[Federal Register Volume 65, Number 74 (Monday, April 17, 2000)]
[Proposed Rules]
[Pages 20686-20695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9334]



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Part IV





Department of Housing and Urban Development





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24 CFR Part 903



Rule To Deconcentrate Poverty and Promote Integration in Public 
Housing; Proposed Rule

  Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 903

[Docket No. FR-4420-P-08]
RIN 2577-AB89


Rule To Deconcentrate Poverty and Promote Integration in Public 
Housing

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the regulatory text of the 
final rule on Public Housing Agency Plans, published October 21, 1999, 
to fully reflect the importance of deconcentration by income and 
affirmatively furthering fair housing in a PHA's admission policy, 
consistent with the directive to achieve ``One America,'' and to 
provide further direction to PHAs on the implementation of 
deconcentration and affirmatively furthering fair housing.
    HUD also proposes to make several clarifying language changes 
throughout the rule to make the PHA Plan regulation clearer for PHAs, 
their residents and members of the public. HUD sets out the entire rule 
for the convenience of the reader. In addition, one change would permit 
the Secretary to further simplify the PHA Plan submission for PHAs 
permitted to submit a streamlined Plan.

DATES: Comments Due Date: June 1, 2000.

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

FOR FURTHER INFORMATION CONTACT: Rod Solomon, Deputy Assistant 
Secretary, 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.

SUPPLEMENTARY INFORMATION:

I. Purpose of This Rule

    HUD today is issuing this proposed rule for two purposes. The first 
is to assure that PHAs know what they must do to deconcentrate poverty 
in the public housing program. The second is to assure that PHAs know 
what they must do to affirmatively further fair housing, as it relates 
to admissions to public housing.
    With the issuance of this revision of the PHA Plan rule, the 
Administration initiates a new chapter in the history of Federal policy 
on subsidized housing for low and moderate income people in America. 
Central to this new chapter is the dream of ``One America,'' where 
families are not segregated by such factors as income and race.
    Focusing specifically on the income mixing and fair housing 
obligations of local public housing agencies, this revised rule 
outlines a bold commitment to meeting the critical housing needs of 
struggling renters and their families and to expanding opportunity 
through housing assistance--the original and enduring dream of 
America's housing policy and, by extension, of the American experiment 
itself. This commitment is embodied in a set of high expectations for 
public housing agencies. The expectations aim to significantly reduce 
the persistently high levels of racial segregation and poverty 
concentration that have too long characterized public housing in many 
of our Nation's communities.
    Over fifty years ago, the Housing Act of 1949 articulated a 
national commitment to a ``decent home and suitable living environment 
for every American family.'' More than a commitment, it was a dream--
namely, that housing and community development assistance generate real 
opportunity for individuals and families struggling up the ladder into 
our Nation's economic mainstream. This dream was also part of the 1937 
enactment of the Nation's first public housing program: the law 
envisioned public housing as a platform of opportunity for families 
ranging in income and background to save money on rent and thereby make 
their way up the economic ladder.
    Sadly, the reality of housing assistance, particularly when 
provided through subsidized housing developments, has often fallen 
short of the dream. And public housing has presented unique and 
significant challenges in this regard. Public housing is a form of 
subsidized housing development that is typically developed and managed 
by local public housing agencies (rather than private or nonprofit 
landlords), with funding from HUD.
    For decades, many of the Nation's cities and towns sited public 
housing developments in predominantly low-income, minority 
neighborhoods. Discriminatory local political processes thus 
concentrated a large share of the locality's most affordable, 
subsidized rental units in geographic areas that tended to be--
already--older, more dilapidated, higher in poverty, less politically 
powerful, and more poorly supported by public services than other 
areas. It was hardly the dream that our Nation's founding fathers, or 
the framers of Federal housing policy in the last century, envisioned. 
And the results of discrimination in the siting of public housing have 
been all too predictable: opportunity denied, racial and economic 
isolation perpetuated, and a mountain of civil rights litigation.
    Unfortunately, the challenge is broader than where public housing 
developments have been sited. Over the years, compounding the frequent 
problem of discriminatory siting was a second local practice: 
discrimination in the lease-up processes that open particular public 
housing developments or provide Section 8 rental subsidies (vouchers) 
to households of particular racial and socioeconomic backgrounds. In 
some cases, relatively higher income families might have been directed 
to higher income, ``better'' buildings in better neighborhoods, or 
similar discrimination might have been practiced on the basis of racial 
or ethnic background. In others, local actions might not have been 
undertaken to counteract discriminatory siting over the years.
    With the issuance of this revised rule, the Administration 
initiates another historic shift in the direction of housing policy and 
a significant strengthening of HUD's role as a promoter of opportunity 
and protector of civil rights. Fulfilling the aims and expectations 
outlined in the Quality Housing and Work Responsibility Act of 1998 
(also known as the Public Housing Reform Act), this revised rule 
specifies what local public housing agencies must do, as part of the 
Public Housing Agency Plans they submit to HUD in order to receive 
funding, to deconcentrate poverty and affirmatively further fair 
housing in the public housing program and to affirmatively further fair 
housing in the Section 8 voucher program.
    No longer will an agency, whether by intent or by default, be able 
to

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concentrate relatively low-income families in some buildings and higher 
income families in other buildings. Under this revised rule, a local 
public housing agency will meet the first requirement--deconcentration-
by bringing higher income tenants into relatively lower income 
buildings and lower income tenants into relatively higher income 
buildings. This will be accomplished by classifying buildings and 
prospective tenants according to their income levels and then making 
lease-up decisions, as outlined above, that gradually improve the 
income mix of each building under a public housing agency's management. 
In order to achieve deconcentration, an agency must skip particular 
families on its waiting list, as necessary. In addition, an agency may 
apply local admission preferences created to serve special, high-need 
groups: homeless persons, victims of domestic violence, and families 
with severe rent burden (greater than fifty percent of household 
income).
    In addition, a public housing agency must meet the revised rule's 
second principal requirement by preparing and carrying out its Plan in 
ways that protect the civil rights of families served. First, each 
agency must carry out its Plan in conformity with Federal civil rights 
laws, including provisions of the Civil Rights Act of 1964 and the Fair 
Housing Act of 1968. Beyond the basic requirement of nondiscrimination, 
however, an agency should affirmatively further fair housing to reduce 
racial and national origin concentrations. As this revised rule 
indicates, HUD will take action to challenge civil rights 
certifications where it appears that a PHA Plan or its implementation 
does not reduce racial and ethnic concentrations and is perpetuating 
segregation or is, worse yet, creating new segregation. If HUD offers 
this challenge, the onus will be on the public housing agency to 
establish that it is providing the full range of housing opportunities 
to applicants and tenants or that it is implementing affirmative 
efforts. Affirmative efforts may include the marketing of geographic 
areas in which particular demographic groups typically do not reside, 
additional consultation and information for applicants, and provision 
of additional support services and amenities to a development.
    Together, the deconcentration and fair housing expectations 
clarified in this historic revised rule represent a new contract 
between the Nation's housing and urban development agency and its 
communities, between HUD and those who provide vital housing assistance 
with HUD funds. The dream of One America, of opportunity for all across 
all the old divides, endures. And while much hard work lies ahead to 
meet the requirements of this revised rule and mount other important 
strategies that reduce social and economic isolation, this revised rule 
puts America's core rental housing assistance programs on a new path--
the path of opportunity for hardworking families all across the land, 
regardless of income or background.

II. Scope of Comments

    Although HUD is issuing the entire PHA Plan rule so that the reader 
can see the amended deconcentration and nondiscrimination provisions in 
the context of the entire PHA Plan rule, HUD is only seeking comment on 
the proposed changes (notably, the provisions of Subpart A), and will 
only address these comments at the final rule stage. In particular, the 
Department is interested in receiving comment on the principal approach 
presented in Sec. 903.2 of the rule text, and on the alternative 
approach presented in Section III of this preamble.

III. Consideration of Approaches

    When the Department decided on a specific approach to assure that 
poverty would be deconcentrated in public housing as a result of this 
rule, it considered various approaches, two of which are described 
below.
    The approach included in this Proposed Rule is basically to require 
that PHAs determine an overall average income for tenants in their 
family developments; characterize each building as higher income or 
lower income, based on whether the average income in the building is 
above or below the overall average; and require that lower income 
families be admitted to higher income buildings and higher income 
families be admitted to lower income buildings. This method for 
implementing the deconcentration policy would be easy to understand and 
have the widest possible impact.
    Another approach that was considered, but is not included in the 
Proposed Rule, is to require consideration of the income of a family 
relative to the average income of a building only when the average 
income in a building is a certain percentage below or above the overall 
average; and then to allow the admission of families with incomes below 
the overall average only to those buildings in the middle range or 
above, and to allow the admission of families with incomes above the 
overall average only to those buildings with incomes in the middle 
range or below. Although this approach involves less administrative 
complexity, it also would have less impact on deconcentration.
    The Department solicits comments on the changes in the entire rule 
but especially regarding the following:
    1. To the extent that your comments express concern that this rule 
affects the fulfillment of statutory and policy goals other than income 
deconcentration, what alternative mechanisms do you suggest that still 
accomplish deconcentration?
    2. To the extent that your comments address administrative 
complexity, please include alternative suggestions that achieve 
deconcentration.

IV. Justification for Shortened Public Comment Period

    It is the general practice of the Department to provide a 60-day 
public comment period on all proposed rules. The Department, however, 
is reducing its usual 60-day public comment period to 45 days for this 
proposed rule. Through the PHA Annual Plans submitted to date, HUD has 
determined that there is in urgent need to provide PHAs with more 
specific direction on how to implement deconcentration policies in 
public housing and how to comply with requirements for 
nondiscrimination and affirmatively furthering fair housing in public 
housing admissions. The October 21, 1999 final rule provided that PHAs 
could determine a PHA-wide average income in family developments and 
categorize applicant families and public housing buildings as higher or 
lower income based on that average. The October 21, 1999 final rule did 
not make clear, however, what action PHAs must take with respect to 
these higher and lower income applicants relative to the higher or 
lower income buildings. Additionally, the rule did not specify various 
other critical matters regarding deconcentration requirements. The rule 
also did not specify how the requirement to affirmatively further fair 
housing would be applied in the context of admission to public housing. 
The first PHA Annual Plans that have been submitted to HUD generally 
reflect these shortcomings. HUD, therefore, needs to issue a second 
final rule as quickly as possible, so that PHAs that have not yet 
submitted their Plans can submit deconcentration plans and related fair 
housing admissions policies that meet the statutory requirements and 
accomplish the statutory goals.

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V. Findings and Certifications

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this proposed rule, and in so 
doing certifies that this rule does not have a significant economic 
impact on a substantial number of small entities. This proposed rule 
amends the final rule published on October 21, 1999, to make 
clarification and plain language changes made to the earlier final 
rule. This proposed rule does not alter the Regulatory Flexibility 
finding made in the October 21, 1999 final rule.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on State and local governments and 
is not required by statute, or preempts State law, unless the relevant 
requirements of section 6 of the Executive Order are met. This proposed 
rule does not have federalism implications and does not impose 
substantial direct compliance costs on State and local governments or 
preempt State law within the meaning of the Executive Order.

Environmental Impact

    The Finding of No Significant Impact with respect to the 
environment was prepared during the interim rulemaking stage of this 
rule, in accordance with HUD regulations in 24 CFR part 50 that 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4223). That Finding remains applicable to this proposed 
rule, and is available for public inspection between 7:30 a.m. and 5:30 
p.m. weekdays in the Office of the Rules Docket Clerk, Office of 
General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 7th Street, SW, Washington, DC 20410.

Regulatory Review

    The Office of Management and Budget (OMB) reviewed this proposed 
rule under Executive Order 12866, Regulatory Planning and Review. OMB 
determined that this proposed rule is a ``significant regulatory 
action,'' as defined in section 3(f) of the Order (although not 
economically significant, as provided in section 3(f)(1) of the Order). 
Any changes made to the final rule after its submission to OMB are 
identified in the docket file, which is available for public inspection 
in the office of the Department's Office of General Counsel, 
Regulations Division, Room 10276, 451 Seventh Street, SW, Washington, 
DC 20410-0500.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal 
agencies to assess the effects of their regulatory actions on State, 
local, and tribal governments, and on the private sector. This proposed 
rule does not impose any Federal mandates on any State, local, or 
tribal governments, or on the private sector, within the meaning of the 
UMRA.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers applicable to 
the programs affected by this rule are 14.850 and 14.855.

List of Subjects in 24 CFR Part 903

    Administrative practice and procedure, Public housing, Reporting 
and recordkeeping requirements

    For the reasons stated in the preamble, HUD proposes to revise part 
903 of title 24 of the Code of Federal Regulations to read as follows:

PART 903--PUBLIC HOUSING AGENCY PLANS

Subpart A--Deconcentration of Poverty and Fair Housing in Program 
Admissions
Sec.
903.1   What is the purpose of this subpart?
903.2   With respect to admissions, what must a PHA do to 
deconcentrate poverty in its developments and comply with fair 
housing requirements?
Subpart B--PHA Plans
903.3   What is the purpose of this subpart?
903.4   What are the public housing agency plans?
903.5   When must a PHA submit the plans to HUD?
903.6   What information must a PHA provide in the 5-Year Plan?
903.7   What information must a PHA provide in the Annual Plan?
903.9   May HUD request additional information in the Annual Plan of 
a troubled PHA?
903.11   Are certain PHAs eligible to submit a streamlined Annual 
Plan?
903.13   What is a Resident Advisory Board and what is its role in 
development of the Annual Plan?
903.15   What is the relationship of the public housing agency plans 
to the Consolidated Plan?
903.17   What is the process for obtaining public comment on the 
plans?
903.19   When is the 5-Year Plan or Annual Plan ready for submission 
to HUD?
903.21   May the PHA amend or modify a plan?
903.23   What is the process by which HUD reviews, approves, or 
disapproves an Annual Plan?
903.25   How does HUD ensure PHA compliance with its plans?

    Authority:  42 U.S.C. 1437c; 42 U.S.C. 3535(d).

Subpart A--Deconcentration of Poverty and Fair Housing in Program 
Admissions


Sec. 903.1  What is the purpose of this subpart?

    The purpose of this subpart is to specify what a Public Housing 
Agency must do in order to reduce the concentration of lower income and 
higher income public housing tenants in particular buildings or 
developments and to affirmatively further fair housing.


Sec. 903.2  With respect to admissions, what must a PHA do to 
deconcentrate poverty in its developments and comply with fair housing 
requirements?

    (a) Deconcentration of poverty and income mixing. The PHA's 
admission policy with respect to deconcentration of poverty and income 
mixing implements section 16(a)(3)(B) of the 1937 Act (42 U.S.C. 
1437n), which applies to the PHA's public housing program. 
Deconcentration is achieved by bringing higher income tenants into 
lower income developments and lower income tenants into higher income 
developments. The provisions of this section apply to applicants to and 
residents seeking voluntary transfers within public housing 
developments, except for those approved for demolition or for 
conversion to tenant-based assistance.
    (1) General. To implement this requirement, the PHA must admit 
lower income families to higher income buildings (or developments) and 
admit higher income families to lower income buildings (or 
developments), using the following steps:
    (i) Step 1. Annually determine the average income of all families 
residing in all of its general occupancy developments (including 
families residing in developments approved for demolition or conversion 
to tenant-based assistance and families residing in public housing 
units in mixed-finance developments).
    (ii) Step 2. Annually determine the average income of all families 
residing in each building of each general occupancy development.
    (iii) Step 3. Determine which general occupancy development 
buildings have an average income higher than the PHA average for 
general occupancy developments--designated ``higher income 
buildings''--and which have an

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average income lower than the PHA average for general occupancy 
developments--designated ``lower income buildings''.
    (iv) Step 4. Determine which families on the waiting list have 
incomes higher than the PHA-wide average income for general occupancy 
developments--designated ``higher income families'' for this purpose--
and which have incomes lower than the PHA-wide average for general 
occupancy developments--designated ``lower income families'' for this 
purpose.
    (v) Step 5. When a unit becomes available for occupancy in a higher 
income building, the PHA must skip families on the waiting list if 
necessary to reach a lower income family to whom it will offer the 
unit. When a unit becomes available for occupancy in a lower income 
building, the PHA must skip families on the waiting list if necessary 
to reach a higher income family to whom it will offer the unit. 
Skipping is required, as necessary, with respect to both site-based and 
community-wide waiting lists, and it must be uniformly applied. If the 
waiting list does not contain a family in the income category to whom 
the unit is to be offered, the PHA may offer a unit to a family in the 
other income category.
    (2) Applicability of local preferences. In determining which higher 
income or lower income families to admit to a lower income or a higher 
income building, the PHA must use its waiting list. The PHA may use 
local admission preferences, except if using them would result either 
in offering a unit in a higher income building to a higher income 
family or in offering a unit in a lower income building to a lower 
income family. However, if a PHA has a preference for homeless persons, 
for families paying more than 50 percent of their income in rent, or 
for families who are victims of domestic violence, it may use such a 
preference when determining which family to admit to any building, and 
may admit a family with such a preference instead of a family that 
otherwise would be offered the unit. PHA local admission preference 
policies must affirmatively further fair housing.
    (3) Definition of ``building''. For purposes of applying this 
deconcentration policy, a ``building'' is one or more contiguous 
structures containing at least 8 public housing dwelling units.
    (4) Scattered site and small developments. If a development 
contains no structures that qualify as a building, the deconcentration 
requirement is applied to the entire development as if the development 
were a building.
    (5) Mixed-finance developments and units newly added to a PHA's 
public housing stock. For mixed-finance developments, including HOPE VI 
projects that are mixed finance developments, and for units newly added 
to a PHA's public housing stock, the requirement to deconcentrate is 
applicable as follows:
    (i) For the initial lease-up of vacant public housing units in 
mixed finance developments or for units newly added to a PHA's public 
housing stock (subject to the possible right of return by prior 
residents), the average income for the public housing units in each 
building shall not exceed the PHA's average income for general 
occupancy public housing developments;
    (ii) After the initial lease-up of vacant units in mixed finance 
developments and units newly added to a PHA's public housing stock, the 
leasing of public housing units is covered by the deconcentration 
requirements of paragraph (a)(1) through (4) of this section unless the 
building which contains these units is classified (based on the incomes 
of families residing in public housing units) as a lower income 
building.
    (6) Right of return. If a PHA has provided that a family that 
resided in public housing on the site of a mixed-finance or other 
development has a right to admission to a public housing unit in that 
development after revitalization, this deconcentration policy does not 
preclude fulfilling that commitment.
    (7) Family's discretion to refuse a unit. A family has the sole 
discretion whether to accept an offer of a unit made under this 
deconcentration policy. The PHA may not take any adverse action toward 
any eligible family for choosing not to accept an offer of a unit under 
this deconcentration policy. The PHA may uniformly limit the number of 
offers received by applicants.
    (8) Relationship to income targeting requirement. Nothing in this 
deconcentration policy relieves a PHA of the obligation to meet the 
requirement to admit annually at least 40 percent families whose 
incomes are below 30 percent of area median income as provided by 
section 16(a)(2) of the 1937 Act, 42 U.S.C. 1437n(a)(2).
    (b) Fair housing requirements. All admission and occupancy policies 
for public housing and Section 8 tenant-based housing programs must 
comply with Fair Housing Act requirements and regulations for 
affirmatively further fair housing. The PHA may not require any 
specific income or racial quotas for any development or developments.
    (1) Nondiscrimination. A PHA must carry out its Plan in conformity 
with the nondiscrimination requirements in Federal civil rights laws, 
including title VI of the Civil Rights Act of 1964 and the Fair Housing 
Act. A PHA cannot assign persons to a particular section of a community 
or to a development or building based on race, color, religion, sex, 
disability, familial status or national origin for purposes of 
segregating populations (Sec. 1.4(b)(1)(ii) of this title).
    (2) Affirmatively Furthering Fair Housing. PHA policies that govern 
eligibility, selection and admissions under its Plan should be designed 
to reduce racial and national origin concentrations. Any affirmative 
actions or incentives a PHA plans to take must be stated in the 
admission policy.
    (i) HUD regulations provide that PHAs should take affirmative 
action to overcome the effects of conditions which resulted in limiting 
participation of persons because of their race, national origin or 
other prohibited basis (Sec. 1.4(b)(1)(iii) and (6)(ii) of this title).
    (ii) Such affirmative action may include but is not limited to, 
appropriate affirmative marketing efforts; additional applicant 
consultation and information; and provision of additional supportive 
services and amenities to a development.
    (3) Validity of certification. (i) HUD will take action to 
challenge the PHA's certification under Sec. 903.7(o) where it appears 
that a PHA Plan or its implementation:
    (A) Does not reduce racial and national origin concentration in 
developments or buildings and is perpetuating segregated housing; or
    (B) Is creating new segregation in housing.
    (ii) If HUD challenges the validity of a PHA's certification, the 
PHA must establish that it is providing a full range of housing 
opportunities to applicants and tenants or that it is implementing 
actions described in paragraph (b)(2)(ii) of this section.
    (c) Relationship between poverty deconcentration and fair housing. 
The requirements for poverty deconcentration, in paragraph (a) of this 
section, and for fair housing, in paragraph (b) of this section, arise 
under separate statutory authorities and are independent.

Subpart B--PHA Plans


Sec. 903.3  What is the purpose of this subpart?

    (a) This subpart specifies the requirements for PHA plans, required 
by

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section 5A of the United States Housing Act of 1937 (42 U.S.C. 1437c-
1).
    (b) The purpose of the plans is to provide a framework for:
    (1) Local accountability; and
    (2) An easily identifiable source by which public housing 
residents, participants in the tenant-based assistance program, and 
other members of the public may locate basic PHA policies, rules and 
requirements concerning the PHA's operations, programs and services.


Sec. 903.4  What are the public housing agency plans?

    (a) Types of plans. There are two public housing agency plans. They 
are:
    (1) The 5-Year Plan (the 5-Year Plan) that a public housing agency 
(PHA) must submit to HUD once every five PHA fiscal years. The 5-Year 
Plan covers the five PHA fiscal years immediately following the date on 
which the 5-Year Plan is due to HUD; and
    (2) The Annual Plan (Annual Plan) that the PHA must submit to HUD 
for each fiscal year immediately following the date on which the Annual 
Plan is due to HUD and for which the PHA receives:
    (i) Section 8 tenant-based assistance (under section 8(o) of the 
U.S. Housing Act of 1937, 42 U.S.C. 1437f(o)) (tenant-based 
assistance); or
    (ii) Amounts from the public housing operating fund or capital fund 
(under section 9 of the U.S. Housing Act of 1937 (42 U.S.C. 1437g) 
(public housing)).
    (b) Format. HUD may prescribe the format of submission (including 
electronic format submission) of the plans. HUD also may prescribe the 
format of attachments to the plans and documents related to the plan 
that the PHA does not submit but may be required to make available 
locally. PHAs will receive appropriate notice of any prescribed format.
    (c) Applicability. The requirements of this subpart only apply to a 
PHA that receives the type of assistance described in paragraph (a) of 
this section.
    (d) Authority for waivers. In addition to the waiver authority 
provided in Sec. 5.110 of this title, the Secretary may, subject to 
statutory limitations, waive any provision of this title on a program-
wide basis, and delegate this authority in accordance with section 106 
of the Department of Housing and Urban Development Reform Act of 1989 
(42 U.S.C. 3535(q)) where the Secretary determines that such waiver is 
necessary for the effective implementation of this part.
    (e) 1937 Act. References to the ``1937 Act'' in this part refer to 
the U.S. Housing Act of 1937 (42 U.S.C. 1437 et seq.)


Sec. 903.5  When must a PHA submit the plans to HUD?

    (a) 5-Year Plan. (1) The first PHA fiscal year that is covered by 
the requirements of this part as amended on [date of publication of 
final rule in the Federal Register], is the PHA fiscal year that begins 
October, 2000. This 5-Year Plan submitted by a PHA must be submitted 
for the 5-year period beginning October 1, 2000.
    (2) For all PHAs, the first 5-Year Plans are due 75 days before the 
commencement of their fiscal year.
    (3) For all PHAs, after submission of their first 5-Year Plan, all 
subsequent 5-Year Plans must be submitted once every 5 PHA fiscal 
years, no later than 75 days before the commencement of the PHA's 
fiscal year.
    (4) PHAs may choose to update their 5-Year Plans every year as good 
management practice and must update their 5-Year Plans that were 
submitted for PHA fiscal years beginning before October 1, 2000, to 
comply with the requirements of this part as amended on [date of 
publication of final rule in the Federal Register], at the time they 
submit their next Annual Plan. PHAs must explain any substantial 
deviation from their 5-Year Plans in their Annual Plans. (Substantial 
deviation is determined by the PHA in accordance with criteria provided 
by the PHA in its Annual Plan in accordance with Sec. 903.7(r).)
    (b) The Annual Plan. (1) The first PHA fiscal year that is covered 
by the requirements of this part as amended on [date of publication of 
final rule in the Federal Register], is the PHA fiscal year that begins 
October 1, 2000.
    (2) For all PHAs, the first Annual Plans are due 75 days before the 
commencement of their fiscal year.
    (3) For all PHAs, after submission of the first Annual Plan, all 
subsequent Annual Plans will be due no later than 75 days before the 
commencement of their fiscal year.


Sec. 903.6  What information must a PHA provide in the 5-Year Plan?

    (a) A PHA must include in its 5-Year Plan a statement of:
    (1) The PHA's mission for serving the needs of low-income, very 
low-income and extremely low-income families in the PHA's jurisdiction; 
and
    (2) The PHA's goals and objectives that enable the PHA to serve the 
needs of the families identified in the PHA's Annual Plan. For HUD, the 
PHA and the public to better measure the success of the PHA in meeting 
its goals and objectives, the PHA must adopt quantifiable goals and 
objectives for serving those needs wherever possible.
    (b) After submitting its first 5-Year Plan, a PHA in its succeeding 
5-Year Plans, must address:
    (1) The PHA's mission, goals and objectives for the next 5 years; 
and
    (2) The progress the PHA has made in meeting the goals and 
objectives described in the PHA's previous 5-Year Plan.


Sec. 903.7  What information must a PHA provide in the Annual Plan?

    With the exception of the first Annual Plan submitted by a PHA, the 
Annual Plan must include the information provided in this section. HUD 
will advise PHAs by separate notice, sufficiently in advance of the 
first Annual Plan due date, of the information, described in this 
section that must be part of the first Annual Plan submission, and any 
additional instructions or directions that may be necessary to prepare 
and submit the first Annual Plan. The information described in this 
section applies to both public housing and tenant-based assistance, 
except where specifically stated otherwise. The information that the 
PHA must submit for HUD approval under the Annual Plan includes the 
discretionary policies of the various plan components or elements (for 
example, rent policies) and not the statutory or regulatory 
requirements that govern these plan components and that provide no 
discretion on the part of the PHA in implementation of the 
requirements. The PHA's Annual Plan must be consistent with the goals 
and objectives of the PHA's 5-Year Plan.
    (a) A statement of housing needs. (1) This statement must address 
the housing needs of the low-income and very low-income families who 
reside in the jurisdiction served by the PHA, and other families who 
are on the public housing and Section 8 tenant-based assistance waiting 
lists, including:
    (i) Families with incomes below 30 percent of area median 
(extremely low-income families);
    (ii) Elderly families and families with disabilities;
    (iii) Households of various races and ethnic groups residing in the 
jurisdiction or on the waiting list.
    (2) A PHA must make reasonable efforts to identify the housing 
needs of each of the groups listed in paragraph (a)(1) of this section 
based on information provided by the applicable Consolidated Plan, 
information provided by HUD, and other generally available data.

[[Page 20691]]

    (i) The identification of housing needs must address issues of 
affordability, supply, quality, accessibility, size of units and 
location.
    (ii) The statement of housing needs also must describe the ways in 
which the PHA intends, to the maximum extent practicable, to address 
those needs, and the PHA's reasons for choosing its strategy.
    (b) A statement of the PHA's deconcentration and other policies 
that govern eligibility, selection, and admissions. This statement must 
describe the PHA's policies that govern resident or tenant eligibility, 
selection and admission. This statement also must describe any PHA 
admission preferences, and any occupancy policies that pertain to 
public housing units and housing units assisted under section 8(o) of 
the 1937 Act, as well as any unit assignment policies for public 
housing. This statement must include the following information:
    (1) Deconcentration Policy. The PHA's deconcentration policy 
applicable to public housing, as described in Sec. 903.2(a).
    (2) Waiting List Procedures. The PHA's procedures for maintaining 
waiting lists for admission to the PHA's public housing developments. 
The statement must address any site-based waiting lists, as authorized 
by section 6(s) of the 1937 Act (42 U.S.C. 1437d(s)), for public 
housing. Section 6(s) of the 1937 Act permits PHAs to establish a 
system of site-based waiting lists for public housing that is 
consistent with all applicable civil rights and fair housing laws and 
regulations. Notwithstanding any other regulations, a PHA may adopt 
site-based waiting lists where:
    (i) The PHA regularly submits required occupancy data to HUD's 
Multifamily Tenant Characteristics Systems (MTCS) in an accurate, 
complete and timely manner;
    (ii) The system of site-based waiting lists provides for full 
disclosure to each applicant of any option available to the applicant 
in the selection of the development in which to reside, including basic 
information about available sites (location, occupancy, number and size 
of accessible units, amenities such as day care, security, 
transportation and training programs) and an estimate of the period of 
time the applicant would likely have to wait to be admitted to units of 
different sizes and types (e.g., regular or accessible) at each site;
    (iii) Adoption of site-based waiting lists would not violate any 
court order or settlement agreement, or be inconsistent with a pending 
complaint brought by HUD;
    (iv) The PHA includes reasonable measures to assure that adoption 
of site-based waiting lists is consistent with affirmatively furthering 
fair housing, such as reasonable marketing activities to attract 
applicants regardless of race or ethnicity;
    (v) The PHA provides for review of its site-based waiting list 
policy to determine if the policy is consistent with civil rights laws 
and certifications through the following steps:
    (A) As part of the submission of the Annual Plan, the PHA shall 
assess changes in racial, ethnic or disability-related tenant 
composition at each PHA site that may have occurred during the 
implementation of the site-based waiting list, based upon MTCS 
occupancy data that has been confirmed to be complete and accurate by 
an independent audit (which may be the annual independent audit) or is 
otherwise satisfactory to HUD;
    (B) At least every three years the PHA uses independent testers or 
other means satisfactory to HUD, to assure that the site-based waiting 
list is not being implemented in a discriminatory manner, and that no 
patterns or practices of discrimination exist, and providing the 
results to HUD;
    (C) Taking any steps necessary to remedy the problems surfaced 
during the review; and (D) Taking the steps necessary to affirmatively 
further fair housing.
    (3) Other admissions policies. The PHA's admission policies that 
include any other PHA policies that govern eligibility, selection and 
admissions for the public housing (see part 960 of this title) and 
tenant-based assistance programs (see part 982, subpart E of this 
title). (The information requested on site-based waiting lists and 
deconcentration is applicable only to public housing.)
    (c) A statement of financial resources. This statement must address 
the financial resources that are available to the PHA for the support 
of Federal public housing and tenant-based assistance programs 
administered by the PHA during the plan year. The statement must 
include a listing, by general categories, of the PHA's anticipated 
resources, such as PHA operating, capital and other anticipated Federal 
resources available to the PHA, as well as tenant rents and other 
income available to support public housing or tenant-based assistance. 
The statement also should include the non-Federal sources of funds 
supporting each Federal program, and state the planned uses for the 
resources.
    (d) A statement of the PHA's rent determination policies. This 
statement must describe the PHA's basic discretionary policies that 
govern rents charged for public housing units, applicable flat rents, 
and the rental contributions of families receiving tenant-based 
assistance. For tenant-based assistance, this statement also shall 
cover any discretionary minimum tenant rents and payment standard 
policies.
    (e) A statement of the PHA's operation and management. (1) This 
statement must list the PHA's rules, standards, and policies that 
govern maintenance and management of housing owned, assisted, or 
operated by the PHA.
    (2) The policies listed in this statement must include a 
description of any measures necessary for the prevention or eradication 
of pest infestation. Pest infestation includes cockroach infestation.
    (3) This statement must include a description of PHA management 
organization, and a listing of the programs administered by the PHA.
    (4) The information requested on a PHA's rules, standards and 
policies regarding management and maintenance of housing applies only 
to public housing. The information requested on PHA program management 
and listing of administered programs applies to public housing and 
tenant-based assistance.
    (f) A statement of the PHA grievance procedures. This statement 
describes the grievance and informal hearing and review procedures that 
the PHA makes available to its residents and applicants. These 
procedures include public housing grievance procedures and tenant-based 
assistance informal review procedures for applicants and hearing 
procedures for participants.
    (g) A statement of capital improvements needed. With respect to 
public housing only, this statement describes the capital improvements 
necessary to ensure long-term physical and social viability of the 
PHA's public housing developments, including the capital improvements 
to be undertaken in the year in question and their estimated costs, and 
any other information required for participation in the Capital Fund. 
PHAs also are required to include 5-Year Plans covering large capital 
items.
    (h) A statement of any demolition and/or disposition. (1) Plan for 
Demolition/Disposition. With respect to public housing only, a 
description of any public housing development, or portion of a public 
housing development, owned by the PHA for

[[Page 20692]]

which the PHA has applied or will apply for demolition and/or 
disposition approval under section 18 of the 1937 Act (42 U.S.C. 
1437p), and the timetable for demolition and/or disposition. The 
application and approval process for demolition and/or disposition is a 
separate process. Approval of the PHA Plan does not constitute approval 
of these activities.
    (2) Interim Plan for Demolition/Disposition. (i) Before submission 
of the first Annual Plan, a PHA may submit an interim PHA Annual Plan 
solely for demolition/disposition. The interim plan must provide:
    (A) The required description of the action to be taken;
    (B) A certification of consistency with the Consolidated Plan;
    (C) A description of how the plan is consistent with the 
Consolidated Plan;
    (D) A relocation plan that includes the availability of units in 
the area and adequate funding; and
    (E) Confirmation that a public hearing was held on the proposed 
action and that the resident advisory board was consulted.
    (ii) Interim plans for demolition/disposition are subject to PHA 
Plan procedural requirements in this part (see Secs. 903.13, 903.15, 
903.17, 903.19, 903.21, 903.23, 903.25), with the following exception. 
If a resident advisory board has not yet been formed, the PHA may seek 
a waiver of the requirement to consult with the resident advisory board 
on the grounds that organizations that adequately represent residents 
for this purpose were consulted.
    (iii) The actual application for demolition or disposition may be 
submitted at the same time as submission of the interim plan or at a 
later date.
    (i) A statement of the public housing developments designated as 
housing for elderly families or families with disabilities or elderly 
families and families with disabilities.
    (1) With respect to public housing only, this statement identifies 
any public housing developments owned, assisted, or operated by the 
PHA, or any portion of these developments, that:
    (i) The PHA has designated for occupancy by:
    (A) Only elderly families;
    (B) Only families with disabilities; or
    (C) Elderly families and families with disabilities; and
    (ii) The PHA will apply for designation for occupancy by:
    (A) Only elderly families;
    (B) Only families with disabilities; or
    (C) Elderly families and families with disabilities as provided by 
section 7 of the 1937 Act (42 U.S.C. 1437e).
    (2) The designated housing application and approval process is a 
separate process. Approval of the PHA Plan does not constitute approval 
of these activities.
    (j) A statement of the conversion of public housing to tenant-based 
assistance.
    (1) This statement describes:
    (i) Any building or buildings that the PHA is required to convert 
to tenant-based assistance under section 33 of the 1937 Act (42 U.S.C. 
1437z-5);
    (ii) The status of any building or buildings that the PHA may be 
required to convert to tenant-based assistance under section 202 of the 
Fiscal Year 1996 HUD Appropriations Act (42 U.S.C. 14371 note); or
    (iii) The PHA's plans to voluntarily convert under section 22 of 
the 1937 Act (42 U.S.C. 1437t).
    (2) The statement also must include an analysis of the developments 
or buildings required to be converted under section 33.
    (3) For both voluntary and required conversions, the statement must 
include the amount of assistance received commencing in Federal Fiscal 
Year 1999 to be used for rental assistance or other housing assistance 
in connection with such conversion.
    (4) The application and approval processes for required or 
voluntary conversions are separate approval processes. Approval of the 
PHA Plan does not constitute approval of these activities.
    (5) The information required under this paragraph (j) of this 
section is applicable to public housing and only that tenant-based 
assistance which is to be included in the conversion plan.
    (k) A statement of homeownership programs administered by the PHA.
    (1) This statement describes:
    (i) Any homeownership programs administered by the PHA under 
section 8(y) of the 1937 Act (42 U.S.C. 1437f(y));
    (ii) Any homeownership programs administered by the PHA under an 
approved section 5(h) homeownership program (42 U.S.C. 1437c(h));
    (iii) An approved HOPE I program (42 U.S.C. 1437aaa); or
    (iv) Any homeownership programs for which the PHA has applied to 
administer or will apply to administer under section 5(h), the HOPE I 
program, or section 32 of the 1937 Act (42 U.S.C. 1437z-4).
    (2) The application and approval process for homeownership under 
the programs described in paragraph (k) of this section, with the 
exception of the section 8(y) homeownership program, are separate 
processes. Approval of the PHA Plan does not constitute approval of 
these activities.
    (l) A statement of the PHA's community service and self-sufficiency 
programs. (1) This statement describes:
    (i) Any PHA programs relating to services and amenities 
coordinated, promoted or provided by the PHA for assisted families, 
including programs provided or offered as a result of the PHA's 
partnership with other entities;
    (ii) Any PHA programs coordinated, promoted or provided by the PHA 
for the enhancement of the economic and social self-sufficiency of 
assisted families, including programs provided or offered as a result 
of the PHA's partnerships with other entities, and activities under 
section 3 of the Housing and Community Development Act of 1968 and 
under requirements for the Family Self-Sufficiency Program and others. 
The description of programs offered shall include the program's size 
(including required and actual size of the Family Self-Sufficiency 
program) and means of allocating assistance to households.
    (iii) How the PHA will comply with the requirements of section 12 
(c) and (d) of the 1937 Act (42 U.S.C. 1437j (c) and (d)). These 
statutory provisions relate to community service by public housing 
residents and treatment of income changes in public housing and tenant-
based assistance recipients resulting from welfare program 
requirements. PHAs must address any cooperation agreements, as 
described in section 12(d)(7) of the 1937 Act (42 U.S.C. 1437j(d)(7)), 
that the PHA has entered into or plans to enter into.
    (2) The information required by paragraph (l) of this section is 
applicable to both public housing and tenant-based assistance, except 
that the information regarding the PHA's compliance with the community 
service requirement applies only to public housing.
    (m) A statement of the PHA's safety and crime prevention measures.
    (1) With respect to public housing only, this statement describes 
the PHA's plan for safety and crime prevention to ensure the safety of 
the public housing residents that it serves. The plan for safety and 
crime prevention must be established in consultation with the police 
officer or officers in command of the appropriate precinct or police 
departments. The plan also must provide, on a development-by-
development or jurisdiction wide-basis, the measures necessary to 
ensure the safety of public housing residents.
    (2) The statement regarding the PHA's safety and crime prevention 
plan must include the following information:

[[Page 20693]]

    (i) A description of the need for measures to ensure the safety of 
public housing residents;
    (ii) A description of any crime prevention activities conducted or 
to be conducted by the PHA; and
    (iii) A description of the coordination between the PHA and the 
appropriate police precincts for carrying out crime prevention measures 
and activities.
    (3) If the PHA expects to receive drug elimination program grant 
funds, the PHA must submit, in addition to the information required by 
paragraph (m)(1) of this section, the plan required by HUD's Public 
Housing Drug Elimination Program regulations (see part 761 of this 
title).
    (4) If HUD determines at any time that the security needs of a 
public housing development are not being adequately addressed by the 
PHA's plan, or that the local police precinct is not assisting the PHA 
with compliance with its crime prevention measures as described in the 
Annual Plan, HUD may mediate between the PHA and the local precinct to 
resolve any issues of conflict.
    (n) A statement of the PHA's policies and rules regarding ownership 
of pets in public housing. This statement describes the PHA's policies 
and requirements pertaining to the ownership of pets in public housing. 
The policies must be in accordance with section 31 of the 1937 Act (42 
U.S.C. 1437a-3).
    (o) Civil rights certification. (1) The PHA must certify that it 
will carry out its plan in conformity with title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d-2000d-4), the Fair Housing Act (42 U.S.C. 
3601-19), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794), and title II of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12101 et seq.). The PHA also must certify that it will 
affirmatively further fair housing.
    (2) The certification is applicable to both the 5-Year Plan and the 
Annual Plan.
    (3) A PHA shall be considered in compliance with the certification 
requirement to affirmatively further fair housing if the PHA fulfills 
the requirements of Sec. 903.2(b) and:
    (i) Examines its programs or proposed programs;
    (ii) Identifies any impediments to fair housing choice within those 
programs;
    (iii) Addresses those impediments in a reasonable fashion in view 
of the resources available;
    (iv) Works with local jurisdictions to implement any of the 
jurisdiction's initiatives to affirmatively further fair housing that 
require the PHA's involvement; and
    (v) Maintains records reflecting these analyses and actions.
    (p) Recent results of PHA's fiscal year audit. This statement 
provides the results of the most recent fiscal year audit of the PHA 
conducted under section 5(h)(2) of the 1937 Act (42 U.S.C. 1437c(h)).
    (q) A statement of asset management. To the extent not covered by 
other components of the PHA Annual Plan, this statement describes how 
the PHA will carry out its asset management functions with respect to 
the PHA's public housing inventory, including how the PHA will plan for 
long-term operating, capital investment, rehabilitation, modernization, 
disposition, and other needs for such inventory.
    (r) Additional information to be provided. (1) For all Annual Plans 
following submission of the first Annual Plan, a PHA must include a 
brief statement of the PHA's progress in meeting the mission and goals 
described in the 5-Year Plan;
    (2) A PHA must identify the basic criteria the PHA will use for 
determining:
    (i) A substantial deviation from its 5-Year Plan; and
    (ii) A significant amendment or modification to its 5-Year Plan and 
Annual Plan.
    (3) A PHA must include such other information as HUD may request of 
PHAs, either on an individual or across-the-board basis. HUD will 
advise the PHA or PHAs of this additional information through advance 
notice.


Sec. 903.9  May HUD request additional information in the Annual Plan 
of a troubled PHA?

    HUD may request that a PHA that is at risk of being designated as 
troubled or is designated as troubled in accordance with section 
6(j)(2) of the 1937 Act (42 U.S.C. 1437d(j)(2)), the Public Housing 
Management Assessment Program (part 901 of this title) or the Public 
Housing Assessment System (part 902 of this chapter) include its 
operating budget. The PHA also must include or reference any applicable 
memorandum of agreement with HUD or any plan to improve performance, 
and such other material as HUD may prescribe.


Sec. 903.11  Are certain PHAs eligible to submit a streamlined Annual 
Plan?

    (a) Yes, the following PHAs may submit a streamlined Annual Plan, 
as described in paragraph (b) of this section:
    (1) PHAs that are determined to be high performing PHAs as of the 
last annual or interim assessment of the PHA before the submission of 
the 5-Year or Annual Plan;
    (2) PHAs with less than 250 public housing units (small PHAs) and 
that have not been designated as troubled in accordance with section 
6(j)(2) of the 1937 Act; and
    (3) PHAs that only administer tenant-based assistance and do not 
own or operate public housing.
    (b) All streamlined plans must provide information on how the 
public may reasonably obtain additional information on the PHA policies 
contained in the standard Annual Plan, but excluded from their 
streamlined submissions.
    (c) A streamlined plan must include the information provided in 
this paragraph (c). The Secretary may reduce the information 
requirements of streamlined Plans further, with adequate notice.
    (1) For high performing PHAs, the streamlined Annual Plan must 
include the information required by Sec. 903.7 (a), (b), (c), (d), (g), 
(h), (m), (n), (o), (p) and (r). The information required by 
Sec. 903.7(m) must be included only to the extent this information is 
required for PHA's participation in the public housing drug elimination 
program and the PHA anticipates participating in this program in the 
upcoming year.
    (2) For small PHAs that are not designated as troubled or that are 
not at risk of being designated as troubled under section 6(j)(2) of 
the 1937 Act the streamlined Annual Plan must include the information 
required by Sec. 903.7 (a), (b), (c), (d), (g), (h), (k), (m), (n), 
(o), (p) and (r). The information required by Sec. 903.7(k) must be 
included only to the extent that the PHA participates in homeownership 
programs under section 8(y). The information required by Sec. 903.7(m) 
must be included only to the extent this information is required for 
the PHA's participation in the public housing drug elimination program 
and the PHA anticipates participating in this program in the upcoming 
year.
    (3) For PHAs that administer only tenant-based assistance, the 
streamlined Annual Plan must include the information required by 
Sec. 903.7 (a), (b), (c), (d), (e), (f), (k), (l), (o), (p) and (r).


Sec. 903.13  What is a Resident Advisory Board and what is its role in 
development of the Annual Plan?

    (a) A Resident Advisory Board refers to a board or boards, as 
provided in paragraph (b) of this section, whose membership consists of 
individuals who adequately reflect and represent the residents assisted 
by the PHA.

[[Page 20694]]

    (1) The role of the Resident Advisory Board (or Resident Advisory 
Boards) is to assist and make recommendations regarding the development 
of the PHA plan, and any significant amendment or modification to the 
PHA plan.
    (2) The PHA shall allocate reasonable resources to assure the 
effective functioning of Resident Advisory Boards. Reasonable resources 
for the Resident Advisory Boards must provide reasonable means for them 
to become informed on programs covered by the PHA Plan, to communicate 
in writing and by telephone with assisted families and hold meetings 
with those families, and to access information regarding covered 
programs on the internet, taking into account the size and resources of 
the PHA.
    (b) Each PHA must establish one or more Resident Advisory Boards, 
as provided in paragraph (b) of this section.
    (1) If a jurisdiction-wide resident council exists that complies 
with the tenant participation regulations in part 964 of this title, 
the PHA shall appoint the jurisdiction-wide resident council or the 
council's representatives as the Resident Advisory Board. If the PHA 
makes such appointment, the members of the jurisdiction-wide resident 
council or the council's representatives shall be added or another 
Resident Advisory Board formed to provide for reasonable representation 
of families receiving tenant-based assistance where such representation 
is required under paragraph (b)(2) of this section.
    (2) If a jurisdiction-wide resident council does not exist but 
resident councils exist that comply with the tenant participation 
regulations, the PHA shall appoint such resident councils or their 
representatives to serve on one or more Resident Advisory Boards. If 
the PHA makes such appointment, the PHA may require that the resident 
councils choose a limited number of representatives.
    (3) Where the PHA has a tenant-based assistance program of 
significant size (where tenant-based assistance is 20% or more of 
assisted households), the PHA shall assure that the Resident Advisory 
Board (or Boards) has reasonable representation of families receiving 
tenant-based assistance and that a reasonable process is undertaken to 
choose this representation.
    (4) Where or to the extent that resident councils that comply with 
the tenant participation regulations do not exist, the PHA shall 
appoint Resident Advisory Boards or Board members as needed to 
adequately reflect and represent the interests of residents of such 
developments; provided that the PHA shall provide reasonable notice to 
such residents and urge that they form resident councils with the 
tenant participation regulations.
    (c) The PHA must consider the recommendations of the Resident 
Advisory Board or Boards in preparing the final Annual Plan, and any 
significant amendment or modification to the Annual Plan, as provided 
in Sec. 903.21 of this title.
    (1) In submitting the final plan to HUD for approval, or any 
significant amendment or modification to the plan to HUD for approval, 
the PHA must include a copy of the recommendations made by the Resident 
Advisory Board or Boards and a description of the manner in which the 
PHA addressed these recommendations.
    (2) Notwithstanding the 75-day limitation on HUD review, in 
response to a written request from a Resident Advisory Board claiming 
that the PHA failed to provide adequate notice and opportunity for 
comment, HUD may make a finding of good cause during the required time 
period and require the PHA to remedy the failure before final approval 
of the plan.


Sec. 903.15  What is the relationship of the public housing agency 
plans to the Consolidated Plan?

    (a) The PHA must ensure that the Annual Plan is consistent with any 
applicable Consolidated Plan for the jurisdiction in which the PHA is 
located. The Consolidated Plan includes a certification that requires 
the preparation of an Analysis of Impediments to Fair Housing Choice.
    (1) The PHA must submit a certification by the appropriate State or 
local officials that the Annual Plan is consistent with the 
Consolidated Plan and include a description of the manner in which the 
applicable plan contents are consistent with the Consolidated Plans.
    (2) For State agencies that are PHAs, the applicable Consolidated 
Plan is the State Consolidated Plan.
    (b) A PHA may request to change its fiscal year to better 
coordinate its planning with the planning done under the Consolidated 
Plan process, by the State or local officials, as applicable.


Sec. 903.17  What is the process for obtaining public comment on the 
plans?

    (a) The PHA's board of directors or similar governing body must 
conduct a public hearing to discuss the PHA plan (either the 5-Year 
Plan and/or Annual Plan, as applicable) and invite public comment on 
the plan(s). The hearing must be conducted at a location that is 
convenient to the residents served by the PHA.
    (b) Not later than 45 days before the public hearing is to take 
place, the PHA must:
    (1) Make the proposed PHA plan(s), the required attachments and 
documents related to the plans, and all information relevant to the 
public hearing to be conducted, available for inspection by the public 
at the principal office of the PHA during normal business hours; and
    (2) Publish a notice informing the public that the information is 
available for review and inspection, and that a public hearing will 
take place on the plan, and the date, time and location of the hearing.
    (c) PHAs shall conduct reasonable outreach activities to encourage 
broad public participation in the PHA plans.


Sec. 903.19  When is the 5-Year Plan or Annual Plan ready for 
submission to HUD?

    A PHA may adopt its 5-Year Plan or its Annual Plan and submit the 
plan to HUD for approval only after:
    (a) The PHA has conducted the public hearing;
    (b) The PHA has considered all public comments received on the 
plan;
    (c) The PHA has made any changes to the plan, based on comments, 
after consultation with the Resident Advisory Board or other resident 
organization.


Sec. 903.21  May the PHA amend or modify a plan?

    (a) A PHA, after submitting its 5-Year Plan or Annual Plan to HUD, 
may amend or modify any PHA policy, rule, regulation or other aspect of 
the plan. If the amendment or modification is a significant amendment 
or modification, as defined in Sec. 903.7(r)(2), the PHA:
    (1) May not adopt the amendment or modification until the PHA has 
duly called a meeting of its board of directors (or similar governing 
body) and the meeting, at which the amendment or modification is 
adopted, is open to the public; and
    (2) May not implement the amendment or modification, until 
notification of the amendment or modification is provided to HUD and 
approved by HUD in accordance with HUD's plan review procedures, as 
provided in Sec. 903.23.
    (b) Each significant amendment or modification to a plan submitted 
to HUD is subject to the requirements of Secs. 903.13, 903.15, and 
903.17.


Sec. 903.23  What is the process by which HUD reviews, approves, or 
disapproves an Annual Plan?

    (a) Review of the plan. When the PHA submits its Annual Plan to 
HUD, including any significant amendment or

[[Page 20695]]

modification to the plan, HUD reviews the plan to determine whether:
    (1) The plan provides all the information that is required to be 
included in the plan;
    (2) The plan is consistent with the information and data available 
to HUD;
    (3) The plan is consistent with any applicable Consolidated Plan 
for the jurisdiction in which the PHA is located; and
    (4) The plan is not prohibited or inconsistent with the 1937 Act or 
any other applicable Federal law.
    (b) Disapproval of the plan. (1) HUD may disapprove a PHA plan, in 
its entirety or with respect to any part, or disapprove any significant 
amendment or modification to the plan, only if HUD determines that the 
plan, or one of its components or elements, or any significant 
amendment or modification to the plan:
    (i) Does not provide all the information that is required to be 
included in the plan;
    (ii) Is not consistent with the information and data available to 
HUD;
    (iii) Is not consistent with any applicable Consolidated Plan for 
the jurisdiction in which the PHA is located; or
    (iv) Is not consistent with applicable Federal laws and 
regulations.
    (2) Not later than 75 days after the date on which the PHA submits 
its plan or significant amendment or modification to the plan, HUD will 
issue written notice to the PHA if the plan or a significant amendment 
or modification has been disapproved. The notice that HUD issues to the 
PHA must state with specificity the reasons for the disapproval. HUD 
may not state as a reason for disapproval the lack of time to review 
the plan.
    (3) If HUD fails to issue the notice of disapproval on or before 
the 75th day after the date on which the PHA submits its plan or 
significant amendment or modification to the plan, HUD shall be 
considered to have determined that all elements or components of the 
plan required to be submitted and that were submitted, and to be 
reviewed by HUD were in compliance with applicable requirements and the 
plan has been approved.
    (4) The provisions of paragraph (b)(3) of this section do not apply 
to troubled PHAs. The plan of a troubled PHA must be approved or 
disapproved by HUD through written notice.
    (c) Designation of due date as submission date for first plan 
submissions. For purposes of the 75-day period described in paragraph 
(b) of this section, the first 5-year and Annual Plans submitted by a 
PHA will be considered to have been submitted no earlier than the due 
date as provided in Sec. 903.5.
    (d) Public availability of the approved plan. Once a PHA's plan has 
been approved, a PHA must make the approved plan and the required 
attachments and documents related to the plan, available for review and 
inspection, at the principal office of the PHA during normal business 
hours.


Sec. 903.25  How does HUD ensure PHA compliance with its plan?

    A PHA must comply with the rules, standards and policies 
established in the plans. To ensure that a PHA is in compliance with 
all policies, rules, and standards adopted in the plan approved by HUD, 
HUD shall, as it deems appropriate, respond to any complaint concerning 
PHA noncompliance with its plan. If HUD should determine that a PHA is 
not in compliance with its plan, HUD will take whatever action it deems 
necessary and appropriate.

    Dated: March 28, 2000.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 00-9334 Filed 4-14-00; 8:45 am]
BILLING CODE 4210-33-P