06-9902. Extension of Regulatory and Administrative Waivers Granted for Public and Indian Housing Programs To Assist With Recovery and Relief in Hurricanes Katrina, Rita, and Wilma Disaster Areas

AGENCY:

Office of the Assistant Secretary for Public and Indian Housing, HUD.

ACTION:

Notice.

SUMMARY:

This notice advises the public of HUD's decision to extend for an additional period ending December 31, 2007, or for such other period as specified in this notice (e.g., Uniform Financial Reporting Standards (UFRS) and Public Housing Assessment System (PHAS) waivers) certain HUD regulations and other administrative requirements governing HUD's Office of Public and Indian Housing (PIH) programs that were identified and waived or deferred under notices of Regulatory and Administrative Waivers Granted for Public and Indian Housing Programs to Assist with Recovery and Relief in Hurricanes Katrina, Rita, and Wilma Disaster Areas, published October 3, 2005, November 1, 2005, and March 13, 2006. The requirements in these three notices were waived or deferred in order to facilitate the delivery of safe and decent housing under these programs to families and individuals who were displaced from their housing by Hurricanes Katrina, Rita, and Wilma.

This notice provides that entities that administer PIH programs, which include public housing agencies (PHAs), tribally designated housing entities (TDHEs), and local and tribal governments, and that are located in an area declared by the President to be a federal disaster area as a result of Hurricane Katrina, Rita, or Wilma, and that previously notified HUD that they were deferring compliance with the program requirements identified in the three Federal Register notices, may continue to defer compliance with the regulations and requirements listed in this notice for an additional period ending December 31, 2007, or for such other period as specified in this notice (e.g., for UFRS and PHAS waivers). The additional waiver period is subject to the program administrator submitting a notification to HUD, within 45 calendar days of the effective date of this notice, advising of the intent to defer compliance with the program requirements identified in this notice, unless a specific waiver provision states: (1) That the waiver will be applied automatically or (2) the specific waiver does not require such notification.

PIH program administrators that are not located in a disaster area but are continuing to assist with Hurricane Katrina, Rita, or Wilma recovery and relief and have requested and were approved for waiver of the regulations and administrative requirements listed in this notice under the original waiver notices, may request waiver or deferral of the requirements for an additional period ending December 31, 2007, or for such other period as specified in this notice (e.g., under UFRS and PHAS waivers), with justification of the need for more time, unless a specific waiver provision states it will be applied automatically. HUD will review and respond to waiver requests through an expedited process that assigns priority to these requests and maximizes use of electronic communications to speed response time. PIH program administrators, located in an area declared a federal disaster area as a result of Hurricane Katrina, Rita, or Wilma, or PIH program administrators not located in such an area but continuing to assist with Hurricane Katrina, Rita, or Wilma relief and recovery efforts, may defer compliance or request waiver of a regulation or other administrative requirement, respectively, through the expedited waiver process provided in this notice.

This notice applies only to PIH programs or to cross-cutting regulatory or administrative requirements that are applicable to PIH program administrators.

In addition to the regulatory and administrative requirements cited in the notice of waivers granted to assist with recovery and relief in Hurricane Katrina disaster areas, this notice includes a waiver, identified in Section III.A.2 of the notices of waivers granted to assist with recovery and relief in Hurricane Rita disaster areas, for an extension for improved performance by certain PHAs located in areas declared a federal disaster area as a result of Hurricane Katrina.

DATES:

Effective Date: December 28, 2006.

FOR FURTHER INFORMATION CONTACT:

PIH Disaster Relief Officer, Office of Policy Programs and Legislation, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4116, Washington, DC 20410-5000; telephone numbers [phone], extension 4245, or [phone], extension 7651. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at [phone].

SUPPLEMENTARY INFORMATION:

I. Background Information

In late August 2005, Hurricane Katrina hit the Gulf Coast area of the United States, causing unprecedented and catastrophic damage to property, significant loss of life, and the displacement of tens of thousands of individuals and families from their homes and communities. Hurricane Rita soon followed, adding to the damage to property and displacement of individuals and families from their homes and communities that already had been caused by Hurricane Katrina. After Hurricane Katrina struck, the President called upon all federal agencies to do everything in their power to assist the victims, with the top priority to save and sustain lives. The President later directed federal agencies to include victims of Hurricane Rita in relief and recovery efforts underway for victims of Hurricane Katrina. With recognition that shelter is key to saving and sustaining lives, and following the President's direction to eliminate or reduce “red tape” that would impede the delivery of federal financial assistance and other needed benefits, the October 3, 2005, and November 1, 2005, notices identified HUD regulations and other administrative requirements governing HUD's PIH programs that were waived or temporarily suspended or deferred in an area declared by the President to be a federal disaster area as a result of Hurricanes Katrina or Rita (“disaster area”). In addition, HUD provided an expedited review process to waive the requirements listed in the notices, upon request from PIH program administrators that were not located in disaster areas but were assisting with Hurricane Katrina or Rita recovery and relief efforts. In a notice published March 13, 2006, similar relief from the same regulatory and administrative requirements was offered to PIH program administrators in areas declared a disaster as a result of Hurricane Wilma (71 FR 12988).

In developing the waiver notices, PIH examined the regulations governing its programs and recommended waiver or temporary suspension or deferral of those regulations that it believed could impede PIH program administrators from expeditiously helping to house PIH program participants who lost housing as a result of Hurricanes Katrina and Rita, as well as others who needed housing assistance under PIH programs as a result of the hurricanes. The waivers allowed PIH program administrators located in disaster areas to defer compliance with the requirements listed in the notices for an initial period of 12 months under the notification process described in the three notices. The requirements listed in the notices that were deferred, or temporarily suspended by waiver, included regulatory and other administrative provisions that require periodic reporting and other information delivery by PHAs, Indian tribes, and TDHEs. While such reporting is important to ensure effective and efficient administration of PIH programs, those requirements were waived so that PIH program administrators could focus their time and resources on identifying and providing decent and safe housing during the period of unparalleled displacement of families and individuals.

For the majority of the regulations and administrative requirements listed in the previously published notices and for which a waiver was granted, HUD did not waive the requirements entirely but deferred compliance until such time as compliance would be feasible. For example, in many cases HUD extended deadlines for reports or other documents that PIH program administrators must submit to HUD. Because the devastation caused by Hurricanes Katrina and Rita was unprecedented, and the need for housing and other basic life-saving and sustaining relief was widespread and immediate, HUD relied on its experienced local partners in the HUD housing-assistance programs who are in the front-line of recovery efforts to meet the challenge of providing decent, safe, and sanitary housing as expeditiously as possible and to comply to the extent possible with the regulations that promote that goal. HUD did not want the time and resources of PHAs, Indian tribes, and TDHEs diverted by requirements that are important but could be deferred until a degree of normalcy in operations returned in the disaster areas. As the recovery period proceeded, HUD indicated it might: (1) identify other regulations for which waiver or temporary deferral or suspension is needed or (2) determine that other alternative requirements may be necessary to assist with facilitation of delivery of housing to those most in need. Any additional HUD waivers or suspensions or other alternative requirements would be announced by direct notice to PIH program administrators and by Federal Register publication.

PIH program administrators not located in a disaster area but assisting with Hurricane Katrina recovery and relief efforts could request waiver of the regulations and administrative requirements through the expedited waiver request and response process set forth in the waiver notices.

In addition to HUD's waiver of regulatory requirements in the previously published notices, HUD also identified statutory provisions that contain built-in waiver provisions that allow administrative waiver of the statutory requirements for cause. Certain of those provisions were included in Section III.A of the October 3, 2005, notice. An additional provision was included in Section III.A.2 of the November 1, 2005, notice, for an extension for improved performance by certain PHAs located in areas declared a federal disaster area as a result of Hurricane Katrina.

The three previously published notices listed HUD regulatory and administrative requirements that PIH determined needed to be waived or temporarily deferred or suspended during the Hurricanes Katrina, Rita, and Wilma recovery periods. If PHAs, Indian tribes, and TDHEs, and other PIH program administrators identified other regulations that they believed should be waived, they were advised to seek a waiver by submitting a waiver request that specified the need for a waiver. Section II of each notice described the expedited waiver process, and that process is explained in Section II of this notice.

The extension of certain requirements provided by this notice underscores the unprecedented devastation caused by the hurricanes of 2005, and the additional time needed to recover from such devastation.

II. Waiver Process

A. For PIH Program Administrators in Declared Disaster Areas

1. The Waiver Process Previously Established. This notice continues the process for notification to HUD by program administrators of their intent to use, or their actual use of, the waived or deferred requirements under the previously published notices, with some exceptions, as described here in section II. The previous notices provided that entities that administer public or Indian housing or voucher programs and were located in the areas declared a federal disaster area as a result of Hurricanes Katrina, Rita, and Wilma could defer or suspend compliance with the regulations and other administrative requirements listed in each notice, with the exception of the waiver of the provision in Section III.B.12, upon the effective date of each notice, for an initial period of 12 months or for such other period as may be specified in each notice. These entities, however, were advised to notify HUD within 2 weeks of the determination of any need to utilize the waived requirements in each notice, or as soon as possible, by contacting HUD in the manner detailed in the following paragraph.

An official of the PHA, TDHE, or tribal or local government that had a need and intended to suspend compliance with or defer the requirements listed in each notice was required to contact HUD in writing (e-mail communication was allowed) and identify the requirements by section and number utilized in each notice (e.g., Section III.A.2, Section III.B.1, 2, or 3, etc., or “all of the waived or suspended requirements in Section III.”). The following e-mail addresses were established in order to expedite the process: [e-mail], [e-mail], and [e-mail].

This process was described as a notification only, and HUD asked that the notification be made to HUD no later than 2 weeks after a PHA determined the need to rely on one or more or all of the waived or suspended requirements in each notice. While, as noted earlier in this notice, HUD did not want to impose additional administrative requirements on PIH program administrators located in the disaster areas during the recovery period, it was important for HUD to know (and helpful for HUD to know) how these entities were administering their PIH programs during the recovery period. HUD maintains information on the PHAs, Indian tribes, and TDHEs that elected to defer compliance with certain regulatory and administrative requirements in accordance with each notice. A list of those PHAs, Indian tribes, or TDHEs are included as an appendix to this notice. The previously published notices provide that certain regulations or administrative requirements would remain inapplicable for a period of 12 months and would be considered waived or suspended by HUD for an additional 3 months upon notification to HUD, following the same notification process described above.

2. The Waiver Process for this Notice. HUD will continue to use the waiver process previously established, with some exceptions. First, HUD has since determined that timely notification of an entity's intent to use, or its actual use of the waivers or deferral periods is essential to effective program administration, and in light of the intervening period for entities to determine whether they need relief, HUD is now requiring that such notifications or waiver requests must be submitted to HUD within 45 calendar days of the publication of this notice as described in Section IV, unless a specific waiver provision states the waiver will be applied automatically, or the specific waiver does not require such notification. Secondly, under this notice there is not an additional 3-month deferral period beyond the initial 12-month period granted under the original notices, and the period for deferral ends December 31, 2007, regardless of the expiration dates of the 15-month deferral periods granted under the original three notices. Finally, some regulatory or administrative requirements included in the original notices are not eligible for continued deferral in this notice, and are identified in Section III below.

B. For PIH Program Participants in Non-Disaster Declared Areas

The previous notices provided that PIH program administrators not located in a disaster area but that were contributing to Hurricanes Katrina and Rita relief and recovery efforts could request a waiver of the regulations or administrative requirements listed in each of the original notices by e-mailing a request for a waiver to [e-mail], [e-mail], or [e-mail]. The request was required to specify the need for the waiver of the requirement. HUD would review and respond to waiver requests submitted through the e-mail addresses using an expedited waiver process that would assign a priority to such requests and maximize the use of electronic communications.

As with the previous notices, this notice provides that PIH program administrators not located in a disaster area but contributing to the relief and recovery efforts must request a waiver of the regulations or administrative requirements by e-mailing the request for a waiver to [e-mail], [e-mail], or [e-mail]. This process remains in effect unless a specific waiver provision (e.g., under UFRS or PHAS) states that it will be applied automatically to the non-disaster PHAs that previously requested and received the waivers under the original notices, or if a specific waiver is not eligible for continued deferral, as identified in Section III below.

C. Regulations and Requirements Not Waived in This Notice

In the three prior notices published previously, HUD provided that, for any regulation or other administrative requirement not listed in each notice for which a PIH program administrator sought a waiver or suspension, the program administrator could seek a waiver by e-mailing a request to [e-mail], [e-mail], and [e-mail]. Any such request had to specify the need for the waiver of the requirement. As noted earlier in this notice, waiver requests submitted through each e-mail address would receive expedited and priority processing, and HUD would respond to the requestor by e-mail.

That expedited waiver process was provided only for waiver or suspension of requirements that would assist with Hurricanes Katrina, Rita, and Wilma relief and recovery efforts. HUD would not respond to any waiver requests submitted to any of the hurricane designated e-mail addresses that were unrelated to relief and recovery of the disaster areas.

This process remains in effect for this notice.

III. Authority to Grant Waivers

In general, waivers of HUD regulations are handled on a case-by-case basis. Under statutory requirements set forth in section 7(q) of the Department of Housing and Urban Development Act (42 U.S.C. 3535(q)), a regulated party that seeks a waiver of a HUD regulation must request a waiver from HUD in writing and the request must specify the need for the waiver. HUD then responds to the request in writing and, if the waiver is granted, HUD includes a summary of the waiver granted (and all regulatory waivers granted during a 3-month period) in a Federal Register notice that is published quarterly. Since the damage to property and the displacement of families and individuals in the disaster areas was massive, and the need for regulatory relief in many areas pertaining to HUD-assisted housing readily apparent, HUD suspended its usual regulatory waiver protocols for the disaster areas and substituted an expedited process that meets the requirements of section 7(q).

In its quarterly notice of regulations waived, HUD identifies the PIH program administrators in the disaster areas that are utilizing: (1) One or more of the waived regulations in the three notices or (2) other regulations for which a waiver was requested or granted. The quarterly notice also identifies PIH program administrators that are located in non-federally declared disaster areas and are contributing to Hurricane Katrina, Rita, or Wilma relief and recovery efforts, and that requested and were granted waivers in accordance with the waiver process, as provided in each notice.

The regulatory and administrative requirements set forth in Section III of each of the prior notices were waived or temporarily deferred or suspended, as provided in each notice. This action was determined necessary to help PIH program administrators in the disaster areas in the identification and delivery of housing for families and individuals displaced from their homes by Hurricanes Katrina, Rita, and Wilma.

With respect to this notice, the term “PIH program administrators,” as referenced in Section III of this notice, includes those PHAs, tribes, and TDHEs located in disaster areas.

As the preceding discussion discloses, the process for deferring compliance with certain requirements listed in this notice is similar to the process utilized under the previously published notices, with some exceptions. First, PHAs, tribes, and TDHEs located in a federally declared disaster area will be required to notify HUD within 45 calendar days of the effective date of this notice that they intend to continue deferring compliance during the extended waiver period. If the PHAs, tribes, and TDHEs are outside the disaster areas but are continuing to assist recovery efforts, they must submit a new waiver request during the extended waiver period. Secondly, some waivers (e.g., UFRS, PHAS) will be automatically applied to PHAs, tribes, and TDHEs that previously notified HUD they were deferring compliance or that requested the waiver and were granted approval to defer compliance. Finally, this notice does not provide an extension of deferral of compliance with the following requirements:

A. Requirements for Which No Waiver Extension Is Provided by This Notice

1. Waiver of Indian Community Development Block Grant Program (ICDBG) 50 Percent Downpayment Assistance Limitation for Low- and Moderate-Income Homebuyers. Section 122 of the Housing and Community Development Act of 1974 (“Act”) (42 U.S.C. 5321) authorizes the Secretary to suspend requirements for activities that address the damage in a Presidentially declared disaster area. Section 105(a)(24)(D) of the Act (42 U.S.C. 5305) permits a grantee to provide downpayment assistance to low- and moderate-income homebuyers, but limits the assistance to 50 percent of the amount of downpayment the homebuyer must provide. Because of the extraordinary need for housing among low- and moderate-income evacuees, HUD found good cause to permit downpayment assistance of up to 100 percent for the purchase of homes in the disaster area. Based on consultation with affected entities, this waiver is not extended.

2. 24 CFR 5.216(g)(5) (Disclosure and Verification of Social Security and Employer Identification Numbers). Section 5.216 addresses the disclosure and verification of Social Security Numbers and employer identification numbers of applicants for assistance under certain HUD-assisted housing programs. Section 5.216(g) imposes special documentation requirements on applicants, and subsection (g)(5) establishes the time limit for submission of this documentation. The time period required for submission of verification documents was waived for a period of 3 months, in the case of all families, and, with HUD approval, for a period not to exceed 12 months.

Under this notice, this waiver is not extended. The use of Social Security and employer identification numbers is essential for updating and maintaining HUD's management information systems and the Department's key initiatives for ensuring accurate reporting. As a result, HUD believes it is not advisable to further extend the time frames for disclosures and submitting verification documents.

3. 24 CFR 5.512(c) (Verification of Eligible Immigration Status; Secondary Verification). Section 5.512 provides the process by which verification of eligible immigration status must be undertaken for families seeking assistance under certain HUD programs. While the declaration of eligibility and this verification process is required by statute and cannot be waived, HUD does have the authority to waive certain deadlines. Section 5.512(d) provides the time frame under which a secondary verification must be requested from the Immigration and Customs Enforcement (ICE), by the responsible entity, when the primary verification (the automated verification system) is not conclusive of immigration status. The responsible entity must submit a request to ICE to undertake a secondary verification within 10 days of receipt of the results of the primary verification, and must provide the ICE with all records on the applicant, evidencing citizen or eligible immigration status, that the applicant has provided to the responsible entity. The three previous notices expanded the time frame under which a secondary verification must be requested, from 10 days after the date of the results of the primary verification to 90 days after such date.

Under this notice, this waiver is not extended. HUD believes it is not advisable to further extend the time frames for requesting from ICE the secondary verifications of eligible immigration status.

4. 24 CFR 1000.156 and 1000.158 Indian Housing Block Grant (IHBG) Moderate Design Requirements for Housing Development. The IHBG program regulations at §§ 1000.156 and 1000.158 require that housing developed with IHBG funds must be of moderate design. Under these regulatory sections, IHBG recipients must either adopt written moderate design standards or comply with the total development cost (TDC) limits issued by HUD. In recognition of the higher development costs in communities affected by Hurricane Katrina, and to facilitate the development of housing for families in such communities, these moderate design requirements were waived for IHBG recipients until issuance of new TDC levels. Based on consultation with affected entities, this waiver is not extended.

5. 24 CFR 1000.214 (Indian Housing Plan (IHP) Submission Deadline). To receive an IHBG formula allocation, an Indian tribe or its TDHE must annually submit an IHP to HUD describing the affordable housing activities the Indian tribe or TDHE will undertake. Section 1000.214 requires that the IHP must be submitted to HUD no later than July 1 of each year. This section was waived to permit tribes and TDHEs to undertake affordable housing activities on behalf of families displaced by Hurricane Katrina, Rita, or Wilma, although such activities may not have been identified in the IHP originally submitted by the tribe or TDHE.

Based on consultation with affected entities, this waiver is not extended.

6. 24 CFR 1003.400(c) and Section I.C. of Fiscal Year (FY) 2005 ICDBG Program Notice of Funding Availability (NOFA) (Grant Ceilings for ICDBG Imminent Threat Applications). The ICDBG regulations at § 1003.400(c) provide that HUD will establish grant ceilings for imminent threat applications. On March 21, 2005, HUD published its FY2005 ICDBG NOFA as part of HUD's FY2005 SuperNOFA (70 FR 13655). Section I.C. of the FY2005 ICDBG NOFA specifies that the grant ceiling for ICDBG imminent threat requests for FY2005 is $425,000. This grant ceiling was waived to permit applicants to request imminent threat funding in excess of $425,000, if necessary to address disaster-related needs in their communities.

This waiver is not extended. The grant ceiling requirement was included as part of the FY2005 ICDBG grant funding cycle, which has passed.

7. 24 CFR 1003.401 and Section I.C. of FY2005 ICDBG NOFA (Application Requirements for ICDBG Imminent Threat Funds). The ICDBG regulations at § 1003.401 provide that, in response to applications for assistance, HUD may make ICDBG funds available to applicants to address imminent threats to health and safety. The regulations further provide that applications must contain the information specified by the annual ICDBG NOFA. For FY2005, the required information that must be contained for imminent threat applications is located in Section I.C. of the FY2005 ICDBG NOFA. These application requirements were waived to permit Indian tribes located in areas affected by Hurricane Katrina to more expeditiously request and receive ICDBG imminent threat funds.

This waiver is not extended. The application requirements waived were part of the FY2005 ICDBG grant funding cycle, which has passed.

8. 24 CFR 1003.604 (ICDBG Citizen Participation Requirements). The ICDBG regulations at § 1003.604 require applicants to consult with residents prior to submitting their funding applications. The consultation requirements have the potential to delay the ability of ICDBG recipients to address urgent housing, health, and safety needs of persons displaced by Hurricane Katrina. Accordingly, this section was waived to permit eligible ICDBG applicants to address disaster-related needs without the need for prior resident consultation.

This waiver is not extended. The resident consultation requirement was waived as part of the FY2005 ICDBG grant funding cycle, which has passed.

9. 24 CFR 982.206 (Waiting List; Opening and Public Notice). This section requires a PHA to give public notice that families may apply for tenant-based assistance. The regulation requires a PHA to publish, in a local newspaper of general circulation, and also by minority media and other suitable means, a notice of the opening of the waiting list. The requirement to publish in a newspaper of general circulation and also by minority media was waived, and a PHA was permitted to provide such information on its website and at any of its offices, and in a voice mail message for any callers that may inquire whether a list is opened.

Under this notice, the waiver of the requirement for publishing a notice of the opening of a waiting list, in local newspapers of general circulation and in minority media or other means, is not extended. In the 15 months after the hurricanes, PHAs should now have the ability to secure publication of the opening of their waiting lists. It is especially important to relocation efforts that PHAs advertise, in a variety of media, that they are now ready to accept tenant applications.

B. Requirements Eligible under this Notice for Continued Extension of Deferral of Compliance

The following requirements are eligible for continued deferment of compliance, in accordance with the procedures of this notice and subject to any specific conditions that may be identified in the description of the requirement for which compliance may be deferred.

1. Statutory Requirements with Built-In Waiver Authority.

a. Extension of Deadline for Obligation and Expenditure of Capital Funds. Section 9(j)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437g(j)(2)) (1937 Act) authorizes the Secretary to extend the time period for obligation of capital funds by PHAs, as set forth in section 9(j)(1), for such period as the Secretary determines necessary if the Secretary determines that the failure of the PHA to obligate assistance in a timely manner is attributable to, among other criteria listed, an event beyond the control of the PHA, or any other reason established by the Secretary by notice published in the Federal Register. Pursuant to section 9(j)(1) of the 1937 Act, PHAs are required to obligate capital funds not later than 24 months after the date on which the funds became available, or the date on which the PHA accumulates adequate funds to undertake modernization, substantial rehabilitation, or new construction of units, plus the period of any extension approved under section 9(j)(2). Because Hurricane Katrina was beyond the control of the PHAs located in the disaster areas and caused such massive and widespread destruction and displacement, the obligation deadline under section 9(j)(1) of the 1937 Act is hereby extended, pursuant to section 9(j)(2) of the 1937 Act, for an additional 12 months for PHAs located in the areas declared a federal disaster area.

In addition, section 9(j)(5)(A) of the 1937 Act requires a PHA to expend capital funds not later than 4 years after the date on which the funds become available for obligation, plus the period of any extension approved under section 9(j)(2). The expenditure period under section 9(j)(5) is accordingly also extended in the affected areas for 12 months to include the extension approved under section 9(j)(2). The extension of the section 9(j) obligation and extension deadlines made in this notice also apply to the implementing regulation for section 9(j) at 24 CFR 905.120.

Under this extension notice, the original deadlines for obligation and expenditure of capital funds may be extended an additional 12 months from the initial 12 months plus subsequent 3 months made available under the Katrina, Rita, and Wilma regulatory and administrative waiver notices for all PHAs in federally declared disaster areas that previously notified HUD they were suspending compliance with this requirement, thereby allowing a total of 27 additional months beyond the original obligation and expenditure deadlines, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice.

b. Extension of Deadlines for Improvement of PHAs Designated Troubled or Substandard (Extension Available for PHAs in Hurricane Rita as well as Hurricane Katrina Disaster Areas). Sections 6(j)(3)(B)(ii)(I) and (II) of the 1937 Act (42 U.S.C. 1437d(j)(3)(B)(ii)(I) and (II)) and the implementing regulations for these sections at 24 CFR 902.75(d)(1) and (2) require that a PHA designated as troubled improve its performance by 50 percent within one year of such designation, and improve its performance to no longer be designated as troubled within 2 years of such designation. The implementing regulations also apply these one- and 2-year deadlines for improvement to PHAs designated as overall troubled and substandard. The consequences for failure to timely achieve the required improvements could require the appointment of a receiver for the PHA, pursuant to section 6(j)(3)(B)(ii)(III) of the 1937 Act and 24 CFR 902.77 of the implementing regulations. The apparent meaning of the provision is that Congress intended that a troubled PHA would have one or 2 uninterrupted years of continuous operation during which to improve its performance so that it is no longer designated as troubled, before the actions by the Secretary required under section (6)(j)(3)(B)(ii)(III) would be triggered.

HUD has determined that because the extraordinary conditions created by Hurricanes Katrina and Rita cited throughout this notice and the notice published on October 3, 2005 (70 FR 57716), were caused by acts outside the control of any PHA, and outside the control of any government or private entity, and because such conditions interrupted the one-or 2-year period of contemplated continuous operation of the troubled agency in the disaster areas, the Secretary will extend, by 12 months, each of the respective periods for improvement under sections 6(j)(3)(B)(ii)(I) and (II) of the 1937 Act and the implementing regulations for these sections (at 24 CFR 902.75(d)(1) and (2)) for troubled or substandard PHAs in the disaster area that were substantially impacted by Hurricanes Katrina and Rita. This action will permit the administrators of affected PHAs designated as troubled or substandard to devote their attention to the fullest extent necessary to address the problems created by the disaster.

Under this extension notice, the respective periods for improvement are extended by an additional 12 months from the initial 12 months plus subsequent 3 months made available under the prior Katrina, Rita, and Wilma regulatory and administrative waiver notices, for a total of 27 months beyond the standard deadlines for the respective periods for improvement, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice.

2. Regulatory Requirements.

a. 24 CFR 5.801(c) and 5.801(d)(1) (Uniform Financial Reporting Standards (UFRS); Reporting Due Date). These sections establish uniform financial reporting standards for PHAs and other owners and administrators of HUD-assisted housing. Section 5.801(c) establishes the financial information requirements and § 5.801(d)(1) establishes the filing deadline for financial information and provides that PHAs must submit their unaudited financial information no later than 60 days after the end of their fiscal year. In addition, § 5.801(d)(1) requires that PHAs submit their audited financial information no later than 9 months after the PHA's fiscal year end. Under the original three notices, the deadline for the submission of unaudited financial information was changed from 60 days to 180 days after the end of the PHA's fiscal year. Also, under the original three notices, the deadline for the submission of audited financial information was changed from 9 months to 13 months after the end of the PHA's fiscal year, for PHAs with fiscal years ending December 31, 2004, and March 31, 2005.

Under this notice, the deadline for submitting unaudited financial information is automatically changed from 60 days to 180 days after the end of the PHA's fiscal year for PHAs in the federally declared disaster areas that previously notified HUD they were utilizing the extended deadlines for unaudited financial submissions set forth in the original Hurricane Katrina, Rita, and Wilma waiver notices, as well as for PHAs in non-disaster declared areas contributing to Hurricanes Katrina, Rita, and Wilma recovery efforts that requested and were granted an extended deadline for unaudited financial submissions under the original three waiver notices. The extended deadline will apply only to eligible PHAs with fiscal years ending December 31, 2006, March 31, 2007, June 30, 2007, and September 30, 2007. The deadline for submitting audited financial information is not changed and remains 9 months after the end of the PHA's fiscal year.

Although PHAs are still required to submit unaudited and audited financial information pursuant to UFRS, they will not be scored under the Public Housing Assessment System (PHAS), as more fully discussed in Section III.B.2.b.

b. 24 CFR part 902 (Public Housing Assessment System (PHAS)). Part 902 sets out the indicators by which HUD measures the performance of a PHA. These indicators measure a PHA's physical condition, financial condition, management operations, and resident service and satisfaction.

In the original three notices, for PHAs in the federally declared disaster area beginning with a fiscal year ending September 30, 2005, and for those with fiscal years ending March 31, 2005, and June 30, 2005, that had not yet received their physical condition inspections for 2005, the PHAS score would be the same as their previous year score. However, PHAs were still required to submit unaudited and audited information in accordance with Section III.B.3 of the original notice.

Under this extension notice, PHAs in the federally declared disaster areas that previously notified HUD they were suspending the requirements set forth in the Hurricane Katrina, Rita, and Wilma waiver notices, as well as PHAs in non-disaster declared areas contributing to Katrina, Rita, and Wilma recovery efforts that requested and were granted a waiver by HUD, will be automatically waived for fiscal years ending December 31, 2006, March 31, 2007, June 30, 2007, and September 30, 2007, and will receive the same PHAS score that they received for the most recent year that they were fully assessed under PHAS. However, these PHAs must submit unaudited and audited information in accordance with Section III.B.2.a. Beginning with fiscal years ending December 31, 2007, and continuing for all fiscal years thereafter, these PHAs will be fully assessed under PHAS, unless they notify HUD within 45 calendar days of the effective date of this notice that they want to be scored under PHAS sooner. Thus, on January 1, 2007, the affected PHAs must begin to prepare for their PHAS assessments that will start with the PHAs with fiscal years ending December 31, 2007.

c. 24 CFR 903.5 (Annual Plan Submission Deadline). Section 5A(h)(2) of the 1937 Act (42 U.S.C. 1437c-1(h)(2)) and 24 CFR 903.5 provide that a PHA Annual Plan must be submitted no later than 75 days before the commencement of a PHA's fiscal year. Each PHA affected may have a different fiscal year and for those PHAs that are approaching this submission deadline, this requirement may be impossible to meet because the PHAs are not operating. Because this requirement is a statutory one and not waivable by HUD without further authority, HUD is currently seeking legislative relief. In the interim, HUD will accept, as a submission, a letter from the PHA stating that HUD should consider its existing annual plan to be the plan for the next year or until it submits another annual plan. For Capital Fund activities, PHAs may obligate their Capital Funds for any activity listed in their existing and approved 5-year plan. PHAs should also submit amendments to their 5-year plan to the extent necessary.

For this extension period ending December 31, 2007, HUD will continue to accept, as a PHA Plan submission, a letter from the PHA stating that HUD should consider its existing annual plan to be the plan for the next year or until it submits another annual plan, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in Section II.A.(2) of this notice. PHAs are still required to submit the Capital Fund Annual Statement and Performance and Evaluation Report for each open grant.

d. 24 CFR 905.10(i) (Capital Fund Formula; Limitation of Replacement Housing Funds to New Development). Section 905.10 describes the Capital Fund formula. Section 905.10(i) limits the use of replacement housing funds to the development of new public housing. This section is waived to allow replacement housing funds to be used for two other areas: (1) Public housing modernization and (2) homeownership for public housing families, which will help address housing needs caused by Hurricane Katrina.

Under this extension, the time frame during which the PHA has the authority to use Replacement Housing Factor (RHF) grants for modernization or homeownership is extended for an additional period ending December 31, 2007, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice. PHAs are required to resubmit their RHF Plans and identify which RHF grants will be used for modernization or homeownership.

e. 24 CFR 941.306 (Maximum Project Cost). Section 941.306 establishes the calculation of maximum project cost and the calculation of the total development cost. In order to facilitate the use of capital funds for repairs and construction for needed housing in the disaster areas, HUD has waived the total development cost (TDC) and housing cost cap limits for all work funded by the Capital Fund and HOPE VI funds until issuance of new TDC levels. Until new TDC levels are issued, PHAs should strive to keep housing costs reasonable in light of local market conditions.

Under this waiver extension notice, the time frame during which PHAs have the authority to waive the TDC and housing cost cap limits is extended for an additional period, ending December 31, 2007, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice, and in recognition of the higher development costs in communities affected by Hurricanes Katrina, Rita, and Wilma, and to facilitate the development of housing for families in these communities.

f. 24 CFR 965.302 (Requirements for Energy Audits). This section establishes the requirement that all PHAs complete an energy audit for each PHA-owned project under management, not less than once every 5 years. PHAs that were required to conduct or update an audit this year are given an additional 12 months after September 30, 2005, to complete the audit. HUD is relieving PHAs of this administrative burden so that they may focus on the more urgent need to house impacted families.

Under this notice, PHAs that are required to conduct or update an audit in the current year are given until December 31, 2007, to complete the audit, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice.

g. 24 CFR 982.54 (Administrative Plan). This section provides that a PHA must adopt, in accordance with HUD requirements, a written administrative plan that establishes local policies for the administration of the Housing Choice Voucher Program. In order to allow PHAs to exercise maximum flexibility with program administration as a result of Hurricane Katrina, the PHA may temporarily revise the administrative plan to address unique circumstances without PHA Board of Commissioners approval or other authorized PHA official approval, if such Board or officials also waive this requirement.

Under this notice, the waiver is extended an additional time period, ending December 31, 2007, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice.

h. 24 CFR 982.401(d) (Housing Quality Standards: Space Requirements). By regulation, § 982.401 establishes housing quality standards. Section 982.401(d) provides, among other things, the requirement for adequate space for the family. With respect to space, this section provides that each dwelling unit must have at least one bedroom or living/sleeping room for every two persons. The spacing requirements of this section can be waived only if the family understands and consents to a waiver of this provision. Again, as noted from the outset, the waiver of these regulations does not represent a long-term change but rather a temporary suspension of requirements to address emergency needs.

Under this notice, the waiver of space requirements is extended an additional time period, ending December 31, 2007, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in Section II.A.(2) of this notice.

i. 24 CFR 982.503(b) (Waiver of Payment Standard Limit; Establishing Payment Standard Amounts). [Waiver of this Provision Available through Waiver Request.] Section 982.503(b) imposes a cap on the amount a PHA may establish as its payment standard amount at 110 percent of the published fair market rent (FMR). In order to expand the housing available to families displaced by Hurricane Katrina, PHAs in disaster areas may establish separate payment standard amounts up to 120 percent of the published FMR. Higher exception payment standards above 120 percent may be requested through the expedited waiver process, but must be justified by rental housing data. In all cases, the actual gross rent for the unit leased by the family may not exceed what is charged for comparable unassisted units in the area.

Note that areas outside of disaster areas in which rental housing markets have been significantly affected by families displaced by Hurricane Katrina may request a waiver through the expedited waiver review process, set forth in Section II of this notice, for approval of payment standards in excess of 110 percent of the published FMRs. However, the PHA must provide information indicating that: (1) They have a significant number of displaced families and (2) area rents have increased.

Under this notice, the waiver of payment standard limits is extended an additional time period, ending December 31, 2007, subject to submission to HUD of the necessary waiver request to cover the extended waiver period as explained in the Summary and Section II.A.(2) of this notice, and upon HUD approval of waiver requests submitted through the expedited waiver process.

j. 24 CFR 984.303 (Contract of Participation; Family Self-Sufficiency (FSS) Program; Extension of Contract) and 24 CFR 984.105 (Minimum Program Size). Part 984 of HUD's regulations provide the requirements for the Section 8 and Public Housing FSS Program. Section 984.303 sets out the requirements for the contract of participation, and § 984.303(d) allows for an extension of the FSS program for a period not to exceed 2 years. For those families at the end of their initial contract term, the 2-year limitation is waived and PHAs may provide an extension for a period not to exceed 3 years. This additional time period would account for any time lost on the FSS contract as a result of the displacement of families participating in the FSS program. Section 984.105 sets out the requirements for minimum FSS program size. This notice exempts PHAs from the minimum program size (§§ 984.105(a) and (b)) for a period of 2 years.

Under this waiver extension notice, the 2-year limitation continues to be waived and PHAs may extend the extension period an additional 12 months, not to exceed 4 years; and the minimum program size exemption may be extended an additional 12 months, for a period of 3 years, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice.

k. 24 CFR part 985 (Section 8 Management Assessment Program (SEMAP)). Part 985 sets out the requirements by which Section 8 tenant-based assistance programs are assessed. Similar to the action that HUD has taken with respect to the PHAS regulations in 24 CFR part 902, PHAs administering a Section 8 tenant-based assistance program are eligible to defer compliance with the SEMAP requirements for a period of 12 months.

Under this waiver extension notice, eligibility to defer compliance with SEMAP requirements is extended another 12 months, similarly to eligibility to defer compliance with PHAS requirements, except that this waiver is subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice. That is, PHAs in the federally declared disaster areas that notify HUD they are suspending this requirement during the extended waiver period, and PHAs in non-disaster declared areas contributing to Hurricanes Katrina, Rita, and Wilma recovery efforts that request and are granted a waiver by HUD during the waiver extension period with fiscal years ending December 31, 2006, March 31, 2007, June 30, 2007, and September 30, 2007, will receive the same SEMAP score that they received for the most recent year that they were fully assessed under SEMAP. Beginning with fiscal years ending December 31, 2007, these PHAs will be fully assessed under SEMAP.

l. 24 CFR 990.145 (Dwelling Units with Approved Vacancies). Section 990.145 of the Operating Fund Program regulation lists the categories of vacant units that are eligible to receive operating subsidy and, therefore, are considered approved vacancies. PHAs that had vacant units during the reporting period that were not “approved” vacancies pursuant to § 990.145, but were available for occupancy, may treat those units as approved vacancies if: (1) The PHA anticipates the units will be occupied by families and individuals affected by the disaster during the upcoming funding year or (2) the PHA is holding the units vacant for families and individuals affected by the disaster.

Under this notice, PHAs may continue to treat vacant units as approved, if the subject conditions are met, for FY2007 operating subsidy calculations, subject to submission to HUD of the necessary notification or waiver request to cover the extended waiver period, as explained in the Summary and Section II.A.(2) of this notice.

IV. Twelve-Month Extension of Waivers

Due to the lengthy recovery period brought about by Hurricanes Katrina, Rita, and Wilma, HUD will automatically extend for an additional period, ending December 31, 2007, or for such other period as specified in this notice (e.g., for UFRS and PHAS waivers): (1) Those waivers that PHAs in the disaster-declared areas notified HUD they were utilizing and (2) those waivers that PHAs outside of the disaster declared areas that were assisting with recovery efforts in the disaster areas requested and were approved for by HUD under the waiver notices published for each hurricane. A list of those PHAs is included with this notice. The expiration date for waivers granted under the Hurricane Katrina notice published October 3, 2005, is December 28, 2006; the one for the Hurricane Rita notice published November 1, 2005 (70 FR 66222), is January 26, 2007; and the one for the Hurricane Wilma notice published on March 13, 2006, is June 7, 2007.

Any PHA that does not wish for or need an automatic extension must notify HUD within 45 calendar days of the effective date of this notice by using the e-mail addresses identified in Section II of this notice.

Dated: December 21, 2006.

Roy A. Bernardi,

Deputy Secretary.

Appendix A.—PHAs/Tribes/TDHEs that Submitted Waiver Suspension Notifications or Requests under Original Waiver Notices

Disaster (Katrina, Rita or Wilma)	Agency type (PHA/TDHE/ tribe/local government)	Agency code	Agency or government name
Katrina Suspension Notifications Received
Katrina	PHA	AL165	Foley Housing Authority
Katrina	PHA	LA001	Housing Authority of New Orleans
Katrina	PHA	LA003	East Baton Rouge Parish Housing Authority
Katrina	PHA	LA004	Lake Charles Housing Authority
Katrina	PHA	LA005	Lafayette Parish Housing Authority
Katrina	PHA	LA011	Westwego Housing Authority
Katrina	PHA	LA012	Housing Authority of Kenner
Katrina	PHA	LA013	Jefferson Parish Housing Authority
Katrina	PHA	LA024	Bogalusa Housing Authority
Katrina	PHA	LA026	Kaplan Housing Authority
Katrina	PHA	LA029	Crowley Housing Authority
Katrina	PHA	LA036	Morgan City Housing Authority
Katrina	PHA	LA043	Donaldsonville Housing Authority
Katrina	PHA	LA045	Arcadia Housing Authority
Katrina	PHA	LA055	Housing Authority of the City of Opelousas
Katrina	PHA	LA063	Sulphur Housing Authority
Katrina	PHA	LA070	Housing Authority of the Town of Patterson
Katrina	PHA	LA076	Ferriday Housing Authority
Katrina	PHA	LA080	Housing Authority of Lafourche Parish
Katrina	PHA	LA090	Houma-Terrebonne Housing Authority
Katrina	PHA	LA092	St. James Parish Housing Authority
Katrina	PHA	LA094	St. Charles Parish Housing Authority
Katrina	PHA	LA095/ LA181	Housing Authority of St. John the Baptist Parish
Katrina	PHA	LA103	Slidell Housing Authority
Katrina	PHA	LA254	Pearl River Housing Authority
Katrina	PHA	LA122	Colfax Housing Authority
Katrina	PHA	LA132	Avoyelles Parish Section 8 Program
Katrina	PHA	LA178	St. Martin Parish Police Jury
Katrina	PHA	LA207	Tangipahoa Parish Government
Katrina	PHA	LA215	Assumption Parish Police Jury
Katrina	PHA	LA219	City of Baton Rouge Office of Community Development
Katrina	PHA	LA221	Morgan City Housing Authority
Katrina	PHA	LA238	Covington Housing Authority
Katrina	PHA	LA253	Housing Authority of Lafourche Parish
Katrina	PHA	LA262	East Carroll Parish Housing Authority
Katrina	PHA	MS001	Hattiesburg Housing Authority
Katrina	PHA	MS002	City of Laurel Housing Authority
Katrina	PHA	MS003	The Housing Authority of the City of McComb City, Mississippi
Katrina	PHA	MS004	The Housing Authority of the City of Meridian
Katrina	PHA	MS005	Biloxi Housing Authority
Katrina	PHA	MS030	Mississippi Regional Housing Authority No. V
Katrina	PHA	MS040	Mississippi Regional Housing Authority No. VIII
Katrina	PHA	MS047	The Housing Authority of the City of Starkville, Mississippi
Katrina	PHA	MS057	Mississippi Regional Housing Authority No. VII
Katrina	PHA	MS058	Mississippi Regional Housing Authority No. VI
Katrina	PHA	MS061	Canton Housing Authority
Katrina	PHA	MS064	Bay St. Louis Housing Authority
Katrina	PHA	MS066	Picayune Housing Authority
Katrina	PHA	MS067	Richton Housing Authority
Katrina	PHA	MS071	Aberdeen Housing Authority
Katrina	PHA	MS077	Tupelo Housing Authority
Katrina	PHA	MS082	Winona Housing Authority
Katrina	PHA	MS084	Housing Authority of the Town of Summit
Katrina	PHA	MS086	Vicksburg Housing Authority
Katrina	PHA	MS094	Hazlehurst Housing Authority
Katrina	PHA	MS101	Waveland Housing Authority
Katrina	PHA	MS103	Housing Authority of the City of Jackson, Mississippi
Katrina	PHA	MS105	Natchez Housing Authority
Katrina	PHA	MS107	Greenwood Housing Authority
Katrina	PHA	MS109	Long Beach Housing Authority
Katrina	Tribe	Tribe	Tunica-Biloxi Tribe of Louisiana
Katrina	TDHE	Indian HA	Choctaw Housing Authority
Katrina	Tribe	Tribe	Chitimacha Tribe of Louisiana
Katrina	Tribe	Tribe	Poarch Band of Creek Indians
Katrina Waiver Requests Submitted
Katrina	PHA	AR006	Housing Authority of the City of Conway
Katrina	PHA	CA004	Housing Authority of the City of Los Angeles
Katrina	PHA	CA052	Housing Authority of the County of Marin
Katrina	PHA	CA058	Berkeley Housing Authority
Katrina	PHA	CO005	Housing Authority of the City of Trinidad
Katrina	PHA	CT001	Housing Authority of the City of Bridgeport
Katrina	PHA	FL003	Tampa Housing Authority
Katrina	PHA	FL089	Hillsborough County—OCC
Katrina	PHA	GA059	Gainesville Housing Authority
Katrina	PHA	GA148	Housing Authority City of Dallas, Georgia
Katrina	PHA	MA029	Pittsfield Housing Authority
Katrina	PHA	MD002	Housing Authority of Baltimore City
Katrina	PHA	MI024	Bay City Housing Commission
Katrina	PHA	MO004	Housing Authority of St. Louis County
Katrina	PHA	MO006	Saint Charles City Housing Authority
Katrina	PHA	NJ050	East Orange Housing Authority
Katrina	PHA	NY086	North Hempstead Housing Authority
Katrina	PHA	TN001	Housing Authority of the City of Memphis
Katrina	PHA	TX063	Hearne Housing Authority
Katrina	PHA	TX431	Tarrant County Housing Assistance Office
Rita Suspension Notifications Received
Rita	PHA	LA046	Housing Authority of the Town of Vinton
Rita	PHA	LA065	Housing Authority of the Town of Delcambre
Rita	PHA	LA084	Parks Housing Authority
Rita	PHA	LA090	Houma-Terrebonne Housing Authority
Rita	PHA	LA172	Calcasieu Parish Housing Department
Rita	PHA	LA261	Fenton Housing Authority
Rita	PHA	LA889	Pilgrim Rest Community Development Agency
Rita	PHA	TX004	Fort Worth Housing Authority
Rita	PHA	TX005	Housing Authority of the City of Houston
Rita	PHA	TX006	San Antonio Housing Authority
Rita	PHA	TX009	Housing Authority of the City of Dallas, Texas
Rita	PHA	TX018	Lubbock Housing Authority
Rita	PHA	TX023	Housing Authority of the City of Beaumont
Rita	PHA	TX029	Mercedes Housing Authority
Rita	PHA	TX034	City of Port Arthur Housing Authority
Rita	PHA	TX037	Orange Housing Authority
Rita	PHA	TX223	Newton Housing Authority
Rita	PHA	TX225	Woodville Housing Authority
Rita	PHA	TX383	San Augustine Housing Authority
Rita	PHA	TX431	Tarrant County Housing Assistance Office
Rita	PHA	TX436	City of Mesquite Housing Authority
Rita	PHA	TX451	Asherton Housing Authority
Rita	PHA	TX492	Jasper Housing Authority
Rita	PHA	TX512	Deep East Texas Council of Governments (DETCOG) Regional Housing Authority
Rita	PHA	TX526	Brazos Valley Council of Governments
Rita	PHA	TX540	Brenham Section 8 Program, City of (BVDC)
Wilma Suspension Notifications Received
Wilma	PHA	FL005	Miami Dade Housing Authority
Wilma	PHA	FL010	Housing Authority of Fort Lauderdale
Wilma	PHA	FL013	Housing Authority City of Key West
Wilma	PHA	FL017	Housing Authority City of Miami Beach
Wilma	PHA	FL021	Pahokee Housing Authority
Wilma	PHA	FL025	Housing Authority of the City of Titusville
Wilma	PHA	FL066	Hialeah Housing Authority
Wilma	PHA	FL076	Riviera Beach Housing Authority
Wilma	PHA	FL116	Dania Beach Housing Authority
Wilma	PHA	FL136	Hollywood Housing Authority
Wilma	PHA	FL144	Monroe County Housing Authority
Wilma Waiver Requests Submitted
Wilma	PHA	FL003	Tampa Housing Authority