Consortia of Public Housing Agencies and Joint Ventures

SUMMARY: This proposed rule would implement a new statutory provision

specifically authorizing public housing agencies (PHAs) to administer

any or all of their housing programs through a consortium of PHAs. It

also authorizes PHAs to use subsidiaries, joint ventures, partnerships

or other business arrangements to administer its housing programs or to

provide supportive or social services. The proposed rule specifies

minimum requirements relating to formation and operation of consortia

and minimum contents of consortium agreements, as required by the

statute.

DATES: Comments Due Date: November 15, 1999.

ADDRESSES: Submit comments regarding this proposed rule to the

Regulations Division, Office of General Counsel, 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.

Facsimile (FAX) comments are not acceptable. A copy of each

communication submitted will be available for public inspection and

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

FOR FURTHER INFORMATION CONTACT: Rod Solomon, Deputy Assistant

Secretary for Policy, Program, and Legislative Initiatives, Office of

Public and Indian Housing, U.S. Department of Housing and Urban

Development, at (202) 708-0713 or e-mail him at the following address:

RodS[email protected]. The preceding telephone number is not toll-free.

Persons with hearing or speech impairments may access the above

telephone number via TTY by calling the Federal Information Relay

Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Statutory Basis

Section 515 of the Quality Housing and Work Responsibility Act of

1998 (Pub. L. 105-276, 112 Stat. 2549, approved October 21, 1998)

(Public Housing Reform Act) repealed the existing section 13 of the

United States Housing Act of 1937 (42 U.S.C. 1437k) dealing with energy

conservation, replacing it with a new section 13 authorizing PHAs to

operate in consortia and joint ventures. The statute requires that HUD

specify minimum requirements relating to the formation and operation of

consortia and minimum contents of consortium agreements.

New section 13 provides authority for PHAs to form consortia, joint

ventures, affiliates, and subsidiaries for the purposes set out in the

statute. Before enactment of section 13, some PHAs had established

cooperative arrangements for carrying out some of their

responsibilities. A principal difference between such arrangements and

consortia as authorized under section 13, is that under section 13

funding may be directed to a representative of the consortium on behalf

of several PHAs instead of being paid to the PHAs separately. Another

major difference is that under a section 13 consortium, a joint PHA

plan is submitted on behalf of participating PHAs. Enactment of section

13, however, does not restrict the ability of PHAs to continue to

establish cooperative arrangements under which they receive funding

separately and submit separate PHA plans.

II. Regulatory Interpretations

A. Consortia

1. HUD Programs Covered

Generally, this rule covers the public housing program, PHA-

administered Section 8 housing assistance programs, and related

programs. Programs not covered are other housing owned by the PHA and

two categories of project-based Section 8 projects:

PHA-administered project-based section 8 under the Request

for Proposals published on May 19, 1999, 64 FR 27358 (HUD invited

response by specially created consortia that could qualify as PHAs.);

and

Section 8 projects that are the subject of financing

restructuring under the finance restructuring ``Mark to Market''

program, where Participating Administrative Entities are designated to

administer the program (see 42 U.S.C. 1437f note).

2. General

HUD encourages PHAs to take advantage of the new authority to

create consortia to operate their programs. This type of coordination

may be particularly helpful for PHAs with small programs or ones whose

location is not convenient to access planning resources. Acting

together, PHAs should be able to access expertise not otherwise readily

available and obtain significant cost savings. In addition, joint

planning by PHAs in adjacent geographic areas will permit a

metropolitan or regional perspective to be set out in a single PHA

Annual Plan. This may facilitate reaching deconcentration and mobility

goals for very low income families. Consequently, HUD has placed very

few limits on the exercise of PHA discretion in implementing this

statutory provision. Nothing in this rule, however, precludes PHAs from

making other contractual arrangements for administration of their

programs, consistent with program regulations and provisions of their

Annual Contributions Contracts (ACCs) with HUD.

This rule provides for reporting by the consortium to HUD on behalf

of participating PHAs (see Sec. 943.124). HUD invites comments on

whether all reports should be combined reports.

Under the Section 8 Voucher program, program regulations (24 CFR

982.4) already provide for using a consortium of PHAs and having a

separate ACC with an entity authorized to act as legal representative

of the consortium.

3. PHA Inclusion of Programs in a Consortium

The statute specifies that ``any or all of the housing programs of

[the PHAs]'' may be administered by a consortium. HUD interprets the

coverage to include a PHA's public housing and Section 8 programs, and

related programs, such as the drug elimination program. When a PHA

participates, it must decide which categories of its programs to

include. For this purpose, the categories are as follows:

Public housing;

Section 8 voucher;

Section 8 Moderate Rehabilitation, including Single Room

Occupancy;

All project-based Section 8 programs administered by a PHA

under an ACC with HUD, except for Moderate Rehabilitation and

Certificates and Vouchers;

Grant programs associated with public housing and Section

8 housing programs (such as drug elimination)--unless use of a

consortium would be inconsistent with the terms of the grant program.

The participating PHAs will designate a lead agency in the

consortium agreement. The consortium agreement will specify the

responsibilities of the

[[Page 49941]]

lead PHA and other participating PHAs for administration of the

consortium and for administration of the covered programs. To assure

competency in the operation of the consortium, the rule requires that

the lead agency for the consortium may not be one designated as

troubled by HUD or one that fails the funding threshold on satisfaction

of civil rights requirements.

4. Relationship of PHAs in Consortium

The period of existence of a consortium and the terms under which a

PHA may withdraw from it before the end of that period must be

specified in the consortium agreement. To provide for orderly

transition, a PHA's withdrawal from a consortium or its natural

termination date must take effect at the end of the consortium's fiscal

year. Nothing in this rule affects HUD's authority to intervene, as

necessary, to enforce its rights under the Annual Contributions

Contract, if the actions of a consortium result in a default by a PHA.

5. HUD's Relationship to Consortium

The relationship between HUD and the consortium is to be specified

in a payment agreement with the lead agency and the other participating

PHAs. This agreement will specify the agreement for direct payment of

program funds to the lead agency on behalf of the consortium and

requirements for use of the funds in accordance with HUD regulations

and requirements, and remedies for any breach of the obligation of the

lead agency and participating PHAs to administer the combined program

in accordance with HUD requirements.

B. Joint Ventures, Partnerships, Affiliates, and Subsidiaries

1. HUD Programs Covered

Although section 13 authorizes joint ventures, partnerships,

affiliates, subsidiaries, and other business arrangements for all of a

PHA's programs, this rule covers only the public housing program. PHAs

engaged in Section 8 program administration are free to engage in such

arrangements without any new regulatory restrictions. (In the Section 8

programs, the PHA is paid a fixed fee for administration of assistance

to owners and is responsible for delivering the contract administration

services, without either increase or reduction of the fixed fee). In

the public housing program, special protections are imposed where

physical assets are at risk, as in Part 941, Subpart F, for mixed

finance development. This rule does not override those protections.

Section 13 authorizes the use of joint ventures, partnerships, or

other business arrangements with persons or entities ``with respect to

administration of the programs of the [PHA].'' In this proposed rule,

HUD has chosen to limit the applicability of the joint venture subpart

(Subpart C) and its associated special procurement flexibility to the

public housing program. PHAs do not need the flexibility granted by

this subpart for their Section 8 operations because they already have

it. For example, Section 8 operations are not subject to the

procurement provisions of 24 CFR part 85.

2. Procurement Provisions

To encourage PHAs to select the most qualified partners for joint

ventures in administration of public housing, the rule clarifies the

applicability of public housing procurement requirements (found in 24

CFR part 85) to these partners. For procurement of (a) supportive and

social services, and (b) administrative functions, this rule provides

that the standard requirements are applicable to the procurement of

goods and services, but a PHA may consider factors other than price in

selecting a partner under the conditions that would warrant sole source

selection. (See Sec. 943.150(b)). The rule also clarifies that a joint

venture partner is not subject to standard procurement requirements in

its activities unless the partner is a subsidiary, affiliate, or

identity of interest party of the PHA. In that case, HUD may exempt the

joint venture partner from compliance with the standard procurement

requirements if the joint venture partner has an acceptable alternative

procurement plan. A wholly owned subsidiary or affiliate of a PHA is

not exempt in any way.

3. Impact on Existing Joint Venture Authority

This statute does not attempt to regulate a PHA's use of joint

ventures, as may be permitted under State law, when using non-1937 Act

funds. The rule (Sec. 943.140(c)) makes that clear.

Findings and Certifications

Public Reporting Burden

The proposed information collection requirements contained in

Secs. 943.124, 943.126, and 943.128 have been submitted to the Office

of Management and Budget (OMB) under the Paperwork Reduction Act of

1995 (44 U.S.C. 3501-3520). In accordance with the Paperwork Reduction

Act, HUD may not conduct or sponsor, and a person is not required to

respond to, a collection of information unless the collection displays

a currently valid OMB control number.

Submit comments on the information collections by November 15,

1999, referring to the title and docket number of the rule. Comments

should be addressed to Mildred Hamman, Reports Liaison Officer, Office

of Public and Indian Housing, Department of Housing and Urban

Development, 451 Seventh Street, S.W., Washington, D.C. 20410.

Comments are solicited from members of the public and affected

entities concerning the proposed collection of information specifically

to:

(1) Evaluate whether the proposed collection of information is

necessary for the proper performance of the functions of the agency,

including whether the information will have practical utility;

(2) Evaluate the accuracy of the agency's estimate of the burden of

the proposed collection of information;

(3) Enhance the quality, utility, and clarity of the information to

be collected; and

(4) Minimize the burden of the collection of information on those

who are to respond, including through the use of appropriate automated

collection techniques or other forms of information technology, e.g.,

permitting electronic submission of responses.

The burden of information is estimated as follows:

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Number of Responses per Total annual Hours per Total annual

Section of CFR respondents respondent responses response hours

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943.124 Consortium Agreement... 40 1 40 8 320

943.126 Payment Agreement...... 40 1 40 4 160

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943.128(a) Consolid. Plan;..... Already included in burden estimates for PHA Plan under Part 903

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[[Page 49942]]

943.128(b) Consortium Reporting 40 1 40 8 320

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Total....................... .............. .............. .............. .............. 800

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Impact on Small Entities

The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that an

agency analyze the impact of a rule on small entities whenever it

determines that the rule is likely to have a significant impact on a

substantial number of small entities. Based on HUD's experience and

contacts with representatives of PHAs and HUD field offices, we expect

a relatively small number of PHAs to form consortia--certainly fewer

than 100. While there would be savings and efficiencies in the long run

for small PHAs, forming a consortium also would require some work for

these PHAs--to enter consortium agreements--and would required them to

overcome resistance to giving up local control of their programs.

Consequently, we conclude that the rule will not have a significant

impact on a substantial number of small entities. We encourage small

entities to submit comments, however, on ways that the impact of the

rule on them could be made more advantageous.

Environmental Finding

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. The Finding of No Significant Impact is available for

public inspection between the hours of 7:30 a.m. and 5:30 p.m. weekdays

in the Regulations Division at the above address.

Federalism Impact

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.

Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532)

establishes requirements for Federal agencies to assess the effects of

their regulatory actions on State, local, and tribal governments and

the private sector. This proposed rule does not impose a Federal

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

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

or more in any one year. On the contrary, it adds new options for PHA

operations.

Regulatory Review

The Office of Management and Budget (OMB) has reviewed this

proposed rule under Executive Order 12866, Regulatory Planning and

Review, issued by the President on September 30, 1993. OMB determined

that this rule is a ``significant regulatory action'' as defined in

section 3(f) of the Order (although not an economically significant

regulatory action under the Order). Any changes made in this proposed

rule after its submission to OMB are identified in the docket file,

which is available for public inspection during regular business hours

in the Regulations Division, Office of General Counsel, Room 10276,

U.S. Department of Housing and Urban Development, 451 Seventh Street,

SW, Washington, DC 20410.

Catalog

The Catalog of Federal Domestic Assistance number for the programs

covered by this rule are 14.850, 14.855, and 14.857.

List of Subjects in 24 CFR 943

Low and moderate income housing, Reporting and recordkeeping

requirements.

Accordingly, HUD proposes to add a new part 943 to title 24 of the

Code of Federal Regulations as follows:

PART 943-- PUBLIC HOUSING AGENCY CONSORTIA AND JOINT VENTURES

Sec.

Subpart A--General

943.100 What is the purpose of this part?

Subpart B--Consortia

943.115 What programs are covered under this subpart?

943.118 What is a consortium?

943.120 What programs of a PHA are included in a consortium's

functions:

943.122 How is a consortium organized?

943.124 What elements must a consortium agreement contain?

943.126 What is the relationship between HUD and a consortium?

943.128 How does a consortium carry out planning and reporting

functions?

943.130 What are the responsibilities of participating PHAs?

Subpart C--Subsidiaries, Affiliates, Joint Ventures in Public Housing

943.140 What programs and activities are covered by this subpart?

943.142 In what types of operating organizations may a PHA

participate?

943.144 What financial impact do operations of a subsidiary,

affiliate, or joint venture operations have on a PHA?

943.146 What impact does the use of a subsidiary, affiliate, or

joint venture have on financial accountability to HUD and the

Federal government?

943.148 What procurement standards apply to PHAs selecting partners

for a joint venture?

943.150 What procurement standards apply to a PHA's joint venture

partner?

943.151 What procurement standards apply to a joint venture itself?

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

Subpart A--General

Sec. 943.100 What is the purpose of this part?

This part authorizes public housing agencies (PHAs) to form

consortia, joint ventures, affiliates, subsidiaries, partnerships, and

other business arrangements under section 13 of the United States

Housing Act of 1937 (42 U.S.C. 1437k). Under this authority,

participating PHAs submit joint PHA plans to HUD and combine their

funding and program administration. This part does not preclude a PHA

from entering cooperative arrangements to operate its programs under

other authority, as long as they are consistent with other program

regulations and requirements.

Subpart B--Consortia

Sec. 943.115 What programs are covered under this subpart?

(a) Except as provided in paragraph (b) of this section, this

subpart applies to the following:

(1) PHA administration of public housing or Section 8 programs

under an ACC with HUD; and

[[Page 49943]]

(2) PHA administration of grants to the PHA in connection with its

public housing or Section 8 programs.

(b) This subpart does not apply to the following:

(1) PHA administration of Section 8 projects assigned to a PHA for

contract administration pursuant to an ACC entered under the Request

for Proposals published May 19, 1999 (64 FR 27358);

(2) Section 8 contract administration of a restructured subsidized

multifamily project by a Participating Administrative Entity in

accordance with part 401 of this title; or

(3) A PHA in its capacity as owner of a Section 8 project.

Sec. 943.118 What is a consortium?

A consortium consists of two or more PHAs that join together to

perform planning, reporting, and other administrative functions for

participating PHAs, as specified in a consortium agreement. The lead

agency collects the assistance funds from HUD that would be paid to the

participating PHAs for the elements of their operations that are

administered by the consortium and allocates them according to the

consortium agreement. A consortium also submits a joint PHA plan.

Sec. 943.120 What programs of a PHA are included in a consortium's

functions?

(a) A PHA may enter a consortium under this subpart for

administration of any of the following program categories:

(1) The PHA's public housing program;

(2) The PHA's Section 8 voucher and certificate program (including

the project-based certificate and voucher programs);

(3) The PHA's Section 8 Moderate Rehabilitation program, including

Single Room Occupancy program;

(4) All other project-based Section 8 programs administered by the

PHA under an Annual Contributions Contract (ACC) with HUD, except for

Moderate Rehabilitation and Certificates and Vouchers; and

(5) Any grants to the PHA in connection with its Section 8 or

public housing programs, to the extent not inconsistent with the terms

of the governing documents for the grant's funding source.

(b) If a PHA elects to enter a consortium with respect to a program

category specified in paragraph (a)(1), (a)(2), (a)(3), or (a)(4) of

this section, the consortium must cover the PHA's whole program under

the ACC with HUD for that program category, including all dwelling

units and all funding for that program under the ACC with HUD.

Sec. 943.122 How is a consortium organized?

(a) PHAs that elect to form a consortium enter into a consortium

agreement among the participating PHAs, specifying a lead agency (see

Sec. 943.124). HUD enters into a payment agreement with the lead agency

and the other participating PHAs (see Sec. 943.126).

(b) The lead agency must not be a PHA that is designated as a

``troubled PHA'' by HUD or that has been determined by HUD to fail the

civil rights compliance threshold for new funding. The lead agency is

designated to receive HUD program payments on behalf of participating

PHAs, to administer HUD requirements for administration of the funds,

and to apply the funds in accordance with the consortium agreement and

HUD regulations and requirements.

Sec. 943.124 What elements must a consortium agreement contain?

(a) The consortium agreement among the participating PHAs governs

the formation and operation of the consortium. It must be consistent

with the consortium's payment agreement with HUD and must specify the

following:

(1) The names of the participating PHAs and the program categories

each PHA is including under the consortium agreement;

(2) The name of the lead agency;

(3) The functions to be performed by the lead agency and the other

participating PHAs during the term of the payment agreement;

(4) The allocation of funds among participating PHAs and

responsibility for administration of funds paid to the consortium under

the payment agreement; and

(5) The period of existence of the consortium and the terms under

which a PHA may withdraw from it before the end of that period. To

provide for orderly transition, the consortium's termination date or a

PHA's withdrawal from the consortium must take effect at the end of the

consortium's fiscal year.

(b) The agreement must acknowledge that the participating PHAs are

subject to the requirements of the joint PHA Plan.

(c) The agreement must be signed by an authorized representative of

each participating PHA.

Sec. 943.126 What is the relationship between HUD and a consortium?

(a) HUD has a direct relationship with the consortium through a

payment agreement, executed in the form prescribed by HUD. The payment

agreement specifies the conditions under which HUD agrees to pay

program funds to the lead agency on behalf of the participating PHAs.

It specifies the requirements for use of the funds in accordance with

HUD regulations and requirements.

(b) Under the payment agreement, the participating PHAs agree that

HUD will pay the consortium all assistance payments otherwise payable

to the PHAs for the program categories they have included under the

consortium agreement. The combined amount is paid to the lead agency on

behalf of the consortium.

Sec. 943.128 How does a consortium carry out planning and reporting

functions?

(a) During the term of the payment agreement, the consortium must

complete a joint five-year Plan and a joint Annual Plan for all

participating PHAs, in accordance with part 903 of this chapter.

(b) The consortium must submit reports to HUD, in accordance with

HUD regulations and requirements, for all of the participating PHAs.

All PHAs will be bound by plans and reports submitted to HUD by the

consortium for programs covered by the consortium.

(c) Each PHA must keep a copy of the consortium agreement on file

for inspection.

Sec. 943.130 What are the responsibilities of participating PHAs?

Despite participation in a consortium, each participating PHA

remains responsible for its own obligations under its ACC with HUD.

This means that it has an obligation to assure that all program funds,

including funds paid to the lead agency for administration by the

consortium, are used in accordance with HUD regulations and

requirements, and that the PHA program is administered in accordance

with HUD regulations and requirements. Any breach of program

requirements with respect to a program covered by the consortium

agreement is a breach of the ACC with each of the participating PHAs,

so each PHA is responsible for the performance of the consortium.

Subpart C--Subsidiaries, Affiliates, Joint Ventures in Public

Housing

Sec. 943.140 What programs and activities are covered by this subpart?

(a) This subpart applies to the provision of a PHA's public housing

administrative functions, and to the provision (or arranging for the

provision) of supportive and social services in connection with public

housing. It does not apply to activities of a PHA that are subject to

the

[[Page 49944]]

requirements of part 941, subpart F, of this title.

(b) For purposes of this subpart, the term ``joint venture

partner'' means a participant (other than a PHA) in a joint venture,

partnership, or other business arrangement or contract for services

with a PHA.

(c) This part does not affect a PHA's authority to use joint

ventures, as may be permitted under State law, when using non-1937 Act

funds.

Sec. 943.142 In what types of operating organizations may a PHA

participate?

(a) A PHA may create and operate a wholly owned or controlled

subsidiary or other affiliate; may enter into joint ventures,

partnerships, or other business arrangements with individuals,

organizations, entities, or governmental units. A subsidiary or

affiliate may be a nonprofit corporation. It may be an organization

controlled by the same persons who serve on the governing board of the

PHA or who are employees of the PHA.

(b) The purpose of any of these operating organizations would be to

administer programs of the PHA.

Sec. 943.144 What financial impact do operations of a subsidiary,

affiliate, or joint venture have on a PHA?

Income generated by subsidiaries, affiliates, or joint ventures

formed under the authority of this subpart is to be used for low-income

housing or to benefit the residents assisted by the PHA. This income

will not cause a decrease in funding provided under the public housing

program except as otherwise provided under the Operating Fund and

Capital Fund formulas.

Sec. 943.146 What impact does the use of a subsidiary, affiliate, or

joint venture have on financial accountability to HUD and the Federal

government?

None. The subsidiary, affiliate, or joint venture is subject to the

same authority of HUD, HUD's Inspector General, and the General

Accounting Office to audit its conduct.

Sec. 943.148 What procurement standards apply to PHAs selecting

partners for a joint venture?

(a) The requirements of part 85 of this title (generally requiring

a request for proposals or ``RFP'') are applicable to a PHA's

procurement of goods and services under this subpart in connection with

the PHA's public housing program.

(b) A PHA may use competitive proposal procedures for

qualifications-based procurement (request for qualifications or

``RFQ'') or may solicit a proposal from only one source (``sole

source'') to select a joint venture partner to perform an

administrative function of its public housing program or to provide or

arrange to provide supportive or social services covered under this

part under the following circumstances:

(1) The proposed joint venture partner has under its control and

will make available to the partnership substantial, unique and tangible

resources or other benefits that would not otherwise be available to

the PHA on the open market (e.g., planning expertise, program

experience, or financial or other resources). In this case, the PHA

must maintain documentation to substantiate both the cost

reasonableness of its selection of the proposed partner and the unique

qualifications of the partner: or

(2) A resident group or a PHA subsidiary is willing and able to act

as the PHA's partner in performing administrative functions or to

provide supportive or social services. This entity must comply with the

requirements of part 85 of this title with respect to its selection of

the members of the team and the members must be paid on a cost-

reimbursement basis only.

Sec. 943.150 What procurement standards apply to a PHA's joint venture

partner?

(a) General. A joint venture partner is not a grantee or subgrantee

and, accordingly, is not required to comply with part 85 of this title

in its procurement of goods and services under this part. The partner

must comply with all applicable State and local procurement and

conflict of interest requirements with respect to its selection of

entities to assist in PHA program administration.

(b) Exception. If the joint venture partner is a subsidiary,

affiliate, or identity of interest party of the PHA, it is subject to

the requirements of part 85 of this title. HUD may, on a case-by-case

basis, exempt such a joint venture partner from the need to comply with

requirements under part 85 of this title if it determines that the

joint venture has developed an acceptable alternative procurement plan.

(c) Contracting with identity-of-interest parties. A joint venture

partner may contract with an identity-of-interest party for goods or

services, or a party specified in the selected bidder's response to a

RFP or RFQ (as applicable), without the need for further procurement

if:

(1) The PHA can demonstrate that its original competitive selection

of the partner clearly anticipated the later provision of such goods or

services;

(2) Compensation of all identity-of-interest parties is structured

to ensure there is no duplication of profit or expenses; and

(3) The PHA can demonstrate that its selection is reasonable based

upon prevailing market costs and standards, and that the quality and

timeliness of the goods or services is comparable to that available in

the open market. For purposes of this paragraph (c), an ``identity-of-

interest party'' means a party that is wholly owned or controlled by,

or that is otherwise affiliated with, the partner or the PHA. The PHA

may use an independent organization experienced in cost valuation to

determine the cost reasonableness of the proposed contracts.

Sec. 943.151 What procurement standards apply to a joint venture

itself?

(a) When the joint venture as a whole is controlled by the PHA or

an identity of interest party of the PHA, the joint venture is subject

to the requirements of part 85 of this title.

(b) If a joint venture is not controlled by the PHA or an identity

of interest party of the PHA, then the rules that apply to the other

partners apply. See Sec. 943.150.

Dated: August 27, 1999.

Harold Lucas,

Assistant Secretary for Public and Indian Housing.

[FR Doc. 99-23701 Filed 9-13-99; 8:45 am]

BILLING CODE 4210-33-P