94-20656. Electronic Transmission of Required Data for Certification and Recertification and Subsidy Billing Procedures for Multifamily Subsidized Projects  

  • [Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
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    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-20656]
    
    
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    [Federal Register: August 24, 1994]
    
    
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    DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
    
    Office of the Assistant Secretary for Housing-Federal Housing 
    Commissioner
    
    24 CFR Part 208
    
    [Docket No. R-94-1691; FR-3521-F-03]
    RIN 2502-AG16
    
     
    
    Electronic Transmission of Required Data for Certification and 
    Recertification and Subsidy Billing Procedures for Multifamily 
    Subsidized Projects
    
    AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
    Commissioner, HUD.
    
    ACTION: Final rule.
    
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    SUMMARY: This rule requires electronic submission in a HUD-prescribed 
    format of tenant and financial data by owners of certain subsidized 
    multifamily projects and by the public agencies that administer the 
    assistance contracts for HUD. Electronic transmission is necessary 
    because the manual submission of HUD forms has become a burden to 
    project owners, managers and HUD.
        This final rule responds to public comments received on a previous 
    interim rule that applies to multifamily subsidized projects 
    administered by State housing finance and development agencies and 
    other public housing agencies under the following programs: the section 
    236 Interest Reduction and Rental Assistance Payments program, the 
    section 8 Housing Assistance Payments Program (except the section 8 
    Existing Housing Program or the Moderate Rehabilitation Program), the 
    section 221(d)(3) Below Market Interest Rate Loan program, and the 
    section 101 Rent Supplement Payment program. It also applies to 
    projects under the following programs: the section 202 program (except 
    section 202/8 projects, for which a similar rule was already 
    effective), and the section 811 Supportive Housing for Persons with 
    Disabilities program.
        The change made in response to comments on the interim rule to 
    clarify the 12 month retroactive data collection is extended in this 
    rule to comparable provisions applicable already by final rule to 
    owners of subsidized projects that are administered directly by HUD.
    
    EFFECTIVE DATE: This rule is effective September 23, 1994.
    
    FOR FURTHER INFORMATION CONTACT: Barbara D. Hunter, Acting Director, 
    Planning and Procedures Division, Office of Multifamily Housing 
    Management, Room 6180, Department of Housing and Urban Development, 451 
    Seventh Street SW., Washington, D.C. 20410, telephone (202) 708-3944. 
    Hearing or speech-impaired individuals may call HUD's TDD number (202) 
    708-4594. (These telephone numbers are not toll-free.)
    
    SUPPLEMENTARY INFORMATION:
    
    I. Paperwork Burden
    
        The information collection requirements contained in this rule were 
    approved by the Office of Management and Budget (OMB) under the 
    Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520) and assigned OMB 
    control numbers 2502-0204 and 2502-0182.
    
    II. Background
    
        On November 19, 1993, a rule was published (58 FR 61017) [following 
    previous publication of a proposed rule in June 1988] that covered both 
    the HUD multifamily subsidized projects administered by HUD and the 
    ones administered by State finance and development agencies or other 
    public housing agencies as Contract Administrators (CAs) for HUD. The 
    rule was final as to the projects administered directly by HUD and 
    interim with no stated effective date with respect to those 
    administered by CAs and to Section 202 and Section 811 projects. 
    (Project owners who had already automated tenant certifications and 
    recertifications of income were subject to an effective date of March 
    21, 1994, whereas project owners who had not yet automated were subject 
    to an effective date of May 20, 1994.)
        The rule was interim (Secs. 208.108 (c) and (d)) with respect to 
    the projects administered by CAs, Section 202 Elderly Housing projects, 
    and Section 811 Supportive Housing for Persons With Disabilities 
    projects. No effective date announcement has been published for the 
    interim rule, and this rule makes final the provisions of that interim 
    rule with two changes to reflect response to comments received.
    
    III. Discussion of Public Comments From Interim Rule
    
        Comments on the requirements applicable to contract administrators 
    and the Section 202 projects and Section 811 projects were due January 
    18, 1994. In response to the publication of that rule, the Department 
    received 6 public comments. The commenters were three management 
    companies, two State housing finance and development agencies, and the 
    National Council of State Housing Agencies. All commentors expressed 
    concern about details of the conversion to electronic submission of 
    data rather than about the overall concept. As a result of these 
    comments, the Department has made some revisions to the rule governing 
    automation of submission of data by project owners and contract 
    administrators. The following discussion summarizes the comments and 
    provides HUD's responses to those comments.
        Comment: This automation of certification and recertification of 
    tenant data (TRACS) should be put on hold or implemented as designed in 
    the proposed rule. If this is not done, it will be impractical for many 
    CAs to meet the current timing.
        Response: The Department's intent to automate has been known since 
    1988, and most owners and agents have already automated the form HUD 
    50059. Furthermore, this effort is necessary for the Department to meet 
    its goals of improving financial management of these important programs 
    and enabling accurate forecasting of budget projections for these 
    programs.
        Comment: (From two management companies) HUD should consult with 
    Contract Administrators to find out what additional data they would 
    like to obtain, and HUD should prescribe one alternative transmission 
    format for this additional data. This additional format would allow 
    developers/owners to achieve the benefits of uniformity and provide 
    them with the information they need.
        Response: The Department is limited to the collection of 
    information that is approved by OMB. The information collected must be 
    mandated by Federal Regulations and be justified by HUD before OMB will 
    grant approval. Therefore, HUD is not authorized to require the 
    collection of any additional information CAs may believe it is 
    desirable to obtain from project owners. CAs may not use HUD data 
    collection needs as a basis for seeking additional information.
        Comment: HUD should provide clear directions to CAs regarding how 
    TRACS operates, what software will be needed by CAs and what technical 
    assistance HUD will provide CAs to get up and running. They ask HUD to 
    work with them to answer these questions to determine a reasonable date 
    by which the CAs will be in full compliance with TRACS.
        Response: When a project obtains HUD-50059 data on paper, it 
    submits the certification data, either directly or by a service bureau, 
    to the CA in the prescribed format. The certification data are 
    submitted electronically to the CA via modem, disk or tape, in 
    accordance with this rule. The CA then transmits the certification data 
    to HUD via modem, disk or tape.
        HUD receives the certification data and checks the format of the 
    transmission. Physically acceptable records are validated for 
    conformation to HUD programmatic rules. Discrepancy records are 
    generated for data that does not conform to programmatic rules. 
    Discrepancy records are sent back to the CA, which are in turn 
    forwarded to the project. (A future enhancement of the TRACS software 
    will allow discrepancy records to be sent simultaneously to the CA and 
    the project if desired.) Invalid certifications are corrected as 
    required by the project and resubmitted to HUD by the CA.
        There are a number of sources available to CAs that provide 
    guidance:
        The HUD-50059 Information Packet. This is also known as the Yellow 
    Book. The HUD-50059 Information Packet contains general information on 
    TRACS, data collection and processing, data transmission media, error 
    correction, and the Monthly Activity Transmission (MAT) User Guide, 
    which details the required format--record layouts and field 
    characteristics--for all TRACS data transmitted to and from HUD.
        The Release 1.1 Entity and Attribute Definition Report Reference. 
    This contains detailed information about the data gathered by TRACS and 
    the edits performed on the data to ensure that it is valid. (This 
    information is technical and would be most suited for use by ADP 
    professionals.)
        The PC SprintMail Electronic Information Packet. This is also known 
    as the Blue Book. The PC SprintMail Electronic Information Packet 
    contains information regarding electronic submission of certification 
    data to HUD, using SprintMail software. The Packet covers hardware 
    requirements, configuration information, installation instructions, and 
    operating instructions for PC SprintMail. The PC SprintMail software is 
    available from the TRACS Central Facility at 1-800-767-7558.
        Understanding the TRACS Automation Rule. This contains information 
    on the programs covered by the rule, effective dates for the rule, 
    transmission of retroactive data, options for submitting data 
    electronically, the costs of automation, and the data to be transmitted 
    to HUD.
        TRACS Industry Bulletin Board. The Bulletin Board provides a format 
    for open communication between HUD and third parties with an active 
    interest in TRACS. Questions and observations of a technical or 
    programmatic nature can be posted on the Bulletin Board, via modem, at 
    202-755-2189. For more information, CAs should consult the TRACS BBS 
    User Guide.
        The TRACS Central Facility. The TRACS Central Facility can provide 
    guidance on the data transmittal process and assistance in correction 
    of errors in the physical composition of transmissions. All of the 
    documents referenced here are available from the TRACS Central 
    Facility. The TRACS Central Facility can be contacted at 1-800-767-
    7588.
        The HUD-50059 Information Packet, the Release 1.1 Entity and 
    Attribute Definition Report Reference, and the PC SprintMail Electronic 
    Information Packet are available from the TRACS Central Facility at 1-
    800-767-7588. In addition, many software vendors are now developing and 
    offering products that automate the preparation of certification data 
    in the prescribed format. CAs may call either or both the National 
    Leased Housing Association (NLHA) at 202-785-8888 and the National 
    Assisted Housing Management Association (NAHMA) at 703-683-8630 or 
    other associations related to the management of assisted housing to 
    obtain a listing of software developers.
        Comment: Although owners and agents may voluntarily participate by 
    submitting data electronically to CA after December 1993, the CAs who 
    are not automated will not be able to process these payment requests.
        Response: CAs will need to purchase or modify their software to be 
    ready to receive and transmit data electronically when this rule 
    becomes effective. After the CAs are automated they must notify 
    projects under their jurisdiction as to when and how they are to begin 
    electronic submission.
        Comment: HUD should provide CAs with in-house TRACS edit programs 
    that would allow the Contract Administrators to correct all field and 
    format errors before forwarding to the HUD database. This edit program 
    will enhance the accuracy of the housing assistance payments.
        Response: The TRACS team has created several documents to assist 
    data submitters in preparation of error-free transmissions. See above 
    listing.
        Comment: Section 208.108(c) requires CAs to transmit data 
    electronically to HUD in a HUD specified format. To date, the CAs have 
    not been advised of the format to be utilized.
        Response: The HUD specified format is detailed in the Yellow Book. 
    See listing of sources of information on TRACS.
        Comment: In order to build the contemplated HUD database, it does 
    not appear necessary to collect all tenant data for the previous twelve 
    months. Rather collection of the most recent tenant certification from 
    form HUD 50059 should provide all the necessary data.
        Response: Data is requested for subsidized tenants who are 
    currently in occupancy and have not had their assistance terminated. 
    The transmission of retroactive data is to include only the tenant's 
    most recent ``complete certification'' (move-in, initial certification, 
    interim recertification). When the most recent certification for a 
    tenant is a partial certification (gross rent change or unit transfer), 
    both the complete and partial certifications should be transmitted so 
    that HUD's automated system can establish a complete record for the 
    household.
        Sections 208.108(a) through (d) have been revised to reflect this 
    clarification, both for the projects administered by CAs and those 
    directly administered by HUD.
        Comment: Current HUD handbook provisions require the CA to review 
    supporting documentation for Special Claims before approving the claim 
    for payment. Special claims are submitted for billing only after this 
    review. The Interim Rule (Sec. 208.108(e)) does not distinguish between 
    Special Claims that have been reviewed and approved for payment from 
    those that have just been received from project owners. The Final Rule 
    should clearly indicate that only previously approved Special Claims 
    should be submitted electronically to the CA.
        Response: Automation of Special Claims is contained in a future 
    system release, and the design has not been fully developed at this 
    time. In instances where HUD is the contract administrator, current 
    plans call for electronic transmission of detailed data contained in 
    the Section 8 Special Claims Worksheets (Forms 52671A-D), prior to 
    approval by the field office. There would be a concurrent manual 
    submission of supporting documentation as required in Handbook 
    Sec. 4350.3, Chapter 6. Special Claims would not be submitted for 
    billing until after the field office has approved the claim and so 
    noted it in the system. The billing data is contained in the Housing 
    Owner's Certification and Application for Housing Assistance Payments 
    (Form 52670), and Schedule of Section 8 Special Claims (Form 52670A 
    Part 2). The system will be designed to verify that approval has been 
    granted when special claims are billed.
        Where a contract administrator other than HUD has the 
    responsibility for reviewing and approving special claims, it is 
    anticipated that there will be a similar process by which the contract 
    administrator will review the documentation and note the approval in 
    the system. Again, the system will verify that approval has been 
    granted by the contract administrator. More information on this 
    function will be provided when the system design is completed.
        Comment: HUD should reimburse CAs equitably for TRACS-related 
    expenses.
        Response: CAs receive an administrative fee as reimbursement for 
    administering contracts. It is the Department's opinion that once CAs 
    are automated, the actual costs of doing business will be reduced, 
    since CAs will be able to reduce their clerical and administrative 
    costs. The cost of administering contracts will be higher with the 
    onset of automation, but the actual costs will be reduced over time, 
    which will have a balancing effect on the overall cost of administering 
    the contracts. Moreover, CAs will need to automate various other 
    functions they perform just to stay current with technological 
    improvements in management practices.
        Comment: HUD should allow for a trial operating period, so the 
    system can be tested and any difficulties resolved.
        Response: Undoubtedly, once CAs start transmitting, there will be 
    some difficulties. These will be tested and resolved during those 
    initial months of transmission.
        Comment: Requiring some projects, particularly small projects 
    located in remote areas or projects where an owner/manager only owns 
    one or two projects, to automate and electronically transmit the 
    required data to HUD will place unnecessary burden on them. HUD should 
    allow CAs to accept hard copy information directly from these projects, 
    either by processing these projects' data forms or by operating as 
    service bureaus.
        Response: Section 208.112(e) of the current rule permits owners of 
    small projects covered by the rule either to automate or to contract 
    with a service bureau to perform the automated transmission function. 
    This rule revises Sec. 208.112(e) to extend the same option of using a 
    service bureau to State agencies administering only one project. Even 
    though the Department would prefer for each State agency to obtain its 
    own hardware and software, this rule gives greater latitude to State 
    agencies administering only one project (approximately 100 units) in 
    recognition of their concern that automation of their operations might 
    not be cost effective.
    
    IV. Other Matters
    
    A. Regulatory Review
    
        This rule was reviewed by the Office of Management and Budget (OMB) 
    under Executive Order 12866 on Regulatory Planning and Review, issued 
    by the President on September 30, 1993. Any changes made in this rule 
    subsequent to its submission to OMB are identified in the docket file, 
    which is available for public inspection in the office of the 
    Department's Rules Docket Clerk, room 10276, 451 Seventh Street SW., 
    Washington, DC.
    
    B. Environmental Impact
    
        In accordance with 40 CFR 1508.4 of the regulations of the Council 
    on Environmental Quality and 24 CFR 50.20(k) of the HUD regulations, 
    the policies and procedures contained in this rule relate only to HUD 
    administrative procedures and, therefore, are categorically excluded 
    from the requirements of the National Environmental Policy Act.
    
    C. Executive Order 12612, Federalism
    
        The General Counsel, as the Designated Official under section 6(a) 
    of Executive order 12612, Federalism, has determined that the policies 
    contained in this rule will not have substantial direct effects on 
    states or their political subdivisions, or the relationship between the 
    Federal government and the states, or on the distribution of power and 
    responsibilities among the various levels of government. Specifically, 
    this rule is directed to owners of multifamily housing projects and 
    State housing and finance agencies that serve as contract 
    administrators for HUD, and will not impinge upon the general 
    relationship between the Federal Government and State and local 
    governments. As a result, the rule is not subject to review under the 
    order.
    
    D. Executive Order 12606, the Family
    
        The General Counsel, as the Designated Official under Executive 
    Order 12606, The Family, has determined that this rule does not have 
    potential for significant impact on family formation, maintenance, and 
    general well-being, and, thus, is not subject to review under the 
    order. No significant change in existing HUD policies or programs will 
    result from promulgation of this rule, as those policies and programs 
    relate to family concerns.
    
    E. Regulatory Flexibility Act
    
        The Secretary, in accordance with the Regulatory Flexibility Act (5 
    U.S.C. 605(b)) has reviewed and approved this rule, and in so doing 
    certifies that this rule will not have a significant economic impact on 
    a substantial number of small entities. Because this rule changes the 
    way in which the data is transmitted to HUD, and all costs associated 
    with implementation of the electronic transmission will be considered 
    project operating costs, the rule is not expected to have a significant 
    economic impact.
    
    F. Regulatory Agenda
    
        This rule was listed as item number 1601 under the Office of 
    Housing in the Department's Semiannual Agenda of Regulations published 
    on April 25, 1994 (59 FR 20424, 20451) under Executive Order 12866 and 
    the Regulatory Flexibility Act.
    
    G. Catalog
    
        The Catalog of Federal Domestic Assistance numbers for the programs 
    affected by this rule are 14.103, 14.149, 14.157, 14.181, and 14.182.
    
    List of Subjects in 24 CFR Part 208
    
        Computer technology--automatic data processing, Data processing, 
    Electronic data processing, Subsidies--grant programs, Rent subsidies.
    
        Accordingly, chapter II of title 24 of the Code of Federal 
    Regulations is amended as follows:
    
    PART 208--ELECTRONIC TRANSMISSION OF REQUIRED DATA FOR 
    CERTIFICATION AND RECERTIFICATION AND SUBSIDY BILLING PROCEDURES 
    FOR MULTIFAMILY SUBSIDIZED PROJECTS
    
        1. The authority citation for part 208 continues to read as 
    follows:
    
        Authority: 12 U.S.C. 1701s, 1715l, 1715z-1; 42 U.S.C. 1437f and 
    3535(d).
    
    
        2. Section 208.108 is amended by:
        a. Adding section headings at the beginning of paragraphs (a), (b), 
    and (e);
        b. Adding two sentences to the end of paragraphs (a) and (b)(3); 
    and
        c. Revising paragraphs (c) and (d), to read as follows:
    
    
    Sec. 208.108  Requirements.
    
        (a) Projects specified in Sec. 208.104(a) that are automated. * * * 
    Data collected for the 12 months preceding March 21, 1994, is to 
    include only the tenant's most recent ``complete certification'' (move-
    in, initial certification, interim recertification, or annual 
    recertification). When the most recent certification for a tenant is a 
    partial certification (gross rent change, unit transfer, or 
    correction), both the complete and partial certifications must be 
    transmitted.
        (b) Projects specified in Sec. 208.104(a) that are not automated.
        (3) * * *
        Data collected for the 12 months preceding May 20, 1994, is to 
    include only the tenant's most recent ``complete certification'' (move-
    in, initial certification, interim recertification, or annual 
    recertification). When the most recent certification for a tenant is a 
    partial certification (gross rent change, unit transfer, or 
    correction), both the complete and partial certifications must be 
    transmitted.
        (c) Projects specified in Sec. 208.104(b). (1) Project owners. 
    Project owners of applicable projects under Sec. 208.104(b) must 
    electronically transmit data for certification, recertification and 
    subsidy billing procedures in a HUD specified format to the contract 
    administrator. These project owners are required to transmit data 
    collected for the 12 months preceding September 23, 1994, as well as 
    data collected on or after that date. Data collected for the 12 months 
    preceding September 23, 1994 is to include only the tenant's most 
    recent ``complete certification'' (move-in, initial certification, 
    interim recertification, or annual recertification). When the most 
    recent certification for a tenant is a partial certification (gross 
    rent change, unit transfer, or correction), both the complete and 
    partial certifications must be transmitted.
        (2) Contract administrators. State housing finance and development 
    agencies and Public Housing Agencies that serve as the subsidy contract 
    administrator must accept the electronic transmission of the HUD forms 
    listed below in Sec. 208.108(e) from the projects they administer, and 
    electronically transmit that data to HUD in a HUD specified format 
    after appropriate review and correction of the data.
        (d) Projects specified in Sec. 208.104(c). Project owners of 
    applicable projects under Sec. 208.104(c) must electronically transmit 
    data for certification, recertification and subsidy billing procedures 
    to HUD in a HUD specified format. In the case of partially assisted 
    section 202 projects, owners are required to electronically transmit 
    data only for subsidized units. These project owners are required to 
    transmit data collected for the 12 months preceding the effective date 
    of the rule, as well as data collected on or after the effective date 
    of the rule. Data collected for the 12 months preceding September 23, 
    1994 is to include only the tenant's most recent ``complete 
    certification'' (move-in, initial certification, interim 
    recertification, or annual recertification). When the most recent 
    certification for a tenant is a partial certification (gross rent 
    change, unit transfer, or correction), both the complete and partial 
    certifications must be transmitted.
        (e) Data to be transmitted. * * *
        3. In Sec. 208.112, paragraph (e) is revised to read as follows:
    
    
    Sec. 208.112  Cost.
    
    * * * * *
        (e) Owners of smaller projects or partially assisted projects with 
    few subsidized units and CAs that administer no more than one project 
    that determine that the purchase of hardware and/or software is not 
    cost effective may contract out the electronic data transmission 
    function to organizations that provide such services, including, but 
    not limited to the following organizations: local management agents, 
    local management associations and management agents with centralized 
    facilities. Owners of multiple projects may centralize the electronic 
    transmission function. However, owners that contract out or centralize 
    the electronic transmission function are required to retain the ability 
    to monitor the day-to-day operations of the project at the project site 
    and be able to demonstrate that ability to the relevant HUD field 
    office.
    
    
        Dated: August 15, 1994.
    Nicolas Retsinas,
    Assistant Secretary for Housing-Federal Housing Commissioner.
    [FR Doc. 94-20656 Filed 8-23-94; 8:45 am]
    BILLING CODE 4210-27-P
    
    
    

Document Information

Effective Date:
9/23/1994
Published:
08/24/1994
Department:
Housing and Urban Development Department
Entry Type:
Uncategorized Document
Action:
Final rule.
Document Number:
94-20656
Dates:
This rule is effective September 23, 1994.
Pages:
0-0 (1 pages)
Docket Numbers:
Federal Register: August 24, 1994, Docket No. R-94-1691, FR-3521-F-03
RINs:
2502-AG16
CFR: (3)
24 CFR 208.108
24 CFR 208.112
24 CFR 4350.3