| Page Range | 8056-8080 | |
| FR Document | 2017-01310 |
[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)] [Notices] [Pages 8056-8080] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-01310] [[Page 8055]] Vol. 82 Monday, No. 13 January 23, 2017 Part V Department of Housing and Urban Development ----------------------------------------------------------------------- Operations Notice for the Expansion of the Moving To Work Demonstration Program Solicitation of Comment; Notice Federal Register / Vol. 82 , No. 13 / Monday, January 23, 2017 / Notices [[Page 8056]] ----------------------------------------------------------------------- DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT [Docket No. FR-5994-N-01] Operations Notice for the Expansion of the Moving To Work Demonstration Program Solicitation of Comment AGENCY: Office of Public and Indian Housing, HUD. ACTION: Notice; solicitation of comment. ----------------------------------------------------------------------- SUMMARY: The Public Housing/Section 8 Moving to Work (MTW) demonstration program was first established under Section 204 of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 to provide statutory and regulatory flexibility to participating public housing agencies (PHAs) under three statutory objectives. Those three statutory objectives are: To reduce cost and achieve greater cost effectiveness in federal expenditures; to give incentives to families with children where the head of household is working, is seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self-sufficient; and to increase housing choices for eligible low-income families. Section 239 of the Fiscal Year 2016 Appropriations Act, Public Law 114-113 (2016 MTW Expansion Statute), signed by the President in December of 2015, authorizes HUD to expand the MTW demonstration program from the current level of 39 PHAs to an additional 100 PHAs over a period of seven years. In this notice, HUD seeks public comment on the draft Operations Notice for the Expansion of the MTW demonstration program (Operations Notice). The Operations Notice establishes requirements for the implementation and continued operations of the MTW demonstration program pursuant to the 2016 MTW Expansion Statute. HUD seeks public comment on all aspects of the Operations Notice and on specific areas for comment identified throughout this notice. HUD also seeks comment on the topic of regionalization in the MTW demonstration, which is discussed in Section 9 of the Operations Notice. Appendix C of this notice contains a listing of all of the questions in which HUD seeks public comment. DATES: Comment Due Date: March 24, 2017. ADDRESSES: Interested persons are invited to submit comments regarding this notice to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the www.regulations.gov 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 notice. 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 appointment to review the public comments must be scheduled in advance by calling the Regulations Division at 202-708- 3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 1-800-877-8339 (this is a toll-free number). Copies of all comments submitted are available for inspection and downloading at www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Marianne Nazzaro, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 4130, Washington, DC 20410; email address [email protected]. SUPPLEMENTARY INFORMATION: I. Background MTW Demonstration Program The MTW demonstration program was first established under Section 204 of Title II of section 101(e) of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Public Law 104-134, 110 Stat. 1321-281; 42 U.S.C. 1437f note (1996 MTW Statute) \1\ to provide statutory and regulatory flexibility \2\ to participating PHAs under three statutory objectives. Those three statutory objectives are to: --------------------------------------------------------------------------- \1\ PHAs currently operating an MTW demonstration program include PHAs with an active MTW agreement as of December 15, 2015. PHAs currently operating an MTW program do not include PHAs that previously participated in the MTW demonstration and later left the demonstration. \2\ The MTW demonstration program may only provide certain flexibilities under the 1937 Act. For more information on the history of the MTW demonstration program, please go to: www.hud.gov/mtw. ---------------------------------------------------------------------------Reduce cost and achieve greater cost effectiveness in federal expenditures; give incentives to families with children where the head of household is working; is seeking work; or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self- sufficient; and increase housing choices for eligible low-income families. To achieve these objectives, PHAs selected for participation in the MTW demonstration are given exemptions from many existing public housing and voucher rules and offered more flexibility with how they use their Federal funds. MTW agencies use the opportunities presented by MTW to better address local housing needs. Learning from the experience of MTW agencies, HUD develops new housing policy recommendations that can positively impact assisted housing delivery for all PHAs nationwide. In addition to statutory and regulatory relief,\3\ MTW agencies have the flexibility to apply fungibility between public housing operating, public housing capital, and Housing Choice Voucher (HCV) assistance into an agency-wide funding source referred to as the ``MTW Block Grant.'' \4\ Use of the MTW Block Grant as a source of providing funding for eligible MTW activities across the three programs does not negate the need to track the funding to its original source. --------------------------------------------------------------------------- \3\ For more information about the MTW demonstration program and the specific programs of current MTW agencies, please refer to the MTW Web site at: http://www.hud.gov/mtw. \4\ Funds awarded under Sections 8(o), 9(d), and 9(e) of the 1937 Act are eligible for inclusion in the MTW Block Grant, with the exception of funds provided for specific non-MTW HCV sub-programs. --------------------------------------------------------------------------- Throughout participation in the MTW demonstration program, all MTW agencies must continue to meet five statutory requirements established under the 1996 MTW Statute. These five statutory requirements are: [[Page 8057]] (1) To ensure at least 75 percent of families assisted are very low-income as defined in Section 3(b)(2) of the U.S. Housing Act of 1937 (the 1937 Act); (2) to establish a reasonable rent policy that is designed to encourage employment and self-sufficiency; (3) to continue to assist substantially the same total number of eligible low-income families as would have been served had funds not been combined; \5\ --------------------------------------------------------------------------- \5\ HUD's verification method detailed in Section 6(c)(i) of this notice. --------------------------------------------------------------------------- (4) to maintain a comparable mix of families (by family size) as would have been provided had the funds not been used under the MTW demonstration program; and (5) to ensure housing assisted under the MTW demonstration program meets housing quality standards established or approved by the Secretary. There are currently 39 PHAs \6\ participating in the MTW demonstration program. The administrative structure for these 39 PHAs is outlined in the Standard MTW Agreement, a contract between each current MTW PHA and HUD. The 2016 MTW Expansion Statute extended the term of the Standard MTW Agreement through each of the current MTW PHA's 2028 fiscal year. --------------------------------------------------------------------------- \6\ The 39 PHAs are: Alaska Housing Finance Corporation; Atlanta Housing Authority; Housing Authority of the City of Baltimore; Boulder Housing Partners; Cambridge Housing Authority; Housing Authority of Champaign County; Charlotte Housing Authority; Chicago Housing Authority; Housing Authority of Columbus, Georgia; District of Columbia Housing Authority; Delaware State Housing Authority; Fairfax County Redevelopment and Housing Authority; Holyoke Housing Authority; Keene Housing; King County Housing Authority; Lawrence- Douglas County Housing Authority; Massachusetts Department of Housing and Community Development; Minneapolis Public Housing Authority; Housing Authority of the City of New Haven; Oakland Housing Authority; Orlando Housing Authority; Philadelphia Housing Authority; Housing Authority of the City of Pittsburgh; Portage Metropolitan Housing Authority; Home Forward (Portland, OR); Housing Authority of the City of Reno; San Antonio Housing Authority; Housing Authority of the County of San Bernardino; San Diego Housing Commission; Housing Authority of the County of San Mateo; Housing Authority of the County of Santa Clara/City of San Jose; Seattle Housing Authority; Tacoma Housing Authority; Tulare County Housing Authority; and Vancouver Housing Authority. --------------------------------------------------------------------------- 2016 Expansion to the MTW Demonstration Program As directed by the 2016 MTW Expansion Statute, HUD is authorized to expand the MTW demonstration program from the current level of 39 PHAs to an additional 100 PHAs over a period of seven years. In expanding the MTW demonstration, HUD intends to build on the successes and lessons from the demonstration thus far. The vision for the MTW expansion is to learn from MTW interventions in order to improve the delivery of federally assisted housing and promote self-sufficiency for low-income families across the nation. Through the expansion, HUD will extend flexibility to a broader range of PHAs both in terms of size and geographic diversity and will balance the flexibility inherent in MTW with the need for measurement and evaluation at the outset. HUD will select the additional 100 PHAs in cohorts, with applications for each cohort to be sought via PIH Notice.\7\ For each cohort of agencies selected, the 2016 MTW Expansion Statute requires HUD to direct all the agencies in the cohort to implement one specific policy change, which HUD will rigorously evaluate. PHAs may implement additional policy changes. The MTW Research Advisory Committee, described further below, advised HUD on the policy changes to be tested through the new cohorts of MTW agencies and the methods of research and evaluation. --------------------------------------------------------------------------- \7\ PIH Notice 2017-01 provides the Request for Applications for the first cohort of PHAs to be selected pursuant to the 2016 MTW Expansion Statute. --------------------------------------------------------------------------- Eligibility and Selection for the Expansion of the MTW Demonstration The 2016 MTW Expansion Statute provides that the 100 MTW agencies selected must be high performers, at the time of application to the demonstration, and represent geographic diversity across the country. Further, the statute provides that of these 100 PHAs: No less than 50 PHAs shall administer 1,000 or fewer aggregate housing voucher and public housing units; no less than 47 PHAs shall administer 1,001-6,000 aggregate housing voucher and public housing units; no more than 3 PHAs shall administer 6,001-27,000 aggregate housing voucher and public housing units; no PHA shall be granted MTW designation if it administers more than 27,000 aggregate housing voucher and public housing units; and five of the PHAs selected shall be agencies with a Rental Assistance Demonstration (RAD) portfolio award. HUD will issue separate notices, by cohort, soliciting applications from eligible PHAs for participation in the MTW demonstration. These notices, when issued, will outline the specific application submission requirements, evaluation criteria, and process HUD will use when selecting PHAs for MTW participation. MTW Research Advisory Committee The 2016 MTW Expansion Statute established the MTW Research Advisory Committee (the Committee). The Committee is governed by the Federal Advisory Committee Act (5 U.S.C. Appendix 2), which sets forth standards for the formation and use of advisory committees. The purpose of the Committee is to provide independent advice with respect to the policies to be studied through the MTW expansion and the methods of research and evaluation related. The Advisory Committee is charged with advising HUD on the following: Policy proposals and evaluation methods for the MTW demonstration to inform the one specific policy change required for each cohort of agencies; rigorous research methodologies to measure the impact of policy changes studied; policy changes adopted by MTW agencies that have proven successful and can be applied more broadly to all PHAs; and statutory and/or regulatory changes (specific waivers and program and policy flexibility) necessary to implement policy changes for all PHAs. The Committee has no role in reviewing or selecting the 100 PHAs to participate in the expansion of the MTW demonstration. The Committee members were appointed in June 2016 by the HUD Secretary and chosen to ensure balance, diversity, and a broad representation of ideas.\8\ The Committee includes program and research experts from HUD; a representation of MTW agencies, including current and former residents; and independent subject matter experts in housing policy research. --------------------------------------------------------------------------- \8\ For more information on the establishment, purpose, members and meeting content of the MTW Research Advisory Committee, please go to: http://go.usa.gov/xZnj9. --------------------------------------------------------------------------- PHAs are reminded that the MTW demonstration program does not permit waivers related to fair housing, nondiscrimination, labor standards, or environmental requirements. Other subject matter prohibited from waivers or restricted with respect to waivers is discussed elsewhere in this notice. Operations Notice for the Expansion of the MTW Demonstration HUD's guiding principles for the expansion of the MTW demonstration are: (1) Simplify; (2) learn; and (3) apply. HUD seeks to design and test new approaches to providing and administering housing assistance and then to apply the lessons learned [[Page 8058]] nationwide, all within a framework of simplifying program administration. The Operations Notice is a first step toward implementing this vision. The Operations Notice describes a new framework for the MTW demonstration that streamlines and simplifies HUD's oversight of participating PHAs while providing for rigorous evaluation of specific policy changes. The new framework would apply to all PHAs designated as an MTW PHA pursuant to the 2016 MTW Expansion Statute and to any previously-designated MTW agencies that agree to operate under the new framework. These PHAs are referred to in the Operations Notice as ``MTW agencies.'' Participation in the new framework will be formalized by an amendment to the PHA's Annual Contributions Contract (ACC), or other agreement as determined by HUD. A key feature of the new framework is that PHAs will not be required to seek HUD's approval for some of the waivers identified in the Operations Notice, as determined by HUD. Instead, via the Operations Notice, HUD will grant a set of general waivers to all MTW agencies when they are so designated. In addition, HUD seeks to reduce the data collection and reporting requirements for PHAs under the new framework, focusing on financial data, basic program monitoring and performance assessment, and evaluation of the specific policy changes to be tested through each cohort. HUD will rely on existing data and reporting that PHAs will continue to submit through HUD administrative systems. HUD is seeking comment on the draft Operations Notice because robust public comment is critical to ensuring that the Operations Notice effectively positions MTW agencies to be able to meet the demonstration's goals of increasing cost effectiveness, self- sufficiency, and housing choice. The Operations Notice is organized into 12 sections as follows: 1. Purpose and Applicability 2. Waivers a. General Waivers b. Conditional Waivers c. Cohort-specific Waivers 3. Term of Participation 4. Funding, MTW Block Grant, and Financial Reporting a. Level of Funding b. Calculation of Funding c. MTW Block Grant and Flexibility in Use of Funds d. Financial Reporting and Auditing 5. Evaluation a. Program-wide Evaluation b. Cohort-specific Evaluation 6. Program Administration and Oversight a. Planning and Reporting b. Performance Assessment c. Monitoring and Oversight 7. Rental Assistance Demonstration Program 8. Applying MTW Flexibilities to Special Purpose Vouchers a. Veterans Affairs Supportive Housing (HUD-VASH) b. Family Unification Program (FUP) c. Non-Elderly Persons with Disabilities (NED) Vouchers d. Enhanced Vouchers and Tenant Protection Vouchers 9. Regionalization 10. Applicability of Other Federal, State, and Local Requirements 11. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute 12. Sanctions, Terminations, and Default HUD seeks comment on all 12 sections of the Operations Notice, as well as Appendix A General Waivers, and Appendix B Conditional Waivers, which outline available waivers and MTW activities that may be implemented by MTW agencies. In addition, for some sections of the Operations Notice, HUD identifies specific topics for comment and poses questions on those topics. The majority of the Operations Notice applies only to MTW agencies, defined above as PHAs designated MTW pursuant to the 2016 MTW Expansion Statute and any previously-designated MTW agencies that agree to operate under the new framework. However, Section 9 of the Notice (Regionalization) also applies to existing MTW agencies, that is, those with an active MTW agreement as of December 15, 2015. II. Draft Operations Notice 1. Purpose and Applicability The Operations Notice establishes requirements for the implementation and continued operation of the expansion of the MTW demonstration program pursuant to the 2016 MTW Expansion Statute. The Operations Notice applies to all PHAs designated as MTW pursuant to the 2016 MTW Expansion Statute and to any previously-designated MTW PHA that elects to operate under the terms of this Notice. Through an amended ACC, or other agreement as determined by HUD, an MTW agency agrees to abide by the program structure, flexibilities, and terms and conditions detailed in the Operations Notice for the term of the agency's participation in MTW demonstration. HUD may supplement the Operations Notice with PIH Notices providing more detailed guidance and reserves the right to revise the Operations Notice to address unforeseen circumstances and programmatic clarifications. Any significant updates to the Operations Notice by HUD will be preceded by a public comment period. Additionally, HUD will develop informational materials to address various program elements that HUD will post on the MTW Web site. Unless otherwise provided in the Operations Notice, a PHA's MTW program applies to all of the agency's public housing assisted units (including agency-owned properties and units comprising a part of mixed-income, mixed finance communities), tenant-based Section 8 HCV assistance, project-based Section 8 voucher assistance under Section 8(o), and Homeownership units developed using Section 8(y) HCV assistance. This Operating Notice does not apply to Section 8 HCV assistance that is required: (i) For payments to other public housing agencies under Section 8 HCV portability billing procedures; (ii) to meet particular purposes for which HUD has expressly committed the assistance to the agency; \9\ or (iii) to meet existing contractual obligations of the agency to a third party (such as HAP contracts with owners under the agency's Section 8 HCV program), unless a third party agrees to PBV activities implemented under the MTW program with the agency. --------------------------------------------------------------------------- \9\ Five Year Mainstream Vouchers, Moderate Rehabilitation Renewals, HUD-Veterans Affairs Supportive Housing (HUD-VASH) Vouchers, Non-Elderly Disabled (NED) Vouchers, and Family Unification Program (FUP) Vouchers are not part of the MTW demonstration program. --------------------------------------------------------------------------- 2. Waivers Pursuant to this section of the Operations Notice, HUD delegates to the MTW agency the authority to pursue locally-driven policies, procedures, and programs with the aim of developing more efficient ways to provide and administer housing assistance that increases housing choice, gives incentives to low, very-low, and extremely low-income families to achieve economic self-sufficiency, and reduce costs and achieve greater cost-effectiveness in federal expenditures. Many of these policies, procedures and programs require waivers of existing statutory and regulatory requirements. HUD therefore waives certain provisions of the 1937 Act as well as HUD's implementing requirements and regulations to implement the PHA's MTW demonstration activities as described in this Notice. Certain provisions of the 1937 Act will continue to apply to the PHA and the assistance received pursuant to the Act. These ongoing provisions, as well as other applicable federal, state, and local requirements, are described in Section 10 of this Operations Notice. [[Page 8059]] This Notice discusses three categories of waivers, and the associated activities, that MTW agencies may pursue--general waivers; conditional waivers; and cohort-specific waivers. This Notice specifies the process for implementing MTW activities using the waivers under each category. Appendix A--General Waivers and Appendix B--Conditional Waivers provide the complete list of waivers and associated activities available for all MTW agencies. General Waivers are available to MTW agencies without HUD review--beyond the MTW application review. Conditional Waivers are available following additional HUD review and approval, as described generally in Appendix B. Cohort-Specific Waivers will be defined in a series of notices soliciting applications for participation in MTW. Appendices A and B provide an overview of the General and Conditional Waivers. The actual statutory and regulatory provisions that will be waived will be more clearly identified in the final Operations Notice, in response to this notice and further refinement. The specific statutory and regulatory provisions that will be covered by the waivers will be included in the final MTW Operations Notice, which is anticipated to be published later this summer. Please note that in adopting an MTW program, HUD and PHA may not waive or otherwise deviate from compliance with Fair Housing and Civil Rights laws and regulations. While MTW activities are listed by specific waiver, MTW agencies may group activities together to create more comprehensive initiatives at the local level. MTW agencies are subject to all remaining regulatory and statutory requirements, unless an activity is specifically and explicitly authorized in the Notice via the attached waivers, in which case the agency is exempt from the applicable regulatory and statutory requirements under the 1937 Act. The five statutory requirements established under the 1996 MTW Statute cannot be waived. Additionally, in implementing activities, MTW agencies remain subject to all other terms, conditions, and obligations under this Notice, and all other federal requirements applicable to public housing, HCV, PBV, and PHAs. To the extent any MTW activity conflicts with any of the five statutory requirements or other applicable requirements, HUD reserves the right to require the MTW agency to discontinue the activity or to revise it so that the requirements are complied with. HUD also reserves the right to require an MTW agency to discontinue any activity derived from a waiver should it have unforeseen, significant negative impacts on families, as determined by HUD. HUD understands that MTW agencies may wish to undertake activities that are not listed in Appendix A and Appendix B. If an MTW agency wishes to implement activities or request waivers that are not included in Appendix A or Appendix B, the MTW agency may seek approval from HUD for doing so via the MTW Supplement to the Annual Plan. (The MTW Supplement is discussed in Section 6 of this Notice.) The MTW agency must obtain explicit prior written approval from HUD for each additional activity and waiver. If HUD determines that an activity(s) derived from either a general waiver or a conditional waiver would impact or conflict with the specific policy(s) to be studied in the MTW agency's cohort group, the MTW agency will not be able to conduct that activity(s) until the evaluation of the specific policy change has concluded. (Once the evaluation of the policy change is completed, the MTW agency may implement the conflicting activities for the remainder of the agency's term of MTW participation.) Any MTW activities that would impact or conflict with the cohort-specific policy change will be identified in the respective Selection Notice so that the MTW agency is aware of this potential restriction on its use of waivers before it enters the MTW demonstration program. a. General Waivers The MTW activities derived from the general waivers, within the specified program parameters listed in Appendix A, are available to all MTW agencies when the MTW ACC amendment, or other agreement to be determined by HUD, is executed. The MTW PHA must indicate via the MTW Supplement to its Annual Plan the MTW activities that it will undertake from the general waivers category. Prior HUD approval is not required to implement activities from the general waivers category. Appendix A contains the full list of general waivers currently available, the MTW activities associated with these general waivers, and the specific parameters around the implementation of those activities. b. Conditional Waivers Conditional waivers listed in Appendix B are available to all MTW agencies within certain program parameters, but implementation of these MTW activities may not begin until additional information is received, vetted, and approved by HUD. The additional information required for each activity associated with a conditional waiver will be specified in the MTW Supplement to the Annual Plan (see Section 6 of this Notice). Conditional waivers are expected to have a greater and more direct impact on assisted households. Consequently, HUD seeks to ensure that adequate protections are in place for participants and MTW agencies prior to implementation. The additional information required must be submitted by the MTW agency via the MTW Supplement and reviewed and approved by HUD before the MTW PHA may implement the activity. Additional information may also be required throughout the time the MTW agency is conducting an activity associated with a conditional waiver. Upon request from the Department for the continued oversight of the conditional waivers, MTW agencies must provide hardship policies, impact analyses and/or other information required by HUD. Appendix B provides the full list of conditional waivers, the activities associated with these conditional waivers, and any specific parameters around the implementation of those activities. Waivers and MTW activities that are not provided as a general waiver or conditional waiver may be proposed by MTW agencies to HUD. Such waivers may be needed to implement an initiative being pursued by an MTW agency or may be the result of a local condition. Additional waivers will be reviewed on a case-by-case basis as part of the MTW Supplement review process. MTW agencies may not seek or obtain waivers from nondiscrimination or equal opportunity requirements. c. Cohort-Specific Waivers A cohort-specific waiver is one that is not included in the general waivers or conditional waivers categories and that is available exclusively to an MTW agency that is implementing a cohort-specific policy change that requires the waivers. At the time of selection to MTW, each agency will be selected into an evaluative cohort that seeks to test a specific policy change, as specified in that cohort's Selection Notice. To the extent that one or more additional waivers, beyond the general waivers or conditional waivers, are needed to implement a specific policy change, HUD will grant that waiver(s) to the MTW agencies in the cohort as cohort-specific waivers. The cohort-specific waiver and the associated activity(s) will be described in detail in the applicable Selection Notice so that the MTW agency is aware of this in advance of entry to the MTW demonstration program. One or more [[Page 8060]] cohort-specific waivers may be associated with a particular cohort of MTW agencies. It is possible that the specific policy changes to be tested through a given cohort would not need any cohort-specific waivers. Cohort-specific waivers and the associated MTW activities may only be used to the extent allowed under the applicable evaluative framework provided by HUD in the applicable Selection Notice. More detail on the specific statutory and regulatory citations will be included in the final Operations Notice, which will be published later this summer. Please note that certain regulations will be interpreted to protect Fair Housing and Civil Rights laws and regulations. Specific Areas for Comment on Waivers HUD is seeking comment on the general waivers and conditional waivers presented in Appendix A and Appendix B. HUD is specifically seeking comment on the following questions regarding waivers: Does the list of general waivers, MTW activities, and parameters in Appendix A and Appendix B contain the needed flexibility to achieve the three MTW statutory objectives? If not, what waivers, activities, and/or parameters are missing? Are there any MTW activities and/or waivers that should not be included as general waivers, available to all MTW agencies without prior HUD approval? Are there any MTW activities and/or waivers that should not be included as conditional waivers but rather should be included as general waivers, or not included at all? Does the list of conditional waivers, MTW activities, and parameters in Appendix B contain the needed flexibility to implement any alternative income-based rent model? If not, what waivers, activities, and/or parameters are missing? 3. Term of Participation The term of each agency's MTW designation expires at the end of the MTW agency's Fiscal Year 2028. All general and conditional waivers provided through the Operations Notice expire at the end of the agency's term of participation. However, cohort-specific waivers provided to enable a cohort-specific policy change will be extended beyond the agency's term of participation with HUD's specific approval if HUD determines that additional time is needed to evaluate the policy change. The MTW agency must end all activities requiring MTW-specific waivers upon expiration of MTW participation, as HUD cannot guarantee that it will be able to extend any waivers beyond that point. For this reason, when entering into contracts with third-parties that draw upon MTW flexibility, the agency should disclose that such flexibility is only available during the term of the agency's participation in the MTW demonstration as permitted in this notice. An exception is third-party contracts that relate to the cohort-specific policy change and associated waiver(s), if HUD determines that additional time beyond the end of the PHA's MTW term is needed to evaluate the policy change and specifically approves an extension of the cohort-specific waiver(s). It is the MTW agency's responsibility to plan for the expiration of its MTW agreement and associated waivers. HUD recommends that MTW agencies begin transition planning\10\ at least one year in advance of the expiration of its MTW designation. Not later than nine months prior to the agency's expiration date, the agency must submit a transition plan to HUD that describes the agency's plans for phasing out the MTW- specific waivers that it is using, and describes the agency's plans for re-establishing regular reporting to HUD on a standard schedule. After submitting the transition plan to HUD, MTW agencies will begin drafting changes to their policies and procedures documents, notifying participants of any changes to the terms of their residency or rent calculation, planning for the submission of standard data to HUD, and re-training PHA staff as needed. --------------------------------------------------------------------------- \10\ https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10542.pdf. --------------------------------------------------------------------------- Specific Areas for Comment on MTW Term of Participation With respect to the term of MTW participation, HUD is specifically seeking comment on the following questions: Assuming all cohorts are selected between 2017 and 2020, is the end of each MTW agency's Fiscal Year 2028 an appropriate timeframe for MTW participation, and understanding that HUD may extend cohort-specific waivers to accommodate evaluation of MTW activities that require additional time? Is there a preferable length or structure for the term of MTW participation? HUD will develop additional guidance on the required elements of the transition plan and a recommended transition process via PIH Notice. HUD is specifically seeking comment on: What elements of the MTW agency's transition plan should be mandatory? What elements of the transition process should HUD require in order to protect participants from potential harm and minimize disruptions to agency operations? 4. Funding, MTW Block Grant, and Financial Reporting During the term of the demonstration, HUD will provide the MTW agencies designated pursuant to the 2016 MTW Expansion Statute with public housing Operating Fund subsidies, public housing Capital Fund program (CFP) grants, and Section 8 HCV assistance, as provided in this notice. CFP grants may include Formula grants, Demolition or Disposition Transitional Funding (DDTF, included in regular Formula grants) as well as Replacement Housing Factor (RHF) grants (superseded by DDTF). The funding amount for MTW agencies may be increased by additional allocations of vouchers or by replacement public housing units to which the agency is awarded over the term of its participation in the MTW demonstration. MTW agencies will have the flexibility to apply fungibility between public housing operating, public housing capital, and HCV assistance into an agency-wide funding source referred to as the ``MTW Block Grant.'' The agency must complete an annual audit pursuant to the Single Audit Act requirements set forth in 2 CFR 200 Subpart F, including any applicable Compliance Supplement(s), as determined by the auditor, to be relevant to MTW and other programs. The Single Audit Act-compliant audit must be submitted to HUD in accordance with HUD regulations. a. Level of Funding The 1996 MTW Statute and the 2016 MTW Expansion Statute prohibit MTW agencies from receiving any more or any less funding than they would receive if they were not participating in the MTW demonstration. The 1996 MTW Statute states, in part, that, ``The amount of assistance received under section 8, section 9, or pursuant to section 14 by a public housing agency participating in the demonstration under this part shall not be diminished by its participation.'' In addition, the 2016 MTW Expansion Statute states, in part, that, ``No PHA granted this designation through this section shall receive more funding under sections 8 or 9 of the 1937 Act than they otherwise would have received absent this designation.'' [[Page 8061]] b. Calculation of Funding i. Public Housing Operating Fund Subsidy (a) The calculation of an MTW PHA's Operating Fund subsidy eligibility will continue in accordance with operating subsidy formula law, regulations, and appropriations act requirements. (b) The agency may use these funds for any eligible activity permissible under Section 9(e)(1) of the 1937 Act or, if the agency proposes to use the funding as part of the MTW Block Grant, it may use these funds for any eligible activity permissible under Section 8(o), 9(d)(1) and 9(e)(1) and as specified in this Notice. (c) For operating subsidy funding provided in years prior to the designation of the agency as an MTW agency, the agency may use any accumulated operating reserves for eligible MTW purposes, subject to applicable provisions of this Notice, subsequent legislation, including appropriations acts, and HUD and other federal requirements. ii. Public Housing Capital Fund Formula and Grants (a) The agency's Public Housing Capital Fund formula characteristics and grant amounts, including DDTF and RHF, will continue to be calculated in accordance with public housing law, regulations, and appropriations act requirements. Capital Funds will be disbursed in accordance with standard HUD procedures for disbursement of public housing Capital Fund grants, provided however that the agency may not accelerate drawdown of funds in order to fund reserves. (b) In requisitioning Capital Fund grant funds, the MTW agency will not be required to provide line item detail in HUD's Line of Credit Control System (LOCCS), but will request the funds using a single MTW line item with the exception of grant funds required for payment of debt service pursuant to the Capital Fund Financing Program (CFFP). The agency will provide to HUD information on all capital activities funded by the MTW Block Grant as necessary to ensure compliance with requirements outside the scope of MTW, including environmental review requirements and Energy and Performance Information Center (EPIC) reporting requirements. (c) The agency may use these funds for any eligible activity permissible under Section 9(d)(1) of the 1937 Act or, if the agency proposes to use the funding as part of the MTW Block Grant, it may use these funds for any eligible activity permissible under Section 8(o), 9(d)(1) and 9(e)(1) and as specified in this Notice. CFP funds not included in the MTW Block Grant are subject to all requirements relevant to non-MTW agency CFP funding, including eligible activities and cost limits. (d) For Capital Funds provided in years prior to the designation of the agency as an MTW agency, the agency may use such funds for eligible MTW purposes, subject to applicable provisions of this Notice, subsequent legislation, including appropriations acts, and HUD and other federal requirements. (e) The agency remains subject to the requirements of Section 9(j) of the 1937 Act with respect to Capital Fund grants. Section 9(d) funds remain subject to the obligation and expenditure deadlines and requirements provided in Section 9(j) despite the fact that they are combined in a single block grant fund. Capital Funds awarded to MTW agencies must be obligated within two years and expended within four years of award. Funds not obligated or expended within those timeframes will be subject to recapture. As with all PHAs, an MTW PHA may requisition CFP funds from HUD only when such funds are due and payable, unless HUD approves another payment schedule. iii. Housing Choice Voucher (HCV) Funding (a) For the calendar year after the MTW agency joins the MTW demonstration (the ``Initial Year''), an agency's HCV HAP renewal funding will be calculated based on the previous CY's HAP expenses reported in VMS that originated from HAP funds adjusted by any applicable inflation factor and national proration, in accordance with the funding formula in the appropriations act used for all HCV agencies. This adjusted amount will be the agency's Annual Voucher Budget Authority (AVBA) for the initial year of MTW participation. (b) For subsequent years, the HCV HAP renewal funding will be calculated as follows: (i) HCV HAP Renewal funding will be calculated based on (i) the previous CY's HAP expenses reported in VMS that originated from HAP funds plus (ii) the previous CY's eligible non-HAP MTW expenses (subject to the conditions and percentage limitations described below) and (iii) the eligible non-HAP MTW commitments and obligations (subject to the conditions, percentage limitations and utilization requirements described below), the sum of which will be adjusted by any applicable inflation factor appropriate for the HAP and non-HAP expenses and national proration for the current CY. The resulting adjusted amount is the agency's AVBA for the current CY. The amount of non-HAP expenses and the amount of commitments and obligations that may be included in the above calculation are subject to percentage limitations and utilization requirements described below. (ii) An MTW agency is required to spend at least 90% of its CY AVBA on eligible HAP expenses each year. If the MTW agency meets this requirement but the actual HAP expenses did not exceed 100% of its CY AVBA, then the agency's eligible non-HAP MTW expenses and the agency's commitments and obligations will be included in its renewal funding eligibility for the next CY as described herein. The amount of eligible non-HAP MTW expenses, commitments, and obligations that will be included in the renewal calculation is limited to the lower of: (a) The amount of AVBA expended, committed, or obligated for eligible non-HAP MTW expenses as reported and validated in VMS, or (b) the amount of AVBA that was not used for HAP expenses, or (c) 10% of AVBA. (iii) Only HAP expenses that originated from HAP Funds (including HAP reserves) are included in the HAP renewal funding formula. Public Housing Operating funds and Capital funds, and Section 8 Administrative Fee funds that may have been used for HAP expenses as part of MTW flexibility will not be included in the following calendar year's renewal funding formula. (iv) If an MTW agency expends 100% or more of its AVBA in HAP expenses in a given year, the total HAP expenses will be used for the next CY's Renewal funding formula to the extent that the HAP expenses originated from HAP or HAP reserves. However, none of the funds provided in the renewal formula may be used to fund a total number or unit months under lease which exceeds the MTW agency's authorized level of unit months available under the MTW agency's ACC, in accordance with the funding formula used for non-MTW agencies. (c) Additional details about the HCV Renewal funding formula are provided below: (i) Budget Utilization Requirement. Starting in the Initial Year of MTW funding, and for the duration of its participation in the MTW demonstration, the MTW agency must spend at least 90 percent of each CY's MTW AVBA on HCVP eligible HAP expenses in the funded year. Eligible HAP expenses are defined in HUD's [[Page 8062]] Voucher Management System (VMS) guidebook (or the guidebook of any successor system). HUD's VMS (or its successor system) will be the data source to verify compliance with the HCVP budget utilization requirement throughout the duration of participation in the MTW demonstration. If performance below the 90% utilization requirement persists, HUD may take appropriate corrective actions including, but not limited to, the restriction of uses of funds, other administrative actions, including the termination of the MTW agency's participation in the MTW demonstration. (ii) HAP-Originated Reserves. Any reserves the MTW agency has accumulated prior to the start of the Initial Year may be used for any eligible MTW activity. If pre-existing reserves before the start of the Initial Year are used for HAP expenses, those expenses will be included in the subsequent year's funding formula to the extent those funds originated from HAP. Any sum generated by the MTW agency in the Restricted Net Position (RNP) account or HUD-held reserves after the effective date that the MTW agency receives MTW designation shall remain available and may be used for all eligible MTW activities, subject to applicable provisions of this Notice, subsequent legislation, including appropriations acts, and other HUD requirements. HAP-Originated reserves accumulated after the effective date that the MTW agency receives MTW designation will be included in the subsequent year's funding formula if spent on HAP expenses. (iii) Limitation of Amount of HUD-Held Reserves. The maximum HAP- Originated funds in HUD-held reserves cannot exceed 100% of AVBA. If the total amount of HAP-Originated reserves at CY end exceeds 100% of AVBA, any reserves originated from HAP in excess of this amount will be reduced from the subsequent year's funding formula. (iv) Cash Management Requirements Apply. All undisbursed HAP funds including HAP-Originated reserve funds will be held as HUD-held reserves per OMB cash management requirements and can be requested by the MTW agency when HAP (or non-HAP) immediate need exceeds the scheduled HAP and Fee monthly disbursements, but only after consideration of available MTW agency-held RNP or unrestricted net position (UNA), respectively. Any sum held by the MTW agency as excess administrative fee funds (Unrestricted Net Position) shall remain available to the MTW agency. All excess administrative fee funds may be used for any eligible MTW activities. (v) Commitments/Obligations of Funds. Commitments and obligations of funds that will be used for eligible MTW activities in the future will receive consideration in the HCV Renewal funding formula as described above. Committed and obligated funds remain part of HUD-held reserves until drawn down and all cash management requirements and other rules applicable to reserve amounts apply. In addition, committed and obligated funds may be subject to HUD reserve offsets as part of future Congressional Appropriations Bills. Commitments. A commitment is the setting aside or earmarking of undisbursed and unobligated funds to be used for eligible MTW activities in the future. An MTW agency may commit funds to planned future MTW eligible uses, as evidenced in the MTW Supplement to the Annual Plan which must be adopted by the board. For commitments to qualify for consideration in the Renewal funding formula, an MTW agency must describe its future plans to use the funds for a certain type of MTW eligible use with sufficient supporting detail in the MTW Supplement to the Annual PHA Plan. Such detail may include the program type (i.e., public housing, housing voucher, both, or local, non- traditional), development number/name, description of work or activity, quantity, estimated cost, anticipated timeline, and other information as applicable. Committed unspent MTW funds must be reported in VMS in the Unspent MTW Funds section (see VMS User's Manual for more details). An MTW agency may update and revise commitments as necessary, in response to changing local conditions. Obligations. An obligation is a legally binding agreement that will require an outlay or expenditure of funds, immediately or in the future. An example of an obligation is an executed construction contract between the MTW agency and a construction company. Obligated unspent MTW funds must be reported in VMS in the Unspent MTW Funds section (see VMS User's Manual for more details). HUD intends to exclude obligated funds in HUD-held reserves from Congressional offset to the extent that future statutory language would allow such exclusion. (vi) Administrative Fees. The administrative fee rates used to calculate fee eligibility for MTW agencies shall be established according to the same methodology used to establish administrative fee rates for all other public housing agencies. Administrative fees will be paid on the basis of units leased as of the first day of each month; this data will be extracted from VMS at the close of each reporting cycle. Administrative fees for MTW agencies are also subject to the national proration factor and any other appropriations act requirements to the total eligibility amount. (vii) Incremental Vouchers. If the MTW agency receives incremental HCVP vouchers and funding (including tenant protection vouchers), other than special purpose vouchers (described in (x) below), renewal funding for those vouchers will be included in the MTW HCV renewal funding eligibility calculation for the following year. (See Section 8 of this Operations Notice for further discussion of tenant protection and other special purpose vouchers.) The MTW agency's renewal funding eligibility (which includes renewal funding associated with these vouchers) remains subject to the budget utilization requirement detailed above. The renewal amount is based on the MTW per unit cost (PUC), any months not covered by initial increment, and adjusted by the inflation factor. Incremental vouchers included in the MTW agency's renewal funding eligibility will be funded pursuant to the current year's per unit funding amount. (viii) Adjustments for the first-time renewal of certain vouchers. HUD will also make adjustments to the renewal funding for the first- time renewal of certain vouchers that are included in the MTW HAP renewal calculation when the funding increment will expire during the CY. (ix) Applicable inflation factor and proration. The same applicable inflation factor that applies for non-MTW agencies will be applied each CY to determine the MTW agency's HAP funding renewal eligibility. Likewise, the MTW agency's HAP funding renewal eligibility is subject to the same national proration as non-MTW agencies' renewal eligibility, based on the total eligibility of all MTW agencies compared to the actual amount appropriated for HAP renewal funding for the CY. (x) Rental Assistance Demonstration (RAD). Any vouchers received as part of a RAD component I conversion shall be added to the ACC for the remainder of the CY in which they are awarded. HUD will issue a new increment of voucher funding in support of those vouchers for the first full CY following a RAD component I conversion. In subsequent years, voucher funding for RAD converted units will be renewed under the MTW HCV renewal funding [[Page 8063]] calculation, based on a weighted MTW per unit cost (PUC), plus inflation factor and the applicable proration factor. RAD component II conversions are funded in accordance with the incremental voucher section above. Administrative fees for RAD vouchers will be established based on the same methodology used to establish administrative fees in (vi) of this section. Fees for RAD vouchers will be prorated at the same level that applies to all non-MTW agencies. (xi) Voucher Programs Not Included in MTW Program. Vouchers and funding provided for the following special purpose vouchers, whether for new allocations or renewal of existing increments, shall not be included in the HCV MTW Program renewal calculation: Five Year Mainstream, Moderate Rehabilitation renewals, Veterans Affairs Supportive Housing (VASH), Non-Elderly Disabled (NED), and Family Unification Program (FUP). These vouchers will be renewed under the regular voucher renewal requirements as provided under the appropriations acts. Special purpose vouchers are discussed in more detail in Section 8 of this Operations Notice. c. MTW Block Grant and Flexibility An agency participating in the MTW demonstration program may combine public housing Operating and Capital Funds provided under Sections 9(d) and 9(e) of the 1937 Act and voucher program funds provided under Section 8 of the 1937 Act as the MTW Block Grant. Certain provisions of Sections 8 and 9 of the 1937 Act and 24 CFR 982 are waived as necessary, to implement the MTW Block Grant. MTW Block Grant flexibility is optional and does not require prior HUD approval. The agency may use MTW Block Grant funds for any eligible activity under Sections 9(d)(1), 9(e)(1) and Section 8(o) of the 1937 Act and for the local, non-traditional activities specified in this Notice, including Appendix A and B. Within the scope of the permissible eligible activities, the agency can carry out the purposes of the MTW demonstration program to provide flexibility in the design and administration of housing assistance to eligible families; (1) To reduce cost and achieve greater cost effectiveness in federal expenditures, (2) to give incentives to families with children where the head of household is working, seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self-sufficient, and (3) to increase housing choices for low-income families. The agency may use MTW Block Grant funds to support the evaluation of MTW activities subject to reasonable cost requirements set forth in 2 CFR part 200. d. Financial Reporting and Auditing MTW agencies must submit year-end unaudited and audited financial information to the Department using the Financial Data Schedule (FDS) contained in the Real Estate Assessment Center's (REAC) Financial Assessment Subsystem (FASS-PH), or its successor system. Financial reporting requirements for MTW agencies are currently posted on the REAC Web site at http://www.hud.gov/offices/reac/products/fass/fass_pdf/mtw-reporting.pdf. An MTW agency must submit unaudited financial information into REAC's FASS-PH, or its successor system, within 60 days of the end of its fiscal year, and audited financial information with nine months of the end of its fiscal year. REAC reviews financial submissions for basic financial soundness (e.g., cash balances, accounts receivable and accounts payable, quick ratio, current ratio, etc.). The MTW agency will keep project level budgeting and accounting and report financial information in the FDS. The MTW agency will abide by project level management reviews in accordance with Asset Management guidance contained in PIH Notice 2007-9, or any successor guidance. The MTW agency will conform to the cost requirements of 2 CFR 200 and any HUD implementation thereof. The MTW agency must procure an Independent Public Accountant (IPA) to perform an annual audit pursuant to federal requirements at 2 CFR part 200 and 24 CFR 990.190, or successor, as well as any audit compliance supplements developed specifically for use with the MTW demonstration. An MTW agency that may be otherwise exempt from a single audit will be required to perform an annual financial statement audit as a condition of becoming an MTW agency under the MTW Expansion. Completed IPA audits must be submitted to HUD in accordance with current HUD regulations. HUD will review the IPA audits of MTW agencies to determine appropriate action relative to any findings, prepare recommendations for audit finding resolution, and follow up with MTW agencies to assure finding closure. If there are audit findings related to the MTW program itself, HUD will monitor the resolution of all audit findings. Specific Areas for Comment on Funding, MTW Block Grant, and Financial Reporting With respect to funding, MTW Block Grant, and financial reporting, HUD is specifically seeking comment on the following questions: Is a 90 percent HAP budget utilization requirement the appropriate amount? What sanctions or restrictions should HUD consider using should an MTW agency continue to fail to meet the budget utilization requirement? Are there other methods for calculating HCV funding that HUD should consider? Are there other factors HUD should consider in the calculation of funding? Are there any comments or clarifications needed in relation to funding, the MTW Block Grant, or financial reporting? 5. Evaluation As a condition of participating in the MTW demonstration, MTW agencies agree to cooperate fully with HUD and its contractors in the monitoring and evaluation of the MTW demonstration, to keep records, and to submit reports and other information as required by HUD. This includes any data collection required for the use of waivers (e.g., conditional waivers) and any evaluation efforts that HUD undertakes for the cohort-specific policy changes. MTW is a demonstration that provides PHAs flexibilities to innovate and try different approaches to housing assistance in order to achieve at least one of the three statutory objectives laid out in the 1996 MTW Statute. At its core, the demonstration is an opportunity for PHAs, participants, HUD, stakeholders and the general public to learn from different approaches to providing federal housing assistance to low- income families. This includes learning from approaches that are effective and produce desired outcomes, and from approaches that are less effective than anticipated and where results may have unintended consequences. Because PHAs have the ability to use different flexibilities calling on multiple MTW waivers that serve local populations in various parts of the country, interpreting PHA-reported performance metrics data on the effects of an individual MTW activity is not always clear- cut. Consequently, and while adhering to the guiding principles for the expansion (simplify, learn, and apply), HUD will create and develop an [[Page 8064]] evaluation system that will tell the story of the MTW demonstration through the lens of the three statutory objectives relating to cost effectiveness, self-sufficiency, and housing choice. HUD envisions two types of evaluation--program-wide evaluation and cohort-specific evaluation. Through this notice, HUD is seeking feedback on each of these evaluation types. a. Program-Wide Evaluation Program-wide evaluation would seek to assess whether or not, and to what extent, MTW agencies use Federal dollars more efficiently, help residents find employment and become self-sufficient, and increase housing choices for low-income families. HUD intends to develop performance metrics for program-wide evaluation that are based, to the extent possible, on information already being collected from MTW agencies through existing HUD administrative data systems. HUD may determine and require that some additional reporting is necessary to effectively evaluate MTW. The following are examples of potential performance metrics that could be used for each statutory objective; the list is not exhaustive and will be revised further with feedback from this notice and additional internal evaluation: ------------------------------------------------------------------------ MTW statutory objective: Potential performance metrics ------------------------------------------------------------------------ 1. Reduce cost and achieve greater cost Administrative cost effectiveness in federal expenditures. savings per unit in direct program administration (HCVP and public housing) and indirect costs. Changes in rental revenue. Changes in number of families served. 2. Give incentives to families with Changes in employment children where the head of household rates or hours worked. is working; is seeking work; or is Changes in earned preparing for work by participating in income levels since entering job training, educational programs, or the program. programs that assist people to obtain Changes in rent employment and become economically burden. self-sufficient. Changes in number of households receiving supportive services aimed to increase self-sufficiency. 3. Increase housing choices for Changes in the quality eligible low-income families. and type of housing stock accessible to extremely low- income, very low-income, and low-income households. Changes in the percentage of households moving to or living in areas with lower rates of poverty. Changes in occupancy rates in public housing and utilization rates of housing vouchers. Changes in average applicant time on waiting list. ------------------------------------------------------------------------ b. Cohort-Specific Evaluation The 2016 MTW Expansion Statute requires HUD to direct all the agencies in a cohort to implement one specific policy change and to conduct a rigorous evaluation of the one specific policy change. The MTW Research Advisory Committee has considered input from the public and advised HUD on the policy changes to be tested through the new cohorts of MTW agencies and on the methods of research and evaluation. The cohort-specific policy change and evaluation methods will be described in the applicable Selection Notice so that the MTW agency is aware, in advance of application to the MTW demonstration program, of the policy it will be required to implement and the evaluation requirements. The specific evaluation methods (and requirements for participating MTW agencies) will vary based on the policy changes to be tested. Some cohorts of MTW agencies may be required to participate in Randomized Control Trials (RCTs), while others may be required to participate in detailed process studies or ethnographic research. HUD's Office of Policy Development and Research is seeking funding for evaluating cohort-specific policy changes. In all cases, the purpose of the evaluation will be to measure the outcomes associated with the specific policy change(s) in order to offer policy recommendations for implementing the policy change(s) across all PHAs. HUD will determine the length and timeframe for the evaluation based on the recommendations of the MTW Research Advisory Committee. In some cases, the evaluation timeframe may extend beyond the agency's term of MTW participation. The MTW agency is required to participate in the evaluation for the full timeframe designated by HUD. HUD intends to extend waivers beyond the agency's term of participation to the extent that those waivers are needed to support the evaluation of the specific policy change and HUD determines that additional time is needed to evaluate the policy change. Specific Areas for Comment on Evaluation With respect to the program-wide evaluation, HUD is specifically seeking comment on the following questions: Is there any information not captured in HUD administrative data systems that would provide informative data points or performance metrics for evaluating the MTW demonstration? What are measures of MTW activities that ``reduce cost and achieve greater cost effectiveness in Federal expenditures'' that can apply to and are either being reported in existing HUD systems or can be reported by every MTW agency? What are measures of MTW activities that ``give incentives to families with children where the head of household is working, seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self-sufficient'' that can apply to and are either being reported in existing HUD systems or can be reported by every MTW agency? Should HUD standardize a definition of ``self- sufficient''? If so what elements of self-sufficiency should be included in HUD's definition? What are measures of MTW activities that ``increase housing choices for low-income families'' that can apply to and are either being reported in existing HUD systems or can be reported by every MTW agency? What is the best way to capture and report exit data on families exiting the Public Housing, HCV, and local non-traditional housing programs? What are the appropriate exit reasons to capture? Is there any information not captured in HUD administrative data systems that would be informative data points or performance metrics in terms of evaluating the MTW demonstration? In the list of performance metrics provided above, should any be clarified or removed? Are there any alternative or additional metrics that would enhance [[Page 8065]] performance evaluation on the MTW demonstration? With respect to the cohort-specific evaluation, HUD will consider the advice provided by the MTW Research Advisory Committee. 6. Program Administration and Oversight In general, MTW agencies will be subject to the same planning and reporting protocols as non-MTW agencies, including the PHA Plan (5-Year Plan and Annual Plan) and Capital Fund planning. MTW agencies must also report data in HUD data systems, as required. New protocols and instruments will be developed for assessing MTW PHA performance, and incorporated into HUD's Public Housing Assessment System (PHAS) and Section Eight Management Program (SEMAP), or successor assessment systems. In addition, HUD will employ standard program compliance and monitoring approaches including assessment of relative risk and on-site monitoring conducted by HUD or by entities contracted by HUD a. Planning and Reporting i. The PHA Plan MTW agencies must adhere to Public Housing Agency Plan regulations at 24 CFR part 903, any implementing HUD Notices and guidance, as well as any succeeding regulations. The PHA Plan consists of the 5-Year Plan that a PHA must submit to HUD once every five PHA fiscal years and the Annual Plan that the PHA must submit to HUD for each PHA's fiscal year. Any HUD assistance that the PHA is authorized to use under the MTW demonstration must be used in accordance with the PHA's Annual Plan, as applicable. Annual and 5-Year Plans must be submitted in a format prescribed by HUD. Currently, submission format requirements are outlined in Notice PIH 2015-18 (HA), issued October 23, 2015, which is effective until amended, superseded or rescinded. The MTW agency must submit: HUD-50075-5Y, the 5-Year Plan HUD-50075-HP, the Annual Plan for high performing agencies, along with supporting documents [cir] HUD 50077-ST-HCV-HP [cir] HUD-50077-SL [cir] Resident Advisory Board (RAB) comments received [cir] Any challenged elements of the Plan MTW Supplement to the Annual Plan (under development) As an MTW agency, all PHA Plan information must be provided in the context of the PHA's participation in the MTW demonstration. This includes taking into account the waivers and flexibilities afforded to the MTW agency. To this end, the MTW agency will provide and HUD will make available to the public, an MTW Supplement to the Annual Plan, in a format to be developed by HUD. HUD anticipates that MTW agencies would use the MTW Supplement to the Annual Plan to: (a) Indicate the MTW activities and associated waivers that the agency will undertake in the Annual Plan year that require general waivers (Appendix A) using a check-box or other simple format. (b) Indicate the MTW activities and associated waivers that the agency will undertake in the Annual Plan year that require conditional waivers (Appendix B) using a check-box or other simple format. (c) Indicate the MTW activities that the agency will undertake in the Annual Plan year that require cohort-specific waivers (as applicable and identified in each cohort's Selection Notice), and the cohort-specific waivers to be used, using a check-box or other simple, non-narrative format. (d) Submit specific information or data required by HUD for any conditional waiver(s) the agency intends to use for the first time in the Annual Plan year. (e) Submit data or reporting required for the ongoing use of any MTW waivers from the preceding year. (f) Submit data required for HUD's verification of the MTW agency's compliance with the five statutory requirements established under the 1996 MTW Statute. (g) Request HUD approval for any MTW activities and waivers that the MTW agency seeks to implement in the Annual Plan year that are outside of the lists of general, conditional, and cohort-specific waivers. Non-MTW PHAs with a combined unit total of 550 or less public housing units and vouchers and that are not designated as troubled under PHAS and that do not have a failing score under SEMAP are exempt from the requirement to submit the Annual Plan. Per this Operations Notice, MTW agencies with a combined unit total of 550 or less public housing units and vouchers would be required, at a minimum, to submit the MTW Supplement to the Annual Plan on an annual basis. MTW agencies must submit to HUD the Annual PHA Plan, including any required attachments and the MTW supplement, no later than seventy-five (75) days prior to the start of the agency's fiscal year.\11\ Before submission to HUD, the PHA must have a 45-day public review period and a public hearing. PHAs must consider, in consultation with the RABs, all the comments received at the public hearing. The recommendations received must be submitted by the PHAs as a required attachment to the Plan. PHAs must also include a narrative describing their analysis of the recommendations and the decisions made on these recommendations. PHAs must also obtain the proper signed certifications and board certification. --------------------------------------------------------------------------- \11\ It is understood that the requirements in the remainder of this section refer to the Annual Plan and the MTW Supplement if the MTW agency is required to submit the Annual Plan and only to the MTW Supplement if the MTW agency is not required to submit an Annual Plan as discussed in the previous paragraph. --------------------------------------------------------------------------- HUD will notify the MTW agency in writing if HUD objects to any provisions or information in the Annual Plan or the MTW supplement. When the MTW agency submits its Plan seventy-five (75) days in advance of its fiscal year, HUD will respond to the MTW agency within 75 days. If HUD does not respond to the MTW agency within 75 days after an on- time receipt of the Annual Plan, the agency's Annual Plan (and MTW Supplement) is approved. If HUD does not receive the agency's Annual Plan on time, the Plan is not approved until HUD responds. ii. Admissions and Continued Occupancy Policy (ACOP) and Administrative Plan The MTW agency must update its ACOP and Administrative Plan to be consistent with the MTW activities and related waivers that it implements. The agency may not implement an MTW activity or waiver until the relevant sections of the ACOP and/or Administrative Plan are updated. MTW agencies must provide HUD with electronic versions of the ACOP and Administrative Plan upon request. If the MTW agency implements an activity using the local, non-traditional uses of funds waiver, the MTW agency must create and update an implementing document specifically for such activity. In addition, the PHA must review its Administrative Plan, ACOP, and other selection and admissions related policies to ensure that they comply with Departmental regulations and other directives concerning the use of criminal records and other criminal activity in admissions and continued occupancy decisions. The PHA's policies and procedures may not permit the automatic exclusion of an applicant [[Page 8066]] or participant on the basis of the record of a criminal arrest alone. The same applies to policies and procedures concerning prospective tenant screening by landlords and other third parties. HUD may review the PHA's admissions and continued occupancy policies to ensure compliance with HUD requirements concerning criminal records and criminal activity. For more information, see the related letter from HUD's Office of General Counsel at: https://portal.hud.gov/hudportal/documents/huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf and PIH's related notice at https://portal.hud.gov/hudportal/documents/huddoc?id=PIH2015-19.pdf. iii. Capital Planning and Reporting MTW agencies must adhere to CFP regulations at 24 CFR part 905, any implementing HUD Notices and guidance, as well as any succeeding regulations. As noted previously, MTW agencies are funded in accordance with CFP regulations and formula funds are calculated and distributed in the same manner as non-MTW agencies. MTW agencies have the authority and flexibility to combine CFP funds with other funds as part of the MTW Block Grant. HUD will award a Capital Fund grant to the MTW agencies, in keeping with the standard process for all PHAs. The Field Office will spread the funds in LOCCs to the MTW agencies in the same manner as for the non-MTW agencies. As with other PHAs, an MTW PHA may requisition Capital Funds from HUD only when such funds are due and payable, unless HUD approves another payment schedule. To the extent that the MTW agency places CFP funding in the MTW Block Grant, the CFP funding would be recorded on Budget Line Item (BLI) 1492 (Moving to Work) on form HUD-50075.1. CFP funds entered on BLI 1492 would not need to be broken out and itemized in the part II supporting pages of the HUD-50075.1. However, an MTW PHA may not accelerate drawdowns of funds in order to fund reserves. An MTW agency is not required to include all or a portion of its CFP grant in the MTW Block Grant. To the extent that the MTW agency wishes to dedicate all or a portion of its CFP grant to specific capital improvements, the agency may record CFP funding on any BLI on form HUD-50075.1 other than BLI 1492. iv. Inventory Management System (IMS)/PIH Information Center (PIC) Reporting Data from HUD's Inventory Management System (IMS) and PIH Information Center (PIC), or successor systems, is critical to all aspects of program administration, including HUD monitoring and tracking of MTW agency progress in meeting the MTW statutory objectives. IMS/PIC data is used to establish funding eligibility levels for both Operating Subsidy and Capital Fund grants. Further, HUD relies on IMS/PIC data to provide a thorough and comprehensive view of PHA program performance and compliance. MTW agencies are required to submit the following information to HUD via IMS/PIC (or its successor system): Family data to IMS/PIC using Form HUD-50058 or Form HUD- 50058 MTW (or successor forms) and in compliance with HUD's 50058 or 50058 MTW submission requirements for MTW agencies. HUD will identify which form the MTW agencies will submit for families in the publication of the final Operations Notice. MTW agencies must report information on all families receiving some form of tenant-based or project-based housing assistance, either directly or indirectly, as well as all public housing families, to at least a 95 percent level. Current building and unit information in the development module of IMS/PIC (or successor system). Basic data about the PHA (address, phone number, email address, etc.). HUD will monitor MTW agency reporting to IMS/PIC (or successor system) to ensure compliance and provide technical assistance to MTW agencies as needed. v. Voucher Management System (VMS) Reporting MTW agencies are required to report voucher utilization in the Voucher Management System (VMS), or its successor system. There are several areas in which VMS reporting is different for MTW agencies. These areas are highlighted in the VMS User's Manual (http://portal.hud.gov/hudportal/documents/huddoc?id=instructions.pdf) which details the VMS reporting requirements. HUD will monitor each MTW agency's VMS reporting to ensure compliance and provide technical assistance to MTW agencies as needed. vi. General Reporting Requirement In addition to the reporting requirements outlined in this Operations Notice, MTW agencies are required to comply with any and all HUD reporting requirements not specifically waived by HUD for participation in the MTW demonstration program, including the requirement (discussed in Section 5) to comply with HUD's evaluation of the specific-policy changes being implemented by cohort. b. Performance Assessment Assessing the performance of PHAs (both MTW and non-MTW) helps the delivery of services in the public housing and voucher programs and enhances trust among PHAs, public housing participants, HUD, and the general public. To facilitate this effort, HUD will provide management tools for effectively and fairly measuring the performance of a PHA in essential housing operations. Currently, HUD uses PHAS and SEMAP to assess risk and identify underperforming PHAs in the traditional public housing and voucher programs. However, since some of the MTW flexibilities make it difficult to accurately depict the performance of MTW agencies under the existing systems, HUD will develop alternative, MTW-specific performance indicators in consultation with MTW agencies and incorporate them into PHAS and SEMAP (or successor assessment system(s)). MTW agencies may not opt out of the MTW-specific successor system(s). i. Public Housing Assessment System (PHAS) MTW agencies are scored in PHAS but they can elect not to receive the overall score (MTW agencies continue to receive PHAS sub-scores even if they elect not to receive the overall score). If an MTW agency elects to receive its overall PHAS score, the agency must continue to be scored for the duration of the demonstration, or until the agency is assessed under performance indicators designed specifically for MTW agencies in a successor system(s) to PHAS, whichever comes first. Once developed, MTW agencies that elect not to receive an overall PHAS score must be assessed under the MTW-specific successor system(s). Per the 1996 MTW statute, when providing public housing, the MTW agency must ensure that the housing is safe, decent, sanitary, and in good repair, according to the physical inspection protocols established and approved by HUD. Thus, MTW agencies continue to be subject to HUD physical inspections. To the extent that HUD physical inspections reveal deficiencies, the MTW agency must continue to [[Page 8067]] address these deficiencies in accordance with existing physical inspection requirements. If an MTW agency does not maintain public housing adequately, as evidenced by the physical inspection performed by HUD and is determined to be troubled in this area, HUD will determine appropriate remedial actions. The actions to be taken by HUD and the PHA will include actions statutorily required and such other actions as may be determined appropriate by HUD. These actions may include developing and executing a Memorandum of Agreement (MOA) with the MTW agency, suspension or termination of the MTW ACC amendment, or other agreement to be determined by HUD, in accordance with the provisions therein, or such other actions legally available to the Department. MTW agencies must continue to submit year-end financial information into the Financial Data Schedule (FDS) or successor system, as discussed earlier. ii. Section 8 Management Assessment System (SEMAP) MTW agencies are scored in SEMAP but they can elect not to receive the overall score. If an MTW agency elects to receive its overall SEMAP score, the agency must continue to be scored for the duration of the demonstration, or until the agency is assessed under an assessment system designed specifically for MTW agencies, whichever comes first. Once developed, MTW agencies that opt out of SEMAP must be assessed under the MTW-specific successor system(s). iii. MTW-specific Assessment HUD will develop new performance indicators for evaluating MTW agencies and for measuring the relative progress of assisted families toward self-sufficiency. Such MTW-specific performance indicators will be incorporated into PHAS and SEMAP (or successor system(s)) for purposes of MTW agencies and will address PHA performance (general public housing and Section 8 HCV management, as well as MTW-specific activities) and PHA risk associated with MTW. c. Monitoring and Oversight MTW agencies remain subject to the full range of HUD monitoring and oversight efforts including, but not limited to, annual risk assessments, on-site monitoring reviews, monitoring reviews relating to VMS reporting and rent reasonableness, review of the accuracy of data reported into HUD data systems, use of HUD data systems to assess PHA program performance, among other activities. i. MTW Statutory Requirements Throughout participation in the MTW demonstration program, all MTW agencies must continue to meet five statutory requirements established under the 1996 MTW Statute. HUD will monitor and determine MTW agencies' compliance with these five requirements as follows: ------------------------------------------------------------------------ MTW statutory requirement: HUD verification approach: ------------------------------------------------------------------------ 1. MTW agencies must ensure that at HUD will verify this least 75 percent of the families requirement by pulling Public assisted are very low income families, Housing and HCV data from PIC, as defined in section 3(b)(2) of the or its successor system, and 1937 Act.. the MTW agency will provide income data for its families served through local, non- traditional housing programs, if any, in the MTW Supplement to the Annual Plan. 2. MTW agencies must establish a HUD will verify this reasonable rent policy.. requirement through its review of the MTW Supplement to the Annual Plan. 3. MTW agencies must continue to assist HUD will verify this substantially the same total number of requirement in accordance with eligible low-income families as would the calculation in Notice PIH- have been served had the amounts not 2013-02, Baseline Methodology been combined.. for MTW agencies, or successor notice. 4. MTW agencies must maintain a HUD will verify this comparable mix of families (by family requirement by pulling Public size) as would have been provided had Housing and HCV data from PIC, the amounts not been used under the or successor system. demonstration.. 5. MTW agencies must ensure that HUD will verify this housing assisted under the requirement through its review demonstration meets housing quality of PHAS Physical scores, or standards established or approved by successor assessment system. the Secretary.. ------------------------------------------------------------------------ ii. Income Integrity and Enterprise Income Verification System (EIV) Reviews MTW agencies are required to comply with the final rule regarding EIV issued December 29, 2009, and utilize EIV for all income verifications. EIV has been modified for MTW agencies so that family information submitted in PIC will not expire for 40 months, in order to accommodate agencies choosing to extend recertification periods for up to three years. MTW agencies are subject to HUD review to ensure compliance with EIV requirements as well as monitor the accuracy and integrity of the MTW agencies' income and rent determination policies, procedures, and outcomes. iii. MTW Site Visit HUD will periodically conduct a site visit to provide guidance, discuss the MTW agency's MTW activities, and offer needed technical assistance regarding its program. The purpose of the site visit will be to confirm reported agency MTW activities, to review the status and effectiveness of the agency's MTW strategies, and to identify and resolve outstanding MTW related issues. The MTW agency shall give HUD access, at reasonable times and places, to all requested sources of information including access to files, access to units and an opportunity to interview agency staff and assisted participants. Where travel funding or staff resources are not available to facilitate in-person site visits, HUD may exercise the option to conduct remote site visits via telephone, videoconference, or webinar. To the extent possible, HUD will coordinate the MTW site visit with other site visits to be conducted by HUD. iv. Housing Choice Voucher Utilization HUD will monitor HCV utilization at MTW agencies and it will ensure that HCV funds are fully utilized, subject to Section 6(a)(iii)(c) of this notice. Where leasing levels are inconsistent, HUD may take appropriate actions to work with the MTW agency to increase leasing and utilization. v. Public Housing Occupancy HUD will monitor public housing occupancy rates for MTW agencies. In instances where the MTW agency's public housing occupancy rate falls [[Page 8068]] below 96 percent, HUD may require, at its discretion, that the MTW agency enter into an Occupancy Action Plan to address the occupancy issues. The Occupancy Action Plan will include the cause of the occupancy issue, the intended solution, and reasonable timeframes to address the cause of the occupancy issue. vi. Additional Monitoring and Oversight HUD may, based on the MTW agency's risks and at HUD's discretion, conduct management, financial, or other reviews of the MTW agency. The MTW agency shall respond to any findings with appropriate corrective action(s). In addition, HUD will make use of all HUD data systems and available information to conduct ongoing remote monitoring and oversight actions for MTW agencies, consistent with the results of the PIH risk assessment. Specific areas for comment on Program Administration and Oversight With respect to planning and reporting requirements for MTW agencies, HUD is specifically seeking comment on the following questions: Is the MTW Supplement to the Annual Plan, as described, an appropriate mechanism for HUD to track MTW agencies' activities and use of waivers? Are there specific elements that should be included in the MTW Supplement to the Annual Plan? Should MTW agencies with a combined unit total of 550 or less public housing units and Section 8 vouchers be exempt from the requirement to submit the Annual Plan? If so, how should HUD collect information on the activities and waivers implemented over the course of the demonstration? Do you have suggestions for how HUD can strengthen the public engagement process to ensure that participants have an opportunity to offer meaningful input in the selection and implementation of MTW activities? With respect to public housing and voucher program performance assessment for MTW agencies, HUD is specifically seeking comment on the following questions: How could HUD measure public housing and voucher program performance for MTW agencies and incorporate those measures into PHAS and SEMAP? Are there MTW-specific indicators that should be included in a revised PHAS and SEMAP assessment? Should an MTW agency retain its high-performer status in PHAS or SEMAP until MTW specific indicators are developed? With respect to monitoring and oversight for MTW agencies, HUD is specifically seeking comment on the following questions: Are HUD's monitoring and oversight efforts sufficient for MTW agencies? What are the specific areas of risk that should be considered for MTW agencies? Are there additional areas that should be monitored for MTW agencies? 7. Rental Assistance Demonstration (RAD) Program MTW agencies converting public housing program units to Section 8 assistance under the Rental Assistance Demonstration (RAD) program are able to retain MTW regulatory and statutory flexibilities in the management of those units, subject to RAD requirements, if the conversion is to Section 8 Project-Based Voucher (PBV) assistance. MTW agencies converting projects under RAD to PBV may continue to undertake flexibilities except to the extent limited by RAD, as described in the RAD Notice, PIH-2012-32, REV-2 or its successor notice.\12\ --------------------------------------------------------------------------- \12\ Notices and laws related to RAD can be found at http://portal.hud.gov/hudportal/HUD?src=/RAD/library/notices. --------------------------------------------------------------------------- 8. Applying MTW Flexibilities to Special Purpose Vouchers Special Purpose Vouchers (SPVs) are specifically provided for by Congress in line item appropriations which distinguish them from regular vouchers. Generally, SPVs are not part of the MTW demonstration. Following is guidance on how MTW flexibilities may be applied to specific types of SPVs, which can be found on the MTW Web site\13\. --------------------------------------------------------------------------- \13\ https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10495.pdf. --------------------------------------------------------------------------- a. Veteran Affairs Supportive Housing (HUD-VASH) HUD-VASH vouchers have separate operating requirements and must be administered in accordance with the requirements listed at www.hud.gov/offices/pih/programs/hcv/vash. The operating requirements waive and alter many of the standard HCV statutes and regulations at 24 CFR 982. Unless stated in the HUD-VASH operating requirements, however, the regulatory requirements at 24 CFR 982 and all other HUD directives for the HCV program are applicable to HUD-VASH vouchers. PHAs may submit a request to HUD to operate HUD-VASH vouchers in accordance with MTW administrative flexibilities. b. Family Unification Program (FUP) The FUP NOFA language allows vouchers to be administered in accordance with MTW operations unless MTW provisions are inconsistent with the appropriations act or requirements of the FUP NOFA. In the event of a conflict between the Final Operations Notice and the appropriations act or FUP NOFA language, the act and NOFA govern. c. Non-elderly Persons with Disabilities (NED) Vouchers The NED NOFA language allows vouchers to be administered in accordance with operations unless MTW provisions are inconsistent with the appropriations act or requirements of the NED NOFA. In the event of a conflict between the Final Operations Notice and the appropriations act or FUP NOFA language, the act and NOFA govern. d. Enhanced Vouchers and Tenant Protection Vouchers Enhanced and tenant protection vouchers funds will be fungible one year after a family receives the voucher. The family must still be provided assistance until the end of the initial protection period which lasts until the family moves out of the residence where the voucher was originally received or is terminated from the program. Once the initial protection period ends, the enhanced or tenant protection voucher becomes a regular voucher. MTW agencies must follow the procedures described in PIH Notice 2013-27, or its successor notice, when the recipient of an enhanced voucher voluntarily agrees to relinquish such assistance in exchange for the provision of PBV assistance. 9. Regionalization The 2016 MTW Expansion Statute states that: The Secretary may, at the request of an MTW agency and one or more adjacent PHAs in the same area, designate that MTW agency as a regional agency. An MTW agency may be selected as a regional agency if the Secretary determines that unified administration of assistance under sections 8 and 9 by that agency across multiple jurisdictions will lead to a) efficiencies and to b) greater housing choice for low-income persons in the region. A regional MTW agency may administer the assistance under sections 8 and 9 of the 1937 Act for the participating agencies within its region pursuant to the terms of its MTW ACC [[Page 8069]] amendment, or other agreement to be determined by HUD, with HUD. The Secretary may agree to extend the term of the ACC amendment, or other agreement to be determined by HUD, and to make any necessary changes to accommodate regionalization. HUD will operationalize this regionalization provision through the same terms and conditions as the MTW Operations Notice. HUD will issue a separate PIH Notice addressing the criteria for designation as a regional MTW agency, the mechanisms for administration by the regional MTW agency on behalf of participating agencies, and the procedures for extending or modifying MTW activities to accommodate regionalization. Specific Areas for Comment on Regionalization In anticipation of the guidance that HUD plans to issue on regionalization, HUD seeks comment on the following issues: How should ``adjacent'' be defined for the purposes of identifying which PHAs should be allowed to be part of an MTW agency's regional agency designation? Should regional MTW agencies extend across state borders? What flexibilities should the regional MTW agency be able to administer on behalf of its regional partners? Should the partner PHAs have full flexibility in the use of funds? How should regional partners be included in the MTW evaluation process? What data should they need to submit in conjunction with the MTW agency? What form of governance structure, if any, should be formed between the regional MTW agency and its partner PHAs? What form should the agreement (i.e., contract, memorandum of understanding, partnership agreement, etc.) take between the regional MTW agency and its PHA partners? Should the criteria for regionalization be the same for current MTW agencies and PHAs that join under the expansion? Should HUD issue a revised Public Housing and Voucher Consortia Rule to further the regionalization concept? 10. Applicability of Other Federal, State, and Local Requirements Notwithstanding the MTW waivers described in this Operations Notice, the following provisions of the 1937 Act continue to apply to MTW agencies and the assistance received pursuant to the 1937 Act: i. The terms ``low-income families'' and ``very low-income families'' shall continue to be defined by reference to Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)); ii. Section 12 of the 1937 Act (42 U.S.C. 1437j), as amended, shall apply to housing assisted under the demonstration, other than housing assisted solely due to occupancy by families receiving tenant-based assistance; and iii. Section 18 of the 1937 Act (42 U.S.C. 1437p, as amended by Section 1002(d) of Public Law 104-19, Section 201(b)(1) of Public Law 104-134, and Section 201(b) of Public Law 104-202), governing demolition and disposition, shall continue to apply to public housing notwithstanding any use of the housing under MTW. iv. Section 8(r)(1) of the 1937 Act on HCV portability shall continue to apply unless provided as a cohort-specific waiver and associated activity(s) in an evaluative cohort as necessary to implement comprehensive rent reform and occupancy policies. Such a cohort-specific waiver and associated activity(s) would contain, at a minimum, exceptions for requests to port due to employment, education, health and safety and reasonable accommodation. Notwithstanding any requirement contained in this Notice or any MTW waiver granted herein, other federal, state and local requirements applicable to public housing or HCV assistance will continue to apply. The ACC Amendment, or agreement to be determined by HUD, will place in HUD the authority to determine if any future law or future regulation conflicts with any MTW-related agreement or Notice. If a future law conflicts, the law shall be implemented, and no breach of contract claim, or any claim for monetary damages, may result from the conflict or implementation of the conflicting law or regulation. If any requirement applicable to public housing, outside of the 1937 Act, contains a provision that conflicts or is inconsistent with any MTW waiver granted by HUD, the PHA remains subject to the terms of that non-1937 Act requirement. Such requirements include, but are not limited to: Requirements for Federal Funds: Notwithstanding the flexibilities described in this Notice, the public housing and voucher funding provided to MTW agencies remain federal funds and are subject to any and all other federal requirements outside of the 1937 Act (e.g., including but not limited to competitive HUD NOFAs under which the MTW agency has received an award, state and local laws, federal statutes other than the 1937 Act (including appropriations acts), and OMB Circulars and requirements), as modified from time to time. The MTW agency's expenditures must comply with 2 CFR part 200 and other applicable federal requirements, which provide basic guidelines for the use of federal funds, including the requirements of this Notice. National Environmental Policy Act (NEPA): MTW agencies must comply with NEPA, 24 CFR part 50 or Part 58, as applicable, and other related federal laws and authorities identified in 24 CFR part 50 or Part 58, as applicable. Fair Housing and Equal Opportunity: As with the administration of all HUD programs and all HUD-assisted activities, fair housing and civil rights issues apply to the administration of MTW demonstration programs. This includes actions and policies that may have a discriminatory effect on the basis of race, color, sex, national origin, religion, disability, or familial status (see 24 CFR part 1 and part 100 subpart G) or that may impede, obstruct, prevent, or undermine efforts to affirmatively further fair housing. PHA Plans must include a civil rights certification required by Section 5A of the 1937 Act and implemented by regulation at 24 CFR 903.7(o) and 903.15, as well as a statement of the PHA's strategies and actions to achieve fair housing goals outlined in an approved Assessment of Fair Housing consistent with 24 CFR 5.154. If the PHA does not have a HUD accepted AFH, it must still provide a civil rights certification and statement of the PHA's fair housing strategies, which would be informed by the corresponding jurisdiction's AFH or Analysis of Impediments to Fair Housing Choice and the PHA's assessment of its own operations. All PHAs, including MTW agencies, are obligated to comply with non- discrimination and equal opportunity laws and implementing regulation, including those in 24 CFR 5.105. Specific laws and regulations must be viewed in their entirety for full compliance, as this Operations Notice does not incorporate a complete discussion of all legal authorities. For example, PHAs, including MTW agencies, are required to comply with the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, Title II of the Americans with Disabilities Act of 1990, Architectural Barriers Act of 1968, Executive Order 11063: Equal Opportunity in Housing, Executive Order 13166: Improving Access to [[Page 8070]] Services for Persons with Limited English Proficiency, HUD's Equal Access Rule (24 CFR 5.105(a)(2), Age Discrimination Act of 1975, and Title IX of the Education Amendments Act of 1972, as well as HUD and government-wide regulations implementing these authorities.. PHAs should review PIH Notice 2011-31 for more details. Court Orders and Voluntary Compliance Agreements: MTW agencies must comply with the terms of any applicable court orders or Voluntary Compliance Agreements that are in existence or may come into existence during the term of the ACC Amendment, or other agreement as determined by HUD, The PHA must cooperate fully with any investigation by the HUD Office of Inspector General or any other investigative and law enforcement agencies of the U.S. Government. 11. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute The 39 MTW agencies that entered the MTW demonstration prior to the 2016 MTW Expansion Statute adhere to an administrative structure outlined in the Standard MTW Agreement, a contract between each current PHA and HUD. The 2016 MTW Expansion Statute extended the term of the Standard MTW Agreement for these existing MTW agencies through each PHA's 2028 fiscal year. Some PHAs that entered the MTW demonstration prior to the 2016 MTW Expansion Statute may wish to opt out of their Standard MTW Agreement and join the MTW Expansion. HUD will support an existing MTW PHA's request to join the MTW Expansion provided that: The PHA makes the change at the end of its fiscal year, so that it does not have part of a fiscal year under the Standard Agreement and part under the new framework; The PHA follows the same public comment and Board resolution process as would be required for amending the Standard MTW Agreement; and The PHA agrees to all the terms and conditions that apply to MTW agencies admitted pursuant to the 2016 MTW Expansion Statute, including all of the provisions of this Operations Notice and the accompanying ACC amendment, or other agreement as determined by HUD. The only difference between an MTW agency admitted pursuant to the 2016 MTW Expansion Statute and an existing MTW PHA that elects to join the new framework will be that the existing MTW PHA joining the framework described in this Operations Notice will not be required to implement the specific policy change associated with each cohort of post-2016 MTW agencies and will not be required to participate in the evaluation of that specific policy change. Specific areas for comment on MTW Agencies Admitted Prior to 2016 MTW Expansion Statute With respect to MTW agencies admitted prior to the 2016 MTW Expansion Statute, HUD is specifically seeking comment on the following questions: Is it appropriate to permit existing MTW agencies to come under the framework of this Operations Notice and associated ACC amendment, or other agreement as determined by HUD? Should these existing PHAs be subject to any different or supplemental requirements? 12. Sanctions, Terminations and Default If the MTW agency violates any of the requirements outlined in this Notice, HUD is authorized to take any corrective or remedial action. Sanctions, terminations, and default are covered in the PHA's MTW ACC amendment, or other agreement as determined by HUD. III. Environmental Impact 1. Purpose and Applicability A Finding of No Significant Impact (FONSI) 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 FONSI will be available for public inspection on www.regulations.gov. Dated: January 13, 2017. Jemine A. Bryon, General Deputy Assistant, Secretary for Public and Indian Housing. [[Page 8071]] Appendix A--General Waivers ---------------------------------------------------------------------------------------------------------------- Regulations Available Waiver name Waiver description waived activities Parameters ---------------------------------------------------------------------------------------------------------------- Activities Related to Public Housing and Housing Choice Vouchers ---------------------------------------------------------------------------------------------------------------- Limited Lease Terms........... The Agency may Certain Limited Lease Successful develop and adopt a provisions of Term Housing participants must be program to limit the Sections 3, 4, Program (PH): eligible to transfer term of assistance 5, 6, 8, and 9 The Agency may into regular public in Section 8 and 9 of the 1937 Act create a housing/HCV programs in order to and 24 CFR 966 limited lease programs; must not create a new limited Subpart A, 960 term housing have disparate lease term housing Subpart B, and program with impact on a program. Successful 982.303. reasonable protected class or participants in conditions in other protected these programs will its public characteristic; be eligible for housing program. policies, transfer to the Limited Lease procedures, and Agency's public Term Housing programs must be housing or HCV Program (HCV): consistent with programs. The Agency The Agency may applicable will ensure that create a nondiscrimination these programs do limited lease and equal not have a disparate term housing opportunity impact on protected program with authorities, classes, and will be reasonable including but not operated in a manner conditions in limited to Section that is consistent its HCV program. 504 of the with the Rehabilitation Act; requirements of participants are not nondiscrimination required to and equal participate in opportunity services targeted to authorities, persons with including but not disabilities; limited to Section admission is not 504 of the conditioned on a Rehabilitation Act. diagnosis or More specifically, specific disability under no of an applicant or circumstances will participant family. residents of such The term of programs be required assistance may not to participate in be shorter than 6 supportive services months. Agencies that are targeted at seeking to create a persons with limited lease term disabilities in program that goes general, or persons beyond the with any specific activities listed in disability. In this waiver may addition, admission propose an activity to any of the under the Local Non- programs or priority Traditional for supportive Activities Rental services developed Subsidy Program under this section Waiver located in will not be the Conditional conditioned on a Waivers. diagnosis or specific disability of a member of an applicant or participant family. This section is not intended to govern the designation of housing that is subject to Section 7 of the 1937 Act. Homeownership Program......... The Agency is Certain Homeownership Inventory removal of authorized to use provisions of (Both): The current public the Section 8 Sections 5, 9, Agency may housing units must Homeownership 24, 32, 35, create a be approved in Program as the basis 8(o)(15) and homeownership advance by HUD. The for providing 8(y) of the program that Agency is required homeownership 1937 Act, 24 includes soft to submit a Section opportunities to CFR 905, 906, second 32 homeownership families who are low- 24 CFR 982.625 mortgages or application to HUD income, including through 982.643. down payment via the Inventory public housing assistance to Removal Submodule of residents, HCV or low income IMS/PIC. If the PBV tenants, or families Agency is seeking to other low-income including PH waive portions of 24 families. residents, PBV CFR 906, then the Participants in this and HCV Agency must include Homeownership families in those regulations as Program will be lieu of monthly part of the Section subject to the HAP. 32 Homeownership Section 8 occupancy application. Note and admission that the disposition requirements. requirements of Subject to subsidy Section 18 and 24 layering review, the CFR Part 970 do not Agency is authorized apply to the sale of to apply the Section public housing units 8 Homeownership in accordance with requirements to the Section 32 families who are low- homeownership plan. income, including Assistance under public housing and this waiver is still other low-income subject to subsidy families. The layering review. Section 8 Recruitment, Homeownership eligibility, and requirements can be selection policies modified to provide and procedures must soft second be consistent with mortgages or down the Department's payment assistance nondiscrimination to participating low- and equal income families or opportunity to provide monthly requirements. HAP payments to HCV recipients. [[Page 8072]] Authorizations Related to The Agency is Certain Waive Operating ..................... Family Self Sufficiency. authorized to provisions of a Required FSS operate any of its Section 23 of Program (Both): existing self- the 1937 Act The Agency is sufficiency and and 24 CFR 984. authorized to training programs, waive its including its Family requirement to Self-Sufficiency operate the (FSS) Program and traditional FSS any successor program. programs exempt from Alternative to certain HUD program Program requirements. If the Coordinating Agency receives Committee dedicated funding (Both): The for an FSS Agency is coordinator, such authorized to funds must be used create an to employ a self- alternative sufficiency structure for coordinator. In securing local developing and resources to operating such support an FSS programs, the Agency program. is authorized to establish strategic relationships and partnerships with local private and public agencies and service providers to leverage expertise and funding. In implementing this waiver, the Agency must execute a contract of participation, or other locally developed agreement, that is at least 5 years but no more than 10 years. However, notwithstanding the above, any funds granted pursuant to a competition must be used in accordance with the NOFA and the approved application and work plan. ..................... ................ Alternative Recruitment, Family eligibility, and Selection selection policies Procedures and procedures must (Both): The be consistent with Agency is the Department's authorized to nondiscrimination develop its own and equal recruitment and opportunity selection requirements. Agency procedures for may not require its FSS families to program(s). participate in the program as a condition of receiving housing assistance. Agency may not include current work status, work history and/or source of income as part of the selection criteria. ``Family'' is not limited to families with a member who is able to work full time, but is defined broadly so as not to exclude families with a member who is disabled but able to work, disabled but unable to work, or working as a caregiver for a family member with a disability. ..................... ................ Modify or The Agency may modify Eliminate the the terms of the Contract of contract of Participation participation to (Both): The align with Agency is adjustments made to authorized to its FSS program(s) modify the using MTW terms of, or flexibility. eliminate the Further, the Agency contract of may discontinue use participation, of the contract of in lieu of a participation and local form. instead employ a locally-developed agreement that codifies the terms of participation. [[Page 8073]] ..................... ................ Policies for Consistent with the Addressing goals and structure Increases in of its MTW FSS Family Income program, the Agency (Both): The can set policies for Agency is whether income authorized to increases are set its own recognized for policies for purposes of addressing increasing rent or increases in changing the amount family income of funds moved to during escrow/savings participation through the program. in the FSS The Agency may not program. use income increases during participation in the FSS program to change a family's eligibility status for purposes of participation in the FSS program or for the receipt public housing or HCV assistance. ..................... ................ Calculating FSS The Agency may set Credits (Both): policies to defer The Agency is income increases to authorized to savings OR to allow create participants to earn alternative savings deposits methods for based on meeting computing the certain program family's FSS milestones. Such credit. policies must be made clear to participants in writing prior to starting their participation in the program. ..................... ................ Disbursement of Consistent with the Savings (Both): goals and structure The Agency may of its MTW FSS set its own program, the Agency policies for can set policies for when savings when savings are funds can be disbursed to disbursed to participants. This participants. could mean all funds are disbursed at once, or at certain key points of participation. Such policies must be made clear to participants in writing prior to starting their participation in the program. ---------------------------------------------------------------------------------------------------------------- Activities Related to Public Housing ---------------------------------------------------------------------------------------------------------------- PH--Initial, Annual and The Agency is Certain Alternate Reexaminations must Interim Income Review Process. authorized to provisions of Reexamination occur at least every restructure the sections Schedule for three years. Must initial, annual and 3(a)(1) and Workable allow at least one interim review 3(a)(2) of the Households interim adjustment process in the 1937 Act and 24 (PH): The at the request of public housing CFR 966.4 and Agency may the household per program in order to 960.257. establish an year. affect the frequency alternate Reexaminations must of the reviews and reexamination occur at least every the methods and schedule for four years. Must process used to workable continue to allow establish the households. interim adjustments integrity of the Alternate at the request of income information Reexamination the household. provided. In Schedule for The Agency must addition, the Agency Elderly/ determine the is expressly Disabled eligibility of a authorized to adopt Households families in a local system of (PH): The accordance with 24 income verification Agency may CFR 5.609. Prior to in lieu of the establish an the implementation current HUD system. alternate of the activity a For example, the reexamination hardship policy and Agency may implement schedule for impact analysis must alternate time elderly and/or be developed and frames for validity disabled adopted in of verification or households. accordance with MTW adopt policies for Alternate guidance. verification of Verification income and assets Policy (PH): through sources The Agency may other than those verify currently allowed information under the 1937 Act. provided by the The terms ``low- participant in income families'' alternate ways. and ``very low- income families'' shall continue to be defined by reference to Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)). HUD has defined ``Annual Income'' at 24 CFR 5.609 and MTW Agencies must determine the eligibility of the family in accordance with provisions of 24 CFR 5.609. ---------------------------------------------------------------------------------------------------------------- [[Page 8074]] Activities Related to Housing Choice Vouchers ---------------------------------------------------------------------------------------------------------------- HCV--Operational Policies and The Agency is Certain Alternate Reexaminations must Procedures. authorized to provisions of Reexamination occur at least every define, adopt and Section Schedule for three years. Must implement a 8(o)(5), Workable allow at least one reexamination 8(o)(7) and Households interim adjustment program that differs 8(o)(13)(F) of (HCV): The at the request of from the the 1937 Act Agency may the household per reexamination and 24 CFR establish an year. The Department program currently 982.516 and alternate will develop a rider mandated in the 1937 982.162(b). reexamination to the HAP contract Act and its schedule for that reflects MTW implementing workable authorizations that regulations. The households. adjust the current terms ``low-income elements of the HAP families'' and contract. ``very low-income families'' shall continue to be defined by reference to Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)). ..................... ................ Alternate Reexaminations must Reexamination occur at least every Schedule for four years. Must Elderly/ continue to allow Disabled interim adjustments Households at the request of (HCV): The the household. The Agency may Department will establish an develop a rider to alternate the HAP contract reexamination that reflects MTW schedule for authorizations that elderly and/or adjust the current disabled elements of the HAP households. contract. ..................... ................ Alternate The Agency must Verification determine the Policy (HCV): eligibility of a The Agency may families in verify accordance with 24 information CFR 5.609. Prior to provided by the the implementation participant in of the activity a alternate ways. hardship policy and impact analysis must be developed and adopted in accordance with MTW guidance. The Department will develop a rider to the HAP contract that reflects MTW authorizations that adjust the current elements of the HAP contract. HCV--Leasing Incentives....... The Agency is Certain Vacancy Loss The Agency must authorized to provisions of (HCV): The update its determine a damage Section Agency may Administrative Plan claim and/or vacancy 8(o)(9), of the provide to reflect vacancy loss policy and 1937 Act and 24 landlords with loss claim policy. payment policy for CFR 982.311. vacancy loss In order to occupied units that payments up to incentivize differs from the 3 months. landlords to lease policy requirements to HCV families an currently mandated Agency may provide in the 1937 Act and vacancy loss its implementing payments to regulations. Damage landlords whether or and vacancy not a family is authority are terminated. subject to state and local laws. ..................... ................ Damage Claims The Agency must (HCV): The update its Agency may Administrative Plan provide to reflect damage landlords with claim policy. In compensation in implementing this the event that activity, the a tenant leaves tenant's security the unit with deposit should first significant be used to cover damage. damages before the Agency provides compensation to a landlord. ---------------------------------------------------------------------------------------------------------------- [[Page 8075]] PBV--Unit Cap Percentage The Agency is Section Raise PBV Unit The Agency is subject Waiver. authorized to use 8(o)(13)(B) of Cap (PBV): The to the PBV Section for project-based the 1937 Act Agency may of PIH Notice 2015- assistance up to 50% and 24 CFR project-base up 05 or any successor of its total 983.6. to 50% of its notice and/or authorized units as authorized guidance. If more long as units are units. than 20% of the located in census total authorized tracts with no more units are project than 20% poverty based, the rate and/or house at- additional units risk populations must meet one of the defined as an following criteria: individual or family house people who that does not have meet the HUD sufficient resources definition of or support networks homeless; house immediately vulnerable available to prevent populations; house them from moving to veterans; provide an emergency shelter supportive housing or lacks a fixed, for elderly or regular, and disabled; or be adequate nighttime located in areas of residence. high-opportunity. Agency must comply with Fair Housing and Civil Rights requirements. The Agency is subject to Notice 2013-27. PBV--Development Percentage The Agency is Section Raise PBV Cap The Agency is subject Waiver. authorized to 8(o)(13)(B) of Within a to the PBV Section determine the the 1937 Act Development to of PIH Notice 2015- percentage of units and 24 CFR 50% PBV (PBV): 05 or any successor within a development 983.56. The Agency may notice and/or that can be project- raise the PBV guidance. If more based that differs cap within a than 20% of the from the percentage development to units in a currently mandated 50%. development are in the 1937 Act and Raise PBV Cap project-based, the its implementing Within a additional units regulations. In Development to must meet one of the using this 75% PBV (PBV): following criteria: authorization, the The Agency may house people who Agency must place raise the PBV meet the HUD units in locally cap within a definition of defined areas of development to homeless; house opportunity. 75%. vulnerable Raise PBV Cap populations; house Within a veterans; provide Development to supportive housing 100% (PBV): The for elderly or Agency may disabled; is located raise the PBV in an area of high cap within a opportunity; or is a development to market-rate rental 100%. property owned by the Agency. The Agency must comply with Fair Housing and Civil Rights requirements. Agency is subject to Notice PIH 2013-27. PBV--Elimination of Subject to subsidy Certain Eliminate PBV The Agency is still Competitive Process. layering review, the provisions of Competitive subject to the PBV Agency is authorized Sections Process (PBV): Section of Notice to project-base 8(o)(13)(B and The Agency may PIH 2015-05 or any Section 8 assistance D) of the 1937 eliminate the successor notice and/ at properties owned Act and 24 CFR competitive or guidance. Agency by a single asset 982.1, 982.352 process in the is subject to Notice entity of the Agency and 24 CFR Part award of PBVs PIH 2013-27. This that are not public 983 Subpart B. to properties waiver does not housing properties, owned by a waive Part 983, subject to HUD's single asset Subpart B in its requirements entity of the entirety and Agency regarding subsidy Agency that are must still comply layering. Project- not public with 24 CFR 983.57 based assistance for housing. and 983.59(b) which such owned units requires that HQS does not need to be inspections be competitively bid, completed by nor are the owned independent units subject to any entities. required assessments for voluntary conversion. Agency still needs to complete site selection requirements. This waiver does not waive 24 CFR 983.57 despite reference to Part 983, Subpart B. This waiver also does not waive the requirement of 24 CFR 983.59(b) that HQS inspections be performed by an independent entity. [[Page 8076]] PBV--Alternate Competitive The Agency is Certain Establish Agency is subject to Process. authorized to provisions of Alternate PBV PBV Section of establish a 24 CFR 983.51. Competitive Notice PIH 2015-05 reasonable Process (PBV): or any successor competitive process The Agency may notice and/or or utilize an establish an guidance. Agency is existing local alternate subject to Notice competitive process competitive PIH 2013-27. for project-basing process in the leased housing award PBVs. assistance at units that meet existing Housing Quality Standards and that are owned by non- profit, for-profit housing entities, or a single asset entity of the Agency. PBV--Operational Policies and The Agency is Certain Add Units to PBV The anniversary and Procedures. authorized to provisions of HAP Contract expiration date for determine the time Sections (PBV): The any additional units period for amending 8(o)(7)(a), Agency may add added to a PBV HAP the PBV HAP contract 8(o)(13)(F) and units to a PBV contract must be the to add units 8(o)(13)(G) of HAP contract at same as that for the thereto, the length the 1937 Act any time. original units under of the lease period, and 24 CFR 983 the PBV HAP when vouchers Subpart F. contract. expire, and when vouchers will be issued or reissued. ---------------------------------------------------------------------------------------------------------------- Appendix B--Conditional Waivers ---------------------------------------------------------------------------------------------------------------- Regulations No. Waiver name Waiver description waived Available activities Parameters ---------------------------------------------------------------------------------------------------------------- Activities Related to Public Housing ---------------------------------------------------------------------------------------------------------------- 1...... PH--Leases...... The Agency is Certain Establish Community Agency may only authorized to provisions of Rules through Local implement changes to develop and adopt a Section 6(l) of Lease (PH): The the lease under this new form of local the 1937 Act Agency may establish activity that do not lease and establish and 24 CFR community rules require either a community rules and 966.4. through a local regulatory or reasonable tenant lease. statutory waiver. fees based on proven Establish Reasonable Fair Housing and private management Fees through Local other civil rights models (subject to Lease (PH): The requirements State and local Agency may charge continue to apply. laws), provided that fees that are An appeals process no-cause evictions reasonable and cost and hardship policy are not permitted effective through a must be put in and the Agency local lease. place. The hardship allows for grievance policy must be procedures. developed and adopted in accordance with MTW guidance. 2...... PH--Rent The Agency is Certain Rent Policies (PH): The rent bands must Policies. authorized to provisions of Income bands--The be set in accordance determine family Section Agency may implement with bedroom size. A payment, including 3(a)(2), changes to the rent hardship policy must the total tenant 3(a)(3)(A) and calculation in order be put in place. The payment, the minimum Section 6(l) of to create a system hardship policy must rent, utility the 1937 Act based upon rent be developed and reimbursements and and 24 CFR bands. Such rent adopted in tenant rent. The 5.603, 5.611, policies are accordance with MTW Agency is authorized 5.628, 5.630, structured using two guidance. to adopt and 5.632, 5.634 variables: (1) implement any and 960.255 and Income bands, or reasonable policies 966 Subpart A. ranges, that assign for setting rents in dollar increments public housing, that have been including but not determined locally limited to: by the Agency, and Establishing (2) bedroom size. In definitions of a table, the y-axis income and adjusted lists the income income or earned bands and the x-axis income disallowance lists the various that differ from bedroom sizes. In those in current creating this statues and system, the Agency regulations. Agency may also adopt a must comply with flat rent policy Section 3(b)(2) of within each income the Act to determine band instead of eligibility. calculating rent based on adjusted income. The income bands may result in total tenant payment being more than 30%. Rent Policies (PH): ..................... Flat Rents--The Agency may establish flat rents based on bedroom size. Rent Policies (PH): Minimum rent may not Minimum Rent--The exceed $250. Tenant Agency may implement rents may be a minimum rent calculated between policy that is 25% to 50% of targeted towards adjusted income. work able families. Hardship policy, impact analysis, and any other information required by HUD for the oversight of this policy must be provided to HUD upon request. Rent Policies (PH): ..................... Other Income-Based Rent Model--The Agency may calculate rent at an alternative adjusted income. Rent Policies (PH): The gross income Gross Income Rents-- calculation may not The Agency may exceed 40% of rent calculate rent as a burden for working percentage of gross families and 27% for income that does not elderly and/or include income disabled households. deductions and/or exemptions. Rent Policies (PH): The Agency should Alternative Utility review its schedule Allowance--The of utility Agency may create a allowances each utility schedule(s) year, and must for all units based revise its allowance upon bedroom size, for a utility the property category if there location and/or the has been a change of types of utilities 10 percent or more paid by resident. from the prior year. The Agency must maintain information supporting its annual review of utility allowances and any revisions made in its utility allowance schedule. [[Page 8077]] 3...... PH--Work The Agency is Certain Work Requirement Residents must have Requirements. authorized to provisions of (PH): The Agency may the opportunity to implement a Section 3 of implement a work utilize the requirement that a the 1937 Act requirement for provisions of the specified segment of and 24 CFR public housing Agency's Grievance its public housing 960.206. residents between Procedure to resolve residents work as a the ages of 18 and a dispute regarding condition of tenancy 54. The requirement a determination that subject to subject shall be no less a resident has to all applicable than 15 hours of failed to comply Fair Housing work per week and no with the work Requirements and the more than 30 hours requirement. The mandatory admission of work per week. Agency must update and prohibition Work requirements its ACOP to include requirements imposed shall not be applied a description of the by sections 576-578 to exclude, or have circumstances in of the Quality the effect of which residents Housing and Work excluding, the shall be exempt for Responsibility Act admission of or the requirement and of 1998 and Section participation by hardship policies. 428 of Public Law persons with The ACOP should 105-276. Those disabilities or include a individuals exempt families that description of what from the Community include persons with is considered work Service Requirement disabilities. Work as well as other in accordance with requirements shall activities that Section 12(c)(2)(A), not apply to person shall be considered (B), (D) and (E) of with disabilities or acceptable the 1937 Act are families that substitutes for also exempt from the include persons with work. Services, or Agency's work disabilities. referrals to requirement. However, persons services, must be with disabilities provided by the and families that Agency to support include persons with preparing families disabilities must to comply with this have equal access to requirement. The the full range of hardship policy in program services and the ACOP should other incentives. apply to residents who are actively trying to comply with the Agency's work requirement, but are having difficulties obtaining work or an acceptable substitute. The ACOP should also describe the consequences of failure to comply with the work requirement. Agencies may not implement the PH- Work Requirements Waiver on individuals exempted from the Community Service Requirement under Section 12(c)(2)(A), (B), (D) and (E). While the work requirements do not apply to persons with disabilities or families that include a person with disabilities, such persons and families are not precluded from working or engaging in substitute activities (such as caring for a family member who is disabled). Regardless of the level of engagement with work or substitute activities, persons and families that include persons with disabilities must have equal access to services or referral to services to support their efforts to obtain work or an acceptable substitute, and any other services or other incentives associated with the program. 4...... PH--Term Limits. The Agency is Certain Term Limits (PH): The The term of authorized to adopt provisions of Agency may limit the assistance may not and implement term Section duration for which a be shorter than 5 limits for its 3(a)(3)(A) and family receives years except in the Public Housing Section 6(l) of housing assistance. case of short-term program. the 1937 Act transitional housing and 24 CFR programs. Services, 5.603 and 966 or referrals to Subpart A. services, must be provided by the Agency to support preparing families for the termination of assistance. A hardship policy must also be created to address extenuating circumstances. Hardship information and any other information required by HUD for the oversight of this policy must be provided to HUD upon request. Agency must also conduct an impact analysis prior to the implementation of this activity. An Agency may not retroactively apply the 5-year term limit to families currently residing in public housing. 5...... PH--Income The Agency is Certain Elimination of The Agency must Deductions and authorized to provisions of Deduction(s) (PH): determine the Exclusions. restructure the sections The Agency may initial eligibility initial, annual and 3(a)(1) and eliminate one, some of a families in interim review 3(a)(2) of the or all deductions. accordance with 24 process in the 1937 Act and 24 Standard Deductions CFR 5.609. Prior to public housing CFR 5.611, (PH): The Agency may the implementation program in order to 966.4 and replace existing of the activity a affect the income 960.257. deduction(s) with a hardship policy and deductions and standard impact analysis must exclusions. The deduction(s). be developed and terms ``low-income Alternate Income adopted in families'' and Inclusions/ accordance with MTW ``very low-income Exclusions (PH): The guidance. Agencies families'' shall Agency may establish are required to continue to be alternate policies follow 24 CFR defined by Section to include or 5.609(c) and other 3(b)(2) of the 1937 exclude certain federal statutes Act (42 U.S.C. forms of participant that specifically 1437a(b)(2)). HUD income during the exclude certain has defined ``Annual income review and income sources from Income'' at 24 CFR rent calculation being counted as 5.609 and MTW process. These income. Agencies must alternate policies determine the must be consistent eligibility of the with the inclusions family in accordance and exclusions at 24 with provisions of CFR 5.609. 24 CFR 5.609. ---------------------------------------------------------------------------------------------------------------- Activities Related to Housing Choice Vouchers ---------------------------------------------------------------------------------------------------------------- 1...... HCV--Earned The Agency must Certain EID (HCV): The Agency ..................... Income comply with Section provisions of may eliminate the Disregard. 3(b)(2) of the Act Sections 16(b) Earned Income to determine of the 1937 Act Disregard from the eligibility. The and 24 CFR calculation of the Agency may calculate 5.603, 5.609, tenant's share of the tenant's share 5.611, 5.628, the rent. of rent in a manner 982.516, EID (HCV): The Agency other than that 982.201 and 982 may create an required by statute Subpart E. alternative to the and regulation in Earned Income order to eliminate Disregard in order or create an to calculate the alternative Earned tenant's share of Income Disregard the rent. which may not be used to determine eligibility or recertification. Rent calculations must comply with Fair Housing and Civil Rights requirements. [[Page 8078]] 2...... HCV & PBV-- The Agency is Certain Elimination of The Agency must Reexamination authorized to provisions of Deduction(s) (HCV): determine the Policies and define, adopt and Section The Agency may eligibility of a Lease Terms. implement a 8(o)(5), eliminate one, some families in reexamination 8(o)(7) and or all deductions. accordance with 24 program that differs 8(o)(13)(F) and Standard Deductions CFR 5.609. Prior to from the (G) of the 1937 (HCV): The Agency the implementation reexamination Act and 24 CFR may replace existing of the activity a program currently 982.516 and deduction(s) with a hardship policy and mandated in the 1937 982.162(b). standard impact analysis must Act and its deduction(s). be developed and implementing Alternate Income adopted in regulations. The Inclusions/ accordance with MTW terms ``low-income Exclusions (HCV): guidance. The families'' and The Agency may Department will ``very low-income establish alternate develop a rider to families'' shall ways to include or the HAP contract continue to be exclude participant that reflects MTW defined by reference income. authorizations that to Section 3(b)(2) adjust the current of the 1937 Act (42 elements of the HAP U.S.C. 1437a(b)(2)). contract. The Agency is Certain Length of HAP Agencies implementing authorized to provisions of Contract (HCV & revised lease terms, determine the length Sections PBV): The Agency may including length of of the HAP contract, 8(o)(7)(a), change the term of a lease period for HCV the length of the 8(o)(13)(F) and HAP contract. and PBV families, lease period, when 8(o)(13)(G) of Alteration of HAP must demonstrate how vouchers expire, and the 1937 Act Contract (HCV & the altered lease when vouchers will and 24 CFR 983 PBV): The Agency may terms, including be issued or Subpart F. alter the length of length, benefit the reissued. the lease period, tenant. The when vouchers expire anniversary and and when vouchers expiration date for will be issued or any additional units reissued. added to a PBV HAP contract must be the same as that for the original units under the PBV HAP contract. The Department develop a rider to the HAP contract that reflects MTW authorizations that adjust the current elements of the HAP contract. 3...... HCV & PBV-- The Agency is Certain Term Limits (HCV & The term of Tenant Term authorized to provisions of PBV): The Agency may assistance may not Limits. implement term Section 8(o)(7) limit the duration be shorter than 5 limits for HCV and and 8(o)(13)(F)- for which a family years except in the PBV units designated (G) of the 1937 receives housing case of short-term as part of the MTW Act and 24 CFR assistance. transitional housing Demonstration. 982 Subpart L programs. Services, and 983 Subpart or referrals to E. services, must be provided by the Agency to support preparing families for the termination of assistance. A hardship policy must also be created to address extenuating circumstances. Hardship information and any other information required by HUD for the oversight of this policy must be provided to HUD upon request. Agency must also conduct an impact analysis prior to the implementation of this activity. 4...... HCV & PBV--Rent The Agency is Certain Rent Policies (HCV & A hardship policy Policies. authorized to adopt provisions of PBV): Payment must also be created and implement any Sections Standards--The to address reasonable policy to 8(o)(2)(A), Agency is authorized extenuating establish payment 8(o)(2)(B), to adopt and circumstances. standards, rents or 8(o)(3), implement any Hardship information subsidy levels for 3(a)(1), reasonable policy to and any other tenant-based 8(o)(2)(C), and establish payment information required assistance that 8(o)(13)(H)-(I) standards that do by HUD for the differ from the of the 1937 Act not exceed 200% of oversight of this currently mandated and 24 CFR the FMR. This may policy must be program requirements 982.508, include the setting provided to HUD upon in the 1937 Act and 982.503 and of payment standards request. its implementing 982.518. outside of the basic regulations. The range, and creating Agency is authorized multiple payment to adopt and standards based on implement any variations in the reasonable policies local rental market. to calculate the tenant portion of the rent that differ from the currently mandated program requirements in the 1937 Act and its implementing regulations. Rent Policies (HCV & A hardship policy PBV): Income Bands-- must also be created The Agency may to address implement changes to extenuating the rent calculation circumstances. in order to create a Hardship information system based upon and any other rent bands. Such information required rent policies are by HUD for the structured using two oversight of this variables: (1) policy must be Income bands, or provided to HUD upon ranges, that assign request. dollar increments that have been determined locally by the Agency, and (2) bedroom size. In a table, the y-axis lists the income bands and the x-axis lists the various bedroom sizes. In creating this system, the Agency may also adopt a flat rent policy within each income band instead of calculating rent based on adjusted income. Certain Rent Policies (HCV & A hardship policy provisions of PBV): Initial Rent must also be created Sections Burden--The Agency to address 8(o)(1), may waive the extenuating 8(o)(2), maximum family share circumstances. 8(o)(3), at initial occupancy Hardship information 8(o)(10) and of 40% of the and any other 8(o)(13)(H)-(I) family's adjusted information required of the 1937 Act monthly income. by HUD for the and 24 CFR oversight of this 982.508. policy must be provided to HUD upon request. Agency must also conduct an impact analysis. Certain Rent Policies (HCV & Rent increases may provisions of PBV): Stepped Rent-- not occur more than Sections The Agency may once per year. This 8(o)(1), create a stepped activity may only 8(o)(2), rent model that apply to non-elderly 8(o)(3), alters the family's and/or non-elderly 8(o)(10) and rent payment on a and disabled 8(o)(13)(H)-(I) fixed schedule in residents. Agency of the 1937 both frequency and must implement a Act, 24 CFR amount. grace period policy 982.518, Implementation of for HCV families 982.308, this activity may that reach zero HAP 982.451, 983 only occur if the through this Subpart E, Stepped Rent activity. The grace 982.508, and activity is combined period would allow 982.503. with another Rent families to receive Policy waiver zero HAP for at identified in HCV- least six months Rent Policies before being Available Activities. transitioned off the HCV program. Certain Rent Policies (HCV & Minimum rent may not provisions of PBV): Minimum Rent-- exceed $250. Tenant Sections The Agency is rents may be 8(o)(1), authorized to adopt calculated between 8(o)(2), and implement any 25% to 50% of 8(o)(3), reasonable policies adjusted income. 8(o)(10) and to calculate the Hardship policy, 8(o)(13)(H)-(I) tenant portion of impact analysis, and of the 1937 Act the rent that differ any other and 24 CFR from the currently information required 982.518. mandated program by HUD for the requirements in the oversight of this 1937 Act and its policy must be implementing provided to HUD upon regulations. request. [[Page 8079]] The Agency is Certain Rent Policies (HCV & A family's rents may authorized to provisions of PBV): Contract be calculated determine contract Sections Rents--The Agency is between 25% to 50% rents and increases 8(o)(1)(B) and authorized to of adjusted income. and to determine the 8(o)(13)(H) of determine contract Any lease content of the HAP the 1937 Act rents and increases alteration(s) must contract that differ and 24 CFR and to determine the comply with State from the currently 982.308, content of the HAP and local law. A mandated program 982.451 and 983 contracts that hardship policy must requirements in the Subpart E. differ from the be put in place. The 1937 Act and its currently mandated hardship policy must implementing program requirements be developed and regulations. in the 1937 Act and adopted in its implementing accordance with MTW regulations. guidance. 5...... HCV & PBV- Rent The Agency is Certain Rent Reasonableness Agencies must Reasonableness. authorized to provisions of (HCV & PBV): The provide, for HUD's develop a local Section Agency is authorized approval, an process to determine 8(o)(10) of the to develop a local alternative measure rent reasonableness 1937 Act and 24 process to determine to determine that that differs from CFR 982.507. rent reasonableness rents charged by the currently that differs from owners to voucher mandated program the currently participants are requirements in the mandated program reasonable. 1937 Act and its requirements in the implementing 1937 Act and its regulations. Agency implementing must determine that regulations. rents charged by owners are reasonable before entering into a HAP contract. 6...... HCV & PBV--Work The Agency is Certain Work Requirement (HCV The Agency must Requirements. authorized to provisions of & PBV): The Agency update its implement a Sections may implement a work Administrative Plan requirement that a 8(o)(7)(a), requirement for HCV to include a specified segment of 8(o)(13)(F), and PBV residents description of the its HCV and PBV and 8(o)(13)(G) between the ages of circumstances in residents work as a of the 1937 Act 18 and 54. The which families shall condition of tenancy and 24 CFR requirement shall be be exempt from the subject to all 982.303, no less than 15 requirement. The applicable Fair 982.309 and 983 hours of work per Administrative Plan Housing Requirements. Support F. week and no more must also include a than 30 hours of hardship policy. The work per week. The Administrative Plan Agency shall provide should include a supportive services description of what to assist families is considered work obtain employment or as well as other an acceptable activities that substitute. Work shall be considered requirements shall acceptable not be applied to substitutes for exclude, or have the work. Services, or effect of excluding, referrals to the admission of or services, must be participation by provided by the persons with Agency to support disabilities or preparing families families that for the termination include persons with of assistance. The disabilities. Work hardship policy in requirements shall the Administrative not apply to persons Plan should apply to with disabilities or families who are families that actively trying to include persons with comply with the disabilities. Agency's work However, persons requirement, but are with disabilities having difficulties and families that obtaining work or an include persons with acceptable disabilities must substitute. The have equal access to Administrative Plan the full range of should also describe program services and the consequences of other incentives. failure to comply with the work requirement. 7...... PBV Unit Types.. Subject to subsidy Certain PBV Unit Types: As The Agency must layering review, the provisions of long as units are provide a transition Agency is authorized Section 8(p) of rental housing and plan to both the to determine the 1937 Act meet HQS, the Agency affected residents property eligibility and 24 CFR may attach and pay and HUD prior to the criteria, including 983.53(a)-(b) PBV assistance for end of the types of units and 982 units in various demonstration. If currently prohibited Subparts H and types of housing the Agency places a by Section 8 M. including housing PBV unit in a public regulations so long described at 24 CFR housing project, as these units are 983.53(a)(3), (5) then the Agency will rental housing and and (6). not receive meet HQS. operating funds for that PH unit. PBV units must comply with HQS and be consistent with fair housing deconcentration requirements. This waiver is subject to subsidy layering review. ---------------------------------------------------------------------------------------------------------------- Activities Related to Local, Non-Traditional ---------------------------------------------------------------------------------------------------------------- 1...... Local Non- The Agency is N/A............. Rental Subsidy Agency is subject to Traditional authorized to use Programs: The Agency Notice PIH 2011-45 Activities--Ren MTW funds to provide may provide funds or any successor tal Subsidy rental subsidy to a for supportive notice and/or Programs. third-party entity. housing programs and guidance. Any MTW services. funds awarded to a Rental Subsidy third party provider Programs: The Agency must be may provide funds competitively bid. for homeless/ transitional housing programs and services. Rental Subsidy Programs: The Agency may provide funds for the creation of a local rental subsidy program that addresses special needs populations. 2...... Local Non- The Agency is N/A............. Service Provision: Agency is subject to Traditional authorized to use The Agency may Notice PIH 2011-45 Activities--Ser MTW funds to provide provide services for or any successor vice Provision. supportive services residents of other notice and/or to eligible Agency owned or guidance. Any MTW participants. managed low-income funds awarded to a housing that is not third party provider public housing or must be Housing Choice competitively bid. Voucher assistance. Service Provision: The Agency may provide services for low-income non- residents. Service Provision: The Agency may provide supportive services subsidies or budgets for low- income families. Service Provision: The Agency may contract with a third party provider for the provision of services to eligible participants. 3...... Local Non- The Agency is N/A............. LIHTC Development: Agency is subject to Traditional authorized to The Agency may Notice PIH 2011-45 Activities--Hou contribute MTW funds contribute MTW funds or any successor sing to the development towards a Low Income notice and/or Development of affordable Housing Tax Credit guidance. The use of Programs. housing outside of project. federal funds must Sections 8 and 9. Affordable Housing be consistent with Development: The the requirements of Agency may 2 CFR 200 and other contribute MTW funds basic federal towards the principles. development of housing for low- income families. ---------------------------------------------------------------------------------------------------------------- Appendix C--Public Comments To Be Solicited Through MTW Operations Notice ------------------------------------------------------------------------ ------------------------------------------------------------------------- Waivers ------------------------------------------------------------------------ Does the list of general waivers, MTW activities, and parameters in Appendix A and Appendix B contain the needed flexibility to achieve the three MTW statutory objectives? If not, what waivers, activities, and/ or parameters are missing? Are there any MTW activities and/or waivers that should not be included as general waivers, available to all MTW agencies without prior HUD approval? Are there any MTW activities and/or waivers that should not be included as conditional waivers but rather should be included as general waivers, or not included at all? [[Page 8080]] Does the list of conditional waivers, MTW activities, and parameters in Appendix B contain the needed flexibility to implement any alternative income-based rent model? If not, what waivers, activities, and/or parameters are missing? ------------------------------------------------------------------------ Term of Participation ------------------------------------------------------------------------ Assuming all cohorts are selected between 2017 and 2020, is the end of each MTW agency's Fiscal Year 2028 an appropriate timeframe for MTW participation, and understanding that HUD may extend cohort-specific waivers to accommodate evaluation of MTW activities that require additional time? Is there a preferable length or structure for the term of MTW participation? What elements of the MTW agency's transition plan should be mandatory? What elements of the transition process should HUD require in order to protect residents from potential harm and minimize disruptions to agency operations? ------------------------------------------------------------------------ Funding, Single Fund Budget, and Financial Reporting ------------------------------------------------------------------------ Is a 90 percent HAP budget utilization requirement the appropriate amount? What sanctions or restrictions should HUD consider using should an MTW agency continue to fail to meet the budget utilization requirement? Are there other methods for calculating HCV funding that HUD should consider? Are there other factors HUD should consider in the calculation of funding? Are there any comments or clarifications needed in relation to funding, the MTW Block Grant, or financial reporting? ------------------------------------------------------------------------ Evaluation ------------------------------------------------------------------------ Is there any information not captured in HUD administrative data systems that would provide informative data points or performance metrics for evaluating the MTW demonstration? What are measures of activities that ``reduce cost and achieve greater cost effectiveness in Federal expenditures'' that can apply to and are either being reported in existing HUD systems or can be reported by every MTW agency? What are measures of activities that ``give incentives to families with children where the head of household is working, seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self-sufficient'' that can apply to and are either being reported in existing HUD systems or can be reported by every MTW agency? Should HUD standardize a definition of ``self-sufficient''? If so what elements of self-sufficiency should be included in HUD's definition? What are measures of MTW activities that ``increase housing choices for low-income families'' that can apply to and are either being reported in existing HUD systems or can be reported by every MTW agency? What is the best way to capture and report exit data on families exiting the Public Housing, HCV, and local non-traditional housing programs? What are the appropriate exit reasons to capture? Is there any information not captured in HUD administrative data systems that would be informative data points or performance metrics in terms of evaluating the MTW demonstration? In the list of performance metrics provided above, should any be clarified or removed? Are there any alternative or additional metrics that would enhance performance evaluation on the MTW demonstration? ------------------------------------------------------------------------ Program Administration and Oversight ------------------------------------------------------------------------ Is the MTW Supplement to the Annual Plan, as described, an appropriate mechanism for HUD to track MTW agencies' activities and use of waivers? Are there specific elements that should be included in the MTW Supplement to the Annual Plan? Should MTW agencies with a combined unit total of 550 or less public housing units and Section 8 vouchers be exempt from the requirement to submit the Annual Plan? If so, how should HUD collect information on the activities and waivers implemented over the course of the demonstration? Do you have suggestions for how HUD can strengthen the public engagement process to ensure that residents have an opportunity to offer meaningful input in the selection and implementation of MTW activities? How could HUD measure public housing and voucher program performance for MTW agencies and incorporate those measures into PHAS and SEMAP? Are there MTW-specific indicators that should be included in a revised PHAS and SEMAP assessment? Should an MTW agency retain its high-performer status in PHAS or SEMAP until MTW specific indicators are developed? Are HUD's monitoring and oversight efforts sufficient for MTW agencies? What are the specific areas of risk that should be considered for MTW agencies? Are there additional areas that should be monitored for MTW agencies? ------------------------------------------------------------------------ Regionalization ------------------------------------------------------------------------ How should ``adjacent'' be defined for the purposes of identifying which PHAs should be allowed to be part of an MTW agency's regional agency designation? Should regional MTW agencies extend across state borders? What flexibilities should the regional MWT agency be able to administer on behalf of its regional partners? Should the partner PHAs have full flexibility in the use of funds? What form of governance structure, if any, should be formed between the regional MTW agency and its partner PHAs? What form should the agreement (i.e., contract, memorandum of understanding, partnership agreement, etc.) take between the regional MTW agency and its PHA partners? Should the criteria for regionalization be the same for current MTW agencies and PHAs that join under the expansion? Should HUD issue a revised Public Housing and Voucher Consortia Rule to further the regionalization concept? ------------------------------------------------------------------------ MTW Agencies Admitted Prior to 2016 MTW Expansion Statute ------------------------------------------------------------------------ Is it appropriate to permit existing MTW agencies to come under the framework of this Operations Notice and associated MTW agreement? Should these existing PHAs be subject to any different or supplemental requirements? ------------------------------------------------------------------------ [FR Doc. 2017-01310 Filed 1-19-17; 8:45 am] BILLING CODE 4210-67-P
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice; solicitation of comment. | |
| Dates | Comment Due Date: March 24, 2017. | |
| Contact | Marianne Nazzaro, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 | |
| FR Citation | 82 FR 8056 |