[Federal Register Volume 68, Number 148 (Friday, August 1, 2003)]
[Proposed Rules]
[Pages 45734-45735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19623]



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Part VI





Department of Housing and Urban Development





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24 CFR Part 960



PHA Discretion in Treatment of Over-Income Families; Proposed Rule

  Federal Register / Vol. 68, No. 148 / Friday, August 1, 2003 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 960

[Docket No. FR-4824-P-01]
RIN 2577-AC42


PHA Discretion in Treatment of Over-Income Families

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would give public housing agencies (PHAs) 
the discretion, in accordance with federal law and regulations, to 
evict public housing tenants who are over the income limit for 
eligibility to participate in public housing programs. PHAs may decide 
that such families should be able to find other housing and that public 
housing units should be made available for families with greater 
housing need.

DATES: Comments Due Date: September 30, 2003.

ADDRESSES: Interested persons are invited to submit written comments 
regarding this rule to the Regulations Division, Room 10276, Office of 
General Counsel, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410-0500. Comments should refer 
to the above docket number and title. A copy of each comment submitted 
will be available for public inspection and copying between 8 a.m. and 
5 p.m., weekdays, at the above address. Facsimile (FAX) comments will 
not be accepted.

FOR FURTHER INFORMATION CONTACT: Pat Arnaudo, Office of Public Housing 
Occupancy and Management, Department of Housing and Urban Development, 
Room 4116, 451 Seventh Street, SW., Washington, DC 20410-5000; 
telephone (202) 708-0744 (this is not a toll-free number). Hearing or 
speech impaired individuals may access this number via TTY by calling 
the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    This rule proposes to amend 24 CFR 960.261, ``Restrictions on 
evictions of families based upon income,'' which limits the authority 
of PHAs to evict families residing in public housing based on an 
increase in income unless: (1) The PHA has determined that there is 
other decent, safe, and sanitary housing available to the tenant at a 
rent not exceeding the then-current tenant rent; or (2) the PHA is 
required to evict the family by local law. Through this rule, HUD 
proposes that a PHA have the discretion to evict a family that is over 
the eligible income limit. HUD believes that public housing should be 
available to low-income families and that it is inappropriate to limit 
the ability of a PHA to move over-income families out of public housing 
to make room for low-income families on waiting lists.
    The restriction on eviction provision is a regulatory requirement, 
not a statutory one. The CFR section has undergone some revision since 
its original promulgation; it was promulgated in its current form on 
March 29, 2000. (See 65 FR 16729.)
    There are statutory provisions in the U.S. Housing Act of 1937, 42 
U.S.C. 1437 et seq. (the 1937 Act) and policy considerations that 
affect the ability of PHAs to evict residents based on income changes 
in some specifically defined cases. These considerations relate to the 
two-year earned income disallowance in section 3(d) of the Act, 42 
U.S.C. 1437a(d), and the Family Self-Sufficiency program under section 
23 of the Act, 42 U.S.C. 1437u.
    In order to create an incentive for public housing residents to 
find employment, the 1937 Act provides for a moratorium on increases in 
rent because of employment, under specified statutory criteria that 
ensure that over-income families remain in place for valid reasons. 
Section 3(d) of the 1937 Act (42 U.S.C. 1437a(d)), provides that for 
certain families who have a member who succeeds in becoming employed, 
rent is not increased at all for the 12-month period following the 
commencement of employment and is increased only in a 50 percent 
increment for the subsequent 12-month period. This temporary 
disallowance only applies to families who have a member: (1) Whose 
income increases as a result of employment if the member was previously 
unemployed for one or more years; (2) whose income increases because of 
participation in a local self-sufficiency program; or (3) who is or was 
within the previous 6 months assisted under a state program for 
temporary assistance to needy families (TANF). (See 42 U.S.C. 
1437a(d).) This statute not only implies that such families should not 
be considered over-income until the period of rent moratorium expires, 
it is part of an important HUD policy to create incentives for self-
sufficiency and employment that will ultimately enable families to 
leave public housing. HUD does not wish to undermine this policy, so 
this rule would exempt families eligible for the earned income 
disregard from those who may be immediately evicted when over income.
    Similarly, the Family Self-Sufficiency (FSS) program under 42 
U.S.C. 1437u, provides that families enter into contracts of 
participation with the PHA under which the head of the household is 
required to seek suitable employment during the term of the contract. 
The FSS program is an important policy initiative of the department to 
coordinate resources to enable public housing residents to achieve 
economic self-sufficiency. Allowing participants to be evicted during 
the term of the contract because they found employment, which is the 
object of the self-sufficiency contract, would undermine the program. 
Therefore, this proposed rule would exempt such families from eviction 
so long as they have a valid contract of participation in an FSS 
program under the statute and HUD's regulations.

II. This Proposed Rule

    HUD believes that, except for the statutory special-case exemptions 
noted above in Section I of this preamble, PHAs should be free to make 
local decisions to serve low-income families. Those with incomes over 
80 percent of the median--the upper limit for public housing admissions 
eligibility--should be able to find housing in the private market, and 
the PHA will therefore be able to focus its efforts on families with 
lower incomes. In the past, 24 CFR 960.261 and its predecessor sections 
have unduly limited the PHA's ability to respond to over-income 
families who choose to remain in public housing. HUD believes it is 
better policy to grant PHAs the ability to target scarce public 
resources to those most in need for housing. HUD, under its general 
regulatory authority provided in 42 U.S.C. 3535(d), which states that 
the Secretary may ``make such regulations as may be necessary to carry 
out his functions, powers, and duties,'' is proposing to implement this 
policy by amending 24 CFR 960.261.

III. Findings and Certifications

Environmental Impact

    This rule concerns a statutorily required and/or discretionary 
establishment and review of income limits and exclusions with regard to 
eligibility for or calculation of HUD housing assistance or rental 
assistance. As such, this rule is categorically excluded from the 
provisions of the National Environmental Policy Act, 42 U.S.C. 4332, 
under 24 CFR 50.19(c)(6) of HUD's regulations.

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Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this rule and in so doing 
certifies that this rule would not have a significant economic impact 
on a substantial number of small entities.
    This rule is concerned only with granting PHAs the discretion to 
evict over-income families. It does not mandate that any PHA take such 
action. Furthermore, the rule preserves the ability that small PHAs 
with fewer than 250 units have to admit over-income families in cases 
where there is no demand for a unit by an eligible family, thus 
preventing such small PHAs from having to support vacant units. 
Therefore, this rule would not have a significant economic impact on a 
substantial number of small entities.
    Although HUD has determined that this proposed rule would not have 
a significant economic impact on a substantial number of small 
entities, HUD welcomes comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This proposed rule does not 
impose any federal mandates on any state, local, or tribal governments 
or the private sector within the meaning of the UMRA.

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.

Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this proposed 
rule under Executive Order 12866 (entitled ``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 proposed rule subsequent to its 
submission to OMB are identified in the docket file, which is available 
for public inspection in the office of the Rules Docket Clerk, Room 
10276, U.S. Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC, 20410-0500.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number applicable to the 
program affected by this rule is 14.850.

List of Subjects in 24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Pets, Public housing.

    For the reasons stated in the preamble, HUD proposes to amend 24 
CFR part 960 as follows:

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

    1. The authority citation for part 960 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, 1437z-3, and 
3535(d).
* * * * *

Subpart C--Rent and Reexamination

    2. Revise 24 CFR 960.261 to read as follows:


Sec.  960.261  Restriction on eviction of families based on income.

    (a) PHAs may evict or terminate the tenancies of families who are 
over income, subject to paragraphs (b) and (c) of this section.
    (b) Unless it is required to do so by local law, a PHA may not 
evict or terminate the tenancy of a family solely because the family is 
over income, if the family is entitled to the disallowance of earned 
income as provided at 42 U.S.C. 1437a(d), so long as that family or a 
member of that family meets the requirements of that section.
    (c) Unless it is required to do so by local law, a PHA may not 
evict or terminate the tenancy of a family solely because the family is 
over income, if the family has a contract for participation in an FSS 
program under part 984 of this title.

    Dated: July 2, 2003.
Michael M. Liu,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 03-19623 Filed 7-31-03; 8:45 am]
BILLING CODE 4210-33-P