[Federal Register Volume 73, Number 227 (Monday, November 24, 2008)]
[Notices]
[Pages 71037-71040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-27871]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5242-N-01]


The Housing and Economic Recovery Act of 2008 Applicability to 
HUD Public Housing, Section 8 Tenant-Based Voucher and Section 8 
Project-Based Voucher Programs

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

ACTION: Notice.

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SUMMARY: This notice provides information about the applicability to 
HUD's public housing and Section 8 tenant-based and project-based 
voucher programs of certain provisions of the Housing and Economic 
Recovery Act of 2008. This notice provides an overview of key 
provisions that affect HUD's public housing programs, identifies those 
provisions that are self-implementing and require no action on the part 
of HUD for participants to commence taking action to be in compliance, 
those provisions that require implementing regulations on the part of 
HUD, and advises of efforts underway within HUD to further facilitate 
compliance with this new law, including rules and guidance that as may 
be necessary or appropriate. Provisions of this new law that affect 
project-based assisted housing programs administered by HUD's Office of 
Housing are also identified. This notice also solicits comments, 
questions, or proposals that HUD should take into consideration in 
developing more detailed guidance or rules to implement those 
provisions of the new law that require more detailed guidance or 
rulemaking.

DATES: Comment Due Date: December 24, 2008.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, 451 7th Street, SW., Room 10276, Department of Housing and 
Urban Development, Washington, DC 20410-0500. Communications must refer 
to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street, SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule.


[[Page 71038]]


    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number through TTY by calling the Federal Information 
Relay Service at 800-877-8339. Copies of all comments submitted are 
available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For information about HUD's Public 
Housing and Voucher programs, contact David Vargas, Associate Deputy 
Assistant Secretary for Public Housing and Voucher Programs, Office of 
Public and Indian Housing, Room 4206, telephone number 202-708-2815. 
For information about the HUD's Capital Fund program, please contact 
Jeffrey Riddel, Director, Capital Program Division, Office of Public 
and Indian Housing, Room 4130, telephone number 202-401-8812. The 
address for both offices is the Department of Housing and Urban 
Development, 451 7th Street, SW., Washington, DC 20410. The listed 
telephone numbers are not toll-free numbers. Persons with hearing or 
speech impairments may access this number through TTY by calling the 
toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Overview

    The Housing and Economic Recovery Act of 2008 (Pub. L. 110-289, 122 
Stat. 2654, approved July 30, 2008) (HERA) made a number of changes to 
the U.S. Housing Act of 1937 (42 U.S.C. 1437 et seq.) (1937 Act) that 
affect PIH programs, including changes to the definition of income, 
which also affect the Office of Housing's project-based assistance 
programs; the public housing agency (PHA) plan; the voucher program; 
the capital and operating funds with respect to emergency funds; and 
establishing a collection of information on tenants in tax credit 
projects. This notice identifies those changes and provides information 
to program participants on how those changes affect HUD's public 
housing programs.

II. HERA Amendments to the 1937 Act

    Under the 1937 Act, HUD promotes the goal of providing decent and 
affordable housing for all citizens by providing funds for housing 
assistance. These funds directly assist PHAs to provide affordable 
publicly owned housing and also subsidize affordable privately owned 
housing. HERA makes changes that affect both public and private 
affordable housing, as described in this notice.

A. Definition of Annual Income

    Section 2608 of Title VI of Division B of HERA amends the 
definition of ``annual income'' in section 3(b)(4) of the 1937 Act to 
exclude any deferred Department of Veterans Affairs (VA) disability 
benefits that are received in a lump sum amount or in prospective 
monthly amounts from the definition of income. Accordingly, as of the 
effective date of HERA, July, 30, 2008, such benefits are not to be 
included for purposes of determining the annual income of an applicant 
for or recipient of benefits under the 1937 Act. This income exclusion 
is similar to the existing exclusion for deferred periodic amounts from 
supplemental security income and Social Security benefits under 24 CFR 
5.609(c)(14). Although the full amount of periodic Social Security 
payments is included in annual income pursuant to 24 CFR 5.609(b)(4), 
the deferred amount resulting from the delayed start of the periodic 
payment is not included in annual income. In the same way, the full 
amount of periodic VA disability benefit payments will continue to be 
included in annual income pursuant to 24 CFR 5.609(b)(4), but the 
deferred amount resulting from the delayed start of the disability 
payments will not be included in annual income. A payment qualifies as 
a VA disability benefit if it is identified as a disability benefit in 
the VA benefit award letter, regardless of whether or not the family 
member that is the beneficiary of the award would qualify as a person 
with disabilities under HUD's regulations. For existing residents or 
tenants, including those residing in project-based assisted housing 
administered by HUD's Office of Housing, the new exclusion for deferred 
payments will be made applicable at the time of annual recertification 
of income, or at interim examination. This provision is self-
implementing without further regulatory action by HUD. HUD will later 
publish a conforming rule to include this item with the exclusion from 
income for deferred Social Security benefits at 24 CFR 5.609(c)(14).

B. Qualified Public Housing Agencies

    Section 2702 of Title VII of Division B of HERA amends section 
5A(b) of the 1937 Act by establishing ``qualified public housing 
agencies,'' a category of PHAs that are provided substantial paperwork 
relief, primarily with respect to the PHA Annual Plan requirements in 
section 5(A)(b) of the 1937 Act. The requirement for preparation and 
submission of a 5-year plan pursuant to section 5A(a) of the 1937 Act 
is not affected.
    A PHA is a ``qualified public housing agency'' if the PHA is not 
designated as a troubled PHA, does not have a failing score under the 
Section 8 Management Assessment Program during the prior 12 months, and 
if the sum of the public housing units administered by the agency and 
the section 8(o) vouchers authorized under the PHA's Consolidated 
Annual Contributions Contract, is 550 or less. The paperwork relief to 
qualified PHAs, as provided in section 2702, is effective as of the 
effective date of HERA, July 30, 2008, and will be made applicable to 
such PHAs commencing with the next date of Annual Plan submission.
    HUD will make conforming changes to its regulations at 24 CFR part 
903 and issue guidance, as may be determined necessary, to further 
address qualified PHAs, including the following statutory provisions 
that are applicable to qualified PHAs. The statutory provisions 
applicable to qualified PHAs are self-implementing.
    1. Public Housing Agency (PHA) Plans. New section 5A(b)(3)(A) of 
the 1937Act excludes qualified PHAs from the requirement to prepare and 
submit an annual PHA plan.
    2. Civil Rights Certification. Even though an annual PHA plan is 
not required of a qualified PHA, section 5A(b)(3)(B) maintains the 
requirement for such agencies to prepare and submit the annual civil 
rights certification provided for in section 5A(d)(16) of the 1937 Act. 
Accordingly, qualified PHAs must continue to submit their civil rights 
certifications to HUD for review.
    3. Resident Advisory Board. A new section 5A(d)(4) is added to 
affirm that qualified PHAs are still subject to the requirement to 
establish one or more resident advisory boards. A requirement is also 
added to consult with, and consider the recommendations of, the 
resident advisory board at the annual public hearing required under new 
section 5A(f)(5), regarding any changes to the goals, objectives, and 
policies of the PHA.
    4. Annual Public Meeting. As noted in paragraph B.3. of this 
notice, new

[[Page 71039]]

section 5A(f)(5) of the 1937 Act requires a qualified PHA to conduct 
annually a public hearing to discuss any changes to the goals, 
objectives, and policies of the agency; and to invite public comment 
regarding such changes. The PHA must publish a notice of the hearing 
and relevant information, and make such information available for 
inspection at its principal office, at least 45 days before the date 
that the hearing is held.

C. Section 9 Emergency Set-Aside

    Section 2804 of Title VIII of Division B of HERA strikes section 
9(k) of the 1937 Act, which is entitled ``Emergency Reserve and Use of 
Amounts.'' The removal of section 9(k) eliminates the requirement 
imposed on HUD to set aside, in each fiscal year, not more than two 
percent of the total amount of public housing operating funds and 
capital funds made available each fiscal year through appropriations 
acts for emergencies and other disasters and housing needs resulting 
from any settlement of litigation. Section 9(k) was applicable to and 
imposed an obligation on HUD.

D. Section 8 Tenant Based Assistance: Housing Choice Voucher Program--
Rent for Tax Credit Units

    Subtitle B of Title VIII of HERA (sections 2831 through 2835) makes 
a number of changes to coordinate tax incentives for private housing 
and federal housing programs, including the Section 8 voucher program. 
As one of these changes, the procedure for determining the rent 
reasonableness standard applicable to dwelling units receiving low-
income housing tax credits (LIHTC) or assistance under the HOME 
Investments Partnership (HOME) program is streamlined by section 
2835(a)(2) of HERA, which adds section 8(o)(10)(F) to the 1937 Act.
    A rent comparison with unassisted local market units is not 
required for such dwelling units if the rent does not exceed the rent 
for other LIHTC or HOME assisted units in the project that are not 
occupied by families with tenant based assistance. The rent shall be 
considered reasonable if it does not exceed the greater of (1) the rent 
for other LIHTC or HOME assisted units in the project not occupied by 
families with tenant based assistance, or (2) the payment standard 
established by a PHA for a unit of the size involved. This provision is 
effective and may be used commencing with the date of enactment of 
HERA, July 30, 2008. Accordingly, this provision is self-implementing. 
HUD will make conforming changes to its regulations at 24 CFR 982.507 
to reflect this statutory provision.

E. Section 8 Project Based Voucher Program

    Section 2835(a)(1) of HERA makes several changes to the Section 8 
project-based voucher (PBV) program under section 8(o)(13) of the 1937 
Act (42 U.S.C. 1437f(o)(13)) and 24 CFR part 983 of HUD's regulations, 
as follows:
    1. Applicability of 25 Percent Cap on Number of PBV Units. Prior to 
amendment by section 2835(a)(1)(A) of HERA, PBV assistance was limited 
to 25 percent of the units in a building. This cap in section 
8(o)(13)(D)(i) of the 1937 Act is amended by replacing the term 
``building'' with the term ``project,'' defined to mean a single 
building, multiple contiguous buildings, or multiple buildings on 
contiguous parcels of land. HUD will make conforming changes to its 
regulations at 24 CFR 983.56 to reflect this statutory provision. 
Accordingly, this provision is self-implementing. HUD specifically 
requests comments on the impact on deconcentration efforts concerning 
the change in terms from ``building'' to ``project'' as discussed in 
this Section II.E.1 of this notice.
    2. Term of Initial Housing Assistance Payment (HAP) Contract. The 
maximum term of the initial HAP contract provided in section 
8(o)(13)(F) of the 1937 Act is extended from 10 to 15 years by section 
2835(a)(1)(B) of HERA. HUD considers this provision to be available for 
use commencing with the date of enactment of HERA, July 30, 2008. 
Accordingly, this provision is self-implementing. Conforming changes 
will be made to HUD's regulations to reflect the longer permissible 
term of the initial HAP contract.
    3. Extension of initial term. Section 8(o)(13)(G) of the 1937 Act 
is amended by HERA section 2835(a)(1)(C) to specify the maximum term 
for an extension of the HAP contract as 15 years, at the election of 
the PHA and owner. A PHA may agree to enter into an extension at the 
time of the initial HAP contract or any time before expiration of the 
contract. This provision may be utilized commencing with the date of 
enactment of HERA, July 30, 2008. Although this provision is self-
implementing, such contract or contract extension may not exceed 15 
years cumulatively. Additionally, a PHA must still determine that the 
extension of the contract is appropriate to achieve long-term 
affordability of the housing or to expand housing opportunities.
    HUD will make conforming changes to its regulations, as well as any 
additional changes related to contract extensions that may be necessary 
for the orderly administration of the PBV program.
    4. Rent calculation. Language is added by section 2835(a)(1)(D) of 
HERA to section 8(o)(13)(H) of the 1937 Act to permit a PHA to use the 
higher section 8 rent for a tax credit unit if the LIHTC rent is less 
than the amount that would be permitted under section 8. The rent 
reasonableness of section 8(o)(10)(A) must also continue to be met.
    This provision may be utilized commencing with the date of 
enactment of HERA, July 30, 2008. Accordingly, this provision is self-
implementing. A conforming change to HUD's regulations will follow.
    5. Rent adjustments. Section 2835(a)(1)(E) of HERA amends section 
8(o)(13)(I) of the 1937 Act to make permissive a HAP contract provision 
that the maximum rent on a unit shall not be less than the initial 
rent. Because this provision is permissive, and not mandatory, HUD is 
considering parameters for when its use would be appropriate. 
Accordingly, this provision is not self-implementing. HUD will finalize 
its policy on this provision through rulemaking.
    6. Use of PBV in Cooperative Housing and Elevator Buildings. A new 
section 8(o)(13)(L) is added by section 2835(a)(1)(F) of HERA to allow 
PHAs to enter into HAP contracts with respect to units in cooperative 
housing and in high-rise elevator projects. The authority for units in 
high-rise elevator projects specifically states it may be exercised 
without review and approval by HUD. HUD considers section 8(o)(13)(L) 
to be effective commencing with the date of enactment of HERA, July 30, 
2008. Accordingly, this provision is self-implementing. HUD will make 
any necessary conforming changes to its regulations.
    7. Reviews. Section 2835(a)(1)(F) of HERA also provides relief from 
certain review requirements by adding section 8(o)(13)(M) to the 1937 
Act. New section 8(o)(13)(M)(i) removes the requirement to conduct a 
subsidy layering review in the case of a HAP contract for an existing 
structure or if such a review has been conducted by the applicable 
state or local agency. This provision is self-implementing for existing 
housing. The provision, however, is not self-implementing for newly 
constructed or rehabilitated housing, HUD will be issuing guidance on 
how such reviews must be conducted for newly constructed or 
rehabilitated housing.
    Section 8(o)(13)(M)(ii) relieves a PHA from undertaking an 
environmental review for an existing structure, except to the extent 
such a review is otherwise required by law or regulation. Under 24

[[Page 71040]]

CFR part 58, federal environmental reviews are undertaken by a 
Responsible Entities (usually units of general local governments), not 
PHAs. In addition, any federally required environmental review is 
``required by law or regulation,'' so there do not appear to be any 
federally required environmental reviews that would be eliminated by 
this provision.

F. Collection of Information on Tenants in Tax Credit Projects

    HERA section 2835(d) adds a new section 36 to the 1937 Act to 
require state agencies administering LIHTC projects to furnish HUD with 
information on tenants residing in such projects. This provision is 
also applicable to project-based assisted housing programs administered 
by HUD's Office of Housing. HUD must also establish standards and 
definitions for the information to be collected. HUD will implement 
this provision through a notice prepared in accordance with the 
Paperwork Reduction Act and to be published in the Federal Register.

    Dated: November 18, 2008.
Paula O. Blunt,
General Deputy Assistant Secretary for Public and Indian Housing.
 [FR Doc. E8-27871 Filed 11-21-08; 8:45 am]
BILLING CODE 4210-67-P