[Federal Register Volume 61, Number 37 (Friday, February 23, 1996)]
[Rules and Regulations]
[Pages 7060-7063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3962]
[[Page 7059]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 510, 511, and 590
Streamlining of Affordable Housing Programs; Final Rule
Federal Register / Vol. 61, No. 37 / Friday, February 23, 1996 /
Rules and Regulations
[[Page 7060]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development
24 CFR Parts 510, 511, and 590
[Docket No. FR-3938-F-01]
RIN 2506-AB76
Streamlining of Affordable Housing Programs
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule revises the regulations for certain affordable
housing programs within the Office of Community Planning and
Development to eliminate outdated provisions and to streamline and
simplify the remaining provisions.
EFFECTIVE DATE: March 25, 1996.
FOR FURTHER INFORMATION CONTACT: Gordon McKay, Director, Office of
Affordable Housing Programs, Room 7168, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410. Telephone:
(202) 708-2685; TTY: 1-800-877-8339. (These are not toll-free numbers.)
SUPPLEMENTARY INFORMATION: President Clinton's memorandum of March 4,
1995, titled ``Regulatory Reinvention Initiative'' directed heads of
Federal departments and agencies to review all existing regulations to
eliminate those that are outdated and modify others to increase
flexibility and reduce burden. As a part of HUD's overall effort to
reduce regulatory burden and streamline the content of title 24 of the
Code of Federal Regulations, this rule revises 24 CFR parts 510, 511,
and 590 to eliminate outdated provisions and to streamline and simplify
the remaining provisions.
Part 510--Section 312 Rehabilitation Loan Program
Part 510 is eliminated except for Sec. 510.105(h). Authority to
make loans under the Section 312 Rehabilitation Loan Program was
repealed as of October 1, 1991. However, since there are still loan
collection functions associated with the program, Sec. 510.105(h) is
retained and revised to refer to loan assumption, which it still
governs. Section 510.105(h) is also revised to change ``Area Manager''
to ``Assistant Secretary for CPD,'' and to delete reference to local
loan approval officers and to the statutory authority to approve loans
because the collection functions are now administered centrally. The
waiver provision in Sec. 510.104 is being consolidated into the
Department-wide waiver regulation being promulgated separately.
Part 511--Rental Rehabilitation Grant Program
Section 511.3, ``Technical Assistance,'' is eliminated because
authority to make new grants under the program was repealed as of
October 1, 1991, and no more technical assistance will be made
available.
Section 511.5, ``Waivers,'' is being consolidated into the
Department-wide waiver regulation being promulgated separately.
In Sec. 511.10, paragraph (d) is eliminated to remove a minimum
project cost. This amendment will facilitate the use of small amounts
of leftover program funds. A conforming change is made to
Sec. 511.11(a). Paragraph (a) of Sec. 511.11 is also revised to remove
the inflexible repayment requirement for incomplete projects. The last
two sentences of Sec. 511.11(c)(2)(iii) are deleted for conforming
reasons. Also, paragraph (g) of Sec. 511.11 (which lists the programs
with which program grant amounts may not be used) is removed because
the programs listed are governed by federally-imposed rent regulatory
agreements or requirements and use of program funds in conjunction with
these programs is not statutorily prohibited.
Subpart D is eliminated, except for Sec. 511.33(c). Sections
511.30, 511.31, and 511.34 relate to formula allocations, which are no
longer being made. In Sec. 511.33, the references to reallocations in
paragraphs (a), (b), and (d) are no longer applicable, since there is
no remaining authority to ``reallocate funds.'' Section 511.33(c)
becomes a separate section regarding the deobligation of rental
rehabilitation grant amounts. In Sec. 511.33(c), the former first two
sentences and the former fifth and sixth sentences are deleted because
those provisions are now out of date and unnecessary. For similar
reasons, in the former third (now second) sentence (requiring
consultation with the grantee prior to deobligation), the reference to
a reasonable start-up time for implementing a new program is deleted.
In the former fourth (now first) sentence, the word ``will'' is changed
to ``may'' and each of the time periods referred to therein is extended
by one year, and clarifications are made. This assumes that the
discretionary one-year extensions permitted by the former regulation
were granted, and it authorizes, but no longer requires, HUD to
deobligate uncommitted or unexpended grant funds after the extended
time periods have expired. Finally, a new third sentence is added which
authorizes the applicable HUD field office to direct a grantee to
proceed to close-out its rental rehabilitation program and to
deobligate remaining funds when the field office determines, after
consultation with the grantee, that any remaining uncommitted funds
cannot be committed within a reasonable time, only small amounts of
funds remain, and any incomplete projects cannot be completed within a
reasonable time. The net effect of these changes is to empower HUD
field offices and grantees with the necessary authority and flexibility
to close out rental rehabilitation programs on an orderly, but timely,
basis.
The first three sentences of Sec. 511.50 regarding a State's
election to administer a State allocation are deleted because they are
no longer needed; all such allocations have already been made.
For similar reasons, in Sec. 511.51(a), the phrase ``that elects to
administer its allocation in accordance with Sec. 511.50'' and
paragraph (d) (regarding State administration of rental rehabilitation
grant program for cities receiving a formula allocation) are deleted.
Section 511.52, ``HUD-administered program,'' is eliminated because
the authority to make new grants was repealed as of October 1, 1991.
However, the rest of subpart F contains continuing, substantive
requirements for States using grants obligated prior to repeal and,
therefore, is retained.
Section 511.76(h)(2) is revised to allow grantees increased
flexibility by permitting the use of program income for other
affordable housing projects (which might include State or locally
assisted projects) and does not limit them to using this program income
for only RRP, HOME, HOPE, or CDBG activities.
Section 511.77(a) is revised to remove language regarding
obligating funds for any fiscal year.
Section 511.80(a) is revised to eliminate the introductory
reference to reallocations under Sec. 511.33 because reallocations are
no longer available under the program.
Section 511.81(b) is eliminated. The annual performance report is
still required for grantees which are still actively expending funds,
but the content of the report need not be specified in regulations.
Section 511.82(c)(2) is eliminated because conditioning the use of
Rental Rehabilitation grant amounts from a succeeding fiscal year's
allocation as a
[[Page 7061]]
corrective or remedial action is no longer possible.
Section 511.82(d) is revised to remove the first sentence referring
to reallocation of grant amounts that become available from a
succeeding fiscal year's allocation, because funds may not be
reallocated to other grantees after October 1, 1991.
Part 590--Urban Homesteading Program
Section 590.1 is revised to reflect that authority to reimburse
Federal agencies for transfer of additional properties to LUHAs under
this part was repealed effective October 1, 1991.
Section 590.3, ``Waiver authority,'' is being consolidated into the
Department-wide waiver regulation being promulgated separately.
Section 590.5 is revised to remove the definitions of ``Federally-
owned property,'' ``FmHA,'' ``RTC,'' and ``VA,'' since no additional
properties may be transferred from any source.
In Sec. 590.7, paragraphs (a), (b), and (c) are revised to remove
unnecessary provisions and to streamline and conform the remaining
provisions.
The following sections are eliminated because the authority to
transfer properties under the program was repealed as of October 1,
1991, and the sections are no longer necessary:
Sec. 590.9 ``Listing of Federally-owned properties''
Sec. 590.11 ``Applications''
Sec. 590.13 ``Standards for HUD review and approval of a local urban
homesteading program''
Sec. 590.15 ``Urban homesteading program participation agreement''
Sec. 590.17 ``Transfer of HUD-owned property''
Sec. 590.18 ``Reimbursement to FmHA, VA and RTC''
Sec. 590.21 ``Reservation of funds''
Section 590.19, ``Use of Section 810 funds,'' is revised to
eliminate the first two sentences which reference the use of Section
810 funds. With no Section 810 funds available, discussion of fund use
is unnecessary.
In Sec. 590.23, paragraphs (a) and (c) are revised, and paragraph
(d) is removed, to streamline the provisions by removing unnecessary
regulatory detail regarding close-out.
In Sec. 590.29, paragraphs (a) and (c) are revised to streamline
the language regarding the review of LUHA performance.
In Sec. 590.31, paragraph (c) is deleted, since conditioning a
future participation request is no longer possible.
Other Matters:
Environmental Review. This rulemaking does not have an
environmental impact. This rulemaking simply amends existing
regulations by streamlining and simplifying the provisions and does not
alter the environmental effect of the regulations being amended.
Findings of No Significant Impact with respect to the environment were
made in accordance with HUD regulations in 24 CFR part 50 that
implement section 102(2)(C) of the National Environmental Policy Act of
1969 (42 U.S.C. 4332) at the time of development of the implementing
regulations. Those findings remain applicable to this rule and are
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.
Regulatory Flexibility Act. The Secretary, in accordance with the
Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this rule
before publication and by approving it certifies that this rule does
not have a significant economic impact on a substantial number of small
entities because this rule pertains to the administrative matter of
streamlining and simplifying provisions in title 24 of the Code of
Federal Regulations.
Executive Order 12612, Federalism. The General Counsel, as the
Designated Official under section 6(a) of Executive Order 12612,
Federalism, has determined that this rule does not have ``federalism
implications'' because it does not have substantial direct effects on
the States (including their political subdivisions), or on the
distribution of power and responsibilities among the various levels of
government.
Executive Order 12606, The Family. The General Counsel, as the
Designated Official under Executive Order 12606, The Family, has
determined that this rule does not have potential significant impact on
family formation, maintenance, and general well-being.
List of Subjects
24 CFR Part 510
Lead poisoning, Loan programs--housing and community development,
Relocation assistance, Reporting and recordkeeping requirements, Social
security, Urban renewal.
24 CFR Part 511
Administrative practice and procedure, Grant programs--housing and
community development, Lead poisoning, Low and moderate income housing,
Reporting and recordkeeping requirements, Technical assistance.
24 CFR Part 590
Government property, Housing, Intergovernmental relations, Low and
moderate income housing, Reporting and recordkeeping requirements,
Urban renewal.
Accordingly, the Department amends title 24 of the Code of Federal
Regulations, subtitle B, chapter V, parts 510, 511, and 590, as
follows:
PART 510--SECTION 312 REHABILITATION PROGRAM
1. The authority for part 510 is revised to read as follows:
Authority: 42 U.S.C. 1452b and 3535(d).
PART 510--[AMENDED]
2. Part 510 is amended as follows:
a. All sections of part 510 are removed, except for Sec. 510.105(h)
(1), (2), and (3) which is redesignated as Sec. 510.1 (a), (b), and
(c), ``Multi-family property loans.''
Sec. 510.1 [Amended]
b. In newly redesignated Sec. 510.1(a), the phrase ``Area Manager''
is removed and, in its place, the phrase ``Assistant Secretary for
CPD'' is added; the phrase ``, or the approving officer where a
locality has local section 312 loan approval authority,'' is removed;
and the phrase ``under section 312(a)(3) for approval'' is removed and,
in its place, the phrase ``for assumption'' is added.
PART 511--RENTAL REHABILITATION GRANT PROGRAM
3. The authority for part 511 continues to read as follows:
Authority: 42 U.S.C. 1437o and 3535(d).
Secs. 511.3 and 511.5 [Removed and Reserved]
4. Sections 511.3 and 511.5 are removed and reserved.
Sec. 511.10 [Amended]
5. In Sec. 511.10, paragraph (d) is removed and reserved.
6. Section 511.11 is amended by removing the last two sentences of
paragraph (c)(2)(iii), by removing and reserving paragraph (g), and by
revising paragraph (a), to read as follows:
Sec. 511.11 Project requirements.
(a) Rehabilitation. To receive assistance under this part, a
project must require rehabilitation, measured by whether the project
before the assisted rehabilitation does not meet the rehabilitation
standards under Sec. 511.10(e). If a project is terminated before
completion of rehabilitation (as defined in Sec. 511.2), whether
voluntarily
[[Page 7062]]
by the grantee or otherwise, amounts equal to the rental rehabilitation
grant amounts already dispersed for the project under the C/MI System
are not eligible project costs, whether or not the grantee has already
expended such grant amounts to pay for project costs. If such amount is
not repaid, the grantee may be subject to corrective and remedial
actions under Sec. 511.82.
* * * * *
Secs. 511.30, 511.31, 511.34 [Removed and Reserved]
7. Sections 511.30, 511.31 and 511.34 are removed and reserved.
8. Section 511.33 is revised to read as follows:
Sec. 511.33 Deobligation of rental rehabilitation grant amounts.
(a) Before deobligating grant amounts, HUD will consult with the
affected grantee and take into account factors such as timing of the
grantee's program year; the timing of State distributions to State
recipients, if applicable; the timing of expected project approvals for
projects in the grantee's pipeline; climatic or other considerations
affecting rehabilitation work schedules; and other relevant
considerations. In addition to any remedial deobligation under
Sec. 511.82, HUD may deobligate any rental rehabilitation grant amounts
that are not:
(1) Committed to specific local projects within 3 years of the date
of obligation of the grant under Sec. 511.21(d) (4 years in the case of
a State that distributes rental rehabilitation grant amounts to State
recipients); or
(2) Expended for eligible costs within 5 years of such date of
obligation (6 years in the case of a State that distributes rental
rehabilitation grant amounts to State recipients).
(b) After such consultation, the HUD field office may direct the
grantee to proceed with program closeout and may deobligate remaining
unexpended grant amounts if the field office determines that any
uncommitted funds will not be committed within a reasonable time, only
small amounts of funds remain unexpended, or completion of uncompleted
projects appears infeasible within a reasonable time. None of the time
periods referred to in this section are extended by any suspensions of
project set-ups or other remedial action imposed by HUD under this
part.
Sec. 511.50 [Amended]
9. In Sec. 511.50, paragraph (a) is amended by removing the first
three sentences.
Sec. 511.51 [Amended]
10. In Sec. 511.51, paragraph (a) is amended by removing the phrase
``that elects to administer its allocation in accordance with
Sec. 511.50,'' and paragraph (d) is removed.
Sec. 511.52 [Removed and Reserved]
11. Section 511.52 is removed and reserved.
12. In Sec. 511.76, paragraph (h)(2) is revised to read as follows:
Sec. 511.76 Program income.
* * * * *
(h) * * *
(2) Program income on hand at the time of program closeout or
earned after program closeout may be contributed to HOME or HOPE
program grantees as a cash matching contribution in accordance with
applicable HOME or HOPE program rules, or may be used for activities
that would be eligible under other affordable housing activities, as
determined by the recipient.
13. In Sec. 511.77, the introductory sentence is removed, and
paragraph (a) is revised, to read as follows:
Sec. 511.77 Grant closeout.
(a) Each individual fiscal year rental rehabilitation grant will be
closed out when all grant amounts for the grant to be closed out have
been drawn down and expended for completed projects and/or
administrative costs, or grant amounts not drawn down and expended have
been deobligated by HUD.
* * * * *
Sec. 511.80 [Amended]
14. In Sec. 511.80, paragraph (a) is amended by removing the phrase
``In addition to reviewing grantee performance for purposes of making
reallocations under Sec. 511.33,'' from the first sentence.
Sec. 511.81 [Amended]
15. In Sec. 511.81, paragraph (b) is removed and reserved.
Sec. 511.82 [Amended]
16. In Sec. 511.82, paragraph (c)(2) is removed and reserved, and
the first sentence of paragraph (d) is removed.
PART 590--URBAN HOMESTEADING
17. The authority citation for part 590 continues to read as
follows:
Authority: 12 U.S.C. 1706e; 42 U.S.C. 3535(d).
18. Section 590.1 is revised to read as follows:
Sec. 590.1 General.
This part applies to the completion of activities remaining under
the Urban Homesteading Program authorized under section 810(b) of the
Housing and Community Development Act of 1974 (12 U.S.C. 1706e).
Authority to reimburse Federal agencies for transfer of additional
properties to LUHAs under this part was repealed effective October 1,
1991.
Secs. 590.3, 590.9, 590.11, 590.13, 590.15, 590.17, 590.18, and
590.21 [Removed and Reserved]
19. Sections 590.3, 590.9, 590.11, 590.13, 590.15, 590.17, 590.18,
and 590.21 are removed and reserved, and the first and second sentences
of Sec. 590.19 are removed.
Sec. 590.5 [Amended]
20. Section 590.5 is amended by removing the definitions of
``Federally-owned property,'' ``FmHA,'' ``RTC,'' and ``VA.''
Sec. 590.7 [Amended]
21. Section 590.7 is amended as follows:
a. Paragraph (a) is removed and reserved;
b. Paragraph (b)(6) is amended by removing the last two sentences;
c. Paragraph (b)(8) is amended by removing the phrase ``consistent
with the coordinated approach to neighborhood improvement'';
d. Paragraph (c)(1) is amended by removing the second sentence, and
to remove the phrase ``as described in Secs. 590.13-.15 of this part''
from the third sentence;
e. Paragraph (c)(2)(i) is amended by removing the phrase ``VA, FmHA
and RTC as described in Sec. 590.11(a)(7)'';
f. Paragraph (c)(2)(iii) is revised; and
g. Paragraphs (c)(3) and (c)(4) are removed, to read as follows:
Sec. 590.7 Program requirements.
* * * * *
(c) * * *
(2) * * *
(iii) Designate, and enter into a written agreement with, a
qualified community organization (as defined in the Act) to act as LUHA
in accordance with this part.
22. Section 590.23 is amended by revising paragraph (a), and by
removing the last sentence of paragraph (c) and paragraph (d), to read
as follows:
Sec. 590.23 Program close-out.
(a) Initiation of close-out. The LUHA shall institute close-out
procedures, as prescribed by HUD.
* * * * *
23. In Sec. 590.29, paragraph (a) introductory text, paragraph
(a)(4), and paragraph (c) are revised to read as follows:
[[Page 7063]]
Sec. 590.29 HUD review of LUHA performance.
(a) HUD may review the performance of each active LUHA as
necessary, as determined by HUD, to determine whether:
* * * * *
(4) The LUHA is making reasonable progress in moving properties
through the stages of the homesteading process, including acquisition,
homesteader selection, conditional conveyance, rehabilitation, and
final conveyance.
* * * * *
(c) LUHAs shall supply data and make available records necessary
for HUD's monitoring of the LUHA's local urban homesteading program.
Sec. 590.31 [Removed and Reserved]
24. In Sec. 590.31, paragraph (c) is removed and reserved.
Dated: February 13, 1996.
Andrew M. Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 96-3962 Filed 2-22-96; 8:45 am]
BILLING CODE 4210-29-P