Office of the Assistant Secretary for Community Planning and Development; Shelter Plus Care Program; Streamlining

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

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

regulatory reform initiatives, this rule will streamline the Shelter

Plus Care regulations by removing provisions that are redundant of

statutes or are otherwise unnecessary. This final rule will make the

Shelter Plus Care regulations clearer and more concise.

EFFECTIVE DATE: October 30, 1996.

FOR FURTHER INFORMATION CONTACT: David Pollack, Program Development

Division, Office of Community Planning and Development, Department of

Housing and Urban Development, Room 7260, 451 7th Street, SW.,

Washington, DC 20410; telephone (202) 708-1234. (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 1-800-877-

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 582 implement the Department's Shelter Plus Care Program,

which provides rental assistance that is matched with supportive

services for hard-to-serve homeless persons with disabilities. In

developing the regulations for the Shelter Plus Care, 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 as much discretion and flexibility as possible. See, for

example, the interim rule, published on May 10, 1994 (59 FR 24252). The

Department has determined that it can further improve and streamline

the regulations for the Shelter Plus Care program.

This final rule makes the following specific amendments to part

582:

(1) Amends the first sentence of Sec. 582.1 regarding the

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

in order to facilitate references to the statute throughout the

regulations;

(2) Replaces many of the definitions in Sec. 582.5 that are

redundant of the statute with references to the pertinent statutory

sections;

(3) Removes the rating criteria for applications in Sec. 582.200(b)

that repeat statute and adds cross-reference to the statute;

(4) Revises Sec. 582.230 to add provisions on nonrecipient

responsible entities assuming HUD environmental review responsibilities

under the SRO component of the program. These revisions conform

Sec. 582.230 to 24 CFR part 58 as revised at 60 FR 13518, March 13,

1995, and at 60 FR 48610, September 19, 1995;

(5) Removes provisions in Sec. 582.310 that repeat the text of

section 3(a)(1) of the United States Housing Act of 1937; and

(6) Makes several conforming amendments to Secs. 582.105, 582.300,

582.305, and 582.340.

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 merely 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 streamlines

the Shelter Plus Care 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 developed the regulations

in part 582, 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.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule before publication and by

approving it certifies, in accordance with the Unfunded Mandates Reform

Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal

mandate that will result in the expenditure by State, local, and tribal

governments, in the aggregate, or by the private sector, of $100

million or more in any one year. This rule is

[[Page 51169]]

limited to removing those unnecessary provisions in the Shelter Plus

Care Program regulations.

Catalog

The Catalog of Federal Domestic Assistance number is 14.238,

Shelter Plus Care.

List of Subjects in 24 CFR Part 582

Homeless, Rent subsidies, Reporting and recordkeeping requirements,

Supportive housing programs--housing and community development,

Supportive services.

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

582 is amended as follows:

PART 582--SHELTER PLUS CARE

1. The authority citation for 24 CFR part 582 is revised to read as

follows:

Authority: 42 U.S.C. 3535(d) and 11403-11407b.

2. Section 582.1 is amended by revising the first sentence in

paragraph (a) and by revising paragraph (b), to read as follows:

Sec. 582.1 Purpose and scope.

(a) General. The Shelter Plus Care program (S+C) is authorized by

title IV, subtitle F, of the Stewart B. McKinney Homeless Assistance

Act (the McKinney Act) (42 U.S.C. 11403-11407b). * * *

* * * * *

(b) Components. Rental assistance is provided through four

components described in Sec. 582.100. Applicants may apply for

assistance under any one of the four components, or a combination.

3. Section 582.5 is revised to read as follows:

Sec. 582.5 Definitions.

The terms Fair Market Rent (FMR), HUD, Public Housing Agency (PHA),

Indian Housing Authority (IHA), and Secretary are defined in 24 CFR

part 5.

As used in this part:

Acquired immunodeficiency syndrome (AIDS) and related diseases has

the meaning given in section 853 of the AIDS Housing Opportunity Act

(42 U.S.C. 12902).

Applicant has the meaning given in section 462 of the McKinney Act

(42 U.S.C. 11403g).

Eligible person means a homeless person with disabilities

(primarily persons who are seriously mentally ill; have chronic

problems with alcohol, drugs, or both; or have AIDS and related

diseases) and, if also homeless, the family of such a person. To be

eligible for assistance, persons must be very low income, except that

low-income individuals may be assisted under the SRO component in

accordance with 24 CFR 813.105(b).

Homeless or homeless individual has the meaning given in section

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

Indian tribe has the meaning given in section 102 of the Housing

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

Low-income means an annual income not in excess of 80 percent of

the median income for the area, as determined by HUD. HUD may establish

income limits higher or lower than 80 percent of the median income for

the area on the basis of its finding that such variations are necessary

because of the prevailing levels of construction costs or unusually

high or low family incomes.

Nonprofit organization has the meaning given in section 104 of the

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12704).

The term nonprofit organization also includes a community mental health

center established as a public nonprofit organization.

Participant means an eligible person who has been selected to

participate in S+C.

Person with disabilities means a household composed of one or more

persons at least one of whom is an adult who has a disability.

(1) A person shall be considered to have a disability if such

person has a physical, mental, or emotional impairment which is

expected to be of long-continued and indefinite duration; substantially

impedes his or her ability to live independently; and is of such a

nature that such ability could be improved by more suitable housing

conditions.

(2) A person will also be considered to have a disability if he or

she has a developmental disability, which is a severe, chronic

disability that--

(i) Is attributable to a mental or physical impairment or

combination of mental and physical impairments;

(ii) Is manifested before the person attains age 22;

(iii) Is likely to continue indefinitely;

(iv) Results in substantial functional limitations in three or more

of the following areas of major life activity:

(A) Self-care;

(B) Receptive and expressive language;

(C) Learning;

(D) Mobility;

(E) Self-direction;

(F) Capacity for independent living; and

(G) Economic self-sufficiency; and

(v) Reflects the person's need for a combination and sequence of

special, interdisciplinary, or generic care, treatment, or other

services which are of lifelong or extended duration and are

individually planned and coordinated.

(3) Notwithstanding the preceding provisions of this definition,

the term person with disabilities includes, except in the case of the

SRO component, two or more persons with disabilities living together,

one or more such persons living with another person who is determined

to be important to their care or well-being, and the surviving member

or members of any household described in the first sentence of this

definition who were living, in a unit assisted under this part, with

the deceased member of the household at the time of his or her death.

(In any event, with respect to the surviving member or members of a

household, the right to rental assistance under this part will

terminate at the end of the grant period under which the deceased

member was a participant.

Recipient means an applicant approved to receive a S+C grant.

Seriously mentally ill has the meaning given in section 462 of the

McKinney Act (42 U.S.C. 11403g).

Single room occupancy (SRO) housing means a unit for occupancy by

one person, which need not but may contain food preparation or sanitary

facilities, or both.

Sponsor means a nonprofit organization which owns or leases

dwelling units and has contracts with a recipient to make such units

available to eligible homeless persons and receives rental assistance

payments under the SRA component.

State has the meaning given in section 462 of the McKinney Act (42

U.S.C. 11403g).

Supportive service provider, or service provider, means a person or

organization licensed or otherwise qualified to provide supportive

services, either for profit or not for profit.

Supportive services means assistance that--

(1) Addresses the special needs of eligible persons; and

(2) Provides appropriate services or assists such persons in

obtaining appropriate services, including health care, mental health

treatment, alcohol and other substance abuse services, child care

services, case management services, counseling, supervision, education,

job training, and other services essential for achieving and

maintaining independent living.

(Inpatient acute hospital care does not qualify as a supportive

service.).

Unit of general local government has the meaning given in section

102 of the Housing and Community Development Act of 1974 (42 U.S.C.

5302).

[[Page 51170]]

Very low-income means an annual income not in excess of 50 percent

of the median income for the area, as determined by HUD, with

adjustments for smaller and larger families. HUD may establish income

limits higher or lower than 50 percent of the median income for the

area on the basis of its finding that such variations are necessary

because of unusually high or low family incomes.

Sec. 582.105 [Amended]

4. In Sec. 582.105, paragraph (a) is amended by removing the words

``paragraph (f)'' and adding, in their place, the words ``paragraph

(e)''; and paragraph (d)(2) is amended by removing the word

``paragraph'' and adding, in its place, the words ``paragraph (d)''.

5. Section 582.200 is revised to read as follows:

Sec. 582.200 Application and grant award.

(a) Review. When funds are made available for assistance, HUD will

publish a notice of fund availability in the Federal Register in

accordance with the requirements of 24 CFR part 4. Applications will be

reviewed and screened in accordance with the guidelines, rating

criteria and procedures published in the notice.

(b) Rating criteria. HUD will award funds based on the criteria

specified in section 455(a)(1) through (8) of the McKinney Act (42

U.S.C. 11403d(1)--11403d(8)) and on the following criteria authorized

by section 455(a)(9) of the McKinney Act (42 U.S.C. 11403d(9)):

(1) The extent to which the applicant has demonstrated coordination

with other Federal, State, local, private and other entities serving

homeless persons in the planning and operation of the project, to the

extent practicable;

(2) Extent to which the project targets homeless persons living in

emergency shelters, supportive housing for homeless persons, or in

places not designed for, or ordinarily used as, a regular sleeping

accommodation for human beings;

(3) Quality of the project; and

(4) Extent to which the program will serve homeless persons who are

seriously mentally ill, have chronic alcohol and/or drug abuse

problems, or have AIDS and related diseases.

(Approved by the Office of Management and Budget under control

number 2506-0118)

6. Section 582.230 is revised to read as follows:

Sec. 582.230 Environmental review requirements.

(a) Responsibility for review. (1) HUD will perform the

environmental review, in accordance with part 50 of this title, for

conditionally selected applications received from PHA applicants and

from IHA applicants. HUD is not permitted to approve such applications

prior to its completion of this review, nor is the PHA or IHA permitted

to enter into a contract for, or otherwise commit HUD or local funds

for, acquisition, rehabilitation, conversion, lease, repair, or

construction of property to provide housing under the program, prior to

HUD's completion of this review and approval of the application, except

under the SRO component.

(2) Applicants that are States, units of general local government,

or Indian tribes must assume responsibility as ``responsible entities''

for environmental review, decisionmaking, and action for each

application for assistance in accordance with part 58 of this title. In

addition, for PHA projects and IHA projects under the SRO component,

environmental reviews will be performed by State, local government,

Indian tribe, or Alaska native village ``nonrecipient responsible

entities'' as provided under part 58 of this title. HUD is permitted to

approve such applications subject to the completion of reviews by the

applicant in accordance with part 58 of this title. Applicants

performing these reviews may adopt relevant and adequate prior reviews

conducted by HUD or another governmental entity if the reviews meet the

particular requirements of the Federal environmental law or authority

under which they would be adopted, and only under certain conditions

(e.g., a determination that no environmentally significant changes have

occurred since the review was done). Applicants who adopt such relevant

and adequate prior reviews may include the environmental certification

and Request for Release of Funds with their applications.

(b) Environmental review by HUD. With regard to the environmental

effects of applications for which HUD performs the review, HUD will

undertake its review in accordance with the provisions of NEPA and the

related authorities listed in 24 CFR 50.4. HUD may eliminate an

application from consideration where the application would require an

Environmental Impact Statement (EIS). PHA applicants and IHA applicants

(other than under the SRO component) must include in their application

an assurance that the applicant will:

(1) Not enter into a contract for, or otherwise commit HUD or local

funds for, acquisition, rehabilitation, conversion, lease, repair, or

construction of property to provide housing under the program, prior to

HUD's completion of the review and approval of the application;

(2) Supply HUD with information necessary for HUD to perform any

applicable environmental review when requested under Sec. 582.225(a);

and

(3) Carry out mitigating measures required by HUD or ensure that

alternate sites are utilized.

(c) Environmental review by applicants or nonrecipient responsible

entities. (1) An applicant that is required under paragraph (a)(2) of

this section to assume environmental review responsibility must include

in its application an assurance that the applicant 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 58.5. A PHA or IHA applicant under the SRO

component must include in its application an assurance by the

nonrecipient responsible entity that the entity 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 58.5.

(2) For applicants required to assume environmental review

responsibility and for PHAs and IHAs under the SRO component, the award

of funding 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. (This provision does not

preclude the applicant from enclosing its environmental certification

and Request for Release of Funds with its application.)

(i) Upon completion of the requirements in 24 CFR part 58:

(A) Applicants required to assume environmental review

responsibility must certify the completion;

(B) PHA and IHA applicants under the SRO component must submit the

nonrecipient responsible entities' certification of completion; and

(C) All applicants must submit a Request for Release of Funds. This

submission is not required in cases in which the applicant determines,

in accordance with part 58 that its program components are totally

exempt.

(ii) HUD will not release grant funds if the recipient or any other

party commits grant funds (i.e., incurs any costs or expenditures to be

paid or reimbursed with such funds) before the grantee submits and HUD

approves its Request for Release of Funds (when such submission is

required).

[[Page 51171]]

Sec. 582.300 [Amended]

6. In Sec. 582.300, paragraph (a)(1) is amended by removing the

words ``Sec. 582.340(e)'' and adding, in their place, the words

``Sec. 582.340(b)''.

Sec. 582.305 [Amended]

7. In Sec. 582.305, paragraph (a) is amended by removing the words

``882.109'' and adding, in their place, the words ``982.401''.

8. In Sec. 582.310, paragraph (a) is revised to read as follows:

Sec. 582.310 Resident rent.

(a) Amount of rent. Each participant must pay rent in accordance

with section 3(a)(1) of the U.S. Housing Act of 1937 (42 U.S.C.

1437a(3)(1)), except that the gross income of a person occupying an

intermediate care facility assisted under title XIX of the Social

Security Act is the same as if the person were being assisted under

title XVI of the Social Security Act.

* * * * *

9. Section 582.340 is amended by:

a. Revising paragraph (a)(1);

b. In paragraphs (b)(2) and (b)(3)(iv), removing the words

``paragraph (e)(1)'', each place they appear and adding in each place,

the words ``paragraph (b)(1)'';

c. Revising paragraph (b)(2)(i); and

d. In the introductory text of paragraph (b)(3), removing the words

``paragraph (e)(2)'' and adding, in their place, the words ``paragraph

(b)(2)'', to read as follows:

Sec. 582.340 Other Federal requirements.

(a) * * *

(1) The policies, guidelines, and requirements of OMB Circular No.

A-87 (Cost Principles Applicable to Grants, Contracts and Other

Agreements with State and Local Governments) and 24 CFR part 85 apply

to the acceptance and use of assistance under the program by

governmental entities, and OMB Circular Nos. A-110 (Grants and

Cooperative Agreements with Institutions of Higher Education,

Hospitals, and Other Nonprofit Organizations) and 24 CFR part 84 and A-

122 (Cost Principles Applicable to Grants, Contracts and Other

Agreements with Nonprofit Institutions) apply to the acceptance and use

of assistance by private nonprofit organizations, except where

inconsistent with provisions of the McKinney Act, other Federal

statutes, or this part. (OMB Circulars are available from the Executive

Office of the President, Publication Service, 725 17th Street, N.W.,

Suite G-2200, Washington, DC 20503, Telephone 202-395-7332.)

(b) * * *

(2) * * *

(i) For States, units of general local governments, PHAs and IHAs,

a disclosure of the nature of the conflict, accompanied by an assurance

that there has been public disclosure of the conflict and a description

of how the public disclosure was made; and

* * * * *

Dated: September 23, 1996.

Andrew M. Cuomo,

Assistant Secretary for Community Planning and Development.

[FR Doc. 96-24875 Filed 9-27-96; 8:45 am]

BILLING CODE 4210-29-P