83_FR_50581 83 FR 50387 - Operations Notice for the Expansion of the Moving to Work Demonstration Program

83 FR 50387 - Operations Notice for the Expansion of the Moving to Work Demonstration Program

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 83, Issue 194 (October 5, 2018)

Page Range50387-50402
FR Document2018-21723

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 whose heads of household are either working, seeking work, or are participating in job training, educational or other programs that assist in obtaining employment and becoming economically self-sufficient; and to increase housing choices for low-income families. This Operations Notice for the Expansion of the MTW Demonstration Program (Operations Notice) establishes requirements for the implementation and continued operation of the MTW demonstration program pursuant to the 2016 MTW Expansion Statute.

Federal Register, Volume 83 Issue 194 (Friday, October 5, 2018)
[Federal Register Volume 83, Number 194 (Friday, October 5, 2018)]
[Notices]
[Pages 50387-50402]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-21723]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5994-N-03]


Operations Notice for the Expansion of the Moving to Work 
Demonstration Program

AGENCY: Office of Public and Indian Housing, HUD.

ACTION: Notice.

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

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 whose heads of household are either working, seeking 
work, or are participating in job training, educational or other 
programs that assist in obtaining employment and becoming economically 
self-sufficient; and to increase housing choices for low-income 
families. This Operations Notice for the Expansion of the MTW 
Demonstration Program (Operations Notice) establishes requirements for 
the implementation and continued operation of the MTW demonstration 
program pursuant to the 2016 MTW Expansion Statute.

DATES: Comment Due Date: November 19, 2018.

Submission of Comments

    Electronic Submission of Comments. HUD strongly encourages 
interested persons 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. Interested persons may 
submit comments electronically through the Federal eRulemaking Portal 
at www.regulations.gov. Comments submitted electronically through the 
www.regulations.gov website can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    Submission of Comments by Mail. Alternatively, interested persons 
may submit comments regarding this Notice to the Regulations Division, 
Office of General Counsel, Department of

[[Page 50388]]

Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500. Communications must refer to the above 
docket number and title.
    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, Director, Moving to 
Work Demonstration Program, 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

    Section 239 of the Fiscal Year 2016 Appropriations Act, Public Law 
114-113 (2016 MTW Expansion Statute), signed by the President in 
December 2015, authorizes HUD to expand the MTW demonstration program 
from the current size of 39 agencies to an additional 100 agencies over 
a period of 7 years. This Notice was originally published on January 
23, 2017, in the Federal Register, entitled ``Operations Notice for the 
Expansion of the Moving to Work Demonstration Program Solicitation of 
Comment.'' On May 4, 2017, the Notice was republished with three 
technical revisions and an extension of the comment period. HUD took 
all comments received into consideration.
    Changes to this Notice have been made to incorporate feedback from 
the two previous publications and to reflect policy decisions. The 
primary changes are as follows:
     The term of participation has been set at 12 years from 
the year of designation in response to public comments for the term to 
be at least 10 years from the year of designation.
     In response to public comments, the Department removed the 
General Waivers and Conditional Waivers categories and replaced them 
with a singular MTW Waivers category, which MTW agencies may implement 
without further approval from HUD.
    [cir] In restructuring the MTW Waivers, the Notice now includes 
safe harbors, which are defined as the additional requirements, beyond 
those specified in the activity description, that the agency must 
follow in implementing activities without further HUD approval.
    [cir] MTW Waivers now include specific guidance on impact analyses, 
hardship policies, and applicability of waivers to elderly/disabled 
families.
    [cir] An additional MTW Waiver was added: ``Increase Elderly Age,'' 
which allows agencies to amend the definition of an elderly person to 
be an individual who is at least sixty-five.
    [cir] The Homeownership Waiver was removed. Upon reviewing this 
waiver, the Department determined that the activities provided to 
agencies under the waiver were already available under the Section 32 
Homeownership Program.
     The 90 percent voucher utilization requirement was 
removed. The MTW Housing Assistance Payment (HAP) Renewal Formula has 
been revised to use as a base, all prior-year MTW-eligible Housing 
Choice Voucher (HCV) funding expenses paid from HAP, including HAP 
expenses plus non-HAP expenses.
     For a prospective agency to be eligible for selection to 
the MTW demonstration, it must be a high performer in either the Public 
Housing Assessment System (PHAS) or the Section Eight Management 
Assessment Program (SEMAP).
     Regionalization was removed from the MTW Operations Notice 
and will be implemented through a separate forthcoming notice.
     Agencies will formalize their MTW status with an amendment 
to their Annual Contributions Contract.
     The monitoring of the requirement that an MTW agency 
designated pursuant to the 2016 MTW Expansion Statute continues to 
assist substantially the same number of families has been simplified. 
Compliance will be determined using a baseline ratio of total public 
housing and HCV HAP funding to families served.

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, 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 HCV rules and offered more flexibility with how they use 
their Federal funds. MTW agencies use this opportunity presented by the 
MTW demonstration to better address local housing needs. HUD learns 
from the experience of MTW agencies to develop new housing policy 
recommendations that can positively impact assisted housing delivery 
for PHAs nationwide.
    In addition to statutory and regulatory relief,\3\ MTW agencies 
have the flexibility to apply fungibility among three core funding 
programs' funding streams--public housing Operating Funds, public 
housing Capital Funds, and HCV assistance (to include both HAP and 
Administrative Fees)--hereinafter referred to as ``MTW Funding.'' \4\ 
These flexibilities do not

[[Page 50389]]

negate the need for both the PHA and HUD to be able to account for the 
funding from its original source to the date of its ultimate eligible 
use \5\ by the PHA, to comply with Federal grant and financial 
management requirements, and to use funds effectively and efficiently 
for their eligible purposes. As the Department continues to implement 
program-specific financial management policies in its core housing 
programs, MTW agencies will be subject to the same requirements and 
procedures as non-MTW agencies. Therefore, the requirements and 
procedures described in this Notice may change as new financial 
management policies are implemented over time.
---------------------------------------------------------------------------

    \3\ For more information about the MTW demonstration program and 
the specific activities of existing MTW agencies, please refer to 
the MTW website at www.hud.gov/mtw.
    \4\ Funds awarded under Sections 8(o), 9(d), and 9(e) of the 
1937 Act are eligible for expanded uses pursuant to MTW fungibility, 
with the exception of funds provided for specific non-MTW HCV sub-
programs. Other funds a PHA may receive (i.e., grant funds under 
another obligating document) are likewise not covered by MTW 
flexibilities and must be tracked and reported under the applicable 
rules and requirements.
    \5\ The date of the ``ultimate eligible use'' means the date of 
disbursement by the PHA for an eligible purpose, which would remove 
the funding from the PHA's account and the PHA's control.
---------------------------------------------------------------------------

    Throughout participation in the MTW demonstration program, MTW 
agencies must continue to meet five statutory requirements established 
under the 1996 MTW Statute. The five statutory requirements are:
     At least 75 percent of the families assisted by 
participating demonstration public housing authorities shall be very 
low-income families, as defined in section 3(b)(2) of the United States 
Housing Act of 1937;
     establishing a reasonable rent policy, which shall be 
designed to encourage employment and self-sufficiency by participating 
families, consistent with the purpose of this demonstration, such as by 
excluding some or all of a family's earned income for purposes of 
determining rent;
     continuing to assist substantially the same total number 
of eligible low-income families as would have been served had the 
amounts not been combined;
     maintaining a comparable mix of families (by family size) 
as would have been provided had the amounts not been used under the 
demonstration; and
     assuring that housing assisted under the demonstration 
program meets housing quality standards established or approved by the 
Secretary.
    Currently, there are 39 agencies \6\ participating in the MTW 
demonstration program. The administrative structure for these 39 
agencies is outlined in the Standard MTW Agreement, a contract between 
each existing MTW agency and HUD. The 2016 MTW Expansion Statute 
extended the term of the Standard MTW Agreement through each of the 
existing MTW agencies' 2028 fiscal year.
---------------------------------------------------------------------------

    \6\ The 39 agencies 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; Lexington-
Fayette Urban County Housing Authority; Lincoln Housing Authority; 
Louisville Metropolitan 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; Housing Authority of 
Tulare County; and Vancouver Housing Authority.
---------------------------------------------------------------------------

2016 Expansion of the MTW Demonstration Program

    As the 2016 MTW Expansion Statute directs, HUD is authorized to 
expand the MTW demonstration program from the current level of 39 
agencies to an additional 100 agencies over a period of 7 years, ending 
in 2023. In expanding the MTW demonstration, HUD intends to build on 
the successes and lessons learned from the demonstration thus far. The 
vision for the MTW expansion is to learn from MTW interventions 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, evaluation, 
and prudent oversight.
    HUD will select the additional 100 PHAs in cohorts, with 
applications for each cohort to be sought via PIH Notice. For each 
cohort of agencies selected, the 2016 MTW Expansion Statute requires 
HUD to direct all the agencies within the cohort to implement one 
specific policy change, which HUD will evaluate rigorously. MTW 
agencies may implement policy changes in addition to the policy change 
directed by HUD as long as those policy changes do not conflict or 
interfere with the cohort study. As required by the 2016 MTW Expansion 
Statute, the HUD-appointed 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.
    The 2016 MTW Expansion Statute also includes a provision allowing 
the Secretary to designate an MTW agency as a regional MTW agency--at 
the request of said agency--should the Secretary determine that unified 
administration of assistance ``under sections 8 and 9 of the United 
States Housing Act of 1937 (42 U.S.C. 1437f and g)'' by that agency 
across multiple jurisdictions will lead to (a) efficiencies and to (b) 
greater housing choice for low-income persons in the region. HUD will 
issue separate guidance regarding how an MTW agency may be designated 
as a regional MTW agency.
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 in either HUD's Public Housing 
Assessment System (PHAS) or its Section Eight Management Assessment 
Program (SEMAP) at the time of application to the demonstration, and 
represent geographic diversity across the country. Further, the 2016 
MTW Expansion Statute states 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 PIH 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 designation.
    The PHA sizes eligible for participation in the MTW demonstration 
are statutory and were defined by Congress; therefore, HUD is unable to 
waive or modify those size restrictions.

[[Page 50390]]

MTW Research Advisory Committee

    The 2016 MTW Expansion Statute required HUD to form and consult 
with a Federal MTW Research Advisory Committee (the Committee), 
established in May 2016. 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 related 
methods of research and evaluation. The 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 
associated activities, 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 to a two-year term in June 
2016 by the HUD Secretary and chosen to ensure balance, diversity, and 
a broad representation of ideas.\7\ In May 2018, HUD extended the 
Committee and the members' appointments for another two-year term. As 
required by the 2016 MTW Expansion Statute, 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.
---------------------------------------------------------------------------

    \7\ For more information on the establishment, purpose, members, 
and meeting content of the MTW Research Advisory Committee, please 
go to: https://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/mtw/expansion/rac.
---------------------------------------------------------------------------

    Based on the advice of the Committee, HUD will study, by cohort of 
MTW agencies, the following four policies (which are in no particular 
order except for the first two cohorts):
     Impact of MTW Flexibility on Small and Medium PHAs: In 
this first cohort, HUD will evaluate the overall effects of MTW 
flexibility on a PHA and the residents it serves. The Committee 
recommended that PHAs with under 1,000 aggregate public housing and 
voucher units be included in this cohort. To date, only one of the 
existing MTW agencies has less than 1,000 aggregate units, while the 
majority of PHAs nationwide fit into this size category.
     Rent Reform: In this second cohort, HUD will evaluate 
different rent reform models. Rent reform models may be income based 
and may include tiered rents and/or stepped-up rents.
     Work Requirements: In this cohort, HUD will evaluate work 
requirements for residents/participants who are non-elderly, non-
disabled, and at least 18 years old.
     Landlord Incentives: In this cohort, HUD will evaluate how 
to improve landlord participation in the HCV program through incentives 
such as participation payments, vacancy payments, alternate inspection 
schedules and other methods.

Operations Notice for the Expansion of the MTW Demonstration

    Through the MTW expansion, HUD seeks to design and test new 
approaches to providing and administering housing assistance and then 
to apply the lessons-learned nationwide, all within a framework of 
simplifying program administration. This is laid out in HUD's guiding 
principles for the expansion, which are: (1) Simplify; (2) learn; and 
(3) apply. The Operations Notice is an embodiment of this vision. The 
Operations Notice describes a framework for the MTW demonstration that 
streamlines and simplifies HUD's implementation of MTW status and the 
associated flexibilities of participating MTW agencies while providing 
for the rigorous evaluation of specific policy changes. This framework 
would apply to all PHAs designated as an MTW agency pursuant to the 
2016 MTW Expansion Statute and to any previously-designated MTW 
agencies that agree to operate under the framework of the Operations 
Notice. These PHAs are referred to in the Operations Notice as ``MTW 
agencies.'' Participation in the MTW Expansion will be formalized by an 
amendment to the PHA's Consolidated Annual Contributions Contract, 
which is called the MTW CACC Amendment.\8\
---------------------------------------------------------------------------

    \8\ The MTW Consolidated ACC Amendment amends the ACCs and the 
CACCs for the Public Housing and Section 8 Voucher programs.
---------------------------------------------------------------------------

    The Operations Notice is organized into 11 sections as follows:

1. Purpose and Applicability
2. Waivers
    a. MTW Waivers
    b. Agency-Specific Waiver Requests
    c. Cohort-Specific Waivers
3. Term of Participation
4. MTW Funding Flexibilities and Financial Reporting
    a. MTW Funding Flexibility
    b. Calculation of Funding
    c. Financial Reporting and Auditing
5. Evaluation
    a. Program-Wide Evaluation
    b. Cohort-Specific Evaluation
    c. Ad-Hoc 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. HUD-Veterans Affairs Supportive Housing
    b. Family Unification Program
    c. Non-Elderly Persons With Disabilities Vouchers
    d. Enhanced Vouchers and Tenant Protection Vouchers
9. Applicability of Other Federal, State, and Local Requirements
10. MTW Agencies Admitted Prior to 2016 MTW Expansion Statute
11. Sanctions, Terminations, and Default

II. 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 also applies to all PHAs designated as MTW pursuant 
to the 2016 MTW Expansion Statute and to any previously-designated MTW 
agency that elects to operate under the terms of this Notice.
    Through the MTW CACC Amendment, 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. Any significant updates to the Operations Notice by 
HUD will be preceded by a public comment period. HUD may supplement the 
Operations Notice with PIH Notices providing more detailed guidance, 
including with respect to implementing future appropriations act 
provisions and revisions to financial policies and procedures. 
Additionally, HUD will develop informational materials to address 
various program elements, which HUD will post on the MTW website.

[[Page 50391]]

    Unless otherwise provided in the Operations Notice, an agency's MTW 
program applies to all of the agency's public housing units (including 
agency-owned properties and units comprising a part of mixed-income, 
mixed finance communities, tenant-based HCV assistance, project-based 
HCV assistance under Section 8(o), and Homeownership units developed 
using Section 8(y) HCV assistance. This Operations Notice does not 
apply to HCV assistance that is required: (i) To make payments to other 
PHAs under 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 Housing Assistance Payment (HAP) 
contracts with owners under the agency's HCV program), unless a third 
party agrees to Project-Based Voucher (PBV) activities implemented 
under the MTW program with the agency.
---------------------------------------------------------------------------

    \9\ 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.
---------------------------------------------------------------------------

    PHAs are reminded that the MTW demonstration program does not 
permit waivers related to statutes outside of the 1937 Act or 
regulations promulgated under authority outside of the 1937 Act, 
including any waivers 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.

2. Waivers

    Pursuant to the 1996 MTW Statute and 2016 MTW Expansion Statute, 
the Appendix of this Notice provides waivers of certain provisions of 
the 1937 Act as well as the implementing requirements and regulations. 
These waivers and associated activities afford MTW agencies the 
opportunity to use their MTW authority to pursue locally-driven 
policies, procedures, and programs in order to further the goals of the 
demonstration. In implementing MTW activities, agencies will ensure 
assisted families are made aware of the impacts the activity(s) may 
have to their tenancy. The following are the three categories of 
waivers that MTW agencies may pursue: (a) MTW Waivers; (b) Agency-
Specific Waiver Requests; and (c) Cohort-Specific Waivers. MTW agencies 
may conduct any permissible activity in the MTW Waivers category within 
the provided safe harbors, as detailed in the Appendix, without 
additional approval from HUD. Agencies may make an Agency-Specific 
Waiver Request to implement additional activities not contained in the 
MTW Waivers, request to waive a statutory or regulatory requirement not 
waived in the MTW Waivers, and/or request to expand the safe harbors of 
an MTW Waivers activity. Agencies may also be provided with Cohort-
Specific Waivers if they are necessary to allow for the implementation 
of the required cohort study.
a. MTW Waivers
    The Appendix contains the available waivers and associated 
activities that MTW agencies may implement after they have been 
included in the MTW Supplement (described in Section 6 of this Notice) 
of an approved PHA Plan. The Appendix includes the waiver name, waiver 
description, statutes and regulations waived, permissible activities, 
and safe harbors. The waiver description defines the authorization 
provided to the MTW agency, subject to the terms of this Notice. The 
list of statutes and regulations waived details the citations of the 
1937 Act requirements that may be waived by an MTW agency in order to 
implement an activity. The list of waivers and list of activities are 
organized by program type. The safe harbors section contains the 
additional requirements (beyond those specified in the activity 
description) that the agency must satisfy in implementing activities 
without further HUD approval. If an MTW agency wishes to implement 
additional activities not contained in the MTW Waivers, request to 
waive a statutory or regulatory requirement, and/or request the ability 
to go beyond an MTW activity's safe harbor(s), the MTW agency must 
submit an Agency-Specific Waiver Request for approval from HUD as 
explained further in Section 2.b of this Notice.
    MTW agencies may implement any activity contained in the Appendix 
as long as it is included in the MTW Supplement of an approved PHA Plan 
and implemented within the associated safe harbor(s). The MTW agency 
will update the MTW Supplement annually, as described in Section 6 of 
this Notice, to reflect the new activities it plans to implement in the 
coming fiscal year and ongoing activities it has implemented in the 
prior year, which includes estimated costs/savings for planned 
activities that have a cost implication. While MTW activities are 
listed by specific waiver name, MTW agencies may use the MTW Supplement 
to combine activities together to create more comprehensive initiatives 
at the local level.
    The MTW Waivers only waive certain provisions of the 1937 Act and 
its implementing regulations. The five statutory requirements 
established under the 1996 MTW Statute cannot be waived. Other 
applicable Federal, state, and local requirements shall continue to 
apply even in the event of a conflict between such a requirement and a 
waiver or activity granted by this Notice. Accordingly, HUD and the MTW 
agencies may not waive or otherwise deviate from compliance with Fair 
Housing and Civil Rights laws and regulations. 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 the public housing program, the HCV 
program, Federal funds, 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 the activity to comply 
with this Notice, and the other applicable Federal requirements. HUD 
also reserves the right to require an MTW agency to discontinue any 
activity derived from a waiver should it have significant negative 
impacts on families or the agency's operation of its assisted housing 
programs using Section 8 and 9 funds, as determined by HUD.
b. Agency-Specific Waiver Requests
    Pursuant to the exceptions in Section 9 of this Notice, HUD 
understands that MTW agencies may wish to request Agency-Specific 
Waivers to implement activities, waive statutory or regulatory 
requirements that are not in the Appendix, and/or expand the safe 
harbor(s) of an activity included in the MTW Waivers. There are two 
categories of Agency-Specific Waiver Requests: (1) A request to waive a 
statutory or regulatory requirement, or to implement an activity, not 
provided for in the Appendix; and (2) a request to expand an activity 
that is in the Appendix outside of the listed safe harbor (or multiple 
safe harbors). The MTW agency must obtain explicit written approval 
from HUD for each Agency-Specific Waiver Request prior to 
implementation. Agency-Specific Waiver Requests are optional and made 
at the discretion of the MTW agency.
    To submit an Agency-Specific Waiver Request(s), an MTW agency will 
first share the specifics and details of the proposed waiver in the MTW 
Supplement to the Annual PHA Plan, indicating which of the two 
categories of Agency-Specific Waiver Requests is

[[Page 50392]]

being sought. The MTW Supplement form, when finalized, will provide a 
comprehensive explanation of the elements required to submit an Agency-
Specific Waiver Request.
    The approval of the Annual PHA Plan and MTW Supplement during this 
stage does not constitute an approval of the Agency-Specific Waiver 
Request. Rather, the public comment and review period affords the MTW 
agency's Resident Advisory Board (RAB), community, and residents the 
opportunity to provide input on the proposed waiver prior to its 
submission to HUD.
    Once the MTW agency obtains approval of its Annual PHA Plan and MTW 
Supplement containing the Agency-Specific Waiver Request information, 
the agency will then submit a letter to its local HUD field office 
requesting final approval of the Agency-Specific Waiver Request(s). 
This letter is sent and reviewed outside of the Annual PHA Plan and MTW 
Supplement process. It must include: A good cause justification that 
relates to one or more of the three MTW statutory objectives; the 
statute, regulation, and/or MTW Waiver safe harbor which the MTW agency 
seeks to waive and its justification for doing so; a copy of the 
approval letter for the Annual PHA Plan and MTW Supplement containing 
the proposed waiver; a description of the initiative; the 
implementation timeline; and any other information requested by HUD. 
Depending on the nature of the request, HUD may ask for an associated 
hardship policy, impact analysis, and/or other information necessary to 
understand the waiver and its possible effects. Agency-Specific Waiver 
Requests may not conflict with the agency's cohort-specific evaluation.
    If the Agency-Specific Waiver is approved by HUD and the changes 
between the Agency-Specific Waiver Request and the Waiver that HUD 
ultimately approves do not constitute a ``significant amendment'' to 
the Annual PHA Plan, as defined by the agency, then the Agency-Specific 
Waiver may be implemented once the MTW Agency receives HUD's explicit 
written approval. The MTW Agency will need to submit a narrative 
description of the Agency Specific Waiver in its subsequent MTW 
Supplement.
    If the Agency-Specific Waiver is approved by HUD with changes 
between the Agency-Specific Waiver Request and the Waiver that HUD 
ultimately approves that constitute a ``significant amendment'' to the 
Annual PHA Plan, as defined by the agency, then the MTW agency must re-
submit the Agency-Specific Waiver Request through the Annual PHA Plan 
and MTW Supplement public comment process a second time. Once the 
Annual PHA Plan and MTW Supplement are approved this second time, the 
MTW agency may implement its Agency-Specific Waiver.
    To the extent a policy in an Agency-Specific Waiver Request 
conflicts with any of the five statutory requirements, the cohort-
specific evaluation, or other applicable requirements, HUD shall 
require the MTW agency to discontinue the policy or to revise the 
policy to comply with this Notice and the other applicable federal 
requirements. HUD also reserves the right to require an MTW agency to 
discontinue any policy derived from a waiver should it have significant 
negative impacts on families or the agency's operation of its assisted 
housing programs using Section 8 and 9 funds, as determined by HUD.
c. Cohort-Specific Waivers
    Pursuant to the 2016 MTW Expansion Statute, at the time of 
designation as an MTW agency, 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. Cohort-Specific Waivers 
include statutory and/or regulatory waivers and associated activities 
that are unique to a specific cohort to allow them to complete their 
required cohort study. Depending upon the cohort's study, there is a 
possibility that HUD restricts certain activities within the MTW 
Waivers or provides additional waivers that are not included in the 
Appendix. It is also possible that the specific policy changes to be 
tested through a given cohort would not need any Cohort-Specific 
Waivers. 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. 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.
    In determining the Cohort-Specific Waivers that will be included in 
the Selection Notices, HUD will remove and/or add waivers and 
associated activities based on whether a waiver and its associated 
activity would impact or conflict with the specific policy(s) to be 
studied in the MTW agency's cohort group. The addition or removal of 
any waivers and associated activities would only apply within the 
confines of the cohort study. For instance, if the study focuses on 
rent models as it relates to the voucher program, then an agency's 
public housing program would not be affected by the addition or removal 
of any such waivers and associated activities. If the MTW Waiver(s) and 
associated activity(s) are not provided to a cohort, or some portion of 
the agency's portfolio within the cohort, to allow the cohort to test a 
specific policy change, the agencies within that cohort study will not 
be able to conduct that activity(s) until the evaluation of the 
specific policy change has concluded.

3. Term of Participation

    The term of each agency's MTW designation will be 12 years (PHA 
Fiscal Years) starting from the time of its designation as an MTW 
agency. All waivers and associated activities 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 may 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, subject to 
continued statutory authority for the MTW demonstration.
    Once an MTW agency has implemented an activity pursuant to the 
authority of the Operations Notice, the agency may continue to 
implement that activity throughout the term of its participation in the 
demonstration, subject to the other terms and conditions of this 
Notice. 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 and associated activities 
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 agency's MTW term 
is needed to evaluate a cohort-specific policy change, HUD may approve 
an extension of any cohort-specific waiver(s).

4. MTW Funding Flexibility and Financial Reporting

    During the term of the demonstration, subject to appropriations, 
HUD will provide an MTW agency with public housing Operating Fund 
Program grants,

[[Page 50393]]

public housing Capital Fund Program (CFP) grants, and/or HCV HAP and 
Administrative Fee assistance as detailed in this Notice. CFP grants 
may include Formula grants; Demolition or Disposition Transitional 
Funding (DDTF), which are included in regular Formula grants; and/or 
funds from older Replacement Housing Factor (RHF) grants (a program 
later superseded by DDTF). The funding amount for MTW agencies may be 
increased by additional allocations of vouchers that the agency is 
awarded over the term of its participation in the MTW demonstration. 
MTW Funding provided to an MTW agency, including public housing 
Operating Fund Program grants, public housing CFP grants, and HCV HAP 
and Administrative Fee assistance, is subject to any future laws and 
appropriations. If a future law or appropriations bill conflicts with 
this Operations Notice, the law or appropriations bill 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.
a. MTW Funding Flexibility
    MTW agencies will have the flexibility to apply fungibility among 
public housing Operating Fund, public housing Capital Fund, and HCV HAP 
and Administrative Fee assistance. These flexibilities expand the 
eligible uses of each covered funding stream, but do not negate the 
need for both the PHA and HUD to be able to account for the funding 
from its original source to the date of its ultimate eligible use \10\ 
by the PHA, comply with Federal grant and financial management 
requirements, and use funds effectively and efficiently for their 
eligible purposes. As the Department continues to implement program-
specific financial management policies in its core housing programs, 
MTW agencies will be subject to the same requirements and procedures as 
non-MTW agencies. Therefore, the requirements and procedures described 
in this Notice may change as new financial management policies are 
implemented over time. HUD will update existing guidance and issue new 
reporting requirements, as appropriate, to allow HUD to meet its 
monitoring and oversight responsibilities while ensuring MTW agencies 
fully utilize and benefit from the flexibilities established by 
Congress for these funds pursuant to the MTW demonstration and the 2016 
MTW expansion. HUD will also update existing guidance and issue new 
reporting requirements, as appropriate, to ensure compliance with 2 CFR 
part 200, including with respect to Federal financial management.
---------------------------------------------------------------------------

    \10\ The date of the ``ultimate eligible use'' means the date of 
disbursement by the PHA for an eligible purpose, which would remove 
the funding from the PHA's account and the PHA's control.
---------------------------------------------------------------------------

    An agency participating in the MTW demonstration program may 
flexibly use public housing Operating and Capital Funds provided under 
Sections 9(d) and 9(e) of the 1937 Act and HCV HAP and Administrative 
Fee program funds provided under Section 8 of the 1937 Act, referred to 
collectively as MTW Funding. Certain provisions of Sections 8 and 9 of 
the 1937 Act and 24 CFR 982 are waived as necessary to implement this 
flexibility. Once the agency receives its MTW designation through the 
execution of the MTW CACC Amendment, this flexibility in the use of MTW 
Funding does not require prior HUD approval.
    The agency may use MTW Funding covered by MTW flexibility 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 in the Appendix. Any reserves the MTW agency has 
accumulated prior to signing an MTW CACC Amendment (including public 
housing Operating and Capital Reserves and HCV HAP and Administrative 
Fee Reserves) must be used for their originally appropriated purposes 
and may not be used flexibly for any eligible MTW activity described in 
the Appendix. All MTW PHA expenditures, including for local, non-
traditional activities, must be consistent with the PHA's charter, 
approved 5-Year and Annual PHA Plans, and the approved MTW Supplement 
to the Annual PHA Plan.
i. Calculation of Funding
(a) Public Housing Operating Grants
    (1) The calculation of an MTW agency's Operating Fund subsidy grant 
eligibility will continue in accordance with operating subsidy formula 
law, regulations, and appropriations act requirements. As these 
programmatic and financial requirements are updated, MTW agencies will 
be affected by and shall comply with these changes.
    (2) 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 under its MTW flexibility, it may also use 
these funds for any eligible activity permissible under Section 8(o), 
Section 9(d)(1), and for the local, non-traditional activities 
specified in this Notice, including in the Appendix.
    (3) For Operating Fund grant funding, the MTW agency has 
accumulated prior to signing an MTW CACC Amendment, the agency may not 
use such funds for eligible MTW purposes other than the originally 
appropriated purpose of the funds (i.e., these funds may not be used as 
flexible MTW Funding).
(b) Public Housing Capital Fund Formula and Grants
    (1) The agency's public housing Capital Fund formula 
characteristics and grant amounts, including DDTF and Replacement 
Housing Factor (RHF), will continue to be calculated in accordance with 
public housing law, regulations, and appropriations act requirements.
    (2) MTW agencies must continue to follow the immediate need 
requirements applicable to all Capital funds and may not accelerate 
their drawdown of Capital funds for the purpose of funding reserves or 
for any other purpose. All Capital funds, including funds in BLI 1410 
(Administrative Costs) and Budget Line Item (BLI) 1492 (MTW), must be 
drawn down only when funds are due and payable.
    (3) 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 under its MTW flexibility, it may also use 
these funds for any eligible activity permissible under Section 8(o), 
Section 9(e)(1), and for the local, non-traditional activities 
specified in this Notice, including in the Appendix. Capital Fund 
Program (CFP) funds used for activities under section 9(d)(1) are 
subject to all requirements relevant to non-MTW agency CFP funding, 
including eligible activities and cost limits.
    (4) For Capital Funds the MTW agency has accumulated prior to 
signing an MTW CACC Amendment, the agency may not use such funds for 
eligible MTW purposes other than the originally appropriated purpose of 
the funds (i.e., these funds may not be used as flexible MTW Funding).
    (5) In requisitioning Capital Fund grant funds, the MTW agency will 
request funds using traditional Capital Fund Budget Line Items (BLIs) 
for funds to be used for activities under section 9(d) and using the 
available MTW Budget Line (BLI 1492) items for activities under section 
9(e), section 8(o), or local, non-traditional activities. MTW agencies 
shall not use the Transfer to Operations Budget Line (BLI 1406) since 
funds for all non-section 9 activities shall be included in the MTW 
Budget Line (BLI 1492). The agency will

[[Page 50394]]

provide to HUD information on all capital activities funded by the MTW 
Funding 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.
    (6) 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 may be 
in the MTW Single Fund. Capital Funds awarded to MTW agencies must be 
obligated within 2 years and expended within 4 years of award. Funds 
not obligated or expended within those timeframes will be subject to 
recapture. As with all agencies, an MTW agency may requisition CFP 
funds from HUD only when such funds are due and payable, unless HUD 
approves another payment schedule.
(c) Housing Choice Voucher Funding
    (1) Funding for the Initial MTW Year. For the calendar year (CY) 
after the MTW agency joins the MTW demonstration (the ``Initial MTW 
Year''), the MTW agency's HCV HAP renewal funding will be calculated in 
accordance with the same HAP renewal funding formula used for non-MTW 
HCV agencies in the applicable FY appropriations act. The HAP renewal 
formula is customarily based on the previous CY's HAP expenses reported 
in the Voucher Management System (VMS), adjusted by any applicable 
inflation factor and national proration.
    Example:
     If an MTW Agency signs its MTW CACC Amendment in July 
2018, CY 2019 will be the Initial Year in the MTW demonstration. The 
MTW Agency's CY 2019 HAP renewal funding will be calculated based on 
the Agency's CY 2018 HAP expenses, adjusted by inflation and proration 
(assuming this is the formula in the 2019 Appropriations Act).
    (2) Funding for Subsequent MTW Years. As is the case for non-MTW 
PHAs under current appropriations law, the HAP renewal funding 
eligibility for subsequent MTW years will be calculated based on the 
MTW agency's actual expenses for the previous calendar year (known as 
the re-benchmark year). Unique to MTW agencies, however, the MTW 
agency's actual expenses are: (i) The previous CY's HAP expenses 
reported in Voucher Management System (VMS,) and (ii) the previous CY's 
eligible non-HAP MTW expenses reported in VMS. For both HAP and non-HAP 
MTW expenses, the reported expenses must have been paid from an 
eligible source of funds as described in section 4(c) below in order to 
be included in the HAP renewal funding formula. In addition, MTW HAP 
renewal funding is subject to an MTW Renewal Eligibility Cap derived 
from the number of units authorized under the agency's ACC, as 
described in paragraph (d) on the following page. The lower of the 
total combined HAP/non-HAP expenses or the MTW Renewal Eligibility Cap 
will then be adjusted by an applicable inflation factor and any 
national proration that applies to the HCV renewal appropriation to 
determine the MTW agency's actual CY HAP renewal funding.
    Example:
     In CY 2019, an MTW Agency expended $3,600,000 on HAP and 
$400,000 on eligible non-HAP MTW expenses. The agency's HCV HAP renewal 
funding for CY 2020 will be $4 million (assuming the HAP Renewal 
Eligibility Cap is greater than $4 million), adjusted by an inflation 
factor and any applicable national proration.
    (3) HAP Renewal Sources of Funds. The only HAP and non-HAP MTW 
expenses that will be included in the MTW HAP renewal formula are those 
paid for with the same sources of funds that would be included in the 
non-MTW HAP renewal formula for a non-MTW agency (see PIH Notice 2013-
28 and any future successor notices). Accordingly, HAP expenses and 
non-HAP MTW expenses must be paid from the following sources of funds 
to be included in the HAP renewal formula calculation:
     Housing Choice Voucher (HCV) budget authority,
     HUD-held HAP reserves (undisbursed budget authority),
     PHA-held HAP reserves (i.e., Restricted Net Position 
(RNP)),
     Any funds from the HAP Set-aside (if available after PHA 
application and approval), and
     Administrative Fee reserves (i.e., Unrestricted Net 
Position (UNP)). HAP expenses or non-HAP MTW expenses that were covered 
by any other funding source (for example, public housing Operating 
Funds and Capital Funds, and current year HCV Administrative Fee funds) 
will not be included in the MTW PHA's HCV renewal funding calculation.
    (4) HAP Renewal Eligibility Cap. The MTW PHA's renewal eligibility 
for all MTW Years will be limited by the HAP Renewal Eligibility Cap. 
The calculation multiplies (1) the MTW PHA's total number of MTW-
eligible ACC authorized units \11\ in the re-benchmark year (the CY 
immediately preceding the CY for which the PHA's renewal eligibility is 
being calculated) \12\ by (2) the PHA's pre-MTW monthly per-unit cost 
(PUC) inflated to the re-benchmark year.
---------------------------------------------------------------------------

    \11\ ``MTW-eligible ACC authorized units'' means the PHA's 
number of ACC authorized units, regardless of whether the units are 
leased, after excluding the number of authorized units that would 
not be subject to the MTW renewal formula. In other words, special 
purpose vouchers that are renewed separately and are not part of the 
MTW HAP renewal formula are not included in the formula used to 
calculate the HAP Renewal Eligibility Cap. See Section 8 of this 
Notice for further information on these special purpose vouchers 
that are renewed separately outside the MTW renewal formula.
    \12\ As noted above, the re-benchmark year is also the source 
year for the actual expense data used in the MTW PHA's HAP renewal 
formula.
---------------------------------------------------------------------------

     For (1), the number of MTW-eligible ACC authorized units 
is measured in unit months available (UMAs).\13\
---------------------------------------------------------------------------

    \13\ Authorized units in the HCV program context are measured in 
terms of unit months available. For example, if an authorized unit 
is under CACC as of January 1, the authorized unit equals 12 unit 
months available for that CY. On the other hand, if the authorized 
unit was added to the CACC under a new funding increment effective 
July 1, the authorized unit is equal to 6 unit months available for 
that CY.
---------------------------------------------------------------------------

     For (2), the inflated pre-MTW PUC is projected using, as a 
base, the monthly PUC for the CY in which the agency signed its MTW 
CACC Amendment. HUD applies an inflation factor to this base PUC to 
estimate what the PHA's HCV PUC would be, had the PHA not joined the 
MTW program, as of the re-benchmark year.
    After the calculation of the HAP Renewal Eligibility Cap, it is 
compared with the MTW PHA's actual total combined HAP/non-HAP expenses. 
The lower of these two amounts--(1) the HAP Renewal Eligibility Cap or 
(2) the MTW PHA's actual total combined HAP/non-HAP expenses--is then 
adjusted by the inflation factor and any national proration factor to 
determine the MTW PHA's CY renewal funding.
    Example:
     If an MTW Agency signs its MTW CACC Amendment in July 
2018, CY 2019 will be the Initial Year in the MTW demonstration. In the 
Initial CY (CY 2019) the MTW Agency's renewal formula is the same 
formula that is used for non-MTW PHAs. In calculating the MTW Agency's 
HCV renewal funding for CY 2020, the following information applies:
    [cir] The MTW PHA's average monthly PUC for CY 2018 was $700.
    [cir] The CY 2019 inflation rate is 2 percent.
    [cir] The number of MTW-eligible ACC authorized units during CY 
2019 is 800

[[Page 50395]]

units. (In this example all units were under ACC as of January 1, 2019, 
so the number of unit months available (UMAs) is simply 800 units 
multiplied by 12 months, or 9,600 UMAs.)
     The HAP Renewal Eligibility Cap for CY 2020 is calculated 
by first determining the estimated PUC for CY 2019, which is $714 (the 
monthly PUC for CY 2018 inflated for CY 2019, or $700 x 1.02). The 
estimated PUC for CY 2019 is then multiplied by the MTW PHA's CY 2019 
MTW-eligible ACC authorized UMAs \14\ ($714 x 9,600 UMAs) to determine 
the HAP Renewal Eligibility Cap, which is $6,854,400.
---------------------------------------------------------------------------

    \14\ As noted earlier, these are the MTW PHA's CY 2019 UMAs that 
are subject to the MTW renewal formula. UMAs attributable to special 
purpose vouchers such as HUD-VASH and FUP that are renewed 
separately are not included in this count.
---------------------------------------------------------------------------

     The HAP Renewal Eligibility Cap ($6,854,400) is then 
compared to the MTW Agency's total combined HAP/non-HAP expenses for 
the re-benchmark year that originated from the eligible funding sources 
described earlier in this Notice. If the total combined HAP/non-HAP 
expenses do not exceed $6,854,400, the MTW Agency's CY 2020 renewal 
funding will be the total combined HAP/non-HAP expenses adjusted by an 
inflation factor and any national proration. If the total combined HAP/
non-HAP expenses exceed $6,854,400, the MTW Agency's CY 2020 renewal 
funding will be $6,854,400, adjusted by an inflation factor and any 
national proration.
    (5) Financial Management Requirements Apply. The same financial 
management requirements that apply to non-MTW agencies also apply to 
MTW agencies. Accordingly, all undisbursed HAP funds, including HAP-
originated reserve funds, will be retained as HUD-held reserves per 
Office of Management and Budget cash management requirements and can be 
requested by the MTW agency when immediate need exceeds the scheduled 
HAP monthly disbursements, but only after consideration of available 
MTW agency-held Restricted Net Position (RNP).
    (6) 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 agencies, including non-MTW agencies. As is the case for 
all agencies under current appropriations law, administrative fees will 
be calculated on the basis of units leased as of the first day of each 
month; this data will be extracted from Voucher Management System (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.
    (7) Adjustments for the First-Time Renewal of Certain Vouchers. If 
the MTW agency receives incremental HCV vouchers and funding (including 
tenant protection vouchers) other than special purpose vouchers, 
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 Notice for further discussion of tenant protection 
and other special purpose vouchers.) The renewal amount for the 
following year is based on HAP costs reported for these increments in 
VMS in the prior year, which will be adjusted by the inflation factor. 
Should the initial increment(s) be funded for less than 12 months due 
to lack of appropriations, HUD will adjust for the missing months upon 
renewal, by selecting the higher of the funded PUC for the initial 
increment, or the MTW per unit cost (PUC) times the number of 
units,\15\ then adjusted by the inflation factor. The aggregate renewal 
eligibility is always subject to the national proration factor.
---------------------------------------------------------------------------

    \15\ The MTW PUC is equal to MTW HAP expenses divided by the 
number of MTW units leased. (Non-HAP MTW expenses are not included 
in the MTW PUC calculation.) HUD may further adjust the MTW PUC 
calculation for PHAs administering RAD project-based vouchers to 
exclude RAD Rehab payments so the MTW PUC only reflects expenses 
attributable to actual housing assistance payments.
---------------------------------------------------------------------------

    (8) Applicable Inflation Factor and Proration. The same applicable 
inflation factor that applies to 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.
    (9) Prior Year Reserves. For HCV HAP and Administrative Fee funding 
provided in years prior to the designation of the agency as an MTW 
agency, the agency may not use any accumulated HCV reserves for 
eligible MTW purposes other than the originally appropriated purpose of 
the funds (i.e., these funds may not be used as flexible MTW Funding).
    (10) 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 calculation, plus inflation factor and the 
applicable proration factor. Tenant protection vouchers provided for 
RAD Component II conversions are renewed in accordance with section 
4.v, Adjustment for the first-time renewal of certain vouchers, above. 
Administrative fees for RAD vouchers will be calculated based on the 
same methodology used to establish administrative fees for non-MTW 
agencies. Fees for RAD vouchers will be prorated at the same level that 
applies to all non-MTW agencies.
    (11) Voucher Programs Not Included in MTW Program. Vouchers and 
funding provided for the following special purpose vouchers, or any new 
special purpose vouchers provided in future appropriations acts, 
whether for new allocations or renewal of existing increments, shall 
not be included in the HCV MTW renewal calculation: Mainstream, HUD-
Veterans Affairs Supportive Housing (HUD-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 Notice. In addition, funding 
provided for the Section 8 Moderate Rehabilitation Program is not part 
of the MTW program and may not be used for MTW activities.
b. Financial Reporting and Auditing
    MTW agencies must submit year-end unaudited financial information 
to the Department no later than 2 months after their fiscal year end 
using the Financial Data Schedule (FDS) contained in the Real Estate 
Assessment Center's (REAC) Financial Assessment Subsystem (FASS-PH), or 
its successor system. Current financial reporting requirements for MTW 
agencies are posted on the REAC website at https://www.hud.gov/sites/documents/DOC_11833.PDF. These requirements may be updated in the 
future.
    MTW agencies are also required to electronically submit their 
audited financial information, if applicable, to the Department no 
later than 9 months after their fiscal year end. MTW agencies must 
include public housing project level financial information in the FDS 
and must follow the Asset Management guidelines established in Public 
and Indian Housing (PIH) Notice 2007-9 Supplement to Financial 
Management Handbook Office of Public and Indian Housing (PIH) Revised 
April 2007, and any subsequent updates to this Handbook or PIH Notice. 
MTW agencies will conform to the cost

[[Page 50396]]

requirements of 2 CFR part 200 and any HUD implementation thereof.
    MTW agencies 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.
    Completed IPA audits must be submitted to HUD in accordance with 
current HUD regulations. HUD will review 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.

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. MTW agencies shall 
keep records and submit reports and other information as required by 
HUD. This includes any data collection required for the use of waivers 
and associated activities, for the uses of MTW funds within and across 
funding streams, 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 MTW agencies can use different flexibilities calling on 
multiple activities within the MTW Waivers to serve local populations 
in various parts of the country, interpreting PHA-reported performance 
data on the effects of an individual MTW activity can be challenging. 
Consequently, and while adhering to the guiding principles for the 
expansion--to simplify, learn, and apply--HUD will create and develop 
an evaluation system that will document and consider the MTW 
demonstration through the lens of the three statutory objectives 
relating to cost effectiveness, self-sufficiency, and housing choice.
    HUD envisions three types of evaluation: Program-wide evaluation, 
cohort-specific evaluation, and ad hoc evaluation.
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/or increase 
housing choices for low-income families. HUD intends to develop a 
method for program-wide evaluation that is based, to the extent 
possible, on information already being collected through existing HUD 
administrative data systems. HUD may determine and require that 
additional reporting is necessary to effectively evaluate MTW.
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. For example, some cohorts of MTW agencies may be required to 
participate in randomized control trials, while others may be required 
to participate in detailed process studies or ethnographic research. 
HUD's Office of Policy Development and Research (PD&R) will take the 
lead on evaluating cohort-specific policy changes, and funds have been 
appropriated by Congress for this evaluation. 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, 
which will be informed by feedback provided by 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 may extend waivers and associated activities 
beyond the agency's term of participation to the extent that those 
waivers and associated activities are needed to support the evaluation 
of the specific policy change and HUD determines whether additional 
time is needed to evaluate the policy change.
c. Ad-Hoc Evaluation
    HUD reserves the right to request, and the MTW agency agrees to 
provide, any additional information required by law or required for the 
sound administration or evaluation of the MTW agency.

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 PHA Plan) and Capital Fund planning. MTW agencies must 
also report data into HUD data systems, as required.
    New protocols and instruments will be developed for assessing an 
MTW agency's performance and will be incorporated into PHAS and SEMAP, 
or successor assessment systems, or an alternative assessment system 
developed by HUD, explained further in Section 6.b. of this Operations 
Notice. 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 Annual PHA Plan
    MTW agencies must adhere to Annual PHA Plan regulations at 24 CFR 
part 903, any implementing HUD Notices and guidance, as well as any 
succeeding regulations. The Annual PHA Plan consists of the 5-Year Plan 
that a PHA must submit to HUD once every five PHA fiscal years and the 
Annual PHA Plan that the PHA must submit to HUD for each PHA fiscal 
year. Any HUD assistance that the agency is authorized to use under the 
MTW demonstration must be used in accordance with the Annual PHA 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,

[[Page 50397]]

which is effective until amended, superseded, or rescinded.
ii. MTW Supplement to the Annual PHA Plan (Under Development)
    As an MTW agency, all Annual PHA Plan information must be provided 
in the context of the agency's participation in the MTW demonstration. 
This includes taking into account the MTW Waiver(s) and associated 
activity(s) afforded to the MTW agency. To this end, the MTW agency 
will submit an MTW Supplement to the Annual PHA Plan, in a format to be 
developed by HUD. Prior to submitting to HUD, the MTW Supplement must 
go through a public process along with the Annual PHA Plan. This will 
allow the agency to inform the community of any programmatic changes 
and give the public an opportunity to comment. Details about this 
requirement are elaborated later in this section. New MTW agencies will 
not be required to submit the Annual MTW Plan or Annual MTW Report 
(i.e., Form 50900), which are required for existing MTW agencies.
    The MTW Supplement form has not been finalized at the time of 
publishing of this Operations Notice. The MTW Supplement will be made 
available for public review and comment, per Paperwork Reduction Act 
requirements, prior to finalizing the form. At this time, HUD plans to 
require MTW agencies to use the MTW Supplement to the Annual PHA Plan 
to:
     Describe how the MTW agency seeks to address the three MTW 
statutory objectives during the coming fiscal year, in a narrative 
format;
     Indicate the MTW activities that the agency plans to 
implement in the Annual PHA Plan year that utilize the activities 
contained in the MTW Waivers (Appendix), and ongoing activities the 
agency has implemented in the prior year, using a check-box or other 
simple format;
     Indicate the estimated costs/savings per year for planned 
activities that have a cost implication;
     Indicate the reason(s) why any previously approved MTW 
activities were not implemented in the previous year;
     Indicate any changes in the MTW activities and associated 
waivers, including safe harbors, that have changed from the previous 
Annual PHA Plan year;
     Describe any Agency-Specific Waiver Requests that the MTW 
agency seeks to implement in PHA fiscal year, if applicable;
     Indicate the MTW activities that the agency will undertake 
in the Annual PHA 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;
     Certify to HUD that all MTW activities being implemented 
by the agency fall within the safe harbors outlined in the Appendix;
     Submit data or information required for the ongoing use of 
any activities within the MTW Waivers; and
     Submit data required for HUD's verification of the MTW 
agency's compliance with the five statutory requirements established 
under the 1996 MTW Statute.
    Non-MTW PHAs that are qualified under 24 CFR 903.3(c) 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 
PHA Plan. Per this Operations Notice, while MTW agencies that are 
qualified under 24 CFR 903.3(c) are not required to submit the Annual 
PHA Plan, they are required to submit the MTW Supplement to the Annual 
PHA Plan on an annual basis.
    During the agency's initial year of participation in the MTW 
demonstration, an agency may implement MTW activities once they have 
been included in an approved MTW Supplement, either during the next 
regularly scheduled submission of the Annual PHA Plan and MTW 
Supplement or through an amendment to the Annual PHA Plan, which would 
include the MTW Supplement. Agency-Specific Waiver Requests and 
activities may only be implemented after explicit written approval from 
HUD.
    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. Before 
submission to HUD, the agency must have at least a 45-day public review 
period of its plan, after publishing a notice informing the public of 
its availability and conducting reasonable outreach to encourage 
participation in the plan process, followed by a public hearing. MTW 
agencies must consider, in consultation with the RABs, all of the 
comments received at the public hearing. The recommendations received 
by the public and RABs must be submitted by the agency as a required 
attachment to the Plan. MTW agencies must also include a narrative 
describing their analysis of the recommendations and the decisions made 
on these recommendations. Agencies must also obtain the proper signed 
certifications and board certification.
    HUD will notify the MTW agency in writing if HUD objects to any 
provisions or information in the Annual PHA 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.
    Reviews of the Annual PHA Plan and the MTW Supplement will be 
conducted by the local field office, in consultation with the MTW 
Office.
iii. 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.
iv. 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 successor 
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 utilize their 
CFP funds for expanded uses as part of their MTW funding flexibility. 
HUD will award Capital Fund grants to MTW agencies in keeping with the 
standard process for all PHAs. The Field Office will distribute funds 
in Line of Credit Control System (LOCCS) to the MTW agencies in 
accordance with the standard process. As with all PHAs, an MTW agency 
may draw down 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 plans to use CFP funding for other MTW-eligible 
(non-CFP) activities, the CFP funding would be recorded on 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,

[[Page 50398]]

regardless of the BLI utilized, funds may not be drawn down until the 
PHA has an immediate need for the funds. An MTW agency may not 
accelerate drawdowns of funds in order to fund reserves or to otherwise 
increase locally held amounts, as discussed in 4(a)(i)(b)(2) of this 
Notice.
    An MTW agency is not required to use all or any portion of its CFP 
grant for non-CFP activities. To the extent that the MTW agency wishes 
to dedicate all or a portion of its CFP grant to specific capital 
improvements, the agency shall record CFP funding on the appropriate 
BLI(s) on Form HUD-50075.1 (other than BLI 1492) as in the standard 
program.
v. Inventory Management System/PIH Information Center Reporting
    Data from HUD's Inventory Management System (IMS) and Public and 
Indian Housing (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 Fund 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 MTW (or 
successor forms) or Form HUD-50058 and in compliance with HUD's 50058 
MTW or standard 50058 submission requirements for MTW agencies. 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 be current 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.
vi. Voucher Management System 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.
vii. 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 with 
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 assessing the performance of a PHA in 
essential housing operations and program administration.
    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 assess the performance of MTW agencies under 
the existing systems, HUD will develop an alternative, MTW-specific 
assessment system, which may be incorporated into PHAS and SEMAP (or 
successor assessment system(s)). MTW agencies may not opt out of the 
MTW-specific successor system(s). Until the successor system is 
implemented, HUD will monitor MTW agency performance through PHAS sub-
scores.
i. Public Housing Assessment System
    MTW agencies are scored in PHAS, however, agencies 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 the alternative, MTW-specific assessment 
system(s), whichever comes first. Once developed, all MTW agencies, 
including MTW agencies that elect not to receive an overall PHAS score, 
must be assessed under the MTW-specific assessment 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 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 
agency 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 CACC Amendment 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 System (FDS)or successor system, as discussed 
earlier.
ii. Section 8 Management Assessment Program
    MTW agencies are not scored in SEMAP but they can elect to be 
scored if they choose to opt in. 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 
the MTW-specific assessment system, whichever comes first. Once 
developed, all MTW agencies, including MTW agencies that opt out of 
SEMAP, must be assessed under the MTW-specific assessment system(s).
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, and use of HUD data systems

[[Page 50399]]

to assess agency 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. Implementation, monitoring and enforcement 
of the five statutory requirements will be discussed in greater detail 
in the final version of this Operations Notice, and specific 
enforcement processes will be included in the MTW CACC Amendment (see 
also, section 11 of this Notice). HUD will monitor and determine MTW 
agencies' compliance with these five requirements as follows:
    (a) MTW agencies must ensure that at least 75 percent of the 
families assisted are very low-income families, in each fiscal year, as 
defined in section 3(b)(2) of the 1937 Act.
    (i) HUD Verification Approach: Initial household certification data 
recorded in PIC will be used for both the public housing and HCV 
programs for compliance monitoring purposes. The initial certification 
is comprised only of new admissions in the agency's given fiscal year. 
Initial household certification data for families housed through local, 
non-traditional activities (in accordance with the Appendix) will be 
provided in a manner specified by the Department. An agency's portfolio 
will then be weighted with respect to the number of households being 
served by each housing program type (i.e., PH, HCV, Local, Non-
Traditional).
    (b) MTW agencies must establish a reasonable rent policy which 
shall be designed to encourage employment and self-sufficiency by 
participating families, consistent with the purpose of this 
demonstration, such as by excluding some or all of a family's earned 
income for purposes of determining rent.
    (i) HUD Verification Approach: HUD defines rent reform as any 
change in the regulations on how rent is calculated for a household. 
Upon designation into the MTW demonstration, agencies are to submit 
their planned policy to implement a reasonable rent policy in the MTW 
Supplement. All activities falling under the Tenant Rent Policies 
category, detailed in the Appendix, meet the definition of a reasonable 
rent policy. An MTW agency must implement one or multiple reasonable 
rent policies during the term of its MTW designation (MTW agencies in 
the rent reform cohort may have prescribed deadlines to implement their 
reasonable rent policies).
    (c) MTW agencies must continue to assist substantially the same 
total number of eligible low-income families as would have been served 
had the amounts not been combined.
    (i) HUD Verification Approach: HUD continues to consider the best 
approach to monitor the MTW statutory requirement that MTW agencies 
serve substantially the same number of families absent the 
demonstration. The main themes and principles for this effort include a 
Substantially the Same (STS) methodology that: Ensures substantially 
the same number of families are housed; allows for local flexibility; 
is responsive to changing budgetary climates; is feasible for HUD to 
administer; is easy for MTW agencies to predict compliance; is straight 
forward to understand; is calculated each year; and has publicly 
available results. First, the STS methodology would establish a 
baseline ratio of dollars the agency expends and families housed. 
Before an agency enters the MTW demonstration, the public housing 
funding and the HCV HAP funding spent by the agency in the prior CY 
would be divided by the current number of families housed in each 
program. This calculation would yield how many families the agency 
houses per $100,000 of funding in both the public housing and HCV 
programs. Each year during an agency's participation in the MTW 
demonstration, the baseline number of total families housed per 
$100,000 of funding in both the public housing and HCV programs would 
be applied to the agency's actual funding for that calendar year. So, 
for example, the agency would know that if it is appropriated ``x 
number of dollars,'' it would be required to house ``y number of 
families.'' Depending on the specific circumstances of the agency, a 
dip below the baseline year number would be allowed. HUD is exploring 
methods to ensure that the ratio of families housed per $100,000 in the 
baseline year continues to be an accurate measure of ``substantially 
the same'' service levels in future years of the MTW designation. There 
would also be opportunities for PHAs to request adjustments of the 
baseline ratio to account for changes in costs due to special 
circumstances.
    The following is an example of the STS baseline ratio calculation:

Baseline Year (Calendar Year Before Agency Enters MTW)

     Agency expends $800,000 in HCV HAP funds and houses 100 
HCV families. Agency then houses 12.5 HCV families per $100,000 of HCV 
funds.
     Agency expends $500,000 in public housing funds and houses 
75 public housing families. Agency then houses 15 public housing 
families per $100,000 public housing funds.

First Year in MTW Demonstration

     MTW agency receives $900,000 in HCV HAP funds and $300,000 
in public housing funds.
     MTW agency must house 112.5 families for the HCV share and 
45 families for the public housing share. Therefore, in this example, 
the MTW agency is required to house 157 total families flexibly with 
its MTW funds (this may be in the public housing program, the HCV 
program, a local, non-traditional rental subsidy program, or a local, 
non-traditional development program \16\).
---------------------------------------------------------------------------

    \16\ MTW agencies may use their MTW Funding to develop 
affordable housing units that are outside of the traditional public 
housing and HCV programs. Such local, non-traditional development 
allows for the creation of important affordable housing resources, 
which must be balanced with the existing and immediate needs of 
families waiting for housing assistance. It is therefore necessary 
to relate the amount of the MTW agency's total available MTW Funding 
investment to the number of affordable units developed. To that end, 
HUD will divide the MTW agency's total available MTW Funding in the 
local, non-traditional development by the HUD-published Total 
Development Cost (TDC). The resulting number of units would then 
count as families housed for the length of time the units remained 
affordable.
---------------------------------------------------------------------------

    (d) MTW agencies must maintain a comparable mix of families (by 
family size) as would have been provided had the amounts not been used 
under the demonstration.
    (i) HUD Verification Approach: In order to establish a comparable 
mix baseline, the Department will pull data, by family size, for 
occupied public housing units and leased vouchers at the time of entry 
into the demonstration. The Department will rely upon agency-reported 
data into HUD systems (i.e., PIC, VMS). This information will be used 
to establish baseline percentages, by family size, to which the agency 
is measured by for the remainder of participation. Following entry into 
the demonstration, agencies will provide comparable mix data and, if 
applicable, associated justifications in the MTW Supplement. The 
Department deems an acceptable level of variation to be no more than 5 
percent from the baseline. Justifications or explanations for 
fluctuations greater than 5 percent are required and subject to the 
Department's review.
    (e) MTW agencies must ensure that housing assisted under the 
demonstration meets housing quality standards established or approved 
by the Secretary.

[[Page 50400]]

    (i) HUD Verification Approach: In order to demonstrate that the MTW 
agency meets housing quality standards, HUD will verify compliance for 
each housing program type as follows:
     HCV--Program regulations at 24 CFR part 982 set forth 
basic housing quality standards (HQS) for housing assisted under the 
HCV program. These housing quality standards, or its successor 
regulations, are the standards used to determine if the agency is 
fulfilling its responsibilities to ensure owners are maintaining the 
units in accordance with HQS in the evaluation of an agency. Agencies 
with an HCV program must certify in the MTW Supplement that they have 
fulfilled their responsibilities to comply with and ensure enforcement 
of HQS under this requirement.
     Public Housing--HUD will verify this requirement through 
its review of PHAS Physical Assessment Subsystem (PASS) scores, or 
successor assessment system. Scores falling below 24 out of 40 will be 
identified as non-compliant with the statutory requirement.
     Local, Non-Traditional--In the MTW Supplement, MTW 
Agencies must certify that local, non-traditional units meet housing 
quality standards as required in PIH Notice 2011-45, or successor 
notice.
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 site visits to provide guidance, 
discuss the MTW agency's MTW activities, and offer any needed technical 
assistance regarding its program. The purpose of a site visit will be 
to confirm reported agency MTW activities, to review the status and 
effectiveness of the agency's MTW strategies, provide technical 
assistance, 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 will ensure 
that HCV funds are utilized in accordance with Section 4(a)(i)(c) and 
Section 6(c)(i)(c) of this Notice. Where leasing levels are 
inconsistent with the requirements of this Notice, 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 
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, programmatic, 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.

7. Rental Assistance Demonstration 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 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-3, or its successor Notice.\17\
---------------------------------------------------------------------------

    \17\ 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. Except for enhanced vouchers and tenant-protection 
vouchers (described below), SPVs are not part of the MTW demonstration 
and are not part of the MTW agency's total available flexible MTW 
Funding. The funding is renewed outside of the MTW HAP renewal formula 
and the funding (both the initial increment and renewal funding) for 
the SPVs may only be used for eligible SPV purposes. There are no 
additional MTW flexibilities around using MTW funds to cover SPV 
shortfalls. MTW PHAs may use non-HAP sources to cover shortfalls, 
following the procedures outlined in Notice PIH 2013-28. PHAs already 
have the ability to use HAP reserve funds to address SPV instances of 
shortfalls, where the SPVs are under the same appropriations allocation 
for renewal as their Section 8 vouchers.\18\
---------------------------------------------------------------------------

    \18\ https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10495.pdf.
---------------------------------------------------------------------------

a. HUD-Veterans Affairs Supportive Housing
    HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers have 
separate operating requirements and must be administered in accordance 
with the requirements listed at www.hud.gov/program_offices/public_indian_housing/programs/hcv/vash. The operating requirements 
waive and alter many of the standard HCV statutes and regulations at 24 
CFR part 982. Unless stated in the HUD-VASH operating requirements, 
however, the regulatory requirements at 24 CFR part 982 and all other 
HUD directives for the HCV program are applicable to HUD-VASH vouchers. 
Agencies may submit a request to HUD to operate HUD-VASH vouchers in 
accordance with MTW administrative flexibilities.
b. Family Unification Program
    The Family Unification Program (FUP) NOFA language allows vouchers 
to be administered in accordance with MTW operations, unless MTW 
provisions are inconsistent with the

[[Page 50401]]

appropriations act or requirements of the FUP NOFA. In the event of a 
conflict between the Operations Notice and the appropriations act or 
FUP NOFA language, the act and NOFA govern.
c. Non-Elderly Persons With Disabilities Vouchers
    The Non-Elderly Persons with Disabilities (NED) 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 NED NOFA. In the event of a conflict between the 
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 voucher funds become fungible once 
the initial funding increment is renewed. The agency must continue to 
provide rental assistance to enhanced voucher families and tenant 
protection voucher families after the initial funding increment is 
renewed.
    The statutory enhanced voucher requirements under Section 8(t) of 
the 1937 Act (e.g., the HAP calculation) apply to an enhanced voucher 
family until the family either moves from the project or leaves the HCV 
tenant-based program for any reason. MTW agencies must follow the 
procedures described in Notice PIH 2013-27, or its successor Notice, 
for a recipient of an enhanced voucher to voluntarily agree to 
relinquish their tenant-based assistance in exchange for PBV 
assistance. When an enhanced voucher family moves from the project, 
either after initially receiving the voucher or anytime thereafter, the 
Section 8(t) enhanced voucher requirements no longer apply. The voucher 
is then administered in accordance with the regular HCV program 
requirements, as modified by the agency's individual MTW waivers and 
MTW policies for its tenant-based HCV program.
    Regular tenant protection vouchers (i.e., tenant protection 
vouchers that are not enhanced vouchers) are always administered in 
accordance with the normally applicable HCV program requirements, as 
modified by the agency's individual MTW waivers and MTW policies for 
its tenant-based HCV program, regardless of whether the family stays or 
moves from the project.

9. Applicability of Other Federal, State, and Local Requirements

    Notwithstanding the MTW Waivers and associated activities provided 
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;
    iii. Section 18 of the 1937 Act (42 U.S.C. 1437p, as amended by 
Section 1002(d) of Pub. L. 104-19, Section 201(b)(1) of Pub. L. 104-
134, and Section 201(b) of Pub. L. 104-202), governing demolition and 
disposition, shall continue to apply to public housing notwithstanding 
any use of the housing under MTW; and
    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 and associated activity granted herein, other Federal, state and 
local requirements applicable to public housing or HCV assistance will 
continue to apply. The MTW CACC Amendment 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 non-1937 Act requirement applicable to PHAs, public housing, 
or HCV assistance contains a provision that conflicts or is 
inconsistent with any MTW Waiver and associated activity granted by 
HUD, the agency 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. Information and guidance on the 
environmental review process and requirements is provided in PIH Notice 
2016-22, or successor notice.
     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. Annual 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 (AFH) 
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 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

[[Page 50402]]

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 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 MTW CACC Amendment. 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.

10. 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 
agency and HUD. The 2016 MTW Expansion Statute extended the term of the 
Standard MTW Agreement for these existing MTW agencies through each 
agency's 2028 fiscal year.
    Some agencies that entered the MTW demonstration prior to the 2016 
MTW Expansion Statute may wish to opt out of their Standard MTW 
Agreement and administer their MTW program pursuant to the MTW 
Expansion and the requirements in this MTW Operations Notice. HUD will 
support an existing MTW agency's request to join the MTW Expansion 
provided that the agency:
     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 Operations Notice;
     follows the same public comment and Board resolution 
process as would be required for amending the Standard MTW Agreement;
     executes its MTW CACC Amendment to authorize participation 
in the MTW demonstration consistent with the Operations Notice; and
     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 
MTW CACC Amendment.
    Should an existing MTW agency elect to administer its MTW program 
pursuant to the framework described in this Operations Notice, it will 
not be required to implement the cohort-specific policy change 
associated with any of the MTW cohorts and it will not be required to 
participate in the evaluation of that specific policy change. All other 
requirements in this Operations Notice will apply.

11. 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 
permitted by law. Sanctions, terminations, and default are covered in 
the agency's MTW CACC Amendment.

III. Environmental Impact

1. Purpose and Applicability

    A Finding of No Significant Impact (FONSI) with respect to the 
environment was made for a previous version of this Notice 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 is applicable to the current version of 
the Notice because there were no significant changes to the provisions 
of the Notice. The FONSI will be available for public inspection on 
www.regulations.gov.

    Dated: August 24 2018.
Robert E. Mulderig,
Acting Deputy Assistant Secretary for Public Housing Investments.
[FR Doc. 2018-21723 Filed 10-4-18; 8:45 am]
 BILLING CODE 4210-67-P



                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                          50387

                                               DEPARTMENT OF HOMELAND                                  DEPARTMENT OF HOMELAND                                DEPARTMENT OF HOUSING AND
                                               SECURITY                                                SECURITY                                              URBAN DEVELOPMENT
                                                                                                                                                             [Docket No. FR–5994–N–03]
                                               Federal Emergency Management                            Federal Emergency Management
                                               Agency                                                  Agency                                                Operations Notice for the Expansion of
                                                                                                                                                             the Moving to Work Demonstration
                                               [Internal Agency Docket No. FEMA–3403–                  [Internal Agency Docket No. FEMA–4393–                Program
                                               EM; Docket ID FEMA–2018–0001]                           DR; Docket ID FEMA–2018–0001]
                                                                                                                                                             AGENCY: Office of Public and Indian
                                               Virginia; Amendment No. 1 to Notice of                  North Carolina; Amendment No. 3 to                    Housing, HUD.
                                               an Emergency Declaration                                Notice of a Major Disaster Declaration                ACTION: Notice.

                                                                                                       AGENCY:Federal Emergency                              SUMMARY:   The Public Housing/Section 8
                                               AGENCY:Federal Emergency                                                                                      Moving to Work (MTW) demonstration
                                               Management Agency, DHS.                                 Management Agency, DHS.
                                                                                                                                                             program was first established under
                                               ACTION:   Notice.                                       ACTION:   Notice.                                     Section 204 of the Omnibus
                                                                                                                                                             Consolidated Rescissions and
                                               SUMMARY:  This notice amends the notice                 SUMMARY:   This notice amends the notice              Appropriations Act of 1996 to provide
                                               of an emergency declaration for the                     of a major disaster declaration for the               statutory and regulatory flexibility to
                                               Commonwealth of Virginia (FEMA–                         State of North Carolina (FEMA–4393–                   participating public housing agencies
                                                                                                       DR), dated September 14, 2018, and                    (PHAs) under three statutory objectives.
                                               3403–EM), dated September 11, 2018,
                                                                                                       related determinations.                               Those three statutory objectives are: To
                                               and related determinations.
                                                                                                                                                             reduce cost and achieve greater cost
                                                                                                       DATES:This amendment was issued                       effectiveness in Federal expenditures; to
                                               DATES:This amendment was issued
                                                                                                       September 27, 2018.                                   give incentives to families with children
                                               September 27, 2018.
                                                                                                       FOR FURTHER INFORMATION CONTACT:                      whose heads of household are either
                                               FOR FURTHER INFORMATION CONTACT:                                                                              working, seeking work, or are
                                                                                                       Dean Webster, Office of Response and
                                               Dean Webster, Office of Response and                    Recovery, Federal Emergency                           participating in job training, educational
                                               Recovery, Federal Emergency                             Management Agency, 500 C Street SW,                   or other programs that assist in
                                               Management Agency, 500 C Street SW,                     Washington, DC 20472, (202) 646–2833.                 obtaining employment and becoming
                                               Washington, DC 20472, (202) 646–2833.                                                                         economically self-sufficient; and to
                                                                                                       SUPPLEMENTARY INFORMATION:     The notice             increase housing choices for low-
                                               SUPPLEMENTARY INFORMATION:     Notice is                of a major disaster declaration for the
                                               hereby given that the incident period for                                                                     income families. This Operations Notice
                                                                                                       State of North Carolina is hereby                     for the Expansion of the MTW
                                               this emergency is closed effective                      amended to include the following area                 Demonstration Program (Operations
                                               September 21, 2018.                                     among those areas determined to have                  Notice) establishes requirements for the
                                                 The following Catalog of Federal                      been adversely affected by the event                  implementation and continued
                                               Domestic Assistance Numbers (CFDA)                      declared a major disaster by the                      operation of the MTW demonstration
                                               are to be used for reporting and drawing                President in his declaration of                       program pursuant to the 2016 MTW
                                               funds: 97.030, Community Disaster                       September 14, 2018.                                   Expansion Statute.
                                               Loans; 97.031, Cora Brown Fund;                           Greene County for Individual Assistance             DATES: Comment Due Date: November
                                               97.032, Crisis Counseling; 97.033,                      and assistance for debris removal and                 19, 2018.
                                               Disaster Legal Services; 97.034, Disaster               emergency protective measures (Categories A
                                                                                                       and B), including direct Federal assistance,          Submission of Comments
                                               Unemployment Assistance (DUA);
                                               97.046, Fire Management Assistance                      under the Public Assistance program.                    Electronic Submission of Comments.
                                                                                                         The following Catalog of Federal Domestic           HUD strongly encourages interested
                                               Grant; 97.048, Disaster Housing
                                                                                                       Assistance Numbers (CFDA) are to be used              persons to submit comments
                                               Assistance to Individuals and                           for reporting and drawing funds: 97.030,
                                               Households In Presidentially Declared                                                                         electronically. Electronic submission of
                                                                                                       Community Disaster Loans; 97.031, Cora                comments allows the commenter
                                               Disaster Areas; 97.049, Presidentially                  Brown Fund; 97.032, Crisis Counseling;
                                               Declared Disaster Assistance—Disaster                                                                         maximum time to prepare and submit a
                                                                                                       97.033, Disaster Legal Services; 97.034,
                                                                                                                                                             comment, ensures timely receipt by
                                               Housing Operations for Individuals and                  Disaster Unemployment Assistance (DUA);
                                                                                                       97.046, Fire Management Assistance Grant;             HUD, and enables HUD to make them
                                               Households; 97.050, Presidentially
                                                                                                       97.048, Disaster Housing Assistance to                immediately available to the public.
                                               Declared Disaster Assistance to
                                                                                                       Individuals and Households In Presidentially          Interested persons may submit
                                               Individuals and Households—Other                                                                              comments electronically through the
                                                                                                       Declared Disaster Areas; 97.049,
                                               Needs; 97.036, Disaster Grants—Public                                                                         Federal eRulemaking Portal at
                                                                                                       Presidentially Declared Disaster Assistance—
                                               Assistance (Presidentially Declared                     Disaster Housing Operations for Individuals           www.regulations.gov. Comments
                                               Disasters); 97.039, Hazard Mitigation                   and Households; 97.050 Presidentially                 submitted electronically through the
                                               Grant.                                                  Declared Disaster Assistance to Individuals           www.regulations.gov website can be
                                               Brock Long,                                             and Households—Other Needs; 97.036,                   viewed by other commenters and
                                                                                                       Disaster Grants—Public Assistance                     interested members of the public.
                                               Administrator, Federal Emergency                        (Presidentially Declared Disasters); 97.039,          Commenters should follow the
daltland on DSKBBV9HB2PROD with NOTICES




                                               Management Agency.                                      Hazard Mitigation Grant.                              instructions provided on that site to
                                               [FR Doc. 2018–21708 Filed 10–4–18; 8:45 am]
                                                                                                                                                             submit comments electronically.
                                               BILLING CODE 9110–12–P                                  Brock Long,                                             Submission of Comments by Mail.
                                                                                                       Administrator, Federal Emergency                      Alternatively, interested persons may
                                                                                                       Management Agency.                                    submit comments regarding this Notice
                                                                                                       [FR Doc. 2018–21709 Filed 10–4–18; 8:45 am]           to the Regulations Division, Office of
                                                                                                       BILLING CODE 9111–11–P                                General Counsel, Department of


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00057   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50388                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               Housing and Urban Development, 451                         • The term of participation has been               MTW Demonstration Program
                                               7th Street SW, Room 10276,                              set at 12 years from the year of                         The MTW demonstration program
                                               Washington, DC 20410–0500.                              designation in response to public                     was first established under Section 204
                                               Communications must refer to the above                  comments for the term to be at least 10               of Title II of section 101(e) of the
                                               docket number and title.                                years from the year of designation.                   Omnibus Consolidated Rescissions and
                                                  Note: To receive consideration as                       • In response to public comments, the              Appropriations Act of 1996, Public Law
                                               public comments, comments must be                       Department removed the General                        104–134, 110 Stat. 1321–281; 42 U.S.C.
                                               submitted through one of the two                        Waivers and Conditional Waivers                       1437f note (1996 MTW Statute) 1 to
                                               methods specified above. Again, all                     categories and replaced them with a                   provide statutory and regulatory
                                               submissions must refer to the docket                    singular MTW Waivers category, which                  flexibility 2 to participating PHAs under
                                               number and title of the Notice.                         MTW agencies may implement without                    three statutory objectives. Those three
                                                  No Facsimile Comments. Facsimile                     further approval from HUD.                            statutory objectives are to:
                                               (fax) comments are not acceptable.                                                                               • Reduce cost and achieve greater
                                                  Public Inspection of Public                             Æ In restructuring the MTW Waivers,
                                                                                                       the Notice now includes safe harbors,                 cost effectiveness in Federal
                                               Comments. All properly submitted
                                                                                                       which are defined as the additional                   expenditures;
                                               comments and communications                                                                                      • give incentives to families with
                                               submitted to HUD will be available for                  requirements, beyond those specified in
                                                                                                       the activity description, that the agency             children where the head of household is
                                               public inspection and copying between                                                                         working, seeking work, or is preparing
                                               8 a.m. and 5 p.m. weekdays at the above                 must follow in implementing activities
                                                                                                       without further HUD approval.                         for work by participating in job training,
                                               address. Due to security measures at the                                                                      educational programs, or programs that
                                               HUD Headquarters building, an                              Æ MTW Waivers now include specific
                                                                                                       guidance on impact analyses, hardship                 assist people to obtain employment and
                                               appointment to review the public                                                                              become economically self-sufficient;
                                               comments must be scheduled in                           policies, and applicability of waivers to
                                                                                                       elderly/disabled families.                            and
                                               advance by calling the Regulations                                                                               • increase housing choices for eligible
                                               Division at 202–708–3055 (this is not a                    Æ An additional MTW Waiver was                     low-income families.
                                               toll-free number). Individuals with                     added: ‘‘Increase Elderly Age,’’ which                   To achieve these objectives, PHAs
                                               speech or hearing impairments may                       allows agencies to amend the definition               selected for participation in the MTW
                                               access this number via TTY by calling                   of an elderly person to be an individual              demonstration are given exemptions
                                               the Federal Relay Service at 1–800–877–                 who is at least sixty-five.                           from many existing public housing and
                                               8339 (this is a toll-free number). Copies                  Æ The Homeownership Waiver was                     HCV rules and offered more flexibility
                                               of all comments submitted are available                 removed. Upon reviewing this waiver,                  with how they use their Federal funds.
                                               for inspection and downloading at                       the Department determined that the                    MTW agencies use this opportunity
                                               www.regulations.gov.                                    activities provided to agencies under the             presented by the MTW demonstration to
                                               FOR FURTHER INFORMATION CONTACT:                        waiver were already available under the               better address local housing needs. HUD
                                               Marianne Nazzaro, Director, Moving to                   Section 32 Homeownership Program.                     learns from the experience of MTW
                                               Work Demonstration Program, Office of                      • The 90 percent voucher utilization               agencies to develop new housing policy
                                               Public and Indian Housing, Department                   requirement was removed. The MTW                      recommendations that can positively
                                               of Housing and Urban Development,                       Housing Assistance Payment (HAP)                      impact assisted housing delivery for
                                               451 7th Street SW, Room 4130,                           Renewal Formula has been revised to                   PHAs nationwide.
                                               Washington, DC 20410; email address                     use as a base, all prior-year MTW-                       In addition to statutory and regulatory
                                               mtw-info@hud.gov.                                       eligible Housing Choice Voucher (HCV)                 relief,3 MTW agencies have the
                                               SUPPLEMENTARY INFORMATION:                              funding expenses paid from HAP,                       flexibility to apply fungibility among
                                                                                                       including HAP expenses plus non-HAP                   three core funding programs’ funding
                                               I. Background                                           expenses.                                             streams—public housing Operating
                                                 Section 239 of the Fiscal Year 2016                      • For a prospective agency to be                   Funds, public housing Capital Funds,
                                               Appropriations Act, Public Law 114–                     eligible for selection to the MTW                     and HCV assistance (to include both
                                               113 (2016 MTW Expansion Statute),                       demonstration, it must be a high                      HAP and Administrative Fees)—
                                               signed by the President in December                     performer in either the Public Housing                hereinafter referred to as ‘‘MTW
                                               2015, authorizes HUD to expand the                      Assessment System (PHAS) or the                       Funding.’’ 4 These flexibilities do not
                                               MTW demonstration program from the                      Section Eight Management Assessment
                                               current size of 39 agencies to an                       Program (SEMAP).
                                                                                                                                                               1 PHAs currently operating an MTW

                                               additional 100 agencies over a period of                                                                      demonstration program include PHAs with an
                                                                                                          • Regionalization was removed from                 active MTW agreement as of December 15, 2015.
                                               7 years. This Notice was originally                                                                           PHAs currently operating an MTW program do not
                                                                                                       the MTW Operations Notice and will be
                                               published on January 23, 2017, in the                                                                         include PHAs that previously participated in the
                                                                                                       implemented through a separate
                                               Federal Register, entitled ‘‘Operations                                                                       MTW demonstration and later left the
                                                                                                       forthcoming notice.                                   demonstration.
                                               Notice for the Expansion of the Moving
                                               to Work Demonstration Program                              • Agencies will formalize their MTW                  2 The MTW demonstration program may only

                                                                                                                                                             provide certain flexibilities under the 1937 Act. For
                                               Solicitation of Comment.’’ On May 4,                    status with an amendment to their                     more information on the history of the MTW
                                               2017, the Notice was republished with                   Annual Contributions Contract.                        demonstration program, please go to: www.hud.gov/
                                               three technical revisions and an                           • The monitoring of the requirement                mtw.
                                                                                                                                                               3 For more information about the MTW
                                               extension of the comment period. HUD                    that an MTW agency designated
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                             demonstration program and the specific activities of
                                               took all comments received into                         pursuant to the 2016 MTW Expansion                    existing MTW agencies, please refer to the MTW
                                               consideration.                                          Statute continues to assist substantially             website at www.hud.gov/mtw.
                                                 Changes to this Notice have been                      the same number of families has been                    4 Funds awarded under Sections 8(o), 9(d), and

                                               made to incorporate feedback from the                   simplified. Compliance will be                        9(e) of the 1937 Act are eligible for expanded uses
                                                                                                                                                             pursuant to MTW fungibility, with the exception of
                                               two previous publications and to reflect                determined using a baseline ratio of                  funds provided for specific non-MTW HCV sub-
                                               policy decisions. The primary changes                   total public housing and HCV HAP                      programs. Other funds a PHA may receive (i.e.,
                                               are as follows:                                         funding to families served.                           grant funds under another obligating document) are



                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00058   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                           50389

                                               negate the need for both the PHA and                    program. The administrative structure                 agencies and the methods of research
                                               HUD to be able to account for the                       for these 39 agencies is outlined in the              and evaluation.
                                               funding from its original source to the                 Standard MTW Agreement, a contract                      The 2016 MTW Expansion Statute
                                               date of its ultimate eligible use 5 by the              between each existing MTW agency and                  also includes a provision allowing the
                                               PHA, to comply with Federal grant and                   HUD. The 2016 MTW Expansion Statute                   Secretary to designate an MTW agency
                                               financial management requirements,                      extended the term of the Standard MTW                 as a regional MTW agency—at the
                                               and to use funds effectively and                        Agreement through each of the existing                request of said agency—should the
                                               efficiently for their eligible purposes. As             MTW agencies’ 2028 fiscal year.                       Secretary determine that unified
                                               the Department continues to implement                                                                         administration of assistance ‘‘under
                                                                                                       2016 Expansion of the MTW
                                               program-specific financial management                                                                         sections 8 and 9 of the United States
                                                                                                       Demonstration Program
                                               policies in its core housing programs,                                                                        Housing Act of 1937 (42 U.S.C. 1437f
                                               MTW agencies will be subject to the                        As the 2016 MTW Expansion Statute                  and g)’’ by that agency across multiple
                                               same requirements and procedures as                     directs, HUD is authorized to expand                  jurisdictions will lead to (a) efficiencies
                                               non-MTW agencies. Therefore, the                        the MTW demonstration program from                    and to (b) greater housing choice for
                                               requirements and procedures described                   the current level of 39 agencies to an                low-income persons in the region. HUD
                                               in this Notice may change as new                        additional 100 agencies over a period of              will issue separate guidance regarding
                                               financial management policies are                       7 years, ending in 2023. In expanding                 how an MTW agency may be designated
                                               implemented over time.                                  the MTW demonstration, HUD intends                    as a regional MTW agency.
                                                  Throughout participation in the MTW                  to build on the successes and lessons
                                               demonstration program, MTW agencies                     learned from the demonstration thus far.              Eligibility and Selection for the
                                               must continue to meet five statutory                    The vision for the MTW expansion is to                Expansion of the MTW Demonstration
                                               requirements established under the                      learn from MTW interventions to                          The 2016 MTW Expansion Statute
                                               1996 MTW Statute. The five statutory                    improve the delivery of Federally                     provides that the 100 MTW agencies
                                               requirements are:                                       assisted housing and promote self-                    selected must be high performers in
                                                  • At least 75 percent of the families                sufficiency for low-income families                   either HUD’s Public Housing
                                               assisted by participating demonstration                 across the Nation. Through the                        Assessment System (PHAS) or its
                                               public housing authorities shall be very                expansion, HUD will extend flexibility                Section Eight Management Assessment
                                               low-income families, as defined in                      to a broader range of PHAs both in terms              Program (SEMAP) at the time of
                                               section 3(b)(2) of the United States                    of size and geographic diversity and will             application to the demonstration, and
                                               Housing Act of 1937;                                    balance the flexibility inherent in MTW               represent geographic diversity across
                                                  • establishing a reasonable rent                     with the need for measurement,                        the country. Further, the 2016 MTW
                                               policy, which shall be designed to                      evaluation, and prudent oversight.                    Expansion Statute states that of these
                                               encourage employment and self-                             HUD will select the additional 100                 100 PHAs:
                                               sufficiency by participating families,                  PHAs in cohorts, with applications for
                                               consistent with the purpose of this                                                                              • No less than 50 PHAs shall
                                                                                                       each cohort to be sought via PIH Notice.              administer 1,000 or fewer aggregate
                                               demonstration, such as by excluding                     For each cohort of agencies selected, the
                                               some or all of a family’s earned income                                                                       housing voucher and public housing
                                                                                                       2016 MTW Expansion Statute requires                   units;
                                               for purposes of determining rent;                       HUD to direct all the agencies within
                                                  • continuing to assist substantially                 the cohort to implement one specific                     • no less than 47 PHAs shall
                                               the same total number of eligible low-                  policy change, which HUD will evaluate                administer 1,001–6,000 aggregate
                                               income families as would have been                      rigorously. MTW agencies may                          housing voucher and public housing
                                               served had the amounts not been                         implement policy changes in addition to               units;
                                               combined;                                               the policy change directed by HUD as                     • no more than 3 PHAs shall
                                                  • maintaining a comparable mix of                    long as those policy changes do not                   administer 6,001–27,000 aggregate
                                               families (by family size) as would have                 conflict or interfere with the cohort                 housing voucher and public housing
                                               been provided had the amounts not                       study. As required by the 2016 MTW                    units;
                                               been used under the demonstration; and                  Expansion Statute, the HUD-appointed                     • no PHA shall be granted MTW
                                                  • assuring that housing assisted                     MTW Research Advisory Committee,                      designation if it administers more than
                                               under the demonstration program meets                   described further below, advised HUD                  27,000 aggregate housing voucher and
                                               housing quality standards established or                on the policy changes to be tested                    public housing units; and
                                               approved by the Secretary.                              through the new cohorts of MTW                           • five of the PHAs selected shall be
                                                  Currently, there are 39 agencies 6                                                                         agencies with a Rental Assistance
                                               participating in the MTW demonstration                                                                        Demonstration (RAD) portfolio award.
                                                                                                       Authority; Lawrence-Douglas County Housing
                                                                                                       Authority; Lexington-Fayette Urban County                HUD will issue separate PIH Notices,
                                               likewise not covered by MTW flexibilities and must      Housing Authority; Lincoln Housing Authority;
                                               be tracked and reported under the applicable rules      Louisville Metropolitan Housing Authority;            by cohort, soliciting applications from
                                               and requirements.                                       Massachusetts Department of Housing and               eligible PHAs for participation in the
                                                  5 The date of the ‘‘ultimate eligible use’’ means
                                                                                                       Community Development; Minneapolis Public             MTW demonstration. These Notices,
                                               the date of disbursement by the PHA for an eligible     Housing Authority; Housing Authority of the City
                                               purpose, which would remove the funding from the
                                                                                                                                                             when issued, will outline the specific
                                                                                                       of New Haven; Oakland Housing Authority;
                                               PHA’s account and the PHA’s control.                    Orlando Housing Authority; Philadelphia Housing       application submission requirements,
                                                  6 The 39 agencies are: Alaska Housing Finance        Authority; Housing Authority of the City of           evaluation criteria, and process HUD
                                               Corporation; Atlanta Housing Authority; Housing         Pittsburgh; Portage Metropolitan Housing              will use when selecting PHAs for MTW
daltland on DSKBBV9HB2PROD with NOTICES




                                               Authority of the City of Baltimore; Boulder Housing     Authority; Home Forward (Portland, OR); Housing       designation.
                                               Partners; Cambridge Housing Authority; Housing          Authority of the City of Reno; San Antonio Housing
                                               Authority of Champaign County; Charlotte Housing        Authority; Housing Authority of the County of San        The PHA sizes eligible for
                                               Authority; Chicago Housing Authority; Housing           Bernardino; San Diego Housing Commission;             participation in the MTW
                                               Authority of Columbus, Georgia; District of             Housing Authority of the County of San Mateo;         demonstration are statutory and were
                                               Columbia Housing Authority; Delaware State              Housing Authority of the County of Santa Clara/
                                               Housing Authority; Fairfax County Redevelopment         City of San Jose; Seattle Housing Authority; Tacoma
                                                                                                                                                             defined by Congress; therefore, HUD is
                                               and Housing Authority; Holyoke Housing                  Housing Authority; Housing Authority of Tulare        unable to waive or modify those size
                                               Authority; Keene Housing; King County Housing           County; and Vancouver Housing Authority.              restrictions.


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00059   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50390                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               MTW Research Advisory Committee                         recommended that PHAs with under                         b. Agency-Specific Waiver Requests
                                                  The 2016 MTW Expansion Statute                       1,000 aggregate public housing and                       c. Cohort-Specific Waivers
                                                                                                       voucher units be included in this                     3. Term of Participation
                                               required HUD to form and consult with
                                                                                                       cohort. To date, only one of the existing             4. MTW Funding Flexibilities and
                                               a Federal MTW Research Advisory
                                                                                                       MTW agencies has less than 1,000                            Financial Reporting
                                               Committee (the Committee), established                                                                           a. MTW Funding Flexibility
                                               in May 2016. The Committee is                           aggregate units, while the majority of
                                                                                                       PHAs nationwide fit into this size                       b. Calculation of Funding
                                               governed by the Federal Advisory                                                                                 c. Financial Reporting and Auditing
                                               Committee Act (5 U.S.C. Appendix 2),                    category.
                                                                                                         • Rent Reform: In this second cohort,               5. Evaluation
                                               which sets forth standards for the                                                                               a. Program-Wide Evaluation
                                               formation and use of advisory                           HUD will evaluate different rent reform
                                                                                                       models. Rent reform models may be                        b. Cohort-Specific Evaluation
                                               committees. The purpose of the                                                                                   c. Ad-Hoc Evaluation
                                               Committee is to provide independent                     income based and may include tiered
                                                                                                                                                             6. Program Administration and
                                               advice with respect to the policies to be               rents and/or stepped-up rents.
                                                                                                         • Work Requirements: In this cohort,                      Oversight
                                               studied through the MTW expansion                                                                                a. Planning and Reporting
                                                                                                       HUD will evaluate work requirements
                                               and the related methods of research and                                                                          b. Performance Assessment
                                                                                                       for residents/participants who are non-                  c. Monitoring and Oversight
                                               evaluation. The Committee is charged
                                                                                                       elderly, non-disabled, and at least 18                7. Rental Assistance Demonstration
                                               with advising HUD on the following:
                                                                                                       years old.
                                                  • Policy proposals and evaluation                                                                                Program
                                                                                                         • Landlord Incentives: In this cohort,              8. Applying MTW Flexibilities to
                                               methods for the MTW demonstration to
                                                                                                       HUD will evaluate how to improve                            Special Purpose Vouchers
                                               inform the one specific policy change
                                                                                                       landlord participation in the HCV                        a. HUD-Veterans Affairs Supportive
                                               required for each cohort of agencies;
                                                                                                       program through incentives such as
                                                  • rigorous research methodologies to                                                                             Housing
                                                                                                       participation payments, vacancy                          b. Family Unification Program
                                               measure the impact of policy changes
                                                                                                       payments, alternate inspection                           c. Non-Elderly Persons With
                                               studied;
                                                                                                       schedules and other methods.                                Disabilities Vouchers
                                                  • policy changes adopted by MTW
                                               agencies that have proven successful                    Operations Notice for the Expansion of                   d. Enhanced Vouchers and Tenant
                                               and can be applied more broadly to all                  the MTW Demonstration                                       Protection Vouchers
                                               PHAs; and                                                                                                     9. Applicability of Other Federal, State,
                                                                                                          Through the MTW expansion, HUD                           and Local Requirements
                                                  • statutory and/or regulatory changes                seeks to design and test new approaches
                                               (specific waivers and associated                                                                              10. MTW Agencies Admitted Prior to
                                                                                                       to providing and administering housing                      2016 MTW Expansion Statute
                                               activities, and program and policy                      assistance and then to apply the lessons-
                                               flexibility) necessary to implement                                                                           11. Sanctions, Terminations, and
                                                                                                       learned nationwide, all within a                            Default
                                               policy changes for all PHAs.                            framework of simplifying program
                                                  The Committee has no role in                         administration. This is laid out in                   II. Operations Notice
                                               reviewing or selecting the 100 PHAs to                  HUD’s guiding principles for the
                                               participate in the expansion of the MTW                                                                       1. Purpose and Applicability
                                                                                                       expansion, which are: (1) Simplify; (2)
                                               demonstration.                                          learn; and (3) apply. The Operations                     The Operations Notice establishes
                                                  The Committee members were                           Notice is an embodiment of this vision.               requirements for the implementation
                                               appointed to a two-year term in June                    The Operations Notice describes a                     and continued operation of the
                                               2016 by the HUD Secretary and chosen                    framework for the MTW demonstration                   expansion of the MTW demonstration
                                               to ensure balance, diversity, and a broad               that streamlines and simplifies HUD’s                 program pursuant to the 2016 MTW
                                               representation of ideas.7 In May 2018,                  implementation of MTW status and the                  Expansion Statute. The Operations
                                               HUD extended the Committee and the                      associated flexibilities of participating             Notice also applies to all PHAs
                                               members’ appointments for another                       MTW agencies while providing for the                  designated as MTW pursuant to the
                                               two-year term. As required by the 2016                  rigorous evaluation of specific policy                2016 MTW Expansion Statute and to
                                               MTW Expansion Statute, the Committee                    changes. This framework would apply                   any previously-designated MTW agency
                                               includes program and research experts                   to all PHAs designated as an MTW                      that elects to operate under the terms of
                                               from HUD; a representation of MTW                       agency pursuant to the 2016 MTW                       this Notice.
                                               agencies, including current and former                  Expansion Statute and to any                             Through the MTW CACC
                                               residents; and independent subject                      previously-designated MTW agencies                    Amendment, an MTW agency agrees to
                                               matter experts in housing policy                        that agree to operate under the                       abide by the program structure,
                                               research.                                               framework of the Operations Notice.                   flexibilities, and terms and conditions
                                                  Based on the advice of the Committee,                These PHAs are referred to in the                     detailed in the Operations Notice for the
                                               HUD will study, by cohort of MTW                        Operations Notice as ‘‘MTW agencies.’’                term of the agency’s participation in
                                               agencies, the following four policies                   Participation in the MTW Expansion                    MTW demonstration. Any significant
                                               (which are in no particular order except                will be formalized by an amendment to                 updates to the Operations Notice by
                                               for the first two cohorts):                             the PHA’s Consolidated Annual                         HUD will be preceded by a public
                                                  • Impact of MTW Flexibility on Small                 Contributions Contract, which is called               comment period. HUD may supplement
                                               and Medium PHAs: In this first cohort,                  the MTW CACC Amendment.8                              the Operations Notice with PIH Notices
                                               HUD will evaluate the overall effects of                   The Operations Notice is organized                 providing more detailed guidance,
                                               MTW flexibility on a PHA and the                        into 11 sections as follows:                          including with respect to implementing
daltland on DSKBBV9HB2PROD with NOTICES




                                               residents it serves. The Committee                                                                            future appropriations act provisions and
                                                                                                       1. Purpose and Applicability
                                                                                                                                                             revisions to financial policies and
                                                                                                       2. Waivers
                                                 7 For more information on the establishment,
                                                                                                          a. MTW Waivers                                     procedures. Additionally, HUD will
                                               purpose, members, and meeting content of the                                                                  develop informational materials to
                                               MTW Research Advisory Committee, please go to:
                                               https://portal.hud.gov/hudportal/HUD?src=/                8 The MTW Consolidated ACC Amendment                address various program elements,
                                               program_offices/public_indian_housing/programs/         amends the ACCs and the CACCs for the Public          which HUD will post on the MTW
                                               ph/mtw/expansion/rac.                                   Housing and Section 8 Voucher programs.               website.


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00060   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                         50391

                                                  Unless otherwise provided in the                     additional approval from HUD.                            The MTW Waivers only waive certain
                                               Operations Notice, an agency’s MTW                      Agencies may make an Agency-Specific                  provisions of the 1937 Act and its
                                               program applies to all of the agency’s                  Waiver Request to implement additional                implementing regulations. The five
                                               public housing units (including agency-                 activities not contained in the MTW                   statutory requirements established
                                               owned properties and units comprising                   Waivers, request to waive a statutory or              under the 1996 MTW Statute cannot be
                                               a part of mixed-income, mixed finance                   regulatory requirement not waived in                  waived. Other applicable Federal, state,
                                               communities, tenant-based HCV                           the MTW Waivers, and/or request to                    and local requirements shall continue to
                                               assistance, project-based HCV assistance                expand the safe harbors of an MTW                     apply even in the event of a conflict
                                               under Section 8(o), and Homeownership                   Waivers activity. Agencies may also be                between such a requirement and a
                                               units developed using Section 8(y) HCV                  provided with Cohort-Specific Waivers                 waiver or activity granted by this
                                               assistance. This Operations Notice does                 if they are necessary to allow for the                Notice. Accordingly, HUD and the MTW
                                               not apply to HCV assistance that is                     implementation of the required cohort                 agencies may not waive or otherwise
                                               required: (i) To make payments to other                 study.                                                deviate from compliance with Fair
                                               PHAs under HCV portability billing                                                                            Housing and Civil Rights laws and
                                                                                                       a. MTW Waivers
                                               procedures; (ii) To meet particular                                                                           regulations. Additionally, in
                                               purposes for which HUD has expressly                       The Appendix contains the available                implementing activities, MTW agencies
                                               committed the assistance to the                         waivers and associated activities that                remain subject to all other terms,
                                               agency; 9 or (iii) to meet existing                     MTW agencies may implement after                      conditions, and obligations under this
                                               contractual obligations of the agency to                they have been included in the MTW                    Notice, and all other Federal
                                               a third party (such as Housing                          Supplement (described in Section 6 of                 requirements applicable to the public
                                               Assistance Payment (HAP) contracts                      this Notice) of an approved PHA Plan.                 housing program, the HCV program,
                                               with owners under the agency’s HCV                      The Appendix includes the waiver                      Federal funds, and PHAs. To the extent
                                               program), unless a third party agrees to                name, waiver description, statutes and                any MTW activity conflicts with any of
                                               Project-Based Voucher (PBV) activities                  regulations waived, permissible                       the five statutory requirements or other
                                               implemented under the MTW program                       activities, and safe harbors. The waiver              applicable requirements, HUD reserves
                                               with the agency.                                        description defines the authorization                 the right to require the MTW agency to
                                                  PHAs are reminded that the MTW                       provided to the MTW agency, subject to                discontinue the activity or to revise the
                                               demonstration program does not permit                   the terms of this Notice. The list of                 activity to comply with this Notice, and
                                               waivers related to statutes outside of the              statutes and regulations waived details               the other applicable Federal
                                               1937 Act or regulations promulgated                     the citations of the 1937 Act                         requirements. HUD also reserves the
                                               under authority outside of the 1937 Act,                requirements that may be waived by an                 right to require an MTW agency to
                                               including any waivers to fair housing,                  MTW agency in order to implement an                   discontinue any activity derived from a
                                               nondiscrimination, labor standards, or                  activity. The list of waivers and list of             waiver should it have significant
                                               environmental requirements. Other                       activities are organized by program type.             negative impacts on families or the
                                               subject matter prohibited from waivers                  The safe harbors section contains the                 agency’s operation of its assisted
                                               or restricted with respect to waivers is                additional requirements (beyond those                 housing programs using Section 8 and 9
                                               discussed elsewhere in this Notice.                     specified in the activity description)                funds, as determined by HUD.
                                                                                                       that the agency must satisfy in
                                               2. Waivers                                              implementing activities without further               b. Agency-Specific Waiver Requests
                                                  Pursuant to the 1996 MTW Statute                     HUD approval. If an MTW agency                           Pursuant to the exceptions in Section
                                               and 2016 MTW Expansion Statute, the                     wishes to implement additional                        9 of this Notice, HUD understands that
                                               Appendix of this Notice provides                        activities not contained in the MTW                   MTW agencies may wish to request
                                               waivers of certain provisions of the 1937               Waivers, request to waive a statutory or              Agency-Specific Waivers to implement
                                               Act as well as the implementing                         regulatory requirement, and/or request                activities, waive statutory or regulatory
                                               requirements and regulations. These                     the ability to go beyond an MTW                       requirements that are not in the
                                               waivers and associated activities afford                activity’s safe harbor(s), the MTW                    Appendix, and/or expand the safe
                                               MTW agencies the opportunity to use                     agency must submit an Agency-Specific                 harbor(s) of an activity included in the
                                               their MTW authority to pursue locally-                  Waiver Request for approval from HUD                  MTW Waivers. There are two categories
                                               driven policies, procedures, and                        as explained further in Section 2.b of                of Agency-Specific Waiver Requests: (1)
                                               programs in order to further the goals of               this Notice.                                          A request to waive a statutory or
                                               the demonstration. In implementing                         MTW agencies may implement any                     regulatory requirement, or to implement
                                               MTW activities, agencies will ensure                    activity contained in the Appendix as                 an activity, not provided for in the
                                               assisted families are made aware of the                 long as it is included in the MTW                     Appendix; and (2) a request to expand
                                               impacts the activity(s) may have to their               Supplement of an approved PHA Plan                    an activity that is in the Appendix
                                               tenancy. The following are the three                    and implemented within the associated                 outside of the listed safe harbor (or
                                               categories of waivers that MTW agencies                 safe harbor(s). The MTW agency will                   multiple safe harbors). The MTW
                                               may pursue: (a) MTW Waivers; (b)                        update the MTW Supplement annually,                   agency must obtain explicit written
                                               Agency-Specific Waiver Requests; and                    as described in Section 6 of this Notice,             approval from HUD for each Agency-
                                               (c) Cohort-Specific Waivers. MTW                        to reflect the new activities it plans to             Specific Waiver Request prior to
                                               agencies may conduct any permissible                    implement in the coming fiscal year and               implementation. Agency-Specific
                                               activity in the MTW Waivers category                    ongoing activities it has implemented in              Waiver Requests are optional and made
                                               within the provided safe harbors, as                    the prior year, which includes estimated              at the discretion of the MTW agency.
daltland on DSKBBV9HB2PROD with NOTICES




                                               detailed in the Appendix, without                       costs/savings for planned activities that                To submit an Agency-Specific Waiver
                                                                                                       have a cost implication. While MTW                    Request(s), an MTW agency will first
                                                 9 Mainstream Vouchers, Moderate Rehabilitation        activities are listed by specific waiver              share the specifics and details of the
                                               Renewals, HUD-Veterans Affairs Supportive               name, MTW agencies may use the MTW                    proposed waiver in the MTW
                                               Housing (HUD–VASH) Vouchers, Non-Elderly
                                               Disabled (NED) Vouchers, and Family Unification
                                                                                                       Supplement to combine activities                      Supplement to the Annual PHA Plan,
                                               Program (FUP) Vouchers are not part of the MTW          together to create more comprehensive                 indicating which of the two categories
                                               demonstration program.                                  initiatives at the local level.                       of Agency-Specific Waiver Requests is


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00061   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50392                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               being sought. The MTW Supplement                        through the Annual PHA Plan and                       focuses on rent models as it relates to
                                               form, when finalized, will provide a                    MTW Supplement public comment                         the voucher program, then an agency’s
                                               comprehensive explanation of the                        process a second time. Once the Annual                public housing program would not be
                                               elements required to submit an Agency-                  PHA Plan and MTW Supplement are                       affected by the addition or removal of
                                               Specific Waiver Request.                                approved this second time, the MTW                    any such waivers and associated
                                                  The approval of the Annual PHA Plan                  agency may implement its Agency-                      activities. If the MTW Waiver(s) and
                                               and MTW Supplement during this stage                    Specific Waiver.                                      associated activity(s) are not provided to
                                               does not constitute an approval of the                    To the extent a policy in an Agency-                a cohort, or some portion of the agency’s
                                               Agency-Specific Waiver Request.                         Specific Waiver Request conflicts with                portfolio within the cohort, to allow the
                                               Rather, the public comment and review                   any of the five statutory requirements,               cohort to test a specific policy change,
                                               period affords the MTW agency’s                         the cohort-specific evaluation, or other              the agencies within that cohort study
                                               Resident Advisory Board (RAB),                          applicable requirements, HUD shall                    will not be able to conduct that
                                               community, and residents the                            require the MTW agency to discontinue                 activity(s) until the evaluation of the
                                               opportunity to provide input on the                     the policy or to revise the policy to                 specific policy change has concluded.
                                               proposed waiver prior to its submission                 comply with this Notice and the other
                                               to HUD.                                                 applicable federal requirements. HUD                  3. Term of Participation
                                                  Once the MTW agency obtains                          also reserves the right to require an                    The term of each agency’s MTW
                                               approval of its Annual PHA Plan and                     MTW agency to discontinue any policy                  designation will be 12 years (PHA Fiscal
                                               MTW Supplement containing the                           derived from a waiver should it have                  Years) starting from the time of its
                                               Agency-Specific Waiver Request                          significant negative impacts on families              designation as an MTW agency. All
                                               information, the agency will then                       or the agency’s operation of its assisted             waivers and associated activities
                                               submit a letter to its local HUD field                  housing programs using Section 8 and 9                provided through the Operations Notice
                                               office requesting final approval of the                 funds, as determined by HUD.                          expire at the end of the agency’s term of
                                               Agency-Specific Waiver Request(s). This                                                                       participation. However, Cohort-Specific
                                               letter is sent and reviewed outside of the              c. Cohort-Specific Waivers                            Waivers provided to enable a cohort-
                                               Annual PHA Plan and MTW                                    Pursuant to the 2016 MTW Expansion                 specific policy change may be extended
                                               Supplement process. It must include: A                  Statute, at the time of designation as an             beyond the agency’s term of
                                               good cause justification that relates to                MTW agency, each agency will be                       participation with HUD’s specific
                                               one or more of the three MTW statutory                  selected into an evaluative cohort that               approval if HUD determines that
                                               objectives; the statute, regulation, and/               seeks to test a specific policy change, as            additional time is needed to evaluate
                                               or MTW Waiver safe harbor which the                     specified in that cohort’s Selection                  the policy change, subject to continued
                                               MTW agency seeks to waive and its                       Notice. Cohort-Specific Waivers include               statutory authority for the MTW
                                               justification for doing so; a copy of the               statutory and/or regulatory waivers and               demonstration.
                                               approval letter for the Annual PHA Plan                 associated activities that are unique to a               Once an MTW agency has
                                               and MTW Supplement containing the                       specific cohort to allow them to                      implemented an activity pursuant to the
                                               proposed waiver; a description of the                   complete their required cohort study.                 authority of the Operations Notice, the
                                               initiative; the implementation timeline;                Depending upon the cohort’s study,                    agency may continue to implement that
                                               and any other information requested by                  there is a possibility that HUD restricts             activity throughout the term of its
                                               HUD. Depending on the nature of the                     certain activities within the MTW                     participation in the demonstration,
                                               request, HUD may ask for an associated                  Waivers or provides additional waivers                subject to the other terms and
                                               hardship policy, impact analysis, and/or                that are not included in the Appendix.                conditions of this Notice. The MTW
                                               other information necessary to                          It is also possible that the specific policy          agency must end all activities requiring
                                               understand the waiver and its possible                  changes to be tested through a given                  MTW-specific waivers upon expiration
                                               effects. Agency-Specific Waiver                         cohort would not need any Cohort-                     of MTW participation, as HUD cannot
                                               Requests may not conflict with the                      Specific Waivers. Any MTW activities                  guarantee that it will be able to extend
                                               agency’s cohort-specific evaluation.                    that would impact or conflict with the                any waivers and associated activities
                                                  If the Agency-Specific Waiver is                     cohort-specific policy change will be                 beyond that point. For this reason, when
                                               approved by HUD and the changes                         identified in the respective Selection                entering into contracts with third-
                                               between the Agency-Specific Waiver                      Notice so that the MTW agency is aware                parties that draw upon MTW flexibility,
                                               Request and the Waiver that HUD                         of this potential restriction on its use of           the agency should disclose that such
                                               ultimately approves do not constitute a                 waivers before it enters the MTW                      flexibility is only available during the
                                               ‘‘significant amendment’’ to the Annual                 demonstration program. Cohort-Specific                term of the agency’s participation in the
                                               PHA Plan, as defined by the agency,                     Waivers and the associated MTW                        MTW demonstration as permitted in
                                               then the Agency-Specific Waiver may be                  activities may only be used to the extent             this Notice. An exception is third-party
                                               implemented once the MTW Agency                         allowed under the applicable evaluative               contracts that relate to the cohort-
                                               receives HUD’s explicit written                         framework provided by HUD in the                      specific policy change and associated
                                               approval. The MTW Agency will need                      applicable Selection Notice.                          waiver(s). If HUD determines that
                                               to submit a narrative description of the                   In determining the Cohort-Specific                 additional time beyond the end of the
                                               Agency Specific Waiver in its                           Waivers that will be included in the                  agency’s MTW term is needed to
                                               subsequent MTW Supplement.                              Selection Notices, HUD will remove                    evaluate a cohort-specific policy change,
                                                  If the Agency-Specific Waiver is                     and/or add waivers and associated                     HUD may approve an extension of any
                                               approved by HUD with changes                            activities based on whether a waiver                  cohort-specific waiver(s).
daltland on DSKBBV9HB2PROD with NOTICES




                                               between the Agency-Specific Waiver                      and its associated activity would impact
                                               Request and the Waiver that HUD                         or conflict with the specific policy(s) to            4. MTW Funding Flexibility and
                                               ultimately approves that constitute a                   be studied in the MTW agency’s cohort                 Financial Reporting
                                               ‘‘significant amendment’’ to the Annual                 group. The addition or removal of any                    During the term of the demonstration,
                                               PHA Plan, as defined by the agency,                     waivers and associated activities would               subject to appropriations, HUD will
                                               then the MTW agency must re-submit                      only apply within the confines of the                 provide an MTW agency with public
                                               the Agency-Specific Waiver Request                      cohort study. For instance, if the study              housing Operating Fund Program grants,


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00062   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                           50393

                                               public housing Capital Fund Program                     pursuant to the MTW demonstration                     traditional activities specified in this
                                               (CFP) grants, and/or HCV HAP and                        and the 2016 MTW expansion. HUD                       Notice, including in the Appendix.
                                               Administrative Fee assistance as                        will also update existing guidance and                   (3) For Operating Fund grant funding,
                                               detailed in this Notice. CFP grants may                 issue new reporting requirements, as                  the MTW agency has accumulated prior
                                               include Formula grants; Demolition or                   appropriate, to ensure compliance with                to signing an MTW CACC Amendment,
                                               Disposition Transitional Funding                        2 CFR part 200, including with respect                the agency may not use such funds for
                                               (DDTF), which are included in regular                   to Federal financial management.                      eligible MTW purposes other than the
                                               Formula grants; and/or funds from older                    An agency participating in the MTW                 originally appropriated purpose of the
                                               Replacement Housing Factor (RHF)                        demonstration program may flexibly use                funds (i.e., these funds may not be used
                                               grants (a program later superseded by                   public housing Operating and Capital                  as flexible MTW Funding).
                                               DDTF). The funding amount for MTW                       Funds provided under Sections 9(d) and                (b) Public Housing Capital Fund
                                               agencies may be increased by additional                 9(e) of the 1937 Act and HCV HAP and                  Formula and Grants
                                               allocations of vouchers that the agency                 Administrative Fee program funds
                                               is awarded over the term of its                                                                                  (1) The agency’s public housing
                                                                                                       provided under Section 8 of the 1937                  Capital Fund formula characteristics
                                               participation in the MTW                                Act, referred to collectively as MTW
                                               demonstration. MTW Funding provided                                                                           and grant amounts, including DDTF and
                                                                                                       Funding. Certain provisions of Sections               Replacement Housing Factor (RHF), will
                                               to an MTW agency, including public                      8 and 9 of the 1937 Act and 24 CFR 982
                                               housing Operating Fund Program grants,                                                                        continue to be calculated in accordance
                                                                                                       are waived as necessary to implement                  with public housing law, regulations,
                                               public housing CFP grants, and HCV                      this flexibility. Once the agency receives
                                               HAP and Administrative Fee assistance,                                                                        and appropriations act requirements.
                                                                                                       its MTW designation through the                          (2) MTW agencies must continue to
                                               is subject to any future laws and                       execution of the MTW CACC                             follow the immediate need requirements
                                               appropriations. If a future law or                      Amendment, this flexibility in the use                applicable to all Capital funds and may
                                               appropriations bill conflicts with this                 of MTW Funding does not require prior                 not accelerate their drawdown of
                                               Operations Notice, the law or                           HUD approval.                                         Capital funds for the purpose of funding
                                               appropriations bill shall be                                                                                  reserves or for any other purpose. All
                                                                                                          The agency may use MTW Funding
                                               implemented, and no breach of contract                                                                        Capital funds, including funds in BLI
                                                                                                       covered by MTW flexibility for any
                                               claim, or any claim for monetary                                                                              1410 (Administrative Costs) and Budget
                                                                                                       eligible activity under Sections 9(d)(1),
                                               damages, may result from the conflict or                                                                      Line Item (BLI) 1492 (MTW), must be
                                                                                                       9(e)(1) and Section 8(o) of the 1937 Act
                                               implementation of the conflicting law or                                                                      drawn down only when funds are due
                                                                                                       and for the local, non-traditional
                                               regulation.                                                                                                   and payable.
                                                                                                       activities specified in this Notice,
                                               a. MTW Funding Flexibility                              including in the Appendix. Any                           (3) The agency may use these funds
                                                                                                       reserves the MTW agency has                           for any eligible activity permissible
                                                  MTW agencies will have the
                                                                                                       accumulated prior to signing an MTW                   under Section 9(d)(1) of the 1937 Act or,
                                               flexibility to apply fungibility among
                                                                                                       CACC Amendment (including public                      if the agency proposes to use the
                                               public housing Operating Fund, public
                                                                                                       housing Operating and Capital Reserves                funding under its MTW flexibility, it
                                               housing Capital Fund, and HCV HAP
                                                                                                       and HCV HAP and Administrative Fee                    may also use these funds for any eligible
                                               and Administrative Fee assistance.
                                                                                                       Reserves) must be used for their                      activity permissible under Section 8(o),
                                               These flexibilities expand the eligible
                                                                                                       originally appropriated purposes and                  Section 9(e)(1), and for the local, non-
                                               uses of each covered funding stream,
                                                                                                       may not be used flexibly for any eligible             traditional activities specified in this
                                               but do not negate the need for both the
                                                                                                       MTW activity described in the                         Notice, including in the Appendix.
                                               PHA and HUD to be able to account for
                                                                                                       Appendix. All MTW PHA expenditures,                   Capital Fund Program (CFP) funds used
                                               the funding from its original source to
                                                                                                       including for local, non-traditional                  for activities under section 9(d)(1) are
                                               the date of its ultimate eligible use 10 by
                                                                                                       activities, must be consistent with the               subject to all requirements relevant to
                                               the PHA, comply with Federal grant and
                                                                                                       PHA’s charter, approved 5-Year and                    non-MTW agency CFP funding,
                                               financial management requirements,
                                                                                                       Annual PHA Plans, and the approved                    including eligible activities and cost
                                               and use funds effectively and efficiently
                                                                                                       MTW Supplement to the Annual PHA                      limits.
                                               for their eligible purposes. As the                                                                              (4) For Capital Funds the MTW
                                               Department continues to implement                       Plan.
                                                                                                                                                             agency has accumulated prior to signing
                                               program-specific financial management                   i. Calculation of Funding                             an MTW CACC Amendment, the agency
                                               policies in its core housing programs,                                                                        may not use such funds for eligible
                                                                                                       (a) Public Housing Operating Grants
                                               MTW agencies will be subject to the                                                                           MTW purposes other than the originally
                                               same requirements and procedures as                        (1) The calculation of an MTW                      appropriated purpose of the funds (i.e.,
                                               non-MTW agencies. Therefore, the                        agency’s Operating Fund subsidy grant                 these funds may not be used as flexible
                                               requirements and procedures described                   eligibility will continue in accordance               MTW Funding).
                                               in this Notice may change as new                        with operating subsidy formula law,                      (5) In requisitioning Capital Fund
                                               financial management policies are                       regulations, and appropriations act                   grant funds, the MTW agency will
                                               implemented over time. HUD will                         requirements. As these programmatic                   request funds using traditional Capital
                                               update existing guidance and issue new                  and financial requirements are updated,               Fund Budget Line Items (BLIs) for funds
                                               reporting requirements, as appropriate,                 MTW agencies will be affected by and                  to be used for activities under section
                                               to allow HUD to meet its monitoring                     shall comply with these changes.                      9(d) and using the available MTW
                                               and oversight responsibilities while                       (2) The agency may use these funds                 Budget Line (BLI 1492) items for
daltland on DSKBBV9HB2PROD with NOTICES




                                               ensuring MTW agencies fully utilize                     for any eligible activity permissible                 activities under section 9(e), section
                                               and benefit from the flexibilities                      under Section 9(e)(1) of the 1937 Act or,             8(o), or local, non-traditional activities.
                                               established by Congress for these funds                 if the agency proposes to use the                     MTW agencies shall not use the
                                                 10 The date of the ‘‘ultimate eligible use’’ means
                                                                                                       funding under its MTW flexibility, it                 Transfer to Operations Budget Line (BLI
                                               the date of disbursement by the PHA for an eligible
                                                                                                       may also use these funds for any eligible             1406) since funds for all non-section 9
                                               purpose, which would remove the funding from the        activity permissible under Section 8(o),              activities shall be included in the MTW
                                               PHA’s account and the PHA’s control.                    Section 9(d)(1), and for the local, non-              Budget Line (BLI 1492). The agency will


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00063   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50394                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               provide to HUD information on all                       HAP and non-HAP MTW expenses, the                     authorized units 11 in the re-benchmark
                                               capital activities funded by the MTW                    reported expenses must have been paid                 year (the CY immediately preceding the
                                               Funding as necessary to ensure                          from an eligible source of funds as                   CY for which the PHA’s renewal
                                               compliance with requirements outside                    described in section 4(c) below in order              eligibility is being calculated) 12 by (2)
                                               the scope of MTW, including                             to be included in the HAP renewal                     the PHA’s pre-MTW monthly per-unit
                                               environmental review requirements and                   funding formula. In addition, MTW                     cost (PUC) inflated to the re-benchmark
                                               Energy and Performance Information                      HAP renewal funding is subject to an                  year.
                                               Center (EPIC) reporting requirements.                   MTW Renewal Eligibility Cap derived                      • For (1), the number of MTW-eligible
                                                 (6) The agency remains subject to the                 from the number of units authorized                   ACC authorized units is measured in
                                               requirements of Section 9(j) of the 1937                under the agency’s ACC, as described in               unit months available (UMAs).13
                                               Act with respect to Capital Fund grants.                paragraph (d) on the following page.                     • For (2), the inflated pre-MTW PUC
                                               Section 9(d) funds remain subject to the                The lower of the total combined HAP/                  is projected using, as a base, the
                                               obligation and expenditure deadlines                    non-HAP expenses or the MTW                           monthly PUC for the CY in which the
                                               and requirements provided in Section                    Renewal Eligibility Cap will then be                  agency signed its MTW CACC
                                               9(j) despite the fact that they may be in               adjusted by an applicable inflation                   Amendment. HUD applies an inflation
                                               the MTW Single Fund. Capital Funds                      factor and any national proration that                factor to this base PUC to estimate what
                                               awarded to MTW agencies must be                         applies to the HCV renewal                            the PHA’s HCV PUC would be, had the
                                               obligated within 2 years and expended                   appropriation to determine the MTW                    PHA not joined the MTW program, as of
                                               within 4 years of award. Funds not                      agency’s actual CY HAP renewal                        the re-benchmark year.
                                               obligated or expended within those                      funding.                                                 After the calculation of the HAP
                                               timeframes will be subject to recapture.                   Example:                                           Renewal Eligibility Cap, it is compared
                                               As with all agencies, an MTW agency                        • In CY 2019, an MTW Agency                        with the MTW PHA’s actual total
                                               may requisition CFP funds from HUD                      expended $3,600,000 on HAP and                        combined HAP/non-HAP expenses. The
                                               only when such funds are due and                        $400,000 on eligible non-HAP MTW                      lower of these two amounts—(1) the
                                               payable, unless HUD approves another                    expenses. The agency’s HCV HAP                        HAP Renewal Eligibility Cap or (2) the
                                               payment schedule.                                       renewal funding for CY 2020 will be $4                MTW PHA’s actual total combined
                                               (c) Housing Choice Voucher Funding                      million (assuming the HAP Renewal                     HAP/non-HAP expenses—is then
                                                                                                       Eligibility Cap is greater than $4                    adjusted by the inflation factor and any
                                                  (1) Funding for the Initial MTW Year.                million), adjusted by an inflation factor             national proration factor to determine
                                               For the calendar year (CY) after the                    and any applicable national proration.                the MTW PHA’s CY renewal funding.
                                               MTW agency joins the MTW                                   (3) HAP Renewal Sources of Funds.                     Example:
                                               demonstration (the ‘‘Initial MTW                        The only HAP and non-HAP MTW                             • If an MTW Agency signs its MTW
                                               Year’’), the MTW agency’s HCV HAP                       expenses that will be included in the                 CACC Amendment in July 2018, CY
                                               renewal funding will be calculated in                   MTW HAP renewal formula are those                     2019 will be the Initial Year in the MTW
                                               accordance with the same HAP renewal                    paid for with the same sources of funds               demonstration. In the Initial CY (CY
                                               funding formula used for non-MTW                        that would be included in the non-MTW                 2019) the MTW Agency’s renewal
                                               HCV agencies in the applicable FY                       HAP renewal formula for a non-MTW                     formula is the same formula that is used
                                               appropriations act. The HAP renewal                     agency (see PIH Notice 2013–28 and any                for non-MTW PHAs. In calculating the
                                               formula is customarily based on the                     future successor notices). Accordingly,               MTW Agency’s HCV renewal funding
                                               previous CY’s HAP expenses reported in                  HAP expenses and non-HAP MTW                          for CY 2020, the following information
                                               the Voucher Management System                           expenses must be paid from the                        applies:
                                               (VMS), adjusted by any applicable                       following sources of funds to be                         Æ The MTW PHA’s average monthly
                                               inflation factor and national proration.                included in the HAP renewal formula                   PUC for CY 2018 was $700.
                                                  Example:                                             calculation:
                                                  • If an MTW Agency signs its MTW                                                                              Æ The CY 2019 inflation rate is 2
                                                                                                          • Housing Choice Voucher (HCV)                     percent.
                                               CACC Amendment in July 2018, CY                         budget authority,                                        Æ The number of MTW-eligible ACC
                                               2019 will be the Initial Year in the MTW                   • HUD-held HAP reserves                            authorized units during CY 2019 is 800
                                               demonstration. The MTW Agency’s CY                      (undisbursed budget authority),
                                               2019 HAP renewal funding will be                           • PHA-held HAP reserves (i.e.,                        11 ‘‘MTW-eligible ACC authorized units’’ means
                                               calculated based on the Agency’s CY                     Restricted Net Position (RNP)),                       the PHA’s number of ACC authorized units,
                                               2018 HAP expenses, adjusted by                             • Any funds from the HAP Set-aside                 regardless of whether the units are leased, after
                                               inflation and proration (assuming this is               (if available after PHA application and               excluding the number of authorized units that
                                               the formula in the 2019 Appropriations                                                                        would not be subject to the MTW renewal formula.
                                                                                                       approval), and                                        In other words, special purpose vouchers that are
                                               Act).                                                      • Administrative Fee reserves (i.e.,               renewed separately and are not part of the MTW
                                                  (2) Funding for Subsequent MTW                       Unrestricted Net Position (UNP)). HAP                 HAP renewal formula are not included in the
                                               Years. As is the case for non-MTW                       expenses or non-HAP MTW expenses                      formula used to calculate the HAP Renewal
                                               PHAs under current appropriations law,                  that were covered by any other funding                Eligibility Cap. See Section 8 of this Notice for
                                                                                                                                                             further information on these special purpose
                                               the HAP renewal funding eligibility for                 source (for example, public housing                   vouchers that are renewed separately outside the
                                               subsequent MTW years will be                            Operating Funds and Capital Funds,                    MTW renewal formula.
                                               calculated based on the MTW agency’s                    and current year HCV Administrative                      12 As noted above, the re-benchmark year is also

                                               actual expenses for the previous                        Fee funds) will not be included in the                the source year for the actual expense data used in
                                               calendar year (known as the re-                                                                               the MTW PHA’s HAP renewal formula.
                                                                                                       MTW PHA’s HCV renewal funding
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                                13 Authorized units in the HCV program context
                                               benchmark year). Unique to MTW                          calculation.                                          are measured in terms of unit months available. For
                                               agencies, however, the MTW agency’s                        (4) HAP Renewal Eligibility Cap. The               example, if an authorized unit is under CACC as of
                                               actual expenses are: (i) The previous                   MTW PHA’s renewal eligibility for all                 January 1, the authorized unit equals 12 unit
                                               CY’s HAP expenses reported in Voucher                   MTW Years will be limited by the HAP                  months available for that CY. On the other hand,
                                                                                                                                                             if the authorized unit was added to the CACC under
                                               Management System (VMS,) and (ii) the                   Renewal Eligibility Cap. The calculation              a new funding increment effective July 1, the
                                               previous CY’s eligible non-HAP MTW                      multiplies (1) the MTW PHA’s total                    authorized unit is equal to 6 unit months available
                                               expenses reported in VMS. For both                      number of MTW-eligible ACC                            for that CY.



                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00064   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                          50395

                                               units. (In this example all units were                  MTW agencies are also subject to the                  the MTW HCV renewal funding
                                               under ACC as of January 1, 2019, so the                 national proration factor and any other               calculation, plus inflation factor and the
                                               number of unit months available                         appropriations act requirements.                      applicable proration factor. Tenant
                                               (UMAs) is simply 800 units multiplied                      (7) Adjustments for the First-Time                 protection vouchers provided for RAD
                                               by 12 months, or 9,600 UMAs.)                           Renewal of Certain Vouchers. If the                   Component II conversions are renewed
                                                 • The HAP Renewal Eligibility Cap                     MTW agency receives incremental HCV                   in accordance with section 4.v,
                                               for CY 2020 is calculated by first                      vouchers and funding (including tenant                Adjustment for the first-time renewal of
                                               determining the estimated PUC for CY                    protection vouchers) other than special               certain vouchers, above. Administrative
                                               2019, which is $714 (the monthly PUC                    purpose vouchers, renewal funding for                 fees for RAD vouchers will be calculated
                                               for CY 2018 inflated for CY 2019, or                    those vouchers will be included in the                based on the same methodology used to
                                               $700 × 1.02). The estimated PUC for CY                  MTW HCV renewal funding eligibility                   establish administrative fees for non-
                                               2019 is then multiplied by the MTW                      calculation for the following year. (See              MTW agencies. Fees for RAD vouchers
                                               PHA’s CY 2019 MTW-eligible ACC                          Section 8 of this Notice for further                  will be prorated at the same level that
                                               authorized UMAs 14 ($714 × 9,600                        discussion of tenant protection and                   applies to all non-MTW agencies.
                                               UMAs) to determine the HAP Renewal                      other special purpose vouchers.) The                     (11) Voucher Programs Not Included
                                               Eligibility Cap, which is $6,854,400.                   renewal amount for the following year                 in MTW Program. Vouchers and funding
                                                 • The HAP Renewal Eligibility Cap                     is based on HAP costs reported for these              provided for the following special
                                               ($6,854,400) is then compared to the                    increments in VMS in the prior year,                  purpose vouchers, or any new special
                                               MTW Agency’s total combined HAP/                        which will be adjusted by the inflation               purpose vouchers provided in future
                                               non-HAP expenses for the re-benchmark                   factor. Should the initial increment(s) be            appropriations acts, whether for new
                                               year that originated from the eligible                  funded for less than 12 months due to                 allocations or renewal of existing
                                               funding sources described earlier in this               lack of appropriations, HUD will adjust               increments, shall not be included in the
                                               Notice. If the total combined HAP/non-                  for the missing months upon renewal,                  HCV MTW renewal calculation:
                                               HAP expenses do not exceed                              by selecting the higher of the funded                 Mainstream, HUD-Veterans Affairs
                                               $6,854,400, the MTW Agency’s CY 2020                    PUC for the initial increment, or the                 Supportive Housing (HUD–VASH),
                                               renewal funding will be the total                       MTW per unit cost (PUC) times the                     Non-Elderly Disabled (NED), and
                                               combined HAP/non-HAP expenses                           number of units,15 then adjusted by the               Family Unification Program (FUP).
                                               adjusted by an inflation factor and any                 inflation factor. The aggregate renewal               These vouchers will be renewed under
                                               national proration. If the total combined               eligibility is always subject to the                  the regular voucher renewal
                                               HAP/non-HAP expenses exceed                             national proration factor.                            requirements as provided under the
                                               $6,854,400, the MTW Agency’s CY 2020                       (8) Applicable Inflation Factor and                appropriations acts. Special purpose
                                               renewal funding will be $6,854,400,                     Proration. The same applicable inflation              vouchers are discussed in more detail in
                                               adjusted by an inflation factor and any                 factor that applies to non-MTW agencies               Section 8 of this Notice. In addition,
                                               national proration.                                     will be applied each CY to determine                  funding provided for the Section 8
                                                 (5) Financial Management                              the MTW agency’s HAP funding                          Moderate Rehabilitation Program is not
                                               Requirements Apply. The same financial                  renewal eligibility. Likewise, the MTW                part of the MTW program and may not
                                               management requirements that apply to                   agency’s HAP funding renewal                          be used for MTW activities.
                                               non-MTW agencies also apply to MTW                      eligibility is subject to the same national
                                               agencies. Accordingly, all undisbursed                                                                        b. Financial Reporting and Auditing
                                                                                                       proration as non-MTW agencies’
                                               HAP funds, including HAP-originated                     renewal eligibility.                                     MTW agencies must submit year-end
                                               reserve funds, will be retained as HUD-                    (9) Prior Year Reserves. For HCV HAP               unaudited financial information to the
                                               held reserves per Office of Management                  and Administrative Fee funding                        Department no later than 2 months after
                                               and Budget cash management                              provided in years prior to the                        their fiscal year end using the Financial
                                               requirements and can be requested by                    designation of the agency as an MTW                   Data Schedule (FDS) contained in the
                                               the MTW agency when immediate need                      agency, the agency may not use any                    Real Estate Assessment Center’s (REAC)
                                               exceeds the scheduled HAP monthly                       accumulated HCV reserves for eligible                 Financial Assessment Subsystem
                                               disbursements, but only after                           MTW purposes other than the originally                (FASS–PH), or its successor system.
                                               consideration of available MTW agency-                  appropriated purpose of the funds (i.e.,              Current financial reporting requirements
                                               held Restricted Net Position (RNP).                                                                           for MTW agencies are posted on the
                                                                                                       these funds may not be used as flexible
                                                 (6) Administrative Fees. The                                                                                REAC website at https://www.hud.gov/
                                                                                                       MTW Funding).
                                               Administrative Fee rates used to                           (10) Rental Assistance Demonstration               sites/documents/DOC_11833.PDF.
                                               calculate fee eligibility for MTW                       (RAD). Any vouchers received as part of               These requirements may be updated in
                                               agencies shall be established according                 a RAD Component I conversion shall be                 the future.
                                               to the same methodology used to                                                                                  MTW agencies are also required to
                                                                                                       added to the ACC for the remainder of
                                               establish Administrative Fee rates for all                                                                    electronically submit their audited
                                                                                                       the CY in which they are awarded. HUD
                                               agencies, including non-MTW agencies.                                                                         financial information, if applicable, to
                                                                                                       will issue a new increment of voucher
                                               As is the case for all agencies under                                                                         the Department no later than 9 months
                                                                                                       funding in support of those vouchers for
                                               current appropriations law,                                                                                   after their fiscal year end. MTW
                                                                                                       the first full CY following a RAD
                                               administrative fees will be calculated on                                                                     agencies must include public housing
                                                                                                       Component I conversion. In subsequent
                                               the basis of units leased as of the first                                                                     project level financial information in the
                                                                                                       years, voucher funding for RAD-
                                               day of each month; this data will be                                                                          FDS and must follow the Asset
                                                                                                       converted units will be renewed under
                                               extracted from Voucher Management                                                                             Management guidelines established in
daltland on DSKBBV9HB2PROD with NOTICES




                                               System (VMS) at the close of each                          15 The MTW PUC is equal to MTW HAP expenses        Public and Indian Housing (PIH) Notice
                                               reporting cycle. Administrative fees for                divided by the number of MTW units leased. (Non-      2007–9 Supplement to Financial
                                                                                                       HAP MTW expenses are not included in the MTW          Management Handbook Office of Public
                                                 14 As noted earlier, these are the MTW PHA’s CY       PUC calculation.) HUD may further adjust the MTW      and Indian Housing (PIH) Revised April
                                               2019 UMAs that are subject to the MTW renewal           PUC calculation for PHAs administering RAD
                                               formula. UMAs attributable to special purpose           project-based vouchers to exclude RAD Rehab
                                                                                                                                                             2007, and any subsequent updates to
                                               vouchers such as HUD–VASH and FUP that are              payments so the MTW PUC only reflects expenses        this Handbook or PIH Notice. MTW
                                               renewed separately are not included in this count.      attributable to actual housing assistance payments.   agencies will conform to the cost


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00065   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50396                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               requirements of 2 CFR part 200 and any                  through the lens of the three statutory               Committee. In some cases, the
                                               HUD implementation thereof.                             objectives relating to cost effectiveness,            evaluation timeframe may extend
                                                  MTW agencies must procure an                         self-sufficiency, and housing choice.                 beyond the agency’s term of MTW
                                               Independent Public Accountant (IPA) to                    HUD envisions three types of                        participation. The MTW agency is
                                               perform an annual audit pursuant to                     evaluation: Program-wide evaluation,                  required to participate in the evaluation
                                               Federal requirements at 2 CFR part 200                  cohort-specific evaluation, and ad hoc                for the full timeframe designated by
                                               and 24 CFR 990.190, or successor, as                    evaluation.                                           HUD. HUD may extend waivers and
                                               well as any audit compliance                                                                                  associated activities beyond the
                                                                                                       a. Program-Wide Evaluation
                                               supplements developed specifically for                                                                        agency’s term of participation to the
                                               use with the MTW demonstration.                            Program-wide evaluation would seek                 extent that those waivers and associated
                                                  Completed IPA audits must be                         to assess whether or not, and to what                 activities are needed to support the
                                               submitted to HUD in accordance with                     extent, MTW agencies use Federal                      evaluation of the specific policy change
                                               current HUD regulations. HUD will                       dollars more efficiently, help residents              and HUD determines whether
                                               review IPA audits of MTW agencies to                    find employment and become self-                      additional time is needed to evaluate
                                               determine appropriate action relative to                sufficient, and/or increase housing                   the policy change.
                                               any findings, prepare recommendations                   choices for low-income families. HUD
                                               for audit finding resolution, and follow                intends to develop a method for                       c. Ad-Hoc Evaluation
                                               up with MTW agencies to assure finding                  program-wide evaluation that is based,                   HUD reserves the right to request, and
                                               closure. If there are audit findings                    to the extent possible, on information                the MTW agency agrees to provide, any
                                               related to the MTW program itself, HUD                  already being collected through existing              additional information required by law
                                               will monitor the resolution of all audit                HUD administrative data systems. HUD                  or required for the sound administration
                                               findings.                                               may determine and require that                        or evaluation of the MTW agency.
                                                                                                       additional reporting is necessary to
                                               5. Evaluation                                                                                                 6. Program Administration and
                                                                                                       effectively evaluate MTW.
                                                  As a condition of participating in the                                                                     Oversight
                                               MTW demonstration, MTW agencies                         b. Cohort-Specific Evaluation                            In general, MTW agencies will be
                                               agree to cooperate fully with HUD and                      The 2016 MTW Expansion Statute                     subject to the same planning and
                                               its contractors in the monitoring and                   requires HUD to direct all the agencies               reporting protocols as non-MTW
                                               evaluation of the MTW demonstration.                    in a cohort to implement one specific                 agencies, including the PHA Plan (5-
                                               MTW agencies shall keep records and                     policy change and to conduct a rigorous               Year Plan and Annual PHA Plan) and
                                               submit reports and other information as                 evaluation of the one specific policy                 Capital Fund planning. MTW agencies
                                               required by HUD. This includes any                      change. The MTW Research Advisory                     must also report data into HUD data
                                               data collection required for the use of                 Committee has considered input from                   systems, as required.
                                               waivers and associated activities, for the              the public and advised HUD on the                        New protocols and instruments will
                                               uses of MTW funds within and across                     policy changes to be tested through the               be developed for assessing an MTW
                                               funding streams, and any evaluation                     new cohorts of MTW agencies and on                    agency’s performance and will be
                                               efforts that HUD undertakes for the                     the methods of research and evaluation.               incorporated into PHAS and SEMAP, or
                                               cohort-specific policy changes.                            The cohort-specific policy change and              successor assessment systems, or an
                                                  MTW is a demonstration that                          evaluation methods will be described in               alternative assessment system
                                               provides PHAs flexibilities to innovate                 the applicable Selection Notice so that               developed by HUD, explained further in
                                               and try different approaches to housing                 the MTW agency is aware, in advance                   Section 6.b. of this Operations Notice. In
                                               assistance in order to achieve at least                 of application to the MTW                             addition, HUD will employ standard
                                               one of the three statutory objectives laid              demonstration program, of the policy it               program compliance and monitoring
                                               out in the 1996 MTW Statute. At its                     will be required to implement and the                 approaches including assessment of
                                               core, the demonstration is an                           evaluation requirements. The specific                 relative risk and on-site monitoring
                                               opportunity for PHAs, participants,                     evaluation methods and requirements                   conducted by HUD or by entities
                                               HUD, stakeholders, and the general                      for participating MTW agencies will                   contracted by HUD.
                                               public to learn from different                          vary based on the policy changes to be                a. Planning and Reporting
                                               approaches to providing Federal                         tested. For example, some cohorts of
                                               housing assistance to low-income                        MTW agencies may be required to                       i. The Annual PHA Plan
                                               families. This includes learning from                   participate in randomized control trials,                MTW agencies must adhere to Annual
                                               approaches that are effective and                       while others may be required to                       PHA Plan regulations at 24 CFR part
                                               produce desired outcomes, and from                      participate in detailed process studies or            903, any implementing HUD Notices
                                               approaches that are less effective than                 ethnographic research. HUD’s Office of                and guidance, as well as any succeeding
                                               anticipated and where results may have                  Policy Development and Research                       regulations. The Annual PHA Plan
                                               unintended consequences.                                (PD&R) will take the lead on evaluating               consists of the 5-Year Plan that a PHA
                                                  Because MTW agencies can use                         cohort-specific policy changes, and                   must submit to HUD once every five
                                               different flexibilities calling on multiple             funds have been appropriated by                       PHA fiscal years and the Annual PHA
                                               activities within the MTW Waivers to                    Congress for this evaluation. In all cases,           Plan that the PHA must submit to HUD
                                               serve local populations in various parts                the purpose of the evaluation will be to              for each PHA fiscal year. Any HUD
                                               of the country, interpreting PHA-                       measure the outcomes associated with                  assistance that the agency is authorized
                                               reported performance data on the effects                the specific policy change(s) in order to             to use under the MTW demonstration
daltland on DSKBBV9HB2PROD with NOTICES




                                               of an individual MTW activity can be                    offer policy recommendations for                      must be used in accordance with the
                                               challenging. Consequently, and while                    implementing the policy change(s)                     Annual PHA Plan, as applicable.
                                               adhering to the guiding principles for                  across all PHAs.                                         Annual and 5-Year Plans must be
                                               the expansion—to simplify, learn, and                      HUD will determine the length and                  submitted in a format prescribed by
                                               apply—HUD will create and develop an                    timeframe for the evaluation, which will              HUD. Currently, submission format
                                               evaluation system that will document                    be informed by feedback provided by                   requirements are outlined in Notice PIH
                                               and consider the MTW demonstration                      the MTW Research Advisory                             2015–18 (HA), issued October 23, 2015,


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00066   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                          50397

                                               which is effective until amended,                       PHA Plan year that require Cohort-                    obtain the proper signed certifications
                                               superseded, or rescinded.                               Specific Waivers (as applicable and                   and board certification.
                                                                                                       identified in each cohort’s Selection                    HUD will notify the MTW agency in
                                               ii. MTW Supplement to the Annual                                                                              writing if HUD objects to any provisions
                                                                                                       Notice), and the Cohort-Specific
                                               PHA Plan (Under Development)                                                                                  or information in the Annual PHA Plan
                                                                                                       Waivers to be used, using a check-box
                                                  As an MTW agency, all Annual PHA                     or other simple, non-narrative format;                or the MTW Supplement. When the
                                               Plan information must be provided in                       • Certify to HUD that all MTW                      MTW agency submits its Plan seventy-
                                               the context of the agency’s participation               activities being implemented by the                   five (75) days in advance of its fiscal
                                               in the MTW demonstration. This                          agency fall within the safe harbors                   year, HUD will respond to the MTW
                                               includes taking into account the MTW                    outlined in the Appendix;                             agency within 75 days.
                                               Waiver(s) and associated activity(s)                       • Submit data or information required                 Reviews of the Annual PHA Plan and
                                               afforded to the MTW agency. To this                     for the ongoing use of any activities                 the MTW Supplement will be
                                               end, the MTW agency will submit an                      within the MTW Waivers; and                           conducted by the local field office, in
                                               MTW Supplement to the Annual PHA                           • Submit data required for HUD’s                   consultation with the MTW Office.
                                               Plan, in a format to be developed by                    verification of the MTW agency’s
                                                                                                       compliance with the five statutory                    iii. Admissions and Continued
                                               HUD. Prior to submitting to HUD, the                                                                          Occupancy Policy (ACOP) and
                                               MTW Supplement must go through a                        requirements established under the
                                                                                                       1996 MTW Statute.                                     Administrative Plan
                                               public process along with the Annual
                                               PHA Plan. This will allow the agency to                    Non-MTW PHAs that are qualified                       The MTW agency must update its
                                               inform the community of any                             under 24 CFR 903.3(c) and that are not                ACOP and Administrative Plan to be
                                               programmatic changes and give the                       designated as troubled under PHAS and                 consistent with the MTW activities and
                                               public an opportunity to comment.                       that do not have a failing score under                related waivers that it implements. The
                                               Details about this requirement are                      SEMAP are exempt from the                             agency may not implement an MTW
                                               elaborated later in this section. New                   requirement to submit the Annual PHA                  activity or waiver until the relevant
                                               MTW agencies will not be required to                    Plan. Per this Operations Notice, while               sections of the ACOP and/or
                                               submit the Annual MTW Plan or                           MTW agencies that are qualified under                 Administrative Plan are updated. MTW
                                               Annual MTW Report (i.e., Form 50900),                   24 CFR 903.3(c) are not required to                   agencies must provide HUD with
                                               which are required for existing MTW                     submit the Annual PHA Plan, they are                  electronic versions of the ACOP and
                                               agencies.                                               required to submit the MTW                            Administrative Plan upon request. If the
                                                  The MTW Supplement form has not                      Supplement to the Annual PHA Plan on                  MTW agency implements an activity
                                               been finalized at the time of publishing                an annual basis.                                      using the local, non-traditional uses of
                                               of this Operations Notice. The MTW                         During the agency’s initial year of                funds waiver, the MTW agency must
                                               Supplement will be made available for                   participation in the MTW                              create and update an implementing
                                               public review and comment, per                          demonstration, an agency may                          document specifically for such activity.
                                               Paperwork Reduction Act requirements,                   implement MTW activities once they
                                                                                                       have been included in an approved                     iv. Capital Planning and Reporting
                                               prior to finalizing the form. At this time,
                                                                                                       MTW Supplement, either during the                        MTW agencies must adhere to CFP
                                               HUD plans to require MTW agencies to
                                                                                                       next regularly scheduled submission of                regulations at 24 CFR part 905, any
                                               use the MTW Supplement to the Annual
                                                                                                       the Annual PHA Plan and MTW                           implementing HUD Notices and
                                               PHA Plan to:
                                                  • Describe how the MTW agency                        Supplement or through an amendment                    guidance, as well as any successor
                                               seeks to address the three MTW                          to the Annual PHA Plan, which would                   regulations. As noted previously, MTW
                                               statutory objectives during the coming                  include the MTW Supplement. Agency-                   agencies are funded in accordance with
                                               fiscal year, in a narrative format;                     Specific Waiver Requests and activities               CFP regulations and formula funds are
                                                  • Indicate the MTW activities that the               may only be implemented after explicit                calculated and distributed in the same
                                               agency plans to implement in the                        written approval from HUD.                            manner as non-MTW agencies.
                                               Annual PHA Plan year that utilize the                      MTW agencies must submit to HUD                       MTW agencies have the authority and
                                               activities contained in the MTW                         the Annual PHA Plan, including any                    flexibility to utilize their CFP funds for
                                               Waivers (Appendix), and ongoing                         required attachments, and the MTW                     expanded uses as part of their MTW
                                               activities the agency has implemented                   Supplement no later than seventy-five                 funding flexibility. HUD will award
                                               in the prior year, using a check-box or                 (75) days prior to the start of the                   Capital Fund grants to MTW agencies in
                                               other simple format;                                    agency’s fiscal year. Before submission               keeping with the standard process for
                                                  • Indicate the estimated costs/savings               to HUD, the agency must have at least                 all PHAs. The Field Office will
                                               per year for planned activities that have               a 45-day public review period of its                  distribute funds in Line of Credit
                                               a cost implication;                                     plan, after publishing a notice informing             Control System (LOCCS) to the MTW
                                                  • Indicate the reason(s) why any                     the public of its availability and                    agencies in accordance with the
                                               previously approved MTW activities                      conducting reasonable outreach to                     standard process. As with all PHAs, an
                                               were not implemented in the previous                    encourage participation in the plan                   MTW agency may draw down Capital
                                               year;                                                   process, followed by a public hearing.                Funds from HUD only when such funds
                                                  • Indicate any changes in the MTW                    MTW agencies must consider, in                        are due and payable, unless HUD
                                               activities and associated waivers,                      consultation with the RABs, all of the                approves another payment schedule. To
                                               including safe harbors, that have                       comments received at the public                       the extent that the MTW agency plans
                                               changed from the previous Annual PHA                    hearing. The recommendations received                 to use CFP funding for other MTW-
daltland on DSKBBV9HB2PROD with NOTICES




                                               Plan year;                                              by the public and RABs must be                        eligible (non-CFP) activities, the CFP
                                                  • Describe any Agency-Specific                       submitted by the agency as a required                 funding would be recorded on BLI 1492
                                               Waiver Requests that the MTW agency                     attachment to the Plan. MTW agencies                  (Moving to Work) on Form HUD–
                                               seeks to implement in PHA fiscal year,                  must also include a narrative describing              50075.1. CFP funds entered on BLI 1492
                                               if applicable;                                          their analysis of the recommendations                 would not need to be broken out and
                                                  • Indicate the MTW activities that the               and the decisions made on these                       itemized in the part II supporting pages
                                               agency will undertake in the Annual                     recommendations. Agencies must also                   of the HUD–50075.1. However,


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00067   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50398                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               regardless of the BLI utilized, funds may               different for MTW agencies. These areas               system(s), whichever comes first. Once
                                               not be drawn down until the PHA has                     are highlighted in the VMS User’s                     developed, all MTW agencies, including
                                               an immediate need for the funds. An                     Manual (http://portal.hud.gov/                        MTW agencies that elect not to receive
                                               MTW agency may not accelerate                           hudportal/documents/huddoc?id=                        an overall PHAS score, must be assessed
                                               drawdowns of funds in order to fund                     instructions.pdf), which details the VMS              under the MTW-specific assessment
                                               reserves or to otherwise increase locally               reporting requirements.                               system(s).
                                               held amounts, as discussed in                             HUD will monitor each MTW                             Per the 1996 MTW statute, when
                                               4(a)(i)(b)(2) of this Notice.                           agency’s VMS reporting to ensure                      providing public housing, the MTW
                                                 An MTW agency is not required to                      compliance and provide technical                      agency must ensure that the housing is
                                               use all or any portion of its CFP grant                 assistance to MTW agencies as needed.                 safe, decent, sanitary, and in good
                                               for non-CFP activities. To the extent that                                                                    repair, according to the physical
                                                                                                       vii. General Reporting Requirement
                                               the MTW agency wishes to dedicate all                                                                         inspection protocols established and
                                               or a portion of its CFP grant to specific                 In addition to the reporting                        approved by HUD. Thus, MTW agencies
                                               capital improvements, the agency shall                  requirements outlined in this                         continue to be subject to HUD physical
                                               record CFP funding on the appropriate                   Operations Notice, MTW agencies are                   inspections. To the extent that HUD
                                               BLI(s) on Form HUD–50075.1 (other                       required to comply with any and all                   physical inspections reveal deficiencies,
                                               than BLI 1492) as in the standard                       HUD reporting requirements not                        the MTW agency must continue to
                                               program.                                                specifically waived by HUD for                        address these deficiencies in accordance
                                                                                                       participation in the MTW                              with existing physical inspection
                                               v. Inventory Management System/PIH                      demonstration program, including the                  requirements. If an MTW agency does
                                               Information Center Reporting                            requirement (discussed in Section 5) to               not maintain public housing adequately,
                                                  Data from HUD’s Inventory                            comply with HUD’s evaluation of the                   as evidenced by the physical inspection
                                               Management System (IMS) and Public                      specific-policy changes being                         performed by HUD and is determined to
                                               and Indian Housing (PIH) Information                    implemented by cohort.                                be troubled in this area, HUD will
                                               Center (PIC), or successor systems, is                                                                        determine appropriate remedial actions.
                                                                                                       b. Performance Assessment
                                               critical to all aspects of program                                                                            The actions to be taken by HUD and the
                                               administration, including HUD                              Assessing the performance of PHAs                  agency will include actions statutorily
                                               monitoring and tracking of MTW agency                   (both MTW and non-MTW) helps with                     required and such other actions as may
                                               progress in meeting the MTW statutory                   the delivery of services in the public                be determined appropriate by HUD.
                                               objectives. IMS/PIC data is used to                     housing and voucher programs and                      These actions may include developing
                                               establish funding eligibility levels for                enhances trust among PHAs, public                     and executing a Memorandum of
                                               both Operating Subsidy Fund and                         housing participants, HUD, and the                    Agreement (MOA) with the MTW
                                               Capital Fund grants. Further, HUD relies                general public. To facilitate this effort,            agency, suspension or termination of the
                                               on IMS/PIC data to provide a thorough                   HUD will provide management tools for                 MTW CACC Amendment in accordance
                                               and comprehensive view of PHA                           effectively and fairly assessing the                  with the provisions therein, or such
                                               program performance and compliance.                     performance of a PHA in essential                     other actions legally available to the
                                                  MTW agencies are required to submit                  housing operations and program                        Department.
                                               the following information to HUD via                    administration.                                         MTW agencies must continue to
                                               IMS/PIC (or its successor system):                         Currently, HUD uses PHAS and                       submit year-end financial information
                                                  • Family data to IMS/PIC using Form                  SEMAP to assess risk and identify                     into the Financial Data System (FDS)or
                                               HUD–50058 MTW (or successor forms)                      underperforming PHAs in the                           successor system, as discussed earlier.
                                               or Form HUD–50058 and in compliance                     traditional public housing and voucher
                                                                                                       programs. However, since some of the                  ii. Section 8 Management Assessment
                                               with HUD’s 50058 MTW or standard
                                                                                                       MTW flexibilities make it difficult to                Program
                                               50058 submission requirements for
                                               MTW agencies. MTW agencies must                         accurately assess the performance of                     MTW agencies are not scored in
                                               report information on all families                      MTW agencies under the existing                       SEMAP but they can elect to be scored
                                               receiving some form of tenant-based or                  systems, HUD will develop an                          if they choose to opt in. If an MTW
                                               project-based housing assistance, either                alternative, MTW-specific assessment                  agency elects to receive its overall
                                               directly or indirectly, as well as all                  system, which may be incorporated into                SEMAP score, the agency must continue
                                               public housing families, to be current to               PHAS and SEMAP (or successor                          to be scored for the duration of the
                                               at least a 95 percent level.                            assessment system(s)). MTW agencies                   demonstration, or until the agency is
                                                  • Current building and unit                          may not opt out of the MTW-specific                   assessed under the MTW-specific
                                               information in the development module                   successor system(s). Until the successor              assessment system, whichever comes
                                               of IMS/PIC (or successor system).                       system is implemented, HUD will                       first. Once developed, all MTW
                                                  • Basic data about the PHA (address,                 monitor MTW agency performance                        agencies, including MTW agencies that
                                               phone number, email address, etc.).                     through PHAS sub-scores.                              opt out of SEMAP, must be assessed
                                                  HUD will monitor MTW agency                                                                                under the MTW-specific assessment
                                                                                                       i. Public Housing Assessment System
                                               reporting to IMS/PIC (or successor                                                                            system(s).
                                               system) to ensure compliance and                           MTW agencies are scored in PHAS,
                                                                                                       however, agencies can elect not to                    c. Monitoring and Oversight
                                               provide technical assistance to MTW
                                               agencies as needed.                                     receive the overall score (MTW agencies                  MTW agencies remain subject to the
                                                                                                       continue to receive PHAS sub-scores                   full range of HUD monitoring and
daltland on DSKBBV9HB2PROD with NOTICES




                                               vi. Voucher Management System                           even if they elect not to receive the                 oversight efforts including, but not
                                               Reporting                                               overall score). If an MTW agency elects               limited to, annual risk assessments, on-
                                                 MTW agencies are required to report                   to receive its overall PHAS score, the                site monitoring reviews, monitoring
                                               voucher utilization in the Voucher                      agency must continue to be scored for                 reviews relating to VMS reporting and
                                               Management System (VMS), or its                         the duration of the demonstration, or                 rent reasonableness, review of the
                                               successor system. There are several                     until the agency is assessed under the                accuracy of data reported into HUD data
                                               areas in which VMS reporting is                         alternative, MTW-specific assessment                  systems, and use of HUD data systems


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00068   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                                   50399

                                               to assess agency program performance,                      (c) MTW agencies must continue to                    • Agency expends $500,000 in public
                                               among other activities.                                 assist substantially the same total                   housing funds and houses 75 public
                                                                                                       number of eligible low-income families                housing families. Agency then houses
                                               i. MTW Statutory Requirements
                                                                                                       as would have been served had the                     15 public housing families per $100,000
                                                  Throughout participation in the MTW                  amounts not been combined.                            public housing funds.
                                               demonstration program, all MTW                             (i) HUD Verification Approach: HUD
                                               agencies must continue to meet five                                                                           First Year in MTW Demonstration
                                                                                                       continues to consider the best approach
                                               statutory requirements established                      to monitor the MTW statutory                             • MTW agency receives $900,000 in
                                               under the 1996 MTW Statute.                             requirement that MTW agencies serve                   HCV HAP funds and $300,000 in public
                                               Implementation, monitoring and                          substantially the same number of                      housing funds.
                                               enforcement of the five statutory                       families absent the demonstration. The                   • MTW agency must house 112.5
                                               requirements will be discussed in                       main themes and principles for this                   families for the HCV share and 45
                                               greater detail in the final version of this             effort include a Substantially the Same               families for the public housing share.
                                               Operations Notice, and specific                         (STS) methodology that: Ensures                       Therefore, in this example, the MTW
                                               enforcement processes will be included                  substantially the same number of                      agency is required to house 157 total
                                               in the MTW CACC Amendment (see                          families are housed; allows for local                 families flexibly with its MTW funds
                                               also, section 11 of this Notice). HUD                   flexibility; is responsive to changing                (this may be in the public housing
                                               will monitor and determine MTW                          budgetary climates; is feasible for HUD               program, the HCV program, a local, non-
                                               agencies’ compliance with these five                    to administer; is easy for MTW agencies               traditional rental subsidy program, or a
                                               requirements as follows:                                                                                      local, non-traditional development
                                                                                                       to predict compliance; is straight
                                                  (a) MTW agencies must ensure that at                                                                       program 16).
                                                                                                       forward to understand; is calculated
                                               least 75 percent of the families assisted                                                                        (d) MTW agencies must maintain a
                                               are very low-income families, in each                   each year; and has publicly available
                                                                                                                                                             comparable mix of families (by family
                                               fiscal year, as defined in section 3(b)(2)              results. First, the STS methodology
                                                                                                                                                             size) as would have been provided had
                                               of the 1937 Act.                                        would establish a baseline ratio of
                                                                                                                                                             the amounts not been used under the
                                                  (i) HUD Verification Approach: Initial               dollars the agency expends and families
                                                                                                                                                             demonstration.
                                               household certification data recorded in                housed. Before an agency enters the                      (i) HUD Verification Approach: In
                                               PIC will be used for both the public                    MTW demonstration, the public                         order to establish a comparable mix
                                               housing and HCV programs for                            housing funding and the HCV HAP                       baseline, the Department will pull data,
                                               compliance monitoring purposes. The                     funding spent by the agency in the prior              by family size, for occupied public
                                               initial certification is comprised only of              CY would be divided by the current                    housing units and leased vouchers at
                                               new admissions in the agency’s given                    number of families housed in each                     the time of entry into the demonstration.
                                               fiscal year. Initial household                          program. This calculation would yield                 The Department will rely upon agency-
                                               certification data for families housed                  how many families the agency houses                   reported data into HUD systems (i.e.,
                                               through local, non-traditional activities               per $100,000 of funding in both the                   PIC, VMS). This information will be
                                               (in accordance with the Appendix) will                  public housing and HCV programs. Each                 used to establish baseline percentages,
                                               be provided in a manner specified by                    year during an agency’s participation in              by family size, to which the agency is
                                               the Department. An agency’s portfolio                   the MTW demonstration, the baseline                   measured by for the remainder of
                                               will then be weighted with respect to                   number of total families housed per                   participation. Following entry into the
                                               the number of households being served                   $100,000 of funding in both the public                demonstration, agencies will provide
                                               by each housing program type (i.e., PH,                 housing and HCV programs would be                     comparable mix data and, if applicable,
                                               HCV, Local, Non-Traditional).                           applied to the agency’s actual funding                associated justifications in the MTW
                                                  (b) MTW agencies must establish a                    for that calendar year. So, for example,              Supplement. The Department deems an
                                               reasonable rent policy which shall be                   the agency would know that if it is                   acceptable level of variation to be no
                                               designed to encourage employment and                    appropriated ‘‘x number of dollars,’’ it              more than 5 percent from the baseline.
                                               self-sufficiency by participating                       would be required to house ‘‘y number                 Justifications or explanations for
                                               families, consistent with the purpose of                of families.’’ Depending on the specific              fluctuations greater than 5 percent are
                                               this demonstration, such as by                          circumstances of the agency, a dip                    required and subject to the Department’s
                                               excluding some or all of a family’s                     below the baseline year number would                  review.
                                               earned income for purposes of                           be allowed. HUD is exploring methods                     (e) MTW agencies must ensure that
                                               determining rent.                                       to ensure that the ratio of families                  housing assisted under the
                                                  (i) HUD Verification Approach: HUD                   housed per $100,000 in the baseline                   demonstration meets housing quality
                                               defines rent reform as any change in the                year continues to be an accurate                      standards established or approved by
                                               regulations on how rent is calculated for               measure of ‘‘substantially the same’’                 the Secretary.
                                               a household. Upon designation into the                  service levels in future years of the
                                               MTW demonstration, agencies are to                      MTW designation. There would also be                    16 MTW agencies may use their MTW Funding to

                                               submit their planned policy to                          opportunities for PHAs to request                     develop affordable housing units that are outside of
                                               implement a reasonable rent policy in                   adjustments of the baseline ratio to                  the traditional public housing and HCV programs.
                                                                                                       account for changes in costs due to                   Such local, non-traditional development allows for
                                               the MTW Supplement. All activities                                                                            the creation of important affordable housing
                                               falling under the Tenant Rent Policies                  special circumstances.                                resources, which must be balanced with the
                                               category, detailed in the Appendix,                        The following is an example of the                 existing and immediate needs of families waiting
                                               meet the definition of a reasonable rent                STS baseline ratio calculation:                       for housing assistance. It is therefore necessary to
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                             relate the amount of the MTW agency’s total
                                               policy. An MTW agency must
                                                                                                       Baseline Year (Calendar Year Before                   available MTW Funding investment to the number
                                               implement one or multiple reasonable                                                                          of affordable units developed. To that end, HUD
                                                                                                       Agency Enters MTW)
                                               rent policies during the term of its MTW                                                                      will divide the MTW agency’s total available MTW
                                               designation (MTW agencies in the rent                     • Agency expends $800,000 in HCV                    Funding in the local, non-traditional development
                                                                                                                                                             by the HUD-published Total Development Cost
                                               reform cohort may have prescribed                       HAP funds and houses 100 HCV                          (TDC). The resulting number of units would then
                                               deadlines to implement their reasonable                 families. Agency then houses 12.5 HCV                 count as families housed for the length of time the
                                               rent policies).                                         families per $100,000 of HCV funds.                   units remained affordable.



                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00069   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50400                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                                 (i) HUD Verification Approach: In                       The MTW agency shall give HUD                       Voucher (PBV) assistance. MTW
                                               order to demonstrate that the MTW                       access, at reasonable times and places,               agencies converting projects under RAD
                                               agency meets housing quality standards,                 to all requested sources of information,              to PBV may continue to undertake
                                               HUD will verify compliance for each                     including access to files, access to units,           flexibilities except to the extent limited
                                               housing program type as follows:                        and an opportunity to interview agency                by RAD, as described in the RAD
                                                 • HCV—Program regulations at 24                       staff and assisted participants.                      Notice, PIH 2012–32, REV–3, or its
                                               CFR part 982 set forth basic housing                      Where travel funding or staff                       successor Notice.17
                                               quality standards (HQS) for housing                     resources are not available to facilitate
                                                                                                                                                             8. Applying MTW Flexibilities to Special
                                               assisted under the HCV program. These                   in-person site visits, HUD may exercise
                                                                                                                                                             Purpose Vouchers
                                               housing quality standards, or its                       the option to conduct remote site visits
                                               successor regulations, are the standards                via telephone, videoconference, or                       Special Purpose Vouchers (SPVs) are
                                               used to determine if the agency is                      webinar.                                              specifically provided for by Congress in
                                               fulfilling its responsibilities to ensure                 To the extent possible, HUD will                    line item appropriations, which
                                               owners are maintaining the units in                     coordinate the MTW site visit with                    distinguish them from regular vouchers.
                                               accordance with HQS in the evaluation                   other site visits to be conducted by                  Except for enhanced vouchers and
                                               of an agency. Agencies with an HCV                      HUD.                                                  tenant-protection vouchers (described
                                               program must certify in the MTW                                                                               below), SPVs are not part of the MTW
                                                                                                       iv. Housing Choice Voucher Utilization                demonstration and are not part of the
                                               Supplement that they have fulfilled
                                               their responsibilities to comply with                     HUD will monitor HCV utilization at                 MTW agency’s total available flexible
                                               and ensure enforcement of HQS under                     MTW agencies and will ensure that                     MTW Funding. The funding is renewed
                                               this requirement.                                       HCV funds are utilized in accordance                  outside of the MTW HAP renewal
                                                                                                       with Section 4(a)(i)(c) and Section                   formula and the funding (both the initial
                                                 • Public Housing—HUD will verify
                                                                                                       6(c)(i)(c) of this Notice. Where leasing              increment and renewal funding) for the
                                               this requirement through its review of
                                                                                                       levels are inconsistent with the                      SPVs may only be used for eligible SPV
                                               PHAS Physical Assessment Subsystem
                                                                                                       requirements of this Notice, HUD may                  purposes. There are no additional MTW
                                               (PASS) scores, or successor assessment                                                                        flexibilities around using MTW funds to
                                               system. Scores falling below 24 out of                  take appropriate actions to work with
                                                                                                       the MTW agency to increase leasing and                cover SPV shortfalls. MTW PHAs may
                                               40 will be identified as non-compliant                                                                        use non-HAP sources to cover shortfalls,
                                               with the statutory requirement.                         utilization.
                                                                                                                                                             following the procedures outlined in
                                                 • Local, Non-Traditional—In the                       v. Public Housing Occupancy                           Notice PIH 2013–28. PHAs already have
                                               MTW Supplement, MTW Agencies must                          HUD will monitor public housing                    the ability to use HAP reserve funds to
                                               certify that local, non-traditional units               occupancy rates for MTW agencies. In                  address SPV instances of shortfalls,
                                               meet housing quality standards as                       instances where the MTW agency’s                      where the SPVs are under the same
                                               required in PIH Notice 2011–45, or                      public housing occupancy rate falls                   appropriations allocation for renewal as
                                               successor notice.                                       below 96 percent, HUD may require, at                 their Section 8 vouchers.18
                                               ii. Income Integrity and Enterprise                     its discretion, that the MTW agency                   a. HUD-Veterans Affairs Supportive
                                               Income Verification System (EIV)                        enter into an Occupancy Action Plan to                Housing
                                               Reviews                                                 address the occupancy issues. The
                                                                                                       Occupancy Action Plan will include the                   HUD-Veterans Affairs Supportive
                                                  MTW agencies are required to comply                  cause of the occupancy issue, the                     Housing (HUD–VASH) vouchers have
                                               with the final rule regarding EIV issued                intended solution, and reasonable                     separate operating requirements and
                                               December 29, 2009, and utilize EIV for                  timeframes to address the cause of the                must be administered in accordance
                                               all income verifications. EIV has been                  occupancy issue.                                      with the requirements listed at
                                               modified for MTW agencies so that                                                                             www.hud.gov/program_offices/public_
                                               family information submitted in PIC                     vi. Additional Monitoring and Oversight               indian_housing/programs/hcv/vash.
                                               will not expire for 40 months, in order                    HUD may, based on the MTW                          The operating requirements waive and
                                               to accommodate agencies choosing to                     agency’s risks and at HUD’s discretion,               alter many of the standard HCV statutes
                                               extend recertification periods for up to                conduct management, programmatic,                     and regulations at 24 CFR part 982.
                                               three years.                                            financial, or other reviews of the MTW                Unless stated in the HUD–VASH
                                                  MTW agencies are subject to HUD                      agency. The MTW agency shall respond                  operating requirements, however, the
                                               review to ensure compliance with EIV                    to any findings with appropriate                      regulatory requirements at 24 CFR part
                                               requirements as well as monitor the                     corrective action(s).                                 982 and all other HUD directives for the
                                               accuracy and integrity of the MTW                          In addition, HUD will make use of all              HCV program are applicable to HUD–
                                               agencies’ income and rent                               HUD data systems and available                        VASH vouchers. Agencies may submit a
                                               determination policies, procedures, and                 information to conduct ongoing remote                 request to HUD to operate HUD–VASH
                                               outcomes.                                               monitoring and oversight actions for                  vouchers in accordance with MTW
                                                                                                       MTW agencies, consistent with the                     administrative flexibilities.
                                               iii. MTW Site Visit
                                                                                                       results of the PIH risk assessment.                   b. Family Unification Program
                                                  HUD will periodically conduct site
                                               visits to provide guidance, discuss the                 7. Rental Assistance Demonstration                       The Family Unification Program
                                               MTW agency’s MTW activities, and                        Program                                               (FUP) NOFA language allows vouchers
                                               offer any needed technical assistance                      MTW agencies converting public                     to be administered in accordance with
daltland on DSKBBV9HB2PROD with NOTICES




                                               regarding its program. The purpose of a                 housing program units to Section 8                    MTW operations, unless MTW
                                               site visit will be to confirm reported                  assistance under the Rental Assistance                provisions are inconsistent with the
                                               agency MTW activities, to review the                    Demonstration (RAD) program are able
                                                                                                                                                                17 Notices and laws related to RAD can be found
                                               status and effectiveness of the agency’s                to retain MTW regulatory and statutory
                                                                                                                                                             at http://portal.hud.gov/hudportal/HUD?src=/RAD/
                                               MTW strategies, provide technical                       flexibilities in the management of those              library/notices.
                                               assistance, and to identify and resolve                 units, subject to RAD requirements, if                   18 https://portal.hud.gov/hudportal/documents/

                                               outstanding MTW related issues.                         the conversion is to Project Based                    huddoc?id=DOC_10495.pdf.



                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00070   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                                                              Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices                                         50401

                                               appropriations act or requirements of                   this Operations Notice, the following                 to MTW agencies remain Federal funds
                                               the FUP NOFA. In the event of a conflict                provisions of the 1937 Act continue to                and are subject to any and all other
                                               between the Operations Notice and the                   apply to MTW agencies and the                         Federal requirements outside of the
                                               appropriations act or FUP NOFA                          assistance received pursuant to the 1937              1937 Act (e.g., including, but not
                                               language, the act and NOFA govern.                      Act:                                                  limited to, competitive HUD NOFAs
                                                                                                         i. The terms ‘‘low-income families’’                under which the MTW agency has
                                               c. Non-Elderly Persons With Disabilities                and ‘‘very low-income families’’ shall                received an award, state and local laws,
                                               Vouchers                                                continue to be defined by reference to                Federal statutes other than the 1937 Act
                                                  The Non-Elderly Persons with                         Section 3(b)(2) of the 1937 Act (42                   (including appropriations acts), and
                                               Disabilities (NED) NOFA language                        U.S.C. 1437a(b)(2));                                  OMB Circulars and requirements), as
                                               allows vouchers to be administered in                     ii. Section 12 of the 1937 Act (42                  modified from time to time. The MTW
                                               accordance with MTW operations                          U.S.C. 1437j), as amended, shall apply                agency’s expenditures must comply
                                               unless MTW provisions are inconsistent                  to housing assisted under the                         with 2 CFR part 200 and other
                                               with the appropriations act or                          demonstration, other than housing                     applicable Federal requirements, which
                                               requirements of the NED NOFA. In the                    assisted solely due to occupancy by                   provide basic guidelines for the use of
                                               event of a conflict between the                         families receiving tenant-based                       Federal funds, including the
                                               Operations Notice and the                               assistance;                                           requirements of this Notice.
                                               appropriations act or FUP NOFA                            iii. Section 18 of the 1937 Act (42                    • National Environmental Policy Act
                                               language, the act and NOFA govern.                      U.S.C. 1437p, as amended by Section                   (NEPA): MTW agencies must comply
                                                                                                       1002(d) of Pub. L. 104–19, Section                    with NEPA, 24 CFR part 50 or part 58,
                                               d. Enhanced Vouchers and Tenant                         201(b)(1) of Pub. L. 104–134, and                     as applicable, and other related Federal
                                               Protection Vouchers                                     Section 201(b) of Pub. L. 104–202),                   laws and authorities identified in 24
                                                  Enhanced and tenant protection                       governing demolition and disposition,                 CFR. Part 50 or part 58, as applicable.
                                               voucher funds become fungible once the                  shall continue to apply to public                     Information and guidance on the
                                               initial funding increment is renewed.                   housing notwithstanding any use of the                environmental review process and
                                               The agency must continue to provide                     housing under MTW; and                                requirements is provided in PIH Notice
                                               rental assistance to enhanced voucher                     iv. Section 8(r)(1) of the 1937 Act on              2016–22, or successor notice.
                                               families and tenant protection voucher                  HCV portability shall continue to apply                  • Fair Housing and Equal
                                               families after the initial funding                      unless provided as a cohort-specific                  Opportunity: As with the administration
                                               increment is renewed.                                   waiver and associated activity(s) in an               of all HUD programs and all HUD-
                                                  The statutory enhanced voucher                       evaluative cohort as necessary to                     assisted activities, fair housing, and
                                               requirements under Section 8(t) of the                  implement comprehensive rent reform                   civil rights issues apply to the
                                               1937 Act (e.g., the HAP calculation)                    and occupancy policies. Such a cohort-                administration of MTW demonstration
                                               apply to an enhanced voucher family                     specific waiver and associated                        programs. This includes actions and
                                               until the family either moves from the                  activity(s) would contain, at a                       policies that may have a discriminatory
                                               project or leaves the HCV tenant-based                  minimum, exceptions for requests to                   effect on the basis of race, color, sex,
                                               program for any reason. MTW agencies                    port due to employment, education,                    national origin, religion, disability, or
                                               must follow the procedures described in                 health and safety, and reasonable                     familial status (see 24 CFR part 1 and
                                               Notice PIH 2013–27, or its successor                    accommodation.                                        part 100 subpart G) or that may impede,
                                               Notice, for a recipient of an enhanced                    Notwithstanding any requirement                     obstruct, prevent, or undermine efforts
                                               voucher to voluntarily agree to                         contained in this Notice or any MTW                   to affirmatively further fair housing.
                                               relinquish their tenant-based assistance                Waiver and associated activity granted                Annual PHA Plans must include a civil
                                               in exchange for PBV assistance. When                    herein, other Federal, state and local                rights certification required by Section
                                               an enhanced voucher family moves                        requirements applicable to public                     5A of the 1937 Act and implemented by
                                               from the project, either after initially                housing or HCV assistance will continue               regulation at 24 CFR 903.7(o) and
                                               receiving the voucher or anytime                        to apply. The MTW CACC Amendment                      903.15, as well as a statement of the
                                               thereafter, the Section 8(t) enhanced                   will place in HUD the authority to                    PHA’s strategies and actions to achieve
                                               voucher requirements no longer apply.                   determine if any future law or future                 fair housing goals outlined in an
                                               The voucher is then administered in                     regulation conflicts with any MTW-                    approved Assessment of Fair Housing
                                               accordance with the regular HCV                         related agreement or Notice. If a future              (AFH) consistent with 24 CFR 5.154. If
                                               program requirements, as modified by                    law conflicts, the law shall be                       the PHA does not have a HUD-accepted
                                               the agency’s individual MTW waivers                     implemented, and no breach of contract                AFH, it must still provide a civil rights
                                               and MTW policies for its tenant-based                   claim, or any claim for monetary                      certification and statement of the PHA’s
                                               HCV program.                                            damages, may result from the conflict or              fair housing strategies, which would be
                                                  Regular tenant protection vouchers                   implementation of the conflicting law or              informed by the corresponding
                                               (i.e., tenant protection vouchers that are              regulation.                                           jurisdiction’s AFH and the PHA’s
                                               not enhanced vouchers) are always                         If any non-1937 Act requirement                     assessment of its own operations.
                                               administered in accordance with the                     applicable to PHAs, public housing, or                   All PHAs, including MTW agencies,
                                               normally applicable HCV program                         HCV assistance contains a provision                   are obligated to comply with non-
                                               requirements, as modified by the                        that conflicts or is inconsistent with any            discrimination and equal opportunity
                                               agency’s individual MTW waivers and                     MTW Waiver and associated activity                    laws and implementing regulation,
                                               MTW policies for its tenant-based HCV                   granted by HUD, the agency remains                    including those in 24 CFR 5.105.
daltland on DSKBBV9HB2PROD with NOTICES




                                               program, regardless of whether the                      subject to the terms of that non-1937 Act             Specific laws and regulations must be
                                               family stays or moves from the project.                 requirement. Such requirements                        viewed in their entirety for full
                                                                                                       include, but are not limited to:                      compliance, as this Operations Notice
                                               9. Applicability of Other Federal, State,                 • Requirements for Federal Funds:                   does not incorporate a complete
                                               and Local Requirements                                  Notwithstanding the flexibilities                     discussion of all legal authorities. For
                                                  Notwithstanding the MTW Waivers                      described in this Notice, the public                  example, PHAs, including MTW
                                               and associated activities provided in                   housing and voucher funding provided                  agencies, are required to comply with


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00071   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1


                                               50402                          Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices

                                               the Fair Housing Act, Title VI of the                   admitted pursuant to the 2016 MTW                     SUMMARY:    In accordance with the
                                               Civil Rights Act of 1964, Section 504 of                Expansion Statute, including all of the               National Environmental Policy Act of
                                               the Rehabilitation Act of 1973, Title II                provisions of this Operations Notice and              1969, as amended, and the Federal Land
                                               of the Americans with Disabilities Act                  the accompanying MTW CACC                             Policy and Management Act of 1976
                                               of 1990, Architectural Barriers Act of                  Amendment.                                            (FLPMA), as amended, the Bureau of
                                               1968, Executive Order 11063: Equal                        Should an existing MTW agency elect                 Land Management (BLM) has prepared
                                               Opportunity in Housing, Executive                       to administer its MTW program                         a Draft Resource Management Plan
                                               Order 13166: Improving Access to                        pursuant to the framework described in                (RMP) and Draft Environmental Impact
                                               Services for Persons with Limited                       this Operations Notice, it will not be                Statement (EIS) for the San Juan Islands
                                               English Proficiency, HUD’s Equal                        required to implement the cohort-                     National Monument, and, by this notice,
                                               Access Rule (24 CFR 5.105(a)(2), Age                    specific policy change associated with                is announcing the opening of the
                                               Discrimination Act of 1975, and Title IX                any of the MTW cohorts and it will not                comment period.
                                               of the Education Amendments Act of                      be required to participate in the                     DATES: To ensure that comments will be
                                               1972, as well as HUD and government-                    evaluation of that specific policy                    considered, the BLM must receive
                                               wide regulations implementing these                     change. All other requirements in this                written comments on the Draft RMP and
                                               authorities. PHAs should review PIH                     Operations Notice will apply.                         Draft EIS within 90 days following the
                                               Notice 2011–31 for more details.                                                                              date the Environmental Protection
                                                 • Court Orders and Voluntary                          11. Sanctions, Terminations, and
                                                                                                       Default                                               Agency publishes its Notice of
                                               Compliance Agreements: MTW agencies                                                                           Availability of the Draft RMP and Draft
                                               must comply with the terms of any                         If the MTW agency violates any of the               EIS in the Federal Register. The BLM
                                               applicable court orders or Voluntary                    requirements outlined in this Notice,                 will announce future meetings or
                                               Compliance Agreements that are in                       HUD is authorized to take any corrective              hearings and any other public
                                               existence or may come into existence                    or remedial action permitted by law.                  participation activities at least 15 days
                                               during the term of the MTW CACC                         Sanctions, terminations, and default are              in advance through public notices,
                                               Amendment. The PHA must cooperate                       covered in the agency’s MTW CACC                      media releases, and/or mailings.
                                               fully with any investigation by the HUD                 Amendment.                                            ADDRESSES: You may submit comments
                                               Office of Inspector General or any other
                                                                                                       III. Environmental Impact                             related to the San Juan Islands National
                                               investigative and law enforcement
                                                                                                                                                             Monument Draft RMP and Draft EIS by
                                               agencies of the U.S. Government.                        1. Purpose and Applicability                          any of the following methods:
                                               10. MTW Agencies Admitted Prior to                         A Finding of No Significant Impact                    • Website: https://go.usa.gov/xRphc.
                                               2016 MTW Expansion Statute                              (FONSI) with respect to the                              • Email: blm_or_sanjuanislandsnm@
                                                                                                       environment was made for a previous                   blm.gov.
                                                  The 39 MTW agencies that entered
                                                                                                       version of this Notice in accordance                     • Fax: 509–536–1275.
                                               the MTW demonstration prior to the                                                                               • Mail: San Juan Islands National
                                               2016 MTW Expansion Statute adhere to                    with HUD regulations in 24 CFR part 50
                                                                                                       that implement section 102(2)(C) of the               Monument Comments, Lopez Island
                                               an administrative structure outlined in                                                                       BLM Office, PO Box 3, Lopez, WA
                                               the Standard MTW Agreement, a                           National Environmental Policy Act of
                                                                                                       1969 (42 U.S.C. 4332(2)(C)). The FONSI                98261.
                                               contract between each current agency                                                                             Copies of the San Juan Islands
                                               and HUD. The 2016 MTW Expansion                         is applicable to the current version of
                                                                                                       the Notice because there were no                      National Monument Draft RMP and
                                               Statute extended the term of the                                                                              Draft EIS are available at the BLM Lopez
                                               Standard MTW Agreement for these                        significant changes to the provisions of
                                                                                                       the Notice. The FONSI will be available               Island Office (37 Washburn Place, Lopez
                                               existing MTW agencies through each                                                                            Island, WA 98261), the BLM Spokane
                                               agency’s 2028 fiscal year.                              for public inspection on
                                                                                                       www.regulations.gov.                                  District Office (1103 N Fancher Rd,
                                                  Some agencies that entered the MTW                                                                         Spokane Valley, WA 99212), and the
                                               demonstration prior to the 2016 MTW                       Dated: August 24 2018.                              BLM Oregon/Washington State Office
                                               Expansion Statute may wish to opt out                   Robert E. Mulderig,                                   (1220 SW 3rd Avenue, Portland, OR
                                               of their Standard MTW Agreement and                     Acting Deputy Assistant Secretary for Public          97204). The document is also available
                                               administer their MTW program                            Housing Investments.                                  on the following website: https://
                                               pursuant to the MTW Expansion and                       [FR Doc. 2018–21723 Filed 10–4–18; 8:45 am]           go.usa.gov/xRphc.
                                               the requirements in this MTW                            BILLING CODE 4210–67–P                                FOR FURTHER INFORMATION CONTACT:
                                               Operations Notice. HUD will support an
                                                                                                                                                             Lauren Pidot, Planner, 503–808–6297;
                                               existing MTW agency’s request to join
                                                                                                                                                             Lopez Island BLM Office, PO Box 3,
                                               the MTW Expansion provided that the
                                                                                                       DEPARTMENT OF THE INTERIOR                            Lopez, WA 98261; lpidot@blm.gov.
                                               agency:
                                                  • Makes the change at the end of its                                                                       Persons who use a telecommunications
                                               fiscal year, so that it does not have part              Bureau of Land Management                             device for the deaf (TDD) may call the
                                               of a fiscal year under the Standard                                                                           Federal Relay Service (FRS) at 1–800–
                                               Agreement and part under the                            [LLOR932000.L16100000.                                877–8339 to contact the above
                                               Operations Notice;                                      DP0000.LXSSH0930000.18X.HAG 18–0143]                  individual during normal business
                                                  • follows the same public comment                                                                          hours. FRS is available 24 hours a day,
                                                                                                       Notice of Availability of the Draft                   7 days a week, to leave a message or a
                                               and Board resolution process as would
                                                                                                       Resource Management Plan/                             question with the above individual. You
                                               be required for amending the Standard
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                       Environmental Impact Statement for                    will receive a reply during normal
                                               MTW Agreement;
                                                  • executes its MTW CACC                              the San Juan Islands National                         business hours.
                                               Amendment to authorize participation                    Monument, Washington                                  SUPPLEMENTARY INFORMATION: The BLM
                                               in the MTW demonstration consistent                     AGENCY:   Bureau of Land Management,                  has prepared the San Juan Islands
                                               with the Operations Notice; and                         Interior.                                             National Monument Draft RMP/EIS to
                                                  • agrees to all the terms and                                                                              evaluate potential management
                                                                                                       ACTION: Notice of availability.
                                               conditions that apply to MTW agencies                                                                         strategies for the San Juan Islands


                                          VerDate Sep<11>2014   17:11 Oct 04, 2018   Jkt 247001   PO 00000   Frm 00072   Fmt 4703   Sfmt 4703   E:\FR\FM\05OCN1.SGM   05OCN1



Document Created: 2018-10-05 01:52:09
Document Modified: 2018-10-05 01:52:09
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesComment Due Date: November 19, 2018.
ContactMarianne Nazzaro, Director, Moving to Work Demonstration Program, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street SW, Room
FR Citation83 FR 50387 

2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR