Public Housing Agency Plans

SUMMARY: This interim rule implements an important new component of

public housing and tenant-based assistance operations--the public

housing agency plans. Through these plans--a 5-year plan and an annual

plan--a public housing agency (PHA) will advise HUD, its residents and

members of the public of the PHA's mission for serving the needs of

low-income and very low-income families, and the PHA's strategy for

addressing those needs. The public housing agency plans constitute one

of several public housing reforms made by the Quality Housing and Work

Responsibility Act of 1998. This rule establishes initial procedures

and requirements for development, submission and implementation of the

plans.

DATES: Effective Date: March 22, 1999.

Comment Due Date: April 19, 1999.

ADDRESSES: Interested persons are invited to submit comments regarding

this interim rule to the Regulations Division, Office of General

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

Seventh Street, SW, Washington, DC 20410. 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: For further information contact Rod

Solomon, Senior Director for Policy and Legislation, Office of Policy,

Program and Legislative Initiatives, Office of Public and Indian

Housing, Department of Housing and Urban Development, 451 Seventh

Street, SW, Room 4116, Washington, DC 20410; telephone (202) 708-0730

(this is not a toll-free number). Persons with hearing or speech

impairments may access that number via TTY by calling the Federal

Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. This Rulemaking

Section 511 of the Quality Housing and Work Responsibility Act of

1998 (Pub. L. 105-276, 112 Stat. 2461, approved October 21, 1998)

(QHWRA) requires that not later than 120 days after the date of

enactment of the QHWRA HUD shall issue an interim rule to require the

submission of an interim public housing agency plan. This interim rule

is issued in accordance with section 511.

Section 511, which added section 5A to the United States Housing

Act of 1937 (USHA), (42 U.S.C. 1437 et seq.) also requires that before

the final rule is issued, HUD will seek the recommendations on

implementation of the public housing plans from organizations

representing (1) State or local public housing agencies; (2) residents,

including resident management corporations; and (3) other appropriate

parties. Section 511 also requires HUD to convene not less than two

public forums at which the persons or organizations making

recommendations may express their views concerning the proposed

disposition of their recommendations.

In addition to the general solicitation of public comments on this

interim rule, HUD specifically seeks through this rulemaking

recommendations on implementation of the public housing agency plans

from the three groups mentioned above: (1) State or local public

housing agencies; (2) residents, including resident management

corporations; and (3) other appropriate parties. HUD believes that

other appropriate parties should include representatives of affected

communities. HUD will notify the public of the dates, times and

locations of the public forums. HUD therefore expects that this rule

will be clarified and improved as the rulemaking process progresses.

With the publication of this rule, however, PHAs should begin

preparing their plans for Fiscal Year 2000 (PHA fiscal years commencing

January 1, 2000 and thereafter).

II. Background

A. The Need for and Benefits of Comprehensive Planning by PHAs

The recently enacted QHWRA makes important changes to the

operations and programs of public housing and tenant-based assistance.

These changes are designed to revitalize and improve HUD's public

housing and tenant-based assistance programs. One of the most important

changes made by the QHWRA is the introduction of the public housing

agency plans--a 5-year plan and an annual plan. The 5-year plan

describes the mission of the PHA and the PHA's long range goals and

objectives for achieving its mission over the subsequent 5 years. The

annual plan provides details about the PHA's immediate operations,

program participants, programs and services, and the PHA's strategy for

handling operational concerns, residents' concerns and needs, programs

and services for the upcoming fiscal year. Both planning mechanisms

(the 5-year plan and the annual plan) require PHAs to examine their

existing operations and needs, and to design long-range and short-range

strategies to address those needs. Through this planning mechanism,

PHAs will make more efficient use of Federal assistance, more

effectively operate their programs, and better serve their residents.

Secretary Andrew Cuomo has long believed that greater efficiency

and effectiveness in the use of HUD assistance can be achieved by HUD

program participants when the participants engage in comprehensive

planning activities that allow them to examine the needs of the

individuals they serve, consult with interested and affected parties,

and design strategies to address those needs. In 1994, Secretary Cuomo,

then the Assistant Secretary for Community Planning and Development,

established the consolidated plan for community planning and

development programs (the ``Consolidated Plan'' was established by

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

Plan combined the planning, application and reporting requirements of

several HUD community planning and development programs. Through the

Consolidated Plan, States and localities examine their needs and design

their own strategies to address those needs. This planning process

includes (1) the involvement of citizen participation in the planning

process, (2) the creation of an action plan that provides the basis for

the program participant to assess its performance; and (3) the

consultation with public and private agencies, including those outside

a single jurisdiction, to identify shared needs and solutions. (Note

that the Consolidated Plan includes an Analysis of Impediments to Fair

Housing Choice.) The Consolidated Plan establishes renewed partnerships

among HUD, State and local governments, public and private agencies,

tribal governments, and communities by empowering the entities and

individuals to work with one another, to work with HUD field staff, and

with other entities, to fashion

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creative solutions to community problems.

The public housing agency plans embody, in many respects, the

concepts of HUD's Consolidated Plan. Like the Consolidated Plan for CPD

Programs, the public housing agency plans provide a planning mechanism

by which a PHA can examine its long-range needs and its short-range

needs, specifically the needs of the families that it serves, and

design both long-term strategies and short-term strategies for

addressing those needs. Like the Consolidated Plan, the public housing

agency plans involve consultation with affected groups in the

development of the plan.

The Consolidated Plan has been a highly successful mechanism for

comprehensive planning for community needs. HUD believes that the

public housing agency plans also will prove to be a successful

mechanism for comprehensive planning for the needs of those served by

PHAs.

B. Increased Flexibility, Local Accountability, Reduction in

Submissions

While the QHWRA contemplates a comprehensive planning process for

public housing and tenant-based assistance, and while the elements

listed for inclusion in the annual plan are extensive, the purposes of

the QHWRA emphasize deregulation, consolidation and flexibility for

PHAs. The QHWRA also authorizes HUD to allow submission of streamlined

plans by high-performing PHAs and small PHAs that are not designated as

troubled. The challenge for HUD and PHAs is how to fulfill these

purposes and still assure adequate local accountability by the PHA.

HUD's response to this challenge is that PHAs which are permitted to

submit streamlined plans must provide a reasonable means by which the

public can obtain any basic information that is not included in the

plans. For PHAs that are not eligible to submit streamlined plans, HUD

has strived in this first rule to keep the plan submission requirements

complete but simple. HUD is accepting references to any plan materials

that are already in existence and which already have been submitted to

HUD rather than require resubmissions of these materials to HUD. HUD,

however, also requires that while these materials need not be

resubmitted to HUD, PHAs must ensure local availability of the required

Plan components to their residents and members of the public.

In addition to moving toward increased flexibility and local

accountability, one of the goals of the PHA annual plan is to reduce

the number of PHA submissions to HUD. To the extent practicable, the

PHA annual plan will eventually consolidate all PHA information that is

required to be submitted under existing HUD planning and reporting

requirements into one document. The objective is for the PHA annual

plan to eventually supersede submission requirements currently imposed

on PHAs under various HUD programs. The elimination of all other

currently required submissions cannot be accomplished with this interim

rule. HUD is working, however, to phase out other submissions and

consolidate them as part of the annual plan, and certain submissions

will soon be folded into the annual plan submission, as described

below.

For example, HUD intends that the planning submissions required

under HUD's modernization program will be superseded by this new PHA

planning process commencing with modernization funds made available by

Congress for Federal Fiscal Year 2000. HUD will issue a separate notice

that provides PHAs with more information about how the modernization

program submissions are superseded by this new PHA planning process.

Another change brought about by the annual plan is in the submissions

and approval process for site-based waiting lists. As further discussed

below, PHAs will not need prior HUD approval to implement site-based

waiting lists, other than the approval provided under the annual plan.

Other submissions required of PHAs, for example those required under

HUD's Drug Elimination Program, are expected to be folded into the PHA

annual plan submission. Existing planning and reporting submissions

remain applicable, however, until HUD notifies PHAs (through this

interim rule or other means) that they have become part of the PHA

annual plan, and HUD establishes the new submission procedures.

In addition to consolidating other required submissions in the PHA

annual plan, HUD intends that the new public housing agency planning

process, to the extent practicable, will allow for a PHA to plan for

all of its program needs based on the PHA's fiscal year. Allowing a PHA

to plan for all of its programs based on a PHA's fiscal year will

assist PHAs in planning in a comprehensive manner and will expedite the

release of public housing funds. As discussed further below, HUD will

require the PHA annual plan to be submitted 75 days in advance of a

PHA's fiscal year. Since the first PHA fiscal years that will be funded

with Federal Fiscal Year (FFY) 2000 funds begin on January 1, 2000, the

first PHA annual plan (and 5-Year Plan) will be due 75 days before

January 1, 2000. PHA plans will be due thereafter to match the

commencement of PHA fiscal years, which are staggered on a quarterly

basis. In addition to the benefits to PHAs of this scheduling, receipt

of PHA plans on a quarterly schedule will assist HUD with its review

process, and allow HUD the opportunity to provide better feedback to a

PHA on its plan where such feedback is necessary.

HUD intends for the planning currently required under the

modernization program and Drug Elimination Grant Program to be placed

on the submission schedule for the PHA plans. Funding for these

programs will be provided by formula in the future. The QHWRA requires

all capital funds to be distributed by formula. This formula funding is

being developed through negotiated rulemaking. The QHWRA allows formula

funding for drug elimination funds. (Note that elsewhere in today's

Federal Register, HUD is publishing an Advance Notice of Proposed

Rulemaking on HUD's proposal to provide formula funding for Drug

Elimination Program grant funds.) To assure that capital funds are made

available to PHAs in a timely fashion, PHAs that are scheduled to

submit PHA plans in the second half of the Federal Fiscal Year (i.e.,

in April and July) may receive access to funds midway through the

Federal Fiscal Year for which funds are being distributed. PHAs may

receive access to these funds as long as they have submitted as part of

the previous year's Annual Plan a multi-year capital plan covering

activities to be undertaken in the coming year. To accommodate the

expedited schedule for release of capital funds, once the new capital

formula is established, HUD expects to determine formula shares based

on formula characteristics of a PHA 90 days earlier than has been the

case in the past (June 30 rather than September 30 of the preceding

fiscal year).

In addition to moving toward a reduction in administrative burden

through the consolidation of PHA required submissions in the PHA plan,

HUD, as part of the HUD 2020 Management Reform effort, is moving toward

electronic reporting for all required submissions under its programs.

HUD is aware that automated systems are being used more and more

extensively nationwide, including more extensive use by PHAs and other

entities that participate in HUD programs. Vice President Gore's Report

of the National Performance Review has,

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as a stated objective, the expanded use of new technologies and

telecommunications to create an electronic government (September 7,

1993, Report of the Vice President's National Performance Review, pp.

113-117, Reg. 2) To meet the Vice President's objective and HUD's own

objective to keep in step with modern technology, HUD already has

converted several required reporting submissions in both its public

housing programs and in its multifamily programs to electronic

submission. In addition to making submissions easier for its program

participants (paper reduction), electronic data assists HUD and its

program partners to exchange information more easily and to monitor

activity, note trends in programs and the performance of the program

participants (weaknesses and strengths) and better serve the families

and communities that HUD programs are designed to serve.

HUD specifically invites comments from PHAs on suggestions to

streamline or merge current information requirements already reported

electronically to HUD with the additional requirements listed in this

rule.

For these two new plans required by QHWRA, HUD is developing as

expeditiously as possible software that will allow for, and eventually

require, electronic submission of the PHA annual plan and 5-year plan.

This software will not be solely directed at facilitating electronic

submissions, through the internet or other means, but is anticipated to

provide recommended uniform formats and layouts for the submission of

information required by the 5-year plan and annual plan. The uniformity

of formats should make for easier reading by HUD, the PHAs, and most

importantly the public housing residents and the public, generally.

Until this software is developed and ready for use, PHAs should follow

the guidance for submission of plan information as provided in this

rule and through any additional guidance documents that HUD may issue.

As stated earlier, HUD's objective is that the planning process

contemplated by this new statutory requirement to develop Annual Plans

and 5-Year Plans will prove to be as successful a planning mechanism as

the Consolidated Plan. In this regard, HUD specifically solicits

comments from PHAs on the feasibility and importance of additional

steps to coordinate the 5-Year Plan and/or Annual Plan with the

submission of the Consolidated Plan either in whole or in part.

III. The Public Housing Agency Plans

Section 511 of the QHWRA provides for two types of plans to be

submitted by a PHA--a long range 5-year plan (5-Year Plan) that

describes the mission of the PHA and the PHA's goals and objectives for

achieving its mission over the next 5 years, and an annual plan (Annual

Plan) that provides more details about the PHA's current policies,

operations, programs and services.

As will be discussed further below, one of HUD's primary goals for

public housing and tenant-based assistance is ensuring compliance with

all applicable nondiscrimination requirements, such as the Fair Housing

Act, title VI of the Civil Rights Act of 1964, section 504 of the

Rehabilitation Act of 1937, and title II of the Americans with

Disabilities Act, as well as affirmatively furthering fair housing.

This goal remains and is more clearly specified by the QHWRA's PHA plan

requirements as well as by other amendments made by the QHWRA to the

USHA.

A. The 5-Year Plan

1. What the QHWRA Requires

Section 511 of the QHWRA requires that a PHA must submit to HUD a

5-year plan that provides a statement of:

--The PHA's mission for serving the needs of low-income and very low-

income families in the PHA's jurisdiction during the next 5 fiscal

years; and

--The PHA's goals and objectives that will enable the PHA to serve the

needs of the low-income and very low-income families as identified by

the PHA for the next 5 fiscal years.

Section 511 provides that the 5-Year Plan must cover a period of 5

PHA fiscal years that follow the date that the PHA submits its 5-Year

Plan to HUD. For example, if a PHA's fiscal year runs January 1st to

December 31st, the due date for the submissions of the plans by the PHA

is no later than 75 days before January 1st. For a PHA with a fiscal

year beginning January 1st, the 5 years covered by the 5-Year Plan will

be the 5 fiscal years beginning January 1, 2000, January 1, 2001,

January 1, 2002, January 1, 2003, and January 1, 2004.

The first 5-Year Plan will be due at the same time as the first PHA

Annual Plan. Subsequent 5-Year Plans will be due to HUD once every 5

years. PHAs will not be required to submit an annual update to the 5-

Year Plan, but PHAs will be required to explain any substantial

deviations from the 5-Year Plan in their Annual Plans. After submission

of the first 5-Year Plan, PHAs in their succeeding 5-Year Plans, in

addition to addressing their mission, goals and objectives for the next

5 years, must address the progress made by the PHA in meeting its goals

and objectives described in the previous 5-Year Plan.

With respect to substantial deviations, HUD believes that this

refers to a change in a PHA's mission or change in a goal or objective

to meet that mission. HUD specifically solicits comment on how

``substantial deviations'' should be defined.

2. An Acceptable 5-Year Plan

In reviewing a PHA's 5-Year Plans, HUD believes that a PHA's

mission, goals and objectives should be consistent with and contribute

to HUD's mission and goals and objectives, which also overlay almost

all HUD programs. HUD's mission is to promote adequate and affordable

housing, economic opportunity, and a suitable living environment

without discrimination. HUD's strategic goals that are applicable to

PHAs are (1) increasing the availability of decent, safe and affordable

housing in American communities; (2) ensuring equal opportunity in

housing for all Americans; (3) promoting self-sufficiency and asset

development of families and individuals; and (4) improving community

quality of life and economic vitality.

In establishing goals and objectives, PHAs must set quantifiable

ones, where possible. For example, a goal of providing decent, safe and

sanitary housing can be measured partly by a PHA's physical inspection

score under the Public Housing Assessment System. The goal of promoting

economic self-sufficiency can be measured by PHA residents that no

longer require assistance because of welfare-to-work or similar

initiatives. Additional examples of quantifiable measures and more

information on HUD's mission, goals and objectives can be found in HUD

Fiscal Year 2000 Annual Performance Plan, located at HUD's web site

(http//www.hud.gov).

HUD specifically seeks comments on what constitutes an acceptable

5-Year Plan.

B. The Annual Plan Pertaining to Section 8 Assistance, Capital Funds,

and Annual Contributions for Operation of Lower Income Housing Projects

The second plan required by Section 511 of the QHWRA is an Annual

Plan that the PHA must submit for each year for which the PHA receives

assistance under section 8(o) or section 9 of the USHA. Section 511

provides for 18 components of the Annual Plan. The content of each

component and HUD's

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permitted form of submission of each component is discussed in Section

IV of this preamble, which follows.

IV. The Annual Plan

A. Statutory Contents of the Annual Plan, Generally, and HUD Guidance

on Submissions

Section 511 specifies the information that must be included in the

Annual Plan for the fiscal year for which the PHA receives assistance

under section 8(o) or section 9 of the USHA. The statutory components

of the Annual Plan are fully provided in the regulatory text of this

interim rule. This section of the preamble does not repeat the complete

statutory language or the regulatory text language, but rather provides

a brief summary of the statutorily required contents for each

component. Therefore, it is important for the reader to review the

regulatory text, as well as this preamble, for a full description of

what is required for the Annual Plan. It is also important for the

reader to note that the information that the PHA must submit for HUD

approval under the Annual Plan are the discretionary policies of the

various plan components or elements (for example, selection policies)

and not the statutory or regulatory requirements that govern these

components.

This section of the preamble also includes HUD guidance on how the

information for Annual Plan components may be compiled and submitted.

HUD guidance includes using or referencing materials that PHAs already

may have compiled or are in the process of compiling under current

program planning and reporting requirements. Where these materials are

used or referenced, the PHA must clearly identify the source of the

materials, and must clearly identify for the public where these

materials can be obtained or inspected. The submission guidance

provided in this rulemaking is primarily for the first Annual Plan

submission or at most for the first two years. HUD anticipates that the

comments submitted on this rule, and the recommendations made at the

public forums, will assist HUD in developing more long-term guidance on

submissions to be made under the Annual Plan. At the final rule stage

or in a future rulemaking, HUD may not only provide guidance but may

prescribe the information that must be submitted to satisfy the

statutory and regulatory requirements and may prescribe the format of

submission. Before taking this action, HUD wants the benefit of public

comment and the recommendations from the three groups identified in

section 511 of the QHWRA.

HUD specifically invites comment on the manner of submission of the

information required under the Annual Plan.

For those components of the Annual Plan for which the PHA has no

submission (for example, if the PHA has no projects targeted for

demolition or disposition), the PHA must state in its Annual Plan the

reason that this component is not addressed (again, in the example

provided, a simple statement that no projects are targeted for

demolition/disposition). Each component of the Annual Plan that is

required to be addressed must be addressed in some fashion.

Additionally, HUD points out that certain PHA activities, such as

demolition, disposition, conversion to vouchers, designation, and

public housing homeownership programs, have separate submission and

approval processes as well as specific HUD review and approval periods.

These processes remain in place and are not superseded by the Annual

Plan. As noted earlier, however, PHAs may submit relevant approval

documents and other materials relating to these separate processes

along with the Annual Plan if these materials are clearly identified as

being part of one of these separate processes.

In providing an overview of the statutory components of the Annual

Plan as well as HUD's submission guidance in this section of the

preamble, the reader should note that the components of the Annual Plan

apply to both public housing and Section 8 tenant-based assistance,

except where specifically stated otherwise.

1. Housing Needs. What the QHWRA Requires. A statement of the

housing needs of the low-income and very-low income families (including

elderly families and families with disabilities) in the jurisdiction

served by the PHA and on the PHA's waiting list.

HUD notes that it has specified two categories of families--

extremely low-income families (i.e., families with incomes below 30

percent of the area median) and households of various races and ethnic

groups--within categories of families listed by the QHWRA. (Please see

Sec. 903.7(a)(1) of regulatory text.) HUD added the extremely low-

income family category because (1) the needs of extremely low-income

families are specifically addressed in the local consolidated plans

with which PHA plans (5-Year and Annual) must be in compliance; and (2)

the QHWRA targets housing assistance to extremely low-income families.

HUD added the breakdown by racial and ethic groups because such

breakdown is consistent with a PHA's civil rights obligations under

section 511.

Submission Guidance. PHAs may obtain this information from the

Consolidated Plan for their jurisdiction if the Consolidated Plan

accurately describes their housing needs. Rather than restate the

Consolidated Plan's housing needs statement, the PHA may submit any

applicable portions of the Consolidated Plan. The information about

needs of families on waiting lists must of course come from the PHA's

analysis of the waiting list.

PHAs which are not in a city or county with its own Consolidated

Plan may include in their submissions any applicable portions of the

Consolidated Plan for the State. PHAs whose jurisdictions encompass

more than one Consolidated Plan jurisdiction may include portions of

all applicable Consolidated Plans. These PHAs also will need to examine

their waiting lists to specify the housing needs arising from families

on the waiting list.

Whether or not a PHA includes an applicable portion of a

Consolidated Plan for this component of the Annual Plan, the PHA's

statement of housing needs must be consistent with the needs described

in the Consolidated Plan for the jurisdictions served by the PHA. The

statute requires consistency with the Consolidated Plan.

2. Financial Resources. What the QHWRA Requires. A statement of the

financial resources available to the PHA and the planned uses of those

resources.

Submission Guidance. PHAs should provide a statement of: (a) The

estimated financial resources available for the support of the Federal

public housing and tenant-based assistance programs administered by the

PHA during the plan year; and (b) the planned use of available

resources in support of these programs. The statement of resources

available should include the sources of funds supporting each federal

program, including current federal grants, prior year grant funds,

dwelling rental income, any other sources of non-grant income

(including donations, leveraged funds, entrepreneurial, program, or

investment income), and reserves. The planned uses of these resources

should be displayed by major category of activity including: public

housing operations, public housing modernization and/or development,

section 8 payments to owners, anti-crime and security activities;

services to assisted families; and program administration.

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3. Policies Governing Eligibility, Selection, Admissions. What the

QHWRA Requires. A statement of: (a) the PHA's policies governing

eligibility, selection and admission (including any admission

preferences), assignment, and occupancy policies with respect to public

housing and Section 8 tenant-based assistance, as applicable, and (b)

procedures for maintaining waiting lists, including the public housing

admissions policy for deconcentration of lower-income families and any

public housing site-based waiting list procedures.

Submission Guidance. PHA admissions policies, occupancy policies,

and waiting lists policies are currently required by existing

regulations and the requirements to adopt and maintain these policies

have not been repealed. With respect to the information required by

this component of the Annual Plan, PHAs need not submit these policies

with their Annual Plan if they already have been submitted and approved

by HUD (for example, the Tenant Selection and Assignment Plan). In this

case, however, PHAs must identify in the Annual Plan the policies that

have been submitted and approved. Additionally, if there have been any

changes or additions to these policies since HUD approval of these

policies, the PHA must submit the changes or additions. Where the

changed or additional policies are contained in existing PHA documents,

the PHA may excerpt and include relevant portions of those documents as

part of this component. For tenant-based assistance, PHAs must include

those applicable portions of the Section 8 Administrative Plan. Please

see discussion in Section IV.C of this preamble for submission guidance

regarding admissions policies related to deconcentration of poverty and

site-based waiting lists.

Applicability. The policies governing eligibility, selection and

admissions and waiting list administration is applicable to public

housing and tenant-based assistance, except for the information

requested on site-based waiting lists and deconcentration. This

information is applicable only to public housing.

4. Rent Determination. What the QHWRA Requires. A statement of the

discretionary policies of the PHA that govern rents charged for public

housing units, including flat rents, and rental contributions of

families assisted under section 8(o) of the USHA.

Submission Guidance. For this component of the Annual Plan, PHAs

should submit the listing of minimum rents, flat rents and any

discretionary rent policies not mandated by statute. For tenant-based

assistance, PHAs should submit minimum rent and payment standard

policies.

5. Operation and Management. What the QHWRA Requires. A statement

of the PHA's rules, standards, and policies governing maintenance and

management of the housing owned, assisted, or operated by the PHA, and

management of the agency and programs of the agency.

Submission Guidance. PHAs should submit a list of their basic

rules, standards and policies governing maintenance and management of

public housing, and management of the PHA and the programs administered

by the PHA. PHAs also should identify where the rules, standards and

policies are maintained and may be reviewed, specifically including

measures necessary for the prevention or eradication of pest

infestation. With respect to tenant-based assistance programs, PHAs

should list the programs, the number of households assisted, and the

estimated number of units becoming available annually.

Applicability. The list of PHA rules, standards and policies

regarding management and maintenance of housing applies only to public

housing. Information about PHA management, standards and policies, and

the programs administered by the agency, however, applies to public

housing and tenant-based assistance.

6. Grievance Procedures. What the QHWRA Requires. A statement of

the grievance procedures that the PHA makes available to their

residents.

Submission Guidance. PHA grievance procedures and informal review

and hearing procedures for tenant-based assistance are currently

required by existing regulations and the regulatory requirements to

provide these policies have not been repealed. Submission of these

procedures (including any procedures affecting public housing and

tenant-based assistance applicants) satisfies this component of the

Annual Plan.

7. Capital Improvements. What the QHWRA Requires. With respect to

public housing projects owned, assisted, or operated by the PHA, the

PHA's plan describing the capital improvements necessary to ensure

long-term physical and social viability of the projects.

Submission Guidance. PHAs should submit a list of its capital

projects and the estimates of costs. Alternatively, in at least the

first year of implementation, an update of the Comprehensive Grant Plan

forms will satisfy this component of the Annual Plan. With respect to

the capital improvement plans, PHAs may submit 5-Year Plans and update

them annually. This is good management practice and this will allow

PHAs to have HUD-approved spending items for future years, as is the

case now under the annual statements for the Comprehensive Grant

Program.

Applicability. This section is applicable only to public housing.

8. Demolition and/or Disposition. What the QHWRA Requires. A

description of any public housing project owned by the PHA for which

the PHA will apply for demolition and/or disposition approval and the

timetable for demolition and/or disposition.

Submission Guidance. PHAs that already have submitted or have

prepared demolition or disposition requests in accordance with the

applicable law, regulations or notices may submit these requests, if

not already submitted, or may reference a request already submitted. If

already submitted, the PHA should advise of the date of submission. If

no request has been prepared or submitted, the PHA should identify any

project or portion of a project targeted for demolition/disposition and

the PHA's estimated timetable for this activity. The description of

targeted demolition/disposition in the Annual Plan should include the

timetable for submission of the demolition/disposition application.

Applicability. This section is applicable only to public housing.

9. Designation of Public Housing for Elderly Families or Families

with Disabilities or Elderly Families and Families with Disabilities.

What the QHWRA Requires. Identification of any public housing projects

owned, assisted, or operated by the PHA, or any portion of these

projects, that the PHA has designated, or plans to designate, for

occupancy only by elderly families, or only by families with

disabilities, or for elderly families and families with disabilities.

Submission Guidance. The option to designate public housing for

elderly families, or families with disabilities, or for elderly

families and families with disabilities was authorized by section

622(a) of the Housing and Community Development Act of 1992 (Pub. L.

102-550, approved October 28, 1992, 106 Stat. 3672, 3813), which

amended section 7 of the USHA. Section 7 was amended a second time by

section 10 of the Housing Opportunity Program Extension Act of 1996

(Pub. L. 104-120, approved March 28, 1996), and this more recent

statute establishes the current requirements for designation. These

requirements are provided in PIH Notice 98-24.

For this component of the Annual Plan, the PHA should follow the

same

[[Page 8175]]

submission procedure allowed for the demolition/disposition component

of the Annual Plan. PHAs that already have submitted or have prepared

designation plans in accordance with current HUD procedures, may submit

their designations plans, if not already submitted, or may reference a

plan already submitted. If a designation plan already has been

submitted, the PHA should advise of the date of submission. If no

designation plan has been prepared or submitted, the PHA should

identify any project or portion of a project targeted for designation

and the PHA's estimated timetable for this activity.

Applicability. This section is only applicable to public housing.

10. Conversion of Public Housing. What the QHWRA Requires. A

description of any building or buildings that the PHA is required to

convert, or voluntarily plans to convert to tenant-based assistance,

and both an analysis of the projects or buildings required to be

converted and a statement of the amount of assistance received that is

to be used for rental assistance or other housing assistance in

connection with the conversion.

Submission Guidance. HUD will be issuing a rule in the near future

on voluntary conversions. Until that rule has been issued for effect,

PHAs are not required to address the subject of voluntary conversions.

For mandatory conversions, until a rule is issued on changes under the

QHWRA, PHAs should submit a list of projects or portions of projects

identified by the PHA or HUD as covered by section 202 of the FY 1996

HUD Appropriations Act (42 U.S.C. 14371 note) and the status of such

projects or portions of projects covered by section 202.

Applicability. This section is applicable to public housing and

only that tenant-based assistance which is to be included in a

conversion plan.

11. Homeownership. What the QHWRA Requires. A description of any

homeownership programs administered by the PHA under section 8(y) of

the USHA, or any homeownership programs for which the PHA has applied

or will apply to administer under new section 32 of the USHA (added by

section 536 of the QHWRA), once that section is implemented.

Submission Guidance. PHAs should describe any homeownership

programs previously approved or proposed for approval under the Public

Housing 5(h) Ownership program, or the HOPE I Homeownership Program, or

section 32, or which they will administer under the section 8(y)

voucher homeownership program and should describe the basic elements of

these homeownership programs.

12. Community Service and Self-Sufficiency. What the QHWRA

Requires. A description of any community service and self-sufficiency

programs of the PHA, any policies or programs for the enhancement of

economic and social self-sufficiency of assisted families, and how the

PHA will comply with the requirements of section 12(c) and (d) of the

USHA, as added by the QHWRA.

Submission Guidance. PHAs should list and briefly describe any

programs coordinated, promoted, or provided, including program size and

means of allocating assistance to households. This includes any

activities under programs such as Family Self-Sufficiency (including

required and actual program size), Section 3 (Section 3 of the Housing

and Urban Development Act of 1968), activities funded by HUD under the

Economic Development Supportive Services Program (EDSS) and other

similar programs. In addition, PHAs must address how they will comply

with section 12(d) of the USHA which addresses treatment of income

changes resulting from welfare program requirements. Until rulemaking

is completed for section 12(c) the USHA (which relates to community

service), PHAs are not required to address this aspect of the community

service and self-sufficiency component.

Applicability. This section is applicable to both public housing

and tenant-based assistance except that the information regarding the

PHA's compliance with the community service requirement applies only to

public housing.

13. Safety and Crime Prevention. What the QHWRA Requires. The PHA's

plan for safety and crime prevention to ensure the safety of the

residents that it serves, that is developed in consultation with local

law enforcement.

Submission Guidance. For this component, PHAs may describe any

plans or measures directed toward safety and crime prevention of a

PHA's residents as required by the QHWRA, and include any materials

required to be included for participation in the Public Housing Drug

Elimination Program (once new regulations for the program are issued).

Please see Section IV.F. of this preamble for further discussion about

forthcoming HUD regulations to implement section 586 of the QHWRA which

makes changes to HUD's Public Housing Drug Elimination Program.

Applicability. This section only applies to public housing.

14. Ownership of Pets in Public Housing. What the QHWRA Requires. A

statement of the PHA's policies and requirements pertaining to the

ownership of pets in public housing issued in accordance with section

31 of the USHA.

Submission Guidance. HUD's regulations in 24 CFR part 5, subpart C,

specify the current statutory requirements governing household pets in

public and assisted housing for elderly families and families with

disabilities, and allow PHAs to establish rules governing the keeping

of household pets in these projects. The existing statute and

regulations, however, are limited to projects for elderly families and

families with disabilities. Additionally, the existing regulations are

not applicable to animals that are used to assist persons with

disabilities.

Section 526 of the QHWRA amends the USHA to add a new section 31

that provides conditions for ownership of household pets in public

housing projects other than those for elderly families and families

with disabilities. Section 526, however, requires HUD to implement this

new section through proposed and final rulemaking. Until HUD issues

these new regulations for effect, PHAs are not required to submit this

component of the Annual Plan.

Applicability. This section only applies to public housing.

15. Civil Rights Certification. What the QHWRA requires. A

certification by the PHA that it will carry out its plan in conformity

with all applicable civil rights requirements and will affirmatively

further fair housing.

Submission Guidance. The civil rights certification of the QHWRA is

a critical component of the Annual Plan and must be submitted. The

certification is twofold: that the PHA will carry out its plan in

compliance with all applicable civil rights requirements and that the

PHA will affirmatively further fair housing. Additionally, the

certification is not only applicable to a PHA's Annual Plan but also to

its 5-Year Plan.

16. Most Recent Fiscal Year Audit. What the QHWRA Requires. The

results of the most recent fiscal year audit of the PHA conducted under

section 5(h)(2) of the USHA.

Submission Guidance. This information will be obtained by HUD's

Real Estate Assessment Center (REAC) beginning June 30, 2000 (for PHAs

with fiscal years ending September 30, 1999 and after) through its

financial assessment subsystem (FASS). For audits prior to June 30,

2000, HUD Field Offices will either have a copy of a PHA's most recent

audit, or will obtain a copy from the OMB Clearinghouse. Accordingly,

since this information is

[[Page 8176]]

already in HUD's possession, PHAs are not required to make a separate

submission of this component of the Annual Plan. As with any other

Annual Plan component for which information is in the possession of the

PHA (as well as HUD) but which is not required to be submitted to HUD

as part of the Annual Plan, PHAs must provide a reasonable means by

which the public may obtain or review this information.

17. Asset Management. What the QHWRA Requires. A statement of how

the PHA will carry out its asset management functions with respect to

the PHA's public housing inventory, including how the PHA will plan for

long-term operating, capital investment, rehabilitation, modernization,

disposition and other needs for such inventory. This statement also

should address the PHA's strategy for managing its assets with respect

to tenant-based assistance.

Submission Guidance. PHAs should submit a general statement

explaining how they will deploy physical, financial and other assets to

fulfill their mission, goals and objectives, to the extent that this

information is not already addressed in other components of the Annual

or 5-Year Plan.

18. Other Information--Table of Contents, Executive Summary and

Progress Report. The QHWRA authorizes HUD to require submission of any

other relevant information. The rule provides for three specific

submissions.

First, a table of contents that corresponds to the Annual Plan's

components in the order listed in the rule must be submitted. The table

of contents also must identify the location of any materials that are

not being submitted with the Annual Plan (for example, if REAC has the

financial information required, the table of contents would note this

and the date submitted to REAC.)

Second, an executive summary must be submitted which provides a

brief overview of the information that the PHA is submitting in its

Annual Plan and relates the Annual Plan programs and activities to the

PHA's mission and the goals, as described in the 5-Year Plan. The

executive summary also must explain any substantial deviation of these

activities from the 5-Year Plan.

Third, for all Annual Plans following submission of the first

Annual Plan, a brief summary must be included of the PHA's progress in

meeting the mission and goals described in the 5-Year Plan.

HUD specifically solicits comments on these items that HUD has

added to the Annual Plan submission and seeks recommendations on any

other items that should be included.

B. What Constitute Acceptable Plans

An acceptable and approvable Annual Plan or 5-Year Plan is one that

addresses all subjects required to be addressed by the statute and

regulations, and contains all required information and meets the

applicable statutory and regulatory requirements. Failure to submit a

plan by the deadline, failure to submit information required by the

plan, or failure of the information provided to meet the Plan

requirements may result in HUD's disapproval of plan, in whole or in

part, and may result in action by HUD that it determines to be an

appropriate response to the PHA's failure to submit the plan or

information required by the plan. This action may include withholding

of funding.

C. Certain Components of the Admissions Policy Submission

1. Deconcentration of Poverty and Income-Mixing in Public Housing

Section 513 of the QHWRA makes several amendments to section 16

with respect to deconcentration of poverty and income targeting,

effective immediately. HUD's Notice of Initial Guidance on the QHWRA,

published elsewhere in today's Federal Register, and which addresses

those provisions of the QHWRA which are effective immediately, provides

further guidance on the initial requirements for the new

deconcentration provisions.

The Annual Plan's required submission on the PHA's policies

governing eligibility, selection and admissions includes the PHA's

description of its admissions policy. This admissions policy must be

designed to provide for deconcentration of poverty and income-mixing by

bringing higher income tenants into lower income projects and lower

income tenants into higher income projects.

A PHA may offer incentives to eligible families that would help

accomplish the deconcentration and income-mixing objectives. In

addition, skipping of a family on a waiting list specifically to reach

another family with a lower or higher income is permissible, provided

that such skipping is uniformly applied. Skipping families is

consistent with site-based waiting lists. Such skipping must be adopted

by a PHA if necessary to implement an admissions policy that

effectively meets the statute's requirements. Admissions policies

relating to deconcentration do not impose specific quotas. In adopting

deconcentration and income-targeting provisions, Congress recognized

that significant income disparities may occur both in the income levels

of public housing developments and in the income levels of the

neighborhoods in which the public housing developments are located

(income levels for neighborhoods are approximate income levels based on

census tract information).

To effectively develop an admissions policy that encourages

deconcentration of poverty and income-mixing, PHAs should analyze

expeditiously their public housing stock and tenant incomes. PHAs must:

(1) determine and compare the relative tenant incomes of each

development and the incomes of census tracts in which the developments

are located, and (2) consider what policies, measures or incentives are

necessary to bring higher income families into lower income

developments (or, if appropriate to achieve the deconcentration of

poverty, into developments in lower income census tracts) and lower-

income families into higher-income projects (or if appropriate to

achieve the deconcentration of poverty, into developments in higher

income census tracts). PHA policies must devote appropriate attention

to both of these goals.

PHAs may consider a number of approaches as they examine designing

an admissions policy to achieve the goals of deconcentration and

income-mixing, such as the use of skipping over certain families on

waiting lists based on incomes; the establishment of certain

preferences such as worker preferences; appropriate affirmative

marketing efforts; additional applicant consultation and information;

provision of additional supportive services and amenities; and rent

incentives authorized by the QHWRA. PHAs with relatively few units or

projects should comply with deconcentration and income-mixing

requirements by adopting any necessary changes in their admissions

policies based on their circumstances, taking into account current

tenant populations, applicant populations and housing resources. Of

course, PHA policies must be in writing and followed consistently, and

must affirmatively further fair housing. It is not permissible to

achieve deconcentration and income-mixing for developments as a whole,

but with unacceptable disparities between areas or buildings within

developments.

2. Site-Based Waiting Lists

This interim rule implements the QHWRA's authorization for PHAs to

adopt and implement site-based waiting

[[Page 8177]]

lists under certain conditions (as specified in section 525 of the

QHWRA) and the statute's directive that PHAs can do this

notwithstanding any law, regulation, notice or handbook to the

contrary, except that applicable civil rights laws apply. In addition,

the QHWRA states that each applicant shall benefit from full disclosure

by the PHA of any options available to the applicant with respect to

the selection of developments.

The Senate Committee Report on the QHWRA, which provides, with

respect to legislative history, the most detailed statement on site-

based waiting lists, cites several of the possible benefits of site-

based waiting lists, but also acknowledges that past HUD limitations on

site-based waiting lists were based on concern about racial steering

and a desire to prevent housing discrimination. The Senate Committee

anticipated that PHAs will assure that all applicants are aware of

their rights under fair housing and civil rights laws, and encouraged

HUD to monitor implementation so that steering does not occur.

HUD interprets this legislative history to mean that PHAs should be

allowed to implement site-based waiting lists once PHA Annual Plans

proposing site-based lists are approved by HUD, and that every

reasonable action should be taken by PHAs to assure that applicants can

make informed choices and that the programs are carefully monitored.

This interim rule allows for implementation of site-based waiting lists

in this fashion and specifies the necessary protections. All PHAs that

request a site-based waiting list as part of their PHA Plan admissions

policies (including those PHAs presently using site-based waiting lists

and which wish to continue to do so) must meet the thresholds described

in the regulation. To ensure that a plan proposing a site-based waiting

list is consistent with the civil rights laws, regulations and

certifications, HUD will determine whether any significant changes in

the levels of racial and ethnic composition occur as a result of the

implementation of the site-based waiting list, and whether any pattern

or practice of discrimination exists.

Some PHAs may wish to implement site-based waiting lists before

approval of their initial PHA Annual Plans, as an integral part of the

implementation of admissions policies to promote deconcentration of

poverty in public housing or to achieve other plan objectives. If so,

PHAs may follow current procedures for requesting HUD approval. HUD

will take into account the standards established by this interim rule

when reviewing any such request for approval.

3. Admissions Policy and Civil Rights Requirements

The QHWRA includes a statutory requirement that PHA annual plans

include civil rights certifications and these responsibilities are a

fundamental objective of the annual plan. To do so, PHAs should develop

admissions policies to achieve greater housing choice and opportunity

on a non-discriminatory basis at each of their sites, for both tenants

and applicants, and annually conduct the analysis to satisfy the

elements of their civil rights certifications.

D. Additional Plan Information for Troubled PHAs and PHAs at Risk of

Being Designated Troubled

Section 511 of the QHWRA provides that the Secretary may require

any additional information in the PHA's Annual Plan that the Secretary

determines to be appropriate for each PHA that (1) is at risk of being

designated as troubled under section 6(j)(2) of the USHA, or (2) is

designated as troubled under section 6(j)(2). To these categories, HUD

includes a PHA that is at risk of being designated as troubled or is

designated as troubled under HUD's new Public Housing Assessment System

(24 CFR part 901).

Certain additional information that is important to the PHA's

progress in recovery from troubled status or near-troubled status will

be available through HUD's Troubled Agency Recovery Center (TARC). The

TARCs, part of the HUD 2020 Management Reform effort, were established

to assist PHAs designated as troubled to reach improved performance

through the development and implementation of sustainable solutions.

The TARC works with a PHA to develop and implement an intervention

strategy to help raise the PHA's level of performance. The PHA reports

to the TARC and the TARC monitors the PHA's performance. To the extent

that HUD can obtain additional information on troubled PHAs through the

TARC it will do so to reduce duplication of submissions. HUD, however,

retains the authority provided by the QHWRA to request any additional

information from a troubled PHA for the PHA Annual Plan that HUD

determines is appropriate, and may not be available at the TARC. A

troubled PHA must make available locally (to its residents and members

of the public) its memorandum of agreement and operating budgets in

addition to other materials required by this interim rule. For PHAs at

risk of being designated troubled and that are not being monitored by

the TARC, HUD may request additional information for the PHA Annual

Plan similar to that information which is required of troubled PHAs by

the TARC.

E. Streamlined Annual Plan for Certain PHAs

Section 511 also provides that the Secretary may establish a

streamlined plan for:

--PHAs that are determined to be high performing PHAs;

--PHAs with less than 250 public housing units (small PHAs) and that

have not been designated as troubled under section 6(j)(2) of the USHA;

and

--PHAs that only administer tenant-based assistance and that do not own

or operate public housing.

In this interim rule, HUD exercises this authority to allow

streamlined plans for high performing PHAs, nontroubled small PHAs, and

PHAs that only administer Section 8 tenant-based assistance. HUD

generally will exempt these categories of PHAs from submitting elements

of the Annual Plan which (1) simply reflect good management practice,

or compliance with regulatory requirements and therefore not

discretionary policies (for example, operation and management

practices; grievance procedures); (2) are inapplicable to a PHA's

operations (notably with respect to a PHA's administration of Section 8

tenant-based assistance); or (3) require HUD approval before the PHA

may take action and also require Board of Commissioners approval (for

example, designation plans, public housing homeownership programs, and

conversion to vouchers). As noted above, PHAs are urged to fully inform

their assistance recipients and the public generally, of PHA policies

that exist but are exempt from submission, and must indicate how the

public may receive more information about these policies in a

reasonable fashion.

F. Interim Plan for Demolition/Disposition

Interim Plan for Demolition/Disposition. Before submission of the

first Annual Plan, PHAs may submit an interim PHA Annual Plan solely

with respect to demolition/disposition. The interim plan must provide

the required description of the action to be taken, include a

certification of consistency with the Consolidated Plan, and confirm

that a public hearing was held on the proposed action and that the

resident advisory board was consulted. If a resident advisory board has

not yet been

[[Page 8178]]

formed, the PHA may seek a waiver of the requirement to consult with

the resident advisory board on the grounds that organizations that

adequately represent residents for this purpose were consulted. The

actual application for demolition or disposition could be submitted at

the same time or at a later date.

G. The Resident Advisory Board: Establishment and Consultation

To assist PHAs in the development of their annual plans, section

511 of the QHWRA provides for the establishment of a Resident Advisory

Board. The QHWRA provides that each PHA must establish one or more

Resident Advisory Boards, and the membership on the board or boards

must adequately reflect and represent the residents assisted by the

PHA.

The purpose of the Resident Advisory Board is to assist the PHA and

make recommendations regarding the development of the Annual Plan. The

PHA must consider the recommendations of the Resident Advisory Board or

Boards in preparing the final Annual Plan, and, in submitting the final

plan to HUD for approval, the PHA must include a copy of the

recommendations made by the Resident Advisory Board or Boards and a

description of the manner in which the PHA addressed these

recommendations.

HUD specifically will require PHAs to appoint as Resident Advisory

Boards jurisdiction-wide resident councils where they exist, or local

resident councils, that are in compliance with tenant participation

regulations (see 24 CFR part 964). PHAs will be required to encourage

tenants that are not represented by such resident councils to seek

representation on these councils in accordance with any applicable

tenant participation regulations. Section 8 tenant-based assistance

recipients also must be represented on resident councils because their

interests may be very different from those of public housing residents.

Although the QHWRA allows HUD to waive the resident advisory board

requirement where current organizations adequately represent residents,

HUD's strong preference is that PHAs appoint those organizations as

Resident Advisory Boards rather than seek waivers.

H. Consistency With the Consolidated Plan

Section 511 of the QHWRA provides that the PHA must ensure that its

Annual Plan is consistent with the Consolidated Plan for the

jurisdiction in which the PHA is located. PHAs whose jurisdictions

encompass more than one Consolidated Plan jurisdiction must ensure

consistency with any applicable Consolidated Plans. The Annual Plan

must contain a certification by the appropriate State or local

officials that the plan is consistent with the Consolidated Plan and

provide a description of the manner in which the applicable contents of

the Annual Plan are consistent with the Consolidated Plan. This

consistency requirement is applicable to both the 5-Year Plan and the

Annual Plan.

As part of fulfilling this requirement, the Annual Plan should also

be consistent with the local jurisdiction's Analysis of Impediments to

Fair Housing Choice (AI), which describes barriers to fair housing

choice and opportunity that affect, among others, public housing and

Section 8 tenants and applicants, and outlines actions to be taken to

address the impediments. Where impediments have been identified

relating to the administration of public housing and Section 8 tenant-

based assistance programs, the impediments must be addressed in the

PHA's Annual Plan, including any appropriate actions to be taken to

remove them.

V. Adoption, Submission, Amendments, and Review of the Plans

A. Public Information and Notice About the Plans

Section 511 of the QHWRA requires the board of directors or similar

governing body of the PHA to conduct a public hearing to discuss the

PHA plans and to invite public comment regarding the plans. The hearing

is to be conducted at a location that is convenient to the residents

served by the PHA. Section 511 also requires that not later than 45

days before the public hearing is to take place, the PHA must:

--Make the proposed PHA plan (either the 5-Year Plan or Annual Plan, or

both, as applicable) and all information relevant to the public hearing

to be conducted, available for inspection by the public at the

principal office of the PHA during normal business hours; and

--Publish a notice informing the public that the information is

available for review and inspection, and that a public hearing will

take place on the plan, and the date, time and location of the hearing.

Where practical, a PHA notice to the public should include

electronic posting on the internet. A PHA also should contact all

organizations and groups that the PHA believes are interested in the

operations, programs and services of the PHA (for example,

organizations that the PHA is aware have previously expressed interest)

and specifically seek their comments and recommendations on the Annual

Plan or 5-Year Plan or both, as applicable.

B. When 5-Year Plan and/or Annual Plan Are Ready for Submission to HUD

Section 511 of the QHWRA provides that a PHA may adopt its 5-Year

Plan and Annual Plan and submit the plans to HUD only after:

--The PHA has conducted the public hearing;

--The PHA has considered all public comments received on the plans;

--The PHA has made any changes to the plans, based on comments, in

consultation with the Resident Advisory Board or other resident

organization.

C. Submission of the 5-Year Plan and Annual Plan to HUD

Section 511 of the QHWRA provides that the first 5-Year Plan and

Annual Plan are to be submitted by the PHA beginning with the PHA

fiscal year in which the PHA first will receive Federal fiscal year

2000 funding under sections 8(o) or 9 of the USHA. After the first

Annual Plan is submitted, section 511 requires that not later than 75

days before the start of each succeeding fiscal year of the PHA, the

PHA shall annually submit to HUD a plan which may be an update,

including any amendments or modifications to any previous year's Annual

Plan.

D. Amendments and Modifications to the 5-Year Plan and Annual Plan

Section 511 of the QHWRA also provides that a PHA, after submitting

its 5-Year Plan or Annual Plan to HUD, may amend or modify any PHA

policy, rule, regulation or other aspect of the plans but provides that

significant amendments or modifications:

--May not be adopted until the PHA has duly called a meeting of its

board of directors (or similar governing body), the meeting is open to

the public, and the plan is adopted at the meeting; and

--May not be implemented until notification of the amendment or

modification is provided to HUD and approved by HUD in accordance with

HUD's plan review procedures, discussed in Section E below.

With respect to the 5-Year Plan, HUD believes that significant

amendments or modifications are those that make a change to the PHA's

mission, or the goals and objectives to enable the PHA to meet the

needs of the families that it

[[Page 8179]]

serves, or both. With respect to the Annual Plan, HUD believes that

significant amendments or modifications are those that make significant

changes to information provided by the PHA in its Annual Plan. For

example, the PHA's housing needs or its strategies for meeting those

needs has changed substantially, or the PHA has made substantial

changes to its planned use of financial resources.

HUD specifically seeks comments on what should constitute

``significant'' amendments or modifications to either the 5-Year Plan

or Annual Plan.

E. HUD's Review of the 5-Year Plan and Annual Plan, Determination of

Compliance and Approval and Disapproval

Review of the Plans. Upon submission by the PHA to HUD of the PHA's

plans, and any amendment or modification to the plans, HUD shall review

the plans and determine whether the contents of the plan:

--Provide the information that is required to be included;

--Are consistent with the information and data available to HUD and

with the Consolidated Plan for the jurisdiction in which the PHA is

located; and

--Are not prohibited by or inconsistent with the USHA or any other

applicable Federal law.

Disapproval. HUD may disapprove a PHA plan (5-Year Plan or Annual

Plan), in its entirety or in part, or may disapprove any amendment or

modification to the plan, only if HUD determines that the plan, or any

amendment or modification to the plan:

--Does not provide all the information that is required to be included

in the plan;

--Is not consistent with the information and data available to HUD or

with any applicable Consolidated Plan for the jurisdiction in which the

PHA is located; and

--Is not consistent with the USHA or other applicable Federal law.

Not later than 75 days after the date on which the PHA submits its

plan, or the date on which the PHA submits its amendment or

modification to the plan, HUD shall issue written notice to the PHA if

the plan or any part of the plan has been disapproved. The notice must

state with specificity the reasons for the disapproval. If HUD fails to

issue the notice of disapproval on or before the 75th day after the PHA

submits the plan, HUD shall be considered to have determined that all

components of the plan required to be submitted and that were

submitted, and reviewed by HUD were in compliance with applicable

requirements and the plan has been approved.

Public Availability of the Approved Plan. Once a PHA's plan has

been approved, a PHA must make its approved plan available for review

and inspection, at the principal office of the PHA during normal

business hours.

HUD specifically seeks comments on whether the final rule should

provide that a PHA must post notice in the developments owned, operated

or administered by the PHA that the plan has been approved and

information on where the plan may be inspected, and also whether the

PHA should post notice in a newspaper of general circulation that the

plan has been approved and information about where it may be inspected.

F. PHA's Compliance With the Plan

A PHA must comply with the policies, rules, and standards adopted

in the plan as approved by HUD. To ensure that a PHA is in compliance

with its plan, HUD shall respond appropriately to any complaint

concerning PHA noncompliance with its plan. HUD also may be informed of

a PHA's compliance with its plan through PHA reports on progress,

results of audits, performance evaluation scores and other means. If

HUD determines that a PHA is not in compliance with its plan, HUD will

take necessary and appropriate action to ensure compliance by the PHA.

G. The PHA Annual Plan as It Relates to Existing Regulations and the

Necessity for Conforming Regulatory Amendments

HUD also is aware that conforming amendments must be made to

existing regulations as a result of the changes made to the USHA by the

requirements of the PHA Plans as well as changes made to the USHA by

other QHWRA amendments. HUD anticipates making these conforming changes

at the final rule stage or through other rulemakings. HUD also may

decide that matters now covered by this preamble should be part of the

regulatory text. For example, an item that HUD recommended should be

submitted in the preamble submission guidance provided for a particular

component may be a required submission item at the final rule stage.

With this in mind, HUD specifically welcomes comments on whether

various described items in the submission guidance provided should or

should not be required submission items at the final rule stage.

VI. Issues on Which HUD Specifically Seeks Comment

HUD seeks comments on all aspects of this rulemaking. However,

throughout this preamble, HUD has specifically requested comment on

certain issues and questions. For the convenience of the reader, the

following restates those issues and questions, and adds an additional

question on the rule's organization.

1. The feasibility of combining the 5-Year Plan and/or Annual Plan

with the submission of the Consolidated Plan either in whole or in

part.

2. Ways to streamline or merge current information requirements

already reported electronically by PHAs to HUD with the additional

requirements listed in this rule.

3. How should the term ``substantial deviation'' be defined.

4. What constitutes an acceptable 5-Year Plan?

5. The manner of submission of the information required under the

Annual Plan.

6. HUD's addition of items to the Annual Plan submission and

whether commenters recommend any other items for inclusion.

7. What should constitute ``significant'' amendments or

modifications to either the 5-Year Plan or Annual Plan?

8. What methods should HUD use to encourage PHAs to utilize

metropolitan-wide strategies to increase the success of deconcentration

approaches.

9. Whether the final rule should provide that a PHA must post

notice in the projects owned, operated or administered by the PHA that

the plan has been approved and provide information on where the plan

may be inspected, and also whether the PHA should post notice in a

newspaper of general circulation that the plan has been approved and

information about its availability for review.

10. Whether any items in the submission guidance provided for the

Annual Plan should or should not remain required submission items at

the final rule stage.

11. Is the rule organized in a manner that is helpful and should

the rule include a definition section?

VII. Findings and Certifications

Justification for Interim Rule

It is the general practice of HUD to publish a rule for public

comment before issuing a rule for effect, in accordance with its

regulations in 24 CFR part 10. Section 511 of the Quality Housing and

Work Responsibility Act of 1998, however, specifically directs that

[[Page 8180]]

HUD issue this regulation as an interim rule.

Paperwork Reduction Act

The information collection requirements in this interim rule have

been submitted to the Office of Management and Budget (OMB) for review,

under section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35).

In accordance with 5 CFR 1320.5(a)(1)(iv), HUD estimates the total

reporting and recordkeeping burden that will result from the PHA Plans

are as provided under the caption ``Reporting Burden.'' As the preamble

to this rule has discussed, many of the PHA Plan items represent

existing reporting and recordkeeping requirements. Therefore the

reporting burden does not an entirely new reporting burden but instead

reflects the existing reporting burden which has been modified by the

PHA Plan requirements.

Reporting Burden

----------------------------------------------------------------------------------------------------------------

Freq. of Est. time

Number of respondents response (hours) Total (hrs.)

----------------------------------------------------------------------------------------------------------------

3,400........................................................ 1 104 hrs 353,600

Total Reporting Burden: 353,600.

----------------------------------------------------------------------------------------------------------------

In accordance with 5 CFR 1320.8(d)(1), the Department is soliciting

comments from members of the public and affected agencies concerning

the collection of information to:

(1) Evaluate whether the 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 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.

Interested persons are invited to submit comments regarding the

information collection requirements in this rule. Under the provisions

of 5 CFR part 1320, OMB is required to make a decision concerning this

collection of information between 30 and 60 days after today's

publication date. Therefore, a comment on the information collection

requirements is best assured of having its full effect if OMB receives

the comment within 30 days of today's publication. This time frame does

not affect the deadline for comments to the agency on the rule,

however. Comments must refer to the rule by name and docket number (FR-

4420) and must be sent to:

Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and

Budget, New Executive Office Building, Washington, DC 20503

and

Mildred Hamman, Reports Liaison Officer, Department of Housing & Urban

Development, Office of Public and Indian Housing, Room 4238, 451

Seventh Street, SW, Washington, DC 20410

Executive Order 12866

This interim rule was reviewed by the Office of Management and

Budget (OMB) under Executive Order 12866, Regulatory Planning and

Review. OMB determined that this interim rule is a ``significant

regulatory action,'' as defined in section 3(f) of the Order (although

not economically significant under section (3)(f)(1) of the Order). Any

changes made to the interim rule subsequent to its submission to OMB

are clearly identified in the docket file, which is available for

public inspection in the office of the Department's Rules Docket Clerk,

Room 10276, 451 Seventh Street SW, Washington DC, 20410.

Regulatory Flexibility Act

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

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

doing certifies that this rule does not have a significant economic

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

implements, by statutory directive, a comprehensive planning system for

public housing agencies which also provides for consolidated statement

of PHA policies on various PHA operations and also provides a

consolidated reporting mechanism. The public housing agency plans

ultimately should minimize administrative burden on all PHAs, including

small PHAs, consistent with reasonable accountability. HUD is sensitive

to the fact, however, that the uniform application of requirements on

entities of differing sizes may place a disproportionate burden on

small entities. In this regard, the interim rule provides for

submission of a streamlined plan by small entities. HUD is soliciting

additional recommendations on how small PHAs might fulfill the purposes

of the rule (and the statutory requirements) in a way that is less

burdensome to them.

Executive Order 12612, Federalism

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

of Executive Order 12612, Federalism, has determined that this interim

rule would 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 rule

pertains solely to Federal assistance and no programmatic or policy

changes would result from this interim rule that affect the

relationship between the Federal Government and State and local

governments.

Environmental Impact

A Finding of No Significant Impact with respect to the environment

was made in accordance with HUD regulations in 24 CFR part 50 that

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

1969 (42 U.S.C. 4223). 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 General Counsel, Room 10276, Department of

Housing and Urban Development, 451 7th Street, SW, Washington, DC

20410.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-

4; approved March 22, 1995) (UMRA) establishes requirements for Federal

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

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

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

governments, or on the private

[[Page 8181]]

sector, within the meaning of the UMRA.

List of Subjects in 24 CFR Part 903

Administrative practice and procedure, Public housing, Reporting

and recordkeeping requirements.

Accordingly, for the reasons stated in the preamble, title 24 of

the CFR is amended by adding part 903 to read as follows:

PART 903--PUBLIC HOUSING AGENCY PLANS

Sec.

903.1 What are the public housing agency plans?

903.3 When must a PHA submit the plans to HUD?

903.5 What information must a PHA provide in the 5-Year Plan?

903.7 What information must a PHA provide in the Annual Plan?

903.9 Must a troubled PHA include additional information in its

Annual Plan?

903.11 Are certain PHAs eligible to submit a streamlined Annual

Plan?

903.13 What is a Resident Advisory Board and what is its role in

development of the Annual Plan?

903.15 What is the relationship of the public housing agency plans

to the Consolidated Plan?

903.17 Must the PHA make public the contents of the plans?

903.19 When is the 5-Year Plan or Annual Plan ready for submission

to HUD?

903.21 May the PHA amend or modify a plan?

903.23 What is the process by which HUD reviews, approves, or

disapproves an Annual Plan?

903.25 How does HUD ensure PHA compliance with its plans?

Authority: 42 U.S.C. 1437c; 42 U.S.C. 3535(d).

Sec. 903.1 What are the public housing agency plans?

(a) There are two public housing agency plans. They are:

(1) The 5-year plan (the 5-Year Plan) that a public housing agency

(PHA) must submit to HUD once every 5 PHA fiscal years; and

(2) The annual plan (Annual Plan) that the PHA must submit to HUD

for each fiscal year for which the PHA receives:

(i) Section 8 tenant-based assistance (section 8(o) of the U.S.

Housing Act of 1937, 42 U.S.C. 1437f(o)) (tenant-based assistance); or

(ii) Public housing operating subsidy or capital fund (section 9 of

the U.S. Housing Act of 1937 (42 U.S.C. 1437g) (public housing)).

(b) The purpose of the plans is to provide a framework for local

accountability and an easily identifiable source by which public

housing residents, participants in the tenant-based assistance program,

and other members of the public may locate basic PHA policies, rules

and requirements concerning its operations, programs and services.

(c) HUD may prescribe the format of submission (including

electronic format submission) of the plans. PHAs will receive

appropriate notice of any prescribed format.

(d) The requirements of this part only apply to a PHA that receives

the type of assistance described in paragraph (a) of this section.

(e) In addition to the waiver authority provided in 24 CFR 5.110,

the Secretary may, subject to statutory limitations, waive any

provision of this title on a program-wide basis, and delegate this

authority in accordance with section 106 of the Department of Housing

and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)) where the

Secretary determines that such waiver is necessary for the effective

implementation of this part.

Sec. 903.3 When must a PHA submit the plans to HUD?

(a) 5-Year Plan. (1) The first PHA fiscal year that is covered by

the requirements of this part is the PHA fiscal year that begins

January 1, 2000. The first 5-Year Plan submitted by a PHA must be

submitted for the 5-year period beginning January 1, 2000. The first 5-

Year Plans will be due no later than 75 days before January 1, 2000.

For PHAs whose fiscal years begin after January 1, 2000, their 5-Year

Plans are due no later than 75 days before the commencement of their

fiscal year. For all PHAs, after submission of their first 5-Year Plan,

all subsequent 5-Year Plans must be submitted once every 5 PHA fiscal

years, no later than 75 days before the commencement of the PHA's

fiscal year.

(2) PHAs may choose to update their 5-Year Plans every year as good

management practice. PHAs must explain any substantial deviation from

their 5-Year Plans in their Annual Plans.

(b) The Annual Plan. The first Annual Plan submitted by a PHA must

be submitted 75 days in advance of the first PHA fiscal year in which

the PHA receives Federal fiscal year 2000 funds. Since the first PHA

fiscal year funded with Federal Fiscal Year 2000 funds will commence

January 1, 2000, the first Annual Plan will be due 75 days in advance

of that date or October 15, 1999. PHAs with later fiscal year

commencement dates must submit their Annual Plans 75 days in advance of

their fiscal year commencement date. Subsequent Annual Plans will be

due 75 days in advance of the commencement of a PHA's fiscal year.

Sec. 903.5 What information must a PHA provide in the 5-Year Plan?

(a) A PHA must include in its 5-Year Plan for the 5 PHA fiscal

years immediately following the date on which the 5-Year Plan is due to

HUD, a statement of:

(1) The PHA's mission for serving the needs of low-income, very

low-income and extremely low-income families in the PHA's jurisdiction;

and

(2) The PHA's goals and objectives that enable the PHA to serve the

needs of the families identified in the PHA's Annual Plan. For HUD, the

PHA and the public to better measure the success of the PHA in meeting

its goals and objectives, PHAs must adopt quantifiable goals and

objectives for serving those needs wherever possible.

(b) After submission of the first 5-Year Plan, a PHA in their

succeeding 5-Year Plans, in addition to addressing their mission, goals

and objectives for the next 5 years, must address the progress made by

the PHA in meeting its goals and objectives described in the previous

5-Year Plan.

Sec. 903.7 What information must a PHA provide in the Annual Plan?

The Annual Plan must include the information provided in this

section, except that for the first Annual Plan, the following

information need not be submitted: the information required by

paragraph (l) of this section that pertains to section 12 of the U.S.

Housing Act of 1937 (42 U.S.C. 1437j(c)); the information required by

paragraph (m) of this section that relates to drug elimination

policies; and the information required by paragraph (n) of this

section. Additionally, the information described in this section

applies to both public housing and tenant-based assistance, except

where specifically stated otherwise, and the information that the PHA

must submit for HUD approval under the Annual Plan are the

discretionary policies of the various plan components or elements (for

example, selection policies) and not the statutory or regulatory

requirements that govern these components.

(a) A statement of housing needs. (1) This statement must address

the housing needs of the low-income and very low-income families who

reside in the jurisdiction served by the PHA, and families who are on

the public housing and Section 8 tenant-based assistance waiting lists,

including:

[[Page 8182]]

(i) Families with incomes below 30 percent of area median

(extremely low-income families);

(ii) Elderly families and families with disabilities;

(iii) Households of various races and ethnic groups residing in the

jurisdiction or on the waiting list.

(2) The housing needs of each of these groups must be identified

separately. The identification of housing needs should address issues

of affordability, supply, quality, accessibility, size of units and

location. The statement of housing needs also must describe the ways in

which the PHA intends, to the maximum extent practicable, to address

those needs, and the PHA's reasons for choosing its strategy.

(b) A statement of financial resources. This statement must address

the financial resources that are available to the PHA for the support

of Federal public housing and tenant-based assistance programs

administered by the PHA during the plan year. The statement must

include a listing of the significant PHA operating, capital and other

proposed Federal resource commitments available to the PHA, as well as

tenant rents and other income available to support public housing or

tenant-based assistance. The statement also should include the non-

Federal sources of funds supporting each federal program. In this

statement, the PHA also must describe the planned uses for the

resources.

(c) A statement of the PHA's policies that govern eligibility,

selection, and admissions. This statement must describe the PHA's

policies governing resident or tenant eligibility, selection and

admission. This statement also must describe any PHA admission

preferences, assignment and any occupancy policies that pertain to

public housing units and housing units assisted under section 8(o) of

the U.S. Housing Act of 1937. The requirement to submit PHA policies

governing assignment only applies to public housing. This statement

also must include the following information:

(1) The PHA's procedures for maintaining waiting lists for

admission to the PHA's public housing projects. These procedures must

include any site-based waiting lists, as provided by section 6(s) of

the U.S. Housing Act of 1937. This section permits PHAs to establish a

system of site-based waiting lists that are consistent with all

applicable civil rights and fair housing laws and regulations.

Notwithstanding any other regulations, a PHA may adopt site-based

waiting lists where:

(i) The PHA regularly submits required occupancy data to HUD's

Multifamily Tenant Characteristics Systems (MTCS) in an accurate,

complete and timely manner;

(ii) The system of site-based waiting lists provides for full

disclosure to each applicant of any option available to the applicant

in the selection of the development in which to reside, including basic

information about available sites (location, occupancy, number and size

of accessible units, amenities such as day care, security,

transportation and training programs) and an estimate of the period of

time the applicant would likely have to wait to be admitted to units of

different sizes and types (e.g., regular or accessible) at each site;

(iii) Adoption of site-based waiting lists would not violate any

court order or settlement agreement, or be inconsistent with a pending

complaint brought by HUD;

(iv) The PHA includes reasonable measures to assure that such

adoption is consistent with affirmatively furthering fair housing, such

as reasonable marketing activities;

(v) The PHA provides for review of its site-based waiting list

policy to determine if it is consistent with civil rights laws and

certifications through the following steps:

(A) As part of the submission of the Annual Plan, the PHA shall

assess changes in racial, ethnic or disability-related tenant

composition at each PHA site that may have occurred during the

implementation of the site-based waiting list, based upon MTCS

occupancy data that has been confirmed to be complete and accurate by

an independent audit (which may be the annual independent audit);

(B) At least biannually use independent testers or other means

satisfactory to HUD, to assure that the site-based waiting list is not

being implemented in a discriminatory manner, and that no patterns or

practices of discrimination exist, and providing the results to HUD;

and

(C) Taking any steps necessary to remedy the problems surfaced

during the review and the steps necessary to affirmatively further fair

housing.

(2) The PHA's admissions policy with respect to deconcentration of

very low-income families and income-mixing. Deconcentration and income-

mixing is required by section 16 of the U.S. Housing Act of 1937 (42

U.S.C. 1437n). To implement the requirement, which is applicable

specifically to public housing, PHAs must:

(i) Determine and compare the relative tenant incomes of each

development, as well as the household incomes of census tracts in which

the developments are located; and

(ii) Consider what admissions policy measures or incentives, if

any, will be needed to bring higher-income families into lower-income

developments (or if appropriate to achieve deconcentration of poverty,

into developments in lower income census tracts) and lower-income

families into higher income developments (or if appropriate to achieve

deconcentration of poverty, into developments in higher income census

tracts). PHA policies must devote appropriate attention to both of

these goals. PHA policies must affirmatively further fair housing; and

(i) Make any appropriate changes in their admissions policies.

(3) The policies governing eligibility, selection and admissions

are applicable to public housing and tenant-based assistance, except

for the information requested on site-based waiting lists and

deconcentration. This information is applicable only to public housing.

(d) A statement of the PHA's rent determination policies. This

statement must describe the PHA's basic discretionary policies that

pertain to rents charged for public housing units, including applicable

flat rents, and the rental contributions of families receiving tenant-

based assistance. For tenant-based assistance, this statement shall

cover any discretionary minimum tenant rents and payment standard

policies.

(e) A statement of the PHA's operation and management. (1) This

statement must describe the PHA's rules, standards, and policies that

govern maintenance and management of housing owned, assisted, or

operated by the PHA. This statement also must include a description of

any measures necessary for the prevention or eradication of pest

infestation which includes cockroach infestation. Additionally, this

statement must include a description of PHA management organization,

and a listing of the programs administered by the PHA.

(2) The information pertaining to PHA's rules, standards and

policies regarding management and maintenance of housing applies only

to public housing. The information pertaining to program management

applies to public housing and tenant-based assistance.

(f) A statement of the PHA grievance procedures. This statement

describes the grievance and informal hearing and review procedures that

the PHA makes available to its residents and applicants. This includes

public housing grievance procedures and tenant-based assistance

informal review procedures for

[[Page 8183]]

applicants and hearing procedures for participants.

(g) A statement of capital improvements needed. With respect to

public housing only (public housing projects owned, assisted or

operated by the PHA), this statement describes the capital improvements

necessary to ensure long-term physical and social viability of the

public housing projects, including the capital improvements to be

undertaken in the year in question and their estimated costs. PHAs are

encouraged to include 5-Year Plans covering large capital items.

(h) A statement of any demolition and/or disposition. With respect

to public housing only, a description of any public housing project, or

portion of a public housing project, owned by the PHA for which the PHA

has applied or will apply for demolition and/or disposition approval

under section 18 of the U.S. Housing Act of 1937 (42 U.S.C. 1437p), and

the timetable for demolition and/or disposition.

(i) A statement of the public housing projects designated as

housing for elderly families or families with disabilities or elderly

families and families with disabilities. With respect to public housing

only, this statement identifies any public housing projects owned,

assisted, or operated by the PHA, or any portion of these projects,

that the PHA has designated for occupancy only by the elderly families

or only by families with disabilities, or by elderly families and

families with disabilities or will apply for designation for occupancy

by only elderly families or only families with disabilities, or by

elderly families and families with disabilities as provided by section

7 of the U.S. Housing Act of 1937 (42 U.S.C. 1437e).

(j) A statement of the conversion of public housing to tenant-based

assistance. (1) This statement describes any building or buildings that

the PHA is required to convert to tenant-based assistance under section

33 of the U.S. Housing Act of 1937 (42 U.S.C. 1437z-5), or that the PHA

plans to voluntarily convert under section 22 of the U.S. Housing Act

of 1937 (42 U.S.C. 1437t). The statement also must include an analysis

of the projects or buildings required to be converted under section 33,

and the amount of assistance received commencing in Federal Fiscal 1999

to be used for rental assistance or other housing assistance in

connection with such conversion.

(2) The information required under this paragraph (j) of this

section is applicable to public housing and only that tenant-based

assistance which is to be included in the conversion plan.

(k) A statement of homeownership programs administered by the PHA.

This statement describes any homeownership programs administered by the

PHA under section 8(y) of the U.S. Housing Act of 1937 (42 U.S.C.

1437f(y)), or under an approved section 5(h) homeownership program (42

U.S.C. 1437c(h)), or an approved HOPE I program (42 U.S.C. 1437aaa) or

for any homeownership programs for which the PHA has applied to

administer or will apply to administer under section 5(h), the HOPE I

program, or section 32 of the U.S. Housing Act of 1937 (42 U.S.C.

1437z-4).

(l) A statement of the PHA's community service and self-sufficiency

programs. (1) This statement describes:

(i) Any PHA programs relating to services and amenities

coordinated, promoted or provided by the PHA for assisted families,

including programs provided or offered as a result of the PHA's

partnership with other entities;

(ii) Any PHA programs coordinated, promoted or provided by the PHA

for the enhancement of the economic and social self-sufficiency of

assisted families, including programs provided or offered as a result

of the PHA's partnerships with other entities, and activities under

section 3 of the Housing and Community Development Act of 1968 and

under requirements for the Family Self-Sufficiency Program and others.

The description of programs offered shall include the program's size

(including required and actual size of the Family Self-Sufficiency

program) and means of allocating assistance to households.

(iii) How the PHA will comply with the requirements of section

12(c) and (d) of the U.S. Housing Act of 1937 (42 U.S.C. 1437j(c) and

(d)). These statutory provisions relate to community service by public

housing residents and treatment of income changes in public housing and

tenant-based assistance recipients resulting from welfare program

requirements.

(2) The information required by paragraph (l) of this section is

applicable to both public housing and tenant-based assistance except

that the information regarding the PHA's compliance with the community

service requirement applies only to public housing.

(m) A statement of the PHA's safety and crime prevention measures.

With respect to public housing only, this statement describes the PHA's

plan for safety and crime prevention to ensure the safety of the public

housing residents that it serves. The plan for safety and crime

prevention must be established in consultation with the police officer

or officers in command of the appropriate precinct or police

departments, and the plan must provide, on a project-by-project or

jurisdiction wide-basis, the measures necessary to ensure the safety of

public housing residents.

(1) The statement regarding the PHA's safety and crime prevention

plan must include the following information:

(i) A description of the need for measures to ensure the safety of

public housing residents;

(ii) A description of any crime prevention activities conducted or

to be conducted by the PHA;

(iii) A description of the coordination between the PHA and the

appropriate police precincts for carrying out crime prevention measures

and activities;

(iv) The information required to be included by the Public Housing

Drug Elimination Program regulations if the PHA expects to receive drug

elimination program grant funds.

(2) If HUD determines at any time that the security needs of a

public housing project are not being adequately addressed by the PHA's

plan, or that the local police precinct is not assisting the PHA with

compliance with its crime prevention measures as described in the

Annual Plan, HUD may mediate between the PHA and the local precinct to

resolve any issues of conflict.

(n) A statement of the PHA's policies and rules regarding ownership

of pets in public housing. This statement describes the PHA's policies

and requirements pertaining to the ownership of pets in public housing

issued in accordance with section 31 of the U.S. Housing Act of 1937

(42 U.S.C. 1437a-3).

(o) Civil rights certification. (1) The PHA must certify that it

will carry out its plan in conformity with title VI of the Civil Rights

Act of 1964 (42 U.S.C. 2000d-2000d-4), the Fair Housing Act (42 U.S.C.

3601-19), section 504 of the Rehabilitation Act of 1973 (29 U.S.C.

794), and title II of the Americans with Disabilities Act of 1990 (42

U.S.C. 12101 et seq.), and also certify that it will affirmatively

further fair housing. The certification is applicable to both the 5-

Year Plan and the Annual Plan.

(2) PHAs shall be considered in compliance with the obligation to

affirmatively further fair housing if they examine their programs or

proposed programs, identify any impediments to fair housing choice

within those programs, address those impediments in a reasonable

fashion in view of the resources available, and work with local

jurisdictions to implement any of the jurisdiction's initiatives to

affirmatively further fair housing that require the

[[Page 8184]]

PHA's involvement, and maintain records reflecting these analyses and

actions.

(p) Recent results of PHA's fiscal year audit. The PHA's plan must

include the results of the most recent fiscal year audit of the PHA

conducted under section 5(h)(2) of the U.S. Housing Act of 1937 (42 U

S.C. 1437c(h)).

(q) A statement of asset management. This statement describes how

the PHA will carry out its asset management functions with respect to

the PHA's public housing inventory, including how the PHA will plan for

long-term operating, capital investment, rehabilitation, modernization,

disposition, and other needs for such inventory.

(r) Additional information to be provided. PHAs also must include

in their Annual Plan:

(1) A table of contents that corresponds to the Annual Plan's

components in the order listed in this section. The table of contents

also must identify the location of any materials that are not being

submitted with the Annual Plan;

(2) An executive summary that provides a brief overview of the

information that the PHA is submitting in its Annual Plan and relates

the Annual Plan programs and activities to the PHA's mission and goals

as described in the 5-Year Plan, and explains any substantial

deviations of these activities from the 5-Year Plan; and

(3) For all Annual Plans following submission of the first Annual

Plan, a brief summary of the PHA's progress in meeting the mission and

goals described in the 5-Year Plan.

Sec. 903.9 Must a troubled PHA include additional information in its

Annual Plan?

Yes. A PHA that is at risk of being designated as troubled or is

designated as troubled under section 6(j)(2) of the U.S. Housing Act of

1937 (42 U.S.C. 1437d(j)(2)) or under the Public Housing Assessment

System (24 CFR part 901) must include its operating budget, and include

or reference any applicable memorandum of agreement with HUD or other

plan to improve performance and such other material as HUD may

prescribe.

Sec. 903.11 Are certain PHAs eligible to submit a streamlined Annual

Plan?

(a) Yes, the following PHAs may submit a streamlined Annual Plan,

as described in paragraph (b) of this section:

(1) PHAs that are determined to be high performing PHAs;

(2) PHAs with less than 250 public housing units (small PHAs) and

that have not been designated as troubled under section 6(j)(2); and

(3) PHAs that only administer tenant-based assistance and that do

not own or operate public housing.

(b) All streamlined plans must provide information on how the

public may reasonably obtain additional information on the PHA policies

contained in the standard Annual Plan, but excluded from their

streamlined submissions. A streamlined plan must included the following

information:

(1) For high-performing PHAs, the streamlined Annual Plan must

include the information required by Sec. 903.7(a), (b), (c), (d), (g),

(h), (m), (n), (o), (p) and (r). The information required by

Sec. 903.7(m) must be included only to the extent this information is

required for PHA's participation in the public housing drug elimination

program and the PHA anticipates participating in this program in the

upcoming year.

(2) For small PHAs that are not designated as troubled or that are

not at risk of being designated as troubled, the streamlined Annual

Plan must include the information required by Sec. 903.7(a), (b), (c),

(d), (g), (h), (k), (m), (n), (o), (p) and (r). The information

required by Sec. 903.7(k) must be include only to the extent that the

PHA participates in homeownership programs under section 8(y). The

information required by Sec. 903.7(m) must be included only to the

extent this information is required for the PHA's participation in the

public housing drug elimination program and the PHA anticipates

participating in this program in the upcoming year.

(3) For PHA's that administer only tenant-based assistance, the

streamlined Annual Plan must include the information required by

Sec. 903.7(a), (b), (c), (d), (f), (k), (l), (o), (p) and (r). The

information required by Sec. 903.7(b) (financial resources) can be a

statement of the programs the PHA administers and the estimated number

of new families to be assisted and total families to be assisted in

each program.

Sec. 903.13 What is a Resident Advisory Board and what is its role in

development of the Annual Plan?

(a) A Resident Advisory Board is a board whose membership is made

up of individuals who adequately reflect and represent the residents

assisted by the PHA. The role of the Resident Advisory Board (or

Resident Advisory Boards) is to participate in the PHA planning process

and to assist and make recommendations regarding the PHA plan. The PHA

shall allocate reasonable resources to assure the effective functioning

of Resident Advisory Boards.

(b) Each PHA must establish one or more Resident Advisory Boards,

and the membership on the board must adequately reflect and represent

the residents assisted by the PHA.

(1) To the extent a jurisdiction-wide resident council exists that

complies with the tenant participation regulations in 24 CFR part 964,

the PHA shall appoint the jurisdiction-wide resident council or its

representatives as a Resident Advisory Board. If a jurisdiction-wide

resident council does not exist but resident councils exist that comply

with the tenant participation regulations, the PHA shall appoint such

resident councils or their representatives to serve on Resident

Advisory Boards, provided that the PHA may require that the resident

councils choose a limited number of representatives.

(2) Where the PHA has a tenant-based assistance program of

significant size, the PHA shall assure that the Resident Advisory Board

or Boards has reasonable representation of families receiving tenant-

based assistance and that a reasonable process is undertaken to choose

this representation. Where resident councils do not exist which would

adequately reflect and represent the residents assisted by the PHA, the

PHA may appoint additional Resident Advisory Boards or Board members,

provided that the PHA shall provide reasonable notice to residents and

urge that they form resident councils that comply with the tenant

participation regulations.

(c) The PHA must consider the recommendations of the Resident

Advisory Board or Boards in preparing the final Annual Plan. In

submitting the final plan to HUD for approval, the PHA must include a

copy of the recommendations made by the Resident Advisory Board or

Boards and a description of the manner in which the PHA addressed these

recommendations. Notwithstanding the 75-day limitation on HUD review,

in response to a written request from a Resident Advisory Board

claiming that the PHA failed to provide adequate notice and opportunity

for comment, HUD may make a finding of good cause during the required

time period and require the PHA to remedy the failure before final

approval of the plan.

Sec. 903.15 What is the relationship of the public housing agency

plans to the Consolidated Plan?

The PHA must ensure that the Annual Plan is consistent with any

applicable Consolidated Plan to the jurisdiction in which the PHA is

located. The Consolidated Plan includes the Analysis

[[Page 8185]]

of Impediments to Fair Housing Choice. The PHA must submit a

certification by the appropriate State or local officials that the

Annual Plan is consistent with the Consolidated Plan and include a

description of the manner in which the applicable plan contents are

consistent with the Consolidated Plans.

Sec. 903.17 Must the PHA make public the contents of the plans?

(a) Yes. The PHA's board of directors or similar governing body

must conduct a public hearing to discuss the PHA plan (either the 5-

Year Plan or Annual Plan, or both as applicable) and invite public

comment on the plan(s). The hearing must be conducted at a location

that is convenient to the residents served by the PHA.

(b) Not later than 45 days before the public hearing is to take

place, the PHA must:

(1) Make the proposed PHA plan(s) and all information relevant to

the public hearing to be conducted, available for inspection by the

public at the principal office of the PHA during normal business hours;

and

(2) Publish a notice informing the public that the information is

available for review and inspection, and that a public hearing will

take place on the plan, and the date, time and location of the hearing.

Sec. 903.19 When is the 5-Year Plan or Annual Plan ready for

submission to HUD?

A PHA may adopt its 5-Year Plan or its Annual Plan and submit the

plan to HUD for approval only after:

(a) The PHA has conducted the public hearing;

(b) The PHA has considered all public comments received on the

plan;

(c) The PHA has made any changes to the plan, based on comments,

after consultation with the Resident Advisory Board or other resident

organization.

Sec. 903.21 May the PHA amend or modify a plan?

A PHA, after submitting its 5-Year Plan or Annual Plan to HUD, may

amend or modify any PHA policy, rule, regulation or other aspect of the

plan. If the amendment or modification is a significant amendment or

modification, the PHA:

(a) May not adopt the amendment or modification until the PHA has

duly called a meeting of its board of directors (or similar governing

body) and the meeting, at which the amendment or modification is

adopted, is open to the public; and

(b) May not implement the amendment or modification, until

notification of the amendment or modification is provided to HUD and

approved by HUD in accordance with HUD's plan review procedures, as

provided in Sec. 903.23.

Sec. 903.23 What is the process by which HUD reviews, approves, or

disapproves an Annual Plan?

(a) Review of the plan. When the PHA submits its Annual Plan to

HUD, including any amendment or modification to the plan, HUD reviews

the plan to determine whether:

(1) The plan provides all the information that is required to be

included in the plan;

(2) The plan is consistent with the information and data available

to HUD and with any applicable Consolidated Plan for the jurisdiction

in which the PHA is located; and

(3) The plan is not prohibited or inconsistent with the U.S.

Housing Act of 1937 or any other applicable Federal law.

(b) Disapproval of the plan. (1) HUD may disapprove a PHA plan, in

its entirety or with respect to any part, or disapprove any amendment

or modification to the plan, only if HUD determines that the plan, or

one of its components or elements, or any amendment or modification to

the plan:

(i) Does not provide all the information that is required to be

included in the plan;

(ii) Is not consistent with the information and data available to

HUD or with any applicable Consolidated Plan for the jurisdiction in

which the PHA is located; and

(iii) Is not consistent with all applicable laws and regulations.

(2) Not later than 75 days after the date on which the PHA submits

its plan, or the date on which the PHA submits its amendment or

modification to the plan, HUD will issue written notice to the PHA if

the plan has been disapproved. The notice that HUD issues to the PHA

must state with specificity the reasons for the disapproval. HUD may

not state as a reason for disapproval the lack of time to review the

plan.

(3) If HUD fails to issue the notice of disapproval on or before

the 75th day after the PHA submits the plan, HUD shall be considered to

have determined that all elements or components of the plan required to

be submitted and that were submitted, and reviewed by HUD were in

compliance with applicable requirements and the plan has been approved.

(d) Public availability of the approved plan. Once a PHA's plan has

been approved, a PHA must make its approved plan available for review

and inspection, at the principal office of the PHA during normal

business hours.

Sec. 903.25 How does HUD ensure PHA compliance with its plan?

A PHA must comply with the rules, standards and policies

established in the plans. To ensure that a PHA is in compliance with

all policies, rules, and standards adopted in the plan approved by HUD,

HUD shall respond appropriately to any complaint concerning PHA

noncompliance with its plan. If HUD determines that a PHA is not in

compliance with its plan, HUD will take necessary and appropriate

action to ensure compliance by the PHA.

Dated: February 1, 1999.

Harold Lucas,

Assistant Secretary for Public and Indian Housing.

[FR Doc. 99-3651 Filed 2-17-99; 8:45 am]

BILLING CODE 4210-33-P