Public Housing and Section 8 Programs: Housing Choice Voucher Program: Streamlining the Portability Process, 18731-18738 [2012-7341]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 77, Number 60 (Wednesday, March 28, 2012)]
[Proposed Rules]
[Pages 18731-18738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-7341]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 982

[Docket No. FR-5453-P-01]
RIN 2577-AC86


Public Housing and Section 8 Programs: Housing Choice Voucher 
Program: Streamlining the Portability Process

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend HUD's regulations governing 
portability in the Housing Choice Voucher (HCV) program. Portability is 
a feature of the HCV program that allows an eligible family with a 
housing choice voucher to use that voucher to lease a unit anywhere in 
the United States where there is a public housing agency (PHA) 
operating an HCV program. The purpose of HUD's proposed changes to the 
portability regulations is to clarify requirements already established 
in the existing regulations and improve the process involved with 
processing portability requests to enable PHAs to better serve families 
and expand housing opportunities. It is HUD's intent to increase 
administrative efficiencies by eliminating confusing and obscure 
regulatory language in areas that are known to be troublesome. This 
proposed rule attempts to balances the needs and interests of PHAs 
while increasing family choice.

DATES: Comment Due Date: May 29, 2012.

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 must 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 
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 
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 advance appointment to review the public comments must be 
scheduled 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 toll-free Federal Relay 
Service at 800-877-8339. Copies of all comments submitted are available 
for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Laure Rawson, Director, Housing 
Voucher and Management Operations Division, Office of Housing Choice 
Vouchers, Department of Housing and Urban Development, 451 7th Street 
SW., Room 4216, Washington, DC 20410-8000, telephone number 202-708-
0477 (this is not a toll-free number). Individuals with speech or 
hearing impairments may access this number through TTY by calling the 
toll-free Federal Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    The HCV program is the Federal Government's largest program for 
assisting very low-income families, the elderly, and the disabled to 
afford decent, safe, and sanitary housing in the private market. The 
HCV program is authorized by section 8(o) of the United States Housing 
Act of 1937 (42 U.S.C. 1473f(o)) (1937 Act), and the HCV program 
regulations are found in 24 CFR part 982.
    Housing choice vouchers are administered locally by PHAs. PHAs 
receive federal funds from HUD to administer the HCV program. A family 
that is issued a housing choice voucher is responsible for finding a 
suitable housing unit of the family's choice where the owner agrees to 
rent under the program. This unit may include the family's current 
residence. Rental units must meet minimum standards of health and 
safety, as determined by the PHA and must also meet a reasonable rent 
determination based on similar unassisted units. The maximum amount the 
PHA can pay toward a unit is determined by the payment standard set 
using the annual Fair Market Rents published by HUD. The PHA determines 
the family's annual income to determine the amount that the family will 
contribute toward rent, which is generally 30 percent of its adjusted 
annual income. A housing subsidy is paid to the landlord directly by 
the PHA on behalf of the participating family to pay the difference 
between the payment standard and the tenant rent contribution. A key 
feature of the HCV program is the mobility of the voucher assistance or 
``portability.'' Section 8(r) of the 1937 Act provides that HCV 
participants may choose a unit that meets program requirements anywhere 
in the United States, provided that a PHA administering the tenant-
based program has jurisdiction over the area in which the unit is 
located. The term ``portability'' refers to the process of leasing a 
dwelling unit with tenant-based housing voucher assistance outside of 
the jurisdiction of the PHA that initially issued the family its 
voucher (the initial PHA). Currently, program regulations, found at 24 
CFR 982.353 through 982.355, detail where a

[[Page 18732]]

family may move and the responsibilities of the initial PHA and the 
receiving PHA (the PHA with jurisdiction over the area to which the 
family desires to move). Situations have arisen during the time these 
regulations have been in place that have caused HUD to identify several 
issues with the potential to delay or impede the ability of families to 
relocate while retaining their voucher. One of the main purposes of 
this proposed rule is to make it easier for families with housing 
vouchers to relocate to areas that may offer greater opportunities.
    On March 2 and 3, 2010, the Office of Public and Indian Housing 
convened a meeting among PHAs, representatives from PHA organizations 
such as the Public Housing Authorities Directors Association, the 
National Leased Housing Association, the National Association of 
Housing and Redevelopment Officials, and Council of Large Public 
Housing Authorities, along with HUD staff, to discuss portability. 
Representatives of PHAs and industry organizations raised such issues 
as: the difficulty in resolving payment issues between an initial PHA 
and a receiving PHA; the ability of PHAs to absorb a high number of 
families that seek to move to their jurisdiction; the coordination of 
reporting between an initial PHA and a receiving PHA; and different 
program requirements of PHAs in portability arrangements.\1\ This rule 
addresses several of the issues raised at these meetings, as well as 
issues identified by HUD in its review of the voucher regulations. 
Through amendments to the HCV program regulations, this rule proposes 
to: (1) More clearly delineate the roles of initial and receiving PHAs, 
making the portability process more certain; (2) improve accountability 
in portability billing arrangements between PHAs; and (3) increase 
family choice and reduce burden in locating suitable housing.
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    \1\ A summary of these meetings can be found on HUD's Web site 
at https://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv under ``2010 Meeting Summary-
Report on the Convening Session of SEMAP and Portability.''
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II. This Proposed Rule--Section-by-Section Review and Issues for 
Comment

Definitional Changes (Sec.  982.4)

    After receiving a voucher, and particularly in the case of 
portability moves, a family has a limited window of time to locate 
suitable housing. After a family has located a unit, the family is 
required to submit a request for PHA approval of the tenancy. 
Currently, a PHA has a choice in adopting a policy that would allow for 
suspension of the voucher term when the family submits a request for 
tenancy approval. This proposed rule would revise the definition of 
``suspension'' in Sec.  982.4 to remove the phrase ``for such period as 
determined by the PHA'' from the definition and to replace it with the 
``stopping of the clock'' from the date on which the family submits a 
request for PHA approval of the tenancy, until the date the PHA 
approves or denies the request. This change would require PHAs to stop 
the clock on the family's voucher in order to give the family the 
maximum time possible to locate a suitable unit and remove potential 
barriers to mobility.

Suspension of Voucher Term (Sec.  982.54)

    This section of the proposed rule removes any reference to PHA 
discretion regarding ``suspension'' based on the revised definition of 
``suspension.''

Mandatory Voucher Suspension (Sec.  982.303)

    Under the current regulation at Sec.  982.303(c), a PHA may suspend 
the term of the voucher when a family submits a request for tenancy 
approval. The proposed rule would mandate suspension for all vouchers 
issued, and the suspension would last from the date the family submits 
the request for tenancy approval until the PHA approves or denies such 
request. Without this suspension, families may lose valuable time on 
their voucher while waiting for the PHA to complete the Housing Quality 
Standards (HQS) inspection requirements and to make a determination of 
approval or denial of the tenancy. This proposed change would give 
families the maximum time possible to locate a suitable unit and 
removes potential barriers to mobility.

Notification Requirement Before Denying Moves for Insufficient Funding 
(Sec.  982.354)

    The regulations currently allow a PHA to deny a family permission 
to move if the PHA does not have sufficient funding. In the proposed 
rule, HUD would require a PHA to provide written notification to the 
local HUD Field Office when the PHA determines it is necessary to deny 
moves based on a determination of insufficient funding. The additional 
notification required by this proposed rule would help ensure that a 
PHA has considered the circumstances of each move prior to determining 
that insufficient funding is available.

Portability Processing Procedures (Sec.  982.355)

    If a family chooses to exercise portability under the proposed 
rule, the initial PHA administering the family's voucher would be 
required to contact the receiving PHA to determine if the receiving PHA 
will bill or absorb the voucher. The proposed rule would require that 
the communication by both PHAs be by email or other confirmed delivery 
method. HUD encourages PHAs to communicate this information via email 
in order to expedite the processing of the families' request. The 
confirmed delivery method is important in documenting the communication 
between PHAs. HUD would not prescribe a specific form to be used for 
this communication. This communication and documentation requirement 
redistributes the administrative burden on the front-end of a family 
move and prevents future disputes between PHAs regarding the billing of 
individual families. Further, this requirement will prevent families 
from engaging in costly interjurisdictional moves prior to a final 
determination of receiving assistance in their new jurisdiction.
    When a receiving PHA agrees to absorb a family, the initial PHA 
often relies on this agreement and plans its annual budget accordingly. 
When a receiving PHA reverses this decision later, the impact on the 
family can be devastating. When an initial PHA has insufficient funds 
to cover the cost of the voucher in the receiving PHA's jurisdiction, 
the family is required to relocate to the initial jurisdiction or 
relinquish assistance entirely. Under the proposed rule, if a receiving 
PHA decides to absorb the family, the receiving PHA cannot reverse its 
decision at a later date without consent of the initial PHA. This 
requirement will provide PHAs with stable, consistent information 
necessary to plan financially and to better serve families.
    HUD also adds clarifying language to this section of the rule 
stating that a receiving PHA cannot refuse to assist incoming portable 
families as is currently required by Sec.  982.355(a). HUD may 
determine in certain instances that a PHA is not required to accept 
incoming portable families, such as a PHA in a declared disaster area. 
However, the PHA must have approval in writing from HUD before refusing 
any incoming portable families. Although HUD anticipates that refusals 
and thus the need for prior approval will be uncommon, such prior 
approval helps HUD to monitor and ensure that any refusal by a PHA to 
accept incoming

[[Page 18733]]

portable families is documented and approved.

Term of Receiving PHA Voucher (Sec.  982.355)

    HUD is proposing to add an additional 30 days to the term of the 
voucher for portability moves to accommodate the additional time that 
the portability process requires. For example, under the current 
regulations, the time period when the family is waiting to attend a 
briefing session at the receiving PHA is counting against the family's 
initial voucher expiration date, thus reducing the family's time to 
locate a unit.

Administrative Fee (Sec.  982.355)

    Under current regulation, when a voucher is in a portability 
billing arrangement between the initial PHA and receiving PHA, the 
initial PHA must pay the receiving PHA 80 percent of its administrative 
fee for each month the family receives assistance at the receiving PHA. 
The proposed rule would set the maximum amount the initial PHA is 
required to pay at 100 percent of the receiving PHA's administrative 
fee rate. This change prevents a receiving PHA with a lower 
administrative fee from profiting from an initial PHA with a higher 
administrative fee. Under the proposed rule, a receiving PHA will be 
able to more fairly cover the costs of administering the voucher.

Mandatory Absorption of Portability Vouchers (Sec.  982.355(e))

    In order to help ensure that a PHA utilizes available budget 
authority to the maximum extent possible, and to reduce the number of 
portability billing arrangements between agencies, the proposed rule 
would require a PHA that: (1) Is utilizing less than 95 percent of its 
available budget authority, and (2) has a leasing rate of less than 95 
percent, to absorb incoming portability families until the percentage 
of available budget authority used or the leasing rate is at least 95 
percent. The available budget authority includes the available Housing 
Assistance Payment (HAP) Net Restrict Assets, or NRA.

III. Specific Issues for Comment

    While HUD solicits and welcomes comments on all aspects of this 
rule, HUD specifically seeks comment on the following:
    1. Portability in the voucher program has been a subject of 
significant interest among PHAs, HUD, and others interested in 
effective administration of the voucher program and family mobility 
opportunities. HUD is aware of the additional administrative burden 
that portability billing arrangements place on PHAs, and HUD is 
interested in finding ways to reduce or eliminate portability billing 
arrangements between agencies. In the past, some PHAs suggested that 
HUD immediately transfer funds from the initial PHA consolidated Annual 
Contributions Contract (ACC) to the receiving PHA consolidated ACC, in 
order to instantly eliminate portability billing. Others suggested a 
sharing of costs by the initial and receiving PHA whereby the initial 
PHA would pay to the receiving PHA no more than the family's subsidy at 
the initial PHA location.
    HUD specifically invites comments that offer proposals to design 
the portability feature of the HCV program that would eliminate or 
minimize the administrative burdens associated with the portability 
feature for PHAs and families.
    2. Under the current portability regulations, a family that chooses 
to move using portability must pass the screening criteria at the 
receiving PHA, although the family may have been a voucher recipient at 
the initial PHA for years. This is a problem for families when the 
receiving PHA has more stringent criteria than the initial PHA. For 
example, a family that includes an individual with a criminal 
background, and is acceptable under the initial PHA's admission 
policies (e.g., the incident occurred more than 5 years ago), may 
decide to move using portability and request a voucher from the 
receiving PHA. Under that scenario, while the family is searching for 
new housing, the receiving PHA might notify the family that it did not 
pass the PHA's criminal background screening criteria. At that point, 
the family had already notified its landlord of its intent to vacate, 
and its unit was rented to another family. As a result, in order to 
keep its assistance, the family would have to move back to the initial 
PHA's jurisdiction and locate a different available unit in the initial 
PHA's jurisdiction.
    HUD is seeking comments on ways to prevent this type of hardship on 
families and possible ways to address this issue such as prohibiting 
screening by the receiving PHA at the time of portability or 
standardizing policies for portability moves.
    3. The regulations at Sec.  982.301 require that the PHA provide a 
briefing to families upon selection to participate in the HCV program. 
Currently, Sec.  982.301(b)(3) requires that the briefing to families 
living in high-poverty census tracts include an explanation of the 
advantages of moving to an area that does not have a high concentration 
of poor families. HUD is seeking comment on whether this information 
should be provided to all families selected to participate in the HCV 
program, and not just those families living in high-poverty census 
tracts.
    Further, HUD seeks comments on whether the briefing should be 
revised to highlight the factors and trade-offs that a family should 
consider in terms of where they wish to lease a unit with voucher 
assistance.\1\ These factors include but are not limited to: employment 
opportunities; safety, health and environmental amenities; public 
transportation; the quality of schools; access to social services; the 
quality of housing; and proximity to family and friends. HUD seeks 
comment on the content and emphases of the briefings.
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    \1\ See https://www.nber.org/mtopublic/for a comprehensive 
database on MTO research, which analyzes the effects of families' 
moving with vouchers. Other good references would be: Galvez, M.M. 
(2010). What Do We Know About Housing Choice Voucher Program 
Location Outcomes: A Review of Recent Litterature. What Works 
Collaborative--Urban Institute, see https://www.urban.org/url.cfm?ID=412218. Phillip Tegeler, Mary Cunningham, and Margery 
Austin Turner, editors (2005). Keeping the Promise: Preserving and 
Enhancing Housing Mobility in the Section 8 Housing Choice Voucher 
Program: Final Conference Report of the Third National Conference on 
Housing Mobility.
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    4. The current regulations at 24 CFR 982.301(b)(11) require a PHA 
to provide families with a list of landlords or other parties known to 
the PHA who may be willing to lease a unit to the family or help the 
family find a unit. HUD is interested in learning if the list of 
landlords and other parties is helpful for families, or if HUD should 
remove this requirement in the revised rule. HUD is requesting comments 
regarding the focus of such information and whether additional 
information on areas of opportunity or neighborhoods would be more 
beneficial for families.
    5. When a family requests to port and there is more than one PHA in 
the family's desired location, the current regulations at 24 CFR 
982.355(b) require the initial PHA to select the receiving PHA. HUD is 
instead considering allowing the family to select the receiving PHA 
based on the PHA that best meets its needs. For example, some PHAs 
offer homeownership programs or Family Self Sufficiency (FSS) programs 
that a family may be interested in participating, or the family may 
want to select a PHA based on the scores of the schools in the PHA's 
jurisdiction. The initial PHA would be responsible for informing the 
family of the PHAs that serve the area and providing the contact 
information for those PHAs, but would

[[Page 18734]]

not be responsible for determining what options or services each PHA 
offers.
    6. In this proposed rule, HUD is proposing mandatory absorptions of 
portability vouchers when a PHA is utilizing less than 95 percent of 
its available budget authority and has a leasing rate of less than 95 
percent. It is HUD's position that this approach would encourage PHAs 
to utilize their available budget authority while also reducing the 
number of portability billing arrangements. HUD is seeking comments as 
to whether 95 percent is an appropriate threshold for all PHAs or if 
HUD should consider an alternative scale based on the size of the PHA 
or other factors.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and therefore, subject to review by the Office of Management and Budget 
(OMB) in accordance with the requirements of the order. Executive Order 
13563 (Improving Regulations and Regulatory Review) directs executive 
agencies to analyze regulations that are ``outmoded, ineffective, 
insufficient, or excessively burdensome, and to modify, streamline, 
expand, or repeal them in accordance with what has been learned.'' 
Executive Order 13563 also directs that, where relevant, feasible, and 
consistent with regulatory objectives, and to the extent permitted by 
law, agencies are to identify and consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public. This rule was determined to be a ``significant regulatory 
action'' as defined in section 3(f) of Executive Order (although not an 
economically significant regulatory action, as provided under section 
3(f)(1) of the Executive Order).
    This proposed rule would amend HUD's regulations governing 
portability in the HCV program. The proposed regulatory changes would 
streamline the portability process and help enable initial and 
receiving PHAs to better serve families and expand housing 
opportunities. HUD's analysis indicates that these regulatory 
amendments will not have an economic effect of greater than $100 
million and thus do not require a regulatory impact analysis. The 
proposed rule, however, would yield certain non-tangible benefits. The 
findings of HUD's analysis are summarized below:
    1. Benefits of proposed rule. The HCV portability policy helps 
ensure that families have the opportunity to relocate in order to 
pursue increased or new employment opportunities or to gain access to 
higher-performing schools for their children. An efficient portability 
process also helps ensure that victims of domestic violence and 
stalking have access to the resources necessary to relocate to a safe, 
stable home away from an abuser.
    Opportunity moves have important benefits to housing choice voucher 
families. Research from HUD's moving to opportunity (MTO) demonstration 
and from the Gautreaux desegregation program in Chicago has shown that 
families with children moving from communities of high-poverty 
concentration to low-poverty communities tend to perform better in 
school (e.g., dropout rates are lower, grades are better, college 
attendance rates are higher). In addition, families report benefiting 
greatly from reduced crime and greater employment opportunities. It is 
expected that the proposed rule will remove potential barriers to 
mobility. Some research indicates that families often use their 
vouchers to move to better opportunities, including employment 
opportunities.
    2. Costs of proposed rule. HUD does not expect that the portability 
billing arrangements proposed by this rule will place any additional 
administrative burden on PHAs.
    Portability may add to the cost of the HCV program. The fiscal year 
(FY) 2012 appropriations for the Department provide a set-aside of $103 
million of HAP funds for additional renewal funding to be provided to 
PHAs under certain circumstances.
    3. Transfers. While the fiscal impact of the proposed rule is 
marginal, it does have the potential to create substantial financial 
transfers among PHAs.
    Mandatory absorptions. In this proposed rule, HUD is proposing 
mandatory absorptions of portability vouchers when a PHA is utilizing 
95 percent or less of its available budget authority and has a leasing 
rate of less than 95 percent. It is HUD's position that this approach 
would help ensure that PHAs are utilizing their available budget 
authority to the maximum extent possible while also reducing the number 
of portability billing arrangements.
    Administrative Fee. Under current regulation, when a voucher is in 
a portability billing arrangement between the initial PHA and receiving 
PHA, the initial PHA must pay the receiving PHA 80 percent of its 
administrative fee for each month that the family receives assistance 
at the receiving PHA. Removal of potential barriers to mobility is 
expected to increase the number of portability vouchers and thus 
increase the amount of administrative fees transfers between PHAs.
    The proposed rule would set the maximum amount that the initial PHA 
is required to pay at 100 percent of the receiving PHA's administrative 
fee rate. In other words, the initial PHA would reimburse the receiving 
PHA for the lesser of: (1) 80 percent of the initial PHA's ongoing fee, 
or (2) the full amount of the receiving PHA's administrative fee. This 
change would eliminate the incentive for a receiving PHA with a lower 
administrative fee from billing an initial PHA with a higher 
administrative fee in order to receive a higher administrative fee than 
it would normally earn from HUD. This action should reduce portability 
billings for those PHAs for whom 80 percent of the initial PHA's fee is 
more than 100 percent of their own administrative fee. For 
illustration, assume that a receiving PHA's administrative fee is $60. 
Under current rules, if a family moves to the receiving PHA's 
jurisdiction from an initial PHA that receives $100 in administrative 
fees for a housing voucher, the receiving PHA may bill the initial PHA 
for $80, which is $20 more than the PHA would earn if it simply 
absorbed the voucher. Under the proposed rule, the receiving PHA will 
receive $60 regardless of whether the receiving PHA bills the initial 
PHA or absorbs the family into its own program.
    The full economic analysis is available for review at 
www.regulations.gov. The docket file for this rule 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 toll-free 
Federal Relay Service at 800-877-8339.
Information Collection Requirements
    The information collection requirements contained in this proposed 
rule have been submitted to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In 
accordance with the Paperwork Reduction Act, an agency may not conduct 
or sponsor, and a person is not

[[Page 18735]]

required to respond to, a collection of information, unless the 
collection displays a currently valid OMB control number.
    The burden of the information collections in this proposed rule is 
estimated as follows:

                                       Reporting and Recordkeeping Burden
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                                                                                     Estimated
                                                                     Number of     average time      Estimated
                Section reference                    Number of     responses per        for        annual burden
                                                    respondents     respondent      requirement     (in hours)
                                                                                    (in hours)
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982.354(e)......................................             100               1            1.00             100
982.355(d)......................................           2,450              20             .25          12,250
                                                 ---------------------------------------------------------------
    Totals......................................           2,550              21            1.25          12,350
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    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology; e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this rule. Comments must refer 
to the proposal by name and docket number (FR-5453) and be sent to:

HUD Desk Officer, Office of Management and Budget, New Executive Office 
Building, Washington, DC 20503, Fax number: (202) 395-6947

 and
Reports Liaison Officer, Office of the Chief Information Officer, 
Department of Housing and Urban Development, 451 7th Street SW., 
Washington, DC 20410-8000.

    Interested persons may submit comments regarding the information 
collection requirements electronically through the Federal eRulemaking 
Portal at https://www.regulations.gov. HUD strongly encourages 
commenters to submit comments electronically. Electronic submission of 
comments allows the commenter maximum time to prepare and submit 
comments, ensures their timely receipt by HUD, and enables HUD to make 
them immediately available to the public. Comments submitted 
electronically through the https://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.
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 the private sector. This proposed rule does not 
impose any federal mandates on any state, local, or tribal government, 
or the private sector within the meaning of UMRA.
Executive Order 13132, Federalism
    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This rule will not have federalism 
implications and would not impose substantial direct compliance costs 
on state and local governments or preempt state law within the meaning 
of the Executive Order.
Regulatory Flexibility Act
    The Regulatory Flexibility Act (5 U.S.C. 605(b)) 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 rule is 
solely concerned with the portability feature of the voucher program. 
There are currently approximately 2,800 small PHAs (i.e., PHAS with 
less than 250 public housing units or vouchers), all of which will be 
subject to the proposed rule. Although the proposed rule will impact 
these PHAs, the impact will not be significant. As stated previously in 
this preamble, through the amendments to the HCV regulations provided 
in this rule, HUD proposes to reduce the administrative burden of 
portability for both PHAs and families, reduce portability billing 
arrangements between PHAs, and ensure maximum family choice in locating 
suitable housing. Through this rule, HUD strives to reduce 
administrative burden for all PHAs large or small. As explained more 
fully above in the ``Executive Order 12866'' section of this preamble, 
the benefits of the proposed regulatory changes will largely outweigh 
the administrative and compliance costs to PHAs. Accordingly, the 
undersigned certifies that this rule will not have a significant 
economic impact on a substantial number of small entities.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comments regarding less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.
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. Accordingly, under 24 CFR 50.19(c)(1), this rule 
is categorically excluded from environmental review under the

[[Page 18736]]

National Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects in 24 CFR Part 982

    Grant programs--housing and community development, Grant programs--
Indians, Indians, Public housing, Rent subsidies, Reporting and 
recordkeeping requirements.

    Accordingly, HUD proposes to amend 24 CFR part 982, as follows:

PART 982--SECTION 8 TENANT BASED ASSISTANCE: HOUSING CHOICE VOUCHER 
PROGRAM

    1. The authority citation for 24 CFR part 982 continues to read as 
follows:


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

    2. In Sec.  982.4(b), revise the definition of ``Suspension'' to 
read as follows:


Sec.  982.4  Definitions.

* * * * *
    Suspension. Stopping the clock on the term of a family's voucher 
from the date that the family submits a request for PHA approval of the 
tenancy, until the date the PHA approves or denies the request.
* * * * *
    3. Section 982.54 is amended as follows:
    a. Revise paragraphs (d)(2) and (d)(19);
    b. Remove paragraph (d)(20); and
    c. Redesignate paragraphs (d)(21) through (d)(23), as paragraphs 
(d)(20) through (d)(22), respectively, to read as follows:


Sec.  982.54  Administrative plan.

* * * * *
    (d) * * *
    (2) Issuing or denying vouchers, including PHA policy governing the 
voucher term and any extensions of the voucher term. If the PHA decides 
to allow extensions of the voucher term, the PHA administrative plan 
must describe how the PHA determines whether to grant extensions, and 
how the PHA determines the length of any extension.
* * * * *
    (19) Restrictions, if any, on the number of moves by a participant 
family (see Sec.  982.354(c)); and
* * * * *
    4. Revise Sec.  982.303 (c), to read as follows:


Sec.  982.303  Term of voucher.

* * * * *
    (c) Suspension of term. The PHA must provide for suspension of the 
initial or any extended term of the voucher from the date that the 
family submits a request for PHA approval of the tenancy until the date 
the PHA approves or denies the request.
* * * * *
    5. Section Sec.  982.353 is amended as follows:
    a. Remove the word ``or'' from paragraph (c)(1) and in its place 
add the word ``nor'';
    b. Revise paragraphs (c)(3), (d)(2), and (f); and
    c. Remove paragraph (d)(3), to read as follows:


Sec.  982.353  Where family can lease a unit with tenant-based 
assistance.

* * * * *
    (c) * * *
    (3) If the initial PHA approves, the family may lease a unit 
outside the PHA jurisdiction under portability procedures.
    (d) * * *
    (2) If a portable family is a participant in the initial PHA 
Section 8 tenant-based program, income eligibility is not redetermined 
when the family moves to the receiving PHA program under portability 
procedures.
* * * * *
    (f) Freedom of choice. The PHA may not directly or indirectly 
reduce the family's opportunity to select among available units, except 
as provided in paragraph (a) of this section, or elsewhere in this part 
982 (e.g., prohibition on the use of ineligible housing, housing not 
meeting HQS, or housing for which the rent to owner exceeds a 
reasonable rent). However, the PHA must provide families the 
information required in Sec.  982.301 for both the oral briefing and 
the information packet to ensure that they have the information they 
need to make an informed decision on their housing choice.
    6. Redesignate Sec.  982.314 as Sec.  982.354, and amend newly 
designated Sec.  982.354 as follows:
    a. Revise paragraphs (c)(1), (c)(2), and (e)(1);
    b. Remove paragraphs (c)(3) and (d)(1); and
    c. Redesignate paragraph (d)(2) as paragraph (d), to read as 
follows:


Sec.  982.354  Move with continued tenant-based assistance.

* * * * *
    (c) How many moves. (1) A participant family may move with 
continued assistance under the program, either inside the PHA 
jurisdiction, or under the portability procedures (See Sec.  982.353) 
in accordance with the PHA's policies.
    (2) Consistent with applicable civil rights laws and regulations, 
the PHA may establish policies that:
    (i) Prohibit any move by the family during the initial lease term; 
and
    (ii) Prohibit more than one move by the family during any one-year 
period.
* * * * *
    (e) When PHA may deny permission to move. (1) The PHA may deny 
permission to move if the PHA does not have sufficient funding for 
continued assistance. The PHA must provide written notification to the 
local HUD Office upon determining it is necessary to deny moves to a 
higher-cost unit based on insufficient funding.
* * * * *
    7. Section 982.355 is revised as follows:


Sec.  982.355  Portability: Administration by initial and receiving 
PHA.

    (a) When a family moves under portability (in accordance with Sec.  
982.353(b)) to an area outside the initial PHA jurisdiction, the 
receiving PHA must administer assistance for the family if a PHA with a 
tenant-based program has jurisdiction in the area where the unit is 
located.
    (b) A receiving PHA cannot refuse to assist incoming portable 
families or direct them to another neighboring PHA for assistance. HUD 
may determine in certain instances that a PHA is not required to accept 
incoming portable families, such as a PHA in a declared disaster area. 
However, the PHA must have approval in writing from HUD before refusing 
any incoming portable families.
    (c) Portability procedures. The following portability procedures 
must be followed:
    (1) When the family decides to use the voucher outside of the PHA 
jurisdiction, the family must notify the initial PHA of its desire to 
relocate and must specify the location where it wants to live.
    (2) The family must notify the owner of its desire to move in 
accordance with its lease.
    (3) The initial PHA must determine the family's eligibility to move 
in accordance with Sec. Sec.  982.353 and 982.354.
    (4) The initial PHA must contact the receiving PHA via email or 
other confirmed delivery method prior to approving the family's request 
to move in order to determine if the voucher will be absorbed or billed 
by the initial PHA. The receiving PHA must advise the initial PHA in 
writing via email or other confirmed delivery method of its decision.
    (5) If the receiving PHA notifies the initial PHA that it will 
absorb the voucher, the receiving PHA cannot reverse its decision at a 
later date without consent of the initial PHA.

[[Page 18737]]

    (6) If the receiving PHA will bill the initial PHA for the 
portability voucher and the cost of the HAP will increase due to the 
move, the initial PHA may deny the move in accordance with Sec.  
982.354 (e)(1).
    (7) If a billing arrangement is approved by the initial PHA or if 
the voucher is to be absorbed by the receiving PHA, the initial PHA 
must issue the family a voucher and advise the family how to contact 
and request assistance from the receiving PHA.
    (8) The initial PHA must promptly notify the receiving PHA to 
expect the family. The initial PHA must give the receiving PHA the Form 
HUD-52665, the most recent HUD
    Form-50058 (Family Report) for the family, and all related 
verification information.
    (9) The family must promptly contact the receiving PHA in order to 
be informed of the receiving PHA's procedures for incoming portable 
families and comply with these procedures. The family's failure to 
comply may result in denial or termination of the receiving PHA's 
voucher.
    (10) The receiving PHA does not redetermine income eligibility for 
a participant family. However, for a portable family that was not 
already receiving assistance in the PHA tenant-based program, the 
initial PHA must determine whether the family is income-eligible for 
admission to the receiving PHA voucher program.
    (11) When a receiving PHA assists a family under portability, 
administration of the voucher must be in accordance with the receiving 
PHA's policies. This requirement also applies to policies of Moving to 
Work agencies. The receiving PHA procedures and preferences for 
selection among eligible applicants do not apply to the portable 
family, and the receiving PHA waiting list is not used.
    (12) If the receiving PHA opts to conduct a new reexamination for a 
current participant family, the receiving PHA may not delay issuing the 
family a voucher or otherwise delay approval of a unit.
    (13) The receiving PHA must determine the family unit size for the 
portable family, and base its determination on the subsidy standards of 
the receiving PHA.
    (14) The receiving PHA must issue a voucher to the family. The term 
of the receiving PHA voucher must be 30 days after the expiration date 
of the initial PHA voucher. If the voucher expired before the family 
arrives at the receiving PHA, the receiving PHA must contact the 
initial PHA to determine if it will extend the voucher.
    (15) Once the receiving PHA issues the portable family a voucher, 
the receiving PHA's policies on extensions of the voucher term apply. 
The receiving PHA must notify the initial PHA of any extensions granted 
to the term of the voucher.
    (16) The family must submit a request for tenancy approval to the 
receiving PHA during the term of the receiving PHA voucher. As required 
in Sec.  982.303, if the family submits a request for tenancy approval 
during the term of the voucher, the PHA must suspend the term of that 
voucher.
    (17) The receiving PHA must promptly notify the initial PHA if the 
family has leased an eligible unit under the program, or if the family 
fails to submit a request for tenancy approval for an eligible unit 
within the term of the voucher.
    (18) At any time, either the initial PHA or the receiving PHA may 
make a determination to deny or terminate assistance to the family in 
accordance with Sec.  982.552 and 982.553.
    (d) Absorption by the receiving PHA. (1) If funding is available 
under the consolidated ACC for the receiving PHA voucher program on the 
effective date of the HAP contract, the receiving PHA may absorb the 
family into the receiving PHA voucher program. After absorption, the 
family is assisted with funds available under the consolidated ACC for 
the receiving PHA tenant-based program.
    (2) HUD may require that the receiving PHA absorb all or a portion 
of the portable families.
    (3) HUD may provide financial or nonfinancial (or both) incentives 
to PHAs that absorb portability vouchers.
    (4) PHAs that are utilizing less than 95 percent of their available 
budget authority and have a leasing rate of less than 95 percent are 
required to absorb incoming portable families until the percentage of 
available budget authority used or the leasing rate is at least 95 
percent. The available budget authority includes the available HAP Net 
Restrict Assets, or NRA.
    (e) Portability billing. (1) To cover assistance for a portable 
family that was not absorbed in accordance with paragraph (d) of this 
section, the receiving PHA may bill the initial PHA for housing 
assistance payments and administrative fees.
    (2) The initial PHA must promptly reimburse the receiving PHA for 
the full amount of the housing assistance payments made by the 
receiving PHA for the portable family. The amount of the housing 
assistance payment for a portable family in the receiving PHA program 
is determined in the same manner as for other families in the receiving 
PHA program.
    (3) The initial PHA must promptly reimburse the receiving PHA for 
the lesser of 80 percent of the initial PHA ongoing administrative fee 
or the full amount of the receiving PHA's administrative fee for each 
unit month that the family receives assistance under the tenant-based 
program from the receiving PHA. The receiving PHA cannot bill the 
initial PHA for more than 100 percent of its own administrative fee. If 
both PHAs agree, the PHAs may negotiate a different amount of 
reimbursement.
    (4) When a portable family moves out of the tenant-based program of 
a receiving PHA that has not absorbed the family, the PHA in the new 
jurisdiction to which the family moves becomes the receiving PHA, and 
the first receiving PHA is no longer required to provide assistance for 
the family.
    (5) HUD may reduce the administrative fee to an initial or 
receiving PHA if the PHA does not comply with HUD portability 
requirements.
    (6) In administration of portability, the initial PHA and the 
receiving PHA must comply with financial procedures required by HUD, 
including the use of HUD-required billing forms. The initial and 
receiving PHA must also comply with billing and payment deadlines under 
the financial procedures.
    (7) A PHA must manage the PHA tenant-based program in a manner that 
ensures that the PHA has the financial ability to provide assistance 
for families that move out of the PHA program under the portability 
procedures that have not been absorbed by the receiving PHA, as well as 
for families that remain in the PHA program.
    (f) Portability funding. (1) HUD may transfer units and funds for 
assistance to portable families to the receiving PHA from funds 
available under the initial PHA ACC.
    (2) HUD may provide additional funding (e.g., funds for incremental 
units) to the initial PHA for funds transferred to a receiving PHA for 
portability purposes.
    (3) HUD may provide additional funding (e.g., funds for incremental 
units) to the receiving PHA for absorption of portable families.
    (4) HUD may require the receiving PHA to absorb portable families.
    (g) Portability and Project-Based Assistance. (1) Provisions on 
portability do not apply to the Project-Based Voucher program.
    (2) A family that is porting into a receiving PHA's jurisdiction 
may only receive a tenant-based voucher or

[[Page 18738]]

homeownership assistance. In order for a tenant-based voucher holder to 
be housed in a PBV unit, the family would have to apply to the 
receiving PHA's PBV program and give up its tenant-based voucher prior 
to being housed in the PBV unit.
    (h) Portability and special purpose vouchers. (1) The initial PHA 
must submit the codes used for special purpose vouchers on the Form 
HUD-50058, Family Report, and the receiving PHA must maintain the codes 
on the Family Report, as long as they choose to bill the initial PHA.
    (2) In cases where HUD has established alternative program 
requirements for special purpose vouchers, such as the HUD-Veterans 
Affairs Supportive Housing (VASH) vouchers, both the initial and 
receiving PHAs must administer the vouchers in accordance with HUD 
established policy (i.e., the most recent HUD-VASH program operating 
requirements).

    Dated: March 2, 2012.
Sandra B. Henriquez,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 2012-7341 Filed 3-27-12; 8:45 am]
BILLING CODE 4210-67-P