2011-24514. Revision to the Section 8 Management Assessment Program Lease-Up Indicator

AGENCY:

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

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would amend HUD's regulations for the Section 8 Management Assessment program (SEMAP) to revise the process by which HUD measures and verifies performance under the SEMAP lease-up indicator. Specifically, HUD proposes to amend the existing regulation to reflect that assessment of a public housing agency's (PHA) leasing indicator will be based on a calendar year cycle, rather than a fiscal year cycle, which would increase administrative efficiencies for PHAs. This proposed rule would also clarify that units assisted under the voucher homeownership option or occupied under a project-based housing assistance (HAP) contract are included in the assessment of PHA units leased.

DATES:

Comment Due Date: October 24, 2011.

ADDRESSES:

Interested persons are invited to submit comments regarding this proposed rule to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Communications should refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.

1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500.

2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

Note:

To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the rule.

No Facsimile Comments. Facsimile (FAX) comments are not acceptable.

Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an appointment to review the public comments must be scheduled in advance by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street, SW., Room 4216, Washington, DC 20410, telephone number 202-402-2425.

SUPPLEMENTARY INFORMATION:

I. Background

In 2005, the Office of Public and Indian Housing (PIH) issued PIH Notice 2005-1, which implemented a policy for voucher renewal funding based on a calendar year system as provided by the Consolidated Appropriations Act, 2005 (Pub. L. 108-447, 118 Stat. 2809, approved December 8, 2004). The 2005 Consolidated Appropriations Act provides, in relevant part, that “the Secretary for the calendar year 2005 funding cycle shall renew such contracts for each public housing agency based on verified Voucher Management System leasing and cost data.” (See 118 Stat. 3295.) The 2005 PIH notice provides that “PHAs will receive monthly disbursements from HUD on the basis of the PHA's calculated calendar year budget.” Since the issuance of this notice and consistent with the 2005 appropriations act, HUD has provided PHAs with renewal funding for their Housing Choice Voucher (HCV) program on a calendar year basis. At the beginning of each calendar year, PHAs are notified of their funding amounts for the calendar year and they plan their voucher issuance and leasing according to that funding cycle.

In contrast to the process for measuring voucher management system leasing and cost data, the SEMAP lease-up indicator continues to measure a PHA's lease-up rate on a fiscal year basis. The use of a calendar year for renewal funding, while using a fiscal year system for SEMAP measurements, has resulted in increased complexity for PHAs administering the voucher program and programmatic inefficiency. To eliminate such complexity, and reduce inefficiency in the voucher program resulting from two processes based on different periods of measurement, through this rule HUD would amend the SEMAP regulations to provide for the SEMAP lease-up indicator to be measured based on a calendar year funding cycle, rather than the existing fiscal year cycle.

This proposed rule would also clarify that units assisted under the voucher homeownership option or occupied under a project-based housing assistance (HAP) contract are included in the assessment of PHA units leased. These homeownership units and project-based voucher units have always been included in the assessment, but this is not explicit in current regulations.

II. Findings and Certifications

Justification for 30-Day Public Comment Period

It is the general practice of the Department to provide a 60-day public comment period on all proposed rules. However, the Department is shortening its usual 60-day public comment period to 30 days for this proposed rule. This rule, which promotes consistency within HUD regulations, alleviates unnecessary administrative burdens for PHAs, and provides a more accurate reflection of PHA lease-up rates. Therefore, a 60-day public comment period prior to implementation is unnecessary, and to further delay implementation of this policy would be contrary to the public interest.

Executive Order 12866, Regulatory Planning and Review

The Office of Management and Budget (OMB) reviewed this rule under Executive Order 12866 (entitled “Regulatory Planning and Review”). OMB determined that this proposed rule is a “significant regulatory action,” as defined in section 3(f) of the Order (although not economically significant, as provided in section 3(f)(1) of the Order). The docket file is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The proposed regulatory amendments will not impose any economic costs on nonprofit organizations. Rather, the sole purpose of the proposed rule is to bring HUD regulations in line with current PHA practice. This rule would also provide clarification for PHAs regarding units included in this measure.

Environmental Impact

This proposed rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. This rule is limited to the means by which PHAs lease-up rates are measured. Accordingly, under 24 CFR 50.19(c)(1), this proposed rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Executive Order 13132, Federalism

Executive Order 13132 (entitled “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute, or preempts state law, unless the relevant requirements of section 6 of the Executive Order are met. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This rule does not impose any federal mandates on any state, local, or tribal government, or on the private sector, within the meaning of UMRA.

List of Subjects in 24 CFR Part 985

• Grant programs—housing and community development
• Housing
• Rent subsidies
• Reporting and recordkeeping requirements

Accordingly, for the reasons stated in the preamble, HUD proposes to amend 24 CFR part 985 as follows:

PART 985—SECTION 8 MANAGEMENT ASSESSMENT PROGRAM (SEMAP)

1. The authority citation for part 985 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f, and 3535(d).

2. Revise § 985.3(n) to read as follows:

§ 985.3

Indicators, HUD verification methods and ratings.

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(n) Lease-up. (1) This indicator shows whether the PHA enters into HAP contracts for the number of the PHA's baseline voucher units (units that are contracted under an ACC) for the calendar year that ends on or before the PHA's fiscal year or whether the PHA has expended its allocated budget authority for the same calendar year. Units assisted under the voucher homeownership option and units occupied under a project-based HAP contract are included in the measurement of this indicator. Units and funding contracted under an ACC during the assessed calendar year and units and funding that are obligated for litigation are not included in the baseline number of voucher units.

(2) HUD verification method: Percent of units leased under a tenant-based or project-based HAP contract or occupied by homeowners under the voucher homeownership option during the calendar year that ends on or before the assessed PHA's fiscal year, or the percent of allocated budget authority expended during the calendar year that ends on or before the assessed PHA's fiscal year. The percent of units leased is determined by taking unit months leased under a HAP contract and unit months occupied by homeowners under the voucher homeownership option as shown in HUD systems for the calendar year that ends on or before the assessed PHA fiscal year and dividing that number by the number of unit months available for leasing based on the number of baseline units available at the beginning of the calendar year.

(3) Rating: (i) The percent of units leased or occupied by homeowners under the voucher homeownership option or the percent of allocated budget authority expended during the calendar year that ends on or before the assessed PHA fiscal year was 98 percent or more. 20 points.

(ii) The percent of units leased or occupied by homeowners under the voucher homeownership option or the percent of allocated budget authority expended during the calendar year that ends on or before the assessed PHA fiscal year was 95 to 97 percent. 15 points.

(iii) The percent of units leased or occupied by homeowners under the voucher homeownership option and the percent of allocated budget authority expended during the calendar year that ends on or before the assessed PHA fiscal year was less than 95 percent. 0 points.

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Dated: August 19, 2011.

Sandra B. Henriquez,

Assistant Secretary for Public and Indian Housing—HUD.