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Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Rules and Regulations provision to make it clear when review of a document becomes final to permit an interested party to seek redress from the courts.
Comment: The Interim final rules procedural requirements will delay the issuance of guidance and limit HUDs flexibility in issuing guidance.
Commenters expressed concern with the review of HUD guidance by the Office of Information and Regulatory Affairs OIRA and the need for HUD to receive and review public comments on significant guidance. One commenter stated that OIRA is a small office with a heavy workload that is slow to formally review proposed and final rules submitted by HUD. The commenter stated that adding the review of many HUD guidance documents to OIRAs workload would cause significant delays in the issuance of both HUDs guidance documents and its rules issued under the Administrative Procedure Act. Another commenter stated that applying such procedures to sub-regulatory guidance creates unnecessary and burdensome bureaucracy. Other commenters said that the review, approval, and signature process for significant guidance would hamper HUDs ability to act nimbly to issue guidance on key issues. Finally, one commenter noted that the rule would not only delay, but ultimately prevent, the dissemination of guidance.
Commenters also stated that allowing petitions to modify or rescind guidance documents and the requirement for HUD to respond to each petition in writing, would drain scarce agency resources and hamper HUDs ability to issue important guidance. One commenter stated that the process of permitting HUD to issue a coordinated response to similar petitions is insufficient to address delay issues. The commenter further said that HUD would be doing the work for petitioners with inadequate submissions by laying out a roadmap and effectively crafting arguments for petitioners to have their petitions successfully adjudicated.
Another commenter added that the petition mechanism will likely confuse funding recipients, which in turn would create more work for HUD staff and delay day-to-day programmatic decision-making. The commenter also noted that the interim final rule will strip authority from the career experts who normally develop guidance . . .
and place day-to-day decisions directly into the hands of non-experts.
HUD Response: HUD agrees that the timely dissemination of guidance documents is important to the successful administration and consistent implementation of its
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programs. In support of this policy, HUD must have flexibility to quickly issue guidance to further the implementation of HUDs programs without additional barriers. As commenters noted, applying the notice and comment process to significant guidance documents would unnecessarily detract from HUDs ability to respond to the needs of its stakeholders and adversely impact its ability to issue regulations under the APA by diverting HUD and OMB
resources away from rulemaking processes. In addition, HUD currently seeks input from the public on many of its guidance documents and often issues guidance documents in response to such input and frequently asked questions.
Similarly, HUD agrees that the petition process would cause delay in HUDs ability to disseminate guidance documents. Furthermore, HUD agrees that there is no need to codify such a requirement because HUD can and does already receive requests from the public which it considers when issuing, updating, and rescinding guidance.
Comment: The ambiguity of the terms used in the interim final rule make the scope of the rule unclear.
Commenters stated that the interim final rule lacks clarity, uses ambiguous terms, and creates general implementation issues. Many commenters stated that the interim final rule does not provide clear definitions and does not clarify which types of communication are subject to the rule.
For example, commenters noted that the interim final rules definition of what constitutes guidance is vague and makes the scope of the rule unclear. One commenter noted that the definition of guidance could be read broadly enough to include virtually all written communications HUD delivers to stakeholders.
One commenter found the definition of guidance lacking and recommended that legal opinions directed to parties about circumstance-specific questions and Notices of Funding Availability NOFAs 1 be added to the definition of guidance documents. The commenter suggested that legal opinions are helpful to more than a single PHA facing similar factual scenarios.
Commenters also stated that the definition of significant guidance is 1 HUD currently uses the term Notices of Funding Opportunity or NOFO for documents that would previously have been referred to as NOFAs. This change is based on the terminology used in Office of Management and Budget Management in its Guidance for Grants and Agreements 85 FR 49506, August 13, 2020. However, following the terminology used in the public comments, this document uses the term NOFA throughout.

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unclear, overly broad, and susceptible to variance. One commenter stated that terms used in the definition of significant guidance, such as serious inconsistency or interference with another agency, are so vague that if the interim final rule is interpreted broadly, nearly every piece of guidance not explicitly exempted from being considered significant guidance will be subject to the burdensome OIRA review and public comment process. The commenter also noted the lack of explanation for how economic impact analyses would be conducted for significant guidance, and the apparent lack of public access to such analyses.
HUD Response: HUD agrees that the terms and definitions used by the interim final rule lack clarity and could lead to confusion and inconsistent implementation of HUDs programs.
HUD appreciates the commenters recommendations regarding legal opinions, but each legal opinion is partyand fact-specific, and HUD does not believe that they can be made generally applicable to other similarly situated parties. As for the NOFA
process, PHAs and other entities are permitted to follow-up with HUD with questions regarding NOFAs and provide feedback for future NOFAs regardless of the language in part 11.
Lastly, HUD agrees with public commenters that the definitions of guidance and significant guidance could be interpreted broadly and doing so would make issuing guidance challenging. HUD notes that the definition of significant guidance incorporated in the interim final rule mirrors the definition in E.O. 12866
Regulatory Planning and Review for significant regulatory action and includes novel legal or policy issues which challenges articulating a specific definition. Notwithstanding, the requirement that HUD provide an economic analysis for guidance that rises to the level of significant regulatory action creates additional challenges to the Departments ability to timely issue guidance and outweighs any benefit resulting from the interim final rule.
Comment: The interim final rule creates uncertainty.
Commenters stated that the uncertainty created by the interim final rule would negatively affect HUD
constituencies that routinely rely on HUD guidance, including tenants, advocates, owners, vulnerable populations, and PHAs. One commenter stated that HUD guidance is undermined by the provision noting that the authority is nonbinding and unenforceable. The commenter stated
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