[Federal Register Volume 64, Number 212 (Wednesday, November 3, 1999)]
[Rules and Regulations]
[Pages 59620-59622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28790]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 982

[Docket No. FR-4428-F-05]
RIN 2577-AB91


Housing Choice Voucher Program; Amendment

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

ACTION: Final rule.

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SUMMARY: On October 21, 1999, HUD published a final rule implementing 
the statutory merger of the Section 8 tenant-based certificate and 
voucher programs. This rule makes an amendment to the October 21, 1998 
final rule concerning the 40 percent of adjusted monthly income initial 
rent burden limit. HUD is making this change based upon its 
reconsideration of the statutory language and legislative history 
regarding this requirement.

DATES: Effective Date: December 3, 1999.

FOR FURTHER INFORMATION CONTACT: Gerald J. Benoit, Office of Public and 
Indian Housing, Department of Housing and Urban Development, Room 4210, 
451 Seventh Street, SW, Washington, DC 20410; telephone (202) 708-0477. 
(This is not a toll-free number.) Hearing or speech-impaired 
individuals may access this number via TTY by calling

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the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 21, 1999 (64 FR 56894), HUD published a final rule 
implementing the statutory merger of the Section 8 tenant-based 
certificate and voucher programs. The October 21, 1999 final rule 
implemented section 545 of the Quality Housing and Work Responsibility 
Act of 1998 (Title V of the FY 1999 HUD Appropriations Act; Pub. L. 
105-276, approved October 21, 1998) (referred to as the ``Public 
Housing Reform Act''). The new tenant-based program (known as the 
Housing Choice Voucher program) has features of the previously 
authorized certificate and voucher programs, plus new features. 
Interested persons should consult the preamble to the October 21, 1999 
final rule for additional details. This final rule makes an amendment 
to new Housing Choice Voucher Program regulations at 24 CFR part 982.
    The Public Housing Reform Act provides that at the time a family 
initially receives tenant based assistance under the Housing Choice 
Voucher Program with respect to any dwelling unit:

    [T]he total amount that a family may be required to pay for rent 
may not exceed 40 percent of the monthly adjusted income of the 
family. (42 U.S.C. 1437f(o)(3), as amended by section 545 of the 
Public Housing Reform Act)

    This statutory provision is currently implemented by Sec. 982.508.
    This final rule provides that the initial rent burden restriction 
at Sec. 982.508 applies only to a family who leases a unit at a gross 
rent which exceeds the applicable payment standard for the family. This 
final rule provides that at the time the Public Housing Agency (PHA) 
approves a tenancy for initial occupancy of a dwelling unit by a family 
with assistance under the voucher program, and where the gross rent of 
the unit exceeds the applicable payment standard for the family, the 
family share of gross rent must not exceed 40 percent of the family's 
monthly adjusted income. Under this final rule, the initial rent burden 
restriction will not apply to a family that rents a unit for a gross 
rent (rent to owner plus tenant-paid utilities) at or below the payment 
standard for the family.
    In the Housing Choice Voucher Program, the monthly assistance 
payment for a family that rents for a gross rent below the payment 
standard for the family is the gross rent minus the total tenant 
payment (TTP), as computed by a statutory formula. The TTP is the 
highest of:
    1. 30 percent of monthly adjusted income;
    2. 10 percent of monthly income;
    3. In ``as-paid'' States (where the welfare housing grant is 
adjusted in accordance with actual housing cost), the portion of 
welfare assistance designated for housing; or
    4. The PHA's minimum rent (from $0 to $50, as determined by the 
PHA).
    Under the last three branches of this formula, the TTP (which is 
not covered by the voucher subsidy payment) for a family may exceed 40 
percent of adjusted monthly income. HUD previously advised that such 
families may not rent a unit for a gross rent that exceeds the 40 
percent initial rent burden limit.
    On reconsideration of the statute and legislative history, HUD 
believes that the statute is only intended to place a restriction on 
the rent burden of a family who chooses to lease a unit for a rent that 
exceeds the payment standard applicable to the family.
    The exact language later enacted as the initial rent burden 
restriction in the Public Housing Reform Act originated in the 
predecessor of the Public Housing Reform Act, as reported by the Senate 
Banking Committee in May, 1997 (Sen. Report 105-21, May 23, 1997). The 
Committee report specifies that the 40 percent rent burden limitation 
applies ``if the initial rent on a unit exceeds the payment standard'' 
(Sen. Report 105-21, page 34; see also, page 35). The Committee report 
also states that ``if the tenant wishes to lease a unit where the 
initial rent on a unit exceeds the payment standard'' tenants may pay 
the difference up to 40 percent of adjusted income (Sen. Report 105-21, 
page 56). The Committee report clearly indicates that the 40 percent 
rent burden limitation is not intended to apply for a family that rents 
below the payment standard, and whose statutory total tenant payment 
exceeds 40 percent of adjusted income.
    Although this final rule will not take effect until December 3, 
1999, PHAs are advised that the amendment made by this final rule 
better reflects the intent of the Congress in enacting the ``40 percent 
rent burden limit.'' PHAs should, therefore, immediately begin to 
conform their practices and procedures to the language of Sec. 982.508, 
as amended by this final rule. In the meantime, pending the effective 
date of this rule, HUD does not anticipate imposing sanctions against 
PHAs that rely on the course set out here as a ``safe harbor.''

II. Justification for Final Rulemaking

    In general, HUD publishes a rule for public comment before issuing 
a rule for effect, in accordance with its own regulations on rulemaking 
at 24 CFR part 10. Part 10, however, does provide for exceptions from 
that general rule where HUD finds good cause to omit advance notice and 
public participation. The good cause requirement is satisfied when the 
prior public procedure is ``impracticable, unnecessary, or contrary to 
the public interest'' (24 CFR 10.1). HUD finds that good cause exists 
to publish this rule for effect without first soliciting public 
comment, in that prior public procedure would be contrary to the public 
interest. This final rule amends the Housing Choice Voucher Program 
regulations at 24 CFR part 982 to more accurately reflect the 
Congressional intent regarding the ``40 percent initial rent burden.'' 
Upon reconsideration of the relevant statutory language and legislative 
history, HUD has determined that its initial interpretation (codified 
at Sec. 982.505) may contradict the intent of the Congress in enacting 
this provision. It is necessary for this rule not to be delayed to 
solicit public comments in order to correct any potential confusion on 
the part of PHAs and assisted families regarding the scope and 
applicability of this statutory requirement. Accordingly, HUD is 
publishing this rule for effect without prior public participation.

III. Findings and Certifications

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made on HUD's May 14, 1999 interim rule implementing the statutory 
merger of the tenant-based Section 8 certificate and voucher programs, 
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. 4223). That Finding remains applicable to this final rule and is 
available for public inspection between 7:30 a.m. and 5:30 p.m. 
weekdays in the Office of the Rules Docket Clerk, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC.

Unfunded Mandates Reform Act

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

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local, or tribal governments or the private sector within the meaning 
of Unfunded Mandates Reform Act of 1995.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) (the RFA), has reviewed and approved this final rule and 
in so doing certifies that this rule would not have a significant 
economic impact on a substantial number of small entities. The final 
rule is exclusively concerned with public housing agencies that 
administer tenant-based housing assistance under Section 8 of the 
United States Housing Act of 1937. Specifically, the final rule would 
establish requirements governing tenant-based assistance for an 
eligible family. The final regulatory amendment would not change the 
amount of funding available under the Section 8 voucher program. 
Accordingly, the economic impact of this rule will not be significant, 
and it will not affect a substantial number of small entities.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This final rule does not have 
federalism implications and does not impose substantial direct 
compliance costs on State and local governments or preempt State law 
within the meaning of the Executive Order.

Catalog of Domestic Assistance Numbers

    The Catalog of Domestic Assistance numbers for the programs 
affected by this final rule are 14.855 and 14.85.

List of Subjects in 24 CFR Part 982

    Grant programs--housing and community development, Housing, Rent 
subsidies.
    For the reasons described in the preamble, HUD is amending 24 CFR 
part 982 as follows:

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

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

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

    2. Revise Sec. 982.305(a)(5) to read as follows:


Sec. 982.305  PHA approval of assisted tenancy.

    (a) * * *
    (5) At the time a family initially receives tenant-based assistance 
for occupancy of a dwelling unit, and where the gross rent of the unit 
exceeds the applicable payment standard for the family, the family 
share does not exceed 40 percent of the family's monthly adjusted 
income.
* * * * *
    3. Revise Sec. 982.508 to read as follows:


Sec. 982.508  Maximum family share at initial occupancy.

    At the time the PHA approves a tenancy for initial occupancy of a 
dwelling unit by a family with tenant-based assistance under the 
program, and where the gross rent of the unit exceeds the applicable 
payment standard for the family, the family share must not exceed 40 
percent of the family's adjusted monthly income. The determination of 
adjusted monthly income must be based on verification information 
received by the PHA no earlier than 60 days before the PHA issues a 
voucher to the family.

    Dated: October 28, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-28790 Filed 11-1-99; 8:51 am]
BILLING CODE 4210-33-U