[Federal Register Volume 74, Number 167 (Monday, August 31, 2009)]
[Rules and Regulations]
[Pages 44751-44752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20903]



31 CFR Part 32

RIN 1505-AC17

Payments in Lieu of Low Income Housing Tax Credits

AGENCY: Office of the Fiscal Assistant Secretary, Treasury.

ACTION: Interim final rule.


SUMMARY: The Department of the Treasury is amending its policy 
regarding the time limitation within which State housing credit 
agencies must disburse funds received under section 1602 of the 
American Recovery and Reinvestment Tax Act of 2009. This change will 
allow States to disburse section 1602 funds to subawardees through 
December 31, 2011 under certain conditions.

DATES: This final rule is effective August 31, 2009. Comments must be 
received on or before September 30, 2009.

ADDRESSES: Treasury participates in the U.S. government's eRulemaking 
Initiative by publishing rulemaking information on http://www.regulations.gov. Regulations.gov offers the public the ability to 
comment on, search, and view publicly available rulemaking materials, 
including comments received on rules. Comments on this rule should be 
submitted using only the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions on the Web site for submitting comments.
    Mail: Ellen Neubauer, Fiscal Service, U.S. Department of the 
Treasury, 1500 Pennsylvania Ave., Washington, DC 20220. Instructions: 
All submissions received must include the agency name (``Fiscal 
Service'') and the title of this rulemaking. In general, comments 
received will be published on Regulations.gov without change, including 
any business or personal information provided. Comments received, 
including attachments and other supporting materials, are part of the 
public record and subject to public disclosure. Do not enclose any 
information in your comment or supporting materials that you consider 
confidential or inappropriate for public disclosure.
    You may also inspect and copy this interim rule at: Treasury 
Department Library, Freedom of Information Act (FOIA) Collection, Room 
1428, Main Treasury Building, 1500 Pennsylvania Avenue, NW., 
Washington, DC 20220. Before visiting, you must call (202) 622-0990 for 
an appointment.

FOR FURTHER INFORMATION CONTACT: Ellen Neubauer, Program Manager, at 
(202) 622-0560 or at [email protected].


I. Background

    Section 1602 of the American Recovery and Reinvestment Tax Act of 
2009 (Act) (Pub. L. 111-5) (hereinafter Section 1602) allows State 
housing credit agencies to elect to receive payments in lieu of low-
income housing credits under section 42 of the Internal Revenue Code. 
Payments must be used to make subawards to finance the construction or 
acquisition and rehabilitation of qualified low-income

[[Page 44752]]

buildings. The United States Department of the Treasury (Treasury) 
awards Section 1602 funds to State housing credit agencies in an amount 
equal to their low-income housing grant election amount which may not 
exceed a portion of the States' low-income housing tax credit ceiling 
for 2009.
    Section 1602(d) of the Act requires that State housing credit 
agencies return to the Treasury funds not used to make subawards before 
January 1, 2011. The Terms and Conditions promulgated by the Treasury 
to govern the program require that any funds not disbursed before 
January 1, 2011, be returned to the Treasury. Upon further 
consideration Treasury has determined that this requirement is overly 
restrictive and may preclude funding of otherwise eligible projects 
that may not reach final completion by the end of 2010. This rule 
therefore changes this requirement. Under this rule set forth at 31 CFR 
part 32, State housing credit agencies are required to return to the 
Treasury any funds not used to make subawards by December 31, 2010. 
However, once a subaward has been made, a State can continue to 
disburse funds for the subaward through December 31, 2011, provided the 
project is at least 30 percent complete by the end of 2010.

II. Procedural Analyses

Administrative Procedures Act

    This rule is being issued without prior public notice and comment 
because under 5 U.S.C. 553(b) and (d)(3) good cause exists to determine 
that prior notice and comment rulemaking is unnecessary and contrary to 
the public interest. The policy being implemented through this rule 
impacts procedural requirements imposed on State housing credit 
agencies that receive funds from the Federal government under Section 
1602 and does not adversely affect the rights of the public. 
Additionally, delay in the effective date of this rule is contrary to 
the public interest because without clarity regarding the time period 
within which State housing credit agencies may disburse funds under the 
program, State housing credit agencies are unable to make decisions 
regarding which projects to fund thereby delaying the construction or 
rehabilitation of low-income housing.

Request for Comment on Plain Language

    Executive Order 12866 requires each agency in the Executive branch 
to write regulations that are simple and easy to understand. We invite 
comment on how to make the interim rule clearer. For example, you may 
wish to discuss: (1) Whether we have organized the material to suit 
your needs; (2) whether the requirements of the rules are clear; or (3) 
whether there is something else we could do to make these rules easier 
to understand.

Regulatory Planning and Review

    The rule is a ``significant regulatory action'' as defined in 
Executive Order 12866. Accordingly, the rule has been reviewed by the 
Office of Management and Budget.

Regulatory Flexibility Act Analysis

    Because no notice of rulemaking is required, the provisions of the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

List of Subjects in 31 CFR Part 32

    Low-income housing tax credits.

For the reasons set forth in the preamble, we add 31 CFR Part 32 to 
read as follows:


32.1. Timing of disbursements.

    Authority: Public Law 111-5.

Sec.  32.1  Timing of disbursements.

    (a) State housing credit agencies that receive funds under section 
1602 of Division B of the American Recovery and Reinvestment Tax Act of 
2009 must make subawards to subawardees to finance the construction or 
acquisition and rehabilitation of low-income housing no later than 
December 31, 2010. Any funds that are not used to make subawards by 
December 31, 2010, must be returned to the Treasury by January 1, 2011.
    (b) The requirement in subsection (a) above does not prevent State 
housing credit agencies from continuing to disburse funds to 
subawardees after December 31, 2010 provided:
    (1) A subaward has been made to the subawardee on or before 
December 31, 2010;
    (2) The subawardee has, by the close of 2010, paid or incurred at 
least 30 percent of the subawardee's total adjusted basis in land and 
depreciable property that is reasonably expected to be part of the low-
income housing project; and
    (3) Any funds not disbursed to the subawardee by December 31, 2011, 
must be returned to the Treasury by January 1, 2012.

    Dated: August 19, 2009.
Gary Grippo,
Acting Fiscal Assistant Secretary.
[FR Doc. E9-20903 Filed 8-28-09; 8:45 am]