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###### Department of Agriculture

###### Rural Housing Service 

          - 7 CFR Part 1944 
          - RIN 0575-AC25 

# AGENCY:

Rural Housing Service, USDA. 

# ACTION:

Proposed rule. 

# SUMMARY:

                        The Rural Housing Service (RHS) proposes to amend its regulations for the Farm Labor Housing (FLH) program. The Housing Act of 1949 authorizes the RHS to provide financial assistance to private and public nonprofit agencies to encourage the development of domestic and migrant farm labor housing projects. The nonprofit agencies that receive this financial assistance, in turn, provide “technical assistance” to other organizations to assist them in obtaining loans and grants for the construction of farm labor housing. The RHS has provided this assistance in prior years by awarding technical assistance contracts. In fiscal year 2000 a Request for Proposals was published in the                         **Federal Register**                         requesting grant proposals from private and public nonprofit agencies. The intended effect of this action is to amend the regulations to establish the eligibility requirements that nonprofit agencies must meet to receive technical assistance grants and how the financial assistance will be made available by the RHS.                     

# DATES:

Written or E-mail comments must be received on or before July 31, 2001. 

# ADDRESSES:

                        Written comments may be submitted, in duplicate, to the Branch Chief, Regulations and Paperwork Management Branch, 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 “Technical” in the subject. All written comments will be available for public inspection at 300 E Street SW, Washington, DC 20546, during normal working hours.                     

# FOR FURTHER INFORMATION CONTACT:

Douglas MacDowell, Senior Loan Specialist, Multi-Family Housing Processing Division, Rural Housing Service, U.S. Department of Agriculture, STOP 0781, 1400 Independence Avenue SW., Washington, DC 20250-0781, Telephone (202) 720-1604. 

# SUPPLEMENTARY INFORMATION:

## Classification 

This 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 (OMB). 

## Paperwork Reduction Act 

The information collection requirements contained in this regulation have been previously approved by OMB under the provisions of 44 U.S.C. chapter 35 and this regulation has been assigned OMB control number 0575-0181, in accordance with the Paperwork Reduction Act of 1995. 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 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 section 202 and 205 of the UMRA. 

## 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. 

## 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 contained 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. 

## Background 

                    Farmworkers are among the lowest paid workers in the United States and                           ( print page 29740)                        often lack decent, safe, sanitary, and affordable housing. RHS's FLH program provides loans and grants for farmworker housing and related facilities.                 

The FLH 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. Section 516 also authorizes the RHS to provide financial assistance (not more than 10 percent of the section 516 funds) to encourage the development of domestic and migrant farm labor housing projects. 

RHS's FLH program provides funding for both “on-farm” and “off-farm” housing. The housing may also be for either seasonal or year-round occupancy. Off-farm housing, typically apartment complexes, is open to farmworkers who work at any farming operation. On-farm housing provides housing for the workers of only one farm and is typically designed as single family dwellings. Occupancy of both types of housing is restricted to United States citizens or permanent resident aliens. 

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. 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 limited partnerships in which the general partner is a nonprofit entity. 

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 financed with section 514 loans and is not eligible for 516 grants. The tenants (farmworkers) who live in on-farm housing are not eligible for rental assistance. 

RHS also provides financial assistance to private and public nonprofit agencies to encourage the development of domestic and migrant farm labor housing projects. The services that are provided by these non-profit agencies is commonly referred to as “technical assistance”. 

Most section 514 and section 516 funds are leveraged with funds from other sources. Likewise, RHS has taken steps to ensure that technical assistance funds are effectively used. 

Prior to Fiscal Year 2000, RHS awarded technical assistance “contracts”. These contracts were awarded for one year periods with four option periods that could be exercised at the discretion of the Government. In FY 2000, RHS changed the way that FLH technical assistance funds were awarded. During FY 2000, RHS awarded technical assistance “grants” rather than “contracts”. 

                    On June 21, 2000, a Request for Proposals (RFP) was published in the                     **Federal Register**                     requesting “grant” proposals from private and public nonprofit agencies. The RFP outlined the application requirements and the criteria that would be used to select proposals for funding. The RFP also established three FLH technical assistance grant regions (the Eastern, Central, and Western grant regions) and contained the terms of the grants.                 

On September 27, 2000, three technical assistance grants were awarded. Two of the grants were awarded for the Western grant region and the other was awarded for the Central grant region. No grant proposals were received for the Eastern grant region. Each of the grants has a three year grant period. 

When the RFP was published, comments and suggestions were received from interested parties. Some suggested that more than one FY's funding should be made available during the three year grant period. Another issue was that the Central grant region received less funding than the Eastern and Western grant regions. Lastly, one commented it was unfair to consider an applicant's experience if such experience was gained outside of the grant region, or to give equal weight to an applicant's experience in developing non-farmworker multifamily housing to an applicant's experience in developing farmworker housing. 

In the future, RHS intends to periodically publish RFPs that are similar to the one that was published on June 21, 2000. When published, RHS will have the opportunity to make changes to the way funds are distributed, to the minimum performance requirements that must be met, or to other terms of the grants. RHS will at that time consider the suggestions that have been made. However, this revision to the regulation only implements the statutory authority for awarding grants. It does not establish the application requirements, the selection criteria, the performance standards that must be met, or how funds will be distributed when grants are awarded. 

# List of Subjects in 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 1944—HOUSING 

1. 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 

2. Section 1944.151 is revised to read as follows: 

§ 1944.151 

This subpart contains the policies and procedures and delegates authority for making initial and subsequent insured loans under section 514 and grants under section 516 of the Housing Act of 1949, to provide housing and related facilities for domestic farm labor. This subpart also contains the policies and procedures for making grants under section 516 to encourage the development of farm labor housing. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to Rural Housing Service (RHS) employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an RHS employee. 

3. Section 1944.157 is amended by redesignating paragraph (c) as (d) and by adding a new paragraph (c) to read as follows: 

§ 1944.157 

* * * * *

                            (c)                             *Eligibility of applicant for an LH technical assistance grant*. To be eligible for an LH technical assistance grant the applicant must:                         

(1) Be a private or public nonprofit agency; 

(2) Have the knowledge, ability, technical expertise, or practical experience necessary to develop and package loan and grant applications for LH under the section 514 and 516 programs; and, 

                            (3) Possess the ability to exercise leadership, organize work, and prioritize assignments to meet work demands in a timely and cost efficient manner. The grantee may arrange for other nonprofit agencies to provide                                   ( print page 29741)                                services on its behalf; however, RHS will expect the grantee to provide the overall management necessary to ensure the objectives of the grant are met. Nonprofit agencies acting on behalf of the grantee must also meet the above stated eligibility requirements.                         

* * * * *

4. Section 1944.158 is amended by adding a new paragraph (o) to read as follows: 

§ 1944.158 

* * * * *

                            (o) Encourage the development of farm labor housing. RHS may award “technical assistance” grants to eligible private and public nonprofit agencies. These grant recipients will, in turn, assist other organizations obtain loans and grants for the construction of farm labor housing. Technical assistance services may not be funded under both this paragraph and paragraph (i) of this section. In addition, technical assistance may not be funded by RHS when an identity of interest exists between the technical assistance provider and the loan or grant applicant. Requests for Proposals (RFP) may be periodically published in the                             **Federal Register**                             by RHS inviting eligible nonprofit organizations to submit LH technical assistance grant proposals. RFPs will contain the amount of available funding, the method of allocating or distributing funds, where to submit proposals, proposal requirements, the deadline for the submission of proposals, the selection criteria, and the grant agreement to be entered into between RHS and the grantee.                         

Dated: May 22, 2001.

Dawn Riley,

Acting Deputy Under Secretary.

[FR Doc. 01-13801 Filed 5-31-01; 8:45 am] 

BILLING CODE 3410-XV-U