[Federal Register Volume 67, Number 205 (Wednesday, October 23, 2002)]
[Rules and Regulations]
[Pages 65272-65273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27046]



[[Page 65271]]

-----------------------------------------------------------------------

Part V





Department of Housing and Urban Development





-----------------------------------------------------------------------



24 CFR Part 5



Clarification of Eligibility of Citizens of Freely Associated States 
for Housing Assistance; Final Rule

  Federal Register / Vol. 67, No. 205 / Wednesday, October 23, 2002 / 
Rules and Regulations  

[[Page 65272]]


-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

[Docket No. FR-4754-F-01]
RIN 2577-AC35


Clarification of Eligibility of Citizens of Freely Associated 
States for Housing Assistance

AGENCY: Office of Public and Indian Housing, HUD.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Recently enacted law provides that citizens of the Freely 
Associated States (the Marshall Islands, the Federated States of 
Micronesia, and Palau) are eligible to receive housing assistance under 
Section 8, public housing, and other programs while lawfully residing 
in the United States, its territories and possessions. However, while 
residing in Guam, such aliens are not entitled to a preference over 
United States citizens or nationals. This rule makes conforming changes 
to HUD's regulations concerning restrictions on assistance to 
noncitizens.

DATES: Effective Date: November 22, 2002.

FOR FURTHER INFORMATION CONTACT: Glenda N. Green, Office of Public and 
Indian Housing, U.S. Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410, at (202) 708-0950. Persons 
with hearing- or speech-impairments may access these numbers via TTY by 
calling the Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Statutory Background.

    On January 14, 1986, Congress approved the Compacts of Free 
Association between the United States and the Federated States of 
Micronesia, and between the United States and the Government of the 
Marshall Islands (48 U.S.C. 1901 note). Section 141 of the Compacts of 
Free Association grants born or naturalized citizens of Micronesia and 
the Marshall Islands, and those entitled to citizenship by lineal 
descent, the right to establish legal residence in the United States 
and its territories and possessions, and to be employed in the United 
States. On November 14, 1986, Congress approved the Compact of Free 
Association with the Government of Palau (48 U.S.C. 1931 
note)(collectively, this rule refers to these documents as the 
``Compacts of Free Association''). Section 141 of the Compact of Free 
Association with Palau contains analogous provisions, with the 
exception, not relevant to the purposes of this rulemaking, of the 
lineal descent provision.
    Section 3(b) of Public Law 106-504 (approved November 13, 2000) 
amended section 214(a) of the Housing and Community Development Act of 
1980 (42 U.S.C. 1436a(a)) which governs restrictions on housing 
assistance provided by HUD. As a result of this amendment, citizens of 
the Freely Associated States lawfully residing in the United States, 
its territories and possessions, are now among those noncitizens 
eligible for the housing assistance covered in that section. Such 
assistance includes public housing, Section 8 housing (both tenant and 
project-based), the development grant programs, and assistance under 
sections 235 and 236 of the National Housing Act and the Rent 
Supplement program under 12 U.S.C. 1701s. Additionally, Section 3(b) 
amends 42 U.S.C. 1436a(a) to provide that aliens legally residing in 
Guam under the provisions of section 141 of the Compacts of Free 
Association shall not be entitled to a preference in receiving housing 
assistance over any United States citizen or national residing in Guam. 
These provisions are codified in 42 U.S.C. 1436a(a)(7).

II. HUD Notice PIH 2001-27.

    On August 3, 2001, HUD issued Notice PIH 2001-27 to provide 
guidance on the implementation of section 3(b) of Public Law 106-504. 
This guidance advised, and HUD strongly reiterates, that:
    [sbull] PHAs must notify in writing all affected families that as a 
result of Public Law 106-504, citizens of the Marshall Islands, the 
Federated States of Micronesia, and Palau (``the Freely Associated 
States'') living in the United States, its territories and possessions, 
are now eligible to receive housing assistance.
    [sbull] If a family, prior to the approval of Public Law 106-504, 
was considered ``mixed'' and receiving prorated assistance because 
certain of its members were eligible under the legal and regulatory 
provisions in effect before the statutory change, and other members 
were citizens of the Freely Associated States who are now eligible, 
such family is no longer ``mixed'' but is now fully eligible.
    [sbull] PHAs must conduct interim reexaminations and make any rent 
adjustments as soon as possible. Notice PIH 2001-27 provided the 
process for making retroactive rent adjustments.
    In addition, HUD advises that:
    [sbull] PHAs in the United States, its territories and possessions, 
including Guam, must (if the waiting list is open for applications) 
accept an application from a citizen of the Freely Associated States. 
This is true notwithstanding the provision of the law regarding 
preferences in Guam.
    [sbull] Citizens of the Freely Associated States may receive a 
local housing preference, established by the PHA. However, within Guam, 
such preference cannot allow them to receive housing assistance in 
preference to applicants who are United States citizens or nationals 
residing in Guam. Date and time of application are not a preference, so 
citizens of the Freely Associated States receive the benefit of prior 
date and time of application.
    [sbull] Households consisting entirely of citizens of the Freely 
Associated States must be treated the same as United States citizens in 
the selection, admission, and occupancy of federally assisted housing 
in Guam, with the exception of the restriction on preferences. For 
example, let us assume for the sake of discussion that the Guam Housing 
and Urban Renewal Authority has a local preference for families paying 
more than 50% of their income for rent.\1\ Let us also assume that 
family 1, all of whose members are citizens of the Freely 
Associated States, is eligible for the selection preference, and has 
applied for a unit of a particular bedroom size on May 15, 2002, at 10 
a.m. Let us further assume that family 2 of eligible United 
States citizens, not entitled to any selection preference, applied for 
a unit of the same bedroom size on May 15, 2002, at 9:30 a.m., that no 
other applications were filed between these two times, and that there 
is one unit of the appropriate bedroom size available. The question is, 
could family 1 from the Freely Associated States be moved 
ahead of family 2 of United States citizens because of their 
preference, even though their application was later in time? The answer 
is no because the law prohibits such family from receiving a preference 
in housing assistance over any United States citizen or national 
residing in Guam.
---------------------------------------------------------------------------

    \1\ This is a hypothetical example for discussion purposes only 
and is not intended to be an accurate representation of the Guam 
Housing and Urban Renewal Authority's tenant selection policies or 
preferences.
---------------------------------------------------------------------------

    However, let us change the example slightly. Let us now assume that 
family 2's application was filed by an eligible family of 
citizens of the Freely Associated States, but one that is not entitled 
to the selection preference, there are no other applications, and only 
one unit is available, as in the previous example. Family 1 
from the Freely Associated States that has a preference

[[Page 65273]]

would get the benefit of the preference in that case and be given the 
unit ahead of family 2 without the preference, even though its 
application was a half-hour later in time.
    Finally, if family 2's application was filed by the family 
from the Freely Associated States, and family 1's application 
was filed by the U.S. citizen family, and neither had any selection 
preferences, family 1's application would be selected 
according to the normal priority based on date and time of application.

III. This Final Rule

    This rule merely conforms HUD's regulations to existing law. 
Therefore, public comment is unnecessary, and this rule is being issued 
as a final rule.
    This final rule amends 24 CFR part 5, subpart E, the implementing 
regulation for 42 U.S.C. 1436a. Specifically, the rule adds a new 
paragraph 5.506(c) to conform the rule to the limitation on preferences 
in 42 U.S.C. 1436a(a)(7). It should be noted that current 24 CFR 
5.506(a)(2) now includes citizens of the countries in the Compacts of 
Free Association (including those living in Guam and other territories 
and possessions) by virtue of cross-reference to 42 U.S.C. 1436a(a).

IV. Findings and Certifications

Justification for Final Rulemaking

    HUD generally publishes a rule for public comment before issuing a 
rule for effect, in accordance with its own regulations on rulemaking 
in 24 CFR part 10. However, part 10 provides for exceptions to the 
general rule if the agency finds good cause to omit advanced notice and 
public participation. The good cause requirement is satisfied when 
prior public procedure is ``impractical, unnecessary, or contrary to 
the public interest'' (see 24 CFR 10.1). In this case, public comment 
is unnecessary, since this rule simply conforms HUD's regulations to 
statutory changes that are currently in effect, in order to emphasize 
and communicate those legal changes to HUD's regulated community.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this final rule, and in so 
doing certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. This rule merely 
conforms HUD's regulations to existing law.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made in accordance with HUD regulations at 24 CFR part 50, which 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332). The Finding of No Significant Impact to this 
final rule is available for public inspection between the hours of 7:30 
a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk, 
Office of General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410-0500.

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 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.

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 interim 
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.

List of Subjects in 24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Individuals with disabilities, 
Loan programs--housing and community development, Low and moderate 
income housing, Mortgage insurance, Pets, Public housing, Rent 
subsidies, Reporting and recordkeeping requirements.

    For the foregoing reasons, HUD amends 24 CFR part 5, subpart E as 
follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

Subpart E--Restrictions on Assistance to Noncitizens

    1. The authority citation for subpart E continues to read as 
follows:

    Authority: 42 U.S.C. 1436a and 3535d.


    2. Amend 24 CFR 5.506 as follows:
    a. Add a new paragraph (c) to read as follows:


Sec.  5.506  General provisions.

* * * * *
    (c) Preferences. Citizens of the Republic of Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau who are 
eligible for assistance under paragraph (a)(2) of this section are 
entitled to receive local preferences for housing assistance, except 
that, within Guam, such citizens who have such local preference will 
not be entitled to housing assistance in preference to any United 
States citizen or national resident therein who is otherwise eligible 
for such assistance.

    Dated: September 20, 2002.
Michael Liu,
Asistant Secretary for Public and Indian Housing.
[FR Doc. 02-27046 Filed 10-22-02; 8:45 am]
BILLING CODE 4210-33-P