Compliance Procedures for Affirmative Fair Housing Marketing; Nomenclature Change

[Federal Register Volume 64, Number 155 (Thursday, August 12, 1999)]
[Rules and Regulations]
[Pages 44094-44097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20801]



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Part III

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Department of Housing and Urban Development





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24 CFR Part 108



Compliance Procedures for Affirmative Fair Housing Marketing; 
Nomenclature Change; Final Rule

Federal Register / Vol. 64, No. 155 / Thursday, August 12, 1999 / 
Rules and Regulations

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 108

[Docket No. FR-4514-F-01]
RIN 2529-AA87


Compliance Procedures for Affirmative Fair Housing Marketing; 
Nomenclature Change

AGENCY: Office of the Assistant Secretary for Fair Housing and Equal 
Opportunity, HUD.

ACTION: Final rule.

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SUMMARY: HUD's regulations at 24 CFR part 108 cover compliance 
procedures for affirmative fair housing marketing. As a result of 
internal HUD organizational changes, the offices referred to in these 
regulations no longer exist as they did when the regulations were 
issued. This final rule updates these references. This final rule also 
incorporates language that all correspondence that could lead to an 
enforcement action against a small entity (such as audits, 
investigations, or compliance reviews) will notify the small entity of 
its right to comment to the National Small Business Ombudsman. This 
requirement is added in accordance with the Small Business Regulatory 
Enforcement Fairness Act.

DATES: Effective date: September 13, 1999.

FOR FURTHER INFORMATION CONTACT: Pamela D. Walsh, Office of Fair 
Housing and Equal Opportunity, Room 5224, U.S. Department of Housing 
and Urban Development, 451 Seventh Street, SW, Washington, DC, 20410-
2000; telephone (202) 708-2288 (this is not a toll-free number). 
Hearing-or speech-impaired individuals may access this number via TTY 
by calling the toll-free Federal Information Relay Service at (800) 
877-8339.

SUPPLEMENTARY INFORMATION:

I. Background Information

    HUD's regulations at 24 CFR part 108 cover compliance procedures 
for affirmative fair housing marketing. These regulations were 
published in 1979. Since then, HUD and the Office of Fair Housing and 
Equal Opportunity have experienced several reorganizations. As 
currently promulgated, the regulations define a compliance process that 
requires two offices to perform complementary monitoring and reviewing 
functions. An Area Office is primarily responsible for monitoring 
functions and a Regional Office is primarily responsible for reviewing 
functions. As a result of recent internal HUD organizational changes, 
however, these offices no longer exist as they did when the regulations 
were issued in 1979.
    This final rule replaces references to Area Office and Regional 
Office with the terms monitoring office and civil rights/compliance 
reviewing office, respectively. These terms do not correspond to actual 
offices within HUD, but are intended to reflect the functions of each 
office within the compliance process. HUD will publish concurrently 
with this final rule a notice in the Federal Register that designates 
the specific offices within HUD that will act as monitoring and civil 
rights/compliance reviewing offices under this part. In the future, 
should HUD's internal organizational structure change again, the 
specific offices that will act as monitoring and civil rights/
compliance reviewing offices will again be designated through a notice 
published in the Federal Register.
    With respect to compliance reviews, which are addressed in 24 CFR 
part 108, HUD is cognizant that section 222 of the Small Business 
Regulatory Enforcement Fairness Act (SBREFA) requires the Small 
Business and Agriculture Regulatory Enforcement Ombudsman to ``work 
with each agency with regulatory authority over small businesses to 
ensure that small business concerns that receive or are subject to an 
audit, on-site inspection, compliance assistance effort or other 
enforcement related communication or contact by agency personnel are 
provided with a means to comment on the enforcement activity conducted 
by this personnel.'' To implement this statutory provision, the Small 
Business Administration has requested that agencies include the 
following language on agency publications and notices that are provided 
to small businesses concerns at the time the enforcement action is 
undertaken. The language is as follows:

Your Comments Are Important

    The Small Business and Agriculture Regulatory Enforcement 
Ombudsman and 10 Regional Fairness Boards were established to 
receive comments from small businesses about federal agency 
enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to 
small business. If you wish to comment on the enforcement actions of 
[insert agency name], call 1-888-REG-FAIR (1-888-734-3247).

    As HUD stated in its notice describing HUD's actions on 
implementation of SBREFA, which was published on May 21, 1998 (63 FR 
28214), HUD intends to work with the Small Business Administration 
(SBA) to provide small entities with information on the Fairness Boards 
and National Ombudsman program, at the time enforcement actions are 
taken, to ensure that small entities have the full means to comment on 
the enforcement activity conducted by HUD. Accordingly, this rule 
adopts the language requested by the SBA and it is included in 
Sec. 108.25(b).

II. Justification for Final Rulemaking

    HUD generally publishes a rule for public comment before issuing a 
rule for effect, in accordance with its own regulations on rulemaking 
at 24 CFR part 10. Part 10 provides for exceptions to the general rule 
if the agency finds good cause to omit advance notice and public 
participation. The good cause requirement is satisfied when prior 
public procedure is ``impracticable, unnecessary, or contrary to the 
public interest'' (24 CFR 10.1). For the following reasons, HUD finds 
that good cause exists to publish this rule for effect without first 
soliciting public comment.
    This final rule makes nomenclature changes to 24 CFR part 108. As a 
result of internal HUD organizational changes the offices referred to 
in the current regulations no longer exist as they did when the 
regulations were issued. This final rule merely replaces references to 
Area Office and Regional Office with the terms monitoring office and 
civil rights/compliance reviewing office, respectively. This rule also 
amends 24 CFR part 108 to include ``notification'' language to small 
entities, consistent with SBREFA, which the SBA has requested Federal 
agencies adopt in their enforcement regulations, and which HUD has 
agreed to adopt in its enforcement regulations. Neither of these two 
amendments make any substantive changes to the compliance procedures 
contained in part 108. Therefore, we have determined that it is 
unnecessary to publish this rule for public comment prior to publishing 
the rule for effect.

III. Findings and Certifications

Environmental Impact

    This final rule involves regulations that set out fair housing or 
nondiscrimination standards or enforcement procedures. Accordingly, 
under 24 CFR 50.19(c)(3), this final rule is categorically excluded 
from environmental review under the National Environmental Policy Act 
of 1969 (Public Law 91-190, 83 Stat. 852, codified as amended at 42 
U.S.C. 4321-4347).

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Regulatory Flexibility Act

    Section 605(b). The Secretary has reviewed this final rule before 
publication and by approving it certifies, in accordance with the 
Regulatory Flexibility Act (5 U.S.C. 605(b)), that this final rule 
would not have a significant economic impact on a substantial number of 
small entities. This final rule implements a nomenclature change only 
and does not make any substantive changes to the regulations at 24 CFR 
part 108. Therefore, the action taken by this rule (the nomenclature 
change) does not create any additional burden.
    Section 610. HUD notes, however, that changes were last made to 
this rule in 1985. Section 610 of the Regulatory Flexibility Act 
requires Federal Agencies to review every ten years existing 
regulations that have or will have a significant economic impact on a 
substantial number of small entities. The purpose of the review is to 
determine whether existing rules should be left unchanged, or whether 
they should be revised or rescinded in order to minimize significant 
economic impacts on a substantial number of small entities. In deciding 
whether change is necessary, the Regulatory Flexibility Act establishes 
several factors that must be considered:
    (1) Whether the rule is still needed;
    (2) What type of complaints or comments were received from the 
public concerning the rule;
    (3) The complexity of the rule;
    (4) How much the rule overlaps, duplicates or conflicts with other 
Federal rules, and, to the extent feasible, with State and local 
governmental rules; and
    (5) How long it has been since the rule has been evaluated or how 
much the technology, economic conditions, or other factors have changed 
in the area affected by the rule.
    During the years that the regulations in 24 CFR part 108 have been 
in effect, HUD has not received any data that indicates that the 
requirements of this part have had a significant economic impact on a 
substantial number of small entities. Nevertheless, HUD has reviewed 
this rule in accordance with the principles of section 610.
    (1) This rule is only applicable to participants in certain HUD 
programs, as specified in Sec. 108.1. Because HUD's mission is to 
provide a decent, safe and sanitary home and suitable living 
environment for every American, and this mission encompasses fighting 
for fair housing and increasing affordable housing and homeownership, 
HUD believes that this rule is needed for HUD's programs. HUD's 
programs should provide the leadership in marketing sales and rentals 
of homes that affirmatively furthers fair housing.
    (2) HUD has not received complaints about this rule.
    (3) The rule is not complex.
    (4) The rule does not overlap, duplicate or conflict with other 
Federal rules, nor, to the extent feasible, with State and local 
governmental rules. Again, this rule is only applicable to HUD 
programs.
    (5) The rule was last evaluated in 1995 as part of President 
Clinton's directive to all Federal agencies to review all existing 
regulations and determine which regulations were obsolete, no longer 
necessary or could be consolidated with other regulations. In 1995, HUD 
determined, as it has now, that this rule is needed, and that the rule 
did not duplicate other HUD regulations, and therefore consolidation 
with other regulations was not appropriate.
    The marketing techniques addressed by this rule have changed given 
the change in technology. The rule, however, does not regulate the type 
of marketing techniques used. Rather, the rule provides that whatever 
marketing techniques the HUD program participant commits to utilize in 
its Affirmative Fair Housing Marketing (AFHM) plan, the participant 
utilizes such techniques to affirmatively further fair housing.
    As noted earlier, although this rule makes no substantive changes 
to 24 CFR part 108, only nomenclature changes, HUD welcomes comments 
from its program participants about its part 108 regulation and their 
experience with its requirements to date. Comments that provide a 
factual basis for any views or suggestions presented are particularly 
helpful to HUD in its evaluation of this regulation. Comments should be 
submitted to: Office of the General Counsel, Rules Docket Clerk, Room 
10276, U.S. Department of Housing and Urban Development, 451 Seventh 
Street, SW, Washington, DC 20410-0500. Comments should refer to the 
docket number of FR-4514-F-01.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 
104-4, 109 Stat. 48, 64, codified at 2 U.S.C. 1531-1538) (UMRA) 
requires Federal agencies to assess the effects of their regulatory 
actions on State, local, and tribal governments and on the private 
sector. This final rule does not impose, within the meaning of the 
UMRA, any Federal mandates on any State, local, or tribal governments 
or on the private sector.

Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612 (entitled ``Federalism''), has determined that 
the policies contained in this rule will not have substantial direct 
effects on States or their political subdivisions, on the relationship 
between the Federal Government and the States, or on the distribution 
of power and responsibilities among various levels of government.

List of Subjects in 24 CFR Part 108

    Fair housing, Reporting and recordkeeping requirements.

    For the reasons discussed in the preamble, HUD proposes to amend 24 
CFR part 108 as follows:

PART 108--COMPLIANCE PROCEDURES FOR AFFIRMATIVE FAIR HOUSING 
MARKETING

    1. The authority citation for part 108 is revised to read as 
follows:

    Authority: 42 U.S.C. 3608, 3535(d); E.O. 11063, 27 FR 11527, 3 
CFR, 1958-1963 Comp., p. 652; E.O. 12892, 59 FR 2939, 3 CFR, 1994 
Comp., p. 849.

    2. Add new paragraphs (e) and (f) to Sec. 108.1 to read as follows:


Sec. 108.1  Purpose and application.

* * * * *
    (e) The term monitoring office includes any office within HUD 
designated by HUD to act as a monitoring office. As necessary, HUD will 
designate specific offices within HUD to act as monitoring offices 
through a notice published in the Federal Register.
    (f) The term civil rights/compliance reviewing office includes any 
office within HUD designated by HUD to act as a civil rights/compliance 
reviewing office. As necessary, HUD will designate specific offices 
within HUD to act as civil rights/compliance reviewing offices through 
a notice published in the Federal Register.
    3. Revise the first and second sentences of Sec. 108.15 to read as 
follows:


Sec. 108.15  Pre-occupancy conference.

    Applicants shall submit a Notification of Intent to Begin Marketing 
to the monitoring office no later than 90 days prior to engaging in 
sales or rental marketing activities. Upon receipt of the Notification 
of Intent to Begin Marketing from the applicant, the monitoring office 
shall review any previously approved plan and may schedule a pre-
occupancy conference. * * *

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    4. Revise Sec. 108.20 to read as follows:


Sec. 108.20  Monitoring office responsibility for monitoring plans and 
reports.

    (a) Submission of documentation. Pursuant to initiation of 
marketing, the applicant shall submit to the monitoring office reports 
documenting the implementation of the AFHM plan, including sales or 
rental reports, as required by the Department. Copies of such 
documentation shall be forwarded to the civil rights/compliance 
reviewing office by the monitoring office as requested.
    (b) Monitoring of AFHM plan. The monitoring office is responsible 
for monitoring AFHM plans and providing technical assistance to the 
applicant in preparation or modification of such plans during the 
period of development and initial implementation.
    (c) Review of applicant's reports. Each sales or rental report 
shall be reviewed by the monitoring office as it is received. When 
sales or rental reports show that 20% of the units covered by the AFHM 
plan have been sold or rented, or whenever it appears that the plan may 
not accomplish its intended objective, the monitoring office shall 
notify the civil rights/compliance reviewing office.
    (d) Failure of applicant to file documentation. If the applicant 
fails to file required documentation, the applicant shall be sent a 
written notice indicating that if the delinquent documentation is not 
submitted to the monitoring office within 10 days from date of receipt 
of the notice, the matter will be referred to the civil rights/
compliance reviewing office by the monitoring office for action which 
may lead to the imposition of sanctions.
    5. Revise Sec. 108.21 to read as follows:


Sec. 108.21  Civil rights/compliance reviewing office compliance 
responsibility.

    The civil rights/compliance reviewing office shall be responsible 
for determining whether an applicant's actions are in apparent 
compliance with its approved AFHM plan, the AFHM regulations, and this 
part and for determining changes or modifications necessary in the plan 
after initiation of marketing.
    6. Revise paragraphs (a), (b), (d), (e), (f), (g), and (h) of 
Sec. 108.25 to read as follows:


Sec. 108.25  Compliance meeting.

    (a) Scheduling meeting. If an applicant fails to comply with 
requirements under Sec. 108.15 or Sec. 108.20 or it appears that the 
goals of the AFHM plan may not be achieved, or that the implementation 
of the Plan should be modified, the civil rights/compliance reviewing 
office shall schedule a meeting with the applicant. The meeting shall 
be held at least ten days before the next sales or rental report is 
due. The purpose of the compliance meeting is to review the applicant's 
compliance with AFHM requirements and the implementation of the AFHM 
Plan and to indicate any changes or modifications which may be required 
in the Plan.
    (b) Notice of Compliance Meeting. A Notice of Compliance Meeting 
shall be sent to the last known address of the applicant, by certified 
mail or through personal service. The Notice will advise the applicant 
of the right to respond within seven (7) days to the matters identified 
as subjects of the meeting and to submit information and relevant data 
evidencing compliance with the AFHM regulations, the AFHM Plan, 
Executive Order 11063 and title VIII of the Civil Rights Act of 1968, 
when appropriate. If the applicant is a small entity, as defined by the 
regulations of the Small Business Administration, the Notice shall 
include notification that the entity may submit comment on HUD's 
actions to the Small Business and Agriculture Regulatory Enforcement 
Ombudsman, and shall include the appropriate contact information.
* * * * *
    (d) Preparation for the compliance meeting. The monitoring office 
will provide information concerning the status of the project or 
housing involved to be presented to the applicant at the meeting. The 
monitoring office shall be notified of the meeting and may send 
representatives to the meeting.
    (e) Resolution of matters. Where matters raised in the compliance 
meetings are resolved through revision to the plan or its 
implementation, the terms of the resolution shall be reduced to writing 
and submitted to the civil rights/compliance reviewing office within 10 
days of the date of the compliance meeting.
    (f) Determination of compliance. If the evidence shows no violation 
of the AFHM regulations and that the applicant is complying with its 
approved AFHM plan and this part, the civil rights/compliance reviewing 
office shall so notify the applicant within 10 days of the meeting.
    (g) Determination of possible noncompliance. If the evidence 
indicates an apparent failure to comply with the AFHM plan or the AFHM 
regulation, or if the matters raised cannot be resolved, the civil 
rights/compliance reviewing office shall so notify the applicant no 
later than ten (10) days after the date the compliance meeting is held, 
in writing by certified mail, return receipt requested, and shall 
advise the applicant that the Department will conduct a comprehensive 
compliance review or refer the matter to the Assistant Secretary for 
Fair Housing and Equal Opportunity for consideration of action 
including the imposition of sanctions. The purpose of a compliance 
review is to determine whether the applicant has complied with the 
provisions of Executive Order 11063, title VIII of the Civil Rights Act 
of 1968, and the AFHM regulations in conjunction with the applicant's 
specific AFHM plan previously approved by HUD.
    (h) Failure of applicant to attend the meeting. If the applicant 
fails to attend the meeting scheduled pursuant to this section, the 
civil rights/compliance reviewing office shall so notify the applicant 
no later than ten (10) days after the date of the scheduled meeting, in 
writing by certified mail, return receipt requested, and shall advise 
the applicant as to whether the civil rights/compliance reviewing 
office will conduct a comprehensive compliance review or refer the 
matter to the Assistant Secretary for Fair Housing and Equal 
Opportunity for consideration of action including the imposition of 
sanctions.
    7. Revise the first and second sentences of Sec. 108.35 to read as 
follows:


Sec. 108.35  Complaints.

    Individuals and private and public entities may file complaints 
alleging violations of the AFHM regulations or an approved AFHM plan 
with any monitoring office, civil rights/compliance reviewing office, 
or with the Assistant Secretary for FH&EO. Complaints will be referred 
to the civil rights/compliance reviewing office. * * *
    8. Revise paragraphs (a) and (b) of Sec. 108.40 to read as follows:


Sec. 108.40  Compliance reviews.

    (a) General. All compliance reviews shall be conducted by the civil 
rights/compliance reviewing office. Complaints alleging a violation(s) 
of the AFHM regulations, or information ascertained in the absence of a 
complaint indicating an applicant's failure to comply with an AFHM 
plan, shall be referred immediately to the civil rights/compliance 
reviewing office. The monitoring office shall be notified as 
appropriate of all alleged violations of the AFHM regulations or 
alleged failure to comply with an AFHM plan.
    (b) Initiation of compliance reviews. Even in the absence of a 
complaint or other information indicating

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noncompliance pursuant to paragraph (a), the civil rights/compliance 
reviewing office may conduct periodic compliance reviews throughout the 
life of the mortgage in the case of multi-family projects and 
throughout the duration of the Housing Assistance Payments Contract 
with the Department in the case of housing assisted under section 8 of 
the United States Housing Act of 1937, as amended, 42 U.S.C. 1437.
* * * * *


Sec. 108.45  [Amended]

    9. Remove the last sentence of Sec. 108.45.

    Dated: July 26, 1999.
Eva M. Plaza,
Assistant Secretary for Fair Housing and Equal Opportunity.
[FR Doc. 99-20801 Filed 8-11-99; 8:45 am]
BILLING CODE 4210-28-P