, and other business arrangements, the 
September 14, 1999 proposed rule only covered the public housing 
program. PHAs engaged in Section 8 program administration have been and 
continue to be free to engage in such arrangements without any new 
regulatory restrictions.
    HUD's final rule implementing section 515 is under development. 
PHAs that wish to form consortia may indicate this in PHA Plans that 
are submitted prior to the effective date of the final rule. PHAs then, 
after the final rule is effective, may propose consortia through 
``significant amendments'' to their PHA Plans.
    Section 516--Public Housing Agency Mortgages and Security 
Interests. Section 516 of the Public Housing Reform Act, which was 
effective beginning on October 1, 1999, provides that HUD may, upon 
such terms and conditions as HUD may prescribe, authorize a PHA to 
mortgage or otherwise grant a security interest in any public housing 
project or other property of the PHA. In making any such authorization, 
HUD may consider the ability of the PHA to use the proceeds of the 
mortgage or security interest for low-income housing uses; the ability 
of the PHA to make payments on the mortgage or security interest; and 
other criteria. Section 516 also provides that no action taken under 
this provision shall result in any liability to the Federal government.
    Until rulemaking is done, PHAs wishing to use the authority of 
section 516 may submit requests to HUD headquarters, Office of Public 
Housing Investments, Room 4130. HUD will review such requests and 
provide approvals on a case-by-case basis if appropriate. However, 
HUD's review of such requests will take into account the fact that 
rulemaking is pending and that these regulatory requirements, once 
established, will guide implementation of section 516. To minimize the 
risk of loss of public housing property, HUD also will encourage full 
collateralization of any debt secured by such a mortgage, independent 
of and at risk before the public housing property. In addition, until 
rulemaking is completed, the regulations in 24 CFR part 941, subpart F 
(mixed finance development) continue to govern.
    Section 517--Mental Health Action Plan. Section 517 of the Public 
Housing Reform Act was effective beginning on October 1, 1999. Section 
517 provides that HUD, in consultation with the Department of Health 
and Human Services, the Department of Labor, and State and local 
officials, shall develop an action plan and a list of recommendations 
for improving severe mental illness treatment to families and 
individuals receiving housing assistance under the 1937 Act. 
Additionally, HUD is required to develop and disseminate a list of 
current practices that serve to benefit persons in need of mental 
health care. HUD has met with the other Federal agencies involved and 
has begun the process of developing the action plan and fulfilling 
other requirements.
    Section 518(b)--Local Notification. Section 518(b) of the Public 
Housing Reform Act was effective beginning on October 1, 1999. Section 
518(b) amends section 5(e)(2) of the 1937 Act to provide, generally, 
that HUD shall require each local cooperation agreement to provide 
that, notwithstanding any order, judgment, or decree of any court 
(including any settlement order), before making any amounts available 
for use for the development of any housing or other property not 
previously used as public housing, the PHA shall: (1) notify the 
appropriate local government official of such use, and (2) pursuant to 
the request of such local government, provide such information as may 
reasonably be requested by the local government regarding the public 
housing to be so assisted (except to the extent otherwise prohibited by 
law). PHAs must comply with the requirements of section 518(b) 
beginning on October 1, 1999, and should endeavor to have cooperation 
agreements amended accordingly. HUD may provide further elaboration on 
this provision in the forthcoming rulemaking on the Capital Fund 
program (the non-formula rulemaking) and eventually may make it an 
amendment to the Annual Contributions Contract (ACC).
    Section 519--Public Housing Capital and Operating Funds. Section 
519 of the Public Housing Reform Act amends section 9 of the 1937 Act 
to establish a Capital Fund and an Operating Fund for public housing. 
Section 519 also provides that HUD shall develop the formulas for 
allocating such funds through negotiated rulemaking procedures.
    1. Capital Fund. As noted earlier in this notice, a final rule has 
been published allowing fiscal 1999 Comprehensive Improvement 
Assistance Program (CIAP) funds to be distributed by formula. In 
addition, negotiated rulemaking on the Capital Fund formula has been 
completed and the proposed rule, as also noted earlier in this notice, 
was published on September 14, 1999. Federal Fiscal Year 2000 Capital 
Funds will be distributed pursuant to the final rule on the Capital 
Fund formula. Upon the effective date of the final rule implementing 
the Capital Fund formula, PHAs may begin to undertake the eligible 
activities listed in section 9(d)(1) of the 1937 Act.
    HUD intends soon to publish a proposed rule on all aspects of the 
Capital Fund program (other than the formula), with a final rule to 
follow in the first half of calendar year 2000. Until completion of 
that rulemaking, the regulations at 24 CFR part 968 continue to apply 
to assistance made available to PHAs through the Comprehensive Grant 
Program (CGP) or CIAP under section 14 of the 1937 Act for Federal 
fiscal year 1999 and prior years unless this Notice provides otherwise. 
In addition, the regulations at 24 CFR part 941 continue to apply to 
assistance made available under those provisions.
    Effective October 21, 1998, new section 9(g)(2) of the 1937 Act 
allows PHAs with less than 250 dwelling units (small PHAs), to use 
capital or operating funds for any eligible capital or operating 
expense subject to certain conditions. This provision was implemented 
in the February 18, 1999 Notice of Initial Guidance. PHAs should follow 
that guidance until completion of rulemaking on the Capital Fund 
program.

[[Page 71809]]

    Section 9(g)(3)(A) states that, with certain exceptions, a PHA may 
not use any of the amounts allocated for the PHA from the Capital Fund 
or Operating Fund for the purpose of constructing any public housing 
unit, if such construction would result in a net increase from the 
number of public housing units owned, assisted, or operated by the PHA 
on October 1, 1999, including any public housing units demolished as 
part of any revitalization effort. HUD's current regulations at 24 CFR 
part 941 require HUD authorization for such PHA activity. Until 
rulemaking on the new law is completed, HUD will provide the necessary 
authorization where consistent with the standards of the new law.
    Section 9(m) allows the commitment of capital assistance only (as 
well as operating assistance only, as discussed later in this notice) 
to public housing units in appropriate circumstances. This will be the 
subject of rulemaking in the near future. Until that time, PHAs wishing 
to use this provision for the development of public housing must 
request HUD approval. Until rulemaking is completed, public housing 
units developed and operated using capital assistance only shall be 
subject to all public housing laws and regulations.
    2. Operating Fund. Negotiated rulemaking on the Operating Fund 
formula is still underway, and the current operating formula may 
continue as section 519 permits. Upon the effective date of the final 
rule implementing the Operating Fund formula, PHAs may begin to 
undertake the eligible activities listed in section 9(e)(1) of the 1937 
Act (except use of the Operating Fund for repayment of debt service 
incurred to finance rehabilitation or development of public housing, 
which the statute makes subject to reasonable requirements set by HUD; 
such requirements will be the subject of rulemaking).
    Except as otherwise provided in this Notice, the Performance 
Funding System and current program rules at 24 CFR part 990 will 
continue to apply to operating subsidy provided to PHAs under section 9 
of the 1937 Act, as in effect prior to October 21, 1998. Section 9(l), 
however, provides that income from nonrental sources (as determined by 
the Secretary) is to be retained by PHAs and used only for low-income 
housing or to benefit assisted residents. This subsection therefore 
will be put in effect for Federal Fiscal Year 2000, by the funding 
notice regarding fiscal year 2000 operating subsidy.
    Sections 519(d) and (e) of the Public Housing Reform Act include 
provisions relating to ceiling rents, transitional funding before 
implementation of the new Operating Fund formula, and the adoption of 
rental amounts other than ceiling rents or optional earned income 
disregards. These provisions were discussed in the February 18, 1999 
Notice of Initial Guidance. PHAs should continue to follow that 
guidance until rulemaking on the Operating Fund or Admissions and 
Occupancy, as applicable, is completed.
    Commencing October 1, 1999, PHAs are required to give residents a 
choice on an income-based rent or a flat rent. Until the new Operating 
Fund formula is implemented, flat rents set comparable to market (as 
provided by the August 6, 1999 Federal Register Notice of Guidance on 
Public Housing Rent Policies and as will be provided by the Admissions 
and Occupancy final rule) shall be treated in the same manner as 
ceiling rents were treated in the past. This will be elaborated on in 
the Federal Fiscal Year 2000 funding notice referenced above.
    Section 9(m) allows for public housing assistance using operating 
assistance only. This will be the subject of rulemaking. Until 
rulemaking is completed, PHAs wishing to use this provision must 
request HUD approval and the housing assisted in this manner will be 
subject to all public housing laws and regulations.
    3. Other Provisions. Section 9(h) of the 1937 Act, regarding 
technical assistance and related activities, is effective immediately 
and needs no regulations. Section 9(n)(2) and 9(n)(3), regarding New 
York City Housing Authority programs, were implemented by the Notice of 
Initial Guidance.
    Section 520--Total Development Costs. Section 520 of the Public 
Housing Reform Act, effective October 1, 1999, amends sections 3(c)(1) 
and 6(b) of the 1937 Act, which govern Total Development Costs for the 
development of public housing. HUD expects to conduct rulemaking on 
section 520. Until rulemaking is completed, PHAs should follow PIH 
Notice 99-17, issued March 15, 1999, which is consistent with section 
520.
    Section 521--Sanctions for Improper Use of Amounts. Section 521 of 
the Public Housing Reform Act was effective beginning on October 1, 
1999. Section 521 amends section 6(j) of the 1937 Act to provide for 
sanctions which HUD may impose on a PHA receiving amounts from the 
Capital Fund or Operating Fund for public housing if the PHA has failed 
to comply substantially with any provision of the 1937 Act relating to 
the public housing program. Section 521 also contains provisions 
regarding the termination of such sanctions. Rulemaking is not 
necessary to implement this section. However, HUD will reference this 
sanction authority in appropriate program regulations.
    Section 522--Repeal of Modernization Fund. Section 522(a) of the 
Public Housing Reform Act, which repeals section 14 of the 1937 Act, 
was effective beginning on October 1, 1999 (for guidance see the 
discussion of section 519 of the Public Housing Reform Act, above). 
Sections 522(b)(1) through 522(b)(4) of the Public Housing Reform Act 
contain conforming amendments which were effective October 1, 1999. 
Section 522(b)(5) contains a conforming amendment regarding the use of 
HOME program funds for public housing (see the HUD Office of Community 
Planning and Development memorandum on the ``Impacts of the 1999 
Appropriations Act on HOME and SHOP'' dated November 23, 1998, and the 
clarifying memorandum on the same subject dated March 25, 1999). 
Section 522(c) was effective on October 21, 1998 and provides that, 
before implementation of the Capital Fund and Operating Fund formulas, 
PHAs may continue to use the authority in section 14(q) of the 1937 
Act, as amended (including the amendment made by section 208 of the 
fiscal year 1999 HUD appropriations act), notwithstanding the repeal of 
the modernization fund by section 522(a).
    Section 523--Family Choice of Rental Payment. Section 523 of the 
Public Housing Reform Act is effective October 1, 1999. Section 523 
amends section 3(a) of the 1937 Act to provide that each family can 
elect annually whether the rent payment is a flat rate or income based. 
Guidance on how to implement this provision was discussed in the 
February 18, 1999 Notice of Initial Guidance and in the August 6, 1999 
Federal Register Notice of Guidance on Public Housing Rent Policies.
    Final guidance on section 523 will be contained in the Admissions 
and Occupancy final rule. The final guidance on flat rents may result 
in somewhat different flat rents from those PHAs have implemented if 
they followed the August 6, 1999 Federal Register guidance. If so, PHAs 
must change their flat rents accordingly, in time to include such flat 
rents in PHA Plans for fiscal years commencing on and after July 1, 
2000.
    Section 524--Occupancy by Police Officers and Over-Income Families. 
Section 524 of the Public Housing Reform Act became effective on 
October 21, 1998 and was originally implemented in the February 18, 
1999

[[Page 71810]]

Notice of Initial Guidance. Section 524 allows PHAs, under certain 
conditions, to allow police officers who are not otherwise eligible for 
public housing, and over-income families, to occupy a public housing 
unit. Section 524 is being implemented by the final rule on Admissions 
and Occupancy.
    Section 525--Site-Based Waiting Lists. Section 525 of the Public 
Housing Reform Act, effective October 1, 1999, amends section 6 of the 
1937 Act to allow PHAs to establish a system of site-based waiting 
lists, subject to applicable civil rights laws. Section 525 was 
initially implemented in the PHA Plan interim rule published on 
February 18, 1999. Implementation of this provision is made final by 
the PHA Plan final rule published on October 21, 1999.
    Section 526--Pet Ownership. Section 526 of the Public Housing 
Reform Act provides that public housing residents may have pets, 
subject to the reasonable requirements of PHAs and other conditions. 
This section will be effective on completion of the rulemaking that is 
now in progress.
    Section 529--Contract Provisions. Section 529 of the Public housing 
Reform Act, effective October 1, 1999, amends section 6 of the 1937 Act 
to make technical and conforming changes to the contents of ACC for the 
public housing program. No rulemaking is necessary or anticipated.
    Section 530--Housing Quality Requirements. Effective October 1, 
1999, Section 530 amends section 6 of the 1937 Act to add a new 
subsection (f), which requires ACCs to include a requirement that a PHA 
maintain its public housing units in compliance with safety and 
habitability standards specified by HUD. For implementation guidance, 
PHAs should refer to the discussion of section 530 in the February 18, 
1999 Notice of Initial Guidance. No rulemaking is necessary or 
anticipated. However, HUD will issue an amendment to the ACC to reflect 
this provision.
    Section 531--Demolition and Disposition of Public Housing. Section 
531 of the Public Housing Reform Act amends section 18 of the 1937 Act. 
Section 531 became effective on October 21, 1998 and was implemented by 
the February 18, 1999 Notice of Initial Guidance, the PHA Plan interim 
rule, and PIH Notice 99-19 issued on April 20, 1999. PHAs should rely 
on that guidance and on the PHA Plan final rule until HUD completes its 
rulemaking revising 24 CFR part 970. Until HUD completes rulemaking on 
section 531, PHAs also must comply with the regulations in 24 CFR part 
970 except to the extent that these regulations have been revised by 
section 531 and the revisions were implemented by the February 18, 1999 
Notice of Initial Guidance and PIH Notice 99-19.
    Section 532--Resident Councils and Resident Management 
Corporations. Section 532 of the Public Housing Reform Act revises 
section 20 of the 1937 Act and was effective October 1, 1999. HUD 
issued a proposed rule implementing section 532, published on October 
21, 1999, which provides for the direct payment of operating and 
capital funds from HUD to Resident management Corporations (RMCs). HUD 
expects to conduct comprehensive rulemaking on resident participation 
during Federal Fiscal Year 2000.
    Section 533--Voluntary Conversion of Public Housing to Vouchers. 
Section 533 of the Public Housing Reform Act became effective October 
1, 1999. Section 533 amends section 22 of the 1937 Act to allow PHAs to 
convert public housing to tenant-based assistance under certain 
conditions. As noted earlier in this notice, HUD published a proposed 
rule to implement this section on July 23, 1999. The public comment 
period on this rule closed September 21, 1999. PHAs that wish to 
commence the conversion assessment of all their properties required by 
section 22(b) (2) and (3), may begin that assessment by following the 
process for certifications under Sec. 972.207(b)(1) of the proposed 
rule. Because the ``cost test'' may change at the final rule stage, 
PHAs should not begin to apply that test with respect to assessments or 
possible voluntary conversions.
    Section 534--Transfer of Management of Certain Housing. Section 534 
which became effective October 1, 1999 amends section 25 of the 1937 
Act to provide that HUD may transfer the management of public housing 
from a PHA to another management entity in accordance with certain 
requirements. Residents may use this authority by making a request to 
the HUD field office. No rulemaking is necessary or anticipated.
    Section 535--Demolition, Site Revitalization, Replacement Housing, 
and Tenant-Based Assistance Grants for Projects (HOPE VI). Section 535 
of the Public Housing Reform Act amends section 24 of the 1937 Act to 
provide continued authority for the HOPE VI program, and establishes 
application selection and grant requirements. This provision was 
effective beginning on October 21, 1998 and was substantially 
implemented by HUD's Fiscal Year 1999 Notice of Funding Availability 
(NOFA) for the HOPE VI program (which was part of HUD's Fiscal Year 
1999 SuperNOFA, published in the Federal Register on February 26, 1999 
(64 FR 9618)). HUD may undertake rulemaking on section 535 in Federal 
Fiscal Year 2000.
    Section 536--Public Housing Homeownership. Section 536 of the 
Public Housing Reform Act, which became effective October 1, 1999, adds 
section 32 to the 1937 Act, which authorizes a new public housing 
homeownership program that replaces, but is substantially based on, the 
former ``Section 5(h) program.'' As noted earlier in this notice, HUD 
published a proposed rule to implement section 536 on September 14, 
1999. The public comment period for this rule closed November 15, 1999.
    Until the final rule is published, HUD will process public housing 
homeownership proposals under its Section 5(h) program regulations at 
24 CFR part 906. As noted, the Congress modeled section 32 on the 
Section 5(h) program, and there are many similarities between section 
32 and the part 906 regulations. Accordingly, the use of 24 CFR part 
906 until rulemaking on section 32 is completed is consistent with 
Congressional intent. Further, the use of the part 906 regulations will 
permit HUD to process homeownership proposals using well established 
regulatory requirements.
    Section 537--Required Conversion of Public Housing to Vouchers. 
Section 537 of the Public Housing Reform Act, effective October 1, 
1999, adds a new section 33 to the 1937 Act concerning the removal of 
public housing units identified as distressed from the public housing 
inventory and the ACC. As noted earlier in this notice, HUD published a 
proposed rule on section 537 on July 23, 1999. The public comment 
period on this rule closed on September 21, 1999. While the final rule 
is being completed, PHAs should prepare for required conversion by 
determining if the PHA has developments that would fail the vacancy 
rate test included in part 972.104(b) of the proposed rule and, if so, 
devoting appropriate attention to the situation of any such 
development.
    Although section 202 of the fiscal year 1996 HUD Appropriations Act 
(the forerunner to section 537) is repealed, it continues to apply to 
public housing identified by HUD or a PHA prior to October 21, 1998 for 
conversion or for assessment of whether conversion is required under 
section 202.
    Section 538--Linking Services to Public Housing Residents. Section 
538 of the Public Housing Reform Act became effective October 21, 1998. 
Section 538 adds a new section 34 to the 1937 Act, which authorizes a 
program of

[[Page 71811]]

supportive services and resident empowerment activities to assist 
public housing residents in becoming self-sufficient. Section 34 was 
implemented through a Fiscal Year 1999 NOFA (Resident Opportunities and 
Self-Sufficiency (ROSS) Program) published on August 10, 1998 (64 FR 
43530). HUD may undertake a rulemaking to codify its implementation of 
section 534 in Federal Fiscal Year 2000.
    Section 539--Mixed-Finance Public Housing. Section 539 of the 
Public Housing Reform Act, effective October 1, 1999, authorizes PHAs 
to own, operate, assist or otherwise participate in one or more mixed-
finance projects, in accordance with certain requirements. HUD will 
undertake a rulemaking to implement section 539 in Federal Fiscal Year 
2000. Until this future rulemaking is completed, parties proposing to 
use these provisions must notify HUD. The existing regulations at 24 
CFR part 941, subpart F will continue to apply to mixed-finance 
transactions to the extent they are consistent with section 539.
    Section 545--Merger of Certificate and Voucher Programs. Section 
545 of the Public Housing Reform Act amends section 8(o) of the 1937 
Act to merge the Section 8 tenant-based Certificate and Voucher 
programs into a new Housing Choice Voucher Program. As noted earlier in 
this notice, HUD published an interim rule implementing section 545 on 
May 14, 1999. The May 14, 1998 interim rule provided for an effective 
date of August 14, 1999. By Federal Register notice published on August 
11, 1999 (64 FR 43613), HUD extended the effective date to October 1, 
1999. On September 14, 1999 (64 FR 49656), HUD published a technical 
correction to the May 14, 1999 interim rule. The final rule was 
published on October 21, 1999. Additionally, on November 3, 1999 (64 FR 
59620), HUD published an amendment to the final rule concerning initial 
rent burden of certain voucher holders.
    Section 546--Public Housing Agencies. Section 546 of the Public 
Housing Reform Act amends the definition of the term ``public housing 
agency'' and is implemented by the Housing Choice Voucher Program final 
rule.
    Section 547--Administrative Fees. Section 547 of the Public Housing 
Reform Act amends section 8(q) of the 1937 Act relating to Section 8 
administrative fees, and is effective for fiscal year 1999 and 
subsequent fiscal years. Section 547 was implemented by the February 
18, 1999 Notice of Initial Guidance and will be supplemented by annual 
notices. As discussed in the Notice of Initial Guidance, PHAs may 
propose fee adjustments where they incur additional expenses to serve 
persons with disabilities more fully.
    Section 548--Law Enforcement and Security Personnel in Assisted 
Housing. Section 548 of the 1998, which became effective October 1, 
1999, provides, that for purposes of increasing security, Section 8 
project-based assistance may be provided to police officers and other 
security personnel who are not otherwise eligible for assistance. This 
section is addressed in HUD's proposed rule on Admissions and 
Occupancy.
    Section 549--Advance Notice to Tenants of Expiration, Termination, 
or Owner Nonrenewal of Assistance Contract. Section 549 of the Public 
Housing Reform Act was effective as of October 21, 1998. This provision 
was implemented for the Section 8 tenant-based assistance program by 
the February 18, 1999 Notice of Initial Guidance and by PIH Notice 98-
64, and is elaborated on in the Housing Choice Voucher Program interim 
and final rules.
    Section 550--Technical and Conforming Amendments. Section 550 of 
the Public Housing Reform Act, which became effective beginning on 
October 1, 1999, contains various technical and conforming amendments 
relating to the statutory merger of the tenant-based Section 8 
certificate and voucher programs. No rulemaking is necessary or 
anticipated.
    Section 551--Funding and Allocation. Section 551 of the Public 
Housing Reform Act was implemented and made effective by the February 
18, 1999 Notice of Initial Guidance, to which PHAs should refer for 
guidance. In general, section 551 provides that local government 
comments with respect to affected PHA applications for Section 8 and 
public housing funds are no longer required.
    Section 553--Portability. Section 553 of the Public Housing Reform 
Act amends section 8(r) of the 1937 Act with respect to the portability 
of tenant-based Section 8 assistance. Section 553 is made effective by 
the Housing Choice Voucher Program interim and final rules.
    Section 554--Leasing to Voucher Holders. Section 554 permanently 
repeals the so-called ``take one, take all'' provision in the Section 8 
tenant-based assistance program as of October 21, 1998. Section 554 is 
also discussed in the February 18, 1999 Notice of Initial Guidance and 
in the Housing Choice Voucher Program interim and final rules.
    Section 555--Homeownership Option. Section 555 of the Public 
Housing Reform Act amends section 8(y) of the 1937 Act, effective 
October 21, 1998, to authorize a PHA to provide tenant-based Section 8 
assistance for an eligible family that purchases a dwelling unit that 
will be occupied by the family. As noted earlier in this notice, HUD 
published a proposed rule to implement section 555 on April 30, 1999, 
and expects to issue a final rule within the next several months. HUD 
has demonstration authority under section 555 and has approved several 
demonstrations which are consistent with the proposed rule.
    Section 556--Renewals. Section 556 of the Public Housing Reform Act 
amends the 1937 Act by adding subsection 8(dd), which directs HUD to 
establish an allocation baseline amount of assistance to cover the 
renewal of expiring tenant-based Section 8 ACCs, and to apply an 
inflation factor (based on local or regional factors) to the baseline. 
Section 556 also required HUD to implement this provision through 
notice not later than December 31, 1998, and to issue final regulations 
on the allocation of tenant-based Section 8 ACC renewal funding that 
are developed through negotiated rulemaking no later than October 21, 
1999. Consistent with the statutory requirement, HUD issued PIH Notice 
98-65 on December 30, 1999. This notice was published for the 
convenience of the public on February 18, 1999 (64 FR 8188). The 
required final rule was published on October 21, 1999.
    Section 557--Manufactured Housing Demonstration Program. Section 
557 of the Public Housing Reform Act became effective October 21, 1998 
and requires HUD to carry out a program during Federal Fiscal Years 
1999, 2000, and 2001 to demonstrate the effectiveness of providing 
tenant-based Section 8 assistance directly to eligible families that 
own manufactured homes and rent real property on which their homes are 
located. This demonstration program was implemented by letter to the 
participating housing authorities.
    Section 559--Rulemaking and Implementation. Section 559 of the 
Public Housing Reform Act, effective October 21, 1998, requires HUD to 
issue any interim regulations necessary for the merger of tenant-based 
Section 8 certificate and voucher assistance. Section 559 also requires 
HUD to issue final regulations not later than one year after enactment 
of the Public Housing Reform Act. As discussed previously in this 
notice, HUD issued its interim rule on the Housing Choice Voucher 
Program on May 14, 1999. The final rule was published on October 21, 
1999.

[[Page 71812]]

    Section 561--Home Rule Flexible Grant Demonstration. Section 561 
adds a demonstration program in which eligible jurisdictions, typically 
units of general local government, could receive public housing and 
tenant-based assistance for up to five years to meet specified 
performance goals. The demonstration became effective on October 21, 
1998, and was implemented in the February 18, 1999 Notice of Initial 
Guidance.
    As the February 18, 1999 Notice of Initial Guidance stated, any 
eligible jurisdiction wishing to participate in the demonstration may 
follow the statute's requirements and submit an application to HUD. HUD 
will not approve such an application, however, unless the application 
presents a compelling case that the eligible jurisdiction's 
participation and proposal would achieve the goals of the statute 
(which include the underlying program management and performance goals 
of the public housing and tenant-based assistance programs) in a 
superior manner to continuation of program management with the affected 
PHA.
    Section 563--Performance Evaluation Study. Section 563 of the 
Public Housing Reform Act, effective October 21, 1998, directs HUD to 
provide for a study to be conducted to determine the effectiveness of 
various alternative methods of evaluating the performance of PHAs and 
other providers of federally assisted housing. Section 563 also 
requires HUD to request that the National Academy of Public 
Administration (NAPA) enter into a contract to conduct the study. HUD 
has entered into such a contract with NAPA and the study is proceeding.
    Section 564--Public Housing Management Assessment Program. Section 
564 of the Public Housing Reform Act, effective October 1, 1999, amends 
section 6(j) of the 1937 Act to modify and add to the indicators HUD 
uses to evaluate PHA management performance. These provisions are 
addressed in the June 22, 1999 PHAS proposed rule, and will be included 
in the final rule. Notification that the provisions amending 
requirements for independent assessment of newly troubled PHAs were in 
effect was provided by the Initial Guidance Update Notice, published on 
April 30, 1999 (64 FR 23344). As noted earlier in Section II of this 
Notice, further details regarding the phase-in of the Public Housing 
Assessment System (PHAS) were published in a Federal Register notice on 
October 21, 1999.
    Section 565--Expansion of Powers for Dealing with Public Housing 
Agencies in Substantial Default. Effective October 21, 1998, section 
565 of the Public Housing Reform Act provides for an expansion of 
various powers to be exercised by HUD or receivers and requires HUD to 
petition for court-ordered receivership (or to implement an 
administrative receivership, in the case of PHAs with fewer than 1,250 
public housing units), with respect to certain troubled PHAs where the 
PHA remains troubled longer than the specified time period. This 
provision was implemented in the February 18, 1999 Notice of Initial 
Guidance, was elaborated on in the June 22, 1999 PHAS proposed rule, 
and will be part of the PHAS final rule.
    Section 566--Audits. Section 566 of the Public Housing Reform Act, 
which became effective October 1, 1999, adds section 5(h) to the 1937 
Act to require each ACC to provide that HUD, the HUD Inspector General, 
and the Comptroller of the United States shall have access to PHA 
records, and that HUD may withhold assistance from PHAs to pay for 
audit costs in some circumstances. HUD will begin a process of amending 
such contracts accordingly.
    Section 567--Advisory Council for Housing Authority of New Orleans. 
Section 567 of the Public Housing Reform Act requires appointment of 
such an Advisory Council. No regulation is necessary to implement this 
section.
    Section 568--Troubled PHAs and Consolidated Plans. Section 568 of 
the Public Housing Reform Act requires local jurisdictions with 
troubled PHAs to describe in their Consolidated Plans the manner in 
which they will assist the PHA in improving its operations to remove 
the troubled designation. Section 568 became effective October 1, 1999, 
and will be addressed in rulemaking on Consolidated Plans.
    Section 575--Provisions Applicable Only to Public Housing and 
Section 8 Assistance. Section 575 of the Public Housing Reform Act 
contains provisions regarding public housing grievance procedures, 
termination of tenancy in public housing, availability of criminal 
records in connection with project-based assisted housing and obtaining 
information from drug abuse treatment facilities. These provisions 
generally became effective October 1, 1999. The provision concerning 
obtaining information from drug abuse treatment facilities, however, 
was implemented in the February 18, 1999 Notice of Initial Guidance. 
The remaining provisions are found in HUD's July 23, 1999 ``One 
Strike'' proposed rule. The public comment period on this proposed rule 
closed September 21, 1999.
    Section 576--Screening of Applicants for Federally Assisted 
Housing. Section 576 of the Public Housing Reform Act, effective 
October 1, 1999, is covered by HUD's July 23, 1999 ``One Strike'' 
proposed rule.
    Section 577--Termination of Tenancy and Assistance. Section 577 of 
the Public Housing Reform Act, which became effective October 1, 1999, 
is covered by the ``One Strike'' proposed rule.
    Section 578--Ineligibility of Dangerous Sex Offenders for Public 
Housing. Section 578 of the Public Housing Reform Act, which became 
effective October 1, 1999, is covered by HUD's July 23, 1999 ``One 
Strike'' proposed rule.
    Section 579--Definitions. The definitions in Section 579 of the 
Public Housing Reform Act are applicable to the requirements described 
in section 575-578.
    Section 581--Annual Report. Section 581 of the Public Housing 
Reform Act requires an annual report on the impact of the Public 
Housing Reform Act on the demographics of assistance recipients and the 
economic viability of PHAs, as well as the employment status and earned 
income of public housing residents. The first such annual report was 
submitted to the Congress in accordance with the required schedule.
    Section 582--Repeals. No regulation is necessary to effectuate 
these repeals, which became effective October 1, 1999.
    Section 583--Consolidated Plans. Section 583 of the Public Housing 
Reform Act, which became effective October 1, 1999, requires 
Consolidated Plans to describe the manner in which the plans will help 
address the needs of the jurisdiction's public housing. This section 
will be implemented through rulemaking on Consolidated Plans.
    Section 584--Use of American Products. Section 584 of the Public 
Housing Reform Act was implemented in the February 18, 1999 Notice of 
Initial Guidance. No further regulation is necessary.
    Section 585--GAO Study on Housing Assistance Programs. The study 
required by this section is under way.
    Section 586--Drug Elimination Program. These amendments were 
implemented by the Public Housing Drug Elimination Program (PHDEP) 
final rule, published on September 14, 1999, which among other things, 
provides for formula funding commencing with fiscal year 1999 funding.
    Section 587--Report on Drug Elimination Contracts. This report was 
submitted to Congress as required.

[[Page 71813]]

    Section 589--Notice on Treatment of Occupancy Standards. This 
notice was developed and published in the Federal Register on December 
18, 1998 (63 FR 70256) as required. No further regulation is necessary.
    Section 592--Use of Assisted Housing by Aliens. Section 592 of the 
Public Housing Reform Act, which clarified the scope of PHA ``opt 
outs'' for determining alien status, was implemented by the final rule 
on ``Revised Restriction on Assistance to Noncitizens,'' published on 
May 12, 1999.
    Section 595--Native American Housing Assistance. Section 595 of the 
Public Housing Reform Act made various changes affecting public housing 
and other housing assistance for Native Americans. The provisions of 
this section have been implemented by notice. No regulations are 
necessary or anticipated.
    Section 596--Community Development Block Grants Public Services 
Cap. Section 596 of the Public Housing Reform Act extends a waiver from 
the cap on public services spending for Los Angeles. No regulations are 
necessary.
    Section 597--Moderate Rehabilitation Terms for Contract Renewals. 
These terms were implemented in the February 18, 1999 Notice of Initial 
Guidance and by Notice PIH 98-62. No regulations are necessary or 
anticipated.
    Section 599--Tenant Participation. Section 599 of the Public 
Housing Reform Act largely covers project-based assisted housing tenant 
participation rules, but also covers moderate rehabilitation projects 
and certain projects which receive enhanced vouchers. A proposed rule 
was published on June 17, 1999 (64 FR 32782). HUD received 73 public 
comments on the proposed rule.
    Section 599H--Miscellaneous. Section 599H of the Public Housing 
Reform Act covers various matters largely relating to particular 
communities. This section was effective October 21, 1998. None of the 
matters covered require further regulations.

Conclusion

    Implementation of the Public Housing Reform Act has presented a 
challenge to HUD and its partners. HUD appreciates the comments 
submitted to date on its proposed and interim rules (over 600 apart 
from the proposed rule on pet policies), and those provided at the 
public forums. HUD also appreciates the hard work of the three 
negotiated rulemaking committees that were formed to assist in the 
development of three important formula rules. The input of HUD's 
partners, program participants and other interested members of the 
public has greatly assisted HUD in the promulgation of the rules and 
notices issued to date under the Public Housing Reform Act.
    HUD is committed to working closely with its public housing and 
Section 8 partners to make the changes in its public housing and 
Section 8 programs a success. HUD will continue to provide additional 
guidance and seek public involvement through all appropriate means, so 
that the purposes and promise of this important legislation may be 
fulfilled.

    Dated: December 15, 1999.
Rod Solomon,
Deputy Assistant Secretary for Policy, Program and Legislative 
Initiatives.
[FR Doc. 99-33106 Filed 12-21-99; 8:45 am]
BILLING CODE 4210-33-P