[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9319]
[[Page Unknown]]
[Federal Register: April 19, 1994]
_______________________________________________________________________
Part VI
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Assistant Secretary for Public and Indian Housing
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24 CFR Parts 905, 913, 964, and 990
Tenant Participation and Tenant Opportunities in Public and Indian
Housing; Proposed Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Assistant Secretary for Public and Indian Housing
24 CFR Parts 905, 913, 964 and 990
[Docket No. R-94-1707; FR-3568-P-01]
RIN 2577-AB36
Public and Indian Housing Amendment to the Tenant Participation
and Tenant Opportunities in Public and Indian Housing
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This document proposes to amend regulations on tenant
participation in public and Indian housing to add new policies,
procedures and guidelines for tenant participation, revise the Resident
Management Program to Tenant Opportunities Programs, and add
regulations to govern the Family Investment Centers (FIC) Program.
These changes would be made to address several weaknesses in the
existing regulations which have interferred with successful program
implementation.
DATES: Comments due: May 19, 1994.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Office of General Counsel, Rules Docket
Clerk, room 10276, Department of Housing and Urban Development, 451
Seventh Street SW., Washington, DC 20410. Facsimile (FAX) are not
acceptable. A copy of each communication submitted will be available
for public inspection and copying on weekdays between 7:30 a.m. and
5:30 p.m. at the above address.
FOR FURTHER INFORMATION CONTACT: For questions concerning the Public
Housing rule contact Dorothy Walker or Marcia Martin, Office of
Resident Initiatives, room 4112, telephone (202) 708-3611, or 708-0850.
For Indian Housing, contact Dom Nessi, Director, Office of Native
American Programs, room 4141, telephone (202) 708-1015 (these are not
toll-free numbers). Hearing- or speech-impaired persons may use the
Telecommunications Devices for the Deaf (TDD) by contacting the Federal
Information Relay Service on 1-800-877-TDDY (1-800-877-8339) or 202-
708-9300 (not a toll free number) for information on the program.
The address for the above listed persons is: Department of Housing
and Urban Development, 451 7th Street SW., Washington, DC 20410. (The
telephone numbers listed above are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Information Collections
The information collection requirements contained in this proposed
rule have been submitted to the Office of Management and Budget (OMB)
for review under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-
3520).
The public reporting burden for each of these collections of
information is estimated to include the time for reviewing the
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Information on the estimated public
reporting burden is provided under the preamble heading, Other Matters.
Send comments regarding this burden estimate or any other aspect of
this collection of information, including suggestions for reducing this
burden, to the Department of Housing and Urban Development, Rules
Docket Clerk, 451 Seventh Street SW., room 10276, Washington, DC 20410;
and to the Office of Information and Regulatory Affairs, Office of
Management and Budget, Attention Desk Officer for HUD, Washington, DC
20503.
II. Background
Section 20 of the United States Housing Act of 1937, as amended (42
U.S.C. 1437r) (the ``1937 Act'') was enacted to encourage increased
resident management of public housing projects * * * ``to promote
formation and development of resident management entities.'' The
Department implemented section 20 by regulations (24 CFR part 964 for
Public Housing, and 24 CFR part 905, subpart O for Indian Housing),
that governed tenant participation and resident management in public/
Indian housing under Section 20 of the 1937 Act.
III. Overview of Public Housing Changes
Several weaknesses in the regulations have interfered with
successful program implementation. The current regulations fail to
establish clear and detailed policy on resident participation and
guidance on the structure for public housing resident organizations.
Additionally, the current regulations fail to establish specific
requirements for resident involvement in public/Indian housing
management, and a strong partnership between the PHAs/IHAs
(thereinafter referred to as HAs) and resident councils. Internal
conflict between competing resident councils in a development poses
serious problems to HUD with respect to program eligibility and
participation, as well as HA recognition. The Department is concerned
about the need to provide more details on how resident councils/
resident management corporations should be structured and how to
broaden tenant involvement in public housing.
The Department recognizes the need to increase the amount of cash
contributions for resident council activities, presently limited at
three (3) dollars per unit per year, and to compensate resident council
officers who are serving as volunteers in the public housing community.
The Secretary asked a former top HUD official to develop policy
recommendations on the role of residents in the management of public
housing. Based on these recommendations, the Secretary established an
Interim Resident Advisory Committee consisting of representatives of
regional and state resident organizations who developed a Policy Paper
on resident involvement in public housing. Public Housing Advocacy
Groups: Public Housing Authorities Directors Association (PHADA),
Council of Large Public Housing Authorities (CLPHA) and National
Association of Housing Redevelopment Officials (NAHRO), were given an
opportunity to review and comment on the Policy Paper.
Section 20 authorizes funds for technical assistance and training
to resident councils (RCs)/resident management corporations (RMCs) to
promote increased resident management of public housing. HUD's
experience in providing grants to RCs/RMCs under the Public Housing
Resident Management Program has revealed that major changes were needed
in the provisions of the program. RCs/RMCs and HAs across the country
overwhelmingly requested revamping of the program to assist in meeting
their residents' need for economic development, education, job training
and development, social services, and opportunities for other self-help
initiatives.
Recommendations from the Interim Resident Advisory Committee on
Tenant Involvement in Public Housing, and requests for changes in the
Resident Management Technical Assistance Program resulted in the
proposed comprehensive revision of 24 CFR part 964.
The major changes in the proposed rule would allow for broader,
more flexible programs aimed at increasing the capacity of resident
entities to participate significantly in all aspects of public housing
operations while simultaneously permitting further economic uplift
opportunities, to the extent permitted under section 20 of the United
States Housing Act of 1937. Section 20 requires that all activities
funded under it be related to improved living conditions and public
housing operations. (See Secs. 905.967 and 964.205.) The Department is
now proposing amendments to section 20 to permit funding of a broader
range of tenant development activities to include activities that are
not necessarily related to resident management or housing authority
operations.
The current regulation on the Tenant Participation and Resident
Management Program is proposed to be renamed ``Tenant Participation and
Tenant Opportunities in the Public Housing Program.'' The proposed
regulations would include the Tenant Opportunities Program (TOP), which
replaces the Resident Management Program under subpart C in the current
regulation.
The revised program was created in response to requests from
resident councils/resident management corporations and HAs across the
country for a more flexible program to address the needs in their
communities related to encouraging increased resident management
activities as a means of improved living conditions and public housing
operations. The revised program is designed to prepare residents to
experience the dignity of meaningful work; to own and operate resident
businesses; to move toward financial independence; to enable them to
choose where they want to live; and to assure meaningful participation
in the management of their housing developments. The authority for the
TOP program comes from section 20 of the 1937 Act, which discusses
resident management of public housing. Section 20(f) authorizes
technical assistance and training. Financial assistance in the form of
technical assistance grants is provided by the Secretary to RCs/RMCs to
prepare for management activities in their housing development
(hereinafter referred to as TOP technical assistance grants). Technical
assistance grants are available for ``the development of resident
managed entities, including the formation of such entities, the
development of the management capability of newly formed or existing
entities, the identification of the social support needs of residents
of public housing projects and the securing of such support.'' TOP
technical assistance grants can enable residents to manage their
developments or portions of their developments. The results are
significant and multifaceted. For example, resident managed activities
have resulted in economic development, resident self-sufficiency,
improved living conditions, and enhanced social services for residents
(e.g., child care and other youth programs).
The Resident Management Program would continue to be an option to
resident councils/resident management corporations who are interested
in performing management functions in one or more projects of a HA.
None of the requirements for the resident management program will be
changed. However, some of the provisions are being moved to other
regulations, or HUD documents. For example, the requirements under
subpart C (Sec. 964.39) governing the operating subsidy, budget,
operating reserves, etc. are proposed to be moved to 24 CFR Part 990--
Annual Contributions for Operating Subsidy. The Department believes
these provisions of Sec. 964.39 are more appropriately placed in that
regulation. Also, the requirements for the RMC management contract
contents are being removed from subpart C and are contained in HUD
Notice PIH 93-56 (HA) which also includes a model management contract.
This contract must be followed unless HUD approves a requested change.
Subpart A would be expanded to add policies on partnerships between
HAs and residents. For example, HAs are required to provide a duly
elected resident council office space and meeting facilities, free of
charge, for the purposes of conducting resident activities.
Also, the section on definitions (Sec. 964.7) would be amended by
removing terms such as ``resident council'' and ``resident management
corporation'' and expanding the definition of these terms to provide
clarity on the eligibility of a voting member of the resident council
and establish the frequency of elections for resident management
corporations. The definitions for other terms such as ``project'' and
``tenant participation'' are eliminated.
The current rule under subpart B would be expanded substantially to
establish policies and procedures for HAs with respect to resident
participation activities. For example, HAs shall provide any funds they
receive for resident participation activities to the duly elected
resident council. Parts 990 and 905, subpart J would be amended to
require an ``add-on'' of $25 per unit per year to the HA's operating
subsidy calculation, which would be paid to the HA only if
appropriations were available for that purpose, to support activities
of the duly elected resident council. The HUD Circular HM 7475.9 dated
February 10, 1992, authorized funds not to exceed three ($3) dollars
per unit per year. The Department believes that an increase of $22 per
unit per year is reasonable and, if available, would guarantee the
resources necessary to create a bonafide partnership among the duly
elected resident council and the HA. Strong partnerships are critical
for achieving mutual goals contained in this subpart.
Also, HUD proposes to encourage HAs to provide stipends in an
amount up to $200 per month/per officer to resident council officers
who serve as volunteers in the public housing development to carry out
these duties and functions as officers of the resident council. The
Department believes that these volunteers should be reimbursed for
their expenses related to volunteer efforts, such as child care,
transportation, special equipment, clothing, etc.
The current part 964 regulations lack specificity regarding
resident elections and organizational policies, and have made it
difficult to determine what is a duly elected resident council and that
has caused conflicts among the residents.
The proposed regulations would add new policies and procedures for
resident councils by defining what is a duly elected resident council,
detailing minimum standards for elections of resident councils and
specifying the relationship between the resident councils and resident
management corporations. Resident councils would be required to meet
HUD's election standards in order to receive official recognition from
the HA and HUD, as well as to receive funds in conjunction with the
conduct of resident council business. The role of the jurisdiction-wide
resident council would be established under the proposed rule. The rule
also contains provisions that expand the resident participation
requirements to strongly support resident participation in all aspects
of a HA's management operations and that give rights to residents to
freely organize and represent their interests.
The proposed rule would add a new subpart D to implement the Family
Investment Center (FIC) Program under section 22 of the 1937 Act (42
U.S.C. 1437t) (added by section 515 of the Cranston-Gonzalez National
Affordable Housing Act). The FIC program provides families living in
public housing with better access to educational and employment
opportunities. This new subpart will be added to part 964 to include
FIC because it complements the Department's resident participation and
self-sufficiency initiatives. The program was proposed by a national
association on behalf of numerous housing authorities. Representatives
from public/Indian housing authorities, resident councils/resident
management corporations and nonprofit housing agencies were convened at
the Department to discuss program provisions and provide policy
recommendations during the initial program planning stage. Some HAs
will combine their FIC and Family Self-Sufficiency (FSS) programs. This
rule would provide that section 8 FSS Program participants are eligible
to participate in the FIC program when it is combined with FSS, but
that income exclusions that are provided to public housing residents
participating in employment training and supportive service programs
would not apply to Section 8 FSS families. The treatment of the FSS
escrow account for public housing FIC/FSS families is not addressed in
this proposed rule, but will be included in the final rulemaking.
Proposed Sec. 964.320 provides HUD policy on training, employment
and contracting of public/Indian housing residents under section 3 of
the Housing and Community Development Act of 1968. Section 915 of the
Housing and Community Development Act of 1992 made significant changes
to section 3. HUD recently published a proposed rule implementing those
changes (see 58 FR 52534, October 8, 1993). Section 3, as amended,
requires that HAs make their best efforts, consistent with existing
Federal, State, and local laws and regulations, to amend contracts for
work to be performed in connection with development, operation and
modernization assistance provided pursuant to sections 5, 9 and 14 of
the U.S. Housing Act of 1937. As amended, section 3 establishes an
order of priority to which the HA's efforts must be directed. Thus, the
first level of priority is to residents of the housing development, for
which the assistance is provided. This proposed rule includes
provisions consistent with the proposed section 3 rule.
The reader should note that combination terms such as ``tenant and
resident'', ``tenant council,'' and ``resident council'', and ``tenant
management corporation'' and ``resident management corporation'' are
similar terms and may be used interchangeably. Hereafter, for ease of
discussion, the proposed rule will use the terms resident, resident
council and resident management corporation, as appropriate.
IV. Amendments of the Tenant Participation and Tenant Opportunities
Program in Public Housing
A. Regulatory Actions: 964
Based on recommendations of the Interim Resident Advisory
Committee, program experience, and comments from various Housing
Interest Groups, the regulations are proposed to be revised to: (1)
Expand tenant participation in various programs and involvement in
public housing operations, and (2) change the Resident Management
Program to the Tenant Opportunities Program (TOP), and (3) add a new
subpart D to the 964 regulations which contains policies and procedures
for the FIC Program.
This section discusses each of the specific regulatory revisions.
1. Subpart A would be amended as follows:
a. Section 964.1 Purpose would be streamlined.
b. Section 964.3 Applicability and scope would remain unchanged.
c. Section 964.7 Definitions would be amended by removing several
definitions such as project and tenant participation; by moving terms
such as Resident Council and Resident Management Corporation to a more
appropriate section under subpart B, and by expanding definitions; and
by adding new terms which relate to the FIC program.
d. Section 964.11 HUD policy on tenant participation would be
amended to strongly support tenant participation in all the functions
of a HA's management operations and give rights to residents to freely
organize and represent their interests.
e. Section 964.12 HUD policy on Tenant Opportunities Program (TOP)
would provide HUD's policy on the Tenant Opportunities Program. Subpart
C of the current regulation would be changed from ``Resident Management
Program'' to ``Tenant Opportunities Program'' (TOP). The name is being
changed to TOP because it reflects the evolution of the program over
time, to enhance resident capacity in a variety of ways, including job
training, economic development, and self-sufficiency activities carried
out by resident councils/resident management corporations in public
housing. Resident management is a component of TOP and resident
councils/resident management corporations may continue to engage in
activities relative to public housing management. Tenant opportunities
programs are proven to be effective in facilitating economic uplift as
well as in improving the overall conditions in public housing.
f. Section 964.14 HUD policy on partnerships would be added to
provide HUD policy on Partnerships between HAs and residents. Strong
partnerships between HAs and resident councils/resident management
corporations are key to the success of program objectives, and critical
for achieving specific and mutual goals and creating positive change
for residents in public housing.
g. Section 964.15 HUD policy on resident management would remain
unchanged. This section states HUD's support for resident councils/
resident management corporations who are interested in becoming
resident managed entities in public housing.
h. Section 964.16 HUD role in activities under this part--
Monitoring would be added to describe HUD's proactive responsibility
for promoting tenant participation and tenant opportunities in public
housing. It provides that HUD will monitor program progress to ensure
efficient and effective operations pursuant to this rule.
i. Section 964.18 HA role in activities under subparts B&C would
establish a stronger HA role under this subpart. HAs shall, upon
request, provide office space to a duly elected resident council and
shall negotiate in good faith usage of community space for meetings and
other activities for residents. HAs have a responsibility to negotiate
such usage of space with the duly elected resident council.
j. Section 964.24 HUD policy on FIC program would provide HUD's
policy and support for the FIC program.
2. Subpart B would be amended as follows:
a. Section 964.100 Role of resident council which establishes the
role of a resident council and Section 964.105 Role of the
jurisdiction-wide resident council which establishes the role of a
jurisdiction-wide resident council would be added to the rule.
b. Section 964.110 Resident membership on HA Board of Commissioners
would encourage resident membership on HA Board of Commissioners.
c. Section 964.115 Resident council requirements would describe the
provisions necessary for the Resident Council to receive official
recognition from the HA and HUD. In the current rule, this provision
was included in the definitions section, and in this proposed rule it
becomes a separate section.
d. Section 964.117 Resident council partnerships would be added to
encourage and promote partnerships between the resident councils and
public/private organizations. While the Department encourages
partnerships to complement council activities, such organizations must
not become the governing entity of the resident council.
e. Section 964.120 Resident management corporation requirements
would establish characteristics in order to receive formal recognition
by the HA and HUD. In the current rule, this was included in the
definitions sections and in this proposed rule, it becomes a separate
section.
f. Section 964.125 Eligibility for resident council membership
would be added to provide guidance on eligibility for council
membership. This section establishes that any member of a household,
who is on the lease, may be a member of a resident council. However, in
order to be a voting member of the resident council, a person's name
must appear on the lease of a unit in the public housing development,
and he/she must be: (1) A legal head of household (means the member of
the family who is the head of the household for purposes of determining
income eligibility and rent), or (2) 18 years of age or older.
g. Section 964.130 Election procedures and standards would be added
to provide minimum standards for resident council elections including
the requirement for supervision by an independent third party. HAs
shall monitor the resident council's elections to ensure compliance
with HUD's minimum standards.
h. Section 964.135 Resident involvement in HA management would be
added to provide policy on resident involvement in HA management
operations. Residents shall participate fully in the overall policy
development and direction of a HA operations.
i. Section 964.140 Resident training would be added to encourage
HAs to take the lead in providing training opportunities for public
housing residents. If residents are willing, they may receive training
from the HA and become involved in implementing various Federal
programs.
j. Section 964.145 Conflict of interest would be added to provide
policy on resident council officers serving as contractors or as
employees of a HA.
k. Section 964.150 Funding tenant participation would be added to
establish policy on funding duly elected resident councils. Subject to
appropriations, HAs shall provide funds to the duly elected resident
council for tenant participation activities. This rule also proposes
amendment to 24 CFR part 990 for tenant services to include up to $25
per unit per year, subject to the availability of appropriations, as an
add-on to the Performance Funding System (PFS).
3. Subpart C would be amended as follows:
a. Section 964.200 General would be added to provide information on
the provisions of the TOP.
b. Section 964.205 Eligibility would be added to define who is
eligible to apply and receive a technical assistance grant, and would
outline eligible activities under TOP.
c. Section 964.210 Announcement of funding availability would be
added to describe notification of funding availability for obtaining
funds to participate in TOP.
d. Section 964.215 Grant agreement would provide the terms of the
grant agreement for the proposed activities under the TOP program.
e. Section 964.220 Technical assistance would describe HUD's
commitment to fund TOP activities.
f. Section 964.225 Resident management requirements would provide
minimal guidelines for HAs and residents for the performance of
management functions.
g. Section 964.230 Audit and administrative requirements would
provide audit and administrative guidelines for recipients of TOP grant
funds and resident management corporations contracting with a HA for
management responsibilities.
4. Subpart D would be added to the part 964 as follows:
a. Section 964.300 General would provide the purpose and program
provisions of the FIC program. FIC provides families living in public
housing with better access to educational and employment opportunities
to achieve self-sufficiency and independence.
b. Section 964.305 Eligibility for FIC would provide eligible
activities and requirements under the FIC program.
c. Section 964.308 Supportive services requirements for FIC would
provide supportive services requirements essential for families living
with children in public housing.
d. Section 964.310 Audit/Compliance Requirements for FIC would
provide audit and compliance requirements governing the program.
e. Section 964.315 HAs role in FIC activities under this part would
provide the process required to assure that HA residents are informed
about FIC.
f. Section 964.320 HUD policy on training, employment, contracting
and subcontracting of public/Indian housing residents under FIC would
state HUD's policy on resident training, employment and contracting
under FIC.
g. Section 964.325 Announcement of funding availability for FIC
would indicate that the Notice of Funding Availability (NOFA) will be
published periodically and contain specific information regarding
eligibility, funding criteria, etc.
h. Section 964.330 Grant set-aside assistance for FIC would state
HUD's policy of permitting up to five percent (5%) of amounts available
in any fiscal year to augment grants previously awarded under this
program.
i. Section 964.335 Grant agreement for FIC would provide the grant
agreement term.
j. Section 964.340 Resident compensation for FIC would provide
guidelines governing employment compensation under this program.
k. Section 964.45 Treatment of income would provide provisions for
income exclusions for any resident participating in the FIC program.
l. Section 964.350 Administrative Requirements for FIC would
provide administrative and reporting requirements governing the FIC
program.
B. Indian Housing Changes--Part 905
The proposed rule also revises 24 CFR part 905, subpart O,
``Resident Participation and Opportunities''. The Indian housing
section is similar to its public housing counterpart, but does not
contain some of the provisions in 24 CFR part 964 in an effort to
streamline the regulations and tailor them specifically to the
generally smaller size of most Indian Housing Authorities (IHA).
However, all activities, functions and benefits permitted under any
public housing resident programs will remain eligible activities,
functions and benefits for Indian housing resident programs.
The major changes in the proposed rule will allow for broader, more
flexible programs aimed at increasing the capacity of Indian housing
resident organizations and resident management corporations to carry
out their organizational functions in a more structured manner while
simultaneously permitting further economic uplift opportunities.
Within the subpart there is a general section; a Tenant
Opportunities Program (TOP) section; and a Family Investment Centers
Program section. The current Indian Housing Resident Management Program
under existing regulations is viable and remains an option under TOP.
None of the requirements for the resident management program will be
changed; however, some sections are being moved to other sections of
the 905 regulations or HUD handbooks.
C. Miscellaneous Conforming Changes
Changes that have been made to other parts are the exclusion from
income of stipends to RC officers and of training grants under the FIC
program that would be added to 905 and 913; the provision for payments
to duly elected resident council officers, and the inclusion of
requirements governing the RMC Operating subsidy, budget, operating
reserves, etc., that would be made to 990; and changes for the resident
participation subpart that would be made in part 905 to parallel
changes in part 964.
Other Matters
Justification for Shortened Comment Period
It is the general practice of the Department to provide a 60-day
comment period on all proposed rules. However, the Department is
shortening its usual 60-day comment period to 30 days because it would
be contrary to the public interest to delay the benefits of the rule
another 30 days and because it is unnecessary to have a longer comment
period. The policies contained in this proposed rule are the result of
collaborative efforts with various housing interest groups, i.e.,
public housing resident leaders, Public/Indian Housing Authorities,
Public Housing Advocacy Groups. This should decrease the need for the
usual time period for comment, since consultation took place while the
policy was being developed.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this proposed rule before publication and
by approving it certifies that this proposed rule does not have a
significant economic impact on a substantial number of small entities.
The proposed rule provides substantial revisions to the regulations
concerning Tenant Participation and Management in Public Housing under
which resident councils/resident management corporations receive
funding on a competitive basis. HUD does not anticipate a significant
economic impact on small entities since resident councils/resident
management corporations will continue to obtain by contract technical
assistance to carry out program activities.
Environmental Impact
A finding of no significant impact with respect to the environment
has been made in accordance with HUD regulations in 24 CFR part 50 that
implement section 102(2)(C) of the National Environmental Policy Act of
1969 (42 U.S.C. 4332). The Finding of No Significant Impact is
available for public inspection between 7:30 a.m. and 5:30 p.m.
weekdays in the office of the Rules Docket Clerk at the above address.
Executive Order 12866
This proposed rule was reviewed by the Office of Management and
Budget under Executive Order 12866, Regulatory Planning and Review. Any
changes made to the proposed rule as a result of that review are
clearly identified in the docket file which is available for public
inspection in the office of the Department's Rules Docket Clerk, room
10276, 451 Seventh Street SW., Washington, DC.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this proposed rule will not have substantial direct
effects on states or their political subdivisions, or the relationship
between the federal government and the states, or on the distribution
of power and responsibilities among the various levels of government.
As a result, the proposed rule is not subject to review under the
order. The revised proposed rule is consistent with federalism
principles since it reduces unnecessary burdens on resident
organizations. Since participation by resident organizations is
discretionary, this proposed rule lacks the direct and substantial
effects on resident organizations required for a policy with federalism
implications under the Order.
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this proposed rule has a
beneficial effect on the family, and thus, does not require further
review. No significant change in existing HUD policies or programs will
result from promulgation of this proposed rule, as those policies and
programs relate to family concerns.
Regulatory Agenda
This proposed rule was listed as Item No. 1636 in the Department's
Semiannual Agenda of Regulations published on October 25, 1993, (58 FR
56402, 56448) in accordance with Executive Order 12291 and the
Regulatory Flexibility Act.
Public Reporting Burden
The information collection requirements contained in this proposed
rule have been submitted to the Office of Management and Budget under
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520). The
Department has determined that the following provisions contain
information collection requirements.
The Department has estimated the public reporting burden involved
in the information collections contained in the proposed rule as shown
below. The public reporting burden for each of these collections of
information is estimated to include the time for reviewing the
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Information Collection Burden of Top Rule
------------------------------------------------------------------------
Est. avg.
No. of Freq. of response Est. annual
Reference respondents responses time burden
(hours) (hours)
------------------------------------------------------------------------
964.18 & 905.964.... 1500 1 3 4500
964.115 & 964.130... 1500 1 3 4500
964.215............. 200 1 2 400
964.225 (b) &
905.969............ 25 1 3 75
964.230, 964.305 &
905.982............ 500 1 1 500
964.310............. 500 1 8 4000
964.335............. 75 1 2 150
964.350, 964.350(a)
& 905.988.......... 75 1 1 75
---------------------------------------------------
Total Reporting
Burden......... ........... ........... ........... 14,200
Recordkeeping
Burden:
964.230(a)(2) &
905.972............ 200 ........... 1 200
---------------------------------------------------
Total
Recordkeeping
Burden......... ........... ........... ........... 200
------------------------------------------------------------------------
The Catalog of Federal Domestic Assistance program number is
14.853.
List of Subjects
24 CFR Part 905
Aged, Energy conservation, Grant programs--housing and community
development, Grant programs--Indians, Indians, Individuals with
disabilities, Lead poisoning, Loan programs--housing and community
development, Loan programs--Indians, Low and moderate income housing,
Public housing, Reporting and recordkeeping requirements.
24 CFR Part 913
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
24 CFR Part 964
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
24 CFR Part 990
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
Accordingly, parts 905, 913, 964, and 990 of title 24 of the Code
of Federal Regulations are proposed to be amended as follows:
PART 905--INDIAN HOUSING PROGRAMS
1. The authority citation for part 905 would be revised to read as
follows:
Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437aa, 1437bb, 1437c,
1437cc, 1437d(c)(4)(D), 1437ee and 3535(d).
2. In Sec. 905.102, the definition of Annual income would be
amended by removing the word ``or'' from paragraph (2)(viii)(B); by
adding the word ``or'' at the end of paragraph (2)(viii)(C); by adding
a new paragraph (2)(viii)(D); by removing the word ``or'' from
paragraph (2)(x); by designating paragraph (2)(xi) as paragraph
(2)(xii); and by adding a new paragraph (2)(xi) to read as follows:
Sec. 905.102. Definitions.
* * * * *
Annual income.
* * * * *
(2) * * *
(viii) * * *
(D) A resident stipend, but only if the resident stipend does not
exceed $200 per month per officer to resident council officers.
Stipends are intended to cover costs related to officers volunteer
efforts and include but are not limited to the following items: child
care, transportation, special equipment and special clothing.
* * * * *
(xi) The earnings and benefits to any resident resulting from the
participation in a program providing employment training and supportive
services in accordance with the Family Support Act of 1988, section 22
of the U.S. Housing Act of 1937, or any comparable Federal, State,
Tribal or local law during the exclusion period. For purposes of this
paragraph, the following definitions apply:
(A) Comparable Federal, State, Tribal or Local law means a program
providing employment training and supportive services that--
(1) is authorized by a Federal, State, Tribal or local law;
(2) is funded by Federal, State, Tribal or local government;
(3) is operated or administered by a public agency; and
(4) has as its objective to assist participants in acquiring job
skills.
(B) Exclusion period means the period during which the resident
participates in a program described in this section, plus 18 months
from the date the resident begins the first job acquired by the
resident after completion of such program that is not funded by public
housing assistance under the U.S. Housing Act of 1937 or the date the
resident is terminated from employment without good cause. If the
resident is terminated from employment without good cause, the
exclusion period shall end.
(C) Earnings and Benefits means the incremental earnings and
benefits resulting from a qualifying job training program or subsequent
job; or
* * * * *
3. In Sec. 905.720, a new paragraph (f) would be added, to read as
follows:
Sec. 905.720 Other costs.
* * * * *
(f) Funding for Resident Organization Expenses. In accordance with
the provisions of 24 CFR part 905, subpart O and procedures determined
by HUD, each HA with a duly elected resident organization shall include
in the operating subsidy eligibility calculation, $25 per unit per year
(subject to appropriations) in support of the duly elected resident
organization's activities.
* * * * *
4. Subpart O of part 905 would be revised to read as follows:
Subpart O--Resident Participation and Opportunities
General Provisions
Sec.
905.960 Purpose.
905.961 Applicability and scope.
905.962 Definitions.
905.963 HUD's role in activities under this subpart.
905.964 Resident participation requirements.
905.965 Funding Resident Participation.
Tenant Opportunities Program
905.966 General.
905.967 Eligible TOP Activities.
905.968 Technical assistance.
905.969 Resident management requirements.
905.970 Management specialist.
905.971 Operating subsidy, preparation of operating budget,
operating reserves and retention of excess revenues.
905.972 TOP Audit and administrative requirements.
Family Investment Centers (FIC) Program
905.980 General.
905.982 Eligibility.
905.983 FIC Activities.
905.984 HA role in activities under this part.
905.985 HUD Policy on training, employment, contracting and
subcontracting of Indian housing residents.
905.986 Grant set-aside assistance.
905.987 Resident compensation.
905.988 Administrative requirements.
Subpart O--Resident Participation and Opportunities
General Provisions
Sec. 905.960 Purpose.
The purpose of this subpart is to recognize the importance of
involving residents in creating a positive living environment and in
contributing to the successful operation of Indian housing.
Sec. 905.961 Applicability and scope.
(a) This subpart applies to any Indian housing authority (HA) that
has an Annual Contributions Contract (ACC) with the Department. This
subpart does not apply to housing assistance payments under section 8
of the U.S. Housing Act of 1937.
(b) This subpart contains HUD's policies, procedures, and
requirements for the participation of Indian housing residents in
Indian housing management.
(c) This subpart is designed to encourage increased tenant
participation in Indian housing.
(d) This subpart is not intended to negate any pre-existing
arrangements for resident management in Indian housing between a HA and
a resident management corporation. On or after [insert effective date
of the final rule], any new, renewed or renegotiated contracts must
meet the requirements of this subpart, the ACC and all applicable laws
and regulations.
(e) This subpart includes requirements for the Family Investment
Centers (FIC) Program, which was established by Section 515 of the
Cranston-Gonzalez National Affordable Housing Act, which created a new
section 22 of the Act. The FIC program is designed to provide families
living in Indian housing with better access to educational and
employment opportunities.
Sec. 905.962 Definitions.
Family Investment Center. A Facility in or near Indian housing
which provides families living in Indian housing with better access to
educational and employment opportunities to achieve self sufficiency
and independence.
Management. All activities for which the HA is responsible to HUD
under the ACC, within the definition of ``operation'' under the Act and
the ACC, including the development of resident programs and services.
Management contract. A written agreement between a resident
management corporation and a HA, as provided by Sec. 905.969. Project.
For purposes of this subpart, the term includes any of the following:
(1) One or more contiguous buildings.
(2) An area of contiguous row houses.
(3) Scattered site buildings.
(4) Scattered site single-family units.
Resident management. The performance of one or more management
activities for one or more projects by a resident management
corporation under a management contract with the HA.
Resident Management Corporation (RMC). A Resident Management
Corporation is an entity that proposes to enter into, or enters into, a
contract to manage HA property. The corporation must have each of the
following characteristics:
(1) It must be a nonprofit organization that is incorporated under
the laws of the State or Indian tribe in which it is located.
(2) It may be established by more than one resident organization,
so long as each such organization both approves the establishment of
the corporation and has representation on the Board of Directors of the
corporation.
(3) It must have an elected Board of Directors.
(4) Its by-laws must require the Board of Directors to include
representatives of each resident organization involved in establishing
the corporation.
(5) Its voting members are required to be residents of the project
or projects it manages.
(6) It must be approved by the resident organization. If there is
no organization, a majority of the households of the project or
projects must approve the establishment of such an organization.
Resident Organization (RO). A Resident Organization (or ``Resident
Council'' as defined in section 20 of the Act) is an incorporated or
unincorporated nonprofit organization or association that meets each of
the following criteria:
(1) It must consist of residents only, and only residents may vote.
(2) If it represents residents in more than one development or in
all of the developments of a HA, it must fairly represent residents
from each development that it represents.
(3) It must adopt written procedures providing for the election of
specific officers on a regular basis.
(4) It must have a democratically elected governing board. The
voting membership of the board shall consist solely of the residents of
the development or developments that the RO represents.
Resident participation. A process of consultation between residents
and the HA concerning matters affecting the management of Indian
housing.
Resident-owned business. A Business staffed by residents that is
related to the management of the IHA development(s).
Sec. 905.963 HUD's role in activities under this subpart.
(a) General. Subject to the requirements of this part and other
requirements imposed on HAs by the ACC, statute or regulation, the form
and extent of resident participation or resident management are local
decisions to be made jointly by ROs and the HAs.
(b) Duty to bargain in good faith. If a HA refuses to negotiate
with a RMC in good faith or, after negotiations, refuses to enter into
a contract, the corporation may file an informal appeal with HUD,
setting out the circumstances and providing copies of relevant
materials evidencing the corporation's efforts to negotiate a contract.
HUD shall require the HA to respond with a report stating the HA's
reasons for rejecting the corporation's contract offer or for refusing
to negotiate. Thereafter, HUD shall require the parties (with or
without direct HUD participation) to undertake or to resume
negotiations on a contract providing for resident management, and shall
take such other actions as are necessary to resolve the conflicts
between the parties. If no resolution is achieved within 90 days from
the date HUD required the parties to undertake or resume such
negotiations, HUD shall serve notice on both parties that
administrative remedies have been exhausted (except that, pursuant to
mutual agreement of the parties, the time for negotiations may be
extended by no more than an additional 30 days).
Sec. 905.964 Resident participation requirements.
(a) HA responsibilities. (1) A HA must provide the residents or any
resident organization with current information concerning the HA's
policies on resident participation in management, including guidance on
information and recognition of a RO, and, where appropriate, a RMC.
(2) A HA must consult with residents or resident organizations (if
they exist), to determine the extent to which residents desire to
participate in the management of their housing and the specific methods
that may be mutually agreeable to the HA and the residents.
(3) When requested by residents, a HA must provide appropriate
guidance to residents to assist them in establishing and maintaining a
RO, and, where appropriate, a RMC.
(b) Recognition. A resident organization may request that it be
recognized as the official organization representing the residents in
meetings with the HA or with other entities.
(c) Written understanding. At a minimum, the HA and the RO shall
put in writing their understanding concerning the elements of their
relationship.
Sec. 905.965 Funding Resident Participation.
Funding will be provided under subpart J, for the following:
(a) Resident Organizations. Subject to appropriations, the HA shall
provide funds to ROs for resident participation activities. Eligibility
to receive operating subsidy for RO activities at $25 per unit per year
is a separate cost item under the Performance Funding System. Of this
amount, $15 per unit per year shall fund resident participation
activities of the RO. Ten dollars per unit per year shall fund HA costs
incurred in carrying out resident participation activities.
(b) Stipends. HAs may provide stipends to officers of the RO. The
stipend, which may be up to $200 per month per officer, shall be
decided locally by the RO and HA. (See definition of annual income in
Sec. 905.102 for exclusion for these stipends.)
Tenant Opportunities Program
Sec. 905.966 General.
The Indian Tenant Opportunities Program (TOP) (which is the program
similar to the public housing TOP for public housing residents)
provides technical assistance for various activities including resident
management for ROs/RMCs as authorized by Section 20 of the Act. The TOP
provides opportunities for RO/RMCs to improve living conditions and
resident satisfaction in Indian housing communities.
Sec. 905.967 Eligible TOP Activities.
Activities to be funded and carried out by an eligible resident
council or resident management corporation, as defined in subpart B,
must improve the living conditions and public housing operations and
may include any combination of, but are not limited to, the following:
(a) Resident Capacity Building. (1) Training Board members in
community organizing, Board development, and leadership training;
(2) Determining the feasibility of resident management enablement
for a specific project or projects; and
(3) Assisting in the actual creation of an RMC, such as consulting
and legal assistance to incorporate, preparing by-laws and drafting a
corporate charter.
(b) Resident Management. (1) Training residents, as potential
employees of an RMC, in skills directly related to the operation,
management, maintenance and financial systems of a project;
(2) Training of residents with respect to fair housing
requirements; and
(3) Gaining assistance in negotiating management contracts, and
designing a long-range planning system.
(c) Resident Management Business Development.
(1) Training related to resident-owned business development and
technical assistance for job training and placement in RMC
developments;
(2) Technical assistance and training in resident managed business
development through:
(i) Feasibility and market studies;
(ii) Development of business plans;
(iii) Outreach activities; and
(iv) Innovative financing methods including revolving loan funds.
(3) Legal advice in establishing resident managed business entity.
(d) Social Support Needs (such as self-sufficiency and youth
initiatives). (1) Feasibility studies to determine training and social
services needs;
(2) Training in management-related trade skills, computer skills,
etc;
(3) Management-related employment training and counseling;
(4) Coordination of support services;
(5) Training for programs such as child care, early childhood
development, parent involvement, volunteer services, parenting skills,
before and after school programs; and
(6) Training programs on health, nutrition and safety.
(7) Training in the development of strategies to successfully
implement a youth program. For example, assessing the needs and
problems of the youth, improving youth initiatives that are currently
active, and training youth, housing authority staff, resident
management corporations and resident organizations on youth initiatives
and program activities.
(8) Workshops for youth services, child abuse and neglect
prevention, tutorial services, in partnership with community-based
organizations such as local Boys and Girls Clubs, YMCA/YWCA, Boy/Girl
Scouts, Campfire and Big Brother/Big Sisters, etc. Other HUD programs
such as the Youth Sports Program and the Public Housing Drug
Elimination Programs also provide funding in these areas; and
(e) General. (1) Required training on HUD regulations and policies
governing the operation of low-income public and Indian housing,
financial management, capacity building to develop the necessary skills
to assume management responsibilities at the development and property
management;
(2) Purchasing hardware, i.e., computers and software, office
furnishings and supplies, in connection with business development.
Every effort must be made to acquire donated or discounted hardware;
(3) Training in accessing other funding sources; and
(4) Hiring trainers or other experts (RO/RMCs) must ensure that
this training is provided by a qualified housing management specialist,
a community organizer, the HA, or other sources knowledgeable about the
program.
Sec. 905.968 Technical assistance.
To the extent that grant authority is available, HUD shall provide
financial assistance to ROs or RMCs that obtain, by contract or
otherwise, technical assistance for the development of resident
management entities, including the formation of these entities; the
development of the management capabilities of newly formed or existing
entities; the identification of the social support needs of residents
of projects, and the securing of this support; and a wide range of
activities to further the purposes of this subpart.
Sec. 905.969 Resident management requirements.
The following requirements apply when a HA and its residents are
interested in providing for resident performance of management
functions in one or more projects under this subpart.
(a) Resident management corporation. Residents interested in
contracting with a HA must establish a RMC that meets the requirements
for such a corporation, as specified in this subpart.
(b) Management Contract. (1) A management contract between the HA
and a RMC is required for resident management. The HA and the
corporation may agree to the performance by the corporation of any or
all management functions for which the HA is responsible to HUD under
the ACC, and any other functions not inconsistent with the ACC and
applicable laws and regulations. The management contract must be in
conformance with the minimum requirements established by HUD.
(2) The management contract may include specific provisions
governing management personnel; compensation for maintenance laborers
and mechanics and administrative employees employed in the operation of
the project, except that the amount of this compensation must meet
applicable labor standard requirements of Federal law; rent collection
procedures; resident income verification; resident eligibility
determinations; resident eviction; the acquisition of supplies and
materials; and such other matters as the HA and the corporation
determine to be appropriate, and as HUD may specify in administrative
instructions.
(3) The management contract shall be treated as a contracting out
of services, and must be subject to any provision of a collective
bargaining agreement regarding the contracting out of services to which
the HA is subject.
(4) Provisions on competitive bidding and requirements of prior
written HUD approval of contracts contained in the ACC do not apply to
the decision of a HA to contract with a RMC.
(c) Prohibited activities. A HA may not contract for assumption by
the RMC of the HA's underlying responsibilities to HUD under the ACC.
(d) Bonding and insurance. Before assuming any management
responsibility under its contract, the RMC must provide fidelity
bonding and insurance, or equivalent protection that is adequate (as
determined by HUD and the HA) to protect HUD and the HA against loss,
theft, embezzlement, or fraudulent acts on the part of the corporation
or its employees.
Sec. 905.970 Management specialist.
The RO must select, in consultation with the HA, a qualified Indian
housing management specialist to assist in determining the feasibility
of, and to help establish, a RMC and to provide training and other
duties in connection with operating the TOP project. The Housing
Management Specialist (Trainer) can be a non-profit organization, the
HA or a consultant.
Sec. 905.971 Operating subsidy, preparation of operating budget,
operating reserves and retention of excess revenues.
(a) Calculation of operating subsidy. Operating subsidy will be
calculated separately for any project managed by a resident management
corporation. This subsidy computation will be the same as the separate
computation made for the balance of the projects in the HA in
accordance with subpart J of this part, with the following exceptions:
(1) The project managed by a resident management corporation will have
an Allowable Expense Level based on the actual expenses for the project
in the fiscal year immediately preceding management under this subpart.
These expenditures will include the project's share of any expenses
which are overhead or centralized HA expenditures. The expenses must
represent a normal year's expenditures for the project, and must
exclude all expenditures which are not normal fiscal year expenditures
as to amount or as to the purpose for which expended. Documentation of
this expense level must be presented with the project budget and
approved by HUD. Any project expenditures funded from a source of
income other than operating subsidies or income generated by the
locally owned Indian housing program will be excluded from the subsidy
calculation. For budget years after the first budget year under
management by the resident management corporation, the Allowable
Expense Level will be calculated as it is for all other projects, in
accordance with subpart J of this part.
(2) The resident management corporation project will estimate
dwelling rental income based on the rent roll of the project
immediately preceding the assumption of management responsibility under
this subpart, increased by the estimate of inflation of resident income
used in calculating PFS subsidy.
(3) The resident management corporation will exclude, from its
estimate of other income, any increased income directly generated by
activities of the corporation or facilities operated by the
corporation.
(4) Any reduction in the subsidy of a HA that occurs as a result of
fraud, waste, or mismanagement by the HA shall not affect the subsidy
calculation for the resident management corporation project.
(b) Calculation of total income and preparation of operating
budget.--No reduction. (1) Subject to paragraph (c) of this section,
the amount of funds provided by a HA to a project managed by a resident
management corporation under this subpart may not be reduced during the
three-year period beginning on the date a resident management
corporation first assumes management responsibility for the project.
(2) Treatment of technical assistance. For purposes of determining
the amount of funds provided to a project under paragraph (b)(1) of
this section, the provision of technical assistance by the HA to the
resident management corporation will not be included.
(3) Operating budget. The resident management corporation and the
HA shall submit a separate operating budget, including the calculation
of operating subsidy eligibility in accordance with paragraph (a) of
this section, for the project managed by a resident management
corporation to HUD for approval. This budget will reflect all project
expenditures and will identify which expenditures are related to the
responsibilities of the resident management corporation and which are
related to functions which will continue to be performed by the HA.
(4) Operating reserves. (i) Each project or part of a project that
is operating in accordance with the ACC amendment relating to this
subpart and in accordance with a contract vesting maintenance
responsibilities in the resident management corporation will have
transferred, into a sub-account of the operating reserve of the host
HA, an operating reserve. Where all maintenance responsibilities for
the resident-managed project are the responsibility of the corporation,
the amount of the reserve made available to projects under this subpart
will be the per unit cost amount available in the HA operating reserve,
exclusive of all inventories, prepaids and receivables (at the end of
the HA fiscal year preceding implementation), multiplied by the number
of units in the project operated in accordance with the provisions of
this subpart. Where some, but not all, maintenance responsibilities are
vested in the resident management corporation, the contract may provide
for an appropriately reduced portion of the operating reserve to be
transferred into the corporation's sub-account.
(ii) The use of the reserve will be subject to all administrative
procedures generally applicable to the Indian housing program. Any
expenditure of funds from the reserve will be for eligible expenditures
which are incorporated into an operating budget subject to approval by
HUD.
(iii) Investment of funds held in the reserve will be in accordance
with the provisions of chapter 4 of the Financial Management Handbook,
7475.1 REV, and interest generated will be included in the calculation
of operating subsidy in accordance with subpart J of this part.
(c) Adjustments to total income. (1) Operating subsidy will reflect
changes in inflation, utility rates and consumption, and changes in the
number of units in the project.
(2) In addition to the amount of income derived from the project
(from sources such as rents and charges) and the operating subsidy
calculated in accordance with paragraph (a) of this section, the
contract may specify that income be provided to the project from other
sources of income of the HA.
(3) The following conditions may not affect the amounts to be
provided to a project managed by a resident management corporation
under this subpart:
(i) Any reduction in the total income of a HA that occurs as a
result of fraud, waste, or mismanagement by the HA; or
(ii) Any change in the total income of a HA that occurs as a result
of project-specific characteristics that are not shared by the project
managed by the corporation under this subpart.
(d) Retention of excess revenues. Any income generated by a
resident management corporation that exceeds the income estimated for
the income category involved must be excluded in subsequent years in
calculating: (1) The operating subsidy provided to a HA under subpart J
of this part; and
(2) The funds provided by the HA to the resident management
corporation.
(e) Use of retained revenues. Any revenues retained by a resident
management corporation under paragraph (d) of this section may only be
used for purposes of improving the maintenance and operation of the
project, establishing business enterprises that employ residents of
Indian housing, or acquiring additional dwelling units for low-income
families. Units acquired by the resident management corporation will
not be eligible for payment of operating subsidy.
Sec. 905.972 TOP Audit and administrative requirements.
(a) Annual audit of books and records. The financial statements of
a RMC managing a project under this subpart must be audited annually by
a licensed certified public accountant, designated by the RMC, in
accordance with generally accepted government audit standards. A
written report of each audit must be forwarded to HUD and the HA within
30 days of issuance.
(b) Relationship to other authorities. The requirements of
paragraph (a) of this section are in addition to any other Federal law
or other requirement that would apply to the availability and audit of
books and records of RMCs under this part.
(c) General administrative requirements. Except as modified by this
part, RMCs must comply with the requirements of OMB Circulars A-110 and
A-122, as applicable.
Family Investment Centers (FIC) Program
Sec. 905.980 General.
(a) The Family Investment Centers (FIC) Program. This program
provides families living in Indian housing with better access to
educational and employment opportunities by:
(1) developing facilities in or near Indian housing for training
and support services;
(2) mobilizing public and private resources to expand and improve
the delivery of such services;
(3) providing funding for such essential training and support
services that cannot otherwise be funded; and
(4) improving the capacity of management to assess the training and
service needs of families, coordinating the provision of training and
services that meet such needs, and ensuring the long-term provision of
such training and services.
(b) Supportive Services. New or significantly expanded services
essential to providing families in Indian housing with better access to
educational and employment opportunities to achieve self-sufficiency
and independence. HAs applying for funds to provide supportive services
must demonstrate that the services will be provided at a higher level
than currently provided. Supportive services may include:
(1) Child care;
(2) Employment training and counseling;
(3) Computer skills training;
(4) Education including remedial education; literacy training;
completion of secondary or post secondary education and assistance in
the attainment of certificates of high school equivalency;
(5) Business, entrepreneurial training and counseling;
(6) Transportation necessary to enable any participating family
member to receive available services or to commute to his/her place of
employment;
(7) Personal welfare (e.g. substance/alcohol abuse treatment and
counseling, self-development counseling, etc.);
(8) Supportive Health Care Services (e.g., outreach and referral
services; and
(9) Any other services and resources, including case management,
determined to be appropriate in assisting eligible residents.
(c) FIC Service Coordinator. Any person who is responsible for:
(1) determining the eligibility and assessing needs of families to
be serviced by the FIC;
(2) assessing training and service needs of eligible residents;
(3) working with service providers to coordinate the provision of
services and to tailor the services to the needs and characteristics of
eligible residents;
(4) mobilizing public and private resources to ensure that the
supportive services identified can be funded over the five-year period,
at least, following the initial receipt of funding;
(5) monitoring and evaluating the delivery, impact and
effectiveness of any supportive service funded with capital or
operating assistance under the FIC program.
(6) coordinating the development and implementation of the FIC
Program with other self-sufficiency, educational and employment
programs; and
(7) performing other duties and functions that are appropriate for
providing eligible residents with better access to educational and
employment opportunities.
Sec. 905.982 Eligibility.
A HA may apply to establish one or more FICs for more than one
Indian housing development. A HA must demonstrate a firm commitment of
assistance from one or more sources ensuring that supportive services
will be provided for not less than one year following the completion of
activities.
Sec. 905.983 FIC Activities.
Activities that may be funded and carried out by an eligible HA may
include: (a) The renovation, conversion, or combination of vacant
dwelling units to create common areas to accommodate the provision of
supportive services;
(b) The renovation of existing common areas to accommodate the
provision of supportive services;
(c) The renovation of facilities located near the premises of one
or more HA developments to accommodate the provision of supportive
services;
(d) The provision of not more than 15 percent of the total cost of
supportive services (which may be provided directly to eligible
residents by the HA or by contract or lease through other appropriate
agencies or providers), but only if the HA demonstrates that:
(1) The supportive services are appropriate to improve the access
of eligible residents to employment and educational opportunities; and
(2) The HA has made diligent efforts to use or obtain other
available resources to fund or provide such services; and
(e) The employment of service coordinators.
Sec. 905.984 HA role in activities under this part.
A HA shall develop a process that ensures that RO/RMC
representatives and residents are fully informed of, and have an
opportunity to comment on, the contents of the application and
activities at all stages of the application and grant award process.
The HA shall give full and fair consideration to the comments and
concerns of the residents.
Sec. 905.985 HUD Policy on training, employment, contracting and
subcontracting of Indian housing residents.
In accordance with section 3 of the Housing and Urban Development
Act of 1968 and the implementing regulations at 24 CFR part 135, HAs,
their contractors and subcontractors shall use best efforts, consistent
with existing Federal, State, Tribal and local laws and regulations
(including section 7(b) of the Indian Self-Determination and Education
Assistance Act, to give low and very low-income persons the training
and employment opportunities generated by section 3 covered assistance
(as this term is defined in 24 CFR 135.7) to give section 3 business
concerns the contracting opportunities generated by section 3 covered
assistance.
Sec. 905.986 Grant set-aside assistance.
HUD may set-aside five percent of any amounts available in each
fiscal year (subsequent to the first funding cycle) to supplement
grants previously awarded under this program. These supplemental grants
would be awarded to HAs that demonstrate that funds cannot otherwise be
obtained and are needed to provide adequate service levels to
residents.
Sec. 905.987 Resident compensation.
Residents employed pursuant to a FIC grant shall be paid at a rate
not less than the highest of:
(a) The minimum wage that would be applicable to the employee under
the Fair Labor Standards Act of 1938 (FLSA), if section 6(a)(1) of the
FLSA applied to the resident and if the resident was not exempt under
section 13 of the FLSA;
(b) The State, local or Tribal minimum wage for the most nearly
comparable covered employment; or
(c) The prevailing rate of pay for persons employed in similar
public occupations by the same employer.
Sec. 905.988 Administrative requirements.
Each HA receiving a grant shall submit to the HUD Field Office an
annual progress report describing and evaluating the use of grant
amounts received under this program.
PART 913--DEFINITION OF INCOME, INCOME LIMITS, RENT AND
REEXAMINATION OF FAMILY INCOME FOR THE PUBLIC HOUSING PROGRAM
5. The authority citation for part 913 would continue to read as
follows:
Authority: 42 U.S.C. 1437a, 1437d, 1437n and 3535(d).
6. In Sec. 913.106, paragraph (c) would be amended by removing the
word ``or'' from paragraph (c)(8)(ii); by adding the word ``or'' at the
end of paragraph (c)(8)(iii); by adding a new paragraph (c)(8)(iv); by
removing the word ``or'' from paragraph (c)(10); by redesignating
paragraph (c)(11) as paragraph (c)(12); and by adding a new paragraph
(c)(11), to read as follows:
Sec. 913.106 Annual income.
* * * * *
(c) * * *
(8) * * *
(iv) A resident service stipend, but only if the resident service
stipend does not exceed $200 per month/per officer to resident council
officers. Stipends are intended to cover costs related to officer's
volunteer efforts and include but are not limited to the following
items: Child care, transportation, special equipment and special
clothing.
* * * * *
(11) The earnings and benefits to any resident resulting from the
participation in a program providing employment training and supportive
services in accordance with the Family Support Act of 1988, section 22
of the U.S. Housing Act of 1937, or any comparable Federal, State, or
local law during the exclusion period. For purposes of this paragraph,
the following definitions apply.
(i) Comparable Federal, State or Local law means a program
providing employment training and supportive services that--
(A) is authorized by a federal, state or local law;
(B) is funded by federal, state or local government;
(C) is operated or administered by a public agency; and
(D) has as its objective to assist participants in acquiring job
skills.
(ii) Exclusion period means the period during which the resident
participates in a program described in this section, plus 18 months
from the date the resident begins the first job acquired by the
resident after completion of such program that is not funded by public
housing assistance under the U.S. Housing Act of 1937. If the resident
is terminated from employment without good cause, the exclusion period
shall end.
(iii) Earnings and Benefits means the incremental earnings and
benefits resulting from a qualifying job training program or subsequent
job;
* * * * *
7. Part 964, would be revised to read as follows:
PART 964--TENANT PARTICIPATION AND TENANT OPPORTUNITIES IN PUBLIC
HOUSING
Subpart A--General Provisions
Sec.
964.1 Purpose.
964.3 Applicability and scope.
964.7 Definitions.
964.11 HUD policy on tenant participation.
964.12 HUD policy on the Tenant Opportunities Program (TOP).
964.14 HUD policy on partnerships.
964.15 HUD policy on resident management.
964.16 HUD role in activities under this rule.
964.18 HA role in activities under subpart B & C.
964.24 HUD policy on FIC Program.
Subpart B--Tenant Participation
964.100 Role of resident council.
964.105 Role of the Jurisdiction-Wide Resident Council.
964.110 Resident membership on HA board of Commissioners.
964.115 Resident council requirements.
964.117 Resident council partnerships.
964.120 Resident management corporation requirements.
964.125 Eligibility for resident council membership.
964.130 Election procedures and standards.
964.135 Resident Involvement in HA Management Operations.
964.140 Resident training.
964.145 Conflict of interest.
964.150 Funding tenant participation.
Subpart C--Tenant Opportunities Program
964.200 General.
964.205 Eligibility.
964.210 Announcement of Funding Availability.
964.215 Grant agreement.
964.220 Technical Assistance.
964.225 Resident management requirements.
964.230 Audit and administrative requirements.
Subpart D--Family Investment Centers (FIC) Program
964.300 General.
964.305 Eligibility.
964.308 Supportive services requirements.
964.310 Audit/Compliance Requirements.
964.315 HAs role in activities under this part.
964.320 HUD Policy on training, employment, contracting and
subcontracting of public housing residents.
964.325 Announcement of funding availability.
964.330 Grant Set-Aside Assistance.
964.335 Grant agreement.
964.340 Resident compensation.
964.345 Treatment of income.
964.350 Administrative requirements.
Authority: 42 U.S.C. 1437d, 1437g, 1437l, 1437r, 1437t, 3535(d).
Subpart A--General Provisions
Sec. 964.1 Purpose.
The purpose of this part is to recognize the importance of resident
involvement in creating a positive living environment and in actively
participating in the overall mission of public housing.
Sec. 964.3 Applicability and scope.
(a) The policies and procedures contained in this part apply to any
HA that has a Public Housing Annual Contributions Contract (ACC) with
HUD. This part does not apply to PHAs with housing assistance payments
contracts with HUD under section 8 of the U. S. Housing Act of 1937.
(b) Subpart B of this part contains HUD policies, procedures, and
requirements for the participation of residents in public housing
operations. These policies, procedures, and requirements apply to all
residents participating under this part.
(c)(1) Subpart C of this part contains HUD policies, procedures,
and requirements for residents participating in the Tenant
Opportunities Program (TOP) (replaces the Resident Management Program
under section 20 of the United States Housing Act of 1937). Resident
management in public housing is viable and remains an option under TOP.
(2) Subpart C of this part is not intended to negate any pre-
existing arrangements for resident management in public housing between
a PHA and a resident management corporation. On or after [insert
effective date of this regulation], any new, renewed or renegotiated
contracts must meet the requirements of this part, the ACC and all
applicable laws and regulations.
(d) Subpart D of this part includes requirements for the Family
Investment Centers (FIC) Program which was established by section 22 of
the United States Housing Act of 1937 (42 U.S.C. 1437t) to provide
families living in public housing and Indian housing with better access
to educational and employment opportunities.
(e) The term ``resident,'' as used throughout this part, is
interchangeable with the term ``tenant,'' to reflect the fact that
local resident organizations have differing preferences for the terms.
Terms such as ``resident council'' and ``tenant council'' and
``resident management'' and ``tenant management'' are interchangeable.
Hereafter, for ease of discussion, the proposed rule will use the terms
resident, resident council and resident management corporation, as
appropriate.
Sec. 964.7 Definitions.
Annual Contributions Contract (ACC). A contract (in the form
prescribed by HUD) under which HUD agrees to provide financial
assistance, and the HA agrees to comply with HUD requirements for the
development and operation of the public housing project.
Eligible Residents for FIC. A participating resident of a
participating HA. If the HA is combining FIC with the Family Self-
Sufficiency (FSS) program, the term also means Public Housing FSS and
Section 8 families participating in the FSS program. Although Section 8
FSS families are eligible residents for FIC, they do not qualify for
income exclusions that are provided for public housing residents
participating in employment and supportive service programs.
Family Investment Centers (FIC). A facility on or near public
housing which provides families living in public housing with better
access to educational and employment opportunities to achieve self-
sufficiency and independence.
FIC Service Coordinator. Any person who is responsible for:
(1) Determining the eligibility and assessing needs of families to
be served by the FIC;
(2) Assessing training and service needs of eligible residents;
(3) Working with service providers to coordinate the provision of
services on a HA-wide or less than HA-wide basis, and to tailor the
services to the needs and characteristics of eligible residents;
(4) Mobilizing public and private resources to ensure that the
supportive services identified can be funded over the five-year period,
at least, following the initial receipt of funding.
(5) Monitoring and evaluating the delivery, impact, and
effectiveness of any supportive service funded with capital or
operating assistance under FIC program;
(6) Coordinating the development and implementation of the FIC
program with other self-sufficiency programs, and other education and
employment programs; and
(7) Performing other duties and functions that are appropriate for
providing eligible residents with better access to educational and
employment opportunities.
Management. All activities for which the HA is responsible to HUD
under the ACC, within the definition of ``operation'' under the Act and
the ACC, including the development of resident programs and services.
Management contract. A written agreement between a resident
management corporation and a HA, as provided by subpart C.
Public Housing Agency (HA). Any State, county, municipality, or
other governmental entity or public body (or agency or instrumentality
thereof) which is authorized to engage in or assist in the development
and operation of low-income housing.
Public Housing Development (Development). Any conventional housing
project that is owned and operated by a HA, including the authorities
of Guam, Puerto Rico, Alaska and the Virgin Islands, for which it
receives operating subsidy from HUD under the Performance Funding
System (PFS) to engage in the operation of low-income housing.
Resident Management. The performance of one or more management
activities for one or more projects by a resident management
corporation under a management contract with the HA.
Resident Management Corporation. An entity that proposes to enter
into, or enters into, a contract to manage one or more management
activities of a HA.
Resident-owned business. A Business staffed by residents that is
related to the management of the HA development(s).
Supportive Services for FIC. New or significantly expanded services
that are essential to providing families living with children in public
housing with better access to educational and employment opportunities
to achieve self-sufficiency and independence.
Tenant Opportunities Program (TOP). The TOP program is designed to
prepare residents to experience the dignity of meaningful work, to own
and operate resident businesses, to move toward financial independence,
and to enable them to choose where they want to live and engage in
meaningful participation in the management of housing developments in
which they live. Financial assistance in the form of technical
assistance grants are available to RCs/RMCs to prepare to manage
activities in their public housing developments. TOP will include
components such as economic development, self-sufficiency initiatives,
and social services for public housing residents.
Vacant Unit under FIC. A dwelling unit that is not under an
effective lease to an eligible family. An effective lease is a lease
under which an eligible family has a right to possession of the unit
and is being charged rent, even if the amount of any utility allowance
equals or exceeds the amount of a total resident payment that is based
on income and, as a result, the amount paid by the family to the HA is
zero.
Sec. 964.11 HUD policy on tenant participation.
HUD promotes resident participation and the active involvement of
residents in all aspects of a HA's overall mission and operation.
Residents have a right to organize and elect a resident council to
represent their interests. As long as proper procedures are followed,
the HA shall recognize the duly elected resident council to participate
fully through a working relationship with the HA. HUD encourages HAs
and residents to work together to determine the most appropriate ways
to foster constructive relationships, particularly through duly-elected
resident organizations.
Sec. 964.12 HUD policy on the Tenant Opportunities Program (TOP).
HUD promotes TOP programs to support activities that enable
residents to improve the quality of life and resident satisfaction, and
obtain other social and economic benefits for residents and their
families. Tenant opportunity programs are proven to be effective in
facilitating economic uplift, as well as in improving the overall
conditions of the public housing communities.
Sec. 964.14 HUD policy on partnerships.
HUD promotes partnerships between residents and HAs which are an
essential component to building, strengthening and improving public
housing. Strong partnerships are critical for creating positive changes
in lifestyles thus improving the quality of life for public housing
residents, and the surrounding community.
Sec. 964.15 HUD policy on resident management.
It is HUD's policy to encourage resident management. HUD encourages
HAs, resident councils and resident management corporations to explore
the various functions involved in management to identify appropriate
opportunities for contracting with a resident management corporation.
Potential benefits of resident-managed entities include improved
quality of life, experiencing the dignity of meaningful work, enabling
residents to choose where they want to live, and meaningful
participation in the management of the housing development.
Sec. 964.16 HUD role in activities under this rule.
(a) General. Subject to the requirements of this part and other
requirements imposed on HAs by the ACC, statute or regulation, the form
and extent of resident participation including resident management are
local decisions to be made jointly by resident councils/resident
management corporations and their HAs. HUD will promote tenant
participation and tenant opportunities programs, and will provide
additional guidance, as necessary and appropriate. In addition, HUD
will endeavor to provide technical assistance in connection with these
initiatives.
(b) Monitoring. HUD shall ensure that the requirements under this
rule are operating efficiently and effectively.
Sec. 964.18 HA role in activities under subparts B & C.
(a) HAs with 100 units or more. (1) A HA shall officially recognize
a duly elected resident council as the sole representative of the
residents it purports to represent, and support its tenant
participation activities.
(2) When requested by residents, a HA shall provide appropriate
guidance to residents to assist them in establishing and maintaining a
resident council.
(3) A HA may consult with residents, or resident councils (if they
exist), to determine the extent to which residents desire to
participate in activities involving their community, including the
management of specific functions of a public housing development that
may be mutually agreeable to the HA and the resident council/resident
management corporation.
(4) A HA shall provide the residents or any resident council with
current information concerning the HA's policies on tenant
participation in management.
(5) If requested, a HA shall provide a duly recognized resident
council office space and meeting facilities, free of charge, preferably
within the development it represents.
(6) If requested, a HA shall negotiate with the duly elected
resident council on all uses of community space for meetings,
recreation and social services and other resident participation
activities pursuant to HUD guidelines. Such agreements shall be put
into a written document to be signed by the HA and the resident
council. If a HA fails to negotiate with a resident council in good
faith or, after negotiations, refuses to permit such usage of community
space, the resident council may file an informal appeal with HUD,
setting out the circumstances and providing copies of relevant
materials evidencing the resident council's efforts to negotiate a
written agreement. HUD shall require the HA to respond with a report
stating the HA's reasons for rejecting the request or for refusing to
negotiate. HUD shall require the parties (with or without direct HUD
participation) to undertake or to resume negotiations on an agreement.
HUD shall take other actions as are necessary to resolve the conflicts
between the parties.
(7) In no event shall HUD or a HA recognize a competing resident
council once a duly elected resident council has been established. Any
funding of resident activities and resident input into decisions
concerning public housing operations shall be made only through the
officially recognized resident council.
(8) The HA shall ensure open communication and frequent meetings
between HA management and resident councils and shall encourage the
formation of joint HA management-resident committees to work on issues
and planning.
(9) The resident council shall hold frequent meetings with the
residents to ensure that residents have input, and are aware and
actively involved in HA management-resident council decisions and
activities.
(10) The HA and resident council shall put in writing in the form
of a Memorandum of Understanding the elements of their partnership
agreement and it shall be updated at least once every three (3) years.
(11) The HA, in collaboration with the resident councils, shall
assume the lead role for assuring maximum opportunities for skills
training for public housing residents. To the extent possible, the
training resources should be local to ensure maximum benefit and on-
going access.
(b) HAs with fewer than 100 units. (1) HAs with fewer than 100
units of public housing have the option of participating in programs
under this rule.
(2) HAs shall not deny residents the opportunity to organize. If
the residents decide to organize and form a resident council, the HA
shall comply with the following:
(i) A HA shall officially recognize a duly elected resident council
as the sole representative of the residents it purports to represent,
and support its tenant participation activities.
(ii) When requested by residents, a HA shall provide appropriate
guidance to residents to assist them in establishing and maintaining a
resident council.
(iii) A HA shall provide the residents or any resident council with
current information concerning the HA's policies on tenant
participation in management.
(iv) In no event shall HUD or a HA officially recognize a competing
resident council once a duly elected resident council has been
established. If a duly elected resident council has been formed, any
input into changes concerning public housing operations shall be made
only through the officially recognized resident council.
Sec. 964.24 HUD policy on FIC Program.
HUD promotes Family Investment Centers which provide better access
to educational and employment opportunities for residents living in
public housing. HUD encourages resident involvement in the FIC Program
and promotes resident-HA partnerships to achieve mutual goals.
Subpart B--Tenant Participation
Sec. 964.100 Role of resident council.
The role of a resident council is to improve the quality of life
and resident satisfaction and participate in self-help initiatives to
enable residents to create a positive living environment for families
living in public housing. Resident councils may actively participate
through a working partnership with the HA to advise and assist in all
aspects of public housing operations.
Sec. 964.105 Role of the Jurisdiction-Wide Resident Council.
(a) Jurisdiction-Wide Resident Council. Resident councils may come
together to form an organization which can represent the interest of
residents residing in units under a HA's jurisdiction. This can be
accomplished by the presidents of duly elected resident councils
forming an organization, by resident councils electing a representative
to the organization, or through jurisdiction-wide elections. If duly
elected resident councils form such an organization, the HA shall
recognize it as the voice of authority-wide residents for input into
housing authority policy making.
(b) Function. The jurisdiction-wide council may advise the Board of
Commissioners and executive director in all areas of HA operations,
including but not limited to occupancy, general management,
maintenance, security, resident training, resident employment, social
services and modernization priorities.
(c) Cooperation with other groups. There shall be regularly
scheduled meetings between the HA and the local duly elected resident
council, and the jurisdiction-wide resident council to discuss
problems, plan activities and review progress.
Sec. 964.110 Resident membership on HA Board of Commissioners.
HUD encourages to the maximum extent possible resident membership
on HA Board of Commissioners, for the purpose of having maximum input
into HA policy and decision-making on matters concerning public
housing.
Sec. 964.115 Resident council requirements.
A resident council shall consist of residents residing in public
housing and must meet each of the following requirements in order to
receive official recognition from the HA/HUD, and be eligible to
receive funds for resident council activities, and stipends for their
related costs for volunteer work in public housing: (a) It may
represent residents residing in scattered site buildings, in areas of
contiguous row houses; or in one or more contiguous buildings; in a
development; or in a combination of these buildings or developments;
(b) It must adopt written procedures such as by-laws, or a
constitution which provides for the election of residents to the
governing board by the voting membership of the residents residing in
public housing, described in paragraph (b) of this section, on a
regular basis but at least once every three (3) years. The written
procedures must provide for the recall of the resident board by
approval of at least 51 percent of the voting membership; and
(c) It must have a democratically elected governing board that is
elected by the voting membership. The voting membership must consist of
residents at least 18 years of age and whose name appears on a lease
for the unit in the public housing that the resident council
represents.
Sec. 964.117 Resident council partnerships.
A resident council may form partnerships with outside
organizations, provided that such relationships are complementary to
the resident council in its duty to represent the residents, and
provided that such outside organizations do not become the governing
entity of the resident council.
Sec. 964.120 Resident management corporation requirements.
A resident management corporation must consist of residents
residing in public housing and have each of the following
characteristics in order to receive official recognition by the HA and
HUD: (a) It shall be a non-profit organization that is validly
incorporated under the laws of the State in which it is located;
(b) It may be established by more than one resident council, so
long as each such council:
(1) Approves the establishment of the corporation, and
(2) Has representation on the Board of Directors of the
corporation;
(c) It shall have an elected Board of Directors, and elections must
be held at least once every three (3) years;
(d) Its by-laws shall require the Board of Directors to include
resident representatives of each resident council involved in
establishing the corporation;
(e) Its voting members shall be residents at least 18 years of age
and whose name appears on the lease of a unit in the public housing
represented by the resident management corporation;
(f) Where a resident council already exists for the development, or
a portion of the development, the resident management corporation shall
be approved by the resident council board and a majority of the
residents. If there is no resident council, a majority of the residents
of the public housing development it will represent must approve the
establishment of such a corporation for the purposes of managing the
project; and
(g) It may serve as both the resident management corporation and
the resident council, so long as the corporation meets the requirements
of this part for a resident council.
Sec. 964.125 Eligibility for resident council membership.
(a) Any member of a public housing household who is on the lease of
a unit in the public housing development and meets the requirements of
the by-laws is eligible to be a member of a resident council. The
resident council may establish additional criteria that are non-
discriminatory and do not infringe on rights of other residents in the
development. Such criteria must be stated in the by-laws or
constitution as appropriate.
(b) The right to vote for resident council board shall be limited
to designated heads of households and other members of the household
who are 18 years or older whose name appears on the lease of a unit in
the public housing development represented by the resident council.
(c) Any qualified voting member of a resident council who meets the
requirements described in the by-laws and is in compliance with the
lease may seek office and serve on the resident council governing
board.
Sec. 964.130 Election procedures and standards.
At a minimum, a resident council may use local election boards/
commissions or if none exists, or is unwilling, an independent third-
party to oversee elections and recall procedures.
(a) Resident councils shall adhere to the following minimum
standards regarding election procedures:
(1) All procedures must assure fair and frequent elections of
resident council members--at least once every three years for each
member.
(2) Staggered terms for resident council governing board members
and term limits shall be discretionary with the resident council.
(3) Each resident council shall adopt and issue election and recall
procedures in their by-laws.
(4) The election procedures shall include qualifications to run for
office, frequency of elections, procedures for recall, and term limits
if desired.
(5) Sufficient notice of nomination and election, minimally 30
days, describing election procedures, eligibility requirements and
dates of nominations/elections must be given to all voting members
prior to the date of the nominations/elections.
(b) If a resident council fails to satisfy HUD minimum standards
for fair and frequent elections, or fails to follow its own election
procedures as adopted, HUD shall require the HA to withdraw recognition
of the resident council and to withhold resident services funds as well
as funds provided in conjunction with services rendered for resident
participation in public housing.
(c) HAs shall monitor the resident council election process and
shall establish a procedure to appeal any adverse decision relating to
failure to satisfy HUD minimum standards. Such appeal shall be
submitted to a jointly selected third-party arbitrator at the local
level. If costs are incurred by using a third-party arbitrator, then
such costs should be paid from the HAs resident services funds pursuant
to Sec. 964.150.
Sec. 964.135 Resident involvement in HA management operations.
Residents shall be involved and participate in the overall policy
development and direction of Public Housing operations.
(a) Resident management corporations (RMCs) may contract with HAs
to perform one or more management functions provided the resident
entity has received sufficient training and/or has staff with the
necessary expertise to perform the management functions and provided
the RMC meets bonding and licensing requirements.
(b) Residents shall be actively involved in a HA's decision-making
process and give advice on matters such as modernization, security,
maintenance, resident screening and selection, and recreation.
(c) While a HA has responsibility for management operations, it
shall ensure strong resident participation in all issues and facets of
its operations through the duly elected resident councils at public
housing developments, and with jurisdiction-wide resident councils.
(d) A HA shall work in partnership with the duly elected resident
councils.
(e) HAs, upon request from the duly elected resident council, shall
ensure that the duly elected resident council officers as defined in
subpart B of this rule, and other residents in the development are
fully trained and involved in developing and implementing Federal
programs including but not limited to Comprehensive Improvement
Assistance Program (CIAP), Comprehensive Grant Program, Urban
Revitalization Demonstration, Drug Elimination, and FIC.
(f) HAs shall involve resident council officers and other
interested residents at the development through education and direct
participation in all phases of the budgetary process.
(g) Resident council officers shall be encouraged to become
involved in the resident screening and selection process for
prospective residents at the development. Those selected to perform
resident screening and selection functions must be trained by the HA in
resident screening and selection and must sign a legal document
committing to confidentiality.
Sec. 964.140 Resident training.
(a) Resident training opportunities. HUD encourages a partnership
between the residents, the HA and HUD, as well as with the public and
non-profit sectors to provide training opportunities for public housing
residents. The categories in which training could occur include, but
are not limited to:
(1) Community organization and leadership training;
(2) Organizational development training for Resident Management
Corporations and duly elected Resident Councils;
(3) Public housing policies, programs, rights and responsibilities
training; and
(4) Business entrepreneurial training, planning and job skills.
(b) Local training resources. HUD encourages the use of local
training resources to ensure the ongoing accessibility and availability
of persons to provide training and technical assistance. Possible
training resources may include:
(1) Resident organizations;
(2) Housing authorities;
(3) Local community colleges, vocational schools; and
(4) HUD and other Federal agencies and other local public, private
and non-profit organizations.
Sec. 964.145 Conflict of interest.
Resident council officers cannot serve as contractors or employees
at the HA.
Sec. 964.150 Funding tenant participation. '
(a) Funding duly elected resident councils. (1) The HA shall
provide funds it receives for this purpose to the duly elected resident
council to use for resident participation activities. This shall be an
add-on to the Performance Funding System (PFS), as provided by 24 CFR
part 990, to permit HAs to fund $25 per unit per year for resident
services, subject to the availability of appropriations. Of this
amount, $15 per unit per year would be provided to fund appropriate
activities for duly elected resident councils, and $10 per unit per
year would be used by the HA to pay for costs incurred in carrying out
tenant participation activities under subpart B of this rule, including
the expenses for an arbitrator required under subpart B Sec. 964.130.
This will guarantee the resources necessary to create a bonafide
partnership among the duly elected resident council, the HA and HUD.
(2) A duly elected resident council shall receive tenant services
funding regardless of the HA's financial status. The resident council
funds shall not be impacted or restricted by the HA financial status
and all said funds must be used for the purpose set forth in subparts B
& C under this rule.
(b) Stipends. (1) HUD encourages HAs to provide stipends to
resident council officers who serve as volunteers in their public
housing developments. The amount of the stipend, up to $200 per month/
per officer, shall be decided locally by the resident council and the
HA. Pursuant to Sec. 913.106, stipends are excluded from income for
rent purposes.
(2) Stipends are not to be construed as salaries and should not be
included as income for calculation of rents, and are not subject to
conflict of interest requirements.
(3) Funding provided by a HA to a duly elected resident council may
be made only under a written agreement between the HA and a resident
council, which includes a resident council budget and assurance that
all resident council expenditures will not contravene provisions of law
and will promote serviceability, efficiency, economy and stability in
the operation of the local development. The agreement must require the
local resident council to account to the HA for the use of the funds
and permit the HA to inspect and audit the resident council's financial
records related to the agreement.
Subpart C--Tenant Opportunities Program
Sec. 964.200 General.
(a) The Tenant Opportunities Program (TOP) provides technical
assistance for various activities including resident management for
resident councils/resident management corporations as authorized by
section 20 of the U.S. Housing Act of 1937. The TOP provides
opportunities for resident organizations to improve living conditions
and resident satisfaction in public housing communities.
(b) This subpart establishes the policies, procedures and
requirements for participating in the TOP with respect to applications
for funding for programs identified in this subpart.
(c) This subpart contains the policies, procedures and requirements
for the resident management program as authorized by section 20 of the
U.S. Housing Act of 1937.
Sec. 964.205 Eligibility.
(a) Resident councils/resident management corporations. Any
eligible resident council/resident management corporation as defined in
subpart B is eligible to participate in a program administered under
this subpart.
(b) Activities. Activities to be funded and carried out by an
eligible resident council or resident management corporation, as
defined in subpart B, must improve the living conditions and public
housing operations and may include any combination of, but are not
limited to, the following: (1) Resident Capacity Building. (i) Training
Board members in community organizing, Board development, and
leadership training;
(ii) Determining the feasibility of resident management enablement
for a specific project or projects; and
(iii) Assisting in the actual creation of an RMC, such as
consulting and legal assistance to incorporate, preparing by-laws and
drafting a corporate charter.
(2) Resident Management. (i) Training residents, as potential
employees of an RMC, in skills directly related to the operation,
management, maintenance and financial systems of a project;
(ii) Training of residents with respect to fair housing
requirements; and
(iii) Gaining assistance in negotiating management contracts, and
designing a long-range planning system.
(3) Resident Management Business Development. (i) Training related
to resident-owned business development and technical assistance for job
training and placement in RMC developments;
(ii) Technical assistance and training in resident managed business
development through:
(A) Feasibility and market studies;
(B) Development of business plans;
(C) Outreach activities; and
(D) Innovative financing methods including revolving loan funds;
and
(iii) Legal advice in establishing resident managed business
entity.
(4) Social Support Needs (such as self-sufficiency and youth
initiatives). (i) Feasibility studies to determine training and social
services needs;
(ii) Training in management-related trade skills, computer skills,
etc.;
(iii) Management-related employment training and counseling;
(iv) Coordination of support services;
(v) Training for programs such as child care, early childhood
development, parent involvement, volunteer services, parenting skills,
before and after school programs;
(vi) Training programs on health, nutrition and safety;
(vii) Workshops for youth services, child abuse and neglect
prevention, tutorial services, in partnership with community-based
organizations such as local Boys and Girls Clubs, YMCA/YWCA, Boy/Girl
Scouts, Campfire and Big Brother/Big Sisters, etc. Other HUD programs
such as the Youth Sports Program and the Public Housing Drug
Elimination Programs also provide funding in these areas; and
(viii) Training in the development of strategies to successfully
implement a youth program. For example, assessing the needs and
problems of the youth, improving youth initiatives that are currently
active, and training youth, housing authority staff, resident
management corporations and resident councils on youth initiatives and
program activities.
(5) General. (i) Required training on HUD regulations and policies
governing the operation of low-income public housing, financial
management, capacity building to develop the necessary skills to assume
management responsibilities at the project and property management;
(ii) Purchasing hardware, i.e., computers and software, office
furnishings and supplies, in connection with business development.
Every effort must be made to acquire donated or discounted hardware;
(iii) Training in accessing other funding sources; and
(iv) Hiring trainers or other experts (RCs/RMCs must ensure that
this training is provided by a qualified housing management specialist,
a community organizer, the HA, or other sources knowledgeable about the
program).
Sec. 964.210 Announcement of funding availability.
A Notice of Funding Availability shall be published periodically in
the Federal Register containing the amounts of funds available, funding
criteria, where to obtain and submit applications, the deadline for
submissions, and further explanation of the selection criteria.
Sec. 964.215 Grant agreement.
(a) General. HUD shall enter into a grant agreement with the
recipient of a technical assistance grant which defines the legal
framework for the relationship between HUD and a resident council or
resident management corporation for the proposed funding.
(b) Term of grant agreement. A grant shall be for a term of three
to five years (3-5 years), and renewable at the expiration of the term.
Sec. 964.220 Technical assistance.
(a) Financial assistance. HUD will provide financial assistance, to
the extent available, to resident councils or resident management
corporations for technical assistance and training to further the
activities under this subpart.
(b) Requirements for a management specialist. If a resident council
or resident management corporation seeks to manage a development, it
must select, in consultation with the HA, a qualified housing
management specialist to assist in determining the feasibility of, and
to help establish, a resident management corporation and to provide
training and other duties in connection with the daily operations of
the project.
Sec. 964.225 Resident management requirements.
The following requirements apply when a HA and its residents are
interested in providing for resident performance of several management
functions in one or more projects.
(a) Resident management corporation. Resident councils interested
in contracting with a HA must establish a resident management
corporation that meets the requirements for such a corporation, as
specified in subpart B. The RMC and its employees must demonstrate
their ability and skill to perform in the particular areas of
management pursuant to the management contract.
(b) HA responsibilities. HAs shall give full and serious
consideration to resident management corporations seeking to enter into
a management contract with the HA. A HA shall enter into good-faith
negotiations with a corporation seeking to contract to provide
management services.
(c) Duty to bargain in good faith. If a HA refuses to negotiate
with a resident management corporation in good faith or, after
negotiations, refuses to enter into a contract, the corporation may
file an informal appeal with HUD, setting out the circumstances and
providing copies of relevant materials evidencing the corporation's
efforts to negotiate a contract. HUD shall require the HA to respond
with a report stating the HA's reasons for rejecting the corporation's
contract offer or for refusing to negotiate. Thereafter, HUD shall
require the parties (with or without the direct HUD participation) to
undertake or to resume negotiations on a contract providing for
resident management, and shall take such other actions as are necessary
to resolve the conflicts between the parties. If no resolution is
achieved within 90 days from the date HUD required the parties to
undertake or resume such negotiations, HUD shall serve notice on both
parties that administrative remedies have been exhausted (except that,
pursuant to mutual agreement of the parties, the time for negotiations
may be extended by no more than an additional 30 days).
(d) Management contract. A management contract between the HA and a
resident management corporation is required for property management.
The HA and the resident management corporation may agree to the
performance by the corporation of any or all management functions for
which the HA is responsible to HUD under the ACC and any other
functions not inconsistent with the ACC and applicable state and local
laws, regulations and licensing requirements.
(e) Procurement requirements. The management contract shall be
treated as a contracting out of services, and must be subject to any
provision of a collective bargaining agreement regarding the
contracting out of services to which the HA is subject. Provisions on
competitive bidding and requirements of prior written HUD approval of
contracts contained in the ACC do not apply to the decision of a HA to
contract with a RMC.
(f) Prohibited activities. A HA may not contract for assumption by
the resident management corporation of the HA's underlying
responsibilities to HUD under the ACC.
(g) Bonding and insurance. Before assuming any management
responsibility under its contract, the RMC must provide fidelity
bonding and insurance, or equivalent protection that is adequate (as
determined by HUD and the HA) to protect HUD and the HA against loss,
theft, embezzlement, or fraudulent acts on the part of the resident
management corporation or its employees.
(h) Waiver of HUD requirements. Upon the joint request of a
resident management corporation and the HA, HUD may waive any
requirement that HUD has established and that is not required by law,
if HUD determines, after consultation with the resident management
corporation and the HA, that the requirement unnecessarily increases
the costs to the project or restricts the income of the project; and
that the waiver would be consistent with the management contract and
any applicable collective bargaining agreement. Any waiver granted to a
resident management corporation under this section will apply as well
to the HA to the extent the waiver affects the HA's remaining
responsibilities relating to the resident management corporation's
project.
Sec. 964.230 Audit and administrative requirements.
(a) TOP grant recipients. The HUD Inspector General, the
Comptroller General of the United States, or any duly authorized
representative shall have access to all records required to be retained
by this subpart or by any agreement with HUD for the purpose of audit
or other examinations.
(1) Grant recipients must comply with the requirements of OMB
Circulars A-110 and A-122, as applicable.
(2) A final audit shall be required for the activities and
expenditures made pursuant to this subpart by a Certified Public
Accountant (CPA), in accordance with generally accepted government
audit standards. A written report of the audit must be forwarded to HUD
within 60 days of issuance.
(b) Resident management corporations. Resident management
corporations who have entered into a contract with a HA with respect to
management of a development(s) must comply with the requirements of OMB
Circulars A-110 and A-122, as applicable. Resident management
corporations managing a development(s) must be audited annually by a
licensed certified public accountant, designated by the corporation, in
accordance with generally accepted government audit standards.
Subpart D--Family Investment Centers (FIC) Program
Sec. 964.300 General.
The Family Investment Centers Program provides families living in
public housing with better access to educational and employment
opportunities by:
(a) Developing facilities in or near public housing for training
and support services;
(b) Mobilizing public and private resources to expand and improve
the delivery of such services;
(c) Providing funding for such essential training and support
services that cannot otherwise be funded; and
(d) Improving the capacity of management to assess the training and
service needs of families, coordinate the provision of training and
services that meet such needs, and ensure the long-term provision of
such training and services. FIC provides funding to HAs to access
educational, housing, or other social service programs to assist public
housing residents toward self-sufficiency.
Sec. 964.305 Eligibility.
(a) Public Housing Authorities. HAs may apply to establish one or
more FICs for more than one public housing development.
(b) FIC Activities. Activities that may be funded and carried out
by eligible HAs, as defined in 964.305(a) and 964.310 (a) may include:
(1) The renovation, conversion, or combination of vacant dwelling
units in a HA development to create common areas to accommodate the
provision of supportive services;
(2) The renovation of existing common areas in a HA development to
accommodate the provision of supportive services;
(3) The renovation of facilities located near the premises of one
or more HA developments to accommodate the provision of supportive
services;
(4) The provision of not more than 15 percent of the total cost of
supportive services (which may be provided directly to eligible
residents by the HA or by contract or lease through other appropriate
agencies or providers), but only if the HA demonstrates that:
(i) The supportive services are appropriate to improve the access
of eligible residents to employment and educational opportunities; and
(ii) The HA has made diligent efforts to use or obtain other
available resources to fund or provide such services; and
(5) The employment of service coordinators.
(c) Follow up. A HA must demonstrate a firm commitment of
assistance from one or more sources ensuring that supportive services
will be provided for not less than one year following the completion of
activities.
(d) Environmental Review. Any environmental impact regarding
eligible activities will be addressed through an environmental review
of that activity as required by 24 CFR part 50, including the
applicable related laws and authorities under section 50.4, to be
completed by HUD, to ensure that any environmental impact will be
addressed before assistance is provided to the HA. Grantees will be
expected to adhere to all assurances applicable to environmental
concerns.
Sec. 964.308 Supportive services requirements.
HAs shall provide new or significantly expanded services essential
to providing families in public housing with better access to
educational and employment opportunities to achieve self-sufficiency
and independence. HAs applying for funds to provide supportive services
must demonstrate that the services will be provided at a higher level
than currently provided. Supportive services may include:
(a) Child care, of a type that provides sufficient hours of
operation and serves appropriate ages as needed to facilitate parental
access to education and job opportunities;
(b) Employment training and counseling (e.g., job training,
preparation and counseling, job development and placement, and follow-
up assistance after job placement);
(c) Computer skills training;
(d) Education (e.g., remedial education, literacy training,
completion of secondary or post-secondary education, and assistance in
the attainment of certificates of high school equivalency;
(e) Business entrepreneurial training and counseling;
(f) Transportation, as necessary to enable any participating family
member to receive available services or to commute to his or her place
of employment;
(g) Personal welfare (e.g., substance/alcohol abuse treatment and
counseling, self-development counseling, etc.);
(h) Supportive Health Care Services (e.g., outreach and referral
services; and
(i) Any other services and resources, including case management,
that are determined to be appropriate in assisting eligible residents.
Sec. 964.310 Audit/Compliance Requirements.
HAs cannot have serious unaddressed, outstanding Inspector General
audit findings or fair housing and equal opportunity monitoring review
findings or Field Office management review findings. In addition, the
HA must be in compliance with civil rights laws and equal opportunity
requirements. A HA will be considered to be in compliance if:
(a) As a result of formal administrative proceedings, there are no
outstanding findings of noncompliance with civil rights laws unless the
HA is operating in compliance with HUD-approved compliance agreement
designed to correct the area(s) of noncompliance;
(b) There is no adjudication of a civil rights violation in a civil
action brought against it by a private individual, unless the HA
demonstrates that it is operating in compliance with a court order, or
implementing a HUD-approved resident selection and assignment plan or
compliance agreement, designed to correct the area(s) of noncompliance;
(c) There is no deferral of Federal funding based upon civil rights
violations;
(d) HUD has not deferred application processing by HUD under Title
VI of the Civil Rights Act of 1964, the Attorney General's Guidelines
(28 CFR 50.3) and HUD's Title VI regulations (24 CFR 1.8) and
procedures (HUD Handbook 8040.1) [HAs only] or under Section 504 of the
Rehabilitation Act of 1973 and HUD regulations (24 CFR 8.57) [HAs and
IHAs];
(e) There is no pending civil rights suit brought against the HA by
the Department of Justice; and
(f) There is no unresolved charge of discrimination against the HA
issued by the Secretary under Section 810(g) of the Fair Housing Act,
as implemented by 24 CFR 103.400.
Sec. 964.315 HAs role in activities under this part.
The HAs shall develop a process that assures that RC/RMC
representatives and residents are fully briefed and have an opportunity
to comment on the proposed content of the HA's application for funding.
The HA shall give full and fair consideration to the comments and
concerns of the residents. The process shall include:
(a) Informing residents of the selected developments regarding the
preparation of the application, and providing for residents to assist
in the development of the application.
(b) Once a draft application has been prepared, the HA shall make a
copy available for reading in the management office; provide copies of
the draft to any resident organization representing the residents of
the development(s) involved; and provide adequate opportunity for
comment by the residents of the development and their representative
organizations prior to making the application final.
(c) After HUD approval of a grant, notify the duly elected resident
organization and if none exists, notify the residents of the
development of the approval of the grant; provide notification of the
availability of the HUD-approved implementation schedule in the
management office for reading; and develop a system to facilitate a
regular resident role in all aspects of program implementation.
Sec. 964.320 HUD Policy on training, employment, contracting and
subcontracting of public housing residents.
In accordance with section 3 of the Housing and Urban Development
Act of 1968 and the implementing regulations at 24 CFR part 135, PHAs,
their contractors and subcontractors shall make best efforts,
consistent with existing Federal, State, and local laws and
regulations, to give low and very low-income persons the training and
employment opportunities generated by section 3 covered assistance (as
this term is defined in 24 CFR 135.7) and to give section 3 business
concerns the contracting opportunities generated by section 3 covered
assistance.
Sec. 964.325 Announcement of funding availability.
A Notice of Funding Availability will be published periodically in
the Federal Register containing the amounts of funds available, funding
criteria, where to obtain and submit applications, the deadline for the
submissions, and further explanation of the selection criteria.
Sec. 964.330 Grant Set-Aside Assistance.
The Department may make available five percent (5%) of any amounts
available in each fiscal year (subsequent to the first funding cycle)
available to eligible HAs to supplement grants previously awarded under
this program. These supplemental grants would be awarded if the HA
demonstrates that the funds cannot otherwise be obtained and are needed
to maintain adequate levels of services to residents.
Sec. 964.335 Grant agreement.
(a) General. HUD will enter into a grant agreement with the
recipients of a Family Investment Centers grant, which defines the
legal framework for the relationship between HUD and a HA.
(b) Term of grant agreement. A grant will be for a term of three to
five years depending upon the tasks undertaken, as defined under this
subpart.
Sec. 964.340 Resident compensation.
Residents employed to provide services or renovation or conversion
work funded under this program shall be paid at a rate not less than
the highest of:
(a) The minimum wage that would be applicable to the employees
under the Fair Labor Standards Act of 1938 (FLSA), if section 6(a)(1)
of the FLSA applied to the resident and if the resident were not exempt
under section 13 of the FLSA;
(b) The State or local minimum wage for the most nearly comparable
covered employment; or
(c) The prevailing rate of pay for persons employed in similar
public occupations by the same employer.
Sec. 964.345 Treatment of income.
Program participation shall begin on the first day the resident
enters training or begins to receive services. Furthermore, the
earnings of and benefits to any HA resident resulting from
participation in the FIC program shall not be considered as income in
computing the resident's total annual income that is used to determine
the resident rental payment during:
(a) The period that the resident participates in the program; and
(b) The period that begins with the commencement of employment of
the resident in the first job acquired by the resident after completion
of the program that is not funded by assistance under the 1937 Act, and
ends on the earlier of:
(1) The date the resident ceases to continue employment without
good cause; or
(2) The expiration of the 18-month period beginning on the date of
commencement of employment in the first job not funded by assistance
under this program. (See Sec. 913.106, Annual Income.)
Sec. 964.350 Administrative requirements.
The HUD Inspector General, the Comptroller General of the United
States, or any duly authorized representative shall have access to all
records required to be retained by this subpart or by any agreements
with HUD for the purpose of audit or other examinations.
(a) Each HA receiving a grant shall submit to HUD an annual
progress report, participant evaluation and assessment data and other
information, as needed, regarding the effectiveness of FIC in achieving
self-sufficiency.
(b) The policies, guidelines, and requirements of OMB Circular Nos.
A-110 and A-122 are applicable with respect to the acceptance and use
of assistance by private nonprofit organizations.
PART 990--ANNUAL CONTRIBUTIONS FOR OPERATING SUBSIDY
8. The authority citation for part 990 would continue to read as
follows:
Authority: 42 U.S.C. 1437g and 3535(d).
9. In Sec. 990.108, a new paragraph (f) would be added, to read as
follows:
Sec. 990.108 Other costs.
* * * * *
(f) Funding for Resident Council Expenses. In accordance with the
provisions of 24 CFR part 964 and procedures determined by HUD, each HA
with a duly elected resident council shall include in the operating
subsidy eligibility calculation, $25 per unit per year in support of
the duly elected resident council's activities.
* * * * *
9. A new subpart D, consisting of Secs. 990.401 through 990.405,
would be added to read as follows:
Subpart D--Resident Management Corporations Operating Subsidy
Sec.
990.401 Calculation of operating subsidy.
990.402 Calculation of total income and preparation of operating
budget.
990.403 Adjustments to total income.
990.404 Retention of excess revenues.
990.405 Use of retained revenues.
Subpart D--Resident Management Corporations Operating Subsidy
Sec. 990.401 Calculation of operating subsidy.
Operating subsidy will be calculated separately for any project
managed by a resident management corporation. This subsidy computation
will be the same as the separate computation made for the balance of
the projects in the PHA in accordance with this part, with the
following exceptions:
(a) The project managed by a resident management corporation will
have an Allowable Expense Level based on the actual expenses for the
project in the fiscal year immediately preceding management under this
subpart. These expenditures will include the project's share of any
expenses which are overhead or centralized PHA expenditures. The
expenses must represent a normal year's expenditures for the project,
and must exclude all expenditures which are not normal fiscal year
expenditures as to amount or as to the purpose for which expended.
Documentation of this expense level must be presented with the project
budget and approved by HUD. Any project expenditures funded from a
source of income other than operating subsidies or income generated by
the locally owned public housing program will be excluded from the
subsidy calculation. For budget years after the first budget year under
management by the resident management corporation, the Allowable
Expense Level will be calculated as it is for all other projects in
accordance with Sec. 990.105(e)(5).
(b) The resident management corporation project will estimate
dwelling rental income based on the rent roll of the project
immediately preceding the assumption of management responsibility under
this subpart, increased by the estimate of inflation of tenant income
used in calculating PFS subsidy.
(c) The resident management corporation will exclude, from its
estimate of other income, any increased income directly generated by
activities by the corporation or facilities operated by the
corporation.
(d) Any reduction in the subsidy of a PHA that occurs as a result
of fraud, waste, or mismanagement by the PHA shall not affect the
subsidy calculation for the resident management corporation project.
Sec. 990.402 Calculation of total income and preparation of operating
budget.
(a) Subject to Sec. 990.403 of this section, the amount of funds
provided by a PHA to a project managed by a resident management
corporation under this subpart may not be reduced during the three-year
period beginning on February 5, 1988 or on such later date as a
resident management corporation first assumes management responsibility
for the project.
(b) For purposes of determining the amount of funds provided to a
project under Sec. 990.402(a) of this section, the provision of
technical assistance by the PHA to the resident management corporation
will not be included.
(c) The resident management corporation and the PHA shall submit a
separate operating budget, including the calculation of operating
subsidy eligibility in accordance with Sec. 990.401 of this section,
for the project managed by a resident management corporation to HUD for
approval. This budget will reflect all project expenditures and will
identify which expenditures are related to the responsibilities of the
resident management corporation and which are related to the functions
which will continue to be performed by the PHA.
(d) Each project or part of a project that is operating in
accordance with the ACC amendment relating to this subpart and in
accordance with a contract vesting maintenance responsibilities in the
resident management corporation will have transferred, into a sub-
account of the operating reserve of the host PHA, an operating reserve.
Where all maintenance responsibilities for the resident-managed project
are the responsibility of the corporation, the amount of the reserve
made available to projects under this subpart will be the per unit cost
amount available to the PHA operating reserve, exclusive of all
inventories, prepaids and receivables (at the end of the PHA fiscal
year preceding implementation), multiplied by the number of units in
the project operated in accordance with the provision of this subpart.
Where some, but not all, maintenance responsibilities are vested in the
resident management corporation, the contract may provide for an
appropriately reduced portion of the operating reserve to be
transferred into the corporation's sub-account.
(e) The use of the reserve will be subject to all administrative
procedures applicable to the conventionally owned public housing
program. Any expenditure of funds from the reserve will be for eligible
expenditures which are incorporated into an operating budget subject to
approval by HUD.
(f) Investment of funds held in the reserve will be in accordance
with the provisions of Chapter 4 of the Financial Management Handbook,
7476.1 REV.1 and interest generated will be included in the calculation
of operating subsidy in accordance with this part.
Sec. 990.403 Adjustments to total income.
(a) Operating subsidy calculated in accordance with Sec. 964.401
will reflect changes in inflation, utility rates and consumption, and
changes in the number of units in the resident management project.
(b) In addition to the amount of income derived from the project
(from sources such as rents and charges) and the operating subsidy
calculated in accordance with Sec. 990.401 of this subpart, the
contract may specify that income be provided to the project from other
sources of income of the PHA.
(c) The following conditions may not affect the amounts to be
provided to a project managed by a resident management corporation
under this subpart:
(1) Any reduction in the total income of a PHA that occurs as a
result of fraud, waste, or mismanagement by the PHA.
(2) Any change in the total income of a PHA that occurs as a result
of project-specific characteristics that are not shared by the project
managed by the corporation under this subpart.
Sec. 990.404 Retention of excess revenues.
(a) Any income generated by a resident management corporation that
exceeds the income estimated for the income category involved as
specified in the RMC's management contract must be excluded in
subsequent years in calculating: (1) The operating subsidy provided to
a PHA under part 990 subpart A of this chapter.
(2) The funds provided by the PHA to the resident management
corporation.
(b) The management contract must specify the amount of income
expected to be derived from the project (from sources such as rents and
charges) and the amount of income to be provided to the project from
the other sources of income of the PHA (such as operating subsidy under
part 990 subpart A of this chapter, interest income, administrative
fees, and rents). These income estimates must be calculated on a PHA-
wide basis, as well as for each category of income on which the PHA and
the resident management corporation agree, consistent with HUD's
administrative instructions. Income estimates may provide for proration
of anticipated project income between the corporation and the PHA,
based upon the management and other project-associated responsibilities
(if any) that are to be retained by the PHA under the contract.
Sec. 990.405 Use of retained revenues.
Any revenues retained by a resident management corporation under
Sec. 990.404 of this subpart may only be used for purposes of improving
the maintenance and operation of the project, establishing businesses
enterprises that employ residents of public housing, or acquiring
additional dwelling units for lower income families. Units acquired by
the resident management corporation will not be eligible for payment of
operating subsidy.
Dated: April 11, 1994.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 94-9319 Filed 4-18-94; 8:45 am]
BILLING CODE 4210-33-P
