[Federal Register Volume 59, Number 58 (Friday, March 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7035]


[[Page Unknown]]

[Federal Register: March 25, 1994]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing

24 CFR Parts 905 and 941

[Docket No. R-94-1690; FR-3550-F-02]
RIN 2577-AB34

 

Public and Indian Housing Development--Amendment to Calculation 
of Total Development Cost

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

ACTION: Final rule.

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

SUMMARY: This rule adopts as final an interim rule, published on 
November 29, 1993, which revised the Department's regulations at 24 CFR 
parts 905 and 941 to remove donations (non-public or non-Indian housing 
funds) from the Department's calculation of total development cost 
(TDC). The Department's experience indicated that the inclusion of 
donations within the TDC of projects has created unwarranted delays in 
the development process, and, in some cases, has been a contributory 
reason for cost increases in the low-income housing development 
process.

EFFECTIVE DATE: April 25, 1994.

FOR FURTHER INFORMATION CONTACT: For Public Housing, Janice Rattley, 
Director of the Office of Construction, Rehabilitation and Maintenance, 
Department of Housing and Urban Development, 451 Seventh Street SW., 
room 4136, Washington, DC 20410. Telephone (202) 708-1800 (voice) or 
(202) 708-4594 (TDD). (These are not toll-free numbers.)
    For Indian Housing, Dom Nessi, Director, Office of Native American 
Programs, Department of Housing and Urban Development, 451 Seventh 
Street SW., room 4140, Washington, DC 20410. Telephone (202) 708-1015 
(voice) or (202) 708-4594 (TDD). (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

1. The November 29, 1993 Interim Rule

    On November 29, 1993 (58 FR 62522), HUD published an interim rule 
to remove donations (non-public or non-Indian housing funds) from the 
Department's calculation of total development cost (TDC).
    Before publication of the November 29, 1993 interim rule, the 
regulations for HUD's public housing development program and Indian 
housing development program (codified, respectively, in 24 CFR parts 
941 and 905) provided for the inclusion of donations (non-public or 
non-Indian housing funds), in calculating the total development cost 
(TDC). The project TDC would then be compared to the published TDC 
limitations currently in effect, which could result in actual 
development costs that are less than, the same as, or more than the 
published TDC limitations. Under this procedure, if the project TDC 
exceeded 100 percent of the published TDC limitation, notwithstanding 
the reason for the increase over the TDC limitation or the source of 
funding for the increase, the Field Office was unable to approve the 
project TDC without authorization of the Regional Administrator or the 
Assistant Secretary for Public and Indian Housing. This approval 
procedure was intended to verify Field Office processing, and to ensure 
that the project TDC would provide modest, non-luxury, durable housing 
at a reasonable cost. In actual fact, however, the TDC approval 
process, which did not take into consideration that donations may be 
the reason for, or the source of payment of, the increase over the TDC 
limits, resulted in unwarranted delays in the development process 
because of the amount of time it takes for the request to move through 
the system. In some cases, these delays were a contributory reason for 
cost increases in development of public and Indian housing.
    The amendments to be made by the November 29, 1993 interim rule, 
and adopted in final by this rule, permit HUD Field Offices to 
calculate the project TDC relative to published TDC limitations, and to 
authorize housing agencies to proceed with developments, without 
referral to Regional Administrators or the Assistant Secretary, where 
funds in excess of TDC limits are provided through donations. Where 
funds in excess of TDC limits will not be provided through donations, 
Field Offices must continue to seek authorization from the Regional 
Administrators or the Assistant Secretary. HUD will not provide funds 
to housing agencies under section 5 of the U.S. Housing Act of 1937 in 
excess of TDC limitations without such authorization.
    The specific sections in 24 CFR parts 905 and 941 amended by the 
November 29, 1993 interim rule, and adopted in final by this rule, are 
as follows:
    Sections 905.102 and 941.103 are each amended by revising the 
definition of ``total development cost'' contained in these sections to 
clarify that maximum total development cost excludes any donations.
    Sections 905.255 and 941.204 are amended to add a new paragraph to 
each section that will clarify that although donations are not included 
in the project TDC calculations, donations must be included in the 
project development cost budget. A new paragraph (j) has been added to 
Sec. 905.255 and a new paragraph (d) has been added to Sec. 941.204. 
Additionally, Sec. 905.255(a)(2) is amended to clarify that the 
``inclusion of all costs'' discussed in this paragraph does not include 
donations.
    Additionally, Sec. 941.406 is amended to clarify that the total 
project cost refers to HUD funds.

2. Public Comments

    The November 29, 1993 interim rule solicited public comments 
through January 28, 1994. By the expiration of the comment period, only 
one comment was received. The commenter, a public housing agency, 
stated that it was in full agreement with the interim rule, and 
supported the amendment to HUD's regulations.
    Since no other comments were received on the interim rule, and 
since the Department intends to make no further changes, the Department 
will adopt as its final rule the November 29, 1993 interim rule.

Other Matters

Environmental Impact

    At the time of development of the November 29, 1993 interim rule, a 
Finding of No Significant Impact with respect to the environment was 
made in accordance with HUD regulations at 24 CFR part 50, which 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969. That Finding remains applicable to this final rule, and is 
available for public inspection between 7:30 a.m. and 5:30 p.m. 
weekdays in the Office of the Rules Docket Clerk at the above address.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this final rule before publication, and, 
by approving it, certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities. 
The rule's major effect is on housing agencies which are state and 
local governmental entities. The final rule revises the manner in which 
the total development cost is calculated, and in so doing, reduces 
delays and costs in the development of public and Indian housing, which 
is beneficial to housing agencies.

Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order No. 12612, Federalism, has determined that this 
final rule will not have a substantial, direct effect on the States or 
their political subdivisions or on the relationship between the Federal 
government and the States, or on the distribution of power or 
responsibilities among the various levels of government. The rule 
removes, rather than imposes, a program requirement.

Impact on the Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this final rule does not 
have a potential 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 rule, as those policies and programs 
relate to family concerns.

Regulatory Agenda

    This rule was listed as sequence number 1650 in the Department's 
Semiannual Agenda of Regulations published on October 25, 1993 (58 FR 
56402, 56451) under Executive Order 12291 and the Regulatory 
Flexibility Act.

Catalog of Federal Domestic Assistance Program

    The Catalog of Federal Domestic Assistance Program title and number 
is 14.850, Public and Indian Housing.

List of Subjects

24 CFR Part 905

    Aged, Energy conservation, Grant programs--housing and community 
development, Grant programs--Indians, 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 941

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

    Accordingly, the Department adopts as final and without change, the 
interim rule published on November 29, 1993 (58 FR 62522) that amended 
24 CFR parts 905 and 941.

    Dated: March 16, 1994.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 94-7035 Filed 3-24-94; 8:45 am]
BILLING CODE 4210-33-P