[Federal Register: November 2, 2000 (Volume 65, Number 213)]
[Proposed Rules]
[Page 65790-65793]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02no00-26]
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DEPARTMENT OF AGRICULTURE
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
Farm Service Agency
7 CFR Parts 1930 and 1944
RIN 0575-AC24
Operating Assistance for Off-Farm Migrant Farmworker Projects
AGENCIES: Rural Housing Service, Rural Business-Cooperative Service,
Rural Utilities Service, and Farm Service Agency, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Housing Service (RHS), formerly Rural Housing and
Community Development Service (RHCDS), a successor Agency to the
Farmers Home Administration (FmHA), proposes to amend its regulations
for the Farm Labor Housing (LH) program for off-farm migrant housing
projects. This action is taken to implement section 599C(e) of Pub. L.
105-276, enacted October 21, 1998, which amends the Housing Act of 1949
to permit section 521 rental assistance funds to be used as operating
assistance in migrant farmworker projects financed under sections 514
or 516. The intended result is to reduce operating costs so that rents
may be set at rates that are affordable to low-income migrant
farmworkers.
DATES: Written or e-mail comments on this Proposed Rule must be
received on or before January 2, 2001 to be assured of consideration.
ADDRESSES: Written comments may be submitted, in duplicate, to the
Regulations and Paperwork Management Branch, Attention: Jean Mosley,
Rural Development, U.S. Department of Agriculture, Stop 0742, 1400
Independence Avenue SW, Washington, DC 20250-0742. Comments may be
submitted via the Internet by addressing them to
``comments@rus.usda.gov'' and must contain the word ``migrant'' in the
subject. All written comments will be available for public inspection
during normal working hours at 300 E Street, SW, Washington, DC.
FOR FURTHER INFORMATION CONTACT: Linda Armour, Senior Loan Specialist,
Multi-Family Housing Processing Division, Rural Housing Service, U.S.
Department of Agriculture, Room 5349-South Building, Stop 0781, 1400
Independence Avenue, SW, Washington, DC 20250-0781, telephone (202)
720-1608.
SUPPLEMENTARY INFORMATION:
Classification
This proposed rule has been determined to be not significant for
purposes of Executive Order 12886 and, therefore, has not been reviewed
by the Office of Management and Budget.
Paperwork Reduction Act
The information collection requirements contained in this
regulation have been previously approved by the Office of Management
and Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and have
been assigned OMB control number 0575-0045, in accordance with the
Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act of
1995, no persons are required to respond to a collection of information
unless it displays a valid OMB number. The valid OMB control number
assigned to the collection of information in these regulations is
displayed at the end of the affected section of the regulation. This
rule does not impose any new information collection requirements from
those approved by OMB.
Civil Justice Reform
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. In accordance with this rule: (1) All State and local
laws and regulations that are in conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule; and
(3) administrative proceedings in accordance with 7 CFR part 11 must be
exhausted before bringing suit in court challenging action taken under
this rule.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, RHS
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
the UMRA generally requires RHS to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome
[[Page 65791]]
alternative that achieves the objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for State, local, and tribal
governments or the private sector. Therefore, this rule is not subject
to the requirements of sections 202 and 205 of the UMRA.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review program to eliminate unnecessary regulations and
improve those that remain in force.
Programs Affected
The affected program is listed in the Catalog of Federal Domestic
Assistance under Number 10.405, Farm Labor Housing Loans and Grants.
Intergovernmental Consultation
For the reasons set forth in the Final Rule related Notice to 7 CFR
part 3015, subpart V, this program is subject to Executive Order 12372
which requires intergovernmental consultation with State and local
officials. RHS has conducted intergovernmental consultation in the
manner delineated in RD Instruction 1940-J.
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' It is the determination of RHS
that this action does not constitute a major Federal action
significantly affecting the quality of the human environment and in
accordance with the National Environmental Policy Act of 1969, Pub. L.
91-190, an Environmental Impact Statement is not required.
Regulatory Flexibility Act
This proposed rule has been reviewed with regard to the
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The
undersigned has determined and certified by signature of this document
that this rule will not have a significant economic impact on a
substantial number of small entities since this rulemaking action does
not involve a new or expanded program nor does it require any more
action on the part of a small business than required of a large entity.
Executive Order 13132, Federalism
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on State and local
governments. Therefore, consultation with the States is not required.
Background/Discussion
The farm labor housing (LH) program is authorized by title V of the
Housing Act of 1949 under section 514 (42 U.S.C. 1484) for loans and
section 516 (42 U.S.C. 1486) for grants. The program also has tenant
subsidies available through section 521 (42 U.S.C. 1490a).
The LH program finances both ``on-farm'' and ``off-farm'' housing,
which may be for either seasonal or year-round occupancy. Occupancy of
both types is restricted to United States citizens or legally admitted
aliens. On-farm housing loans are made to farmers or farm entities to
provide housing for farmworker families employed by the farm. On-farm
housing is typically a single-family dwelling and does not include
tenant subsidies. Off-farm housing, typically apartment complexes, is
open to eligible farmworker households of any farming operation. Rental
assistance is available to many tenants of off-farm housing to make
rents affordable. Off-farm housing is financed with section 514 loans
and section 516 grants to nonprofit organizations and public agencies
such as local housing authorities, and with section 514 loans to
nonprofit limited partnerships in which the general partner is a
nonprofit entity.
Off-farm migrant housing serves farmworkers who perform
agricultural work at one or more locations away from their home base
throughout the year for periods ranging from a few weeks to several
months. The Agency's rental assistance (RA) program is available to
assist tenants with housing costs, which is especially critical for
migrant farmworkers, who are among the lowest-paid laborers in the
workforce. However, the RA program, which provides assistance based on
each household's income, is difficult to administer in housing for
migrant workers because of the frequent tenant turnover and short
periods of occupancy.
Section 599C(e) of Pub. L. 105-276, enacted October 21, 1998,
authorizes owners of off-farm migrant housing projects financed under
sections 514 or 516 to use section 521 RA funds to provide operating
assistance to the project instead of providing individual RA to each
household. Operating assistance, by reducing operating costs, allows
rents to be set at rates that are affordable to tenants based on the
average wages of migrant farmworkers in the area. Tenants will still be
required to provide income verification, and household income must be
within the very-low or low-income limits to qualify for the reduced
operating assistance rents. Owners will be required to provide
documentation to the Agency on the incomes of tenants served.
In developing this proposed rule, the Agency conducted an informal
teleconference with stakeholders, including nonprofit groups,
developers, and Agency staff in States with active migrant farm labor
housing programs. Following is a summary of their comments on key
issues:
Project Eligibility for the Operating Assistance Program
The statute provides that the operating assistance program may be
used by migrant farmworker projects. It does not extend eligibility for
the operating assistance program to projects that serve both year-round
and migrant workers. Based on a survey of the stakeholders who
participated in the teleconference, the Agency's existing properties
that serve migrant farmworkers are nearly evenly divided between those
that serve migrant workers exclusively and those that serve a mix of
year-round and migrant workers. Stakeholders recommended that the
Agency pursue a statutory correction to permit operating subsidies for
mixed LH projects.
Establishing the Prevailing Incomes of Farmworkers in the Area
The statute stipulates that operating assistance will be provided
in an amount that makes rents affordable to migrant farmworkers based
on the prevailing incomes of migrant farmworkers in the area. Several
possible sources of income data were mentioned, including the
Association of Farmworkers and the U.S. Department of Labor. However,
most participants felt that the most readily available, current data
could be obtained from the Agency's Multi-Family Tenant File System
(MTFS).
The MTFS is an automated system used to record household data,
including income, to determine the tenant's shelter cost based on 30
percent of adjusted monthly income. It was suggested that existing
Agency-financed properties serving migrant workers use the project's
prior year MTFS data and new properties use MTFS data for like-type
properties in the same or a similar area. After the first year,
adjustments would be made to the amount of operating assistance based
on the actual income levels of the tenants served and
[[Page 65792]]
the year's actual project operating expense figures.
We have incorporated the suggestion to use MTFS data into this
rule. The MTFS is a readily available source of income information for
migrant farmworkers served by the Agency's LH program. We are
especially interested in comments on the use of this data and
suggestions for alternative data sources.
Overcrowding
One stakeholder expressed a concern that overcrowding could result
if rents are established for the unit rather than based on each
household's income. It was suggested that the Agency emphasize the
enforcement of occupancy rules to help prevent this situation. We agree
with this suggestion and will incorporate it into the guidance provided
to Agency staff and owners. Also, the rule will stipulate that
households may not exceed the low-income limit to be eligible for the
reduced rent. Therefore, if additional wage earners join a household
and the household is within the occupancy standards, total household
income cannot exceed the low-income limit to be eligible for the
reduced rent.
Procedures for Requesting operating Assistance
The majority of stakeholders felt that requests for operating
assistance should be submitted on the monthly ``Project Worksheet for
Credit and Rental Assistance'', Form RD 1944-29, and netted against the
loan payment in the same manner as rental assistance. The Agency has
incorporated this suggestion into this proposed rule. Only one
stakeholder recommended paying the assistance on an annual basis. We
welcome comments on the pros and cons of an annual payment method,
which will be taken into consideration in determining whether this
option should be included in the final rule.
Participants noted that the operating assistance program would be
beneficial for project budgeting purposes, especially for properties
that are unoccupied for a portion of the year because of seasonal farm
work, if owners are permitted to average the year's projected income
and expenses and receive monthly payments throughout the year. We
concur, and have included the suggestion in this proposed rule.
Implementation Proposal
When the final rule becomes effective, owners of migrant housing
projects with rental assistance contracts may elect to convert to
project operating assistance. New applicants for off-farm migrant
housing projects will have the option of requesting either rental
assistance or operating assistance.
List of Subjects
7 CFR Part 1930
Accounting, Administrative practice and procedure, Grant programs--
Housing and community development, Loan programs--Housing and community
development, Low and moderate income housing--Rental, Reporting
requirements.
7 CFR Part 1944
Farm labor housing, Grant programs--Housing and community
development, Loan programs--Housing and community development, Migrant
labor, Nonprofit organizations, Public housing, Rent subsidies, Rural
housing.
Therefore, chapter XVIII, title 7, Code of Federal Regulations is
amended to read as follows:
PART 1930--GENERAL
1. The authority citation for part 1930 continues to read as
follows:
Authority: 5 U.S.C. 301, 42 U.S.C. 1480.
Subpart C--Management and Supervision of Multiple Family Housing
Borrowers and Grant Recipients
2. Exhibit B of subpart C is amended in paragraph II by adding in
alphabetical order the definition of ``Operating assistance'', by
adding paragraph IV F, and by revising the first sentence of paragraph
XIII C2f(2) to read as follows:
Exhibit B of Subpart C--Multiple Housing Management Handbook
* * * * *
II. Definitions
* * * * *
Operating assistance. Assistance toward the cost of operating
off-farm migrant farmworker projects financed under sections 514 or
516. Projects that receive operating assistance may not receive
tenant-specific rental assistance (RA). Detailed guidance on the
operating assistance program is provided in Sec. 1944.182(b) of this
chapter.
* * * * *
IV. Rent Subsidy Opportunities * * *
F. Operating assistance program. This is a subsidy program
available to off-farm migrant farmworker projects financed under
section 514 or section 516. Refer to Sec. 1944.182(b) of this
chapter for eligibility requirements and detailed guidance.
* * * * *
XIII. Accounting and Reporting Requirements and Financial
Management Analysis
* * * * *
C. Borrower reporting requirements. * * *
2. Management reports and review processes. * * *
f. Project worksheets. * * *
(2). For LH projects, a project worksheet for interest credit
and rental or operating assistance, on a form provided by the
Agency, will be submitted monthly for projects with tenants who
receive RA and for off-farm migrant housing projects that receive
operating assistance. * * *
* * * * *
PART 1944--HOUSING
3. The authority citation for part 1944 continues to read as
follows:
Authority: 5 U.S.C. 301; 42 U.S.C. 1480.
Subpart D--Farm Labor Housing Loan and Grant Policies, Procedures,
and Authorizations
4. Section 1944.153 is amended by adding in alphabetical order
definitions to read as follows:
Sec. 1944.153 Definitions.
* * * * *
Multi-Family Tenant File System (MTFS). The MTFS is an automated
system used by the Agency to record household data, including income,
to determine the tenant's shelter cost based on 30 percent of adjusted
monthly income.
* * * * *
Operating assistance. Assistance toward the cost of operating off-
farm labor housing projects serving migrant farmworkers exclusively,
financed under sections 514 or 516, that would otherwise be provided to
tenants as rental assistance (RA). Detailed guidance on the operating
assistance program is provided in Sec. 1944.182(b).
* * * * *
Rental assistance (RA). RA is the portion of a specific tenant's
approved shelter cost paid by the Agency and is the difference between
the approved shelter cost and the monthly tenant contribution
calculated in accordance with exhibit B to subpart C of part 1930 of
this chapter.
* * * * *
5. Section 1944.182 is amended by revising the heading, designating
the existing text as paragraph (a), and adding a new paragraph (b) to
read as follows:
Sec. 1944.182 Assistance payments under section 521.
* * * * *
(b) Operating assistance may be used in lieu of tenant-specific
rental assistance in off-farm labor housing projects financed under
section 514 or section 516 of the Housing Act of 1949 that serve
migrant farmworkers
[[Page 65793]]
exclusively. Owners of eligible projects may choose tenant-specific RA
or operating assistance, but may not utilize both programs in the same
project. The objective of this program is to provide assistance toward
the cost of operating the project so that rents may be set at rates
that are affordable to very low and low-income migrant farmworkers.
(1) Project eligibility requirements. To be eligible for the
operating assistance program, projects must be:
(i) Off-farm labor housing projects financed under section 514 or
section 516 serving migrant farmworkers exclusively (projects serving
both migrant and year-round farmworker households are not eligible);
and
(ii) Eligible for the Agency's rental assistance (RA) program as
defined in paragraph II B of exhibit E of subpart C of part 1930 of
this chapter.
(2) Tenant eligibility requirements. To be eligible for operating
assistance rents, tenants must meet the RA eligibility requirements of
paragraph II A of exhibit E of subpart C of part 1930 of this chapter.
(3) Operating assistance limits. The amount of operating assistance
requested by the owner must be based on the project's actual income and
expenses and must be approved by the Agency. In no instance may the
annual amount of operating assistance exceed 90 percent of the
project's annual operating costs.
(4) Owner responsibilities--(i) Request for operating assistance
program. Owners of off-farm migrant housing projects may request
operating assistance by submitting a request on a form provided by the
Agency. The request must include a budget in the format prescribed by
the Agency and prepared in accordance with Agency instructions. The
budget must include:
(A) Estimated project operating costs, including authorized
expenditures such as reserve deposits.
(B) Proposed rental rates to generate sufficient funds for project
operating costs, taking into consideration all other sources of project
income.
(C) Estimated rental income from tenants, based on a tenant
contribution of 30 percent of the average adjusted monthly income of
migrant farmworker households in the area. The average adjusted monthly
income of migrant farmworker households will be determined as follows:
(1) For existing RHS-financed projects that have been in operation
for at least one year, owners will use the average adjusted monthly
household income for each unit-size (1-, 2-, 3-bedroom, etc.) based on
the prior year's Multi-Family Tenant File System (MTFS) data.
(2) For new projects, owners will use the average adjusted monthly
household income for each unit-size, based on the prior year's MTFS
data for a like-type property in the same or similar area, as provided
by the Agency. Owners may request authorization to use other reliable
income data if available.
(D) Estimated operating assistance, calculated as the difference
between estimated project income and estimated project operating costs.
The annual amount of operating assistance may not exceed 90 percent of
the annual operating costs.
(ii) Requesting operating assistance payments. Each month, owners
will submit a project worksheet for interest credit and rental or
operating assistance on a form provided by the Agency. The amount of
operating assistance requested each month will be one-twelfth of the
annual amount approved by the Agency.
(iii) Verifying tenant income eligibility. Owners are responsible
for verifying tenant income in accordance with Sec. 1944.182(a). Only
very low or low-income households are eligible for the operating
assistance rents. Income-eligible households with incomes above low
must pay the full rent.
(iv) Reporting requirements.--(A) Tenant certification. Owners and
tenants will complete a tenant certification, on a form provided by the
Agency, to document tenant income and eligibility. Tenant certification
forms need not be submitted to the Agency but must be maintained, along
with income verifications, for at least 3 years. The tenant files must
be available for the Agency's review upon request. The owner will use
the income information, along with the project's actual expense
figures, to complete the next year's operating assistance request.
(B) Project worksheet. Each month, the borrower will submit to the
Agency a project worksheet for interest credit and rental or operating
assistance on a form provided by the Agency, in accordance with
paragraph XIII C2f (2) of exhibit B of subpart C of part 1930 of this
chapter.
(C) Budgets. Prior to the beginning of the project's fiscal year,
owners must submit an annual planning budget in accordance with
paragraph XIII C2a of exhibit E of subpart C of part 1930 of this
chapter, on a form provided by the Agency. The budget must reflect
actual income and expenses for at least 9 months of the current fiscal
year and the proposed income and expenses for the coming year. Owners
must include a summary report showing the income of tenants served on a
form provided by the Agency. If warranted by the actual income of
tenants served, a request for rent change should be included, following
the guidance in paragraph XIII C2b of exhibit E of subpart C of part
1930 of this chapter. After the first full year of operation, owners
will use the actual year-end budget figures to make appropriate
adjustments to the amount of operating assistance requested.
Dated: October 20, 2000.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 00-27978 Filed 11-1-00; 8:45 am]
BILLING CODE 3410-XV-U
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