[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Proposed Rules]
[Pages 78295-78296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26197]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 92, 93, 574, 960, 966, 982

[Docket No. FR-6057-P-02]
RIN 2577-AD03


Housing Opportunity Through Modernization Act of 2016: Re-Opening 
Public Comment Period on Subject of Over Income Families

AGENCY: Office of the General Counsel, HUD.

ACTION: Proposed rule; re-opening of comment period.

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SUMMARY: On September 17, 2019, HUD published a proposed rule 
implementing sections 102, 103 and 104 of the Housing Opportunity 
through Modernization Act (HOTMA) of 2016. The comment period for the 
proposed rule closed on November 18, 2019. Among other things, Sec.  
960.507 of the rule proposed adding a section addressing the treatment 
of families in public housing whose family income exceeds the new limit 
in HOTMA. Before finalizing the rule, HUD seeks additional public 
comment on the implementation of the public housing income limit, 
specifically public housing agencies' (PHAs') discretion in addressing 
over-income families. This notice therefore re-opens the public comment 
period on the HOTMA proposed rule for an additional 30 days solely to 
seek comment on these specific issues. HUD is not soliciting comment on 
any other issues related to HUD's September 17, 2019, proposed rule.

DATES: The comment period for a specific topic in the proposed rule 
published on September 17, 2019 (84 FR 48820), is re-opened. The due 
date for comments discussed in this supplemental notice of proposed 
rulemaking is January 4, 2021.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule. Copies of all comments submitted are available for 
inspection and downloading at www.regulations.gov. To receive 
consideration as public comments, comments must be submitted through 
one of two methods, specified below. All submissions must refer to the 
above docket number and title.
    1. 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 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.
    2. 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.

FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Associate General 
Counsel for Legislation and Regulations, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
10282, Washington, DC 20410; telephone number 202-402-5300 (this is not 
a toll-free number). Individuals with hearing- or speech-impairments 
may access this number via TTY by calling the toll-free Federal Relay 
Service during working hours at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 29, 2016, the president signed HOTMA into law (Pub. L. 114-
201, 130 Stat. 782). HOTMA makes numerous changes to statutes governing 
HUD programs. In particular, section 103 of HOTMA imposed an income 
limit on families residing in public housing. Specifically, section 103 
provides that two years after the family has reached the income limit, 
PHAs have the option of requiring families to vacate their units within 
6 months or allowing the families to stay, provided the families pay 
the higher of fair market rent or a rent equal the amount of the 
monthly subsidy for the unit. HOTMA requires HUD to determine the 
amount of subsidy through regulation.
    On November 29, 2016, HUD published a Federal Register notice (81 
FR 85996), seeking public input on how HUD should determine the income 
limit for public housing residents, pursuant to section 103 of HOTMA. 
HUD followed this notice with a July 26, 2018, notice (83 FR 35490) 
that made some provisions of section 103 of HOTMA effective.
    On September 17, 2019, HUD published a proposed rule to update its 
regulations according to HOTMA's statutory mandate. Additional details 
about the proposed rule may be found at 84 FR 48820 (September 17, 
2019). In this proposed rule, HUD proposed a new 24 CFR 960.507, which 
would codify the implementation of treatment of over-income families in 
public housing, including how to determine the monthly subsidy for such 
families' units.
    While reviewing public comments and developing the final rule, HUD 
determined that it would be appropriate and helpful to obtain 
additional public comment on very specific aspects of HUD's 
implementation of the income limit for public housing. HUD believes 
that HOTMA provides that families who are over-income (OI) under HOTMA 
for two consecutive years are no longer public housing tenants eligible 
for the public housing program and the PHA must terminate the families' 
participation in the public housing program, even if they are allowed 
to remain in their units. Because these families would no longer be 
public housing tenants, they would not be subject to public housing 
regulations such as 24 CFR part 960 (including income reexamination 
requirements), and HUD would have no statutory basis to directly 
regulate these unassisted

[[Page 78296]]

families. However, HUD can impose various requirements on the PHAs, 
which may then be able to require OI families to comply with 
requirements as a condition of their lease for the unit.
    HUD seeks public comment on this determination, the implications of 
terminating such participation and, as specifically outlined in this 
notice, what procedural rights, if any, OI families remaining in their 
unit should be afforded.

II. Questions for Public Comment

    HUD is seeking public input on the following questions:

1. Repositioning

    For PHAs planning or currently taking advantage of options to 
convert public housing units under repositioning using one of HUD's 
repositioning tools such as Rental Assistance Demonstration (RAD), 
Demolition/Disposition (Section 18) and Streamlined Voluntary 
Conversion (Section 22), should special considerations regarding 
relocation apply to OI families permitted to remain in public housing 
units after the 2-year grace period (the two years after a PHA has 
first determined a family is over-income before the PHA must terminate 
the family's tenancy; for more information, see the proposed rule at 84 
FR 48828) has ended?
    For example, should OI families be afforded any of the tenant 
protections offered to income-eligible families during conversion? 
Further, are there any additional implications for the repositioning 
process that HUD should consider, specifically regarding the 
possibility of the PHA reducing the number of Tenant Protection 
Vouchers (TPV) they are eligible for as a result of units being 
occupied by a non-HUD-assisted family for more than 24 months?

2. Rent and Reexamination & Community Service Activities or Self-
Sufficiency Activities (CSSR)

    What requirements, if any, in 24 CFR part 960 should apply to OI 
families that are permitted to remain in public housing units after the 
2-year grace period has ended?
    Should PHAs have the option to create a preference to allow OI 
families that have experienced a reduction in income to be immediately 
re-admitted to the public housing program if they are determined to be 
income eligible again or should they be considered applicants starting 
at the bottom of the waiting list?
    With respect to CSSR, should HUD give discretion to PHAs to allow 
for non-public housing leases to contain community service 
requirements?

3. Dwelling Leases, Procedures and Requirements

    What requirements, if any, in 24 CFR part 966 should apply to OI 
families permitted to remain in public housing units after the 2-year 
grace period has ended?
    Under HOTMA, the only required lease provision for OI families is 
to charge a rental amount equal to the greater of the fair market rent 
(FMR) or an alternative rent comprising any amounts from the Operating 
Fund and Capital Fund under section 9 of the United States Housing Act 
of 1937 used for the unit. What role should HUD have, if any, specific 
to non-public housing lease requirements? For example, should HUD 
mandate minimum lease provisions such as those related to conduct and 
occupancy restrictions pertaining to drugs, drug-related criminal 
activity, or lifetime registration as a sex offender?

4. Grievance Procedures and Requirements

    Should there be specific grievance or due process rights afforded 
to OI families permitted to remain in public housing units after the 2-
year grace period has ended? At present, if such families are 
terminated from the public housing program, they would not be afforded 
the same rights as families that are public housing program 
participants that are over and above due process rights created by 
State and local law. What should be HUD's role, if any, in determining 
or mandating grievance and or due process rights for OI families? With 
respect to any grievance or due process rights, should discretion be 
given exclusively to PHAs and deference given to applicable state and 
local laws?

5. Additional Ramifications

    What are the consequences to the families and PHAs if a PHA allows 
OI families to stay in public housing units while no longer 
participating in the public housing program? Does such a situation 
increase or decrease burdens on the families and PHAs? Are there 
implications for other rights or procedures that have not been 
discussed above?

III. Justification for Public Comment Period

    In accordance with HUD's regulations on rulemaking at 24 CFR part 
10, it is HUD's policy that the public comment period for proposed 
rules should be 60 days. In the past, HUD has generally provided for 60 
days for public comment in the case of interim rules as well. However, 
HUD's policy does not require 60 days for public comment in the case of 
reopened public comment periods.
    HUD solicited input on the implementation of over-income provisions 
multiple times, and this is a very narrow solicitation of additional 
comments. If HUD determines to adopt any suggestions that may be made 
in the public comments in the final rule, HUD would like to be able to 
do so as quickly as possible so that the final rule can be published in 
an expedient manner.
    For these reasons, HUD has determined that in this case a 30-day 
public comment period is appropriate.

IV. Solicitation of Comment Only on Over-Income Provisions

    This solicitation of public comment is solely on the specific 
questions pertaining to the over-income provisions as provided in this 
supplemental notice of proposed rulemaking. This notice is not re-
opening public comment on any other issues related to HUD's September 
17, 2019 proposed rule, and HUD will not review or consider public 
comments that address issues other than the specific questions in this 
document directed to the over-income provisions.

Aaron Santa Anna,
Associate General Counsel for Legislation and Regulations.
[FR Doc. 2020-26197 Filed 12-3-20; 8:45 am]
BILLING CODE 4210-67-P