[Federal Register Volume 73, Number 243 (Wednesday, December 17, 2008)]
[Notices]
[Pages 76674-76677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-29813]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5269-N-01]


Waiver of Regulations Issued by HUD Restatement of Policy

AGENCY: Office of the Secretary, HUD.

ACTION: Notice.

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SUMMARY: This notice reiterates HUD's statement of policy concerning 
the procedures that govern the waiver of regulations and directives 
issued by HUD. This policy was first announced by notice published in 
1991, following enactment of the Department of Housing and Urban 
Development Reform Act of 1989. In 2001, HUD published a notice that 
clarified how these procedures are implemented during a period of 
Administration transition. This notice consolidates the information and 
procedures provided by the two notices, and updates information and 
terminology to reflect current HUD operations and procedures.

FOR FURTHER INFORMATION CONTACT: For Regulations: Camille E. Acevedo, 
Associate General Counsel for Legislation and Regulations, Office of 
General Counsel, Department of Housing and Urban Development, 451 7th 
Street, SW., Room 10282, Washington, DC 20410-0500, telephone number 
202-708-1793. (This is not a toll-free number.) For Directives: Dorothy 
Fason, Departmental Directives Management Officer, Office of 
Administration, Department of Housing and Urban Development, 451 7th 
Street, SW., Room 10139, Washington, DC 20410, telephone 202-708-3054. 
(This is not a toll-free number.) Persons with hearing or speech 
impairments may access these numbers through TTY by calling the toll-
free Federal Information Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 106 of the Department of Housing and Urban Development 
Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989) added 
a new section 7(q) to the Department of Housing and Urban Development 
Act. (See 42 U.S.C. 3535(q).) This provision specifies that all waivers 
of HUD regulations:
     Must be in writing and indicate the grounds for granting 
the waiver;
     May be delegated by the Secretary only to an individual of 
Assistant Secretary or equivalent rank, who is authorized to issue the 
regulation to be waived; and
     Must provide notification to the public through a notice 
published at least quarterly in the Federal Register. (See 42 U.S.C. 
3535(q)(1) through (3).)
    Section 7(q) also provides that any waiver of a provision of a HUD 
handbook (which is included in HUD's definition of ``directive'') must 
be in writing, specify the grounds for the waiver, and be indexed and 
made available for public inspection for a period of 3 years. (See 42 
U.S.C. 3535(q)(4).)
    Section 7(q) contains only procedural requirements with respect to 
waivers of regulations and handbooks. These include requirements 
governing the form and content of a waiver, who may grant the waiver, 
and public notification of the waiver. Section 7(q) made no change in 
the substantive grounds upon which, or the circumstances in which, HUD 
may grant a waiver.

II. Statement of Policy on Waiver of Regulations and Directives

    This statement sets forth HUD's policy and procedures governing the 
waivers of HUD regulations and directives. These procedures are 
consistent with the requirements of section 7(q) of the Department of 
Housing and Urban Development Act, as added by section 106 of the 
Department of Housing and Urban Development Reform Act of 1989 (42 
U.S.C. 3535(q)). HUD's regulation at 24 CFR 5.110 also sets forth HUD's

[[Page 76675]]

obligation to comply with the waiver requirements of 42 U.S.C. 3535(q).

A. Definitions

    As used in this Statement Policy:
    Assistant Secretary means an Assistant Secretary of the Department 
under section 4(a) of the Department of Housing and Urban Development 
Act (42 U.S.C. 3533(a)), or an individual of equivalent rank (as such 
term is defined in this section).
    Department or HUD means the United States Department of Housing and 
Urban Development.
    Deputy Secretary means the Deputy Secretary of Housing and Urban 
Development.
    HUD Act means the Department of Housing and Urban Development Act 
(42 U.S.C. 3531 et seq.).
    Directive means a handbook (including a change or supplement), 
notice, and any other issuance that HUD may classify as a directive.
    Individual of equivalent rank means an individual with rank 
equivalent to an Assistant Secretary, such as the General Counsel, the 
Chief Financial Officer, the Inspector General, and the President of 
the Government National Mortgage Association.
    Regulation means:

--Any material contained in Title 24, Code of Federal Regulations;
--Any notice published in the Federal Register announcing the 
availability of funds (referred to as a notice of funding availability 
or NOFA), or the criteria to be used to select recipients of the funds, 
under any program administered by HUD; and
--Any other notice published in the Federal Register that establishes 
program requirements pursuant to a statute that authorizes HUD to 
administer the program by Federal Register publication, pending 
issuance of effective regulations amending Title 24, Code of Federal 
Regulations.

    Secretary means the Secretary of Housing and Urban Development.

B. Waiver of Regulations

    1. Actions Subject to Section 7(q). Section 7(q) of the HUD Act 
only covers waivers of non-statutory regulatory requirements. Many HUD 
regulations reflect statutory requirements, and section 7(q) grants no 
authority to waive statutory requirements that may be codified in HUD 
regulations. Therefore, HUD officials must always exercise caution that 
a waiver of a HUD regulation is not a waiver of a statutory 
requirement.
    Section 7(q), however, is not applicable to HUD regulations that 
contain, within the regulation, the authority to grant an exception to 
the overall requirement stated in the regulation under certain 
specified criteria. This type of regulation was established to provide 
``built-in'' exceptions to the general regulatory requirement, thereby 
allowing the applicable HUD official to act on such exceptions under 
the exception criteria specified without undertaking the more formal 
regulatory waiver process. Examples of this type of regulation can be 
found in the following regulations:
    a. 24 CFR 203.43(c)(2)

Sec.  203.43 Eligibility of Miscellaneous Type Mortgages

* * * * *

    (c) The Commissioner may insure under this part, without regard 
to any limitation upon eligibility contained in the other provisions 
of this subpart, any mortgage given to refinance an existing 
mortgage insured under the National Housing Act. The refinancing 
mortgage must meet the following special requirements:
* * * * *
    (2) It must have a term which does not exceed the unexpired term 
of the existing mortgage, except that in any case where the 
Commissioner determines that an extension of the term of the 
mortgage will inure to the benefit of the applicable insurance fund, 
taking into consideration the outstanding insurance liability under 
the existing insured mortgage, the term may be extended to the 
lesser of (i) 30 years or (ii) the unexpired term of the existing 
mortgage, plus 12 years; (Emphasis added.)

    Section 203.43 specifies the conditions under which the Federal 
Housing Commissioner may grant an exception to the general condition 
that a refinanced mortgage must have a term that does not exceed the 
unexpired term of the existing mortgage.
    b. 24 CFR 201.5

Sec.  201.5 Waivers

    Waiver of lender's noncompliance. The Secretary may waive a 
lender's noncompliance with any provision of this part, subject to 
statutory limitations, when it is determined that enforcement of the 
regulations would impose an injustice upon a lender which has 
substantially complied with the regulations in good faith and 
refunded or credited any excess charge made, and when such waiver 
does not involve an increase in the Secretary's obligation beyond 
that which would have been involved if the lender was in full 
compliance with the regulations.

    Section 201.5 provides a built-in waiver provision and specifies 
the basis upon which the waiver may be granted.
    2. Form and Content of Waivers. Each waiver of a HUD regulation 
must be in writing and specify the grounds for granting the waiver.
    3. Who May Grant a Waiver? The Secretary is the ultimate repository 
of the authority both to issue and to waive HUD regulations. The Deputy 
Secretary has been delegated concurrent authority with the Secretary to 
issue and waive HUD regulations. The Secretary may delegate each of 
these powers to HUD Assistant Secretaries or other individuals of 
equivalent rank, as defined in this notice, and as provided in this 
section. Typically, the authority to issue regulations is delegated to 
an Assistant Secretary, with concurrent authority delegated to the 
Assistant Secretary's principal deputy, generally a General Deputy 
Assistant Secretary.
    The authority to waive a regulation may not be delegated below the 
Assistant Secretary or equivalent rank (e.g., an Assistant Secretary's 
principal deputy) unless that individual is serving as the Assistant 
Secretary or as other individual of equivalent rank. That is, persons 
formally authorized to act for the Secretary, Deputy Secretary, or an 
Assistant Secretary, or an individual of equivalent rank in that 
official's absence may exercise the waiver authority of that 
individual. Use of this power is limited to situations in which an 
official is designated as, and is performing the duties of, the absent 
official pursuant to a current, written order of succession signed by 
the appropriate official. Note: Special issues are raised by the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970, as amended. The statute authorizes the Department of 
Transportation, as lead agency, to issue regulations. (See 42 U.S.C. 
4633 and the implementing regulations at 49 CFR part 24.) Section 24.7 
of the Department of Transportation regulations (49 CFR 24.7) 
authorizes the federal funding agency to waive certain non-statutory 
requirements of part 24. Accordingly, the authority to issue and the 
authority to waive are in different agencies. HUD's position is that 
the waiver authority of 49 CFR 24.7 is not subject to section 7(q) of 
the HUD Act because section 7(q) addresses only regulations that the 
Secretary has the authority to issue.
    4. Legal Concurrence in Waivers. A proposed waiver of a regulation 
subject to section 7(q) must be concurred in by the General Counsel (or 
the General Counsel's designee with responsibility for the legal area 
involving the waiver), if the waiver would:
    a. Be precedential in effect;
    b. Affect in any way the competitive ``ground rules'' under which 
assistance is distributed to recipients;
    c. Relate to litigation involving HUD or its programs; or

[[Page 76676]]

    d. Otherwise present novel decisions or circumstances.
    A proposed waiver that does not meet any of these criteria may be 
granted without the concurrence of the Office of General Counsel.
    5. Concurrence in Waivers of Nondiscrimination Provisions. Any 
proposed waiver of a regulation subject to section 7(q) that prohibits 
discrimination on the basis of race, color, religion, national origin, 
sex, disability, age, or familial status, or that sets forth related 
affirmative obligations, must be concurred in by the Assistant 
Secretary for Fair Housing and Equal Opportunity, or the Assistant 
Secretary's designee.
    6. Notification to the Public.
    a. In General. HUD will notify the public of all waivers of 
regulations subject to section 7(q) that are granted by HUD through 
notice published in the Federal Register.
    b. Timing of Notice. Each notice will be published not less 
frequently than quarterly, and will provide information on all waivers 
of regulations subject to section 7(q) since the end of the period 
covered by the last Federal Register notice containing all the waivers 
granted during the reporting period.
    c. Content of Notice. The notice will contain the following 
information for each waiver:
    i. An identification of the project or activity that is the subject 
of the regulatory waiver;
    ii. A description of the nature of the requirement that has been 
waived and a specification of the provision involved, including the 
citation to the Code of Federal Regulations (CFR), if the provision is 
codified in the CFR;
    iii. The name and title of the official who granted the waiver;
    iv. A brief description of the grounds for granting the waiver; and
    v. A statement of how more information about the waiver, a copy of 
any request, and the approval of the waiver may be obtained.
    d. Public Inspection of Waivers. A record of each waiver of a HUD 
regulation (including the information specified in Section B.c. of this 
notice) is maintained by the office of the HUD official who granted the 
waiver, and will be made available to the public, upon request, subject 
to the 3-year recordkeeping period for the waiver required by section 
7(q)(4)(C). As provided in Section C.4. of this notice, information 
about specific waivers granted should be directed to the office that 
granted the waiver. General information about the procedures for 
granting waivers of regulations may be obtained from the Regulations 
Division, Office of General Counsel, Department of Housing and Urban 
Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-
0500, telephone number 202-708-2084. (This is not a toll-free number.) 
Persons with hearing or speech impairments may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at 800-877-8339.

C. Waiver of Directives

    1. Form and Content of Waivers. Each waiver of a provision in a HUD 
directive will be in writing and will specify the grounds for granting 
it.
    2. Who May Grant a Waiver? The HUD officer who is authorized to 
issue a directive may also grant waivers of its provisions. This 
authority may be delegated to any officer or employee in the issuing 
official's organization, as well as to any officer or employee in a HUD 
Field or Regional Office. Any such delegation must be in writing, 
although a published delegation of authority is not necessary to 
delegate the power to waive the provisions of directives.
    3. What May be Waived? This notice applies only to a waiver that is 
intended to provide a benefit to, or to remove an obstacle to 
participation in a HUD program by specific individuals or entities 
outside the Department. Waivers of provisions governing internal HUD 
operations, and any action establishing guidance that applies to all 
individuals or entities that are in similar circumstances, are not 
subject to the waiver requirements of this notice. Issuance of a new 
directive is not a waiver for purposes of this notice.
    HUD officials must be alert and cognizant that waiver of a 
directive provision that restates or summarizes a regulation may 
constitute a regulatory waiver. In determining whether a directive 
provision is to be treated as a regulatory waiver, HUD will consider 
whether the waiver of the directive would also require a regulatory 
waiver. If so, the waiver must meet the regulatory waiver requirements 
set forth in this notice.
    All prohibitions against discrimination on the basis of race, sex, 
color, national origin, religion, handicap, age, or familial status, 
and all related affirmative obligations that are direct derivatives of 
regulations, are considered regulatory prohibitions.
    4. Public Inspection of Waivers. A record of each waiver of a HUD 
directive (including the grounds for granting the waiver) will be made 
available to the public. For more information on where and how this 
information may be inspected, interested members of the public are to 
contact the HUD office that granted the waiver. The record of the 
waiver will be maintained for not less than the 3-year period beginning 
on the date the waiver is granted.

D. Regulatory Waiver Procedures During Period of Administration 
Transition

    During a period of Administration transition, HUD officials 
authorized to waive regulations include those persons who, by reason of 
a vacancy in a position requiring Senate confirmation, are designated 
to exercise authority of the Secretary, Deputy Secretary, Assistant 
Secretary, or an individual of equivalent rank under a published order 
of succession. HUD's orders of succession, consistent with 42 U.S.C. 
3535(d), ensure that waivers of regulations will be issued only by 
those persons authorized to issue the regulation to be waived. 
Consistent with such orders of succession and the Vacancies Reform Act 
of 1998 (5 U.S.C. 3345-3349d), delegation of this authority, and the 
waiver procedures set forth in this statement of policy continue until 
individuals nominated by the President to offices requiring Senate 
confirmation are confirmed by the Senate and sworn in by the President.
    Employing orders of succession and existing delegations of 
authority during a period of Administration transition is essential to 
ensure that the business of the Department is not seriously impaired by 
the absence of individuals occupying positions requiring Senate 
confirmation. HUD receives a significant number of requests for waivers 
of regulations and directives, and failure to respond to these requests 
in a timely, considered manner may have significant adverse effects on 
HUD grantees and undercut HUD's credibility with the public. This 
clarification is also consistent with the Department's April 22, 1991, 
statement of policy, reiterated in this notice, in which HUD noted that 
the only other persons who are authorized to waive a regulation are 
those serving in an ``acting'' capacity. Use of this power is limited 
to situations in which an official is designated as, and is performing 
the duties of, the absent official pursuant to a current, written order 
of succession signed by the appropriate official. HUD has in place 
written orders of succession to ensure an orderly flow of the authority 
of those vacant positions that require Senate confirmation.
    Notwithstanding Section II.B.4.e. of this notice, all waivers of 
regulation proposed during a period of Administration transition must 
be concurred in by the Associate General

[[Page 76677]]

Counsel who serves as program counsel to the program office considering 
granting the waiver, and by the General Counsel or General Counsel's 
designee under the most recent General Counsel's order of succession. 
This review procedure will ensure that all waivers are consistent with 
the Vacancies Reform Act of 1998.

III. Findings and Certifications

    Environmental Review. An environmental finding under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) is unnecessary 
since this notice involves internal administrative procedures that are 
categorically excluded under HUD regulations at 24 CFR 50.20(k). It 
should be noted that the actual grant of a waiver pursuant to this 
notice may require environmental review. If this occurs, the 
environmental considerations will be assessed at that time and in that 
context.
    Executive Order 13132, Federalism. Executive Order 13132 (entitled 
``Federalism'') prohibits, to the extent practicable and permitted by 
law, an agency from promulgating a regulation that has federalism 
implications and either imposes substantial direct compliance costs on 
state and local governments and is not required by statute, or preempts 
state law, unless the relevant requirements of section 6 of the 
Executive Order are met. The statement of policy sets forth only the 
procedures for granting waivers of regulations and directives, and for 
notifying the public of the waiver. Accordingly, this statement of 
policy does not have federalism implications and does not impose 
substantial direct compliance costs on state and local governments or 
preempt state law within the meaning of the Executive Order.

    Authority: Sections 7(d) and 7(q), Department of Housing and 
Urban Development Act (42 U.S.C. 3535(d) and 3535(q)).

    Dated: December 9, 2008.
 Roy A. Bernardi,
Deputy Secretary.
[FR Doc. E8-29813 Filed 12-16-08; 8:45 am]
BILLING CODE 4210-67-P