94-16916. Public Housing Development; Major Reconstruction of Obsolete Public Housing; Proposed Rule DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT  

  • [Federal Register Volume 59, Number 133 (Wednesday, July 13, 1994)]
    [Unknown Section]
    [Page 0]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-16916]
    
    
    [[Page Unknown]]
    
    [Federal Register: July 13, 1994]
    
    
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    Part IV
    
    
    
    
    
    Department of Housing and Urban Development
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    Office of the Assistant Secretary for Public and Indian Housing
    
    
    
    _______________________________________________________________________
    
    
    
    24 CFR Part 941
    
    
    
    
    Public Housing Development; Major Reconstruction of Obsolete Public 
    Housing; Proposed Rule
    DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
    
    Office of the Assistant Secretary for Public and Indian Housing
    
    24 CFR Part 941
    
    [Docket No. R-94-1737; FR-3621-P-01]
    RIN 2577-AB41
    
     
    Public Housing Development; Major Reconstruction of Obsolete 
    Public Housing (MROP)
    
    AGENCY: Office of the Assistant Secretary for Public and Indian 
    Housing, HUD.
    
    ACTION: Proposed rule.
    
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    SUMMARY: This proposed rule would add a new subpart F to the 
    Department's regulations at 24 CFR part 941, which govern public 
    housing development by public housing agencies. The new subpart F would 
    set forth the requirements and procedures applicable to the major 
    reconstruction of obsolete public housing (MROP) projects. This 
    proposed rule also would implement the provisions of section 111 of the 
    Housing and Community Development Act of 1992 which pertain to MROP 
    projects. The specific provisions that would comprise subpart F are 
    discussed in the Supplementary Information section of this document.
    
    DATES: Comment Due Date: September 12, 1994.
    
    ADDRESSES: Interested persons are invited to submit comments regarding 
    this rule to the Office of General Counsel, Rules Docket Clerk, Room 
    10276, Department of Housing and Urban Development, Washington, DC 
    20410-0500. Comments should refer to the above docket number and title. 
    Facsimile (FAX) comments 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: Janice Rattley, Director, Office of 
    Construction, Rehabilitation, and Maintenance, Public and Indian 
    Housing, Department of Housing and Urban Development, Room 4230, 451 
    Seventh Street, SW., Washington, DC 20410-5000, telephone (202) 708-
    1015. (This is not a toll-free number.) Hearing- or speech-impaired 
    individuals may contact this office via TDD by calling (202) 708-9300 
    (which is not a toll-free number) or 1-800-877-8339 (which is a toll-
    free number).
    
    SUPPLEMENTARY INFORMATION:
    
    I. Paperwork Reduction Act Statement
    
        The information collection requirements contained in part 941 have 
    been previously approved by the Office of Management and Budget under 
    the Paperwork Reduction Act of 1980, and assigned the stated OMB 
    approval numbers: 
    
                                                                            
    ------------------------------------------------------------------------
       New rule section           Rule section             Approval No.     
    ------------------------------------------------------------------------
    941.606................  941.302, 402, 403, 406.  2577-0033, 0164, 0104.
    941.607................  941.404................  2577-0033, 0024, 0036.
    ------------------------------------------------------------------------
    
    II. Background
    
        Sections 4 and 5 of the United States Housing Act of 1937 (42 
    U.S.C. 1437b, 1437c and 1437g) (the Act) authorize the Department to 
    provide technical and financial assistance to public housing agencies 
    (PHAs) for the development of low income housing projects, including 
    the major reconstruction of obsolete public housing projects. The 
    Department's regulations at 24 CFR part 941 establish: the requirements 
    and procedures for the development of low-income housing (excluding 
    Indian housing) by PHAs; development methods to be utilized for public 
    housing projects; PHA eligibility requirements; the application and 
    proposal procedures and other program requirements, which include a 
    number of Federal statutory and administrative requirements applicable 
    to public housing development.
        The Department will in the future publish under a separate proposed 
    rule comprehensive changes to part 941 that reflect the Department's 
    redesign of the public housing development program.
        This proposed rule is more limited and would only add a new subpart 
    F to the existing part 941 to address the requirements and procedures 
    applicable to the major reconstruction of obsolete public housing 
    (MROP) projects. Section 111(a) of the Housing and Community 
    Development Act of 1992 (Pub. L. 102-550, approved October 28, 1992) 
    (the 1992 Act) amends section 5(j)(2) of the Act regarding MROP 
    projects. Section 5(j)(2), among other things, provides a definition 
    for ``obsolete public housing project or building''; specifies that 
    funding for MROP will be distributed on the basis of competition; and 
    lists the criteria by which PHAs will be awarded funds. In accordance 
    with sections 111(c) and 191 of the 1992 Act, which provide for 
    rulemaking to implement section 111, this proposed rule would implement 
    the provisions of section 111(a). The regulatory sections that would 
    comprise subpart F are as follows:
        Section 941.601. This section would provide that subpart F sets 
    forth the basic policies and general requirements applicable to MROP 
    projects. With respect to applicability, this section would provide 
    that, unless otherwise stated, subpart F would apply to all MROP 
    projects funded in Federal Fiscal Year 1995 and thereafter.
        Section 941.602. This section would address MROP funding by 
    providing that any notice of funding availability (NOFA) issued under 
    24 CFR part 941, subpart F, will reflect the current statutory 
    requirements applicable to MROP projects.
        Section 941.603. This section would describe the criteria a project 
    must meet to be eligible for MROP funding. Some of the eligibility 
    requirements, listed in this section, include the following: the 
    project must be a rental project, and not a homeownership project; the 
    project must have been financed under section 5 of the Act and be under 
    an Annual Contributions Contract (ACC), or be a section 23 bond 
    financed leased housing project which meets certain conditions; the 
    existing project must have had an approved actual development cost 
    certificate (ADCC) for five years before the application submission 
    deadline; and the project must be determined to be obsolete. With 
    respect to the determination of obsolete, the requirements of section 
    5(j)(2) of the Act, as added by section 111 of the 1992 Act are being 
    incorporated.
        In accordance with section 5(j)(2)(E) of the Act, Sec. 941.603 
    would prohibit MROP assistance to any project or building assisted 
    within five years of the MROP application by Comprehensive Improvement 
    Assistance Program (CIAP) or Comprehensive Grant Program (CGP) 
    modernization funds under section 14 of the Act (through inclusion in 
    an approved ``annual statement of work''). A proposed MROP which 
    received emergency modernization funding within the time frame is 
    excluded from the five-year prohibition stated above.
        Section 941.604. This section would address the limitations imposed 
    on the use of MROP funds.
        Section 941.605. This section would describe the general 
    requirements applicable to the MROP program; these include (1) those 
    set forth in subpart A of part 941, with the exception that MROP 
    projects may only be developed by: (a) sealed bid method with award to 
    the lowest responsible bidder; or (b) competitive proposal method 
    whereby the PHA would execute a fixed price contract in which the 
    contractor would be responsible for design of specific work items in 
    the Request for Proposals, soliciting and contracting for construction 
    work, contract administration and construction administration and 
    construction inspection; the contract would either provide progress 
    payments, or a lump sum payment after successful completion of all 
    work; and (2) the requirements set forth in subpart B, with certain 
    exceptions. With respect to the new MROP cost limit system required by 
    section 5(j)(2)(D) of the Act, a methodology is proposed in this 
    section.
        Section 941.606. This section would describe the application 
    submission requirements of the MROP program.
        Section 941.607. This section would address the MROP proposal and 
    would provide that MROP proposals must comply with the provisions of 
    Sec. 941.404.
        Section 941.608. This section would address MROP project 
    development and would provide for compliance with the procedures and 
    requirements of subpart E, except as modified by Sec. 941.608.
        In the regulatory text that follows the preamble section ``Other 
    Matters,'' the reader should note that the terms ``Act'' and ``ACC'' 
    are not defined in subpart F, because these terms are defined in 
    subpart A of part 941. The ``Act'' refers, as previously noted, to the 
    United States Housing Act of 1937, and ``ACC'' refers to Annual 
    Contributions Contract.
    
    Other Matters
    
    Environmental Impact
    
        A Finding of No Significant Impact with respect to the environment 
    has been made in accordance with HUD regulations at 24 CFR part 50, 
    which implement section 102(2)(C) of the National Environmental Policy 
    Act of 1969. The Finding 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.
    
    Impact on Small Entities
    
        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 will not have a 
    significant economic impact on a substantial number of small entities. 
    The rule's major effect is on public housing agencies (PHAs) which are 
    state and local governmental entities. The proposed rule adds a new 
    subpart for the major reconstruction of obsolete public housing 
    projects, as required by the Act, and incorporates provisions requested 
    by industry groups; as such, it is anticipated that it will be 
    considered beneficial to PHAs.
    
    Federalism Impact
    
        The General Counsel, as the Designated Official under section 6(a) 
    of Executive Order No. 12612, Federalism, has determined that this 
    proposed rule would not have a substantial, direct effect on the States 
    or their political subdivisions or on the relationship between the 
    Federal government and the States, or on the distribution of power or 
    responsibilities among the various levels of government. No significant 
    change in the relationships or responsibilities of the various levels 
    of government will result from this proposed rule.
    
    Impact on the Family
    
        The General Counsel, as the Designated Official under Executive 
    Order 12606, The Family, has determined that this proposed rule would 
    not have a potential for significant impact on family formation, 
    maintenance, and general well-being and thus is not subject to review 
    under the Order. No significant change in existing HUD policies or 
    programs will result from promulgation of this rule, as those policies 
    and programs relate to family concerns.
    
    Regulatory Agenda
    
        This proposed rule was listed as sequence number 1684 in the 
    Department's Semiannual Agenda of Regulations published on April 25, 
    1994 (59 FR 20424, 20469) under Executive Order 12866 and the 
    Regulatory Flexibility Act.
    
    Catalog of Federal Domestic Assistance Programs
    
        The Catalog of Federal Domestic Assistance Program title and number 
    is 14.850, Public and Indian Housing.
    
    List of Subjects in 24 CFR Part 941
    
        Grant programs--housing and community development, Loan programs--
    housing and community development, Public housing.
    
        Accordingly, 24 CFR part 941 would be amended as follows:
    
    PART 941--PUBLIC HOUSING DEVELOPMENT
    
        1. The authority citation for part 941 would continue to read as 
    follows:
    
        Authority: 42 U.S.C. 1437b, 1437c, and 1437g; 42 U.S.C. 3535(d).
    
        2. A new subpart F, consisting of Secs. 941.601-941.608, would be 
    added to read as follows:
    
    Subpart F--Major Reconstruction of Obsolete Public Housing (MROP) 
    Projects
    
    Sec.
    941.601  Scope and applicability.
    941.602  MROP funding.
    941.603  MROP eligibility criteria.
    941.604  Uses of MROP funding.
    941.605  General program requirements.
    941.606  MROP application.
    941.607  MROP proposal.
    941.608  MROP project development.
    
    Subpart F--Major Reconstruction of Obsolete Public Housing (MROP) 
    Projects
    
    
    Sec. 941.601  Scope and applicability.
    
        (a) Scope. This subpart F sets forth the basic policies and general 
    requirements for the public housing Major Reconstruction of Obsolete 
    Public Housing (MROP) projects program originally instituted pursuant 
    to the FY 1986 HUD-Independent Agencies Appropriations Act, and 
    thereafter covered by section 5(j), as amended by section 111 of the 
    Housing and Community Development Act of 1992 (42 U.S.C. 1437c(j)(2)). 
    Unless otherwise stated in this subpart F, subparts A through E of part 
    941 apply to MROPs.
        (b) Applicability. Unless otherwise stated herein, this subpart 
    applies in its entirety to all MROP projects funded in FY 1995 and 
    thereafter, beginning with their current development processing and 
    monitoring stage. All MROP projects funded prior to the effective date 
    of this regulation shall continue to comply with the criteria on which 
    their selection for funding was based.
        (c) PHA Eligibility. PHAs eligible for MROP funding are those which 
    have the required legal authority and local cooperation stated under 
    Sec. 941.201. An eligible PHA may include a troubled PHA, and if 
    included, the criteria which a troubled PHA must meet to be eligible 
    for funding will be specified in the notice of funding availability 
    issued in accordance with this subpart.
    
    
    Sec. 941.602  MROP funding.
    
        While section 5(j)(2) of the Act limits MROP funding to no more 
    than 20 percent of available funding, recent Appropriation Acts have 
    provided that HUD may approve applications for development and/or MROP 
    based on applications submitted, or pursuant to a statutory funding 
    set-aside. As a result, any notice of funding availability (NOFA) 
    issued pursuant to 24 CFR part 941 will reflect the applicable 
    statutory requirements.
    
    
    Sec. 941.603  MROP eligibility criteria.
    
        To be eligible for MROP funding, a project must meet the following 
    criteria:
        (a) Rental. The project must be rental and not homeownership.
        (b) Federally assisted PHA-owned. The project must have been 
    financed under section 5 of the Act and under ACC; or be a section 23 
    bond financed leased housing project which was converted to public 
    housing by ACC amendment and is now covered by a cooperation agreement, 
    has clear title vested in the PHA, and there are no legal obstacles 
    affecting the PHA's use of the project during the required additional 
    40-year term of the ACC.
        (c) Five-year ADCC. The existing project must have had an approved 
    actual development cost certificate (ADCC) for five years or more prior 
    to the application submission deadline of the NOFA.
        (d) Obsolete project. The existing project must be determined to be 
    obsolete; i.e., the project, or that portion designated to comprise the 
    MROP project, must have design or marketability problems that have 
    resulted in:
        (1) Current vacancies of more than 25 percent of the units 
    available for occupancy; or
        (2)(i) Estimated costs for redesign, reconstruction or 
    redevelopment (including any costs for lead-based paint abatement 
    activities) that exceed 70 percent of the total current development 
    cost limits for new construction of similar units in the area, but not 
    more than 100 percent of the maximum cost based on the most recently 
    issued MROP limits issued pursuant to section 5(j)(2)(D) of the Act 
    (see Sec. 941.605(b)(2)); and
        (ii) The project or building has: an occupancy density or a 
    building height that is significantly in excess of that which prevails 
    in the neighborhood; or a bedroom configuration that could be altered 
    to better serve the needs of families seeking occupancy to public 
    housing; significant security problems in and around the project; or 
    significant physical deterioration or inefficient energy and utility 
    systems.
        (3) The deficiencies must have been determined correctable under 
    the Comprehensive Grant Program (CGP) or the Comprehensive Improvement 
    Assistance Program (CIAP) procedures (see 24 CFR part 968 and related 
    issuances to ensure long-term viability).
        (e) Long-term viability. The project must be determined to have 
    long-term viability (i.e., a useful life with full occupancy) of more 
    than 20 years after completion of reconstruction, and the ACC for the 
    MROP project must remain in effect for 40 years.
        (f) MROP project composition. (1) An MROP project may consist of 
    one or more or all of the buildings of a single existing public housing 
    project, provided that the funds reserved are sufficient to complete 
    all the necessary redesign, reconstruction, or redevelopment for the 
    entire structure(s) designated for the MROP project. Where funds 
    available in a given year are insufficient or would require a 
    disproportionate amount to fund all of the buildings of an existing 
    project, staging over several years is not permitted, and the existing 
    project must be separated by buildings (individually or in a 
    combination) into portions to establish separate MROP projects, each to 
    be funded separately, and each having a separate project number. The 
    funds for each MROP project must be kept separate and may not be 
    commingled.
        (2) If a PHA submits an MROP application for an entire project and 
    it is determined to be approvable under a NOFA published after the 
    effective date of this regulation, but because of funding limitations 
    only a part of the project is funded, if funds become available in a 
    future fiscal year, additional buildings of the project may be approved 
    for MROP without regard to vacancy, cost and viability criteria of 
    paragraph (e) of this section under a subsequent NOFA, provided that:
        (i) An application for a separate MROP project, or any portion of 
    the project not funded, is submitted in response to a subsequent NOFA, 
    and meets threshold approvability, and all other NOFA requirements, 
    except for vacancy, cost and viability requirements; and
        (ii) Is selected on the basis of its rating and ranking among other 
    MROP applications submitted in response to the NOFA.
        (g) MROP with modernization. MROP assistance may not be provided 
    for any project or building assisted within five years of the MROP 
    application by CGP or CIAP modernization funds under section 14 of the 
    Act (through inclusion in an approved ``annual statement of work'') or 
    HOPE VI under the FY 1993 and 1994 Appropriation Acts.
        (h) MROP with Demo/Dispo. Demolition/disposition (demo/dispo) of 
    existing units may be included as part of an MROP only if required to 
    meet the long-term viability requirement; however, 75 percent of the 
    units in the project or portion of the project which comprise the MROP 
    application must be reconstructed. An MROP application which involves 
    partial demo/dispo must either indicate the date that a demo/dispo 
    application was approved by HUD, or the date the demo/dispo application 
    was submitted. If the demo/dispo application was not approved by the 
    date of the MROP application, the MROP application must be accompanied 
    by evidence of the approval by the unit of general local government in 
    which the project is located; this approval may be obtained from the 
    Chief Executive Officer.
        (i) MROP with unit conversions. Conversions are not subject to 
    section 18 of the Act; however, a proposed conversion must be approved 
    before an MROP involving a conversion may be approved, or an 
    application for said conversion must have been submitted (see 
    Sec. 941.604(d)).
    
    
    Sec. 941.604   Uses of MROP funding.
    
        The following establish limitations on the use of MROP funds:
        (a) Management improvements. Management improvements limited to the 
    MROP project are eligible costs under MROP to the extent that such 
    proposed management improvement is necessary for the viability of the 
    project; i.e., to maintain the proposed physical improvements of the 
    MROP project.
        (b) Development and property acquisition. Development of additional 
    units is an ineligible cost under MROP.
        (c) Demo/dispo and replacement. The MROP project may include the 
    cost of approved demo/dispo pursuant to Sec. 941.603(h). MROP funds may 
    not be used for replacement housing.
        (d) MROP conversion of units. Costs of converting existing dwelling 
    units to different bedroom sizes or to nondwelling space are eligible 
    MROP costs only as follows:
        (1) It must be demonstrated that the units proposed for conversion 
    are in excess of the needs of the PHA and there is a greater need for 
    the proposed converted units; and
        (2) The proposed conversion must not result in a net reduction 
    greater than that permitted under Sec. 941.603(h).
        (e) MROP conversion of non-dwelling space. Conversion from non-
    dwelling use to dwelling use is permitted under MROP. Conversion in use 
    of non-dwelling space (e.g., community to management or vice versa) is 
    eligible under MROP.
        (f) Duplicate funding. The PHA shall not receive duplicate funding 
    for the same work item or activity under any circumstance, and shall 
    establish controls to assure that any activity, program, or project 
    that is funded under any other HUD program, shall not be funded by 
    MROP.
    
    
    Sec. 941.605   General program requirements.
    
        (a) Subpart A. Subpart A of part 941 is applicable to the MROP 
    program, except that MROP projects may only be developed by:
        (1) Sealed bid procurement method with award to the lowest 
    responsible bidder; or
        (2) Competitive proposal method, whereby the PHA would execute a 
    fixed price contract in which the contractor would be responsible for 
    design of specific work items identified in the Request for Proposals, 
    soliciting and contracting for construction work, contract 
    administration and construction inspection; the contract could either 
    provide for progress payments, as in the sealed bid method, or a lump 
    sum after successful completion of all work.
        (b) Subpart B. Subpart B of this part applies to the MROP program, 
    except:
        (1) Since the site is already owned and the structures are already 
    present, the following provisions of subpart B are not applicable to 
    the MROP program: Sec. 941.202 (concerning site and neighborhood 
    standards); Sec. 941.203 (a), (e) and (f) (concerning certain 
    requirements of the design and construction standards); Sec. 941.206 
    (concerning eligible properties); and Sec. 941.405(b)(1) (concerning 
    the section 213 review). Instead, the modernization and energy 
    conservation standards set forth in 24 CFR part 968 are applicable and 
    the environmental requirements must be met before an MROP application 
    may be approved, as under CIAP (24 CFR part 968). The Intergovernmental 
    Review under Executive Order 12372 (see Sec. 941.405(b)(2)) must be 
    completed before an MROP application may be approved.
        (2) Pursuant to section 5(j)(2)(D) of the Act, HUD will establish 
    limitations on the total costs for MROP recognizing the higher direct 
    costs of MROP work as related to new development and modernization, and 
    the requirements of Sec. 941.204 are therefore modified. The total MROP 
    cost (TMC) limitations which HUD establishes will be used as a maximum 
    for the purpose of reserving the funds for MROP projects and represent 
    the maximum TMC that may be approved and included in the ACC for an 
    MROP project.
        (i) As in the case of the total development cost (TDC) limitations 
    under Sec. 941.204, the TMC limitations are established for specific 
    unit sizes (i.e., number of bedrooms) and structure types (i.e., 
    detached, semi-detached, row, walk-up and elevator), and market areas 
    (which are areas where trade conditions and economic influences tend to 
    make costs substantially the same); they will be issued periodically by 
    notice sent to all PHAs; and any donations will be treated in the same 
    way as stated in Sec. 941.204(d).
        (ii) The TMC limitations shall be determined by doubling the 
    average of two nationally recognized residential construction cost 
    indices for good and sound quality housing.
        (3) Since eligibility for MROP is based on different cost 
    requirements, Sec. 941.406(a)(1), which concerns maximum TDC at fund 
    reservation, is modified to provide that the total MROP project cost 
    that may be approved with HUD funds at the time of initial fund 
    reservation, is limited to at least 70 percent of the maximum TDC based 
    on the most recently issued TDC limitations for new construction of 
    similar units in the area, but not more than 100 percent of the maximum 
    TMC based on the MROP limitations most recently issued pursuant to 
    section 5(j)(2)(D) of the Act (see Sec. 941.605(b)(2)), except that the 
    reservation amount will be trended by projected construction cost 
    increases over the next 18 months. In addition, Sec. 941.406(a)(2) 
    which concerns maximum TDC after fund reservation, is inapplicable; 
    there will be no amendment funds to increase the original amount of the 
    MROP activities fund reservation.
        (4) A development project for MROP activities must have long-term 
    viability (see Sec. 941.603(e)) after completion of reconstruction and 
    the annual contributions contract (ACC) for the MROP project must 
    remain in effect for 40 years. In determining viability, the PHA must 
    have a comprehensive plan (funded from other sources such as CIAP, CGP 
    or donations, etc.) for the project for which the development funds for 
    MROP activities are being requested. The comprehensive plan for the 
    project may be part of the PHA's comprehensive plan for modernization. 
    The comprehensive plan must demonstrate a strategy which will assure 
    that the entire development will be viable for a minimum period of 20 
    years. This strategy may include, but not be limited to, an estimate of 
    the required amount needed for rehabilitation of the remaining portion 
    of the development to the extent additional rehabilitation is required; 
    sources of funding for any additional work; any proposed demolition/
    disposition that may be planned; and written evidence of local 
    government and resident support for the strategy.
    
    
    Sec. 941.606  MROP application.
    
        Eligibility for MROP application approval shall be determined using 
    the CIAP application and procedures under 24 CFR part 968, as modified 
    by the regulations of this part.
        (a) Application submission. To apply for MROP funds, an eligible 
    PHA shall submit a CIAP application in the form prescribed by HUD to 
    the appropriate HUD Office in response to an issued NOFA. The 
    application must identify the entire existing project, the portion 
    proposed as the MROP project, explain how the PHA and the requested 
    MROP meet the eligibility, rating and other criteria of the NOFA, 
    identify the proposed physical and management improvement needs, 
    estimated costs and funding sources.
        (1) The application must include a statement of the PHA's 
    priorities for receiving funding, and if it is submitting more than one 
    application, whether it will accept funding for fewer units than 
    requested (refusal to accept fewer units may result in application non-
    funding due to a disproportionate requirement for funds), and indicate 
    whether the application should be considered for CIAP funding, if 
    appropriate, if the project is determined ineligible for MROP.
        (2) The application must be accompanied by a PHA Resolution and 
    certifications required under the NOFA that the PHA will comply with 
    the requirements of 24 CFR part 941.
        (3) If demo/dispo or conversion is needed for long-term viability 
    after reconstruction, the PHA must so state in its MROP application and 
    advise as to the status of its demo/dispo or conversion application 
    (see 24 CFR 941.603 (h) and (i)).
        (b) Application receipt and processing. HUD Offices will receive, 
    screen applications, and notify PHAs under the deficiency notice 
    procedure set forth in the NOFA issued for fund availability under 24 
    CFR part 941.
        (1) Review, rating and ranking, and selection for funding shall 
    occur in accordance with the criteria stated in the published NOFA, 
    which for MROP shall be largely based on the PHA's management 
    capability to carry out the proposed MROP activities (considering the 
    PHA's latest rating under the Public Housing Management Assessment 
    Program), the expected term of useful life of the project or building 
    after completion of proposed MROP activities, the likelihood of 
    achieving full occupancy within the project or building after 
    completion of MROP activities, and such other factors as the Secretary 
    may determine, including statutory provisions which may cause the above 
    factors to change.
        (2) Funds shall be reserved in accordance with Sec. 941.605(b)(2), 
    and PHAs shall be notified in accordance with the NOFA issued for 
    funding availability under 24 CFR part 941.
    
    
    Sec. 941.607   MROP proposal.
    
        Following application approval and fund reservation, MROP projects 
    will be processed under the development procedures and a project 
    planning conference to discuss program requirements and the time 
    schedule shall be held. The PHA shall incorporate its approved 
    application into a proposal described in Sec. 941.404, and upon its 
    approval, an ACC will be executed in the form prescribed by HUD.
    
    
    Sec. 941.608   MROP project development.
    
        MROP project development shall proceed in accordance with subpart 
    E, with the following modifications:
        (a) No site/property acquisition. Since the property is already 
    owned, Sec. 941.501 is inapplicable.
        (b) Development method. If the sealed bid method is used (as 
    described in Sec. 941.605) only Secs. 941.502 (a) and (b) are 
    applicable; however, no cost adjustments shall be made. If the 
    competitive proposal method is used, Sec. 941.502 is inapplicable, and 
    Sec. 941.605(a)(2) shall be followed.
        (c) Reconstruction, acceptance of contract work, and completion. 
    Sections 941.503 (concerning reconstruction requirements), 941.504 
    (concerning acceptance of contract work), and 941.505 (concerning 
    completion of development) are applicable to MROP projects, except that 
    there shall be no initial operating period or cost as under 
    Sec. 941.505(a) since the PHA will be receiving operating subsidy for 
    the units under the original project until completion of the MROP 
    project. A Date of Full Availability (DOFA) shall be established as the 
    last day of the month in which substantially all the units in the MROP 
    project are available for occupancy after reconstruction; the PHA and 
    HUD will execute an amendment to the ACC to remove the units of the 
    MROP project from the original development project, and initiate the 
    operating subsidy for the MROP project units, both effective as the end 
    of the quarter in which DOFA was achieved. Changes to applicable data 
    systems shall also be effective as of that date.
    
        Dated: June 13, 1994.
    Michael B. Janis,
    General Deputy, Assistant Secretary for Public and Indian Housing.
    [FR Doc. 94-16916 Filed 7-12-94; 8:45 am]
    BILLING CODE 4210-33-P
    
    
    

Document Information

Published:
07/13/1994
Entry Type:
Uncategorized Document
Action:
Proposed rule.
Document Number:
94-16916
Dates:
Comment Due Date: September 12, 1994.
Pages:
0-0 (1 pages)
Docket Numbers:
Federal Register: July 13, 1994
CFR: (13)
24 CFR 941.605(a)(2)
24 CFR 941.505(a)
24 CFR 941.604(d))
24 CFR 941.201
24 CFR 941.404
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