[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20656]
[[Page Unknown]]
[Federal Register: August 24, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
24 CFR Part 208
[Docket No. R-94-1691; FR-3521-F-03]
RIN 2502-AG16
Electronic Transmission of Required Data for Certification and
Recertification and Subsidy Billing Procedures for Multifamily
Subsidized Projects
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Final rule.
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SUMMARY: This rule requires electronic submission in a HUD-prescribed
format of tenant and financial data by owners of certain subsidized
multifamily projects and by the public agencies that administer the
assistance contracts for HUD. Electronic transmission is necessary
because the manual submission of HUD forms has become a burden to
project owners, managers and HUD.
This final rule responds to public comments received on a previous
interim rule that applies to multifamily subsidized projects
administered by State housing finance and development agencies and
other public housing agencies under the following programs: the section
236 Interest Reduction and Rental Assistance Payments program, the
section 8 Housing Assistance Payments Program (except the section 8
Existing Housing Program or the Moderate Rehabilitation Program), the
section 221(d)(3) Below Market Interest Rate Loan program, and the
section 101 Rent Supplement Payment program. It also applies to
projects under the following programs: the section 202 program (except
section 202/8 projects, for which a similar rule was already
effective), and the section 811 Supportive Housing for Persons with
Disabilities program.
The change made in response to comments on the interim rule to
clarify the 12 month retroactive data collection is extended in this
rule to comparable provisions applicable already by final rule to
owners of subsidized projects that are administered directly by HUD.
EFFECTIVE DATE: This rule is effective September 23, 1994.
FOR FURTHER INFORMATION CONTACT: Barbara D. Hunter, Acting Director,
Planning and Procedures Division, Office of Multifamily Housing
Management, Room 6180, Department of Housing and Urban Development, 451
Seventh Street SW., Washington, D.C. 20410, telephone (202) 708-3944.
Hearing or speech-impaired individuals may call HUD's TDD number (202)
708-4594. (These telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Paperwork Burden
The information collection requirements contained in this rule were
approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520) and assigned OMB
control numbers 2502-0204 and 2502-0182.
II. Background
On November 19, 1993, a rule was published (58 FR 61017) [following
previous publication of a proposed rule in June 1988] that covered both
the HUD multifamily subsidized projects administered by HUD and the
ones administered by State finance and development agencies or other
public housing agencies as Contract Administrators (CAs) for HUD. The
rule was final as to the projects administered directly by HUD and
interim with no stated effective date with respect to those
administered by CAs and to Section 202 and Section 811 projects.
(Project owners who had already automated tenant certifications and
recertifications of income were subject to an effective date of March
21, 1994, whereas project owners who had not yet automated were subject
to an effective date of May 20, 1994.)
The rule was interim (Secs. 208.108 (c) and (d)) with respect to
the projects administered by CAs, Section 202 Elderly Housing projects,
and Section 811 Supportive Housing for Persons With Disabilities
projects. No effective date announcement has been published for the
interim rule, and this rule makes final the provisions of that interim
rule with two changes to reflect response to comments received.
III. Discussion of Public Comments From Interim Rule
Comments on the requirements applicable to contract administrators
and the Section 202 projects and Section 811 projects were due January
18, 1994. In response to the publication of that rule, the Department
received 6 public comments. The commenters were three management
companies, two State housing finance and development agencies, and the
National Council of State Housing Agencies. All commentors expressed
concern about details of the conversion to electronic submission of
data rather than about the overall concept. As a result of these
comments, the Department has made some revisions to the rule governing
automation of submission of data by project owners and contract
administrators. The following discussion summarizes the comments and
provides HUD's responses to those comments.
Comment: This automation of certification and recertification of
tenant data (TRACS) should be put on hold or implemented as designed in
the proposed rule. If this is not done, it will be impractical for many
CAs to meet the current timing.
Response: The Department's intent to automate has been known since
1988, and most owners and agents have already automated the form HUD
50059. Furthermore, this effort is necessary for the Department to meet
its goals of improving financial management of these important programs
and enabling accurate forecasting of budget projections for these
programs.
Comment: (From two management companies) HUD should consult with
Contract Administrators to find out what additional data they would
like to obtain, and HUD should prescribe one alternative transmission
format for this additional data. This additional format would allow
developers/owners to achieve the benefits of uniformity and provide
them with the information they need.
Response: The Department is limited to the collection of
information that is approved by OMB. The information collected must be
mandated by Federal Regulations and be justified by HUD before OMB will
grant approval. Therefore, HUD is not authorized to require the
collection of any additional information CAs may believe it is
desirable to obtain from project owners. CAs may not use HUD data
collection needs as a basis for seeking additional information.
Comment: HUD should provide clear directions to CAs regarding how
TRACS operates, what software will be needed by CAs and what technical
assistance HUD will provide CAs to get up and running. They ask HUD to
work with them to answer these questions to determine a reasonable date
by which the CAs will be in full compliance with TRACS.
Response: When a project obtains HUD-50059 data on paper, it
submits the certification data, either directly or by a service bureau,
to the CA in the prescribed format. The certification data are
submitted electronically to the CA via modem, disk or tape, in
accordance with this rule. The CA then transmits the certification data
to HUD via modem, disk or tape.
HUD receives the certification data and checks the format of the
transmission. Physically acceptable records are validated for
conformation to HUD programmatic rules. Discrepancy records are
generated for data that does not conform to programmatic rules.
Discrepancy records are sent back to the CA, which are in turn
forwarded to the project. (A future enhancement of the TRACS software
will allow discrepancy records to be sent simultaneously to the CA and
the project if desired.) Invalid certifications are corrected as
required by the project and resubmitted to HUD by the CA.
There are a number of sources available to CAs that provide
guidance:
The HUD-50059 Information Packet. This is also known as the Yellow
Book. The HUD-50059 Information Packet contains general information on
TRACS, data collection and processing, data transmission media, error
correction, and the Monthly Activity Transmission (MAT) User Guide,
which details the required format--record layouts and field
characteristics--for all TRACS data transmitted to and from HUD.
The Release 1.1 Entity and Attribute Definition Report Reference.
This contains detailed information about the data gathered by TRACS and
the edits performed on the data to ensure that it is valid. (This
information is technical and would be most suited for use by ADP
professionals.)
The PC SprintMail Electronic Information Packet. This is also known
as the Blue Book. The PC SprintMail Electronic Information Packet
contains information regarding electronic submission of certification
data to HUD, using SprintMail software. The Packet covers hardware
requirements, configuration information, installation instructions, and
operating instructions for PC SprintMail. The PC SprintMail software is
available from the TRACS Central Facility at 1-800-767-7558.
Understanding the TRACS Automation Rule. This contains information
on the programs covered by the rule, effective dates for the rule,
transmission of retroactive data, options for submitting data
electronically, the costs of automation, and the data to be transmitted
to HUD.
TRACS Industry Bulletin Board. The Bulletin Board provides a format
for open communication between HUD and third parties with an active
interest in TRACS. Questions and observations of a technical or
programmatic nature can be posted on the Bulletin Board, via modem, at
202-755-2189. For more information, CAs should consult the TRACS BBS
User Guide.
The TRACS Central Facility. The TRACS Central Facility can provide
guidance on the data transmittal process and assistance in correction
of errors in the physical composition of transmissions. All of the
documents referenced here are available from the TRACS Central
Facility. The TRACS Central Facility can be contacted at 1-800-767-
7588.
The HUD-50059 Information Packet, the Release 1.1 Entity and
Attribute Definition Report Reference, and the PC SprintMail Electronic
Information Packet are available from the TRACS Central Facility at 1-
800-767-7588. In addition, many software vendors are now developing and
offering products that automate the preparation of certification data
in the prescribed format. CAs may call either or both the National
Leased Housing Association (NLHA) at 202-785-8888 and the National
Assisted Housing Management Association (NAHMA) at 703-683-8630 or
other associations related to the management of assisted housing to
obtain a listing of software developers.
Comment: Although owners and agents may voluntarily participate by
submitting data electronically to CA after December 1993, the CAs who
are not automated will not be able to process these payment requests.
Response: CAs will need to purchase or modify their software to be
ready to receive and transmit data electronically when this rule
becomes effective. After the CAs are automated they must notify
projects under their jurisdiction as to when and how they are to begin
electronic submission.
Comment: HUD should provide CAs with in-house TRACS edit programs
that would allow the Contract Administrators to correct all field and
format errors before forwarding to the HUD database. This edit program
will enhance the accuracy of the housing assistance payments.
Response: The TRACS team has created several documents to assist
data submitters in preparation of error-free transmissions. See above
listing.
Comment: Section 208.108(c) requires CAs to transmit data
electronically to HUD in a HUD specified format. To date, the CAs have
not been advised of the format to be utilized.
Response: The HUD specified format is detailed in the Yellow Book.
See listing of sources of information on TRACS.
Comment: In order to build the contemplated HUD database, it does
not appear necessary to collect all tenant data for the previous twelve
months. Rather collection of the most recent tenant certification from
form HUD 50059 should provide all the necessary data.
Response: Data is requested for subsidized tenants who are
currently in occupancy and have not had their assistance terminated.
The transmission of retroactive data is to include only the tenant's
most recent ``complete certification'' (move-in, initial certification,
interim recertification). When the most recent certification for a
tenant is a partial certification (gross rent change or unit transfer),
both the complete and partial certifications should be transmitted so
that HUD's automated system can establish a complete record for the
household.
Sections 208.108(a) through (d) have been revised to reflect this
clarification, both for the projects administered by CAs and those
directly administered by HUD.
Comment: Current HUD handbook provisions require the CA to review
supporting documentation for Special Claims before approving the claim
for payment. Special claims are submitted for billing only after this
review. The Interim Rule (Sec. 208.108(e)) does not distinguish between
Special Claims that have been reviewed and approved for payment from
those that have just been received from project owners. The Final Rule
should clearly indicate that only previously approved Special Claims
should be submitted electronically to the CA.
Response: Automation of Special Claims is contained in a future
system release, and the design has not been fully developed at this
time. In instances where HUD is the contract administrator, current
plans call for electronic transmission of detailed data contained in
the Section 8 Special Claims Worksheets (Forms 52671A-D), prior to
approval by the field office. There would be a concurrent manual
submission of supporting documentation as required in Handbook
Sec. 4350.3, Chapter 6. Special Claims would not be submitted for
billing until after the field office has approved the claim and so
noted it in the system. The billing data is contained in the Housing
Owner's Certification and Application for Housing Assistance Payments
(Form 52670), and Schedule of Section 8 Special Claims (Form 52670A
Part 2). The system will be designed to verify that approval has been
granted when special claims are billed.
Where a contract administrator other than HUD has the
responsibility for reviewing and approving special claims, it is
anticipated that there will be a similar process by which the contract
administrator will review the documentation and note the approval in
the system. Again, the system will verify that approval has been
granted by the contract administrator. More information on this
function will be provided when the system design is completed.
Comment: HUD should reimburse CAs equitably for TRACS-related
expenses.
Response: CAs receive an administrative fee as reimbursement for
administering contracts. It is the Department's opinion that once CAs
are automated, the actual costs of doing business will be reduced,
since CAs will be able to reduce their clerical and administrative
costs. The cost of administering contracts will be higher with the
onset of automation, but the actual costs will be reduced over time,
which will have a balancing effect on the overall cost of administering
the contracts. Moreover, CAs will need to automate various other
functions they perform just to stay current with technological
improvements in management practices.
Comment: HUD should allow for a trial operating period, so the
system can be tested and any difficulties resolved.
Response: Undoubtedly, once CAs start transmitting, there will be
some difficulties. These will be tested and resolved during those
initial months of transmission.
Comment: Requiring some projects, particularly small projects
located in remote areas or projects where an owner/manager only owns
one or two projects, to automate and electronically transmit the
required data to HUD will place unnecessary burden on them. HUD should
allow CAs to accept hard copy information directly from these projects,
either by processing these projects' data forms or by operating as
service bureaus.
Response: Section 208.112(e) of the current rule permits owners of
small projects covered by the rule either to automate or to contract
with a service bureau to perform the automated transmission function.
This rule revises Sec. 208.112(e) to extend the same option of using a
service bureau to State agencies administering only one project. Even
though the Department would prefer for each State agency to obtain its
own hardware and software, this rule gives greater latitude to State
agencies administering only one project (approximately 100 units) in
recognition of their concern that automation of their operations might
not be cost effective.
IV. Other Matters
A. Regulatory Review
This rule was reviewed by the Office of Management and Budget (OMB)
under Executive Order 12866 on Regulatory Planning and Review, issued
by the President on September 30, 1993. Any changes made in this rule
subsequent to its submission to OMB are identified in the docket file,
which is available for public inspection in the office of the
Department's Rules Docket Clerk, room 10276, 451 Seventh Street SW.,
Washington, DC.
B. Environmental Impact
In accordance with 40 CFR 1508.4 of the regulations of the Council
on Environmental Quality and 24 CFR 50.20(k) of the HUD regulations,
the policies and procedures contained in this rule relate only to HUD
administrative procedures and, therefore, are categorically excluded
from the requirements of the National Environmental Policy Act.
C. Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive order 12612, Federalism, has determined that the policies
contained in this rule will not have substantial direct effects on
states or their political subdivisions, or the relationship between the
Federal government and the states, or on the distribution of power and
responsibilities among the various levels of government. Specifically,
this rule is directed to owners of multifamily housing projects and
State housing and finance agencies that serve as contract
administrators for HUD, and will not impinge upon the general
relationship between the Federal Government and State and local
governments. As a result, the rule is not subject to review under the
order.
D. Executive Order 12606, the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule does not have
potential for significant impact on family formation, maintenance, and
general well-being, and, thus, is not subject to review under the
order. No significant change in existing HUD policies or programs will
result from promulgation of this rule, as those policies and programs
relate to family concerns.
E. Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing
certifies that this rule will not have a significant economic impact on
a substantial number of small entities. Because this rule changes the
way in which the data is transmitted to HUD, and all costs associated
with implementation of the electronic transmission will be considered
project operating costs, the rule is not expected to have a significant
economic impact.
F. Regulatory Agenda
This rule was listed as item number 1601 under the Office of
Housing in the Department's Semiannual Agenda of Regulations published
on April 25, 1994 (59 FR 20424, 20451) under Executive Order 12866 and
the Regulatory Flexibility Act.
G. Catalog
The Catalog of Federal Domestic Assistance numbers for the programs
affected by this rule are 14.103, 14.149, 14.157, 14.181, and 14.182.
List of Subjects in 24 CFR Part 208
Computer technology--automatic data processing, Data processing,
Electronic data processing, Subsidies--grant programs, Rent subsidies.
Accordingly, chapter II of title 24 of the Code of Federal
Regulations is amended as follows:
PART 208--ELECTRONIC TRANSMISSION OF REQUIRED DATA FOR
CERTIFICATION AND RECERTIFICATION AND SUBSIDY BILLING PROCEDURES
FOR MULTIFAMILY SUBSIDIZED PROJECTS
1. The authority citation for part 208 continues to read as
follows:
Authority: 12 U.S.C. 1701s, 1715l, 1715z-1; 42 U.S.C. 1437f and
3535(d).
2. Section 208.108 is amended by:
a. Adding section headings at the beginning of paragraphs (a), (b),
and (e);
b. Adding two sentences to the end of paragraphs (a) and (b)(3);
and
c. Revising paragraphs (c) and (d), to read as follows:
Sec. 208.108 Requirements.
(a) Projects specified in Sec. 208.104(a) that are automated. * * *
Data collected for the 12 months preceding March 21, 1994, is to
include only the tenant's most recent ``complete certification'' (move-
in, initial certification, interim recertification, or annual
recertification). When the most recent certification for a tenant is a
partial certification (gross rent change, unit transfer, or
correction), both the complete and partial certifications must be
transmitted.
(b) Projects specified in Sec. 208.104(a) that are not automated.
(3) * * *
Data collected for the 12 months preceding May 20, 1994, is to
include only the tenant's most recent ``complete certification'' (move-
in, initial certification, interim recertification, or annual
recertification). When the most recent certification for a tenant is a
partial certification (gross rent change, unit transfer, or
correction), both the complete and partial certifications must be
transmitted.
(c) Projects specified in Sec. 208.104(b). (1) Project owners.
Project owners of applicable projects under Sec. 208.104(b) must
electronically transmit data for certification, recertification and
subsidy billing procedures in a HUD specified format to the contract
administrator. These project owners are required to transmit data
collected for the 12 months preceding September 23, 1994, as well as
data collected on or after that date. Data collected for the 12 months
preceding September 23, 1994 is to include only the tenant's most
recent ``complete certification'' (move-in, initial certification,
interim recertification, or annual recertification). When the most
recent certification for a tenant is a partial certification (gross
rent change, unit transfer, or correction), both the complete and
partial certifications must be transmitted.
(2) Contract administrators. State housing finance and development
agencies and Public Housing Agencies that serve as the subsidy contract
administrator must accept the electronic transmission of the HUD forms
listed below in Sec. 208.108(e) from the projects they administer, and
electronically transmit that data to HUD in a HUD specified format
after appropriate review and correction of the data.
(d) Projects specified in Sec. 208.104(c). Project owners of
applicable projects under Sec. 208.104(c) must electronically transmit
data for certification, recertification and subsidy billing procedures
to HUD in a HUD specified format. In the case of partially assisted
section 202 projects, owners are required to electronically transmit
data only for subsidized units. These project owners are required to
transmit data collected for the 12 months preceding the effective date
of the rule, as well as data collected on or after the effective date
of the rule. Data collected for the 12 months preceding September 23,
1994 is to include only the tenant's most recent ``complete
certification'' (move-in, initial certification, interim
recertification, or annual recertification). When the most recent
certification for a tenant is a partial certification (gross rent
change, unit transfer, or correction), both the complete and partial
certifications must be transmitted.
(e) Data to be transmitted. * * *
3. In Sec. 208.112, paragraph (e) is revised to read as follows:
Sec. 208.112 Cost.
* * * * *
(e) Owners of smaller projects or partially assisted projects with
few subsidized units and CAs that administer no more than one project
that determine that the purchase of hardware and/or software is not
cost effective may contract out the electronic data transmission
function to organizations that provide such services, including, but
not limited to the following organizations: local management agents,
local management associations and management agents with centralized
facilities. Owners of multiple projects may centralize the electronic
transmission function. However, owners that contract out or centralize
the electronic transmission function are required to retain the ability
to monitor the day-to-day operations of the project at the project site
and be able to demonstrate that ability to the relevant HUD field
office.
Dated: August 15, 1994.
Nicolas Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 94-20656 Filed 8-23-94; 8:45 am]
BILLING CODE 4210-27-P