Operations Notice for the Expansion of the Moving to Work Demonstration Program; Republication and Extension of Comment Period, 51474-51499 [2018-22158]

Download as PDF 51474 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices khammond on DSK30JT082PROD with NOTICES 470aa et seq.)); the Paleontological Resources Preservation Act (16 U.S.C. 470aaa et seq.); the Federal Cave Resources Protection Act of 1988 (16 U.S.C. 4301 et seq.); the Safe Drinking Water Act (42 U.S.C. 300f et seq.); the Noise Control Act (42 U.S.C. 4901 et seq.); the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.); the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. 9601 et seq.); the Archaeological and Historic Preservation Act (Pub. L. 86–523, as amended, repealed, or replaced by Pub. 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L. 73– 121 (16 U.S.C. 661 et seq.)); the Administrative Procedure Act (5 U.S.C. 551 et seq.); the River and Harbors Act of 1899 (33 U.S.C. 403)); the Eagle Protection Act (16 U.S.C. 668 et seq.); the Native American Graves Protection and Repatriation Act (25 U.S.C. 3001 et seq.); and the American Indian Religious Freedom Act (42 U.S.C. 1996). This waiver does not revoke or supersede the previous waiver published in the Federal Register on April 8, 2008 (73 FR 19077), which shall remain in full force and effect in accordance with its terms. I reserve the authority to execute further waivers from time to time as I may determine to be necessary under section 102 of IIRIRA. Dated: October 4, 2018. Kirstjen M. Nielsen, Secretary of Homeland Security. [FR Doc. 2018–22063 Filed 10–10–18; 8:45 am] BILLING CODE 9111–14–P VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT [Docket No. FR–5994–N–04] Operations Notice for the Expansion of the Moving to Work Demonstration Program; Republication and Extension of Comment Period Office of Public and Indian Housing, HUD. ACTION: Notice. AGENCY: HUD is republishing the Operations Notice published in the Federal Register on October 5, 2018, which omitted the Appendix. This Notice includes the Appendix and the public comment period is extended accordingly. The Public Housing/Section 8 Moving to Work (MTW) demonstration program was first established under Section 204 of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 to provide statutory and regulatory flexibility to participating public housing agencies (PHAs) under three statutory objectives. Those three statutory objectives are: To reduce cost and achieve greater cost effectiveness in Federal expenditures; to give incentives to families with children whose heads of household are either working, seeking work, or are participating in job training, educational or other programs that assist in obtaining employment and becoming economically self-sufficient; and to increase housing choices for lowincome families. This Operations Notice for the Expansion of the MTW Demonstration Program (Operations Notice) establishes requirements for the implementation and continued operation of the MTW demonstration program pursuant to the 2016 MTW Expansion Statute. DATES: Comment Due Date: November 26, 2018. ADDRESSES: Electronic Submission of Comments. HUD strongly encourages interested persons 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. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. 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 SUMMARY: PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 instructions provided on that site to submit comments electronically. Submission of Comments by Mail. Alternatively, interested persons may submit comments regarding this Notice 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. 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 Notice. No Facsimile Comments. Facsimile (fax) comments are not acceptable. Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an appointment to review the public comments must be scheduled in advance by calling the Regulations Division at 202–708–3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 1–800–877– 8339 (this is a toll-free number). Copies of all comments submitted are available for inspection and downloading at www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Marianne Nazzaro, Director, Moving to Work Demonstration Program, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street SW, Room 4130, Washington, DC 20410; email address mtw-info@hud.gov. SUPPLEMENTARY INFORMATION: This republication of the October 5, 2018 Operations Notice, originally published at 83 FR 50387, includes an Appendix that was omitted. I. Background Section 239 of the Fiscal Year 2016 Appropriations Act, Public Law 114– 113 (2016 MTW Expansion Statute), signed by the President in December 2015, authorizes HUD to expand the MTW demonstration program from the current size of 39 agencies to an additional 100 agencies over a period of 7 years. This Notice was originally published on January 23, 2017, in the Federal Register, entitled ‘‘Operations Notice for the Expansion of the Moving to Work Demonstration Program E:\FR\FM\11OCN1.SGM 11OCN1 khammond on DSK30JT082PROD with NOTICES Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices Solicitation of Comment.’’ On May 4, 2017, the Notice was republished with three technical revisions and an extension of the comment period. HUD took all comments received into consideration. Changes to this Notice have been made to incorporate feedback from the two previous publications and to reflect policy decisions. The primary changes are as follows: • The term of participation has been set at 12 years from the year of designation in response to public comments for the term to be at least 10 years from the year of designation. • In response to public comments, the Department removed the General Waivers and Conditional Waivers categories and replaced them with a singular MTW Waivers category, which MTW agencies may implement without further approval from HUD. Æ In restructuring the MTW Waivers, the Notice now includes safe harbors, which are defined as the additional requirements, beyond those specified in the activity description, that the agency must follow in implementing activities without further HUD approval. Æ MTW Waivers now include specific guidance on impact analyses, hardship policies, and applicability of waivers to elderly/disabled families. Æ An additional MTW Waiver was added: ‘‘Increase Elderly Age,’’ which allows agencies to amend the definition of an elderly person to be an individual who is at least sixty-five. Æ The Homeownership Waiver was removed. Upon reviewing this waiver, the Department determined that the activities provided to agencies under the waiver were already available under the Section 32 Homeownership Program. • The 90 percent voucher utilization requirement was removed. The MTW Housing Assistance Payment (HAP) Renewal Formula has been revised to use as a base, all prior-year MTWeligible Housing Choice Voucher (HCV) funding expenses paid from HAP, including HAP expenses plus non-HAP expenses. • For a prospective agency to be eligible for selection to the MTW demonstration, it must be a high performer in either the Public Housing Assessment System (PHAS) or the Section Eight Management Assessment Program (SEMAP). • Regionalization was removed from the MTW Operations Notice and will be implemented through a separate forthcoming notice. • Agencies will formalize their MTW status with an amendment to their Annual Contributions Contract. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 • The monitoring of the requirement that an MTW agency designated pursuant to the 2016 MTW Expansion Statute continues to assist substantially the same number of families has been simplified. Compliance will be determined using a baseline ratio of total public housing and HCV HAP funding to families served. MTW Demonstration Program The MTW demonstration program was first established under Section 204 of Title II of section 101(e) of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Public Law 104–134, 110 Stat. 1321–281; 42 U.S.C. 1437f note (1996 MTW Statute) 1 to provide statutory and regulatory flexibility 2 to participating PHAs under three statutory objectives. Those three statutory objectives are to: • Reduce cost and achieve greater cost effectiveness in Federal expenditures; • Give incentives to families with children where the head of household is working, seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self-sufficient; and • Increase housing choices for eligible low-income families. To achieve these objectives, PHAs selected for participation in the MTW demonstration are given exemptions from many existing public housing and HCV rules and offered more flexibility with how they use their Federal funds. MTW agencies use this opportunity presented by the MTW demonstration to better address local housing needs. HUD learns from the experience of MTW agencies to develop new housing policy recommendations that can positively impact assisted housing delivery for PHAs nationwide. In addition to statutory and regulatory relief,3 MTW agencies have the flexibility to apply fungibility among three core funding programs’ funding streams—public housing Operating Funds, public housing Capital Funds, 1 PHAs currently operating an MTW demonstration program include PHAs with an active MTW agreement as of December 15, 2015. PHAs currently operating an MTW program do not include PHAs that previously participated in the MTW demonstration and later left the demonstration. 2 The MTW demonstration program may only provide certain flexibilities under the 1937 Act. For more information on the history of the MTW demonstration program, please go to: www.hud.gov/ mtw. 3 For more information about the MTW demonstration program and the specific activities of existing MTW agencies, please refer to the MTW website at www.hud.gov/mtw. PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 51475 and HCV assistance (to include both HAP and Administrative Fees)— hereinafter referred to as ‘‘MTW Funding.’’ 4 These flexibilities do not negate the need for both the PHA and HUD to be able to account for the funding from its original source to the date of its ultimate eligible use 5 by the PHA, to comply with Federal grant and financial management requirements, and to use funds effectively and efficiently for their eligible purposes. As the Department continues to implement program-specific financial management policies in its core housing programs, MTW agencies will be subject to the same requirements and procedures as non-MTW agencies. Therefore, the requirements and procedures described in this Notice may change as new financial management policies are implemented over time. Throughout participation in the MTW demonstration program, MTW agencies must continue to meet five statutory requirements established under the 1996 MTW Statute. The five statutory requirements are: • At least 75 percent of the families assisted by participating demonstration public housing authorities shall be very low-income families, as defined in section 3(b)(2) of the United States Housing Act of 1937; • Establishing a reasonable rent policy, which shall be designed to encourage employment and selfsufficiency by participating families, consistent with the purpose of this demonstration, such as by excluding some or all of a family’s earned income for purposes of determining rent; • Continuing to assist substantially the same total number of eligible lowincome families as would have been served had the amounts not been combined; • Maintaining a comparable mix of families (by family size) as would have been provided had the amounts not been used under the demonstration; and • Assuring that housing assisted under the demonstration program meets housing quality standards established or approved by the Secretary. 4 Funds awarded under Sections 8(o), 9(d), and 9(e) of the 1937 Act are eligible for expanded uses pursuant to MTW fungibility, with the exception of funds provided for specific non-MTW HCV subprograms. Other funds a PHA may receive (i.e., grant funds under another obligating document) are likewise not covered by MTW flexibilities and must be tracked and reported under the applicable rules and requirements. 5 The date of the ‘‘ultimate eligible use’’ means the date of disbursement by the PHA for an eligible purpose, which would remove the funding from the PHA’s account and the PHA’s control. E:\FR\FM\11OCN1.SGM 11OCN1 51476 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices Currently, there are 39 agencies 6 participating in the MTW demonstration program. The administrative structure for these 39 agencies is outlined in the Standard MTW Agreement, a contract between each existing MTW agency and HUD. The 2016 MTW Expansion Statute extended the term of the Standard MTW Agreement through each of the existing MTW agencies’ 2028 fiscal year. khammond on DSK30JT082PROD with NOTICES 2016 Expansion of the MTW Demonstration Program As the 2016 MTW Expansion Statute directs, HUD is authorized to expand the MTW demonstration program from the current level of 39 agencies to an additional 100 agencies over a period of 7 years, ending in 2023. In expanding the MTW demonstration, HUD intends to build on the successes and lessons learned from the demonstration thus far. The vision for the MTW expansion is to learn from MTW interventions to improve the delivery of Federally assisted housing and promote selfsufficiency for low-income families across the Nation. Through the expansion, HUD will extend flexibility to a broader range of PHAs both in terms of size and geographic diversity and will balance the flexibility inherent in MTW with the need for measurement, evaluation, and prudent oversight. HUD will select the additional 100 PHAs in cohorts, with applications for each cohort to be sought via PIH Notice. For each cohort of agencies selected, the 2016 MTW Expansion Statute requires HUD to direct all the agencies within the cohort to implement one specific policy change, which HUD will evaluate rigorously. MTW agencies may 6 The 39 agencies are: Alaska Housing Finance Corporation; Atlanta Housing Authority; Housing Authority of the City of Baltimore; Boulder Housing Partners; Cambridge Housing Authority; Housing Authority of Champaign County; Charlotte Housing Authority; Chicago Housing Authority; Housing Authority of Columbus, Georgia; District of Columbia Housing Authority; Delaware State Housing Authority; Fairfax County Redevelopment and Housing Authority; Holyoke Housing Authority; Keene Housing; King County Housing Authority; Lawrence-Douglas County Housing Authority; Lexington-Fayette Urban County Housing Authority; Lincoln Housing Authority; Louisville Metropolitan Housing Authority; Massachusetts Department of Housing and Community Development; Minneapolis Public Housing Authority; Housing Authority of the City of New Haven; Oakland Housing Authority; Orlando Housing Authority; Philadelphia Housing Authority; Housing Authority of the City of Pittsburgh; Portage Metropolitan Housing Authority; Home Forward (Portland, OR); Housing Authority of the City of Reno; San Antonio Housing Authority; Housing Authority of the County of San Bernardino; San Diego Housing Commission; Housing Authority of the County of San Mateo; Housing Authority of the County of Santa Clara/ City of San Jose; Seattle Housing Authority; Tacoma Housing Authority; Housing Authority of Tulare County; and Vancouver Housing Authority. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 implement policy changes in addition to the policy change directed by HUD as long as those policy changes do not conflict or interfere with the cohort study. As required by the 2016 MTW Expansion Statute, the HUD-appointed MTW Research Advisory Committee, described further below, advised HUD on the policy changes to be tested through the new cohorts of MTW agencies and the methods of research and evaluation. The 2016 MTW Expansion Statute also includes a provision allowing the Secretary to designate an MTW agency as a regional MTW agency—at the request of said agency—should the Secretary determine that unified administration of assistance ‘‘under sections 8 and 9 of the United States Housing Act of 1937 (42 U.S.C. 1437f and g)’’ by that agency across multiple jurisdictions will lead to (a) efficiencies and to (b) greater housing choice for low-income persons in the region. HUD will issue separate guidance regarding how an MTW agency may be designated as a regional MTW agency. Eligibility and Selection for the Expansion of the MTW Demonstration The 2016 MTW Expansion Statute provides that the 100 MTW agencies selected must be high performers in either HUD’s Public Housing Assessment System (PHAS) or its Section Eight Management Assessment Program (SEMAP) at the time of application to the demonstration, and represent geographic diversity across the country. Further, the 2016 MTW Expansion Statute states that of these 100 PHAs: • No less than 50 PHAs shall administer 1,000 or fewer aggregate housing voucher and public housing units; • No less than 47 PHAs shall administer 1,001–6,000 aggregate housing voucher and public housing units; • No more than 3 PHAs shall administer 6,001–27,000 aggregate housing voucher and public housing units; • No PHA shall be granted MTW designation if it administers more than 27,000 aggregate housing voucher and public housing units; and • Five of the PHAs selected shall be agencies with a Rental Assistance Demonstration (RAD) portfolio award. HUD will issue separate PIH Notices, by cohort, soliciting applications from eligible PHAs for participation in the MTW demonstration. These Notices, when issued, will outline the specific application submission requirements, evaluation criteria, and process HUD PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 will use when selecting PHAs for MTW designation. The PHA sizes eligible for participation in the MTW demonstration are statutory and were defined by Congress; therefore, HUD is unable to waive or modify those size restrictions. MTW Research Advisory Committee The 2016 MTW Expansion Statute required HUD to form and consult with a Federal MTW Research Advisory Committee (the Committee), established in May 2016. The Committee is governed by the Federal Advisory Committee Act (5 U.S.C. Appendix 2), which sets forth standards for the formation and use of advisory committees. The purpose of the Committee is to provide independent advice with respect to the policies to be studied through the MTW expansion and the related methods of research and evaluation. The Committee is charged with advising HUD on the following: • Policy proposals and evaluation methods for the MTW demonstration to inform the one specific policy change required for each cohort of agencies; • Rigorous research methodologies to measure the impact of policy changes studied; • Policy changes adopted by MTW agencies that have proven successful and can be applied more broadly to all PHAs; and • Statutory and/or regulatory changes (specific waivers and associated activities, and program and policy flexibility) necessary to implement policy changes for all PHAs. The Committee has no role in reviewing or selecting the 100 PHAs to participate in the expansion of the MTW demonstration. The Committee members were appointed to a two-year term in June 2016 by the HUD Secretary and chosen to ensure balance, diversity, and a broad representation of ideas.7 In May 2018, HUD extended the Committee and the members’ appointments for another two-year term. As required by the 2016 MTW Expansion Statute, the Committee includes program and research experts from HUD; a representation of MTW agencies, including current and former residents; and independent subject matter experts in housing policy research. Based on the advice of the Committee, HUD will study, by cohort of MTW 7 For more information on the establishment, purpose, members, and meeting content of the MTW Research Advisory Committee, please go to: https://portal.hud.gov/hudportal/HUD?src=/ program_offices/public_indian_housing/programs/ ph/mtw/expansion/rac. E:\FR\FM\11OCN1.SGM 11OCN1 khammond on DSK30JT082PROD with NOTICES Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices Contributions Contract, which is called the MTW CACC Amendment.8 The Operations Notice is organized into 11 sections as follows: agencies, the following four policies (which are in no particular order except for the first two cohorts): • Impact of MTW Flexibility on Small and Medium PHAs: In this first cohort, HUD will evaluate the overall effects of MTW flexibility on a PHA and the residents it serves. The Committee recommended that PHAs with under 1,000 aggregate public housing and voucher units be included in this cohort. To date, only one of the existing MTW agencies has less than 1,000 aggregate units, while the majority of PHAs nationwide fit into this size category. • Rent Reform: In this second cohort, HUD will evaluate different rent reform models. Rent reform models may be income based and may include tiered rents and/or stepped-up rents. • Work Requirements: In this cohort, HUD will evaluate work requirements for residents/participants who are nonelderly, non-disabled, and at least 18 years old. • Landlord Incentives: In this cohort, HUD will evaluate how to improve landlord participation in the HCV program through incentives such as participation payments, vacancy payments, alternate inspection schedules and other methods. 1. Purpose and Applicability 2. Waivers a. MTW Waivers b. Agency-Specific Waiver Requests c. Cohort-Specific Waivers 3. Term of Participation 4. MTW Funding Flexibilities and Financial Reporting a. MTW Funding Flexibility b. Calculation of Funding c. Financial Reporting and Auditing 5. Evaluation a. Program-wide Evaluation b. Cohort-Specific Evaluation c. Ad-hoc Evaluation 6. Program Administration and Oversight a. Planning and Reporting b. Performance Assessment c. Monitoring and Oversight 7. Rental Assistance Demonstration Program 8. Applying MTW Flexibilities to Special Purpose Vouchers a. HUD-Veterans Affairs Supportive Housing b. Family Unification Program c. Non-Elderly Persons with Disabilities Vouchers d. Enhanced Vouchers and Tenant Protection Vouchers 9. Applicability of Other Federal, State, and Local Requirements 10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute 11. Sanctions, Terminations, and Default Operations Notice for the Expansion of the MTW Demonstration II. Operations Notice Through the MTW expansion, HUD seeks to design and test new approaches to providing and administering housing assistance and then to apply the lessonslearned nationwide, all within a framework of simplifying program administration. This is laid out in HUD’s guiding principles for the expansion, which are: (1) Simplify; (2) learn; and (3) apply. The Operations Notice is an embodiment of this vision. The Operations Notice describes a framework for the MTW demonstration that streamlines and simplifies HUD’s implementation of MTW status and the associated flexibilities of participating MTW agencies while providing for the rigorous evaluation of specific policy changes. This framework would apply to all PHAs designated as an MTW agency pursuant to the 2016 MTW Expansion Statute and to any previously-designated MTW agencies that agree to operate under the framework of the Operations Notice. These PHAs are referred to in the Operations Notice as ‘‘MTW agencies.’’ Participation in the MTW Expansion will be formalized by an amendment to the PHA’s Consolidated Annual VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 1. Purpose and Applicability The Operations Notice establishes requirements for the implementation and continued operation of the expansion of the MTW demonstration program pursuant to the 2016 MTW Expansion Statute. The Operations Notice also applies to all PHAs designated as MTW pursuant to the 2016 MTW Expansion Statute and to any previously-designated MTW agency that elects to operate under the terms of this Notice. Through the MTW CACC Amendment, an MTW agency agrees to abide by the program structure, flexibilities, and terms and conditions detailed in the Operations Notice for the term of the agency’s participation in MTW demonstration. Any significant updates to the Operations Notice by HUD will be preceded by a public comment period. HUD may supplement the Operations Notice with PIH Notices providing more detailed guidance, including with respect to implementing future appropriations act provisions and 8 The MTW Consolidated ACC Amendment amends the ACCs and the CACCs for the Public Housing and Section 8 Voucher programs. PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 51477 revisions to financial policies and procedures. Additionally, HUD will develop informational materials to address various program elements, which HUD will post on the MTW website. Unless otherwise provided in the Operations Notice, an agency’s MTW program applies to all of the agency’s public housing units (including agencyowned properties and units comprising a part of mixed-income, mixed finance communities, tenant-based HCV assistance, project-based HCV assistance under Section 8(o), and Homeownership units developed using Section 8(y) HCV assistance. This Operations Notice does not apply to HCV assistance that is required: (i) To make payments to other PHAs under HCV portability billing procedures; (ii) to meet particular purposes for which HUD has expressly committed the assistance to the agency; 9 or (iii) to meet existing contractual obligations of the agency to a third party (such as Housing Assistance Payment (HAP) contracts with owners under the agency’s HCV program), unless a third party agrees to Project-Based Voucher (PBV) activities implemented under the MTW program with the agency. PHAs are reminded that the MTW demonstration program does not permit waivers related to statutes outside of the 1937 Act or regulations promulgated under authority outside of the 1937 Act, including any waivers to fair housing, nondiscrimination, labor standards, or environmental requirements. Other subject matter prohibited from waivers or restricted with respect to waivers is discussed elsewhere in this Notice. 2. Waivers Pursuant to the 1996 MTW Statute and 2016 MTW Expansion Statute, the Appendix of this Notice provides waivers of certain provisions of the 1937 Act as well as the implementing requirements and regulations. These waivers and associated activities afford MTW agencies the opportunity to use their MTW authority to pursue locallydriven policies, procedures, and programs in order to further the goals of the demonstration. In implementing MTW activities, agencies will ensure assisted families are made aware of the impacts the activity(s) may have to their tenancy. The following are the three categories of waivers that MTW agencies may pursue: (a) MTW Waivers; (b) 9 Mainstream Vouchers, Moderate Rehabilitation Renewals, HUD-Veterans Affairs Supportive Housing (HUD–VASH) Vouchers, Non-Elderly Disabled (NED) Vouchers, and Family Unification Program (FUP) Vouchers are not part of the MTW demonstration program. E:\FR\FM\11OCN1.SGM 11OCN1 51478 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices khammond on DSK30JT082PROD with NOTICES Agency-Specific Waiver Requests; and (c) Cohort-Specific Waivers. MTW agencies may conduct any permissible activity in the MTW Waivers category within the provided safe harbors, as detailed in the Appendix, without additional approval from HUD. Agencies may make an Agency-Specific Waiver Request to implement additional activities not contained in the MTW Waivers, request to waive a statutory or regulatory requirement not waived in the MTW Waivers, and/or request to expand the safe harbors of an MTW Waivers activity. Agencies may also be provided with Cohort-Specific Waivers if they are necessary to allow for the implementation of the required cohort study. a. MTW Waivers The Appendix contains the available waivers and associated activities that MTW agencies may implement after they have been included in the MTW Supplement (described in Section 6 of this Notice) of an approved PHA Plan. The Appendix includes the waiver name, waiver description, statutes and regulations waived, permissible activities, and safe harbors. The waiver description defines the authorization provided to the MTW agency, subject to the terms of this Notice. The list of statutes and regulations waived details the citations of the 1937 Act requirements that may be waived by an MTW agency in order to implement an activity. The list of waivers and list of activities are organized by program type. The safe harbors section contains the additional requirements (beyond those specified in the activity description) that the agency must satisfy in implementing activities without further HUD approval. If an MTW agency wishes to implement additional activities not contained in the MTW Waivers, request to waive a statutory or regulatory requirement, and/or request the ability to go beyond an MTW activity’s safe harbor(s), the MTW agency must submit an Agency-Specific Waiver Request for approval from HUD as explained further in Section 2.b of this Notice. MTW agencies may implement any activity contained in the Appendix as long as it is included in the MTW Supplement of an approved PHA Plan and implemented within the associated safe harbor(s). The MTW agency will update the MTW Supplement annually, as described in Section 6 of this Notice, to reflect the new activities it plans to implement in the coming fiscal year and ongoing activities it has implemented in the prior year, which includes estimated costs/savings for planned activities that VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 have a cost implication. While MTW activities are listed by specific waiver name, MTW agencies may use the MTW Supplement to combine activities together to create more comprehensive initiatives at the local level. The MTW Waivers only waive certain provisions of the 1937 Act and its implementing regulations. The five statutory requirements established under the 1996 MTW Statute cannot be waived. Other applicable Federal, state, and local requirements shall continue to apply even in the event of a conflict between such a requirement and a waiver or activity granted by this Notice. Accordingly, HUD and the MTW agencies may not waive or otherwise deviate from compliance with Fair Housing and Civil Rights laws and regulations. Additionally, in implementing activities, MTW agencies remain subject to all other terms, conditions, and obligations under this Notice, and all other Federal requirements applicable to the public housing program, the HCV program, Federal funds, and PHAs. To the extent any MTW activity conflicts with any of the five statutory requirements or other applicable requirements, HUD reserves the right to require the MTW agency to discontinue the activity or to revise the activity to comply with this Notice, and the other applicable Federal requirements. HUD also reserves the right to require an MTW agency to discontinue any activity derived from a waiver should it have significant negative impacts on families or the agency’s operation of its assisted housing programs using Section 8 and 9 funds, as determined by HUD. b. Agency-Specific Waiver Requests Pursuant to the exceptions in Section 9 of this Notice, HUD understands that MTW agencies may wish to request Agency-Specific Waivers to implement activities, waive statutory or regulatory requirements that are not in the Appendix, and/or expand the safe harbor(s) of an activity included in the MTW Waivers. There are two categories of Agency-Specific Waiver Requests: (1) A request to waive a statutory or regulatory requirement, or to implement an activity, not provided for in the Appendix; and (2) a request to expand an activity that is in the Appendix outside of the listed safe harbor (or multiple safe harbors). The MTW agency must obtain explicit written approval from HUD for each AgencySpecific Waiver Request prior to implementation. Agency-Specific Waiver Requests are optional and made at the discretion of the MTW agency. PO 00000 Frm 00044 Fmt 4703 Sfmt 4703 To submit an Agency-Specific Waiver Request(s), an MTW agency will first share the specifics and details of the proposed waiver in the MTW Supplement to the Annual PHA Plan, indicating which of the two categories of Agency-Specific Waiver Requests is being sought. The MTW Supplement form, when finalized, will provide a comprehensive explanation of the elements required to submit an AgencySpecific Waiver Request. The approval of the Annual PHA Plan and MTW Supplement during this stage does not constitute an approval of the Agency-Specific Waiver Request. Rather, the public comment and review period affords the MTW agency’s Resident Advisory Board (RAB), community, and residents the opportunity to provide input on the proposed waiver prior to its submission to HUD. Once the MTW agency obtains approval of its Annual PHA Plan and MTW Supplement containing the Agency-Specific Waiver Request information, the agency will then submit a letter to its local HUD field office requesting final approval of the Agency-Specific Waiver Request(s). This letter is sent and reviewed outside of the Annual PHA Plan and MTW Supplement process. It must include: A good cause justification that relates to one or more of the three MTW statutory objectives; the statute, regulation, and/ or MTW Waiver safe harbor which the MTW agency seeks to waive and its justification for doing so; a copy of the approval letter for the Annual PHA Plan and MTW Supplement containing the proposed waiver; a description of the initiative; the implementation timeline; and any other information requested by HUD. Depending on the nature of the request, HUD may ask for an associated hardship policy, impact analysis, and/or other information necessary to understand the waiver and its possible effects. Agency-Specific Waiver Requests may not conflict with the agency’s cohort-specific evaluation. If the Agency-Specific Waiver is approved by HUD and the changes between the Agency-Specific Waiver Request and the Waiver that HUD ultimately approves do not constitute a ‘‘significant amendment’’ to the Annual PHA Plan, as defined by the agency, then the Agency-Specific Waiver may be implemented once the MTW Agency receives HUD’s explicit written approval. The MTW Agency will need to submit a narrative description of the Agency Specific Waiver in its subsequent MTW Supplement. If the Agency-Specific Waiver is approved by HUD with changes E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices khammond on DSK30JT082PROD with NOTICES between the Agency-Specific Waiver Request and the Waiver that HUD ultimately approves that constitute a ‘‘significant amendment’’ to the Annual PHA Plan, as defined by the agency, then the MTW agency must re-submit the Agency-Specific Waiver Request through the Annual PHA Plan and MTW Supplement public comment process a second time. Once the Annual PHA Plan and MTW Supplement are approved this second time, the MTW agency may implement its AgencySpecific Waiver. To the extent a policy in an AgencySpecific Waiver Request conflicts with any of the five statutory requirements, the cohort-specific evaluation, or other applicable requirements, HUD shall require the MTW agency to discontinue the policy or to revise the policy to comply with this Notice and the other applicable federal requirements. HUD also reserves the right to require an MTW agency to discontinue any policy derived from a waiver should it have significant negative impacts on families or the agency’s operation of its assisted housing programs using Section 8 and 9 funds, as determined by HUD. c. Cohort-Specific Waivers Pursuant to the 2016 MTW Expansion Statute, at the time of designation as an MTW agency, each agency will be selected into an evaluative cohort that seeks to test a specific policy change, as specified in that cohort’s Selection Notice. Cohort-Specific Waivers include statutory and/or regulatory waivers and associated activities that are unique to a specific cohort to allow them to complete their required cohort study. Depending upon the cohort’s study, there is a possibility that HUD restricts certain activities within the MTW Waivers or provides additional waivers that are not included in the Appendix. It is also possible that the specific policy changes to be tested through a given cohort would not need any CohortSpecific Waivers. Any MTW activities that would impact or conflict with the cohort-specific policy change will be identified in the respective Selection Notice so that the MTW agency is aware of this potential restriction on its use of waivers before it enters the MTW demonstration program. Cohort-Specific Waivers and the associated MTW activities may only be used to the extent allowed under the applicable evaluative framework provided by HUD in the applicable Selection Notice. In determining the Cohort-Specific Waivers that will be included in the Selection Notices, HUD will remove and/or add waivers and associated activities based on whether a waiver VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 and its associated activity would impact or conflict with the specific policy(s) to be studied in the MTW agency’s cohort group. The addition or removal of any waivers and associated activities would only apply within the confines of the cohort study. For instance, if the study focuses on rent models as it relates to the voucher program, then an agency’s public housing program would not be affected by the addition or removal of any such waivers and associated activities. If the MTW Waiver(s) and associated activity(s) are not provided to a cohort, or some portion of the agency’s portfolio within the cohort, to allow the cohort to test a specific policy change, the agencies within that cohort study will not be able to conduct that activity(s) until the evaluation of the specific policy change has concluded. 3. Term of Participation The term of each agency’s MTW designation will be 12 years (PHA Fiscal Years) starting from the time of its designation as an MTW agency. All waivers and associated activities provided through the Operations Notice expire at the end of the agency’s term of participation. However, Cohort-Specific Waivers provided to enable a cohortspecific policy change may be extended beyond the agency’s term of participation with HUD’s specific approval if HUD determines that additional time is needed to evaluate the policy change, subject to continued statutory authority for the MTW demonstration. Once an MTW agency has implemented an activity pursuant to the authority of the Operations Notice, the agency may continue to implement that activity throughout the term of its participation in the demonstration, subject to the other terms and conditions of this Notice. The MTW agency must end all activities requiring MTW-specific waivers upon expiration of MTW participation, as HUD cannot guarantee that it will be able to extend any waivers and associated activities beyond that point. For this reason, when entering into contracts with thirdparties that draw upon MTW flexibility, the agency should disclose that such flexibility is only available during the term of the agency’s participation in the MTW demonstration as permitted in this Notice. An exception is third-party contracts that relate to the cohortspecific policy change and associated waiver(s). If HUD determines that additional time beyond the end of the agency’s MTW term is needed to evaluate a cohort-specific policy change, HUD may approve an extension of any cohort-specific waiver(s). PO 00000 Frm 00045 Fmt 4703 Sfmt 4703 51479 4. MTW Funding Flexibility and Financial Reporting During the term of the demonstration, subject to appropriations, HUD will provide an MTW agency with public housing Operating Fund Program grants, public housing Capital Fund Program (CFP) grants, and/or HCV HAP and Administrative Fee assistance as detailed in this Notice. CFP grants may include Formula grants; Demolition or Disposition Transitional Funding (DDTF), which are included in regular Formula grants; and/or funds from older Replacement Housing Factor (RHF) grants (a program later superseded by DDTF). The funding amount for MTW agencies may be increased by additional allocations of vouchers that the agency is awarded over the term of its participation in the MTW demonstration. MTW Funding provided to an MTW agency, including public housing Operating Fund Program grants, public housing CFP grants, and HCV HAP and Administrative Fee assistance, is subject to any future laws and appropriations. If a future law or appropriations bill conflicts with this Operations Notice, the law or appropriations bill shall be implemented, and no breach of contract claim, or any claim for monetary damages, may result from the conflict or implementation of the conflicting law or regulation. a. MTW Funding Flexibility MTW agencies will have the flexibility to apply fungibility among public housing Operating Fund, public housing Capital Fund, and HCV HAP and Administrative Fee assistance. These flexibilities expand the eligible uses of each covered funding stream, but do not negate the need for both the PHA and HUD to be able to account for the funding from its original source to the date of its ultimate eligible use 10 by the PHA, comply with Federal grant and financial management requirements, and use funds effectively and efficiently for their eligible purposes. As the Department continues to implement program-specific financial management policies in its core housing programs, MTW agencies will be subject to the same requirements and procedures as non-MTW agencies. Therefore, the requirements and procedures described in this Notice may change as new financial management policies are implemented over time. HUD will update existing guidance and issue new 10 The date of the ‘‘ultimate eligible use’’ means the date of disbursement by the PHA for an eligible purpose, which would remove the funding from the PHA’s account and the PHA’s control. E:\FR\FM\11OCN1.SGM 11OCN1 51480 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices reporting requirements, as appropriate, to allow HUD to meet its monitoring and oversight responsibilities while ensuring MTW agencies fully utilize and benefit from the flexibilities established by Congress for these funds pursuant to the MTW demonstration and the 2016 MTW expansion. HUD will also update existing guidance and issue new reporting requirements, as appropriate, to ensure compliance with 2 CFR part 200, including with respect to Federal financial management. An agency participating in the MTW demonstration program may flexibly use public housing Operating and Capital Funds provided under Sections 9(d) and 9(e) of the 1937 Act and HCV HAP and Administrative Fee program funds provided under Section 8 of the 1937 Act, referred to collectively as MTW Funding. Certain provisions of Sections 8 and 9 of the 1937 Act and 24 CFR 982 are waived as necessary to implement this flexibility. Once the agency receives its MTW designation through the execution of the MTW CACC Amendment, this flexibility in the use of MTW Funding does not require prior HUD approval. The agency may use MTW Funding covered by MTW flexibility for any eligible activity under Sections 9(d)(1), 9(e)(1) and Section 8(o) of the 1937 Act and for the local, non-traditional activities specified in this Notice, including in the Appendix. Any reserves the MTW agency has accumulated prior to signing an MTW CACC Amendment (including public housing Operating and Capital Reserves and HCV HAP and Administrative Fee Reserves) must be used for their originally appropriated purposes and may not be used flexibly for any eligible MTW activity described in the Appendix. All MTW PHA expenditures, including for local, non-traditional activities, must be consistent with the PHA’s charter, approved 5-Year and Annual PHA Plans, and the approved MTW Supplement to the Annual PHA Plan. i. Calculation of Funding khammond on DSK30JT082PROD with NOTICES (a) Public Housing Operating Grants (1) The calculation of an MTW agency’s Operating Fund subsidy grant eligibility will continue in accordance with operating subsidy formula law, regulations, and appropriations act requirements. As these programmatic and financial requirements are updated, MTW agencies will be affected by and shall comply with these changes. (2) The agency may use these funds for any eligible activity permissible under Section 9(e)(1) of the 1937 Act or, VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 if the agency proposes to use the funding under its MTW flexibility, it may also use these funds for any eligible activity permissible under Section 8(o), Section 9(d)(1), and for the local, nontraditional activities specified in this Notice, including in the Appendix. (3) For Operating Fund grant funding, the MTW agency has accumulated prior to signing an MTW CACC Amendment, the agency may not use such funds for eligible MTW purposes other than the originally appropriated purpose of the funds (i.e., these funds may not be used as flexible MTW Funding). (b) Public Housing Capital Fund Formula and Grants (1) The agency’s public housing Capital Fund formula characteristics and grant amounts, including DDTF and Replacement Housing Factor (RHF), will continue to be calculated in accordance with public housing law, regulations, and appropriations act requirements. (2) MTW agencies must continue to follow the immediate need requirements applicable to all Capital funds and may not accelerate their drawdown of Capital funds for the purpose of funding reserves or for any other purpose. All Capital funds, including funds in BLI 1410 (Administrative Costs) and Budget Line Item (BLI) 1492 (MTW), must be drawn down only when funds are due and payable. (3) The agency may use these funds for any eligible activity permissible under Section 9(d)(1) of the 1937 Act or, if the agency proposes to use the funding under its MTW flexibility, it may also use these funds for any eligible activity permissible under Section 8(o), Section 9(e)(1), and for the local, nontraditional activities specified in this Notice, including in the Appendix. Capital Fund Program (CFP) funds used for activities under section 9(d)(1) are subject to all requirements relevant to non-MTW agency CFP funding, including eligible activities and cost limits. (4) For Capital Funds the MTW agency has accumulated prior to signing an MTW CACC Amendment, the agency may not use such funds for eligible MTW purposes other than the originally appropriated purpose of the funds (i.e., these funds may not be used as flexible MTW Funding). (5) In requisitioning Capital Fund grant funds, the MTW agency will request funds using traditional Capital Fund Budget Line Items (BLIs) for funds to be used for activities under section 9(d) and using the available MTW Budget Line (BLI 1492) items for activities under section 9(e), section 8(o), or local, non-traditional activities. PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 MTW agencies shall not use the Transfer to Operations Budget Line (BLI 1406) since funds for all non-section 9 activities shall be included in the MTW Budget Line (BLI 1492). The agency will provide to HUD information on all capital activities funded by the MTW Funding as necessary to ensure compliance with requirements outside the scope of MTW, including environmental review requirements and Energy and Performance Information Center (EPIC) reporting requirements. (6) The agency remains subject to the requirements of Section 9(j) of the 1937 Act with respect to Capital Fund grants. Section 9(d) funds remain subject to the obligation and expenditure deadlines and requirements provided in Section 9(j) despite the fact that they may be in the MTW Single Fund. Capital Funds awarded to MTW agencies must be obligated within 2 years and expended within 4 years of award. Funds not obligated or expended within those timeframes will be subject to recapture. As with all agencies, an MTW agency may requisition CFP funds from HUD only when such funds are due and payable, unless HUD approves another payment schedule. (c) Housing Choice Voucher Funding. (1) Funding for the Initial MTW Year. For the calendar year (CY) after the MTW agency joins the MTW demonstration (the ‘‘Initial MTW Year’’), the MTW agency’s HCV HAP renewal funding will be calculated in accordance with the same HAP renewal funding formula used for non-MTW HCV agencies in the applicable FY appropriations act. The HAP renewal formula is customarily based on the previous CY’s HAP expenses reported in the Voucher Management System (VMS), adjusted by any applicable inflation factor and national proration. Example: • If an MTW Agency signs its MTW CACC Amendment in July 2018, CY 2019 will be the Initial Year in the MTW demonstration. The MTW Agency’s CY 2019 HAP renewal funding will be calculated based on the Agency’s CY 2018 HAP expenses, adjusted by inflation and proration (assuming this is the formula in the 2019 Appropriations Act). (2) Funding for Subsequent MTW Years. As is the case for non-MTW PHAs under current appropriations law, the HAP renewal funding eligibility for subsequent MTW years will be calculated based on the MTW agency’s actual expenses for the previous calendar year (known as the rebenchmark year). Unique to MTW agencies, however, the MTW agency’s E:\FR\FM\11OCN1.SGM 11OCN1 khammond on DSK30JT082PROD with NOTICES Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices actual expenses are: (i) The previous CY’s HAP expenses reported in Voucher Management System (VMS,) and (ii) the previous CY’s eligible non-HAP MTW expenses reported in VMS. For both HAP and non-HAP MTW expenses, the reported expenses must have been paid from an eligible source of funds as described in section 4(c) below in order to be included in the HAP renewal funding formula. In addition, MTW HAP renewal funding is subject to an MTW Renewal Eligibility Cap derived from the number of units authorized under the agency’s ACC, as described in paragraph (d) on the following page. The lower of the total combined HAP/ non-HAP expenses or the MTW Renewal Eligibility Cap will then be adjusted by an applicable inflation factor and any national proration that applies to the HCV renewal appropriation to determine the MTW agency’s actual CY HAP renewal funding. Example: • In CY 2019, an MTW Agency expended $3,600,000 on HAP and $400,000 on eligible non-HAP MTW expenses. The agency’s HCV HAP renewal funding for CY 2020 will be $4 million (assuming the HAP Renewal Eligibility Cap is greater than $4 million), adjusted by an inflation factor and any applicable national proration. (3) HAP Renewal Sources of Funds. The only HAP and non-HAP MTW expenses that will be included in the MTW HAP renewal formula are those paid for with the same sources of funds that would be included in the non-MTW HAP renewal formula for a non-MTW agency (see PIH Notice 2013–28 and any future successor notices). Accordingly, HAP expenses and non-HAP MTW expenses must be paid from the following sources of funds to be included in the HAP renewal formula calculation: • Housing Choice Voucher (HCV) budget authority, • HUD-held HAP reserves (undisbursed budget authority), • PHA-held HAP reserves (i.e., Restricted Net Position (RNP)), • Any funds from the HAP Set-aside (if available after PHA application and approval), and • Administrative Fee reserves (i.e., Unrestricted Net Position (UNP)). HAP expenses or non-HAP MTW expenses that were covered by any other funding source (for example, public housing Operating Funds and Capital Funds, and current year HCV Administrative Fee funds) will not be included in the MTW PHA’s HCV renewal funding calculation. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 (4) HAP Renewal Eligibility Cap. The MTW PHA’s renewal eligibility for all MTW Years will be limited by the HAP Renewal Eligibility Cap. The calculation multiplies (1) the MTW PHA’s total number of MTW-eligible ACC authorized units 11 in the re-benchmark year (the CY immediately preceding the CY for which the PHA’s renewal eligibility is being calculated) 12 by (2) the PHA’s pre-MTW monthly per-unit cost (PUC) inflated to the re-benchmark year. • For (1), the number of MTW-eligible ACC authorized units is measured in unit months available (UMAs).13 • For (2), the inflated pre-MTW PUC is projected using, as a base, the monthly PUC for the CY in which the agency signed its MTW CACC Amendment. HUD applies an inflation factor to this base PUC to estimate what the PHA’s HCV PUC would be, had the PHA not joined the MTW program, as of the re-benchmark year. After the calculation of the HAP Renewal Eligibility Cap, it is compared with the MTW PHA’s actual total combined HAP/non-HAP expenses. The lower of these two amounts—(1) the HAP Renewal Eligibility Cap or (2) the MTW PHA’s actual total combined HAP/non-HAP expenses—is then adjusted by the inflation factor and any national proration factor to determine the MTW PHA’s CY renewal funding. Example: • If an MTW Agency signs its MTW CACC Amendment in July 2018, CY 2019 will be the Initial Year in the MTW demonstration. In the Initial CY (CY 2019) the MTW Agency’s renewal formula is the same formula that is used for non-MTW PHAs. In calculating the MTW Agency’s HCV renewal funding for CY 2020, the following information applies: 11 ‘‘MTW-eligible ACC authorized units’’ means the PHA’s number of ACC authorized units, regardless of whether the units are leased, after excluding the number of authorized units that would not be subject to the MTW renewal formula. In other words, special purpose vouchers that are renewed separately and are not part of the MTW HAP renewal formula are not included in the formula used to calculate the HAP Renewal Eligibility Cap. See Section 8 of this Notice for further information on these special purpose vouchers that are renewed separately outside the MTW renewal formula. 12 As noted above, the re-benchmark year is also the source year for the actual expense data used in the MTW PHA’s HAP renewal formula. 13 Authorized units in the HCV program context are measured in terms of unit months available. For example, if an authorized unit is under CACC as of January 1, the authorized unit equals 12 unit months available for that CY. On the other hand, if the authorized unit was added to the CACC under a new funding increment effective July 1, the authorized unit is equal to 6 unit months available for that CY. PO 00000 Frm 00047 Fmt 4703 Sfmt 4703 51481 Æ The MTW PHA’s average monthly PUC for CY 2018 was $700. Æ The CY 2019 inflation rate is 2 percent. Æ The number of MTW-eligible ACC authorized units during CY 2019 is 800 units. (In this example all units were under ACC as of January 1, 2019, so the number of unit months available (UMAs) is simply 800 units multiplied by 12 months, or 9,600 UMAs). • The HAP Renewal Eligibility Cap for CY 2020 is calculated by first determining the estimated PUC for CY 2019, which is $714 (the monthly PUC for CY 2018 inflated for CY 2019, or $700 × 1.02). The estimated PUC for CY 2019 is then multiplied by the MTW PHA’s CY 2019 MTW-eligible ACC authorized UMAs14 ($714 × 9,600 UMAs) to determine the HAP Renewal Eligibility Cap, which is $6,854,400. • The HAP Renewal Eligibility Cap ($6,854,400) is then compared to the MTW Agency’s total combined HAP/ non-HAP expenses for the re-benchmark year that originated from the eligible funding sources described earlier in this Notice. If the total combined HAP/nonHAP expenses do not exceed $6,854,400, the MTW Agency’s CY 2020 renewal funding will be the total combined HAP/non-HAP expenses adjusted by an inflation factor and any national proration. If the total combined HAP/non-HAP expenses exceed $6,854,400, the MTW Agency’s CY 2020 renewal funding will be $6,854,400, adjusted by an inflation factor and any national proration. (5) Financial Management Requirements Apply. The same financial management requirements that apply to non-MTW agencies also apply to MTW agencies. Accordingly, all undisbursed HAP funds, including HAP-originated reserve funds, will be retained as HUDheld reserves per Office of Management and Budget cash management requirements and can be requested by the MTW agency when immediate need exceeds the scheduled HAP monthly disbursements, but only after consideration of available MTW agencyheld Restricted Net Position (RNP). (6) Administrative Fees. The Administrative Fee rates used to calculate fee eligibility for MTW agencies shall be established according to the same methodology used to establish Administrative Fee rates for all agencies, including non-MTW agencies. As is the case for all agencies under current appropriations law, 14 As noted earlier, these are the MTW PHA’s CY 2019 UMAs that are subject to the MTW renewal formula. UMAs attributable to special purpose vouchers such as HUD–VASH and FUP that are renewed separately are not included in this count. E:\FR\FM\11OCN1.SGM 11OCN1 khammond on DSK30JT082PROD with NOTICES 51482 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices administrative fees will be calculated on the basis of units leased as of the first day of each month; this data will be extracted from Voucher Management System (VMS) at the close of each reporting cycle. Administrative fees for MTW agencies are also subject to the national proration factor and any other appropriations act requirements. (7) Adjustments for the First-Time Renewal of Certain Vouchers. If the MTW agency receives incremental HCV vouchers and funding (including tenant protection vouchers) other than special purpose vouchers, renewal funding for those vouchers will be included in the MTW HCV renewal funding eligibility calculation for the following year. (See Section 8 of this Notice for further discussion of tenant protection and other special purpose vouchers.) The renewal amount for the following year is based on HAP costs reported for these increments in VMS in the prior year, which will be adjusted by the inflation factor. Should the initial increment(s) be funded for less than 12 months due to lack of appropriations, HUD will adjust for the missing months upon renewal, by selecting the higher of the funded PUC for the initial increment, or the MTW per unit cost (PUC) times the number of units,15 then adjusted by the inflation factor. The aggregate renewal eligibility is always subject to the national proration factor. (8) Applicable Inflation Factor and Proration. The same applicable inflation factor that applies to non-MTW agencies will be applied each CY to determine the MTW agency’s HAP funding renewal eligibility. Likewise, the MTW agency’s HAP funding renewal eligibility is subject to the same national proration as non-MTW agencies’ renewal eligibility. (9) Prior Year Reserves. For HCV HAP and Administrative Fee funding provided in years prior to the designation of the agency as an MTW agency, the agency may not use any accumulated HCV reserves for eligible MTW purposes other than the originally appropriated purpose of the funds (i.e., these funds may not be used as flexible MTW Funding). (10) Rental Assistance Demonstration (RAD). Any vouchers received as part of a RAD Component I conversion shall be added to the ACC for the remainder of the CY in which they are awarded. HUD 15 The MTW PUC is equal to MTW HAP expenses divided by the number of MTW units leased. (NonHAP MTW expenses are not included in the MTW PUC calculation). HUD may further adjust the MTW PUC calculation for PHAs administering RAD project-based vouchers to exclude RAD Rehab payments so the MTW PUC only reflects expenses attributable to actual housing assistance payments. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 will issue a new increment of voucher funding in support of those vouchers for the first full CY following a RAD Component I conversion. In subsequent years, voucher funding for RADconverted units will be renewed under the MTW HCV renewal funding calculation, plus inflation factor and the applicable proration factor. Tenant protection vouchers provided for RAD Component II conversions are renewed in accordance with section 4.v, Adjustment for the first-time renewal of certain vouchers, above. Administrative fees for RAD vouchers will be calculated based on the same methodology used to establish administrative fees for nonMTW agencies. Fees for RAD vouchers will be prorated at the same level that applies to all non-MTW agencies. (11) Voucher Programs Not Included in MTW Program. Vouchers and funding provided for the following special purpose vouchers, or any new special purpose vouchers provided in future appropriations acts, whether for new allocations or renewal of existing increments, shall not be included in the HCV MTW renewal calculation: Mainstream, HUD-Veterans Affairs Supportive Housing (HUD–VASH), Non-Elderly Disabled (NED), and Family Unification Program (FUP). These vouchers will be renewed under the regular voucher renewal requirements as provided under the appropriations acts. Special purpose vouchers are discussed in more detail in Section 8 of this Notice. In addition, funding provided for the Section 8 Moderate Rehabilitation Program is not part of the MTW program and may not be used for MTW activities. b. Financial Reporting and Auditing MTW agencies must submit year-end unaudited financial information to the Department no later than 2 months after their fiscal year end using the Financial Data Schedule (FDS) contained in the Real Estate Assessment Center’s (REAC) Financial Assessment Subsystem (FASS–PH), or its successor system. Current financial reporting requirements for MTW agencies are posted on the REAC website at https://www.hud.gov/ sites/documents/DOC_11833.PDF. These requirements may be updated in the future. MTW agencies are also required to electronically submit their audited financial information, if applicable, to the Department no later than 9 months after their fiscal year end. MTW agencies must include public housing project level financial information in the FDS and must follow the Asset Management guidelines established in Public and Indian Housing (PIH) Notice PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 2007–9 Supplement to Financial Management Handbook Office of Public and Indian Housing (PIH) Revised April 2007, and any subsequent updates to this Handbook or PIH Notice. MTW agencies will conform to the cost requirements of 2 CFR part 200 and any HUD implementation thereof. MTW agencies must procure an Independent Public Accountant (IPA) to perform an annual audit pursuant to Federal requirements at 2 CFR part 200 and 24 CFR 990.190, or successor, as well as any audit compliance supplements developed specifically for use with the MTW demonstration. Completed IPA audits must be submitted to HUD in accordance with current HUD regulations. HUD will review IPA audits of MTW agencies to determine appropriate action relative to any findings, prepare recommendations for audit finding resolution, and follow up with MTW agencies to assure finding closure. If there are audit findings related to the MTW program itself, HUD will monitor the resolution of all audit findings. 5. Evaluation As a condition of participating in the MTW demonstration, MTW agencies agree to cooperate fully with HUD and its contractors in the monitoring and evaluation of the MTW demonstration. MTW agencies shall keep records and submit reports and other information as required by HUD. This includes any data collection required for the use of waivers and associated activities, for the uses of MTW funds within and across funding streams, and any evaluation efforts that HUD undertakes for the cohort-specific policy changes. MTW is a demonstration that provides PHAs flexibilities to innovate and try different approaches to housing assistance in order to achieve at least one of the three statutory objectives laid out in the 1996 MTW Statute. At its core, the demonstration is an opportunity for PHAs, participants, HUD, stakeholders, and the general public to learn from different approaches to providing Federal housing assistance to low-income families. This includes learning from approaches that are effective and produce desired outcomes, and from approaches that are less effective than anticipated and where results may have unintended consequences. Because MTW agencies can use different flexibilities calling on multiple activities within the MTW Waivers to serve local populations in various parts of the country, interpreting PHAreported performance data on the effects of an individual MTW activity can be E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices challenging. Consequently, and while adhering to the guiding principles for the expansion—to simplify, learn, and apply—HUD will create and develop an evaluation system that will document and consider the MTW demonstration through the lens of the three statutory objectives relating to cost effectiveness, self-sufficiency, and housing choice. HUD envisions three types of evaluation: Program-wide evaluation, cohort-specific evaluation, and ad hoc evaluation. khammond on DSK30JT082PROD with NOTICES a. Program-Wide Evaluation Program-wide evaluation would seek to assess whether or not, and to what extent, MTW agencies use Federal dollars more efficiently, help residents find employment and become selfsufficient, and/or increase housing choices for low-income families. HUD intends to develop a method for program-wide evaluation that is based, to the extent possible, on information already being collected through existing HUD administrative data systems. HUD may determine and require that additional reporting is necessary to effectively evaluate MTW. b. Cohort-Specific Evaluation The 2016 MTW Expansion Statute requires HUD to direct all the agencies in a cohort to implement one specific policy change and to conduct a rigorous evaluation of the one specific policy change. The MTW Research Advisory Committee has considered input from the public and advised HUD on the policy changes to be tested through the new cohorts of MTW agencies and on the methods of research and evaluation. The cohort-specific policy change and evaluation methods will be described in the applicable Selection Notice so that the MTW agency is aware, in advance of application to the MTW demonstration program, of the policy it will be required to implement and the evaluation requirements. The specific evaluation methods and requirements for participating MTW agencies will vary based on the policy changes to be tested. For example, some cohorts of MTW agencies may be required to participate in randomized control trials, while others may be required to participate in detailed process studies or ethnographic research. HUD’s Office of Policy Development and Research (PD&R) will take the lead on evaluating cohort-specific policy changes, and funds have been appropriated by Congress for this evaluation. In all cases, the purpose of the evaluation will be to measure the outcomes associated with the specific policy change(s) in order to offer policy recommendations for VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 implementing the policy change(s) across all PHAs. HUD will determine the length and timeframe for the evaluation, which will be informed by feedback provided by the MTW Research Advisory Committee. In some cases, the evaluation timeframe may extend beyond the agency’s term of MTW participation. The MTW agency is required to participate in the evaluation for the full timeframe designated by HUD. HUD may extend waivers and associated activities beyond the agency’s term of participation to the extent that those waivers and associated activities are needed to support the evaluation of the specific policy change and HUD determines whether additional time is needed to evaluate the policy change. c. Ad Hoc Evaluation HUD reserves the right to request, and the MTW agency agrees to provide, any additional information required by law or required for the sound administration or evaluation of the MTW agency. 6. Program Administration and Oversight In general, MTW agencies will be subject to the same planning and reporting protocols as non-MTW agencies, including the PHA Plan (5Year Plan and Annual PHA Plan) and Capital Fund planning. MTW agencies must also report data into HUD data systems, as required. New protocols and instruments will be developed for assessing an MTW agency’s performance and will be incorporated into PHAS and SEMAP, or successor assessment systems, or an alternative assessment system developed by HUD, explained further in Section 6.b. of this Operations Notice. In addition, HUD will employ standard program compliance and monitoring approaches including assessment of relative risk and on-site monitoring conducted by HUD or by entities contracted by HUD. a. Planning and Reporting i. The Annual PHA Plan MTW agencies must adhere to Annual PHA Plan regulations at 24 CFR part 903, any implementing HUD Notices and guidance, as well as any succeeding regulations. The Annual PHA Plan consists of the 5-Year Plan that a PHA must submit to HUD once every five PHA fiscal years and the Annual PHA Plan that the PHA must submit to HUD for each PHA fiscal year. Any HUD assistance that the agency is authorized to use under the MTW demonstration PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 51483 must be used in accordance with the Annual PHA Plan, as applicable. Annual and 5-Year Plans must be submitted in a format prescribed by HUD. Currently, submission format requirements are outlined in Notice PIH 2015–18 (HA), issued October 23, 2015, which is effective until amended, superseded, or rescinded. ii. MTW Supplement to the Annual PHA Plan (Under Development) As an MTW agency, all Annual PHA Plan information must be provided in the context of the agency’s participation in the MTW demonstration. This includes taking into account the MTW Waiver(s) and associated activity(s) afforded to the MTW agency. To this end, the MTW agency will submit an MTW Supplement to the Annual PHA Plan, in a format to be developed by HUD. Prior to submitting to HUD, the MTW Supplement must go through a public process along with the Annual PHA Plan. This will allow the agency to inform the community of any programmatic changes and give the public an opportunity to comment. Details about this requirement are elaborated later in this section. New MTW agencies will not be required to submit the Annual MTW Plan or Annual MTW Report (i.e., Form 50900), which are required for existing MTW agencies. The MTW Supplement form has not been finalized at the time of publishing of this Operations Notice. The MTW Supplement will be made available for public review and comment, per Paperwork Reduction Act requirements, prior to finalizing the form. At this time, HUD plans to require MTW agencies to use the MTW Supplement to the Annual PHA Plan to: • Describe how the MTW agency seeks to address the three MTW statutory objectives during the coming fiscal year, in a narrative format; • Indicate the MTW activities that the agency plans to implement in the Annual PHA Plan year that utilize the activities contained in the MTW Waivers (Appendix), and ongoing activities the agency has implemented in the prior year, using a check-box or other simple format; • Indicate the estimated costs/savings per year for planned activities that have a cost implication; • Indicate the reason(s) why any previously approved MTW activities were not implemented in the previous year; • Indicate any changes in the MTW activities and associated waivers, including safe harbors, that have E:\FR\FM\11OCN1.SGM 11OCN1 khammond on DSK30JT082PROD with NOTICES 51484 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices changed from the previous Annual PHA Plan year; • Describe any Agency-Specific Waiver Requests that the MTW agency seeks to implement in PHA fiscal year, if applicable; • Indicate the MTW activities that the agency will undertake in the Annual PHA Plan year that require CohortSpecific Waivers (as applicable and identified in each cohort’s Selection Notice), and the Cohort-Specific Waivers to be used, using a check-box or other simple, non-narrative format; • Certify to HUD that all MTW activities being implemented by the agency fall within the safe harbors outlined in the Appendix; • Submit data or information required for the ongoing use of any activities within the MTW Waivers; and • Submit data required for HUD’s verification of the MTW agency’s compliance with the five statutory requirements established under the 1996 MTW Statute. Non-MTW PHAs that are qualified under 24 CFR 903.3(c) and that are not designated as troubled under PHAS and that do not have a failing score under SEMAP are exempt from the requirement to submit the Annual PHA Plan. Per this Operations Notice, while MTW agencies that are qualified under 24 CFR 903.3(c) are not required to submit the Annual PHA Plan, they are required to submit the MTW Supplement to the Annual PHA Plan on an annual basis. During the agency’s initial year of participation in the MTW demonstration, an agency may implement MTW activities once they have been included in an approved MTW Supplement, either during the next regularly scheduled submission of the Annual PHA Plan and MTW Supplement or through an amendment to the Annual PHA Plan, which would include the MTW Supplement. AgencySpecific Waiver Requests and activities may only be implemented after explicit written approval from HUD. MTW agencies must submit to HUD the Annual PHA Plan, including any required attachments, and the MTW Supplement no later than seventy-five (75) days prior to the start of the agency’s fiscal year. Before submission to HUD, the agency must have at least a 45-day public review period of its plan, after publishing a notice informing the public of its availability and conducting reasonable outreach to encourage participation in the plan process, followed by a public hearing. MTW agencies must consider, in consultation with the RABs, all of the comments received at the public VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 hearing. The recommendations received by the public and RABs must be submitted by the agency as a required attachment to the Plan. MTW agencies must also include a narrative describing their analysis of the recommendations and the decisions made on these recommendations. Agencies must also obtain the proper signed certifications and board certification. HUD will notify the MTW agency in writing if HUD objects to any provisions or information in the Annual PHA Plan or the MTW Supplement. When the MTW agency submits its Plan seventyfive (75) days in advance of its fiscal year, HUD will respond to the MTW agency within 75 days. Reviews of the Annual PHA Plan and the MTW Supplement will be conducted by the local field office, in consultation with the MTW Office. iii. Admissions and Continued Occupancy Policy (ACOP) and Administrative Plan The MTW agency must update its ACOP and Administrative Plan to be consistent with the MTW activities and related waivers that it implements. The agency may not implement an MTW activity or waiver until the relevant sections of the ACOP and/or Administrative Plan are updated. MTW agencies must provide HUD with electronic versions of the ACOP and Administrative Plan upon request. If the MTW agency implements an activity using the local, non-traditional uses of funds waiver, the MTW agency must create and update an implementing document specifically for such activity. iv. Capital Planning and Reporting MTW agencies must adhere to CFP regulations at 24 CFR part 905, any implementing HUD Notices and guidance, as well as any successor regulations. As noted previously, MTW agencies are funded in accordance with CFP regulations and formula funds are calculated and distributed in the same manner as non-MTW agencies. MTW agencies have the authority and flexibility to utilize their CFP funds for expanded uses as part of their MTW funding flexibility. HUD will award Capital Fund grants to MTW agencies in keeping with the standard process for all PHAs. The Field Office will distribute funds in Line of Credit Control System (LOCCS) to the MTW agencies in accordance with the standard process. As with all PHAs, an MTW agency may draw down Capital Funds from HUD only when such funds are due and payable, unless HUD approves another payment schedule. To the extent that the MTW agency plans PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 to use CFP funding for other MTWeligible (non-CFP) activities, the CFP funding would be recorded on BLI 1492 (Moving to Work) on Form HUD– 50075.1. CFP funds entered on BLI 1492 would not need to be broken out and itemized in the part II supporting pages of the HUD–50075.1. However, regardless of the BLI utilized, funds may not be drawn down until the PHA has an immediate need for the funds. An MTW agency may not accelerate drawdowns of funds in order to fund reserves or to otherwise increase locally held amounts, as discussed in 4(a)(i)(b)(2) of this Notice. An MTW agency is not required to use all or any portion of its CFP grant for non-CFP activities. To the extent that the MTW agency wishes to dedicate all or a portion of its CFP grant to specific capital improvements, the agency shall record CFP funding on the appropriate BLI(s) on Form HUD–50075.1 (other than BLI 1492) as in the standard program. v. Inventory Management System/PIH Information Center Reporting Data from HUD’s Inventory Management System (IMS) and Public and Indian Housing (PIH) Information Center (PIC), or successor systems, is critical to all aspects of program administration, including HUD monitoring and tracking of MTW agency progress in meeting the MTW statutory objectives. IMS/PIC data is used to establish funding eligibility levels for both Operating Subsidy Fund and Capital Fund grants. Further, HUD relies on IMS/PIC data to provide a thorough and comprehensive view of PHA program performance and compliance. MTW agencies are required to submit the following information to HUD via IMS/PIC (or its successor system): • Family data to IMS/PIC using Form HUD–50058 MTW (or successor forms) or Form HUD–50058 and in compliance with HUD’s 50058 MTW or standard 50058 submission requirements for MTW agencies. MTW agencies must report information on all families receiving some form of tenant-based or project-based housing assistance, either directly or indirectly, as well as all public housing families, to be current to at least a 95 percent level. • Current building and unit information in the development module of IMS/PIC (or successor system). • Basic data about the PHA (address, phone number, email address, etc.). HUD will monitor MTW agency reporting to IMS/PIC (or successor system) to ensure compliance and provide technical assistance to MTW agencies as needed. E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices vi. Voucher Management System Reporting MTW agencies are required to report voucher utilization in the Voucher Management System (VMS), or its successor system. There are several areas in which VMS reporting is different for MTW agencies. These areas are highlighted in the VMS User’s Manual (http://portal.hud.gov/ hudportal/documents/ huddoc?id=instructions.pdf), which details the VMS reporting requirements. HUD will monitor each MTW agency’s VMS reporting to ensure compliance and provide technical assistance to MTW agencies as needed. khammond on DSK30JT082PROD with NOTICES vii. General Reporting Requirement In addition to the reporting requirements outlined in this Operations Notice, MTW agencies are required to comply with any and all HUD reporting requirements not specifically waived by HUD for participation in the MTW demonstration program, including the requirement (discussed in Section 5) to comply with HUD’s evaluation of the specific-policy changes being implemented by cohort. b. Performance Assessment Assessing the performance of PHAs (both MTW and non-MTW) helps with the delivery of services in the public housing and voucher programs and enhances trust among PHAs, public housing participants, HUD, and the general public. To facilitate this effort, HUD will provide management tools for effectively and fairly assessing the performance of a PHA in essential housing operations and program administration. Currently, HUD uses PHAS and SEMAP to assess risk and identify underperforming PHAs in the traditional public housing and voucher programs. However, since some of the MTW flexibilities make it difficult to accurately assess the performance of MTW agencies under the existing systems, HUD will develop an alternative, MTW-specific assessment system, which may be incorporated into PHAS and SEMAP (or successor assessment system(s)). MTW agencies may not opt out of the MTW-specific successor system(s). Until the successor system is implemented, HUD will monitor MTW agency performance through PHAS sub-scores. i. Public Housing Assessment System MTW agencies are scored in PHAS, however, agencies can elect not to receive the overall score (MTW agencies continue to receive PHAS sub-scores VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 even if they elect not to receive the overall score). If an MTW agency elects to receive its overall PHAS score, the agency must continue to be scored for the duration of the demonstration, or until the agency is assessed under the alternative, MTW-specific assessment system(s), whichever comes first. Once developed, all MTW agencies, including MTW agencies that elect not to receive an overall PHAS score, must be assessed under the MTW-specific assessment system(s). Per the 1996 MTW statute, when providing public housing, the MTW agency must ensure that the housing is safe, decent, sanitary, and in good repair, according to the physical inspection protocols established and approved by HUD. Thus, MTW agencies continue to be subject to HUD physical inspections. To the extent that HUD physical inspections reveal deficiencies, the MTW agency must continue to address these deficiencies in accordance with existing physical inspection requirements. If an MTW agency does not maintain public housing adequately, as evidenced by the physical inspection performed by HUD and is determined to be troubled in this area, HUD will determine appropriate remedial actions. The actions to be taken by HUD and the agency will include actions statutorily required and such other actions as may be determined appropriate by HUD. These actions may include developing and executing a Memorandum of Agreement (MOA) with the MTW agency, suspension or termination of the MTW CACC Amendment in accordance with the provisions therein, or such other actions legally available to the Department. MTW agencies must continue to submit year-end financial information into the Financial Data System (FDS) or successor system, as discussed earlier. ii. Section 8 Management Assessment Program MTW agencies are not scored in SEMAP but they can elect to be scored if they choose to opt in. If an MTW agency elects to receive its overall SEMAP score, the agency must continue to be scored for the duration of the demonstration, or until the agency is assessed under the MTW-specific assessment system, whichever comes first. Once developed, all MTW agencies, including MTW agencies that opt out of SEMAP, must be assessed under the MTW-specific assessment system(s). c. Monitoring and Oversight MTW agencies remain subject to the full range of HUD monitoring and PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 51485 oversight efforts including, but not limited to, annual risk assessments, onsite monitoring reviews, monitoring reviews relating to VMS reporting and rent reasonableness, review of the accuracy of data reported into HUD data systems, and use of HUD data systems to assess agency program performance, among other activities. i. MTW Statutory Requirements Throughout participation in the MTW demonstration program, all MTW agencies must continue to meet five statutory requirements established under the 1996 MTW Statute. Implementation, monitoring and enforcement of the five statutory requirements will be discussed in greater detail in the final version of this Operations Notice, and specific enforcement processes will be included in the MTW CACC Amendment (see also, section 11 of this Notice). HUD will monitor and determine MTW agencies’ compliance with these five requirements as follows: (a) MTW agencies must ensure that at least 75 percent of the families assisted are very low-income families, in each fiscal year, as defined in section 3(b)(2) of the 1937 Act. (i) HUD Verification Approach: Initial household certification data recorded in PIC will be used for both the public housing and HCV programs for compliance monitoring purposes. The initial certification is comprised only of new admissions in the agency’s given fiscal year. Initial household certification data for families housed through local, non-traditional activities (in accordance with the Appendix) will be provided in a manner specified by the Department. An agency’s portfolio will then be weighted with respect to the number of households being served by each housing program type (i.e., PH, HCV, Local, Non-Traditional). (b) MTW agencies must establish a reasonable rent policy which shall be designed to encourage employment and self-sufficiency by participating families, consistent with the purpose of this demonstration, such as by excluding some or all of a family’s earned income for purposes of determining rent. (i) HUD Verification Approach: HUD defines rent reform as any change in the regulations on how rent is calculated for a household. Upon designation into the MTW demonstration, agencies are to submit their planned policy to implement a reasonable rent policy in the MTW Supplement. All activities falling under the Tenant Rent Policies category, detailed in the Appendix, meet the definition of a reasonable rent E:\FR\FM\11OCN1.SGM 11OCN1 khammond on DSK30JT082PROD with NOTICES 51486 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices policy. An MTW agency must implement one or multiple reasonable rent policies during the term of its MTW designation (MTW agencies in the rent reform cohort may have prescribed deadlines to implement their reasonable rent policies). (c) MTW agencies must continue to assist substantially the same total number of eligible low-income families as would have been served had the amounts not been combined. (i) HUD Verification Approach: HUD continues to consider the best approach to monitor the MTW statutory requirement that MTW agencies serve substantially the same number of families absent the demonstration. The main themes and principles for this effort include a Substantially the Same (STS) methodology that: Ensures substantially the same number of families are housed; allows for local flexibility; is responsive to changing budgetary climates; is feasible for HUD to administer; is easy for MTW agencies to predict compliance; is straight forward to understand; is calculated each year; and has publicly available results. First, the STS methodology would establish a baseline ratio of dollars the agency expends and families housed. Before an agency enters the MTW demonstration, the public housing funding and the HCV HAP funding spent by the agency in the prior CY would be divided by the current number of families housed in each program. This calculation would yield how many families the agency houses per $100,000 of funding in both the public housing and HCV programs. Each year during an agency’s participation in the MTW demonstration, the baseline number of total families housed per $100,000 of funding in both the public housing and HCV programs would be applied to the agency’s actual funding for that calendar year. So, for example, the agency would know that if it is appropriated ‘‘x number of dollars,’’ it would be required to house ‘‘y number of families.’’ Depending on the specific circumstances of the agency, a dip below the baseline year number would be allowed. HUD is exploring methods to ensure that the ratio of families housed per $100,000 in the baseline year continues to be an accurate measure of ‘‘substantially the same’’ service levels in future years of the MTW designation. There would also be opportunities for PHAs to request adjustments of the baseline ratio to account for changes in costs due to special circumstances. The following is an example of the STS baseline ratio calculation: VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 Baseline Year (Calendar Year Before Agency Enters MTW) • Agency expends $800,000 in HCV HAP funds and houses 100 HCV families. Agency then houses 12.5 HCV families per $100,000 of HCV funds. • Agency expends $500,000 in public housing funds and houses 75 public housing families. Agency then houses 15 public housing families per $100,000 public housing funds. First Year in MTW Demonstration • MTW agency receives $900,000 in HCV HAP funds and $300,000 in public housing funds. • MTW agency must house 112.5 families for the HCV share and 45 families for the public housing share. Therefore, in this example, the MTW agency is required to house 157 total families flexibly with its MTW funds (this may be in the public housing program, the HCV program, a local, nontraditional rental subsidy program, or a local, non-traditional development program 16). (d) MTW agencies must maintain a comparable mix of families (by family size) as would have been provided had the amounts not been used under the demonstration. (i) HUD Verification Approach: In order to establish a comparable mix baseline, the Department will pull data, by family size, for occupied public housing units and leased vouchers at the time of entry into the demonstration. The Department will rely upon agencyreported data into HUD systems (i.e., PIC, VMS). This information will be used to establish baseline percentages, by family size, to which the agency is measured by for the remainder of participation. Following entry into the demonstration, agencies will provide comparable mix data and, if applicable, associated justifications in the MTW Supplement. The Department deems an acceptable level of variation to be no more than 5 percent from the baseline. Justifications or explanations for fluctuations greater than 5 percent are 16 MTW agencies may use their MTW Funding to develop affordable housing units that are outside of the traditional public housing and HCV programs. Such local, non-traditional development allows for the creation of important affordable housing resources, which must be balanced with the existing and immediate needs of families waiting for housing assistance. It is therefore necessary to relate the amount of the MTW agency’s total available MTW Funding investment to the number of affordable units developed. To that end, HUD will divide the MTW agency’s total available MTW Funding in the local, non-traditional development by the HUD-published Total Development Cost (TDC). The resulting number of units would then count as families housed for the length of time the units remained affordable. PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 required and subject to the Department’s review. (e) MTW agencies must ensure that housing assisted under the demonstration meets housing quality standards established or approved by the Secretary. (i) HUD Verification Approach: In order to demonstrate that the MTW agency meets housing quality standards, HUD will verify compliance for each housing program type as follows: • HCV—Program regulations at 24 CFR part 982 set forth basic housing quality standards (HQS) for housing assisted under the HCV program. These housing quality standards, or its successor regulations, are the standards used to determine if the agency is fulfilling its responsibilities to ensure owners are maintaining the units in accordance with HQS in the evaluation of an agency. Agencies with an HCV program must certify in the MTW Supplement that they have fulfilled their responsibilities to comply with and ensure enforcement of HQS under this requirement. • Public Housing—HUD will verify this requirement through its review of PHAS Physical Assessment Subsystem (PASS) scores, or successor assessment system. Scores falling below 24 out of 40 will be identified as non-compliant with the statutory requirement. • Local, Non-Traditional—In the MTW Supplement, MTW Agencies must certify that local, non-traditional units meet housing quality standards as required in PIH Notice 2011–45, or successor notice. ii. Income Integrity and Enterprise Income Verification System (EIV) Reviews MTW agencies are required to comply with the final rule regarding EIV issued December 29, 2009, and utilize EIV for all income verifications. EIV has been modified for MTW agencies so that family information submitted in PIC will not expire for 40 months, in order to accommodate agencies choosing to extend recertification periods for up to three years. MTW agencies are subject to HUD review to ensure compliance with EIV requirements as well as monitor the accuracy and integrity of the MTW agencies’ income and rent determination policies, procedures, and outcomes. iii. MTW Site Visit HUD will periodically conduct site visits to provide guidance, discuss the MTW agency’s MTW activities, and offer any needed technical assistance regarding its program. The purpose of a E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices site visit will be to confirm reported agency MTW activities, to review the status and effectiveness of the agency’s MTW strategies, provide technical assistance, and to identify and resolve outstanding MTW related issues. The MTW agency shall give HUD access, at reasonable times and places, to all requested sources of information, including access to files, access to units, and an opportunity to interview agency staff and assisted participants. Where travel funding or staff resources are not available to facilitate in-person site visits, HUD may exercise the option to conduct remote site visits via telephone, videoconference, or webinar. To the extent possible, HUD will coordinate the MTW site visit with other site visits to be conducted by HUD. iv. Housing Choice Voucher Utilization HUD will monitor HCV utilization at MTW agencies and will ensure that HCV funds are utilized in accordance with Section 4(a)(i)(c) and Section 6(c)(i)(c) of this Notice. Where leasing levels are inconsistent with the requirements of this Notice, HUD may take appropriate actions to work with the MTW agency to increase leasing and utilization. khammond on DSK30JT082PROD with NOTICES v. Public Housing Occupancy HUD will monitor public housing occupancy rates for MTW agencies. In instances where the MTW agency’s public housing occupancy rate falls below 96 percent, HUD may require, at its discretion, that the MTW agency enter into an Occupancy Action Plan to address the occupancy issues. The Occupancy Action Plan will include the cause of the occupancy issue, the intended solution, and reasonable timeframes to address the cause of the occupancy issue. vi. Additional Monitoring and Oversight HUD may, based on the MTW agency’s risks and at HUD’s discretion, conduct management, programmatic, financial, or other reviews of the MTW agency. The MTW agency shall respond to any findings with appropriate corrective action(s). In addition, HUD will make use of all HUD data systems and available information to conduct ongoing remote monitoring and oversight actions for MTW agencies, consistent with the results of the PIH risk assessment. 7. Rental Assistance Demonstration Program MTW agencies converting public housing program units to Section 8 VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 assistance under the Rental Assistance Demonstration (RAD) program are able to retain MTW regulatory and statutory flexibilities in the management of those units, subject to RAD requirements, if the conversion is to Project Based Voucher (PBV) assistance. MTW agencies converting projects under RAD to PBV may continue to undertake flexibilities except to the extent limited by RAD, as described in the RAD Notice, PIH 2012–32, REV–3, or its successor Notice.17 8. Applying MTW Flexibilities to Special Purpose Vouchers Special Purpose Vouchers (SPVs) are specifically provided for by Congress in line item appropriations, which distinguish them from regular vouchers. Except for enhanced vouchers and tenant-protection vouchers (described below), SPVs are not part of the MTW demonstration and are not part of the MTW agency’s total available flexible MTW Funding. The funding is renewed outside of the MTW HAP renewal formula and the funding (both the initial increment and renewal funding) for the SPVs may only be used for eligible SPV purposes. There are no additional MTW flexibilities around using MTW funds to cover SPV shortfalls. MTW PHAs may use non-HAP sources to cover shortfalls, following the procedures outlined in Notice PIH 2013–28. PHAs already have the ability to use HAP reserve funds to address SPV instances of shortfalls, where the SPVs are under the same appropriations allocation for renewal as their Section 8 vouchers. 18 a. HUD-Veterans Affairs Supportive Housing HUD-Veterans Affairs Supportive Housing (HUD–VASH) vouchers have separate operating requirements and must be administered in accordance with the requirements listed at www.hud.gov/program_offices/public_ indian_housing/programs/hcv/vash. The operating requirements waive and alter many of the standard HCV statutes and regulations at 24 CFR part 982. Unless stated in the HUD–VASH operating requirements, however, the regulatory requirements at 24 CFR part 982 and all other HUD directives for the HCV program are applicable to HUD– VASH vouchers. Agencies may submit a request to HUD to operate HUD–VASH vouchers in accordance with MTW administrative flexibilities. 17 Notices and laws related to RAD can be found at http://portal.hud.gov/hudportal/HUD?src=/RAD/ library/notices. 18 https://portal.hud.gov/hudportal/documents/ huddoc?id=DOC_10495.pdf. PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 51487 b. Family Unification Program The Family Unification Program (FUP) NOFA language allows vouchers to be administered in accordance with MTW operations, unless MTW provisions are inconsistent with the appropriations act or requirements of the FUP NOFA. In the event of a conflict between the Operations Notice and the appropriations act or FUP NOFA language, the act and NOFA govern. c. Non-Elderly Persons With Disabilities Vouchers The Non-Elderly Persons with Disabilities (NED) NOFA language allows vouchers to be administered in accordance with MTW operations unless MTW provisions are inconsistent with the appropriations act or requirements of the NED NOFA. In the event of a conflict between the Operations Notice and the appropriations act or FUP NOFA language, the act and NOFA govern. d. Enhanced Vouchers and Tenant Protection Vouchers Enhanced and tenant protection voucher funds become fungible once the initial funding increment is renewed. The agency must continue to provide rental assistance to enhanced voucher families and tenant protection voucher families after the initial funding increment is renewed. The statutory enhanced voucher requirements under Section 8(t) of the 1937 Act (e.g., the HAP calculation) apply to an enhanced voucher family until the family either moves from the project or leaves the HCV tenant-based program for any reason. MTW agencies must follow the procedures described in Notice PIH 2013–27, or its successor Notice, for a recipient of an enhanced voucher to voluntarily agree to relinquish their tenant-based assistance in exchange for PBV assistance. When an enhanced voucher family moves from the project, either after initially receiving the voucher or anytime thereafter, the Section 8(t) enhanced voucher requirements no longer apply. The voucher is then administered in accordance with the regular HCV program requirements, as modified by the agency’s individual MTW waivers and MTW policies for its tenant-based HCV program. Regular tenant protection vouchers (i.e., tenant protection vouchers that are not enhanced vouchers) are always administered in accordance with the normally applicable HCV program requirements, as modified by the agency’s individual MTW waivers and MTW policies for its tenant-based HCV E:\FR\FM\11OCN1.SGM 11OCN1 51488 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices khammond on DSK30JT082PROD with NOTICES program, regardless of whether the family stays or moves from the project. 9. Applicability of Other Federal, State, and Local Requirements Notwithstanding the MTW Waivers and associated activities provided in this Operations Notice, the following provisions of the 1937 Act continue to apply to MTW agencies and the assistance received pursuant to the 1937 Act: i. The terms ‘‘low-income families’’ and ‘‘very low-income families’’ shall continue to be defined by reference to Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)); ii. Section 12 of the 1937 Act (42 U.S.C. 1437j), as amended, shall apply to housing assisted under the demonstration, other than housing assisted solely due to occupancy by families receiving tenant-based assistance; iii. Section 18 of the 1937 Act (42 U.S.C. l437p, as amended by Section 1002(d) of Pub. L. 104–19, Section 201(b)(1) of Pub. L. 104–134, and Section 201(b) of Pub. L. 104–202), governing demolition and disposition, shall continue to apply to public housing notwithstanding any use of the housing under MTW; and iv. Section 8(r)(1) of the 1937 Act on HCV portability shall continue to apply unless provided as a cohort-specific waiver and associated activity(s) in an evaluative cohort as necessary to implement comprehensive rent reform and occupancy policies. Such a cohortspecific waiver and associated activity(s) would contain, at a minimum, exceptions for requests to port due to employment, education, health and safety, and reasonable accommodation. Notwithstanding any requirement contained in this Notice or any MTW Waiver and associated activity granted herein, other Federal, state and local requirements applicable to public housing or HCV assistance will continue to apply. The MTW CACC Amendment will place in HUD the authority to determine if any future law or future regulation conflicts with any MTWrelated agreement or Notice. If a future law conflicts, the law shall be implemented, and no breach of contract claim, or any claim for monetary damages, may result from the conflict or implementation of the conflicting law or regulation. If any non-1937 Act requirement applicable to PHAs, public housing, or HCV assistance contains a provision that conflicts or is inconsistent with any MTW Waiver and associated activity granted by HUD, the agency remains VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 subject to the terms of that non-1937 Act requirement. Such requirements include, but are not limited to: • Requirements for Federal Funds: Notwithstanding the flexibilities described in this Notice, the public housing and voucher funding provided to MTW agencies remain Federal funds and are subject to any and all other Federal requirements outside of the 1937 Act (e.g., including, but not limited to, competitive HUD NOFAs under which the MTW agency has received an award, state and local laws, Federal statutes other than the 1937 Act (including appropriations acts), and OMB Circulars and requirements), as modified from time to time. The MTW agency’s expenditures must comply with 2 CFR part 200 and other applicable Federal requirements, which provide basic guidelines for the use of Federal funds, including the requirements of this Notice. • National Environmental Policy Act (NEPA): MTW agencies must comply with NEPA, 24 CFR part 50 or Part 58, as applicable, and other related Federal laws and authorities identified in 24 CFR. Part 50 or Part 58, as applicable. Information and guidance on the environmental review process and requirements is provided in PIH Notice 2016–22, or successor notice. • Fair Housing and Equal Opportunity: As with the administration of all HUD programs and all HUDassisted activities, fair housing, and civil rights issues apply to the administration of MTW demonstration programs. This includes actions and policies that may have a discriminatory effect on the basis of race, color, sex, national origin, religion, disability, or familial status (see 24 CFR part 1 and Part 100 subpart G) or that may impede, obstruct, prevent, or undermine efforts to affirmatively further fair housing. Annual PHA Plans must include a civil rights certification required by Section 5A of the 1937 Act and implemented by regulation at 24 CFR 903.7(o) and 903.15, as well as a statement of the PHA’s strategies and actions to achieve fair housing goals outlined in an approved Assessment of Fair Housing (AFH) consistent with 24 CFR 5.154. If the PHA does not have a HUD-accepted AFH, it must still provide a civil rights certification and statement of the PHA’s fair housing strategies, which would be informed by the corresponding jurisdiction’s AFH and the PHA’s assessment of its own operations. All PHAs, including MTW agencies, are obligated to comply with nondiscrimination and equal opportunity laws and implementing regulation, including those in 24 CFR 5.105. PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 Specific laws and regulations must be viewed in their entirety for full compliance, as this Operations Notice does not incorporate a complete discussion of all legal authorities. For example, PHAs, including MTW agencies, are required to comply with the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, Title II of the Americans with Disabilities Act of 1990, Architectural Barriers Act of 1968, Executive Order 11063: Equal Opportunity in Housing, Executive Order 13166: Improving Access to Services for Persons with Limited English Proficiency, HUD’s Equal Access Rule (24 CFR 5.105(a)(2), Age Discrimination Act of 1975, and Title IX of the Education Amendments Act of 1972, as well as HUD and governmentwide regulations implementing these authorities. PHAs should review PIH Notice 2011–31 for more details. • Court Orders and Voluntary Compliance Agreements: MTW agencies must comply with the terms of any applicable court orders or Voluntary Compliance Agreements that are in existence or may come into existence during the term of the MTW CACC Amendment. The PHA must cooperate fully with any investigation by the HUD Office of Inspector General or any other investigative and law enforcement agencies of the U.S. Government. 10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute The 39 MTW agencies that entered the MTW demonstration prior to the 2016 MTW Expansion Statute adhere to an administrative structure outlined in the Standard MTW Agreement, a contract between each current agency and HUD. The 2016 MTW Expansion Statute extended the term of the Standard MTW Agreement for these existing MTW agencies through each agency’s 2028 fiscal year. Some agencies that entered the MTW demonstration prior to the 2016 MTW Expansion Statute may wish to opt out of their Standard MTW Agreement and administer their MTW program pursuant to the MTW Expansion and the requirements in this MTW Operations Notice. HUD will support an existing MTW agency’s request to join the MTW Expansion provided that the agency: • Makes the change at the end of its fiscal year, so that it does not have part of a fiscal year under the Standard Agreement and part under the Operations Notice; • Follows the same public comment and Board resolution process as would E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices be required for amending the Standard MTW Agreement; • Executes its MTW CACC Amendment to authorize participation in the MTW demonstration consistent with the Operations Notice; and • Agrees to all the terms and conditions that apply to MTW agencies admitted pursuant to the 2016 MTW Expansion Statute, including all of the provisions of this Operations Notice and the accompanying MTW CACC Amendment. Should an existing MTW agency elect to administer its MTW program pursuant to the framework described in this Operations Notice, it will not be required to implement the cohortspecific policy change associated with any of the MTW cohorts and it will not be required to participate in the evaluation of that specific policy change. All other requirements in this Operations Notice will apply. 11. Sanctions, Terminations, and Default If the MTW agency violates any of the requirements outlined in this Notice, HUD is authorized to take any corrective or remedial action permitted by law. Sanctions, terminations, and default are covered in the agency’s MTW CACC Amendment. III. Environmental Impact 1. Purpose and Applicability khammond on DSK30JT082PROD with NOTICES A Finding of No Significant Impact (FONSI) with respect to the environment was made for a previous version of this Notice in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is applicable to the current version of the Notice because there were no significant changes to the provisions of the Notice. The FONSI will be available for public inspection on www.regulations.gov. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 Dated: October 4, 2018. Robert E. Mulderig, Acting Deputy Assistant, Secretary for Public Housing Investments. Appendix—MTW Waivers The Appendix contains the Moving to Work (MTW) Waivers and their associated MTW activities. The Appendix includes the waiver name, waiver description, statutes and regulations waived, permissible activities, and safe harbors. The waiver description defines the authorization provided to the MTW agency, subject to the terms of this Notice. The statutory and regulatory citations that may be waived by an MTW agency in order to implement an activity are included below the activity. The list of waivers and list of activities are organized by program type. The safe harbors contain the additional requirements (beyond those specified in the activity description) the agency must follow in order to implement the activity without additional HUD approval. If an MTW agency wishes to implement additional activities, request additional waivers, or request the ability to go beyond an MTW activity’s safe harbor(s), the MTW agency must submit an agencyspecific waiver request for approval from HUD as explained further in Section 2.b of the MTW Operations Notice. Specific guidelines for safe harbors on impact analyses, applicability to elderly/ disabled families and hardship policies are provided at the end of this appendix. Information on impact analyses is denoted with a ‘‘*’’, information on elderly/disabled families is denoted with a ‘‘**’’ and information on hardship policies is denoted with a ‘‘***.’’ Table of Contents 1. Tenant Rent Policies a. Income Bands (Public Housing [PH]) b. Income Bands (Housing Choice Vouchers [HCV]) c. Stepped Rent (PH) d. Stepped Rent (HCV) e. Minimum Rent (PH) f. Minimum Rent (HCV) g. Rent as a Percentage of Gross Income (PH) h. Total Tenant Payment as a Percentage of Gross Income (HCV) i. Alternative Utility Allowance (PH) j. Alternative Utility Allowance (HCV) k. Fixed Rents (PH) l. Fixed Subsidy (HCV) m. Utility Reimbursements (PH) n. Utility Reimbursements (HCV) o. Initial Rent Burden (HCV) p. Imputed Income (PH) q. Imputed Income (HCV) PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 51489 r. Elimination of Deduction(s) (PH) s. Elimination of Deduction(s) (HCV) t. Standard Deductions (PH) u. Standard Deductions (HCV) v. Alternate Income Inclusions/Exclusions (PH) w. Alternate Income Inclusions/Exclusions (HCV) 2. Payment Standards and Rent Reasonableness a. Payment Standards (HCV) b. Rent Reasonableness (HCV) 3. Increase PBV Rent to Owner 4. Reexaminations a. Alternate Reexamination Schedule for Households (PH) b. Alternate Reexamination Schedule for Households (HCV) c. Self-Certification of Assets (PH) d. Self-Certification of Assets (HCV) 5. Voucher Leasing Incentives a. Vacancy Loss (Tenant-Based Assistance) b. Damage Claims (Tenant-Based Assistance) c. Other Landlord Incentives (TenantBased Assistance) 6. Public Housing Leases a. Establish Community Rules through Local Lease (PH) b. Establish Reasonable Fees through Local Lease (PH) 7. Short-Term Assistance a. Short-Term Assistance (PH) b. Short-Term Assistance (HCV) 8. Term-Limited Assistance a. Term-Limited Assistance (PH) b. Term-Limited Assistance (HCV) 9. Work Requirements a. Work Requirements (PH) b. Work Requirements (HCV) 10. Increase Elderly Age 11. Increase Total PBV Cap 12. Increase PBV Development Cap 13. PBV—Elimination of Competitive Process 14. PBV—Alternate Competitive Process 15. PBV—Unit Types—Shared Housing 16. MTW Self-Sufficiency Program a. Waive Operating a Required FSS Program (PH & HCV) b. Alternative Program Coordinating Committee (PH & HCV) c. Alternative Family Selection Procedures (PH & HCV) d. Modify or Eliminate the Contract of Participation (PH & HCV) e. Policies for Addressing Increases in Family Income (PH & HCV) 17. Local, Non-Traditional Activities a. Rental Subsidy Programs b. Housing Development Programs c. Service Provision * Safe Harbor: Impact Analysis. ** Safe Harbor: Elderly/Disabled Families. *** Safe Harbor: Hardship Policy. E:\FR\FM\11OCN1.SGM 11OCN1 51490 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices 1. Tenant Rent Polices The agency is authorized to adopt and implement the activities listed below for setting tenant rents in public housing, including but not limited to: Establishing definitions of income and adjusted income that differ from those in the current 1937 Act and its implementing regulations. The agency is authorized to adopt and implement the activities listed below to establish total tenant payments (TTP) 1 in the HCV program, and/or tenant rents for tenant-based and project-based voucher assistance that differ from the currently mandated program requirements in the 1937 Act and its implementing regulations. The agency is authorized to adopt and implement the activities listed below to calculate the tenant portion of the rent that differ from the currently mandated program requirements in the 1937 Act and its implementing regulations. The agency must determine initial eligibility in accordance with 24 CFR 5.609 and must comply with Section 3(b)(2) of the Act. For voucher activities, the Department will develop a standard rider to the HAP contract that reflects any MTW authorizations that amend the current requirements of the HAP contract. 1.a.,1.b. Income Bands Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ 1.a. Income Bands (PH)—The agency may implement changes to the tenant rent calculation to create a system based upon income bands. Such rent policies are structured using two variables: (1) Income bands, or ranges, that assign dollar increments that have been determined locally by the agency, and (2) bedroom size. In a table, the y-axis lists the income bands and the xaxis lists the various bedroom sizes. In creating this system, the agency may also adopt a flat rent policy within each income band instead of calculating rent based on adjusted or gross income. The income bands may result in total tenant payment being no more than 35% gross income. Income Bands (PH): Certain provision of sections 3(a)(1)– (2) of the 1937 Act and 24 CFR 5.628, 5.634(b), and 960.253. 1.b. Income Bands (HCV)—The agency may implement changes to the TTP calculation to create a system based upon income bands. This type of rent policy is structured using two variables: (1) Income bands, or ranges, that assign dollar increments that have been determined locally by the agency, and (2) bedroom size. In a table, the y-axis lists the income bands and the xaxis lists the various bedroom sizes. In creating this system, the agency may also adopt a flat TTP policy within each income band instead of calculating TTP based on adjusted or gross income. The income bands may not result in TTP exceeding 35% of gross income. Income Bands (HCV): Certain provision of sections 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.628. 1.a. and 1.b. • The income bands must be set in accordance with bedroom size. • Agency must conduct an impact analysis.* • Agency must exclude elderly and disabled families from rent policy.** • Agency must implement a hardship policy.*** 1.c.,1.d. Stepped Rent Activity ......................... Statutes and Regulations Waived. khammond on DSK30JT082PROD with NOTICES Safe Harbor(s) ............ 1.c. Stepped Rent (PH)—The agency may create a stepped rent model that increases the family’s rent payment on a fixed schedule in both frequency and amount. The fixed schedule/stepped rent model may be disaggregated from family income. Stepped Rent (PH): Certain provisions of section 3(a)(1)– (2) of the 1937 Act and 24 CFR 5.628, 5.634(b) and 960.253. 1.c. ....................................................................................... • Rent increases may not occur more than once per year. • Agency must conduct an impact analysis.* • Agency must exclude elderly and disabled families from rent policy.** • Agency must implement a hardship policy.*** • Services, or referrals to services, must be made available by the agency or a partner organization to support preparing families for the termination of assistance. • At the Department’s request, the agency shall make available the method used to determine that rents charged to families are reasonable when compared to similar unassisted units in the market area. 1.d. Stepped Rent (HCV)—The agency may create a stepped rent model that increases the family’s TTP on a fixed schedule in both frequency and amount. The fixed schedule/stepped rent model may be disaggregated from family income. Stepped Rent (HCV): Certain provisions of sections 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.628. 1.d. • TTP increases may not occur more than once per year. • Agency must conduct an impact analysis.* • Agency must exclude elderly and disabled families from rent policy.** • Agency must implement a hardship policy.*** • Agency must implement a grace period policy for HCV families that reach zero HAP through this activity. The grace period would allow families to receive zero HAP for at least six months before being transitioned off the HCV program. • Services, or referrals to services, must be made available by the agency or a partner organization to support preparing families for the termination of assistance. • At the Department’s request, the agency shall make available the method used to determine that rents charged by owners to voucher participants are reasonable when compared to similar unassisted units in the market area. 1.e.,1.f. Minimum Rent Activity ......................... VerDate Sep<11>2014 1.e. Minimum Rent (PH)—The agency may set a minimum rent that is higher than allowed under current statute and regulation. 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 1.f. Minimum Rent (HCV)—The agency may set a minimum rent that is higher than allowed under current statute and regulation. E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices Statutes and Regulations Waived. Minimum Rent (PH): Certain provisions of sections 3(a)(1)–2) and 3(a)(3)(A) of the Act and 24 CFR 5.628 and 5.630. Safe Harbor(s) ............ 1.e. and 1.f. • Minimum rent may not exceed $250 per month for non-elderly/non-disabled families. • Minimum rent may not exceed $100 for elderly and disabled families. • Agency must conduct an impact analysis.* • Agency must implement a hardship policy.*** 51491 Minimum Rent (HCV): Certain provisions of sections 3(a)(3)(A) and 8(o)(2)( A)–(C) of the Act and 24 CFR 5.628 and 5.630. 1.g.,1.h. TTP as a Percentage of Gross Income Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ 1.g. TTP as a Percentage of Gross Income (PH)—The agency may calculate TTP as a percentage of gross income that does not include income deductions and/or exclusions. TTP as a Percentage of Gross Income (PH): Certain provision of sections 3(a)(1)–(2) and 3(b)(4)–(5) of the 1937 of the Act and 24 CFR 5.609, 5.611, 960.253 and 960.255. 1.h. TTP as a Percentage of Gross Income (HCV)—The agency may calculate TTP as a percentage of gross income that does not include income deductions and/or exclusions. TTP as a Percentage of Gross Income (HCV): Certain provision of sections 3(b)(4)–(5) and 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.609, 5.611, and 982.516. 1.g. and 1.h. • The TTP in PH and the TTP in HCV may not exceed 35% of gross income calculation for non-elderly/non-disabled families and 30% for elderly and disabled households. • Agency must conduct an impact analysis.* • Agency must implement a hardship policy.*** 1i.,1.j. Alternative Utility Allowance Activity ......................... 1i. Alternative Utility Allowance (PH)—The agency may create a utility schedule(s) for all units based upon bedroom size, the property location and/or the types of utilities paid by resident. The agency may not include items in the utility schedule that are excluded under HUD regulations. 1j. Alternative Utility Allowance (HCV)—The agency may create a utility schedule(s) for all HCV units based upon bedroom size, the unit location and/or the types of utilities paid by resident. The agency may establish a sitebased utility allowance in PBV. The agency may not include items in the utility schedule that are excluded under HUD regulations. Alternative Utility Allowance (HCV): Certain provision of section 8(o)(2)(D)(i) of the 1937 Act and 24 CFR 982.517 and 983.301(f)(2)(ii). Statutes and Regulations Waived. Alternative Utility Allowance (PH): Certain provisions of 24 CFR 965.503–506. Safe Harbor(s) ............ 1.i. and 1.j. • Agency must conduct an impact analysis.* • The agency must review its schedule of utility allowances each year, and revise its allowance for a utility category if there has been a change of 10 percent or more from the prior year. The agency must maintain information supporting its annual review of utility allowances and any revisions made in its utility allowance schedule. 1.k,1.l. Fixed Rents/Subsidies Activity ......................... 1.k. Fixed Rents (PH)—The agency may establish flat rents based on bedroom size. Tenant rent under this activity may not exceed 35% of gross income for nonelderly/non-disabled families and 30% for elderly and disabled households. Statutes and Regulations Waived. Fixed Rents (PH): Certain provision of sections 3(a)(1)–(2) and 3(a)(3)(A) of the 1937 Act and 24 CFR 5.628, 5.634(b) and 960.253. Safe Harbor(s) ............ 1.k. and 1.l. • Agency must implement an impact analysis.* • Agency must implement a hardship policy.*** 1.l. Fixed Subsidy (HCV)—The agency may establish a fixed subsidy based on bedroom size. Under this model, the family pays the difference between the gross rent for the unit and the fixed subsidy. However, if the gross rent for the unit is at or below 90% of the applicable FMR the fixed subsidy may not result in a non-elderly/ non-disabled family paying more than 35% of gross income or an elderly and disabled household paying more than 30% of gross income. Fixed Subsidy (HCV): Certain provisions of sections 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.628 and 5.630. 1.m.,1.n. Utility Reimbursements khammond on DSK30JT082PROD with NOTICES Activity ......................... Statutes and Regulations Waived. Safe Harbor ................. VerDate Sep<11>2014 1.m. Utility Reimbursements (PH)—The agency may eliminate utility reimbursement payments in the PH program when the utility allowance is greater than the total tenant payment. Utility Reimbursements (PH): Certain provisions of section 3(a)(1) of the 1937 Act and 24 CFR 5.632. 1.n. Utility Reimbursements (HCV)—The agency may eliminate utility reimbursement payments in the HCV program when the utility allowance is greater than the total tenant payment. Utility Reimbursements (HCV): Certain provisions of sections 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 982.514 and 983.353(d). 1.m. and 1.n. • Agency must implement an impact analysis.* 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 51492 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices • Agency must implement a hardship policy.*** 1.o. Initial Rent Burden (HCV only) Activity ......................... .............................................................................................. Statutes and Regulations Waived. Safe Harbor(s) ............ .............................................................................................. .............................................................................................. 1o. Initial Rent Burden (HCV)—The agency may waive the maximum family share at initial occupancy of 40% of the family’s adjusted monthly income. Initial Rent Burden (HCV): Certain provisions of section 8(o)(4) of the 1937 Act and 24 CFR982.508. 1.o. • Agency must implement an impact analysis * • Agency must implement a hardship policy.*** 1.p.,1.q. Imputed Income Activity ......................... Statutes and Regulations Waived. Safe Harbor ................. 1.p. Imputed Income (PH)—Agency may base rent on an assumed number of hours worked per week, not to exceed 30 hours worked each week per non-elderly/disabled adult household member, at either the local, State or Federal minimum wage. Imputed Income (PH): Certain provisions of section 3(a)(1) of the 1937 Act and 24 CFR 5.609, 5.611, 5.628, 960.255, 960.253 and 960.257. 1.q. Imputed Income (HCV)—Agency may base TTP on an assumed number of hours worked per week, not to exceed 30 hours worked each week per non-elderly/disabled adult household member, at either the local, State or Federal minimum wage. Imputed Income (HCV): Certain provisions of sections 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.609, 5.611, 5.628, and 982.516. 1.p. and 1.q. • Agency must conduct an impact analysis.* • Agency must exclude elderly and disabled families from rent policy.** • Agency must implement a hardship policy.*** 1.r.,1.s. Elimination of Deduction(s) Activity ......................... Statutes and Regulations Waived. 1.r. Elimination of Deduction(s) (PH)—The agency may eliminate one, some, or all deductions. Elimination of Deduction(s) (PH): Certain provisions of section 3(a)(1) of the 1937 Act and 24 CFR 5.611, 960.253, 960.255 and 960.257. 1.s. Elimination of Deduction(s) (HCV)—The agency may eliminate one, some, or all deductions. Elimination of Deduction(s) (HCV): Certain provisions of sections 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.611 and 982.516. 1.t.,1.u. Standard Deductions Activity ......................... Statutes and Regulations Waived. 1.t. Standard Deductions (PH)—The agency may replace existing deduction(s) with a standard deduction(s). Standard Deductions (PH): Certain provisions of section 3(a)(1) of the 1937 Act and 24 CFR 5.611, 960.253, 960.255 and 960.257. 1.u. Standard Deductions (HCV)—The agency may replace existing deduction(s) with a standard deduction(s). Standard Deductions (HCV): Certain provisions of sections 3(a)(1) and 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.611 and 982.516. 1.v.,1.w. Alternate Income Inclusions/Exclusions Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ 1.v. Alternate Income Inclusions/Exclusions (PH)—The agency may establish alternate policies to include or exclude certain forms of participant income during the income review and rent calculation process. Alternate Income Inclusions/Exclusions (PH): Certain provisions of sections 3(a)(1) and 3(b)(4)–(5) of the 1937 Act and 24 CFR 5.609, 5.611, 960.253, 960.255, and 960.257. 1.w. Alternate Income Inclusions/Exclusions (HCV)—The agency may establish alternate policies to include or exclude certain forms of participant income during the income review and rent calculation process. Alternate Income Inclusions/Exclusions (HCV): Certain provisions of sections 3(b)(4)–(5) and 8(o)(2)(A)–(C) of the 1937 Act and 24 CFR 5.609, 5.611, and 982.516. 1.v. and 1.w. • Agency must conduct an impact analysis.* • Agency must implement a hardship policy.*** • Agency must exclude elderly and disabled individuals from rent policy. 2. Payment Standards and Rent Reasonableness The agency is authorized to adopt and implement any reasonable policy to establish payment standards or rent reasonableness that differ from the currently mandated program requirements in the 1937 Act and its implementing regulations. For voucher activities, the Department will develop a standard rider to the HAP contract that reflects any MTW authorizations that amend the current requirements of the HAP contract. khammond on DSK30JT082PROD with NOTICES 2.a. Payment Standards Activity ......................... 2.a. Payment Standards (Tenant Based Assistance)—The agency is authorized to adopt and implement any reasonable policy to establish payment standards up to 150% of the Small Area FMR (SAFMR). This may include setting payment standards outside of the basic range, and creating multiple payment standards based on conditions in the local rental market. Statutes and Regulations Waived. Payment Standards (Tenant Based Assistance): Certain provisions of section 8(o)(1)(B) of the 1937 Act and 24 CFR 982.503–505 and 983.301. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices Safe Harbor ................. 2.a. 51493 • Agency must implement an impact analysis.* • Agency must implement a hardship policy.*** 2.b. Rent Reasonableness Activity ......................... 2.b. Rent Reasonableness (HCV)—The agency is authorized to develop a local process to determine rent reasonableness that differs from the currently mandated program requirements in the 1937 Act and its implementing regulations. Statutes and Regulations Waived. Rent Reasonableness (HCV): Certain provisions of 24 CFR 982.507 and 983.303. Safe Harbor(s) ............ 2.b. • At the Department’s request, the agency shall make available the method used to determine that rents charged by owners to voucher participants are reasonable when compared to similar unassisted units in the market area. • Agency must obtain the services of a third-party entity to determine rent reasonableness for PHA-owned units. 3. Increase PBV Rent to Owner The agency is authorized to establish the initial and re-determined rent to owner that differs from currently mandated program requirements in the 1937 Act and its implementing regulations. For voucher activities, the Department will develop a standard rider to the HAP contract that reflects any MTW authorizations that amend the current requirements of the HAP contract. 3. Increase Rent to Owner Activity ......................... 3. Increase Rent to Owner (PBV): The agency is authorized to develop a local process to determine the initial and redetermined rent to owner. Statutes and Regulations Waived. Increase Rent to Owner (PBV): Certain provisions of section 8(o)(13)(H) of the 1937 Act and 24 CFR 983.301–302. Safe Harbor(s) ............ 3. • Agency must implement an impact analysis.* • Agency must implement a hardship policy.*** 4. Reexaminations The agency is authorized to implement a reexamination program that differs from the reexamination program currently mandated in the 1937 Act and its implementing regulations. The terms ‘‘low-income families’’ and ‘‘very low-income families’’ shall continue to be defined by reference to Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)). MTW agencies must continue to determine the initial eligibility of the family in accordance with provisions of 24 CFR 5.609. 4.a, 4.b. Alternate Reexamination Schedule for Households Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ 4.a. Alternate Reexamination Schedule for Households (PH)—The agency may establish an alternate reexamination schedule for households. Reexaminations (PH): Certain provisions of sections 3(a)(1) and 3(a)(2)(E) of the 1937 Act and 24 CFR 960.257(a)–(b). 4.b. Alternate Reexamination Schedule for Households (HCV)—The agency may establish an alternate reexamination schedule for households. Reexaminations (HCV): Certain provisions of section 8(o)(5) of the 1937 Act and 24 CFR 982.516 (a)(1) and 982.516(c)(2). 4.a. and 4.b. • Reexaminations must occur at least every three years. • Must allow at least one interim adjustment per year at the request of the household, if the household gross income has decreased 10% or more. • Agency must include a hardship policy.*** 4.c., 4.d. Self-Certification of Assets Activity ......................... khammond on DSK30JT082PROD with NOTICES Statutes and Regulations Waived. 4.c. Self-Certification of Assets (PH)—At reexam the agency may allow the self-certification of assets up to $10,000. Reexaminations (PH): Certain provisions of sections 3(a)(1) and 3(a)(2)(E) of the 1937 Act and 24 CFR 960.259(c)(2). 4.d. Self-Certification of agency may allow the $10,000. Reexaminations (HCV): 8(o)(5) of the 1937 Act Assets (HCV)—At reexam the self-certification of assets up to Certain provisions of section and 24 CFR 982.516 (a)(3). 5. Voucher Leasing Incentives The agency is authorized to determine a damage claim and/or vacancy loss policy and payment policy for units that differ from the policy requirements currently mandated in the 1937 Act and its implementing regulations. Damage claim and vacancy loss authority are also subject to state and local laws. The agency must update its Administrative Plan to reflect the vacancy loss policy and/or damage claim policy. Agency may combine activities 3a and 3b into one voucher leasing incentive. For voucher activities related to this waiver, the Department will develop a standard rider to the HAP contract that reflects MTW authorizations that amend the current provisions of the HAP contract. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 51494 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices 5.a.,5.b.,5.c. Vacancy Loss, Damage Claims, and Other Landlord Incentives Activity ......................... 5.a. Vacancy Loss (Tenant-Based Assistance)—The agency is authorized to make an additional payment equal to one month of the contract rent to landlords when vacancies are unforeseen or unexpected. Payment may only be made when a landlord leases unit to another tenant-based assisted family. Activity ......................... 5.b. Damage Claims (Tenant-Based Assistance)—The agency may provide landlords with compensation of up to two months of contract rent if a tenant leaves the unit damaged. In implementing this activity, the tenant’s security deposit must first be used to cover damages and the agency may provide up to two months of contract rent minus the security deposit to cover remaining repairs. Activity ......................... 5.c. Other Landlord Incentives (Tenant-Based Assistance)—In order to incentivize new landlords to join the HCV program, the agency may provide an incentive payment for new landlords that join the program and/or landlords that remain in the program and lease to another tenant-based assisted family. Agencies may also target incentive payments to landlords leasing properties in high opportunity neighborhoods or in areas located where vouchers are difficult to use as defined in an agency’s Administrative Plan. Statutes and Regulations Waived. Voucher Leasing Incentives (Tenant-Based Assistance): Certain provisions of section 8(o)(9) of the 1937 Act and 24 CFR 982.311, 982.352(c), and 983.259(e). Safe Harbor ................. 5.a. and 5.c. only. • Landlords receiving payments under the vacancy loss and other landlord incentives activities must have unit(s) that first pass Housing Quality Standards (HQS) for HCV before payment is made. 6. Public Housing Leases Subject to State and local laws, the agency is authorized to develop and adopt a new form of local lease and establish community rules and reasonable tenant fees, provided that no-cause evictions are not permitted, and the agency includes grievance procedures in accordance with 24 CFR 966 Subpart B. Any implemented fees must be based on customary property management fees, and be generally applicable to nonassisted tenants in any mixed-income properties. 6.a.,6.b. Establish Community Rules and Reasonable Fees through Local Lease Activity ......................... 6.a. Establish Community Rules through Local Lease (PH)—The agency may develop a local lease which may establish community rules. Agency may only implement changes to the lease under this activity that do not require either a regulatory or statutory waiver. Fair housing and other civil rights requirements continue to apply. Agency must comply with HUD’s Smoke-Free Public Housing Rule. Activity ......................... 6.b. Establish Reasonable Fees through Local Lease (PH)—The agency may charge fees that are reasonable and cost effective through a local lease. Statutes and Regulations Waived. Public Housing Leases (PH): Certain provisions of section 6(l)(1) of the 1937 Act and 24 CFR 966.4. Safe Harbor(s) ............ 6.b. only. • Agency must implement an appeals process. • Agency must implement a hardship policy.*** 7. Short-Term Assistance The agency may develop and adopt a Short-Term Assistance Program in HCV or PH for specific populations (i.e., hard to house, at-risk, homeless, etc.).19 The short-term housing assistance program must include supportive services in one or more buildings in collaboration with local community-based organization and government agencies. The agency will ensure that these programs do not have a disparate impact on protected classes, and will be operated in a manner that is consistent with the requirements of nondiscrimination and equal opportunity authorities, including but not limited to Section 504 of the Rehabilitation Act. More specifically, under no circumstances will residents of such programs be required to participate in supportive services that are targeted to persons with disabilities in general, or persons with any specific disability. In addition, admission to any of the programs or priority for supportive services developed under this section will not be conditioned on a diagnosis or specific disability of a member of an applicant or participant family. This section is not intended to govern the designation of housing that is subject to Section 7 of the 1937 Act. The agency must determine initial eligibility in accordance with 24 CFR 5.609 and must comply with Section 3(b)(2) of the Act. Subject to the Agency’s policy, successful participants of the short-term housing assistance program may be given the option of transferring into whichever program (Section 8 or 9) the short-term housing assistance program falls under. 7.a.,7.b. Short-Term Assistance khammond on DSK30JT082PROD with NOTICES Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ VerDate Sep<11>2014 7.a. Short-Term Assistance (PH)—The agency may create a short-term housing assistance program with supportive services in one or more buildings in its public housing program. The agency may collaborate with local community-based organizations and government agencies to provide supportive services. Short-Term Assistance (PH): Certain provisions of sections 6(l)(1) and 6(l)(5) of the 1937 Act and 24 CFR 966.4(a)(2)(i). 7.b. Short-Term Assistance (HCV)—The agency may create a short-term housing assistance program with supportive services in its HCV program. The agency may collaborate with local community-based organizations and government agencies to provide supportive services. Short-Term Assistance (HCV): Certain provisions of sections 8(o)(7)(A)–(C) of the 1937 Act and 24 CFR 982.303, 982.309(a)(1), 983.256(f), and 983.257. 7.a. and 7.b. • The term of assistance may not be shorter than 3 months. 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices 51495 • The activity cannot be extended to an entire PH or HCV program and must only serve specific populations. 8. Term-Limited Assistance The agency is authorized to implement term limits for families residing in public housing or receiving voucher assistance. 8.a.,8.b. Term-Limited Assistance Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ 8.a. Term-Limited Assistance (PH)—The agency may limit the duration for which a family receives housing assistance. Term-Limited Assistance (PH): Certain provisions of sections 6(l)(1) and 6(l)(5) of the 1937 Act and 24 CFR and 966.4(a)(2). 8.b. Term-Limited Assistance (HCV)—The agency may limit the duration for which a family receives housing assistance. Term-Limited Assistance (HCV): Certain provisions of sections 8(o)(7)(A)–(C) of the 1937 Act and 24 CFR 982.303, 982.309(a), 982.552(a), 983.256(f), and 983.257. 8.a. and 8.b. • The term of assistance may not be shorter than 4 years. • Services, or referrals to services, must be provided by the agency or a partner organization to support preparing families for the termination of assistance. • Agency must conduct an impact analysis.* • Agency must exclude elderly and disabled families from term limit.** • Agency must implement a hardship policy.*** 9. Work Requirements The agency is authorized to implement a requirement that a specified segment of its PH and/or HCV residents work as a condition of tenancy, subject to all applicable fair housing and civil rights requirements and the mandatory admission and prohibition requirements imposed by sections 576–578 of the Quality Housing and Work Responsibility Act of 1998 and Section 428 of Public Law 105–276. Those individuals exempt from the Community Service Requirement in accordance with Section 12(c)(2)(A), (B), (D) and (E) of the 1937 Act must also be exempt from the agency’s work requirement. The agency must update its Administrative Plan and/or Admissions and Continued Occupancy Plan (ACOP) to include a description of the circumstances in which families shall be exempt from the requirement. The Administrative Plan and/or ACOP should include a description of what is considered work as well as other activities that shall be considered acceptable substitutes for work. 9.a.,9.b. Work Requirement Activity ......................... Statutes and Regulations Waived. khammond on DSK30JT082PROD with NOTICES Safe Harbor ................. VerDate Sep<11>2014 9.a. Work Requirement (PH)—The agency may implement a work requirement for public housing residents who are at least 18 years old. Additionally, residents must be non-elderly, as defined by the agency, and non-disabled. The requirement shall be no more than 30 hours of work per week per non-elderly/non-disabled adult household member. Supportive services shall be provided, either through the agency or a partner organization, to assist families in obtaining employment or an acceptable substitute, as defined by the MTW agency’s policy. Work requirements shall not be applied to exclude, or have the effect of excluding, the admission of or participation by persons with disabilities or families that include persons with disabilities. Work requirements shall not apply to persons with disabilities. However, persons with disabilities and families that include persons with disabilities must have equal access to the full range of program services and other incentives. Work Requirement (PH): Certain provisions of sections 6(l)(1) and 6(l)(5) of the 1937 Act and 24 CFR 966.4(a)(2). 9.a. ....................................................................................... • Agency must conduct an impact analysis.* • Agency must implement a hardship policy.*** • The hardship policy in the ACOP must apply to families who are actively trying to comply with the agency’s work requirement, but are having difficulties obtaining work or an acceptable substitute. • The ACOP must also describe the consequences of failure to comply with the work requirement. • Services, or referrals to services, must be provided by the agency to support preparing families for the termination of assistance. • Activity may apply to non-elderly, non-disabled households or non-elderly, non-disabled adult household members. 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 9.b. Work Requirement (HCV)—The agency may implement a work requirement for HCV residents who are at least 18 years old. Additionally, residents must be nonelderly, as defined by the agency, and non-disabled. The requirement shall be no more than 30 hours of work per week per non-elderly/non-disabled adult household member. Supportive services shall be provided, either through the agency or a partner organization, to assist families in obtaining employment or an acceptable substitute, as defined by the MTW agency’s policy. Work requirements shall not be applied to exclude, or have the effect of excluding, the admission of or participation by persons with disabilities or families that include persons with disabilities. Work requirements shall not apply to persons with disabilities. However, persons with disabilities and families that include persons with disabilities must have equal access to the full range of program services and other incentives. Work Requirement (HCV): Certain provisions of 24 CFR 982.551. 9.b. • Agency must conduct an impact analysis.* • Agency must implement a hardship policy.*** • The hardship policy in the Administrative Plan must apply to families who are actively trying to comply with the agency’s work requirement, but are having difficulties obtaining work or an acceptable substitute. • The Administrative Plan must also describe the consequences of failure to comply with the work requirement. • Services, or referrals to services, must be provided by the agency to support preparing families for the termination of assistance. • Activity may apply to non-elderly, non-disabled households or non-elderly, non-disabled adult household members. E:\FR\FM\11OCN1.SGM 11OCN1 51496 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices 10. Increase Elderly Age The agency is authorized to amend the definition of an elderly person to be an individual who is at least 65 years of age. 10. Increase Elderly Age Activity ......................... 10. Increase Elderly Age (PH & HCV)—The agency may change HUD’s definition of an elderly person to be at least 65 years of age. The implementation of this activity will apply only to new admissions after the effective date of the MTW ACC. The agency remains subject to HUD’s regulations implementing the Age Discrimination Act of 1975 at 24 CFR Part 146 in its entirety. Statutes and Regulations Waived. Increase Elderly Age (PH & HCV): Certain provisions of section 3(b)(3)(D) of the 1937 Act to read ‘‘[63, 64, or 65] years of age’’ in relevant part, 24 CFR 5.100 to read ‘‘[63, 64, or 65] years of age’’ in relevant part of the definition of Elderly Person, and 24 CFR 5.403 to read ‘‘[63, 64, or 65] years of age’’ in relevant part of the definition of Elderly family. Safe Harbor ................. 10. • Definition of an elderly person may not set a threshold (minimum) age above 65 years old. • Agency must conduct an initial activity analysis consistent with 24 CFR Part 146 and make the activity analysis available during the applicable public review period prior to the implementation of the MTW activity. The activity analysis must be updated at least annually during implementation of the activity and at the time the activity is closed out. • Agency must retain records available for HUD inspection that cover the waiver, tenant consultation and public comment, results of the activity analysis, and specific policies and procedures to implement the waiver. 11. Increase Total PBV Unit Cap The agency is authorized to expand the authority to project-base vouchers from 20% of authorized voucher units to 30% of authorized voucher units. In addition, the agency is authorized to project-base an additional 20% (rather than 10%) of its authorized units in accordance with the exception authority in 8(o)(13)(ii) of the United States Housing Act of 1937 to provide units for families meeting the statutory eligibility categories set forth in that section. The agency is authorized to project-base up to 50% of its authorized voucher units (30% general cap, 20% exception authority), subject to the safe harbors. 11. Increase Total PBV Unit Cap Activity ......................... 11. Increase Total PBV Unit Cap (PBV)—The agency may project-base up to 30% of its authorized voucher units for the agency for project-based assistance. The agency may further project-base an additional 20% of its authorized voucher units if the units meet the statutory exception categories in Section 8(o)(13)(B)(ii) of the 1937 Act. Statutes and Regulations Waived. Increase Total PBV Unit Cap (PBV): Certain provisions of section 8(o)(13)(B) of the 1937 Act and 24 CFR 983.6(a)– (b), as superseded by Notice PIH 2017–21. Safe Harbor(s) ............ 11. • The agency may project-base up to 30% of its total authorized voucher units. The agency may also project-base up to an additional 20% of the total authorized voucher units, provided those additional units fall into one of the following categories: (1) The units are specifically made available to house people who meet the HUD definition of homeless; (2) the units are specifically made available to housing families that are comprised of or include a veteran; (3) the units provide supportive housing for elderly or disabled persons; or (4) the units are located in areas where vouchers are difficult to use (units located in a census tract with a poverty rate of 20 percent or less, and as further determined by the Secretary). 12. Increase PBV Project Cap The agency is authorized to determine the percentage of units within a project that can be project-based to exceed the percentage limitation in the 1937 Act and its implementing regulations. The agency is subject to the PBV section of Notice PIH 2017–21 or any successor notice and/ or guidance. The agency is subject to Notice PIH 2013–27 where applicable, or successor. 12. Increase PBV Project Cap khammond on DSK30JT082PROD with NOTICES Activity ......................... Statutes and Regulations Waived. Safe Harbor(s) ............ 12. Increase PBV Project Cap (PBV)—The agency may raise the PBV cap within a project up to 100%. Increase PBV Project Cap (PBV): Certain provisions of section 8(o)(13)(D) of the 1937 Act and 24 CFR 983.56(a)–(b). 12. • Agency may raise the PBV cap within a project up to 100% for any of the following reasons: (1) At the time the HAP contract is signed, the development is in a census tract with a poverty rate of 20% or less; (2) the agency seeks to convert an existing agency-owned development (other than public housing or other exception projects under HOTMA) to PBV and will use no development dollars; or (3) the agency is seeking to transition a Low-Income Housing Tax Credit property that is approaching the expiration of its affordability period. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices 51497 13. PBV—Elimination of Selection Process Subject to subsidy layering review, the agency is authorized to project-base Section 8 assistance at PHA-owned properties that are not public housing properties. Project-based assistance for such units does not need to be competitively bid, nor are the owned units subject to any required assessments for voluntary conversion. Agency still needs to complete site selection requirements. This waiver does not waive 24 CFR 983.57 or 983.59(b) that HQS inspections be performed by an independent entity. The agency must still comply with 24 CFR 983.57 and 983.59(b) which requires that HQS inspections be completed by independent entities. The agency is subject to the PBV section of Notice PIH 2017–21 or any successor notice and/or guidance. The agency is subject to Notice PIH 2013–27 where applicable, or successor. 13. Eliminate PBV Selection Process Activity ......................... 13. Eliminate PBV Selection Process (PBV)—The agency may eliminate the selection process in the award of PBVs to properties owned by the agency that are not public housing. Statutes and/or Regulations Waived. Eliminate PBV Selection Process (PBV): Certain provisions of 24 CFR 983.51. Safe Harbor(s) ............ 13. • Property must be owned by a single-asset entity of agency, see Notice PIH 2015–05. 14. PBV—Alternative Competitive Process The agency is authorized to establish a reasonable competitive process or utilize an existing local competitive process for project-basing leased housing assistance at units that meet existing HQS requirements and that are owned by non-profit, for-profit housing entities, or by the agency that are not public housing. The agency must still comply with 24 CFR 983.57 and 983.59(b) which requires that HQS inspections be completed by independent entities if the selected project is PHA-owned. The agency is subject to PBV section of Notice PIH 2017–21 or any successor notice and/or guidance. The agency is subject to Notice PIH 2013–27 where applicable, or successor. 14. Establish Alternative PBV Competitive Process Activity ......................... 14. Establish Alternative PBV Competitive Process (PBV)—The agency may establish an alternative competitive process in the award of PBVs that are owned by non-profit, for-profit housing entities, or by the agency that are not public housing. Statutes and/or Regulations Waived. Establish Alternative PBV Competitive Process (PBV): Certain provisions of 24 CFR 983.51 as superseded by the Housing Opportunity through Modernization Act of 2016 (HOTMA) Implementation Notice, Notice PIH 2017–21. Safe Harbor(s) ............ 14. • None. 15. PBV—Unit Types Subject to subsidy layering review, the agency may attach or pay PBV assistance for shared housing units that are normally ineligible for assistance. PBV units must comply with HQS and be consistent with deconcentration and desegregation requirements under 24 CFR part 903. If the agency places a PBV unit in a public housing project, then the agency will not receive public housing funds for that unit. 15. PBV Unit Types Activity ......................... 15. PBV Unit Types (Shared Housing)—The agency may attach and pay PBV assistance for shared housing units. Statutes and/or Regulations Waived. PBV Unit Types (Shared Housing): Certain provisions of 24 CFR 983.53(a)(1). Safe Harbor(s) ............ 15. • Shared housing units may not be owner occupied. khammond on DSK30JT082PROD with NOTICES 16. MTW Self-Sufficiency Program The agency is authorized to operate any of its existing self-sufficiency and training programs, including its Family Self-Sufficiency (FSS) Program and any successor programs, exempt from certain HUD program requirements. If the agency receives dedicated funding for an FSS coordinator, such funds must be used to employ a self-sufficiency coordinator and in accordance with any requirements of any NOFA under which funds were received. Recruitment, eligibility, and selection policies and procedures must be consistent with the Department’s nondiscrimination and equal opportunity requirements. An agency may make its MTW Self-Sufficiency Program participation mandatory for any household member that is non-elderly/non-disabled by waiving the statutory and regulatory definition of FSS family or participating family which is ‘‘a family that resides in public housing or receives assistance under the rental certificate or rental voucher programs, and that elects to participate in the FSS program’’ (24 CFR 984.103(b)). In implementing this waiver, the agency must execute a contract of participation, or other locally developed agreement, that is at least 5 years but no more than 10 years. Notwithstanding the above, any funds granted pursuant to a competition must be used in accordance with the NOFA. These waivers should not exempt the agency from having an up to date, approved FSS Action Plan in accordance with 24 CFR 984.201. 16.a.–16.e. MTW Self Sufficiency Program Activities Activity ......................... VerDate Sep<11>2014 16.a. Waive Operating a Required FSS Program (PH & HCV)—The agency is authorized to waive the requirement to operate the regulatory FSS program. 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 51498 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices Activity ......................... 16.b. Alternative Structure for Establishing Coordinating Committee (PH & HCV)—The agency is authorized to create an alternative structure for securing local resources to support an MTW Self-Sufficiency Program. Activity ......................... 16.c. Alternative Family Selection Procedures (PH & HCV)—The agency is authorized to develop its own recruitment and selection procedures for its MTW Self-Sufficiency Program(s). Alternatively, agency may make participation in the MTW Self-Sufficiency Program mandatory for any household member that is non-elderly or non-disabled. Activity ......................... 16.d. Modify or Eliminate the Contract of Participation (PH & HCV)—The agency is authorized to modify the terms of, or eliminate the contract of participation, in lieu of a local form. The agency may modify the terms of the contract of participation to align with adjustments made to its MTW Self-Sufficiency Program(s) using MTW flexibility. Further, the agency may discontinue use of the contract of participation and instead employ a locally-developed agreement that codifies the terms of participation. However, all required fields in Form HUD–50058 MTW Section 23 or Form HUD– 50058 Section 17 must be included in the Contract of Participation. Activity ......................... 16.e. Policies for Addressing Increases in Family Income (PH & HCV)—The agency is authorized to set its own policies for addressing increases in family income during participation in the MTW Self-Sufficiency Program. Consistent with the goals and structure of its MTW Self-Sufficiency Program, the agency may set policies for whether income increases are recognized for purposes of increasing rent (consistent with the agency’s existing rent policy) or changing the amount of funds moved to escrow/savings through the program. The agency may not use income increases during participation in the MTW Self-Sufficiency Program to change a family’s eligibility status for purposes of participation in the MTW SelfSufficiency Program or for the receipt public housing or HCV assistance. Statutes and Regulations Waived. MTW Self-Sufficiency Program (PH & HCV): Certain provisions of sections 23(b)–(d), (f), and (n)(1) of the 1937 Act and 24 CFR 984.105, 984.202(b)–(c), 984.203(a)–(c)(2), 984.303(b)–(d), (f)–(h). Safe Harbor(s) ............ 16.a.–16.e. • Agency must review FSS Guidance.20 • If the agency requires MTW Self-Sufficiency Program participation as a condition for housing subsidy, an impact analysis must be developed and adopted in accordance with MTW guidance prior to the implementation of the activity.* • The agency may not make MTW Self-Sufficiency Program participation mandatory for individuals that do not meet the definition of an eligible family at Section 23(n)(3) of the U.S. Housing Act of 1937 (1937 Act) (42 U.S.C. 1437u(n)(3)), and those exempted from the Community Service Requirement under Section 12(c)(2)(A), (B), (D) and (E) of the 1937 Act, 42 U.S.C. 1437j(c)(2)(A), (B), (D), and (E). If the agency requires MTW FSS program participation as a condition for housing subsidy, a hardship policy must be developed and adopted in accordance with MTW guidance prior to the implementation of the activity.*** • If an agency terminates the housing subsidy or tenancy of a family for alleged violation of mandatory MTW SelfSufficiency Program participation, the family will be entitled to a hearing under the Agency’s Grievance Procedure (24 CFR part 966, subpart B) or the HCV informal hearing process (24 CFR part 982.555). 17. Local, Non-Traditional Activities MTW funds awarded to an MTW agency under Sections 8(o), 9(d), and 9(e) of the 1937 Act can be utilized per statute and regulation on the eligible activities listed at Sections 9(d)(1), 9(e)(1), and 8(o) of the 1937 Act. Any authorized use of these funds outside of the allowable uses listed in the 1937 Act constitutes a local, non-traditional activity. The agency is authorized to implement the local, non-traditional activities listed below to provide a rental subsidy to a third-party entity to provide housing and supportive services to eligible participants, and to contribute MTW funds to the development of affordable housing. Families served through the activities described below must be at or below 80% of area median income, and implemented activities must meet one of the three MTW statutory objectives of increasing the efficiency of federal expenditures, incentivizing self-sufficiency of participating families and increasing housing choice for low-income families. Any MTW funds awarded to a third-party provider must be competitively bid. The use of MTW funds must be consistent with the requirements of 2 CFR 200 and other basic federal principles. The agency must determine the eligibility of families in accordance with 24 CFR 5.609 and with Section 3(b)(2) of the Act. The agency is subject to Notice PIH 2011–45 or any successor notice and/or guidance. Local, non-traditional activities must fall within one of the three categories below and comply with Notice 2011–45 or any successor notice/and or guidance. khammond on DSK30JT082PROD with NOTICES 17.a.,17.b. Rental Subsidy Programs and Service Provision Activity Categories ...... 17.a. Rental Subsidy Programs—Programs that use MTW funds to provide a rental subsidy to a third-party entity (other than a landlord or tenant) who manages intake and administration of the subsidy program to implement activities, which may include: supportive housing programs and services to help homeless individuals and families reach independence; Supportive living; homeless/transitional housing programs; or programs that address special needs populations. Activity Categories ...... 17.b. Service Provision—The provision of HUD-approved self-sufficiency or supportive services that are not otherwise permitted under the public housing and HCV programs, or that are provided to eligible low-income individuals who do not receive either public housing or HCV assistance from the PHA. Eligible activities may include: Services for residents of other PHA-owned or managed affordable housing that is not public housing or HCV assistance; services for low-income non-residents; or supportive services. Statutes and Regulations Waived. Local, Non-Traditional Activities: MTW funds awarded to an MTW agency under sections 8(o), 9(d), and 9(e) of the 1937 Act can be utilized per statute and regulation on the eligible activities listed at Sections 9(d)(1), 9(e)(1), and 8(o) of the 1937 Act. Any authorized use of these funds outside of the allowable uses listed in the 1937 Act constitutes a local, non-traditional activity. Safe Harbor(s) ............ 17.a and 17.b. • Agency may spend up to 10% of its MTW budget on local, non-traditional actives. All other applicable MTW requirements apply. • The agency is subject to Notice PIH 2011–45 or any successor notice and/or guidance. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices 51499 17.c. Housing Development Programs Activity Categories ...... 17.c. Housing Development Programs—Programs that use MTW funds to acquire, renovate and/or build affordable units for low-income families that are not public housing units. Eligible activities may include: Gap financing for nonPHA development of affordable housing or tax credit partnerships. Statutes and Regulations Waived. Local, Non-Traditional Activities: MTW funds awarded to an MTW agency under sections 8(o), 9(d), and 9(e) of the 1937 Act can be utilized per statute and regulation for the eligible activities listed at Sections 8(o), 9(d)(1), and 9(e)(1) of the 1937 Act. Any authorized use of these funds outside of the allowable uses listed in the 1937 Act constitutes a local, non-traditional activity. Safe Harbor(s) ............ 17.c. • Agency must comply with Section 30 of the 1937 Housing Act. • The agency is subject to Notice PIH 2011–45 or any successor notice and/or guidance. • Agency may spend up to 10% of its MTW budget on local, non-traditional actives. All other applicable MTW requirements apply. 1 In the HCV tenant-based program, the housing assistance payment (HAP) is the lower of: (1) The payment standard minus the family’s TTP, or (2) the gross rent minus the TTP. The TTP is the minimum amount the family will pay as the family share. If the gross rent exceeds the payment standard, the family will pay TTP and the difference between the gross rent and the payment standard as the family share. In the HCV project-based program, the family always pays TTP minus any utility allowance (UA) as the tenant rent. khammond on DSK30JT082PROD with NOTICES * Impact Analysis The MTW agency must analyze and put into the writing the various impacts of the MTW activity. The MTW agency must prepare this analysis (1) prior to implementation of the MTW activity; (2) at minimum, on an annual basis during the implementation of the MTW activity; and (3) at the time the MTW activity is closed out. This analysis must consider the following eight factors: 1. Impact on the agency’s finances (e.g., how much will the activity cost, any change in the agency’s per family contribution); 2. Impact on affordability of housing costs for affected families (e.g., any change in how much affected families will pay towards their housing costs); 3. Impact on the agency’s waitlist(s) (e.g., any change in the amount of time families are on the waitlist); 4. Impact on the agency’s termination rate of families (e.g., the rate at which families non-voluntarily lose assistance from the agency); 5. Impact on the agency’s current occupancy level in public housing and utilization rate in the HCV program; 6. Impact on the agency’s ability to meet the MTW statutory requirements; 7. Impact on the community (e.g., any change in the number of families transitioning to self-sufficiency, and any change in the employment rate after the implementation of activities targeted towards working families); and 8. Across the other factors above, the impact on protected classes (and any associated disparate impact). The MTW agency must have the initial impact analysis, which analyzes potential 19 Agencies seeking to create a short-term program that goes beyond Section 8 or Section 9 as modified by MTW may propose an activity under the Local Non-Traditional Activities Rental Subsidy Program Waiver. 20 As agencies are considering potential waivers to the FSS program, they are encouraged to consult the Promising Practices Guidebook and Online Training that can be found at https:// www.hudexchange.info/programs/fss/#1introduction. In addition, the HUD FSS team is available to review and provide feedback on proposed waivers. Please contact fss@hud.gov. VerDate Sep<11>2014 20:54 Oct 10, 2018 Jkt 247001 impacts of the MTW activity, available during the applicable public review period prior to implementation of the MTW activity. The agency must supply the annual impact analysis and/or the final impact analysis of the closed-out activity (if applicable), which analyzes actual impact of the MTW activity, at HUD’s request. This information must be retained by the agency for the duration of the agency’s participation in the MTW demonstration program and available for public review and inspection at the agency’s principal office during normal business hours. ** Elderly/Disabled Families The MTW activity must not apply to elderly families and disabled families as defined in 24 CFR 5.403 or the MTW agency’s approved definition under its MTW program. *** Hardship Policy The MTW agency must adopt written policies for determining when a requirement or provision of the MTW activity constitutes a financial or other hardship for the family. The agency shall make the determination of whether a financial or other hardship exists within a reasonable time after the family request. If the agency determines that a financial or other hardship exists, the PHA must immediately provide an exemption from the MTW activity at a reasonable level and duration, according to the agency’s written policies. Residents must be notified of the agency’s hardship policy. The agency’s written policies for determining what constitutes financial hardship must include the following situations: • The family has experienced a decrease in income because of changed circumstances, including loss or reduction of employment, death in the family, or reduction in or loss of earnings or other assistance; • The family has experienced an increase in expenses, because of changed circumstances, for medical costs, child care, transportation, education, or similar items; and • Such other situations and factors determined by the agency to be appropriate. The agency’s written policies shall include a grievance procedure that a family may PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 request for second level review of denied hardship requests. The agency shall keep records of all hardship requests received and the results of these requests, and supply them at HUD’s request. This information must be retained by the agency for the duration of the agency’s participation in the MTW program and available for public review and inspection at the agency’s principal office during normal business hours. The protections for victims of domestic violence, dating violence, sexual assault, or stalking in 24 CFR part 5, subpart L, apply. The protections for persons requesting a reasonable accommodation under 24 CFR part 8 also apply. [FR Doc. 2018–22158 Filed 10–10–18; 8:45 am] BILLING CODE 4210–67–P DEPARTMENT OF THE INTERIOR Geological Survey [GX18LC00BM3FD00; OMB Control Number 1028–0079/Renewal] Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; North American Breeding Bird Survey U.S. Geological Survey, Interior. ACTION: Notice of information collection; request for comment. AGENCY: In accordance with the Paperwork Reduction Act of 1995, we, the U.S. Geological Survey (USGS) are proposing to renew an information collection. DATES: Interested persons are invited to submit comments on or before November 13, 2018. ADDRESSES: Send written comments on this information collection request (ICR) to the Office of Management and Budget’s Desk Officer for the SUMMARY: E:\FR\FM\11OCN1.SGM 11OCN1

Agencies

[Federal Register Volume 83, Number 197 (Thursday, October 11, 2018)]
[Notices]
[Pages 51474-51499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22158]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5994-N-04]


Operations Notice for the Expansion of the Moving to Work 
Demonstration Program; Republication and Extension of Comment Period

AGENCY: Office of Public and Indian Housing, HUD.

ACTION: Notice.

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SUMMARY: HUD is republishing the Operations Notice published in the 
Federal Register on October 5, 2018, which omitted the Appendix. This 
Notice includes the Appendix and the public comment period is extended 
accordingly.
    The Public Housing/Section 8 Moving to Work (MTW) demonstration 
program was first established under Section 204 of the Omnibus 
Consolidated Rescissions and Appropriations Act of 1996 to provide 
statutory and regulatory flexibility to participating public housing 
agencies (PHAs) under three statutory objectives. Those three statutory 
objectives are: To reduce cost and achieve greater cost effectiveness 
in Federal expenditures; to give incentives to families with children 
whose heads of household are either working, seeking work, or are 
participating in job training, educational or other programs that 
assist in obtaining employment and becoming economically self-
sufficient; and to increase housing choices for low-income families. 
This Operations Notice for the Expansion of the MTW Demonstration 
Program (Operations Notice) establishes requirements for the 
implementation and continued operation of the MTW demonstration program 
pursuant to the 2016 MTW Expansion Statute.

DATES: Comment Due Date: November 26, 2018.

ADDRESSES:
    Electronic Submission of Comments. HUD strongly encourages 
interested persons 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. Interested persons may 
submit comments electronically through the Federal eRulemaking Portal 
at www.regulations.gov. 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.
    Submission of Comments by Mail. Alternatively, interested persons 
may submit comments regarding this Notice 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.
    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 Notice.
    No Facsimile Comments. Facsimile (fax) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an appointment to review the public comments must be 
scheduled in advance by calling the Regulations Division at 202-708-
3055 (this is not a toll-free number). Individuals with speech or 
hearing impairments may access this number via TTY by calling the 
Federal Relay Service at 1-800-877-8339 (this is a toll-free number). 
Copies of all comments submitted are available for inspection and 
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Marianne Nazzaro, Director, Moving to 
Work Demonstration Program, Office of Public and Indian Housing, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
4130, Washington, DC 20410; email address [email protected].

SUPPLEMENTARY INFORMATION: This republication of the October 5, 2018 
Operations Notice, originally published at 83 FR 50387, includes an 
Appendix that was omitted.

I. Background

    Section 239 of the Fiscal Year 2016 Appropriations Act, Public Law 
114-113 (2016 MTW Expansion Statute), signed by the President in 
December 2015, authorizes HUD to expand the MTW demonstration program 
from the current size of 39 agencies to an additional 100 agencies over 
a period of 7 years. This Notice was originally published on January 
23, 2017, in the Federal Register, entitled ``Operations Notice for the 
Expansion of the Moving to Work Demonstration Program

[[Page 51475]]

Solicitation of Comment.'' On May 4, 2017, the Notice was republished 
with three technical revisions and an extension of the comment period. 
HUD took all comments received into consideration.
    Changes to this Notice have been made to incorporate feedback from 
the two previous publications and to reflect policy decisions. The 
primary changes are as follows:
     The term of participation has been set at 12 years from 
the year of designation in response to public comments for the term to 
be at least 10 years from the year of designation.
     In response to public comments, the Department removed the 
General Waivers and Conditional Waivers categories and replaced them 
with a singular MTW Waivers category, which MTW agencies may implement 
without further approval from HUD.
    [cir] In restructuring the MTW Waivers, the Notice now includes 
safe harbors, which are defined as the additional requirements, beyond 
those specified in the activity description, that the agency must 
follow in implementing activities without further HUD approval.
    [cir] MTW Waivers now include specific guidance on impact analyses, 
hardship policies, and applicability of waivers to elderly/disabled 
families.
    [cir] An additional MTW Waiver was added: ``Increase Elderly Age,'' 
which allows agencies to amend the definition of an elderly person to 
be an individual who is at least sixty-five.
    [cir] The Homeownership Waiver was removed. Upon reviewing this 
waiver, the Department determined that the activities provided to 
agencies under the waiver were already available under the Section 32 
Homeownership Program.
     The 90 percent voucher utilization requirement was 
removed. The MTW Housing Assistance Payment (HAP) Renewal Formula has 
been revised to use as a base, all prior-year MTW-eligible Housing 
Choice Voucher (HCV) funding expenses paid from HAP, including HAP 
expenses plus non-HAP expenses.
     For a prospective agency to be eligible for selection to 
the MTW demonstration, it must be a high performer in either the Public 
Housing Assessment System (PHAS) or the Section Eight Management 
Assessment Program (SEMAP).
     Regionalization was removed from the MTW Operations Notice 
and will be implemented through a separate forthcoming notice.
     Agencies will formalize their MTW status with an amendment 
to their Annual Contributions Contract.
     The monitoring of the requirement that an MTW agency 
designated pursuant to the 2016 MTW Expansion Statute continues to 
assist substantially the same number of families has been simplified. 
Compliance will be determined using a baseline ratio of total public 
housing and HCV HAP funding to families served.

MTW Demonstration Program

    The MTW demonstration program was first established under Section 
204 of Title II of section 101(e) of the Omnibus Consolidated 
Rescissions and Appropriations Act of 1996, Public Law 104-134, 110 
Stat. 1321-281; 42 U.S.C. 1437f note (1996 MTW Statute) \1\ to provide 
statutory and regulatory flexibility \2\ to participating PHAs under 
three statutory objectives. Those three statutory objectives are to:
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    \1\ PHAs currently operating an MTW demonstration program 
include PHAs with an active MTW agreement as of December 15, 2015. 
PHAs currently operating an MTW program do not include PHAs that 
previously participated in the MTW demonstration and later left the 
demonstration.
    \2\ The MTW demonstration program may only provide certain 
flexibilities under the 1937 Act. For more information on the 
history of the MTW demonstration program, please go to: www.hud.gov/mtw.
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     Reduce cost and achieve greater cost effectiveness in 
Federal expenditures;
     Give incentives to families with children where the head 
of household is working, seeking work, or is preparing for work by 
participating in job training, educational programs, or programs that 
assist people to obtain employment and become economically self-
sufficient; and
     Increase housing choices for eligible low-income families.
    To achieve these objectives, PHAs selected for participation in the 
MTW demonstration are given exemptions from many existing public 
housing and HCV rules and offered more flexibility with how they use 
their Federal funds. MTW agencies use this opportunity presented by the 
MTW demonstration to better address local housing needs. HUD learns 
from the experience of MTW agencies to develop new housing policy 
recommendations that can positively impact assisted housing delivery 
for PHAs nationwide.
    In addition to statutory and regulatory relief,\3\ MTW agencies 
have the flexibility to apply fungibility among three core funding 
programs' funding streams--public housing Operating Funds, public 
housing Capital Funds, and HCV assistance (to include both HAP and 
Administrative Fees)--hereinafter referred to as ``MTW Funding.'' \4\ 
These flexibilities do not negate the need for both the PHA and HUD to 
be able to account for the funding from its original source to the date 
of its ultimate eligible use \5\ by the PHA, to comply with Federal 
grant and financial management requirements, and to use funds 
effectively and efficiently for their eligible purposes. As the 
Department continues to implement program-specific financial management 
policies in its core housing programs, MTW agencies will be subject to 
the same requirements and procedures as non-MTW agencies. Therefore, 
the requirements and procedures described in this Notice may change as 
new financial management policies are implemented over time.
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    \3\ For more information about the MTW demonstration program and 
the specific activities of existing MTW agencies, please refer to 
the MTW website at www.hud.gov/mtw.
    \4\ Funds awarded under Sections 8(o), 9(d), and 9(e) of the 
1937 Act are eligible for expanded uses pursuant to MTW fungibility, 
with the exception of funds provided for specific non-MTW HCV sub-
programs. Other funds a PHA may receive (i.e., grant funds under 
another obligating document) are likewise not covered by MTW 
flexibilities and must be tracked and reported under the applicable 
rules and requirements.
    \5\ The date of the ``ultimate eligible use'' means the date of 
disbursement by the PHA for an eligible purpose, which would remove 
the funding from the PHA's account and the PHA's control.
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    Throughout participation in the MTW demonstration program, MTW 
agencies must continue to meet five statutory requirements established 
under the 1996 MTW Statute. The five statutory requirements are:
     At least 75 percent of the families assisted by 
participating demonstration public housing authorities shall be very 
low-income families, as defined in section 3(b)(2) of the United States 
Housing Act of 1937;
     Establishing a reasonable rent policy, which shall be 
designed to encourage employment and self-sufficiency by participating 
families, consistent with the purpose of this demonstration, such as by 
excluding some or all of a family's earned income for purposes of 
determining rent;
     Continuing to assist substantially the same total number 
of eligible low-income families as would have been served had the 
amounts not been combined;
     Maintaining a comparable mix of families (by family size) 
as would have been provided had the amounts not been used under the 
demonstration; and
     Assuring that housing assisted under the demonstration 
program meets housing quality standards established or approved by the 
Secretary.

[[Page 51476]]

    Currently, there are 39 agencies \6\ participating in the MTW 
demonstration program. The administrative structure for these 39 
agencies is outlined in the Standard MTW Agreement, a contract between 
each existing MTW agency and HUD. The 2016 MTW Expansion Statute 
extended the term of the Standard MTW Agreement through each of the 
existing MTW agencies' 2028 fiscal year.
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    \6\ The 39 agencies are: Alaska Housing Finance Corporation; 
Atlanta Housing Authority; Housing Authority of the City of 
Baltimore; Boulder Housing Partners; Cambridge Housing Authority; 
Housing Authority of Champaign County; Charlotte Housing Authority; 
Chicago Housing Authority; Housing Authority of Columbus, Georgia; 
District of Columbia Housing Authority; Delaware State Housing 
Authority; Fairfax County Redevelopment and Housing Authority; 
Holyoke Housing Authority; Keene Housing; King County Housing 
Authority; Lawrence-Douglas County Housing Authority; Lexington-
Fayette Urban County Housing Authority; Lincoln Housing Authority; 
Louisville Metropolitan Housing Authority; Massachusetts Department 
of Housing and Community Development; Minneapolis Public Housing 
Authority; Housing Authority of the City of New Haven; Oakland 
Housing Authority; Orlando Housing Authority; Philadelphia Housing 
Authority; Housing Authority of the City of Pittsburgh; Portage 
Metropolitan Housing Authority; Home Forward (Portland, OR); Housing 
Authority of the City of Reno; San Antonio Housing Authority; 
Housing Authority of the County of San Bernardino; San Diego Housing 
Commission; Housing Authority of the County of San Mateo; Housing 
Authority of the County of Santa Clara/City of San Jose; Seattle 
Housing Authority; Tacoma Housing Authority; Housing Authority of 
Tulare County; and Vancouver Housing Authority.
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2016 Expansion of the MTW Demonstration Program

    As the 2016 MTW Expansion Statute directs, HUD is authorized to 
expand the MTW demonstration program from the current level of 39 
agencies to an additional 100 agencies over a period of 7 years, ending 
in 2023. In expanding the MTW demonstration, HUD intends to build on 
the successes and lessons learned from the demonstration thus far. The 
vision for the MTW expansion is to learn from MTW interventions to 
improve the delivery of Federally assisted housing and promote self-
sufficiency for low-income families across the Nation. Through the 
expansion, HUD will extend flexibility to a broader range of PHAs both 
in terms of size and geographic diversity and will balance the 
flexibility inherent in MTW with the need for measurement, evaluation, 
and prudent oversight.
    HUD will select the additional 100 PHAs in cohorts, with 
applications for each cohort to be sought via PIH Notice. For each 
cohort of agencies selected, the 2016 MTW Expansion Statute requires 
HUD to direct all the agencies within the cohort to implement one 
specific policy change, which HUD will evaluate rigorously. MTW 
agencies may implement policy changes in addition to the policy change 
directed by HUD as long as those policy changes do not conflict or 
interfere with the cohort study. As required by the 2016 MTW Expansion 
Statute, the HUD-appointed MTW Research Advisory Committee, described 
further below, advised HUD on the policy changes to be tested through 
the new cohorts of MTW agencies and the methods of research and 
evaluation.
    The 2016 MTW Expansion Statute also includes a provision allowing 
the Secretary to designate an MTW agency as a regional MTW agency--at 
the request of said agency--should the Secretary determine that unified 
administration of assistance ``under sections 8 and 9 of the United 
States Housing Act of 1937 (42 U.S.C. 1437f and g)'' by that agency 
across multiple jurisdictions will lead to (a) efficiencies and to (b) 
greater housing choice for low-income persons in the region. HUD will 
issue separate guidance regarding how an MTW agency may be designated 
as a regional MTW agency.
Eligibility and Selection for the Expansion of the MTW Demonstration
    The 2016 MTW Expansion Statute provides that the 100 MTW agencies 
selected must be high performers in either HUD's Public Housing 
Assessment System (PHAS) or its Section Eight Management Assessment 
Program (SEMAP) at the time of application to the demonstration, and 
represent geographic diversity across the country. Further, the 2016 
MTW Expansion Statute states that of these 100 PHAs:
     No less than 50 PHAs shall administer 1,000 or fewer 
aggregate housing voucher and public housing units;
     No less than 47 PHAs shall administer 1,001-6,000 
aggregate housing voucher and public housing units;
     No more than 3 PHAs shall administer 6,001-27,000 
aggregate housing voucher and public housing units;
     No PHA shall be granted MTW designation if it administers 
more than 27,000 aggregate housing voucher and public housing units; 
and
     Five of the PHAs selected shall be agencies with a Rental 
Assistance Demonstration (RAD) portfolio award.
    HUD will issue separate PIH Notices, by cohort, soliciting 
applications from eligible PHAs for participation in the MTW 
demonstration. These Notices, when issued, will outline the specific 
application submission requirements, evaluation criteria, and process 
HUD will use when selecting PHAs for MTW designation.
    The PHA sizes eligible for participation in the MTW demonstration 
are statutory and were defined by Congress; therefore, HUD is unable to 
waive or modify those size restrictions.

MTW Research Advisory Committee

    The 2016 MTW Expansion Statute required HUD to form and consult 
with a Federal MTW Research Advisory Committee (the Committee), 
established in May 2016. The Committee is governed by the Federal 
Advisory Committee Act (5 U.S.C. Appendix 2), which sets forth 
standards for the formation and use of advisory committees. The purpose 
of the Committee is to provide independent advice with respect to the 
policies to be studied through the MTW expansion and the related 
methods of research and evaluation. The Committee is charged with 
advising HUD on the following:
     Policy proposals and evaluation methods for the MTW 
demonstration to inform the one specific policy change required for 
each cohort of agencies;
     Rigorous research methodologies to measure the impact of 
policy changes studied;
     Policy changes adopted by MTW agencies that have proven 
successful and can be applied more broadly to all PHAs; and
     Statutory and/or regulatory changes (specific waivers and 
associated activities, and program and policy flexibility) necessary to 
implement policy changes for all PHAs.
    The Committee has no role in reviewing or selecting the 100 PHAs to 
participate in the expansion of the MTW demonstration.
    The Committee members were appointed to a two-year term in June 
2016 by the HUD Secretary and chosen to ensure balance, diversity, and 
a broad representation of ideas.\7\ In May 2018, HUD extended the 
Committee and the members' appointments for another two-year term. As 
required by the 2016 MTW Expansion Statute, the Committee includes 
program and research experts from HUD; a representation of MTW 
agencies, including current and former residents; and independent 
subject matter experts in housing policy research.
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    \7\ For more information on the establishment, purpose, members, 
and meeting content of the MTW Research Advisory Committee, please 
go to: https://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/mtw/expansion/rac.
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    Based on the advice of the Committee, HUD will study, by cohort of 
MTW

[[Page 51477]]

agencies, the following four policies (which are in no particular order 
except for the first two cohorts):
     Impact of MTW Flexibility on Small and Medium PHAs: In 
this first cohort, HUD will evaluate the overall effects of MTW 
flexibility on a PHA and the residents it serves. The Committee 
recommended that PHAs with under 1,000 aggregate public housing and 
voucher units be included in this cohort. To date, only one of the 
existing MTW agencies has less than 1,000 aggregate units, while the 
majority of PHAs nationwide fit into this size category.
     Rent Reform: In this second cohort, HUD will evaluate 
different rent reform models. Rent reform models may be income based 
and may include tiered rents and/or stepped-up rents.
     Work Requirements: In this cohort, HUD will evaluate work 
requirements for residents/participants who are non-elderly, non-
disabled, and at least 18 years old.
     Landlord Incentives: In this cohort, HUD will evaluate how 
to improve landlord participation in the HCV program through incentives 
such as participation payments, vacancy payments, alternate inspection 
schedules and other methods.

Operations Notice for the Expansion of the MTW Demonstration

    Through the MTW expansion, HUD seeks to design and test new 
approaches to providing and administering housing assistance and then 
to apply the lessons-learned nationwide, all within a framework of 
simplifying program administration. This is laid out in HUD's guiding 
principles for the expansion, which are: (1) Simplify; (2) learn; and 
(3) apply. The Operations Notice is an embodiment of this vision. The 
Operations Notice describes a framework for the MTW demonstration that 
streamlines and simplifies HUD's implementation of MTW status and the 
associated flexibilities of participating MTW agencies while providing 
for the rigorous evaluation of specific policy changes. This framework 
would apply to all PHAs designated as an MTW agency pursuant to the 
2016 MTW Expansion Statute and to any previously-designated MTW 
agencies that agree to operate under the framework of the Operations 
Notice. These PHAs are referred to in the Operations Notice as ``MTW 
agencies.'' Participation in the MTW Expansion will be formalized by an 
amendment to the PHA's Consolidated Annual Contributions Contract, 
which is called the MTW CACC Amendment.\8\
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    \8\ The MTW Consolidated ACC Amendment amends the ACCs and the 
CACCs for the Public Housing and Section 8 Voucher programs.
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    The Operations Notice is organized into 11 sections as follows:

1. Purpose and Applicability
2. Waivers
    a. MTW Waivers
    b. Agency-Specific Waiver Requests
    c. Cohort-Specific Waivers
3. Term of Participation
4. MTW Funding Flexibilities and Financial Reporting
    a. MTW Funding Flexibility
    b. Calculation of Funding
    c. Financial Reporting and Auditing
5. Evaluation
    a. Program-wide Evaluation
    b. Cohort-Specific Evaluation
    c. Ad-hoc Evaluation
6. Program Administration and Oversight
    a. Planning and Reporting
    b. Performance Assessment
    c. Monitoring and Oversight
7. Rental Assistance Demonstration Program
8. Applying MTW Flexibilities to Special Purpose Vouchers
    a. HUD-Veterans Affairs Supportive Housing
    b. Family Unification Program
    c. Non-Elderly Persons with Disabilities Vouchers
    d. Enhanced Vouchers and Tenant Protection Vouchers
9. Applicability of Other Federal, State, and Local Requirements
10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute
11. Sanctions, Terminations, and Default

II. Operations Notice

1. Purpose and Applicability

    The Operations Notice establishes requirements for the 
implementation and continued operation of the expansion of the MTW 
demonstration program pursuant to the 2016 MTW Expansion Statute. The 
Operations Notice also applies to all PHAs designated as MTW pursuant 
to the 2016 MTW Expansion Statute and to any previously-designated MTW 
agency that elects to operate under the terms of this Notice.
    Through the MTW CACC Amendment, an MTW agency agrees to abide by 
the program structure, flexibilities, and terms and conditions detailed 
in the Operations Notice for the term of the agency's participation in 
MTW demonstration. Any significant updates to the Operations Notice by 
HUD will be preceded by a public comment period. HUD may supplement the 
Operations Notice with PIH Notices providing more detailed guidance, 
including with respect to implementing future appropriations act 
provisions and revisions to financial policies and procedures. 
Additionally, HUD will develop informational materials to address 
various program elements, which HUD will post on the MTW website.
    Unless otherwise provided in the Operations Notice, an agency's MTW 
program applies to all of the agency's public housing units (including 
agency-owned properties and units comprising a part of mixed-income, 
mixed finance communities, tenant-based HCV assistance, project-based 
HCV assistance under Section 8(o), and Homeownership units developed 
using Section 8(y) HCV assistance. This Operations Notice does not 
apply to HCV assistance that is required: (i) To make payments to other 
PHAs under HCV portability billing procedures; (ii) to meet particular 
purposes for which HUD has expressly committed the assistance to the 
agency; \9\ or (iii) to meet existing contractual obligations of the 
agency to a third party (such as Housing Assistance Payment (HAP) 
contracts with owners under the agency's HCV program), unless a third 
party agrees to Project-Based Voucher (PBV) activities implemented 
under the MTW program with the agency.
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    \9\ Mainstream Vouchers, Moderate Rehabilitation Renewals, HUD-
Veterans Affairs Supportive Housing (HUD-VASH) Vouchers, Non-Elderly 
Disabled (NED) Vouchers, and Family Unification Program (FUP) 
Vouchers are not part of the MTW demonstration program.
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    PHAs are reminded that the MTW demonstration program does not 
permit waivers related to statutes outside of the 1937 Act or 
regulations promulgated under authority outside of the 1937 Act, 
including any waivers to fair housing, nondiscrimination, labor 
standards, or environmental requirements. Other subject matter 
prohibited from waivers or restricted with respect to waivers is 
discussed elsewhere in this Notice.

2. Waivers

    Pursuant to the 1996 MTW Statute and 2016 MTW Expansion Statute, 
the Appendix of this Notice provides waivers of certain provisions of 
the 1937 Act as well as the implementing requirements and regulations. 
These waivers and associated activities afford MTW agencies the 
opportunity to use their MTW authority to pursue locally-driven 
policies, procedures, and programs in order to further the goals of the 
demonstration. In implementing MTW activities, agencies will ensure 
assisted families are made aware of the impacts the activity(s) may 
have to their tenancy. The following are the three categories of 
waivers that MTW agencies may pursue: (a) MTW Waivers; (b)

[[Page 51478]]

Agency-Specific Waiver Requests; and (c) Cohort-Specific Waivers. MTW 
agencies may conduct any permissible activity in the MTW Waivers 
category within the provided safe harbors, as detailed in the Appendix, 
without additional approval from HUD. Agencies may make an Agency-
Specific Waiver Request to implement additional activities not 
contained in the MTW Waivers, request to waive a statutory or 
regulatory requirement not waived in the MTW Waivers, and/or request to 
expand the safe harbors of an MTW Waivers activity. Agencies may also 
be provided with Cohort-Specific Waivers if they are necessary to allow 
for the implementation of the required cohort study.
a. MTW Waivers
    The Appendix contains the available waivers and associated 
activities that MTW agencies may implement after they have been 
included in the MTW Supplement (described in Section 6 of this Notice) 
of an approved PHA Plan. The Appendix includes the waiver name, waiver 
description, statutes and regulations waived, permissible activities, 
and safe harbors. The waiver description defines the authorization 
provided to the MTW agency, subject to the terms of this Notice. The 
list of statutes and regulations waived details the citations of the 
1937 Act requirements that may be waived by an MTW agency in order to 
implement an activity. The list of waivers and list of activities are 
organized by program type. The safe harbors section contains the 
additional requirements (beyond those specified in the activity 
description) that the agency must satisfy in implementing activities 
without further HUD approval. If an MTW agency wishes to implement 
additional activities not contained in the MTW Waivers, request to 
waive a statutory or regulatory requirement, and/or request the ability 
to go beyond an MTW activity's safe harbor(s), the MTW agency must 
submit an Agency-Specific Waiver Request for approval from HUD as 
explained further in Section 2.b of this Notice.
    MTW agencies may implement any activity contained in the Appendix 
as long as it is included in the MTW Supplement of an approved PHA Plan 
and implemented within the associated safe harbor(s). The MTW agency 
will update the MTW Supplement annually, as described in Section 6 of 
this Notice, to reflect the new activities it plans to implement in the 
coming fiscal year and ongoing activities it has implemented in the 
prior year, which includes estimated costs/savings for planned 
activities that have a cost implication. While MTW activities are 
listed by specific waiver name, MTW agencies may use the MTW Supplement 
to combine activities together to create more comprehensive initiatives 
at the local level.
    The MTW Waivers only waive certain provisions of the 1937 Act and 
its implementing regulations. The five statutory requirements 
established under the 1996 MTW Statute cannot be waived. Other 
applicable Federal, state, and local requirements shall continue to 
apply even in the event of a conflict between such a requirement and a 
waiver or activity granted by this Notice. Accordingly, HUD and the MTW 
agencies may not waive or otherwise deviate from compliance with Fair 
Housing and Civil Rights laws and regulations. Additionally, in 
implementing activities, MTW agencies remain subject to all other 
terms, conditions, and obligations under this Notice, and all other 
Federal requirements applicable to the public housing program, the HCV 
program, Federal funds, and PHAs. To the extent any MTW activity 
conflicts with any of the five statutory requirements or other 
applicable requirements, HUD reserves the right to require the MTW 
agency to discontinue the activity or to revise the activity to comply 
with this Notice, and the other applicable Federal requirements. HUD 
also reserves the right to require an MTW agency to discontinue any 
activity derived from a waiver should it have significant negative 
impacts on families or the agency's operation of its assisted housing 
programs using Section 8 and 9 funds, as determined by HUD.
b. Agency-Specific Waiver Requests
    Pursuant to the exceptions in Section 9 of this Notice, HUD 
understands that MTW agencies may wish to request Agency-Specific 
Waivers to implement activities, waive statutory or regulatory 
requirements that are not in the Appendix, and/or expand the safe 
harbor(s) of an activity included in the MTW Waivers. There are two 
categories of Agency-Specific Waiver Requests: (1) A request to waive a 
statutory or regulatory requirement, or to implement an activity, not 
provided for in the Appendix; and (2) a request to expand an activity 
that is in the Appendix outside of the listed safe harbor (or multiple 
safe harbors). The MTW agency must obtain explicit written approval 
from HUD for each Agency-Specific Waiver Request prior to 
implementation. Agency-Specific Waiver Requests are optional and made 
at the discretion of the MTW agency.
    To submit an Agency-Specific Waiver Request(s), an MTW agency will 
first share the specifics and details of the proposed waiver in the MTW 
Supplement to the Annual PHA Plan, indicating which of the two 
categories of Agency-Specific Waiver Requests is being sought. The MTW 
Supplement form, when finalized, will provide a comprehensive 
explanation of the elements required to submit an Agency-Specific 
Waiver Request.
    The approval of the Annual PHA Plan and MTW Supplement during this 
stage does not constitute an approval of the Agency-Specific Waiver 
Request. Rather, the public comment and review period affords the MTW 
agency's Resident Advisory Board (RAB), community, and residents the 
opportunity to provide input on the proposed waiver prior to its 
submission to HUD.
    Once the MTW agency obtains approval of its Annual PHA Plan and MTW 
Supplement containing the Agency-Specific Waiver Request information, 
the agency will then submit a letter to its local HUD field office 
requesting final approval of the Agency-Specific Waiver Request(s). 
This letter is sent and reviewed outside of the Annual PHA Plan and MTW 
Supplement process. It must include: A good cause justification that 
relates to one or more of the three MTW statutory objectives; the 
statute, regulation, and/or MTW Waiver safe harbor which the MTW agency 
seeks to waive and its justification for doing so; a copy of the 
approval letter for the Annual PHA Plan and MTW Supplement containing 
the proposed waiver; a description of the initiative; the 
implementation timeline; and any other information requested by HUD. 
Depending on the nature of the request, HUD may ask for an associated 
hardship policy, impact analysis, and/or other information necessary to 
understand the waiver and its possible effects. Agency-Specific Waiver 
Requests may not conflict with the agency's cohort-specific evaluation.
    If the Agency-Specific Waiver is approved by HUD and the changes 
between the Agency-Specific Waiver Request and the Waiver that HUD 
ultimately approves do not constitute a ``significant amendment'' to 
the Annual PHA Plan, as defined by the agency, then the Agency-Specific 
Waiver may be implemented once the MTW Agency receives HUD's explicit 
written approval. The MTW Agency will need to submit a narrative 
description of the Agency Specific Waiver in its subsequent MTW 
Supplement.
    If the Agency-Specific Waiver is approved by HUD with changes

[[Page 51479]]

between the Agency-Specific Waiver Request and the Waiver that HUD 
ultimately approves that constitute a ``significant amendment'' to the 
Annual PHA Plan, as defined by the agency, then the MTW agency must re-
submit the Agency-Specific Waiver Request through the Annual PHA Plan 
and MTW Supplement public comment process a second time. Once the 
Annual PHA Plan and MTW Supplement are approved this second time, the 
MTW agency may implement its Agency-Specific Waiver.
    To the extent a policy in an Agency-Specific Waiver Request 
conflicts with any of the five statutory requirements, the cohort-
specific evaluation, or other applicable requirements, HUD shall 
require the MTW agency to discontinue the policy or to revise the 
policy to comply with this Notice and the other applicable federal 
requirements. HUD also reserves the right to require an MTW agency to 
discontinue any policy derived from a waiver should it have significant 
negative impacts on families or the agency's operation of its assisted 
housing programs using Section 8 and 9 funds, as determined by HUD.
c. Cohort-Specific Waivers
    Pursuant to the 2016 MTW Expansion Statute, at the time of 
designation as an MTW agency, each agency will be selected into an 
evaluative cohort that seeks to test a specific policy change, as 
specified in that cohort's Selection Notice. Cohort-Specific Waivers 
include statutory and/or regulatory waivers and associated activities 
that are unique to a specific cohort to allow them to complete their 
required cohort study. Depending upon the cohort's study, there is a 
possibility that HUD restricts certain activities within the MTW 
Waivers or provides additional waivers that are not included in the 
Appendix. It is also possible that the specific policy changes to be 
tested through a given cohort would not need any Cohort-Specific 
Waivers. Any MTW activities that would impact or conflict with the 
cohort-specific policy change will be identified in the respective 
Selection Notice so that the MTW agency is aware of this potential 
restriction on its use of waivers before it enters the MTW 
demonstration program. Cohort-Specific Waivers and the associated MTW 
activities may only be used to the extent allowed under the applicable 
evaluative framework provided by HUD in the applicable Selection 
Notice.
    In determining the Cohort-Specific Waivers that will be included in 
the Selection Notices, HUD will remove and/or add waivers and 
associated activities based on whether a waiver and its associated 
activity would impact or conflict with the specific policy(s) to be 
studied in the MTW agency's cohort group. The addition or removal of 
any waivers and associated activities would only apply within the 
confines of the cohort study. For instance, if the study focuses on 
rent models as it relates to the voucher program, then an agency's 
public housing program would not be affected by the addition or removal 
of any such waivers and associated activities. If the MTW Waiver(s) and 
associated activity(s) are not provided to a cohort, or some portion of 
the agency's portfolio within the cohort, to allow the cohort to test a 
specific policy change, the agencies within that cohort study will not 
be able to conduct that activity(s) until the evaluation of the 
specific policy change has concluded.

3. Term of Participation

    The term of each agency's MTW designation will be 12 years (PHA 
Fiscal Years) starting from the time of its designation as an MTW 
agency. All waivers and associated activities provided through the 
Operations Notice expire at the end of the agency's term of 
participation. However, Cohort-Specific Waivers provided to enable a 
cohort-specific policy change may be extended beyond the agency's term 
of participation with HUD's specific approval if HUD determines that 
additional time is needed to evaluate the policy change, subject to 
continued statutory authority for the MTW demonstration.
    Once an MTW agency has implemented an activity pursuant to the 
authority of the Operations Notice, the agency may continue to 
implement that activity throughout the term of its participation in the 
demonstration, subject to the other terms and conditions of this 
Notice. The MTW agency must end all activities requiring MTW-specific 
waivers upon expiration of MTW participation, as HUD cannot guarantee 
that it will be able to extend any waivers and associated activities 
beyond that point. For this reason, when entering into contracts with 
third-parties that draw upon MTW flexibility, the agency should 
disclose that such flexibility is only available during the term of the 
agency's participation in the MTW demonstration as permitted in this 
Notice. An exception is third-party contracts that relate to the 
cohort-specific policy change and associated waiver(s). If HUD 
determines that additional time beyond the end of the agency's MTW term 
is needed to evaluate a cohort-specific policy change, HUD may approve 
an extension of any cohort-specific waiver(s).

4. MTW Funding Flexibility and Financial Reporting

    During the term of the demonstration, subject to appropriations, 
HUD will provide an MTW agency with public housing Operating Fund 
Program grants, public housing Capital Fund Program (CFP) grants, and/
or HCV HAP and Administrative Fee assistance as detailed in this 
Notice. CFP grants may include Formula grants; Demolition or 
Disposition Transitional Funding (DDTF), which are included in regular 
Formula grants; and/or funds from older Replacement Housing Factor 
(RHF) grants (a program later superseded by DDTF). The funding amount 
for MTW agencies may be increased by additional allocations of vouchers 
that the agency is awarded over the term of its participation in the 
MTW demonstration. MTW Funding provided to an MTW agency, including 
public housing Operating Fund Program grants, public housing CFP 
grants, and HCV HAP and Administrative Fee assistance, is subject to 
any future laws and appropriations. If a future law or appropriations 
bill conflicts with this Operations Notice, the law or appropriations 
bill shall be implemented, and no breach of contract claim, or any 
claim for monetary damages, may result from the conflict or 
implementation of the conflicting law or regulation.
a. MTW Funding Flexibility
    MTW agencies will have the flexibility to apply fungibility among 
public housing Operating Fund, public housing Capital Fund, and HCV HAP 
and Administrative Fee assistance. These flexibilities expand the 
eligible uses of each covered funding stream, but do not negate the 
need for both the PHA and HUD to be able to account for the funding 
from its original source to the date of its ultimate eligible use \10\ 
by the PHA, comply with Federal grant and financial management 
requirements, and use funds effectively and efficiently for their 
eligible purposes. As the Department continues to implement program-
specific financial management policies in its core housing programs, 
MTW agencies will be subject to the same requirements and procedures as 
non-MTW agencies. Therefore, the requirements and procedures described 
in this Notice may change as new financial management policies are 
implemented over time. HUD will update existing guidance and issue new

[[Page 51480]]

reporting requirements, as appropriate, to allow HUD to meet its 
monitoring and oversight responsibilities while ensuring MTW agencies 
fully utilize and benefit from the flexibilities established by 
Congress for these funds pursuant to the MTW demonstration and the 2016 
MTW expansion. HUD will also update existing guidance and issue new 
reporting requirements, as appropriate, to ensure compliance with 2 CFR 
part 200, including with respect to Federal financial management.
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    \10\ The date of the ``ultimate eligible use'' means the date of 
disbursement by the PHA for an eligible purpose, which would remove 
the funding from the PHA's account and the PHA's control.
---------------------------------------------------------------------------

    An agency participating in the MTW demonstration program may 
flexibly use public housing Operating and Capital Funds provided under 
Sections 9(d) and 9(e) of the 1937 Act and HCV HAP and Administrative 
Fee program funds provided under Section 8 of the 1937 Act, referred to 
collectively as MTW Funding. Certain provisions of Sections 8 and 9 of 
the 1937 Act and 24 CFR 982 are waived as necessary to implement this 
flexibility. Once the agency receives its MTW designation through the 
execution of the MTW CACC Amendment, this flexibility in the use of MTW 
Funding does not require prior HUD approval.
    The agency may use MTW Funding covered by MTW flexibility for any 
eligible activity under Sections 9(d)(1), 9(e)(1) and Section 8(o) of 
the 1937 Act and for the local, non-traditional activities specified in 
this Notice, including in the Appendix. Any reserves the MTW agency has 
accumulated prior to signing an MTW CACC Amendment (including public 
housing Operating and Capital Reserves and HCV HAP and Administrative 
Fee Reserves) must be used for their originally appropriated purposes 
and may not be used flexibly for any eligible MTW activity described in 
the Appendix. All MTW PHA expenditures, including for local, non-
traditional activities, must be consistent with the PHA's charter, 
approved 5-Year and Annual PHA Plans, and the approved MTW Supplement 
to the Annual PHA Plan.
i. Calculation of Funding
(a) Public Housing Operating Grants
    (1) The calculation of an MTW agency's Operating Fund subsidy grant 
eligibility will continue in accordance with operating subsidy formula 
law, regulations, and appropriations act requirements. As these 
programmatic and financial requirements are updated, MTW agencies will 
be affected by and shall comply with these changes.
    (2) The agency may use these funds for any eligible activity 
permissible under Section 9(e)(1) of the 1937 Act or, if the agency 
proposes to use the funding under its MTW flexibility, it may also use 
these funds for any eligible activity permissible under Section 8(o), 
Section 9(d)(1), and for the local, non-traditional activities 
specified in this Notice, including in the Appendix.
    (3) For Operating Fund grant funding, the MTW agency has 
accumulated prior to signing an MTW CACC Amendment, the agency may not 
use such funds for eligible MTW purposes other than the originally 
appropriated purpose of the funds (i.e., these funds may not be used as 
flexible MTW Funding).
(b) Public Housing Capital Fund Formula and Grants
    (1) The agency's public housing Capital Fund formula 
characteristics and grant amounts, including DDTF and Replacement 
Housing Factor (RHF), will continue to be calculated in accordance with 
public housing law, regulations, and appropriations act requirements.
    (2) MTW agencies must continue to follow the immediate need 
requirements applicable to all Capital funds and may not accelerate 
their drawdown of Capital funds for the purpose of funding reserves or 
for any other purpose. All Capital funds, including funds in BLI 1410 
(Administrative Costs) and Budget Line Item (BLI) 1492 (MTW), must be 
drawn down only when funds are due and payable.
    (3) The agency may use these funds for any eligible activity 
permissible under Section 9(d)(1) of the 1937 Act or, if the agency 
proposes to use the funding under its MTW flexibility, it may also use 
these funds for any eligible activity permissible under Section 8(o), 
Section 9(e)(1), and for the local, non-traditional activities 
specified in this Notice, including in the Appendix. Capital Fund 
Program (CFP) funds used for activities under section 9(d)(1) are 
subject to all requirements relevant to non-MTW agency CFP funding, 
including eligible activities and cost limits.
    (4) For Capital Funds the MTW agency has accumulated prior to 
signing an MTW CACC Amendment, the agency may not use such funds for 
eligible MTW purposes other than the originally appropriated purpose of 
the funds (i.e., these funds may not be used as flexible MTW Funding).
    (5) In requisitioning Capital Fund grant funds, the MTW agency will 
request funds using traditional Capital Fund Budget Line Items (BLIs) 
for funds to be used for activities under section 9(d) and using the 
available MTW Budget Line (BLI 1492) items for activities under section 
9(e), section 8(o), or local, non-traditional activities. MTW agencies 
shall not use the Transfer to Operations Budget Line (BLI 1406) since 
funds for all non-section 9 activities shall be included in the MTW 
Budget Line (BLI 1492). The agency will provide to HUD information on 
all capital activities funded by the MTW Funding as necessary to ensure 
compliance with requirements outside the scope of MTW, including 
environmental review requirements and Energy and Performance 
Information Center (EPIC) reporting requirements.
    (6) The agency remains subject to the requirements of Section 9(j) 
of the 1937 Act with respect to Capital Fund grants. Section 9(d) funds 
remain subject to the obligation and expenditure deadlines and 
requirements provided in Section 9(j) despite the fact that they may be 
in the MTW Single Fund. Capital Funds awarded to MTW agencies must be 
obligated within 2 years and expended within 4 years of award. Funds 
not obligated or expended within those timeframes will be subject to 
recapture. As with all agencies, an MTW agency may requisition CFP 
funds from HUD only when such funds are due and payable, unless HUD 
approves another payment schedule.
(c) Housing Choice Voucher Funding.
    (1) Funding for the Initial MTW Year. For the calendar year (CY) 
after the MTW agency joins the MTW demonstration (the ``Initial MTW 
Year''), the MTW agency's HCV HAP renewal funding will be calculated in 
accordance with the same HAP renewal funding formula used for non-MTW 
HCV agencies in the applicable FY appropriations act. The HAP renewal 
formula is customarily based on the previous CY's HAP expenses reported 
in the Voucher Management System (VMS), adjusted by any applicable 
inflation factor and national proration.
    Example:
     If an MTW Agency signs its MTW CACC Amendment in July 
2018, CY 2019 will be the Initial Year in the MTW demonstration. The 
MTW Agency's CY 2019 HAP renewal funding will be calculated based on 
the Agency's CY 2018 HAP expenses, adjusted by inflation and proration 
(assuming this is the formula in the 2019 Appropriations Act).
    (2) Funding for Subsequent MTW Years. As is the case for non-MTW 
PHAs under current appropriations law, the HAP renewal funding 
eligibility for subsequent MTW years will be calculated based on the 
MTW agency's actual expenses for the previous calendar year (known as 
the re-benchmark year). Unique to MTW agencies, however, the MTW 
agency's

[[Page 51481]]

actual expenses are: (i) The previous CY's HAP expenses reported in 
Voucher Management System (VMS,) and (ii) the previous CY's eligible 
non-HAP MTW expenses reported in VMS. For both HAP and non-HAP MTW 
expenses, the reported expenses must have been paid from an eligible 
source of funds as described in section 4(c) below in order to be 
included in the HAP renewal funding formula. In addition, MTW HAP 
renewal funding is subject to an MTW Renewal Eligibility Cap derived 
from the number of units authorized under the agency's ACC, as 
described in paragraph (d) on the following page. The lower of the 
total combined HAP/non-HAP expenses or the MTW Renewal Eligibility Cap 
will then be adjusted by an applicable inflation factor and any 
national proration that applies to the HCV renewal appropriation to 
determine the MTW agency's actual CY HAP renewal funding.
    Example:
     In CY 2019, an MTW Agency expended $3,600,000 on HAP and 
$400,000 on eligible non-HAP MTW expenses. The agency's HCV HAP renewal 
funding for CY 2020 will be $4 million (assuming the HAP Renewal 
Eligibility Cap is greater than $4 million), adjusted by an inflation 
factor and any applicable national proration.
    (3) HAP Renewal Sources of Funds. The only HAP and non-HAP MTW 
expenses that will be included in the MTW HAP renewal formula are those 
paid for with the same sources of funds that would be included in the 
non-MTW HAP renewal formula for a non-MTW agency (see PIH Notice 2013-
28 and any future successor notices). Accordingly, HAP expenses and 
non-HAP MTW expenses must be paid from the following sources of funds 
to be included in the HAP renewal formula calculation:
     Housing Choice Voucher (HCV) budget authority,
     HUD-held HAP reserves (undisbursed budget authority),
     PHA-held HAP reserves (i.e., Restricted Net Position 
(RNP)),
     Any funds from the HAP Set-aside (if available after PHA 
application and approval), and
     Administrative Fee reserves (i.e., Unrestricted Net 
Position (UNP)).
    HAP expenses or non-HAP MTW expenses that were covered by any other 
funding source (for example, public housing Operating Funds and Capital 
Funds, and current year HCV Administrative Fee funds) will not be 
included in the MTW PHA's HCV renewal funding calculation.
    (4) HAP Renewal Eligibility Cap. The MTW PHA's renewal eligibility 
for all MTW Years will be limited by the HAP Renewal Eligibility Cap. 
The calculation multiplies (1) the MTW PHA's total number of MTW-
eligible ACC authorized units \11\ in the re-benchmark year (the CY 
immediately preceding the CY for which the PHA's renewal eligibility is 
being calculated) \12\ by (2) the PHA's pre-MTW monthly per-unit cost 
(PUC) inflated to the re-benchmark year.
---------------------------------------------------------------------------

    \11\ ``MTW-eligible ACC authorized units'' means the PHA's 
number of ACC authorized units, regardless of whether the units are 
leased, after excluding the number of authorized units that would 
not be subject to the MTW renewal formula. In other words, special 
purpose vouchers that are renewed separately and are not part of the 
MTW HAP renewal formula are not included in the formula used to 
calculate the HAP Renewal Eligibility Cap. See Section 8 of this 
Notice for further information on these special purpose vouchers 
that are renewed separately outside the MTW renewal formula.
    \12\ As noted above, the re-benchmark year is also the source 
year for the actual expense data used in the MTW PHA's HAP renewal 
formula.
---------------------------------------------------------------------------

     For (1), the number of MTW-eligible ACC authorized units 
is measured in unit months available (UMAs).\13\
---------------------------------------------------------------------------

    \13\ Authorized units in the HCV program context are measured in 
terms of unit months available. For example, if an authorized unit 
is under CACC as of January 1, the authorized unit equals 12 unit 
months available for that CY. On the other hand, if the authorized 
unit was added to the CACC under a new funding increment effective 
July 1, the authorized unit is equal to 6 unit months available for 
that CY.
---------------------------------------------------------------------------

     For (2), the inflated pre-MTW PUC is projected using, as a 
base, the monthly PUC for the CY in which the agency signed its MTW 
CACC Amendment. HUD applies an inflation factor to this base PUC to 
estimate what the PHA's HCV PUC would be, had the PHA not joined the 
MTW program, as of the re-benchmark year.
    After the calculation of the HAP Renewal Eligibility Cap, it is 
compared with the MTW PHA's actual total combined HAP/non-HAP expenses. 
The lower of these two amounts--(1) the HAP Renewal Eligibility Cap or 
(2) the MTW PHA's actual total combined HAP/non-HAP expenses--is then 
adjusted by the inflation factor and any national proration factor to 
determine the MTW PHA's CY renewal funding.
    Example:
     If an MTW Agency signs its MTW CACC Amendment in July 
2018, CY 2019 will be the Initial Year in the MTW demonstration. In the 
Initial CY (CY 2019) the MTW Agency's renewal formula is the same 
formula that is used for non-MTW PHAs. In calculating the MTW Agency's 
HCV renewal funding for CY 2020, the following information applies:
    [cir] The MTW PHA's average monthly PUC for CY 2018 was $700.
    [cir] The CY 2019 inflation rate is 2 percent.
    [cir] The number of MTW-eligible ACC authorized units during CY 
2019 is 800 units. (In this example all units were under ACC as of 
January 1, 2019, so the number of unit months available (UMAs) is 
simply 800 units multiplied by 12 months, or 9,600 UMAs).
     The HAP Renewal Eligibility Cap for CY 2020 is calculated 
by first determining the estimated PUC for CY 2019, which is $714 (the 
monthly PUC for CY 2018 inflated for CY 2019, or $700 x 1.02). The 
estimated PUC for CY 2019 is then multiplied by the MTW PHA's CY 2019 
MTW-eligible ACC authorized UMAs\14\ ($714 x 9,600 UMAs) to determine 
the HAP Renewal Eligibility Cap, which is $6,854,400.
---------------------------------------------------------------------------

    \14\ As noted earlier, these are the MTW PHA's CY 2019 UMAs that 
are subject to the MTW renewal formula. UMAs attributable to special 
purpose vouchers such as HUD-VASH and FUP that are renewed 
separately are not included in this count.
---------------------------------------------------------------------------

     The HAP Renewal Eligibility Cap ($6,854,400) is then 
compared to the MTW Agency's total combined HAP/non-HAP expenses for 
the re-benchmark year that originated from the eligible funding sources 
described earlier in this Notice. If the total combined HAP/non-HAP 
expenses do not exceed $6,854,400, the MTW Agency's CY 2020 renewal 
funding will be the total combined HAP/non-HAP expenses adjusted by an 
inflation factor and any national proration. If the total combined HAP/
non-HAP expenses exceed $6,854,400, the MTW Agency's CY 2020 renewal 
funding will be $6,854,400, adjusted by an inflation factor and any 
national proration.
    (5) Financial Management Requirements Apply. The same financial 
management requirements that apply to non-MTW agencies also apply to 
MTW agencies. Accordingly, all undisbursed HAP funds, including HAP-
originated reserve funds, will be retained as HUD-held reserves per 
Office of Management and Budget cash management requirements and can be 
requested by the MTW agency when immediate need exceeds the scheduled 
HAP monthly disbursements, but only after consideration of available 
MTW agency-held Restricted Net Position (RNP).
    (6) Administrative Fees. The Administrative Fee rates used to 
calculate fee eligibility for MTW agencies shall be established 
according to the same methodology used to establish Administrative Fee 
rates for all agencies, including non-MTW agencies. As is the case for 
all agencies under current appropriations law,

[[Page 51482]]

administrative fees will be calculated on the basis of units leased as 
of the first day of each month; this data will be extracted from 
Voucher Management System (VMS) at the close of each reporting cycle. 
Administrative fees for MTW agencies are also subject to the national 
proration factor and any other appropriations act requirements.
    (7) Adjustments for the First-Time Renewal of Certain Vouchers. If 
the MTW agency receives incremental HCV vouchers and funding (including 
tenant protection vouchers) other than special purpose vouchers, 
renewal funding for those vouchers will be included in the MTW HCV 
renewal funding eligibility calculation for the following year. (See 
Section 8 of this Notice for further discussion of tenant protection 
and other special purpose vouchers.) The renewal amount for the 
following year is based on HAP costs reported for these increments in 
VMS in the prior year, which will be adjusted by the inflation factor. 
Should the initial increment(s) be funded for less than 12 months due 
to lack of appropriations, HUD will adjust for the missing months upon 
renewal, by selecting the higher of the funded PUC for the initial 
increment, or the MTW per unit cost (PUC) times the number of 
units,\15\ then adjusted by the inflation factor. The aggregate renewal 
eligibility is always subject to the national proration factor.
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    \15\ The MTW PUC is equal to MTW HAP expenses divided by the 
number of MTW units leased. (Non-HAP MTW expenses are not included 
in the MTW PUC calculation). HUD may further adjust the MTW PUC 
calculation for PHAs administering RAD project-based vouchers to 
exclude RAD Rehab payments so the MTW PUC only reflects expenses 
attributable to actual housing assistance payments.
---------------------------------------------------------------------------

    (8) Applicable Inflation Factor and Proration. The same applicable 
inflation factor that applies to non-MTW agencies will be applied each 
CY to determine the MTW agency's HAP funding renewal eligibility. 
Likewise, the MTW agency's HAP funding renewal eligibility is subject 
to the same national proration as non-MTW agencies' renewal 
eligibility.
    (9) Prior Year Reserves. For HCV HAP and Administrative Fee funding 
provided in years prior to the designation of the agency as an MTW 
agency, the agency may not use any accumulated HCV reserves for 
eligible MTW purposes other than the originally appropriated purpose of 
the funds (i.e., these funds may not be used as flexible MTW Funding).
    (10) Rental Assistance Demonstration (RAD). Any vouchers received 
as part of a RAD Component I conversion shall be added to the ACC for 
the remainder of the CY in which they are awarded. HUD will issue a new 
increment of voucher funding in support of those vouchers for the first 
full CY following a RAD Component I conversion. In subsequent years, 
voucher funding for RAD-converted units will be renewed under the MTW 
HCV renewal funding calculation, plus inflation factor and the 
applicable proration factor. Tenant protection vouchers provided for 
RAD Component II conversions are renewed in accordance with section 
4.v, Adjustment for the first-time renewal of certain vouchers, above. 
Administrative fees for RAD vouchers will be calculated based on the 
same methodology used to establish administrative fees for non-MTW 
agencies. Fees for RAD vouchers will be prorated at the same level that 
applies to all non-MTW agencies.
    (11) Voucher Programs Not Included in MTW Program. Vouchers and 
funding provided for the following special purpose vouchers, or any new 
special purpose vouchers provided in future appropriations acts, 
whether for new allocations or renewal of existing increments, shall 
not be included in the HCV MTW renewal calculation: Mainstream, HUD-
Veterans Affairs Supportive Housing (HUD-VASH), Non-Elderly Disabled 
(NED), and Family Unification Program (FUP). These vouchers will be 
renewed under the regular voucher renewal requirements as provided 
under the appropriations acts. Special purpose vouchers are discussed 
in more detail in Section 8 of this Notice. In addition, funding 
provided for the Section 8 Moderate Rehabilitation Program is not part 
of the MTW program and may not be used for MTW activities.
b. Financial Reporting and Auditing
    MTW agencies must submit year-end unaudited financial information 
to the Department no later than 2 months after their fiscal year end 
using the Financial Data Schedule (FDS) contained in the Real Estate 
Assessment Center's (REAC) Financial Assessment Subsystem (FASS-PH), or 
its successor system. Current financial reporting requirements for MTW 
agencies are posted on the REAC website at https://www.hud.gov/sites/documents/DOC_11833.PDF. These requirements may be updated in the 
future.
    MTW agencies are also required to electronically submit their 
audited financial information, if applicable, to the Department no 
later than 9 months after their fiscal year end. MTW agencies must 
include public housing project level financial information in the FDS 
and must follow the Asset Management guidelines established in Public 
and Indian Housing (PIH) Notice 2007-9 Supplement to Financial 
Management Handbook Office of Public and Indian Housing (PIH) Revised 
April 2007, and any subsequent updates to this Handbook or PIH Notice. 
MTW agencies will conform to the cost requirements of 2 CFR part 200 
and any HUD implementation thereof.
    MTW agencies must procure an Independent Public Accountant (IPA) to 
perform an annual audit pursuant to Federal requirements at 2 CFR part 
200 and 24 CFR 990.190, or successor, as well as any audit compliance 
supplements developed specifically for use with the MTW demonstration.
    Completed IPA audits must be submitted to HUD in accordance with 
current HUD regulations. HUD will review IPA audits of MTW agencies to 
determine appropriate action relative to any findings, prepare 
recommendations for audit finding resolution, and follow up with MTW 
agencies to assure finding closure. If there are audit findings related 
to the MTW program itself, HUD will monitor the resolution of all audit 
findings.
5. Evaluation
    As a condition of participating in the MTW demonstration, MTW 
agencies agree to cooperate fully with HUD and its contractors in the 
monitoring and evaluation of the MTW demonstration. MTW agencies shall 
keep records and submit reports and other information as required by 
HUD. This includes any data collection required for the use of waivers 
and associated activities, for the uses of MTW funds within and across 
funding streams, and any evaluation efforts that HUD undertakes for the 
cohort-specific policy changes.
    MTW is a demonstration that provides PHAs flexibilities to innovate 
and try different approaches to housing assistance in order to achieve 
at least one of the three statutory objectives laid out in the 1996 MTW 
Statute. At its core, the demonstration is an opportunity for PHAs, 
participants, HUD, stakeholders, and the general public to learn from 
different approaches to providing Federal housing assistance to low-
income families. This includes learning from approaches that are 
effective and produce desired outcomes, and from approaches that are 
less effective than anticipated and where results may have unintended 
consequences.
    Because MTW agencies can use different flexibilities calling on 
multiple activities within the MTW Waivers to serve local populations 
in various parts of the country, interpreting PHA-reported performance 
data on the effects of an individual MTW activity can be

[[Page 51483]]

challenging. Consequently, and while adhering to the guiding principles 
for the expansion--to simplify, learn, and apply--HUD will create and 
develop an evaluation system that will document and consider the MTW 
demonstration through the lens of the three statutory objectives 
relating to cost effectiveness, self-sufficiency, and housing choice.
    HUD envisions three types of evaluation: Program-wide evaluation, 
cohort-specific evaluation, and ad hoc evaluation.
a. Program-Wide Evaluation
    Program-wide evaluation would seek to assess whether or not, and to 
what extent, MTW agencies use Federal dollars more efficiently, help 
residents find employment and become self-sufficient, and/or increase 
housing choices for low-income families. HUD intends to develop a 
method for program-wide evaluation that is based, to the extent 
possible, on information already being collected through existing HUD 
administrative data systems. HUD may determine and require that 
additional reporting is necessary to effectively evaluate MTW.
b. Cohort-Specific Evaluation
    The 2016 MTW Expansion Statute requires HUD to direct all the 
agencies in a cohort to implement one specific policy change and to 
conduct a rigorous evaluation of the one specific policy change. The 
MTW Research Advisory Committee has considered input from the public 
and advised HUD on the policy changes to be tested through the new 
cohorts of MTW agencies and on the methods of research and evaluation.
    The cohort-specific policy change and evaluation methods will be 
described in the applicable Selection Notice so that the MTW agency is 
aware, in advance of application to the MTW demonstration program, of 
the policy it will be required to implement and the evaluation 
requirements. The specific evaluation methods and requirements for 
participating MTW agencies will vary based on the policy changes to be 
tested. For example, some cohorts of MTW agencies may be required to 
participate in randomized control trials, while others may be required 
to participate in detailed process studies or ethnographic research. 
HUD's Office of Policy Development and Research (PD&R) will take the 
lead on evaluating cohort-specific policy changes, and funds have been 
appropriated by Congress for this evaluation. In all cases, the purpose 
of the evaluation will be to measure the outcomes associated with the 
specific policy change(s) in order to offer policy recommendations for 
implementing the policy change(s) across all PHAs.
    HUD will determine the length and timeframe for the evaluation, 
which will be informed by feedback provided by the MTW Research 
Advisory Committee. In some cases, the evaluation timeframe may extend 
beyond the agency's term of MTW participation. The MTW agency is 
required to participate in the evaluation for the full timeframe 
designated by HUD. HUD may extend waivers and associated activities 
beyond the agency's term of participation to the extent that those 
waivers and associated activities are needed to support the evaluation 
of the specific policy change and HUD determines whether additional 
time is needed to evaluate the policy change.
c. Ad Hoc Evaluation
    HUD reserves the right to request, and the MTW agency agrees to 
provide, any additional information required by law or required for the 
sound administration or evaluation of the MTW agency.

6. Program Administration and Oversight

    In general, MTW agencies will be subject to the same planning and 
reporting protocols as non-MTW agencies, including the PHA Plan (5-Year 
Plan and Annual PHA Plan) and Capital Fund planning. MTW agencies must 
also report data into HUD data systems, as required.
    New protocols and instruments will be developed for assessing an 
MTW agency's performance and will be incorporated into PHAS and SEMAP, 
or successor assessment systems, or an alternative assessment system 
developed by HUD, explained further in Section 6.b. of this Operations 
Notice. In addition, HUD will employ standard program compliance and 
monitoring approaches including assessment of relative risk and on-site 
monitoring conducted by HUD or by entities contracted by HUD.
a. Planning and Reporting
i. The Annual PHA Plan
    MTW agencies must adhere to Annual PHA Plan regulations at 24 CFR 
part 903, any implementing HUD Notices and guidance, as well as any 
succeeding regulations. The Annual PHA Plan consists of the 5-Year Plan 
that a PHA must submit to HUD once every five PHA fiscal years and the 
Annual PHA Plan that the PHA must submit to HUD for each PHA fiscal 
year. Any HUD assistance that the agency is authorized to use under the 
MTW demonstration must be used in accordance with the Annual PHA Plan, 
as applicable.
    Annual and 5-Year Plans must be submitted in a format prescribed by 
HUD. Currently, submission format requirements are outlined in Notice 
PIH 2015-18 (HA), issued October 23, 2015, which is effective until 
amended, superseded, or rescinded.
ii. MTW Supplement to the Annual PHA Plan (Under Development)
    As an MTW agency, all Annual PHA Plan information must be provided 
in the context of the agency's participation in the MTW demonstration. 
This includes taking into account the MTW Waiver(s) and associated 
activity(s) afforded to the MTW agency. To this end, the MTW agency 
will submit an MTW Supplement to the Annual PHA Plan, in a format to be 
developed by HUD. Prior to submitting to HUD, the MTW Supplement must 
go through a public process along with the Annual PHA Plan. This will 
allow the agency to inform the community of any programmatic changes 
and give the public an opportunity to comment. Details about this 
requirement are elaborated later in this section. New MTW agencies will 
not be required to submit the Annual MTW Plan or Annual MTW Report 
(i.e., Form 50900), which are required for existing MTW agencies.
    The MTW Supplement form has not been finalized at the time of 
publishing of this Operations Notice. The MTW Supplement will be made 
available for public review and comment, per Paperwork Reduction Act 
requirements, prior to finalizing the form. At this time, HUD plans to 
require MTW agencies to use the MTW Supplement to the Annual PHA Plan 
to:
     Describe how the MTW agency seeks to address the three MTW 
statutory objectives during the coming fiscal year, in a narrative 
format;
     Indicate the MTW activities that the agency plans to 
implement in the Annual PHA Plan year that utilize the activities 
contained in the MTW Waivers (Appendix), and ongoing activities the 
agency has implemented in the prior year, using a check-box or other 
simple format;
     Indicate the estimated costs/savings per year for planned 
activities that have a cost implication;
     Indicate the reason(s) why any previously approved MTW 
activities were not implemented in the previous year;
     Indicate any changes in the MTW activities and associated 
waivers, including safe harbors, that have

[[Page 51484]]

changed from the previous Annual PHA Plan year;
     Describe any Agency-Specific Waiver Requests that the MTW 
agency seeks to implement in PHA fiscal year, if applicable;
     Indicate the MTW activities that the agency will undertake 
in the Annual PHA Plan year that require Cohort-Specific Waivers (as 
applicable and identified in each cohort's Selection Notice), and the 
Cohort-Specific Waivers to be used, using a check-box or other simple, 
non-narrative format;
     Certify to HUD that all MTW activities being implemented 
by the agency fall within the safe harbors outlined in the Appendix;
     Submit data or information required for the ongoing use of 
any activities within the MTW Waivers; and
     Submit data required for HUD's verification of the MTW 
agency's compliance with the five statutory requirements established 
under the 1996 MTW Statute.
    Non-MTW PHAs that are qualified under 24 CFR 903.3(c) and that are 
not designated as troubled under PHAS and that do not have a failing 
score under SEMAP are exempt from the requirement to submit the Annual 
PHA Plan. Per this Operations Notice, while MTW agencies that are 
qualified under 24 CFR 903.3(c) are not required to submit the Annual 
PHA Plan, they are required to submit the MTW Supplement to the Annual 
PHA Plan on an annual basis.
    During the agency's initial year of participation in the MTW 
demonstration, an agency may implement MTW activities once they have 
been included in an approved MTW Supplement, either during the next 
regularly scheduled submission of the Annual PHA Plan and MTW 
Supplement or through an amendment to the Annual PHA Plan, which would 
include the MTW Supplement. Agency-Specific Waiver Requests and 
activities may only be implemented after explicit written approval from 
HUD.
    MTW agencies must submit to HUD the Annual PHA Plan, including any 
required attachments, and the MTW Supplement no later than seventy-five 
(75) days prior to the start of the agency's fiscal year. Before 
submission to HUD, the agency must have at least a 45-day public review 
period of its plan, after publishing a notice informing the public of 
its availability and conducting reasonable outreach to encourage 
participation in the plan process, followed by a public hearing. MTW 
agencies must consider, in consultation with the RABs, all of the 
comments received at the public hearing. The recommendations received 
by the public and RABs must be submitted by the agency as a required 
attachment to the Plan. MTW agencies must also include a narrative 
describing their analysis of the recommendations and the decisions made 
on these recommendations. Agencies must also obtain the proper signed 
certifications and board certification.
    HUD will notify the MTW agency in writing if HUD objects to any 
provisions or information in the Annual PHA Plan or the MTW Supplement. 
When the MTW agency submits its Plan seventy-five (75) days in advance 
of its fiscal year, HUD will respond to the MTW agency within 75 days.
    Reviews of the Annual PHA Plan and the MTW Supplement will be 
conducted by the local field office, in consultation with the MTW 
Office.
iii. Admissions and Continued Occupancy Policy (ACOP) and 
Administrative Plan
    The MTW agency must update its ACOP and Administrative Plan to be 
consistent with the MTW activities and related waivers that it 
implements. The agency may not implement an MTW activity or waiver 
until the relevant sections of the ACOP and/or Administrative Plan are 
updated. MTW agencies must provide HUD with electronic versions of the 
ACOP and Administrative Plan upon request. If the MTW agency implements 
an activity using the local, non-traditional uses of funds waiver, the 
MTW agency must create and update an implementing document specifically 
for such activity.
iv. Capital Planning and Reporting
    MTW agencies must adhere to CFP regulations at 24 CFR part 905, any 
implementing HUD Notices and guidance, as well as any successor 
regulations. As noted previously, MTW agencies are funded in accordance 
with CFP regulations and formula funds are calculated and distributed 
in the same manner as non-MTW agencies.
    MTW agencies have the authority and flexibility to utilize their 
CFP funds for expanded uses as part of their MTW funding flexibility. 
HUD will award Capital Fund grants to MTW agencies in keeping with the 
standard process for all PHAs. The Field Office will distribute funds 
in Line of Credit Control System (LOCCS) to the MTW agencies in 
accordance with the standard process. As with all PHAs, an MTW agency 
may draw down Capital Funds from HUD only when such funds are due and 
payable, unless HUD approves another payment schedule. To the extent 
that the MTW agency plans to use CFP funding for other MTW-eligible 
(non-CFP) activities, the CFP funding would be recorded on BLI 1492 
(Moving to Work) on Form HUD-50075.1. CFP funds entered on BLI 1492 
would not need to be broken out and itemized in the part II supporting 
pages of the HUD-50075.1. However, regardless of the BLI utilized, 
funds may not be drawn down until the PHA has an immediate need for the 
funds. An MTW agency may not accelerate drawdowns of funds in order to 
fund reserves or to otherwise increase locally held amounts, as 
discussed in 4(a)(i)(b)(2) of this Notice.
    An MTW agency is not required to use all or any portion of its CFP 
grant for non-CFP activities. To the extent that the MTW agency wishes 
to dedicate all or a portion of its CFP grant to specific capital 
improvements, the agency shall record CFP funding on the appropriate 
BLI(s) on Form HUD-50075.1 (other than BLI 1492) as in the standard 
program.
v. Inventory Management System/PIH Information Center Reporting
    Data from HUD's Inventory Management System (IMS) and Public and 
Indian Housing (PIH) Information Center (PIC), or successor systems, is 
critical to all aspects of program administration, including HUD 
monitoring and tracking of MTW agency progress in meeting the MTW 
statutory objectives. IMS/PIC data is used to establish funding 
eligibility levels for both Operating Subsidy Fund and Capital Fund 
grants. Further, HUD relies on IMS/PIC data to provide a thorough and 
comprehensive view of PHA program performance and compliance.
    MTW agencies are required to submit the following information to 
HUD via IMS/PIC (or its successor system):
     Family data to IMS/PIC using Form HUD-50058 MTW (or 
successor forms) or Form HUD-50058 and in compliance with HUD's 50058 
MTW or standard 50058 submission requirements for MTW agencies. MTW 
agencies must report information on all families receiving some form of 
tenant-based or project-based housing assistance, either directly or 
indirectly, as well as all public housing families, to be current to at 
least a 95 percent level.
     Current building and unit information in the development 
module of IMS/PIC (or successor system).
     Basic data about the PHA (address, phone number, email 
address, etc.).
    HUD will monitor MTW agency reporting to IMS/PIC (or successor 
system) to ensure compliance and provide technical assistance to MTW 
agencies as needed.

[[Page 51485]]

vi. Voucher Management System Reporting
    MTW agencies are required to report voucher utilization in the 
Voucher Management System (VMS), or its successor system. There are 
several areas in which VMS reporting is different for MTW agencies. 
These areas are highlighted in the VMS User's Manual (http://portal.hud.gov/hudportal/documents/huddoc?id=instructions.pdf), which 
details the VMS reporting requirements.
    HUD will monitor each MTW agency's VMS reporting to ensure 
compliance and provide technical assistance to MTW agencies as needed.
vii. General Reporting Requirement
    In addition to the reporting requirements outlined in this 
Operations Notice, MTW agencies are required to comply with any and all 
HUD reporting requirements not specifically waived by HUD for 
participation in the MTW demonstration program, including the 
requirement (discussed in Section 5) to comply with HUD's evaluation of 
the specific-policy changes being implemented by cohort.
b. Performance Assessment
    Assessing the performance of PHAs (both MTW and non-MTW) helps with 
the delivery of services in the public housing and voucher programs and 
enhances trust among PHAs, public housing participants, HUD, and the 
general public. To facilitate this effort, HUD will provide management 
tools for effectively and fairly assessing the performance of a PHA in 
essential housing operations and program administration.
    Currently, HUD uses PHAS and SEMAP to assess risk and identify 
underperforming PHAs in the traditional public housing and voucher 
programs. However, since some of the MTW flexibilities make it 
difficult to accurately assess the performance of MTW agencies under 
the existing systems, HUD will develop an alternative, MTW-specific 
assessment system, which may be incorporated into PHAS and SEMAP (or 
successor assessment system(s)). MTW agencies may not opt out of the 
MTW-specific successor system(s). Until the successor system is 
implemented, HUD will monitor MTW agency performance through PHAS sub-
scores.
i. Public Housing Assessment System
    MTW agencies are scored in PHAS, however, agencies can elect not to 
receive the overall score (MTW agencies continue to receive PHAS sub-
scores even if they elect not to receive the overall score). If an MTW 
agency elects to receive its overall PHAS score, the agency must 
continue to be scored for the duration of the demonstration, or until 
the agency is assessed under the alternative, MTW-specific assessment 
system(s), whichever comes first. Once developed, all MTW agencies, 
including MTW agencies that elect not to receive an overall PHAS score, 
must be assessed under the MTW-specific assessment system(s).
    Per the 1996 MTW statute, when providing public housing, the MTW 
agency must ensure that the housing is safe, decent, sanitary, and in 
good repair, according to the physical inspection protocols established 
and approved by HUD. Thus, MTW agencies continue to be subject to HUD 
physical inspections. To the extent that HUD physical inspections 
reveal deficiencies, the MTW agency must continue to address these 
deficiencies in accordance with existing physical inspection 
requirements. If an MTW agency does not maintain public housing 
adequately, as evidenced by the physical inspection performed by HUD 
and is determined to be troubled in this area, HUD will determine 
appropriate remedial actions. The actions to be taken by HUD and the 
agency will include actions statutorily required and such other actions 
as may be determined appropriate by HUD. These actions may include 
developing and executing a Memorandum of Agreement (MOA) with the MTW 
agency, suspension or termination of the MTW CACC Amendment in 
accordance with the provisions therein, or such other actions legally 
available to the Department.
    MTW agencies must continue to submit year-end financial information 
into the Financial Data System (FDS) or successor system, as discussed 
earlier.
ii. Section 8 Management Assessment Program
    MTW agencies are not scored in SEMAP but they can elect to be 
scored if they choose to opt in. If an MTW agency elects to receive its 
overall SEMAP score, the agency must continue to be scored for the 
duration of the demonstration, or until the agency is assessed under 
the MTW-specific assessment system, whichever comes first. Once 
developed, all MTW agencies, including MTW agencies that opt out of 
SEMAP, must be assessed under the MTW-specific assessment system(s).
c. Monitoring and Oversight
    MTW agencies remain subject to the full range of HUD monitoring and 
oversight efforts including, but not limited to, annual risk 
assessments, on-site monitoring reviews, monitoring reviews relating to 
VMS reporting and rent reasonableness, review of the accuracy of data 
reported into HUD data systems, and use of HUD data systems to assess 
agency program performance, among other activities.
i. MTW Statutory Requirements
    Throughout participation in the MTW demonstration program, all MTW 
agencies must continue to meet five statutory requirements established 
under the 1996 MTW Statute. Implementation, monitoring and enforcement 
of the five statutory requirements will be discussed in greater detail 
in the final version of this Operations Notice, and specific 
enforcement processes will be included in the MTW CACC Amendment (see 
also, section 11 of this Notice). HUD will monitor and determine MTW 
agencies' compliance with these five requirements as follows:
    (a) MTW agencies must ensure that at least 75 percent of the 
families assisted are very low-income families, in each fiscal year, as 
defined in section 3(b)(2) of the 1937 Act.
    (i) HUD Verification Approach: Initial household certification data 
recorded in PIC will be used for both the public housing and HCV 
programs for compliance monitoring purposes. The initial certification 
is comprised only of new admissions in the agency's given fiscal year. 
Initial household certification data for families housed through local, 
non-traditional activities (in accordance with the Appendix) will be 
provided in a manner specified by the Department. An agency's portfolio 
will then be weighted with respect to the number of households being 
served by each housing program type (i.e., PH, HCV, Local, Non-
Traditional).
    (b) MTW agencies must establish a reasonable rent policy which 
shall be designed to encourage employment and self-sufficiency by 
participating families, consistent with the purpose of this 
demonstration, such as by excluding some or all of a family's earned 
income for purposes of determining rent.
    (i) HUD Verification Approach: HUD defines rent reform as any 
change in the regulations on how rent is calculated for a household. 
Upon designation into the MTW demonstration, agencies are to submit 
their planned policy to implement a reasonable rent policy in the MTW 
Supplement. All activities falling under the Tenant Rent Policies 
category, detailed in the Appendix, meet the definition of a reasonable 
rent

[[Page 51486]]

policy. An MTW agency must implement one or multiple reasonable rent 
policies during the term of its MTW designation (MTW agencies in the 
rent reform cohort may have prescribed deadlines to implement their 
reasonable rent policies).
    (c) MTW agencies must continue to assist substantially the same 
total number of eligible low-income families as would have been served 
had the amounts not been combined.
    (i) HUD Verification Approach: HUD continues to consider the best 
approach to monitor the MTW statutory requirement that MTW agencies 
serve substantially the same number of families absent the 
demonstration. The main themes and principles for this effort include a 
Substantially the Same (STS) methodology that: Ensures substantially 
the same number of families are housed; allows for local flexibility; 
is responsive to changing budgetary climates; is feasible for HUD to 
administer; is easy for MTW agencies to predict compliance; is straight 
forward to understand; is calculated each year; and has publicly 
available results. First, the STS methodology would establish a 
baseline ratio of dollars the agency expends and families housed. 
Before an agency enters the MTW demonstration, the public housing 
funding and the HCV HAP funding spent by the agency in the prior CY 
would be divided by the current number of families housed in each 
program. This calculation would yield how many families the agency 
houses per $100,000 of funding in both the public housing and HCV 
programs. Each year during an agency's participation in the MTW 
demonstration, the baseline number of total families housed per 
$100,000 of funding in both the public housing and HCV programs would 
be applied to the agency's actual funding for that calendar year. So, 
for example, the agency would know that if it is appropriated ``x 
number of dollars,'' it would be required to house ``y number of 
families.'' Depending on the specific circumstances of the agency, a 
dip below the baseline year number would be allowed. HUD is exploring 
methods to ensure that the ratio of families housed per $100,000 in the 
baseline year continues to be an accurate measure of ``substantially 
the same'' service levels in future years of the MTW designation. There 
would also be opportunities for PHAs to request adjustments of the 
baseline ratio to account for changes in costs due to special 
circumstances.
    The following is an example of the STS baseline ratio calculation:
Baseline Year (Calendar Year Before Agency Enters MTW)
     Agency expends $800,000 in HCV HAP funds and houses 100 
HCV families. Agency then houses 12.5 HCV families per $100,000 of HCV 
funds.
     Agency expends $500,000 in public housing funds and houses 
75 public housing families. Agency then houses 15 public housing 
families per $100,000 public housing funds.
First Year in MTW Demonstration
     MTW agency receives $900,000 in HCV HAP funds and $300,000 
in public housing funds.
     MTW agency must house 112.5 families for the HCV share and 
45 families for the public housing share. Therefore, in this example, 
the MTW agency is required to house 157 total families flexibly with 
its MTW funds (this may be in the public housing program, the HCV 
program, a local, non-traditional rental subsidy program, or a local, 
non-traditional development program \16\).
---------------------------------------------------------------------------

    \16\ MTW agencies may use their MTW Funding to develop 
affordable housing units that are outside of the traditional public 
housing and HCV programs. Such local, non-traditional development 
allows for the creation of important affordable housing resources, 
which must be balanced with the existing and immediate needs of 
families waiting for housing assistance. It is therefore necessary 
to relate the amount of the MTW agency's total available MTW Funding 
investment to the number of affordable units developed. To that end, 
HUD will divide the MTW agency's total available MTW Funding in the 
local, non-traditional development by the HUD-published Total 
Development Cost (TDC). The resulting number of units would then 
count as families housed for the length of time the units remained 
affordable.
---------------------------------------------------------------------------

    (d) MTW agencies must maintain a comparable mix of families (by 
family size) as would have been provided had the amounts not been used 
under the demonstration.
    (i) HUD Verification Approach: In order to establish a comparable 
mix baseline, the Department will pull data, by family size, for 
occupied public housing units and leased vouchers at the time of entry 
into the demonstration. The Department will rely upon agency-reported 
data into HUD systems (i.e., PIC, VMS). This information will be used 
to establish baseline percentages, by family size, to which the agency 
is measured by for the remainder of participation. Following entry into 
the demonstration, agencies will provide comparable mix data and, if 
applicable, associated justifications in the MTW Supplement. The 
Department deems an acceptable level of variation to be no more than 5 
percent from the baseline. Justifications or explanations for 
fluctuations greater than 5 percent are required and subject to the 
Department's review.
    (e) MTW agencies must ensure that housing assisted under the 
demonstration meets housing quality standards established or approved 
by the Secretary.
    (i) HUD Verification Approach: In order to demonstrate that the MTW 
agency meets housing quality standards, HUD will verify compliance for 
each housing program type as follows:
     HCV--Program regulations at 24 CFR part 982 set forth 
basic housing quality standards (HQS) for housing assisted under the 
HCV program. These housing quality standards, or its successor 
regulations, are the standards used to determine if the agency is 
fulfilling its responsibilities to ensure owners are maintaining the 
units in accordance with HQS in the evaluation of an agency. Agencies 
with an HCV program must certify in the MTW Supplement that they have 
fulfilled their responsibilities to comply with and ensure enforcement 
of HQS under this requirement.
     Public Housing--HUD will verify this requirement through 
its review of PHAS Physical Assessment Subsystem (PASS) scores, or 
successor assessment system. Scores falling below 24 out of 40 will be 
identified as non-compliant with the statutory requirement.
     Local, Non-Traditional--In the MTW Supplement, MTW 
Agencies must certify that local, non-traditional units meet housing 
quality standards as required in PIH Notice 2011-45, or successor 
notice.
ii. Income Integrity and Enterprise Income Verification System (EIV) 
Reviews
    MTW agencies are required to comply with the final rule regarding 
EIV issued December 29, 2009, and utilize EIV for all income 
verifications. EIV has been modified for MTW agencies so that family 
information submitted in PIC will not expire for 40 months, in order to 
accommodate agencies choosing to extend recertification periods for up 
to three years.
    MTW agencies are subject to HUD review to ensure compliance with 
EIV requirements as well as monitor the accuracy and integrity of the 
MTW agencies' income and rent determination policies, procedures, and 
outcomes.
iii. MTW Site Visit
    HUD will periodically conduct site visits to provide guidance, 
discuss the MTW agency's MTW activities, and offer any needed technical 
assistance regarding its program. The purpose of a

[[Page 51487]]

site visit will be to confirm reported agency MTW activities, to review 
the status and effectiveness of the agency's MTW strategies, provide 
technical assistance, and to identify and resolve outstanding MTW 
related issues.
    The MTW agency shall give HUD access, at reasonable times and 
places, to all requested sources of information, including access to 
files, access to units, and an opportunity to interview agency staff 
and assisted participants.
    Where travel funding or staff resources are not available to 
facilitate in-person site visits, HUD may exercise the option to 
conduct remote site visits via telephone, videoconference, or webinar.
    To the extent possible, HUD will coordinate the MTW site visit with 
other site visits to be conducted by HUD.
iv. Housing Choice Voucher Utilization
    HUD will monitor HCV utilization at MTW agencies and will ensure 
that HCV funds are utilized in accordance with Section 4(a)(i)(c) and 
Section 6(c)(i)(c) of this Notice. Where leasing levels are 
inconsistent with the requirements of this Notice, HUD may take 
appropriate actions to work with the MTW agency to increase leasing and 
utilization.
v. Public Housing Occupancy
    HUD will monitor public housing occupancy rates for MTW agencies. 
In instances where the MTW agency's public housing occupancy rate falls 
below 96 percent, HUD may require, at its discretion, that the MTW 
agency enter into an Occupancy Action Plan to address the occupancy 
issues. The Occupancy Action Plan will include the cause of the 
occupancy issue, the intended solution, and reasonable timeframes to 
address the cause of the occupancy issue.
vi. Additional Monitoring and Oversight
    HUD may, based on the MTW agency's risks and at HUD's discretion, 
conduct management, programmatic, financial, or other reviews of the 
MTW agency. The MTW agency shall respond to any findings with 
appropriate corrective action(s).
    In addition, HUD will make use of all HUD data systems and 
available information to conduct ongoing remote monitoring and 
oversight actions for MTW agencies, consistent with the results of the 
PIH risk assessment.

7. Rental Assistance Demonstration Program

    MTW agencies converting public housing program units to Section 8 
assistance under the Rental Assistance Demonstration (RAD) program are 
able to retain MTW regulatory and statutory flexibilities in the 
management of those units, subject to RAD requirements, if the 
conversion is to Project Based Voucher (PBV) assistance. MTW agencies 
converting projects under RAD to PBV may continue to undertake 
flexibilities except to the extent limited by RAD, as described in the 
RAD Notice, PIH 2012-32, REV-3, or its successor Notice.\17\
---------------------------------------------------------------------------

    \17\ Notices and laws related to RAD can be found at http://portal.hud.gov/hudportal/HUD?src=/RAD/library/notices.
---------------------------------------------------------------------------

8. Applying MTW Flexibilities to Special Purpose Vouchers

    Special Purpose Vouchers (SPVs) are specifically provided for by 
Congress in line item appropriations, which distinguish them from 
regular vouchers. Except for enhanced vouchers and tenant-protection 
vouchers (described below), SPVs are not part of the MTW demonstration 
and are not part of the MTW agency's total available flexible MTW 
Funding. The funding is renewed outside of the MTW HAP renewal formula 
and the funding (both the initial increment and renewal funding) for 
the SPVs may only be used for eligible SPV purposes. There are no 
additional MTW flexibilities around using MTW funds to cover SPV 
shortfalls. MTW PHAs may use non-HAP sources to cover shortfalls, 
following the procedures outlined in Notice PIH 2013-28. PHAs already 
have the ability to use HAP reserve funds to address SPV instances of 
shortfalls, where the SPVs are under the same appropriations allocation 
for renewal as their Section 8 vouchers. \18\
---------------------------------------------------------------------------

    \18\ https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10495.pdf.
---------------------------------------------------------------------------

a. HUD-Veterans Affairs Supportive Housing
    HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers have 
separate operating requirements and must be administered in accordance 
with the requirements listed at www.hud.gov/program_offices/public_indian_housing/programs/hcv/vash. The operating requirements 
waive and alter many of the standard HCV statutes and regulations at 24 
CFR part 982. Unless stated in the HUD-VASH operating requirements, 
however, the regulatory requirements at 24 CFR part 982 and all other 
HUD directives for the HCV program are applicable to HUD-VASH vouchers. 
Agencies may submit a request to HUD to operate HUD-VASH vouchers in 
accordance with MTW administrative flexibilities.
b. Family Unification Program
    The Family Unification Program (FUP) NOFA language allows vouchers 
to be administered in accordance with MTW operations, unless MTW 
provisions are inconsistent with the appropriations act or requirements 
of the FUP NOFA. In the event of a conflict between the Operations 
Notice and the appropriations act or FUP NOFA language, the act and 
NOFA govern.
c. Non-Elderly Persons With Disabilities Vouchers
    The Non-Elderly Persons with Disabilities (NED) NOFA language 
allows vouchers to be administered in accordance with MTW operations 
unless MTW provisions are inconsistent with the appropriations act or 
requirements of the NED NOFA. In the event of a conflict between the 
Operations Notice and the appropriations act or FUP NOFA language, the 
act and NOFA govern.
d. Enhanced Vouchers and Tenant Protection Vouchers
    Enhanced and tenant protection voucher funds become fungible once 
the initial funding increment is renewed. The agency must continue to 
provide rental assistance to enhanced voucher families and tenant 
protection voucher families after the initial funding increment is 
renewed.
    The statutory enhanced voucher requirements under Section 8(t) of 
the 1937 Act (e.g., the HAP calculation) apply to an enhanced voucher 
family until the family either moves from the project or leaves the HCV 
tenant-based program for any reason. MTW agencies must follow the 
procedures described in Notice PIH 2013-27, or its successor Notice, 
for a recipient of an enhanced voucher to voluntarily agree to 
relinquish their tenant-based assistance in exchange for PBV 
assistance. When an enhanced voucher family moves from the project, 
either after initially receiving the voucher or anytime thereafter, the 
Section 8(t) enhanced voucher requirements no longer apply. The voucher 
is then administered in accordance with the regular HCV program 
requirements, as modified by the agency's individual MTW waivers and 
MTW policies for its tenant-based HCV program.
    Regular tenant protection vouchers (i.e., tenant protection 
vouchers that are not enhanced vouchers) are always administered in 
accordance with the normally applicable HCV program requirements, as 
modified by the agency's individual MTW waivers and MTW policies for 
its tenant-based HCV

[[Page 51488]]

program, regardless of whether the family stays or moves from the 
project.

9. Applicability of Other Federal, State, and Local Requirements

    Notwithstanding the MTW Waivers and associated activities provided 
in this Operations Notice, the following provisions of the 1937 Act 
continue to apply to MTW agencies and the assistance received pursuant 
to the 1937 Act:
    i. The terms ``low-income families'' and ``very low-income 
families'' shall continue to be defined by reference to Section 3(b)(2) 
of the 1937 Act (42 U.S.C. 1437a(b)(2));
    ii. Section 12 of the 1937 Act (42 U.S.C. 1437j), as amended, shall 
apply to housing assisted under the demonstration, other than housing 
assisted solely due to occupancy by families receiving tenant-based 
assistance;
    iii. Section 18 of the 1937 Act (42 U.S.C. l437p, as amended by 
Section 1002(d) of Pub. L. 104-19, Section 201(b)(1) of Pub. L. 104-
134, and Section 201(b) of Pub. L. 104-202), governing demolition and 
disposition, shall continue to apply to public housing notwithstanding 
any use of the housing under MTW; and
    iv. Section 8(r)(1) of the 1937 Act on HCV portability shall 
continue to apply unless provided as a cohort-specific waiver and 
associated activity(s) in an evaluative cohort as necessary to 
implement comprehensive rent reform and occupancy policies. Such a 
cohort-specific waiver and associated activity(s) would contain, at a 
minimum, exceptions for requests to port due to employment, education, 
health and safety, and reasonable accommodation.
    Notwithstanding any requirement contained in this Notice or any MTW 
Waiver and associated activity granted herein, other Federal, state and 
local requirements applicable to public housing or HCV assistance will 
continue to apply. The MTW CACC Amendment will place in HUD the 
authority to determine if any future law or future regulation conflicts 
with any MTW-related agreement or Notice. If a future law conflicts, 
the law shall be implemented, and no breach of contract claim, or any 
claim for monetary damages, may result from the conflict or 
implementation of the conflicting law or regulation.
    If any non-1937 Act requirement applicable to PHAs, public housing, 
or HCV assistance contains a provision that conflicts or is 
inconsistent with any MTW Waiver and associated activity granted by 
HUD, the agency remains subject to the terms of that non-1937 Act 
requirement. Such requirements include, but are not limited to:
     Requirements for Federal Funds: Notwithstanding the 
flexibilities described in this Notice, the public housing and voucher 
funding provided to MTW agencies remain Federal funds and are subject 
to any and all other Federal requirements outside of the 1937 Act 
(e.g., including, but not limited to, competitive HUD NOFAs under which 
the MTW agency has received an award, state and local laws, Federal 
statutes other than the 1937 Act (including appropriations acts), and 
OMB Circulars and requirements), as modified from time to time. The MTW 
agency's expenditures must comply with 2 CFR part 200 and other 
applicable Federal requirements, which provide basic guidelines for the 
use of Federal funds, including the requirements of this Notice.
     National Environmental Policy Act (NEPA): MTW agencies 
must comply with NEPA, 24 CFR part 50 or Part 58, as applicable, and 
other related Federal laws and authorities identified in 24 CFR. Part 
50 or Part 58, as applicable. Information and guidance on the 
environmental review process and requirements is provided in PIH Notice 
2016-22, or successor notice.
     Fair Housing and Equal Opportunity: As with the 
administration of all HUD programs and all HUD-assisted activities, 
fair housing, and civil rights issues apply to the administration of 
MTW demonstration programs. This includes actions and policies that may 
have a discriminatory effect on the basis of race, color, sex, national 
origin, religion, disability, or familial status (see 24 CFR part 1 and 
Part 100 subpart G) or that may impede, obstruct, prevent, or undermine 
efforts to affirmatively further fair housing. Annual PHA Plans must 
include a civil rights certification required by Section 5A of the 1937 
Act and implemented by regulation at 24 CFR 903.7(o) and 903.15, as 
well as a statement of the PHA's strategies and actions to achieve fair 
housing goals outlined in an approved Assessment of Fair Housing (AFH) 
consistent with 24 CFR 5.154. If the PHA does not have a HUD-accepted 
AFH, it must still provide a civil rights certification and statement 
of the PHA's fair housing strategies, which would be informed by the 
corresponding jurisdiction's AFH and the PHA's assessment of its own 
operations.
    All PHAs, including MTW agencies, are obligated to comply with non-
discrimination and equal opportunity laws and implementing regulation, 
including those in 24 CFR 5.105. Specific laws and regulations must be 
viewed in their entirety for full compliance, as this Operations Notice 
does not incorporate a complete discussion of all legal authorities. 
For example, PHAs, including MTW agencies, are required to comply with 
the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section 
504 of the Rehabilitation Act of 1973, Title II of the Americans with 
Disabilities Act of 1990, Architectural Barriers Act of 1968, Executive 
Order 11063: Equal Opportunity in Housing, Executive Order 13166: 
Improving Access to Services for Persons with Limited English 
Proficiency, HUD's Equal Access Rule (24 CFR 5.105(a)(2), Age 
Discrimination Act of 1975, and Title IX of the Education Amendments 
Act of 1972, as well as HUD and government-wide regulations 
implementing these authorities. PHAs should review PIH Notice 2011-31 
for more details.
     Court Orders and Voluntary Compliance Agreements: MTW 
agencies must comply with the terms of any applicable court orders or 
Voluntary Compliance Agreements that are in existence or may come into 
existence during the term of the MTW CACC Amendment. The PHA must 
cooperate fully with any investigation by the HUD Office of Inspector 
General or any other investigative and law enforcement agencies of the 
U.S. Government.

10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute

    The 39 MTW agencies that entered the MTW demonstration prior to the 
2016 MTW Expansion Statute adhere to an administrative structure 
outlined in the Standard MTW Agreement, a contract between each current 
agency and HUD. The 2016 MTW Expansion Statute extended the term of the 
Standard MTW Agreement for these existing MTW agencies through each 
agency's 2028 fiscal year.
    Some agencies that entered the MTW demonstration prior to the 2016 
MTW Expansion Statute may wish to opt out of their Standard MTW 
Agreement and administer their MTW program pursuant to the MTW 
Expansion and the requirements in this MTW Operations Notice. HUD will 
support an existing MTW agency's request to join the MTW Expansion 
provided that the agency:
     Makes the change at the end of its fiscal year, so that it 
does not have part of a fiscal year under the Standard Agreement and 
part under the Operations Notice;
     Follows the same public comment and Board resolution 
process as would

[[Page 51489]]

be required for amending the Standard MTW Agreement;
     Executes its MTW CACC Amendment to authorize participation 
in the MTW demonstration consistent with the Operations Notice; and
     Agrees to all the terms and conditions that apply to MTW 
agencies admitted pursuant to the 2016 MTW Expansion Statute, including 
all of the provisions of this Operations Notice and the accompanying 
MTW CACC Amendment.
    Should an existing MTW agency elect to administer its MTW program 
pursuant to the framework described in this Operations Notice, it will 
not be required to implement the cohort-specific policy change 
associated with any of the MTW cohorts and it will not be required to 
participate in the evaluation of that specific policy change. All other 
requirements in this Operations Notice will apply.

11. Sanctions, Terminations, and Default

    If the MTW agency violates any of the requirements outlined in this 
Notice, HUD is authorized to take any corrective or remedial action 
permitted by law. Sanctions, terminations, and default are covered in 
the agency's MTW CACC Amendment.

III. Environmental Impact

1. Purpose and Applicability

    A Finding of No Significant Impact (FONSI) with respect to the 
environment was made for a previous version of this Notice in 
accordance with HUD regulations in 24 CFR part 50 that implement 
section 102(2)(C) of the National Environmental Policy Act of 1969 (42 
U.S.C. 4332(2)(C)). The FONSI is applicable to the current version of 
the Notice because there were no significant changes to the provisions 
of the Notice. The FONSI will be available for public inspection on 
www.regulations.gov.

    Dated: October 4, 2018.
Robert E. Mulderig,
Acting Deputy Assistant, Secretary for Public Housing Investments.

Appendix--MTW Waivers

    The Appendix contains the Moving to Work (MTW) Waivers and their 
associated MTW activities. The Appendix includes the waiver name, 
waiver description, statutes and regulations waived, permissible 
activities, and safe harbors. The waiver description defines the 
authorization provided to the MTW agency, subject to the terms of 
this Notice. The statutory and regulatory citations that may be 
waived by an MTW agency in order to implement an activity are 
included below the activity. The list of waivers and list of 
activities are organized by program type. The safe harbors contain 
the additional requirements (beyond those specified in the activity 
description) the agency must follow in order to implement the 
activity without additional HUD approval. If an MTW agency wishes to 
implement additional activities, request additional waivers, or 
request the ability to go beyond an MTW activity's safe harbor(s), 
the MTW agency must submit an agency-specific waiver request for 
approval from HUD as explained further in Section 2.b of the MTW 
Operations Notice.
    Specific guidelines for safe harbors on impact analyses, 
applicability to elderly/disabled families and hardship policies are 
provided at the end of this appendix. Information on impact analyses 
is denoted with a ``*'', information on elderly/disabled families is 
denoted with a ``**'' and information on hardship policies is 
denoted with a ``***.''

Table of Contents

1. Tenant Rent Policies
    a. Income Bands (Public Housing [PH])
    b. Income Bands (Housing Choice Vouchers [HCV])
    c. Stepped Rent (PH)
    d. Stepped Rent (HCV)
    e. Minimum Rent (PH)
    f. Minimum Rent (HCV)
    g. Rent as a Percentage of Gross Income (PH)
    h. Total Tenant Payment as a Percentage of Gross Income (HCV)
    i. Alternative Utility Allowance (PH)
    j. Alternative Utility Allowance (HCV)
    k. Fixed Rents (PH)
    l. Fixed Subsidy (HCV)
    m. Utility Reimbursements (PH)
    n. Utility Reimbursements (HCV)
    o. Initial Rent Burden (HCV)
    p. Imputed Income (PH)
    q. Imputed Income (HCV)
    r. Elimination of Deduction(s) (PH)
    s. Elimination of Deduction(s) (HCV)
    t. Standard Deductions (PH)
    u. Standard Deductions (HCV)
    v. Alternate Income Inclusions/Exclusions (PH)
    w. Alternate Income Inclusions/Exclusions (HCV)
2. Payment Standards and Rent Reasonableness
    a. Payment Standards (HCV)
    b. Rent Reasonableness (HCV)
3. Increase PBV Rent to Owner
4. Reexaminations
    a. Alternate Reexamination Schedule for Households (PH)
    b. Alternate Reexamination Schedule for Households (HCV)
    c. Self-Certification of Assets (PH)
    d. Self-Certification of Assets (HCV)
5. Voucher Leasing Incentives
    a. Vacancy Loss (Tenant-Based Assistance)
    b. Damage Claims (Tenant-Based Assistance)
    c. Other Landlord Incentives (Tenant-Based Assistance)
6. Public Housing Leases
    a. Establish Community Rules through Local Lease (PH)
    b. Establish Reasonable Fees through Local Lease (PH)
7. Short-Term Assistance
    a. Short-Term Assistance (PH)
    b. Short-Term Assistance (HCV)
8. Term-Limited Assistance
    a. Term-Limited Assistance (PH)
    b. Term-Limited Assistance (HCV)
9. Work Requirements
    a. Work Requirements (PH)
    b. Work Requirements (HCV)
10. Increase Elderly Age
11. Increase Total PBV Cap
12. Increase PBV Development Cap
13. PBV--Elimination of Competitive Process
14. PBV--Alternate Competitive Process
15. PBV--Unit Types--Shared Housing
16. MTW Self-Sufficiency Program
    a. Waive Operating a Required FSS Program (PH & HCV)
    b. Alternative Program Coordinating Committee (PH & HCV)
    c. Alternative Family Selection Procedures (PH & HCV)
    d. Modify or Eliminate the Contract of Participation (PH & HCV)
    e. Policies for Addressing Increases in Family Income (PH & HCV)
17. Local, Non-Traditional Activities
    a. Rental Subsidy Programs
    b. Housing Development Programs
    c. Service Provision
    * Safe Harbor: Impact Analysis.
    ** Safe Harbor: Elderly/Disabled Families.
    *** Safe Harbor: Hardship Policy.

[[Page 51490]]



------------------------------------------------------------------------
 
------------------------------------------------------------------------
                         1. Tenant Rent Polices
------------------------------------------------------------------------
The agency is authorized to adopt and implement the activities listed
 below for setting tenant rents in public housing, including but not
 limited to: Establishing definitions of income and adjusted income that
 differ from those in the current 1937 Act and its implementing
 regulations. The agency is authorized to adopt and implement the
 activities listed below to establish total tenant payments (TTP) \1\ in
 the HCV program, and/or tenant rents for tenant-based and project-based
 voucher assistance that differ from the currently mandated program
 requirements in the 1937 Act and its implementing regulations. The
 agency is authorized to adopt and implement the activities listed below
 to calculate the tenant portion of the rent that differ from the
 currently mandated program requirements in the 1937 Act and its
 implementing regulations. The agency must determine initial eligibility
 in accordance with 24 CFR 5.609 and must comply with Section 3(b)(2) of
 the Act. For voucher activities, the Department will develop a standard
 rider to the HAP contract that reflects any MTW authorizations that
 amend the current requirements of the HAP contract.
------------------------------------------------------------------------
                         1.a.,1.b. Income Bands
------------------------------------------------------------------------
Activity...................  1.a. Income Bands      1.b. Income Bands
                              (PH)--The agency may   (HCV)--The agency
                              implement changes to   may implement
                              the tenant rent        changes to the TTP
                              calculation to         calculation to
                              create a system        create a system
                              based upon income      based upon income
                              bands. Such rent       bands. This type of
                              policies are           rent policy is
                              structured using two   structured using
                              variables: (1)         two variables: (1)
                              Income bands, or       Income bands, or
                              ranges, that assign    ranges, that assign
                              dollar increments      dollar increments
                              that have been         that have been
                              determined locally     determined locally
                              by the agency, and     by the agency, and
                              (2) bedroom size. In   (2) bedroom size.
                              a table, the y-axis    In a table, the y-
                              lists the income       axis lists the
                              bands and the x-axis   income bands and
                              lists the various      the x-axis lists
                              bedroom sizes. In      the various bedroom
                              creating this          sizes. In creating
                              system, the agency     this system, the
                              may also adopt a       agency may also
                              flat rent policy       adopt a flat TTP
                              within each income     policy within each
                              band instead of        income band instead
                              calculating rent       of calculating TTP
                              based on adjusted or   based on adjusted
                              gross income. The      or gross income.
                              income bands may       The income bands
                              result in total        may not result in
                              tenant payment being   TTP exceeding 35%
                              no more than 35%       of gross income.
                              gross income.
Statutes and Regulations     Income Bands (PH):     Income Bands (HCV):
 Waived.                      Certain provision of   Certain provision
                              sections 3(a)(1)-(2)   of sections
                              of the 1937 Act and    8(o)(2)(A)-(C) of
                              24 CFR 5.628,          the 1937 Act and 24
                              5.634(b), and          CFR 5.628.
                              960.253.
------------------------------------------------------------------------
Safe Harbor(s).............  1.a. and 1.b.
                              The income bands must be set in
                              accordance with bedroom size.
                              Agency must conduct an impact
                              analysis.*
                              Agency must exclude elderly and
                              disabled families from rent policy.**
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                         1.c.,1.d. Stepped Rent
------------------------------------------------------------------------
Activity...................  1.c. Stepped Rent      1.d. Stepped Rent
                              (PH)--The agency may   (HCV)--The agency
                              create a stepped       may create a
                              rent model that        stepped rent model
                              increases the          that increases the
                              family's rent          family's TTP on a
                              payment on a fixed     fixed schedule in
                              schedule in both       both frequency and
                              frequency and          amount. The fixed
                              amount. The fixed      schedule/stepped
                              schedule/stepped       rent model may be
                              rent model may be      disaggregated from
                              disaggregated from     family income.
                              family income.
Statutes and Regulations     Stepped Rent (PH):     Stepped Rent (HCV):
 Waived.                      Certain provisions     Certain provisions
                              of section 3(a)(1)-    of sections
                              (2) of the 1937 Act    8(o)(2)(A)-(C) of
                              and 24 CFR 5.628,      the 1937 Act and 24
                              5.634(b) and 960.253.  CFR 5.628.
Safe Harbor(s).............  1.c..................  1.d.
                              Rent              TTP
                              increases may not         increases may
                              occur more than once      not occur more
                              per year.                 than once per
                              Agency must       year.
                              conduct an impact      Agency must
                              analysis.*.            conduct an impact
                              Agency must    analysis.*
                              exclude elderly and    Agency must
                              disabled families      exclude elderly and
                              from rent policy.**.   disabled families
                              Agency must    from rent policy.**
                              implement a hardship   Agency must
                              policy.***.            implement a
                              Services, or   hardship policy.***
                              referrals to           Agency must
                              services, must be      implement a grace
                              made available by      period policy for
                              the agency or a        HCV families that
                              partner organization   reach zero HAP
                              to support preparing   through this
                              families for the       activity. The grace
                              termination of         period would allow
                              assistance..           families to receive
                              At the         zero HAP for at
                              Department's           least six months
                              request, the agency    before being
                              shall make available   transitioned off
                              the method used to     the HCV program.
                              determine that rents   Services,
                              charged to families    or referrals to
                              are reasonable when    services, must be
                              compared to similar    made available by
                              unassisted units in    the agency or a
                              the market area..      partner
                                                     organization to
                                                     support preparing
                                                     families for the
                                                     termination of
                                                     assistance.
                                                     At the
                                                     Department's
                                                     request, the agency
                                                     shall make
                                                     available the
                                                     method used to
                                                     determine that
                                                     rents charged by
                                                     owners to voucher
                                                     participants are
                                                     reasonable when
                                                     compared to similar
                                                     unassisted units in
                                                     the market area.
------------------------------------------------------------------------
                         1.e.,1.f. Minimum Rent
------------------------------------------------------------------------
Activity...................  1.e. Minimum Rent      1.f. Minimum Rent
                              (PH)--The agency may   (HCV)--The agency
                              set a minimum rent     may set a minimum
                              that is higher than    rent that is higher
                              allowed under          than allowed under
                              current statute and    current statute and
                              regulation.            regulation.

[[Page 51491]]

 
Statutes and Regulations     Minimum Rent (PH):     Minimum Rent (HCV):
 Waived.                      Certain provisions     Certain provisions
                              of sections 3(a)(1)-   of sections
                              2) and 3(a)(3)(A) of   3(a)(3)(A) and
                              the Act and 24 CFR     8(o)(2)( A)-(C) of
                              5.628 and 5.630.       the Act and 24 CFR
                                                     5.628 and 5.630.
------------------------------------------------------------------------
Safe Harbor(s).............  1.e. and 1.f.
                              Minimum rent may not exceed $250
                              per month for non-elderly/non-disabled
                              families.
                              Minimum rent may not exceed $100
                              for elderly and disabled families.
                              Agency must conduct an impact
                              analysis.*
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
              1.g.,1.h. TTP as a Percentage of Gross Income
------------------------------------------------------------------------
Activity...................  1.g. TTP as a          1.h. TTP as a
                              Percentage of Gross    Percentage of Gross
                              Income (PH)--The       Income (HCV)--The
                              agency may calculate   agency may
                              TTP as a percentage    calculate TTP as a
                              of gross income that   percentage of gross
                              does not include       income that does
                              income deductions      not include income
                              and/or exclusions.     deductions and/or
                                                     exclusions.
Statutes and Regulations     TTP as a Percentage    TTP as a Percentage
 Waived.                      of Gross Income        of Gross Income
                              (PH): Certain          (HCV): Certain
                              provision of           provision of
                              sections 3(a)(1)-(2)   sections 3(b)(4)-
                              and 3(b)(4)-(5) of     (5) and 8(o)(2)(A)-
                              the 1937 of the Act    (C) of the 1937 Act
                              and 24 CFR 5.609,      and 24 CFR 5.609,
                              5.611, 960.253 and     5.611, and 982.516.
                              960.255.
------------------------------------------------------------------------
Safe Harbor(s).............  1.g. and 1.h.
                              The TTP in PH and the TTP in HCV
                              may not exceed 35% of gross income
                              calculation for non-elderly/non-disabled
                              families and 30% for elderly and disabled
                              households.
                              Agency must conduct an impact
                              analysis.*
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                 1i.,1.j. Alternative Utility Allowance
------------------------------------------------------------------------
Activity...................  1i. Alternative        1j. Alternative
                              Utility Allowance      Utility Allowance
                              (PH)--The agency may   (HCV)--The agency
                              create a utility       may create a
                              schedule(s) for all    utility schedule(s)
                              units based upon       for all HCV units
                              bedroom size, the      based upon bedroom
                              property location      size, the unit
                              and/or the types of    location and/or the
                              utilities paid by      types of utilities
                              resident. The agency   paid by resident.
                              may not include        The agency may
                              items in the utility   establish a site-
                              schedule that are      based utility
                              excluded under HUD     allowance in PBV.
                              regulations.           The agency may not
                                                     include items in
                                                     the utility
                                                     schedule that are
                                                     excluded under HUD
                                                     regulations.
Statutes and Regulations     Alternative Utility    Alternative Utility
 Waived.                      Allowance (PH):        Allowance (HCV):
                              Certain provisions     Certain provision
                              of 24 CFR 965.503-     of section
                              506.                   8(o)(2)(D)(i) of
                                                     the 1937 Act and 24
                                                     CFR 982.517 and
                                                     983.301(f)(2)(ii).
------------------------------------------------------------------------
Safe Harbor(s).............  1.i. and 1.j.
                              Agency must conduct an impact
                              analysis.*
                              The agency must review its
                              schedule of utility allowances each year,
                              and revise its allowance for a utility
                              category if there has been a change of 10
                              percent or more from the prior year. The
                              agency must maintain information
                              supporting its annual review of utility
                              allowances and any revisions made in its
                              utility allowance schedule.
------------------------------------------------------------------------
                     1.k,1.l. Fixed Rents/Subsidies
------------------------------------------------------------------------
Activity...................  1.k. Fixed Rents       1.l. Fixed Subsidy
                              (PH)--The agency may   (HCV)--The agency
                              establish flat rents   may establish a
                              based on bedroom       fixed subsidy based
                              size. Tenant rent      on bedroom size.
                              under this activity    Under this model,
                              may not exceed 35%     the family pays the
                              of gross income for    difference between
                              non-elderly/non-       the gross rent for
                              disabled families      the unit and the
                              and 30% for elderly    fixed subsidy.
                              and disabled           However, if the
                              households.            gross rent for the
                                                     unit is at or below
                                                     90% of the
                                                     applicable FMR the
                                                     fixed subsidy may
                                                     not result in a non-
                                                     elderly/non-
                                                     disabled family
                                                     paying more than
                                                     35% of gross income
                                                     or an elderly and
                                                     disabled household
                                                     paying more than
                                                     30% of gross
                                                     income.
Statutes and Regulations     Fixed Rents (PH):      Fixed Subsidy (HCV):
 Waived.                      Certain provision of   Certain provisions
                              sections 3(a)(1)-(2)   of sections
                              and 3(a)(3)(A) of      8(o)(2)(A)-(C) of
                              the 1937 Act and 24    the 1937 Act and 24
                              CFR 5.628, 5.634(b)    CFR 5.628 and
                              and 960.253.           5.630.
------------------------------------------------------------------------
Safe Harbor(s).............  1.k. and 1.l.
                              Agency must implement an impact
                              analysis.*
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                    1.m.,1.n. Utility Reimbursements
------------------------------------------------------------------------
Activity...................  1.m. Utility           1.n. Utility
                              Reimbursements (PH)--  Reimbursements
                              The agency may         (HCV)--The agency
                              eliminate utility      may eliminate
                              reimbursement          utility
                              payments in the PH     reimbursement
                              program when the       payments in the HCV
                              utility allowance is   program when the
                              greater than the       utility allowance
                              total tenant payment.  is greater than the
                                                     total tenant
                                                     payment.
Statutes and Regulations     Utility                Utility
 Waived.                      Reimbursements (PH):   Reimbursements
                              Certain provisions     (HCV): Certain
                              of section 3(a)(1)     provisions of
                              of the 1937 Act and    sections 8(o)(2)(A)-
                              24 CFR 5.632.          (C) of the 1937 Act
                                                     and 24 CFR 982.514
                                                     and 983.353(d).
------------------------------------------------------------------------
Safe Harbor................  1.m. and 1.n.
                              Agency must implement an impact
                              analysis.*

[[Page 51492]]

 
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                   1.o. Initial Rent Burden (HCV only)
------------------------------------------------------------------------
Activity...................  .....................  1o. Initial Rent
                                                     Burden (HCV)--The
                                                     agency may waive
                                                     the maximum family
                                                     share at initial
                                                     occupancy of 40% of
                                                     the family's
                                                     adjusted monthly
                                                     income.
Statutes and Regulations     .....................  Initial Rent Burden
 Waived.                                             (HCV): Certain
                                                     provisions of
                                                     section 8(o)(4) of
                                                     the 1937 Act and 24
                                                     CFR982.508.
Safe Harbor(s).............  .....................  1.o.
                                                     Agency must
                                                     implement an impact
                                                     analysis *
                                                     Agency must
                                                     implement a
                                                     hardship policy.***
------------------------------------------------------------------------
                        1.p.,1.q. Imputed Income
------------------------------------------------------------------------
Activity...................  1.p. Imputed Income    1.q. Imputed Income
                              (PH)--Agency may       (HCV)--Agency may
                              base rent on an        base TTP on an
                              assumed number of      assumed number of
                              hours worked per       hours worked per
                              week, not to exceed    week, not to exceed
                              30 hours worked each   30 hours worked
                              week per non-elderly/  each week per non-
                              disabled adult         elderly/disabled
                              household member, at   adult household
                              either the local,      member, at either
                              State or Federal       the local, State or
                              minimum wage.          Federal minimum
                                                     wage.
Statutes and Regulations     Imputed Income (PH):   Imputed Income
 Waived.                      Certain provisions     (HCV): Certain
                              of section 3(a)(1)     provisions of
                              of the 1937 Act and    sections 8(o)(2)(A)-
                              24 CFR 5.609, 5.611,   (C) of the 1937 Act
                              5.628, 960.255,        and 24 CFR 5.609,
                              960.253 and 960.257.   5.611, 5.628, and
                                                     982.516.
------------------------------------------------------------------------
Safe Harbor................  1.p. and 1.q.
                              Agency must conduct an impact
                              analysis.*
                              Agency must exclude elderly and
                              disabled families from rent policy.**
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                  1.r.,1.s. Elimination of Deduction(s)
------------------------------------------------------------------------
Activity...................  1.r. Elimination of    1.s. Elimination of
                              Deduction(s) (PH)--    Deduction(s) (HCV)--
                              The agency may         The agency may
                              eliminate one, some,   eliminate one,
                              or all deductions.     some, or all
                                                     deductions.
Statutes and Regulations     Elimination of         Elimination of
 Waived.                      Deduction(s) (PH):     Deduction(s) (HCV):
                              Certain provisions     Certain provisions
                              of section 3(a)(1)     of sections
                              of the 1937 Act and    8(o)(2)(A)-(C) of
                              24 CFR 5.611,          the 1937 Act and 24
                              960.253, 960.255 and   CFR 5.611 and
                              960.257.               982.516.
------------------------------------------------------------------------
                      1.t.,1.u. Standard Deductions
------------------------------------------------------------------------
Activity...................  1.t. Standard          1.u. Standard
                              Deductions (PH)--The   Deductions (HCV)--
                              agency may replace     The agency may
                              existing               replace existing
                              deduction(s) with a    deduction(s) with a
                              standard               standard
                              deduction(s).          deduction(s).
Statutes and Regulations     Standard Deductions    Standard Deductions
 Waived.                      (PH): Certain          (HCV): Certain
                              provisions of          provisions of
                              section 3(a)(1) of     sections 3(a)(1)
                              the 1937 Act and 24    and 8(o)(2)(A)-(C)
                              CFR 5.611, 960.253,    of the 1937 Act and
                              960.255 and 960.257.   24 CFR 5.611 and
                                                     982.516.
------------------------------------------------------------------------
            1.v.,1.w. Alternate Income Inclusions/Exclusions
------------------------------------------------------------------------
Activity...................  1.v. Alternate Income  1.w. Alternate
                              Inclusions/            Income Inclusions/
                              Exclusions (PH)--The   Exclusions (HCV)--
                              agency may establish   The agency may
                              alternate policies     establish alternate
                              to include or          policies to include
                              exclude certain        or exclude certain
                              forms of participant   forms of
                              income during the      participant income
                              income review and      during the income
                              rent calculation       review and rent
                              process.               calculation
                                                     process.
Statutes and Regulations     Alternate Income       Alternate Income
 Waived.                      Inclusions/            Inclusions/
                              Exclusions (PH):       Exclusions (HCV):
                              Certain provisions     Certain provisions
                              of sections 3(a)(1)    of sections 3(b)(4)-
                              and 3(b)(4)-(5) of     (5) and 8(o)(2)(A)-
                              the 1937 Act and 24    (C) of the 1937 Act
                              CFR 5.609, 5.611,      and 24 CFR 5.609,
                              960.253, 960.255,      5.611, and 982.516.
                              and 960.257.
------------------------------------------------------------------------
Safe Harbor(s).............  1.v. and 1.w.
                              Agency must conduct an impact
                              analysis.*
                              Agency must implement a hardship
                              policy.***
                              Agency must exclude elderly and
                              disabled individuals from rent policy.
------------------------------------------------------------------------
              2. Payment Standards and Rent Reasonableness
------------------------------------------------------------------------
The agency is authorized to adopt and implement any reasonable policy to
 establish payment standards or rent reasonableness that differ from the
 currently mandated program requirements in the 1937 Act and its
 implementing regulations. For voucher activities, the Department will
 develop a standard rider to the HAP contract that reflects any MTW
 authorizations that amend the current requirements of the HAP contract.
------------------------------------------------------------------------
                         2.a. Payment Standards
------------------------------------------------------------------------
Activity...................  2.a. Payment Standards (Tenant Based
                              Assistance)--The agency is authorized to
                              adopt and implement any reasonable policy
                              to establish payment standards up to 150%
                              of the Small Area FMR (SAFMR). This may
                              include setting payment standards outside
                              of the basic range, and creating multiple
                              payment standards based on conditions in
                              the local rental market.
------------------------------------------------------------------------
Statutes and Regulations     Payment Standards (Tenant Based
 Waived.                      Assistance): Certain provisions of section
                              8(o)(1)(B) of the 1937 Act and 24 CFR
                              982.503-505 and 983.301.
------------------------------------------------------------------------

[[Page 51493]]

 
Safe Harbor................  2.a.
                              Agency must implement an impact
                              analysis.*
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                        2.b. Rent Reasonableness
------------------------------------------------------------------------
Activity...................  2.b. Rent Reasonableness (HCV)--The agency
                              is authorized to develop a local process
                              to determine rent reasonableness that
                              differs from the currently mandated
                              program requirements in the 1937 Act and
                              its implementing regulations.
------------------------------------------------------------------------
Statutes and Regulations     Rent Reasonableness (HCV): Certain
 Waived.                      provisions of 24 CFR 982.507 and 983.303.
------------------------------------------------------------------------
Safe Harbor(s).............  2.b.
                              At the Department's request, the
                              agency shall make available the method
                              used to determine that rents charged by
                              owners to voucher participants are
                              reasonable when compared to similar
                              unassisted units in the market area.
                              Agency must obtain the services of
                              a third-party entity to determine rent
                              reasonableness for PHA-owned units.
------------------------------------------------------------------------
                      3. Increase PBV Rent to Owner
------------------------------------------------------------------------
The agency is authorized to establish the initial and re-determined rent
 to owner that differs from currently mandated program requirements in
 the 1937 Act and its implementing regulations. For voucher activities,
 the Department will develop a standard rider to the HAP contract that
 reflects any MTW authorizations that amend the current requirements of
 the HAP contract.
------------------------------------------------------------------------
                        3. Increase Rent to Owner
------------------------------------------------------------------------
Activity...................  3. Increase Rent to Owner (PBV): The agency
                              is authorized to develop a local process
                              to determine the initial and re-determined
                              rent to owner.
                            --------------------------------------------
Statutes and Regulations     Increase Rent to Owner (PBV): Certain
 Waived.                      provisions of section 8(o)(13)(H) of the
                              1937 Act and 24 CFR 983.301-302.
------------------------------------------------------------------------
Safe Harbor(s).............  3.
                              Agency must implement an impact
                              analysis.*
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                            4. Reexaminations
------------------------------------------------------------------------
The agency is authorized to implement a reexamination program that
 differs from the reexamination program currently mandated in the 1937
 Act and its implementing regulations. The terms ``low-income families''
 and ``very low-income families'' shall continue to be defined by
 reference to Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)).
 MTW agencies must continue to determine the initial eligibility of the
 family in accordance with provisions of 24 CFR 5.609.
------------------------------------------------------------------------
        4.a, 4.b. Alternate Reexamination Schedule for Households
------------------------------------------------------------------------
Activity...................  4.a. Alternate         4.b. Alternate
                              Reexamination          Reexamination
                              Schedule for           Schedule for
                              Households (PH)--The   Households (HCV)--
                              agency may establish   The agency may
                              an alternate           establish an
                              reexamination          alternate
                              schedule for           reexamination
                              households.            schedule for
                                                     households.
Statutes and Regulations     Reexaminations (PH):   Reexaminations
 Waived.                      Certain provisions     (HCV): Certain
                              of sections 3(a)(1)    provisions of
                              and 3(a)(2)(E) of      section 8(o)(5) of
                              the 1937 Act and 24    the 1937 Act and 24
                              CFR 960.257(a)-(b).    CFR 982.516 (a)(1)
                                                     and 982.516(c)(2).
------------------------------------------------------------------------
Safe Harbor(s).............  4.a. and 4.b.
                              Reexaminations must occur at least
                              every three years.
                              Must allow at least one interim
                              adjustment per year at the request of the
                              household, if the household gross income
                              has decreased 10% or more.
                              Agency must include a hardship
                              policy.***
------------------------------------------------------------------------
                 4.c., 4.d. Self-Certification of Assets
------------------------------------------------------------------------
Activity...................  4.c. Self-             4.d. Self-
                              Certification of       Certification of
                              Assets (PH)--At        Assets (HCV)--At
                              reexam the agency      reexam the agency
                              may allow the self-    may allow the self-
                              certification of       certification of
                              assets up to $10,000.  assets up to
                                                     $10,000.
Statutes and Regulations     Reexaminations (PH):   Reexaminations
 Waived.                      Certain provisions     (HCV): Certain
                              of sections 3(a)(1)    provisions of
                              and 3(a)(2)(E) of      section 8(o)(5) of
                              the 1937 Act and 24    the 1937 Act and 24
                              CFR 960.259(c)(2).     CFR 982.516 (a)(3).
------------------------------------------------------------------------
                      5. Voucher Leasing Incentives
------------------------------------------------------------------------
The agency is authorized to determine a damage claim and/or vacancy loss
 policy and payment policy for units that differ from the policy
 requirements currently mandated in the 1937 Act and its implementing
 regulations. Damage claim and vacancy loss authority are also subject
 to state and local laws. The agency must update its Administrative Plan
 to reflect the vacancy loss policy and/or damage claim policy. Agency
 may combine activities 3a and 3b into one voucher leasing incentive.
 For voucher activities related to this waiver, the Department will
 develop a standard rider to the HAP contract that reflects MTW
 authorizations that amend the current provisions of the HAP contract.
------------------------------------------------------------------------

[[Page 51494]]

 
     5.a.,5.b.,5.c. Vacancy Loss, Damage Claims, and Other Landlord
                               Incentives
------------------------------------------------------------------------
Activity...................  5.a. Vacancy Loss (Tenant-Based
                              Assistance)--The agency is authorized to
                              make an additional payment equal to one
                              month of the contract rent to landlords
                              when vacancies are unforeseen or
                              unexpected. Payment may only be made when
                              a landlord leases unit to another tenant-
                              based assisted family.
------------------------------------------------------------------------
Activity...................  5.b. Damage Claims (Tenant-Based
                              Assistance)--The agency may provide
                              landlords with compensation of up to two
                              months of contract rent if a tenant leaves
                              the unit damaged. In implementing this
                              activity, the tenant's security deposit
                              must first be used to cover damages and
                              the agency may provide up to two months of
                              contract rent minus the security deposit
                              to cover remaining repairs.
------------------------------------------------------------------------
Activity...................  5.c. Other Landlord Incentives (Tenant-
                              Based Assistance)--In order to incentivize
                              new landlords to join the HCV program, the
                              agency may provide an incentive payment
                              for new landlords that join the program
                              and/or landlords that remain in the
                              program and lease to another tenant-based
                              assisted family. Agencies may also target
                              incentive payments to landlords leasing
                              properties in high opportunity
                              neighborhoods or in areas located where
                              vouchers are difficult to use as defined
                              in an agency's Administrative Plan.
------------------------------------------------------------------------
Statutes and Regulations     Voucher Leasing Incentives (Tenant-Based
 Waived.                      Assistance): Certain provisions of section
                              8(o)(9) of the 1937 Act and 24 CFR
                              982.311, 982.352(c), and 983.259(e).
------------------------------------------------------------------------
Safe Harbor................  5.a. and 5.c. only.
                              Landlords receiving payments under
                              the vacancy loss and other landlord
                              incentives activities must have unit(s)
                              that first pass Housing Quality Standards
                              (HQS) for HCV before payment is made.
------------------------------------------------------------------------
                        6. Public Housing Leases
------------------------------------------------------------------------
Subject to State and local laws, the agency is authorized to develop and
 adopt a new form of local lease and establish community rules and
 reasonable tenant fees, provided that no-cause evictions are not
 permitted, and the agency includes grievance procedures in accordance
 with 24 CFR 966 Subpart B. Any implemented fees must be based on
 customary property management fees, and be generally applicable to non-
 assisted tenants in any mixed-income properties.
------------------------------------------------------------------------
  6.a.,6.b. Establish Community Rules and Reasonable Fees through Local
                                  Lease
------------------------------------------------------------------------
Activity...................  6.a. Establish Community Rules through
                              Local Lease (PH)--The agency may develop a
                              local lease which may establish community
                              rules. Agency may only implement changes
                              to the lease under this activity that do
                              not require either a regulatory or
                              statutory waiver. Fair housing and other
                              civil rights requirements continue to
                              apply. Agency must comply with HUD's Smoke-
                              Free Public Housing Rule.
------------------------------------------------------------------------
Activity...................  6.b. Establish Reasonable Fees through
                              Local Lease (PH)--The agency may charge
                              fees that are reasonable and cost
                              effective through a local lease.
------------------------------------------------------------------------
Statutes and Regulations     Public Housing Leases (PH): Certain
 Waived.                      provisions of section 6(l)(1) of the 1937
                              Act and 24 CFR 966.4.
------------------------------------------------------------------------
Safe Harbor(s).............  6.b. only.
                              Agency must implement an appeals
                              process.
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                        7. Short-Term Assistance
------------------------------------------------------------------------
The agency may develop and adopt a Short-Term Assistance Program in HCV
 or PH for specific populations (i.e., hard to house, at-risk, homeless,
 etc.).\19\ The short-term housing assistance program must include
 supportive services in one or more buildings in collaboration with
 local community-based organization and government agencies. The agency
 will ensure that these programs do not have a disparate impact on
 protected classes, and will be operated in a manner that is consistent
 with the requirements of nondiscrimination and equal opportunity
 authorities, including but not limited to Section 504 of the
 Rehabilitation Act. More specifically, under no circumstances will
 residents of such programs be required to participate in supportive
 services that are targeted to persons with disabilities in general, or
 persons with any specific disability. In addition, admission to any of
 the programs or priority for supportive services developed under this
 section will not be conditioned on a diagnosis or specific disability
 of a member of an applicant or participant family. This section is not
 intended to govern the designation of housing that is subject to
 Section 7 of the 1937 Act. The agency must determine initial
 eligibility in accordance with 24 CFR 5.609 and must comply with
 Section 3(b)(2) of the Act. Subject to the Agency's policy, successful
 participants of the short-term housing assistance program may be given
 the option of transferring into whichever program (Section 8 or 9) the
 short-term housing assistance program falls under.
------------------------------------------------------------------------
                     7.a.,7.b. Short-Term Assistance
------------------------------------------------------------------------
Activity...................  7.a. Short-Term        7.b. Short-Term
                              Assistance (PH)--The   Assistance (HCV)--
                              agency may create a    The agency may
                              short-term housing     create a short-term
                              assistance program     housing assistance
                              with supportive        program with
                              services in one or     supportive services
                              more buildings in      in its HCV program.
                              its public housing     The agency may
                              program. The agency    collaborate with
                              may collaborate with   local community-
                              local community-       based organizations
                              based organizations    and government
                              and government         agencies to provide
                              agencies to provide    supportive
                              supportive services.   services.
Statutes and Regulations     Short-Term Assistance  Short-Term
 Waived.                      (PH): Certain          Assistance (HCV):
                              provisions of          Certain provisions
                              sections 6(l)(1) and   of sections
                              6(l)(5) of the 1937    8(o)(7)(A)-(C) of
                              Act and 24 CFR         the 1937 Act and 24
                              966.4(a)(2)(i).        CFR 982.303,
                                                     982.309(a)(1),
                                                     983.256(f), and
                                                     983.257.
------------------------------------------------------------------------
Safe Harbor(s).............  7.a. and 7.b.
                              The term of assistance may not be
                              shorter than 3 months.

[[Page 51495]]

 
                              The activity cannot be extended to
                              an entire PH or HCV program and must only
                              serve specific populations.
------------------------------------------------------------------------
                       8. Term-Limited Assistance
------------------------------------------------------------------------
The agency is authorized to implement term limits for families residing
 in public housing or receiving voucher assistance.
------------------------------------------------------------------------
                    8.a.,8.b. Term-Limited Assistance
------------------------------------------------------------------------
Activity...................  8.a. Term-Limited      8.b. Term-Limited
                              Assistance (PH)--The   Assistance (HCV)--
                              agency may limit the   The agency may
                              duration for which a   limit the duration
                              family receives        for which a family
                              housing assistance.    receives housing
                                                     assistance.
Statutes and Regulations     Term-Limited           Term-Limited
 Waived.                      Assistance (PH):       Assistance (HCV):
                              Certain provisions     Certain provisions
                              of sections 6(l)(1)    of sections
                              and 6(l)(5) of the     8(o)(7)(A)-(C) of
                              1937 Act and 24 CFR    the 1937 Act and 24
                              and 966.4(a)(2).       CFR 982.303,
                                                     982.309(a),
                                                     982.552(a),
                                                     983.256(f), and
                                                     983.257.
------------------------------------------------------------------------
Safe Harbor(s).............  8.a. and 8.b.
                              The term of assistance may not be
                              shorter than 4 years.
                              Services, or referrals to
                              services, must be provided by the agency
                              or a partner organization to support
                              preparing families for the termination of
                              assistance.
                              Agency must conduct an impact
                              analysis.*
                              Agency must exclude elderly and
                              disabled families from term limit.**
                              Agency must implement a hardship
                              policy.***
------------------------------------------------------------------------
                          9. Work Requirements
------------------------------------------------------------------------
The agency is authorized to implement a requirement that a specified
 segment of its PH and/or HCV residents work as a condition of tenancy,
 subject to all applicable fair housing and civil rights requirements
 and the mandatory admission and prohibition requirements imposed by
 sections 576-578 of the Quality Housing and Work Responsibility Act of
 1998 and Section 428 of Public Law 105-276. Those individuals exempt
 from the Community Service Requirement in accordance with Section
 12(c)(2)(A), (B), (D) and (E) of the 1937 Act must also be exempt from
 the agency's work requirement. The agency must update its
 Administrative Plan and/or Admissions and Continued Occupancy Plan
 (ACOP) to include a description of the circumstances in which families
 shall be exempt from the requirement. The Administrative Plan and/or
 ACOP should include a description of what is considered work as well as
 other activities that shall be considered acceptable substitutes for
 work.
------------------------------------------------------------------------
                       9.a.,9.b. Work Requirement
------------------------------------------------------------------------
Activity...................  9.a. Work Requirement  9.b. Work
                              (PH)--The agency may   Requirement (HCV)--
                              implement a work       The agency may
                              requirement for        implement a work
                              public housing         requirement for HCV
                              residents who are at   residents who are
                              least 18 years old.    at least 18 years
                              Additionally,          old. Additionally,
                              residents must be      residents must be
                              non-elderly, as        non-elderly, as
                              defined by the         defined by the
                              agency, and non-       agency, and non-
                              disabled. The          disabled. The
                              requirement shall be   requirement shall
                              no more than 30        be no more than 30
                              hours of work per      hours of work per
                              week per non-elderly/  week per non-
                              non-disabled adult     elderly/non-
                              household member.      disabled adult
                              Supportive services    household member.
                              shall be provided,     Supportive services
                              either through the     shall be provided,
                              agency or a partner    either through the
                              organization, to       agency or a partner
                              assist families in     organization, to
                              obtaining employment   assist families in
                              or an acceptable       obtaining
                              substitute, as         employment or an
                              defined by the MTW     acceptable
                              agency's policy.       substitute, as
                              Work requirements      defined by the MTW
                              shall not be applied   agency's policy.
                              to exclude, or have    Work requirements
                              the effect of          shall not be
                              excluding, the         applied to exclude,
                              admission of or        or have the effect
                              participation by       of excluding, the
                              persons with           admission of or
                              disabilities or        participation by
                              families that          persons with
                              include persons with   disabilities or
                              disabilities. Work     families that
                              requirements shall     include persons
                              not apply to persons   with disabilities.
                              with disabilities.     Work requirements
                              However, persons       shall not apply to
                              with disabilities      persons with
                              and families that      disabilities.
                              include persons with   However, persons
                              disabilities must      with disabilities
                              have equal access to   and families that
                              the full range of      include persons
                              program services and   with disabilities
                              other incentives.      must have equal
                                                     access to the full
                                                     range of program
                                                     services and other
                                                     incentives.
Statutes and Regulations     Work Requirement       Work Requirement
 Waived.                      (PH): Certain          (HCV): Certain
                              provisions of          provisions of 24
                              sections 6(l)(1) and   CFR 982.551.
                              6(l)(5) of the 1937
                              Act and 24 CFR
                              966.4(a)(2).
Safe Harbor................  9.a..................  9.b.
                              Agency must    Agency must
                              conduct an impact      conduct an impact
                              analysis.*.            analysis.*
                              Agency must    Agency must
                              implement a hardship   implement a
                              policy.***.            hardship policy.***
                              The hardship   The
                              policy in the ACOP     hardship policy in
                              must apply to          the Administrative
                              families who are       Plan must apply to
                              actively trying to     families who are
                              comply with the        actively trying to
                              agency's work          comply with the
                              requirement, but are   agency's work
                              having difficulties    requirement, but
                              obtaining work or an   are having
                              acceptable             difficulties
                              substitute..           obtaining work or
                              The ACOP       an acceptable
                              must also describe     substitute.
                              the consequences of    The
                              failure to comply      Administrative Plan
                              with the work          must also describe
                              requirement..          the consequences of
                              Services, or   failure to comply
                              referrals to           with the work
                              services, must be      requirement.
                              provided by the        Services,
                              agency to support      or referrals to
                              preparing families     services, must be
                              for the termination    provided by the
                              of assistance..        agency to support
                              Activity may   preparing families
                              apply to non-          for the termination
                              elderly, non-          of assistance.
                              disabled households    Activity
                              or non-elderly, non-   may apply to non-
                              disabled adult         elderly, non-
                              household members..    disabled households
                                                     or non-elderly, non-
                                                     disabled adult
                                                     household members.
------------------------------------------------------------------------

[[Page 51496]]

 
                        10. Increase Elderly Age
------------------------------------------------------------------------
The agency is authorized to amend the definition of an elderly person to
 be an individual who is at least 65 years of age.
------------------------------------------------------------------------
                        10. Increase Elderly Age
------------------------------------------------------------------------
Activity...................  10. Increase Elderly Age (PH & HCV)--The
                              agency may change HUD's definition of an
                              elderly person to be at least 65 years of
                              age. The implementation of this activity
                              will apply only to new admissions after
                              the effective date of the MTW ACC. The
                              agency remains subject to HUD's
                              regulations implementing the Age
                              Discrimination Act of 1975 at 24 CFR Part
                              146 in its entirety.
------------------------------------------------------------------------
Statutes and Regulations     Increase Elderly Age (PH & HCV): Certain
 Waived.                      provisions of section 3(b)(3)(D) of the
                              1937 Act to read ``[63, 64, or 65] years
                              of age'' in relevant part, 24 CFR 5.100 to
                              read ``[63, 64, or 65] years of age'' in
                              relevant part of the definition of Elderly
                              Person, and 24 CFR 5.403 to read ``[63,
                              64, or 65] years of age'' in relevant part
                              of the definition of Elderly family.
------------------------------------------------------------------------
Safe Harbor................  10.
                              Definition of an elderly person
                              may not set a threshold (minimum) age
                              above 65 years old.
                              Agency must conduct an initial
                              activity analysis consistent with 24 CFR
                              Part 146 and make the activity analysis
                              available during the applicable public
                              review period prior to the implementation
                              of the MTW activity. The activity analysis
                              must be updated at least annually during
                              implementation of the activity and at the
                              time the activity is closed out.
                              Agency must retain records
                              available for HUD inspection that cover
                              the waiver, tenant consultation and public
                              comment, results of the activity analysis,
                              and specific policies and procedures to
                              implement the waiver.
------------------------------------------------------------------------
                     11. Increase Total PBV Unit Cap
------------------------------------------------------------------------
The agency is authorized to expand the authority to project-base
 vouchers from 20% of authorized voucher units to 30% of authorized
 voucher units. In addition, the agency is authorized to project-base an
 additional 20% (rather than 10%) of its authorized units in accordance
 with the exception authority in 8(o)(13)(ii) of the United States
 Housing Act of 1937 to provide units for families meeting the statutory
 eligibility categories set forth in that section. The agency is
 authorized to project-base up to 50% of its authorized voucher units
 (30% general cap, 20% exception authority), subject to the safe
 harbors.
------------------------------------------------------------------------
                     11. Increase Total PBV Unit Cap
------------------------------------------------------------------------
Activity...................  11. Increase Total PBV Unit Cap (PBV)--The
                              agency may project-base up to 30% of its
                              authorized voucher units for the agency
                              for project-based assistance. The agency
                              may further project-base an additional 20%
                              of its authorized voucher units if the
                              units meet the statutory exception
                              categories in Section 8(o)(13)(B)(ii) of
                              the 1937 Act.
------------------------------------------------------------------------
Statutes and Regulations     Increase Total PBV Unit Cap (PBV): Certain
 Waived.                      provisions of section 8(o)(13)(B) of the
                              1937 Act and 24 CFR 983.6(a)-(b), as
                              superseded by Notice PIH 2017-21.
------------------------------------------------------------------------
Safe Harbor(s).............  11.
                              The agency may project-base up to
                              30% of its total authorized voucher units.
                              The agency may also project-base up to an
                              additional 20% of the total authorized
                              voucher units, provided those additional
                              units fall into one of the following
                              categories: (1) The units are specifically
                              made available to house people who meet
                              the HUD definition of homeless; (2) the
                              units are specifically made available to
                              housing families that are comprised of or
                              include a veteran; (3) the units provide
                              supportive housing for elderly or disabled
                              persons; or (4) the units are located in
                              areas where vouchers are difficult to use
                              (units located in a census tract with a
                              poverty rate of 20 percent or less, and as
                              further determined by the Secretary).
------------------------------------------------------------------------
                      12. Increase PBV Project Cap
------------------------------------------------------------------------
The agency is authorized to determine the percentage of units within a
 project that can be project-based to exceed the percentage limitation
 in the 1937 Act and its implementing regulations. The agency is subject
 to the PBV section of Notice PIH 2017-21 or any successor notice and/or
 guidance. The agency is subject to Notice PIH 2013-27 where applicable,
 or successor.
------------------------------------------------------------------------
                      12. Increase PBV Project Cap
------------------------------------------------------------------------
Activity...................  12. Increase PBV Project Cap (PBV)--The
                              agency may raise the PBV cap within a
                              project up to 100%.
Statutes and Regulations     Increase PBV Project Cap (PBV): Certain
 Waived.                      provisions of section 8(o)(13)(D) of the
                              1937 Act and 24 CFR 983.56(a)-(b).
Safe Harbor(s).............  12.
                              Agency may raise the PBV cap
                              within a project up to 100% for any of the
                              following reasons: (1) At the time the HAP
                              contract is signed, the development is in
                              a census tract with a poverty rate of 20%
                              or less; (2) the agency seeks to convert
                              an existing agency-owned development
                              (other than public housing or other
                              exception projects under HOTMA) to PBV and
                              will use no development dollars; or (3)
                              the agency is seeking to transition a Low-
                              Income Housing Tax Credit property that is
                              approaching the expiration of its
                              affordability period.
------------------------------------------------------------------------

[[Page 51497]]

 
                13. PBV--Elimination of Selection Process
------------------------------------------------------------------------
Subject to subsidy layering review, the agency is authorized to project-
 base Section 8 assistance at PHA-owned properties that are not public
 housing properties. Project-based assistance for such units does not
 need to be competitively bid, nor are the owned units subject to any
 required assessments for voluntary conversion. Agency still needs to
 complete site selection requirements. This waiver does not waive 24 CFR
 983.57 or 983.59(b) that HQS inspections be performed by an independent
 entity. The agency must still comply with 24 CFR 983.57 and 983.59(b)
 which requires that HQS inspections be completed by independent
 entities. The agency is subject to the PBV section of Notice PIH 2017-
 21 or any successor notice and/or guidance. The agency is subject to
 Notice PIH 2013-27 where applicable, or successor.
------------------------------------------------------------------------
                   13. Eliminate PBV Selection Process
------------------------------------------------------------------------
Activity...................  13. Eliminate PBV Selection Process (PBV)--
                              The agency may eliminate the selection
                              process in the award of PBVs to properties
                              owned by the agency that are not public
                              housing.
------------------------------------------------------------------------
Statutes and/or Regulations  Eliminate PBV Selection Process (PBV):
 Waived.                      Certain provisions of 24 CFR 983.51.
------------------------------------------------------------------------
Safe Harbor(s).............  13.
                              Property must be owned by a single-
                              asset entity of agency, see Notice PIH
                              2015-05.
------------------------------------------------------------------------
                14. PBV--Alternative Competitive Process
------------------------------------------------------------------------
The agency is authorized to establish a reasonable competitive process
 or utilize an existing local competitive process for project-basing
 leased housing assistance at units that meet existing HQS requirements
 and that are owned by non-profit, for-profit housing entities, or by
 the agency that are not public housing. The agency must still comply
 with 24 CFR 983.57 and 983.59(b) which requires that HQS inspections be
 completed by independent entities if the selected project is PHA-owned.
 The agency is subject to PBV section of Notice PIH 2017-21 or any
 successor notice and/or guidance. The agency is subject to Notice PIH
 2013-27 where applicable, or successor.
------------------------------------------------------------------------
            14. Establish Alternative PBV Competitive Process
------------------------------------------------------------------------
Activity...................  14. Establish Alternative PBV Competitive
                              Process (PBV)--The agency may establish an
                              alternative competitive process in the
                              award of PBVs that are owned by non-
                              profit, for-profit housing entities, or by
                              the agency that are not public housing.
------------------------------------------------------------------------
Statutes and/or Regulations  Establish Alternative PBV Competitive
 Waived.                      Process (PBV): Certain provisions of 24
                              CFR 983.51 as superseded by the Housing
                              Opportunity through Modernization Act of
                              2016 (HOTMA) Implementation Notice, Notice
                              PIH 2017-21.
------------------------------------------------------------------------
Safe Harbor(s).............  14.
                              None.
------------------------------------------------------------------------
                           15. PBV--Unit Types
------------------------------------------------------------------------
Subject to subsidy layering review, the agency may attach or pay PBV
 assistance for shared housing units that are normally ineligible for
 assistance. PBV units must comply with HQS and be consistent with
 deconcentration and desegregation requirements under 24 CFR part 903.
 If the agency places a PBV unit in a public housing project, then the
 agency will not receive public housing funds for that unit.
------------------------------------------------------------------------
                           15. PBV Unit Types
------------------------------------------------------------------------
Activity...................  15. PBV Unit Types (Shared Housing)--The
                              agency may attach and pay PBV assistance
                              for shared housing units.
------------------------------------------------------------------------
Statutes and/or Regulations  PBV Unit Types (Shared Housing): Certain
 Waived.                      provisions of 24 CFR 983.53(a)(1).
------------------------------------------------------------------------
Safe Harbor(s).............  15.
                              Shared housing units may not be
                              owner occupied.
------------------------------------------------------------------------
                    16. MTW Self-Sufficiency Program
------------------------------------------------------------------------
The agency is authorized to operate any of its existing self-sufficiency
 and training programs, including its Family Self-Sufficiency (FSS)
 Program and any successor programs, exempt from certain HUD program
 requirements. If the agency receives dedicated funding for an FSS
 coordinator, such funds must be used to employ a self-sufficiency
 coordinator and in accordance with any requirements of any NOFA under
 which funds were received. Recruitment, eligibility, and selection
 policies and procedures must be consistent with the Department's
 nondiscrimination and equal opportunity requirements. An agency may
 make its MTW Self-Sufficiency Program participation mandatory for any
 household member that is non-elderly/non-disabled by waiving the
 statutory and regulatory definition of FSS family or participating
 family which is ``a family that resides in public housing or receives
 assistance under the rental certificate or rental voucher programs, and
 that elects to participate in the FSS program'' (24 CFR 984.103(b)). In
 implementing this waiver, the agency must execute a contract of
 participation, or other locally developed agreement, that is at least 5
 years but no more than 10 years. Notwithstanding the above, any funds
 granted pursuant to a competition must be used in accordance with the
 NOFA. These waivers should not exempt the agency from having an up to
 date, approved FSS Action Plan in accordance with 24 CFR 984.201.
------------------------------------------------------------------------
           16.a.-16.e. MTW Self Sufficiency Program Activities
------------------------------------------------------------------------
Activity...................  16.a. Waive Operating a Required FSS
                              Program (PH & HCV)--The agency is
                              authorized to waive the requirement to
                              operate the regulatory FSS program.
------------------------------------------------------------------------

[[Page 51498]]

 
Activity...................  16.b. Alternative Structure for
                              Establishing Coordinating Committee (PH &
                              HCV)--The agency is authorized to create
                              an alternative structure for securing
                              local resources to support an MTW Self-
                              Sufficiency Program.
------------------------------------------------------------------------
Activity...................  16.c. Alternative Family Selection
                              Procedures (PH & HCV)--The agency is
                              authorized to develop its own recruitment
                              and selection procedures for its MTW Self-
                              Sufficiency Program(s). Alternatively,
                              agency may make participation in the MTW
                              Self-Sufficiency Program mandatory for any
                              household member that is non-elderly or
                              non-disabled.
------------------------------------------------------------------------
Activity...................  16.d. Modify or Eliminate the Contract of
                              Participation (PH & HCV)--The agency is
                              authorized to modify the terms of, or
                              eliminate the contract of participation,
                              in lieu of a local form. The agency may
                              modify the terms of the contract of
                              participation to align with adjustments
                              made to its MTW Self-Sufficiency
                              Program(s) using MTW flexibility. Further,
                              the agency may discontinue use of the
                              contract of participation and instead
                              employ a locally-developed agreement that
                              codifies the terms of participation.
                              However, all required fields in Form HUD-
                              50058 MTW Section 23 or Form HUD-50058
                              Section 17 must be included in the
                              Contract of Participation.
------------------------------------------------------------------------
Activity...................  16.e. Policies for Addressing Increases in
                              Family Income (PH & HCV)--The agency is
                              authorized to set its own policies for
                              addressing increases in family income
                              during participation in the MTW Self-
                              Sufficiency Program. Consistent with the
                              goals and structure of its MTW Self-
                              Sufficiency Program, the agency may set
                              policies for whether income increases are
                              recognized for purposes of increasing rent
                              (consistent with the agency's existing
                              rent policy) or changing the amount of
                              funds moved to escrow/savings through the
                              program. The agency may not use income
                              increases during participation in the MTW
                              Self-Sufficiency Program to change a
                              family's eligibility status for purposes
                              of participation in the MTW Self-
                              Sufficiency Program or for the receipt
                              public housing or HCV assistance.
------------------------------------------------------------------------
Statutes and Regulations     MTW Self-Sufficiency Program (PH & HCV):
 Waived.                      Certain provisions of sections 23(b)-(d),
                              (f), and (n)(1) of the 1937 Act and 24 CFR
                              984.105, 984.202(b)-(c), 984.203(a)-
                              (c)(2), 984.303(b)-(d), (f)-(h).
------------------------------------------------------------------------
Safe Harbor(s).............  16.a.-16.e.
                              Agency must review FSS
                              Guidance.\20\
                              If the agency requires MTW Self-
                              Sufficiency Program participation as a
                              condition for housing subsidy, an impact
                              analysis must be developed and adopted in
                              accordance with MTW guidance prior to the
                              implementation of the activity.*
                              The agency may not make MTW Self-
                              Sufficiency Program participation
                              mandatory for individuals that do not meet
                              the definition of an eligible family at
                              Section 23(n)(3) of the U.S. Housing Act
                              of 1937 (1937 Act) (42 U.S.C.
                              1437u(n)(3)), and those exempted from the
                              Community Service Requirement under
                              Section 12(c)(2)(A), (B), (D) and (E) of
                              the 1937 Act, 42 U.S.C. 1437j(c)(2)(A),
                              (B), (D), and (E). If the agency requires
                              MTW FSS program participation as a
                              condition for housing subsidy, a hardship
                              policy must be developed and adopted in
                              accordance with MTW guidance prior to the
                              implementation of the activity.***
                              If an agency terminates the
                              housing subsidy or tenancy of a family for
                              alleged violation of mandatory MTW Self-
                              Sufficiency Program participation, the
                              family will be entitled to a hearing under
                              the Agency's Grievance Procedure (24 CFR
                              part 966, subpart B) or the HCV informal
                              hearing process (24 CFR part 982.555).
------------------------------------------------------------------------
                  17. Local, Non-Traditional Activities
------------------------------------------------------------------------
MTW funds awarded to an MTW agency under Sections 8(o), 9(d), and 9(e)
 of the 1937 Act can be utilized per statute and regulation on the
 eligible activities listed at Sections 9(d)(1), 9(e)(1), and 8(o) of
 the 1937 Act. Any authorized use of these funds outside of the
 allowable uses listed in the 1937 Act constitutes a local, non-
 traditional activity. The agency is authorized to implement the local,
 non-traditional activities listed below to provide a rental subsidy to
 a third-party entity to provide housing and supportive services to
 eligible participants, and to contribute MTW funds to the development
 of affordable housing. Families served through the activities described
 below must be at or below 80% of area median income, and implemented
 activities must meet one of the three MTW statutory objectives of
 increasing the efficiency of federal expenditures, incentivizing self-
 sufficiency of participating families and increasing housing choice for
 low-income families. Any MTW funds awarded to a third-party provider
 must be competitively bid. The use of MTW funds must be consistent with
 the requirements of 2 CFR 200 and other basic federal principles. The
 agency must determine the eligibility of families in accordance with 24
 CFR 5.609 and with Section 3(b)(2) of the Act. The agency is subject to
 Notice PIH 2011-45 or any successor notice and/or guidance. Local, non-
 traditional activities must fall within one of the three categories
 below and comply with Notice 2011-45 or any successor notice/and or
 guidance.
------------------------------------------------------------------------
        17.a.,17.b. Rental Subsidy Programs and Service Provision
------------------------------------------------------------------------
Activity Categories........  17.a. Rental Subsidy Programs--Programs
                              that use MTW funds to provide a rental
                              subsidy to a third-party entity (other
                              than a landlord or tenant) who manages
                              intake and administration of the subsidy
                              program to implement activities, which may
                              include: supportive housing programs and
                              services to help homeless individuals and
                              families reach independence; Supportive
                              living; homeless/transitional housing
                              programs; or programs that address special
                              needs populations.
------------------------------------------------------------------------
Activity Categories........  17.b. Service Provision--The provision of
                              HUD-approved self-sufficiency or
                              supportive services that are not otherwise
                              permitted under the public housing and HCV
                              programs, or that are provided to eligible
                              low-income individuals who do not receive
                              either public housing or HCV assistance
                              from the PHA. Eligible activities may
                              include: Services for residents of other
                              PHA-owned or managed affordable housing
                              that is not public housing or HCV
                              assistance; services for low-income non-
                              residents; or supportive services.
------------------------------------------------------------------------
Statutes and Regulations     Local, Non-Traditional Activities: MTW
 Waived.                      funds awarded to an MTW agency under
                              sections 8(o), 9(d), and 9(e) of the 1937
                              Act can be utilized per statute and
                              regulation on the eligible activities
                              listed at Sections 9(d)(1), 9(e)(1), and
                              8(o) of the 1937 Act. Any authorized use
                              of these funds outside of the allowable
                              uses listed in the 1937 Act constitutes a
                              local, non-traditional activity.
------------------------------------------------------------------------
Safe Harbor(s).............  17.a and 17.b.
                              Agency may spend up to 10% of its
                              MTW budget on local, non-traditional
                              actives. All other applicable MTW
                              requirements apply.
                              The agency is subject to Notice
                              PIH 2011-45 or any successor notice and/or
                              guidance.
------------------------------------------------------------------------

[[Page 51499]]

 
                   17.c. Housing Development Programs
------------------------------------------------------------------------
Activity Categories........  17.c. Housing Development Programs--
                              Programs that use MTW funds to acquire,
                              renovate and/or build affordable units for
                              low-income families that are not public
                              housing units. Eligible activities may
                              include: Gap financing for non-PHA
                              development of affordable housing or tax
                              credit partnerships.
------------------------------------------------------------------------
Statutes and Regulations     Local, Non-Traditional Activities: MTW
 Waived.                      funds awarded to an MTW agency under
                              sections 8(o), 9(d), and 9(e) of the 1937
                              Act can be utilized per statute and
                              regulation for the eligible activities
                              listed at Sections 8(o), 9(d)(1), and
                              9(e)(1) of the 1937 Act. Any authorized
                              use of these funds outside of the
                              allowable uses listed in the 1937 Act
                              constitutes a local, non-traditional
                              activity.
------------------------------------------------------------------------
Safe Harbor(s).............  17.c.
                              Agency must comply with Section 30
                              of the 1937 Housing Act.
                              The agency is subject to Notice
                              PIH 2011-45 or any successor notice and/or
                              guidance.
                              Agency may spend up to 10% of its
                              MTW budget on local, non-traditional
                              actives. All other applicable MTW
                              requirements apply.
------------------------------------------------------------------------
\1\ In the HCV tenant-based program, the housing assistance payment
  (HAP) is the lower of: (1) The payment standard minus the family's
  TTP, or (2) the gross rent minus the TTP. The TTP is the minimum
  amount the family will pay as the family share. If the gross rent
  exceeds the payment standard, the family will pay TTP and the
  difference between the gross rent and the payment standard as the
  family share. In the HCV project-based program, the family always pays
  TTP minus any utility allowance (UA) as the tenant rent.

* Impact Analysis
---------------------------------------------------------------------------

    \19\ Agencies seeking to create a short-term program that goes 
beyond Section 8 or Section 9 as modified by MTW may propose an 
activity under the Local Non-Traditional Activities Rental Subsidy 
Program Waiver.
    \20\ As agencies are considering potential waivers to the FSS 
program, they are encouraged to consult the Promising Practices 
Guidebook and Online Training that can be found at https://www.hudexchange.info/programs/fss/#1-introduction. In addition, the 
HUD FSS team is available to review and provide feedback on proposed 
waivers. Please contact [email protected].
---------------------------------------------------------------------------

    The MTW agency must analyze and put into the writing the various 
impacts of the MTW activity. The MTW agency must prepare this 
analysis (1) prior to implementation of the MTW activity; (2) at 
minimum, on an annual basis during the implementation of the MTW 
activity; and (3) at the time the MTW activity is closed out.
    This analysis must consider the following eight factors:
    1. Impact on the agency's finances (e.g., how much will the 
activity cost, any change in the agency's per family contribution);
    2. Impact on affordability of housing costs for affected 
families (e.g., any change in how much affected families will pay 
towards their housing costs);
    3. Impact on the agency's waitlist(s) (e.g., any change in the 
amount of time families are on the waitlist);
    4. Impact on the agency's termination rate of families (e.g., 
the rate at which families non-voluntarily lose assistance from the 
agency);
    5. Impact on the agency's current occupancy level in public 
housing and utilization rate in the HCV program;
    6. Impact on the agency's ability to meet the MTW statutory 
requirements;
    7. Impact on the community (e.g., any change in the number of 
families transitioning to self-sufficiency, and any change in the 
employment rate after the implementation of activities targeted 
towards working families); and
    8. Across the other factors above, the impact on protected 
classes (and any associated disparate impact).
    The MTW agency must have the initial impact analysis, which 
analyzes potential impacts of the MTW activity, available during the 
applicable public review period prior to implementation of the MTW 
activity. The agency must supply the annual impact analysis and/or 
the final impact analysis of the closed-out activity (if 
applicable), which analyzes actual impact of the MTW activity, at 
HUD's request. This information must be retained by the agency for 
the duration of the agency's participation in the MTW demonstration 
program and available for public review and inspection at the 
agency's principal office during normal business hours.

** Elderly/Disabled Families

    The MTW activity must not apply to elderly families and disabled 
families as defined in 24 CFR 5.403 or the MTW agency's approved 
definition under its MTW program.

*** Hardship Policy

    The MTW agency must adopt written policies for determining when 
a requirement or provision of the MTW activity constitutes a 
financial or other hardship for the family.
    The agency shall make the determination of whether a financial 
or other hardship exists within a reasonable time after the family 
request. If the agency determines that a financial or other hardship 
exists, the PHA must immediately provide an exemption from the MTW 
activity at a reasonable level and duration, according to the 
agency's written policies. Residents must be notified of the 
agency's hardship policy.
    The agency's written policies for determining what constitutes 
financial hardship must include the following situations:
     The family has experienced a decrease in income because 
of changed circumstances, including loss or reduction of employment, 
death in the family, or reduction in or loss of earnings or other 
assistance;
     The family has experienced an increase in expenses, 
because of changed circumstances, for medical costs, child care, 
transportation, education, or similar items; and
     Such other situations and factors determined by the 
agency to be appropriate.
    The agency's written policies shall include a grievance 
procedure that a family may request for second level review of 
denied hardship requests.
    The agency shall keep records of all hardship requests received 
and the results of these requests, and supply them at HUD's request. 
This information must be retained by the agency for the duration of 
the agency's participation in the MTW program and available for 
public review and inspection at the agency's principal office during 
normal business hours.
    The protections for victims of domestic violence, dating 
violence, sexual assault, or stalking in 24 CFR part 5, subpart L, 
apply. The protections for persons requesting a reasonable 
accommodation under 24 CFR part 8 also apply.

[FR Doc. 2018-22158 Filed 10-10-18; 8:45 am]
BILLING CODE 4210-67-P