Streamlining Administrative Regulations for Multifamily Housing Programs and Implementing Family Income Reviews Under the Fixing America's Surface Transportation (FAST) Act, 58335-58341 [2017-26697]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 82, Number 237 (Tuesday, December 12, 2017)]
[Rules and Regulations]
[Pages 58335-58341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26697]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 891, 960, and 982

[Docket No. FR 5743-I-04]
RIN 2577-AJ36


Streamlining Administrative Regulations for Multifamily Housing 
Programs and Implementing Family Income Reviews Under the Fixing 
America's Surface Transportation (FAST) Act

AGENCY: Office of the Deputy Secretary, HUD.

ACTION: Interim final rule.

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SUMMARY: HUD published a final rule on March 8, 2016, containing 
changes to streamline regulatory requirements pertaining to certain 
elements of the Housing Choice Voucher (HCV), Public Housing (PH), and 
various multifamily housing (MFH) rental assistance programs. The goal 
of the final rule was to reduce the administrative burden on public 
housing agencies (PHAs) and MFH owners, including changes pertaining to 
annual income reviews in the HCV, PH, and Section 8 Project-Based 
Rental Assistance (PBRA) programs for families with sources of fixed 
income. On December 4, 2015, the President signed the Fixing America's 
Surface Transportation Act (FAST Act) into law. The law contained 
language that allowed PHAs and owners to conduct full income 
recertification for families with 90 percent or more of their income 
from fixed-income every 3 years instead of annually. This interim final 
rule amends the regulatory language to implement the FAST Act and to 
align the current regulatory flexibilities with those provided in the 
FAST Act. In addition, this interim final rule seeks to extend to 
certain MFH programs some of the streamlining changes that were 
proposed for and made only to the HCV and PH programs.

DATES: Effective date: March 12, 2018.
    Comment due date: January 11, 2018.

ADDRESSES: Interested persons are invited to submit comments regarding 
this interim final rule. All communications must refer to the above 
docket number and title. There are two methods for submitting public 
comments.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, U.S. 
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 comments immediately available 
to the public. Comments submitted electronically through the 
www.regulations.gov Website 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 Facsimiled Comments. Facsimiled (faxed) comments are not 
acceptable.
    Public Inspection of Public Comments. Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov. In addition, 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 Federal Relay Service at 800-877-8339 
(this is a toll-free number).

FOR FURTHER INFORMATION CONTACT: For questions, please contact the 
following people (the phone numbers are not toll-free):
    Multifamily Housing programs: Katherine Nzive, Director, Program 
Administration Office, Asset Management and Portfolio Oversight, 202-
708-3000.
    Housing Choice Voucher and Public Housing programs: Becky Primeaux,

[[Page 58336]]

Director, Housing Voucher Management and Occupancy Division, 202-402-
6050 or Monica Shepherd, Director, Public Housing Management and 
Occupancy, 202-402-4059.
    Persons with hearing or speech impairments may access this number 
through TTY by calling the Federal Relay Service at 800-877-8339 (this 
is a toll-free number). The above-listed contacts may also be reached 
by mail at the following address: U.S. Department of Housing and Urban 
Development; 451 7th Street SW, Washington, DC 20410.

SUPPLEMENTARY INFORMATION: 

I. Background

    On January 6, 2015, at 80 FR 423, HUD issued a proposed rule to 
implement several statutory changes made in the Department of Housing 
and Urban Development Appropriations Act, 2014 and also make multiple 
administrative streamlining changes across several HUD programs. In 
that proposed rule, some of these additional streamlining changes 
applied only to the HCV and PH programs, not MFH programs. Given 
feedback on the rule, HUD is issuing this interim final rule to expand 
some of the flexibilities--namely, flexibilities related to utility 
reimbursements and asset declarations that were finalized for the HCV 
and PH programs in a March 8, 2016, final rule, at 81 FR 12354--to 
housing assisted under the following MFH programs, while seeking public 
feedback on that expansion:
    (1) Section 8 Project-Based Rental Assistance (PBRA), including 
projects undergoing Mark-to Market debt restructuring under the 
Multifamily Assisted Housing Reform and Affordability Housing Act.
    (2) Section 202 of the Housing Act of 1959 (both before and after 
section 202 was amended by section 801 of the Cranston-Gonzalez 
National Affordable Housing Act).
    (3) Section 811 of the Cranston-Gonzalez National Affordable 
Housing Act.
    In addition, another of the provisions in the March 8, 2016, final 
rule, which applied to the HCV, PH, and above-listed MFH programs, 
allowed PHAs and multifamily owners to streamline income 
recertification procedures for families with income that comes from 
fixed-income sources. The new regulatory provision allowed PHAs and 
owners to only require third-party documentation for fixed-income 
sources every 3 years. In the intermediate years the PHA or owner could 
apply a previously determined or verified cost of living adjustment 
(COLA) or interest rate adjustment specific to each source of fixed 
income.
    Prior to the issuance of the final rule, on December 4, 2015, the 
President signed the FAST Act (Pub. L. 114-94). While primarily a 
transportation law, section 78001 of the FAST Act also amended the 
United States Housing Act of 1937 to allow PHAs and owners in the HCV, 
PH, and PBRA programs to eliminate annual income reviews in some years 
by applying a COLA determined by the Secretary to fixed-income sources 
for families with incomes that are made up of at least 90 percent fixed 
income. The PHA or owner is not required to verify non-fixed income 
amounts in years where no fixed-income review is required, but is still 
required to use third-party documentation for a full income 
recertification every 3 years.
    This interim final rule not only implements the statutory 
provisions of the FAST Act, but it also modifies the earlier 
streamlining regulations so that the procedures for families meeting 
the 90 percent fixed-income threshold of the FAST Act are as similar as 
possible to those for families who receive some, but less than 90 
percent, of their income from fixed-income sources.

II. Summary of This Interim Final Rule

Streamlined Certification of Fixed Income (Sec. Sec.  5.233, 5.657, 
960.257, and 982.516)

    Under this interim final rule, during years 2 and 3 after a full 
income review, PHAs and owners in the HCV, PH, and PBRA programs may 
determine a family's fixed income by using a verified COLA or rate of 
interest on the individual sources of fixed income. In the case of a 
family with at least 90 percent of the family's unadjusted income from 
fixed income, a PHA or owner using streamlined income verification may, 
but is not required to, adjust the non-fixed income. For families with 
at least one source of fixed income, but for which less than 90 percent 
of the family's income is from fixed sources, PHAs and owners must 
verify and adjust non-fixed sources annually.
    This interim final rule does not change the requirement that the 
PHA or owner must undertake a full recertification every 3 years. Nor 
does it alter the requirement, applicable under the current 
regulations, that families certify that all the information they submit 
for income verification, including the sources of income, is accurate.

Utility Reimbursements (Sec.  5.632)

    As required by Sec.  5.632 of the current PBRA regulations, where 
tenants pay for their utility usage, owners must reimburse tenants if 
the utility allowance exceeds the total tenant payment, but they do not 
specify how frequently such reimbursement must be made. Such silence 
may have led owners to the assumption that reimbursements must be 
monthly, causing them to process small monthly checks and expend 
postage to mail them to voucher holders, which may constitute an 
administrative and financial burden.
    This interim final rule explicitly allows owners to make 
reimbursements of $45 or less (per quarter) on a quarterly basis, in 
order to eliminate the burdensome process of processing and mailing 
monthly reimbursement checks. In the event a family leaves the program 
in advance of its next quarterly reimbursement, the owner would be 
required to reimburse the family for a prorated share of the applicable 
reimbursement. Owners exercising this option will be required to have a 
policy in place to assist tenants for whom the quarterly reimbursements 
will pose a financial hardship.
    For the Section 202 and Section 811 programs, the regulations do 
not contain the requirements around utility reimbursements, in general, 
leaving such requirements in the assistance contracts. Therefore, HUD 
is not including regulatory text to implement these new flexibilities 
in this interim final rule, but rather would be open to amending the 
assistance contracts of any owners looking to take advantage of the 
flexibilities.

Family Declaration of Assets Under $5,000 (Sec.  5.659)

    Families in the PBRA program are required to report all assets 
annually. The amount of interest earned on those assets is included as 
income used to calculate the tenant's rent obligation. Tenants with 
assets below $5,000 typically generate minimal income from these 
assets, which results in small changes, if any, to tenant rental 
payments. Owners spend significant time verifying such assets.
    This rule amends the regulations so that, for a family that has net 
assets equal to or less than $5,000, an owner, at recertification, may 
accept a family's declaration that it has net assets equal to or less 
than $5,000, without annually taking additional steps to verify the 
accuracy of the declaration. Third-party verification of all family 
assets will be required every 3 years.

[[Page 58337]]

    The regulations allow owners in the Section 202 and Section 811 
programs to require tenants to provide the same certification of assets 
allowed in the HCV, PH, and PBRA programs.

Applicability to Housing Choice Voucher and Public Housing Programs

    In the March 8, 2016, final rule, the provisions related to utility 
allowance reimbursements and asset certification applied to the HCV and 
PH programs only. HUD is currently expanding the same policies to the 
MFH programs through this interim final rule. However, comments on this 
interim final rule may lead us to reconsider those policies as they 
apply to the HCV and PH programs, in the interest of aligning policies 
across HUD programs.

III. Justification for Interim Rulemaking

    In general, HUD publishes a rule for public comment before issuing 
a rule for effect, in accordance with its own regulations on 
rulemaking, 24 CFR part 10. Part 10, however, provides for exceptions 
from that general rule where the Department finds good cause to omit 
advance notice and public participation. The good cause requirement is 
satisfied when the prior public procedure is ``impracticable, 
unnecessary, or contrary to the public interest.''
    The Department finds that good cause exists to publish this interim 
rule for effect on the basis that the streamlining changes made to 
utility reimbursement and declaration of assets in this interim rule 
were included in HUD's January 6, 2015, proposed rule. Although these 
provisions were not presented as streamlining changes for adoption in 
HUD's MFH programs, commenters responding to the solicitation of 
comment in the January 6, 2015, proposed rule requested HUD 
consideration of extending the applicability of these provisions to 
HUD's MFH programs.
    The language implementing the FAST Act is implementing statutory 
language that provides an option for PHAs and owners. While the statute 
does not mandate that PHAs or owners use the streamlined reexamination, 
it does require HUD to give PHAs and owners the option. In addition, 
this interim final rule builds upon proposals that already underwent 
public comment, resulting in HUD's March 8, 2016, final rule. The 
specific use of the Social Security Administration's COLA was not 
issued for prior public comment, but the use of a single COLA, unless 
requested otherwise by the family, will provide PHAs and owners with 
additional streamlining benefits.
    Although HUD is issuing this rule for effect, HUD has delayed the 
effective date for a period of 90 days, allowing participants in HUD's 
MFH programs and other interested parties to submit comment during the 
first 30-day period following publication of this interim rule. HUD 
will take any comments received into consideration and determine 
whether any further changes should be made before implementing the 
streamlining changes for the MFH programs.

IV. Specific Question for Comment

    While HUD welcomes comments on all aspects of this interim final 
rule, HUD is seeking specific comment on the following question:
    The language in this interim final rule proposes a policy on 
utility reimbursements and asset certification identical to that 
applying to the HCV and PH programs contained in the March 8, 2016, 
final rule. Comments on this interim final rule may lead us to 
reconsider those policies as they apply to the HCV and PH programs, in 
the interest of aligning policies across HUD programs. Are there 
program-specific or unintended impacts in the HCV, PH, or MFH programs 
that should be considered in aligning these policies across programs? 
Would any difference cause a burden to entities administering these 
forms of assistance or to the tenants receiving the assistance?

V. 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 not determined to be a ``significant regulatory 
action'' as defined in section 3(f) of the Executive order.
    As discussed, this interim final rule furthers HUD's efforts to 
streamline administrative requirements for owners receiving subsidies 
under the HCV, PH, PBRA, Section 202 and Section 811 programs. 
Specifically, this interim rule gives PHAs and owners greater 
flexibilities in determining tenant families' income and assets, and in 
issuing utility reimbursements. The rule provides PHAs and owners with 
the discretion to implement these regulations. Some may choose the 
status quo; others will choose the streamlining alternative. By 
allowing voluntary implementation, HUD enables participants to choose 
their desired method of administration, which in many cases will 
presumably be the least-cost method. Aggregate savings are expected to 
be approximately $31.2 million.
A. Benefits
    The most significant savings come from reduced time devoted to 
administrative tasks related to certifying income. HUD expects that 
this streamlining interim rule will, in some cases, reduce the time 
required for income recertification, but it is difficult to know by how 
much, given the voluntary nature of the regulatory changes. To monetize 
the cost savings, we make assumptions concerning the proportion of PHAs 
and owners that will adopt the streamlining practices and what the time 
savings will be.
    We assume that administrative costs for PH and PBRA, are similar to 
those for the HCV program. A HUD study of administrative costs in the 
HCV program found that, on average, 13.8 hours are required per voucher 
per year to run a high-performing program.\1\ Half of the effort is 
allocated to ongoing occupancy, of which annual recertification is a 
major portion. Annual recertification includes preparing for and 
scheduling recertification, conducting interviews, verifying income and 
household composition, reviewing Enterprise Income Verification (EIV), 
and calculating total tenant payment and housing assistance payment. 
The average time spent is 232 minutes per voucher per year, with a 95 
percent confidence interval of 206 to 257 minutes. The median is 225 
minutes per voucher per year.
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    \1\ Housing Choice Voucher Administrative Fee Study, Final 
Report, August 2015.
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    Based on this study, we estimate that the savings per household per 
year are 30 minutes (or approximately 12 percent of the total average 
reexamination time of 232 minutes).

[[Page 58338]]

The savings are realized 2 of every 3 years and, so, on average, the 
per-household per-year savings will be 20 minutes. If the opportunity 
cost of labor is $60 per hour, then the average savings per affected 
household per year is $20 ($1 per minute x 20 minutes).
    Current regulations in the HCV, PH, and PBRA programs apply 
streamlined income verification practices to all households with any 
income coming from fixed-income sources (60 percent of households in 
these programs).\2\ This interim final rule changes the streamlined 
procedures for households with at least 90 percent of their income from 
fixed-income sources (53 percent of all households), or 2.5 million of 
4.7 million households in the HCV, PH, and PBRA programs being eligible 
to benefit from this interim final rule.
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    \2\ This percentage was computed by HUD staff using HUD data. It 
is further assumed that the percentage is consistent and observable 
across all HUD programs.
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    For these 2.5 million households, a PHA or owner using streamlined 
income verification may, but is not required to, adjust the non-fixed 
income. It is reasonable to expect that streamlining will be applied to 
no more than half of those eligible (or that the savings will be 
noticeable for no more than half). Thus, we assume that assistance 
providers realize average administrative efficiencies of $20 across 
1.25 million households for aggregate savings of $25 million. The 
aggregate efficiencies realized would be correspondingly higher (lower) 
if applied to more (fewer) households or if opportunity costs were 
higher (lower). Given anecdotal evidence from streamlining regulations, 
HUD expects the lower-end estimates to be more representative of the 
impact of the changes. If the impact ranges from 0 percent to 75 
percent of the point estimate, we could expect administrative 
efficiencies of from $0 to $37.5 million.
    In addition to the savings seen by streamlining annual 
certification of income, self-certification by households of assets is 
expected to reduce administrative burdens on PHAs and owners in the 
PBRA, Section 202, and Section 811 programs. This interim final rule 
applies to the 95 percent of PBRA-, Section 202-, and Section 811-
assisted households that have assets with a cash value of less than 
$5,000 but would only reduce costs for the 43 percent of households in 
these programs that have assets worth less than $5,000 but more than 
zero. Of the 589,000 estimated eligible households (43 percent of 1.378 
million), we assume that the streamlining savings will be realized for 
half of them. Applying the same logic as for income recertification and 
assuming that the average savings per household from streamlining is 
$20, the aggregate savings will be $5.9 million.
    Further savings come from allowing quarterly utility reimbursements 
when such quarterly amounts are $45 or less. The Tenant Rental 
Assistance Certification System (TRACS) database which contains data on 
multifamily owners, contracts, and tenants, reports that as of March 
2017, 82,000 households assisted by the PBRA, Section 202 and Section 
811 programs (of approximately 1.37 million) received utility 
reimbursements. Of these households, 30,000 received a monthly utility 
reimbursement less than $45. If administrators choose quarterly 
reimbursements as opposed to monthly, then doing so would save some 
time and expense by eliminating the costs of sending eight letters 
every year to eligible households. Because it is a minor activity, 
information to estimate time spent on utility reimbursements is not 
available. We assume that processing and mailing costs $3 per letter. 
Over 1 year, the savings amount to $24 (8 months x $3) per affected 
household. If only half choose the streamlining, then total savings 
will be $0.36 million.
    By allowing voluntary implementation, HUD enables participants to 
choose their desired method of administration, which in many cases will 
presumably be the least-cost method. It is difficult to estimate the 
savings with precision given that an unknown number of PHAs and owners 
may choose the status quo. Based on the aforementioned assumptions, 
aggregate savings are expected to be approximately $31.2 million ($24.9 
million from income verification + $0.6 million from utility 
reimbursement + $5.9 million from asset verification).
B. Costs and Transfers
    All of the regulatory changes included in this interim final rule 
are intended to provide additional options and flexibilities to PHAs 
and owners, not to mandate new actions. Therefore, HUD expects that 
PHAs and owners will not adopt any new procedures that add costs to 
their operations.
    There may be a small transfer resulting from the change to the 
income streamlining regulations due to foregone tenant rent increases 
that would otherwise be owed by an unknown portion of the 2.5 million 
tenants affected by the new 90 percent fixed-income cutoff; there is no 
incentive to report an increase in income if regulations do not require 
doing so. Those households who realize a positive transfer from HUD is 
the subset who experience increases in non-fixed income during years 2 
and 3 of the streamlined recertification cycle.
    Of those households who receive 90 percent of income from fixed 
sources, the median annual income from non-fixed sources (labor 
earnings, asset income, temporary public assistance, and other sources 
of income) is $0. The mean annual income from non-fixed sources across 
all such households is $44. Under previous regulations, these 
households would contribute up to 30 percent of any increase in income 
to their rent payments. Thus, the transfer to households would be 
approximately 30 percent of any income gain in non-fixed income 
sources. If we assume that all non-fixed incomes increase by 1 percent 
for all households, then the average gain would be $0.13 annually ($44 
x 1 percent growth x 30 percent towards tenant payment). This transfer 
occurs in only 2 out of every 3 years and so would be approximately 
$0.09 on average. The aggregate transfer could be as high as $225,000. 
As noted, most households will not experience such an impact: Only 13 
percent of the affected population receive income from other than 
fixed-income sources. If we limit the effect to those who receive non-
fixed income the measured impact is more pronounced: The mean non-fixed 
income is $338. The individual impact is more pronounced (about 10 
times larger) for such households. Less frequent recertification will 
lead to less timely data but, given the relative stability of fixed-
income streams, would not result in a significant change in the payment 
of housing assistance.
    There may also be a small cost to the tenant from temporarily 
withholding utility reimbursements for quarterly reimbursements. 
However, given the short time span and low amount, the maximum 
opportunity cost for a household would range from $0.44 (at a 3 percent 
annual discount rate) to $1.04 (at a 7 percent annual discount rate.\3\ 
The maximum aggregate cost across 30,000 households ranges from $13,200 
to $31,200. However, the actual cost will be less because not all of 
the

[[Page 58339]]

affected 30,000 households receive monthly utility reimbursements of 
$15 or less.
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    \3\ If the annual discount rate is 3 percent (7 percent), then 
the monthly discount rate is 0.25 percent (0.57 percent). The 
maximum burden on households will be when the utility reimbursement 
is $15 per month ($45 per quarter). For every quarter, the first 
month's reimbursement will be delayed by 2 months and the second 
month's by 1 month. Per quarter the burden will be $0.11 ($0.26 
cents) at a 3 percent (7 percent) annual discount rate.
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    Any associated risk of lost revenue to PHAs, owners, or HUD 
resulting from errors in imputed asset income is expected to be 
negligible. HUD's Quality Control Study (QC Study) reports that 34.5 
percent of all households in HUD-assisted housing programs reported 
some errors in their income reporting. Of the group with income 
reporting errors, only 3 percent were found to have erroneously 
reported their annual asset income (by $800 on average).
    A potential administrative inefficiency is that the frequency and 
size of reporting error would increase if certifications are required 
every 3 years. Examination of quality control data from 2014 reveals 
that the net error in rent payments is more positive (indicating a 
tenant is overpaying) and varies less when asset income is the largest 
source of the rent error. For those with assets less than $5,000, the 
estimated annual net error is only $8 in cases where asset income is 
the largest source of error (representing an overpayment). It is not 
clear what the impact of the rule would be on the level of the net 
error; however, we could expect greater variability with less accurate 
data. From the quality control data, we estimate that 1 percent of all 
households are those with assets less than $5,000 for which errors 
originate from miscalculation of asset income (or 132,500 of 1.325 
million households in multifamily housing). Even if the net error 
doubled because of the rule, the transfer to or from tenants would 
amount to no more than $1 million per year 2 out of every 3 years. 
Finally, streamlining would allow staff to more rigorously control 
tenant information that is a greater source of error (such as earned 
income).

Information Collection Requirements

    The information collection requirements contained in this interim 
final rule have been approved by the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) 
and assigned OMB control number 2502-0204. In accordance with the 
Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, 
and a person is not required to respond to, a collection of 
information, unless the collection displays a currently valid OMB 
control number.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (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 interim final rule will not impose any federal 
mandates on any state, local, or tribal governments or the private 
sector within the meaning of UMRA.

Environmental Review

    This interim final rule involves external administrative 
requirements and procedures related to calculation of HUD rental 
assistance that do not constitute a development decision affecting the 
physical condition of specific project areas or building sites. 
Accordingly, under 24 CFR 50.19(c)(6), this interim final rule is 
categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

Impact on Small Entities

    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. 
This interim final rule reduces administrative burdens on PHAs and MFH 
owners in several aspects of administering assisted housing. All PHAs 
and MFH owners, regardless of size, will benefit from the burden 
reduction made by this interim final rule. These revisions impose no 
significant economic impact on a substantial number of small entities. 
Therefore, the undersigned certifies that this interim final rule will 
not have a significant impact on a substantial number of small 
entities.
    Notwithstanding HUD's belief that this interim final rule will not 
have a significant effect on a substantial number of small entities, 
HUD specifically invites comments regarding any less burdensome 
alternatives to this interim final rule that will meet HUD's objectives 
as described in this preamble.

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 interim final rule does not 
have federalism implications and does not impose substantial direct 
compliance costs on state and local governments nor preempt state law 
within the meaning of the Executive order.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers applicable to 
the program affected by this interim final rule are 14.157, 14.181, 
14.195, 14.850, and 14.871.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs--housing and community 
development, Individuals with disabilities, Intergovernmental 
relations, Loan programs--housing and community development, Low and 
moderate income housing, Mortgage insurance, Penalties, Pets, Public 
housing, Rent subsidies, Reporting and recordkeeping requirements, 
Social security, Unemployment compensation.

24 CFR Part 891

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Loan programs--housing and community 
development, Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Pets, Public housing.

24 CFR Part 982

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

    Accordingly, for the reasons stated in the preamble, HUD is 
amending 24 CFR parts 5, 891, 960, and 982 as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for part 5 continues to read as follows:

    Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437d, 
1437f, 1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2936; 
Sec. 607, Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et 
seq.); E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O. 
13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273.

0
2. In Sec.  5.632, add three sentences to the end of paragraph (b)(1) 
to read as follows:


Sec.  5.632  Utility reimbursements.

* * * * *
    (b) * * *

[[Page 58340]]

    (1) * * * The responsible entity has the option of making utility 
reimbursement payments not less than once per calendar-year quarter, 
for reimbursements totaling $45 or less per quarter. In the event a 
family leaves the program in advance of its next quarterly 
reimbursement, the responsible entity must reimburse the family for a 
prorated share of the applicable reimbursement. PHAs and owners 
exercising this option must have a hardship policy in place for 
tenants.
* * * * *

0
3. In Sec.  5.657, revise paragraph (d) to read as follows:


Sec.  5.657  Section 8 project-based assistance programs: Reexamination 
of family income and composition.

* * * * *
    (d) Streamlined income determination--(1) General. An owner may 
elect to apply a streamlined income determination to families receiving 
fixed income as described in paragraph (d)(3) of this section.
    (2) Definition of ``fixed income''. For purposes of this section, 
``fixed income'' means periodic payments at reasonably predictable 
levels from one or more of the following sources:
    (i) Social Security, Supplemental Security Income, Supplemental 
Disability Insurance.
    (ii) Federal, state, local, or private pension plans.
    (iii) Annuities or other retirement benefit programs, insurance 
policies, disability or death benefits, or other similar types of 
periodic receipts.
    (iv) Any other source of income subject to adjustment by a 
verifiable COLA or current rate of interest.
    (3) Method of streamlined income determination. Owners using the 
streamlined income determination must adjust a family's income 
according to the percentage of a family's unadjusted income that is 
from fixed income.
    (i) When 90 percent or more of a family's unadjusted income 
consists of fixed income, owners using streamlined income 
determinations must apply a COLA or COLAs to the family's fixed-income 
sources, provided that the family certifies both that 90 percent or 
more of their unadjusted income is fixed income and that their sources 
of fixed income have not changed from the previous year. For non-fixed 
income, owners may choose, but are not required, to make appropriate 
adjustments pursuant to paragraph (b) of this section.
    (ii) When less than 90 percent of a family's unadjusted income 
consists of fixed income, owners using streamlined income 
determinations must apply a COLA to each of the family's sources of 
fixed income. Owners must determine all other income pursuant to 
paragraph (b) of this section.
    (4) COLA rate applied by owners. Owners using streamlined income 
determinations must adjust a family's fixed income using a COLA or 
current interest rate that applies to each specific source of fixed 
income and is available from a public source or through tenant-
provided, third-party-generated documentation. If no public 
verification or tenant-provided documentation is available, then the 
owner must obtain third-party verification of the income amounts in 
order to calculate the change in income for the source.
    (5) Triennial verification. For any income determined pursuant to a 
streamlined income determination, an owner must obtain third-party 
verification of all income amounts every 3 years.

0
4. Amend Sec.  5.659 by revising paragraph (d) introductory text and 
adding paragraph (e) to read as follows:


Sec.  5.659  Family information and verification.

* * * * *
    (d) Owner responsibility for verification. Except as allowed under 
paragraph (e), the owner must obtain and document in the family file 
third party verification of the following factors, or must document in 
the file why third party verification was not available:
* * * * *
    (e) Verification of assets. For a family with net assets equal to 
or less than $5,000, an owner may accept, for purposes of 
recertification of income, a family's declaration that it has net 
assets equal to or less than $5,000 without taking additional steps to 
verify the accuracy of the declaration, except as required in paragraph 
(e)(2) of this section.
    (1) The declaration must state the amount of income the family 
expects to receive from such assets; this amount must be included in 
the family's income.
    (2) An owner must obtain third-party verification of all family 
assets every 3 years.

PART 891--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS WITH 
DISABILITIES

0
5. The authority citation for part 891 continues to read as follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f, 3535(d), and 8013.


0
6. In Sec.  891.415, revise paragraph (a)(2) to read as follows:


Sec.  891.415  Obligations of the household or family.

* * * * *
    (a) * * *
    (2) Supply such certification, release of information, consent, 
completed forms or documentation as the Owner (or Borrower, as 
applicable) or HUD determines necessary, including information and 
documentation relating to the disclosure and verification of Social 
Security Numbers, as provided by 24 CFR part 5, subpart B; the signing 
and submission of consent forms for the obtaining of wage and claim 
information from State Wage Information Collection Agencies, as 
provided by 24 CFR part 5, subpart B; and any certification of family 
net assets, as provided by 24 CFR 5.659(e);
* * * * *

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

0
7. The authority citation for part 960 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, 1437z-3, and 
3535(d).


0
8. In Sec.  960.257, redesignate paragraphs (b)(3) and (c) as 
paragraphs (c) and (d), respectively, and revise redesignated paragraph 
(c) to read as follows:


Sec.  960.257  Family income and composition: Annual and interim 
reexaminations.

* * * * *
    (c) Streamlined income determination--(1) General. A PHA may elect 
to apply a streamlined income determination to families receiving fixed 
income, as described in paragraph (c)(3) of this section.
    (2) Definition of ``fixed income''. For purposes of this section, 
``fixed income'' means periodic payments at reasonably predictable 
levels from one or more of the following sources:
    (i) Social Security, Supplemental Security Income, Supplemental 
Disability Insurance.
    (ii) Federal, state, local, or private pension plans.
    (iii) Annuities or other retirement benefit programs, insurance 
policies, disability or death benefits, or other similar types of 
periodic receipts.
    (iv) Any other source of income subject to adjustment by a 
verifiable COLA or current rate of interest.
    (3) Method of streamlined income determination. A PHA using the 
streamlined income determination must adjust a family's income 
according to the percentage of a family's unadjusted income that is 
from fixed income.
    (i) When 90 percent or more of a family's unadjusted income 
consists of

[[Page 58341]]

fixed income, PHAs using streamlined income determinations must apply a 
COLA or COLAs to the family's sources of fixed income, provided that 
the family certifies both that 90 percent or more of their unadjusted 
income is fixed income and that their sources of fixed income have not 
changed from the previous year. For non-fixed income, the PHA may 
choose, but is not required, to make appropriate adjustments pursuant 
to paragraph (a) of this section.
    (ii) When less than 90 percent of a family's unadjusted income 
consists of fixed income, PHAs using streamlined income determinations 
must apply a COLA to each of the family's sources of fixed income 
individually. The PHA must determine all other income pursuant to 
paragraph (a) of this section.
    (4) COLA rate applied by PHAs. PHAs using streamlined income 
determinations must adjust a family's fixed income using a COLA or 
current interest rate that applies to each specific source of fixed 
income and is available from a public source or through tenant-
provided, third-party-generated documentation. If no public 
verification or tenant-provided documentation is available, then the 
owner must obtain third-party verification of the income amounts in 
order to calculate the change in income for the source.
    (5) Triennial verification. For any income determined pursuant to a 
streamlined income determination, a PHA must obtain third-party 
verification of all income amounts every 3 years.
* * * * *

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

0
9. The authority citation for part 982 continues to read as follows:

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

0
10. In Sec.  982.516, revise paragraph (b) to read as follows:


Sec.  982.516  Family income and composition: Annual and interim 
reexaminations.

* * * * *
    (b) Streamlined income determination--(1) General. A PHA may elect 
to apply a streamlined income determination to families receiving fixed 
income as described in paragraph (b)(3) of this section.
    (2) Definition of ``fixed income''. For purposes of this section, 
``fixed income'' means periodic payments at reasonably predictable 
levels from one or more of the following sources:
    (i) Social Security, Supplemental Security Income, Supplemental 
Disability Insurance.
    (ii) Federal, state, local, or private pension plans.
    (iii) Annuities or other retirement benefit programs, insurance 
policies, disability or death benefits, or other similar types of 
periodic receipts.
    (iv) Any other source of income subject to adjustment by a 
verifiable COLA or current rate of interest.
    (3) Method of streamlined income determination. A PHA using the 
streamlined income determination must adjust a family's income 
according to the percentage of a family's unadjusted income that is 
from fixed income.
    (i) When 90 percent or more of a family's unadjusted income 
consists of fixed income, PHAs using streamlined income determinations 
must apply a COLA or COLAs to the family's fixed-income sources, 
provided that the family certifies both that 90 percent or more of 
their unadjusted income is fixed income and that their sources of fixed 
income have not changed from the previous year. For non-fixed income, 
the PHA may choose, but is not required, to make appropriate 
adjustments pursuant to paragraph (a) of this section
    (ii) When less than 90 percent of a family's unadjusted income 
consists of fixed income, PHAs using streamlined income determinations 
must apply a COLA to each of the family's sources of fixed income 
individually. The PHA must determine all other income pursuant to 
paragraph (a) of this section.
    (4) COLA rate applied by PHAs. PHAs using streamlined income 
determinations must adjust a family's fixed income using a COLA or 
current interest rate that applies to each specific source of fixed 
income and is available from a public source or through tenant-
provided, third-party-generated documentation. If no public 
verification or tenant-provided documentation is available, then the 
owner must obtain third-party verification of the income amounts in 
order to calculate the change in income for the source.
    (5) Triennial verification. For any income determined pursuant to a 
streamlined income determination, a PHA must obtain third-party 
verification of all income amounts every 3 years.
* * * * *

    Dated: November 8, 2017.
Pamela H. Patenaude,
Deputy Secretary.
[FR Doc. 2017-26697 Filed 12-11-17; 8:45 am]
BILLING CODE 4210-67-P; 5743-04-P