[Federal Register Volume 66, Number 158 (Wednesday, August 15, 2001)]
[Proposed Rules]
[Pages 42926-42927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20565]



[[Page 42925]]

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Part IV





Department of Housing and Urban Development





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24 CFR Part 903



Public Housing Agency Plans: Deconcentration--Amendments to Established 
Income Range Definition; Proposed Rule

  Federal Register / Vol. 66, No. 158 / Wednesday, August 15, 2001 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 903

[Docket No. FR-4677-P-01]
RIN 2577-AC31


Public Housing Agency Plans: Deconcentration--Amendments to 
``Established Income Range'' Definition

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the deconcentration component 
of HUD's Public Housing Agency Plans regulations to revise the 
definition of Established Income Range (EIR) to include within the EIR 
those developments in which the average income level is at or below 30 
percent of the area median income, and therefore ensure that such 
developments cannot be categorized as having average income ``above'' 
the Established Income Range. An income level that is at or below 30 
percent of the area median income is defined as ``extremely low 
income'' in HUD's regulations. HUD believes that developments with an 
average family income at or below 30 percent of the area median income 
should not be categorized as higher income developments for purposes of 
income mixing because efforts to place lower income families into these 
developments would not result in income deconcentration as contemplated 
by the statute.

DATES: Comment Due Date October 15, 2001.

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:

Background

    On December 22, 2000 (65 FR 81214), HUD amended the deconcentration 
provisions of its Public Housing Agency Plan regulations to achieve two 
purposes: (1) To assure that PHAs know what they must do to 
deconcentrate poverty in the public housing program; and (2) to assure 
that PHAs know what they must do to affirmatively further fair housing, 
as it relates to admissions to public housing. The December 22, 2000 
final rule was preceded by an April 17, 2000 proposed rule, and took 
into consideration public comment received on the proposed rule. By a 
final rule published on February 5, 2001 (66 FR 8897), HUD amended the 
December 22, 2000 final rule to provide that the first PHA fiscal year 
that is covered by the new deconcentration requirements of the December 
2000 final rule is the PHA fiscal year that begins October 1, 2001. 
(The December 22, 2000 final rule provided that the first PHA fiscal 
year that is covered by the new deconcentration requirements is the PHA 
fiscal year that begins July 1, 2001.)
    Since issuance of the December 22, 2000 final rule, HUD has 
received additional feedback from public housing agencies (PHAs). PHAs 
have advised HUD that in determining the Established Income Range (EIR) 
for certain developments, in accordance with the procedures of the 
rule, the EIR for these developments is sufficiently low that some 
developments for which the average income is at or below 30 percent of 
the area median income, actually fall above the EIR. Developments that 
fall above the EIR are categorized as ``higher income developments,'' 
and in accordance with the deconcentration requirements, PHAs must 
undertake efforts to place lower income families into higher income 
developments. HUD regulations define an income level that is at or 
below 30 percent of the area median income as ``extremely low income'' 
(24 CFR 5.603(b)). HUD agrees with PHA concerns that in all 
practicality deconcentration would not be fostered through efforts to 
place lower income families in developments categorized as higher 
income in which the average family income is in fact at the extremely 
low income level.
    While HUD's current regulations allow a PHA to seek an exemption 
from income mixing by explaining why, in a given case, efforts to 
income mix would not effectively promote income deconcentration, HUD 
believes that this situation is widespread enough to merit a change in 
the regulation rather than PHAs and HUD having to treat developments in 
which the average family income is extremely low income on a case-by-
case basis. HUD agrees that efforts to place lower income families into 
``higher income developments'' in which the average income of these 
``higher income developments'' is extremely low income would not result 
in income deconcentration, as contemplated by the statute or HUD's 
regulation.

This Proposed Rule

    This proposed rule would amend the deconcentration component of 
HUD's Public Housing Agency Plans regulations to revise the definition 
of Established Income Range to include within the EIR those 
developments in which the average income level is at or below 30 
percent of the area median income. This revision will ensure that such 
developments cannot be categorized as having average income ``above'' 
the EIR.
    HUD seeks comments and input from PHAs, residents, and other 
interested parties on this proposed change.
    HUD also seeks comments from PHAs on the requirements of the 
December 22, 2000 final rule for placing ``higher income families'' 
into ``lower income developments.'' (See 24 CFR 903.2(c)(1)(iv) and 
(v).) No changes are being proposed to those requirements in this rule. 
In requesting comments on this issue, however, HUD recognizes that the 
success of income mixing actions may depend on marketability of a 
development and therefore may be beyond the PHA's control, at least to 
a certain extent; and that PHA efforts to achieve deconcentration by 
supporting resident self-sufficiency efforts as well as necessary 
admissions efforts should be encouraged. HUD is therefore interested in 
PHA comments and feedback on the suitability of the December 22, 2000 
final rule in this regard. In particular, HUD requests comments on 
whether the current rule's provisions that allow for explanations and 
justifications (and require corrective actions in the event HUD 
determines the explanations are not adequate) are sufficiently flexible 
to take into account these concerns.

Findings and Certifications

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C.

[[Page 42927]]

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 rule would amend the 
deconcentration component of HUD's Public Housing Agency Plans 
regulations to revise the definition of Established Income Range to 
ensure that included within that range are developments in which the 
average income level is at or below 30 percent of the area median 
income and therefore such developments cannot be categorized as having 
average income ``above'' the Established Income Range. This rule would 
not impose a burden on small entities. This rule would alleviate an 
administrative burden on PHAs that have developments in which the 
average income is extremely low income.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic effect on a substantial number of small entities, 
HUD specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Executive Order 13132, Federalism

    This final rule does not impose substantial direct compliance costs 
on State and local governments or preempt State law within the meaning 
of Executive Order 13132.

Environmental Impact

    This issuance involves a discretionary establishment of external 
administrative or fiscal requirements or procedures related to rate or 
cost determinations which do not constitute a development decision 
affecting the physical condition of specific project areas or building 
sites. Accordingly, under 24 CFR 50.19(c)(6), this proposed rule is 
categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

Regulatory Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, Regulatory Planning and Review. OMB determined 
that this rule is a ``significant regulatory action,'' as defined in 
section 3(f) of the Order (although not economically significant, as 
provided in section 3(f)(1) of the Order). Any changes made to the 
proposed 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 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 amend part 
903 of title 24 of the Code of Federal Regulations to read as follows:

PART 903--PUBLIC HOUSING AGENCY PLANS

    1. The authority for 24 CFR part 903 continues to read as follows:

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

    2. In Sec. 903.2, paragraph (c)(1)(iii) is revised to read as 
follows:


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

* * * * *
    (c) Deconcentration of poverty and income mixing.
    (1) * * *
    (iii) Step 3. A PHA shall determine whether each of its covered 
developments falls above, within or below the Established Income Range. 
The Established Income Range is 85 percent of the average family income 
to the greater of either 115 percent (inclusive of 85 percent and 115 
percent) of the PHA-wide average income for covered developments as 
defined in Step 1 or an average family income at which a family would 
be defined as an extremely low income family under 24 CFR 5.603(b).
* * * * *

    Dated: July 12, 2001.
Mel Martinez,
Secretary.
[FR Doc. 01-20565 Filed 8-14-01; 8:45 am]
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