Operating Fund Rule; Final Notice of Establishment of Negotiated Rulemaking Committee and Notice of First Meeting

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 990

[Docket No. FR-4425-N-02]

Operating Fund Rule; Final Notice of Establishment of Negotiated

Rulemaking Committee and Notice of First Meeting

AGENCY: Office of the Assistant Secretary for Public and Indian

Housing, HUD.

ACTION: Establishment of Negotiated Rulemaking Advisory Committee and

first meeting.

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SUMMARY: HUD announces the establishment of a negotiated rulemaking

advisory committee under the Federal Advisory Committee Act. The

establishment of the committee is required by the Quality Housing and

Work Opportunity Act of 1998, which requires issuance of regulations

under the Negotiated Rulemaking Act of 1990. The purpose of the

committee is to discuss and negotiate a proposed rule that would change

the current method of determining the payment of operating subsidies to

public housing agencies (PHAs). The committee consists of

representatives with a definable stake in the outcome of the proposed

rule. This document announces the committee members and the dates,

location, and agenda for the first committee meeting.

DATES: The first committee meeting will be held on March 23-March 25,

1999. On March 23, 1999, the meeting will start at 10:00 am and run

until completion; on March 24, 1999, the meeting will start at 9:00 am

and run until completion; and on March 25, 1999, the meeting will start

at 9:00 am and run until approximately 3:00 pm.

ADDRESSES: The first committee meeting will take place at the Channel

Inn Hotel (Captain's Room), 650 Water Street, SW, Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Joan DeWitt, Director, Funding and

Financial Management Division, Public and Indian Housing, Room 4216,

Department of Housing and Urban Development, 431 Seventh Street, SW,

Washington, DC 20410-0500; telephone (202) 708-1872 ext. 4035 (this

telephone numbers is not toll-free). Hearing or speech-impaired

individuals may access this number via TTY by calling the toll-free

federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Statutory Background

HUD currently uses a formula approach called the Performance

Funding System (PFS) to distribute operating subsidies to public

housing agencies (PHAs). A regulatory description of the PFS can be

found at 24 CFR part 990. Generally, the amount of subsidy received by

a PHA is the difference between projected expenses and projected

income, with the PFS regulations detailing how these projections will

be made. While the amount varies, this subsidy can represent a

substantial amount of revenue for a PHA. For example, in 1998, HUD

distributed over $2.9 billion in operating subsidies to PHAs.

On February 3, 1999 (65 FR 5570), HUD published a notice of intent

to establish an advisory committee to discuss and negotiate a proposed

rule

[[Page 12921]]

that would change the current method of determining the payment of

operating subsidies to PHAs. The establishment of the committee is

required by the Quality Housing and Work Responsibility Act of 1996

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

``Public Housing Reform Act''). The Public Housing Reform Act makes

extensive changes to HUD's public and assisted housing programs. These

changes include the establishment of an Operating Fund for the purpose

of making assistance available to PHAs for the operation and management

of public housing. The general effective date for the formula (the

beginning date of the fiscal year for which PHAs will determine their

subsidy eligibility using the new formula) is October 1, 1999. Section

519(n)(f) of the Public Housing Reform Act, however, permits HUD to

extend the effective date for up to six months beyond the general

effective date.

The Public Housing Reform Act requires that the assistance to be

made available from the new Operating Fund be determined using a

formula developed through negotiated rulemaking procedures. The basic

concept of negotiated rulemaking is to have the agency that is

considering drafting a rule bring together representatives of affected

interests for face-to-face negotiations that are open to the public.

The give-and-take of the negotiation process is expected to foster

constructive, creative, and acceptable solutions to difficult problems.

The February 3, 1999 document: (1) advised the public of HUD's

intent to establish the negotiated rulemaking committee; (2) solicited

public comments on the proposed membership of the committee; and (3)

explained how persons could be nominated for membership on the

committee. In particular, HUD solicited expressions of interest or

nominations from groups or individuals that operate on behalf of the

communities and neighborhoods served by public housing, and

organizations that represent local officials.

II. The Negotiated Rulemaking Advisory Committee

This document announces HUD's establishment of the Negotiated

Rulemaking Committee on Operating Fund Allocation. As noted above, the

February 3, 1999 document tentatively identified a list of possible

interests and parties to be represented on the negotiated rulemaking

committee, and requested public comment on the proposed committee

membership. The public comment period on the February 3, 1999 document

closed on March 5, 1999. HUD received 72 comments on the document,

including comments from PHAs, PHA associations, and nonprofit

organizations. After careful consideration of all the comments received

on the February 3, 1999 document, HUD has made the following changes to

the proposed list of committee members:

1. The Little Housing Authority (Littleton, Co) has been removed

from the list of committee members; and

2. The following two small PHAs have been added to the list of

committee members:

The Meade County Housing and Redevelopment Authority, Meade

County, SD; and

The Marble Falls Housing Authority, Marble Falls, TX.

The final list of 24 committee members includes representatives of

PHAs, PHA organizations, tenant groups, and HUD. Additionally, two

members of the Federal Mediation and Conciliation Service will serve as

facilitators. HUD believes the group as a whole represents a proper

balance of interests that are willing and able to work within a

consensus framework on the new Operating Fund formula. The PHA

representatives on the committee have been selected to reflect the

diversity of PHAs in terms of size, location, and special

circumstances.

The final list of members for the Negotiated Rulemaking Committee

on Operating Fund Allocation is as follows:

Large Housing Authorities

1. Atlanta Housing Authority, Atlanta, GA

2. Chicago Housing Authority, Chicago, IL

3. New York City Housing Authority, NYC, NY

4. Pittsburgh Housing Authority, Pittsburgh, PA

5. Seattle Housing Authority, Seattle, WA

Medium Housing Authorities

1. Akron Metro Housing Authority, Akron, OH

2. Athens Housing Authority, Athens, GA

3. Indianapolis Housing Authority, Indianapolis, IN

4. Oakland Housing Authority, Oakland, CA

5. Wilmington Housing Authority, Wilmington, DE

Small Housing Authorities

1. Marble Falls Housing Authority, Marble Falls, TX

2. Meade County Housing and Redevelopment Authority, Meade County,

SD

3. Reno Housing Authority, Reno, NV

4. York Housing Authority, York, NE

Non-PFS Housing Authority

1. Puerto Rico Public Housing Authority, San Juan, PR

Tenant Organizations

1. Massachusetts Union of Public Housing Tenants, Needham, MA

2. New Jersey Association of Public and Subsidized Housing

Residents, Newark, NJ

Public Interest Groups

1. National Low Income Housing Coalition, Washington, DC

2. Housing and Development Law Institute, Washington, DC

3. Center for Community Change, Washington, DC

National PHA Associations

1. Public Housing Authority Directors Association (PHADA)

2. National Association of Housing and Renewal Officials (NAHRO)

3. Council of Large Public Housing Authorities (CLPHA)

Federal Government

1. U.S. Department of Housing and Urban Development

III. First Committee Meeting

The first meeting of the Negotiated Rulemaking Committee on

Operating Fund Allocation will be held on March 23, March 24, and March

25, 1999. On March 23, 1999, the meeting will start at 10:00 am and run

until completion; on March 24, 1999, the meeting will start at 9:00 am

and run until completion; and on March 25, 1999, the meeting will start

at 9:00 am and run until approximately 3:00 pm. On all three days, the

meetings will take place at the Channel Inn Hotel (Captain's Room), 650

Water Street, SW, Washington, DC 20024.

The agenda planned for the meeting includes: (1) Orienting members

to the negotiated rulemaking process; (2) establishing a basic set of

understandings and ground rules (protocols) regarding the process that

will be followed in seeking a consensus; and (3) discussion of the

issues relating to the development of an Operating Fund formula.

The meeting will be open to the public without advance

registration. Public attendance may be limited to the space available.

Members of the public may make statements during the meeting, to the

extent time permits, and file written statements with the committee for

its consideration. Written statements should be submitted to the

address listed in the FOR FURTHER INFORMATION section of this document.

Summaries of committee meetings will be available for public inspection

and copying at the address in the same section.

In accordance with the General Services Administration (GSA)

[[Page 12922]]

regulations implementing the Federal Advisory Committee Act, HUD

normally publishes a Federal Register meeting notice at least 15

calendar days before the date of an advisory committee meeting (see 41

CFR 105-54.301(i)). The GSA regulations, however, also provide that an

agency may give less than 15 days notice if the reasons for doing so

are included in the Federal Register meeting notice. (See 41 CFR 105-

54.301(j).) Given the strict statutory deadline for implementation of

the Operating Fund formula, HUD believes it is imperative that the

negotiations for development of the formula begin as soon as possible.

Failure to publish the Operating Fund final rule on a timely basis will

delay the provision of operating subsidies to PHAs. Accordingly, rather

than defer the start of the negotiations, HUD has decided to proceed

with the committee meeting announced in the February 3, 1999 document.

IV. Future Committee Meetings

Decisions with respect to future meetings will be made at the first

meeting and from time to time thereafter. A second meeting is

tentatively scheduled for April 13 and 14, 1999, at a location within

the Washington, DC area, to be determined. The April 13th meeting is

tentatively scheduled to begin at approximately 9:00 am and continue

until approximately 5:00 pm. The April 14th meeting is scheduled to

begin at approximately 9:00 and continue until approximately 3:00 pm.

Notices of all future meetings will be published in the Federal

Register. HUD will make every effort to publish such notices at least

15 calendar days prior to each meeting.

Dated: March 11, 1999.

Deborah Vincent,

General Deputy Assistant Secretary for Public and Indian Housing.

[FR Doc. 99-6464 Filed 3-15-99; 8:45 am]

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