[Federal Register Volume 72, Number 78 (Tuesday, April 24, 2007)]
[Proposed Rules]
[Pages 20406-20408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7706]



[[Page 20405]]

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

Part II





Department of Housing and Urban Development





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



24 CFR Part 200



Uniform Physical Condition Standards and Physical Inspection 
Requirements for Certain HUD Housing; Revision to Response Time for 
Requesting a Technical Review of a Physical Inspection Report; Proposed 
Rule

  Federal Register / Vol. 72, No. 78 / Tuesday, April 24, 2007 / 
Proposed Rules  

[[Page 20406]]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 200

[Docket No. FR-5070-P-01]
RIN 2502-AI43


Uniform Physical Condition Standards and Physical Inspection 
Requirements for Certain HUD Housing; Revision to Response Time for 
Requesting a Technical Review of a Physical Inspection Report

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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

SUMMARY: HUD assesses the physical conditions of multifamily properties 
and notifies owners of its assessment. The owners, under certain 
circumstances, are provided an opportunity to seek a technical review 
of HUD's physical condition assessment and HUD may take action in 
certain cases where the housing is found not to be in compliance with 
the physical condition standards. Currently, the regulations establish 
different time frames for owners to request a technical review, 
depending on whether HUD transmits the inspection results through the 
Internet or certified mail. In order to improve uniformity in the 
technical review request process, this proposed rule would implement a 
standard time frame of 30 calendar days for the submission of a request 
for a technical review for both physical inspection results that are 
transmitted to the owner via the Internet or in hard copy form via 
certified mail.

DATES: Comment Due Date: May 24, 2007.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Regulations Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 10276, Washington, DC 20410-0500. Interested persons also may 
submit comments electronically through the Federal eRulemaking Portal 
at http://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically so that HUD, in turn, can make them 
immediately available to the public. Commenters should follow the 
instructions provided on that site to submit comments electronically. 
Facsimile (FAX) comments are not acceptable. In all cases, 
communications must refer to the docket number and title. All comments 
and communications submitted to HUD will be available for public 
inspection and copying between 8 a.m. and 5 p.m. weekdays at the above 
address. Due to security measures at the HUD Headquarters building, an 
advance appointment to review the public comments must be scheduled by 
calling the Regulations Division at (202) 708-3055 (this is not a toll-
free number). Copies of all comments submitted are available for 
inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kenneth Hannon, Director, Business 
Relationships and Special Initiatives Division, Office of Housing, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 6176, Washington, DC 20410-8000; telephone (202) 708-3944, 
extension 2599 (this is not a toll-free number). Hearing- and speech-
impaired persons may access this number through TTY by calling the 
toll-free Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    HUD's regulations in 24 CFR part 200, subpart P, establish for 
multifamily housing certain administrative processes by which HUD 
notifies owners of HUD's assessment of the physical condition of their 
multifamily housing. The regulations provide owners, under certain 
circumstances, with the opportunity to seek a technical review of HUD's 
physical condition assessment of the multifamily housing; the 
regulations also allow HUD to take action in certain cases where such 
housing is found not to be in compliance with the physical condition 
standards. The regulations in 24 CFR part 200, subpart P, build upon 
the regulations in 24 CFR part 5, subpart G, that establish uniform 
physical condition standards (UPCS) for public housing and housing that 
is insured and/or assisted under certain HUD programs (collectively, 
such housing is referred to as HUD properties).
    The regulations in 24 CFR part 5, subpart G, also establish a 
uniform physical inspection protocol, based on computer software 
developed by HUD, which allows HUD to determine compliance with these 
standards. The UPCS are intended to ensure that HUD program 
participants carry out their legal obligations to maintain HUD 
properties in a condition that is decent, safe, sanitary, and in good 
repair. The uniform inspection protocol is intended to assure that, to 
the greatest extent possible, there is uniformity and objectivity in 
the evaluation of the physical condition of HUD properties.
    The regulations in 24 CFR part 200, subpart P, currently provide 
for two different time frames for owners to request a technical review 
of HUD's physical inspection assessment, depending on whether HUD 
transmits the inspection results to the owner through the Internet or 
via certified mail. Owners receiving their inspection results through 
certified mail are provided 30 calendar days to submit a request for a 
technical review, while those owners receiving their results 
electronically have only 15 calendar days to request a review.

II. This Proposed Rule

    For technical review requests, HUD originally established one time 
frame for reviewing HUD inspection results for owners who receive the 
results by mail and another for reviewing HUD inspection results for 
owners who receive the results electronically. HUD did this because 
mailed communications between HUD and the owner would be slower. In 
establishing a response time of 30 days for a request from an owner who 
received the results by mail, HUD allowed for time to review the 
results and time for the owner to receive the mailed request. From 
almost 10 years of experience with this process, HUD has concluded that 
the differing deadlines have been confusing and do not necessarily 
establish equal review and response time for owners.
    To address these concerns, this proposed rule would make one change 
to the time frames for requesting technical review. In Sec.  200.857, 
HUD is revising paragraphs (c)(3) and (d) to include a uniform, 30-
calendar-day time frame for the submission of a request for a technical 
review for physical inspection results that are transmitted to the 
owner either via the Internet or in hard copy via certified mail. 
Specifically, the proposed rule provides that HUD must receive requests 
for review no later than 30 calendar days from the date that HUD 
transmits the physical inspection report to the owner (as established 
by the postmark, if applicable). HUD believes that establishing a 
uniform time frame for requesting a technical review will be more 
equitable and less confusing to its clients, and simpler for its 
multifamily field offices to administer.

III. Justification for 30-Day Comment Period

    In accordance with HUD's regulations concerning rulemaking at 24 
CFR part 10 (entitled, ``Rulemaking Policy and Procedures''), it is 
HUD's policy that the

[[Page 20407]]

public comment period for proposed rules should be 60 days. In the case 
of this proposed rule, however, HUD has determined there is good cause 
to reduce the public comment period to 30 days. As discussed in more 
detail earlier in this preamble, this proposed rule would implement 
only a minor regulatory change that would make HUD's procedures more 
uniform and easier to follow. Specifically, the proposed rule would 
provide for a uniform, 30-calendar-day period for submission of review 
requests, whether the owner receives the results electronically or via 
certified mail. HUD anticipates that a uniform time frame will expedite 
the processing of review requests because it will eliminate confusion 
and, therefore, promote efficiency in the process. The regulatory 
change is procedural and does not revise or establish new binding 
physical inspection requirements on owners. Nothing in the proposed 
rule would restrict owners from submitting a review request prior to 
the close of the 30 days, and owners may continue to submit their 
requests as quickly as they choose.
    Given the procedural and streamlining nature of the proposed 
regulatory changes, HUD believes that good cause exists to reduce the 
public comment period to 30 days. All comments will be considered in 
the development of the final rule.

IV. Findings and Certifications

Paperwork Reduction Act

    The information collection requirements contained in this proposed 
rule have been approved by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and 
assigned OMB Control number 2502-0369. 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.

Environmental Impact

    In accordance with 24 CFR 50.19(c)(1) of the Department's 
regulations, 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. Therefore, this proposed rule is categorically 
excluded from the requirements of the National Environmental Policy Act 
(42 U.S.C. 4321 et seq.).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
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. 
The proposed rule would establish a uniform time frame for submission 
of review requests for all owners, irrespective of size. The regulatory 
change is procedural and does not revise or establish new binding 
requirements on owners. HUD anticipates that a uniform time frame will 
eliminate confusion and, therefore, expedite the processing of review 
requests. Accordingly, the undersigned certifies that this rule will 
not have a significant economic impact on a substantial number of small 
entities.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comments regarding less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Unfunded Mandates Reform Act

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

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 rule does not have federalism 
implications and does not impose substantial direct compliance costs on 
state and local governments nor preempt State law within the meaning of 
the Executive Order.

List of Subjects in 24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs, Housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (government agencies), Penalties, Reporting 
and recordkeeping requirements, Social Security, Unemployment 
compensation, and Wages.
    Accordingly, for the reasons stated in the preamble, HUD proposes 
to amend 24 CFR part 200 as follows:

PART 200--INTRODUCTION TO FHA PROGRAMS

    1. The authority citation for 24 CFR part 200 continues to read as 
follows:

    Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).

    2. Revise Sec.  200.857(c)(3) and (d) introductory text to read as 
follows:


Sec.  200.857  Administrative process for scoring and ranking the 
physical condition of multifamily housing properties.

* * * * *
    (c) * * *
    (3) If, following review of the physical inspection results and 
score, the owner reasonably believes that an objectively verifiable and 
material error (or errors) occurred in the inspection, which, if 
corrected, will result in a significant improvement in the property's 
overall score (``significant improvement'' is defined in paragraph 
(d)(4) of this section), the owner may submit a written request for a 
technical review. The technical review request must be received in 
writing no later than 30 calendar days (as established by the postmark, 
if applicable) from the date the physical inspection results are 
transmitted to the owner by REAC whether the results and score are 
transmitted to the owner via the Internet, or by hard copy via 
certified mail.
    (d) Technical review of physical inspection results. A request for 
a technical review of physical inspection results must be submitted in 
writing to REAC and must be received by REAC no later than the 30th 
calendar day, as applicable under paragraph (c)(3) of this section, 
following submission of the physical inspection report to the owner as 
provided in paragraph (c)(1) of this section.
* * * * *


[[Page 20408]]


    Dated: March 21, 2007.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
 [FR Doc. E7-7706 Filed 4-23-07; 8:45 am]
BILLING CODE 4210-67-P