[Federal Register Volume 65, Number 132 (Monday, July 10, 2000)]
[Rules and Regulations]
[Pages 42508-42509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17024]



[[Page 42507]]

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

Part IV





Department of Housing and Urban Development





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



24 CFR Part 982



Section 8 Housing Choice Voucher Program; Expansion of Payment Standard 
Protection; Interim Rule

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules 
and Regulations

[[Page 42508]]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 982

[Docket No. FR-4586-I-01]
RIN 2577-AC18


Section 8 Housing Choice Voucher Program; Expansion of Payment 
Standard Protection

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

ACTION: Interim rule.

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

SUMMARY: On October 21, 1999, HUD published a final rule implementing 
the statutory merger of the Section 8 tenant-based and certificate 
programs into the new Housing Choice Voucher program. This interim rule 
amends HUD's regulations governing this new merger program to expand 
the regulatory payment standard protection against subsidy reduction. 
The October 21, 1999 final rule limited payment standard protection to 
the first 24 months of the lease term. The interim rule provides that a 
family is not subject to a subsidy reduction until the second regular 
reexamination of family income and composition following the payment 
standard reduction. This protection extends for the duration of the 
lease term. This interim rule also corrects a typographical error 
contained in the October 21, 1999 final rule.

DATES: Effective Date: August 9, 2000. Comment Due Date: September 8, 
2000.

FOR FURTHER INFORMATION CONTACT: Gerald J. Benoit, Director, Real 
Estate and Housing Performance Division, Office of Public and Indian 
Housing, Department of Housing and Urban Development, Room 4220, 451 
Seventh Street, SW, Washington, DC 20410; telephone (202) 708-0477, 
extension 4069 (this is not a toll-free number). Hearing or speech 
impaired individuals may access this number via TTY by calling 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 Section 8 tenant-based program provisions 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''). Of particular 
significance, the October 21, 1999 final rule implemented section 545 
of the Public Housing Reform Act. Section 545 provides for the complete 
merger of the Section 8 tenant-based certificate and voucher programs. 
HUD's regulations for the new Section 8 merger program (known as the 
``Housing Choice Voucher program'') are located at 24 CFR part 982.
    The October 21, 1999 final rule became effective on November 22, 
1999. The final rule was preceded by HUD's publication of an interim 
rule on May 14, 1999 (64 FR 56894). The final rule took into 
consideration the public comments received on the interim rule, and 
most of the changes made at the final rule stage were in response to 
public comment.

II. This Interim Rule

    The October 21, 1999 final rule amended the part 982 regulations to 
provide that payment standard protection will only apply during the 
first two years of the lease term. After the first two years of the 
lease, a family's subsidy would be based on the appropriate payment 
standard determined at the last regular annual reexamination of family 
income.
    On reconsideration, HUD believes that this provision is too 
restrictive. HUD wishes to provide the benefit of protected subsidy 
levels to a greater number of assisted families--not just to new 
participants in the Housing Choice Voucher program, or assisted 
families moving to a new unit. HUD believes payment standard protection 
should extend for the duration of the lease term, and not be restricted 
to a limited number of years.
    Accordingly, HUD is amending 24 CFR part 982 to expand the 
regulatory payment standard protection. This interim rule provides that 
a family is not subject to a subsidy reduction until the second regular 
reexamination of family income and composition following the payment 
standard reduction. This protection extends for the duration of the 
lease term.
    This final rule also corrects a typographical error contained in 
the October 21, 1999 final rule. Specifically, the interim rule 
corrects Sec. 982.501(c), which mistakenly provides that the provisions 
of Sec. 982.521 apply solely to a tenancy under the Section 8 rental 
certificate program.

III. Justification for Interim 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 is contrary to the public 
interest. The reasons for HUD's determination are as follows.
    HUD believes that the limits on payment standard protection 
established by the October 21, 1999 final rule are too restrictive. The 
interim rule corrects this error by providing assisted families with 
broader and more equitable regulatory safeguards against reductions in 
subsidy. Specifically, the interim rule extends the regulatory payment 
standard protection to all assisted families, not just to new program 
participants and assisted families moving to a new unit.
    Delaying the effectiveness of this interim rule to solicit prior 
public comment would result in uncertainty among PHAs and affected 
families, as PHAs consider adjustments in payment standards under the 
existing requirements of the October 21, 1999 final rule without 
knowing the full scope of the additional regulatory changes to be made 
by HUD. Immediate effectiveness of this interim rule will reduce this 
uncertainty, and will allow PHAs to make payment standard adjustments 
knowing the likely implications of these decisions. Neither PHAs nor 
Section 8 residents will be disadvantaged by the change.
    HUD also notes that the new Housing Choice Voucher program was 
implemented through an extensive public process, including three public 
forums across the nation, as well as the customary notice and comment 
rulemaking procedures.
    Although HUD believes that good cause exists to publish this rule 
for effect without prior public comment, HUD recognizes the value of 
public comment in the development of its regulations. HUD has, 
therefore, issued these regulations on an interim basis and has 
provided the public with a 60-day comment period. HUD welcomes comment 
on the regulatory amendments made by this interim rule. The public 
comments will be addressed in the final rule.

IV. Findings and Certifications

Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, Regulatory Planning and Review. OMB determined

[[Page 42509]]

that this rule is a ``significant regulatory action'' as defined in 
section 3(f) of the Order (although not an economically significant 
regulatory action under the Order). Any changes made to this rule as a 
result of that review 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 20410-
0500.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was prepared on the October 21, 1999 final rule in accordance with the 
HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of 
the National Environmental Policy Act (42 U.S.C. 4223). That Finding is 
applicable to this interim rule, and is available for public inspection 
between the hours of 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.

Regulatory Flexibility Act

    The Secretary has reviewed this interim rule before publication and 
by approving it certifies, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), that this interim rule would not 
have a significant economic impact on a substantial number of small 
entities. The interim 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 interim regulatory amendments 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.

Federalism Impact

    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 interim rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on State and local governments or preempt State law 
within the meaning of the Executive Order.

Unfunded Mandates Reform Act

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

Catalog of Federal Domestic Assistance

    The Catalog of Domestic Assistance number for this program is 
14.855.

List of Subjects in 24 CFR Part 982

    Grant programs--housing and community development, Rent subsidies.

    Accordingly, for the reasons discussed 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 part 982 continues to read as 
follows:

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

    2. In Sec. 982.501(c), revise the reference to ``982.520, and 
982.521'' to read ``and 982.520.''

    3. Amend Sec. 982.505 by revising paragraphs (c)(3), (c)(4), and 
(c)(5) to read as follows:


Sec. 982.505  Voucher tenancy: How to calculate housing assistance 
payment.

* * * * *
    (c) * * *
    (3) Decrease in the payment standard amount during the HAP contract 
term. If the amount on the payment standard schedule is decreased 
during the term of the HAP contract, the lower payment standard amount 
generally must be used to calculate the monthly housing assistance 
payment for the family beginning at the effective date of the family's 
second regular reexamination following the effective date of the 
decrease in the payment standard amount. The PHA must determine the 
payment standard for the family as follows.
    (i) Step 1: At the first regular reexamination following the 
decrease in the payment standard amount, the PHA shall determine the 
payment standard for the family in accordance with paragraphs (c)(1) 
and (c)(2) of this section (using the decreased payment standard 
amount).
    (ii) Step 2 (first reexamination payment standard amount): The PHA 
shall compare the payment standard amount from step 1 to the payment 
standard amount last used to calculate the monthly housing assistance 
payment for the family. The payment standard amount used by the PHA to 
calculate the monthly housing assistance payment at the first regular 
reexamination following the decrease in the payment standard amount is 
the higher of these two payment standard amounts. The PHA shall advise 
the family that the application of the lower payment standard amount 
will be deferred until the second regular reexamination following the 
effective date of the decrease in the payment standard amount.
    (iii) Step 3 (second reexamination payment standard amount): At the 
second regular reexamination following the decrease in the payment 
standard amount, the lower payment standard amount shall be used to 
calculate the monthly housing assistance payment for the family unless 
the PHA has subsequently increased the payment standard amount, in 
which case the payment standard amount is determined in accordance with 
paragraph (c)(4) of this section.
    (4) Increase in the payment standard amount during the HAP contract 
term. If the payment standard amount is increased during the term of 
the HAP contract, the increased payment standard amount shall be used 
to calculate the monthly housing assistance payment for the family 
beginning at the effective date of the family's first regular 
reexamination on or after the effective date of the increase in the 
payment standard amount.
    (5) Change in family unit size during the HAP contract term. 
Irrespective of any increase or decrease in the payment standard 
amount, if the family unit size increases or decreases during the HAP 
contract term, the new family unit size must be used to determine the 
payment standard amount for the family beginning at the family's first 
regular reexamination following the change in family unit size.

    Dated: June 15, 2000.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 00-17024 Filed 7-7-00; 8:45 am]
BILLING CODE 4210-33-P