99-27303. Direct Funding of Public Housing Resident Management Corporations  

  • [Federal Register Volume 64, Number 203 (Thursday, October 21, 1999)]
    [Proposed Rules]
    [Pages 56890-56892]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-27303]
    
    
    
    [[Page 56889]]
    
    _______________________________________________________________________
    
    Part V
    
    
    
    
    
    Department of Housing and Urban Development
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    24 CFR Part 964
    
    
    
    Direct Funding of Public Housing Resident Management Corporations; 
    Proposed Rule
    
    Federal Register / Vol. 64, No. 203 / Thursday, October 21, 1999 / 
    Proposed Rules
    
    [[Page 56890]]
    
    
    
    DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
    
    24 CFR Part 964
    
    [Docket No. FR-4501-P-01]
    RIN 2577-AC12
    
    
    Direct Funding of Public Housing Resident Management Corporations
    
    AGENCY: Office of the Assistant Secretary for Public and Indian 
    Housing, HUD.
    
    ACTION: Proposed rule.
    
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    SUMMARY: This proposed rule revises HUD's regulations regarding 
    resident participation and resident opportunities in public housing. 
    Specifically, the rule would make conforming amendments to the HUD 
    regulations to reflect recent statutory changes made by the Quality 
    Housing and Work Responsibility Act of 1998. The proposed rule provides 
    that a resident management corporation (RMC) may receive capital and 
    operating funds from HUD if the RMC has primary management 
    responsibility for the public housing project and HUD determines that 
    the RMC has the capacity to effectively discharge such responsibility.
    
    DATES: Comments Due Date: December 20, 1999.
    
    ADDRESSES: Interested persons are invited to submit comments regarding 
    this proposed rule to the Regulations Division, Office of General 
    Counsel, Room 10276, Department of Housing and Urban Development, 451 
    Seventh Street, SW, Washington, DC 20410-0500. Communications 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 between 7:30 a.m. and 5:30 
    p.m. weekdays at the above address.
    
    FOR FURTHER INFORMATION CONTACT: Paula Blunt, Director, Customer 
    Services and Amenities Division, Department of Housing and Urban 
    Development, Office of Public and Indian Housing, 451 Seventh Street, 
    SW, Room 4228, Washington, DC 20410; telephone (202) 619-8201 (this is 
    not a toll-free telephone number). Persons with hearing or speech 
    disabilities may access this number via TTY by calling the free Federal 
    Information Relay Service at 1-800-877-8339.
    
    SUPPLEMENTARY INFORMATION:
    
    I. Background
    
        Section 20 of the United States Housing Act of 1937 (42 U.S.C. 1437 
    et seq.) (the ``1937 Act'') encourages resident management of public 
    housing projects as a means of improving existing living conditions in 
    public housing. HUD has implemented section 20 of the 1937 Act in its 
    regulations at 24 CFR part 964 (captioned ``Tenant Participation and 
    Tenant Opportunities in Public Housing''). Under section 20, and 24 CFR 
    part 964, an RMC must be a nonprofit corporation organized under the 
    laws of the State in which the public housing project is located, and 
    the tenants of the project must be the sole voting members of the RMC.
        An eligible RMC enters into a management contract with the public 
    housing agency (PHA) establishing the respective management rights and 
    responsibilities of the RMC and the PHA. The contract must be 
    consistent with the requirements of the 1937 Act and may provide for 
    the RMC to perform any or all of the management functions for which the 
    PHA is responsible to HUD. The management contract is treated as a 
    contracting out of services and is subject to any provision of a 
    collective bargaining agreement regarding the contracting out of 
    services to which the PHA is subject. To assist and encourage resident 
    management of public housing, HUD is developing a sample management 
    contract for use by RMCs and PHAs. Once completed, the sample contract 
    will be included as part of a broader HUD notice, which will also 
    discuss other issues related to public housing management.
        The performance of the RMC is subject to periodic review by the PHA 
    to ensure that the RMC complies with all applicable requirements and 
    standards of performance.
    
    II. Public Housing Reform
    
        On October 21, 1998, President Clinton signed into law HUD's fiscal 
    year 1999 Appropriations Act, which includes the Quality Housing and 
    Work Responsibility Act of 1998 (Pub. L. 105-276; 112 Stat. 2461, 2522) 
    (the ``Public Housing Reform Act'' or ``Act''). The Public Housing 
    Reform Act constitutes a substantial overhaul of HUD's public housing 
    and Section 8 assistance programs. The changes made by the Public 
    Housing Reform Act are directed at revitalizing and improving HUD's 
    public housing and Section 8 tenant-based programs. These changes are 
    also designed to provide for more resident involvement, and to increase 
    resident participation and awareness in creating and maintaining a 
    positive living environment.
    
    III. This Proposed Rule
    
        This proposed rule would amend 24 CFR part 964 to reflect recent 
    statutory changes made to section 20 of the 1937 Act by section 532 of 
    the Public Housing Reform Act. Section 532 of the Public Housing Reform 
    Act provides for the direct provision of capital and operating 
    assistance to an RMC if: (1) The RMC petitions HUD for the release of 
    the funds; (2) the management contract between the RMC and the PHA 
    provides for the RMC to assume the primary management responsibilities 
    of the PHA; and (3) HUD determines that the RMC has the capability to 
    effectively discharge such responsibilities. In all other cases, 
    operating and capital funding will be provided to the RMC by the PHA.
        The proposed rule provides that HUD will consider this third 
    requirement to be satisfied if the RMC is designated at least a 
    ``standard performer'' under the Public Housing Assessment System 
    (PHAS) (see 24 CFR part 902); and the RMC is not in violation of any 
    financial, accounting, procurement, civil rights, fair housing, or 
    other program requirements that HUD determines call into question the 
    capability of the RMC to effectively discharge its responsibilities 
    under the contract.
        The standard that HUD will use to determine RMC eligibility for 
    direct assistance does not impose any new requirements on RMCs. The 
    proposed rule reflects existing performance measures and program 
    requirements that RMCs must already comply with. For example, RMCs are 
    already subject to the PHAS performance measures described in 24 CFR 
    part 902. Further, RMCs are currently required to comply with all 
    applicable program, civil rights, and financial requirements as a 
    condition of assistance under HUD's public housing programs. HUD 
    believes that the use of existing measures will allow HUD to accurately 
    determine RMC management capability, while minimizing the burdens 
    imposed on RMCs.
        The Annual Contributions Contract between HUD and the PHA will 
    provide for the direct allocation of operating and capital assistance 
    to RMCs that meet the requirements described above. Any direct capital 
    or operating assistance provided to the RMC must be used for purposes 
    of operating the public housing developments of the PHA and for 
    performing other eligible activities with respect to public housing. If 
    HUD provides direct funding to an RMC, the PHA is not responsible for 
    the actions of the RMC.
    
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        In addition to implementing section 532 of the Public Housing 
    Reform Act, this proposed rule would also make one clarifying change to 
    24 CFR part 964. Specifically, this rule would revise Sec. 964.225 
    (entitled ``Resident management requirements'') to clarify that an RMC 
    must be in compliance with any local licensing requirement, or other 
    local requirement, governing the qualifications or operations of a 
    property manager.
    
    IV. Other Changes Made by the Public Housing Reform Act to Public 
    Housing Resident Requirements
    
        In addition to the changes described above, the Public Housing 
    Reform Act makes various other amendments to the statutory requirements 
    regarding resident participation and resident opportunities in public 
    housing. For example, the Public Housing Reform Act requires the 
    participation of residents on the governing board of a PHA (section 505 
    of the Act) and provides for grant funding of services for public 
    housing residents (section 538 of the Act).
        The resident board membership requirements established by section 
    505 of the Act are being implemented through a separate proposed 
    rulemaking published on June 23, 1999 (64 FR 33644). The June 23, 1999 
    proposed rule would create a new subpart E to 24 CFR part 964 
    describing these requirements. The other changes made by the Public 
    Housing Reform Act affecting the part 964 requirements will be the 
    subject of a separate proposed rulemaking. HUD is committed to the 
    development of this proposed rule with the active participation of 
    public housing residents (see Section V of this preamble below).
    
    V. HUD's Ongoing Efforts To Promote Effective Resident 
    Participation
    
        To further promote effective resident participation in public 
    housing, HUD is taking various steps to promote resident involvement in 
    creating and maintaining a positive living environment. As discussed 
    above, HUD is developing a proposed rule that will implement the 
    resident related amendments made by the Public Housing Reform Act. HUD 
    is committed to developing this proposed rule with the active 
    participation of public housing residents. HUD will solicit resident 
    input through the scheduling of public forums, solicitations for 
    written comments, and/or other appropriate means.
        HUD's goal in undertaking this rulemaking is to develop a set of 
    easy-to-understand regulations that reflect the meaningful 
    contributions of public housing residents. Accordingly, the proposed 
    rule will not only implement statutory amendments made by the Public 
    Housing Reform Act, but will also streamline and reorganize 24 CFR part 
    964 to simplify and improve the clarity of HUD's resident participation 
    requirements.
        HUD is taking several other steps to increase resident 
    participation in public housing. For example, HUD will conduct training 
    for resident organizations and PHAs on the new Public Housing Reform 
    Act. HUD will also clarify in the PHA Plan regulation that reasonable 
    resources for the Resident Advisory Boards must provide reasonable 
    means for them to become informed on programs covered by the PHA Plan, 
    to communicate in writing and by telephone with assisted families and 
    hold meetings with those families, and to access information regarding 
    covered programs on the internet, taking into account the size and 
    resources of the PHA.
    
    VI. Findings and Certifications
    
    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 (42 U.S.C. 4223). The Finding of No Significant Impact is 
    available for public inspection between the hours of 7:30 a.m. and 5:30 
    p.m. weekdays in the Office of the Rules Docket Clerk, Office of 
    General Counsel, Room 10276, Department of Housing and Urban 
    Development, 451 Seventh Street, SW, Washington, DC.
    
    Regulatory Flexibility Act
    
        The Secretary, in accordance with the Regulatory Flexibility Act (5 
    U.S.C. 605(b)) (the RFA), has reviewed and approved this proposed rule 
    and in so doing certifies that this rule will not have a significant 
    economic impact on a substantial number of small entities. The reasons 
    for HUD's determination are as follows:
        (1) A Substantial Number of Small Entities Will Not be Affected. 
    The proposed rule is exclusively concerned with public housing agencies 
    that contract with RMCs for the management and operation of specific 
    public housing projects. Specifically, the rule would make various 
    conforming amendments to 24 CFR part 964 (captioned ``Tenant 
    Participation and Tenant Opportunities in Public Housing'') to reflect 
    recent statutory changes made by the Public Housing Reform Act. Under 
    the definition of ``Small governmental jurisdiction'' in section 601(5) 
    of the RFA, the provisions of the RFA are applicable only to those few 
    public housing agencies that are part of a political jurisdiction with 
    a population of under 50,000 persons. The number of entities 
    potentially affected by this rule is therefore not substantial.
        (2) No Significant Economic Impact. The Public Housing Reform Act 
    improves and simplifies the way in which PHAs and RMCs are funded. 
    Specifically, section 519 of the Public Housing Reform replaces funding 
    under the existing Performance Funding System (PFS) with formula 
    funding under the new Operating Fund and the Capital Improvement 
    Assistance Program (CIAP) and the Comprehensive Grant Program with 
    formula allocations under the new Capital Fund. The implementation of 
    section 519 is beyond the scope of this proposed rule, and is the 
    subject of separate negotiated rulemakings that HUD is currently 
    undertaking. Accordingly, the economic impact of this proposed rule 
    will not be significant, and it will not affect a substantial number of 
    small entities.
        Notwithstanding HUD's determination that this rule will not have a 
    significant economic effect on a substantial number of small entities, 
    HUD specifically invites comments regarding any less burdensome 
    alternatives to this rule that will meet HUD's objectives as described 
    in this preamble.
    
    Unfunded Mandates Reform Act
    
        Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
    1531-1538) (UMRA) requires Federal agencies to assess the effects of 
    their regulatory actions on State, local, and tribal governments and on 
    the private sector. This proposed rule would not impose, within the 
    meaning of the UMRA, any Federal mandates on any State, local, or 
    tribal governments or on the private sector.
    
    Executive Order 12612, Federalism
    
        The General Counsel, as the Designated Official for HUD under 
    section 6(a) of Executive Order 12612, Federalism, has determined that 
    this rule will not have federalism implications concerning the division 
    of local, State, and Federal responsibilities. This proposed rule would 
    revise 24 CFR part 964 to reflect recent statutory changes made to 
    section 20 of the 1937 Act by section 532 of the Public Housing Act. 
    The proposed rule would also make several clarifying and technical 
    changes to the part 964. No
    
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    programmatic or policy change will result from this rule that will 
    affect the relationship between the Federal government and State and 
    local governments.
    
    Regulatory Planning and Review
    
        The Office of Management and Budget has reviewed this rule under 
    Executive Order 12866 (captioned ``Regulatory Planning and Review'') 
    and determined that this rule is a ``significant regulatory action'' as 
    defined in section 3(f) of the Order (although not an economically 
    significant regulatory action under the Order). Any changes made to 
    this rule as a result of that review are identified in the docket file, 
    which is available for public inspection during regular business hours 
    (7:30 a.m. to 5:30 p.m.) at the Office of the General Counsel, Rules 
    Docket Clerk, Room 10276, U.S. Department of Housing and Urban 
    Development, 451 Seventh Street, SW, Washington, DC 20410-0500.
    
    List of Subjects in 24 CFR Part 964
    
        Grant programs--housing and community development, Public housing, 
    Reporting and recordkeeping requirements.
    
        Accordingly, for the reasons described in the preamble, HUD 
    proposes to amend 24 CFR part 964 as follows:
    
    PART 964--TENANT PARTICIPATION AND TENANT OPPORTUNITIES IN PUBLIC 
    HOUSING
    
        1. The authority citation for part 964 is revised to read as 
    follows:
    
        Authority: 42 U.S.C. 1437d, 1437g, 1437r, 3535(d).
    
        2. Amend Sec. 964.225 as follows:
        a. Redesignate paragraphs (h), (i), (j), and (k) as paragraphs (i), 
    (j), (k), and (l), respectively;
        b. Add new paragraph (h); and
        c. Revise newly designated paragraph (j).
        The addition and revision to Sec. 964.225 read as follows:
    
    
    Sec. 964.225  Resident management requirements.
    
    * * * * *
        (h) Direct provision of operating and capital assistance to RMC.--
    (1) Direct provision of assistance to RMC. The ACC shall provide for 
    the direct provision of operating and capital assistance by HUD to an 
    RMC if:
        (i) The RMC petitions HUD for the release of funds;
        (ii) The contract provides for the RMC to assume the primary 
    management responsibilities of the PHA;
        (iii) The RMC has been designated as at least a ``standard 
    performer'' under the Public Housing Assessment System (PHAS) (see 24 
    CFR part 902); and
        (iv) The RMC is not in violation of any financial, accounting, 
    procurement, civil rights, fair housing or other program requirements 
    that HUD determines call into question the capability of the RMC to 
    effectively discharge its responsibilities under the contract.
        (2) Use of assistance. Any direct capital or operating assistance 
    provided to the RMC must be used for purposes of performing eligible 
    activities with respect to public housing as may be provided under the 
    contract.
        (3) Responsibilities of PHA. If HUD provides direct funding to a 
    RMC under paragraph (h)(1) of this section, the PHA is not responsible 
    for the actions of the RMC.
    * * * * *
        (j) Bonding, insurance, and licensing. (1) 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 PHA) to 
    protect HUD and the PHA against loss, theft, embezzlement, or 
    fraudulent acts on the part of the RMC or its employees.
        (2) Licensing and other local requirements. An RMC must be in 
    compliance with any local licensing, or other local requirement, 
    governing the qualifications or operations of a property manager.
    * * * * *
        Dated: October 13, 1999.
    Deborah Vincent,
    General Deputy Assistant Secretary for Public and Indian Housing.
    [FR Doc. 99-27303 Filed 10-20-99; 8:45 am]
    BILLING CODE 4210-33-P
    
    
    

Document Information

Published:
10/21/1999
Department:
Housing and Urban Development Department
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
99-27303
Pages:
56890-56892 (3 pages)
Docket Numbers:
Docket No. FR-4501-P-01
RINs:
2577-AC12: Direct Funding of Public Housing Resident Management Corporations (FR-4501)
RIN Links:
https://www.federalregister.gov/regulations/2577-AC12/direct-funding-of-public-housing-resident-management-corporations-fr-4501-
PDF File:
99-27303.pdf
CFR: (1)
24 CFR 964.225