Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 423 

provide for the safe use of humate, 

fulvic acid and humic substances as a 

source of iron in animal feed. 

DATES: Submit either electronic or 

written comments on the petitioner’s 

request for categorical exclusion from 

preparing an environmental assessment 

or environmental impact statement by 

February 5, 2015. 

ADDRESSES: Submit electronic 

comments to http://

www.regulations.gov. Submit written 

comments to the Division of Dockets 

Management (HFA–305), Food and Drug 

Administration, 5630 Fishers Lane, Rm. 

1061, Rockville, MD 20852. 

FOR FURTHER INFORMATION CONTACT: 

David Edwards, Center for Veterinary 

Medicine, Food and Drug 

Administration, 7519 Standish Pl., 

Rockville, MD 20855, 240–276–9568. 

SUPPLEMENTARY INFORMATION: Under the 

Federal Food, Drug, and Cosmetic Act 

(section 409(b)(5) (21 U.S.C. 348(b)(5)), 

notice is given that a food additive 

petition (FAP 2290) has been filed by 

the Humic Products Trade Assn., P.O. 

Box 963, Spring Green, WI 53588. The 

petition proposes to amend Title 21 of 

the Code of Federal Regulations (CFR) 

in part 573 Food Additives Permitted in 

Feed and Drinking Water of Animals (21 

CFR part 573) to provide for the safe use 

of humate, fulvic acid and humic 

substances as a source of iron in animal 

feed. The petitioner has requested a 

categorical exclusion from preparing an 

environmental assessment or 

environmental impact statement under 

21 CFR 25.32(r). 

Interested persons may submit either 

electronic comments regarding this 

request for categorical exclusion to 

http://www.regulations.gov or written 

comments to the Division of Dockets 

Management (see DATES and 

ADDRESSES). It is only necessary to send 

one set of comments. Identify comments 

with the docket number found in 

brackets in the heading of this 

document. Received comments may be 

seen in the Division of Dockets 

Management between 9 a.m. and 4 p.m., 

Monday through Friday, and will be 

posted to the docket at http://

www.regulations.gov. 

Dated: December 30, 2014. 

Bernadette Dunham, 

Director, Center for Veterinary Medicine. 

[FR Doc. 2014–30932 Filed 1–5–15; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 5, 574, 960, 966, 982, 983, 

and 990 

[Docket No. FR 5743–P–01] 

RIN 2506–AC38 

Streamlining Administrative 

Regulations for Public Housing, 

Housing Choice Voucher, Multifamily 

Housing, and Community Planning and 

Development Programs 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, Office of the Assistant 

Secretary for Public and Indian 

Housing, HUD. 

ACTION: Proposed rule. 

SUMMARY: Section 243 of the Department 

of Housing and Urban Development 

Appropriations Act, 2014 (2014 

Appropriations Act), authorized HUD to 

implement certain statutory changes to 

the United States Housing Act of 1937 

(1937 Act) made by the 2014 

Appropriations Act through notice, 

followed by notice and comment 

rulemaking. Notices implementing the 

changes were published on May 19, 

2014, and June 25, 2014. Consistent 

with statutory direction, this proposed 

rule commences the rulemaking process 

to codify in regulation the statutory 

changes made to the 1937 Act by the 

2014 Appropriations Act and to solicit 

comment on HUD’s implementation of 

these changes through the published 

notices. HUD intends to address the 

FY14 provision on consortia through 

separate rulemaking. 

In addition, this rulemaking also 

proposes changes to streamline 

regulatory requirements pertaining to 

certain elements of the Housing Choice 

Voucher (HCV), Public Housing (PH), 

and various multifamily housing (MFH) 

rental assistance programs; to reduce the 

administrative burden on public 

housing agencies (PHAs) and MFH 

owners; and to align, where feasible, 

requirements across programs. One of 

the proposed changes would also affect 

the HOME Investment Partnerships 

program, Continuum of Care program, 

and the Housing Opportunities for 

Persons With AIDS (HOPWA) program 

which are administered by HUD’s Office 

of Community Planning and 

Development. 

DATES: Comment Due Date: March 9, 

2015. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule. All communications 

must refer to the above docket number 

and title. 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 

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 comments 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. 

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– 

402–3055 (this is not a toll-free 

number). Individuals with speech or 

hearing impairments may access this 

number via TTY by calling the toll-free 

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 

questions, please contact the following 

people (none of the phone numbers are 

toll-free): 

HOME program: Marcia Sigal, 202– 

402–3002. 

HOPWA: Will Rudy, 202–402–1934. 

Office of Special Needs Housing 

programs: Brett Gagnon, 202–402–3509. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
424 Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 

1See http://www.gpo.gov/fdsys/pkg/FR-2011-01- 

21/pdf/2011-1385.pdf. 

2HUD’s Delivering Together Initiative was started 

to reduce burdens on public housing agencies and 

improve cross-program collaboration (see http://

www.hud.gov/offices/hsg/mfh/trx/meet/

2011tracsindustrybriefing.pdf). The Public Housing 

Administrative Reform Initiative sought to identify 

public housing administrative processes that could 

be streamlined (see http://portal.hud.gov/

hudportal/HUD?src=/program_offices/public_

indian_housing/programs/ph/phari). 

3The Rental Housing Integrity Improvement 

Project (see http://portal.hud.gov/hudportal/

HUD?src=/program_offices/public_indian_housing/

programs/ph/rhiip) is a strategy designed to reduce 

income and rent calculation errors and improper 

payments that result from such errors. 

4See http://portal.hud.gov/hudportal/documents/ 

huddoc?id=pih2013-03.pdf. 

5One of the proposed changes also affects the 

CPD programs listed earlier. 

6HUD’s 2014 Appropriations Act is Title II of 

Division L of Public Law 113–76, 128 Stat. 5, 

approved January 17, 2014. See general provision 

section 238 of this Act at 128 Stat. 635. 

Multifamily Housing programs: Claire 

Brolin, 202–708–3000. 

Housing Choice Voucher program: 

Becky Primeaux, 202–402–6050. 

Public Housing program: Todd 

Thomas, 202–402–5849. 

Persons with hearing or speech 

impairments may access these numbers 

through TTY by calling the toll-free 

Federal Relay Service at 800–877–8339. 

Any of the above-listed contacts may 

also be reached via postal mail at the 

following address: Department of 

Housing and Urban Development, 451 

7th Street SW., Washington, DC 20410. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In recent years and in accordance 

with Executive Order 13563 (Improving 

Regulation and Regulatory Review)1 and 

several HUD-initiated streamlining 

initiatives,2 HUD solicited 

recommendations from program 

participants on how program operations 

could be streamlined to reduce costs 

and enhance efficiency, while still 

maintaining HUD’s core program 

oversight functions (e.g., reducing 

improper payments,3 etc.). With respect 

to public housing programs, HUD 

received input from national and local 

industry groups, individual public 

housing agencies (PHAs), and Movingto-Work (MTW) agencies, among others. 

Where possible, HUD has sought to 

streamline requirements across 

programs, with a particular focus on 

aligning program requirements across 

the public housing and Section 8 

(tenant- and project-based) portfolios. 

This proposed rule therefore includes 

several provisions where the 

requirements of programs operated out 

of the Office and Public and Indian 

Housing are aligned with the 

requirements of project-based Section 8 

programs operated out of HUD’s Office 

of Housing. 

In response to HUD’s solicitation of 

comments, HUD received many 

recommendations. Among these 

recommendations, HUD specifically 

examined recommendations to relieve 

the administrative burden on PHAs and 

MFH owners while maintaining 

important tenant protections and 

oversight practices. Some of the 

recommendations required statutory 

change and were included in recent 

budget proposals; several of the 

recommendations were enacted in FY14 

and are being implemented through this 

proposed regulation. Others have been 

implemented through notice; for 

example, Notice PIH 2013–03 4

(extended by Notice PIH 2013–26) 

provides temporary compliance 

assistance to PHAs through several 

provisions that are proposed to be made 

permanent through this rulemaking. 

Some of the statutorily permitted 

recommendations lacked authority to be 

implemented by notice and are included 

in this proposed rule. 

In addition to the PH and HCV 

programs, this proposed rule would 

affect the following MFH programs, as 

of the date of this proposal: 

A. Project-Based Section 8 (New 

Construction, State Agency-Financed, 

Substantial Rehabilitation, Rural 

Housing Services, Loan Management 

Set-Aside, and Property Disposition SetAside). 

B. Section 8 Moderate Rehabilitation. 

C. Rent Supplement Program. 

D. Section 202 Supportive Housing for 

the Elderly (including PAC and PRAC). 

E. Section 811 Supportive Housing for 

Persons with Disabilities (including 

PRAC and PRA). 

F. Section 235. 

G. Section 236. 

H. Section 221. 

The proposed rule would also affect 

certain programs administered by the 

Assistant Secretary for Community 

Planning and Development: HOME 

Investment Partnerships program 

(HOME) and the Continuum of Care 

program. HUD is also taking the 

opportunity afforded by this proposed 

rule to relocate HOPWA program 

requirements currently codified in 24 

CFR part 5 to the main HOPWA 

program regulations at 24 CFR part 574. 

Although the substance of these 

provisions would not be revised, the 

proposed relocation will improve the 

clarity of the program regulations by 

locating all HOPWA regulatory 

requirements in a single part of the Code 

of Federal Regulations. The section-bysection summary of this proposed rule 

is organized by the program(s) the 

proposed rule would affect. Section A 

addresses proposed regulatory changes 

that cross all programs (e.g., HCV, MFH, 

and PH). Section B presents proposed 

changes that would affect the 

administration of both the HCV and PH 

programs. Section C contains proposed 

changes that affect the PH program only. 

Changes proposed only to the HCV 

program are in section D.5 The proposed 

regulatory changes are then presented in 

order by section number. 

II. This Proposed Rule—Section-bySection Proposed Changes 

A. HCV, MFH, and PH Program 

Regulations 

Verification of Social Security Numbers 

(§ 5.216) 

Under current regulations, most 

applicants are required to have a Social 

Security Number (SSN) at move-in. 

Absent a regulatory waiver, this 

requirement results in an applicant 

family being denied assistance if the 

addition of a child occurs in close 

proximity to the applicant’s move-in 

date and the family is unable to obtain 

a SSN for the child, due to 

circumstances beyond its control. By 

contrast, HUD regulations provide for 

the addition to a participant family of a 

new household member under the age 

of 6 years who has no assigned SSN. 

HUD proposes to align the 

requirements across applicant and 

participant households with respect to 

new household members under the age 

of 6 years who lack SSNs. Specifically, 

HUD proposes to authorize applicant 

households to become program 

participants even if a child under the 

age of 6 years is added to the household 

within the 6-month period prior to the 

household’s date of admission and that 

child has not yet been issued an SSN. 

The household would have 90 days 

from the date of move-in to provide the 

documentation evidencing issuance of 

an SSN. As is the case with program 

participants, an extension of one 90-day 

period would be required for assistance 

applicants under certain circumstances. 

Definition of Extremely Low-Income 

Families (§§ 5.603, 960.102) 

HUD’s 2014 Appropriations Act 6

defines the term ‘‘extremely low-income 

family’’ to mean a very low-income 

family whose income does not exceed 

the higher of 30 percent of area median 

income or the poverty level. This rule 

would amend § 5.603 to include the 

revised definition of an extremely lowincome family. This definition applies 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 425 

7The CPD programs are: HOME Investment 

Partnerships Program (24 CFR part 92), Housing 

Opportunities for Persons with AIDS (24 CFR part 

574, and Continuum of Care program (24 CFR part 

578). Current regulations refer to the Supportive 

Housing program, and HUD is proposing to update 

that reference to the Continuum of Care program. 

to all programs assisted under the 1937 

Act. 

In addition to the change in the 

definition, this rule proposes to correct 

some improper cross-citations in 

§§ 5.603 and 960.102, but proposes no 

substantive changes associated with 

these corrections. 

Use of Actual Past Income (§ 5.609) 

HUD’s current regulations define 

‘‘annual income’’ to mean income 

projected to be received in the 12 

months following admission or the 

annual reexamination date. The process 

of projecting income introduces the 

potential for error. 

This rule proposes to allow PHAs and 

MFH owners to define annual income as 

either actual past income or projected 

income. Actual past income would be 

based on amounts received prior to 

admission or the annual reexamination 

effective date and would therefore 

simply exclude the additional step of 

projecting income based on this 

information. 

For PHAs, whichever definition is 

chosen for either the HCV or PH 

program must be applied to all families 

in the respective program. Likewise, a 

MFH owner must apply the same 

definition of annual income for all 

families in a single property. 

If a PHA or MFH owner chooses to 

define annual income as actual past 

income, then it may not adopt the 

option provided in the proposed 

revisions to §§ 5.657, 960.257, and 

982.516 to provide for the streamlined 

annual reexamination of fixed-income 

families (see below). In other words, if 

a PHA or MFH owner adopts the 

streamlined annual reexamination for 

families on fixed incomes, below, then 

it must use projected income to 

determine annual income. Also, the 

PHA must use projected income if the 

family makes a request (for example the 

family may have experienced a decrease 

in income that would result in a lower 

family payment than would be 

calculated if income is defined as actual 

past income). 

Exclusion of Mandatory Education Fees 

From Income (§ 5.609(b)(9)) 

Current regulations provide that 

education assistance in excess of 

amounts needed for tuition is to be 

counted as income for the purposes of 

determining whether an individual is 

eligible to receive assistance. However, 

in recent years, appropriations acts have 

also excluded from income amounts 

needed to pay required fees charged to 

students as part of a growing trend 

among institutions of higher education 

moving from a traditional tuition-only 

structure to a structure of tuition and 

fees. Fees often include, but are not 

limited to, student service fees, student 

association fees, student activity fees, 

and laboratory fees. 

HUD believes that including many of 

these fixed fees within the definition of 

tuition, in accordance with statutory 

instructions in recent years, will 

increase opportunities for its 

participants to further their education. 

Therefore, HUD is amending the 

definition of income with respect to 

higher education costs pursuant to the 

recent statutory changes. 

Streamlined Annual Reexamination for 

Families on Fixed Incomes (§§ 5.657, 

960.257, 982.516) 

PHAs and MFH owners are statutorily 

required to verify income and calculate 

rent annually, including for families on 

fixed incomes. The requirement to 

undertake the complete process for 

income verification and rent 

determination for families on fixed 

incomes is not necessary given the 

infrequency of changes to their incomes. 

Further, this requirement consumes 

considerable staff time and resources. 

HUD proposes to simplify the 

requirements associated with 

determining the annual income of 

families on fixed incomes by allowing 

PHAs and owners to opt to conduct a 

streamlined annual reexamination of 

income for families when 100 percent of 

the family’s income consists of fixed 

income sources. In a streamlined annual 

reexamination, PHAs and owners will 

recalculate family incomes by applying 

a published cost-of-living adjustment 

(COLA) for the source of income to the 

previously verified income amount. If 

COLA information is not publicly 

available and cannot be provided by the 

tenant through a document generated by 

a third party, then the PHA or owner 

must follow the standard verification 

process to determine the appropriate 

adjustment for the fixed-income source. 

If a family has several sources of fixed 

income, then the PHA or owner must 

apply the respective COLA or verify the 

adjustment for each source. 

Calculating adjustments to annual 

income (e.g., medical deductions, child 

care deductions) is still required as part 

of the streamlined annual reexamination 

of income. PHAs must follow the 

requirements related to deductions for 

such expenses, including third-party 

verification of these deductions. 

Furthermore, PHAs using the 

streamlined annual reexamination of 

income may not exercise the option to 

use actual past income to determine 

annual income under § 5.609 (instead, 

they must use projected income). 

B. HCV and PH Program Regulations 

Utility Reimbursements (§§ 960.253, 

982.514) 

As required by § 5.632 of the current 

regulations, where tenants pay for their 

utility usage, PHAs must reimburse 

tenants if the utility allowance exceeds 

the total tenant payment. HUD’s public 

housing regulations at § 960.253 specify 

the conditions under which a utility 

reimbursement must be paid but do not 

specify how frequently such 

reimbursement must be made. HUD’s 

HCV regulations at § 982.514, however, 

require voucher agencies to pay any 

utility reimbursement on a monthly 

basis. As a result, voucher agencies may 

have to process small monthly checks 

and expend postage to mail them to 

voucher holders, which may constitute 

an administrative and financial burden. 

For both the public housing and HCV 

programs, this rule proposes to permit 

PHAs to make reimbursements of $20 or 

less (per quarter) on a quarterly basis, in 

order to eliminate the burdensome 

process of processing and mailing 

monthly reimbursement checks. In the 

event a family leaves the program in 

advance of its next quarterly 

reimbursement, the PHA would be 

required to reimburse the family for a 

prorated share of the applicable 

reimbursement. 

Earned Income Disregard (§§ 5.617, 

574.305, 960.255) 

HUD’s regulations at § 5.617 and 

§ 960.255 establish the earned income 

disregard (EID), which permits certain 

tenants of public housing and persons 

with disabilities participating in the 

HCV and certain CPD programs 7 to 

accept a job without having their rent 

increase right away due to the increase 

in earned income. The EID is available 

for a total of 24 months, but those 

months can be spread across 48 months 

to account for intermittent job losses. In 

addition, PHAs are required to fully 

exclude income for the first 12 months 

of EID, and to exclude only 50 percent 

for the last 12 months. Tracking 

employment for a 48-month period and 

determining how much to exclude 

depending on the month can be 

burdensome to PHAs. 

HUD proposes to retain the current 

framework for the earned income 

disregard in § 5.617 as applied to the 

HOPWA program and to relocate these 


tkelley on DSK3SPTVN1PROD with PROPOSALS
426 Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 

8HUD notes that section 238 of the Department 

of Housing and Urban Development Act, 2015, as 

part of the Fiscal Year (FY) 2015 Omnibus 

Consolidated and Further Continuing 

Appropriations Act (Public Law 113–235 (further 

revises section 3(a)(2)(B) of the United States 

Housing Act of 1937 (42 U.S.C. 1437a(a)(2)(B)(i)), 

pertaining to flat rents. As to not delay issuance of 

this proposed rule, HUD will address the further 

revision in a separate proposed rule. 

requirements to a new § 574.305 in the 

HOPWA regulations in 24 CFR part 574. 

These requirements will continue to 

apply to qualified families, defined as 

those families that reside in HOPWAassisted housing (including tenantbased rental assistance funded under 

HOPWA). HUD is retaining the current 

framework for HOPWA, while changing 

it for other programs, because under the 

HOPWA program every assisted 

household will have at least one family 

member that is a person with a 

disability (defined at § 5.403) and, 

therefore, will be affected by this 

rulemaking. If the new EID requirements 

were applied to the HOPWA program, it 

would disproportionately affect the 

HOPWA program portfolio and 

adversely affect HOPWA program 

participants. At the same time, however, 

HUD supports retaining the existing EID 

rules for the HOPWA program. For these 

reasons, § 574.305 is proposed to be 

created to retain the existing EID rules 

for the HOPWA program. 

For programs other than HOPWA, 

HUD proposes to limit the EID to 24 

consecutive months from the date that 

a participant qualifies for the EID. The 

rule would maintain the full exclusion 

for the first 12-month period, provided 

the eligible family member remains 

continually employed for such period. 

For the second 12-month period, the 

rule would provide PHAs with the 

discretion to phase in a rent increase, 

disregarding not less than 50 percent of 

the excluded amount in determining a 

family’s rent, but again only if the 

eligible family member remains 

continually employed. After the 

expiration of the consecutive 24-month 

period during which a family has 

remained continually employed, the EID 

would terminate. These changes would 

eliminate the burden on PHAs of having 

to track employment starts and stops 

over a 48-month period. 

HUD notes that, pursuant to section 

3(b)(5)(B)(ii) of the 1937 Act (42 U.S.C. 

1437a(b)(5)(B)(ii)), PHAs have wide 

discretion to exclude earned income in 

determining adjusted income for 

families residing in public housing. At 

their discretion, PHAs could therefore 

adopt policies that continue an earned 

income exclusion for such families 

beyond the point at which the EID 

terminates. 

Family Declaration of Assets Under 

$5,000 (§§ 960.259, 982.516) 

Families are required to report all 

assets annually. The amount of interest 

earned on those assets is included as 

income used to calculate the tenant’s 

rent obligation. Tenants with assets 

below $5,000 typically generate 

minimal income from these assets, 

which results in small changes, if any, 

to tenant rental payments. PHAs spend 

significant time verifying such assets. 

HUD proposes that, for a family that 

has net assets equal to or less than 

$5,000, a PHA, at both admission and 

recertification, may accept a family’s 

declaration that it has net assets equal 

to or less than $5,000, without taking 

additional steps to verify the accuracy of 

the declaration. The declaration must 

state the amount of income the family 

expects to receive from such assets; this 

amount will be included in the family’s 

income. 

C. PH Program Regulations 

Public Housing Rents for Mixed 

Families (§ 5.520(d)) 

a. When calculating prorated rents for 

families that include members both with 

and without citizenship or eligible 

immigration status, § 5.520(d) requires 

PHAs to determine the maximum rent 

by establishing the 95th percentile of all 

total tenant payments (TTPs) for each 

bedroom size. To do this, PHAs have to 

take the full set of TTPs, order them 

from highest to lowest, and identify the 

numeral below which 95 percent of 

TTPs fall. 

This rule would require PHAs to use 

instead the established flat rent 

applicable to the unit, significantly 

reducing the administrative burden for 

PHAs. 

b. Under the current method of 

calculating prorated rents for mixed 

families, when a mixed family’s TTP is 

greater than the maximum rent, the 

mixed family ends up paying less under 

proration than would a family where all 

members are eligible for assistance. 

This rule proposes to amend the 

regulation to use the mixed family’s 

TTP when TTP exceeds the flat rent, 

eliminating this discrepancy. 

Note: Several of the proposed changes to 

this provision simply eliminate references to 

the legacy Section 8 Rental Certificate 

program. The only substantive changes 

pertain to the method of prorating assistance 

for the public housing program. 

Flat Rents (§ 960.253) 

The 2014 Appropriations Act requires 

PHAs to establish flat rents equal to no 

less than 80 percent of the applicable 

Fair Market Rent. In the event that 

implementation of this requirement 

would increase a family’s rent by more 

than 35 percent, the PHA must phase in 

the flat rent as necessary to ensure that 

a family’s rental payment does not 

increase by more than 35 percent in any 

one year. This proposed rule would 

update the current regulations to reflect 

the new statutory requirements and 

provide additional information to PHAs 

on how to implement the new 

requirements, including details on how 

tenant-paid utilities affect flat rents and 

the information about rent options a 

PHA must provide to a family paying a 

flat-rent. 

In addition, HUD’s current regulation 

at § 960.253(d) permits PHAs to set a 

ceiling limit on rents for a period of 

three years from October 1, 1999, if the 

PHA had previously established ceiling 

rents. After that time, PHAs were 

required to adjust the ceiling rent to be 

equal to the flat rent for a unit. Given 

that the 3-year time period has expired 

and the flat rent provisions now 

determine a maximum rent, all ceiling 

rents must be set equal to flat rents. To 

further clarify, this proposed rule would 

apply the requirements for establishing 

and updating flat rents to the 

requirements for ceiling rents.8

Tenant Self-Certification for Community 

Service Requirements (§§ 960.605, 

960.607) 

Under HUD’s current public housing 

regulations, PHAs are required annually 

to review and determine family member 

compliance with the community service 

requirement. For any qualifying activity 

administered by a third party that a 

family states it has completed, the PHA 

is required to obtain third-party 

verification. Although HUD’s 

regulations at § 960.607(a) require 

family members who complete 

qualifying activities administered by a 

third party to obtain a certification 

signed by the third party, in many cases 

this requirement is not met, resulting in 

PHAs having to request third-party 

verification from organizations that 

either fail to maintain adequate records 

or are simply unresponsive. The effort 

to obtain third-party verification of 

compliance consumes considerable time 

and resources that could be directed to 

other PHA activities, and, in some cases, 

delays the recertification process. 

HUD proposes to allow PHAs to 

accept a tenant’s signed self-certification 

of compliance with the community 

service requirement. Any selfcertification must include details 

(including contact information) on what 

the activity was and where it was 

completed and a certification that the 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 427 

statement is true. Further, PHAs are 

encouraged to undertake periodic 

quality assurance reviews of selfcertifications to test for fraudulent 

certifications. 

Public Housing Grievance Procedures 

(§§ 966.52 Through 966.57) 

Under HUD’s current regulations, 

many portions of the grievance process 

are repetitive or overly prescriptive for 

PHAs. Through this rule, HUD proposes 

to eliminate the repetitive and overly 

prescriptive requirements in the 

regulations, and instead provide PHAs 

with additional flexibility to include 

procedures in the mandatory 

Admissions and Continued Occupancy 

Policies developed by each PHA. 

Procedures proposed to be streamlined 

are informal settlements (§ 966.54), 

grievance procedures for failure to 

request a hearing and requiring escrow 

deposits (§ 966.55), and matters relating 

to transcripts, copies, and the conduct 

of the hearing (§§ 966.56 and 966.57). 

Requirements relating to scheduling and 

location formerly contained in § 966.55 

are proposed to be merged into § 966.56. 

HUD also proposes to permit PHAs to 

establish expedited grievance 

procedures and eliminates a separate 

category of hearing panel by redefining 

‘‘hearing officer’’ to include the 

possibility of more than one person 

hearing a complaint. 

Limited Vacancies (§ 990.150) 

Under current regulations, HUD is 

required to provide operating subsidy 

for a limited number of vacant units 

under an Annual Contributions 

Contract. The proposed rule would 

clarify that the number of vacant units 

eligible for operating subsidy shall be 

not more than 3 percent of the total 

units, on a project-by-project basis. 

Section D: HCV Program Regulations 

Start of Assisted Tenancy (§ 982.309) 

Under current regulations, there is no 

option for PHAs to adopt policies 

regarding the date when a tenant may 

move into an assisted unit once the unit 

is ready for move-in. 

HUD proposes to allow PHAs to limit 

move-ins to certain days of the month, 

such as the first day of the month. This 

would streamline administration of 

move-ins for some PHAs, reduce the 

need for pro-rated checks and possibly 

the number of checks issued, and 

provide Housing Assistance Payment 

(HAP) savings by eliminating 

overlapping HAP payments. 

Biennial Inspections and the Use of 

Alternate Inspection Methods 

(§§ 982.405, 983.103) 

The 2014 Appropriations Act 

authorizes PHAs to comply with the 

requirement to inspect HCV units 

during the term of a HAP contract by 

inspecting such units not less than 

biennially rather than annually to assure 

compliance with HUD’s housing quality 

standards. To avoid duplication of 

effort, for example where an HCVassisted tenant resides in a property 

inspected under another program (for 

example, the Low Income Housing Tax 

Credit program), the law authorizes a 

PHA to comply with the biennial 

inspection requirement by relying upon 

an inspection performed pursuant to 

such other program. Finally, the law 

authorizes the Secretary to adjust the 

frequency of inspections for mixedfinance properties assisted with projectbased vouchers where inspections 

performed under such other program 

take place more or less frequently than 

biennially. 

This rule proposes to update HUD’s 

regulations to reflect the statutory 

changes and to provide details on how 

PHAs may use the new flexibilities. 

PHAs will be required to obtain copies 

of reports of these inspections and will 

be prohibited from relying upon such 

inspections if such copies may not be 

obtained. In addition, because section 

8(o)(13)(F) of the 1937 Act states that 

the inspection requirements of section 

8(o)(8) apply to the PBV program, this 

rule proposes to update the PBV 

inspection regulations (§ 983.103) to 

reflect the new statutory authority in 

section 8(o)(8). 

Housing Quality Standards (HQS) 

Reinspection Fees (§ 982.405) 

HUD proposes to allow PHAs the 

option of charging a reasonable fee to an 

owner if the owner indicates that an 

HQS violation is fixed, but a 

reinspection proves that the violation 

has not yet been fixed. This fee would 

not be permitted if the reinspection 

confirms that previous violations have 

been fixed but also reveals new HQS 

violations. The fee would pertain solely 

to owner obligations under § 982.404(a) 

and not to family obligations under 

§ 982.404(b). 

Exception Payment Standards for 

Providing Reasonable Accommodations 

(§§ 982.503, 982.505) 

Current regulations require a PHA to 

request a waiver from a HUD Field 

Office for an exception payment 

standard above 110 percent of the fair 

market rent (FMR) to provide a 

reasonable accommodation for a family 

that includes a person with a disability. 

This process takes considerable 

administrative time for the PHA and, in 

some cases, the processing time for the 

waiver prevents the family from leasing 

the unit. 

HUD proposes to allow PHAs to 

approve, if they so choose, a payment 

standard of not more than 120 percent 

of the FMR without HUD approval if 

required as a reasonable accommodation 

for a family that includes a person with 

a disability. This proposed streamlining 

provision would allow a PHA to 

establish a payment standard within 

limits currently permitted but 

designated for approval only by a HUD 

Field Office. For any voucher unit 

assisted under the program, PHAs 

would still be required to perform a rent 

reasonableness determination in 

accordance with section 8(o)(10) of the 

1937 Act and HCV program regulations. 

Therefore, PHAs that utilize this 

provision must maintain documentation 

that the PHA performed the required 

rent reasonableness analysis. 

Family Income and Composition: 

Regular and Interim Examinations 

(§ 982.516) 

With respect to interim examinations, 

current regulations require PHAs to 

conduct a reexamination of income 

whenever a family member with income 

is added to a family participating in the 

voucher program. Regulations for the 

public housing program (at § 960.257) 

are less prescriptive. 

In the interest of streamlining 

requirements across programs, HUD 

proposes to revise § 982.516 to align the 

regulatory language more closely with 

§ 960.257, which will facilitate HUD’s 

ability to issue guidance on interims 

that applies uniformly to the public 

housing and voucher programs. 

Utility Payment Schedules (§ 982.517) 

a. Size and type of units. HUD’s 

current regulations require PHAs to 

establish a utility allowance based on 

size and type of units in a given locality. 

Requiring PHAs to establish a utility 

allowance based on both of these factors 

increases the complexity involved in 

developing a utility allowance schedule. 

HUD proposes to require that the 

allowance be based on the size of the 

unit and either the type of the unit, as 

is currently required, or a streamlined 

version of ‘‘unit type,’’ limited to 

‘‘attached’’ or ‘‘detached.’’ In other 

words, PHAs would have the option to 

define unit type as either ‘‘attached’’ or 

‘‘detached.’’ For any family that would 

face a lower utility allowance because of 

this change to the schedule, the PHA 


tkelley on DSK3SPTVN1PROD with PROPOSALS
428 Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 

must provide at least 60 days’ notice 

before the revised utility allowance 

schedule may go into effect. 

b. Size of dwelling units. HUD’s 

current regulations require PHAs to use 

utility allowances for the size of the 

dwelling unit actually leased by the 

family. The 2014 Appropriations Act 

requires that the amount allowed for 

tenant-paid utilities not exceed the 

utility allowance for the family unit size 

as determined by the PHA. Therefore, 

HUD proposes to revise the regulations 

to conform to the statutory change. 

The proposed rule would require 

PHAs to use the lesser of the two 

standards, unless the family is living in 

a larger unit as a result of a reasonable 

accommodation, in which case the PHA 

would be required to use the utility 

allowance for the size unit the family is 

actually leasing. Section 982.517(e) 

already requires a PHA to approve a 

higher amount than shown on the utility 

allowance schedule as a reasonable 

accommodation, so HUD is proposing 

no revision to that provision. The 

proposed rule also includes a clarifying 

change to § 982.402, cross-referencing 

§ 982.517. 

III. Specific Issues for Comment 

While HUD solicits and welcomes 

comments on all aspects of this rule, 

HUD specifically seeks comment on the 

following: 

1. Use of Actual Past Income (§ 5.609). 

Does this provision provide a clear 

streamlining benefit to PHAs? If not, 

what additional specific changes should 

HUD consider? 

a. For PHAs that choose to use past 

income to determine annual income, 

does requiring the same time frame for 

all sources of income and expenses still 

provide for streamlining, or does this 

make the information collection and 

verification process too complex? If it 

does make the process too complex, 

what alternatives should be available? 

b. Should PHAs be permitted to use 

past income for only some income 

sources, rather than for the entire 

program? For example, does past 

income only work for families with 

consistent income amounts? Or, does 

past income also work for families that 

have sporadic income? 

c. What other types of income 

documentation should HUD permit 

PHAs to use to verify past income? 

2. Earned Income Disregard (§§ 5.617, 

960.255). Will the proposed changes to 

the earned income disregard reduce the 

administrative burden associated with 

implementing the EID? If not, what 

other or additional specific changes 

would facilitate administration of the 

EID? 

3. Streamlined Annual 

Reexamination for Families on Fixed 

Incomes (§§ 5.657, 960.257, 982.516). In 

order to utilize these provisions, PHAs 

and MFH owners will be required to 

determine annually that family incomes 

consist solely of fixed-income sources. 

Consistent with the goal of streamlining, 

by what means could PHAs and MFH 

owners assure that such families do not 

have other sources of income? 

4. Utility Reimbursements 

(§§ 960.253, 982.514). Will the proposed 

changes to the required frequency of 

utility reimbursement provide 

regulatory relief to PHAs? If not, then 

what changes would provide such 

relief? 

5. Start of Assisted Tenancy 

(§ 982.309). HUD is concerned that this 

proposed change may have the 

unintended consequence of limiting 

tenant choice. Does the provision 

provide enough of a benefit to PHAs to 

merit inclusion in this streamlining 

regulation? 

6. Biennial Inspections and the Use of 

Alternate Inspection Method 

(§ 982.405). Where an inspection 

conducted under an alternative method 

results in a finding that a property is out 

of compliance with the standard 

particular to that method, should HUD 

still require PHAs to inspect units using 

HQS, or should HUD allow PHAs to rely 

upon remedial actions taken to bring the 

property into compliance with the 

standards under the alternative 

inspection protocol? In the latter 

instance, if HUD were to adopt such a 

policy, what should HUD require of 

PHAs to demonstrate that an initially 

noncompliant property was 

subsequently brought into compliance 

with the standards under an alternative 

inspection method? 

7. Inspection of Mixed-Finance 

Properties (§ 982.405). Should HUD 

broaden the applicability of this 

provision beyond PBV-assisted 

properties with LIHTC or HOME 

financing or an FHA-insured mortgage? 

If so, to what specific type(s) of mixedfinance properties should it apply, and 

why? 

8. General. Are there other 

opportunities to align requirements 

across programs? Please be specific. 

IV. Findings and Certifications 

Information Collection Requirements 

The information collection 

requirements contained in this proposed 

rule have been approved by the Office 

of Management and Budget (OMB) 

under the Paperwork Reduction Act of 

1995 (44 U.S.C. 3501–3520) and 

assigned OMB control numbers 2577– 

0220 and 0169. In accordance with the 

Paperwork Reduction Act of 1995, an 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information, unless the 

collection displays a currently valid 

OMB control number. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA) establishes 

requirements for federal agencies to 

assess the effects of their regulatory 

actions on state, local, and tribal 

governments and the private sector. 

This rule will not impose any federal 

mandates on any state, local, or tribal 

governments or the private sector within 

the meaning of UMRA. 

Environmental Review 

A Finding of No Significant Impact 

with respect to the environment has 

been made in accordance with HUD 

regulations in 24 CFR part 50 that 

implement section 102(2)(C) of the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4332(2)(C)). The 

Finding is available for public 

inspection during regular business 

hours in the Regulations Division, 

Office of General Counsel, Department 

of Housing and Urban Development, 

451 Seventh Street, SW., Room 10276, 

Washington, DC 20410–0500. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an appointment to review the Finding 

by calling the Regulations Division at 

202–402–3055 (this is not a toll-free 

number). Individuals with speech or 

hearing impairments may access this 

number via TTY by calling the Federal 

Information Relay Service at 800–877– 

8339. 

Impact on Small Entities 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601 et seq.) generally requires 

an agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. This rule 

reduces administrative burdens on 

PHAs and MFH owners in many aspects 

of administering assisted housing. All 

PHAs and MFH owners, regardless of 

size, will benefit from the burden 

reduction proposed by this rule. These 

revisions impose no significant 

economic impact on a substantial 

number of small entities. Therefore, the 

undersigned certifies that this rule will 

not have a significant impact on a 

substantial number of small entities. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 429 

Notwithstanding HUD’s belief that 

this rule will not have a significant 

effect on a substantial number of small 

entities, HUD specifically invites 

comments regarding any less 

burdensome alternatives to this rule that 

will meet HUD’s objectives as described 

in this preamble. 

Executive Order 13132, Federalism 

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 

final rule does not have federalism 

implications and does not impose 

substantial direct compliance costs on 

state and local governments nor 

preempt state law within the meaning of 

the Executive Order. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance numbers applicable to the 

programs that would be affected by this 

rule are: 14.103, 14.123, 14.135, 14.149, 

14.157, 14.181, 14.195, 14.23514.241, 

14.326, 14.850, 14.871, and 14.872. 

List of Subjects 

24 CFR Part 5 

Administrative practice and 

procedure, Aged, Claims, Crime, 

Government contracts, Grant programshousing and community development, 

Individuals with disabilities, 

Intergovernmental relations, Loan 

programs-housing and community 

development, Low and moderate 

income housing, Mortgage insurance, 

Penalties, Pets, Public housing, Rent 

subsidies, Reporting and recordkeeping 

requirements, Social security, 

Unemployment compensation. 

24 CFR Part 574 

Community facilities, Grant programshousing and community development, 

Grant programs-social programs, HIV/

AIDS, Low and moderate income 

housing, Reporting and recordkeeping 

requirements 

24 CFR Part 960 

Aged, Grant programs-housing and 

community development, Individuals 

with disabilities, Pets, Public housing. 

24 CFR Part 966 

Grant programs-housing and 

community development, Public 

housing, Reporting and recordkeeping 

requirements. 

24 CFR Part 982 

Grant programs-housing and 

community development, Grant 

programs-Indians, Indians, Public 

housing, Rent subsidies, Reporting and 

recordkeeping requirements. 

24 CFR Part 983 

Grant programs-housing and 

community development, Rent 

subsidies, Reporting and recordkeeping 

requirements 

24 CFR Part 990 

Accounting, Grant programs-housing 

and community development, Public 

housing, Reporting and recordkeeping 

requirements 

Accordingly, for the reasons stated in 

the preamble, HUD proposes to amend 

24 CFR parts 5, 574, 960, 966, 982, 983, 

and 990 as follows: 

PART 5—GENERAL HUD PROGRAM 

REQUIREMENTS; WAIVERS 

■ 1. The authority citation for part 5 

continues to read as follows: 

Authority: 42 U.S.C. 1437a, 1437c, 1437d, 

1437f, 1437n, 3535(d), Sec. 327, Pub. L. 109– 

115, 119 Stat. 2936, and Sec. 607, Pub. L. 

109–162, 119 Stat. 3051. 

■ 2. Amend § 5.216 as follows: 

■ a. Designate the second paragraph 

(g)(1)(ii) as paragraph (g)(1)(iii); 

■ b. Revise paragraph (h)(1); 

■ c. In paragraph (h)(2), remove the 

phrase ‘‘paragraph (h)(1)’’ and add in its 

place ‘‘paragraph (g)(1)’’; and 

■ d. Add paragraph (h)(3). 

The revision and addition read as 

follows: 

§ 5.216 Disclosure and verification of 

Social Security and Employer Identification 

Numbers. 

* * * * * 

(h) * * * 

(1) Except as provided in paragraphs 

(h)(2) and (3) of this section, if the 

processing entity determines that the 

assistance applicant is otherwise 

eligible to participate in a program, the 

assistance applicant may retain its place 

on the waiting list for the program but 

cannot become a participant until it can 

provide the documentation referred to 

in paragraph (g)(1) of this section to 

verify the SSN of each member of the 

household. 

* * * * * 

(3) If a child under the age of 6 years 

was added to the assistance applicant 

household within the 6-month period 

prior to the household’s date of 

admission, the assistance applicant may 

become a participant, so long as the 

documentation required in paragraph 

(g)(1) of this section is provided to the 

processing entity within 90 calendar 

days from the date of admission into the 

program. The processing entity shall 

grant an extension of one additional 

90-day period if the processing entity 

determines that, in its discretion, the 

assistance applicant’s failure to comply 

was due to circumstances that could not 

reasonably have been foreseen and were 

outside the control of the assistance 

applicant. If the applicant family fails to 

produce the documentation required in 

paragraph (g)(1) of this section within 

the required time period, the processing 

entity shall follow the provisions of 

§ 5.218. 

* * * * * 

■ 3. Amend § 5.520 as follows: 

■ a. Revise paragraph (c)(1) introductory 

text; 

■ b. Revise paragraph (c)(2) introductory 

text; 

■ c. Revise paragraph (d); and 

■ d. Add paragraph (e). 

The revisions and addition read as 

follows: 

§ 5.520 Proration of assistance. 

* * * * * 

(c) * * * 

(1) Section 8 assistance other than 

assistance provided for a tenancy under 

the Section 8 Housing Choice Voucher 

Program. For Section 8 assistance other 

than assistance for a tenancy under the 

voucher program, the PHA must prorate 

the family’s assistance as follows: 

* * * * * 

(2) Assistance for a Section 8 voucher 

tenancy. For a tenancy under the 

voucher program, the PHA must prorate 

the family’s assistance as follows: 

* * * * * 

(d) Method of prorating assistance for 

Public Housing covered programs. (1) 

The PHA shall prorate the family’s 

assistance as follows: 

(i) Step 1. Determine the total tenant 

payment in accordance with § 5.628. 

(Annual income includes income of all 

family members, including any family 

member who has not established 

eligible immigration status.) 

(ii) Step 2. Subtract the total tenant 

payment from the PHA-established flat 

rent applicable to the unit. The result is 

the maximum subsidy for which the 

family could qualify if all members were 

eligible (‘‘family maximum subsidy’’). 

(iii) Step 3. Divide the family 

maximum subsidy by the number of 

persons in the family (all persons) to 

determine the maximum subsidy per 

each family member who has 

citizenship or eligible immigration 

status (‘‘eligible family member’’). The 

subsidy per eligible family member is 

the ‘‘member maximum subsidy’’. 


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(iv) Step 4. Multiply the member 

maximum subsidy by the number of 

family members who have citizenship 

or eligible immigration status (‘‘eligible 

family members’’). 

(2) The product of steps 1 through 4 

of paragraphs (d)(1)(i) through (iv) of 

this section is the amount of subsidy for 

which the family is eligible (‘‘eligible 

subsidy’’). The family’s rent is the PHAestablished flat rent minus the amount 

of the eligible subsidy. 

(e) Method of prorating assistance 

when the mixed family’s TTP is greater 

than the Public Housing flat rent. When 

the mixed family’s TTP is greater than 

the flat rent, the PHA must use the TTP 

as the mixed family TTP. The PHA 

subtracts from the mixed family TTP 

any established utility allowance, and 

the sum becomes the mixed family rent. 

§ 5.601 [Amended] 

■ 4. In § 5.601 in paragraph (e),, remove 

the phrase ‘‘Housing Opportunities for 

Persons with AIDS (24 CFR part 574);’’. 

■ 5. In § 5.603, revise the definitions of 

‘‘Extremely low income family’’ and 

‘‘Total tenant payment’’ in paragraph (b) 

to read as follows: 

§ 5.603 Definitions. 

* * * * * 

(b) * * * 

Extremely low-income family. A 

family whose annual income does not 

exceed the higher of: 

(1) The poverty guidelines established 

by the Department of Health and Human 

Services applicable to the family of the 

size involved (except in the case of 

families living in Puerto Rico or any 

other territory or possession of the 

United States); or 

(2) 30 percent of the median income 

for the area, as determined by HUD, 

with adjustments for smaller and larger 

families, except that HUD may establish 

income ceilings higher or lower than 30 

percent of the area median income for 

the area if HUD finds that such 

variations are necessary because of 

unusually high or low family incomes. 

* * * * * 

Total tenant payment. See § 5.628. 

* * * * * 

■ 6. Amend § 5.609 as follows: 

■ a. Revise paragraph (a); 

■ b. In paragraph (b)(9), add the phrase 

‘‘and any other required fees and 

charges’’ after ‘‘tuition’’ in the first 

sentence; and 

■ c. Add paragraphs (e) and (f). 

The revision and additions read as 

follows: 

§ 5.609 Annual income. 

(a) Annual income means all 

amounts, monetary or not, which: 

(1) Go to, or on behalf of, the family 

head or spouse (even if temporarily 

absent) or to any other family member, 

either: 

(i) Prior to admission or the annual 

reexamination effective date (i.e., 

‘‘actual past income’’); or 

(ii) During the 12-month period 

following admission or the annual 

reexamination effective date (i.e., 

‘‘projected income’’); and 

(2) Are not specifically excluded in 

paragraph (c) of this section. 

* * * * * 

(e) At the family’s request, the PHA or 

owner must use projected income to 

calculate annual income. 

(f) Absent a family’s request to use 

projected income to calculate annual 

income: 

(1) A PHA may choose to determine 

annual income by using actual past 

income in lieu of projected income for 

its public housing or Housing Choice 

Voucher program (or both), but it must 

apply the same definition of annual 

income for all families in the selected 

program. 

(2) An owner may choose to 

determine annual income by using 

actual past income in lieu of projected 

income, but it must apply the same 

definition of annual income for all 

families in a single property. 

■ 7. In § 5.617, revise paragraphs (a) and 

(c) to read as follows: 

§ 5.617 Self-sufficiency incentives for 

persons with disabilities—Disallowance of 

increase in annual income. 

(a) Applicable programs. The 

disallowance of increase in annual 

income provided by this section is 

applicable only to the following 

programs: HOME Investment 

Partnerships Program (24 CFR part 92); 

Continuum of Care Program (24 CFR 

part 578); and the Housing Choice 

Voucher Program (24 CFR part 982). For 

the Housing Opportunities for Persons 

With AIDS (HOPWA) program, refer to 

24 CFR 574.305. For public housing 

program self-sufficiency incentives, 

refer to 24 CFR 960.255. 

* * * * * 

(c) Disallowance of increase in annual 

income—(1) Initial 12-month exclusion. 

During the consecutive 12-month period 

beginning on the date a member who is 

a person with disabilities of a qualified 

family is first employed or the family 

first experiences an increase in annual 

income attributable to employment, the 

responsible entity must exclude from 

annual income (as defined in the 

regulations governing the applicable 

program listed in paragraph (a) of this 

section) of a qualified family 100 

percent of any increase in income of the 

family member who is a person with 

disabilities as a result of employment 

over prior income of that family 

member. 

(2) Second 12-month exclusion. 

During the second consecutive 12- 

month period after the date a member 

who is a person with disabilities of a 

qualified family is first employed or the 

family first experiences an increase in 

annual income attributable to 

employment, the responsible entity 

must exclude from annual income of a 

qualified family not less than 50 percent 

of any increase in income of such family 

member as a result of employment over 

income of that family member prior to 

the beginning of such employment. 

(3) Duration of exclusions. Any 

income exclusions under this paragraph 

(c) shall continue only as long as the 

family member who is a person with 

disabilities of a qualified family is 

continually employed, during the 24- 

month exclusionary period. If the family 

member becomes unemployed, the 

income exclusion shall stop and the 

family must re-qualify under the terms 

of paragraphs (a) and (b) of this section 

for the benefits under this section. 

(4) Conflicting exclusions. If grant 

funds affected by this paragraph (c) are 

combined with grant funds that have 

conflicting earned income exclusions, 

the regulations pertaining to the 

program that provides the rental 

assistance shall govern. 

* * * * * 

■ 8. In § 5.657, add paragraph (d) to read 

as follows: 

§ 5.657 Section 8 project-based assistance 

programs: Reexamination of family income 

and composition. 

* * * * * 

(d) Reexaminations for families with 

fixed incomes. For families with fixed 

incomes, an owner may elect to 

determine the family’s annual income at 

reexamination by applying a verified 

cost of living adjustment for the source 

of income to the previously verified or 

adjusted income amount. 

(1) ‘‘Families with fixed income’’ is 

defined as families whose income 

consists solely of the following: 

(i) Social Security payments, 

including Supplemental Security 

Income (SSI) and Supplemental 

Security Disability Insurance (SSDI); or 

(ii) Federal, State, local and private 

pension plans. 

(2) To verify a cost of living 

adjustment, an owner may use 

adjustments published publicly or that 

are made available to the owner by 

tenant-provided, third party-generated 

documents. If no verification is 

available, the owner must follow the 


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Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 431 

standard income verification process to 

calculate the change in income. 

(3) An owner that adopts the 

streamlined reexamination procedures 

in this paragraph must use projected 

income to determine a family’s annual 

income and may not adopt the option to 

determine annual income using actual 

past income (§ 5.609(a)(1)(i)). 

PART 574—HOUSING 

OPPORTUNITIES FOR PERSONS WITH 

AIDS 

■ 9. The authority citation for part 574 

continues to read as follows: 

Authority: 42 U.S.C. 3535(d) and 12901– 

12912. 

■ 10. Add § 574.305 to read as follows: 

§ 574.305 Self-sufficiency incentives for 

persons with disabilities—Disallowance of 

increase in annual income. 

(a) Applicability. The disallowance of 

increase in annual income provided by 

this section is applicable only to the 

HOPWA program. 

(b) Definitions. The following 

definitions apply for purposes of this 

section. 

Disallowance. Exclusion from annual 

income. 

Person with disabilities. See 24 CFR 

5.403. 

Previously unemployed includes a 

person with disabilities who has earned, 

in the twelve months previous to 

employment, no more than would be 

received for 10 hours of work per week 

for 50 weeks at the established 

minimum wage. 

Qualified family. A family residing in 

HOPWA-assisted housing: 

(1) Whose annual income increases as 

a result of employment of a family 

member who is a person with 

disabilities and who was previously 

unemployed for one or more years prior 

to employment; 

(2) Whose annual income increases as 

a result of increased earnings by a 

family member who is a person with 

disabilities during participation in any 

economic self-sufficiency or other job 

training program; or 

(3) Whose annual income increases, 

as a result of new employment or 

increased earnings of a family member 

who is a person with disabilities, during 

or within six months after receiving 

assistance, benefits or services under 

any state program for temporary 

assistance for needy families funded 

under Part A of Title IV of the Social 

Security Act, as determined by the 

grantee or project sponsor in 

consultation with the local agencies 

administering temporary assistance for 

needy families (TANF) and Welfare-toWork (WTW) programs. The TANF 

program is not limited to monthly 

income maintenance, but also includes 

such benefits and services as one-time 

payments, wage subsidies and 

transportation assistance—provided that 

the total amount over a six-month 

period is at least $500. 

(c) Disallowance of increase in annual 

income. (1) Initial twelve-month 

exclusion. During the cumulative 

twelve-month period beginning on the 

date a member who is a person with 

disabilities of a qualified family is first 

employed or the family first experiences 

an increase in annual income 

attributable to employment, the grantee 

or project sponsor must exclude from 

annual income (as defined at 24 CFR 

5.609) of a qualified family any increase 

in income of the family member who is 

a person with disabilities as a result of 

employment over prior income of that 

family member. 

(2) Second twelve-month exclusion 

and phase-in. During the second 

cumulative twelve-month period after 

the date a member who is a person with 

disabilities of a qualified family is first 

employed or the family first experiences 

an increase in annual income 

attributable to employment, the grantee 

or project sponsor must exclude from 

annual income of a qualified family fifty 

percent of any increase in income of a 

family member who is a person with 

disabilities as a result of employment 

over income of that family member prior 

to the beginning of such employment. 

(3) Maximum four-year disallowance. 

The disallowance of increased income 

of an individual family member who is 

a person with disabilities as provided in 

paragraph (c)(1) or (2) of this section is 

limited to a lifetime 48-month period. 

The disallowance only applies for a 

maximum of twelve months for 

disallowance under paragraph (c)(1) of 

this section and a maximum of twelve 

months for disallowance under 

paragraph (c)(2) of this section, during 

the 48-month period starting from the 

initial exclusion under paragraph (c)(1) 

of this section. 

(d) Inapplicability to admission. The 

disallowance of increases in income as 

a result of employment of persons with 

disabilities under this section does not 

apply for purposes of admission to the 

program (including the determination of 

income eligibility or any income 

targeting that may be applicable). 

§ 574.310 [Amended] 

■ 11. In § 574.310, remove the citation 

‘‘24 CFR 5.617’’ and add in its place 

‘‘§ 574.305’’ in paragraph (d)(1). 

PART 960—ADMISSION TO, AND 

OCCUPANCY OF, PUBLIC HOUSING 

■ 12. The authority citation for part 960 

continues to read as follows: 

Authority: 42 U.S.C. 1437a, 1437c, 1437d, 

1437n, 1437z–3, and 3535(d). 

■ 13. In § 960.102, revise paragraph (a) 

to read as follows: 

§ 960.102 Definitions. 

(a) Definitions found elsewhere: 

(1) General definitions. The following 

terms are defined in 24 CFR part 5, 

subpart A: 1937 Act, drug, drug-related 

criminal activity, elderly person, 

federally assisted housing, guest, 

household, HUD, MSA, premises, 

public housing, public housing agency 

(PHA), Section 8, violent criminal 

activity. 

(2) Definitions under the 1937 Act. 

The following terms are defined in 24 

CFR part 5, subpart D: annual 

contributions contract (ACC), applicant, 

elderly family, family, person with 

disabilities. 

(3) Definitions and explanations 

concerning income and rent. The 

following terms are defined or 

explained in 24 CFR part 5, subpart F: 

Annual income (see 24 CFR 5.609); 

economic self-sufficiency program, 

extremely low income family, low 

income family, tenant rent, total tenant 

payment (see 24 CFR 5.613), utility 

allowance. 

* * * * * 

■ 14. Amend § 960.253 as follows: 

■ a. Revise paragraph (b); 

■ b. In paragraph (c)(1), remove the 

phrase ‘‘PHA’s rent policies’’ and add in 

its place ‘‘PHA’s policies’’; 

■ c. Remove the last sentence of 

paragraph (c)(3) and add paragraph 

(c)(4); 

■ d. Revise paragraphs (d) and (e); 

■ e. Redesignate paragraph (f) as 

paragraph (g); and 

■ f. Add a new paragraph (f). 

The revisions and addition read as 

follows: 

§ 960.253 Choice of rent. 

* * * * * 

(b) Flat rent. (1) The flat rent is based 

on the rental value of the unit, and is 

subject to the following requirements: 

(i) Not less than once every five PHA 

fiscal years, the PHA must use a 

reasonable method to determine the 

rental value for a unit. 

(ii) The PHA must establish a flat rent 

that is based upon the requirements of 

paragraph (b)(1)(i), but the flat rent may 

not be less than 80 percent of the 

applicable Fair Market Rent (FMR) as 

determined under 24 CFR part 888, 

subpart A. 


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(iii) For units where utilities are 

tenant-paid, the PHA must adjust the 

flat rent amount downward by the 

amount of a utility allowance for which 

the family might otherwise be eligible 

under 24 CFR part 965, subpart E. 

(iv) The PHA must revise, if necessary 

the flat rent amount for a unit no later 

than 90 days after HUD issues new 

FMRs. 

(2) If a new flat rent, adjusted to meet 

the 80 percent of FMR threshold, would 

cause a family’s rent to increase by more 

than 35 percent, the family’s rent 

increase must be phased in at 35 percent 

annually until such time that the family 

chooses to pay the income-based rent or 

the family is paying the flat rent 

established pursuant to this paragraph. 

(3) The PHA must maintain records 

that document the method used to 

determine flat rents, and also show how 

flat rents are determined by the PHA in 

accordance with this method, and 

document flat rents offered to families 

under this method. 

(c) * * * 

(4) The PHA may elect to establish 

policies regarding the frequency of 

utility reimbursement payments for 

payments made to the family. 

(i) The PHA will have the option of 

making utility reimbursement payments 

quarterly, for reimbursements totaling 

$20 or less per quarter. In the event a 

family leaves the program in advance of 

its next quarterly reimbursement, the 

PHA must reimburse the family for a 

prorated share of the applicable 

reimbursement. 

(ii) If the PHA elects to pay the utility 

supplier, the PHA must notify the 

family of the amount of utility 

reimbursement paid to the utility 

supplier. 

(d) Ceiling rent. A PHA using ceiling 

rents authorized and established before 

October 1, 1999, may continue to use 

ceiling rents, provided such ceiling 

rents are set at the level required for flat 

rents under this section. PHAs must 

follow the requirements for calculating 

and adjusting flat rents in paragraph (b) 

of this section when calculating and 

adjusting ceiling rents. 

(e) Information for families. For the 

family to make an informed choice 

about its rent options, the PHA must 

provide sufficient information for an 

informed choice. Such information must 

include at least the following written 

information: 

(1) The PHA’s policies on switching 

type of rent in circumstances of 

financial hardship; and 

(2) The dollar amounts of tenant rent 

for the family under each option, 

following the procedures in paragraph 

(f) of this section. 

(f) Reexamination of family income 

and revisions of flat rental amounts. 

The PHA must revise the flat rental 

amount, as necessary, based on the 

findings of the PHA’s rental value 

analysis and changes to the FMR. 

Families must be offered the choice 

between a flat rental amount and a 

previously calculated income-based rent 

according to the following: 

(1) For a family that chooses the flat 

rent option, the PHA must conduct a 

reexamination of family income and 

composition at least once every three 

years. 

(2) At initial occupancy, or in any 

year in which a participating family is 

paying the income-based rent, the PHA 

must: 

(i) Conduct a full examination of 

family income and composition, 

following the provisions in § 960.257; 

(ii) Inform the family of the flat rental 

amount and the income-based rental 

amount determined by the examination 

of family income and composition; 

(iii) Inform the family of the PHA’s 

policies on switching rent types in 

circumstances of financial hardship; 

and 

(iv) Apply the family’s rent decision 

at the next lease renewal. 

(3) In any year in which a family 

chooses the flat rent option but the PHA 

chooses not to conduct a full 

examination of family income and 

composition for the annual rent option 

under the authority of paragraph (f)(1) of 

this section, the PHA must: 

(i) Use income information from the 

examination of family income and 

composition from the first annual rent 

option; 

(ii) Inform the family of the updated 

flat rental amount and the rental amount 

determined by the most recent 

examination of family income and 

composition; 

(iii) Inform the family of the PHA’s 

policies on switching rent types in 

circumstances of financial hardship; 

and 

(iv) Apply the family’s rent decision 

at the next lease renewal. 

* * * * * 

■ 15. In § 960.255, revise paragraph (c) 

to read as follows: 

§ 960.255 Self-sufficiency incentives— 

Disallowance of increase in annual income. 

* * * * * 

(c) Disallowance of increase in annual 

income—(1) Initial 12-month exclusion. 

During the consecutive 12-month period 

beginning on the date a member of a 

qualified family is first employed or the 

family first experiences an increase in 

annual income attributable to 

employment, the PHA must exclude 

from annual income (as defined in 24 

CFR 5.609) of a qualified family 100 

percent of any increase in income of the 

family member as a result of 

employment over prior income of that 

family member. 

(2) Second 12-month exclusion. 

During the second consecutive 12- 

month period after the date a member of 

a qualified family is first employed or 

the family first experiences an increase 

in annual income attributable to 

employment, the PHA must exclude 

from annual income of a qualified 

family not less than 50 percent of any 

increase in income of such family 

member as a result of employment over 

income of that family member prior to 

the beginning of such employment. 

(3) Duration of exclusions. Any 

income exclusions under this paragraph 

(c) shall continue only as long as a 

member of a qualified family is 

continually employed. If the family 

member becomes unemployed, the 

income exclusion shall stop and the 

family must re-qualify for the benefits 

under this section, at which point such 

family shall be eligible for all benefits 

under this paragraph (c). 

* * * * * 

■ 16. In § 960.257 revise the section 

heading and paragraphs (a) and (b) to 

read as follows: 

§ 960.257 Family income and composition: 

Annual and interim reexaminations. 

(a) When PHA is required to conduct 

reexamination. (1) For families who pay 

an income-based rent, the PHA must 

conduct a reexamination of family 

income and composition at least 

annually and must make appropriate 

adjustments to the rent after 

consultation with the family and upon 

verification of the information. 

(2) For families who choose flat rents, 

the PHA must conduct a reexamination 

of family income and composition at 

least once every three years, in 

accordance with the procedures in 

§ 960.253(f). 

(3) For all families who include 

nonexempt individuals, as defined in 

§ 960.601, the PHA must determine 

compliance once each 12 months with 

community service and self-sufficiency 

requirements in subpart F of this part. 

(4) The PHA may use the results of 

these reexaminations to require the 

family to move to an appropriate size 

unit. 

(b) Interim reexaminations. (1) A 

family may request an interim 

reexamination of family income or 

composition because of any changes 

since the last determination. The PHA 

must make the interim reexamination 


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within a reasonable time after the family 

request. 

(2) The PHA must adopt policies 

prescribing when and under what 

conditions the family must report a 

change in family income or 

composition. The PHA must make the 

interim reexamination of family income 

or composition within a reasonable time 

after the family request. 

(3) For families with fixed incomes, a 

PHA may elect to recalculate a family’s 

annual income at an interim 

reexamination by applying a verified 

cost of living adjustment for the source 

of income to the previously verified or 

adjusted income amount. 

(i) ‘‘Families with fixed income’’ is 

defined as families whose income 

consists solely of the following: 

(A) Social Security payments, 

including Supplemental Security 

Income (SSI) and Supplemental 

Security Disability Insurance (SSDI); or 

(B) Federal, State, local and private 

pension plans. 

(ii) To verify a cost of living 

adjustment, a PHA may use adjustments 

published publicly or that are made 

available to the PHA by tenantprovided, third party-generated 

documents. If no verification is 

available, the PHA must follow the 

standard income verification process to 

calculate the change in income. 

(iii) A PHA that adopts the 

streamlined reexamination procedures 

in this paragraph (b)(3) of this section 

must use projected income to determine 

a family’s annual income and may not 

adopt the option to determine annual 

income using actual past income (24 

CFR 5.609(a)(1)(i)). 

* * * * * 

■ 17. In § 960.259, revise paragraph 

(c)(1) introductory text, and add 

paragraph (c)(2) to read as follows: 

§ 960.259 Family information and 

verification. 

* * * * * 

(c) * * * 

(1) The PHA must obtain and 

document in the family file third-party 

verification of the following factors, or 

must document in the file why thirdparty verification was not available: 

* * * * * 

(2) For a family with net assets equal 

to or less than $5,000, a PHA may 

accept a family’s declaration that it has 

net assets equal to or less than $5,000, 

without taking additional steps to verify 

the accuracy of the declaration. The 

declaration must state the amount of 

income the family expects to receive 

from such assets; this amount must be 

included in the family’s income. 

■ 18. In § 960.605, revise paragraphs 

(c)(3) through (5) to read as follows: 

§ 960.605 How PHA administers service 

requirements. 

* * * * * 

(c) * * * 

(3) The PHA must review family 

compliance with service requirements 

and must verify such compliance 

annually at least 30 days before the end 

of the 12-month lease term. If qualifying 

activities are administered by an 

organization other than the PHA, the 

PHA may obtain verification of family 

compliance from such third parties or 

may accept a signed certification from 

the family member that he or she has 

performed such qualifying activities. 

(4) The PHA must retain reasonable 

documentation of service requirement 

performance or exemption in a 

participant family’s files. 

(5) The PHA must comply with nondiscrimination and equal opportunity 

requirements listed at 24 CFR 5.105(a) 

and affirmatively further fair housing in 

all their activities in accordance with 

the AFFH Certification as described in 

24 CFR 91.225(a)(1). 

■ 19. In § 960.607, revise paragraph (a) 

to read as follows: 

§ 960.607 Assuring resident compliance. 

(a) Acceptable documentation 

demonstrating compliance. (1) If 

qualifying activities are administered by 

an organization other than the PHA, a 

family member who is required to fulfill 

a service requirement must provide one 

of the following: 

(i) A signed certification to the PHA 

by such other organization that the 

family member has performed such 

qualifying activities; or 

(ii) A signed self-certification to the 

PHA by the family member that he or 

she has performed such qualifying 

activities. 

(2) The signed self-certification must 

include the following: 

(i) A statement that the tenant 

contributed at least 8 hours per month 

of community service not including 

political activities within the 

community in which the adult resides; 

or participated in an economic selfsufficiency program (as that term is 

defined in paragraph (g) of this section) 

for at least 8 hours per month; 

(ii) The name, address, and a contact 

person at the community service 

provider; or the name, address and 

contact person for the economic selfsufficiency program; 

(iii) The date(s) during which the 

tenant completed the community 

service activity, or participated in the 

economic self-sufficiency program; 

(iv) A description of the activity 

completed; and 

(v) A certification that the tenant’s 

statement is true. 

* * * * * 

PART 966—PUBLIC HOUSING LEASE 

AND GRIEVANCE PROCEDURE 

■ 20. The authority citation for part 966 

continues to read as follows: 

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

■ 21. Amend § 966.52 by adding a 

second sentence at the end of paragraph 

(a); and adding paragraph (e), to read as 

follows: 

§ 966.52 Requirements. 

(a) * * * A PHA may establish an 

expedited grievance procedure as 

defined in § 966.53. 

* * * * * 

(e) The PHA must not only meet the 

minimal procedural due process 

requirements contained in this subpart 

but also satisfy any additional 

requirements required by local, state, or 

federal law. 

■ 22. In § 966.53, revise paragraphs (b), 

(d), and (e) to read as follows: 

§ 966.53 Definitions. 

* * * * * 

(b) Complainant means any tenant 

whose grievance is presented to the 

PHA or at the project management 

office. 

* * * * * 

(d) Expedited grievance means a 

procedure established by the PHA for 

any grievance concerning a termination 

of tenancy or eviction that involves: (1) 

Any criminal activity that threatens the 

health, safety, or right to peaceful 

enjoyment of the PHA’s public housing 

premises by other residents or 

employees of the PHA; or 

(2) Any drug-related or violent 

criminal activity on or off such 

premises. 

(e) Hearing officer means an impartial 

person or persons selected by the PHA, 

other than the person who made or 

approved the decision under review, or 

a subordinate of that person. Such 

individual or individuals do not need 

legal training. 

* * * * * 

§ 966.54 [Amended] 

■ 23. Amend § 966.54 by removing the 

second and third sentences. 

§ 966.55 [Removed] 

■ 24. Remove § 966.55. 

■ 25. Amend § 966.56 as follows: 

■ a. Revise paragraph (a); 

■ b. In paragraph (b)(2), remove the 

comma; 


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■ c. Remove paragraphs (c), (f), and (g); 

■ d. Redesignate paragraphs (d), (e), and 

(h) as paragraphs (c), (d), and (e), 

respectively; 

■ e. Revise redesignated paragraph (c); 

and 

■ f. In redesignated paragraph (e), add 

paragraph (e)(3). 

The revisions and addition read as 

follows: 

§ 966.56 Procedures governing the 

hearing. 

(a) The hearing shall be scheduled 

promptly for a time and place 

reasonably convenient to both the 

complainant and the PHA and held 

before a hearing officer. A written 

notification specifying the time, place, 

and the procedures governing the 

hearing shall be delivered to the 

complainant and the appropriate 

official. 

* * * * * 

(c) If the complainant or the PHA fails 

to appear at a scheduled hearing, the 

hearing officer may make a 

determination to postpone the hearing 

for no more than five business days or 

may make a determination that the party 

has waived his right to a hearing. Both 

the complainant and the PHA shall be 

notified of the determination by the 

hearing officer A determination that the 

complainant has waived the 

complainant’s right to a hearing shall 

not constitute a waiver of any right the 

complainant may have to contest the 

PHA’s disposition of the grievance in an 

appropriate judicial proceeding. 

* * * * * 

(e) * * * 

(3) Materials must be provided in 

other languages prevalent in the 

Community in accordance with HUD’ 

Final Guidance on LEP published in the 

Federal Register on January 22, 2007. 

■ 26. Revise § 966.57 to read as follows: 

§ 966.57 Decision of the hearing officer. 

(a) The hearing officer shall prepare a 

written decision, including the reasons 

for the PHA’s decision within a 

reasonable time after the hearing. A 

copy of the decision shall be sent to the 

complainant and the PHA. The PHA 

shall retain a copy of the decision in the 

tenant’s folder. 

(b) The decision of the hearing officer 

shall be binding on the PHA unless the 

PHA Board of Commissioners 

determines that: 

(1) The grievance does not concern 

PHA action or failure to act in 

accordance with or involving the 

complainant’s lease on PHA regulations, 

which adversely affects the 

complainant’s rights, duties, welfare or 

status; 

(2) The decision of the hearing officer 

is contrary to applicable Federal, State 

or local law, HUD regulations or 

requirements of the annual 

contributions contract between HUD 

and the PHA. 

(c) A decision by the hearing officer 

or Board of Commissioners in favor of 

the PHA or which denies the relief 

requested by the complainant in whole 

or in part shall not constitute a waiver 

of, nor affect in any manner whatever, 

any rights the complainant may have to 

a trial de novo or judicial review in any 

judicial proceedings, which may 

thereafter be brought in the matter. 

PART 982—SECTION 8 TENANTBASED ASSISTANCE: HOUSING 

CHOICE VOUCHER PROGRAM 

■ 27. The authority citation for part 982 

continues to read as follows: 

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

■ 28. In § 982.309 add paragraph (a)(5) 

to read as follows: 

§ 982.309 Term of assisted tenancy. 

(a) * * * 

(5) The PHA may adopt policies 

limiting the effective date of the lease to 

a certain day or days of the month, such 

as the first day of the month. Assistance 

paid upon family move-out must be in 

accordance with § 982.311(d). 

* * * * * 

■ 29. In § 982.402 add a sentence at the 

end of (d)(2) to read as follows: 

§ 982.402 Subsidy Standards. 

* * * * * 

(d) * * * 

(2) * * * However, utility allowances 

must follow § 982.517(d). 

■ 30. Amend § 982.405 as follows: 

■ a. In paragraph (a), remove the word 

‘‘annually’’ and add in its place 

‘‘biennially’’; 

■ b. Revise paragraph (e); and 

■ c. Add paragraph (f). 

The revision and addition read as 

follows: 

§ 982.405 PHA initial and periodic unit 

inspection. 

* * * * * 

(e) The PHA may not charge the 

family for inspection or reinspection of 

the unit. The PHA may not charge the 

owner for the initial inspection of the 

unit or a regularly scheduled inspection 

of the unit. The PHA may establish a 

reasonable fee to owners for 

reinspections if the reinspection reveals 

that deficiencies cited in the previous 

inspection that the owner is responsible 

for repairing pursuant to § 982.404(a) 

were not corrected. The owner may not 

pass this fee along to the family. 

(f) If a participant family or 

government official reports a condition 

that is life-threatening (i.e., the PHA 

would require the owner to make the 

repair within no more than 24 hours in 

accordance with § 982.404(a)(3)), then 

the PHA must inspect the housing unit 

within 24 hours of when the PHA 

received the notification. If the reported 

condition is not life-threatening (i.e., the 

PHA would require the owner to make 

the repair within no more than 30 

calendar days), then the PHA must 

inspect the unit within 15 days of when 

the PHA received the notification. In the 

event of extraordinary circumstances, 

such as if a unit is within a 

Presidentially declared disaster area, 

HUD may waive the 24-hour or the 15- 

day inspection requirement until such 

time as an inspection is feasible. 

§ 982.406 [Redesignated as § 982.407] 

■ 31. Redesignate § 982.406 as 

§ 982.407. 

■ 32. Add a new § 982.406 to read as 

follows: 

§ 982.406 Use of Alternative Inspections. 

(a) In general. (1) A PHA may comply 

with the biennial inspection 

requirement in § 982.405(a) by relying 

on an inspection conducted for another 

housing assistance program. 

(2) Units in properties that are mixedfinance properties assisted with projectbased vouchers may be inspected at 

least triennially pursuant to 24 CFR 

983.103(g). 

(b) Administrative plans. A PHA 

relying on an alternative inspection to 

fulfill the biennial inspection 

requirement for a particular unit must 

identify the alternative inspection 

method being used in the PHA’s 

administrative plan. Such a change may 

be a significant amendment to the plan, 

in which case the PHA must follow its 

plan amendment and public notice 

requirements before using the 

alternative inspection method. 

(c) Eligible inspection methods. (1) 

PHAs may rely upon inspections of 

housing assisted under the HOME 

Investment Partnerships (HOME) 

program or housing financed under the 

Department of the Treasury’s LowIncome Housing Tax Credit (LIHTC) 

program, or inspections performed by 

HUD with no action other than 

amending their administrative plans. 

(2) If a PHA wishes to rely on an 

inspection method other than a method 

listed in paragraph (c)(1) of this section, 

then, prior to amending its 

administrative plan, the PHA must 

submit to the Real Estate Assessment 

Center (REAC) a certification affirming, 

under penalty of perjury, that the 


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method ‘‘provides the same or greater 

protection to occupants of dwelling 

units’’ as would HQS. A PHA must also 

assure that it will be able to obtain the 

results of such alternative inspection; a 

PHA that is unable to obtain the results 

of an alternative inspection may not rely 

upon the inspection method to comply 

with the biennial inspection 

requirement in § 982.405(a). 

(3) A PHA that submits a certification 

under paragraph (c)(2) of this section 

must monitor changes to the standards 

and requirements applicable to such 

method so that it is made aware of any 

weakening of the method that would 

cause the alternative inspection to no 

longer meet or exceed HQS, in which 

case the PHA may no longer rely upon 

the alternative inspection method to 

comply with the biennial inspection 

requirement. 

(d) Rules for passing alternative 

methods. (1) In order to utilize an 

alternative inspection method, a 

property must meet the standards or 

requirements regarding housing quality 

or safety applicable to properties 

assisted under the program using the 

alternative inspection method. To make 

the determination of whether such 

standards or requirements are met, the 

PHA must adhere to the following 

procedures: 

(i) If a property is inspected under an 

alternative inspection method, and the 

property receives a ‘‘pass’’ score, then 

the PHA may rely on that inspection to 

demonstrate compliance with the 

biennial inspection requirement. 

(ii) If a property is inspected under an 

alternative inspection method, and the 

property receives a ‘‘fail’’ score, then the 

PHA may not rely on that inspection to 

demonstrate compliance with the 

biennial inspection requirement. 

(iii) If a property is inspected under 

an alternative inspection method that 

does not employ a pass/fail 

determination—for example, in the case 

of a program where deficiencies are 

simply noted—then the PHA must 

review the list of deficiencies to 

determine whether any cited deficiency 

would have resulted in a ‘‘fail’’ score 

under HQS. If no such deficiency exists, 

then the PHA may rely on the 

inspection to demonstrate compliance 

with the biennial inspection 

requirements; if such a deficiency does 

exist, then the PHA may not rely on the 

inspection to demonstrate such 

compliance. 

(2) Under any circumstance described 

above in which a PHA is prohibited 

from relying on an alternative 

inspection method, the PHA must, in a 

reasonable period of time, conduct an 

HQS inspection of any units in the 

property occupied by voucher program 

participants and follow HQS procedures 

to remedy any noted deficiencies. 

(f) Records retention. As with all other 

inspection reports, and as required by 

§ 982.158(f)(4), reports for inspections 

conducted pursuant to an alternative 

inspection method must be obtained by 

the PHA. Such reports must be available 

for HUD inspection for at least three 

years from the date of the latest 

inspection. 

■ 33. Amend § 982.503 as follows: 

■ a. Add paragraph (b)(1)(iii); 

■ b. Remove the first word in paragraph 

(b)(2) and in its place add ‘‘Except as 

described in § 982.503(b)(1)(iii), the’’; 

■ c. In paragraph (c)(2), remove the 

paragraph heading, remove paragraph 

(c)(2)(ii), and redesignate paragraphs 

(c)(2)(i)(A) and (B) as paragraphs (c)(2)(i) 

and (ii), respectively. 

The addition reads as follows: 

§ 982.503 Voucher tenancy: Payment 

standard amount and schedule. 

* * * * * 

(b) * * * 

(1) * * * 

(iii) The PHA may establish an 

exception payment standard up to 120 

percent if required as a reasonable 

accommodation for a family that 

includes a person with a disability. Any 

unit approved under an exception 

payment standard must still meet the 

reasonable rent requirements found at 

§ 982.507. 

* * * * * 

§ 982.505 [Amended] 

■ 34. In § 982.505: 

■ a. In the section heading, remove 

‘‘Voucher tenancy:’’; and 

■ b. In paragraph (d), remove the phrase 

‘‘within the basic range’’ and add in its 

place ‘‘between 90 and 120 percent of 

the FMR’’. 

■ 35. In § 982.514, add paragraph (c) to 

read as follows: 

§ 982.514 Distribution of housing 

assistance payment. 

* * * * * 

(c) The PHA may elect to establish 

policies regarding the frequency of 

utility reimbursement payments for 

payments made to the family. 

(i) The PHA will have the option of 

making utility reimbursement payments 

quarterly, for reimbursements totaling 

$20 or less per quarter. In the event a 

family leaves the program in advance of 

its next quarterly reimbursement, the 

PHA would be required to reimburse the 

family for a prorated share of the 

applicable reimbursement. 

(ii) If the PHA elects to pay the utility 

supplier directly, the PHA must notify 

the family of the amount paid to the 

utility supplier. 

■ 36. Amend § 982.516 as follows: 

■ a. Add a hyphen between ‘‘third’’ and 

‘‘party’’ in paragraph (a)(2) introductory 

text and add paragraph (a)(3); 

■ b. Remove paragraph (e); 

■ c. Redesignate paragraphs (b), (c), and 

(d) as paragraphs (c), (d), and (e), 

respectively; 

■ d. Add a new paragraph (b); 

■ e. In redesignated paragraph (c), revise 

the paragraph heading; and 

■ f. Revise redesignated paragraph 

(e)(2). 

The revisions and addition read as 

follows: 

§ 982.516 Family income and composition: 

Annual and interim examinations. 

(a) * * * 

(3) For a family with net assets equal 

to or less than $5,000, a PHA may 

accept a family’s declaration that it has 

net assets equal to or less than $5,000, 

without taking additional steps to verify 

the accuracy of the declaration. The 

declaration must state the amount of 

income the family expects to receive 

from such assets; this amount must be 

included in the family’s income 

(b) Families with fixed income. For 

families with fixed incomes, a PHA may 

elect to recalculate a family’s annual 

income by applying a verified cost of 

living adjustment for the source of 

income to the previously verified or 

adjusted income amount. 

(1) ‘‘Families with fixed income’’ is 

defined as families whose income 

consists solely of the following: 

(i) Social Security payments, 

including Supplemental Security 

Income (SSI) and Supplemental 

Security Disability Insurance (SSDI); or 

(ii) Federal, State, local and private 

pension plans. 

(2) To verify a cost of living 

adjustment, a PHA may use adjustments 

published publicly or that are made 

available to the PHA by tenantprovided, third party-generated 

documents. If no verification is 

available, the PHA must follow the 

standard income verification process to 

calculate the change in income. 

(3) A PHA that adopts the streamlined 

reexamination procedures in this 

paragraph (b) of this section must use 

projected income to determine a 

family’s annual income and may not 

adopt the option to determine annual 

income using actual past income (24 

CFR 5.609(a)(1)(i)). 

(c) Interim reexaminations. * * * 

* * * * * 

(e) * * * 

(2) At the effective date of a regular or 

interim reexamination, the PHA must 


tkelley on DSK3SPTVN1PROD with PROPOSALS
436 Federal Register / Vol. 80, No. 3 / Tuesday, January 6, 2015 / Proposed Rules 

make appropriate adjustments in the 

housing assistance payment in 

accordance with § 982.505. 

* * * * * 

■ 37. Amend § 982.517 as follows: 

■ a. Capitalize the first word in 

paragraph (b)(2)(i); 

■ b. Revise paragraph (b)(3); 

■ c. In paragraph (c)(1), capitalize the 

first word and remove the word ‘‘PHAs’’ 

and add in its place the word ‘‘has’’; 

■ d. Redesignate paragraph (c)(2) as 

paragraph (c)(3) and add a new 

paragraph (c)(2); and 

■ e. Revise paragraph (d). 

The revisions read as follows: 

§ 982.517 Utility allowance schedule. 

* * * * * 

(b) * * * 

(3) The cost of each utility and 

housing service category must be stated 

separately. For each of these categories, 

the utility allowance schedule must take 

into consideration unit size (by number 

of bedrooms) and unit type (e.g., 

apartment, row-house, town house, 

single-family detached, and 

manufactured housing). At the PHA’s 

discretion, ‘‘unit type’’ may consider 

solely whether the unit is ‘‘attached’’ or 

‘‘detached.’’ 

* * * * * 

(c) * * * 

(2) In the event that the utility 

allowance to be used in calculating the 

housing assistance payment provided 

on behalf of a participant decreases 

based solely on a PHA opting to 

determine unit type based solely on 

whether a unit is ‘‘attached’’ or 

‘‘detached,’’ the PHA must provide at 

least 60 days notice to the participant 

prior to the revised utility allowance 

taking effect. 

* * * * * 

(d) Use of utility allowance schedule. 

(1) The PHA must use the appropriate 

utility allowance for the lesser of the 

size of dwelling unit actually leased by 

the family or the family unit size as 

determined under the PHA subsidy 

standards. In cases where the unit size 

leased exceeds the family unit size as 

determined under the PHA subsidy 

standards as a result of a reasonable 

accommodation, the PHA must use the 

appropriate utility allowance for the 

size of the dwelling unit actually leased 

by the family. 

(2) At reexamination, the PHA must 

use the PHA current utility allowance 

schedule, provided the PHA is able to 

provide a family with at least 60 days’ 

notice prior to such reexamination. A 

PHA may comply with this 60-day 

notice requirement by means of an 

interim reexamination. 

* * * * * 

PART 983—PROJECT–BASED 

VOUCHER (PBV) PROGRAM 

■ 38. The Authority citation for part 983 

continues to read as follows: 

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

§ 983.2 [Amended] 

■ 39. In § 983.2 amend paragraph (c)(4) 

by removing the citation ‘‘§ 982.406’’ 

and adding in its place ‘‘§ 982.407’’. 

■ 40. In § 983.103, revise paragraph (d) 

and add paragraph (g) to read as follows: 

§ 983.103 Inspecting Units. 

* * * * * 

(d) Biennial inspections. (1) At least 

biennially during the term of the HAP 

contract, the PHA must inspect a 

random sample, consisting of at least 20 

percent of the contract units in each 

building to determine if the contract 

units and the premises are maintained 

in accordance with the HQS. Turnover 

inspections pursuant to paragraph (c) of 

this section are not counted toward 

meeting this inspection requirement. 

(2) If more than 20 percent of the 

biennial sample of inspected contract 

units in a building fail the initial 

inspection, the PHA must reinspect 100 

percent of the contract units in the 

building. 

(3) A PHA may also use the 

procedures applicable to HCV units in 

24 CFR 982.406. 

* * * * * 

(g) Mixed-Finance Properties. In the 

case of a property assisted with projectbased vouchers (authorized at 42 U.S.C. 

1437f(o)(13)) that is subject to 

inspection under the LIHTC or HOME 

program or as a result of an FHAinsured mortgage, the PHA may rely 

upon inspections conducted at least 

triennially to demonstrate compliance 

with the inspection requirement of 24 

CFR 982.405(a). 

PART 990—THE PUBLIC HOUSING 

OPERATING FUND PROGRAM 

■ 41. The Authority citation for part 990 

continues to read as follows: 

Authority: 42 U.S.C. 1437g; 42 U.S.C. 

3535(d). 

■ 42. In § 990.150 revise paragraph (a) to 

read as follows: 

§ 990.150 Limited vacancies. 

(a) Operating subsidy for a limited 

number of vacancies. HUD shall pay 

operating subsidy for a limited number 

of vacant units under an ACC. The 

limited number of vacant units shall be 

equal to or less than 3 percent of the 

unit months on a project-by-project 

basis based on the definition of a project 

under subpart H of this part (provided 

that the number of eligible unit months 

shall not exceed 100 percent of the unit 

months for a project), beginning July 1, 

2014. 

* * * * * 

Dated: December 22, 2014. 

Jemine A. Bryon, 

Acting Assistant Secretary for Public and 

Indian Housing. 

Biniam T. Gebre, 

Acting Assistant Secretary for HousingFederal Housing Commissioner. 

Clifford Taffet, 

General Deputy Assistant Secretary for 

Community Planning and Development. 

[FR Doc. 2014–30504 Filed 1–5–15; 8:45 am] 

BILLING CODE 4210–67–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 49 and 81 

[EPA–R09–OAR–2014–0869; FRL–9921–35– 

Region–9] 

Approval of Tribal Implementation Plan 

and Designation of Air Quality 

Planning Area; Pechanga Band of 

Luisen ̃o Mission Indians 

AGENCY: Environmental Protection 

Agency. 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to revise the 

boundaries of the Southern California 

air quality planning areas to designate 

the reservation of the Pechanga Band of 

Luisen ̃ o Mission Indians of the 

Pechanga Reservation, California as a 

separate air quality planning area for the 

1997 8-hour ozone National Ambient 

Air Quality Standard. The EPA is also 

proposing to approve the Tribe’s tribal 

implementation plan for maintaining 

the 1997 ozone standard within the 

Pechanga Reservation through 2025 

because it meets the Clean Air Act’s and 

the EPA’s requirements for maintenance 

plans. Lastly, based in part on the 

proposed approval of the maintenance 

plan, EPA is proposing to grant a 

request from the Tribe to redesignate the 

Pechanga Reservation ozone 

nonattainment area to attainment for the 

1997 8-hour ozone standard because the 

area meets the statutory requirements 

for redesignation under the Clean Air 

Act. 

DATES: Written comments must be 

received on or before February 5, 2015. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R09– 

OAR–2014–0869, by one of the 

following methods: 


tkelley on DSK3SPTVN1PROD with PROPOSALS