Electronic Transmission of Required Family Data for Public Housing, Indian Housing, and the Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation Programs

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Public and Indian Housing

24 CFR Parts 813, 905, 908, and 913

[Docket No. R-94-1747; FR-3730-P-01]

RIN 2577-AB47

Electronic Transmission of Required Family Data for Public

Housing, Indian Housing, and the Section 8 Rental Certificate, Rental

Voucher, and Moderate Rehabilitation Programs

AGENCY: Office of the Assistant Secretary for Public and Indian

Housing, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule requires all housing agencies (HAs) to

submit certain data electronically to HUD in a HUD prescribed format.

For HAs that are not already automated or who determine that automation

is not cost-effective, transmission of the data through the use of a

service bureau is permitted. Electronic transmission is necessary

because the manual submission of HUD forms has become a burden to HAs

and HUD. This proposed rule applies to projects administered under the

public housing, Indian housing, and Section 8 Rental Certificate,

Rental Voucher, and Moderate Rehabilitation programs. A similar rule,

24 CFR part 208, was issued with respect to multifamily subsidized

projects administered under programs subject to the oversight of the

Assistant Secretary for Housing-Federal Housing Commissioner.

DATES: Comments due date: December 5, 1994.

ADDRESSES: Comments on this proposed rule may be submitted to the Rules

Docket Clerk, Office of General Counsel, Room 10276, Department of

Housing and Urban Development, 451 Seventh Street, S.W., Washington,

D.C. 20410. Communications should refer to the above docket number and

title. A copy of each communication submitted will be available for

public inspection between 7:30 a.m. and 5:30 p.m. at the above address.

Facsimile (FAX) comments are not acceptable.

FOR FURTHER INFORMATION CONTACT: For Technical Information--Katherine

M. Dillon, Director, Information Services Division, Office of Public

and Indian Housing, Room 4248, telephone (202) 708-5285. For Program

Information--Edward C. Whipple, Director, Occupancy Division, Office of

Public and Indian Housing, Room 4206, telephone (202) 708-0744,

Department of Housing and Urban Development, 451 Seventh Street, S.W.,

Washington, D.C. 20410. Hearing or speech-impaired individuals may call

HUD's TDD number (202) 708-4594. (These telephone numbers are not toll-

free.)

SUPPLEMENTARY INFORMATION:

I. Paperwork Burden

The information collection requirements contained in this proposed

rule have been submitted to the Office of Management and Budget (OMB)

for review under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-

3520). The submission amends the current requirements approved by OMB

on January 26, 1994 (Number: 2577-0083).

The public reporting burden for the collection of information

requirements contained in this proposed rule is estimated to include

the time for reviewing the instructions, searching existing data

sources, gathering and maintaining the data needed, and completing and

reviewing the collection of information. Information on the estimated

public reporting burden is provided under the Preamble heading, Other

Matters. Send comments regarding this burden estimate or any other

aspect of this collection of information, including suggestions for

reducing this burden, to the Department of Housing and Urban

Development, Rules Docket Clerk, 451 Seventh Street, SW, Room 10276,

Washington, DC 20410-0500; and to the Office of Information and

Regulatory Affairs, Office of Management and Budget, Attention: Desk

Officer for HUD, Washington, DC 20503.

II. Background

A. Impetus for Change

Housing agencies have been submitting to HUD data forms for each

family assisted under the public housing, Indian housing, and Section 8

Rental Certificate, Rental Voucher and Moderate Rehabilitation

Programs. The Forms HUD-50058, Family Report, and HUD-50058-FSS, Family

Self-Sufficiency Addendum, concern family characteristics, rent,

income, subsidy payments and participation in the Family Self-

Sufficiency Program.

As of March 1, 1994, these forms were being processed by the

Department's central processing facility. Approximately 85 percent of

reporting agencies (3,655 HAs) are submitting paper forms. This

extensive processing of paper forms has become a burden to the HAs as

well as to HUD.

To reduce the cost to the Department of processing this information

and to improve its accuracy, the Department is issuing this proposed

rule to require that the information be submitted electronically. The

change is expected to contribute significant savings to the Department,

in a time when budget contraints demand such savings.

Housing agencies that report on paper have the time consuming task

of completing the calculations which are prone to error. The Department

edits the information on the forms. When errors are found, HAs are

notified (by letter) and requested to make appropriate corrections.

The time spent by HAs in initiating electronic transmission and

making corrections to the electronic data submissions will be offset by

future savings in the reexamination and reporting process, as well as

increased accuracy and speed associated with the admission,

reexamination and reporting processes, and the reduced number of HUD

adjustments and paperwork required by these adjustments. This change to

electronic submission of family data will also encourage HAs to

automate other functions or to automate this particular function as

they automate others, in the course of revising their own management

practices.

The rule will require HAs to submit data electronically via

telephone modem, rather than through tape, diskette, or paper. However,

the rule also provides that the Department may approve transmission of

the data by tape or diskette where the Department determines that the

cost of telephonic transmission would be excessive. (It is contemplated

that this would only occur in a few instances, involving very large

HAs.)

B. Voluntary Automation

Several years ago, the Department began to develop a computer

system to collect all rental assistance data and ensure the accuracy of

subsidy payments. This system serves as the basis for the Department's

electronic data transmission requirements in lieu of hard copy.

In July 1993, the Department distributed a Form HUD-50058

Information Packet, which gave instructions for submitting the data

electronically. The Department encouraged program participants to begin

transmitting data electronically to HUD (via tape, diskette, or

telephonic network). Approximately 600 housing agencies have responded

by submitting the data electronically. Recently, the Department

initiated a pilot test with 20 HAs using the telephonic network mode

(via SprintMail--a commercial software package) to evaluate HA

capability for data transmission. In addition, a test program (for use

by all HAs) has been initiated to assure that errors are not introduced

by the sender's software. Both processes will facilitate implementation

of this rule.

These electronic transmissions consist of information requested on

the forms, organized into various categories and transmitted in an

ASCII fixed format (not field delimited). These fixed format ASCII

files will deliver the data with the field lengths as specified by HUD

in the July 1993 guide. (This guide may be obtained from the office

listed above for program information.)

The Department encourages HAs to begin electronic transmission as

soon as the capability exists. An earlier electronic transmission will

allow timely correction of errors found during the data load into the

automated software. These corrections will then reduce the number of

errors formerly found when manual information entered the Department's

system. Early electronic transmission will also help minimize an

initial surge of data in the system from the number of currently

nonautomated HAs.

C. Action Required

Nonautomated HAs (i.e. those who currently prepare the Forms HUD-

50058 and HUD-50058-FSS manually) should immediately begin to obtain

information on the cost of purchasing hardware or software, or both, to

determine whether it is financially feasible to purchase these items or

whether they should contract out the electronic transmission of data to

another entity. These HAs must: (1) Complete the search and either

purchase the necessary hardware and software, or sign service

contracts, (2) complete their data loading, and (3) begin electronic

transmission by one year after the publication of the final rule.

While the Department would prefer each HA to obtain its own

hardware and software, HAs may elect to contract out the electronic

transmission function. However, when HAs contract out the electronic

transmission function, they are still required to continue to retain

the ability to monitor the day-to-day operations of the projects and be

able to demonstrate that ability to their local HUD Office.

In recognition of the difficulty some HAs may have in conversion to

electronic submission of data, the rule will permit HUD Field Offices

to grant extensions of time beyond the stated implementation date for

commencement of electronic submission under certain circumstances.

D. Cost

Housing agencies may be concerned about funding the initial cost of

automation. For public and Indian housing, the costs of the electronic

transmission of the correctly formatted data, including either the

purchase and maintenance of computer hardware or software, or both; the

cost of contracting for those services; or the cost of centralizing the

electronic transmission function; are eligible operating expenses and

can be included in the operating budget. However, they are not eligible

for additional operating subsidy funding. Automating this management

function also is an allowable expense under the Comprehensive

Improvement Assistance Program and the Comprehensive Grant Program. For

Section 8 programs, the costs may be paid from ongoing administrative

fees or the Section 8 operating reserve. Ultimately, the cost of

automating this function will be recovered in reduced administrative

costs.

The Department anticipates that the large number of vendors

competing in the marketplace will cause the cost of automation and

electronic transmission to be reasonable, and a large number of HAs

will therefore be able to purchase and maintain their own equipment.

However, the decision to purchase and maintain the necessary equipment

and services or to contract for the automation and electronic

transmission function, will only be made by each housing agency.

III. Parts Amended

This proposed rule would add a new part 908 to specify the

electronic submission requirements. The requirements for obtaining and

verifying family income information in the various programs are found

in Sec. 813.109 for the Section 8 Rental Certificate, Rental Voucher

and Moderate Rehabilitation programs, in Sec. 905.315 for the Indian

housing program, and in Sec. 913.109 for the public housing program.

This rule would add a new paragraph to each of these sections to cross

reference the requirements of the new part 908.

IV. Other Matters

A. Environmental Impact

In accordance with 40 CFR 1508.4 of the regulations of the Council

on Environmental Quality and 24 CFR 50.20(o) of the HUD regulations,

the policies and procedures contained in this proposed rule relate only

to HUD administrative procedures and, therefore, are categorically

excluded from the requirements of the National Environmental Policy

Act.

B. Federalism Impact

The General Counsel, as the Designated Official under section 6(a)

of Executive order 12612, Federalism, has determined that the policies

contained in this proposed rule will not have substantial direct

effects on states or their political subdivisions, or the relationship

between the Federal government and the states, or on the distribution

of power and responsibilities among the various levels of government.

Specifically, this proposed rule is directed to housing agencies that

operate HUD-assisted housing, whose functions and authority remain

unchanged. It merely changes the format of data submitted to HUD to

make its transmission more accurate and efficient. It will not impinge

upon the relationship between the Federal Government and State and

local governments. As a result, the proposed rule is not subject to

review under the order.

C. Impact on the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this proposed rule does

not have potential for significant impact on family formation,

maintenance, and general well-being, and, thus, is not subject to

review under the order. No significant change in existing HUD policies

or programs will result from promulgation of this proposed rule, as

those policies and programs relate to family concerns.

D. Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)) has reviewed and approved this proposed rule, and in so

doing certifies that this proposed rule will not have a significant

economic impact on a substantial number of small entities. Because this

proposed rule changes the way in which the data is transmitted to HUD,

and all costs associated with implementation of the electronic

transmission will be considered allowable project operating costs, the

proposed rule is not expected to have a significant economic impact.

E. Regulatory Agenda

This proposed rule was not listed in the Department's Semiannual

Agenda of Regulations published on April 25, 1994 (59 FR 20424) under

Executive Order 12866 and the Regulatory Flexibility Act, and therefore

was submitted to the Committee on Banking, Housing and Urban Affairs of

the Senate and the Committee on Banking, Finance and Urban Affairs of

the House of Representatives under section 7(o) of the Department of

Housing and Urban Development Act.

F. Catalog

The Catalog of Federal Domestic Assistance numbers for the programs

covered by this proposed rules are 14.850, 14.855, 14.856, and 14.857.

G. Paperwork Reduction Act

The information collection requirements contained in this proposed

rule have been submitted to the Office of Management and Budget under

the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520). In

accordance with OMB regulations, the following chart is provided to

describe the collection of information requirements.

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Number of Total annual Hours/minutes

FY Transmission mode respondents responses per response Total hours

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1994*........... Paper/Diskette/Tape/Telephonic.. 4,500 4,124,000 1 hour......... 4,124,000

1995............ Paper/Diskette/Tape/Telephonic.. 4,500 4,124,000 50 minutes..... 3,435,300

1996............ Telephonic Only................. 4,500 4,124,000 30 minutes..... 2,062,000

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*Burden Hours Currently in OMB Inventory.

List of Subjects

24 CFR Part 813

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements, Utilities.

24 CFR Part 905

Aged, Energy conservation, Grant programs--housing and community

development, Grant programs--Indians, Homeownership, Indians,

Individuals with disabilities, Lead poisoning, Loan programs--housing

and community development, Loan programs--Indians, Low and moderate

income housing, Public housing, Reporting and recordkeeping

requirements.

24 CFR Part 908

Computer technology--automatic data processing, data processing,

electronic data processing, Subsidies--grant programs, Rent subsidies.

24 CFR Part 913

Grant programs--housing and community development, Public housing,

Reporting and recordkeeping requirements.

Accordingly, title 24, chapters VIII and IX, of the Code of Federal

Regulations would be amended as follows:

PART 813--DEFINITION OF INCOME, INCOME LIMITS, RENT AND

REEXAMINATION OF FAMILY INCOME FOR THE SECTION 8 HOUSING ASSISTANCE

PAYMENTS PROGRAMS AND RELATED PROGRAMS

1. The authority citation for part 813 would continue to read as

follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437n, and 3535(d).

2. In Sec. 813.109, a new paragraph (c) would be added, to read as

follows:

Sec. 813.109 Initial determination, verification, and reexamination of

family income and composition.

* * * * *

(c) See 24 CFR part 908 for requirements for transmission of data

to HUD.

* * * * *

PART 905--INDIAN HOUSING PROGRAMS

3. The authority citation for part 905 would be revised to read as

follows:

Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437a, 1437aa, 1437bb,

1437cc, 1437ee, and 3535(d).

4. In Sec. 905.315, paragraphs (a)(2) and (a)(3) would be

redesignated as paragraphs (b) and (c), and a new paragraph (d) would

be added, to read as follows:

Sec. 905.315 Initial determination, verification, and reexamination of

family income and composition.

* * * * *

(d) See 24 CFR part 908 for requirements for transmission of data

to HUD.

5. A new part 908, consisting of Secs. 908.101 through 908.112,

would be added to chapter IX, to read as follows:

PART 908--ELECTRONIC TRANSMISSION OF REQUIRED FAMILY DATA FOR

PUBLIC HOUSING, INDIAN HOUSING, AND THE SECTION 8 RENTAL

CERTIFICATE, RENTAL VOUCHER, AND MODERATE REHABILITATION PROGRAMS

Sec.

908.101 Purpose.

908.104 Requirements.

908.108 Cost.

908.112 Extension of time.

Authority: 42 U.S.C. 1437f, 3535(d), 3543, 3544, and 3608a.

Sec. 908.101 Purpose.

The purpose of this part is to require Housing Agencies (HAs) that

operate public housing, Indian housing, or Section 8 Rental

Certificate, Rental Voucher and Moderate Rehabilitation programs to

electronically submit certain data to HUD for those programs. This

electronically submitted data is required for HUD Forms HUD-50058,

Family Report, and HUD-50058-FSS, Family Self-Sufficiency Addendum.

Sec. 908.104 Requirements.

(a) Automated HAs. Housing agencies that currently use automated

software packages to transmit Forms HUD-50058 and HUD-50058-FSS

information by tape or diskette to the Department's data processing

contractor must convert to telephonic electronic transmission of that

data in a HUD specified format by [insert date 120 days after

publication of the final rule].

(b) Nonautomated HAs. Housing agencies that currently prepare and

transmit the HUD-50058 and HUD-50058-FSS information to HUD paper must:

(1) Complete a vendor search and obtain either:

(i) The necessary hardware and software required to develop and

maintain an in-house automated data processing system (ADP) used to

generate electronic submission of the data for these forms via

telephonic network; or

(ii) A service contract for the operation of an automated system to

generate electronic submission of the data for these forms via

telephonic network;

(2) Complete their data loading; and

(3) Begin electronic transmission by [insert date 365 days after

publication of the final rule].

(c) Electronic transmission of data. Electronic transmission of

data consists of submission of all required data fields (correctly

formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically,

in accordance with HUD instructions. Regardless of whether an HA

obtains the ADP system itself or contracts with a service bureau to

provide the system, the software must be periodically updated to

incorporate changes or revisions in legislation, regulations,

handbooks, notices, or HUD electronic transmission data format

requirements.

(d) Service contract. HAs that determine that the purchase of

hardware and/or software is not cost effective may contract out the

electronic data transmission function to organizations that provide

such services, including, but not limited to the following

organizations: local management associations and management agents with

centralized facilities. HAs that contract out the electronic

transmission function must retain the ability to monitor the day-to-day

operations of the project at the HA site and be able to demonstrate the

ability to the relevant HUD Field Office.

(e) Notwithstanding the provisions of paragraphs (a) and (b) of

this section, the Department may approve transmission of the data by

tape or diskette if it determines that the cost of telephonic

transmission would be excessive.

Sec. 908.108 Cost.

(a) General. The costs of the electronic transmission of the

correctly formatted data, including either the purchase and maintenance

of computer hardware or software, or both, the cost of contracting for

those services, or the cost of centralizing the electronic transmission

function, shall be considered Section 8 Administrative expenses, or

eligible public housing operating expenses that can be included in the

public housing operating budget. At the HA's option, the cost of the

computer software may include service contracts to provide maintenance

or training, or both.

(b) Sources of funding. For public and Indian housing, costs may be

covered from operating subsidy for which the HA is already eligible, or

the initial cost may be covered by funds received by the HA under HUD's

Comprehensive Improvement Assistance Program (CIAP) or Comprehensive

Grant Program (CGP). For Section 8 programs, the costs may be covered

from ongoing administrative fees or the Section 8 operating reserve.

Sec. 908.112 Extension of time.

The HUD Field Office may grant an HA an extension of time, of a

reasonable period, for implementation of the requirements of

Sec. 908.104, if it determines that such electronic submission is

infeasible because of one of the following:

(a) Lack of staff resources;

(b) Insufficient financial resources to purchase the required

hardware, software or contractual services; or

(c) Lack of adequate infrastructure, including, but not limited to,

the inability to obtain telephone service to transmit the required

data.

PART 913--DEFINITION OF INCOME, INCOME LIMITS, RENT AND

REEXAMINATION OF FAMILY INCOME FOR THE PUBLIC HOUSING PROGRAM

6. The authority citation for part 913 would continue to read as

follows:

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

7. In Sec. 913.109, a new paragraph (c) would be added, to read as

follows:

Sec. 913.109 Initial determination, verification, and reexamination of

family income and composition.

* * * * *

(c) See 24 CFR part 908 for requirements for transmission of data

to HUD.

* * * * *

Dated: September 23, 1994.

Michael B. Janis,

General Deputy Assistant Secretary for Public and Indian Housing.

[FR Doc. 94-24626 Filed 10-5-94; 8:45 am]

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