[Federal Register Volume 60, Number 1 (Tuesday, January 3, 1995)]
[Proposed Rules]
[Pages 304-306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32309]
[[Page 303]]
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Part VI
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Assistant Secretary for Public and Indian Housing
_______________________________________________________________________
24 CFR Ch. IX
Vacancy Rule: Intent To Establish a Negotiated Rulemaking Advisory
Committee; Proposed Rule
Federal Register / Vol. 60, No. 1 / Tuesday, January 3, 1995 /
Proposed Rules
[[Page 304]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
24 CFR Ch. IX
[Docket No. N-94-3858; FR-3647-N-01]
RIN 2577-AB44
Vacancy Rule: Notice of Intent To Establish a Negotiated
Rulemaking Advisory Committee and Notice of First Meeting
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Notice of intent to establish committee and of first meeting.
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SUMMARY: The Department is considering the establishment of a
Negotiated Rulemaking Advisory Committee under the Federal Advisory
Committee Act (FACA). The purpose of the Committee would be to discuss
and negotiate a proposed rule that would change the current method of
determining the payment of operating subsidies to vacant public housing
units. The Committee would consist of representatives with a definable
interest in the outcome of a proposed rule. HUD has prepared a charter
and has initiated the requisite consultation process pursuant to the
FACA, Executive Order 12838, and the implementing regulations.
DATES: Comments must be received by February 2, 1995.
If the charter is approved and a final determination is made to
form the Committee, the first meeting will take place March 7-9, 1995,
at a location to be announced in Washington, D.C.
ADDRESSES: Interested persons are invited to submit comments regarding
the proposed Committee and membership to the Rules Docket Clerk, Office
of General Counsel, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410-0500.
Comments or any other communications submitted should consist of an
original and four copies and refer to the above docket number and
title. Facsimile (FAX) comments are not acceptable. The docket will be
available for public inspection and copying between 7:30 a.m. and 5:30
p.m. weekdays at the above address.
The exact location of the first meeting on March 7-9, 1995, in
Washington, D.C., will be announced in a subsequent Federal Register
notice. Interested persons may also contact John Comerford, at the
telephone number listed below, for this information.
FOR FURTHER INFORMATION CONTACT: John T. Comerford, Director, Financial
Management Division, Public and Indian Housing, Room 4212, Department
of Housing and Urban Development, 451 Seventh Street, SW, Washington,
DC 20410-0500; telephone (202) 708-1872, or (202) 708-0850 (TDD).
(These telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Background
HUD uses a formula approach called the Performance Funding System
(PFS) to distribute operating subsidies to public housing agencies
(PHAs) and Indian housing authorities (IHAs). (NOTE: the term housing
agency (HA) is used by HUD to mean both PHAs and IHAs.) A regulatory
description of the PFS can be found at 24 CFR 990. Although somewhat
oversimplified, the amount of subsidy received by a HA is the
difference between projected expenses and projected income, with the
PFS regulations detailing how these projections will be made. HAs
calculate their PFS eligibility annually and submit a request for
funding as part of their budget process. While the amount varies, this
subsidy can represent a substantial amount of revenue to a HA. In 1994,
HUD distributed over $2.6 billion in operating subsidies to HAs.
The amount of dwelling rental income expected to be received is an
important element in estimating subsidy eligibility. If rental income
increases, it can generally be expected that operating subsidy
eligibility will decrease. Likewise, if rental income decreases, an HA
may receive a greater amount of subsidy. With some exceptions, HUD
expects that HAs will project an occupancy level of 97 percent. This
standard of 97 percent has been part of the PFS since its
implementation in 1975.
That part of the PFS that deals with the projection of occupancy
levels is known as the vacancy rule. The vacancy rule was published as
a final rule in 1986 (51 FR 16835, May 7, 1986) and was intended to
create incentives to HAs to return vacant units to occupancy and to
maintain an occupancy level of 97 percent or higher. The rule provided
these incentives by defining the conditions under which HUD would
approve the use of an occupancy level of less than 97 percent; by
specifying that an HA need not use an occupancy level higher than 97
percent; and, in recognition that a low number of vacancies may make it
difficult for a small HA to reach 97 percent, by finding it acceptable
to use an occupancy percentage based on having five or fewer vacant
units.
In September 1991, HUD published a proposed rule (56 FR 45814,
September 6, 1991) that would have made significant changes to the way
in which vacant units would be considered eligible for operating
subsidy. These changes included:
1. Increasing the occupancy standard from 97 percent to 98 percent;
2. Eliminating HUD-approved Comprehensive Occupancy Plans (COPs) as
a means to justify using less than the occupancy standard;
3. Limiting the amount of subsidy paid for vacant units greater
than 2 percent of the total number of units available for occupancy;
and
4. Instituting a year-end review to compare the actual occupancy
achieved with the projected occupancy percentage.
HUD argued that the changes were needed in order to correct what it
perceived to be a situation in which full operating subsidies (100
percent of the Allowable Expense Level) being paid for vacant units in
modernization programs or in COPs were greater than the direct
operating expenses incurred by the HA. With regard to COPs, HUD stated
that HAs with the most extensive and difficult vacancy problems were
expected to develop five year COPs in 1986 and that most of these would
soon expire.
Before the comment period on the proposed rule expired, Congress
inserted language in HUD's Appropriation Act for 1992 (105 Stat. 757)
that prohibited HUD from using appropriated funds to implement the
proposed rule. Later, Congress included a provision in the Housing and
Community Development Act of 1992 (section 114(b), Pub. L. 102-550;
approved October 28, 1992) to require that any changes to the PFS
relating to the payment of operating subsidies to vacant public housing
units be accomplished only through the use of negotiated rulemaking
procedures.
Regulatory Negotiation
Negotiated rulemaking, or ``reg-neg'', is a relatively new process
for the Federal government and this will be the first use of the
process at HUD. The basic concept of reg-neg is to have the agency that
is considering drafting a rule bring together representatives of
affected interests for face-to-face negotiations that are open to the
public. The give-and-take of the negotiation process is expected to
foster [[Page 305]] constructive, creative, and acceptable solutions to
difficult problems.
In July 1994, HUD entered into an Interagency Agreement with the
Federal Mediation and Conciliation Service (FMCS) for convening
services that would assist HUD in assessing the feasibility of
assembling a balanced committee willing and able to work towards the
goal of consensus on a proposed rule that is within HUD's statutory
authority and addresses the issues of the interested parties. If HUD
proceeded with the formation of a negotiated rulemaking committee, the
Interagency Agreement called for FMCS to provide facilitating services.
The final convening report was provided to HUD in September 1994
and concludes that ``there is sufficient support to re-examine the
vacancy rule through a regulatory negotiations process.'' A copy of the
report titled Convening Report for Regulatory-Negotiations on HUD's
Vacancy Rule is available in the office of the Rules Docket Clerk at
the above address.
Chartering of Reg-Neg Committee
As a general rule, an agency of the Federal Government is required
to comply with the requirements of the Federal Advisory Committee Act
(FACA) when it establishes or uses a group of non-Federal members as a
source of advice. Under FACA, HUD must receive a charter for this reg-
neg committee. HUD has prepared a charter and sent it to the Office of
Management and Budget for approval. If the charter is approved and
schedule changes are not necessary as a result of public comments, the
Committee will be convened in accordance with this notice.
Substantive Issues for Negotiation
The convening report identified the following issues to be
addressed by the Committee:
What constitutes an acceptable level of vacancies for
housing authorities of various size classifications?
What criteria should be used for providing less than full
subsidy?
What criteria should be used for providing full subsidy
despite less than full occupancy?
Committee Membership
The FMCS conveners consulted and interviewed over 30 officials of
various organizations interested and affected by the vacancy rule.
Three national HA associations--the Council of Large Public Housing
Authorities (CLPHA), the National Association of Housing and
Redevelopment Officials (NAHRO), and the Public Housing Authority
Directors Association (PHADA)--worked together to suggest executive
directors of HAs for committee membership that would reflect a balance
among HAs in terms of size and number of vacant units. The national
associations committed themselves to serving as staff support to the
HAs selected for membership.
After reviewing the recommendations of the FMCS conveners, HUD has
tentatively identified the following list of possible interests and
parties:
Housing Agencies
Housing Authority of the City Of Houston, TX
Cuyahoga Metropolitan Housing Authority, Cleveland, OH
New York City, NY Housing Authority
Newark, NJ Housing Authority
Reno, NV Housing Authority
Littleton, CO Housing Authority
Housing Authority of the City of South Bend, IN
Tenant Organizations and Public Interest Groups
National Tenants Organization, Ft. Pierce, FL
Bromley Heath Tenant Management Corporation, Jamaica
Plains, MA
New Jersey Association of Public and Subsidized Housing
Residents, Newark, NJ
National Housing Law Project, Washington, DC
Housing and Development Law Institute, Washington, DC
Illinois Association of Housing Authorities
Federal Government
U.S. Department of Housing and Urban Development
Comments and suggestions on this tentative list of committee
members are invited. HUD does not believe that each potentially
affected organization or individual must necessarily have its own
representative. However, HUD must be satisfied that the group as a
whole reflects a proper balance and mix of interests. Negotiation
sessions will be open to members of the public, so individuals and
organizations that are not members of the committee may attend all
sessions and communicate informally with members of the committee.
Requests for Representation
If in response to this Notice, an additional individual or
representative of an interest requests membership or representation on
the committee, HUD, in consultation with the FMCS conveners, will
determine whether that individual or representative will be added to
the committee. Each additional nomination for membership on the
committee must include the name of the nominee and a description of the
interests the nominee would represent, evidence that the nominee is
authorized to represent relevant parties, a written commitment that the
nominee shall participate in good faith, and the reasons that the
members proposed in this notice do not adequately represent the
interests of the person submitting the nomination. HUD will make the
decision on membership based on whether the individual or interest
would be substantially affected by the proposed rule and whether the
individual or interest is already adequately represented on the
committee.
Final Notice Regarding Committee Establishment
After reviewing any comments on this Notice and any requests for
representation, HUD will issue a final notice. That notice will
announce the establishment of a Negotiated Rulemaking Advisory
Committee, unless HUD's charter request is disapproved or HUD decides,
based on comments and other relevant considerations, that such action
is inappropriate.
Tentative Schedule
If the final determination is that the committee should be formed
and negotiations started, HUD plans to hold the first meeting of the
committee on March 7-9, 1995. On March 7, the meeting will start at
10:00 a.m. and run until completion; on March 8, the meeting will start
at 9:00 a.m. and run until completion; and on March 9, the meeting will
start at 9:00 a.m. and run until approximately 1:00 p.m. The exact
location of the meeting in Washington, D.C., will be announced in a
subsequent Federal Register notice. Interested persons may also contact
John Comerford, at the telephone number listed above, for this
information. The purpose of the meeting is to orient members to the
reg-neg process, establish a basic set of understandings and ground
rules (protocols) regarding the process that will be followed in
seeking a consensus, and begin to address the issues. This meeting is
open to the public.
Decisions with respect to future meetings will be made at the first
meeting and from time to time thereafter. Notices of future meetings
will be published in the Federal Register if time
permits. [[Page 306]]
To prevent delays that might postpone timely issuance of a proposed
rule, HUD intends to terminate the committee's activities if it does
not reach consensus within 5 months of the first meeting. The process
may end earlier if the FMCS conveners/facilitators believe that
sufficient progress cannot be made or that an impasse has developed
that cannot be resolved.
Authority: 42 U.S.C. 1437g, 3535(d).
Dated: December 20, 1994.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 94-32309 Filed 12-30-94; 8:45 am]
BILLING CODE 4210-33-P
