Section 8 Moderate Rehabilitation Single Room Occupancy Program for Homeless Individuals; Amendments

[[Page 5850]]

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Community Planning and

Development

24 CFR Part 882

[Docket No. FR-3929-I-01]

RIN 2506-AB75

Section 8 Moderate Rehabilitation Single Room Occupancy Program

for Homeless Individuals; Amendments

AGENCY: Office of the Assistant Secretary for Community Planning and

Development, HUD.

ACTION: Interim rule.

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SUMMARY: This interim rule amends HUD's regulations for the Section 8

Moderate Rehabilitation Single Room Occupancy Program for Homeless

Individuals at 24 CFR part 882, subpart H. These amendments conform the

program regulations with statutory and regulatory changes. The

amendments will clarify and update the regulations according to current

requirements.

DATES: Effective date: March 15, 1996. Comments due date: April 15,

1996.

ADDRESSES: Interested persons are invited to submit comments regarding

this interim rule to the Office of General Counsel, Rules Docket Clerk,

Room 10276, Department of Housing and Urban Development, 451 Seventh

Street SW., Washington, DC 20410-0500. Communications should refer to

the above docket number and title. A copy of each communication

submitted will be available for public inspection and copying on

weekdays between 7:30 a.m. and 5:30 p.m. at the above address. Comments

sent by FAX are not acceptable.

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

Special Needs Assistance Programs, Department of Housing and Urban

Development, 451 Seventh Street, SW, Washington, DC 20410; (202) 708-

4300; TTY for persons who are deaf, hard-of-hearing, or who have speech

impairments (202) 708-2565. (Telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Background

This interim rule makes several changes to conform the Section 8

Moderate Rehabilitation Single Room Occupancy (SRO) program regulations

with statutory and regulatory changes. First, this interim rule

eliminates the remaining provisions on the required use of housing

authority (HA) waiting lists. In an interim rule published on March 15,

1993 (58 FR 13828), HUD conformed the process for selecting homeless

persons for participation in the SRO program with the process used in

HUD's other homeless programs. In place of the HA waiting list process,

the interim rule required that HAs and/or Owners engage in outreach

efforts to bring homeless individuals into the program, and that vacant

units be rented directly to homeless individuals located through these

outreach efforts. This interim rule deletes the remaining references to

HA waiting lists that HUD inadvertently overlooked. This interim rule

also clarifies the role of HAs in helping to identify homeless

individuals during the outreach process (Sec. 882.808(a)(1)).

Second, this interim rule conforms the program regulations with

section 1405 of the Housing and Community Development Act of 1992 (Pub.

L. 102-550, approved October 28, 1992), which amended the Stewart B.

McKinney Homeless Assistance Act (42 U.S.C. 11401). This statutory

amendment includes a requirement for the participation of homeless

individuals in considering and making policies and decisions regarding

rehabilitation of structures receiving assistance under this program,

and for the involvement of homeless individuals in the rehabilitation

and operation of these structures. This interim rule implements the

requirement at Sec. 882.808(q).

The statutory amendment also requires a formal process for

terminating assistance to individuals who violate program requirements.

HUD has determined that the existing requirements for the termination

of tenancy at Sec. 882.808(l) sufficiently protect the rights of

homeless individuals and should serve to prevent abuses such as lack of

notice. Therefore, no change to the regulations is necessary to

implement the requirement. (Note: This interim rule does not change the

lawful grounds for terminating assistance. Termination of assistance

due to unwillingness to accept supportive services or other activities

that do not of themselves constitute a violation of the housing lease

are not allowed.)

The statutory amendment further provides that private nonprofit

organizations can apply directly for SRO assistance. Prior to the

amendments, the only eligible applicants under the program were public

housing agencies and Indian housing authorities. To implement this

change, the interim rule adds definitions of ``applicant'' and

``private nonprofit organization'' at Sec. 882.802. This revised

section further provides that HUD will require private nonprofit

applicants to subcontract with public housing agencies to administer

their rental assistance.

Third, this interim rule conforms the program regulations with the

environmental review procedures in 24 CFR part 58. The Multifamily

Housing Property Disposition Reform Act of 1994 (Pub. L. 103-233,

approved April 11, 1994) made these procedures applicable to the

Section 8 Moderate Rehabilitation SRO program, and HUD published

implementing regulations in the Federal Register on March 13, 1995 (60

FR 13518). Under part 58, it is the HA's responsibility to obtain an

agreement with the responsible entity designated under part 58 for the

performance of environmental reviews.

Fourth, this interim rule revises the provision on project

eligibility at Sec. 882.803(a)(2). This interim rule will provide that

housing is ineligible for assistance under this program if it is

receiving Federal funding for rental assistance or operating costs

under other HUD programs. The current regulation provides that housing

is not eligible for assistance if it is, or has been within 12 months

before the Owner submits a proposal, subsidized under any Federal

housing program. A number of nonprofit organizations and PHAs have

requested clarification of the term ``subsidized,'' and have indicated

that the 12-month restriction eliminates a number of otherwise

excellent facilities from consideration for SRO assistance. In response

to these comments, HUD is revising this provision by adopting the

clearer, less restrictive standard used in its Shelter Plus Care

program. Under the revised standard, there is no restriction on the use

of other Federal funding for acquisition and rehabilitation costs.

Fifth, this interim rule eliminates an obsolete date reference in

the provisions for determining the maximum amount of rehabilitation

allowable in the program. Although Sec. 882.805(g)(1)(ii)(A) provides

that the rehabilitation cost calculation should use the HUD-approved

High Cost Percentage for Base Cities in use before April 1988, HUD

recalculates this percentage periodically. Therefore, this interim rule

will eliminate the date reference so that a more recent percentage can

be used.

Finally, this interim rule corrects an error in a final rule

published in the Federal Register on June 6, 1994 (59 FR 29326). That

rule, which conformed HUD's regulations with the requirements of the

Uniform Relocation Assistance and Real Property Acquisition Policies

Act of 1970, as amended, and its implementing regulations at 49 CFR

part 24, added

[[Page 5851]]

Sec. 882.810 and intended to remove much of Sec. 882.803(d). However,

the most recent codification of part 882 (April 1, 1995) included both

Sec. 882.810 and Sec. 882.803(d) in its entirety. Therefore, in order

to correct the error, this rule removes much of Sec. 882.803(d).

Justification for Interim Rulemaking

HUD generally publishes a rule for public comment before issuing a

rule for effect, in accordance with its regulations on rulemaking at 24

CFR part 10. However, part 10 provides that prior public procedure will

be omitted if HUD determines that it is ``impracticable, unnecessary,

or contrary to the public interest'' (24 CFR 10.1). With this interim

rule, HUD is merely correcting several minor oversights and conforming

the SRO regulations to statutory or regulatory provisions that are

already effective. Therefore, HUD finds that prior public procedure

would be unnecessary. However, HUD is inviting public comments for 60

days, after which it will consider the relevant issues raised by the

commenters in developing a final rule.

Other Matters

Environmental Impact

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50,

which implement section 102(2)(C) of the National Environmental Policy

Act of 1969 (42 U.S.C. 4332). The finding 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 Seventh Street SW,

Washington, DC 20410.

Executive Order 12606, The Family

The General Counsel, as the designated official under Executive

Order 12606, The Family, has determined that this interim rule does not

have potential for significant impact on family formation, maintenance,

and general well-being. To the extent that this interim rule benefits

homeless individuals, it would benefit the families of such

individuals. Since any effect of the interim rule would be beneficial,

this interim rule is not subject to review under the Order.

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

in this interim 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. This interim

rule is limited to conforming the regulations with statutory and

regulatory requirements. Therefore the interim rule is not subject to

review under the Order.

Regulatory Flexibility Act

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

U.S.C. 605(b)), has reviewed this interim rule before publication and

by approving it certifies that this interim rule does not have a

significant economic impact on a substantial number of small entities.

Specifically, the interim rule is limited to making conforming changes

to the program regulations.

List of Subjects in 24 CFR Part 882

Grant programs--housing and community development, Homeless, Lead

poisoning, Manufactured homes, Rent subsidies, Reporting and

recordkeeping requirements.

Accordingly, 24 CFR part 882 is amended as follows:

PART 882--SECTION 8 CERTIFICATE AND MODERATE REHABILITATION

PROGRAMS

1. The authority citation for part 882 continues to read as

follows:

Authority: 42 U.S.C. 1437f and 3535(d).

2. Section 882.802 is amended by adding definitions for the terms

``applicant'' and ``private nonprofit organization'' in alphabetical

order, to read as follows:

Sec. 882.802 Definitions.

* * * * *

Applicant. A public housing agency or Indian housing authority

(collectively referred to as housing agencies or HAs), or a private

nonprofit organization that applies for assistance under this program.

HUD will require private nonprofit applicants to subcontract with

public housing agencies to administer their rental assistance.

* * * * *

Private nonprofit organization. An organization, no part of the net

earnings of which inures to the benefit of any member, founder,

contributor, or individual. The organization must:

(1) Have a voluntary board;

(2) 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; and

(3) Practice nondiscrimination in the provision of assistance.

* * * * *

3. Section 882.803 is amended by revising paragraphs (a)(2) and (d)

to read as follows:

Sec. 882.803 Project eligibility and other requirements.

(a) * * *

(2) Housing is not eligible for assistance under this program if it

is receiving Federal funding for rental assistance or operating costs

under other HUD programs.

* * * * *

(d) Relocation. A project assisted under this subpart H is subject

to the requirements of Sec. 882.810.

* * * * *

4. Section 882.804 is amended by revising paragraph (d) to read as

follows:

Sec. 882.804 Other Federal requirements.

* * * * *

(d) The environmental review requirements of 24 CFR part 58,

implementing the National Environmental Policy Act and related

environmental laws and authorities listed in 24 CFR 58.5, are

applicable to this program.

5. Section 882.805 is amended by removing and reserving paragraph

(d), and by revising paragraph (g)(1)(ii)(A) to read as follows:

Sec. 882.805 PHA application process, HUD review and selection, ACC

execution, and pre-rehabilitation activities.

* * * * *

(d) [Reserved]

* * * * *

(g) * * *

(1) * * *

(ii) * * *

(A) HUD may approve a higher per unit amount up to, but not to

exceed, an amount computed by multiplying the HUD-approved High Cost

Percentage for Base Cities (used for computing FHA high cost area

adjustments) for the area, by the current published cost limitation

plus the cost of the required fire and safety improvements.

* * * * *

6. Section 882.808 is amended by:

a. Revising paragraph (a)(1);

b. Removing paragraphs (a)(3), (b)(2), and (b)(4);

c. Redesignating paragraph (a)(4) as paragraph (a)(3) and revising

it;

d. Redesignating paragraph (b)(3) as paragraph (b)(2);

e. Redesignating paragraphs (b)(5) through (b)(7) as paragraphs

(b)(3) through (b)(5), respectively; and

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f. Adding a new paragraph (q), to read as follows:

Sec. 882.808 Management.

(a) Outreach to homeless individuals and appropriate organizations.

(1) The HA or the Owner shall undertake outreach efforts to homeless

individuals so that they may be brought into the program. The outreach

effort should include notification to emergency shelter providers and

other organizations that could provide referrals of homeless

individuals. In cases where the owner conducts the outreach effort, the

HA shall be notified so that it may provide referrals of homeless

individuals.

* * * * *

(3) First priority for homeless individuals. Homeless individuals

shall have a first priority for occupancy of housing rehabilitated

under this program.

* * * * *

(q) Participation of homeless individuals. (1) Each approved

applicant receiving assistance under this program, except HAs, shall

provide for the participation of not less than one homeless individual

or formerly homeless individual on the board of directors or other

equivalent policymaking entity of such applicant, to the extent that

the entity considers and makes policies and decisions regarding the

rehabilitation of any housing with assistance under this subpart. This

requirement is waived if the applicant is unable to meet this

requirement and presents a plan that HUD approves to consult with

homeless or formerly homeless individuals in considering and making

such policies and decisions.

(2) To the maximum extent practicable, each approved applicant must

involve homeless individuals and families, through employment,

volunteer services, or otherwise, in rehabilitating and operating

facilities assisted under this subpart, and in providing services for

occupants of such facilities.

Dated: January 18, 1996.

Andrew M. Cuomo,

Assistant Secretary for Community Planning and Development.

[FR Doc. 96-3275 Filed 2-13-96; 8:45 am]

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