[Federal Register Volume 64, Number 203 (Thursday, October 21, 1999)]
[Rules and Regulations]
[Pages 56870-56880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27301]
[[Page 56869]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 964
Public Housing Agency Organization; Required Resident Membership on
Board of Directors or Similar Governing Body; Final Rule
Federal Register / Vol. 64, No. 203 / Thursday, October 21, 1999 /
Rules and Regulations
[[Page 56870]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 964
[Docket No. FR-4502-F-02]
RIN 2577-AC13
Public Housing Agency Organization; Required Resident Membership
on Board of Directors or Similar Governing Body
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
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SUMMARY: On June 23, 1999, HUD published a proposed rule to implement
section 2(b) of the United States Housing Act of 1937, which was added
by section 505 of the Quality Housing and Work Responsibility Act of
1998. Section 2(b) requires, with certain exceptions, that the
membership of the board of directors or similar governing body of a
public housing agency (PHA) must contain not less than one member who
is directly assisted by the PHA. This final rule makes effective the
policies and procedures described in the June 23, 1999 proposed rule
and takes into consideration the public comments received on the
proposed rule.
DATES: Effective Date: November 22, 1999.
FOR FURTHER INFORMATION CONTACT: Rod Solomon, Deputy Assistant
Secretary for Policy, Programs, and Legislative Initiatives, Room 4116,
U.S. Department of Housing and Urban Development, 451 Seventh Street,
SW, Washington, DC 20410-5000; telephone (202) 708-0713; or Paula
Blunt, Office of Public and Indian Housing, Room 4226, U.S. Department
of Housing and Urban Development, 451 Seventh Street, SW, Washington,
DC 20410-5000; telephone (202) 619-8201. Hearing- or speech-impaired
individuals may access these numbers via TTY by calling the Federal
Information Relay Service at (800) 877-8339. With the exception of the
``800'' number, these are not toll-free telephone numbers.
SUPPLEMENTARY INFORMATION:
I. The June 23, 1999 Proposed Rule
On June 23, 1999 (64 FR 33644), HUD published a proposed rule to
implement section 505 of the Quality Housing and Work Responsibility
Act of 1998 (Pub. L. 105-276, approved October 21, 1998; 112 Stat.
2461, 2522) (the ``Public Housing Reform Act''). The Public Housing
Reform Act constitutes a substantial overhaul of HUD's public housing
and Section 8 assistance programs. Among other goals, the changes made
by the Public Housing Reform Act are designed to provide for more
resident involvement, and to increase resident participation and
awareness in creating and maintaining a positive living environment.
Section 505 of the Public Housing Reform Act amended section 2 of
the United States Housing Act of 1937 (42 U.S.C. 1437) (the ``1937
Act''). New section 2(b)(1) of the 1937 Act requires, except in certain
cases, that:
the membership of the board of directors or similar governing body
of each public housing agency shall contain not less than 1 member--
(A) who is directly assisted by the public housing agency; and (B)
who may, if provided for in the public housing agency plan, be
elected by the residents directly assisted by the public housing
agency.
New section 2(b)(2) of the 1937 Act establishes two exceptions to
the resident board member requirement. First, public housing agencies
(PHAs) that are located in a State that requires the members of a board
of directors or similar governing body of a PHA to be salaried and to
serve on a full-time basis are excepted from the resident board member
requirement. Second, PHAs with less than 300 units are excepted from
the resident board member requirement if they meet two conditions:
(1) The PHA must provide reasonable notice to the resident advisory
board of the opportunity for residents to serve on the PHA board of
directors or similar governing body; and
(2) The PHA must wait a reasonable time after the resident advisory
board has received this notice.
Resident advisory boards participate in the PHA planning process
and assist and make recommendations regarding the PHA Plan. The
membership of a resident advisory board is made up of individuals who
adequately reflect and represent the residents assisted by the PHA.
(See 24 CFR 903.13 for additional information regarding resident
advisory boards.) Part 903 of 24 CFR (entitled ``Public Housing Agency
Plans'') was established by interim rule published on February 18, 1999
(64 FR 8170).
The June 23, 1999 rule proposed to implement section 2(b) in a new
subpart E to 24 CFR part 964, which contains HUD's regulations
concerning resident participation and resident opportunities in public
housing. The preamble to the June 23, 1999 proposed rule describes in
detail the proposed amendments to 24 CFR part 964.
II. Significant Changes Between June 23, 1999 Proposed Rule and
This Final Rule
This final rule makes effective the policies and procedures
contained in the June 23, 1999 proposed rule and takes into
consideration the public comments received on the proposed rule. The
major changes made by this final rule in response to public comment are
described below. The rationale for these changes are discussed in
greater detail in Section III of this preamble.
1. Covered funding. The final rule clarifies that, subject to
certain exceptions, the statutory resident board member requirement
applies to any PHA that has a public housing annual contributions
contract with HUD or that administers Section 8 tenant-based rental
assistance. The requirement does not apply to any State financed
housing assistance or Section 8 project-based assistance.
2. State and local procedures. Sections 964.435 (which describes
initial implementation of the resident board member requirement) and
964.440 (which describes the procedures for filling an open board
member seat) of the proposed rule are not included in this final rule.
These sections established specific board-level procedures that were
intended to assist PHAs in implementing the resident board member
requirement. HUD decided not to include these sections in the final
rule and instead leave the type of implementation details covered by
Secs. 964.435 and 964.440 to State and local governments to resolve. It
is important to note, however, that the exclusion of these sections
from the final rule does not relieve covered PHAs of the responsibility
to implement the resident board member requirement. The resident board
member requirement took effect beginning on October 1, 1999. HUD
believes that implementation of this new requirement should occur as
soon as possible after this date. All covered PHAs must take the steps
necessary to comply with this requirement if they have not done so
already.
In addition, as a result of the decision to remove Secs. 964.435
and 964.440, the definitions of the terms ``elected board member'' and
``related unit of general local government'' have not been included in
the final rule because they are no longer necessary.
3. Exceptions to resident board member requirement. For purposes of
clarity, this final rule reorganizes the listing of the exceptions to
the statutory resident board member requirement.
[[Page 56871]]
The description of the exception for small PHAs is still located in
Sec. 964.425 (which has been re-designated as ``Small public housing
agencies''). The other two exceptions--for PHA boards with full-time
salaried members and for PHAs with no governing boards--have been
relocated to Sec. 964.405 (which describes the scope of the
applicability of the resident board member requirement).
4. PHAs that only administer Section 8 assistance. The final rule
clarifies that PHAs that only administer Section 8 assistance qualify
for the ``small PHA'' (i.e., those with less than 300 public housing
units) exception to the resident board member requirement regardless of
the number of Section 8 vouchers they administer.
5. Eligibility for ``small PHA'' exception. The final rule
clarifies that, in order to qualify for the ``small PHA'' exception,
the PHA must satisfy all of the conditions described in Sec. 964.425.
Specifically, the PHA must: (a) have less than 300 public housing units
(or no public housing units); (b) provide reasonable notice to the
resident advisory board of the opportunity for residents to serve on
the governing board; (c) not be notified of the intention of any
resident to participate on the governing board within a reasonable
time; and (d) repeat notification to the resident advisory board at
least once every year. If any of these conditions are not satisfied,
the PHA is subject to the resident board member requirements. For
example, if a small PHA (after providing the required notice to the
resident advisory board) is notified of a resident's intention to serve
on the governing board, the PHA must comply with the requirements of
new 24 CFR part 964, subpart E.
6. ``Reasonable time'' must not be less than 30 days. The final
rule provides that, in order to qualify for the ``small PHA''
exception, the PHA must provide residents with at least 30 days to
express their interest in serving on the PHA governing board.
7. Resident participation on the board must include matters
regarding covered assistance. The final rule clarifies that a resident
board member must be allowed to take part in PHA board decisions
related to the administration, operation, and management of Federal
public housing programs and Section 8 tenant-based assistance programs.
This rule does not extend to matters that: (a) Exclusively relate to
other types of housing assistance (such as State financed housing
assistance); or (b) do not involve housing assistance (as may occur
where the city or county governing body also serves as the PHA board).
However, a PHA may choose to expand the scope of resident member
involvement to matters not covered by this rule.
8. Eligible resident. The final rule provides that, in order for a
resident to be eligible for board membership, the resident's name must
appear on the lease and the resident must be at least 18 years of age.
9. Resident board member no longer directly assisted. The final
rule clarifies that a resident board member who is no longer directly
assisted by the PHA may be removed for that cause from the PHA board,
where such action is permitted under State or local law. Alternatively,
the board member may be allowed to complete his/her current term as a
member of the PHA governing board. However, the board member may not be
re-appointed (or re-elected) to the governing board for purposes of
serving as the statutorily required resident board member.
10. Minimum qualifications for board membership. The final rule
provides that any generally applicable qualifications for board
membership also apply to residents, unless the application of the
requirements would result in the governing board not containing at
least one eligible resident as a member. Further, PHAs and localities
may not establish eligibility requirements for board membership that
are solely applicable to residents.
11. Election procedures. The final rule adopts several of the
relevant election procedures described in Sec. 964.130. This section
establishes the requirements governing the election of public housing
resident councils. Further, any election procedures devised by the PHA
must facilitate fair elections.
12. Conflicts of interest. The final rule clarifies that a resident
board member may take part in any matters before the board so long as
that matter is not applicable to that resident in a personal capacity.
A resident board member may only be excluded from participation in a
matter that uniquely applies to that resident, and the resident may be
involved in any matter that is generally applicable to residents. The
final rule also makes clear that having a lease with the PHA does not
constitute a conflict of interest for the resident board member.
Further, the rule clarifies that a board member's status as a public
housing resident or recipient of Section 8 tenant-based assistance does
not constitute a conflict of interest.
13. Conforming change. The final rule also makes a technical, non-
substantive change to 24 CFR part 964. Specifically, the rule removes
outdated Sec. 964.110, which describes HUD's policy regarding resident
membership on the PHA governing board. These provisions have been
incorporated in new subpart E.
III. Discussion of Public Comments Received on the June 23, 1999
Proposed Rule
The public comment period on the June 23, 1999 proposed rule closed
on August 23, 1999. HUD received 71 comments on the proposed rule.
Comments were submitted by PHAs; the three main organizations
representing PHAs; legal services organizations; resident
organizations; low-income housing advocates; and various other
organizations and individuals.
This section of the preamble presents a summary of the significant
issues raised by the public commenters on the May 29, 1998 proposed
rule and HUD's responses to these comments.
A. Support for Proposed Rule
Several commenters supported the proposed amendments to 24 CFR part
964. One of the commenters wrote to express his strong support for the
rule based on his experience as the executive director of a PHA that
has had a resident board member for 25 years. However, the majority of
the commenters writing in support also expressed concerns regarding the
implementation of the resident board membership requirements.
B. Opposition to Resident Board Member
Several commenters opposed the resident board membership
requirement. Although these commenters provided a variety of reasons
for their opposition, they all agreed that a PHA board should not be
required to include a public housing resident as a member.
Comment: Residents are not qualified to serve on PHA board. Several
of the commenters wrote that public housing residents lack the
necessary experience and expertise to serve on a PHA board. One of
these commenters wrote that resident board members, many of whom have
never owned property or managed a bank account, will be required to
make sound financial and management decisions. Another commenter wrote
that most of the qualified residents are elderly or caring for families
and, therefore, unable to serve on a PHA board. The commenters feared
that resident board members would lower the standard for PHA board
membership and weaken the PHA's ability to garner local support. The
commenters also worried that the requirement would
[[Page 56872]]
discourage qualified persons from serving on the PHA board.
Comment: Requirement will endanger confidentiality of board
deliberations and create conflicts of interest. Several commenters
wrote that resident members would endanger the confidentiality of board
deliberations. Other commenters wrote that the requirement may pose a
conflict of interest for a resident required to make decisions that
will financially impact the resident's family. Several commenters
worried about the potential for abuse of power by a resident board
member.
Comment: Requirement presents logistical difficulties. Several
commenters wrote about the logistical difficulties presented by the PHA
board membership requirement. For example, one commenter wrote that in
rural areas PHAs will have difficulty ensuring that a resident board
member travels the necessary distance to attend PHA board meetings. The
commenter also wrote that board meetings are often held during working
hours, which makes it difficult for employed residents to attend.
Comment: Residents are not interested in serving on PHA boards.
Other commenters wrote that PHAs often have difficulty attracting
resident participation. According to the commenters, this could result
in a resident board member who does not fully or enthusiastically
participate in decisionmaking. One commenter wrote that the lack of
resident interest indicates that public housing residents do not have
the necessary responsibility or dedication to serve on a PHA board.
Comment: Requirement is unnecessary--residents already have input
in PHA management and operations. Several commenters wrote that the PHA
board membership requirement is unnecessary. These commenters noted
that residents currently have the right to provide input in public
housing management and operations through the resident advisory board
and other forums.
HUD Response. (This response applies to all of the comments
discussed in this section III.B.) HUD's part 964 regulations have
always encouraged active resident participation in PHAs, including
involvement in management and operation (Sec. 964.15) and resident
membership on PHA governing boards (Sec. 964.110). HUD understands that
these commenters have concerns regarding the effectiveness of requiring
a resident board member. HUD is not in a position, however, to revise
or rescind this requirement because it is a statutorily mandated
requirement. As noted in the preamble to the July 2, 1999 proposed rule
and the preamble to this rule, section 2(b) of the 1937 Act requires
that each PHA governing board contain at least one member who is
directly assisted by the PHA. Congress enacted new section 2(b) because
Congress viewed the resident board member requirement as necessary to
promote a better understanding of resident concerns and to foster
better relations and communication between residents and PHAs (S. Rep.
No. 105-21, at 7 (1998)).
C. Federalism Concerns
Many commenters raised concerns regarding the Federalism
implications of the proposed rule. The comments reflect the belief that
the proposed rule infringes on the rights of PHAs, as well as the
rights of States and localities. The commenters wrote that
accomplishing the statutory goal of including a resident member on each
PHA board will be much more difficult than the proposed rule
contemplates. A large portion of the comments point out that section
2(b) conflicts with many State laws governing PHA board membership.
Several of the commenters wrote that adding an additional seat to an
elected board would conflict with the State election laws and infringe
on the rights of States. Many of the commenters asked HUD to seek a
change to the law where the organization of the board is not conducive
to resident participation, such as where the board is the city council.
One of the commenters wrote that section 2(b) may be
unconstitutional. According to the commenter, section 2(b) would
unconstitutionally ``rewrite State housing authority laws,'' and
``prescribe the manner in which appointing authorities will exercise
the prerogative of appointment, which derives from State statute.'' The
commenter wrote that the ``Federal government may neither issue
directives requiring the States to address particular problems, nor
command the State's officers, or those of their political subdivisions,
to administer or enforce a Federal regulatory program'' (quoting the
United States Supreme Court decision in Printz v. United States, 521
U.S. 98 (1997)). The commenter also noted that many PHAs operate
programs that ``have nothing to do with the Federal government.''
However, the ``Federal mandate contained in (section 2(b) and the
proposed rule) necessarily affects the nonfederal activities of'' PHAs.
The commenter acknowledged that the Federal government may attach
conditions to the receipt of Federal funding. However, the commenter
wrote that ``the mandates involved here are directed, not to the [PHA]
that is party to the (Annual Contributions Contract (ACC)), but to the
appointing authority, which is not.'' The commenter also acknowledged
that the Federal government can preempt State law, but did not believe
that preemption was justified in this context. Specifically, the
commenter did not find explicit statutory language authorizing
peremption, nor the existence of ``a regulatory scheme so pervasive as
to imply (a Federal) intent to occupy a particular field.'' Neither did
the commenter believe that preemption would be justified due to a
conflict between State law and section 2(b).
HUD Response. HUD agrees that this rulemaking, which seeks to
implement the explicit statutory directive of section 2(b), may have
direct effects on States and localities. The Federalism implications of
the rulemaking, however, derive solely from the statutory text and
substance of section 2(b). The scope of the rule is exclusively
concerned with implementation of the statutory resident board
membership requirement.
HUD believes that this rulemaking is necessary to: (1) Provide
guidance to PHAs in fulfilling this requirement; (2) minimize the
potential burdens on States and local governments in carrying out the
statutory mandate; and (3) ensure that the Federal objective of
increasing resident involvement in public housing is achieved. In most
instances where section 2(b) provides HUD with the flexibility to leave
a matter to the discretion of a State or locality, HUD has elected to
do so. As is noted in the summary of comments below, many commenters
requested additional regulatory guidance on a variety of matters
related to the statutory resident board membership requirement. In most
of these instances, HUD has declined to adopt the suggestion made by
the commenters on the basis that States and localities should have
flexibility in implementing the requirements of section 2(b). In one
instance, HUD decided not to include two sections of the proposed rule
(Secs. 964.435 and 964.440) specifically to provide States and
localities with the flexibility to reconfigure their PHA governing
boards to comply with the requirements of section 2(b) in a manner best
suited to local conditions.
HUD is not in a position to determine the Constitutionality of
section 2(b). However, HUD has concluded that section 2(b) preempts any
conflicting State laws regarding PHA board membership. This final rule
reflects this
[[Page 56873]]
statutory preemption, and does not constitute a decision on HUD's part
to preempt State law through its rulemaking authority.
Executive Order 12612, Federalism, was issued on October 30, 1987
(52 FR 41685). The Order requires that executive branch agencies take
Federalism concerns into account when developing and implementing
agency policy initiatives that have substantial, direct effects on
States or their political subdivisions, or on the relationship or
distribution of power among the various levels of government. Section 4
of Executive Order 12612 contains special provisions governing the
preemption of State law by Federal statutes and regulations.
Specifically, section 4 of the Order provides that:
To the extent permitted by law, Executive departments and
agencies shall construe, in regulations and otherwise, a federal
statute to preempt State law only when the statute contains an
express preemption provision or there is some other firm and
palpable evidence compelling the conclusion that the Congress
intended preemption of State law, or when the exercise of State
authority directly conflicts with the exercise of Federal authority
under the Federal statute.
Although section 2(b) does not expressly provide for the preemption
of State laws governing PHA board membership, HUD has concluded that
``firm and palpable'' evidence exists for concluding that the Congress
intended the preemption of State law in those cases where the ``State
authority directly conflicts'' with the Federal resident board
membership requirement.
The first reason for HUD's conclusion is the statutory language of
section 2(b). The statutory resident board membership requirement is
explicit:
Except as provided * * * the membership of the board of
directors or similar governing body of each (PHA) shall contain not
less than 1 member * * * who is directly assisted by the (PHA).
The exceptions referred to are: (1) For small PHAs with less than
300 units; and (2) for PHAs in States that require that PHA board
members be full-time salaried employees. The two statutory exceptions
reflect Congressional awareness that the resident board membership
requirement may be burdensome for small PHAs or conflict with certain
State requirements. Nevertheless, the Congress elected to provide
exceptions only for the two narrow situations described above.
Accordingly, HUD has concluded that the statutory language of section
2(b) contains firm and palpable evidence that the Congress intended the
resident board membership requirement to be broadly applicable,
regardless of conflicting State law.
HUD's second reason for its conclusion is based on the dominant
Federal interest in the public and assisted housing programs
administered under the 1937 Act. HUD's August 22, 1988 (53 FR 31926)
notice implementing Executive Order 12612 provides that HUD will infer
preemption where ``the field is one in which Federal interest is
sufficiently dominant to provide firm and palpable evidence that
Congress intended to preclude enforcement of State laws on the same
subject.'' HUD believes, for the following reasons, that the section
2(b) requirements satisfy this test.
The 1937 Act, a Federal statute, establishes the basic framework
for most of the public and assisted housing programs operated by PHAs
throughout the country. HUD is the Federal agency responsible for
establishing and enforcing the regulatory and contractual requirements
necessary to carrying out the purposes of the 1937 Act. With few
exceptions, HUD is the primary source of funding for public housing
developments assisted under the 1937 Act. Given this dominant Federal
role in the administration of 1937 Act programs, HUD has concluded that
section 2(b) preempts any conflicting State laws governing PHA board
membership.
Further, as one of the commenters acknowledges, the Federal
government may establish conditions on the receipt of Federal funds.
For the recipients of the Federal funds, these conditions preempt any
conflicting State or local requirements. As this final rule makes
clear, the resident board member requirement is a condition to the
receipt of funding under the 1937 Act. For example, the requirements of
section 2(b) apply solely to PHAs that have an ACC with HUD or that
administer tenant-based rental assistance under section 8 of the 1937
Act (see Sec. 964.405). Additionally, resident participation is
required only for those PHA board decisions related to Federally funded
public housing and Section 8 tenant-based assistance programs. The
requirements of section 2(b) do not extend to PHA board decisions that
exclusively affect other types of housing assistance, or that do not
regard housing assistance. (See Sec. 964.430(a)(2).) As a condition of
1937 Act funding, the statutory resident board member requirement
supersedes any conflicting State or local requirements regarding PHA
board membership for those PHAs receiving assistance under the 1937
Act.
D. Other General Comments Regarding the Proposed Rule
Comment: Stipends and Per Diems Should be Excluded from Income. Two
commenters wrote that stipends and per-diem expenses are common for PHA
board members. The commenters suggested that HUD exclude these items
from the income of the resident board member. Otherwise, the board
member would risk an increase in rent, which is calculated based on
resident income.
HUD Response. HUD agrees that counting such stipends as ``income''
for the purposes of determining rent could serve as a deterrent to
residents who would otherwise be interested in serving on the PHA
Board. HUD is addressing this issue in the final rule on Admission and
Occupancy to reflect that stipends for services rendered as a resident
board member are to be treated as resident services stipends, which are
exempted from a resident's income to the extent other such stipends are
exempt. (For additional details regarding the Admission and Occupancy
rule, see the proposed rule published on April 30, 1999 (64 FR 23460).)
Comment: What happens to a resident board member who is no longer
``directly assisted'' by the PHA? Several commenters asked whether a
resident who is no longer directly assisted by the PHA (due to
eviction, etc.) could continue to serve on the PHA board. Some of the
commenters wrote that requiring the resident to leave the board might
conflict with State or local requirements governing the selection and
removal of board members. Other commenters asked whether the resident
who replaces the removed board member would complete the original board
membership term or start a new term.
HUD Response. A resident board member who ceases to be directly
assisted by the PHA is no longer an ``eligible resident'' as defined in
Sec. 964.410. Such a board member may be removed from the PHA board for
that cause, where such action is permitted under State or local law.
State laws and PHA policies should be changed, where necessary, to
reflect that resident board members who cease to be directly assisted
by the PHA may be removed from the board for cause. Alternatively, the
board member may be allowed to complete his/her current term as a
member of the PHA governing board. However, the board member may not be
re-appointed (or re-elected) to the governing board for purposes of
serving as the statutorily required resident board member.
[[Page 56874]]
Comment: Final rule should provide for the removal of disruptive
resident board members. One commenter suggested that HUD revise the
proposed rule to provide for the removal of unruly or disruptive
resident PHA board members.
HUD Response. As previously noted, section 2(b) of the 1937 Act and
Sec. 964.430 of this final rule, provide that a resident board member
is a full member of the governing board. As a full member, the resident
board member is subject to the same rules regarding behavior as any
other board member. HUD does not see any need to impose additional
procedures regulating the behavior of resident board members. Moreover,
the imposition of such procedures specific to resident board members
would undermine the resident board member's position as a full member
of the governing board and would run counter to Congress' intent in
enacting the resident board member requirement.
Comment: Final rule should contain a mechanism for resident
complaints, investigation, and consequences of PHA noncompliance. One
commenter made this suggestion.
HUD Response. HUD has not adopted the change suggested by this
commenter. PHAs that fail to comply with the requirements of this final
rule are subject to the same noncompliance and enforcement procedures
that apply to other 1937 Act requirements. Consequently, HUD does not
see the need to implement additional compliance procedures.
Comment: Rule should provide for training and provision of
resources to resident board member. Two commenters wrote that the final
rule should provide for the training of resident board members by an
independent training entity on all aspects of PHA operations. The
commenters also suggested that resident board members should be
provided with adequate resources (office space, phone, photocopier,
etc.) to carry out their duties.
HUD Response. HUD has not changed the rule to reflect this request.
Resident board members are to be treated as any other member of the
governing board. If all board members are provided with resources, such
as office space and office equipment, these must also be made available
to the resident board member. HUD will not, however, require that PHAs
supply additional resources to the resident board member. HUD continues
to encourage PHAs to maintain partnerships to provide training to
residents consistent with Sec. 964.140.
Comment: What happens if there is only one resident who expresses
interest in serving on the board? Several commenters posed this
question.
HUD Response. Appointing authorities are not required to appoint
any specific member to the board of directors. If there is limited
interest among residents so that the PHA or appointing authority
believes there is no real choice in who becomes a board member, the PHA
or appointing authority may undertake outreach efforts to identify a
pool of interested residents. However, a PHA is required to have a
resident on its board, regardless of the number of residents who are
interested.
E. Comments Regarding Sec. 964.405--Applicability
Proposed Sec. 964.404 identifies the types of assistance to which
the resident board membership requirement applies. The proposed rule
provides that new subpart E is applicable to ``any [PHA] that has a
public housing annual contributions contract with HUD or a housing
assistance payments contract with HUD under section 8 of the United
States Housing Act of 1937 (42 U.S.C. 1437f).''
Comment: Does the resident board membership requirement apply to
PHAs that only administer Section 8 assistance? Several commenters
asked whether the resident board membership requirements are applicable
to PHAs that do not administer public housing programs, but do
administer Section 8 assistance. One of the commenters wrote that the
wording of proposed Sec. 964.405 is confusing because it refers to a
Section 8 ``housing assistance payment [HAP] contract with HUD.'' The
commenter noted that under the tenant-based Section 8 program, there is
no HAP contract with HUD. Another commenter noted that section 2(b)
establishes an exception for small PHAs based on the number of ``public
housing units'' operated by the PHA. According to the commenter, this
statutory language implies that PHAs that do not operate any ``public
housing units'' are totally exempt from the resident board membership
requirements.
HUD Response. PHAs that only administer Section 8 assistance are
subject to the resident board membership requirement. However, they
fall within the category of PHAs with less than 300 public housing
units, regardless of the number of Section 8 vouchers they administer.
This means that these PHAs are exempt from the resident board member
requirement, provided: (1) They have given adequate prior notice to the
resident advisory board of the opportunity for a resident to become a
resident board member, and (2) that within a reasonable time of such
notice, the PHA has not been notified of any residents who are
interested in such participation. This rule makes the necessary
qualification to Sec. 964.425, which describes the ``small PHA''
exception to the resident board member requirement.
The final rule also clarifies that the resident board membership
requirement applies to PHAs that ``administer tenant-based rental
assistance under Section 8 of'' the 1937 Act. The change is in response
to the commenter who noted that under the tenant-based Section 8
program there is no HAP contract with HUD.
HUD also notes that, under the interim rule on PHA Plans published
in the Federal Register on February 18, 1998 (64 FR 8170), all PHAs
(including those that only administer Section 8 assistance) are
required to establish a resident advisory board. (The PHA Plan interim
rule is codified at 24 CFR part 903.)
F. Comment Regarding Sec. 964.410--Additional Definitions
Proposed Sec. 964.410 defines various terms that are applicable to
the resident board membership requirements described in new 24 CFR part
964, subpart E.
Comment: Definition of ``directly assisted'' should be narrowed/
broadened. Proposed Sec. 964.410 defines ``directly assisted'' to mean
``a public housing resident or a participant in the tenant-based
section 8 program.'' Two commenters objected to this definition. One of
the commenters suggested that the scope of the definition be narrowed
to only include Federal programs. The commenter noted that many PHAs
administer State housing programs that should not be subject to Federal
requirements. However, the second commenter suggested that the
definition include all persons assisted by the PHA, including those
assisted under Department of Agriculture Rural Development projects.
HUD Response. The final rule clarifies that ``directly assisted''
means residing in public housing or receiving Section 8 tenant-based
assistance. Direct assistance does not include any State-financed
housing assistance programs, section 8 project-based assistance, or
Section 8 new construction assistance.
Comment: Definition of ``elected board member'' should exclude
residents who serve on PHA board as a result of being elected to
another office. The proposed rule defines ``elected board member'' to
mean ``either a
[[Page 56875]]
member of the governing board who is elected directly to the governing
board or who serves on the board as a result of being elected to
another office'' (emphasis supplied). One commenter wrote that the
definition should be revised to exclude resident board members who
serve on the board as a result of being elected to another office.
According to the commenter, including such members in the definition
frustrates the democratic electoral process contemplated by section
2(b).
HUD Response. As a result of the decision to remove Sec. 964.435
from the final rule, the definition of the term ``elected board
member'' is no longer necessary and has also been removed from the
final rule. This comment and the following discussion are included in
the final rule, however, because the situation where a resident board
member may serve on a governing board as a result of being elected to
another office may still occur.
There are a number of jurisdictions in which certain local elected
officials may also act, by virtue of their elected office, as members
of the PHA governing board. For example, a city council may also act as
the local PHA governing board. In cases like these, when a person is
elected to the city council they are also, automatically, ``elected''
to the PHA governing board. These members have dual roles. The
definition of ``elected board member'' in the proposed rule makes clear
that these elected officials are elected board members. If a PHA
resident is elected to such a ``dual-purpose'' local office, then that
resident may also serve as the statutorily required resident board
member under section 2(b).
The comment suggests that this creates a conflict if the PHA Plan
provides for the resident board member to be ``elected by the residents
directly assisted by the (PHA).'' The conflict appears to stem from the
fact that the resident board member has not been directly elected by
the residents, as provided for in the PHA Plan. In this case, however,
there is no conflict.
The requirement to have at least one resident board member is
mandatory, while provision for direct elections is merely permissive.
If provided for in the PHA Plan, section 2(b) states that a resident
may be directly elected by residents. Even if it is provided for in the
PHA Plan, section 2(b) does not require the direct election by
residents. Therefore, if a resident becomes a board member by virtue of
holding some other elected office, that resident may also qualify as
the statutorily required board member under section 2(b), even though
the resident was not directly elected by residents. However, the
locality is free to decide that the ``dual purpose'' resident should
not also serve as the statutorily required resident board member. The
locality could then hold the election provided for in the PHA Plan, and
have the resident board member directly elected by the public housing
residents.
Comment: Definition of ``eligible resident'' should include
additional criteria. Proposed Sec. 964.410 provides that a resident is
eligible to serve on a PHA board if the resident ``is directly assisted
by a [PHA] and is eighteen years of age or older.'' Several commenters
requested that the definition provide additional eligibility criteria.
For example, one of the commenters suggested that the criteria for
board membership should be the same as for membership in a public
housing Resident Council. However, the commenter also suggested that
the Resident Council eligibility requirements at Sec. 964.125 should be
revised so that residents whose names do not appear on the lease are
eligible for board membership. Other commenters recommended that only
residents in good standing should be eligible for PHA board membership.
One commenter suggested that any minimum qualifications for PHA board
members should also apply to residents. Another commenter requested
clarification on whether Section 8 Existing or New Construction
residents are eligible to serve on a PHA board.
HUD Response. In response to these comments, HUD reevaluated the
requirements contained in the definition of the term ``eligible
resident'' to make sure that the definition was appropriate and capable
of being implemented in a fair and consistent manner. HUD is concerned
about implementation of the resident board member requirement being
delayed because of conflicts over secondary issues such as the
definition of an eligible resident. Accordingly, HUD has made the
following changes to the definition of ``eligible resident.''
HUD has decided to include in the definition that to be eligible, a
resident must be named in the lease. The reason for this change is to
make clear exactly who may become a resident board member and to avoid
any possible conflicts about who is a resident directly assisted by a
PHA. A person is a resident directly assisted if he or she is are
listed on the lease.
HUD agrees with the commenters who wrote that any general minimum
qualifications for board membership should also apply to residents. HUD
has revised the proposed rule to adopt this suggestion. However, these
requirements cannot excuse a PHA's failure to comply with the
requirements of section 2(b). A PHA must have at least one resident
board member despite these minimum qualifications. Further, PHAs and
localities may not establish eligibility requirements for board
membership that are solely applicable to residents.
HUD has decided not to include a requirement that a resident be in
good standing. HUD believes that the term ``good standing'' may be
defined in different ways by each PHA and could be used to exclude a
resident from participation without good cause. Other than the
requirement that a resident must be named in the lease, the definition
of ``eligible resident'' remains the same as in the proposed rule.
G. Comments Regarding Sec. 964.420--Election of Resident Board Member
Proposed Sec. 964.420 provides that residents directly assisted by
a PHA may elect a resident board member, if provided for in the PHA
Plan.
Comment: PHA should be required to advise residents of election
procedures. One commenter suggested that a PHA should be required to
advise all residents of the election procedures in writing. Another
commenter recommended that the a PHA should be required to certify that
it has advised the PHA resident advisory board that resident board
members may be elected.
HUD Response. HUD believes that most decisions regarding election
procedure should be determined locally. However, HUD agrees that some
minimal standards must be met. Accordingly, HUD has revised the
proposed rule to adopt several of the relevant provisions of 24 CFR
964.130, which describes the election procedures for public housing
resident councils. Specifically, the final rule requires that the PHA
must provide residents with at least 30 days advance notice for
nominations and elections. The notice should include a description of
the election procedures, eligibility requirements, and dates of
nominations and elections. Further, any election procedures devised by
the PHA must facilitate fair elections.
Comment: Resident council election procedures should be
incorporated in final rule. One commenter suggested that the resident
council election procedures described in Sec. 964.130 should be
incorporated in new subpart E. According to the commenter, this will
ensure that sufficient notice is provided to residents before
elections, and that election are held on a fair and frequent basis.
[[Page 56876]]
HUD Response. As noted in the response to the previous comment, HUD
has revised the proposed rule to adopt several of the relevant
provisions of 24 CFR 964.130, which describes the election procedures
for public housing resident councils.
Comment: Final rule should require the election of resident board
members. Several commenters wrote that the final rule should require
that resident board members be elected. According to the commenters,
this will ensure that the board membership process is fair and
democratic.
HUD Response. The statute provides that the decision to allow an
elected resident board member is to be made locally. Section 2(b) does
not establish a right to an elected resident board member, it merely
allows for the possibility and requires that this choice become part of
the PHA Plan. The purpose of informing residents of the fact that a
resident board member may be elected is to allow residents to petition
their PHAs to allow elected resident board members. In the end,
however, the decision to allow elected resident board members is a
local one.
H. Comments Regarding Sec. 964.425--Exceptions
Proposed Sec. 964.425 describes the exceptions to the resident
board membership requirements. Specifically, the proposed rule exempts
PHAs that are not governed by a PHA board, or are located in a State
that requires board members to serve on a full-time salaried basis. The
proposed rule also provides that PHAs with less than 300 public housing
units are exempted from the resident board member requirement, provided
the PHA has: (1) Provided reasonable notice to the resident advisory
board of the opportunity for residents to serve on the governing board;
and (2) not been notified of the intention of any resident to
participate on the governing board within a reasonable time of the
resident advisory board receiving the notice.
As noted in Section II of this preamble, this final rule
reorganizes the listing of the exceptions to the statutory resident
board member requirement. The description of the exception for small
PHAs is still located in Sec. 964.425. The other two exceptions--for
PHA boards with full-time salaried members and for PHAs with no
governing boards--have been relocated to Sec. 964.405 (which describes
the scope of the applicability of the resident board member
requirement).
Comment: Reasonable notice should be provided to all residents.
Several commenters wrote that a PHA should be required to provide
reasonable notice to all residents, not just the resident advisory
board. One commenter wrote that the notice could accompany the monthly
rent notifications, or the mailings regarding the PHA Plan process.
Another commenter suggested that the notice could be posted at each
public housing site and rental office.
Several commenters were concerned that PHAs that do not administer
public housing programs under the 1937 Act (but do administer Section 8
assistance) might not be able to comply with the notification
requirement. According to these commenters, such agencies do not have
resident advisory boards.
HUD Response. HUD has not incorporated this request into the final
rule. Section 2(b) of the 1937 Act specifies that notice must be given
to the resident advisory board. Section 2(b) does not require or
provide for the notification of all public housing residents. The
procedures for ensuring that residents are made aware of the
opportunity to participate on the PHA board should be determined
locally (including how the resident advisory board will notify the
residents of such opportunities, and when that notice needs to be
given).
In response to the commenters concerned about the ability of PHAs
that do not administer 1937 Act public housing programs to comply with
the notification requirements, HUD again notes that its interim rule on
PHA Plans (February 18, 1999; 64 FR 8170) requires that all PHAs
establish resident advisory boards (see Sec. 901.13(b) of the interim
rule).
Comment: Final rule should specify what constitutes a ``reasonable
time''. To qualify for exemption, small PHAs must also provide
residents with a ``reasonable time'' to express their intention to
participate on the governing board. Several commenters suggested that
the final rule should specify what constitutes a ``reasonable time.''
Two commenters recommended that the rule provide for a 45-day period.
Another commenter suggested a 120-day period. One of the commenters
suggested that PHAs provide residents with written procedures for
indicating their interest in serving on the governing board.
HUD Response. In developing this final rule (and the June 23, 1999
proposed rule), HUD wished to provide PHAs with flexibility in
implementing the resident board member requirement. The language of
this final rule tracks the statutory language of section 2(b) and
requires that PHAs must provide residents with a reasonable time to
express their interest in serving on the PHA governing board. HUD does
not believe it would be appropriate to dictate by regulation exactly
how much time is ``reasonable,'' nor what procedures should govern
resident expressions of interest. HUD defers to PHAs to make these
determinations on a local basis. However, HUD agrees that a minimum
time period should be established to ensure that residents have
adequate time to indicate their interest. Accordingly, this final rule
provides that the ``reasonable time'' provided by PHAs must not be less
than 30 days.
Comment: HUD should establish additional exemptions. Several
commenters advocated that HUD expand the list of exceptions to the
resident board membership requirement. For example, one commenter
recommended that HUD should exempt PHAs with less than 500 public
housing units. Two commenters suggested that the final rule exempt PHAs
already subject to State or local resident board membership
requirements. Another commenter wrote that HUD should extend the
exemption for full-time salaried PHA boards to include part-time board
members. Several commenters advocated the exemption of PHAs that do not
administer public housing or Section 8 programs as their principal
means of providing housing assistance.
Several commenters wrote that PHA boards consisting of elected
officials (such as city council members or county commissioners) should
not be subject to the resident board membership requirements. These
commenters noted that these officials often take oaths of office and
are, therefore, subject to a different standard of accountability than
a public housing resident. Other commenters advocated an exemption for
elected PHA boards.
HUD Response. Section 2(b) provides clear and narrow exceptions to
the resident board member requirement. The statute does not provide HUD
with the authority to establish additional exceptions.
Comment: Small PHAs should be required to comply with resident
board membership requirement. One commenter wrote that all PHAs, even
those with under 300 units, should be required to include a resident
member on the governing board. Another commenter urged that HUD not
revise the proposed rule to expand the list of exceptions.
HUD Response. The statutory language of section 2(b) explicitly
exempts small PHAs with less than 300 units from the resident board
membership requirement if they follow certain procedures. Accordingly,
HUD does not have the statutory authority to
[[Page 56877]]
adopt the suggestion made by the commenter.
I. Comments Regarding Sec. 964.430--Nondiscrimination
Proposed Sec. 964.430 provides that a ``resident board member is a
full member of the governing board.'' Further, proposed Sec. 964.430(c)
provides that a PHA board ``may not exclude any resident board member
from participating in any matter before the governing board on the
grounds that the resident board member's lease with the [PHA] either
results or may result in a conflict of interest, unless the matter is
clearly applicable to the resident board member only in a personal
capacity.''
Comment: State or local conflict of interest requirements should be
applicable to resident board members. Several commenters objected to
the proposed conflict of interest language quoted above. According to
these commenters, the proposed rule is not strict enough, and would
allow residents to unfairly benefit from their policy making position.
The commenters suggested that State and local conflict of interest
requirements, which apply to the other members of the PHA board, should
also be applicable to resident board members.
HUD Response. Section 2(b) of the 1937 Act makes clear that
resident board members must be treated as full members of the PHA
governing board. In implementing this requirement, HUD has attempted to
address possible conflicts of interest issues by providing a resident
may not take part in any decisions or activities that relate
specifically to that resident in a personal capacity. However, section
2(b) is clear that a resident must not be precluded from board
membership and activities based on his or her status as a resident of
public housing or a recipient of Section 8 tenant-based assistance.
Comment: Suggested clarification to conflict of interest provision.
One commenter suggested that the language of proposed Sec. 964.430(c)
be clarified to provide that a resident may vote on all matters of
general applicability, including issues regarding rents. The commenter
recommended the following addition to the proposed regulatory language:
``* * * unless the matter is clearly applicable to the resident board
member only in a personal capacity which applies uniquely to that
member and not generally to residents or to a subcategory of
residents'' (emphasis supplied to indicate additional language).
Another commenter suggested that HUD issue additional guidance
regarding the conflict of interest governing resident participation on
a PHA board. The commenter wrote that such guidance would prevent
misinterpretation of the conflict of interest provisions and facilitate
compliance with these requirements.
HUD Response. HUD has revised the rule generally to adopt the
language suggested by the first commenter. HUD agrees with the
commenter that the addition of this language clarifies the conflict of
interest requirements, and will assist PHAs and residents to comply
with these provisions. HUD believes that the regulatory language of
revised Sec. 964.430(c) makes clear that a resident board member may
take part in any matters before the board so long as that matter is not
applicable to that resident in a personal capacity. A resident board
member may only be excluded from participation in a matter that
uniquely applies to that resident, and the resident may be involved in
any matter that is generally applicable to residents.
HUD wishes to reiterate that having a lease with the PHA does not
constitute a conflict of interest for the resident board member. If
such a lease could be viewed as constituting a conflict of interest,
the intent of section 2(b) would be frustrated. Under such an
interpretation, no resident with a lease with the PHA would be able to
serve on its governing board. HUD also wishes to clarify that, for
similar reasons, the board member's status as a public housing resident
or recipient of Section 8 tenant-based assistance does not constitute a
conflict of interest. Such an interpretation would prevent residents
directly assisted by the PHA from serving on the governing board.
In response to the second commenter, HUD may issue additional
guidance regarding the conflict of interest provisions (or other
provisions of this final rule) as necessary. Such guidance may be
issued in a handbook, Federal Register notice, or other appropriate
means.
Comment: Resident participation should be limited to Federal
programs. Several commenters noted that PHAs administer non-Federal
housing programs. These commenters recommended that the final rule
limit the participation of the resident board members to those
decisions regarding Federal assistance.
HUD Response. This final rule clarifies that a resident board
member must be allowed to take part in decisions related to the
administration, operation, and management of Federal public housing
programs and Section 8 tenant-based rental assistance programs. This
rule does not extend to matters that: (1) Exclusively relate to other
types of housing assistance (such as State financed housing
assistance); or (2) do not involve housing assistance (as may occur
where the city or county governing body also serves as the PHA board).
However, a PHA may choose to expand the scope of resident member
involvement to matters not covered by this rule.
J. Comments Regarding Sec. 964.435--Initial Implementation of Resident
Board Member Requirement
Proposed Sec. 964.435 provides that if the PHA board consists of
appointed board members, the first seat on the board that becomes open
on or after October 1, 1999, would have to be filled by an eligible
resident. If the board consists of elected board members, the chief
executive officer of the unit of general local government whose
jurisdiction coincides most directly with the jurisdiction of the PHA
would have to create at least one additional seat on the board, by
December 31, 1999, and would have to fill that seat with an eligible
resident. In the case of multi-jurisdictional PHAs, the chief executive
officers of each unit of general local government that comprises the
jurisdiction of the PHA would be jointly responsible for creating and
filling any additional seats.
HUD received a number of public comments on the initial
implementation procedures described in proposed Sec. 964.435. Several
of these commenters raised the Federalism concerns summarized in
section III.C of this preamble. As noted, HUD has responded to these
concerns by not including Sec. 964.435 in the final rule. In developing
the regulations implementing section 2(b), HUD wished to grant PHAs and
localities flexibility in complying with the resident board member
requirement. Rather than specifying regulatory procedures for the
appointment of residents to a PHA board, HUD has decided to leave these
procedures to each locality. HUD is mindful of the implementation
difficulties presented by the statutory resident board member
requirement, and encourages the development of local solutions to these
problems.
Several commenters raised questions or issues about the specific
procedures described in proposed Sec. 964.435. As a result of the
decision not to include Sec. 964.435 in the final rule, these public
comments are no longer applicable to this final rule and are not
discussed in the summary below.
Comment: May a PHA choose to elect a resident board member in a
jurisdiction where PHA board members
[[Page 56878]]
are typically appointed? One commenter posed this question.
HUD Response. The statutory language of section 2(b) is clear--
residents directly assisted by the a PHA may elect a resident board
member, if provided for in the PHA Plan. A PHA could, therefore, choose
to elect a resident board member in a jurisdiction where PHA board
members are usually appointed. The winner of the election would then be
appointed and serve as the statutorily required board member under
section 2(b). However, the choice to hold such an election would need
to be provided for in the PHA Plan.
Comment: HUD should postpone implementation date until July 1,
2000. Several commenters wrote that the implementation dates provided
in the proposed rule are unrealistic. The commenters noted that many
jurisdiction will have to revise their local laws in order to permit
the appointment of a resident board member. The commenters suggested
that HUD delay the implementation dates to permit localities to conform
their laws governing the selection and appointment of board members to
the requirements of section 2(b). Several commenters proposed an
implementation date of July 1, 2000, which reflects the probable
effective date of the necessary legislation.
HUD Response. While HUD has decided not to include Sec. 964.435 in
the final rule, section 503 of the Public Housing Reform Act is clear
that the amendments made by the statute, including the resident board
member requirement, will take effect beginning on October 1, 1999. HUD
believes that implementation of section 2(b) should occur as soon as
possible after this date if a PHA is not already in compliance.
Congress provided a one year period from enactment to implementation to
provide PHAs and localities with adequate notice of the resident board
member requirements.
Comment: Implementation should be ``phased-in''. Many commenters
suggested that HUD ``phase-in'' implementation of the board membership
requirement. These commenters wrote that the final rule should allow
PHAs to implement the new requirement at some point during a specified
period (the next 5 board vacancies, 2 years, etc.) These commenters
feared that the proposed implementation schedule might force the
removal of the most knowledgeable PHA board member, in order to make
room for a resident.
HUD Response. HUD has not adopted the change suggested by these
commenters. As noted in the response to the previous comment, the
resident board member requirement becomes effective beginning October
1, 1999. HUD believes that implementation of section 2(b) should occur
as soon as possible after this date. All covered PHAs must take the
steps necessary to comply with this requirement if they have not done
so already. It has been one year since section 2(b) became law,
providing States and PHAs time to address the concerns this provision
raises and to determine how best to implement this statutory
requirement.
Comment: Implementation date should not be postponed. One commenter
advocated that HUD adopt the proposed implementation schedule without
change. The commenter wrote that implementation should not be delayed.
HUD Response. HUD agrees with this commenter that implementation of
the resident board member requirement should occur as soon as possible
after October 1, 1999. All covered PHAs must take the steps necessary
to comply with this requirement if they have not done so already. As
noted above, States and PHAs have had time to address the concerns
raised by section 2(b) and to determine how best to implement this
statutory requirement.
K. Comments Regarding Sec. 964.440--Filling an Open Board Member Seat
Proposed Sec. 964.440 describes the procedures governing the
filling of an open board seat by a resident. HUD received a number of
public comments on proposed Sec. 964.440. Several of these commenters
raised the Federalism concerns summarized in Section III.C of this
preamble, above. As noted, HUD has responded to these concerns by not
including Sec. 964.440 in the final rule. In developing the regulations
implementing section 2(b), HUD wished to grant PHAs and localities with
flexibility in complying with the resident board member requirement.
Rather than specifying regulatory procedures for the appointment of
residents to a PHA board, HUD has decided to leave these procedures to
each locality. HUD is mindful of the implementation difficulties
presented by the statutory resident board member requirement, and
encourages the development of local solutions to these problems.
Several commenters raised questions or issues about the specific
procedures described in proposed Sec. 964.440. As a result of the
decision not to include Sec. 964.440 in the final rule, these public
comments are no longer applicable to this final rule and are not
discussed in this summary.
IV. Findings and Certifications
Environmental Impact
This final rule does not direct, provide for assistance or loan and
mortgage insurance for, or otherwise govern or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Therefore, under HUD's regulations at 24 CFR
50.19(c)(1), this rule is categorically excluded from environmental
review under the National Environmental Policy Act of 1969 (42 U.S.C.
4321).
Regulatory Flexibility Act
The Secretary has reviewed this final rule before publication and
by approving it certifies, in accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), that this final rule will not have a
significant economic impact on a substantial number of small entities.
The final rule implements section 505 of the Public Housing Reform Act
(42 U.S.C. 1437), which requires with certain exceptions, that the
board of directors or similar governing body of a PHA contain not less
than one member who is directly assisted by the PHA. Section 505 and
this final rule provide flexibility for smaller PHAs through an
exception for PHAs that have less than 300 public housing units.
Consequently, HUD does not believe that this final rule will have a
significant economic impact on a substantial number of small entities.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) requires Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and on
the private sector. This final rule does not impose, within the meaning
of the UMRA, any Federal mandates on any State, local, or tribal
governments or on the private sector.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612 (captioned ``Federalism''), has determined
that the policies contained in this final rule will have federalism
implications. Specifically, the requirement that the membership of the
board of directors or similar governing body of a PHA must contain not
less than one member who is directly assisted by the PHA will have
direct effects on any State or local laws that govern the organization
of PHAs.
[[Page 56879]]
HUD provided copies of the June 23, 1999 proposed rule to each of the
50 State Attorney Generals and specifically invited their comments on
the proposed regulatory requirements. HUD has also prepared and
submitted to the Office of Management and Budget a Federalism
Assessment that addresses the Federalism implications raised by this
rulemaking.
Regulatory Planning and Review
The Office of Management and Budget has reviewed this rule under
Executive Order 12866 (captioned ``Regulatory Planning and Review'')
and determined that this rule is a ``significant regulatory action'' as
defined in section 3(f) of the Order (although not an economically
significant regulatory action under the Order). Any changes made to
this rule as a result of that review are identified in the docket file,
which is available for public inspection during regular business hours
(7:30 a.m. to 5:30 p.m.) at the Office of the General Counsel, Rules
Docket Clerk, Room 10276, U.S. Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410-0500.
List of Subjects in 24 CFR Part 964
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, HUD amends 24 CFR part
964 as follows:
PART 964--TENANT PARTICIPATION AND TENANT OPPORTUNITIES IN PUBLIC
HOUSING
1. The authority citation for 24 CFR part 964 is revised to read as
follows:
Authority: 42 U.S.C. 1437, 1437d, 1437g, 1437l, 1437r, 1437t,
and 3535(d).
2. Amend Sec. 964.3 as follows:
a. Revise paragraph (a);
b. Redesignate paragraph (e) as paragraph (f); and
c. Add new paragraph (e).
The addition and revision to Sec. 964.3 read as follows:
Sec. 964.3 Applicability and scope.
(a) The policies and procedures contained in this part apply to any
PHA that has a Public Housing Annual Contributions Contract (ACC) with
HUD. This part, except for subpart E, does not apply to PHAs with
housing assistance payments contracts with HUD under section 8 of the
U.S. Housing Act of 1937.
* * * * *
(e) Subpart E of this part implements section 2(b) of the United
States Housing Act of 1937 (42 U.S.C. 1437), which provides for
resident membership on the board of directors or similar governing body
of a PHA. Subpart E applies to any public housing agency that has a
public housing annual contributions contract with HUD or administers
tenant-based rental under section 8 of the United States Housing Act of
1937 (42 U.S.C. 1437f).
* * * * *
Sec. 964.110 [Removed]
2. Remove Sec. 964.110.
3. Add subpart E to read as follows:
Subpart E--Resident Board Members
Sec.
964.400 Purpose.
964.405 Applicability.
964.410 Additional definitions.
964.415 Resident board members.
964.420 Resident board member may be elected.
964.425 Small public housing agencies.
964.430 Nondiscrimination.
Subpart E--Resident Board Members
Sec. 964.400 Purpose.
The purpose of this subpart is to implement section 2(b) of the
United States Housing Act of 1937 (42 U.S.C. 1437).
Sec. 964.405 Applicability.
(a) General. Except as described in paragraph (b) of this section,
this subpart applies to any public housing agency that has a public
housing annual contributions contract with HUD or administers tenant-
based rental assistance under section 8 of the United States Housing
Act of 1937 (42 U.S.C. 1437f).
(b) Exceptions. The requirements of this subpart do not apply to a
public housing agency that is:
(1) Located in a State that requires the members of a governing
board to be salaried and to serve on a full-time basis; or
(2) Not governed by a governing board.
Sec. 964.410 Additional definitions.
The following additional definitions apply to this subpart only:
Directly assisted. Directly assisted means a public housing
resident or a recipient of housing assistance in the tenant-based
section 8 program. Direct assistance does not include any State
financed housing assistance or Section 8 project-based assistance.
Eligible resident. An eligible resident is a person:
(1) Who is directly assisted by a public housing agency;
(2) Whose name appears on the lease; and
(3) Is eighteen years of age or older.
Governing board. Governing board means the board of directors or
similar governing body of a public housing agency.
Resident board member. A resident board member is a member of the
governing board who is directly assisted by that public housing agency.
Sec. 964.415 Resident board members.
(a) General. Except as provided in Secs. 964.405(b) and 964.425,
the membership of the governing board of each public housing agency
must contain not less than one eligible resident board member.
(b) Resident board member no longer directly assisted. (1) A
resident board member who ceases to be directly assisted by the public
housing agency is no longer an ``eligible resident'' as defined in
Sec. 964.410.
(2) Such a board member may be removed from the PHA board for that
cause, where such action is permitted under State or local law.
(3) Alternatively, the board member may be allowed to complete his/
her current term as a member of the governing board. However, the board
member may not be re-appointed (or re-elected) to the governing board
for purposes of serving as the statutorily required resident board
member.
(c) Minimum qualifications for board membership. Any generally
applicable qualifications for board membership also apply to residents,
unless the application of the requirements would result in the
governing board not containing at least one eligible resident as a
member. Further, PHAs and localities may not establish eligibility
requirements for board membership that are solely applicable to
residents.
Sec. 964.420 Resident board member may be elected.
(a) General. Residents directly assisted by a public housing agency
may elect a resident board member if provided for in the public housing
agency plan, adopted in accordance with 24 CFR part 903.
(b) Notice to residents. The public housing agency must provide
residents with at least 30 days advance notice for nominations and
elections. The notice should include a description of the election
procedures, eligibility requirements, and dates of nominations and
elections. Any election procedures devised by the public housing agency
must facilitate fair elections.
Sec. 964.425 Small public housing agencies.
(a) General. The requirements of this subpart do not apply to any
public housing agency that:
[[Page 56880]]
(1) Has less than 300 public housing units (or has no public
housing units):
(2) Has provided reasonable notice to the resident advisory board
of the opportunity for residents to serve on the governing board;
(3) Has not been notified of the intention of any resident to
participate on the governing board within a reasonable time (which
shall not be less than 30 days) of the resident advisory board
receiving the notice described in paragraph (a)(3) of this section; and
(4) Repeats the requirements of paragraphs (a)(2) and (a)(3) of
this section at least once every year.
(b) Public housing agencies that only administer Section 8
assistance. A public housing agency that has no public housing units,
but administers Section 8 tenant-based assistance, is eligible for the
exception described in paragraph (a) of this section, regardless of the
number of Section 8 vouchers it administers.
(c) Failure to meet requirements for exception. A public housing
agency that is otherwise eligible for the exception described in
paragraphs (a) and (b) of this section, but does not meet the three
conditions described in paragraphs (a)(2) through (a)(4) of this
section, must comply with the requirements of this subpart.
Sec. 964.430 Nondiscrimination.
(a) Membership status.--(1) General. A resident board member is a
full member of the governing board.
(2) Resident participation must include matters regarding Federal
public housing and Section 8 tenant-based assistance. A resident board
member must be allowed to take part in decisions related to the
administration, operation, and management of Federal public housing
programs and Section 8 tenant-based rental assistance programs. This
rule does not extend to matters that:
(i) Exclusively relate to other types of housing assistance (such
as State financed housing assistance); or
(ii) Do not involve housing assistance (as may occur where the city
or county governing body also serves as the PHA board).
(3) Public housing agency may expand scope of resident
participation. A public housing agency may choose to expand the scope
of resident member involvement to matters not required under paragraph
(a)(2) of this section.
(b) Residence status. A governing board may not prohibit any person
from serving on the governing board because that person is a resident
of a public housing project or is assisted under section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f).
(c) Conflict of interest. A governing board may not exclude any
resident board member from participating in any matter before the
governing board on the grounds that the resident board member's lease
with the public housing agency, or the resident board member's status
as a public housing resident or recipient of Section 8 tenant-based
assistance, either results or may result in a conflict of interest,
unless the matter is clearly applicable to the resident board member
only in a personal capacity and applies uniquely to that member and not
generally to residents or to a subcategory of residents.
Dated: October 14, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-27301 Filed 10-20-99; 8:45 am]
BILLING CODE 4210-33-P
