Office of the Assistant Secretary for Community Planning and Development; Supportive Housing Program; Streamlining

SUMMARY: This final rule amends HUD's regulations for the Supportive

Housing Program. In an effort to comply with the President's regulatory

reform initiatives, this rule will streamline the Supportive Housing

regulations by eliminating provisions that are redundant of statutes or

are otherwise unnecessary. This final rule will make the Supportive

Housing regulations clearer and more concise.

EFFECTIVE DATE: October 30, 1996.

FOR FURTHER INFORMATION CONTACT: Maggie H. Taylor, Director, Office of

Special Needs Assistance Programs, Department of Housing and Urban

Development, 451 7th Street, SW, Washington, DC 20410; telephone (202)

708-4300 (this is not a toll-free number). Hearing- or speech-impaired

persons may access this number via TTY by calling the Federal

Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a

memorandum to all Federal departments and agencies regarding regulatory

reinvention. In response to this memorandum, the Department conducted a

page-by-page review of its regulations to determine which can be

eliminated, consolidated, or otherwise improved. The regulations in 24

CFR part 583 implement the Department's Supportive Housing Program,

which provides assistance for housing and supportive services for

homeless persons, as authorized by title IV, subtitle C of the Stewart

B. McKinney Homeless Assistance Act of 1987, as amended (the McKinney

Act) (42 U.S.C. 11381-11389). In developing the regulations for the

Supportive Housing Program, the Department has always attempted to

codify only those requirements that are necessary to the proper

administration of the program, and to allow the recipients the

flexibility to carry out projects that benefit homeless persons (see,

e.g., the preamble to the Supportive Housing final rule, published on

July 19, 1994 (59 FR 36886)). However, the Department has determined

that it can further improve and streamline the regulations for the

Supportive Housing Program by eliminating unnecessary provisions.

For example, many of the provisions in part 583 come directly from

the McKinney Act. It is unnecessary to maintain statutory requirements

in the Code of Federal Regulations (CFR), since those requirements are

otherwise fully accessible and binding. Furthermore, if regulations

contain statutory language, HUD must amend the regulations whenever

Congress amends the statute. Therefore, this final rule will remove

repetitious statutory language and replace it with a citation to the

specific statutory section for easy reference.

This final rule will make the following specific amendments to part

583:

(1) Amend the first sentence of Sec. 583.1 regarding the

authorizing statute--the Stewart B. McKinney Homeless Assistance Act--

in order to facilitate references to the statute throughout the

regulations;

(2) Replace many of the definitions in Sec. 583.5 that are

redundant of the statute with references to the pertinent statutory

sections. For the definition of ``Operating costs'', this rule will

also amend Secs. 583.125 and 583.135 to include regulatory guidance

that is not redundant of the statute. This rule also updates Sec. 583.5

to refer to the consolidated plan, rather than the Comprehensive

Housing Affordability Strategy, according to HUD's Consolidated Plan

final rule, published on January 5, 1995 (60 FR 1878);

(3) Remove the provision regarding the rating criteria for

applications in Sec. 583.200(b). This information is repetitive of the

statute, and can more appropriately be provided in the annual notice of

funding availability (NOFA);

(4) Streamline the language in Sec. 583.230 regarding environmental

review. The substance of this language is redundant of the

environmental review regulations in 24 CFR parts 50 and 58;

(5) Replace language from Sec. 583.300(f) regarding the

participation of homeless individuals that is redundant of the statute

with a reference to the statutory section;

(6) Replace much of Sec. 583.305, which is redundant of the

statute, with statutory references;

(7) Remove the nondiscrimination requirements in

Sec. 583.325(b)(2). The Department issued a final rule on February 9,

1996 (61 FR 5198) creating a new 24 CFR part 5, subpart A of which

contains certain definitions, Federal requirements, and a waiver

provision that are generally applicable to all HUD programs. The

February 9, 1996 final rule removed the duplicative nondiscrimination

requirements that were in Sec. 583.325(b)(1); this final rule will

remove the duplicative requirements from paragraph (b)(2) of that

section;

(8) Remove the outdated reference to the Comprehensive Housing

Affordability Strategy (CHAS) in Sec. 583.405(a)(1), and replace it

with a reference to the consolidated plan, in accordance with the

Consolidated Plan final rule published on January 5, 1995 (60 FR 1878).

This rule will result in the elimination of approximately four

pages of unnecessary regulations.

Justification for Final Rulemaking

The Department generally publishes a rule for public comment before

issuing a rule for effect, in accordance with its regulations on

rulemaking in 24 CFR part 10. However, part 10 provides for exceptions

to the general rule if the agency finds good cause to omit advance

notice and public participation. The good cause requirement is

satisfied when prior public procedure is ``impracticable, unnecessary,

or contrary to the public interest'' (24 CFR 10.1). The Department

finds that good cause exists to publish this rule for effect without

first soliciting public comment. This rule primarily removes

unnecessary regulatory provisions and does not establish or affect

substantive policy. Therefore, prior public comment is unnecessary.

Findings and Certifications

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed and approved this final rule, and in so

doing certifies that this rule will not have a significant economic

impact on a substantial number of small entities. This rule primarily

streamlines the Supportive Housing regulations by removing unnecessary

provisions. The rule will have no adverse or disproportionate economic

impact on small businesses.

Environmental Impact

This rule does not have an environmental impact. This rule simply

amends existing regulations by consolidating and streamlining

provisions; it does not alter the environmental effect of the

regulations being amended. As the Department

[[Page 51175]]

developed the regulations in part 583, Findings of No Significant

Impact with respect to the environment were made in accordance with

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). Those

findings remain applicable to this rule, and are available for public

inspection between 7:30 a.m. and 5:30 p.m. weekdays in the Office of

the Rules Docket Clerk, Office of General Counsel, Room 10276,

Department of Housing and Urban Development, 451 Seventh Street, SW,

Washington, DC.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that 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. No programmatic or policy changes

will result from this rule that would affect the relationship between

the Federal Government and State and local governments.

Executive Order 12606, The Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this rule will not have

the potential for significant impact on family formation, maintenance,

or general well-being, and thus is not subject to review under the

order. No significant change in the Department's policies or programs

will result from promulgation of this rule.

List of Subjects in 24 CFR Part 583

Homeless, Rent subsidies, Reporting and recordkeeping requirements,

Supportive housing programs--housing and community development,

Supportive services.

PART 583--SUPPORTIVE HOUSING PROGRAM

Accordingly, for the reasons set forth in the preamble, 24 CFR part

583 is amended as follows:

1. The authority citation for 24 CFR part 583 continues to read as

follows:

Authority: 42 U.S.C. 3535(d) and 11389.

2. In Sec. 583.1, paragraph (a) is amended by revising the first

sentence to read as follows:

Sec. 583.1 Purpose and scope.

(a) General. The Supportive Housing Program is authorized by title

IV of the Stewart B. McKinney Homeless Assistance Act (the McKinney

Act) (42 U.S.C. 11381-11389). * * *

* * * * *

3. Section 583.5 is revised to read as follows:

Sec. 583.5 Definitions.

As used in this part:

Applicant is defined in section 422(1) of the McKinney Act (42

U.S.C. 11382(1)). For purposes of this definition, governmental

entities include those that have general governmental powers (such as a

city or county), as well as those that have limited or special powers

(such as public housing agencies).

Consolidated plan means the plan that a jurisdiction prepares and

submits to HUD in accordance with 24 CFR part 91.

Date of initial occupancy means the date that the supportive

housing is initially occupied by a homeless person for whom HUD

provides assistance under this part. If the assistance is for an

existing homeless facility, the ``date of initial occupancy'' is the

date that services are first provided to the residents of supportive

housing with funding under this part.

Date of initial service provision means the date that supportive

services are initially provided with funds under this part to homeless

persons who do not reside in supportive housing. This definition

applies only to projects funded under this part that do not provide

supportive housing.

Disability is defined in section 422(2) of the McKinney Act (42

U.S.C. 11382(2)).

Homeless person means an individual or family that is described in

section 103 of the McKinney Act (42 U.S.C. 11302).

Metropolitan city is defined in section 102(a)(4) of the Housing

and Community Development Act of 1974 (42 U.S.C. 5302(a)(4)). In

general, metropolitan cities are those cities that are eligible for an

entitlement grant under 24 CFR part 570, subpart D.

New construction means the building of a structure where none

existed or an addition to an existing structure that increases the

floor area by more than 100 percent.

Operating costs is defined in section 422(5) of the McKinney Act

(42 U.S.C. 11382(5)).

Outpatient health services is defined in section 422(6) of the

McKinney Act (42 U.S.C. 11382(6)).

Permanent housing for homeless persons with disabilities is defined

in section 424(c) of the McKinney Act (42 U.S.C. 11384(c)).

Private nonprofit organization is defined in section 422(7) (A),

(B), and (D) of the McKinney Act (42 U.S.C. 11382(7) (A), (B), and

(D)). The organization must also have a functioning accounting system

that is operated in accordance with generally accepted accounting

principles, or designate an entity that will maintain a functioning

accounting system for the organization in accordance with generally

accepted accounting principles.

Project is defined in sections 422(8) and 424(d) of the McKinney

Act (42 U.S.C. 11382(8), 11384(d)).

Recipient is defined in section 422(9) of the McKinney Act (42

U.S.C. 11382(9)).

Rehabilitation means the improvement or repair of an existing

structure or an addition to an existing structure that does not

increase the floor area by more than 100 percent. Rehabilitation does

not include minor or routine repairs.

State is defined in section 422(11) of the McKinney Act (42 U.S.C.

11382(11)).

Supportive housing is defined in section 424(a) of the McKinney Act

(42 U.S.C. 11384(a)).

Supportive services is defined in section 425 of the McKinney Act

(42 U.S.C. 11385).

Transitional housing is defined in section 424(b) of the McKinney

Act (42 U.S.C. 11384(b)). See also Sec. 583.300(j).

Tribe is defined in section 102 of the Housing and Community

Development Act of 1974 (42 U.S.C. 5302).

Urban county is defined in section 102(a)(6) of the Housing and

Community Development Act of 1974 (42 U.S.C. 5302(a)(6)). In general,

urban counties are those counties that are eligible for an entitlement

grant under 24 CFR part 570, subpart D.

4. Section 583.125 is amended by revising paragraph (b) to read as

follows:

Sec. 583.125 Grants for operating costs.

* * * * *

(b) Operating costs. Operating costs are those associated with the

day-to-day operation of the supportive housing. They also include the

actual expenses that a recipient incurs for conducting on-going

assessments of the supportive services needed by residents and the

availability of such services; relocation assistance under

Sec. 583.310, including payments and services; and insurance.

* * * * *

5. Section 583.135 is amended by revising paragraph (b) to read as

follows:

Sec. 583.135 Administrative costs.

* * * * *

[[Page 51176]]

(b) Administrative costs. Administrative costs include the costs

associated with accounting for the use of grant funds, preparing

reports for submission to HUD, obtaining program audits, similar costs

related to administering the grant after the award, and staff salaries

associated with these administrative costs. They do not include the

costs of carrying out eligible activities under Secs. 583.105 through

583.125.

6. Section 583.200 is revised to read as follows:

Sec. 583.200 Application and grant award.

When funds are made available for assistance, HUD will publish a

notice of funding availability (NOFA) in the Federal Register, in

accordance with the requirements of 24 CFR part 4. HUD will review and

screen applications in accordance with the requirements in section 426

of the McKinney Act (42 U.S.C. 11386) and the guidelines, rating

criteria, and procedures published in the NOFA.

7. Section 583.230 is revised to read as follows:

Sec. 583.230 Environmental review.

(a) Generally. Project selection is subject to completion of an

environmental review of the proposed site, and the project may be

modified or the site rejected as a result of that review. The

environmental effects must be assessed in accordance with the

provisions of the National Environmental Policy Act of 1969 (42 U.S.C.

4320) (NEPA) and the related environmental laws and authorities listed

in HUD's implementing regulations at 24 CFR parts 50 or 58, depending

on who is responsible for environmental review.

(b) Environmental review by HUD. HUD will perform an environmental

review, in accordance with part 50 of this title, before approval of

conditionally selected applications received directly from private

nonprofit organizations and governmental entities with special or

limited purpose powers. Any application subject to environmental review

by HUD that requires an Environmental Impact Statement (EIS) in

accordance with the procedures in 24 CFR part 50, subpart E, will not

be eligible for assistance under this part.

(c) Environmental review by applicants. Applicants that are States,

metropolitan cities, urban counties, tribes, or other governmental

entities with general purpose powers must assume responsibility for

environmental review, decisionmaking, and action for each application

for assistance in accordance with part 58 of this title. These

applicants must include in their applications an assurance that they

will assume all the environmental review responsibility that would

otherwise be performed by HUD as the responsible Federal official under

NEPA and related authorities listed in 24 CFR part 58. The grant award

is subject to completion of the environmental responsibilities set out

in 24 CFR part 58 within a reasonable time period after notification of

the award. Applicants may, however, enclose an environmental

certification and Request for Release of Funds with their applications.

8. Section 583.300 is amended by revising paragraph (f) to read as

follows:

Sec. 583.300 General operation.

* * * * *

(f) Participation of homeless persons. (1) Each recipient must

provide for the participation of homeless persons as required in

section 426(g) of the McKinney Act (42 U.S.C. 11386(g)). This

requirement is waived if an applicant is unable to meet it and presents

a plan for HUD approval to otherwise consult with homeless or formerly

homeless persons in considering and making policies and decisions. See

also Sec. 583.330(e).

(2) Each recipient of assistance under this part must, to the

maximum extent practicable, involve homeless individuals and families,

through employment, volunteer services, or otherwise, in constructing,

rehabilitating, maintaining, and operating the project and in providing

supportive services for the project.

* * * * *

9. Section 583.305 is revised to read as follows:

Sec. 583.305 Term of commitment; repayment of grants; prevention of

undue benefits.

(a) Term of commitment and conversion. Recipients must agree to

operate the housing or provide supportive services in accordance with

this part and with sections 423 (b)(1) and (b)(3) of the McKinney Act

(42 U.S.C. 11383(b)(1), 11383(b)(3)).

(b) Repayment of grant and prevention of undue benefits. In

accordance with section 423(c) of the McKinney Act (42 U.S.C.

11383(c)), HUD will require recipients to repay the grant unless HUD

has authorized conversion of the project under section 423(b)(3) of the

McKinney Act (42 U.S.C. 11383(b)(3)).

10. Section 583.325 is amended by revising paragraph (b) to read as

follows:

Sec. 583.325 Nondiscrimination and equal opportunity requirements.

* * * * *

(b) Nondiscrimination and equal opportunity requirements. The

nondiscrimination and equal opportunity requirements set forth at part

5 of this title apply to this program. The Indian Civil Rights Act (25

U.S.C. 1301 et seq.) applies to tribes when they exercise their powers

of self-government, and to Indian housing authorities (IHAs) when

established by the exercise of such powers. When an IHA is established

under State law, the applicability of the Indian Civil Rights Act will

be determined on a case-by-case basis. Projects subject to the Indian

Civil Rights Act must be developed and operated in compliance with its

provisions and all implementing HUD requirements, instead of title VI

and the Fair Housing Act and their implementing regulations.

* * * * *

Sec. 583.405 [Amended]

11. In Sec. 583.405, paragraph (a)(1) is amended by removing the

term ``CHAS'', and by adding in its place the term ``consolidated

plan''.

Dated: September 23, 1996.

Andrew M. Cuomo,

Assistant Secretary for Community Planning and Development.

[FR Doc. 96-24873 Filed 9-27-96; 8:45 am]

BILLING CODE 4210-29-P