Office of the Assistant Secretary for Community Planning and Development; Opportunities for Youth: Youthbuild Program Streamlining; Amendment of Interim Rule

SUMMARY: This final rule amends the interim rule which amended the

regulations for the Youthbuild Program to define administrative costs

for which Youthbuild funds may be expended. This final rule also makes

streamlining amendments to part 585.

EFFECTIVE DATE: November 4, 1996.

FOR FURTHER INFORMATION CONTACT: The Office of Economic Development,

Department of Housing and Urban Development, Room 7136, 451 Seventh

Street, SW, Washington, DC 20410. Telephone (202) 708-2035; TTY (202)

708-1455. (These telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Background

Section 164 of the Housing and Community Development Act of 1992

(Pub.L. 102-550) amended title IV of the National Affordable Housing

Act (42 U.S.C. 1437aaa) to add a new subtitle D which established the

Youthbuild program. On February 21, 1995, the Department published a

final rule at 60 FR 9734, which is codified at 24 CFR Part 585.

Amendment of Interim Rule

On May 17, 1996, the Department published an interim rule which

further addressed the use of Youthbuild funds for administrative costs,

including overhead and salaries and wages associated with an

implementation grant. The public comment period on the interim rule

expired on July 1, 1996. Fourteen commenters responded: Ten recipients

of Youthbuild funds, one potential grant operator, one certified public

accounting firm, and two national organizations. Overall, the

commenters believe that the rule diminishes the quality of the program

and is contrary to the goal of increasing the number of young adults in

Youthbuild programs. The commenters believe that it is contradictory to

the guiding principles in HUD's Community Planning and Development

programs and hampers the comprehensive approach to the program. The

commenters also assert that Youthbuild has worked up until now because

HUD has recognized the need to stimulate community investment and

support for Youthbuild's success and that the interim rule starts the

unraveling of this philosophy by weakening the infrastructure that

guides the Youthbuild program. The Department welcomes the comments of

the grantees and participants in the Youthbuild Program, and therefore

in recognition of the overwhelming criticism of the May 17, 1996

interim rule, the Department criticism of the May 17, 1996 interim

rule, the Department further amends Sec. 585.305(m) by removing

paragraphs (m)(1) and (m)(2) which were added by the interim rule.

Streamlining of Part 585

President Clinton's memorandum of March 4, 1995, titled

``Regulatory Reinvention Initiative'' directed heads of Federal

departments and agencies to review all existing regulations to

eliminate those that are outdated and modify others to increase

flexibility and reduce burden. As a part of HUD's overall effort to

reduce regulatory burden and streamline the content of title 24 of the

Code of Federal Regulations, this rule removes those provisions which

are unnecessary to be codified and can be made available through other

non-rulemaking means.

The Youthbuild program is authorized under subtitle D of title IV

of the National Affordable Housing Act (42 U.S.C. 12899) (``NAHA''), as

added by section 164 of the Housing and Community Development Act of

1992 (Pub. L. 102-550). Several provisions of the Youthbuild

regulations repeat statutory language from the legislation. It is

unnecessary to maintain statutory requirements in the Code of Federal

Regulations (CFR), since these requirements are otherwise fully

accessible and binding. Furthermore, if regulations contain statutory

language, HUD must amend the regulations whenever Congress amends the

statute. This final rule removes repetitious statutory language and

replaces it with a citation to the specific statutory section for easy

reference. The following streamlining amendments are made, therefore,

by this rule:

1. Section 585.2 Program Purpose is amended to state that the

purpose is set out in section 451 of NAHA.

2. Section 585.4 Definitions is amended to remove the definitions

for ``adjusted income,'' ``community based organization,'' ``homeless

individual,'' ``housing development agency,'' ``Indian tribe,''

``individual who has dropped out of high school,'' ``institution of

higher education,'' ``limited-English proficiency,'' ``low-income

family,'' ``offender,'' ``State,'' and ``very low-income family.'' An

introductory statement is added to Sec. 585.4 stating that the

definitions for these terms can be found in section 457 of NAHA.

3. Section 585.309 Project-related restrictions applicable to

Youthbuild residential rental housing is amended to revise paragraph

(e) to state that the monthly rental limitation and the profit

limitations on partners can be found in sec. 455(c)(1) and (2) of NAHA,

respectively. The same amendment is made to Sec. 585.310 Project-

related restrictions applicable to Youthbuild transitional housing for

the homeless.

4. Section 585.312 Wages, labor standards, and nondiscrimination is

revised to state that the applicable provisions are set out in sec.

456(e) of NAHA.

Justification for Final Rule on Streamlining Provisions

HUD generally publishes a rule for public comment before issuing a

rule for effect, in accordance with its own 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). HUD finds that good cause exists

to publish this rule for effect without first soliciting public comment

on the streamlining provisions. The streamlining provisions merely

remove unnecessary regulatory provisions and do not establish or affect

substantive policy. Therefore, prior public comment is unnecessary.

Findings and Certifications

(a) Environmental Impact. A Finding of No Significant Impact with

respect to the environment for this rule has been made in accordance

with HUD regulations at 24 CFR part 50, which implement section

102(2)(C) of the National Environmental Policy Act of 1969. The Finding

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, Office of the General Counsel, Department of Housing and Urban

Development, Room 10276, 451

[[Page 52187]]

Seventh Street, SW., Washington, DC 20410.

(b) 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

will not have a significant economic impact on a substantial number of

small entities because the rule merely withdraws an interim rule and

makes nonsubstantive streamlining amendments to part 585.

(c) 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 does not have ``federalism

implications'' because it does not have substantial direct effects on

the States (including their political subdivisions), or on the

distribution of power and responsibilities among the various levels of

government.

(d) 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 a potential significant impact

on family formation, maintenance, and general well-being. This rule

merely withdraws an interim rule and makes nonsubstantive streamlining

amendments to part 585.

(e) Unfunded Mandates Reform Act. Title II of the Unfunded Mandates

Reform Act of 1995, Pub. L. 104-4, established requirements for Federal

agencies to assess the effects of their regulatory actions on State,

local, and tribal governments and the private sector. This rule does

not impose any Federal mandates on any State, local, or tribal

governments or the private sector within the meaning of the Unfunded

Mandates Reform Act of 1995.

(f) Catalog of Federal Domestic Assistance. The Catalog of Federal

Domestic Assistance Program number assigned to this program is 14.243.

(g) List of Subjects in 24 CFR Part 585. Grant programs--housing

and community development, Homeless, Low- and very low-income families,

Reporting and record keeping requirements.

Accordingly, for the reasons set forth in the preamble, part 585 of

title 24 of the Code of Federal Regulations is amended as follows:

PART 585--YOUTHBUILD PROGRAM

1. The authority citation for part 585 continues to read as

follows:

Authority: 42 U.S.C. 3535(d) and 12899.

2. Section 585.2 is revised to read as follows:

Sec. 585.2 Program Purpose.

The purposes of the Youthbuild program are set out in section 451

of the National Affordable Housing Act (42 U.S.C. 12899) (``NAHA'').

3. Section 585.4 is amended to remove the definitions for

``adjusted income,'' ``community based organization,'' ``homeless

individual,'' ``housing development agency,'' ``Indian tribe,''

``individual who has dropped out of high school,'' ``institution of

higher education,'' ``limited-English proficiency,'' ``low-income

family,'' ``offender,'' ``State,'' and ``very low-income family'' and

to add introductory text to read as follows:

Sec. 585.4 Definitions.

The terms ``adjusted income,'' ``community based organization,''

``homeless individual,'' ``housing development agency,'' ``Indian

tribe,'' ``individual who has dropped out of high school,''

``institution of higher education,'' ``limited-English proficiency,''

``low-income family,'' ``offender,'' ``State,'' and ``very low-income

family'' are defined in section 457 of NAHA.

* * * * *

Sec. 585.305 [Amended]

4. In Sec. 585.305, paragraph (m) is amended to remove paragraphs

(m)(1) and (m)(2).

5. Section 585.309 is amended to revise paragraph (e) to read as

follows:

Sec. 585.309 Project-related restrictions applicable to Youthbuild

residential rental housing.

* * * * *

(e) Limitations on profit. Youthbuild residential rental housing

projects meeting the requirements of this section shall be restricted

from producing profit in excess of the limitations set out in sections

455(c)(1) and (2) of NAHA.

* * * * *

6. Section 585.310 is amended to revise paragraph (a) to read as

follows:

Sec. 585.310 Project-related restrictions applicable to Youthbuild

transitional housing for the homeless.

* * * * *

(a) Limitations on profit. Youthbuild residential rental housing

projects meeting the requirements of this section shall be restricted

from producing profit in excess of the limitations set out in sections

455(c)(1) and (2) of NAHA.

* * * * *

7. Section 585.312 is revised to read as follows:

Sec. 585.312 Wages, labor standards, and nondiscrimination.

Applicable provisions are stated in section 456(e) of NAHA.

Dated: September 24, 1996.

Andrew M. Cuomo,

Assistant Secretary for Community Planning and Development.

[FR Doc. 96-25298 Filed 10-3-96; 8:45 am]

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