[Federal Register Volume 84, Number 31 (Thursday, February 14, 2019)]
[Notices]
[Pages 4097-4099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02359]


-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6115-N-01]


Section 209 of the Economic Growth, Regulatory Relief, and 
Consumer Protection Act: Initial Guidance

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

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: On May 24, 2018, President Trump signed into law the Economic 
Growth, Regulatory Relief, and Consumer Protection Act (the ``Economic 
Growth Act''). Section 209 of the Economic Growth Act added section 38 
to the United States Housing Act of 1937 and makes several amendments 
pertaining to small public housing agencies (PHAs) that administer 550 
or fewer combined public housing units and vouchers under section 8(o) 
that predominantly operate in a rural area. Section 209 also requires 
HUD to develop new information systems for public housing consortia, 
and to make shared waiting list software available for voluntary use by 
multiple PHAs and owners of multifamily properties (hereinafter 
referred to in this Notice as, owners) receiving HUD assistance. 
Certain statutory amendments made by section 209 became effective 60 
days after enactment (July 23, 2018). However, while effective, the 
provisions require rulemaking or guidance for implementation. The 
guidance in this Notice, read together with the statutory language, is 
intended to aid HUD program participants and the public generally in 
understanding the reasons for deferred action with respect to specific 
statutory provisions. In addition, HUD seeks comment from the public on 
appropriate implementation of the section 209 provisions.

DATES: Comments Due Date: April 15, 2019.

ADDRESSES: Interested persons are invited to submit comments regarding 
this Notice. All comments must refer to the proposal by name and docket 
number. There are two methods for submitting public comments:
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may also 
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 website can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    Note: To receive consideration as public comments, comments must be 
submitted through one of the methods specified above. Again, all 
submissions must refer to the docket number and title of this Notice.
    No Facsimiled Comments. Facsimiled (faxed) comments are not 
acceptable.
    Public Inspection of Public Comments. Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov. In addition, all properly submitted comments and 
communications submitted to HUD will be available for public inspection 
and copying between 8 a.m. and 5 p.m., weekdays, at the above address. 
Due to security measures at the HUD Headquarters building, an advance 
appointment to review the public comments must be scheduled by calling 
the Regulations Division at 202-708-3055 (this is not a toll-free 
number). Individuals with speech or hearing impairments may access this 
number via TTY by calling the Federal Relay Service at 800-877-8339 
(this is a toll-free number).

FOR FURTHER INFORMATION CONTACT: Harold Katsura, Program Analyst, 
Office of Policy, Program, and Legislative Initiatives, Office of 
Public and Indian Housing, Department of Housing and Urban Development, 
451 7th Street SW, Room 3178, Washington, DC 20410; telephone number 
202-402-3042 (this is not a toll-free number). Persons with hearing or 
speech impairments may access these numbers via TTY by calling the 
Federal Relay Service, toll-free, at 800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Introduction

    On May 24, 2018, President Trump signed the Economic Growth Act 
into law (Pub. L. 115-174, 132 Stat. 1296).\1\ The Economic Growth Act 
amends the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) 
(1937 Act) and other housing laws to modify multiple HUD programs. The 
purpose of the statutory amendments is to promote economic growth, 
provide tailored regulatory relief, and enhance consumer protections. 
Section 209 of the Economic Growth Act amends Title I of the 1937 Act 
by adding several provisions pertaining to small PHAs that 
predominantly operate in a rural area as described in 12 CFR 
1026.35(b)(2)(iv)(A), including

[[Page 4098]]

streamlining certain requirements related to program inspections and 
evaluations, corrective action requirements, environmental reviews, and 
energy conservation funding and financing requirements. Section 209 
also requires HUD to develop new information systems for public housing 
consortia, and to make shared waiting list software available for 
voluntary use by multiple PHAs and owners receiving HUD assistance.
---------------------------------------------------------------------------

    \1\ The text of the Economic Growth Act, along with a summary 
prepared by the Congressional Research Service, can be found at 
https://www.congress.gov/bill/115th-congress/senate-bill/2155.
---------------------------------------------------------------------------

    Certain statutory amendments made by section 209 of the Economic 
Growth Act became effective 60 days after enactment (July 23, 2018). 
However, while effective, the provisions require rulemaking or guidance 
for implementation. PHAs and owners may not use the provisions of the 
Economic Growth Act until HUD issues a rule or appropriate guidance. 
Further, existing HUD policies and procedures continue to apply until 
such time as HUD issues the necessary final implementing regulations or 
guidance.
    The guidance in this Notice, read together with the statutory 
language, is intended to aid HUD program participants and the public 
generally in understanding the reasons for deferred action with respect 
to specific statutory provisions. In addition, HUD seeks comment from 
the public on the implementation of the section 209 provisions. HUD 
welcomes comment on all of the provisions discussed in this Notice and, 
specifically, on the topics identified for comment below. All timely 
comments will be considered in the development of the required rule or 
guidance. HUD is committed to working closely with its program 
participants to see that the changes made by section 209 of the 
Economic Growth Act are successfully implemented and that these 
programs are significantly improved to provide assistance to the 
families HUD serves.

II. Implementation Guidance and Specific Requests for Comments

A. Section 209(a). Small PHAs

    Section 209(a) of the Economic Growth Act amends Title I of the 
1937 Act by adding a new section 38 that defines small PHAs (i.e., PHAs 
that administer 550 or fewer combined public housing units and vouchers 
under section 8(o) that predominantly operate in a rural areas, as 
described in 12 CFR 1026.35(b)(2)(iv)(A)). New section 38 also 
streamlines certain requirements related to program inspections and 
evaluations.
    1. Section 38(a) of the 1937 Act--Definitions. New section 38(a) 
establishes the definitions applicable to the other provisions of 
section 38. Specifically, section 38(a) provides definitions for 
``Housing Voucher Program,'' ``Small Public Housing Agency,'' and 
``Troubled Small Public Housing Agency.''
    Implementation action: The definitions require further 
clarification via rulemaking for implementation. For example, the 
definition of ``Small Public Housing Agency'' includes PHAs that 
administer no more than 550 dwelling units and vouchers under section 
8(o) of the 1937 Act and ``predominantly operate in a rural area,'' as 
described in 12 CFR 1026.35(b)(2)(iv)(A).\2\ This phrase 
``predominately operate in a rural area'' requires further 
clarification and interpretation by HUD. Further, the definitions apply 
to statutory provisions that, as discussed below, require notice and 
comment rulemaking for implementation. HUD is undertaking rulemaking to 
implement these provisions and will address the definitions in the 
broader context of the rules implementing the related provisions.
---------------------------------------------------------------------------

    \2\ The referenced regulations are the Truth in Lending 
(Regulation Z) regulations issued by the Bureau of Consumer 
Financial Protection and codified at 12 CFR part 1026. The 
regulations setting forth the definition of rural area can be found 
at: https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=2af425fb88e5aca2c09e0b4adc8a50a6&mc=true&n=pt12.9.1026&r=PART&ty=HTML#se12.9.1026_135.
---------------------------------------------------------------------------

Specific Topics for Comment
    (i) How should HUD interpret the words ``predominantly operates'' 
in the phrase ``predominantly operates in a rural area''? For example, 
a PHA could be deemed to predominantly operate in a rural area if one 
or more of the following conditions apply: (1) The PHA's physical 
address is in a rural area (a PHA-based definition); (2) more than 50 
percent of the buildings occupied by Housing Choice Voucher 
beneficiaries and public housing residents are in rural areas (a 
building-based definition); or (3) more than 50 percent of the tenants 
served live in rural areas (a household-based definition). Please note 
that HUD is not seeking comment on the definition of ``rural area'' as 
this is provided in statute.
    (ii) How often should HUD reassess the rural nature of each PHA? 
For example, should HUD reclassify PHAs every time the Office of 
Management and Budget, the U.S. Census Bureau, or the U.S. Department 
of Agriculture's Economic Research Service updates data used in the 
definition of rural areas? Also, the ``predominately operates'' 
component may change when buildings are added or lost, or when tenants 
move under a household-based definition.
    (iii) Are there other factors or approaches that HUD should 
consider in determining whether a PHA predominantly operates in a rural 
area?
    (iv) Are there factors that HUD should consider in determining 
whether a PHA meets the criteria of administering 550 or fewer combined 
public housing and section 8(o) units?
     2. Sections 38(c)(1) and (c)(2) of the 1937 Act--Program 
Inspections and Evaluations for Public Housing and Section 8 Voucher 
Units. Section 38(c)(1) as inserted by the Economic Growth Act requires 
HUD to inspect small PHA projects no less than every 3 years. Section 
38(c)(1) also applies existing physical inspection standards for 
projects assisted under section 8 of the 1937 Act to small PHAs. 
Section 38(c)(2) requires small PHAs administering section 8 voucher 
rental assistance to make periodic physical inspections of dwelling 
units at least once every 3 years.\3\
---------------------------------------------------------------------------

    \3\ Sections 38(c)(1) (for public housing) and (c)(2) (for 
Section 8 voucher units) also clarify that HUD or the PHA must 
continue conducting lead safety inspections when applicable in 
accordance with the Lead-Based Paint Poisoning Prevention Act (42 
U.S.C. 4822). These provisions emphasize following existing 
requirements and therefore do not require further action for 
implementation. Safety inspection requirements under the Lead-Based 
Paint Poisoning Prevention Act can be found at: https://www.gpo.gov/fdsys/pkg/USCODE-2009-title42/html/USCODE-2009-title42-chap63-subchapIII-sec4822.htm.
---------------------------------------------------------------------------

    Implementation action: This provision requires further review and 
interpretation by HUD. HUD is considering the appropriate scope of the 
term ``projects assisted under section 8'' as used in section 38(c)(1) 
and will address the subject more fully in future rulemaking. Further, 
as noted above, the definition of small PHA requires further 
consideration and implementation through rulemaking.
    3. Section 38(c)(3) of the 1937 Act--Troubled Small PHAs. Section 
38(c)(3) as inserted by the Economic Growth Act identifies criteria for 
troubled small PHAs and establishes an appeals process under which a 
small PHA may dispute a designation as a troubled small PHA. The new 
section also establishes requirements for Corrective Action Agreements 
under which designated troubled small PHAs shall undertake actions to 
correct identified deficiencies.
    Implementation action: Section 38(c)(3) of the 1937 Act requires 
HUD to issue regulations to establish the appeals process and determine 
how Corrective Action Agreements may be tailored for individual 
troubled

[[Page 4099]]

properties. HUD is developing these regulations.
    4. Section 38(d) of the 1937 Act--Reduction of Administrative 
Burdens. Section 38(d)(1) as inserted by the Economic Growth Act 
exempts small PHAs from any environmental review requirements with 
respect to development or modernization projects costing no more than 
$100,000. Section 38(d)(2) requires HUD, by regulation, to streamline 
procedures for environmental reviews for those small PHAs with 
development or modernization projects costing more than $100,000.
    Implementation action: Section 38(d)(2) requires HUD to issue 
regulations to determine criteria for applicable development and 
modernization projects. By statute, section 38(d)(2) requires HUD to 
issue regulations to establish streamlined procedures for environmental 
reviews. HUD is developing these regulations.
Specific Topic for Comment
    How should HUD define the $100,000 total cost threshold for 
development or modernization project costs? For example, what types of 
costs should be included? Should costs associated with disposition and 
conversion actions be treated as development or modernization costs?

B. Section 209(b). Energy Conservation

    Section 209(b) of the Economic Growth Act amends the Operating Fund 
requirements in section 9(e)(2) of the 1937 Act to authorize a small 
PHA (as defined in the new section 38(a), discussed above) to elect to 
be paid for utility and waste management costs for a period of not more 
than 20 years based on its average annual consumption during the 
preceding 3-year period.
    Implementation action: Section 209(b) requires rulemaking to modify 
existing procedures in a manner that is least disruptive to the 
existing Operating Fund formula funding cycle, as well as to the 
policies and procedures that currently govern utility reimbursements, 
savings, third party agreements and financing, while at the same time 
enabling small PHAs to utilize the additional flexibility provided by 
section 209. For these provisions, PHAs and owners may not use the 
provisions of the Economic Growth Act until HUD issues a rule. Further, 
and as discussed above, the new definition of small PHA necessitates 
further consideration by HUD and implementation through rulemaking.
Specific Topics for Comment
    (i) The statute states that: ``The Secretary shall make an initial 
one-time adjustment in the consumption base level to account for 
differences in the heating degree day average over the most recent 20-
year period compared to the average in the consumption base level.'' 
What are good sources for obtaining 20 years of heating degree day 
data? What resources, computer analysis programs, databases, or 
websites could HUD consult to determine utility consumption adjustments 
to account for temperature variations relative to the most recent 20 
years?
    (ii) The statute permits PHAs to use savings for either Capital 
Fund or Operating Fund eligible expenses. PHAs with less than 250 units 
can follow PIH Notice 2016-18 \4\ or a successor notice on the flexible 
use of operating funds. To the extent that PHAs with more than 250 
units use this flexibility to expend operating funds for capital 
purposes, they will need to document the savings, and track the 
expenditure of the funds. What methods for tracking and reporting on 
the expenditure of such operating funds would enable monitoring, but 
limit burden to PHAs?
---------------------------------------------------------------------------

    \4\ Available at: https://www.hud.gov/sites/documents/PIH-2016-18.PDF.
---------------------------------------------------------------------------

C. Section 209(c). Reporting by Agencies Operating in Consortia

    Section 209(c) of the Economic Growth Act requires HUD to develop 
and deploy electronic information systems to accommodate full 
consolidated reporting by PHAs electing to act in consortia.
    Implementation action: This provision requires HUD to develop and 
deploy electronic information systems no later than 180 days after 
enactment of the Economic Growth Act (November 20, 2018). HUD is 
developing such electronic information systems and will keep program 
participants updated as necessary to facilitate transition to the new 
systems.
    Specific topics for comment: What are the current limitations with 
HUD's systems that prevent full consolidated reporting by PHAs engaged 
in consortia? What improvements to HUD's systems should HUD consider 
for such reporting?

D. Section 209(e). Shared Waiting Lists

    As discussed above, section 209(e) of the Economic Growth Act 
requires HUD to make available one or more software programs that will 
facilitate the voluntary use of shared waiting lists by PHAs and owners 
receiving HUD assistance. While the requirement that HUD make available 
software programs is self-implementing, HUD is also required to publish 
guidance for implementing such lists.
    Implementation action: This provision requires HUD to make 
available software and publish guidance no later than one year after 
enactment of the Economic Growth Act (May 24, 2019). HUD is exploring 
options for implementing the required software and will publish 
required guidance accordingly.
Specific Topics for Comment
    (i) Because the statute refers to software that supports the use of 
``shared waiting lists'' by PHAs and owners receiving HUD assistance, 
HUD seeks public input on the definition of a ``shared waiting list.'' 
HUD is considering defining ``shared waiting list software'' as 
software that enables a household to submit a single application to get 
on multiple waiting lists. One of the most commonly cited examples of a 
shared waiting list is the Massachusetts Section 8 Housing Choice 
Voucher Centralized Waiting List that serves about 100 PHAs. Despite 
its name, the Centralized Waiting List is not a single waiting list 
used by the participating PHAs. Instead, this is a single application 
system that generates a unique waiting list for each PHA by sorting all 
applicants based on the PHA's preferences, which typically include a 
local preference for households living or working in the PHA's 
jurisdiction.
    (ii) What types of PHAs and owners might be the best candidates for 
a shared waiting list?
    (iii) Do owners receiving HUD assistance have unique needs that may 
make it difficult for them to use a shared waiting list?
    (iv) Would there be a need for additional software security in 
providing access to, and using, a shared waiting list?
    (v) HUD also encourages the submission of examples where PHAs or 
owners have used shared waiting lists and seeks opinions regarding the 
need for HUD to provide software support for this function and what 
form this support might take.

    Dated: February 11, 2019.
Dominique G. Blom,
General Deputy Assistant Secretary for Public and Indian Housing.
Brian D. Montgomery,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2019-02359 Filed 2-13-19; 8:45 am]
BILLING CODE 4210-67-P