[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20655]
[[Page Unknown]]
[Federal Register: August 24, 1994]
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Part II
Department of Housing and Urban Development
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Office of the Assistant Secretary for Public and Indian Housing
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24 CFR Part 905 et al.
Public and Indian Housing Amendment to the Tenant Participation and
Tenant Opportunities in Public and Indian Housing; Final Rule
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
24 CFR Parts 905, 913, 964 and 990
[Docket No. R-94-1707; FR-3568-F-03]
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: Final rule.
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SUMMARY: This final rule amends the regulations on tenant participation
in public and Indian housing to provide a comprehensive framework for
tenant opportunities programs which includes new policies, procedures
and guidelines for tenant participation; revision of the Resident
Management Program to the Tenant Opportunities Program; and the
addition of regulations to govern the Family Investment Centers (FIC)
Program. These changes are being made to provide for new resident
programs, as well as to address several weaknesses in the existing
regulations which have interfered with successful program
implementation.
EFFECTIVE DATE: September 23, 1994.
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 Ed Fagan, Office of Native American
Programs, Room 4144, telephone (202) 708-2980 (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
telephone numbers listed above are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Information Collections
The information collection requirements contained in this 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) and
have been approved and assigned OMB number 2577-0127.
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 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.
Section 20 also 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 PHAs/IHAs
(hereinafter referred to as ``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.
III. Overview of Public and Indian 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 to encourage a strong partnership between HAs and
resident councils. [Note that references to resident councils in this
overview affect resident organizations in IHAs.]
Internal conflicts between competing resident councils in a
development pose serious problems to HUD with respect to program
eligibility and participation, as well as with respect to 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 established an Interim Resident Advisory Committee
consisting of representatives of regional and state resident public
housing 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
and Redevelopment Officials (NAHRO)] were given an opportunity to
review and comment on the Policy Paper.
Recommendations from the Interim Resident Advisory Committee on
Tenant Involvement in Public Housing and requests for changes in the
Resident Management Technical Assistance Program are the basis for the
comprehensive revision of 24 CFR Part 964.
The major changes in this rule 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 1937 Act. 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 has proposed amendments to section 20, as a
part of HUD's legislative proposal, to permit funding of a broader
range of resident initiative 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 (24 CFR Part 964) is renamed by this final rule as
the ``Tenant Participation and Tenant Opportunities in the Public
Housing Program'' for public housing. This final rule replaces the
Resident Management Program under subpart C with the Tenant
Opportunities Program (TOP). For Indian housing, the program is named
``Resident Participation and Opportunities for Indian Housing.'' (24
CFR part 905, subpart O).
The revised program (TOP) is designed to (1) Prepare residents to
experience the dignity of meaningful work, to own and operate resident
businesses, and to move toward financial independence; (2) enable them
to choose where they want to live; and (3) assure meaningful
participation in the management of their housing developments. The
authority for the TOP program comes from Section 20 of the 1937 Act.
Also under Section 20, 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 will 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 HUD
regulations or issuances. For example, the requirements under subpart C
(Sec. 964.39) governing the operating subsidy, budget, operating
reserves, etc. are being 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 the model management contract.
Subpart A of part 964 is being expanded to add policies on
partnerships between HAs and residents. For example, HAs are required
to provide office space and meeting facilities to a duly elected
resident council, free of charge, for the purposes of conducting
resident activities.
Also, the section on definitions (Sec. 964.7) is being amended by
removing terms such as ``resident council'', ``project'', and ``tenant
participation''. The eligibility requirements for a voting member of a
resident council have been expanded and clarified. The frequency of
elections for resident management corporations has been established.
Subpart B of part 964 is being 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, are being amended to require an addition
of $25 per unit per year to the HA's operating subsidy calculation for
units represented by a duly elected resident council, which will be
paid to the HA only if appropriations are available for that purpose.
Fifteen dollars of the $25 will fund the duly elected resident
councils, the jurisdiction-wide councils and stipends, as discussed
further in this preamble. The remaining ten dollars is for the HAs to
cover resident-related responsibilities, including but not limited to
third party supervision of elections, recalls and arbitrations. The HUD
Circular HM 7475.9, dated February 10, 1972, authorized cash
contributions for resident council activities for three ($3) dollars
per unit per year. The Department believes that an increase of $12 per
unit per year is reasonable and, if available, will provide more
resources necessary to create a bona fide partnership among the duly
elected resident council and the HA. Therefore, this rule replaces any
existing guidance or authority including HM 7475.9. Strong partnerships
are critical for achieving mutual goals contained in this subpart.
Also, HUD is encouraging 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 such a stipend will enable these volunteers to defray the
costs associated with 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.
This final rule adds new policies and procedures for resident
councils by (1) Defining what is a ``duly elected resident council,''
(2) detailing minimum standards for elections of resident councils, and
(3) specifying the relationship between the resident councils and
resident management corporations. Resident councils are required to
meet HUD's election standards in order to receive official recognition
from the HA and HUD and to receive funds in conjunction with the
conduct of resident council business. The role of the jurisdiction-wide
resident council is established under this 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 these requirements give rights to residents
to freely organize and represent their interests.
The rule adds a new subpart D to part 964 to establish the Family
Investment Center (FIC) Program, as provided for under section 22 of
the 1937 Act (42 U.S.C. 1437t) (added by section 515 of the National
Affordable Housing Act, Pub. L. 101-625). The Indian Housing FIC
Program is found in 24 CFR 905.980. The FIC program provides families
living in public housing with better access to educational and
employment opportunities. This new subpart is being 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 final rule provides 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 do not apply to Section 8 FSS
families. If a public housing family under FSS is currently putting
their funds in an escrow account, they cannot also be eligible for the
income exclusion.
Sections 905.985 and 964.320 provide HUD policy on training,
employment and contracting of public/Indian housing residents under
Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.
1701u). Section 915 of the Housing and Community Development Act of
1992 (Pub. L. 102-550) made significant changes to Section 3. HUD
published an interim rule implementing those changes on June 30, 1994.
Section 3, as amended, requires that HAs make their best efforts,
consistent with existing Federal, State, and local laws and
regulations, to award 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, to
business concerns which provide economic opportunities to low income
persons. 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 rule includes provisions consistent with
the interim 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 rule will use the terms resident, resident council and
resident management corporation, as appropriate.
IV. Public Comments
On April 19, 1994, at 59 FR 18666, the Department published a
proposed rule and allowed 30 days for the public to comment. The
Department received 31 comments in response to the proposed regulation:
20 from housing authorities, two from housing authority advocacy
groups, six from resident councils/resident organizations, two from
residents, one from a HUD field office, and three from private
organizations. Following the general comments discussed below, there is
a listing of the specific issues raised in the comments and the
Department's responses to the issues.
While this final rule applies both to public and Indian housing
communities, there are separate regulations for each: Part 964 for
Public Housing and Part 905, subpart O for Indian Housing. General and
specific comments and responses are grouped by the source of the
comment (public housing commenters or Indian housing commenters). In
many cases, the comments and responses below are applicable to both.
General Public Housing Comments
Overall, there was widespread support for the concept of resident
participation as well as for the new Tenant Opportunities Program (TOP)
and the Family Investment Centers (FIC) Programs contained in the
proposed rule. Seven commenters stated that the 30-day comment period
was too short. However, because consultation took place while the
policy was being developed, and comments were submitted by various
interested parties, the Department believes that a longer period was
unnecessary.
There was also at least one comment on the proliferation on new
specialized programs. Because of the rapid growth of new programs, this
comprehensive regulation provides a common policy and definition for
administering these programs.
There were several comments from housing authorities on the
rationale for HUD requiring resident participation with duly-elected
resident groups rather than any residents in the public housing
community. The Department believes that a clear-cut policy of
accountability through the elected resident leaders will assure
adequate representation and mitigate criticism of housing authority
favoritism. In order to provide time for the public housing community
to implement elections, etc. to comply with this duly elected resident
council requirement, the Department has determined the date for
compliance with this regulation will be April 3, 1995.
There were also concerns that the Department may be providing
prescriptive policies on resident participation. The Department has
developed policies for the basic resident participation requirements to
minimize ambiguity--on resident membership, election frequency and the
residents' partnership with the housing authority. However, the
regulation provides significant flexibility for the method of
implementation. For example, with respect to election standards, the
regulation discusses standards but leaves it up to the public housing
community regarding the specifics.
Specific Public Housing Comments
Comment. Funding Issues: (Secs. 964.115, 964.105, 964.150) One
commenter requested more clarity between the Resident Council and the
Jurisdiction-Wide Resident Council with respect to which organization
would be eligible to receive the $15.00 per unit/per year for resident
services. Concern was raised that the operating subsidy funding for
resident council activities may be required to provide the funds for
resident activities. One commenter requested that ``subject to
appropriations'' be added to Sec. 990.108. Two PHAs expressed concern
that the provision of stipends to resident council officers should also
be an add-on to the PFS. One tenant organization expressed concern
about the impact of withholding for Social Security and income tax on
the residents receiving the stipends. One PHA requested clarification
on the demand for HAs to provide tenant services funding regardless of
the HA financial status.
Response. Section 964.150 has been revised to clarify for whom the
funding is intended. The duly elected Resident Councils at each
development and/or jurisdiction-wide councils are eligible to receive
the resident portion of the Tenant Services Account, i.e., $15 per unit
per year. Where both organizations exist, the distribution will be
agreed upon by the HA and the respective organizations. Dispute
resolution procedures are added at Sec. 964.150(c). The resident
officer stipends (up to $200 per month/per officer to be determined
jointly by the resident council and HA) are also included in the $15
per unit per year funding. The $15 per unit per year is a 500% increase
from the current guideline of $3 per unit per year. In addition, the
$10 per unit per year--as a new policy--is for the housing authority to
cover resident-related responsibilities, including but not limited to
third party supervision of elections, recalls and use of mediation/
arbitration services.
With respect to funding for resident services, section 964.150
states that 24 CFR part 990 would provide an addition to the operating
subsidy eligibility in the amount of $25 per unit per year for units
represented by a duly elected resident council and the provision of
these funds is subject to availability of appropriations. The HA and
resident council should collaborate on the appropriate use of these
funds. The Department is aware that even with this increase, there may
be insufficient funds for resident council expenses plus stipends. The
provision of stipends is not a requirement and will be decided by the
local resident council officers and the HA. If Congress does not
appropriate funds, the HA and duly-elected resident council may
negotiate funds for tenant services based on the availability of funds.
With respect to how stipends are counted for income tax purposes,
the stipends are not a salary but reimbursement for expenses incurred.
Under this definition, stipends will not be treated as income by HUD in
its programs. The treatment of stipends as income for social security
and income tax purposes cannot be addressed by HUD; this issue must be
discussed with Social Security Administration and IRS. However, HUD can
assure that stipends shall not be treated as income for rent purposes.
Comment. Funding Issue: (Sec. 964.150) Five HA comments agreed with
proposed increase of funding for resident participation. Four HA
comments and two housing advocacy organizations expressed concern that
funding for resident activities may not be sufficient for required
activities under the regulation. However, three PHAs oppose an increase
in funding for resident participation from $3.00 per unit/per year to
$25.00 per unit/per year because resident councils are already
receiving substantial funding under the Tenant Opportunities Program/
Technical Assistance Grant, and the Comprehensive Grant Program. One
commenter recommended an increase in the $10 per unit/per month for
housing authority activities.
Response. The Department believes that an increase in support for
resident participation activities from $3.00 per unit/per year to
$25.00 per unit/per year (of this amount $15.00 will be provided to the
duly elected resident council) is reasonable and long overdue to
support the increasing activities and community involvement of these
organizations. While TOP funds are available for such activities, those
funds can only be obtained on a competitive basis, and the availability
of CGP Management Improvement Program funds is contingent upon the
Public Housing Authorities' priorities to improve management
operations. The Department believes that the portion for the PHAs is
equitable in light of the functions to be provided under each and the
funding available to PHAs.
Comment. Audit Issue: (Secs. 905.972(a) and 964.230(a)(2)) One
commenter requested change to a reference in Sec. 905.972(a) from
``audit of books and records'' to ``audits of financial statements;''
and change to a reference in Sec. 964.230(a)(2) from ``* * * activities
and expenditures * * *'' to ``* * * financial statements * * *.''
Response. The above-mentioned provisions will be changed to state
review of financial statements. Such a review of the financial
statements would include scrutiny of expenditures related to the
workplan as well as compliance with the HUD grant agreement.
Comment. Conflict of Interest Issue: (Sec. 964.145) Three tenant
organizations objected to the Conflict of Interest policy because it
would deplete the executive board of the Resident Council/Advisory
Board. It was also noted that over 50 percent of resident leaders are
employed by HAs. Two HAs observed that resident employment encourages
participation in resident governance and should be encouraged when
residents are not employed in supervisory capacities.
Response. The conflict of interest policy has been revised to state
that ``Resident council officers cannot serve as employees in a policy
making position at the HA or as a contractor to the HA. However,
seasonal, part time or non-supervisory positions at the HA or their
contractors which are not involved in policy making work are exempt
from the conflict of interest policy.''
Comment. FIC Issue: (Sec. 964.305) One PHA objected to the small
amount of 15 percent allowed for supportive services and recommends an
increase to 25 percent.
Response. The cap on supportive services (15 percent) is stipulated
in the law. The Department agrees that the current statutory policy is
too restrictive and has included in its legislative proposal raising
the limit to 30 percent.
Comment. Threshold Issue: (Sec. 964.18) Two HAs suggested that the
threshold for applicability of this regulation--i.e., HAs of 100
units--was too low and should be increased to HAs of 250 or even 1250
units.
Response. The Department agrees with the commenter that the
threshold should be increased to 250 units. This would make the
threshold comparable with that of the Comprehensive Grant Program. HAs
with fewer than 250 units cannot deny residents the opportunity to
organize. This regulation is intended to provide all resident groups
with the opportunities available under this regulation.
Comment. Office Space Issue: (Sec. 964.18) One HA objected to the
provision of office space for the duly elected resident council
especially at smaller complexes and said it should only be required at
public housing developments of 250 units and over. Two other commenters
felt that there would not be space for resident councils--even at
larger authorities--especially when there was a long waiting list.
Commenters felt that office space should be covered by operating
subsidy.
One housing advocacy organization recommended that flexibility
should be granted to the HA and that assistance with alternative
locations might be sufficient for small HAs. Another housing advocacy
organization suggested that office space be required only in projects
above 250 units.
Response. The Department agrees with the first commenter that
providing office space to resident councils may not be feasible in
small HAs without any community space options and few units. In such
cases, the HA should make every effort to assist RCs in obtaining space
when units are not available. If there is no community or rental space
available, a request to approve a vacant rental unit for this non-
dwelling use will be considered on a case-by-case basis. Subject to
appropriations, these units will be eligible for operating subsidy.
Comment. Elections Issue: (Sec. 964.130) One HA objected to a third
party supervision for resident council elections especially in cases
where the HA and resident organization are in agreement. Opposition was
expressed to three (3) year terms, with two HAs suggesting that shorter
terms will solve problems of effective resident representation and the
filling of vacancies. Four commenters expressed concern about the
requirement in Sec. 964.115 for approval of 51 percent of ``voting
membership'' instead of \2/3\ of voters to recall a resident board.
Response. A third party supervision, even in cases where the HA and
resident organization are in agreement, provides for a neutral monitor
to oversee elections and recall procedures. Holding elections at least
every three (3) years provides for continuity and allows time for each
resident council board to plan and implement any new activities.
Resident Council By-Laws must include provisions for recall elections
of representatives, including officers. These provisions shall allow
for a petition or other means of expression of the voting membership
for such a recall vote to be taken. The local resident council voting
membership shall determine the threshold for recall. This threshold
shall not be less than 10 percent of the voting membership.
Comment. HA Operations Issue: (Sec. 964.135) Two HAs opposed
resident participation in all issues and facets of a PHA's operations.
Response. Resident participation in all issues and facets provides
support to the HA for improved living conditions and resident
satisfaction in public housing communities. Residents can provide
valuable input regarding the conditions of the property and the
performance of employees and contractors.
Comment. Policy Issue: (Sec. 964.12) One interest group opposed
changing Resident Management to TOP; however, one commenter supported
the new TOP. One RMC objected to the requirement imposed by the
regulation for adopting the model contract for RMCs entering into a
contract with a HA, and the removal of sections governing the operating
subsidy and comprehensive improvement assistance program.
Response. Resident councils, resident management corporations, and
HAs across the country requested that HUD revamp the Resident
Management Technical Assistant Grant Program (RM TAG) to meet the
residents' needs for economic development, education, job training and
development, social services and other self-help opportunities. The
residents still have the option to undertake property management, if
they desire. The expanded range of activities provided by TOP will meet
the residents needs. The language in the proposed rule stated that the
model contract in HUD Notice PIH 93-56 must be followed unless HUD
approves a requested change. It should be noted that there are minimum
statutory and regulatory requirements in the model contract which must
be used and any other provisions would be considered voluntary or
advisory. The section on operating subsidy is being moved to Part 990
so that all procedures covering operating subsidy are contained in the
same regulation. Information on CIAP/CGP has been inserted in the
resident management requirements section of this final regulation in
Sec. 964.225.
Comment. Voting Issue: (Sec. 964.115(c)) Two HAs requested
clarification on the voting membership.
Response. The voting membership is limited to designated heads of
households (any age) and other members of a 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.
Comment. RC/RMC Clarification Issue: (Sec. 964.120(f)) One HA
requested clarification on RMC recognition in the instance where a
resident organization (RO) is formed after an RMC is established. For
example, must the new RO and the voting membership or all of the
residents approve the establishment of such an organization.
Response. The newly formed duly elected resident council and the
RMC should work together to establish a method of documenting, i.e.,
through a resident council board resolution, the approval of the duly
elected representative body for resident management.
Comment. Resident Training Issue: (Sec. 964.140) One resident
organization, one advocacy organization, and one HA each expressed
concern that there is insufficient funding to adequately train
interested residents in overall policy development and direction of HA
operations.
Response. The Department is requesting $85 million for the TOP
Program for FY 1995, which represents a three-fold increase from FY
1994 funding to provide additional training for residents. The option
also exists to use several other resources available to train the
residents, such as: (1) the HA staff, (2) CGP/CIAP, (3) operating
subsidies, (4) TOP TAG and (5) Section 8 administrative fees. In
addition, the RC/RMC together with the HA could form a partnership with
other local and community organizations to provide the support for
training.
Comment. Partnerships Issue: (Sec. 964.14) One HA supports
partnerships but is concerned that outside partnerships may become the
governing entity. The commenter believes that the primary partnerships
should be fostered between RCs and HAs.
Response. HUD promotes partnerships between residents and HAs which
are an essential component to building, strengthening and improving
public housing. However, strong partnerships with other organizations
are also critical for creating positive changes in lifestyles thus
improving the quality of life for public housing residents, and the
surrounding community. However, these outside partners cannot be
recognized or assume the role of the duly-elected governing entity.
Comment. Expanding Resident Council Issue: (Sec. 964.105) One HA
comment requested clarification about whether an HA with an existing
jurisdiction-wide resident council can help establish new resident
councils in scattered sites or separate groups of buildings.
Response. The Department encourages the development of new resident
councils, or revival of inactive resident councils, at all housing
developments including scattered sites.
General Indian Housing Comments
The Department received 18 comments specifically related to 24 CFR
Part 905, Subpart O--Resident Participation and Opportunities for
Indian housing. Eleven were from Field Offices of Native American
Programs, four from an Indian housing authority, one from a public
housing authority, one from an advocacy group and one from a private
organization.
Comment. Replace the term ``tenant'' with ``resident'' since it can
be applied appropriately to all program participants, rental and
homeownership. In Indian housing, resident implies a sense of ownership
and permanence which are important attitudes to convey in order to
accomplish the mission of the Office of Native American Programs
(ONAP).
Response. The Department agrees with the comment for the Indian
housing program. The only reference to tenant will remain in the title
of the Tenant Opportunities Program. This new title reflects the
revised program created to provide more program flexibility to address
the needs in communities to improve living conditions and housing
operations.
Specific Indian Housing Comments
Section 905.102(2)(viii)(D) Stipends
Comment: One commenter stated: Currently there is no limit to the
number of officers of a resident organization or the number of
organizations. Some large IHAs have over 50 resident organizations. The
cost involved for stipends could be substantial if each RO has 5
officers who receive $200 per month, with 50 ROs the cost equals
$600,000. It could be very difficult to determine who should receive
funding and IHAs could be forced to use operating reserves. For
instance, an IHA with 14,000 units will receive $140,000 although
stipends amount to $600,000. The inability to pay stipends could cause
potential problems between the IHA and RO.
Several commenters requested clarification on how the stipend is to
be paid. Is it paid from the $25 per unit per year? Is it from the IHA
$10 per unit per year or the RO $15 per unit per year?
Another commenter recommended that the words ``excluding training
costs'' should be added to the end of the eligible activities for
stipend use. The commenter felt that the maximum stipend amount should
not limit training that ONAP and the IHA determine is important for
resident leaders to attend.
One commenter supported the stipend stating it was extremely
important because it recognizes the economic position of many resident
leaders and the need to avoid out of pocket expenses from resident
leaders.
Response: It is intended that the $15 per unit per year for
resident participation activities of the resident organization will be
used to fund stipends. Section 905.965 is revised to clarify questions
raised regarding the funding for stipends. Also, the Department is
aware that even with this increase, there may be insufficient funds for
resident organization expenses plus stipends. The provision of stipends
is not a requirement and will be decided by the local resident
organization and the IHA. If there is no appropriation for this
additional cost item under the operating subsidy, the IHA and resident
organizations must determine how to use existing funds to accomplish
priority resident activities.
Regarding the third comment, the stipend is intended to cover costs
related to officer volunteer efforts. It does not limit funding to
resident organizations for training. These costs can be covered under
905.965 which would provide $15 per unit per year for resident
participation activities of the RO. IHAs may use other resources for
resident participation activities.
Section 905.720 Other Costs
Comment: A commenter expressed concerns about the cost of stipends
to the IHA. Also, will stipends be eligible even if there are no
appropriations to fund the cost? Another commenter suggested that
consideration must be given for higher cost areas, especially in Alaska
where village travel is by airplane.
Response: If there are no appropriations to fund resident
participation, stipends will still be an eligible cost; however, the
IHA and RO must determine if resources are available. The issue of
higher travel costs in Alaska can be resolved by waiver requests since
the provision is regulatory, not statutory.
Section 905.962 Definition of RO
Comment: One commenter recommended that HUD require each IHA to
adopt a policy and procedure to formally recognize resident
organizations based on the referenced definition.
Response: Only one comment was received requesting that recognition
of an RO be mandatory. The Department does not believe this is
sufficient to change the current regulatory requirements which provide
for local decision making between the IHA and RO.
Section 905.963 HUD's Role in Activities Under This Subpart
Comment: The form and extent of resident participation or resident
management are local decisions to be made jointly by ROs and IHAs. The
regulation discusses the duty to bargain, but if either party does not,
there is no consequence for not doing so. If an RO isn't organized, it
is not eligible for the $15 per unit funding. Therefore, control of
whatever negotiation there might be is in the hands of the IHA. This is
an unfair advantage for the IHA.
Response: A resident organization can organize without IHA
involvement and can also be eligible for funding if it meets the
requirements in accordance with Sec. 905.962. However, HUD strongly
recommends a partnership between the resident organization and the IHA.
The IHA and the duly elected resident organization shall collaborate on
how funds will be distributed. A mechanism to address disputes on
funding decisions is provided for in the rule. The payment of stipends
to resident organization officers will be funded from the $15 per unit
per year for resident participation activities.
Section 905.964 Resident Participation Requirements
Comment: Section 905.964 (a)(1) should be revised to state that an
IHA must provide residents with current information concerning the
IHA's policies on resident participation in management, ``development
and modernization'' in order to cover all aspects of the IHA's
programs.
Response: Subpart O only deals with resident participation in
management. Both the subparts on development and modernization contain
specific regulatory requirements regarding resident participation. This
language is consistent with subpart O and, therefore, we are keeping
the language as currently stated.
Section 905.969 Resident Management Requirements
Comment: Several resident organizations in the State of Alaska have
questioned whether or not a recognized Tribal government in the
community may act in the capacity of the resident organization. In most
of the Alaskan Native communities, the tribal government represents the
Native residents. Most tribal organizations already have mechanisms in
place that would allow greater resident participation, which could lead
to expedience in communities becoming self-sufficient. Where the
majority of residents in a community request that the Tribal Government
act in the capacity as the RO with the IHA, a Memorandum of Agreement
might be executed to establish such a relationship.
Response: If a tribal government wishes to assume the
responsibilities of an RO or RMC, an entity must be created that meets
the requirements of 24 CFR 905.962. The tribal government may not act
as an RO or RMC without complying with those requirements. This does
not prevent the tribal government from authorizing or creating such an
entity under tribal law.
Section 905.972(b) TOP Audit
Comment: The references to ``audit of books and records'' in the
title of proposed sections 905.972(a) and 905.972(b) should be changed
to ``audit of financial statements'' because independent auditors audit
financial statements, not ``books and records.''
The proposed rule should specify the basis of accounting to be used
in preparing the financial statements. We recommend that the financial
statements be prepared in accordance with generally accepted accounting
principles (GAAP).
The final rule should state that an audit conducted in accordance
with the Single Audit Act or OMB Circular A-133, if applicable, would
satisfy the audit requirement.
Response: The sections have been changed to reflect the comment on
review of financial statements. Such a review of the financial
statements would include scrutiny of expenditures related to the
workplan as well as compliance with the HUD grant agreement.
Section 905.980 FIC General
Comment: Remove the following language from the responsibilities of
a FIC Coordinator, ``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.''
Response: This language is statutory (Section 515 of National
Affordable Housing Act) and therefore cannot be removed without
legislative change.
Comment: There is no reference to determine eligibility for program
participants.
Response: The only eligible applicants are IHAs based on the
statute. Eligibility is documented in 905.982. IHA is defined in
905.102 of 24 CFR part 905.
Section 905.982 FIC Eligibility
Comment: Under this program and any other programs that are created
to directly associate with residents, eligible applicants should be
extended to include the Tribal governments. Recommend using the word
``improved'' in place of ``Better'' since ``improved'' is used in other
parts of this document. Also, add the word ``support'' in reference to
services being provided.
Response: The provision that eligible applicants are public or
Indian housing authorities is statutory and cannot be changed without
legislation.
Section 905.983 FIC Activities
Comment: The new activities such as new construction or acquisition
have not been added yet as indicated in the NOFA.
Response: The Public and Indian Housing regulation is changed to
reflect eligibility for new construction and acquisition.
V. Section-By-Section Changes Made By This Final Rule
A. Public Housing Changes--Part 964
1. Subpart A is amended as follows:
a. Section 964.1 Purpose is streamlined.
b. Section 964.3 Applicability and scope remains unchanged.
c. Section 964.7 Definitions is 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 is amended to
strongly support tenant participation in all the functions of an 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)
provides HUD's policy on the Tenant Opportunities Program. Subpart C of
the current regulation is 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 is 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 remains
unchanged. This section states HUD's support for resident councils/
resident management corporations who are interested in managing various
businesses in the public housing community; e.g., lawn service
maintenance or day care.
h. Section 964.16 HUD role in activities under this part--
Monitoring is 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
establishes 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 provides HUD's policy
and support for the FIC program.
k. Section 964.30 Other program requirements provides Civil Rights
compliance requirements and all other Federal laws, executive orders,
regulations and policies for programs conducted and administered under
this rule.
2. Subpart B is amended as follows:
a. Section 964.100 Role of resident council which establishes the
role of a resident council and Sec. 964.105 Role of the jurisdiction-
wide resident council which establishes the role of a jurisdiction-wide
resident council are added to the rule.
b. Section 964.110 Resident membership on HA Board of
Commissioners encourages resident membership on HA Board of
Commissioners.
c. Section 964.115 Resident council requirements describes the
provisions necessary for the Resident Council to receive official
recognition from the HA and HUD. In the previous rule, this provision
was included in the definitions section, and in this rule it becomes a
separate section.
d. Section 964.117 Resident council partnerships is 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
establishes characteristics in order to receive formal recognition by
the HA and HUD. In the previous rule, this was included in the
definitions section and in this rule, it becomes a separate section.
f. Section 964.125 Eligibility for resident council membership is
added to provide guidance on eligibility for council membership. This
section establishes that any member of a household, whose name 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 is 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 is added
to provide policy on resident involvement in HA management operations.
Residents shall participate fully in the overall policy development, as
well as in operations of an HA.
i. Section 964.140 Resident training is 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 is added to provide policy
on resident council officers serving as contractors or as employees of
an HA.
k. Section 964.150 Funding tenant participation is 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 makes an
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 is amended as follows:
a. Section 964.200 General is added to provide information on the
provisions of the TOP.
b. Section 964.205 Eligibility is added to define who is eligible
to apply and receive a technical assistance grant, and to outline
eligible activities under TOP.
c. Section 964.210 Announcement of funding availability is added
to describe notification of funding availability for obtaining funds to
participate in TOP.
d. Section 964.215 Grant agreement provides the terms of the grant
agreement for the proposed activities under the TOP program.
e. Section 964.220 Technical assistance describes HUD's commitment
to fund TOP activities.
f. Section 964.225 Resident management requirements provides
minimal guidelines for HAs and residents for the performance of
management functions.
g. Section 964.230 Audit and administrative requirements provides
audit and administrative guidelines for recipients of TOP grant funds
and resident management corporations contracting with an HA for
management responsibilities.
4. Subpart D is added to the Part 964 as follows:
a. Section 964.300 General provides 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 provides eligible
activities and requirements under the FIC program.
c. Section 964.308 Supportive services requirements for FIC
provides supportive services requirements essential for families living
with children in public housing.
d. Section 964.310 Audit/Compliance Requirements for FIC provides
audit and compliance requirements governing the program.
e. Section 964.315 HAs role in FIC activities under this part
provides 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 states
HUD's policy on resident training, employment and contracting under
FIC.
g. Section 964.325 Announcement of funding availability for FIC
indicates 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 states 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 provides the grant
agreement term.
j. Section 964.340 Resident compensation for FIC provides
guidelines governing employment compensation under this program.
k. Section 964.45 Treatment of income provides provisions for
income exclusions for any resident participating in the FIC program.
l. Section 964.350 Administrative Requirements for FIC provides
administrative and reporting requirements governing the FIC program.
B. Indian Housing Changes--Part 905
The rule also revises 24 CFR 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 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 rule 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 are
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 (1) the exclusion
from income of stipends to RC officers and of training grants under the
FIC program that are added to 905 and 913; (2) the provision for
payments to duly elected resident organization officers, and the
inclusion of requirements governing the RMC Operating subsidy, budget,
operating reserves, etc., that are made to 990; and 3) changes for the
resident participation subpart that are made in part 905 to parallel
changes in part 964.
Other Matters
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The 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 rule was reviewed by the Office of Management and Budget under
Executive Order 12866, Regulatory Planning and Review. Any changes made
to the 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 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 rule is not subject to review under the order. The revised rule is
consistent with federalism principles since it reduces unnecessary
burdens on resident organizations. Since participation by resident
organizations is discretionary, this 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 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 rule, as those policies and programs relate
to family concerns.
Regulatory Agenda
This rule was listed as Item No. 1685 in the Department's
Semiannual Agenda of Regulations published on April 25, 1994, (59 FR
20424, 20469) in accordance with Executive Order 12866 and the
Regulatory Flexibility Act.
Catalog of Federal Domestic Assistance
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, Homeownership, 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 amended as follows:
PART 905--INDIAN HOUSING PROGRAMS
1. The authority citation for part 905 is 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 is amended by:
a. Removing the word ``or'' at the end of paragraph (2)(viii)(B);
b. Adding the word ``or'' at the end of paragraph (2)(viii)(C);
c. Adding a new paragraph (2)(viii)(D);
d. Removing the word ``or'' at the end of paragraph (2)(x);
e. Redesignating paragraph (2)(xi) as paragraph (2)(xii); and
f. 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 organization 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 (42 U.S.C. 1437 et seq.), or any
comparable Federal, State, Tribal or local law during the exclusion
period. For purposes of this paragraph (2)(xi), 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. 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 employment training program or
subsequent job; or
* * * * *
3. In Sec. 905.434, a new paragraph (b)(7) is added, to read as
follows:
Sec. 905.434 Operating subsidy.
* * * * *
(b) * * *
(7) Subject to appropriations, in accordance with the provisions of
subpart O of this part and procedures determined by HUD, each IHA shall
receive $25 per unit per year for units represented by a duly elected
resident organization for resident participation activities. Of this
amount, $15 per unit per year shall fund resident participation
activities of the duly elected ROs including but not limited to
stipends. Ten dollars per unit per year shall fund IHA costs incurred
in carrying out resident participation activities.
* * * * *
4. In Sec. 905.720, a new paragraph (g) is added, to read as
follows:
Sec. 905.720 Other costs.
* * * * *
(g) Funding for resident organization expenses. In accordance with
the provisions of 24 CFR Part 905, subpart O and procedures determined
by HUD, each IHA with a duly elected resident organization shall
include in the operating subsidy eligibility calculation, $25 per unit
per year (subject to appropriations) for each unit represented by a
duly-elected resident organization in support of the duly elected
resident organization's activities.
* * * * *
5. Subpart O of Part 905 is 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 IHA 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 (IHA) 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 resident
participation in Indian housing.
(d) This subpart is not intended to negate any pre-existing
arrangements for resident management in Indian housing between an IHA
and a resident management corporation.
(e) This subpart includes requirements for the Family Investment
Centers (FIC) Program, which was established by Section 515 of the
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 IHA 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 an IHA, as provided by Sec. 905.969.
Project. For purposes of this subpart, any of the following could
be the subject of a management contract:
(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 IHA.
Resident Management Corporation (RMC). A Resident Management
Corporation is an entity that proposes to enter into, or enters into, a
contract to manage IHA 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 an IHA, 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-owned business. Any business concern which is owned and
controlled by public housing residents. (The term ``resident-owned
business'' includes sole proprietorships.) For purposes of this part,
``owned and controlled'' means a business:
(1) Which is at least 51 percent owned by one or more public
housing residents; and
(2) Whose management and daily business operations are controlled
by one or more such individuals.
Resident participation. A process of consultation between residents
and the IHA concerning matters affecting the management of Indian
housing.
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 IHAs 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 IHAs.
(b) Duty to bargain in good faith. If an IHA 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 IHA to respond with a report stating the IHA'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) IHA responsibilities. (1) An IHA must provide the residents or
any resident organization with current information concerning the IHA's
policies on resident participation in management, including guidance on
information and recognition of a RO, and, where appropriate, a RMC.
(2) An IHA 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 IHA and the residents.
(3) When requested by residents, an IHA 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 IHA or with other entities.
(c) Written understanding. At a minimum, the IHA and the RO shall
put in writing their understanding concerning the elements of their
relationship.
(d) Conflict of interest. Resident council officers cannot serve as
contractors or employees if they are in policy making or supervisory
positions at the IHA.
Sec. 905.965 Funding resident participation.
Funding will be provided under subpart J of this part, for the
following:
(a) Resident Organizations. (1) Subject to appropriations, the IHA
shall provide funds to ROs for resident participation activities.
Eligibility to receive operating subsidy for duly elected RO activities
at $25 per unit per year is an additional category of subsidy
eligibility for units represented by a duly elected resident
organization under the Performance Funding System. Of this amount, $15
per unit per year shall fund resident participation activities of the
duly elected ROs. Ten dollars per unit per year shall fund IHA costs
incurred in carrying out resident participation activities.
(2) The IHA and the duly elected resident organization at each
development shall collaborate on how the funds will be distributed for
resident participation activities. If disputes regarding funding
decisions arise between the parties, the matter shall be referred to
the HUD Headquarters for intervention. HUD Headquarters may require the
parties to undertake further negotiations to resolve the dispute. If no
resolution is achieved within 90 days from the date of renegotiation,
Headquarters shall take appropriate actions to settle the dispute in a
fair and equitable manner.
(b) Stipends. (1) IHAs may provide stipends to officers of the duly
elected RO. The stipend, which may be up to $200 per month per officer,
shall be decided locally by the ROs and the IHA. Subject to
appropriations, the stipends will be funded from the portion of the
operating subsidy funding for RO expenses ($15.00 per unit per year).
(See definition of annual income in Sec. 905.102 for exclusion for
these stipends.)
(2) Funding provided by an IHA to a duly elected RO may be made
only under a written agreement between the IHA and a RO, which includes
a RO budget and assurance that all RO 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 RO to account to the IHA for the use of the
funds and permit the IHA to inspect and audit the resident council's
financial records related to the agreement.
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 RO or
resident management corporation, as defined in subpart B of this part,
must improve the living conditions and Indian 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 a 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 a 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 a 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) Homeownership Opportunity. Determining feasibility for
homeownership by residents, including assessing the feasibility of
other housing (including HUD owned or held single or multi-family)
affordable for purchase by residents.
(f) General. (1) Required training on HUD regulations and policies
governing the operation of low-income public and Indian housing
including contracting/procurement regulations, 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 IHA, 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 an IHA 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 an IHA 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 IHA
and a RMC is required for resident management. The IHA and the
corporation may agree to the performance by the corporation of any or
all management functions for which the IHA 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 IHA 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 IHA 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 an IHA to contract with a RMC.
(c) Prohibited activities. An IHA may not contract for assumption
by the RMC of the IHA'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 IHA) to protect HUD and the IHA 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 IHA, 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 IHA 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 IHA 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 IHA 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 an IHA that occurs as a result
of fraud, waste, or mismanagement by the IHA 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 an IHA 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 IHA to the
resident management corporation will not be included.
(3) Operating budget. The resident management corporation and the
IHA 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 IHA.
(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
IHA, 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 IHA operating
reserve, exclusive of all inventories, prepaids and receivables (at the
end of the IHA 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 IHA.
(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 an IHA that occurs as a
result of fraud, waste, or mismanagement by the IHA; or
(ii) Any change in the total income of an IHA 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 an IHA under subpart J of
this part; and
(2) The funds provided by the IHA 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 financial statements. 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 IHA
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
financial statements 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. IHAs 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.
An IHA may apply to establish one or more FICs for more than one
Indian housing development. An IHA 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 IHA
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 acquisition, construction, or renovation of facilities
located near the premises of one or more IHA 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 IHA or by contract or lease through other appropriate
agencies or providers), but only if the IHA demonstrates that:
(1) The supportive services are appropriate to improve the access
of eligible residents to employment and educational opportunities; and
(2) The IHA 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 IHA role in activities under this part.
An IHA 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 IHA 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, IHAs,
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) and 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 IHAs 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 IHA 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
6. The authority citation for part 913 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437d, 1437n and 3535(d).
7. In Sec. 913.106, paragraph (c) is amended by:
a. Removing the word ``or'' from the end of paragraph (c)(8)(ii);
b. Adding the word ``or'' at the end of paragraph (c)(8)(iii);
c. Adding a new paragraph (c)(8)(iv);
d. Removing the word ``or'' from the end of paragraph (c)(10);
e. Redesignating paragraph (c)(11) as paragraph (c)(12); and
f. 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 officers'
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 employment training program or
subsequent job. (This provision does not apply to residents
participating in the Family Self-Sufficiency Program who are utilizing
the escrow account.)
* * * * *
8. Part 964, consisting of Secs. 964.1 through 964.350, is revised
in its entirety, 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 part.
964.18 HA role in activities under subparts B & C.
964.24 HUD policy on FIC Program.
964.30 Other Program requirements.
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 Notice 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 Notice 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 September 23,
1994, 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 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 the 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). The term ``development''
has the same meaning as that provided for ``low-income housing
project'' as that term is defined Section 3(b)(1) of the Act.
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. Any business concern which is owned and
controlled by public housing residents. (The term ``resident-owned
business'' includes sole proprietorships.) For purposes of this part,
``owned and controlled'' means a business:
(1) Which is at least 51 percent owned by one or more public
housing residents; and
(2) Whose management and daily business operations are controlled
by one or more such individuals.
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 is available to RCs/RMCs to prepare to manage
activities in their public housing developments.
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 councils.
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 part.
(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
part are operating efficiently and effectively.
Sec. 964.18 HA role in activities under subparts B & C.
(a) HAs with 250 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 should provide a duly recognized resident
council office space and meeting facilities, free of charge, preferably
within the development it represents. If there is no community or
rental space available, a request to approve a vacant unit for this
non-dwelling use will be considered on a case-by-case basis.
(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.
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).
(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 250 units. (1) HAs with fewer than 250
units of public housing have the option of participating in programs
under this part.
(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.
Sec. 964.30 Other Program requirements.
All programs under this part must be conducted and administered in
accordance with the Civil Rights requirements cited below and comply
with all other Federal laws, executive orders, regulations and
policies.
(a) Fair Housing Requirements. The requirements of the Fair Housing
Act (42 U.S.C. 3601-19) and regulations pursuant thereto (24 CFR Part
100); Executive Order 11063 (Equal Opportunity in Housing) and
regulations pursuant thereto (24 CFR Part 107); the fair housing poster
regulations (24 CFR Part 110) and the advertising guidelines (24 CFR
Part 109).
(b) Nondiscrimination in Housing. Title VI of the Civil Rights Act
of 1964 (42 U.S.C. 2000d) and regulations pursuant thereto (24 CFR Part
1).
(c) Discrimination on the Basis of Age or Handicap. The
prohibitions against discrimination on the basis of age under the Age
Discrimination Act of 1975 (42 U.S.C. 6101-07) and regulations issued
pursuant thereto (24 CFR Part 146), and the prohibitions against
discrimination against handicapped individuals under Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794) and regulations issued
pursuant thereto (24 CFR Part 8).
(d) Employment Opportunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) (Employment
Opportunities for Lower Income Persons in Connection with Assisted
Projects).
(e) Minority and Women's Business Enterprises. The requirements of
Executive Orders 11246, 11625 12432, and 12138. Consistent with HUD's
responsibilities under these orders, recipients must make efforts to
encourage the use of minority and women's business enterprises in
connection with funded activities.
(f) Affirmative Outreach. The Affirmative Fair Housing Marketing
Program requirements of 24 CFR Part 200, Subpart M and the implementing
regulations at 24 CFR part 108.
(g) Disability Requirements--Fair Housing Act, Section 504 and the
Americans with Disabilities Act. The recipient must comply with the
reasonable modification and accommodation requirements of the Fair
Housing Act and the accessibility requirements of the Fair Housing Act
and Section 504 of the Rehabilitation Act of 1973, as amended.
Recipient must also comply with Title II of the Americans with
Disabilities Act of 1990 (42 U.S.C. 12131) and implementing regulation
at 28 CFR Part 35.
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 persons 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
officers for their related costs for volunteer work in public housing:
(a) It may represent residents residing:
(1) In scattered site buildings;
(2) In areas of contiguous row houses; or
(3) In one or more contiguous buildings;
(4) In a development; or
(5) 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 the
voting membership. These provisions shall allow for a petition or other
expression of the voting membership's desire for a recall election, and
set the number of percentage of voting membership (``threshold'') who
must be in agreement in order to hold a recall election. This threshold
shall not be less than 10 percent of the voting membership.
(c) It must have a democratically elected governing board that is
elected by the voting membership. At a minimum, the governing board
should consist of five (5) elected board members.
The voting membership must consist of heads of households (any age)
and other residents at least 18 years of age or older 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; include qualifications to run for office,
frequency of elections, procedures for recall, and term limits if
desired.
(e) Its voting members shall be heads of households (any age) and
other 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 whose name 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 (any age) 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. The resident council shall use 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) All voting members of the resident community must be given
sufficient notice (at least 30 days) for nomination and election. The
notice should include a description of election procedures, eligibility
requirements, and dates of nominations and 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 part, 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 can not serve as contractors or employees
if they are in policy making or supervisory positions at the HA.
Sec. 964.150 Funding tenant participation.
(a) Funding duly elected resident councils and jurisdiction wide
resident councils. (1) The HA shall provide funds it receives for this
purpose to the duly elected resident council at each development and/or
those jurisdiction-wide councils eligible to receive the resident
portion of the tenant services account to use for resident
participation activities. This shall be an addition to the Performance
Funding System (PFS), as provided by 24 CFR part 990, to permit HAs to
fund $25 per unit per year for units represented by duly elected
resident councils for resident services, subject to the availability of
appropriations. Of this amount, $15 per unit per year would be provided
to fund tenant participation activities under subpart B of this part
for duly elected resident councils and/or jurisdiction-wide 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 part, including the expenses for conducting elections,
recalls or arbitration required under Sec. 964.130 in subpart B. This
will guarantee the resources necessary to create a bona fide
partnership among the duly elected resident councils, the HA and HUD.
Where both local and jurisdiction-wide councils exist, the distribution
will be agreed upon by the HA and the respective councils.
(2) If funds are available through appropriations, the HA must
provide tenant services funding to the duly elected resident councils
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 and C
of this part.
(3) The HA and the duly elected resident council at each
development and/or those jurisdiction-wide councils shall collaborate
on how the funds will be distributed for tenant participation
activities. If disputes regarding funding decisions arise between the
parties, the matter shall be referred to the Field Office for
intervention. HUD Field Office shall require the parties to undertake
further negotiations to resolve the dispute. If no resolution is
achieved within 90 days from the date of the Field Office intervention,
the Field Office shall refer the matter to HUD Headquarters for final
resolution.
(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. Subject to appropriations, the stipends will be funded from the
resident council's portion of the operating subsidy funding for
resident council expenses ($15.00 per unit per year).
(2) Pursuant to Sec. 913.106, 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 but not limited to
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 of this part 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 of this part, 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 a 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;
(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; and
(5) Homeownership Opportunity. Determining feasibility for
homeownership by residents, including assessing the feasibility of
other housing (including HUD owned or held single or multi-family)
affordable for purchase by residents.
(6) General. (i) Required training on HUD regulations and policies
governing the operation of low-income public housing including
contracting/procurement regulations, 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 Notice 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, and the deadline for
submissions.
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 responsibilities. 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 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) Rights of families; operation of project. If a resident
management corporation is approved by the tenant organization
representing one or more buildings or an area of row houses that are
part of a public housing project for purposes of part 941 of this
chapter, the resident management program may not, as determined by the
HA, interfere with the rights of other residents of such project or
harm the efficient operation of such project.
(g) Comprehensive improvement assistance with RMCs. (1) The HA may
enter into a contract with the RMC to provide comprehensive improvement
assistance under part 968 of this chapter to modernize a project
managed by the RMC.
(2) The HA shall not retain, for any administrative or other
reason, any portion of the comprehensive improvement assistance
provided, unless the PHA and the RMC provide otherwise by contract.
(3) In assessing the modernization needs of its projects under 24
CFR part 968, or other grant mechanisms established by the Housing and
Community Development Act of 1987, the HAs must consult with the tenant
management corporation regarding any project managed by the
corporation, in order to determine the modernization needs and
preferences of resident-managed projects. Evidence of this required
consultation must be included with a HA's initial submission to HUD.
(h) 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.
(i) 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.
(j) 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.
(k) Monitoring of RMC performance. The HA must review periodically
(but not less than annually) the management corporation's performance
to ensure that it complies with all applicable requirements and meets
agreed-upon standards of performance. (The method of review and
criteria used to judge performance should be specified in the
management contract.)
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 of the financial statements
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. A
written report of each audit must be forwarded to HUD and the HA within
30 days of issuance. These requirements are in addition to any other
Federal law or other requirement that would apply to the availability
and audit of books and records of resident management corporations
under this part.
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 Sec. 964.305(a) and Sec. 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 acquisition, construction or 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 Sec. 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 a 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, HAs,
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. Training, employment and contracting opportunities
connected with programs funded under the FIC and TOP are covered by
Section 3.
Sec. 964.325 Notice 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.) This provision
does not apply to residents participating in the Family Self-
Sufficiency Program who are utilizing the escrow account.
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
9. The authority citation for part 990 continues to read as
follows:
Authority: 42 U.S.C. 1437g and 3535(d).
10. In Sec. 990.108, new paragraphs (f) and (g) are 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
shall include in the operating subsidy eligibility calculation, $25 per
unit per year (subject to appropriations) for each unit represented by
a duly elected resident council in support of the duly elected resident
council's activities. Of this amount, $15 per unit per year shall fund
resident participation activities of the duly elected resident council
and/or jurisdiction-wide councils, including but not limited to
stipends. Ten dollars per unit per year shall fund HA costs incurred in
carrying out resident participation activities.
(g) Funding for Resident Council office space. If there is no
community or rental space available, and HUD has approved the use of a
vacant rental unit for Resident Council office space, the unit will be
eligible for operating subsidy (subject to appropriations) at the rate
of the AEL for the number of months the unit is devoted to such use.
* * * * *
11. A new subpart D, consisting of Secs. 990.401 through 990.405,
is 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 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 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 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.
Sec. 990.402 Calculation of total income and preparation of operating
budget.
(a) Subject to Sec. 990.403, 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
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 HA to the resident management corporation
will not be included.
(c) The resident management corporation and the HA must submit a
separate operating budget, including the calculation of operating
subsidy eligibility in accordance with Sec. 990.401, 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 HA.
(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 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 to 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.
(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 of
this chapter 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 HA.
(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 HA that occurs as a
result of fraud, waste, or mismanagement by the HA.
(2) 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.
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 HA under part 990, subpart
A.
(2) The funds provided by the HA 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 HA (such as operating subsidy under
part 990, subpart A, interest income, administrative fees, and rents).
These income estimates must be calculated 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: August 18, 1994.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 94-20655 Filed 8-23-94; 8:45 am]
BILLING CODE 4210-33-P
