42508 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

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 tenantbased 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 tenantbased 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 § 982.501(c),

which mistakenly provides that the

provisions of § 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

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 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 § 982.501(c), revise the reference

to ‘‘982.520, and 982.521’’ to read ‘‘and

982.520.’’

3. Amend § 982.505 by revising

paragraphs (c)(3), (c)(4), and (c)(5) to

read as follows:

§ 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