[Federal Register Volume 80, Number 161 (Thursday, August 20, 2015)]
[Rules and Regulations]
[Pages 50564-50575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20551]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 982

[Docket No. FR-5453-F-02]
RIN 2577-AC86


Housing Choice Voucher Program: Streamlining the Portability 
Process

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

ACTION: Final rule.

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SUMMARY: This final rule amends HUD's regulations governing portability 
in the Housing Choice Voucher (HCV) program. Portability is a feature 
of the HCV program that allows an eligible family with a housing choice 
voucher to use that voucher to lease a unit anywhere in the United 
States where there is a public housing agency (PHA) operating an HCV 
program. The purpose of HUD's changes to the portability regulations is 
to enable PHAs to better serve families and expand housing 
opportunities by improving portability processes.

DATES: Effective: September 21, 2015.

FOR FURTHER INFORMATION CONTACT: Becky Primeaux, Director, Housing 
Voucher and Management Operations Division, Office of Housing Choice 
Vouchers, Office of Public and Indian Housing, Department of Housing 
and Urban Development, 451 7th Street SW., Room 4216, Washington, DC 
20410-8000, telephone number 202-708-0477 (this is not a toll-free 
number). Individuals with speech or hearing impairments may access this 
number through TTY by calling the Federal Relay Service at 800-877-8339 
(this is a toll-free number).

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of the Regulatory Action

    The purpose of this final rule is to improve the portability 
process of the HCV program. Under the HCV program, the participating 
family is free to choose any housing that meets the requirements of the 
program. As a means to enable housing choice and mobility to encourage 
social and economic integration, the HCV program offers voucher 
portability; that is, the ability of a voucher holder to use the 
voucher assistance outside the jurisdiction of the PHA that initially 
issues the family its voucher. While portability offers an important 
mechanism to increase housing choice, this feature has not been 
maximized by PHAs and participating families because the current 
process for allowing a family to move from one jurisdiction to another 
is time consuming and burdensome. HUD recognizes that for the HCV 
program's goals to support mobility and housing choice to be realized, 
the regulations governing the portability process must be clarified so 
that the burden on families and the PHA is reduced. This final rule 
completes the rulemaking process, which commenced in 2012, to revise 
the existing portability regulations to streamline the portability 
process and facilitate the ability of participating families to move to 
the jurisdiction of their choice.

B. Summary of the Major Provisions of the Regulatory Action

    The key regulatory changes by this final rule include:
     Removing the mandatory absorption requirement discussed in 
the proposed rule and clarifying the notification requirement for 
mandatory voucher suspension;
     Requiring an initial PHA to notify the local HUD office 
within 10 business days of a determination to deny a portability move 
based on insufficient funding;
     Providing that the voucher issued by the receiving PHA to 
the family may not expire before 30 calendar days has passed from the 
expiration date of the initial PHA's voucher;
     Requiring briefings for all participating on how 
portability works and the benefits of living in low-poverty census 
tracts; and
     Allowing a family to choose the receiving PHA to 
administer their voucher should they choose to use portability.

Please see Section III of this preamble, entitled ``Changes at the 
Final Rule Stage'' for a more detailed discussion of all the changes 
proposed by this rule.

C. Costs and Benefits

    The changes made by this final rule are designed to minimize burden 
for PHAs and participating HCV families and thereby increase the 
ability of participating families to live in areas of their choice or 
relocate to a new area for employment opportunities or to gain access 
to preferred schools for their children. In addition, the improved 
portability process contributes to helping victims of domestic 
violence, dating violence, sexual assault, and stalking have access to 
the resources necessary to relocate to a safe, stable home away from an 
abuser. Further, moves to areas with relatively low concentrations of 
neighborhood poverty have shown to relay important benefits to housing 
choice voucher families, in particular mental and physical health for 
adults and long-term educational and earning gains for young children. 
HUD recognizes that some policies may increase burden for some PHAs; 
however, the added clarity to the portability process afforded by this 
final rule is expected to improve the portability process and reduce 
the burden on families and PHAs.
    The streamlining changes do not add any substantial cost to the HCV 
program.

II. Background--the March 28, 2012, Proposed Rule

    On March 28, 2012, at 77 FR 18731, HUD published a rule in the 
Federal Register that proposed to amend HUD's regulations governing 
portability in the HCV program. The HCV program is the Federal 
Government's largest program for assisting very low-income families, 
the elderly, and persons with disabilities to afford decent, safe, and 
sanitary housing in the private market. The HCV program is authorized 
by section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 
1473f(o)) (1937 Act), and the HCV program regulations are found in 24 
CFR part 982.
    Housing choice vouchers are administered locally by PHAs. PHAs 
receive Federal funds from HUD to administer the HCV program. Under the 
HCV program, housing assistance is provided on behalf of the 
participating family who is responsible for finding a suitable housing 
unit of their choice where the owner agrees to rent under the program. 
The participant is free to choose any rental housing, including single 
family homes, townhouses, and apartments, that meets the requirements 
of the program and is not limited to units located in subsidized 
housing projects. Under certain circumstances, if authorized by the 
PHA, a family may use its voucher to purchase a modest home.
    A housing subsidy is paid to the landlord directly by the PHA on 
behalf of the participating family. The family then pays the difference 
between the actual rent charged by the landlord and the amount 
subsidized by the program. The PHA determines the amount that the 
family will contribute toward rent, which is generally 30 percent of 
its adjusted annual income. A key feature

[[Page 50565]]

of the HCV program is the mobility of the voucher assistance. Section 
8(r) of the 1937 Act provides that HCV participants may choose a unit 
that meets program requirements anywhere in the United States, provided 
that a PHA administering the tenant-based program has jurisdiction over 
the area in which the unit is located.
    The term ``portability'' refers to the process of leasing a 
dwelling unit with tenant-based housing voucher assistance outside of 
the jurisdiction of the PHA that initially issued the family its 
voucher (the initial PHA). The HCV regulations, found at 24 CFR 982.353 
through 982.355, detail where a family may move and the 
responsibilities of the initial PHA and the receiving PHA (the PHA with 
jurisdiction over the area to which the family desires to move). 
Situations have arisen over time that caused HUD to identify several 
issues that may delay or impede the ability of families to relocate 
with their voucher.
    This final rule takes into consideration public comment received on 
the March 28, 2012, proposed rule and: (1) More clearly delineates the 
roles of initial and receiving PHAs; (2) improves accountability in 
portability billing arrangements between PHAs; and (3) allows families 
to more easily search for and lease a rental unit in their desired 
location.

III. Changes at the Final Rule Stage

    In response to public comment and following further consideration 
of portability issues by HUD, this final rule makes certain changes to 
the regulations proposed in the March 28, 2012, rule. Changes made in 
response to public comment, issues raised by commenters, and HUD's 
responses to the comments are further addressed in Section III of this 
preamble.
    The following highlights the more substantive changes made to the 
proposed rule at this final rule stage:
    1. Definition of Absorption (Sec.  982.4(b)). To be consistent with 
HUD's portability regulations at Sec.  982.355(d), which allows a PHA 
to absorb the family instead of billing the initial PHA, HUD revises 
the definition of absorption under the HCV program to mean the point at 
which a receiving PHA starts making assistance payments with funding 
under its consolidated Annual Contributions Contract (ACC), rather than 
billing, the initial PHA. The current definition implies that, in order 
to absorb a family, the receiving PHA has to first bill the initial 
PHA. The definition in this final rule also amends the recently revised 
definition in HUD's ``Removal of Obsolete Section 8 Rental Assistance 
Certificate Program Regulations,'' \1\ which was effective on March 19, 
2015, to be consistent with this final portability final rule.
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    \1\ See http://www.gpo.gov/fdsys/pkg/FR-2015-02-17/pdf/2015-03037.pdf.
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    2. Mandatory voucher suspension (Sec.  982.4 and Sec.  982.303(c)). 
HUD revises the notification requirement and definition pertaining to 
mandatory voucher suspension to provide clarity and avoid the 
possibility of disputes between families and PHAs.
    3. Notification requirement before denying moves for insufficient 
funding (Sec.  982.354). HUD revises the written notification 
requirement to require an initial PHA to notify the local HUD office 
within 10 business days of a determination to deny a portability move 
based on insufficient funding.
    4. Portability processing procedures (Sec.  982.355(g)). HUD 
revises Sec.  982.355(g), which pertains to special purpose vouchers 
(SPVs), to clarify that PHAs must administer SPVs in accordance with 
HUD-established policy, including any alternative program requirements 
established by HUD for SPVs.
    5. Term of receiving PHA voucher (Sec.  982.355(c)(13)). HUD 
revises Sec.  982.355(c)(13) to provide that the voucher, issued by the 
receiving PHA to the family, may not expire before 30 calendar days 
have passed from the expiration date of the initial PHA's voucher. 
However, if the initial PHA's voucher has expired before the family 
arrives in the jurisdiction of the receiving PHA, the PHA must contact 
the initial PHA to determine if the initial PHA will extend the 
voucher. Unless the initial PHA is willing to extend its voucher under 
these circumstances, the receiving PHA may not issue the family a 
voucher.
    6. Administrative fee (Sec.  982.355(e)(3)). HUD revises Sec.  
982.355(e)(3) to clarify that if the ongoing administrative fees for 
the program have been prorated due to insufficient administrative fee 
funding, the administrative fee that the receiving PHA may bill the 
initial PHA is also subject to the same proration.
    7. Mandatory absorption of portability vouchers (Sec.  
982.355(d)(2)). HUD removes the mandatory voucher absorption 
requirement and instead states that if HUD should choose to require 
mandatory absorption, HUD must publish a notice in the Federal Register 
and provide PHAs or affected PHAs (if not applicable to all PHAs) with 
the opportunity for public comment under Sec.  982.355(d)(2)).
    8. Family briefings (Sec.  982.301(a)(2), (a)(3), (b)(1), (b)(4), 
and (b)(9)). HUD revises Sec.  982.301(a)(2), (a)(3), (b)(4), and 
(b)(9) to require briefings for all families with a HCV on the benefits 
of living in low-poverty census tracts.
    9. Providing list of landlords to moving families (Sec.  
982.301(b)(11)). HUD revises Sec.  982.301(b)(11) to replace the 
current reference to ``other parties known to the PHA'' for ``other 
resources (such as newspapers, organizations, and online search tools) 
known to the PHA'' that may assist the family in locating a unit, and 
to provide that the list of landlords or other resources covers areas 
outside of poverty or minority concentration.
    10. Allow a family to choose the receiving PHA (Sec.  982.355(b)). 
HUD revises Sec.  982.355(b) to allow a family to choose the receiving 
PHA to administer its voucher, if there is more than one PHA for the 
jurisdiction where the family seeks to lease a unit.
    11. Portability and Project-Based Vouchers (PBV) (Sec.  982.355). 
HUD did not adopt the change to Sec.  982.355(g) in the proposed rule, 
which stated that the provisions on portability do not apply to the PBV 
program. HUD is concerned that the provision as proposed could be 
misinterpreted to preclude any potential touchpoints between the two 
regulations. To address such issues, HUD plans to issue separate 
guidance on this subject.
    12. Other technical changes. In addition to the changes discussed 
above, HUD makes additional technical changes in this final rule. HUD 
revises Sec.  982.355(d)(1), which addresses HCV absorption by the 
receiving PHA and the availability of funding under the consolidated 
ACC for the receiving PHA's HCV program. HUD revises this section to 
remove the reference to the effective date of the Housing Assistance 
Payment (HAP) contract as the date that the receiving PHA must know if 
it has funding to absorb the voucher. Since the receiving PHA may 
choose to subsequently end a billing arrangement and absorb the family 
after the effective date of the HAP contract, the reference was 
confusing. The change clarifies that if the receiving PHA wishes to 
absorb the family into the receiving PHA program, the receiving PHA 
must have funding available under its consolidated ACC to do so.
    HUD makes technical revisions to Sec. Sec.  982.301(b)(1), 
982.554(c)(4), and 982.637(c)(1) to conform with the policy changes 
implemented elsewhere in this final rule. Finally, HUD revises 
Sec. Sec.  982.403(c), 982.551(f), and 982.641(b)(11) to correct an 
incorrect citation.

[[Page 50566]]

IV. Discussion of Public Comments Received on March 28, 2012, Proposed 
Rule

    The comment period for the proposed rule closed May 29, 2012. HUD 
received 52 comments on this proposed rule. The commenters included 
PHAs, organizations representing the public housing industry, tenant 
advocacy groups, State and local government agencies, and other 
interested members of the public.
    The majority of comments were from PHAs and public housing 
representative organizations. The PHAs that commented varied in size 
and geography. In general, the comments from PHAs were mixed. There 
were several proposals that PHAs supported (e.g., allowing an extension 
beyond 30 days for porting vouchers, and actively providing a list of 
landlords) and others to which PHAs expressed opposition (e.g., 
restricting receiving PHAs from rescreening the porting family). 
Advocacy group commenters opposed the proposal regarding rescreening of 
porting families by the receiving PHA and expressed concern about the 
civil rights implications of such proposals. Specific issues raised by 
commenters and HUD's responses are as follows:
    Comment: Concerns that the rule will increase regulatory burden and 
reduce local PHA discretion. Many commenters, while supportive of 
portability and HUD's goals to streamline and reduce administrative 
burdens, expressed concerns that the proposed regulatory changes did 
not sufficiently meet these goals. The commenters wrote that, rather 
than streamlining portability administration, the proposed rule would 
place additional requirements on PHAs (such as notifying the HUD field 
office before denying moves for insufficient funding, extending the 
term of the voucher for at least 30 days beyond the initial 
termination, requiring mandatory absorptions, and capping 
administrative fees). The commenters wrote that these policies would 
add to the burden and costs of administering vouchers, and suggested 
that HUD consider including the proposed new regulatory requirements in 
HUD's upcoming voucher administrative fee study to determine their real 
cost on PHAs and families. The commenters also stated that many of the 
new requirements would reduce local PHA discretion and flexibility.
    HUD Reponses: HUD understands that some policies may increase 
burden for some PHAs. However, HUD disagrees that other policies in 
this rule, such as capping administrative fees, will increase 
administrative burden. HUD further believes that the added clarity to 
the portability process afforded by this final rule will improve the 
portability process and reduce the burden on families and PHAs. To 
address such concerns, each of these four issues is specifically 
addressed below. With respect to HUD's study on voucher administrative 
fees, the study is complete and, because of the time frame, took into 
consideration costs associated with portability, before this 
rulemaking.
    Comment: Mandatory voucher suspension (Sec.  982.4 and Sec.  
982.303). Several commenters supported HUD's proposed change to the 
definition of ``suspension.'' The commenters wrote that the proposed 
language would increase the likelihood that families will successfully 
move during their voucher term. Other commenters, however, expressed 
concerns about the change, writing that the proposed revision would 
eliminate local discretion and increase administrative complexities and 
costs. The commenters wrote that the proposed change would require PHAs 
to monitor the term of the suspension and to notify families of that 
term and its subsequent expiration. The commenters also wrote that the 
mandatory suspension could result in two PHAs administering the same 
voucher, with the voucher remaining outstanding indefinitely and 
limiting the ability of the PHA to accurately report, budget, and 
forecast available voucher funding.
    HUD Response: The proposed rule provided that the suspension term 
starts when the family submits a request for tenancy approval and ends 
when the PHA approves or denies such request. While HUD understands how 
voucher suspensions may impact a PHA's processes, HUD believes the 
benefit to the family outweighs the possible increase in administrative 
burden placed on the PHA. Based on the length of time an inspection 
takes to be completed, and the possibility that the voucher could 
expire if it were not suspended, families may be harmed by such delays 
due to no fault of their own. Furthermore, PHAs should be actively 
monitoring and managing their process for approving the assisted 
tenancy so the mandatory suspension rule should not significantly 
affect a PHAs ability to report, budget, and forecast available 
funding.
    As noted earlier, HUD revised the proposed language on mandatory 
voucher suspensions to clarify that the suspension lasts until the 
family is notified in writing by the PHA whether the request for PHA-
approval of the tenancy has been approved or denied. Specifying that 
the family must be notified before the voucher suspension ends provides 
clarity and avoids potential disputes between families and PHAs. See 
Sec.  Sec.  982.4 and 982.303(c).
    Comment: Notification requirement before denying moves for 
insufficient funding (Sec.  982.354). Several commenters expressed 
support for this provision, but suggested that HUD specify the time 
period in which a PHA must submit notice to HUD, as well as the date by 
which HUD will respond to the PHA's written notice. Other commenters 
expressed opposition to the requirement. They said that the receiving 
PHA is already required to notify the initial PHA whether the receiving 
PHA will bill the initial PHA for the family, or will absorb the 
voucher, and such requirement results in additional delays for the 
family.
    HUD Response: Notification to the local HUD office when a PHA is 
denying moves due to insufficient funding is not a new requirement. 
Notice PIH 2012-42 (HA) \2\ provides for this notification requirement, 
and the inclusion of this provision in the proposed rule was intended 
to codify it in regulation. HUD understands that requiring the PHA to 
notify the local HUD office adds to the administrative process. 
However, this requirement is important to HUD in carrying out its 
oversight and monitoring function. Through the notification 
requirement, HUD can better ensure that participants are not 
unnecessarily prohibited from moving under portability or within the 
PHA jurisdiction.
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    \2\ See http://portal.hud.gov/hudportal/documents/huddoc?id=pih2012-42.pdf.
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    HUD agrees that more specificity is needed with respect to the time 
frames associated with this requirement. The final rule provides that a 
PHA must notify HUD in writing within 10 business days of the date on 
which the PHA determines it is necessary to deny moves based on 
insufficient funding. If HUD determines that the PHA lacks the grounds 
to deny moves due to insufficient funding, the PHA must immediately 
inform any affected family and immediately process the family's request 
to move.
    Comment: Require HUD approval to deny incoming families and other 
portability processing procedures (Sec.  982.355). Several commenters 
expressed support for the requirement that a PHA must have written 
approval from HUD before refusing any incoming families. The commenters 
also suggested that HUD should clarify the procedures that PHAs must 
use when

[[Page 50567]]

allowing portability of special purpose vouchers, referred to in this 
preamble as SPVs (e.g., Non-Elderly Disabled (NED), Veterans Affairs 
Supportive Housing (VASH), Family Unification Program (FUP), and 5-Year 
Mainstream). Commenters suggested that HUD specify limited 
circumstances in which a PHA may not be required to accept incoming 
families. Other commenters expressed concern that prohibiting the 
reversal of a decision to absorb vouchers will keep PHAs from deciding 
to absorb vouchers, thus increasing the amount of portability billing.
    HUD Response: HUD appreciates these comments and has made some 
clarifying changes in the final rule with respect to SPVs, in Sec.  
982.355(g). The proposed rule included an example of a circumstance 
where a PHA may be allowed to deny an incoming family--a PHA in a 
declared disaster area. However, HUD cannot predict all limited 
circumstances that would warrant a denial of incoming families and 
instead prefers to handle such requests on a case-by-case basis.
    In order to specify the procedures related to SPVs, the proposed 
rule set out requirements relating to portability moves of SPVs that 
were applicable to all SPVs; however, due to the intricacies of each 
SPV program, HUD determined that specific portability procedures for 
each SPV are better suited for guidance and not regulation.
    Finally, some commenters claimed that HUD's policy to prohibit PHAs 
from reversing a decision to absorb a voucher may cause some PHAs to be 
more inclined to not absorb a voucher. HUD was unable to find evidence 
that the requirement will have such an effect, or that the impact on 
portability billings will be significant. Moreover, HUD determined that 
it is important to eliminate the potential negative effect such a 
reversal could have on the family.
    Comment: Portability processing procedures and allowing email 
communications between initial and receiving PHA (Sec.  982.355). 
Several commenters expressed support for the requirement that PHAs 
communicate with other PHAs through email or other confirmed delivery 
methods. Commenters wrote that email is simpler than other methods, and 
its use has already been implemented by many PHAs. Some commenters 
wrote that some PHAs do not have email contacts for other PHAs, so it 
would be helpful for HUD to add an email field to the HUD-52665 form. 
Other commenters, however, had concerns about relying on email, and 
suggested that email supplement, rather than replace, other forms of 
communication.
    HUD Response: While HUD supports email as the preferred method of 
communication, the final rule allows for the use of other methods of 
communication that have delivery confirmation. HUD also made a 
technical change to Sec.  982.355(c)(4) to correct the reference to the 
``receiving'' and not the ``initial PHA.''
    Comment: Voucher term of receiving PHA voucher (Sec.  982.355). 
Several commenters expressed support for the requirement that PHAs 
provide an additional 30 days on the voucher term to accommodate the 
time a family needs to attend a briefing session and locate a new unit. 
Some commenters, however, suggested that the extension be provided at 
the agency's discretion and not be mandatory. Another commenter 
encouraged HUD to add language to the regulation making it clear that 
receiving PHAs may choose to issue vouchers with more than the 
additional 30 days of search time. Other commenters objected to 
extending the voucher for 30 days. These commenters wrote that a 
blanket, national requirement that voucher terms last an additional 30 
days would reduce the number of unit months leased nationally.
    HUD Response: While requiring a receiving PHA to add an additional 
30 calendar days to the term of the voucher may increase a PHA's 
administrative burden, providing an additional 30 calendar days to the 
receiving PHA's voucher term accommodates the additional time that the 
portability process requires, and does not count against the family's 
search time.
    HUD agrees that the language in the proposed rule was too 
restrictive and has changed the language in the final rule to 
accommodate extensions of the term of the receiving PHA voucher beyond 
30 calendar days if the receiving PHA chooses to allow such extensions. 
See Sec.  982.355(c)(13).
    Comment: Capping administrative fees (Sec.  982.355). Several 
commenters supported capping the amount paid to the receiving PHA for 
administrative fees at 100 percent of the receiving PHA's administrate 
fee rate. Other commenters were opposed to this proposal stating that 
it would be unfair for a receiving PHA to receive 100 percent of the 
fee since they are not doing 100 percent of the work.
    Several commenters requested clarification of the administrative 
fee structure. The commenters wrote the proposed rule does not address 
the proration issue and that it is unclear if the cap is based on the 
receiving PHAs' published fee or prorated fee. These commenters stated 
that they were also unclear which PHA is responsible for determining 
fees.
    Other commenters suggested alternatives or changes to the proposed 
administrative fee requirements. Commenters suggested that HUD consider 
prohibiting PHAs from prorating administrative fees for their outgoing 
portability vouchers and simply use the 80 percent of the published 
administrative fee. Other commenters suggested a flat administrative 
fee to be paid to the receiving PHA. Commenters also suggested that HUD 
consider reinstatement of the ``hard to house'' fee for SPVs.
    HUD Response: Under the proposed rule, the initial PHA must 
reimburse the receiving PHA for the lesser of 80 percent of the initial 
PHA ongoing administrative fee or 100 percent of the receiving PHA's 
ongoing administrative fee for each program unit. Under this structure, 
the initial PHA always gets to keep a percentage of the administrative 
fee of the voucher, and the receiving PHA does not bill for an amount 
that is higher than the receiving PHA's administrative fee. Prior to 
this final rule provision, if the receiving PHA's prorated 
administrative fee was $45 and the initial PHA's prorated 
administrative fee was $60, for example, the receiving PHA would 
receive $48 (or 80 percent of $60) for the voucher, which is more than 
the $45 it would get for administering its own vouchers. In the same 
scenario under this final rule, the receiving PHA would bill for $45 
for its share of the administrative fee and the initial PHA would keep 
$15 of the prorated monthly on-going admin fee for that unit under 
lease.
    HUD also revises Sec.  982.355(e)(3) to mirror, where appropriate, 
the language concerning ongoing administrative fees under current 
voucher regulations at Sec.  982.152(b)(1). The paragraph is also 
revised to clarify that the receiving PHA is not precluded from billing 
an initial PHA for more than 100 percent of its own administrative fee 
if both PHAs agree to a different amount of reimbursement that is more 
than 100 percent of the receiving PHA's administrative fees. HUD agrees 
with commenters that, as stated in the proposed rule, HUD does not 
address whether the administrative fee is based on the initial PHA's 
published or prorated fee. Therefore, HUD is adding language to clarify 
that, if administrative fees are prorated for the HCV program, the 
proration will apply to the amount of the administrative fee for which 
the receiving PHA may bill under this section (i.e., the receiving PHA 
may bill

[[Page 50568]]

for the lesser of 80 percent of the initial PHA's prorated ongoing 
administrative fee or 100 percent of the receiving PHA's prorated 
ongoing administrative fee).
    Comment: Mandatory absorption of portability vouchers (Sec.  
982.355(d)). Several commenters expressed support to require PHAs to 
absorb porting vouchers. However, several of the commenters requested 
clarification on the following areas: (1) The time period HUD will use 
to determine a PHA is below the 95 percent threshold; (2) how much 
notice a PHA will be provided before being required to absorb vouchers; 
(3) what data HUD will use to measure utilization of vouchers and 
budget authority; and (4) whether the receiving PHA will be prohibited 
from issuing vouchers to new families in their jurisdiction without 
having first absorbed all billed portability families.
    Several other commenters expressed opposition to the proposal, 
stating that the proposed provision fails to take local circumstances 
into consideration. Some commenters expressed concern about possible 
negative consequences for small PHAs. They wrote that mandatory 
absorption may hurt small PHAs if they have a small allocation of 
vouchers or some vouchers are canceled or terminated. Therefore, a 
small PHA may instead prefer to draw from its waiting list, instead of 
absorbing porting vouchers. Other commenters wrote that imposing 
requirements on some PHAs to absorb portable vouchers without making 
absorption the standard solution is problematic. Finally, commenters 
also expressed concern that the burden would fall disproportionately on 
SPVs.
    HUD Response: In this final rule, HUD removes the mandatory 
absorption requirement from the proposed rule. In considering the 
mandatory absorption requirement, HUD weighed various factors such as: 
(1) Monitoring leasing rates to assess when the requirement should be 
put in place and when it should be removed; (2) the impact on the 
utilization rate of initial PHAs (when a receiving PHA absorbs a port-
in voucher for which it was previously billing, it frees-up budget 
authority and reduces the number of unit months leased for the initial 
PHA, and the initial PHA may not have sufficient time to utilize its 
increased budget authority or increase its reduced unit months leased); 
(3) determining the timing of such assessments; (4) the impact on the 
receiving PHA's waiting list as absorption would reduce the number of 
families on the waiting list that could be served; (5) the impact such 
a requirement could have on renewal funding; and (6) the impact 
requiring the use of Net Restricted Position (NRP) would have on PHAs.
    After consideration of such factors, HUD decided not to adopt the 
mandatory absorption requirement as proposed. This final rule continues 
to afford HUD the ability to mandate absorptions on a case-by-case 
basis. Should HUD determine to impose such a requirement in the future 
for all PHAs that: (1) Are utilizing less than 95 percent of their 
available budget authority, and (2) have a leasing rate of less than 95 
percent, it shall do so through a notice in the Federal Register 
stating such proposed policy and procedures, with an opportunity for 
public comment for a period of no less than 60 calendar days. After 
consideration of public comments, HUD will publish a final notice in 
the Federal Register advising PHAs and the public of HUD's final 
determination on mandatory absorption.

V. Comments on Specific Issues Raised by HUD

    Comment: Transfer of ACC funds between initial and receiving PHA. 
HUD invited comments on how to redesign portability in a way that would 
eliminate or minimize the administrative burdens associated with 
portability billings. In the past, some PHAs suggested that HUD 
transfer funds from the initial PHA's consolidated ACC to the receiving 
PHA's consolidated ACC, in order to transfer the money without direct 
PHA involvement. Others suggested a sharing of costs by the initial and 
receiving PHA, whereby the initial PHA would pay to the receiving PHA 
no more than the family's subsidy at the initial PHA location.
    Of those commenters that responded to the request in the proposed 
rule, a few supported a transfer of funds between the initial and 
receiving PHAs for portability vouchers, while others were against it. 
Some commenters wrote that tracking transfers of this type would be an 
added administrative burden on HUD and PHAs. Commenters noted that PHAs 
with a high percentage of outgoing portability vouchers would be 
disproportionately affected by such transfers. A high volume of voucher 
transfers may jeopardize these PHAs' operations, and make the PHAs' 
budgets more unstable and less predictable. Commenters favoring the 
transfers of ACC funds for portability wrote that such transfers would 
result in numerous efficiencies by eliminating billing arrangements 
among PHAs.
    As for sharing the costs between PHAs, a commenter wrote that it is 
unfair for the initial PHA to pay no more than the family's subsidy to 
the receiving PHA because it does not recognize the real cost for the 
receiving PHA for administering the voucher, but the commenter 
suggested that an administrative fee should still be paid.
    HUD Response: HUD agrees with the commenters that expressed 
concerns that transfers of ACC funds under portability may have 
potential negative effect on PHAs, especially those with a high 
percentage of outgoing portability vouchers. Also the administrative 
burden of such transfers on HUD and PHAs outweighs eliminating or 
minimizing portability billings. With respect to limiting the amount 
the initial PHA pays for HAP under the billing option to no more than 
it would pay for that voucher if leasing in their jurisdiction, and 
having the receiving PHA share the cost, HUD concluded that such 
sharing of the costs would be administratively burdensome on PHAs, 
disproportionately affect PHAs with a high percentage of incoming 
portability vouchers, needlessly complicate the portability process, 
and would not reduce portability billings. Therefore, HUD did not 
incorporate this change into this final rule.
    Comment: Rescreening of families using portability. HUD solicited 
comments on how to minimize hardship on families when the receiving 
PHA's screening criteria is more stringent than the initial PHA's 
criteria. Several commenters supported a proposed restriction on 
rescreening of porting families. These commenters wrote that 
rescreening presents a significant barrier for voucher families trying 
to relocate to areas that offer greater opportunity. The commenters 
wrote that, for true mobility, rescreening must not be allowed.
    Other commenters, all PHAs, supported rescreening by the receiving 
PHA. A commenter wrote that PHAs cannot be expected to operate using 
multiple screening standards. A commenter also wrote that it is unfair 
to families that are ineligible under the receiving PHA's criteria, 
while those from another jurisdiction are allowed to participate in the 
HCV program.
    HUD Response: HUD agrees that receiving PHAs should be allowed to 
apply their own screening standards consistently among families in 
their program and for families moving into their jurisdiction under 
portability. However, it is important that moving families be informed 
that they are subject to screening based on the receiving PHA's 
criteria, and that the receiving PHA's screening criteria may be 
different than that of the initial PHA. Any potential hardship on the 
family may be minimized, to some extent, if

[[Page 50569]]

families are aware ahead of time if the receiving PHA will be 
rescreening incoming families. This information should be incorporated 
into the briefing packet as discussed below.
    Comment: Requirement and content of HCV family briefings. HUD 
solicited comments on whether the briefing should be revised to 
highlight the factors and trade-offs a family should consider when 
leasing a unit with voucher assistance. These factors include, but are 
not limited to: employment opportunities; safety, health and 
environmental amenities; public transportation; the quality of schools; 
access to social services; the quality of housing; and proximity to 
family and friends. Comments were also solicited on whether information 
on the benefits of living in low-poverty census tracts should be 
provided to all families selected to participate in the HCV program, 
and not just those families living in high-poverty census tracts, as is 
provided in the codified regulation. The majority of commenters 
expressed opposition to expanding the briefing requirements, stating 
that the existing briefing requirements are already complex and any 
expansion would increase administrative burden. Several commenters 
wrote that the requirements of the family briefings are already covered 
under the Section 8 Management Assessment Program indicator on 
expanding housing opportunities and deconcentration.
    HUD Response: HUD has determined that providing information about 
the factors the family should consider when determining where to lease 
a unit with voucher assistance will only be required as part of the 
briefing should HUD make such information available to PHAs for 
distribution. If required, PHAs are to provide such information as part 
of the oral briefing and the information packet provided to families 
selected to participate in the program. HUD therefore revises the 
regulation at Sec.  982.301 accordingly.
    HUD has also determined that an explanation of the benefits of 
living in low-poverty census tracts should be provided to all families, 
not just those families living in high-poverty census tracts. This 
explanation of benefits should also be included in the information 
packet provided to families selected to participate in the HCV program.
    In making this determination HUD considered the effect on both 
families and PHAs. While families who already live in low-poverty 
census tracts may be aware of the benefits of living in such areas, not 
all families may have such awareness, and HUD does not see any 
disadvantages in providing all families such information. While there 
may be some administrative cost to PHAs in providing such information 
to all families selected to participate in the program, this change 
will also provide some administrative relief for PHAs. With the change, 
PHAs will not have to determine which families live in high-poverty 
census tracts to determine who needs the additional briefing. In this 
regard, a commenter wrote that most PHAs already provide the same 
information regardless of where the family lives.
    HUD determined that information on how portability works should be 
provided during the briefing and as part of the information packet to 
every family, not just those who are eligible to move under 
portability. Accordingly, HUD revised the regulation at Sec.  
982.301(a)(2) and Sec.  982.301(b)(4). HUD is also revising some of the 
required content of the family briefings related to portability in this 
final rule. In addition to an explanation of how portability works, the 
briefing should also include information on how portability may affect 
the family's assistance through rescreening, changes in subsidy 
standards and payment standards, and any other elements of the 
portability process that may affect the family's assistance.
    Comment: Providing list of landlords. HUD solicited comments on 
whether to continue requiring PHAs to provide families with a list of 
landlords or other parties known to the PHA who may be willing to lease 
a unit to the family, and whether additional information on areas of 
opportunity or neighborhoods would be beneficial for families. The 
majority of commenters responding to this solicitation of comments were 
PHAs that supported the provision of a list of landlords. These 
commenters stated that such lists may be extremely helpful to voucher 
participants who are seeking housing and may not be aware of local 
housing opportunities. Some commenters suggested that providing the 
list to voucher participants should be voluntary. A minority of 
commenters expressed concern that such lists may result in steering 
families to high-poverty and racially concentrated areas, and that PHAs 
should be required to assess such lists to ensure they do not steer 
such families.
    HUD Response: HUD agrees that such written references could be 
essential to a successful housing search, particularly to families who 
are moving under portability and may not be familiar with the new 
jurisdiction. HUD also agrees that PHAs that choose to maintain such 
lists should be mindful of the need to provide housing opportunities to 
families in nonracially and nonpoverty concentrated areas. At this 
final rule stage, HUD retains the requirement to provide a list of 
landlords known to the PHA that may be willing to lease a unit to the 
family. Accordingly, HUD modifies Sec.  982.301(b)(11), to replace the 
current reference to ``other parties known to the PHA'' for ``other 
resources (such as newspapers, organizations, and online search tools) 
known to the PHA'' that may assist the family in locating a unit, and 
to provide that the list of landlords or other resources covers areas 
outside of poverty or minority concentration.
    Comment: Allow a family to select the receiving PHA. HUD solicited 
comments on whether a family should have the option to select the 
receiving PHA when more than one PHA has jurisdiction over the area to 
which the family wishes to move. Under the codified HCV program 
regulations, the initial PHA selects the receiving PHA for the porting 
family. The majority of commenters responding to this solicitation 
supported HUD's proposal to allow families to select the receiving PHA. 
Other commenters wrote that it would be burdensome for participants to 
have to review sometimes dozens of PHAs' information. These commenters 
suggested that HUD should maintain a national register of HCV program 
contacts for voucher participants, if the policy were to be 
implemented.
    HUD Response: HUD determined that families should be given the 
option to select the receiving PHA when there is more than one PHA that 
has jurisdiction over the area where the family wishes to lease a unit. 
As stated in the proposed rule, giving such choice to families allows 
families to select receiving PHAs that best meet their needs. While HUD 
understands that in certain cases it may be burdensome for the family 
to select a receiving PHA, this change does not preclude a family from 
seeking assistance from the initial PHA in selecting the receiving PHA 
if the family so chooses. The final rule, therefore, provides that it 
will be the responsibility of the initial PHA to inform the family of 
the PHAs that serve the area and provide the family with the contact 
information for those PHAs. The initial PHA is not required to provide 
information of the options or services that each PHA may offer.
    Accordingly, HUD is revising Sec.  982.355(b) to clarify that the 
family has the option to select the receiving PHA.

[[Page 50570]]

VI. Other Public Comments

    Comment: Limit liability for families to move with portability. 
Several commenters suggested that HUD adopt qualifying criteria (such 
as families moving for educational or employment opportunities, or 
families in flight of domestic violence) for moves under portability to 
ensure that families have a good reason to move. Other commenters 
suggested limiting the number of times a family may move to one move 
per year. Another commenter suggested that HUD limit the percentage of 
portability moves a receiving PHA must handle at a time.
    HUD Response: There are provisions already in place that allow PHAs 
to manage family moves. For example, current regulation at Sec.  
982.314(c) provides that the PHA may establish policies that prohibit 
any move during the initial lease term, and prohibits more than one 
move by the family during any 1-year period, either within the PHA's 
jurisdiction or through portability. Moreover, receiving PHAs may 
always choose to absorb into its voucher program a participant who has 
moved under portability, provided that the receiving PHA has funding 
available to do so.
    Comment: PHAs should be required to remind families they may move 
with portability. Some commenters suggested that PHAs should be 
required to actively remind families that they may move using the HCV 
portability process. Specifically, the commenters suggested that PHAs 
should be required to remind families at their annual recertification 
that they may move to other jurisdictions with continued voucher 
assistance.
    HUD Response: HUD's regulation at Sec.  982.301(a) and (b) provides 
for a family briefing and for an information packet to be given to the 
family when the family first participates in the voucher program. As 
provided in this final rule, every family must receive a briefing, and 
during such briefing, must be given information on how portability 
works. HUD finds this initial briefing to be sufficient and declines to 
require PHAs to remind families about portability at other times.
    Comment: Provide additional support for victims of domestic 
violence. Commenters wrote that victims of domestic violence need 
additional support, beyond briefings. The commenters were supportive of 
the effectiveness of transitional housing and briefing residents on 
such services.
    HUD Response: PHAs are required to offer victims of domestic 
violence, dating violence, sexual assault, and stalking the protections 
afforded under the Violence Against Women Act (VAWA) as reflected in 
HUD's regulations (24 CFR part 5, subpart L). These requirements 
include providing the victim with a notification of his or her rights 
under VAWA (24 CFR 5.2005). PHAs have the option and are encouraged to 
provide the victim with contact information for supportive services for 
victims of abuse. At a minimum, PHAs are encouraged to provide the 
number for the National Domestic Violence Hotline (1-800-799-SAFE 
(7233)) or the National Sexual Assault Hotline (1-800-656-HOPE (4673)) 
to victims. Victims who call these numbers may be able to locate 
supportive services in their area.
    Comment: Exempt small PHAs from portability requirements. Several 
commenters wrote that portability should not apply to participants in 
small PHAs' programs. The commenters pointed out that a small PHA often 
has to pay a significantly higher cost for vouchers that port to 
higher-cost areas than the small PHA would pay for vouchers in their 
own jurisdiction. This higher cost limits the small PHA's ability to 
lease its own vouchers and serve families in its jurisdiction.
    HUD Response: Since portability is authorized by statute, small 
PHAs cannot be exempted from allowing eligible families to move. 
Furthermore, HUD believes that portability is a key feature of the HCV 
program and families should not be denied the opportunity to move to 
other jurisdictions based on the size of the administering PHA. With 
regard to the cost impact, moves to higher-cost areas can impact the 
PHAs' ability to serve families from its waiting list. However, it is 
noted that these higher costs are taken into consideration in 
determining the PHA's renewal eligibility under the HCV program. 
Furthermore, the appropriations act typically provides that the higher 
costs of portability are an eligible category for set-aside funding 
that is used to adjust a PHA's renewal funding. Finally, as discussed 
in the preamble of this final rule, HUD has strived to clarify the 
portability process and thus reduce burden for PHAs.
    Comment: Concerns about billing for portability vouchers. Several 
commenters wrote that the rule encourages billing the initial PHA, but 
should instead encourage absorption of vouchers by the receiving PHA. 
The commenters wrote that if a receiving PHA can receive 100 percent of 
its fee for a billed incoming voucher and only 80 percent of its fee 
for its own voucher, a PHA would have a strong incentive to bill rather 
than absorb the voucher. Several commenters also wrote that delays in 
payment by the initial PHA to a receiving PHA are a burden. They 
suggested that HUD should impose a firm deadline by which the initial 
PHA must pay its bills or establish other sanctions or tools for a PHA 
to use for chronic late-payers. Commenters also suggested that HUD 
develop a program to be used by all PHAs in tracking portability 
payments.
    HUD Response: Prior to this final rule, a receiving PHA would be 
paid 80 percent of the initial PHA's administrative fees. The March 28, 
2012, rule proposed and this final rule revises the administrative fee 
amount that can be billed to the initial PHA to the lesser of the 
amount currently provided in the codified regulation (80 percent of the 
initial PHA's ongoing administrative fee or 100 percent of the 
receiving PHA's administrative fee). Under this rule, a receiving PHA 
cannot bill for more than the administrative fee it would otherwise 
receive for its own program, regardless of whether the initial PHA's 
administrative fee is higher than the receiving PHA's administrative 
fee. Prorations applicable to an initial PHA's administrative fees due 
to an appropriations act that does not fully fund administrative-fee 
eligibility will apply to those amounts. Therefore, the receiving PHA 
cannot bill and receive more in administrative fees for a portability 
voucher than it would receive for its own vouchers, unless both PHAs 
have agreed on a different amount of reimbursement.
    As noted earlier in this preamble, HUD already imposes a firm 
deadline on portability billings and provides mechanisms that the 
receiving PHA may use in cases where the initial PHA fails to comply 
with the initial and subsequent billing due dates. (See Section 8 of 
Notice PIH 2012-42, Housing Choice Voucher Family Moves with Continued 
Assistance.)
    Comment: HUD should present data to define portability success for 
voucher-assisted households. Commenters suggested that the use of data 
to define portability success would be beneficial for stakeholders to 
more fully comment on the proposed rule. A commenter suggested that 
American Community Survey data could be used, in conjunction with HUD 
data, to provide an overlay of assisted and unassisted households to 
determine at each income quintile, how many households move and how 
often they move within their existing city and county, outside of their 
county, or outside of their State. The commenter further wrote that 
such an analysis may help show that a high percentage of mobility moves 
results in

[[Page 50571]]

voucher-assisted households relocating to neighborhoods of opportunity 
or deconcentrated neighborhoods.
    HUD Response: HUD believes that portability success can be defined 
in a multitude of ways and is unclear how the analysis described by the 
commenter would successfully indicate the effects of portability on 
families. While HUD appreciates the suggestion for additional research 
into portability success, the intent of this final rule is to simplify 
the administration of portability issues within the voucher program. 
HUD believes this analysis is not necessary for successful 
implementation of the proposed reforms.

VII. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and therefore subject to review by the Office of Management and Budget 
(OMB) in accordance with the requirements of the order. Executive Order 
13563 (Improving Regulations and Regulatory Review) directs executive 
agencies to analyze regulations that are ``outmoded, ineffective, 
insufficient, or excessively burdensome, and to modify, streamline, 
expand, or repeal them in accordance with what has been learned.'' 
Executive Order 13563 also directs that, where relevant, feasible, and 
consistent with regulatory objectives, and to the extent permitted by 
law, agencies are to identify and consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public. This rule was determined to be a ``significant regulatory 
action'' as defined in section 3(f) of Executive Order 12866 (although 
not an economically significant regulatory action, as provided under 
section 3(f)(1) of the Executive order).
    This final rule amends HUD's regulations governing portability in 
the HCV program. These regulatory changes streamline the portability 
process and enable initial and receiving PHAs to better serve families 
and expand housing opportunities. HUD's analysis determined that these 
regulatory amendments will not have an economic effect of greater than 
$100 million but would yield certain nontangible benefits. The findings 
of HUD's analysis are summarized below, and addressed in more detail in 
the accompanying regulatory analysis:
    1. Benefits of final rule. The HCV portability policy helps ensure 
that families have the opportunity to relocate in order to pursue 
increased or new employment opportunities or to gain access to 
preferred schools for their children. An efficient portability process 
also helps ensure that victims of domestic violence and stalking have 
access to the resources necessary to relocate to a safe, stable home 
away from an abuser.
    Moves to areas with relatively low concentrations of neighborhood 
poverty have important benefits to housing choice voucher families. 
Research from HUD's Moving to Opportunity (MTO) demonstration \3\ 
showed that moving from housing developments in high-poverty 
neighborhoods to private housing in lower-poverty neighborhoods had 
strong positive effects on girls' and adults' mental health, as well as 
on adults' physical health. Under the Gautreaux desegregation program 
in Chicago,\4\ children and adults who moved with HCV assistance to 
middle-income suburbs appear to have experienced educational gains 
compared to families that remained in urban or higher-poverty 
neighborhoods. It is expected that the rule will remove potential 
barriers to mobility and will increase the number of families that may 
move to areas of opportunities. Some research indicates that families 
often use their vouchers to move to better opportunities, including 
employment opportunities.
---------------------------------------------------------------------------

    \3\ See: http://www.huduser.org/publications/pdf/MTOFHD_fullreport_v2.pdf.
    \4\ The Gatreaux desegregation program is a housing 
desegregation program initiated by court order. In a consent decree, 
the court ordered the Chicago Housing Authority to provide 
scattered-site housing for public housing residents residing in 
poverty concentrated areas.
---------------------------------------------------------------------------

    2. Costs of rule. HUD expects that portability billing arrangements 
in this rule will place only a slightly additional administrative 
burden on PHAs. Portability may add to the cost of the HCV program 
through higher HAP costs, but the fiscal year (FY) 2015 appropriations 
act provides a set-aside of up to $120 million from HCV renewal funds 
to allow HUD to provide PHAs with additional renewal funding under 
certain circumstances. One of the eligible categories permitted under 
the appropriations act is for increased costs resulting from unforeseen 
circumstances and portability. HUD is in the process of receiving the 
FY 2015 set-aside applications; however, an average of $23 million has 
been found eligible in the past for PHAs for portability adjustments.
    4. Administrative Fee. Prior to this rule, for a voucher in a 
portability billing arrangement between the initial PHA and receiving 
PHA, the initial PHA had to pay the receiving PHA 80 percent of its 
administrative fee for each month that the family received assistance 
at the receiving PHA, unless the PHAs mutually agreed to a different 
billing amount. Removal of potential barriers to mobility is expected 
to increase the number of portability vouchers and, thus, increase the 
amount of administrative fee transfers between PHAs.
    The final rule would set the maximum amount that the initial PHA is 
required to pay at 100 percent of the receiving PHA's administrative 
fee rate. In other words, the initial PHA would reimburse the receiving 
PHA for the lesser of: (1) 80 percent of the initial PHA's ongoing fee 
or (2) the full amount of the receiving PHA's administrative fee. This 
change eliminates the incentive for a receiving PHA with a lower 
administrative fee to bill an initial PHA with a higher administrative 
fee in order to receive a higher administrative fee than it would 
normally earn from HUD. This action should reduce portability billings 
for those PHAs for whom 80 percent of the initial PHA's fee is more 
than 100 percent of their own administrative fee. For example, assume 
that a receiving PHA's administrative fee is $60. Prior to this rule, 
if a family moves to the receiving PHA's jurisdiction from an initial 
PHA that receives $100 in administrative fees for a housing voucher, 
the receiving PHA may bill the initial PHA for $80, which is $20 more 
than the PHA would earn if it simply absorbed the voucher. Under the 
final rule, the receiving PHA will receive $60 regardless of whether 
the receiving PHA bills the initial PHA or absorbs the family into its 
own program.
    The full economic analysis is available for review at 
www.regulations.gov. The docket file for this rule is available for 
public inspection in the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410-0500. Due to security measures at 
the HUD Headquarters building, please schedule an appointment to review 
the docket file by calling the Regulations Division at 202-402-3055 
(this is not a toll-free number). Individuals with speech or hearing 
impairments may access this number via TTY by calling the Federal Relay 
Service at 800-877-8339 (this is a toll-free number).

[[Page 50572]]

Information Collection Requirements

    The information collection requirements in the proposed rule were 
submitted to OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520). In accordance with the Paperwork Reduction Act, an agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information, unless the collection displays a currently 
valid OMB control number. The information collection requirements of 
this rule was assigned this OMB Control Number 2577-0169.

Unfunded Mandates Reform Act (UMRA)

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

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive order. This final rule does not have 
federalism implications and would not impose substantial direct 
compliance costs on State and local governments or preempt State law 
within the meaning of the Executive order.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 605(b)) generally requires 
an agency to conduct a regulatory flexibility analysis of any rule 
subject to notice and comment rulemaking requirements, unless the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities. This final rule is 
solely concerned with the portability feature of the voucher program. 
There currently are approximately 739 small PHAs (i.e., PHAs with less 
than 250 public housing units or vouchers) \5\ that will be subject to 
the rule. Since portability is authorized by statute, small PHAs 
administering the HCV program cannot be exempt from allowing eligible 
families to move, and HUD has strived to reduce burden for all PHAs. 
Therefore, while this final rule will impact these PHAs, the impact 
will not be significant. As stated previously in this preamble, through 
the amendments to the HCV regulations provided in this rule, HUD will 
reduce the administrative burden of portability for both PHAs and 
families, reduce portability billing arrangements between PHAs, and 
ensure maximum family choice in locating suitable housing. HUD also 
removed the proposed requirement for mandatory absorption of 
portability vouchers by the receiving PHA that was in the proposed 
rule. Through this final rule, HUD strives to clarify the portability 
process and reduce administrative burden for all PHAs, large or small. 
As explained more fully above in the ``Executive Order 12866 and 
13563'' section of this preamble, the benefits of the regulatory 
changes will largely outweigh the administrative and compliance costs 
to PHAs. Accordingly, this rule will not have a significant economic 
impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \5\ The number of 739 PHAs includes HCV-only PHAs and PHAs with 
combined HCV-public housing portfolios. This number does not include 
public housing-only PHAs, which is the largest category of small 
PHAs but which are not affected by this rule.
---------------------------------------------------------------------------

Environmental Impact

    This rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule 
is categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects in 24 CFR Part 982

    Grant programs-housing and community development, Grant programs-
Indians, Indians, Public housing, Rent subsidies, Reporting and 
recordkeeping requirements.
    Accordingly, HUD amends 24 CFR part 982, as follows:

PART 982--SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER 
PROGRAM

0
1. The authority citation for 24 CFR part 982 continues to read as 
follows:

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


0
2. In Sec.  982.4, in paragraph (b), revise the definitions of 
``Absorption'' and ``Suspension'' to read as follows:


Sec.  982.4  Definitions.

* * * * *
    (b) * * *
    Absorption. For purposes of subpart H, the point at which a 
receiving PHA starts making assistance payments with funding under its 
consolidated ACC, rather than billing, the initial PHA.
* * * * *
    Suspension. The term on the family's voucher stops from the date 
that the family submits a request for PHA approval of the tenancy, 
until the date the PHA notifies the family in writing whether the 
request has been approved or denied.
* * * * *

0
3. In Sec.  982.54, revise paragraphs (d)(2) and (19) to read as 
follows:


Sec.  982.54  Administrative plan.

* * * * *
    (d) * * *
    (2) Issuing or denying vouchers, including PHA policy governing the 
voucher term and any extensions of the voucher term. If the PHA decides 
to allow extensions of the voucher term, the PHA administrative plan 
must describe how the PHA determines whether to grant extensions, and 
how the PHA determines the length of any extension.
* * * * *
    (19) Restrictions, if any, on the number of moves by a participant 
family (see Sec.  982.354(c));
* * * * *

0
4. In Sec.  982.301, revise paragraphs (a)(2), (a)(3), (b)(1), (b)(4), 
(b)(9), and (b)(11) to read as follows:


Sec.  982.301  Information when family is selected.

    (a) * * *
    (2) An explanation of how portability works. The PHA may not 
discourage the family from choosing to live anywhere in the PHA 
jurisdiction, or outside the PHA jurisdiction under portability 
procedures, unless otherwise expressly authorized by statute, 
regulation, PIH Notice, or court order. The family must be informed of 
how portability may affect the family's assistance through screening, 
subsidy standards, payment standards, and any other elements of the 
portability process which may affect the family's assistance.
    (3) The briefing must also explain the advantages of areas that do 
not have a high concentration of low-income families.
* * * * *

[[Page 50573]]

    (b) * * *
    (1) The term of the voucher, voucher suspensions, and PHA policy on 
any extensions of the term. If the PHA allows extensions, the packet 
must explain how the family can request an extension;
* * * * *
    (4) Where the family may lease a unit and an explanation of how 
portability works, including information on how portability may affect 
the family's assistance through screening, subsidy standards, payment 
standards, and any other elements of the portability process which may 
affect the family's assistance.
* * * * *
    (9) Materials (e.g., brochures) on how to select a unit and any 
additional information on selecting a unit that HUD provides.
* * * * *
    (11) A list of landlords known to the PHA who may be willing to 
lease a unit to the family or other resources (e.g., newspapers, 
organizations, online search tools) known to the PHA that may assist 
the family in locating a unit. PHAs must ensure that the list of 
landlords or other resources covers areas outside of poverty or 
minority concentration.
* * * * *

0
5. In Sec.  982.303, revise paragraph (c) to read as follows:


Sec.  982.303  Term of voucher.

* * * * *
    (c) Suspension of term. The PHA must provide for suspension of the 
initial or any extended term of the voucher from the date that the 
family submits a request for PHA approval of the tenancy until the date 
the PHA notifies the family in writing whether the request has been 
approved or denied.
* * * * *


Sec.  982.314  [Redesignated as Sec.  982.354]

0
6. Redesignate Sec.  982.314 as Sec.  982.354.
0
7. Section 982.353 is amended as follows:
0
a. Remove the word ``or'' from paragraph (c)(1) and in its place add 
the word ``nor'';
0
b. Revise paragraphs (c)(3) and (d)(2);
0
c. Remove paragraph (d)(3); and
0
d. Remove paragraph (e), redesignate paragraph (f) as paragraph (e), 
and revise newly redesignated paragraph (e).
    The revisions read as follows:


Sec.  982.353  Where family can lease a unit with tenant-based 
assistance.

* * * * *
    (c) * * *
    (3) If the initial PHA approves, the family may lease a unit 
outside the PHA jurisdiction under portability procedures.
    (d) * * *
    (2) If a family is a participant in the initial PHA's voucher 
program, income eligibility is not redetermined when the family moves 
to the receiving PHA program under portability procedures.
* * * * *
    (e) Freedom of choice. The PHA may not directly or indirectly 
reduce the family's opportunity to select among available units, except 
as provided in paragraph (a) of this section, or elsewhere in this part 
982 (e.g., prohibition on the use of ineligible housing, housing not 
meeting HQS, or housing for which the rent to owner exceeds a 
reasonable rent). However, the PHA must provide families the 
information required in Sec.  982.301 for both the oral briefing and 
the information packet to ensure that they have the information they 
need to make an informed decision on their housing choice.

0
8. Amend newly designated Sec.  982.354 as follows:
0
a. Revise paragraphs (c)(1) and (2);
0
b. Remove paragraphs (c)(3) and (d)(1);
0
c. Redesignate paragraph (d)(2) as paragraph (d); and
0
d. Revise paragraph (e)(1).
    The revisions read as follows:


Sec.  982.354  Move with continued tenant-based assistance.

* * * * *
    (c) How many moves. (1) A participant family may move with 
continued assistance under the program, either inside the PHA 
jurisdiction, or under the portability procedures (See Sec.  982.353) 
in accordance with the PHA's policies.
    (2) Consistent with applicable civil rights laws and regulations, 
the PHA may establish policies that:
    (i) Prohibit any move by the family during the initial lease term; 
and
    (ii) Prohibit more than one move by the family during any one-year 
period.
* * * * *
    (e) When the PHA may deny permission to move. (1) The PHA may deny 
permission to move if the PHA does not have sufficient funding for 
continued assistance. The PHA must provide written notification to the 
local HUD Office within 10 business days of determining it is necessary 
to deny moves to a higher-cost unit based on insufficient funding.
* * * * *

0
9. Revise Sec.  982.355 to read as follows:


Sec.  982.355  Portability: Administration by initial and receiving 
PHA.

    (a) General. When a family moves under portability (in accordance 
with Sec.  982.353(b)) to an area outside the initial PHA jurisdiction, 
the receiving PHA must administer assistance for the family if a PHA 
with a HCV program has jurisdiction in the area where the unit is 
located.
    (b) Requirement to administer assistance. A receiving PHA cannot 
refuse to assist incoming portable families or direct them to another 
neighboring PHA for assistance. If there is more than one such PHA, the 
initial PHA provides the family with the contact information for the 
receiving PHAs that serve the area, and the family selects the 
receiving PHA. The family must inform the initial PHA which PHA it has 
selected as the receiving PHA. In cases where the family prefers not to 
select the receiving PHA, the initial PHA selects the receiving PHA on 
behalf of the family. HUD may determine in certain instances that a PHA 
is not required to accept incoming portable families, such as a PHA in 
a declared disaster area. However, the PHA must have approval in 
writing from HUD before refusing any incoming portable families.
    (c) Portability procedures. The following portability procedures 
must be followed:
    (1) When the family decides to use the voucher outside of the PHA 
jurisdiction, the family must notify the initial PHA of its desire to 
relocate and must specify the location where it wants to live.
    (2) The initial PHA must determine the family's eligibility to move 
in accordance with Sec. Sec.  982.353 and 982.354.
    (3) Once the receiving PHA is determined in accordance with 
paragraph (b) of this section, the initial PHA must contact the 
receiving PHA, via email or other confirmed delivery method, prior to 
approving the family's request to move in order to determine whether 
the voucher will be absorbed or billed by the receiving PHA. The 
receiving PHA must advise the initial PHA in writing, via email or 
other confirmed delivery method, of its decision.
    (4) If the receiving PHA notifies the initial PHA that it will 
absorb the voucher, the receiving PHA cannot reverse its decision at a 
later date without consent of the initial PHA.
    (5) If the receiving PHA will bill the initial PHA for the 
portability voucher and the cost of the HAP will increase due to the 
move, the initial PHA may deny the move if it does not have sufficient 
funding for continued

[[Page 50574]]

assistance in accordance with Sec.  982.354 (e)(1).
    (6) If a billing arrangement is approved by the initial PHA or if 
the voucher is to be absorbed by the receiving PHA, the initial PHA 
must issue the family a voucher to move, if it has not already done so, 
and advise the family how to contact and request assistance from the 
receiving PHA.
    (7) The initial PHA must promptly notify the receiving PHA to 
expect the family. The initial PHA must give the receiving PHA the form 
HUD-52665, the most recent form HUD 50058 (Family Report) for the 
family, and all related verification information.
    (8) The family must promptly contact the receiving PHA in order to 
be informed of the receiving PHA's procedures for incoming portable 
families and comply with these procedures. The family's failure to 
comply may result in denial or termination of the receiving PHA's 
voucher.
    (9) The receiving PHA does not redetermine eligibility for a 
participant family. However, for a family that was not already 
receiving assistance in the PHA's HCV program, the initial PHA must 
determine whether the family is eligible for admission to the receiving 
PHA's HCV program. In determining income eligibility, the receiving 
PHA's income limits are used by the initial PHA.
    (10) When a receiving PHA assists a family under portability, 
administration of the voucher must be in accordance with the receiving 
PHA's policies. This requirement also applies to policies of Moving to 
Work agencies. The receiving PHA procedures and preferences for 
selection among eligible applicants do not apply to the family, and the 
receiving PHA waiting list is not used.
    (11) If the receiving PHA opts to conduct a new reexamination for a 
current participant family, the receiving PHA may not delay issuing the 
family a voucher or otherwise delay approval of a unit.
    (12) The receiving PHA must determine the family unit size for the 
family, and base its determination on the subsidy standards of the 
receiving PHA.
    (13) The receiving PHA must issue a voucher to the family. The term 
of the receiving PHA voucher may not expire before 30 calendar days 
from the expiration date of the initial PHA voucher. If the voucher 
expires before the family arrives at the receiving PHA, the receiving 
PHA must contact the initial PHA to determine if it will extend the 
voucher.
    (14) Once the receiving PHA issues the portable family a voucher, 
the receiving PHA's policies on extensions of the voucher term apply. 
The receiving PHA must notify the initial PHA of any extensions granted 
to the term of the voucher.
    (15) The family must submit a request for tenancy approval to the 
receiving PHA during the term of the receiving PHA voucher. As required 
in Sec.  982.303, if the family submits a request for tenancy approval 
during the term of the voucher, the PHA must suspend the term of that 
voucher.
    (16) The receiving PHA must promptly notify the initial PHA if the 
family has leased an eligible unit under the program, or if the family 
fails to submit a request for tenancy approval for an eligible unit 
within the term of the voucher.
    (17) At any time, either the initial PHA or the receiving PHA may 
make a determination to deny or terminate assistance to the family in 
accordance with Sec.  982.552 and 982.553.
    (d) Absorption by the receiving PHA. (1) If funding is available 
under the consolidated ACC for the receiving PHA's HCV program, the 
receiving PHA may absorb the family into the receiving PHA's HCV 
program. After absorption, the family is assisted with funds available 
under the consolidated ACC for the receiving PHA's HCV program.
    (2) HUD may require that the receiving PHA absorb all, or a portion 
of, incoming portable families. Under circumstances described in a 
notice published in the Federal Register, HUD may determine that 
receiving PHAs, or categories of receiving PHAs, should absorb all or a 
portion of incoming portable families. If HUD makes such a 
determination, HUD will provide an opportunity for public comment, for 
a period of no less than 60 calendar days, on such policy and 
procedures. After consideration of public comments, HUD will publish a 
final notice in the Federal Register advising PHAs and the public of 
HUD's final determination on the subject of mandatory absorption of 
incoming portable families.
    (3) HUD may provide financial or nonfinancial incentives (or both) 
to PHAs that absorb portability vouchers.
    (e) Portability billing. (1) To cover assistance for a portable 
family that was not absorbed in accordance with paragraph (d) of this 
section, the receiving PHA may bill the initial PHA for housing 
assistance payments and administrative fees.
    (2) The initial PHA must promptly reimburse the receiving PHA for 
the full amount of the housing assistance payments made by the 
receiving PHA for the portable family. The amount of the housing 
assistance payment for a portable family in the receiving PHA program 
is determined in the same manner as for other families in the receiving 
PHA program.
    (3) The initial PHA must promptly reimburse the receiving PHA for 
the lesser of 80 percent of the initial PHA ongoing administrative fee 
or 100 percent of the receiving PHA's ongoing administrative fee for 
each program unit under HAP contract on the first day of the month for 
which the receiving PHA is billing the initial PHA under this section. 
If administrative fees are prorated for the HCV program, the proration 
will apply to the amount of the administrative fee for which the 
receiving PHA may bill under this section (e.g., the receiving PHA may 
bill for the lesser of 80 percent of the initial PHA's prorated ongoing 
administrative fee or 100 percent of the receiving PHA's prorated 
ongoing administrative fee). If both PHAs agree, the PHAs may negotiate 
a different amount of reimbursement.
    (4) When a portable family moves out of the HCV program of a 
receiving PHA that has not absorbed the family, the PHA in the new 
jurisdiction to which the family moves becomes the receiving PHA, and 
the first receiving PHA is no longer required to provide assistance for 
the family.
    (5) In administration of portability, the initial PHA and the 
receiving PHA must comply with financial procedures required by HUD, 
including the use of HUD-required billing forms. The initial and 
receiving PHA must also comply with billing and payment deadlines under 
the financial procedures.
    (6) A PHA must manage the PHA HCV program in a manner that ensures 
that the PHA has the financial ability to provide assistance for 
families that move out of the PHA's program under the portability 
procedures, and that have not been absorbed by the receiving PHA, as 
well as for families that remain in the PHA's program.
    (7) HUD may reduce the administrative fee to an initial or 
receiving PHA if the PHA does not comply with HUD portability 
requirements.
    (f) Portability funding. (1) HUD may transfer units and funds for 
assistance to portable families to the receiving PHA from funds 
available under the initial PHA ACC.
    (2) HUD may provide additional funding (e.g., funds for incremental 
units) to the initial PHA for funds transferred to a receiving PHA for 
portability purposes.

[[Page 50575]]

    (3) HUD may provide additional funding (e.g., funds for incremental 
units) to the receiving PHA for absorption of portable families.
    (4) HUD may require the receiving PHA to absorb portable families.
    (g) Special purpose vouchers. (1) The initial PHA must submit the 
codes used for special purpose vouchers on the form HUD-50058, Family 
Report, and the receiving PHA must maintain the codes on the Family 
Report, as long as the Receiving PHA chooses to bill the initial PHA.
    (2) Initial and receiving PHAs must administer special purpose 
vouchers, such as the HUD-Veterans Affairs Supportive Housing vouchers, 
in accordance with HUD-established policy in cases where HUD has 
established alternative program requirements of such special purpose 
vouchers.


Sec.  982.403  [Amended]

0
10. In Sec.  982.403, paragraph (b)(3) is amended by removing the 
citation ``Sec.  982.314'' and in its place adding the citation ``Sec.  
982.354.''


Sec.  982.551  [Amended]

0
11. In Sec.  982.551, paragraph (f) is amended by removing the citation 
``Sec.  982.314'' and in its place adding the citation ``Sec.  
982.354.''

0
12. In Sec.  982.554, revise paragraph (c)(4) to read as follows:


Sec.  982.554  Informal review for applicant.

* * * * *
    (c) * * *
    (4) A PHA determination not to approve an extension of the voucher 
term.
* * * * *

0
13. In Sec.  982.555, revise paragraph (b)(4) to read as follows:


Sec.  982.555  Informal hearing for participant.

* * * * *
    (b) * * *
    (4) A PHA determination not to approve an extension of the voucher 
term.
* * * * *

0
14. In Sec.  982.637, revise paragraph (c)(1) to read as follows:


Sec.  982.637  Homeownership option: Move with continued tenant-based 
assistance.

* * * * *
    (c) * * *
    (1) Lack of funding to provide continued assistance. The PHA may 
deny permission to move with continued rental or homeownership 
assistance if the PHA determines that it does not have sufficient 
funding to provide continued assistance. The PHA must provide written 
notification to the local HUD Office within 10 business days of 
determining it is necessary to deny moves based on insufficient 
funding.
* * * * *


Sec.  982.641  [Amended]

0
15. Section 982.641(b)(11) is amended by removing the citation ``Sec.  
982.314'' and in its place adding the citation ``Sec.  982.354.''

    Dated: August 13, 2015.
Jemine A. Bryon,
General Deputy Assistant Secretary for Public and Indian Housing.
    Approved on August 13, 2015.
Nani A. Coloretti,
Deputy Secretary.
[FR Doc. 2015-20551 Filed 8-19-15; 8:45 am]
BILLING CODE 4210-67-P